EXHIBIT 10.24
FTC
COMMERCIAL CORP.
GUARANTY
Los Angeles, California
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, BLUE HOLDINGS, INC. (hereinafter referred to as
"Guarantor") hereby unconditionally and irrevocably delivers this Guaranty to
FTC COMMERICAL CORP. (hereinafter referred to as "FTC") and hereby
unconditionally and irrevocably guarantees to FTC, and any transferee of this
Guaranty or of any liability guaranteed hereby, the full and prompt payment and
performance of all present and future liabilities, obligations and indebtedness
of ANTIK DENIM, LLC (hereinafter referred to as the "Principal") to FTC
irrespective of their nature, the time they arise, when due, whether absolute or
contingent, liquidated or unliquidated, legal or equitable, whether the
Principal is liable individually or jointly or with others, and whether recovery
thereof is or becomes barred by a statute of limitations or otherwise becomes
unenforceable (individually a "liability" and collectively the "liabilities").
This Guaranty is a guaranty of prompt payment and performance (and not merely a
guaranty of collection). If any liability guaranteed hereby is not paid or
performed when due, Guarantor hereby agrees to and will immediately pay or
perform same, without resort by the holder thereof to any other person or party.
The liabilities include all renewals or extensions in whole or in part of any of
liabilities and include all present and future obligations and liabilities of
the Principal to FTC under the Factoring Agreement dated 10/18/2004, the
Inventory Loan Facility Agreement dated July 25, 2005 and various related
instruments, documents and agreements, as amended, modified or supplemented from
time to time (hereinafter collectively and separately referred to as the
"Factoring Agreements") between FTC and the Principal and the full performance
by Principal of all things to be done by Principal pursuant to the Factoring
Agreements and shall further include any and all damages, losses, costs,
interest, charges, attorney's fees and expenses of every kind, nature and
description suffered or incurred by FTC, arising in any manner out of or in any
way connected with, or growing out of, the liabilities. As used herein, the term
person includes natural persons, partnerships, limited liability companies,
trusts, and incorporated and unincorporated entities and associations of every
kind.
The obligation of Guarantor to FTC hereunder is primary, unlimited, absolute and
unconditional. Any payment of Guarantor hereunder may be applied to any of the
liabilities which FTC may choose. The obligation of Guarantor hereunder is in
addition to and shall not prejudice or be prejudiced by any other agreement,
instrument, surety, security or guaranty (including any agreement, instrument,
surety or guaranty signed by Guarantor) which FTC may now or hereafter hold
relative to any of the liabilities. Guarantor, if more than one, shall be
jointly and severally liable hereunder and the term "Guarantor" wherever used
herein shall mean the undersigned or any one or more of them. Any entity signing
this Guaranty shall be bound hereby, whether or not any other entity signs this
Guaranty at any time.
FTC and Guarantor acknowledge that there may be future advances by FTC to the
Principal (although FTC may be under no obligation to make such advances) and
that the number and amount of the liabilities are unlimited and may fluctuate
from time to time hereafter. Guarantor expressly agrees that Guarantor's
obligation hereunder shall remain absolute, primary and unconditional
notwithstanding such future advances and fluctuations, if any, and agree that,
in any event, this Guaranty is a continuing guaranty and shall remain in force
at all times hereafter, whether there are any liabilities outstanding or not,
until all originals hereof are returned to Guarantor by FTC or until a written
notice from Guarantor terminating this Guaranty has been received and
acknowledged by FTC, but such termination shall not release Guarantor from
liability for payment of (i) any and all liabilities (as hereinbefore defined)
then in existence, (ii) any renewals or extensions thereof, in whole or in part,
whether such renewals or extensions are made before or after such termination,
and (iii) any damages, losses, costs, interest, charges, attorney's fees or
expenses then or thereafter incurred in connection with said liabilities or any
renewals or extensions thereof.
As security for the payment of the liabilities and the obligations of Guarantor
hereunder, Guarantor hereby assign and grant a security interest to FTC in (i)
any existing or hereafter created lien or security interest in favor of
Guarantor in any property of the Principal; and (ii) all property of Guarantor
in or coming into the possession, control, or custody of FTC, or in which FTC
1
has or hereafter acquires a lien, security interest, or other right. Guarantor
hereby agree that any rights Guarantor may now or hereafter have in any
collateral securing any of the liabilities or against the Principal or any
property of the Principal, including rights arising by virtue of subrogation or
otherwise, shall be subordinate and junior to FTC's rights to said collateral or
property and to FTC's indefeasible right to the prior payment of the
liabilities. Guarantor further authorize FTC, without notice or demand, to apply
any indebtedness due or to become due to Guarantor from FTC in satisfaction of
any of the liabilities and Guarantor's obligations hereunder, including, but not
limited to, the right to set-off against any deposits of Guarantor with FTC.
Guarantor hereby consents and agrees that, at any time or times, without notice
to or further approval of Guarantor or the Principal, and without in any way
affecting the obligations of Guarantor hereunder, FTC may, with or without
consideration, (i) release, compromise, or agree not to sue, in whole or in
part, the Principal, Guarantor or any other obligor, guarantor, endorser or
surety of the Factoring Agreements any of the liabilities; (ii) waive, rescind,
renew, extend, modify, increase, decrease, delete, terminate, amend; or
accelerate in accordance with its terms, either in whole or in part, the
Factoring Agreements or any of the terms thereof, any of the liabilities, or any
agreement, covenant, condition, or obligation of or with the Principal,
Guarantor, or any other obligor, guarantor, endorser or surety upon the
Factoring Agreements and any of the liabilities; and (iii) apply any payment
received from the Principal, Guarantor or any other obligor, guarantor, endorser
or surety upon any of the liabilities to any of the liabilities which FTC may
choose.
Guarantor hereby consents and agrees that FTC may at any time, either with or
without consideration, surrender, release or receive any property or other
security of any kind or nature whatsoever held by it or any person on its behalf
or for its account securing any indebtedness of the Principal or any liability,
or substitute any collateral so held by FTC for other collateral of like kind,
or of any kind, without notice to or further consent from Guarantor, and such
surrender, receipt, release or substitution shall not in any way affect the
obligation of Guarantor hereunder. FTC shall have full authority to adjust,
compromise and receive less than the amount due upon any such collateral, and
may enter into any accord and satisfaction agreement with respect to the same as
may seem advisable to FTC without affecting the obligation of Guarantor
hereunder, which shall remain absolute, primary and unconditional. FTC shall be
under no duty to undertake to collect upon such collateral or any part thereof,
and shall not be liable for any negligence or mistake in judgment in handling,
disposing of, obtaining, or failing to collect upon, or perfecting a security
interest in, any such collateral. The obligation of Guarantor to FTC hereunder
shall remain absolute and unconditional notwithstanding any failure to perfect
or to realize upon any security interest or collateral securing any of the
liabilities, including but not limited to any security interest granted by
Guarantor or the Principal's liabilities under the Factoring Agreements, and
notwithstanding the unenforceability of all or any part of the Factoring
Agreements and any of the liabilities.
This Guaranty covers all liabilities to FTC actually or purported to be made on
behalf of the Principal by any officer, agent or partner of said Principal,
without regard to the actual authority of such officer, agent or partner to bind
the Principal, and without regard to the capacity of the Principal or whether
the organization or charter of the Principal is in any way defective.
Guarantor hereby waives notice of acceptance of this Guaranty and the Factoring
Agreements, and of the creation, extension or renewal of any liability of the
Principal to which either relates and of any default by the Principal. Guarantor
hereby waives presentment, demand, protests and notice of dishonor of any of the
liabilities, and hereby waive any failure to promptly commence suit against any
party thereto or liable thereon and give any notice to or make any claim or
demand upon Guarantor or the Principal. No act, failure to act, or omission of
any kind on the part of Guarantor, the Principal, FTC or any other person shall
be a legal or equitable discharge or release of Guarantor from their obligations
hereunder unless agreed to hereafter in writing by FTC. This Guaranty shall not
be affected by any change which may arise by reason of the dissolution,
liquidation, merger, consolidation, reorganization or death of Guarantor, or of
any member of Guarantor, or of the Principal. Guarantor further agrees that this
instrument shall continue to be effective or be reinstated as the case may be,
if at any time payment, or any part thereof, of the principal of or interest on
any of the liabilities is rescinded or must otherwise be restored or returned by
FTC upon the insolvency, bankruptcy or reorganization of the Principal, or
otherwise, all as though such payment has not been made. All obligations of the
Principal to Guarantor which presently or in the future may exist are hereby
subordinated to the liabilities.
To the maximum extent permitted by law, Guarantor waives (a) all of the rights
which may be waived by a guarantor pursuant to the provisions of Section 2856 of
the Civil Code of the State of California, (b) all rights and defenses arising
out of an election of remedies (c) all rights and defenses described in Sections
2787 to 2855, inclusive, of the Civil Code of the State of California, (d) all
rights to require FTC to proceed against, enforce or exhaust any security for
the liabilities or to marshal assets or to pursue any other remedy; (e) all
defenses arising by reason of any disability or other defense of the Principal,
the cessation for any reason of the liability of the Principal, any defense that
any other indemnity, guaranty or security was to be
2
obtained, any claim that FTC has made Guarantor's obligations more burdensome or
more burdensome than the Principal's obligations, and the use of any proceeds of
the liabilities other than as intended or understood by Guarantor or the
Principal; (f) all notices or demands to which Guarantor may otherwise be
entitled; (g) all conditions precedent to the effectiveness of this Guaranty;
(h) all rights to file a claim in connection with the liabilities in any
bankruptcy, reorganization or other insolvency proceeding involving the
Principal; (i) all rights to require FTC to enforce any of its remedies; and (j)
until the liabilities are satisfied or fully paid with such payment not subject
to return: (i) all rights of subrogation, contribution, indemnification or
reimbursement, (ii) all rights of recourse to any assets or property of the
Principal, or to any collateral or credit support for the liabilities, (iii) all
rights to participate in or benefit from any security or credit support FTC may
have or acquire, and (iv) all rights, remedies and defenses Guarantor may have
against the Principal. Guarantor waives all rights and defenses that Guarantor
may have by reason of any election of remedies by FTC, even though such election
may destroy any rights of subrogation which Guarantor may have, and any rights
or defenses Guarantor may have because the Principal's debt or this Guaranty is
secured by real property or an estate for years, including but not limited to
any rights or defenses based upon, directly or indirectly, the application of
Section 580a, 580b, 580d or 726 of the Code of Civil Procedure to any of the
liabilities or this Guaranty.
This Guaranty shall bind and inure to the benefit of FTC, and its successors and
assigns, and likewise shall bind Guarantor, and its successors and assigns. FTC
shall have the right at any time to assign the liabilities and this Guaranty,
without notice to or the consent of Guarantor or the Principal, and may disclose
to any prospective or actual purchaser of all or part of the liabilities any and
all information FTC has or acquires concerning Guarantor, this Guaranty, or any
security for this Guaranty. Guarantor expressly agrees, acknowledges, represents
and warrants that FTC's entering into the Factoring Agreements with the
Principal is a direct and significant benefit to Guarantor.
If any legal action or actions are instituted by FTC to enforce any of its
rights against Guarantor hereunder, then Guarantor agrees to pay FTC all
expenses incurred by FTC relative to such legal action or actions, including,
but not limited to, court costs and attorneys' fees, plus fifteen percent (15%)
of the total amount of principal and accrued interest then due FTC hereunder.
FTC is authorized and empowered to proceed against Guarantor without joining the
Principal. All of said parties may be sued together, or any of them may be sued
separately without first or contemporaneously suing the others. There shall be
no duty or obligation upon FTC, whether by notice or otherwise, (i) to proceed
against the Principal, Guarantor, any other guarantor or surety or any security,
(ii) to initiate any proceeding or exhaust any remedy against the Principal,
Guarantor, any other guarantor or surety or any security, or (iii) to give any
notice to Guarantor or the Principal, whatsoever, before bringing suit,
exercising any rights to any collateral or security, or instituting proceedings
of any kind against the Principal or Guarantor.
Guarantor hereby ratifies, confirms and adopts all the terms, conditions,
agreements and stipulations of the Factoring Agreements and all notes and other
evidences of the liabilities heretofore or hereafter executed. Without in any
way limiting the generality of the foregoing, Guarantor waives and renounces any
and all exemption rights it may have under or by virtue of the Constitution or
laws of California, any other state, or the United States, as against the
obligation hereby created; and Guarantor does hereby each transfer, convey and
assign, and direct any trustee in Bankruptcy or receiver to deliver to FTC or
holder hereof, a sufficient amount of property or money in any exemption that
may be allowed to Guarantor to pay any liability guaranteed hereby in full and
all costs of collection. Guarantor also waives and renounces any defense to any
of the liabilities which may be available to or could be asserted by the
Principal, except for payment. Guarantor hereby represents and warrants that
this Guaranty has been duly authorized by Guarantor, that the person(s)
executing and delivering this Guaranty on behalf of Guarantor have full
authority to do so and that this Guaranty is a valid and binding legal
obligation of Guarantor, enforceable according to its terms.
All FTC's rights and remedies are cumulative and those granted hereunder are in
addition to any rights and remedies available to FTC under law. If any provision
of this Guaranty or the application thereof to any person or circumstances
shall, to any extent, be invalid or unenforceable, the remainder of this
Guaranty or the application of such provision to persons or circumstances other
than those as to which it is held invalid or unenforceable shall not be affected
thereby, and each provision of this Guaranty shall be valid and enforceable to
the full extent permitted by law. The failure or forbearance of FTC to exercise
any right hereunder, or otherwise granted to it by law or another agreement,
shall not affect the obligation of Guarantor hereunder and shall not constitute
a waiver of said right. This Guaranty contains the entire agreement between the
parties, and no provision hereof may be waived, modified, or altered except by a
writing executed by Xxxxxxxxx and FTC. There is no understanding that any person
other than or in addition to Guarantor shall execute this Guaranty.
XXXXXXXXX'S EXECUTION OF THIS GUARANTY WAS NOT BASED UPON ANY FACTS OR MATERIALS
PROVIDED BY FTC, NOR WAS GUARANTOR INDUCED TO EXECUTE THIS GUARANTY BY ANY
3
REPRESENTATION, STATEMENT OR ANALYSIS MADE BY FTC. XXXXXXXXX ACKNOWLEDGES AND
AGREES THAT XXXXXXXXX ASSUMES SOLE RESPONSIBILITY FOR INDEPENDENTLY OBTAINING
ANY INFORMATION OR REPORTS DEEMED ADVISABLE BY GUARANTOR WITH REGARD TO THE
PRINCIPAL OR GUARANTOR, AND GUARANTOR AGREES TO RELY SOLELY ON THE INFORMATION
OR REPORTS SO OBTAINED IN REACHING ANY DECISION TO EXECUTE OR NOT TO TERMINATE
THIS GUARANTY. XXXXXXXXX ACKNOWLEDGES AND AGREES THAT FTC IS AND SHALL BE UNDER
NO OBLIGATION NOW OR IN THE FUTURE TO FURNISH ANY INFORMATION TO GUARANTOR
CONCERNING THE PRINCIPAL OR THE LIABILITIES, AND THAT FTC DOES NOT AND SHALL NOT
BE DEEMED IN THE FUTURE TO WARRANT THE ACCURACY OF ANY INFORMATION OR
REPRESENTATION CONCERNING THE PRINCIPAL, GUARANTOR OR ANY OTHER PERSON WHICH MAY
INDUCE GUARANTOR TO EXECUTE OR NOT TO TERMINATE THIS GUARANTY.
This Guaranty and its performance, interpretation and enforcement shall in all
respects be governed by the law of the State of California, without regard to
its conflicts of laws principles. Guarantor consents to the jurisdiction of the
state or federal courts located in California.
XXXXXXXXX AND FTC HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING,
COUNTERCLAIM OR CROSS-CLAIM BROUGHT BY OR AGAINST IT ON ANY MATTERS WHATSOEVER,
IN CONTRACT OR IN TORT, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
GUARANTY.
IN WITNESS HEREOF and in agreement hereto Guarantor has by its duly authorized
person(s) executed this Guaranty on this ______ day of July, 2005.
BLUE HOLDINGS, INC.
By: /S/ XXXX XXXX
----------------------------------
Print Name: XXXX XXXX
Title:__________________________________
ACCEPTED:
FTC COMMERCIAL CORP.
By: /S/ XXXXXXX X. XXXXXXX
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
4
