Exhibit 10.5
EXECUTION COPY
LIMITED RECOURSE
GUARANTY
This GUARANTY (“
Guaranty ”) is made as of the 12th day of December,
2008, by Medallion Funding Corp. (the “ Guarantor
”), in favor of Autobahn Funding Company LLC, as lender (the
“ Lender ”), and DZ Bank AG Deutsche
Zentral-Genossenschaftsbank, Frankfurt am Main, as agent (the
“ Agent ”), with respect to that certain Loan
and Security Agreement, dated as the date hereof (as amended,
restated, supplemented or otherwise modified from time to time, the
“ Loan Agreement ”), among Medallion Taxi Loan
Trust III (the “ Borrower ”), the Lender and the
Agent. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to them in the Loan
Agreement.
1. Guaranty . (i) For
value received and in consideration of any Advance, loan or
financial accommodation of any kind whatsoever heretofore, now or
hereafter made, given or granted to the Borrower by the Lender
pursuant to the Loan Agreement, the Guarantor unconditionally
guarantees for the benefit of the Secured Parties the full and
prompt payment when due, whether at maturity or earlier, by reason
of acceleration or otherwise, and at all times thereafter, of all
Secured Obligations now or hereafter existing under the Loan
Agreement or any other Loan Document, whether for principal,
interest, fees, expenses or otherwise, subject to the limit
described in paragraph (iv) below.
(ii) At any time after the
occurrence of an Event of Default, the Guarantor shall pay to the
Agent, on demand and in immediately available funds, an amount
equal to the Borrowing Base Deficiency at the time such demand is
made, as calculated by the Agent (such calculation to be conclusive
and binding absent manifest error), subject to the limit described
in paragraph (iv) below.
(iii) In addition, the Guarantor
shall pay to the Agent on demand and in immediately available funds
an amount equal to all reasonable fees, costs and expenses
(including, without limitation, all court costs and
attorneys’ and paralegals’ fees, costs and expenses)
paid or incurred by the Agent or the Lender in:
(1) endeavoring to collect all or any part of the Guarantor
Payment Amount from, or in prosecuting any action against, the
Guarantor relating to this Guaranty or the transactions
contemplated hereby; (2) taking any action with respect to any
security or collateral securing the Guarantor’s obligations
hereunder; or (3) preserving, protecting or defending the
enforceability of, or enforcing, this Guaranty or its rights
hereunder. In addition, the Guarantor further agrees to pay to the
Agent and the Lender and reimburse the Agent and the Lender for, on
demand and in immediately available funds, interest on any amount
due hereunder, from the date of demand under this Guaranty until
paid in full at the Default Funding Rate.
(iv) Notwithstanding the foregoing,
the aggregate payments made by the Guarantor hereunder (including
amounts paid pursuant to paragraphs (i) and (ii) above
but
excluding amounts paid pursuant to paragraph
(iii) above) shall not exceed the least of (x) 5% of the
aggregate Net Principal Balance of the Medallion Loans included in
the Collateral at the time of the related Event of Default,
(y) 5% of the Maximum Facility Amount and (z) 10% of the
aggregate outstanding principal balance of the Advances at the time
of the related Event of Default (any such payment due from the
Guarantor hereunder in respect of a Borrowing Base Deficiency being
a “ Guarantor Payment Amount ”).
(v) The Guarantor hereby agrees that
this Guaranty is an absolute guaranty of payment and is not a
guaranty of collection.
2. Obligations Unconditional
. The Guarantor hereby agrees that its obligations under this
Guaranty shall be unconditional, irrespective of:
(i) the validity,
enforceability, avoidance or subordination of any of the Secured
Obligations or any of the Loan Documents;
(ii) the absence of any attempt by,
or on behalf of, the Lender or the Agent to collect, or to take any
other action to enforce, all or any part of the Secured Obligations
whether from or against the Borrower, any other guarantor of the
Secured Obligations or any other party;
(iii) the election of any remedy by,
or on behalf of, the Lender or the Agent with respect to all or any
part of the Secured Obligations;
(iv) the waiver, amendment, consent,
extension, forbearance or granting of any indulgence by, or on
behalf of, the Lender or the Agent with respect to any provision of
any of the Loan Documents;
(v) the failure of the Lender or the
Agent to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or
collateral for the Secured Obligations or any rights as against any
other guarantor of the Secured Obligations or any release of any
collateral security for or release of any other guarantor in
respect of the Secured Obligations;
(vi) the election by, or on behalf
of, the Lender or the Agent, in any proceeding of the Borrower
instituted under Chapter 11 of Title 11 of the United
States Code (11 U.S.C. 101 et seq.) (the “ Bankruptcy
Code ”), of the application of Section 1111(b)(2) of
the Bankruptcy Code;
(vii) any borrowing or grant of
a security interest by the Borrower, as a debtor-in-possession,
under Section 364 of the Bankruptcy Code;
(viii) the disallowance, under
Section 502 of the Bankruptcy Code, of all or any portion of
the claims of the Lender or the Agent against the Borrower for
repayment of all or any part of the Secured Obligations, including
any amount due hereunder;
(ix) any actual or alleged fraud by
any party (other than the Lender or the Agent); or
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(x) any other circumstance
which might otherwise constitute a legal or equitable discharge or
defense of the Borrower or a guarantor (other than the defense of
payment or performance).
3. Representations, Warranties
and Covenants of the Guarantor .
(i) Representations and
Warranties . The Guarantor hereby remakes the
representations and warranties made by it in the Purchase
Agreement.
(ii) Covenants
. Until the Final Payout Date, the Guarantor agrees that it
will perform and observe each of the covenants and agreements
required to be performed or observed by it pursuant to the Loan
Agreement and the other Loan Documents.
4. Enforcement; Application of
Payments . Upon the occurrence of an Event of Default, the
Agent may proceed directly and at once, without notice, against the
Guarantor to obtain performance of and to collect and recover the
full amount, or any portion, of the Guarantor Payment Amount,
without first proceeding against the Borrower, any other guarantor
or any other party, or against any security or collateral for the
Secured Obligations. Subject only to the terms and provisions of
the Loan Agreement, the Agent shall have the exclusive right to
determine the application of payments and credits, if any, from the
Guarantor, the Borrower, any other guarantor or from any other
party on account of the Secured Obligations or any other liability
of the Guarantor to the Secured Parties.
5. Waivers . (i) The
Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of receivership or
bankruptcy of the Borrower, protest or notice with respect to the
Secured Obligations, all setoffs and counterclaims and all
presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor and notices of
acceptance of this Guaranty, the benefits of all statutes of
limitation, and all other demands whatsoever (and shall not require
that the same be made on the Borrower as a condition precedent to
the Guarantor’s obligations hereunder), and covenants that
this Guaranty will not be discharged, except by complete payment
(in cash or as otherwise agreed by the Agent) of the Secured
Obligations or the Guarantor Payment Amount. The Guarantor further
waives all notices of the existence, creation or incurring of new
or additional indebtedness arising from additional Advances
extended to the Borrower pursuant to the Loan Agreement, and also
waives all notices that the principal amount, or any portion
thereof, and/or any interest on any instrument or document
evidencing all or any part of the Secured Obligations is due,
notices of any and all proceedings to collect from the maker, any
endorser or any other guarantor of all or any part of the Secured
Obligations, or from any other party, and, to the extent permitted
by law, notices of exchange, sale, surrender or other handling of
any security or collateral given to the Agent to secure payment of
all or any part of the Secured Obligations.
(ii) The Agent is hereby authorized,
without notice or demand and without affecting the liability of the
Guarantor hereunder, from time to time, (a) with the agreement
of the Borrower (if such agreement is required), to renew, extend,
accelerate or otherwise change the time for payment of, or other
terms relating to, all or any part of the Secured Obligations, or
to otherwise modify, amend or change the terms of any of the Loan
Documents; (b) to accept partial payments on all or any part
of the Secured Obligations; (c) to take and hold security
or
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collateral for the payment of all or any part of
the Secured Obligations, this Guaranty, or any other guaranties of
all or any part of the Secured Obligations or other liabilities of
the Borrower, (d) to exchange, enforce, waive and release any
such security or collateral; (e) to apply such security or
collateral and direct the order or manner of sale thereof as in its
discretion it may determine; and (f) to settle, release,
exchange, enforce, waive, compromise or collect or otherwise
liquidate all or any part of the Secured Obligations, this
Guaranty, any other guaranty of all or any part of the Secured
Obligations, and any security or collateral for the Secured
Obligations or for any such guaranty. Any of the foregoing may be
done in any manner, without affecting or impairing the obligations
of the Guarantor hereunder.
6. Setoff . At any time after
all or any part of the Secured Obligations have become due and
payable (by acceleration or otherwise), the Agent may, to the
extent of the Guarantor Payment Amount, setoff and apply toward the
payment of all or any part of the Guarantor Payment Amount any
moneys, credits or other property belonging to the Guarantor, at
any time held by or coming into the possession of the Agent or its
Affiliates.
7. Financial Information .
The Guarantor hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrower and any and all
endorsers and/or other guarantors of all or any part of the Secured
Obligations, and of all other circumstances bearing upon the risk
of nonpayment of the Secured Obligations, or any part thereof, that
diligent inquiry would reveal, and the Guarantor hereby agrees that
neither the Lender nor the Agent shall have any duty to advise the
Guarantor of information known to it regarding such condition or
any such circumstances. In the event either the Lender or the
Agent, in its sole discretion, undertakes at any time or from time
to time to provide any such information to the Guarantor, neither
the Lender nor the Agent shall be under any obligation (i) to
undertake any investigation not a part of its regular business
routine, (ii) to disclose any information which the Lender or
the Agent, pursuant to accepted or reasonable commercial finance or
banking practices, wishes to maintain confidential or (iii) to
make any other or future disclosures of such information or any
other information to the Guarantor.
8. No Marshalling;
Reinstatement . The Guarantor
