Exhibit 10.5
GUARANTY
AGREEMENT
(Brad Bernstein)
FOR TEN DOLLARS ($10.00) in hand paid and in
order to induce TEXTRON FINANCIAL CORPORATION , a Delaware
corporation in its capacity as agent (together with is successors
in such capacity, "Agent") for the Lenders (as hereinafter
defined), and the Lenders to make loans or extend credit from time
to time, in accordance with the terms of the Loan Agreement (as
hereinafter defined), to ANCHOR FUNDING SERVICES, LLC , a
North Carolina limited liability company ("Debtor"), and for other
good and valuable consideration, the undersigned ("Guarantor")
hereby unconditionally and absolutely guarantees to Agent and
Lenders the due and punctual payment, performance and discharge
(whether upon stated maturity, demand, acceleration or otherwise in
accordance with the terms thereof) of all such loans and extensions
of credit and all other debts, liabilities and obligations of
Debtor to or held by Agent or any Lender (including any portion
thereof nominally held by Agent or any Lender on behalf of others
who have participations or interests therein granted or created by
Agent or such Lender) under the Loan and Security Agreement dated
November 21, 2008, among Debtor, the other financial institutions
party thereto (the "Lenders") and Agent in its capacity as agent
for the Lenders (as at any time amended, restated, supplemented or
otherwise modified, the "Loan Agreement") and related loan
documents, whether direct or indirect, absolute or contingent,
secured or unsecured, due or to become due, liquidated or
unliquidated, primary or secondary, joint or several, now existing
or hereafter arising, whether created directly to or acquired by
assignment or otherwise by Agent or any Lender, and whether Debtor
may be liable individually or jointly with others, and regardless
of whether recovery upon any of such loans or extensions of credit
or other debts, liabilities and obligations becomes barred by any
statute of limitations, is void or voidable under any law relating
to fraudulent obligations or otherwise, or is or becomes invalid or
unenforceable for any other reason (all such debts, liabilities and
obligations being hereinafter referred to collectively as the
"Indebtedness"). Without limiting the generality of the
foregoing, the term "Indebtedness" as used herein shall include all
debts, liabilities and obligations incurred by Debtor to Agent and
Lenders under the Loan Agreement and related loan documents,
including reasonable attorneys' fees, in any bankruptcy case of
Debtor and any interest, fees or other charges accrued in any such
bankruptcy whether or not recoverable from Debtor or Debtor's
estate under 11 U.S.C. § 506.
Except as otherwise provided herein, in no event
shall Guarantor's liability under this Guaranty exceed the Maximum
Guaranteed Amount. For purposes hereof, the term
"Maximum Guaranteed Amount" shall mean an amount equal to the sum
of (i) the Base Guaranteed Amount, and (ii) all costs and expenses,
including reasonable attorneys' fees, incurred by Agent in
enforcing the terms of this Guaranty for the benefit of Lenders in
collecting the Base Guaranteed Amount pursuant to this
Guaranty. For purposes hereof, the term "Base Guaranteed
Amount" shall mean an amount equal to $250,000.
Notwithstanding the foregoing, Guarantor's
guaranty of the Indebtedness shall be unlimited and for the full
amount of the Indebtedness in the event that Agent seeks
enforcement of this Guaranty by reason of the occurrence of any
Event of Default arising from Debtor's or Guarantor's fraud,
deceit, intentional misrepresentation, material omission or other
wrongful conduct in connection with (i) any financial statements,
Borrowing Base Certificates, Factoring Documentation, collateral
reports or other reports, statements or certificates Borrower is
required or elects to deliver to Agent under the Loan Agreement,
and (ii) the remittance of proceeds of collateral, the collection
of payments from Account Debtors and other monies or collections
received by Borrower in respect of the Collateral.
All capitalized terms used in this Guaranty,
unless otherwise defined herein, shall have the meanings ascribed
to such terms in the Loan Agreement.
GUARANTOR HEREBY WAIVES: notice of Agent's
acceptance hereof; notice of the extension of credit from time to
time given by Agent and Lenders to Debtor and the creation,
existence or acquisition of any Indebtedness; notice of the amount
of Indebtedness of Debtor to Agent and Lenders from time to time,
subject, however, to Guarantor's right to make inquiry of Agent to
ascertain the amount of Indebtedness at any reasonable time; notice
of any adverse change in Debtor's financial condition or of any
other fact which might increase Guarantor's risk; notice of
presentment for payment, demand, protest and notice thereof as to
any instrument; notice of default or acceleration and all other
notices and demands to which Guarantor might otherwise be entitled;
any right Guarantor may have, by statute or otherwise, to require
Agent or any Lender to institute suit against Debtor after notice
or demand from Guarantor or to seek recourse first against Debtor
or others, or to realize upon any security for the Indebtedness, as
a condition to enforcing Guarantor's liability and obligations
hereunder; any defense that Debtor may at any time assert based
upon the statute of limitations, the statute of frauds, failure of
consideration, fraud, bankruptcy, lack of legal capacity, usury, or
accord and satisfaction; any defense that other indemnity, guaranty
or security was to be obtained; any defense or claim that any
Person purporting to bind Debtor to the payment of Indebtedness did
not have actual or apparent authority to do so; and any right to
contest the commercial reasonableness of the disposition of any or
all collateral (to the extent waivable under applicable
law). Guarantor further waives any right Guarantor may
have, by statute or otherwise, to appraisement, valuation, stay of
execution, or notice of election to declare due the amount of any
indebtedness of Debtor with regard to Agent's or any Lender's
enforcement of any security interest, lien, mortgage or other
interest Agent or any Lender may hold in any real or personal
property of Debtor.
If an Event of Default under (and as defined in)
the Loan Agreement (other than an Event of Default arising by
reason of Guarantor's death) shall occur and be continuing, or if a
petition for an order for relief with respect to Debtor should be
filed by or against Debtor or Guarantor under any chapter of the
Bankruptcy Code, or if a receiver, trustee or conservator should be
appointed for Debtor or Guarantor or any of Debtor's or Guarantor's
property, or if Guarantor should attempt to revoke this Guaranty or
dispute Guarantor's liability hereunder, then, in any such event
and whether or not any of the Indebtedness is then due and payable
or the maturity thereof has been accelerated or demand for payment
thereof from Debtor has been made, upon notice to Guarantor Agent
may make the Indebtedness immediately due and payable hereunder as
to Guarantor, Agent shall be entitled to enforce the obligations of
Guarantor hereunder and Guarantor shall forthwith pay to Agent, for
the benefit of Lenders, the Maximum Guaranteed Amount or additional
amounts as contemplated by the terms of this Guaranty, if
applicable, together plus such other amounts as may be payable
hereunder; provided that the obligations of Guarantor
hereunder shall be automatically due and payable without notice if
an order for relief shall be filed with respect to Debtor under the
Bankruptcy Code. Guarantor agrees to pay all expenses
incurred by Agent in connection with enforcement of Agent's rights
under the Guaranty, including court costs, collection charges and
reasonable attorneys' fees.
Guarantor consents and agrees that, without
notice to or by Guarantor and without affecting or impairing the
liability or obligations of Guarantor hereunder, Agent
may: compromise or settle, extend the period of duration
or the time for the payment, discharge or performance of any of the
Indebtedness or increase the amount of the Indebtedness; refuse to
enforce, or release any Persons liable for the payment of any of
the Indebtedness; increase, decrease or otherwise alter the rate of
interest payable with respect to the principal amount of any of the
Indebtedness or grant oth
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