Exhibit
10.3
LIMITED GUARANTY
This Limited Guaranty
(“Guaranty”) is made by the following individuals with
residence and mailing addresses as set forth below (referred to
herein as the “Guarantors”)
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Nancy Duitch
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Alan Gerson
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15950 Royal Oak Rd.
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4256 Valley Meadow Rd.
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Encino, CA 91436
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Encino, CA 91436
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to and for the benefit
of MARQUETTE COMMERCIAL FINANCE, INC. (“MCF”), a
Minnesota corporation authorized to transact business in
Texas.
A.
MCF has
contemporaneously herewith entered into that certain Account
Transfer and Purchase Agreement dated as of July 13, 2006 (such
agreement, and all amendments and modifications thereof,
collectively, the “Purchase Agreement”), to which
reference is made for all purposes, with Adsouth Marketing, LLC
(referred to herein as the “Seller”), pursuant to which
MCF has purchased or will purchase all right, title and interest in
certain accounts receivable of the Seller (the
“Accounts”), on those terms and conditions set forth in
the Purchase Agreement.
B.
MCF is willing to enter
into the Purchase Agreement only if the Guarantors execute and
deliver this Guaranty to MCF.
NOW, THEREFORE, in
consideration of the aforesaid premises and other good and valuable
consideration, and for the purpose of inducing MCF to enter into
the Purchase Agreement and to purchase accounts receivable from the
Seller pursuant to the terms thereof, the sufficiency of which is
hereby acknowledged, the Guarantors hereby covenant and agree as
follows:
1.
The Guarantors hereby
unconditionally and irrevocably guarantee the payment in full of
any losses incurred by MCF under the Purchase Agreement
(collectively the “Obligations”) to the extent that
such losses are related to or attributable to any of the following
limited circumstances only:
(a)
In the event that the
Seller takes any affirmative actions which result in the failure of
MCF to obtain payment and which result in losses to MCF under the
Purchase Agreement as a result of any of the following:
1. a
representation to MCF by Seller under Section 9 of the Purchase
Agreement was not true when made, and that misrepresentation
results in losses to MCF under the Purchase Agreement;
2. the Seller
takes an affirmative action to discount or subordinate an Account
sold to MCF under the Purchase Agreement, and such action results
in losses to MCF; and
3.
provided that the Seller fails to make good or
offer satisfactory restitution to MCF within a period of 90 days
after the occurrence of any losses to MCF under this Purchase
Agreement, after receipt of notice from MCF of such
loss.
(b)
In the event that the
Seller, the Guarantors, or any other person, without receiving
prior written consent from MCF, shall cash, deposit, or retain, any
checks, drafts, monies or proceeds of the Accounts purchased by
MCF, and the Seller shall fail to tender the entire amount of the
same to MCF.
2.
MCF shall be required,
as a condition precedent to making a demand upon the Guarantors or
to bringing an action against the Guarantors under this Guaranty,
to act in a commercially reasonable manner with respect to making
demand upon, or to institute any action or proceeding, at law or in
equity against the Seller or anyone else, or to exhaust its
remedies against the Seller, or anyone else, or against any
collateral security. All remedies afforded to MCF by reason
of this Guaranty are separate and cumulative remedies and it is
agreed that not one of such remedies, whether exercised by MCF or
not, shall be deemed to be exclusive of any of the other remedies
available to MCF and shall not limit or prejudice any other remedy
which MCF may have against any party, including the
Guarantors.
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3.
The Guarantors shall
remain liable on this Guaranty notwithstanding any change or
changes in the terms, covenants or conditions of the Purchase
Agreement, or any amendment thereto, hereafter made or granted, or
any delay on the part of MCF in exercising its rights hereunder or
thereunder, it being the intention h