Exhibit 10.3

 

GUARANTY

(Corporate)

 

New York, New York As of December 1, 2015

 

FOR VALUE RECEIVED, and in consideration of loans made or to be made or credit
otherwise extended or to be extended by STERLING NATIONAL BANK (“Sterling”),
each of the financial institutions (together with Sterling, collectively,
“Lenders”) named in or which hereafter become a party to the Loan Agreement (as
hereinafter defined) and Sterling, as agent for Lenders (in such capacity,
“Agent”) to or for the account of CDS Business Services, Inc. (“Borrower”) from
time to time and at any time and for other good and valuable consideration and
to induce Agent and Lenders, in their discretion, to make such loans or
extensions of credit and to make or grant such renewals, extensions, releases of
collateral or relinquishments of legal rights as Agent and Lenders may deem
advisable, the undersigned (and each of them if more than one, the liability
under this Guaranty being joint and several) unconditionally guaranties to Agent
for its own benefit and for the ratable benefit of Lenders, their successors,
endorsees and assigns the prompt payment, immediately upon demand from Agent
following the failure of Borrower to pay when due (whether by acceleration or
otherwise), of (i) any indebtedness and liabilities (including, without
limitation, direct loans, overdrafts, drafts under letters of credit, amounts
outstanding under letters of credit, reimbursement obligations in connection
with drafts under letters of credit, and outstanding banker’s acceptances and/or
drafts in connection therewith, all principal, interest, fees, expenses and
other obligations of any nature whatsoever which may or shall become due and
payable by Borrower to Agent, Lenders or any of their Affiliates (as such term
is defined herein), whether direct or indirect, pursuant to the Loan Agreement
the other Loan Documents (as such terms are defined below) or otherwise whether
arising under that certain Amended and Restated Loan and Security Agreement
dated as of the date hereof by and among Borrower, the guarantors named therein
or which hereafter become a party thereto, Lenders and Agent (as the same may be
further amended, supplemented, modified or restated from time to time, the “Loan
Agreement”), the other Loan Documents (as such term is defined in the Loan
Agreement) or otherwise and (ii) any obligations arising under any guaranty or
similar undertaking in respect of any such indebtedness and liabilities referred
to in the preceding clause (i) (collectively referred to herein as the
“Obligations”) and irrespective of the genuineness, validity, regularity or
enforceability of such Obligations, or of any instrument evidencing any of the
Obligations or of any collateral therefor or of the existence or extent of such
collateral, and irrespective of the allowability, allowance or disallowance of
any or all of the Obligations in any case commenced by or against Borrower under
Title II, United States Code, including, without limitation, obligations or
indebtedness of Borrower for post-petition interest, fees, costs and charges
that would have accrued or been added to Borrower’s Obligations to Agent and the
Lenders but for the commencement of such case. Terms defined in the Loan
Agreement shall have the same meanings herein, unless otherwise herein expressly
provided. In furtherance of the foregoing, the undersigned hereby agrees as
follows:

 

 

 

 

1.            No Impairment. Agent and Lenders may at any time and from time to
time, either before or after the maturity thereof, without notice to or further
consent of the undersigned, extend the time of payment of, exchange or surrender
any collateral for, renew or extend any of the Obligations or increase or
decrease the interest rate thereon, and may also make any agreement with
Borrower or with any other party to or person liable on any of the Obligations,
or interested therein, for the extension, renewal, payment, compromise,
discharge or release thereof, in whole or in part, or for any modification of
the terms thereof or of any agreement between or among Agent, Lenders and
Borrower or any such other party or person, or make any election of rights Agent
and Lenders may deem desirable under the United States Bankruptcy Code, as
amended, or any other federal or state bankruptcy, reorganization, moratorium or
insolvency law relating to or affecting the enforcement of creditors’ rights
generally (any of the foregoing, an “Insolvency Law”) without in any way
impairing or affecting this Guaranty. This instrument shall be effective
regardless of the subsequent incorporation, merger or consolidation of Borrower,
or any change in the composition, nature, personnel or location of Borrower and
shall extend to any successor entity to Borrower, including a debtor in
possession or the like under any Insolvency Law.

 

2.            Guaranty Absolute. The undersigned guarantees that the Obligations
will be paid strictly in accordance with the terms of the Loan Agreement, the
other Loan Documents and/or any other document, instrument or agreement creating
or evidencing the Obligations, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of Borrower with respect thereto. The undersigned hereby knowingly
accepts the full range of risk encompassed within a contract of “continuing
guaranty” which risk includes the possibility that Borrower will contract
additional indebtedness for which the undersigned may be liable hereunder after
Borrower’s financial condition or ability to pay its lawful debts when they fall
due has deteriorated, whether or not Borrower has properly authorized incurring
such additional indebtedness. The undersigned acknowledges that (i) no oral
representations, including any representations to extend credit or provide other
financial accommodations to Borrower, have been made by Agent or any Lender to
induce the undersigned to enter into this Guaranty and (ii) any extension of
credit to the Borrower shall be governed solely by the provisions of the Loan
Agreement. The liability of the undersigned under this Guaranty shall be
absolute and unconditional, in accordance with its terms, and shall remain in
full force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation: (a) any waiver, indulgence, renewal,
extension, amendment or modification of or addition, consent or supplement to or
deletion from or any other action or inaction under or in respect of the Loan
Agreement or the other Loan Documents or any other instruments or agreements
relating to the Obligations or any assignment or transfer of any thereof; (b)
any lack of validity or enforceability of any Loan Document or other documents,
instruments or agreements relating to the Obligations or any assignment or
transfer of any thereof; (c) any furnishing of any additional security to Agent
for the ratable benefit of the Lenders or its assignees or any acceptance
thereof or any release of any security by Agent or its assignees; (d) any
limitation on any party’s liability or obligation under Loan Agreement or the
other Loan Documents or any other documents, instruments or agreements relating
to the Obligations or any assignment or transfer of any thereof or any
invalidity or unenforceability, in whole or in part, of any such document,
instrument or agreement or any term thereof; (e) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to Borrower, or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such proceeding,
whether or not the undersigned shall have notice or knowledge of any of the
foregoing; (f) any exchange, release or nonperfection of any collateral, or any
release, or amendment or waiver of or consent to departure from any guaranty or
security, for all or any of the Obligations; or (g) any other circumstance which
might otherwise constitute a defense available to, or a discharge of, the
undersigned. Any amounts due from the undersigned to Agent or any Lender shall
bear interest until such amounts are paid in full at the highest rate then
applicable to the Obligations of Borrower to Lenders under the Loan Agreement.
Obligations include post-petition interest whether or not allowed or allowable.

 

 

 

 

3.            Waivers. (a)   This Guaranty is a guaranty of payment and not of
collection. Neither Agent nor any Lender shall be under any obligation to
institute suit, exercise rights or remedies or take any other action against
Borrower or any other person liable with respect to any of the Obligations or
resort to any collateral security held by it to secure any of the Obligations as
a condition precedent to the undersigned being obligated to perform as agreed
herein and the undersigned hereby waives any and all rights which it may have by
statute or otherwise which would require Agent or any Lender to do any of the
foregoing. The undersigned further consents and agrees that neither Agent nor
Lenders shall be under any obligation to marshal any assets in favor of the
undersigned, or against or in payment of any or all of the Obligations. The
undersigned hereby waives any rights to interpose any defense, counterclaim or
offset of any nature and description which it may have or which may exist
between and among Agent, Lenders, Borrower and/or the undersigned with respect
to the undersigned’s obligations under this Guaranty, or which Borrower may
assert on the underlying debt, including but not limited to failure of
consideration, breach of warranty, fraud, payment (other than cash payment in
full of the Obligations), statute of frauds, bankruptcy, infancy, statute of
limitations, accord and satisfaction, and usury.

 

(b)   The undersigned further waives (i) notice of the acceptance of this
Guaranty, of the making of any such loans or extensions of credit, and of all
notices and demands of any kind to which the undersigned may be entitled (except
as set forth in the first paragraph of this Guaranty), including, without
limitation, notice of adverse change in Borrower’s financial condition or of any
other fact which might materially increase the risk of the undersigned; (ii)
presentment to or demand of payment from anyone whomsoever liable upon any of
the Obligations, protest, notices of presentment, non-payment or protest and
notice of any sale of collateral security or any default of any sort; and (iii)
the right to assert the statute of limitations as a defense in any lawsuit or
any tolling of the statute of limitations.

 

(c)   Notwithstanding any payment or payments made by the undersigned hereunder,
or any setoff or application of funds of the undersigned by Agent or any Lender,
the undersigned shall not be entitled to be subrogated to any of the rights of
Agent or any Lender against Borrower or against any collateral or guarantee or
right of offset held by Agent or any Lender for the payment of the Obligations,
nor shall the undersigned seek or be entitled to seek any contribution or
reimbursement from Borrower in respect of payments made by the undersigned
hereunder, until all amounts owing to Agent and each Lender by Borrower on
account of the Obligations are paid in full and the Loan Agreement has been
terminated. If, notwithstanding the foregoing, any amount shall be paid to the
undersigned on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full and the Loan Agreement shall not
have been terminated, such amount shall be held by the undersigned in trust for
Agent and Lenders, segregated from other funds of the undersigned, and shall
forthwith upon, and in any event within two (2) business days of, receipt by the
undersigned, be turned over to Agent for the ratable benefit of the Lenders in
the exact form received by the undersigned (duly endorsed by the undersigned to
Agent, if required), to be applied against the Obligations, whether matured or
unmatured, in such order as Agent and Lenders may determine, subject to the
provisions of the Loan Agreement. Any and all present and future debts and
obligations of Borrower to any of the undersigned are hereby waived and
postponed in favor of, and subordinated to the full payment and performance of,
all present and future debts and obligations of Borrower to Agent and Lenders.

 

 

 

 

4.            Security. All sums at any time to the credit of the undersigned
and any property of the undersigned in Agent’s or any Lender’s possession or in
the possession of any bank, financial institution or other entity that directly
or indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, Agent or any Lender (each such entity, an
“Affiliate”) shall be deemed held by Agent, such Lender or such Affiliate, as
the case may be, as security for any and all of the undersigned’s obligations to
Agent and Lenders and to any Affiliate of Agent or any Lender, no matter how or
when arising and whether under this or any other instrument, agreement or
otherwise.

 

In addition, as collateral security for the Obligations, Guarantor has
previously deposited with Agent, the sum of $750,000 to be held by Agent for the
uses and purposes stated below (this deposit to be hereinafter referred to as
the "Collateral Deposit").

 

Upon the occurrence of an Event of Default or if any default shall have occurred
and be continuing under any agreement between or among Borrower or Guarantor and
Agent or any Lender, Agent and its successors and assigns may, without demand of
performance or advertisement or notice of any kind to or upon Guarantor (each of
which demands, advertisements and/or notices are hereby expressly waived),
forthwith or at any time or times thereafter, appropriate and apply all or any
part of the Collateral Deposit to the payment in whole or in part, in such order
as Agent may elect, in its sole discretion, of the Obligations, whether then due
or not due.

 

5.            Representations and Warranties. The undersigned hereby represents
and warrants (all of which representations and warranties shall survive until
all Obligations are indefeasibly satisfied in full and there remain no
outstanding commitments under the Loan Agreement), that:

 

(a)   Corporate Status. The undersigned is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland and is
qualified to conduct business in the State of New York, and has full power,
authority and legal right to own its property and assets and to transact the
business in which it is engaged.

 

(b)   Authority and Execution. The undersigned has full power, authority and
legal right to execute and deliver, and to perform its obligations under, this
Guaranty and has taken all necessary corporate and legal action to authorize the
execution, delivery and performance of this Guaranty.

 

(c)   Legal, Valid and Binding Character. This Guaranty constitutes the legal,
valid and binding obligation of the undersigned enforceable in accordance with
its terms, except as enforceability may be limited by applicable Insolvency Law.

 

 

 

 

(d)   Violations. The execution, delivery and performance of this Guaranty will
not violate any requirement of law applicable to the undersigned or any material
contract, agreement or instrument to which the undersigned is a party or by
which the undersigned or its property is bound or result in the creation or
imposition of any mortgage, lien or other encumbrance other than to Agent for
the ratable benefit of Lenders on any of the property or assets of the
undersigned pursuant to the provisions of any of the foregoing.

 

(e)   Consents or Approvals. No consent of any other Person (including, without
limitation, any creditor of the undersigned) and no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required
in connection with the execution, delivery, performance, validity or
enforceability of this Guaranty.

 

(f)   Litigation. No litigation, arbitration, investigation or administrative
proceeding of or before any court, arbitrator or governmental authority, bureau
or agency is currently pending or, to the best knowledge of the undersigned,
threatened (i) with respect to this Guaranty or any of the transactions
contemplated by this Guaranty or (ii) against or affecting the undersigned, or
any of its property or assets, which, if adversely determined, would have a
material adverse effect on the business, operations, assets or condition,
financial or otherwise, of the undersigned.

 

(g)   Material Adverse Change. Since December 31, 2014, there has been no
material adverse change in the assets or condition, financial or otherwise, of
the undersigned.

 

(h)   Financial Benefit. The undersigned has derived or expects to derive a
financial or other advantage from each and every loan, advance or extension of
credit made under the Loan Agreement or other Obligation incurred by Borrower to
Agent and Lenders.

 

The foregoing representations and warranties (other than that set forth in
paragraph (g) above) shall be deemed to have been made by the undersigned on the
date of each borrowing by Borrower under the Loan Agreement on and as of such
date of such borrowing as though made hereunder on and as of such date.

 

6.            Acceleration. (a)   If either Borrower or the undersigned should
at any time become insolvent, or make a general assignment, or if a proceeding
in or under any Insolvency Law shall be filed or commenced by, or in respect of,
the undersigned, or if a notice of any lien, levy, or assessment is filed of
record with respect to any assets of the undersigned by the United States or any
department, agency, or instrumentality thereof, any and all Obligations shall
for purposes hereof, at Agent’s or any Lender’s option, be deemed due and
payable without notice notwithstanding that any such Obligation is not then due
and payable by Borrower.

 

(b)   The undersigned will promptly notify Agent of any default by the
undersigned in the performance or observance of any material term or condition
of any agreement to which the undersigned is a party if the effect of such
default is to cause, or permit the holder of any obligation under such agreement
to cause, such obligation to become due prior to its stated maturity and, if
such an event occurs, and such acceleration will have, in the Agent’s reasonable
opinion, a material adverse effect upon the financial condition of the
undersigned, Agent shall have the right to accelerate the undersigned’s
obligations hereunder.

 

 

 

 

7.            Payments from Guarantor. Agent, on behalf of Lenders, in its sole
and absolute discretion, with or without notice to the undersigned, may apply on
account of the Obligations any payment from the undersigned or any other
guarantor, or amounts realized from any security for the Obligations, or may
deposit any and all such amounts realized in an interest bearing cash collateral
deposit account to be maintained as security for the Obligations.

 

8.            Costs. The undersigned shall pay on demand, all fees and expenses
(including reasonable expenses for legal services of every kind) relating or
incidental to the enforcement or protection of the rights of Agent or any Lender
hereunder or under any of the Obligations.

 

9.            No Termination. This is a continuing irrevocable guaranty and
shall remain in full force and effect and be binding upon the undersigned, and
the undersigned’s successors and assigns, until all of the Obligations have been
paid in full and the Loan Agreement has been terminated. If any of the present
or future Obligations are guarantied by persons, partnerships or corporations in
addition to the undersigned, the death, release or discharge in whole or in part
or the bankruptcy, merger, consolidation, incorporation, liquidation or
dissolution of one or more of them shall not discharge or affect the liabilities
of the undersigned under this Guaranty.

 

10.          Recapture. Anything in this Guaranty to the contrary
notwithstanding, if Agent or any Lender receives any payment or payments on
account of the liabilities guarantied hereby, which payment or payments or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver, or
any other party under any Insolvency Law, common law or equitable doctrine, then
to the extent of any sum not finally retained by Agent or any such Lender, the
undersigned’s obligations to Agent and Lenders shall be reinstated and this
Guaranty shall remain in full force and effect (or be reinstated) until payment
shall have been made to Lender, which payment shall be due on demand.

 

11.          Books and Records. The books and records of Agent showing the
account among Agent, Lenders and Borrower shall be admissible in evidence in any
action or proceeding, shall be binding upon the undersigned for the purpose of
establishing the items therein set forth and shall constitute prima facie proof
thereof.

 

12.          No Waiver. No failure on the part of Agent to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Agent of any right,
remedy or power hereunder preclude any other or future exercise of any other
legal right, remedy or power. Each and every right, remedy and power hereby
granted to Agent or allowed it by law or other agreement shall be cumulative and
not exclusive of any other, and may be exercised by Agent at any time and from
time to time.

 

13.          Waiver of Jury Trial. THE UNDERSIGNED DOES HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO. THE UNDERSIGNED DOES
HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF AGENT OR ANY LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION.

 

 

 

 

14.          Governing Law; Jurisdiction; Amendments. THIS INSTRUMENT CANNOT BE
CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETED
AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. THE UNDERSIGNED EXPRESSLY CONSENTS TO THE
JURISDICTION AND VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF
NEW YORK, AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR ALL PURPOSES IN CONNECTION HEREWITH. ANY JUDICIAL PROCEEDING BY THE
UNDERSIGNED AGAINST AGENT AND/OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY
ANY MATTER OR CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED HEREWITH
SHALL BE BROUGHT ONLY IN THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF
NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK. THE UNDERSIGNED FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER
PROCESS OR PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER
APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY
NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR
OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE
PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER
AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. THE UNDERSIGNED WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREON AND SHALL
NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON
FORUM NON CONVENIENS.

 

15.          Severability. To the extent permitted by applicable law, any
provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

16.          Amendments, Waivers. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the undersigned therefrom shall in
any event be effective unless the same shall be in writing executed by the
undersigned, Agent and Lenders.

 

17.          Notice. All notices, requests and demands to or upon the
undersigned, shall be in writing or by telecopy or telex and shall be deemed to
have been duly given or made (a) when delivered, if by hand, (b) three (3) days
after being deposited in the mail, postage prepaid, if by mail, (c) when
confirmed, if by telecopy or, (d) in the case of telex notice, when sent, answer
back receiver, in each event, to the number and address set forth beneath the
signature of the undersigned.

 

 

 

 

18.          Successors. Agent or any Lender may, from time to time, without
notice to the undersigned, sell, assign, transfer or otherwise dispose of all or
any part of the Obligations and/or rights under this Guaranty. Without limiting
the generality of the foregoing, Agent or any Lender may assign, or grant
participations to, one or more banks, financial institutions or other entities
all or any part of any of the Obligations in accordance with the terms of the
Loan Agreement. In each such event, Agent, any Lender, its Affiliates and each
and every immediate and successive purchaser, assignee, transferee or holder of
all or any part of the Obligations shall have the right to enforce this
Guaranty, by legal action or otherwise, for its own benefit as fully as if such
purchaser, assignee, transferee or holder were herein by name specifically given
such right. Agent or any Lender shall have an unimpaired right to enforce this
Guaranty for its benefit with respect to that portion of the Obligations which
Agent or any such Lender has not disposed of, sold, assigned, or otherwise
transferred.

 

19.          Release. Nothing except cash payment in full of the Obligations and
the irrevocable termination of the Loan Agreement shall release the undersigned
from liability under this Guaranty.

 

20.          Application of Payments. Any payments made by Guarantor hereunder
from the proceeds of any collateral consisting of real property shall be deemed
to be applied to the Obligations after all other payments made with respect to
the Obligations.

 

21.          Credit Checks. The Bank is authorized to perform credit checks or
request credit reports in respect of Guarantor at any time.

 

[REMAINDER OF THE PAGE LEFT INTENTIONALLY BLANK]

 

 

 

 

IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned as of
December 1, 2015.

 

  NEWTEK BUSINESS SERVICES CORP.       By: /s/ Barry Sloane   Name:   Barry
Sloane   Its: Chief Executive Officer       Address:   212 West 35th Street,
Second Floor   New York, New York  10001   Attention:  Barry Sloane  
Facsimile:   (212) 273-8293

 

 

 

 

STATE OF NEW YORK )   ): ss.: COUNTY OF NEW YORK )

 

On the 3rd day of December, 2015, before me personally came BARRY SLOANE, to me
known, who being by me duly sworn, did depose and say that he is the Chief
Executive Officer of Newtek Business Services Corp., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the board of directors of said corporation.

 

  /s/ Dahlia Sattar     Notary Public