Exhibit 10.3

 

EXECUTION VERSION

 

GUARANTEE

 

This Guarantee, dated as of December 13, 2017 (this “Guarantee”), is made among
777 Partners LLC, a Delaware limited liability company, and SuttonPark Capital
LLC, a Delaware limited liability company (collectively, the “Guarantors”), on a
joint and several basis, for and on behalf of Asta Funding, Inc., a Delaware
corporation (the “Payee”), in respect of the Obligations (as defined below) of
CBC Holdings LLC, a Delaware limited liability company (the “Guaranteed Party”).

 

RECITALS

 

WHEREAS, reference is hereby made to the Securities Purchase Agreement dated as
of December 13, 2017 (the “Purchase Agreement”) by and among CBC Holdings LLC,
Asta Funding, Inc. and CBC Settlement Funding, LLC and the Promissory Note,
dated as of December 13, 2017 (the “Note”), issued by the Guaranteed Party in
favor of the Payee;

 

WHEREAS, this Guarantee is being delivered to the Payee on the Closing Date
under the Purchase Agreement to support the payment obligations of the
Guaranteed Party;

 

WHEREAS, the Guaranteed Party is an affiliate of the Guarantors, and the
Guarantors expect to derive substantial indirect benefits from the transactions
contemplated by the Purchase Agreement;

 

WHEREAS, capitalized terms used herein but not defined herein have the meaning
set forth in the Purchase Agreement;

 

WHEREAS, any reference to a Guarantor, the Guaranteed Party, or the Payee in
this Guarantee also refers to their respective successors in title, permitted
assigns and permitted transferees.

 

NOW THEREFORE, in consideration of the foregoing and intending to be legally
bound hereby, the parties hereto agree as follows:

 

1.     Guarantee. To induce the Payee to enter into the Note, for the duration
of this Guarantee as set forth in Section 3 below, the Guarantors, on a joint
and several basis, absolutely, irrevocably and unconditionally guarantee to the
Payee and to any of its successors, heirs and permitted assigns (each, a
“Beneficiary” and collectively the “Beneficiaries”), the prompt payment, when
due and payable, subject to any applicable grace period, of any and all
outstanding payment obligations of the Guaranteed Party arising under the Note
(collectively, the “Obligations”).

 

2.     Nature of Guarantee. This Guarantee constitutes a guarantee of payment
when due and payable, and not of collection, and shall not be conditioned upon
the pursuit of any remedies against the Guaranteed Party.

 

3.     Duration of the Guarantee. This Guarantee is continuing and shall remain
in full force and effect until the payment in full of all the Obligations, shall
be binding upon the Guarantors, and shall inure to the benefit of and be
enforceable by the Beneficiaries. The parties hereto acknowledge and agree that
all Obligations have been created in reliance hereon.

 

 

--------------------------------------------------------------------------------

 

 

4.     Preservation of Rights. The obligations of each Guarantor under this
Guarantee shall, to the fullest extent permitted under applicable law, be
absolute, irrevocable and unconditional irrespective of:

 

(a)     any failure, omission or delay on the part of the Guaranteed Party to
conform or comply with any term of the Note, or any acceleration, extension,
renewal, settlement, compromise, waiver or release in any respect of the
Obligations, by operation of law or otherwise;

 

(b)     any voluntary or involuntary bankruptcy, insolvency, reorganization,
arrangement, assignment for the benefit of creditors, composition, receivership,
liquidation or similar proceedings with respect to the Guarantor, Guaranteed
Party or any other person or any of their respective properties or creditors, or
any action taken by any trustee or receiver or by any court in any such
proceeding;

 

(c)     any merger or consolidation of the Guaranteed Party into or with any
other person, or sale, lease or transfer of any of the assets of the Guaranteed
Party to any other Person; or

 

(d)     any change in ownership of the Guaranteed Party or any change in
relationship between the Guarantor and the Guaranteed Party, or any termination
of any such relationship.

 

5.     Extensions, Waivers and Renewals. The Guarantors agree that the
Beneficiaries may, at any time and from time to time, without notice to or
consent of the Guarantors, make any agreement with the Guaranteed Party for the
extension, renewal, payment, compromise, discharge or release of any Obligation,
in whole or in part, or for any modification of the terms of the Note, which may
modify the Obligations without in any way impairing the validity of this
Guarantee.

 

6.     Attorneys’ Fees and Collection Costs. Guarantors agree to pay all of
Payee’s reasonable attorneys’ fees and collection costs and expenses associated
with the enforcement of this Guarantee to the fullest extent permitted by
applicable law.

 

7.     No Waiver; Cumulative Rights. No amendment or waiver of any provision of
this Guarantee will be valid and binding unless it is in writing and signed by
the Guarantors and the Beneficiaries. No failure on the part of the
Beneficiaries to exercise, or delay in exercising, any right, remedy or power
hereunder, whether intentional or not, shall operate as a waiver thereof, nor
shall any single or partial exercise by the Beneficiaries of any such right,
remedy or power preclude any other or future exercise by the Beneficiaries
thereof. Each and every right, remedy and power hereby granted to the
Beneficiaries or allowed to them by law or other agreement shall be cumulative
and not exclusive of any other, and may be exercised by the Beneficiaries.

 

8.     Waiver of Notice; Waiver of Defenses. To the fullest extent permitted by
Law, the Guarantors hereby waive notice of the acceptance of this Guarantee,
presentment, demand, notice of dishonor, protest and all other notices,
including notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Beneficiaries upon this
Guarantee or acceptance of this Guarantee, and hereby irrevocably and expressly
waive any and all rights, defenses, offsets or counterclaims. Guarantors
acknowledge and agree that this Guarantee is an unconditional guaranty of
payment and an instrument for the payment of money only within the meaning of
CPLR Section 3213.

 

2

--------------------------------------------------------------------------------

 

 

9.     No Subrogation. Upon performance in full by the Guarantors of all
Obligations, the Guarantors shall be subrogated to the rights of the
Beneficiaries only upon the complete satisfaction of the underlying obligations
of the Guaranteed Party to the Beneficiaries under the Note.

 

10.     Representations and Warranties. Each Guarantor as of the date hereof
represents that:

 

(a)     it is duly organized and validly existing under the applicable law of
the jurisdiction of its incorporation and has full power and legal right to
execute and deliver this Guarantee and to perform the provisions of this
Guarantee on its part to be performed;

 

(b)     its execution, delivery and performance of this Guarantee have been duly
authorized by all necessary corporate action, and all material consents,
approvals, authorizations, permits of, filings with and notifications to, any
Governmental Entity necessary for the due execution, delivery and performance of
this Guarantee by such Guarantor have been obtained or made and all conditions
thereof have been duly complied with, and no other material action by, and no
material notice to or material filing with, any Governmental Entity, is required
in respect of the execution, delivery or performance of this Guarantee;

 

(c)     this Guarantee constitutes the valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization, and other
laws of general applicability relating to or affecting creditors’ rights and to
general equity principles;

 

(d)     the execution, delivery and performance by such Guarantor of this
Guarantee does not (i) violate the organizational documents of such Guarantor or
(ii) violate any applicable Law; and

 

(e)     the Guarantors are solvent, and not in default in any material payment
obligation due to any secured lenders, and the execution of this Guarantee does
not and will not render the Guarantors insolvent.

 

11.     Assignment. No Guarantor may (i) assign and transfer its rights and
obligations hereunder pursuant to a consolidation or merger or by operation of
law or sell all or substantially all of its assets; provided that such Guarantor
may, with the consent of the Beneficiaries, which consent shall not be
unreasonably withheld, conditioned or delayed, assign and transfer its rights
and obligations under this Guarantee pursuant to a consolidation or merger or by
operation of law or any reorganization, or sell all or substantially all of its
assets, if, upon the effectiveness of such assignment and transfer or sale, the
successor entity or acquirer of such assets, as applicable, assumes by operation
of law or expressly assumes in writing, in form and substance reasonably
acceptable to the Beneficiary (an “Assumption Agreement”) all such obligations
hereunder; or (ii) otherwise assign or transfer its rights, interests, or
obligations hereunder to any Person with the prior written consent of the
Beneficiaries, such consent not to be unreasonably withheld, conditioned or
delayed and any attempted assignment or transfer without such consent shall be
null and void.

 

3

--------------------------------------------------------------------------------

 

 

(b)     The Beneficiaries may not assign or transfer their rights, interests or
obligations hereunder to any Person without the prior written consent of the
Guarantors, and any attempted assignment or transfer without such consent shall
be null and void; provided, that any Beneficiary may, with the consent of the
Guarantors, which consent shall not be unreasonably withheld, conditioned or
delayed, assign and transfer all of its rights and obligations under this
Guarantee to any Person to which such Beneficiary makes a permitted assignment
and transfer of its rights and obligations under the Note.

 

12.     Notices. All notices or other communications to the Guarantors or the
Beneficiaries shall be in writing and shall be given as follows:

 

if to the Guarantors:

 

777 Partners LLC
600 Brickell Avenue, 19th Floor
Miami, Florida 33131
Attn:            Joshua Wander
Facsimile:    [       ]
E-mail:         [       ]

 

SuttonPark Capital LLC

777 Brickell Ave. Suite 1100

Miami, Florida 33131

Attn:             Steven W. Pasko

Facsimile:     [      ]

E-mail:          [      ]

 

with copies to:

 

Schulte Roth & Zabel
919 Third Avenue
New York, New York 10022
Attn:           Peter Halasz
Facsimile:   (212) 593-5955
Email:         peter.halasz@srz.com

 

4

--------------------------------------------------------------------------------

 

 

if to any Beneficiary:

 

Asta Funding, Inc.

210 Sylvan Avenue

Englewood Cliff, New Jersey 07632

Attn:            Gary Stern

Facsimile:    [      ]

Email:          [      ]
    

with copies to:

 

Edward Stone Law, P.C.
175 West Putnam Avenue, 2nd Floor
Greenwich, Connecticut 06830
Attn:            Eddie Stone
Facsimile:   (203) 348-8477
Email:         eddie@edwardstonelaw.com

 

13.     Disputes. Any suit, action or other proceeding arising out of or
relating to this Guarantee or any transaction contemplated hereby shall be
brought exclusively in courts of the State of New York located in New York
County, or in the event (but only in the event) that such court does not have
subject matter jurisdiction over such action, the United States District Court
for the Southern District of New York and each of the parties hereto hereby
submits to the exclusive jurisdiction of such courts for the purpose of any such
suit, action or other proceeding. A final judgment in any such suit, action or
other proceeding may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by Law. Each party irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Guarantee or the transactions contemplated
hereby in such courts, and hereby irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
Each party further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party’s respective address set forth
herein shall be effective service of process for any such action, suit or
proceeding. Each party hereby irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Guarantee, the transactions
contemplated hereby or the actions of such party in the negotiation,
administration, performance and enforcement hereof.

 

14.     Governing Law. All issues and questions concerning the construction,
validity, interpretation and enforceability of this Guarantee, and all claims
and disputes arising hereunder or thereunder or in connection herewith or
therewith, whether purporting to sound in contract or tort, or at law or in
equity, shall be governed by, and construed in accordance with, the Laws of the
State of New York, without giving effect to any choice of law or conflict of law
rules or provisions (whether of the State of New York or any other jurisdiction)
that would cause the application of the Laws of any jurisdiction other than the
State of New York.

 

15.     Interpretation. The headings contained in this Guarantee are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Guarantee. Unless the context of this Guarantee otherwise
requires (i) words of any gender are deemed to include each other gender, (ii)
words using singular or plural number also include the plural or singular,
respectively, (iii) the terms “hereof”, “herein”, “hereby”, “hereto”, and
derivative or similar words refer to this entire Guarantee, and (iv) the words
“include”, “includes” or “including” shall be deemed to be followed by “without
limitation.”

 

5

--------------------------------------------------------------------------------

 

 

16.     Counterparts. This Guarantee may be executed in counterparts, each of
which shall be deemed an original and each of which shall constitute one and the
same instrument.

 

17.     Entire Agreement. This Guarantee, including the agreements referred to
herein, any documents executed by the parties simultaneously herewith or
pursuant thereto, and the covenants and other agreements set forth herein and
therein, constitute the entire understanding and agreement of the parties hereto
with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, written or oral, between the parties with respect
to such subject matter.

 

18.     Severability. If any provision of this Guarantee, or the application
thereof to any Person or circumstance, is invalid or unenforceable in any
jurisdiction, (a) a substitute and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable in such
jurisdiction, the intent and purpose of the invalid or unenforceable provision;
and (b) the remainder of this Guarantee and the application of such provision to
other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability of such
provision affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.

 

[Remainder of page intentionally left blank]

 

6

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be executed
and delivered as of the date first above written.

 

 

GUARANTORS:

     

777 PARTNERS LLC

         

By:

/s/ Joshua Wander

 

Name:

Joshua Wander

 

Title:

Managing Partner

     

SUTTONPARK CAPITAL LLC

         

By:

/s/ Steven W. Pasko

 

Name:

Steven W. Pasko

 

Title:

Chief Executive Officer

     

By:

/s/ Paul Kosinski

 

Name:

Paul Kosinski

 

Title:

Chief Financial Officer and Chief Operating Officer

     

BENEFICIARY:

     

ASTA FUNDING, INC.

     

By:

/s/ Gary Stern

 

Name:

Gary Stern

 

Title:

Chief Executive Officer

 

 

[Signature Page to Guarantee]