GUARANTY
Exhibit
10.3
I. RECITALS
Reference
is made to that certain Loan and Security Agreement dated as of October 31,
2006
(as the same may be amended, restated, modified or supplemented and in effect
from time to time, the "Loan Agreement") among Mossimo Holdings LLC, a Delaware
limited liability company ("Company"), Mossimo Management LLC, as Servicer,
the
Lenders from time to time party to the Loan Agreement and XXXXXXX XXXXX MORTGAGE
CAPITAL INC., in its capacity as Agent under the Loan Agreement ("Agent").
As
one of the conditions to making the Loan and other financial accommodations
available to Company under the Loan Agreement, the Lenders have required that
the undersigned ("Guarantor"), guaranty the obligations of Company to Agent
and
the Lenders. Capitalized terms used and not otherwise defined herein shall
have
the respective meanings provided for in the Loan Agreement.
II. GUARANTY
Therefore,
for value received, and in consideration of any loan, advance or financial
accommodation of any kind whatsoever heretofore, now or hereafter made, given
or
granted to Company under the Loan Agreement or any other Transaction Document
by
Agent or any Lender, Guarantor hereby unconditionally guaranties the full and
prompt payment when due, whether at maturity or earlier, by reason of
acceleration or otherwise, and at all times thereafter, of all of the
Obligations. Without limiting the foregoing, Guarantor guarantees the payment
of
all fees, costs and expenses (including attorneys' fees and expenses) incurred
by Agent or any Lender in attempting to collect any amount due under this
Guaranty or in prosecuting any action against Company in any way related to
the
Transaction Documents, Guarantor with respect to this Guaranty or any other
guarantor of all or part of the Obligations and all interest, fees, costs and
expenses owing to Agent or any Lender after the commencement of bankruptcy
proceedings with respect to Company, any Guarantor or any other guarantor of
all
or part of the Obligations (whether or not the same may be collected while
such
proceedings are pending).
Guarantor
hereby agrees that this Guaranty is a present and continuing guaranty of payment
and not of collection and that its obligations hereunder shall be unconditional,
irrespective of (i) the validity or enforceability of the Obligations or any
part thereof, or of any of the Transaction Documents, (ii) the waiver or consent
by Agent or any Lender with respect to any provision of any Transaction
Document, or any amendment, modification or other change with respect to any
Transaction Document, (iii) any merger or consolidation of Company, Guarantor
or
any other guarantor of all or part of the Obligations into or with any Person
or
any change in the ownership of the equity of Company, Guarantor or any other
guarantor of all or part of the Obligations, (iv) any dissolution of Guarantor
or any insolvency, bankruptcy, liquidation, reorganization or similar
proceedings with respect to Company, Guarantor or any other guarantor of all
or
part of the Obligations, (v) any action or inaction on the part of Agent or
any
Lender, including without limitation the absence of any attempt to collect
the
Obligations from Company, Guarantor or any other guarantor of all or part of
the
Obligations or other action to enforce the same or the failure by Agent to
take
any steps to perfect and maintain its Lien on, or to preserve its rights to,
any
security or collateral for the Obligations, (vi) Agent's election, in any
proceeding instituted under Chapter 11 of Title 11 of the Bankruptcy Code of
the
application of Section 1111(b)(2) of the Bankruptcy Code, (vii) any borrowing
or
grant of a Lien by Company, Guarantor or any other guarantor of all or part
of
the Obligations, as debtor-in-possession, under Section 364 of the Bankruptcy
Code, (viii) the disallowance, under Section 502 of the Bankruptcy Code, of
all
or any portion of Agent's or any Lender's claims for repayment of the
Obligations, (ix) Agent's or any Lender's inability to enforce the Obligations
of Company as a result of the automatic stay provisions under Section 362 of
the
Bankruptcy Code, or (x) any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of Company, Guarantor or any other
guarantor of all or part of the Obligations (other than the irrevocable payment
in full in cash of the Obligations).
Notwithstanding
any provision of this Guaranty to the contrary, it is intended that this
Guaranty not constitute a "Fraudulent Conveyance" (as defined below).
Consequently, Guarantor agrees that if this Guaranty would, but for the
application of this sentence, constitute a Fraudulent Conveyance, this Guaranty
shall be valid and enforceable only to the maximum extent that would not cause
this Guaranty to constitute a Fraudulent Conveyance, and this Guaranty shall
automatically be deemed to have been amended accordingly at all relevant times.
For purposes hereof, "Fraudulent Conveyance" means a fraudulent conveyance
or
fraudulent transfer under Section 548 of the Bankruptcy Code or a fraudulent
conveyance or fraudulent transfer under the provisions of any applicable
fraudulent conveyance or fraudulent transfer law or similar law of any state,
nation or other governmental unit, as in effect from time to time.
No
payment made by or for the account or benefit of Guarantor (including, without
limitation, (i) a payment made by Company in respect of the Obligations, (ii)
a
payment made by any Person under any other guaranty of the Obligations or (iii)
a payment made by means of set-off or other application of funds by Agent or
any
Lender) pursuant to this Guaranty shall entitle Guarantor, by subrogation or
otherwise, to any payment by Company or from or out of any property of Company,
and Guarantor shall not exercise any right or remedy against Company or any
property of Company including, without limitation, any right of contribution
or
reimbursement by reason of any performance by Guarantor under this Guaranty,
until the Obligations have been indefeasibly paid in full in cash and the Loan
Agreement has been terminated.
Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims with
a
court in the event of any bankruptcy proceeding (or other insolvency proceeding)
of Company, protest or notice with respect to the Obligations and all demands
whatsoever, and covenants that this Guaranty will not be discharged, except
by
complete and irrevocable payment and performance of the obligations and
liabilities contained herein. No notice to Guarantor or any other party shall
be
required for Agent, on behalf of Agent or any Lender, to make demand hereunder.
Such demand shall constitute a mature and liquidated claim against Guarantor.
Upon the occurrence and during the continuance of any Event of Default and
following the Agent or the Lenders declaring that the Loan and all interest
and
all Fees accrued on the Loan and any other Obligations to be immediately due
and
payable (which such declaration shall be automatic following an Event of Default
described in Section 7.0l of the Loan Agreement), Agent may, at its sole
election, proceed directly and at once, without notice, against Guarantor to
collect and recover the full amount or any portion of the Obligations, without
first proceeding against Company, any other Person or any security or collateral
for the Obligations. Agent shall have the exclusive right to determine the
application of payments and credits, if any, from Guarantor on account of the
Obligations or of any other liability of Guarantor to Agent and Lenders arising
hereunder.
2
Agent
and
Lenders are hereby authorized, without notice or demand to Guarantor and without
affecting or impairing the liability of Guarantor hereunder, to, from time
to
time, (i) renew, extend, accelerate or otherwise change the time for payment
of,
or other terms relating to, the Obligations or otherwise modify, amend or change
the terms of any Transaction Document (other than this Guaranty, but any change
to this Guaranty shall not affect the obligations of Guarantor under this
Guaranty except as otherwise agreed to in such amendment to this Guaranty),
(ii)
accept partial payments on the Obligations, (iii) take and hold collateral
for
the payment of the Obligations, or for the payment of this Guaranty, or for
the
payment of any other guaranties of the Obligations or other liabilities of
Company, and exchange, enforce, waive and release any such collateral, (iv)
apply such collateral and direct the order or manner of sale thereof as in
their
sole discretion they may determine and (v) settle, release, compromise, collect
or otherwise liquidate the Obligations and any collateral therefor in any
manner.
At
any
time after maturity of the Obligations, Agent and Lenders may, in their sole
discretion, without notice to any Guarantor and regardless of the acceptance
of
any collateral for the payment hereof, appropriate and apply toward payment
of
the Obligations (i) any indebtedness due or to become due from Agent or any
Lender to Guarantor and (ii) any moneys, credits or other property belonging
to
Guarantor at any time held by or coming into the possession of Agent or any
Lender or any Affiliates thereof, whether for deposit or otherwise.
Guarantor
hereby assumes responsibility for keeping itself informed of the financial
condition of Company, and any and all endorsers and other guarantors of all
or
any part of the Obligations and of all other circumstances bearing upon the
risk
of nonpayment of the Obligations or any part thereof that diligent inquiry
would
reveal, and Guarantor hereby agrees that neither Agent nor any Lender shall
have
any duty to advise Guarantor of information known to such Agent or Lender
regarding such condition or any such circumstances. Guarantor hereby
acknowledges familiarity with Company's financial condition and that it has
not
relied on any statements by Agent or any Lender in obtaining such information.
In the event Agent or any Lender, in its sole discretion, undertakes at any
time
or from time to time to provide any such information to Guarantor, neither
Agent
nor any Lender shall be under any obligation (i) to undertake any investigation
with respect thereto, (ii) to disclose any information which, pursuant to
accepted or reasonable commercial finance practices, Agent or such Lender wishes
to maintain confidential or (iii) to make any other or future disclosures of
such information, or any other information, to Guarantor.
3
Guarantor
consents and agrees that neither Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Guarantor or against or in payment
of any or all of the Obligations. Guarantor further agrees that, to the extent
that Company makes a payment or payments to Agent or any Lender, or Agent or
any
Lender receives any proceeds of Collateral, which payment or payments or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to Company, its estate,
trustee, receiver or any other party, including Guarantor, under any Applicable
Law or equitable cause, then to the extent of such payment or repayment, the
Obligations or the part thereof which has been paid, reduced or satisfied by
such amount shall be reinstated and continued in full force and effect as of
the
date such initial payment, reduction or satisfaction occurred, and this Guaranty
shall continue to be in existence and in full force and effect, irrespective
of
whether any evidence of indebtedness has been surrendered or
cancelled.
Guarantor
also waives all set-offs and counterclaims and all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices
of
dishonor, and notices of acceptance of this Guaranty. Guarantor further waives
all notices of the existence, creation or incurring of new or additional
indebtedness, arising either from additional loans extended to Company or
otherwise, and also waives all notices that the principal amount, or any portion
thereof, or any interest under or on any Transaction Document is due, notices
of
any and all proceedings to collect from the maker, any endorser or any other
guarantor of all or any part of the Obligations, or from anyone else, and,
to
the extent permitted by law, notices of exchange, sale, surrender or other
handling of any security or collateral given to Agent to secure payment of
the
Obligations.
III. MISCELLANEOUS
Guarantor
hereby represents and warrants to Agent and Lenders that (i) it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) the execution, delivery and performance
by Guarantor of this Guaranty are within its powers, have been duly authorized
by all necessary action pursuant to its Organizational Documents, require no
further action by or in respect of, or filing with, any Government Entity and
do
not violate, conflict with or cause a breach or a default under any provision
of
any Applicable Law, any of its Organizational Documents or any agreement,
binding upon it and (iii) this Guaranty constitutes a valid and binding
agreement of Guarantor, enforceable against Guarantor in accordance with its
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar Applicable Laws relating to the
enforcement of creditors' rights generally and by general equitable principles.
Guarantor
will not, and will not permit any Subsidiary to, directly or indirectly, create,
incur, assume, guarantee or otherwise become or remain directly or indirectly
liable with respect to, any Debt, except for: (i) Debt existing on the Closing
Date; (ii) Debt incurred in connection with the Transaction Documents; (iii)
Debt incurred or assumed for the purpose of financing all or any part of the
acquisition of the capital stock or assets of another Person or in connection
with a merger with another Person of which the Guarantor or Subsidiary is the
surviving entity; and (iv) Debt (other than the Debt described in clauses (ii)
and (iii) above) in an amount such that after giving effect to the incurrence
thereof the aggregate outstanding Debt of Guarantor and its Subsidiaries would
not to exceed the sum of the amount of Debt outstanding on the Closing Date
plus
$70,000,000; provided,
however,
that in
the event that the Guarantor sells not less than $75,000,000 of its capital
stock following the Closing Date, the foregoing limitation on the incurrence
of
additional Debt in excess of $70,000,000 shall be eliminated and the Guarantor
and its Subsidiaries shall be permitted to incur additional Debt in their sole
discretion.
4
No
delay
on the part of Agent in the exercise of any right or remedy shall operate as
a
waiver thereof, and no single or partial exercise by Agent of any right or
remedy shall preclude any further exercise thereof; nor shall any modification
or waiver of any of the provisions of this Guaranty be binding upon Agent or
Lenders, except as expressly set forth in a writing duly signed and delivered
on
Agent's behalf by an authorized officer or agent of Agent. Agent's or any
Lender's failure at any time or times hereafter to require strict performance
Guarantor of any of the provisions, warranties, terms and conditions contained
in this Guaranty shall not waive, affect or diminish any right of Agent and
Lenders at any time or times hereafter to demand strict performance thereof
and
such right shall not be deemed to have been waived by any act or knowledge
of
Agent or any Lender, or its respective agents, officers or employees, unless
such waiver is contained in an instrument in writing signed by an officer or
agent of Agent, and directed Guarantor specifying such waiver. No failure or
delay by Agent or any Lender in exercising any right, power or privilege under
this Guaranty shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
This
Guaranty shall be binding upon Guarantor and its respective successors and
assigns and shall inure to the benefit of Agent and Lenders and their respective
successors and assigns, except that Guarantor may not assign its obligations
hereunder without the written consent of Agent. All notices, approvals,
requests, demands and other communications hereunder shall be given in
accordance with the notice provision of the Loan Agreement; provided, that
such
notices shall be given to Guarantor at its address or facsimile number set
forth
on the signature pages hereof.
THIS
GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND
IRREVOCABLY AGREES THAT, SUBJECT TO AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS GUARANTY SHALL BE LITIGATED IN SUCH COURTS.
GUARANTOR EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. GUARANTOR HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON GUARANTOR BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO GUARANTOR IN ACCORDANCE WITH THE NOTICE
PROVISIONS HEREOF AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER
THE
SAME HAS BEEN POSTED.
5
GUARANTOR
AND AGENT HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
This
Guaranty may be signed in any number of counterparts, each of which shall be
an
original, with the same effect as if the signatures thereto and hereto were
upon
the same instrument.
6
IN
WITNESS WHEREOF, this Guaranty has been duly executed by each Guarantor this
31st day of October, 2006.
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GUARANTOR:
By:
/s/
Xxxx
Xxxx
Its: President
and
CEO
Address:
0000
Xxxxxxxx, 0xx
Xxxxx
Xxx
Xxxx, XX 00000
Facsimile:
(000) 000-0000
XXXXXXX
XXXXX MORTGAGE CAPITAL INC.,
as Agent
By:
/s/
Xxxxxx
Xxxxxx
Its:
Vice
President
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