Exhibit 10.07
GUARANTY
March 31, 2006
Wachovia Capital Finance Corporation (Western)
251 South Lake Avenue, Suite 900
Pasadena, California 91101
     Re:     ECOST.COM, INC., a Delaware corporation (“Borrower”)
Ladies and Gentlemen:
     Wachovia Capital Finance Corporation (Western) (“Lender”) and Borrower have
entered into certain financing arrangements pursuant to which Lender may make
loans and advances and provide other financial accommodations to Borrower as set
forth in the Loan and Security Agreement, dated August 3, 2004 as amended, by
and between Borrower and Lender (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
“Loan Agreement”), and other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto, including, but not limited to, this Guaranty (all of the
foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the “Financing Agreements”).
     Due to the close business and financial relationships between Borrower and
the undersigned (“Guarantor”), in consideration of the benefits which will
accrue to Guarantor and as an inducement for and in consideration of Lender
making loans and advances and providing other financial accommodations to
Borrower pursuant to the Loan Agreement and the other Financing Agreements,
Guarantor hereby agrees in favor of Lender as follows:
     1. Guaranty.
          (a) Guarantor absolutely and unconditionally guarantees and agrees to
be liable for the full and indefeasible payment and performance when due of the
following (all of which are collectively referred to herein as the “Guaranteed
Obligations”): (i) all obligations, liabilities and indebtedness of any kind,
nature and description of Borrower to Lender and/or its affiliates, including
principal, interest, charges, fees, costs and expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise, whether arising
under the Loan Agreement, the other Financing Agreements or otherwise, whether
now existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of the Loan Agreement or after the commencement of
any case with respect to Borrower under the United States Bankruptcy Code or any
similar statute (including, without limitation, the payment of interest and
other amounts, which would accrue and become due but for the commencement of
such case, whether or not such amounts are allowed or allowable in whole or in
part in any such case and including loans, interest, fees, charges and expenses
related thereto and all other obligations of Borrower or its successors to
Lender arising after the commencement of such

 

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case), whether direct or indirect, absolute or contingent, joint or several, due
or not due, primary or secondary, liquidated or unliquidated, secured or
unsecured, and however acquired by Lender and (ii) all expenses (including,
without limitation, attorneys’ fees and legal expenses) incurred by Lender in
connection with the preparation, execution, delivery, recording, administration,
collection, liquidation, enforcement and defense of Borrower’s obligations,
liabilities and indebtedness as aforesaid to Lender, the rights of Lender in any
collateral or under this Guaranty and all other Financing Agreements or in any
way involving claims by or against Lender directly or indirectly arising out of
or related to the relationships between Borrower, Guarantor or any other Obligor
(as hereinafter defined) and Lender, whether such expenses are incurred before,
during or after the initial or any renewal term of the Loan Agreement and the
other Financing Agreements or after the commencement of any case with respect to
Borrower or Guarantor under the United States Bankruptcy Code or any similar
statute.
          (b) This Guaranty is a guaranty of payment and not of collection.
Guarantor agrees that Lender need not attempt to collect any Guaranteed
Obligations from Borrower, Guarantor or any other Obligor or to realize upon any
collateral, but may require Guarantor to make immediate payment of all of the
Guaranteed Obligations to Lender when due, whether by maturity, acceleration or
otherwise, or at any time thereafter. Lender may apply any amounts received in
respect of the Guaranteed Obligations to any of the Guaranteed Obligations, in
whole or in part (including attorneys’ fees and legal expenses incurred by
Lender with respect thereto or otherwise chargeable to Borrower or Guarantor)
and in such order as Lender may elect.
          (c) Payment by Guarantor shall be made to Lender at the office of
Lender from time to time on demand as Guaranteed Obligations become due.
Guarantor shall make all payments to Lender on the Guaranteed Obligations free
and clear of, and without deduction or withholding for or on account of, any
setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,
withholding, restrictions or conditions of any kind. One or more successive or
concurrent actions may be brought hereon against Guarantor either in the same
action in which Borrower or any other Obligor is sued or in separate actions. In
the event any claim or action, or action on any judgment, based on this Guaranty
is brought against Guarantor, Guarantor agrees not to deduct, set-off, or seek
any counterclaim for or recoup any amounts which are or may be owed by Lender to
Guarantor.
     2. Waivers and Consents.
          (a) Notice of acceptance of this Guaranty, the making of loans and
advances and providing other financial accommodations to Borrower and
presentment, demand, protest, notice of protest, notice of nonpayment or default
and all other notices to which Borrower or Guarantor is entitled are hereby
waived by Guarantor. Guarantor also waives notice of and hereby consents to,
(i) any amendment, modification, supplement, extension, renewal, or restatement
of the Loan Agreement and any of the other Financing Agreements, including,
without limitation, extensions of time of payment of or increase or decrease in
the amount of any of the Guaranteed Obligations, the interest rate, fees, other
charges, or any collateral, and the guaranty made herein shall apply to the Loan
Agreement and the other Financing Agreements and the Guaranteed Obligations as
so amended, modified, supplemented, renewed, restated or extended, increased or
decreased, (ii) the taking, exchange, surrender and releasing of collateral or
guarantees now or at any time held by or available to Lender for the obligations
of Borrower

 

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or any other party at any time liable on or in respect of the Guaranteed
Obligations or who is the owner of any property which is security for the
Guaranteed Obligations (individually, an “Obligor” and collectively, the
“Obligors”), (iii) the exercise of, or refraining from the exercise of any
rights against Borrower or any other Obligor or any collateral, (iv) the
settlement, compromise or release of, or the waiver of any default with respect
to, any of the Guaranteed Obligations and (v) any financing by Lender of
Borrower under Section 364 of the United States Bankruptcy Code or consent to
the use of cash collateral by Lender under Section 363 of the United States
Bankruptcy Code. Guarantor agrees that the amount of the Guaranteed Obligations
shall not be diminished and the liability of Guarantor hereunder shall not be
otherwise impaired or affected by any of the foregoing.
          (b) No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations shall affect, impair or be a defense to this
Guaranty, nor shall any other circumstance which might otherwise constitute a
defense available to or legal or equitable discharge of Borrower in respect of
any of the Guaranteed Obligations, or Guarantor in respect of this Guaranty,
affect, impair or be a defense to this Guaranty. Without limitation of the
foregoing, the liability of Guarantor hereunder shall not be discharged or
impaired in any respect by reason of any failure by Lender to perfect or
continue perfection of any lien or security interest in any collateral or any
delay by Lender in perfecting any such lien or security interest. As to
interest, fees and expenses, whether arising before or after the commencement of
any case with respect to Borrower under the United States Bankruptcy Code or any
similar statute, Guarantor shall be liable therefor, even if Borrower’s
liability for such amounts does not, or ceases to, exist by operation of law.
Guarantor acknowledges that Lender has not made any representations to Guarantor
with respect to Borrower, any other Obligor or otherwise in connection with the
execution and delivery by Guarantor of this Guaranty and Guarantor is not in any
respect relying upon Lender or any statements by Lender in connection with this
Guaranty.
          (c) Guarantor hereby irrevocably and unconditionally waives and
relinquishes all statutory, contractual, common law, equitable and all other
claims against Borrower, any collateral for the Guaranteed Obligations or other
assets of Borrower or any other Obligor, for subrogation, reimbursement,
exoneration, contribution, indemnification, setoff or other recourse in respect
to sums paid or payable to Lender by Guarantor hereunder and Guarantor hereby
further irrevocably and unconditionally waives and relinquishes any and all
other benefits which Guarantor might otherwise directly or indirectly receive or
be entitled to receive by reason of any amounts paid by or collected or due from
Guarantor, Borrower or any other Obligor upon the Guaranteed Obligations or
realized from their property.
          (d) Guarantor hereby irrevocably and unconditionally waives and
relinquishes any right to revoke this Guaranty that Guarantor may now have or
hereafter acquire.
          (e) Without limiting the generality of any other waiver or other
provision set forth in this Guaranty, in accordance with Section 2856 of the
California Civil Code, Guarantor hereby irrevocably and unconditionally waives
all rights and defenses arising out of an election of remedies by Lender, even
though that election of remedies, such as a nonjudicial foreclosure with respect
to security for a Guaranteed Obligation, has destroyed Guarantor’s rights of

 

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subrogation and reimbursement against Borrower by operation of Section 580d of
the California Code of Civil Procedure or otherwise.
          (f) Without limiting the generality of any other waiver or other
provision set forth in this Guaranty, in accordance with Section 2856 of the
California Civil Code, Guarantor waives all rights and defenses that Guarantor
may have because the Guaranteed Obligations are secured by real property. This
means, among other things: (i) Lender may collect from Guarantor without first
foreclosing on any real or personal property collateral pledged by Borrower; and
(ii) if Lender forecloses on any real property collateral pledged by Borrower:
(A) the amount of the Guaranteed Obligations may be reduced only by the price
for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price and (B) the Lender may collect from
Guarantor even if Lender, by foreclosing on the real property collateral, has
destroyed any right Guarantor may have to collect from Borrower. This is an
unconditional and irrevocable waiver of any rights and defenses Guarantor may
have because the Guaranteed Obligations are secured by real property. These
rights and defenses include, but are not limited to, any rights or defenses
based upon Sections 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure.
          (g) Without limiting the generality of any other waiver or other
provision set forth in this Guaranty, Guarantor hereby irrevocably and
unconditionally waives and relinquishes, to the maximum extent such waiver or
relinquishment is permitted by applicable law, any and all rights, claims and
defenses arising directly or indirectly under Sections 2787 through 2855,
inclusive, of the California Civil Code and Sections 580a, 580b, 580c, 580d and
726 of the California Code of Civil Procedure or any similar laws of any other
jurisdiction.
     3. Subordination. Payment of all amounts now or hereafter owed to Guarantor
by Borrower or any other Obligor is hereby subordinated in right of payment to
the indefeasible payment in full to Lender of the Guaranteed Obligations and all
such amounts and any security and guarantees therefor are hereby assigned to
Lender as security for the Guaranteed Obligations.
     4. Acceleration. Notwithstanding anything to the contrary contained herein
or any of the terms of any of the other Financing Agreements, the liability of
Guarantor for the entire Guaranteed Obligations shall mature and become
immediately due and payable, even if the liability of Borrower or any other
Obligor therefor does not, upon the occurrence of any act, condition or event
which constitutes an Event of Default as such term is defined in the Loan
Agreement.
     5. Account Stated. The books and records of Lender showing the account
between Lender and Borrower shall be admissible in evidence in any action or
proceeding against or involving Guarantor as prima facie proof of the items
therein set forth, and the monthly statements of Lender rendered to Borrower, to
the extent to which no written objection is made within thirty (30) days from
the date of sending thereof to Borrower, shall be deemed conclusively correct
and constitute an account stated between Lender and Borrower and be binding on
Guarantor.

 

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     6. Termination. This Guaranty is continuing, unlimited, absolute and
unconditional. All Guaranteed Obligations shall be conclusively presumed to have
been created in reliance on this Guaranty. This Guaranty may not be terminated
and shall continue so long as the Loan Agreement shall be in effect (whether
during its original term or any renewal, substitution or extension thereof) or
any Guaranteed Obligations shall be outstanding.
     7. Reinstatement. If after receipt of any payment of, or proceeds of
collateral applied to the payment of, any of the Guaranteed Obligations, Lender
is required to surrender or return such payment or proceeds to any Person for
any reason, then the Guaranteed Obligations intended to be satisfied by such
payment or proceeds shall be reinstated and continue and this Guaranty shall
continue in full force and effect as if such payment or proceeds had not been
received by Lender. Guarantor shall be liable to pay to Lender, and does
indemnify and hold Lender harmless for the amount of any payments or proceeds
surrendered or returned. This Section 7 shall remain effective notwithstanding
any contrary action which may be taken by Lender in reliance upon such payment
or proceeds. This Section 7 shall survive the termination of this Guaranty.
     8. Amendments and Waivers. Neither this Guaranty nor any provision hereof
shall be amended, modified, waived or discharged orally or by course of conduct,
but only by a written agreement signed by an authorized officer of Lender.
Lender shall not by any act, delay, omission or otherwise be deemed to have
expressly or impliedly waived any of its rights, powers and/or remedies unless
such waiver shall be in writing and signed by an authorized officer of Lender.
Any such waiver shall be enforceable only to the extent specifically set forth
therein. A waiver by Lender of any right, power and/or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right, power
and/or remedy which Lender would otherwise have on any future occasion, whether
similar in kind or otherwise.
     9. Corporate Existence, Power and Authority. Guarantor is a corporation
duly organized and in good standing under the laws of its state or other
jurisdiction of incorporation and is duly qualified as a foreign corporation and
in good standing in all states or other jurisdictions where the nature and
extent of the business transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which the failure to
so qualify would not have a material adverse effect on the financial condition,
results of operation or businesses of Guarantor or the rights of Lender
hereunder or under any of the other Financing Agreements. The execution,
delivery and performance of this Guaranty is within the corporate powers of
Guarantor, have been duly authorized and are not in contravention of law or the
terms of the certificates of incorporation, by-laws, or other organizational
documentation of Guarantor, or any indenture, agreement or undertaking to which
Guarantor is a party or by which Guarantor or its property are bound. This
Guaranty constitutes the legal, valid and binding obligation of Guarantor
enforceable in accordance with its terms.
     10. Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.
          (a) The validity, interpretation and enforcement of this Guaranty and
any dispute arising out of the relationship between Guarantor and Lender,
whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of California (without giving effect to principles of
conflicts of law).

 

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          (b) Guarantor hereby irrevocably consents and submits to the
non-exclusive jurisdiction of the Courts of the State of California and the
United States District Court for the Central District of California and waives
any objection based on venue or forum non conveniens with respect to any action
instituted therein arising under this Guaranty or any of the other Financing
Agreements or in any way connected with or related or incidental to the dealings
of Guarantor and Lender in respect of this Guaranty or any of the other
Financing Agreements or the transactions related hereto or thereto, in each case
whether now existing or hereafter arising and whether in contract, tort, equity
or otherwise, and agrees that any dispute arising out of the relationship
between Guarantor or Borrower and Lender or the conduct of any such persons in
connection with this Guaranty, the other Financing Agreements or otherwise shall
be heard only in the courts described above (except that Lender shall have the
right to bring any action or proceeding against Guarantor or its property in the
courts of any other jurisdiction which Lender deems necessary or appropriate in
order to realize on any collateral at any time granted by Borrower or Guarantor
to Lender or to otherwise enforce its rights against Guarantor or its property).
          (c) Guarantor hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by certified
mail (return receipt requested) directed to its address set forth on the
signature pages hereof and service so made shall be deemed to be completed five
(5) days after the same shall have been so deposited in the U.S. mails, or, at
Lender’s option, by service upon Guarantor in any other manner provided under
the rules of any such courts. Within thirty (30) days after such service,
Guarantor shall appear in answer to such process, failing which Guarantor shall
be deemed in default and judgment may be entered by Lender against Guarantor for
the amount of the claim and other relief requested.
          (d) GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS GUARANTY OR ANY OF THE
OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF GUARANTOR AND LENDER IN RESPECT OF THIS GUARANTY
OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE. GUARANTOR HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY AND THAT GUARANTOR OR LENDER MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF GUARANTOR AND LENDER TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
          (e) If any action or proceeding is filed in a court of the State of
California by or against any party hereto in connection with any of the
transactions contemplated by this Guaranty, (a) the court shall, and is hereby
directed to, make a general reference pursuant to California Code of Civil
Procedure Section 638 to a referee or referees to hear and determine all of the
issues in such action or proceeding (whether of fact or of law) and to report a
statement of decision, provided that at the option of Lender, any such issues
pertaining to a ‘provisional

 

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remedy’ as defined in California Code of Civil Procedure Section 1281.8 shall be
heard and determined by the court, and (b) Guarantor shall be solely responsible
to pay all fees and expenses of any referee appointed in such action or
proceeding.
          (f) Lender shall not have any liability to Guarantor (whether in tort,
contract, equity or otherwise) for losses suffered by Guarantor in connection
with, arising out of, or in any way related to the transactions or relationships
contemplated by this Guaranty, or any act, omission or event occurring in
connection herewith, unless it is determined by a final and non-appealable
judgment or court order binding on Lender that the losses were the result of
acts or omissions constituting gross negligence or willful misconduct. In any
such litigation, Lender shall be entitled to the benefit of the rebuttable
presumption that it acted in good faith and with the exercise of ordinary care
in the performance by it of the terms of the Loan Agreement and the other
Financing Agreements.
     11. Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to Lender at its address set forth above and to Guarantor
at its chief executive office set forth below, or to such other address as
either party may designate by written notice to the other in accordance with
this provision, and (b) deemed to have been given or made: if delivered in
person, immediately upon delivery; if by telex, telegram or facsimile
transmission, immediately upon sending and upon confirmation of receipt; if by
nationally recognized overnight courier service with instructions to deliver the
next business day, one (1) business day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing.
     12. Partial Invalidity. If any provision of this Guaranty is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Guaranty as a whole, but this Guaranty shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
     13. Entire Agreement. This Guaranty represents the entire agreement and
understanding of this parties concerning the subject matter hereof, and
supersedes all other prior agreements, understandings, negotiations and
discussions, representations, warranties, commitments, proposals, offers and
contracts concerning the subject matter hereof, whether oral or written.
     14. Successors and Assigns. This Guaranty shall be binding upon Guarantor
and its successors and assigns and shall inure to the benefit of Lender and its
successors, endorsees, transferees and assigns. The liquidation, dissolution or
termination of Guarantor shall not terminate this Guaranty as to such entity or
as to Guarantor.
     15. Construction. All references to the term “Guarantor” wherever used
herein shall mean Guarantor and its successors and assigns (including, without
limitation, any receiver, trustee or custodian for Guarantor or any of its
assets or Guarantor in its capacity as debtor or debtor-in-possession under the
United States Bankruptcy Code). All references to the term “Lender” wherever
used herein shall mean Lender and its successors and assigns and all references
to the term “Borrower” wherever used herein shall mean Borrower and its
successors and assigns (including, without limitation, any receiver, trustee or
custodian for Borrower or any

 

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of its assets or Borrower in its capacity as debtor or debtor-in-possession
under the United States Bankruptcy Code). All references to the term “Person” or
“person” wherever used herein shall mean any individual, sole proprietorship,
partnership, corporation (including, without limitation, any corporation which
elects subchapter S status under the Internal Revenue Code of 1986, as amended),
limited liability company, limited liability partnership, business trust,
unincorporated association, joint stock corporation, trust, joint venture or
other entity or any government or any agency or instrumentality or political
subdivision thereof. All references to the plural shall also mean the singular
and to the singular shall also mean the plural.
     IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as
of the day and year first above written.

              ATTEST:       PFSWEB, INC., a Delaware corporation
 
           
 
      By:    
 
           
 
      Name:    
 
           
[CORPORATE SEAL]
      Title:    
 
           
 
           
 
          Chief Executive Office
 
           
 
          500 North Central Expressway
 
           
 
          Suite 500
 
           
 
          Plano, TX 75074