Exhibit 10.3
UNLIMITED GUARANTY
GUARANTY, dated as of August 2,
2007 made by LEASECOMM CORPORATION, a Massachusetts corporation
(the “ Guarantor ”), in favor of SOVEREIGN BANK,
in its capacity as Agent (in such capacity, the “
Agent ”) for the Lenders under the Credit Agreement
dated as of the date hereof among TimePayment Corp., a Delaware
corporation (the “ Borrower ”), the Agent and
the Lenders named therein (the “ Credit Agreement
”). Unless otherwise defined herein, the terms defined in the
Credit Agreement are used herein as defined in the Credit
Agreement
WHEREAS, the Guarantor and the
Borrower are wholly owned subsidiaries of the Parent, and all of
the Parent, the Borrower and the Guarantor will benefit, directly
or indirectly, from the extensions of credit to be made under the
Credit Agreement.
WHEREAS, the Parent has adopted a new
business plan pursuant to which, through its subsidiaries, it will
finance different types of equipment with leases generated from
different sources than had previously been done by the Guarantor
and, as a consequence thereof, the Parent has decided that all new
leases will be generated and financed by the Borrower and that the
Guarantor will only collect and wind down its existing portfolio of
leases and will not generate and finance any new leases.
NOW, THEREFORE, in order to induce
the Agent and the Lenders to enter into the Credit Agreement and to
make or extend one or more loans, advances or other extensions of
credit upon the terms and subject to the conditions set forth in
the Credit Agreement, and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the Guarantor agrees as follows:
1. GUARANTY OF PAYMENT AND
PERFORMANCE . The Guarantor hereby guarantees to the Agent and
the Lenders the full and punctual payment when due (whether at
maturity, by acceleration or otherwise), and the performance, of
all Obligations. This Guaranty is an absolute, unconditional and
irrevocable guaranty of the full and punctual payment and
performance of the Obligations and not of their collectibility only
and is in no way conditioned upon any requirement that the Agent
first attempt to collect any of the Obligations from the Borrower
or resort to any security or other means of obtaining their
payment. Should the Borrower default in the payment or performance
of any of the Obligations, the obligations of the Guarantor
hereunder shall become immediately due and payable to the Agent and
the Lenders, without demand or notice of any nature, all of which
are expressly waived by the Guarantor. Payments by the Guarantor
hereunder may be required by the Agent on any number of
occasions.
2. GUARANTOR’S
AGREEMENT TO PAY . The Guarantor further agrees, as the
principal obligor and not as a guarantor only, to pay to the Agent,
on demand, all costs and expenses (including court costs and
reasonable legal expenses) incurred or expended by the Agent in
connection with the Obligations, this Guaranty and the enforcement
thereof, together with interest on amounts recoverable under this
Guaranty from the time such amounts become due until payment, at
the rate per annum equal to the rate of interest equal to the Base
Rate, plus a margin of four percent (4.00%); provided that if such
interest exceeds the maximum amount permitted to be paid under
applicable law, then such interest shall be reduced to such maximum
permitted amount.
3. UNLIMITED GUARANTY .
The liability of the Guarantor hereunder shall be unlimited.
4. WAIVERS BY GUARANTOR;
BANK’S FREEDOM TO ACT . The Guarantor agrees that the
Obligations will be paid and performed strictly in accordance with
their respective terms regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of
such terms or the rights of the Agent with respect thereto. To the
extent permitted by applicable law, the Guarantor waives
presentment, demand, protest, notice of acceptance, notice of
Obligations incurred and all other notices of any kind, all
defenses which may be available by virtue of any valuation, stay,
moratorium law or other similar law now or hereafter in effect, any
right to require the marshalling of assets of the Borrower, and all
suretyship defenses generally. Without limiting the generality of
the foregoing, the Guarantor, to the extent permitted by applicable
law, agrees to the provisions of any instrument evidencing,
securing or otherwise executed in connection with any Obligation
and agrees that the obligations of the Guarantor hereunder shall
not be released or discharged, in whole or in part, or otherwise
affected by (i) the failure of the Agent to assert any claim or
demand or to enforce any right or remedy against the Borrower;
(ii) any extensions or renewals of any Obligation;
(iii) any rescissions, waivers, amendments or modifications of
any of the terms or provisions of any agreement evidencing,
securing or otherwise executed in connection with any Obligation;
(iv) the substitution or release of any entity primarily or
secondarily liable for any Obligation; (v) the adequacy of any
rights the Agent may have against any collateral or other means of
obtaining repayment of the Obligations; (vi) the impairment of
any collateral securing the Obligations, including without
limitation the failure to perfect or preserve any rights the Agent
might have in such collateral or the substitution, exchange,
surrender, release, loss or destruction of any such collateral; or
(vii) any other act or omission which might in any manner or
to any extent vary the risk of the Guarantor or otherwise operate
as a release or discharge of the Guarantor, all of which may be
done without notice to the Guarantor.
5. COMPLIANCE WITH CREDIT
AGREEMENT AND OTHER COVENANTS .
(a) The
Guarantor agrees to observe, perform, comply with and be bound by
all of the covenants set forth in the Credit Agreement as if each
such covenant were made by the Guarantor with each reference
therein to the “Borrower” changed to the
“Guarantor”, other than the following: Section 5.7 (Use
of Proceeds), Section 5.10 (Borrower’s Cash Accounts),
Section 6.4 (Asset Quality) and Section 7.6 (Restricted
Payments).
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(b) The
Guarantor agrees not to enter into any new lease agreement,
installment sales contract or other agreement as lessor or seller
with respect to any equipment (a “ Lease ”) or
conduct any other business other than performing under, and
collecting revenue from, its existing portfolio of Leases.
6. UNENFORCEABILITY OF
OBLIGATIONS AGAINST BORROWER . If for any reason the Borrower
has no legal existence or is under no legal obligation to discharge
any of the Obligations, or if any of the Obligations have become
irrecoverable from the Borrower by operation of law or for any
other reason, this Guaranty shall nevertheless be binding on the
Guarantor to the same extent as if the Guarantor at all times had
been the principal obligor on
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