Exhibit 10.4
GUARANTY
THIS GUARANTY (this “ Guaranty
”) is made as
of the 24 day of March, 2008, by
US DRY CLEANING
CORPORATION (the “ Guarantor ”)
, to and with
NEWSTAR FINANCIAL,
INC. , a Delaware corporation with an address at
500 Boylston Street,
Suite 1600, Boston, Massachusetts 02116 (hereinafter
referred to as the “ Lender
”).
W I T N E S S E T
H T H A T:
WHEREAS,
Lender, Guarantor, USDC Portsmouth, Inc. (the “
Borrower ”)
have entered in a certain Secured Party Sale Agreement of even
date, pursuant to which the Borrower agreed to pay a portion
of the purchase price thereunder by executing and delivering a
certain Time Note of even date herewith issued by the Borrower
to the Lender in the principal amount of $975,000 (as the same
may be amended, modified, extended, supplemented or replaced
from time to time, the “ Time Note
”).
WHEREAS, Guarantor is
the sole stockholder of the Borrower and therefore the Guarantor
has a substantial interest in the making of the loan evidenced by
the Time Note.
WHEREAS, to induce
the Lender to make the loan evidenced by the Time Note, the
Guarantor has agreed to guarantee the payment of the indebtedness
and obligations of the Borrower to the Lenders under the Time
Note.
N OW,
THEREFORE, in order to induce the Lender to enter into the
aforesaid loan transactions and in consideration of the premises
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby
covenants and agrees as follows:
Section
1 .
Definitions . Capitalized terms
used in this Agreement without definition have the identical
meanings assigned to them in the Time Note.
Section 2. Agreement
to Guaranty . The Guarantor, as primary obligor
and not merely as surety, hereby, absolutely, unconditionally and
irrevocably, guarantees: (i) the due and punctual payment in
full (and not merely the collectibility
) by the Borrower of
the principal of the
Time Note, and the interest thereon, when due and payable,
according to the terms of the Time Note, whether at stated
maturity, by
required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. § 362(a)) , (ii) all costs of
collection and expenses, including reasonable attorneys’ fees
incurred by the Lender to collect the Guaranteed Obligations from
any party liable for the payment thereof, whether as maker,
endorser, guarantor, surety or otherwise, or in protecting,
enforcing or realizing upon the Lender’s rights in connection
with any collateral securing the Guaranteed Obligations or any
guaranty thereof ( all of the indebtedness,
obligations and liabilities described in this Section 2
are collectively
hereinafter called the “ Guaranteed Obligations
”).
Section
3 . Further
Agreements. The Guarantor also
agrees: that this Guaranty shall not be impaired
by any modification, release or other alteration of any of
the Guaranteed Obligations or arrangements whatsoever with
the Borrower or anyone else; that the liability of the
Guarantor is direct and unconditional and may be enforced
without requiring the Lender first to resort to any other
right, remedy or security; that if the Borrower or Guarantor
should at any time become insolvent or make a general
assignment, or if any petition in bankruptcy or any
insolvency or reorganization proceedings shall be filed or
commenced by, against or in respect of the Borrower or the
Guarantor, any and all Guaranteed Obligations of the
Guarantor shall, at the Lender’s option, forthwith
become due and payable without notice; that the
Lender’s books and records showing the account
between the Lender and the Borrower shall be admissible in
any action or proceedings, and shall constitute prima facie
proof thereof; that this Guaranty is a continuing Guaranty;
that nothing shall discharge or satisfy the liability of the
Guarantor hereunder except the full payment and performance
of all of the Borrower’s said debts and Guaranteed
Obligations to the Lender with interest; and that any and all
present and future debts and obligations of the Borrower to
the Guarantor are hereby waived and postponed in favor of and
subordinated to the full payment and performance of the
Obligations.
Section
4.
Waivers
by Guarantor. The Guarantor waives,
for the benefit
of Lender: (a) any right to require the Lender, as a
condition of payment or performance by the Guarantor, to (i)
proceed against the Borrower, any other guarantor of
the Guaranteed Obligations or any other
Person, (ii) proceed against or exhaust any security held
from the Borrower, any such other guarantor or any other
Person, (iii) proceed against or have resort to any balance
of any deposit account or credit on the books of the Lender
in favor of the Borrower or any other Person, or (iv) pursue
any other remedy in the power of the Lender whatsoever; (b)
any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of the Borrower
or any other guarantor including any defense based on or
arising out of the lack of validity or the unenforceability
of the Guaranteed Obligations or any
agreement or instrument relating thereto or by reason of the
cessation of the liability of the Borrower or any other
guarantor from any cause other than payment or set-off in
full of the Guaranteed Obligations; (c) any defense based
upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor
in other respects more burdensome than that of the principal;
(d) any defense based upon the Lender’s errors or
omissions in the administration of the Guaranteed
Obligations, except behavior which amounts to bad faith,
willful misconduct or gross negligence; (e) (i) any
principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms hereof and
any legal
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