COAST
CONTINUING GUARANTY
Borrower: FIXCOR Industries, Inc.
Pallet Technology, Inc.
Guarantor: Poly Style Industries, Inc.
Date: June 8, 1998
THIS CONTINUING GUARANTY is executed by the above-named guarantor (the
"Guarantor"), as of the above date, in favor of COAST BUSINESS CREDIT-Registered
Trademark-, a division of Southern Pacific Bank ("Coast"), a California
corporation, with offices at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, with respect to the Indebtedness of the above-named borrowers
(jointly and severally, the "Borrower").
1. SECURED CONTINUING GUARANTY. Guarantor hereby unconditionally
guarantees and promises to pay on demand to Coast, at the address indicated
above, or at such other address as Coast may direct, in lawful money of the
United States, and to perform for the benefit of Coast, all Indebtedness of
Borrower now or hereafter owing to or held by Coast. This Continuing Guaranty is
secured by that certain Loan and Security Agreement of even date herewith among
Guarantor, Borrower, Fix-Corp International, Inc. and Coast (the "Loan
Agreement") and the Loan Documents (as defined in the Loan Agreement). As used
herein, the term "Indebtedness" is used in its most comprehensive sense and
shall mean and include without limitation: (a) any and all debts, duties,
obligations, liabilities, representations, warranties and guaranties of Borrower
or any one or more of them, heretofore, now, or hereafter made, incurred, or
created, whether directly to Coast or acquired by Coast by assignment or
otherwise, or held by Coast on behalf of others, however arising, whether
voluntary or involuntary, due or not due, absolute or contingent, liquidated or
unliquidated, certain or uncertain, determined or undetermined, monetary or
non-monetary, written or oral, and whether Borrower may be liable individually
or jointly with others, and regardless of whether recovery thereon may be or
hereafter become barred by any statute of limitations, discharged or
uncollectible in any bankruptcy, insolvency or other proceeding, or otherwise
unenforceable; and (b) any and all amendments, modifications, renewals and
extensions of any or all of the foregoing, including without limitation
amendments, modifications, renewals and extensions which are evidenced by any
new or additional instrument, document or agreement; and (c) any and all
attorneys' fees, court costs, and collection charges incurred in endeavoring to
collect or enforce any of the foregoing against Borrower, Guarantor, or any
other person liable thereon (whether or not suit be brought) and any other
expenses of, for or incidental to collection thereof. As used herein, the term
"Borrower" shall include any successor to the business and assets of Borrower,
and shall also include Borrower in its capacity as a debtor or debtor in
possession under the federal Bankruptcy Code, and any trustee, custodian or
receiver for Borrower or any of its assets, should Borrower
hereafter become the subject of any bankruptcy or insolvency proceeding,
voluntary or involuntary; and all indebtedness, liabilities and obligations
incurred by any such person shall be included in the Indebtedness guaranteed
hereby. This Guaranty is given in consideration for credit and other financial
accommodations which may, from time to time, be given by Coast to Borrower in
Coast's sole discretion, but Guarantor acknowledges and agrees that acceptance
by Coast of this Guaranty shall not constitute a commitment of any kind by Coast
to extend such credit or other financial accommodation to Borrower or to permit
Borrower to incur Indebtedness to Coast. All sums due under this Guaranty shall
bear interest from the date due until the date paid at the highest rate charged
with respect to any of the Indebtedness.
2. WAIVERS. Guarantor hereby waives: (a) presentment for payment,
notice of dishonor, demand, protest, and notice thereof as to any instrument,
and all other notices and demands to which Guarantor might be entitled,
including without limitation notice of all of the following: the acceptance
hereof; the creation, existence, or acquisition of any Indebtedness; the amount
of the Indebtedness from time to time outstanding; any foreclosure sale or other
disposition of any property which secures any or all of the Indebtedness or
which secures the obligations of any other guarantor of any or all of the
Indebtedness; any adverse change in Borrower's financial position; any other
fact which might increase Guarantor's risk; any default, partial payment or
non-payment of all or any part of the Indebtedness; the occurrence of any other
Event of Default (as hereinafter defined); any and all agreements and
arrangements between Coast and Borrower and any changes, modifications, or
extensions thereof, and any revocation, modification or release of any guaranty
of any or all of the Indebtedness by any person (including without limitation
any other person signing this Guaranty); (b) any right to require Coast to
institute suit against, or to exhaust its rights and remedies against, Borrower
or any other person, or to proceed against any property of any kind which
secures all or any part of the Indebtedness, or to exercise any right of offset
or other right with respect to any reserves, credits or deposit accounts held by
or maintained with Coast or any indebtedness of Coast to Borrower, or to
exercise any other right or power, or pursue any other remedy Coast may have;
(c) any defense arising by reason of any disability or other defense of Borrower
or any other guarantor or any endorser, co-maker or other person, or by reason
of the cessation from any cause whatsoever of any liability of Borrower or any
other guarantor or any endorser, co-maker or other person, with respect to all
or any part of the Indebtedness, or by reason of any act or omission of Coast or
others which directly or indirectly results in the discharge or release of
Borrower or any other guarantor or any other person or any Indebtedness or any
security therefor, whether by operation of law or otherwise; (d) any defense
arising by reason of any failure of Coast to obtain, perfect, maintain or keep
in force any security interest in, or lien or encumbrance upon, any property of
Borrower or any other person; (e) any defense based upon any failure of Coast to
give Guarantor notice of any sale or other disposition of any property securing
any or all of the Indebtedness, or any defects in any such notice that may be
given, or any failure of Coast to comply with any provision of applicable law in
enforcing any security interest in or lien upon any property securing any or all
of the Indebtedness including, but not limited to, any failure by Coast to
dispose of any property securing any or all of the Indebtedness in a
commercially reasonable manner; (f) any defense based upon or arising out of any
bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
liquidation or dissolution proceeding commenced by or against Borrower or any
other guarantor or any endorser,
-2-
co-maker or other person, including without limitation any discharge of, or bar
against collecting, any of the Indebtedness (including without limitation any
interest thereon), in or as a result of any such proceeding; and (g) the benefit
of any and all statutes of limitation with respect to any action based upon,
arising out of or related to this Guaranty. Until all of the Indebtedness has
been paid, performed, and discharged in full, nothing shall discharge or satisfy
the liability of Guarantor hereunder except the full performance and payment of
all of the Indebtedness. If any claim is ever made upon Coast for repayment or
recovery of any amount or amounts received by Coast in payment of or on account
of any of the Indebtedness, because of any claim that any such payment
constituted a preferential transfer or fraudulent conveyance, or for any other
reason whatsoever, and Coast repays all or part of said amount by reason of any
judgment, decree or order of any court or administrative body having
jurisdiction over Coast or any of its property, or by reason of any settlement
or compromise of any such claim effected by Coast with any such claimant
(including without limitation the Borrower), then and in any such event,
Guarantor agrees that any such judgment, decree, order, settlement and
compromise shall be binding upon Guarantor, notwithstanding any revocation or
release of this Guaranty or the cancellation of any note or other instrument
evidencing any of the Indebtedness, or any release of any of the Indebtedness,
and the Guarantor shall be and remain liable to Coast under this Guaranty for
the amount so repaid or recovered, to the same extent as if such amount had
never originally been received by Coast, and the provisions of this sentence
shall survive, and continue in effect, notwithstanding any revocation or release
of this Guaranty. Guarantor hereby expressly and unconditionally waives all
rights of subrogation, reimbursement and indemnity of every kind against
Borrower, and all rights of recourse to any assets or property of Borrower, and
all rights to any collateral or security held for the payment and performance of
any Indebtedness, including (but not limited to) any of the foregoing rights
which Guarantor may have under any present or future document or agreement with
any Borrower or other person, and including (but not limited to) any of the
foregoing rights which Guarantor may have under any equitable doctrine of
subrogation, implied contract, or unjust enrichment, or any other equitable or
legal doctrine. Neither Coast, nor any of its directors, officers, employees,
agents, attorneys or any other person affiliated with or representing Coast
shall be liable for any claims, demands, losses or damages, of any kind
whatsoever, made, claimed, incurred or suffered by Guarantor or any other party
through the ordinary negligence of Coast, or any of its directors, officers,
employees, agents, attorneys or any other person affiliated with or representing
Coast.
3. CONSENTS. Guarantor hereby consents and agrees that, without notice
to or by Guarantor and without affecting or impairing in any way the obligations
or liability of Guarantor hereunder, Coast may, from time to time before or
after revocation of this Guaranty, do any one or more of the following in
Coast's sole and absolute discretion: (a) accelerate, accept partial payments
of, compromise or settle, renew, extend the time for the payment, discharge, or
performance of, refuse to enforce, and release all or any parties to, any or all
of the Indebtedness; (b) grant any other indulgence to Borrower or any other
person in respect of any or all of the Indebtedness or any other matter;
(c) accept, release, waive, surrender, enforce, exchange, modify, impair, or
extend the time for the performance, discharge, or payment of, any and all
property of any kind securing any or all of the Indebtedness or any guaranty of
any or all of the Indebtedness, or on which Coast at any time may have a lien,
or refuse to enforce its rights or make any compromise or settlement or
agreement therefor in respect of any or all of such
-3-
property; (d) substitute or add, or take any action or omit to take any action
which results in the release of, any one or more endorsers or guarantors of all
or any part of the Indebtedness, including, without limitation one or more
parties to this Guaranty, regardless of any destruction or impairment of any
right of contribution or other right of Guarantor; (e) amend, alter or change in
any respect whatsoever any term or provision relating to any or all of the
Indebtedness, including the rate of interest thereon; (f) apply any sums
received from Borrower, any other guarantor, endorser, or co-signer, or from the
disposition of any collateral or security, to any indebtedness whatsoever owing
from such person or secured by such collateral or security, in such manner and
order as Coast determines in its sole discretion, and regardless of whether such
indebtedness is part of the Indebtedness, is secured, or is due and payable;
(g) apply any sums received from Guarantor or from the disposition of any
collateral or security securing the obligations of Guarantor, to any of the
Indebtedness in such manner and order as Coast determines in its sole
discretion, regardless of whether or not such Indebtedness is secured or is due
and payable. Guarantor consents and agrees that Coast shall be under no
obligation to marshal any assets in favor of Guarantor, or against or in payment
of any or all of the Indebtedness. Guarantor further consents and agrees that
Coast shall have no duties or responsibilities whatsoever with respect to any
property securing any or all of the Indebtedness. Without limiting the
generality of the foregoing, Coast shall have no obligation to monitor, verify,
audit, examine, or obtain or maintain any insurance with respect to, any
property securing any or all of the Indebtedness.
4. ACCOUNT STATED. Coast's books and records showing the account between
it and the Borrower shall be admissible in evidence in any action or proceeding
as prima facie proof of the items therein set forth. Coast's monthly statements
rendered to the Borrower shall be binding upon the Guarantor (whether or not the
Guarantor receives copies thereof), and shall constitute an account stated
between Coast and the Borrower, unless Coast receives a written statement of the
Borrower's exceptions within 30 days after the statement was mailed to the
Borrower. The Guarantor assumes full responsibility for obtaining copies of
such monthly statements from the Borrower, if the Guarantor desires such copies.
5. EXERCISE OF RIGHTS AND REMEDIES; FORECLOSURE OF TRUST DEEDS.
Guarantor consents and agrees that, without notice to or by Guarantor and
without affecting or impairing in any way the obligations or liability of
Guarantor hereunder, Coast may, from time to time, before or after revocation of
this Guaranty, exercise any right or remedy it may have with respect to any or
all of the Indebtedness or any property securing any or all of the Indebtedness
or any guaranty thereof, including without limitation judicial foreclosure,
nonjudicial foreclosure, exercise of a power of sale, and taking a deed,
assignment or transfer in lieu of foreclosure as to any such property, and
Guarantor expressly waives any defense based upon the exercise of any such right
or remedy, notwithstanding the effect thereof upon any of Guarantor's rights,
including without limitation, any destruction of Guarantor's right of
subrogation against Borrower and any destruction of Guarantor's right of
contribution or other right against any other guarantor of any or all of the
Indebtedness or against any other person, whether by operation of Sections 580a,
580d or 726 of the California Code of Civil Procedure, or any comparable
provisions of the laws of any other jurisdiction, or any other statutes or rules
of law now or hereafter in effect, or otherwise. Without limiting the
generality of the foregoing, (a) Guarantor waives all rights and defenses
arising out of an election of remedies by Coast, even though that election of
remedies, such
-4-
as a nonjudicial foreclosure with respect to security for any of the
Indebtedness, has destroyed the guarantor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the Code
of Civil Procedure or otherwise. (b) Guarantor further waives all rights and
defenses arising out of an election of remedies by Coast, even though that
election of remedies, such as a nonjudicial foreclosure with respect to security
for any of the Indebtedness, has destroyed the guarantor's rights of
subrogation, reimbursement and contribution against any other guarantor of the
guaranteed obligation, by the operation of Section 580d of the Code of Civil
Procedure or otherwise. (c) Guarantor understands that if Coast forecloses any
present or future trust deed, which secures any or all of the Indebtedness or
which secures any other guaranty of any or all of the Indebtedness, by
nonjudicial foreclosure, Guarantor may, as a result, have a complete defense to
liability under this Guaranty, based on the legal doctrine of estoppel and
Sections 580a, 580d or 726 of the California Code of Civil Procedure, and
Guarantor hereby expressly waives all such defenses. (d) Guarantor understands
and agrees that, in the event Coast in its sole discretion forecloses any trust
deed now or hereafter securing any or all of the Indebtedness, by nonjudicial
foreclosure, Guarantor will remain liable to Coast for any deficiency, even
though Guarantor will lose his right of subrogation against the Borrower, and
even though Guarantor will be unable to recover from the Borrower the amount of
the deficiency for which Guarantor is liable, and even though Guarantor may have
retained his right of subrogation against Borrower if Coast had foreclosed said
trust deed by judicial foreclosure as opposed to nonjudicial foreclosure, and
even though absent the waivers set forth herein Guarantor may have had a
complete defense to any liability for any deficiency hereunder. (e) Guarantor
understands and agrees that, in the event Coast in its sole discretion
forecloses any trust deed now or hereafter securing any other guaranty of any or
all of the Indebtedness, by nonjudicial foreclosure, Guarantor will remain
liable to Coast for any deficiency, even though Guarantor will lose his right of
subrogation or contribution against the other guarantor, and even though
Guarantor will be unable to recover from the other guarantor any part of the
deficiency for which Guarantor is liable, and even though Guarantor may have
retained his right of subrogation or contribution against the other guarantor if
Coast had foreclosed said trust deed by judicial foreclosure as opposed to
nonjudicial foreclosure, and even though absent the waivers set forth herein
Guarantor may have had a complete defense to any liability for any deficiency
hereunder.
6. ACCELERATION. Notwithstanding the terms of all or any part of the
Indebtedness, the obligations of the Guarantor hereunder to pay and perform all
of the Indebtedness shall, at the option of Coast, immediately become due and
payable, without notice, and without regard to the expressed maturity of any of
the Indebtedness, in the event: (a) any warranty, representation, statement,
report, or certificate made or delivered to Coast by Borrower or Guarantor, or
any of their respective officers, partners, employees, or agents, is incorrect,
false, untrue, or misleading when given in any material respect; or (b) Borrower
or Guarantor shall fail to pay or perform when due all or any part of the
Indebtedness; or (c) Guarantor shall fail to pay or perform when due any
indebtedness or obligation of Guarantor to Coast or to any parent, subsidiary or
corporate affiliate of Coast, whether under this Guaranty or any other
instrument, document, or agreement heretofore or hereafter entered into; or
(d) there occurs in Coast's judgment, reasonably exercised, a material
impairment of the prospect of payment or performance of any or all of the
Indebtedness; or (e) any event shall occur which may or does result in the
acceleration of the
-5-
maturity of any indebtedness of Borrower or Guarantor to others (regardless of
any requirement of notice, opportunity to cure or other condition prior to the
exercise of any right of acceleration); or (f) Borrower or Guarantor shall fail
promptly to perform or comply with any term or condition of any agreement with
any third party which does or may result in a material adverse effect on the
business of Borrower or Guarantor; or (g) there shall be made or exist any levy,
assessment, attachment, seizure, lien, or encumbrance for any cause or reason
whatsoever upon all or any part of the property of Borrower or Guarantor (unless
discharged by payment, release or bond not more than ten days after such event
has occurred); or (h) there shall occur the dissolution, termination of
existence, insolvency, or business failure of Borrower or Guarantor, or the
appointment of a receiver, trustee or custodian for Borrower or Guarantor or all
or any part of the property of either of them, or the assignment for the benefit
of creditors by Borrower or Guarantor, or the commencement of any proceeding by
or against Borrower or Guarantor under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, now or hereafter in effect; or (i) Borrower or
Guarantor shall be deceased or declared incompetent by any court or a guardian
or conservator shall be appointed for either of them or for the property of
either of them; or (j) Guarantor or Borrower shall generally not pay their
respective debts as they become due or shall enter into any agreement (whether
written or oral), or offer to enter into any such agreement, with all or a
significant number of its creditors regarding any moratorium or other indulgence
with respect to its debts or the participation of such creditors or their
representatives in the supervision, management, or control of the business of
either of them; or (k) Borrower or Guarantor shall conceal, remove or permit to
be concealed or removed any part of its property, with intent to hinder, delay
or defraud its creditors, or make or suffer any transfer of any of its property
which may be fraudulent under any bankruptcy, fraudulent conveyance or similar
law, or shall make any transfer of its property to or for the benefit of any
creditor at a time when other creditors similarly situated have not been paid;
or (l) the board of directors or shareholders of Borrower or Guarantor shall
adopt any resolution or plan for its dissolution or the liquidation of all or
substantially all of its assets; or (m) Guarantor shall revoke this Guaranty or
contest or deny liability under this Guaranty. All of the foregoing are
hereinafter referred to as "Events of Default".
7. RIGHT TO ATTACHMENT REMEDY. Guarantor agrees that, notwithstanding
the existence of any property securing any or all of the Indebtedness, Coast
shall have all of the rights of an unsecured creditor of Guarantor, including
without limitation the right to obtain a temporary protective order and writ of
attachment against Guarantor with respect to any sums due under this Guaranty.
Guarantor further agrees that in the event any property secures the obligations
of Guarantor under this Guaranty, to the extent that Coast, in its sole and
absolute discretion, determines prior to the disposition of such property that
the amount to be realized by Coast therefrom may be less than the indebtedness
of the Guarantor under this Guaranty, Coast shall have all the rights of an
unsecured creditor against Guarantor, including without limitation the right of
Coast, prior to the disposition of said property, to obtain a temporary
protective order and writ of attachment against Guarantor. Guarantor waives the
benefit of Section 483.010(b) of the California Code of Civil Procedure and of
any and all other statutes and rules of law now or hereafter in effect requiring
Coast to first resort to or exhaust all such collateral before seeking or
obtaining any attachment remedy against Guarantor. Coast shall have no
liability to Guarantor as a result thereof, whether or not the actual deficiency
realized by
-6-
Coast is less than the anticipated deficiency on the basis of which Coast
obtains a temporary protective order or writ of attachment.
8. INDEMNITY. Guarantor hereby agrees to indemnify Coast and hold Coast
harmless from and against any and all claims, debts, liabilities, demands,
obligations, actions, causes of action, penalties, costs and expenses (including
without limitation attorneys' fees), of every nature, character and description,
which Coast may sustain or incur based upon or arising out of any of the
Indebtedness, any actual or alleged failure to collect and pay over any
withholding or other tax relating to Borrower or its employees, any relationship
or agreement between Coast and Borrower, any actual or alleged failure of Coast
to comply with any writ of attachment or other legal process relating to
Borrower or any of its property, or any other matter, cause or thing whatsoever
occurred, done, omitted or suffered to be done by Coast relating in any way to
Borrower or the Indebtedness (except any such amounts sustained or incurred as
the result of the gross negligence or willful misconduct of Coast or any of its
directors, officers, employees, agents, attorneys, or any other person
affiliated with or representing Coast). Notwithstanding any provision in this
Guaranty to the contrary, the indemnity agreement set forth in this Section
shall survive any termination or revocation of this Guaranty and shall for all
purposes continue in full force and effect.
9. SUBORDINATION. Any and all rights of Guarantor under any and all
debts, liabilities and obligations owing from Borrower to Guarantor, including
any security for and guaranties of any such obligations, whether now existing or
hereafter arising, are hereby subordinated in right of payment to the prior
payment in full of all of the Indebtedness. No payment in respect of any such
subordinated obligations shall at any time be made to or accepted by Guarantor
if at the time of such payment any Indebtedness is outstanding. If any Event of
Default has occurred, Borrower and any assignee, trustee in bankruptcy,
receiver, or any other person having custody or control over any or all of
Borrower's property are hereby authorized and directed to pay to Coast the
entire unpaid balance of the Indebtedness before making any payments whatsoever
to Guarantor, whether as a creditor, shareholder, or otherwise; and insofar as
may be necessary for that purpose, Guarantor hereby assigns and transfers to
Coast all rights to any and all debts, liabilities and obligations owing from
Borrower to Guarantor, including any security for and guaranties of any such
obligations, whether now existing or hereafter arising, including without
limitation any payments, dividends or distributions out of the business or
assets of Borrower. Any amounts received by Guarantor in violation of the
foregoing provisions shall be received and held as trustee for the benefit of
Coast and shall forthwith be paid over to Coast to be applied to the
Indebtedness in such order and sequence as Coast shall in its sole discretion
determine, without limiting or affecting any other right or remedy which Coast
may have hereunder or otherwise and without otherwise affecting the liability of
Guarantor hereunder. Guarantor hereby expressly waives any right to set-off or
assert any counterclaim against Borrower.
10. REVOCATION. This is a Continuing Guaranty relating to all of the
Indebtedness, including Indebtedness arising under successive transactions which
from time to time continue the Indebtedness or renew it after it has been
satisfied. Guarantor waives all benefits of California Civil Code Section 2815,
and agrees that the obligations of Guarantor hereunder may not be terminated or
revoked in any manner except by giving 90 days' advance written notice of
revocation to Coast at its address above by
-7-
registered first-class U.S. mail, postage prepaid, return receipt requested, and
only as to new loans made by Coast to Borrower more than 90 days after actual
receipt of such written notice by Coast. No termination or revocation of this
Guaranty shall be effective until 90 days following the date of actual receipt
of said written notice of revocation by Coast. Notwithstanding such written
notice of revocation or any other act of Guarantor or any other event or
circumstance, Guarantor agrees that this Guaranty and all consents, waivers and
other provisions hereof shall continue in full force and effect as to any and
all Indebtedness which is outstanding on or before the 90th day following actual
receipt of said written notice of revocation by Coast, and all extensions,
renewals and modifications of said Indebtedness (including without limitation
amendments, extensions, renewals and modifications which are evidenced by new or
additional instruments, documents or agreements executed before or after
expiration of said 90-day period), and all interest thereon, accruing before or
after expiration of said 90-day period, and all attorneys' fees, court costs and
collection charges, incurred before or after expiration of said 90-day period,
in endeavoring to collect or enforce any of the foregoing against Borrower,
Guarantor or any other person liable thereon (whether or not suit be brought)
and any other expenses of, for or incidental to collection thereof.
11. INDEPENDENT LIABILITY. Guarantor hereby agrees that one or more
successive or concurrent actions may be brought hereon against Guarantor, in the
same action in which Borrower may be sued or in separate actions, as often as
deemed advisable by Coast. The liability of Guarantor hereunder is exclusive
and independent of any other guaranty of any or all of the Indebtedness whether
executed by Guarantor or by any other guarantor (including without limitation
any other persons signing this Guaranty). The liability of Guarantor hereunder
shall not be affected, revoked, impaired, or reduced by any one or more of the
following: (a) the fact that the Indebtedness exceeds the maximum amount of
Guarantor's liability, if any, specified herein or elsewhere (and no agreement
specifying a maximum amount of Guarantor's liability shall be enforceable unless
set forth in a writing signed by Coast or set forth in this Guaranty); or
(b) any direction as to the application of payment by Borrower or by any other
party; or (c) any other continuing or restrictive guaranty or undertaking or any
limitation on the liability of any other guarantor (whether under this Guaranty
or under any other agreement); or (d) any payment on or reduction of any such
other guaranty or undertaking; or (e) any revocation, amendment, modification or
release of any such other guaranty or undertaking; or (f) any dissolution or
termination of, or increase, decrease, or change in membership of any Guarantor
which is a partnership. Guarantor hereby expressly represents that he was not
induced to give this Guaranty by the fact that there are or may be other
guarantors either under this Guaranty or otherwise, and Guarantor agrees that
any release of any one or more of such other guarantors shall not release
Guarantor from his obligations hereunder either in full or to any lesser extent.
If Guarantor is a married person, Guarantor hereby expressly agrees that
recourse may be had against his or her separate property for all of his or her
obligations hereunder.
12. FINANCIAL CONDITION OF BORROWER. Guarantor is fully aware of the
financial condition of Borrower and is executing and delivering this Guaranty at
Borrower's request and based solely upon his own independent investigation of
all matters pertinent hereto, and Guarantor is not relying in any manner upon
any representation or statement of Coast with respect thereto. Guarantor
represents and warrants that he is in a position to obtain, and Guarantor hereby
assumes
-8-
full responsibility for obtaining, any additional information concerning
Borrower's financial condition and any other matter pertinent hereto as
Guarantor may desire, and Guarantor is not relying upon or expecting Coast to
furnish to him any information now or hereafter in Coast's possession concerning
the same or any other matter. By executing this Guaranty, Guarantor knowingly
accepts the full range of risks encompassed within a contract of continuing
guaranty, which risks Guarantor acknowledges include without limitation the
possibility that Borrower will incur additional Indebtedness for which Guarantor
will be liable hereunder after Borrower's financial condition or ability to pay
such Indebtedness has deteriorated and/or after bankruptcy or insolvency
proceedings have been commenced by or against Borrower. Guarantor shall have no
right to require Coast to obtain or disclose any information with respect to the
Indebtedness, the financial condition or character of Borrower, the existence of
any collateral or security for any or all of the Indebtedness, the filing by or
against Borrower of any bankruptcy or insolvency proceeding, the existence of
any other guaranties of all or any part of the Indebtedness, any action or
non-action on the part of Coast, Borrower, or any other person, or any other
matter, fact, or occurrence.
13. REPORTS AND FINANCIAL STATEMENTS OF GUARANTOR. Guarantor shall, at
its sole cost and expense, at any time and from time to time, prepare or cause
to be prepared, and provide to Coast upon Coast's request (i) such financial
statements and reports concerning Guarantor for such periods of time as Coast
may designate, (ii) any other information concerning Guarantor's business,
financial condition or affairs as Coast may request, and (iii) copies of any and
all foreign, federal, state and local tax returns and reports of or relating to
Guarantor as Coast may from time to time request. Guarantor hereby
intentionally and knowingly waives any and all rights and privileges it may have
not to divulge or deliver said tax returns, reports and other information which
are requested by Coast hereunder or in any litigation in which Coast may be
involved relating directly or indirectly to Borrower or to Guarantor. Guarantor
further agrees immediately to give written notice to Coast of any adverse change
in Guarantor's financial condition and of any condition or event which
constitutes an Event of Default under this Guaranty. All reports and
information furnished to Coast hereunder shall be complete, accurate and correct
in all respects. Whenever requested, Guarantor shall further deliver to Coast a
certificate signed by Guarantor (and, if Guarantor is a partnership, by all
general partners of Guarantor, in their individual capacities, and, if Guarantor
is a corporation, by the president and secretary of Guarantor, in their
individual capacities) warranting and representing that all reports, financial
statements and other documents and information delivered or caused to be
delivered to Coast under this Guaranty, are complete, correct and thoroughly and
accurately present the financial condition of Guarantor, and that there exists
on the date of delivery of said certificate to Coast no condition or event which
constitutes an Event of Default under this Guaranty.
14. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants that (i) it is in Guarantor's direct interest to assist Borrower in
procuring credit, because Borrower is an affiliate of Guarantor, furnishes goods
or services to Guarantor, purchases or acquires goods or services from
Guarantor, and/or otherwise has a direct or indirect corporate or business
relationship with Guarantor, (ii) this Guaranty has been duly and validly
authorized, executed and delivered and constitutes the valid and binding
obligation of Guarantor, enforceable in accordance with its terms, and (iii) the
execution and delivery of this Guaranty does not
-9-
violate or constitute a default under (with or without the giving of notice, the
passage of time, or both) any order, judgment, decree, instrument or agreement
to which Guarantor is a party or by which it or its assets are affected or
bound.
15. COSTS. Whether or not suit be instituted, Guarantor agrees to
reimburse Coast on demand for all reasonable attorneys' fees and all other
reasonable costs and expenses incurred by Coast in enforcing this Guaranty, or
arising out of or relating in any way to this Guaranty, or in enforcing any of
the Indebtedness against Borrower, Guarantor, or any other person, or in
connection with any property of any kind securing all or any part of the
Indebtedness. Without limiting the generality of the foregoing, and in addition
thereto, Guarantor shall reimburse Coast on demand for all reasonable attorneys'
fees and costs Coast incurs in any way relating to Guarantor, Borrower or the
Indebtedness, in order to: obtain legal advice; enforce or seek to enforce any
of its rights; commence, intervene in, respond to, or defend any action or
proceeding; file, prosecute or defend any claim or cause of action in any action
or proceeding (including without limitation any probate claim, bankruptcy claim,
third-party claim, secured creditor claim, reclamation complaint, and complaint
for relief from any stay under the Bankruptcy Code or otherwise); protect,
obtain possession of, sell, lease, dispose of or otherwise enforce any security
interest in or lien on any property of any kind securing any or all of the
Indebtedness; or represent Coast in any litigation with respect to Borrower's or
Guarantor's affairs. In the event either Coast or Guarantor files any lawsuit
against the other predicated on a breach of this Guaranty, the prevailing party
in such action shall be entitled to recover its attorneys' fees and costs of
suit from the non-prevailing party.
16. NOTICES. Any notice which a party shall be required or shall desire
to give to the other hereunder (except for notice of revocation, which shall be
governed by Section 10 of this Guaranty) shall be given by personal delivery or
by telecopier or by depositing the same in the United States mail, first class
postage pre-paid, addressed to Coast at its address set forth in the heading of
this Guaranty and to Guarantor at his address set forth under his signature
hereon, and such notices shall be deemed duly given on the date of personal
delivery or one day after the date telecopied or 3 business days after the date
of mailing as aforesaid. Coast and Guarantor may change their address for
purposes of receiving notices hereunder by giving written notice thereof to the
other party in accordance herewith. Guarantor shall give Coast immediate
written notice of any change in his address.
17. CLAIMS. Guarantor agrees that any claim or cause of action by
Guarantor against Coast, or any of Coast's directors, officers, employees,
agents, accountants or attorneys, based upon, arising from, or relating to this
Guaranty, or any other present or future agreement between Coast and Guarantor
or between Coast and Borrower, or any other transaction contemplated hereby or
thereby or relating hereto or thereto, or any other matter, cause or thing
whatsoever, whether or not relating hereto or thereto, occurred, done, omitted
or suffered to be done by Coast, or by Coast's directors, officers, employees,
agents, accountants or attorneys, whether sounding in contract or in tort or
otherwise, shall be barred unless asserted by Guarantor by the commencement of
an action or proceeding in a court of competent jurisdiction within Los Angeles
County, California. This provision shall survive any termination of this
Guaranty or any other agreement.
18. CONSTRUCTION; SEVERABILITY. If more than one person has executed this
Guaranty, the term "Guarantor" as used herein shall be deemed to refer to all
and any one or more such
-10-
persons and their obligations hereunder shall be joint and several. Without
limiting the generality of the foregoing, if more than one person has executed
this Guaranty, this Guaranty shall in all respects be interpreted as though each
person signing this Guaranty had signed a separate Guaranty, and references
herein to "other guarantors" or words of similar effect shall include without
limitation other persons signing this Guaranty. As used in this Guaranty, the
term "property" is used in its most comprehensive sense and shall mean all
property of every kind and nature whatsoever, including without limitation real
property, personal property, mixed property, tangible property and intangible
property. Words used herein in the masculine gender shall include the neuter
and feminine gender, words used herein in the neuter gender shall include the
masculine and feminine, words used herein in the singular shall include the
plural and words used in the plural shall include the singular, wherever the
context so reasonably requires. If any provision of this Guaranty or the
application thereof to any party or circumstance is held invalid, void,
inoperative or unenforceable, the remainder of this Guaranty and the application
of such provision to other parties or circumstances shall not be affected
thereby, the provisions of this Guaranty being severable in any such instance.
19. GENERAL PROVISIONS. Coast shall have the right to seek recourse
against Guarantor to the full extent provided for herein and in any other
instrument or agreement evidencing obligations of Guarantor to Coast, and
against Borrower to the full extent of the Indebtedness. No election in one
form of action or proceeding, or against any party, or on any obligation, shall
constitute a waiver of Coast's right to proceed in any other form of action or
proceeding or against any other party. The failure of Coast to enforce any of
the provisions of this Guaranty at any time or for any period of time shall not
be construed to be a waiver of any such provision or the right thereafter to
enforce the same. All remedies hereunder shall be cumulative and shall be in
addition to all rights, powers and remedies given to Coast by law or under any
other instrument or agreement. Time is of the essence in the performance by
Guarantor of each and every obligation under this Guaranty. If Borrower is a
corporation, partnership or other entity, Guarantor hereby agrees that Coast
shall have no obligation to inquire into the power or authority of Borrower or
any of its officers, directors, partners, or agents acting or purporting to act
on its behalf, and any Indebtedness made or created in reliance upon the
professed exercise of any such power or authority shall be included in the
Indebtedness guaranteed hereby. This Guaranty is the entire and only agreement
between Guarantor and Coast with respect to the guaranty of the Indebtedness of
Borrower by Guarantor, and all representations, warranties, agreements, or
undertakings heretofore or contemporaneously made, which are not set forth
herein, are superseded hereby. No course of dealings between the parties, no
usage of the trade, and no parol or extrinsic evidence of any nature shall be
used or be relevant to supplement or explain or modify any term or provision of
this Guaranty. There are no conditions to the full effectiveness of this
Guaranty. The terms and provisions hereof may not be waived, altered, modified,
or amended except in a writing executed by Guarantor and a duly authorized
officer of Coast. All rights, benefits and privileges hereunder shall inure to
the benefit of and be enforceable by Coast and its successors and assigns and
shall be binding upon Guarantor and his heirs, executors, administrators,
personal representatives, successors and assigns. Neither the death of
Guarantor nor notice thereof to Coast shall terminate this Guaranty as to his
estate, and, notwithstanding the death of Guarantor or notice thereof to Coast,
this Guaranty shall continue in full force and effect with respect to all
Indebtedness, including without
-11-
limitation Indebtedness incurred or created after the death of Guarantor and
notice thereof to Coast. Section headings are used herein for convenience only.
Guarantor acknowledges that the same may not describe completely the subject
matter of the applicable Section, and the same shall not be used in any manner
to construe, limit, define or interpret any term or provision hereof.
20. GOVERNING LAW; VENUE AND JURISDICTION. This instrument and all acts
and transactions pursuant or relating hereto and all rights and obligations of
the parties hereto shall be governed, construed, and interpreted in accordance
with the internal laws of the State of California. In order to induce Coast to
accept this Guaranty, and as a material part of the consideration therefor,
Guarantor (i) agrees that all actions or proceedings relating directly or
indirectly hereto shall, at the option of Coast, be litigated in courts located
within Los Angeles County, California, (ii) consents to the jurisdiction of any
such court and consents to the service of process in any such action or
proceeding by personal delivery or any other method permitted by law; and
(iii) waives any and all rights Guarantor may have to transfer or change the
venue of any such action or proceeding.
21. SECURITY. The obligations of Guarantor hereunder are secured by that
certain Loan and Security Agreement dated as of even date herewith between
Guarantor and Coast.
22. MUTUAL WAIVER OF RIGHT TO JURY TRIAL. COAST AND GUARANTOR HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION, CLAIM, LAWSUIT OR PROCEEDING
BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO: (i) THIS GUARANTEE OR ANY
SUPPLEMENT OR AMENDMENT THERETO; OR (ii) ANY OTHER PRESENT OR FUTURE INSTRUMENT
OR AGREEMENT BETWEEN COAST AND GUARANTOR ; OR (iii) ANY BREACH, CONDUCT, ACTS OR
OMISSIONS OF COAST OR GUARANTOR OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSON AFFILIATED WITH OR REPRESENTING
COAST OR GUARANTOR; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE.
23. RECEIPT OF COPY. Guarantor acknowledges receipt of a copy of this
Guaranty.
BY: POLY STYLE INDUSTRIES, INC.
By: /s/ Xxxx Xxxxxx
-----------------------------------
(Please sign here)
Xxxx Xxxxxx
-----------------------------------
(Please print or type name here)
Its: CEO/Secretary
-----------------------------------
(Please print title here)
-12-
