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Exhibit 10.6
EXECUTION COPY
PERFORMANCE GUARANTY
This PERFORMANCE GUARANTY (this " Guaranty ") is made as
of the 12th day of December, by Medallion Financial Corp. (the "
Guarantor "), in favor of Taxi Medallion Loan Trust III (the
" Borrower "), Autobahn Funding Company LLC, as lender (the
" Lender "), and DZ Bank AG Deutsche
Zentral-Genossenschaftsbank, Frankfurt am Main, as agent (the "
Agent "), in connection with (i) that certain Servicing
Agreement, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "
Servicing Agreement "), by and among the Borrower, Medallion
Funding Corp. (" Medallion Funding "), as servicer, and the
Agent and (ii) that certain Mortgage Loan Purchase and
Contribution Agreement, dated as of the date hereof (as amended,
restated, supplemented or otherwise modified from time to time, the
" Purchase Agreement "), by and between the Borrower, as
transferee, and Medallion Funding, as transferor.
1. Definitions . Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to
them in the Servicing Agreement or, if not defined therein, in the
Loan Agreement referred to therein. In addition, the following
terms have the following meanings (such meanings to be equally
applicable to both the singular and the plural forms of the terms
defined):
" Guaranteed Obligations " means the punctual performance
when due of all present and future servicing obligations (howsoever
created, arising or evidenced, whether direct or indirect, absolute
or contingent, or due or to become due) of Medallion Funding,
arising under or in connection with the Servicing Agreement or the
transactions contemplated thereby.
2. Guaranty . For value received and in consideration of
the transactions contemplated by the Servicing Agreement, the
Guarantor unconditionally guarantees for the benefit of the
Borrower and the Secured Parties the full and prompt performance
when due of all the Guaranteed Obligations and agrees to cause and
enable Medallion Funding to perform each and every obligation,
covenant, agreement and term imposed upon the Secured Parties under
the Servicing Agreement. In addition, the Guarantor shall pay to
the Borrower, the Agent and the Lender on demand and in immediately
available funds an amount equal to all reasonable fees, costs and
expenses (including, without limitation, all court costs and all
reasonable attorneys’ and paralegals’ fees, costs and
expenses) paid or incurred by the Borrower, the Agent or the Lender
in: (1) endeavoring to enforce all or any part of the
Guaranteed Obligations from, or in prosecuting any action against,
the Guarantor relating to this Guaranty or the Servicing Agreement
or the transactions contemplated hereby or thereby; or
(2) preserving, protecting or defending the enforceability of,
or enforcing, this Guaranty or its rights hereunder. In addition,
the Guarantor further agrees to pay to (or reimburse) the Borrower,
the Agent and the Lender, 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.
3. 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 Guaranteed Obligations or the Servicing Agreement;
(ii) the absence of any attempt by, or on behalf
of, the Borrower, the Lender or the Agent to collect, or to take
any other action to enforce, all or any part of the Guaranteed
Obligations whether from or against Medallion Funding, any other
guarantor of the Guaranteed Obligations or any other
party;
(iii) the election of any remedy by, or on behalf of, the
Borrower, the Lender or the Agent with respect to all or any part
of the Guaranteed Obligations;
(iv) the waiver, amendment, consent, extension, forbearance or
granting of any indulgence by, or on behalf of, the Borrower, the
Lender or the Agent with respect to any provision of the Servicing
Agreement;
(v) the failure of the Borrower, 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
Guaranteed Obligations or any rights as against any other guarantor
of the Guaranteed Obligations or any release of any collateral
security for or release of any other guarantor in respect of the
Guaranteed Obligations;
(vi) the election by, or on behalf of, the Borrower, the
Lender or the Agent, in any proceeding 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 Medallion
Funding, 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
Borrower, the Lender or the Agent for repayment of all or any part
of the Guaranteed Obligations, including any amount due
hereunder;
(ix) any actual or alleged fraud by any party (other than the
Lender or the Agent); or
(x) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of Medallion Funding or a
guarantor (other than the defense of payment or performance).
4. Representations and Warranties . The Guarantor hereby
represents and warrants to, and covenants with the Borrower, the
Agent, for the benefit of the Secured Parties, and the Lender
that:
(i) The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the Delaware;
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(ii) The Guarantor has the full power and
authority to execute, deliver and perform, and to enter into and
consummate all transactions contemplated by this Guaranty, and has
duly authorized the execution, delivery and performance of this
Guaranty, has duly executed and delivered this Guaranty, and this
Guaranty constitutes the legal, valid and binding obligation of the
Guarantor, enforceable against it in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of
creditors’ rights generally and by the availability of
equitable remedies;
(iii) None of the execution and delivery of this Guaranty, the
consummation of the transactions contemplated hereby or thereby,
nor the fulfillment of or compliance with the terms and conditions
of this Guaranty will conflict with or result in a breach of any of
the terms, conditions or provisions of the Guarantor’s
charter or bylaws or any agreement or instrument to which the
Guarantor is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order,
judgment or decree to which the Guarantor or its property is
subject;
(iv) There is no litigation pending or, to the Guarantor’s
knowledge, after due inquiry, threatened, which if determined
adversely to the Guarantor, would adversely affect the execution,
delivery or enforceability of this Guaranty, or any of the duties
or obligations of the Guarantor hereunder, or which would have a
material adverse effect on the financial condition of the
Guarantor; and
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Guarantor of or compliance by the Guarantor
with this Guaranty or the consummation of the transactions
contemplated hereby or thereby.
5. Enforcement; Application of Payments . Upon the
occurrence of a Servicer Default, the Agent may proceed directly
and at once, without notice, against the Guarantor to obtain
performance of the Guaranteed Obligations, without first proceeding
against Medallion Funding, any other guarantor or any other party,
or against any security or collateral for the Guaranteed
Obligations.
6. Waivers . The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in
the event of receivership or bankruptcy of Medallion Funding,
protest or notice with respect to the Guaranteed 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
Medallion Funding 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) of the
Guaranteed Obligations.
7. Financ
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