Exhibit 10.3
LOAN GUARANTY
THIS LOAN GUARANTY (this
“Guaranty”) is made as of the 1st day of June, 2007, by
TechTeam Global, Inc., a Delaware corporation (the
“Principal”) TechTeam Cyntergy, L.L.C., a Michigan
limited liability company (“Cyntergy”), TechTeam
Government Solutions, Inc., a Virginia corporation
(“TTGS”), and Sytel, Inc., a Maryland corporation
(“Sytel”) (the Principal, Cyntergy, TTGS and Sytel may
be referred to collectively as the “Loan Guarantors”
and each individually as a “Loan Guarantor”) in favor
of the Administrative Agent, for the benefit of the Lenders, under
the Credit Agreement referred to below;
WITNESSETH :
WHEREAS , the Principal and
JPMorgan Chase Bank, National Association, a national banking
association, as Administrative Agent (the “Administrative
Agent”), and certain other Lenders from time to time party
thereto have entered into a certain Credit Agreement dated as of
even date herewith (as same may be amended or modified from time to
time, the “Credit Agreement”), providing, subject to
the terms and conditions thereof, for extensions of credit to be
made by the Lenders to the Principal;
WHEREAS , it is a condition
precedent to the Administrative Agent and the Lenders executing the
Credit Agreement that each of the Loan Guarantors execute and
deliver this Guaranty whereby each of the Loan Guarantors shall
guarantee the payment when due, subject to Section 9 hereof,
of all Secured Obligations; and
WHEREAS , in consideration of
the financial and other support that the Principal has provided,
and such financial and other support as the Principal may in the
future provide, to the Loan Guarantors, and in order to induce the
Lenders and the Administrative Agent to enter into the Credit
Agreement, and the Lenders and their Affiliates to enter into one
or more agreements relating to Swap Agreement Obligations and
Banking Services Obligations with the Principal or any Guarantor,
and because each Loan Guarantor has determined that executing this
Guaranty is in its interest and to its financial benefit, each of
the Loan Guarantors, other than the Principal, is willing to
guarantee the obligations of the Principal under the Credit
Agreement and the other Loan Documents and to guarantee the other
Secured Obligations and the Principal is willing to guarantee the
Secured Obligations under the Credit Agreement, including but not
limited to the obligations of any Letter of Credit Applicant under
any Letter of Credit;
NOW, THEREFORE , in
consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION l.1. Terms in Credit
Agreement. All capitalized terms used herein but not defined
herein shall have the meaning set forth in the Credit
Agreement.
SECTION 2.1. Representations and
Warranties . Each of the Loan Guarantors represents and
warrants (which representations and warranties shall be deemed to
have been renewed upon the date of each Borrowing under the Credit
Agreement) that:
(a) It
is a corporation, partnership or limited liability company duly and
properly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation
or organization and, except where the failure to do so would not be
reasonably expected to have a Material Adverse Effect, has all
requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
(b) It
has the power and authority and legal right to execute and deliver
this Guaranty and to perform its obligations hereunder. The
execution and delivery by it of this Guaranty and the
performance of its obligations hereunder have been duly authorized
by proper corporate proceedings, and this Guaranty constitutes a
legal, valid and binding obligation of such Loan Guarantor
enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally
and except as enforceability may be limited by general principles
of equity, regardless of whether considered in a proceeding in
equity or at law.
(c) Neither
the execution and delivery by it of this Guaranty, nor the
consummation of the transactions herein contemplated, nor
compliance with the provisions hereof will violate (i) any
law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on it or any of its subsidiaries or (ii) its
articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management agreement,
as the case may be, or (iii) the provisions of any indenture,
instrument or agreement to which it or any of its subsidiaries is a
party or is subject, or by which it, or its Property, is bound, or
conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the
Property of such Loan Guarantor or a subsidiary thereof pursuant to
the terms of any such indenture, instrument or agreement. No order,
consent, adjudication, approval, license, authorization, or
validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or
public body or authority, or any subdivision thereof, which has not
been obtained by it or any of its subsidiaries, is required to be
obtained by it or any of its subsidiaries in connection with the
execution and delivery of this Guaranty or the performance by it of
its obligations hereunder or the legality, validity, binding effect
or enforceability of this Guaranty.
SECTION 2.2. Covenants . Each
of the Loan Guarantors covenants that, so long as any Lender has
any Commitment outstanding under the Credit Agreement, any
transaction relating to any Swap Agreement Obligations or Banking
Services Obligations remains in effect or any of the Secured
Obligations shall remain unpaid, that it will fully comply with
those covenants and agreements set forth in the Credit Agreement
which are applicable to such Loan Guarantor and, if it is necessary
and such Loan Guarantor is able to do so, such Loan Guarantor will
enable the Principal, any Subsidiary of the Principal or any Letter
of Credit Applicant (each, a “Debtor” and collectively,
the “Debtors”) to fully comply with such covenants and
agreements.
SECTION 3. The Guaranty .
Subject to Section 9 hereof, each of the Loan Guarantors
hereby absolutely and unconditionally guarantees, as primary
obligor and not as surety, the full and punctual payment (whether
at stated maturity, upon acceleration or early termination or
otherwise, and at all times thereafter) and performance of the
Secured Obligations, including without limitation any such Secured
Obligations incurred or accrued during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding,
whether or not allowed or allowable in such proceeding. Upon
failure by any Debtor to pay punctually any Secured Obligation,
each of the Loan Guarantors agrees that it shall forthwith on
demand pay to the Administrative Agent for the benefit of the
Lenders and, if applicable, their Affiliates, the Secured
Obligation not so paid at the place and in the manner specified in
the Credit Agreement, the relevant Loan Document or the relevant
agreement relating to any Swap Agreement Obligations or Banking
Services Obligations, as the case may be. This Guaranty is a
guaranty of payment and not of collection. Each of the Loan
Guarantors waives any right to require the Lender to sue any
Debtor, any other guarantor, or any other person obligated for all
or any part of the Secured Obligations, or otherwise to enforce its
payment against any collateral securing all or any part of the
Secured Obligations.
SECTION 4. Guaranty
Unconditional . Subject to Section 9 hereof, the
obligations of each of the Loan Guarantors hereunder shall be
unconditional and absolute and, without limiting the generality of
the foregoing, shall not be released, discharged or otherwise
affected by:
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(i) any
extension, renewal, settlement, compromise, waiver or release in
respect of any of the Secured Obligations, by operation of law or
otherwise, or any obligation of any other guarantor of any of the
Secured Obligations, or any default, failure or delay, willful or
otherwise, in the payment or performance of the Secured
Obligations;
(ii) any
modification or amendment of or supplement to the Credit Agreement,
any other Loan Document or any agreement relating to any Swap
Agreement Obligations or Banking Services Obligations;
(iii) any
release, nonperfection or invalidity of any direct or indirect
security for any Secured Obligations or any obligations of any
other guarantor of any of the Secured Obligations, or any action or
failure to act by the Administrative Agent, any Lender or any
Affiliate of any Lender with respect to any collateral securing all
or any part of the Secured Obligations;
(iv) any
change in the corporate existence, structure or ownership of any
Debtor or any other guarantor of any of the Secured Obligations, or
any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any Debtor, or any other guarantor of the
Secured Obligations, or its assets or any resulting release or
discharge of any obligation of any Debtor, or any other guarantor
of any of the Secured Obligations;
(v) the
existence of any claim, setoff or other rights which the Loan
Guarantors may have at any time against any Debtor, any other
guarantor of any of the Secured Obligations, the Administrative
Agent, any Lender or any other Person, whether in connection
herewith or any unrelated transactions;
(vi) any
invalidity or unenforceability relating to or against any Debtor,
or any other guarantor of any of the Secured Obligations, for any
reason related to the Credit Agreement, any other Loan Document,
any agreement relating to any Swap Agreement Obligations or Banking
Services Obligations, or any provision of applicable law or
regulation purporting to prohibit the payment by any Debtor, or any
other guarantor of the Secured Obligations, of the principal of or
interest on any of the Secured Obligations or any other amount
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