PARENT GUARANTY
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This Parent Guaranty (herein referred to as the "Guaranty") is executed as
of the ____ day of January, 2003, by EGX FUNDS TRANSFER, INC., a Delaware
corporation (herein referred to as the "Guarantor"), in order to induce IIG
CAPITAL LLC as agent for IIG TRADE OPPORTUNITIES FUND N.V. (herein referred to
as "Secured Party"), to continue to provide financial accommodations to E
MERCHANT PROCESSING, INC. (herein referred to as "Debtor").
1. Guaranty of Payment.
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(a) Guarantor and any debtor-in-possession or trustee in bankruptcy
which succeeds to the interest of Guarantor hereby unconditionally guarantees
the full and prompt payment to Secured Party when due, whether by acceleration
or otherwise, of any and all Indebtedness (as hereinafter defined) of Debtor to
Secured Party.
(b) As used in this Guaranty, "Indebtedness" shall mean any and all
indebtedness of Debtor to Secured Party under that certain Secured Promissory
Note dated of even date herewith made by Debtor payable to the order of Secured
Party in an aggregate principal amount of US$4,000,000 (as the same may be
amended, restated, extended, renewed or otherwise modified, the "Note") and any
and all indebtedness and other liabilities of Debtor to Secured Party of every
kind and character and all extensions, renewals and replacements thereof,
including, without limitation, all unpaid accrued interest thereon and all costs
and expenses payable as hereinafter provided: (i) whether now existing or
hereafter incurred; (ii) whether direct, indirect, primary, absolute, secondary,
contingent, secured, unsecured, matured or unmatured; (iii) whether such
indebtedness is from time to time reduced and thereafter increased, or entirely
extinguished and thereafter reincurred; (iv) whether such indebtedness was
originally contracted with Secured Party or with another or others; (v) whether
or not such indebtedness is evidenced by a negotiable or nonnegotiable
instrument or any other writing; and (vi) whether such indebtedness is
contracted by Debtor alone or jointly or severally with another or others.
Notwithstanding that Debtor may not be obligated to Secured Party for interest
and/or attorneys' fees and expenses on, or in connection with, the Indebtedness
from and after the Petition Date (as hereinafter defined) as a result of the
provisions of the federal bankruptcy law or otherwise, Indebtedness for which
Guarantor shall be obligated under this Guaranty shall include interest accruing
on the Indebtedness at the highest rate provided for in the Note from and after
the date on which Debtor files for protection under the federal bankruptcy laws
or from and after the date on which an involuntary proceeding is filed against
Debtor under the federal bankruptcy laws (herein collectively referred to as the
"Petition Date") and all reasonable attorneys' fees and expenses incurred by the
Secured Party from and after the Petition Date in connection with the
Indebtedness.
(c) Guarantor acknowledges that valuable consideration supports this
Guaranty, including, without limitation, any commitment to lend, extension of
credit or other financial accommodation, whether heretofore or hereafter made by
Secured Party to Debtor; any extension, renewal or replacement of any
Indebtedness; any forbearance with respect to any Indebtedness or
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otherwise; any cancellation of an existing guaranty; any purchase of any of
Debtor's assets by Secured Party; or any other valuable consideration.
2. Secured Party's Costs and Expenses. Guarantor agrees to pay on demand
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all costs and expenses of every kind incurred by Secured Party: (a) in
enforcing this Guaranty; (b) in collecting any Indebtedness from Debtor or
Guarantor; (c) in realizing upon or protecting any collateral for this Guaranty
or for payment of any Indebtedness; and (d) for any other purpose related to the
Indebtedness or this Guaranty. "Costs and expenses" as used in the preceding
sentence shall include, without limitation, the actual attorneys' fees incurred
by Secured Party in retaining counsel for advice, suit, appeal, any insolvency
or other proceedings under the Federal Bankruptcy Code or otherwise, or for any
purpose specified in the preceding sentence.
3. Nature of Guaranty: Continuing, Absolute and Unconditional.
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(a) This Guaranty is and is intended to be a continuing guaranty of
payment and performance of the Indebtedness (irrespective of the aggregate
amount thereof) independent of and in addition to any other guaranty,
endorsement, collateral or other agreement held by Secured Party therefor or
with respect thereto, whether or not furnished by Guarantor.
(b) This Guaranty is absolute and unconditional and shall not be
changed or affected by any representation, oral agreement, act or thing
whatsoever, except as herein provided. This Guaranty is intended by Guarantor to
be the final, complete and exclusive expression of the agreement between
Guarantor and Secured Party. No modification or amendment of any provision of
this Guaranty shall be effective unless in writing and signed by a duly
authorized officer of Secured Party.
4. Certain Rights and Obligations.
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(a) Guarantor authorizes Secured Party, without notice, demand or any
reservation of rights against Guarantor and without affecting Guarantor's
obligations hereunder, from time to time: (i) to renew, extend, increase,
accelerate or otherwise change the time for payment of, the terms of, or the
interest on, the Indebtedness or any part thereof; (ii) to accept from any
person or entity and hold collateral for the payment of the Indebtedness or any
part thereof, and to exchange, enforce or refrain from enforcing, or release,
such collateral or any part thereof; (iii) to accept and hold any indorsement or
guaranty of payment of the Indebtedness or any part thereof, and to discharge,
release or substitute any such obligation of any such indorser or guarantor, or
any person or entity who has given any security interest in any collateral as
security for the payment of the Indebtedness or any part thereof, or any other
person or entity in any way obligated to pay the Indebtedness or any part
thereof, and to enforce or refrain from enforcing, or compromise or modify, the
terms of any obligation of any such indorser, guarantor, person or entity; (iv)
to dispose of any and all collateral securing the Indebtedness in any manner as
Secured Party, in its sole discretion, may deem appropriate, and to direct the
order or manner of such disposition and the enforcement of any and all
endorsements and guaranties relating to the Indebtedness or any part thereof as
Secured Party, in its sole discretion, may determine; and (v) to determine the
manner, amount and time of
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application of payments and credits, if any, to be made on all or any part of
any component or components of the Indebtedness (whether principal, interest,
costs and expenses, or otherwise).
(b) If any default shall be made in the payment of any Indebtedness,
Guarantor hereby agrees to pay the same in full: (i) without deduction by
reason of any setoff, defense or counterclaim of Debtor; (ii) without requiring
protest or notice of nonpayment or notice of default to Guarantor, to Debtor or
to any other person; (iii) without demand for payment or proof of such demand;
(iv) without requiring Secured Party to resort first to Debtor (this being a
guaranty of payment and not of collection) or to any other guaranty or any
collateral which the Secured Party may hold; (v) without requiring notice of
acceptance hereof or assent hereto by Secured Party; and (vi) without requiring
notice that any Indebtedness has been incurred or of the reliance by the Secured
Party upon this Guaranty; all of which Guarantor hereby waives.
(c) Guarantor hereby irrevocably and unconditionally waives all
suretyship defenses. Guarantor's obligation hereunder shall not be affected by
any of the following, all of which Guarantor hereby waives: (i) any failure to
perfect or continue the perfection of any security interest in or other lien on
any collateral securing payment of any Indebtedness or Guarantor's obligations
hereunder; (ii) the invalidity, unenforceability, propriety or manner of
enforcement of, or loss or change in priority of, any such security interest or
other lien; (iii) any failure to protect, preserve or insure any such
collateral; (iv) failure of Guarantor to receive notice of any intended
disposition of such collateral; (v) any defense arising by reason of the
cessation from any cause whatsoever of liability of the Debtor including,
without limitation, any failure, negligence or omission by Secured Party in
enforcing its claims against the Debtor; (vi) any release, settlement or
compromise of any obligation of Debtor; (vii) the invalidity or unenforceability
of any of the Indebtedness; or (viii) it is especially and expressly agreed that
if the indebtedness of said Debtor now or at any time hereafter exceeds the
amount permitted by law, or if Debtor's obligation to pay interest, attorneys'
fees, costs or expenses or any other sums ceases to exist by operation of law,
or if said Debtor is not liable because the act of creating the obligation is
ultra xxxxx, or the officers creating same acted without authority, and for
these reasons the indebtedness to Secured Party which Guarantor agrees to pay
cannot be enforced against the Debtor, such fact shall in no manner affect
Guarantor's liability hereunder, notwithstanding the fact that said Debtor is
not liable for such indebtedness, but Guarantor shall be liable hereunder to the
same extent as Guarantor would have been if the indebtedness of the said Debtor
had been fully enforceable against said Debtor. Guarantor hereby waives notice
of intent to accelerate the Indebtedness and notice of acceleration of the
Indebtedness.
5. Subordination of Subrogation and Contribution. Guarantor hereby
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irrevocably subordinates any claim or other rights which it may have against
Debtor that arise from the existence, payment, performance or enforcement of
Guarantor's obligations under this Guaranty, the Note, or any other agreement
between Secured Party and Debtor related to the Loan Agreement (hereinafter
collectively referred to as the "Loan Documents"), including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy of Secured
Party against Debtor or any collateral which Secured Party now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract,
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statute or common law, including, without limitation, the right to take or
receive from Debtor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim or
other rights. If any amount shall be paid to Guarantor in violation of the
preceding sentence and the Indebtedness shall not have been paid in full, such
amount shall be deemed to have been paid to Guarantor for the benefit of, and
held in trust for the benefit of, Secured Party and shall forthwith be paid to
Secured Party and credited and applied upon the Indebtedness, whether matured or
unmatured, in accordance with the terms of the Loan Documents. Guarantor
acknowledges that it will receive material, direct and indirect benefits from
the Indebtedness provided by Secured Party to Debtor and the other transactions
evidenced by and contemplated in the Loan Documents and that the waiver set
forth in this Section 5 is knowingly made in contemplation of such benefits.
6. Other Parties: Joint and Several Liability.
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(a) If more than one party executes this Guaranty, or if other
separately executed guaranties of the Indebtedness presently, or in the future,
exist, Secured Party shall have the right to discharge or release one or more of
the undersigned from any obligation hereunder, in whole or in part, without in
any way releasing, impairing or affecting its right against the other or others
or the undersigned. The failure of any other person to sign this Guaranty shall
not release or affect the obligations or liability of the undersigned.
(b) If more than one party executes this Guaranty, the obligations of
the undersigned hereunder shall be joint and several and the term "Guarantor"
shall include each as well as all of them.
7. Guaranty of Payment. Guarantor guarantees the full, prompt and
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unconditional performance of all Indebtedness.
8. Termination. This Guaranty shall remain in full force and effect as to
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each Guarantor until Secured Party shall actually receive from such Guarantor
written notice of its discontinuance, or notice of the death or judicial
declaration of incompetency of such Guarantor; provided, however, this Guaranty
shall remain in full force and effect thereafter until all indebtedness
outstanding or contracted or committed for (whether or not outstanding) before
the receipt of such notice by Secured Party, and any extensions, renewals or
replacements thereof (whether made before or after receipt of such notice),
together with interest accruing thereon after such notice, shall be finally and
irrevocably paid in full. Discontinuance of this Guaranty as to one Guarantor
shall not operate as a discontinuance hereof as to any other Guarantor. Payment
of all of the Indebtedness from time to time shall not operate as a
discontinuance of this Guaranty, unless notice of discontinuance as above
provided has theretofore actually been received by Secured Party. If after
receipt of any payment of all or any part of the Indebtedness, Secured Party is
for any reason compelled to surrender such payment to any person or entity,
because such payment is determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any reason, this
Guaranty shall continue in full force notwithstanding any contrary action which
may have been taken by Secured Party in reliance upon such payment, and any such
contrary action so taken shall be without
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prejudice to Secured Party's rights under this Guaranty and shall be deemed to
have been conditioned upon such payment having become final and irrevocable.
9. Representations and Warranties. Guarantor represents and warrants to
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Secured Party as follows:
(a) Guarantor has the power and authority to execute, deliver and
perform its obligations under this Guaranty, and this Guaranty constitutes the
legal, valid and binding obligation of Guarantor, enforceable against Guarantor
in accordance with its terms, except as limited by bankruptcy, insolvency, or
other laws of general application relating to the enforcement of creditor's
rights.
(b) The execution, delivery, and performance by Guarantor of this
Guaranty will not violate any law or any order of any court, governmental
authority or arbitrator and will not conflict with, result in a breach of, or
constitute a default under, or result in the imposition of any lien upon any
assets of Guarantor pursuant to the provisions of, any indenture, mortgage, deed
of trust, security agreement, franchise, permit, license, or other instrument or
agreement to which Guarantor or its properties is bound.
(c) No authorization, approval, or consent of, and no filing or
registration with, any court, governmental authority, or third party is
necessary for the execution, delivery or performance by Guarantor of this
Guaranty or the validity or enforceability thereof.
(d) Debtor is a wholly-owned subsidiary of Guarantor and the value of
the consideration received and to be received by Guarantor as a result of
Secured Party making extensions of credit to Debtor and Guarantor executing and
delivering this Guaranty is reasonably worth at least as much as the liability
and obligation of Guarantor hereunder, and such liability and obligation and
such extensions of credit may reasonably be expected to benefit Guarantor
directly or indirectly.
(e) Guarantor is Solvent (as hereinafter defined). For purposes of
this Guaranty, "Solvent" means, when used with respect to each Guarantor, that:
(a) the fair value of all its assets is in excess of the total amount of its
debts (including contingent liabilities); (b) it is able to pay its debts as
they mature; and (c) it does not have unreasonably small capital for the
business in which it is engaged or for any business or transaction in which it
is about to engage.
10. Covenants. Guarantor covenants and agrees that, as long as the
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Indebtedness or any part thereof is outstanding or Secured Party has any
commitment to Debtor:
(a) Guarantor will furnish promptly to Secured Party written notice
of the occurrence of any default under this Guaranty;
(b) Guarantor will furnish promptly to Secured Party such additional
information concerning Guarantor as Secured Party may request; and
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(c) Guarantor will obtain at any time and from time to time all
authorizations, licenses, consents or approvals as shall now or hereafter be
necessary or desirable under all applicable laws or regulations or otherwise in
connection with the execution, delivery and performance of this Guaranty and
will promptly furnish copies thereof to Secured Party.
11. Miscellaneous.
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(a) "Debtor" and "Guarantor" as used in this Guaranty shall include:
(i) any successor individual or individuals, association, partnership or
corporation to which all or a substantial part of the business or assets of
Debtor or Guarantor shall have been transferred; (ii) in the case of a
partnership Debtor or Guarantor, any new partnership which shall have been
created by reason of the admission of any new partner or partners therein or by
reason of the dissolution of the existing partnership by voluntary agreement or
the death, resignation or other withdrawal of any partner; and (iii) in the case
of a corporate Debtor, any other corporation into or with which Debtor shall
have been merged, consolidated, reorganized or absorbed.
(b) Without limiting any other right of Secured Party, whenever
Secured Party has the right to declare any Indebtedness to be immediately due
and payable (whether or not it has so declared), Secured Party at its sole
election may set off against the Indebtedness any and all monies then owed to
Guarantor by Secured Party in any capacity, whether or not the Indebtedness or
the obligation to pay such moneys owed by Secured Party is then due, and Secured
Party shall be deemed to have exercised such right of setoff immediately at the
time of such election even though any charge therefor is made or entered on
Secured Party's records subsequent thereto.
(c) Guarantor's obligation hereunder is to pay the Indebtedness in
full when due according to its terms, and shall not be affected by any extension
of time for payment by the Debtor resulting from any proceeding under the
Federal Bankruptcy Code or any similar law.
(d) No course of dealing between Debtor or Guarantor and Secured
Party and no act, delay or omission by Secured Party in exercising any right or
remedy hereunder or with respect to the Indebtedness shall operate as a waiver
thereof or of any other right or remedy, and no single or partial exercise
thereof shall preclude any other or further exercise thereof or the exercise of
any other right or remedy. Secured Party may remedy any default by Debtor under
any agreement with Debtor or with respect to the Indebtedness in any reasonable
manner without waiving the default remedied and without waiving any other prior
or subsequent default by Debtor. All rights and remedies of Secured Party
hereunder are cumulative.
(e) Secured Party and Guarantor as used herein shall include the
successors or assigns of those parties. The rights and benefits of Secured
Party hereunder shall, if Secured Party so directs, inure to any party acquiring
any interest in the Indebtedness or any part thereof. If any right of Secured
Party hereunder is construed to be a power of attorney, such power of attorney
shall not be affected by the subsequent disability or incompetence of Guarantor.
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(f) Captions of the paragraphs of this Guaranty are solely for the
convenience of Secured Party and Guarantor, and are not an aid in the
interpretation of this Guaranty.
(g) GUARANTOR AGREES THAT ANY ACTION OR PROCEEDING TO ENFORCE OR
ARISING OUT OF THIS GUARANTY MAY BE COMMENCED IN THE DISTRICT COURT OF ANY
COUNTY, OR IN XXX XXXXXXXX XXXXX XX XXX XXXXXX XXXXXX IN ANY DISTRICT, IN WHICH
SECURED PARTY HAS AN OFFICE, AND GUARANTOR WAIVES PERSONAL SERVICE OF PROCESS
AND AGREES THAT A SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN
ANY SUCH COURT SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION
IF SERVED BY REGISTERED MAIL TO GUARANTOR, OR AS OTHERWISE PROVIDED BY THE LAWS
OF THE STATE OF NEW YORK OR THE UNITED STATES.
(h) If any provision of this Guaranty is unenforceable in whole or in
part for any reason, the remaining provisions shall continue to be effective.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as a part of this Guaranty a provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible
and be legal, valid and enforceable. No provision herein or in any other Loan
Document evidencing the Indebtedness shall require the payment or permit the
collection of interest in excess of the maximum permitted by applicable law.
(i) Guarantor agrees that Secured Party has no obligation to preserve
rights to the collateral against prior parties or to marshal any collateral for
the benefit of Guarantor or any other third party.
(j) PAYMENTS OF ALL SUMS OF MONEY AND THE PERFORMANCE OF ALL OF THE
COVENANTS AND AGREEMENTS HEREUNDER SHALL BE PAYABLE AND DUE AT THE OFFICE OF
SECURED PARTY SET FORTH IN THE NOTE. THIS GUARANTY AND THE TRANSACTION
EVIDENCED HEREBY SHALL BE CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF NEW
YORK.
(k) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
(l) GUARANTOR AND SECURED PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY THAT GUARANTOR OR SECURED PARTY
MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH
THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO. GUARANTOR REPRESENTS
AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF SECURED PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT
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SECURED PARTY WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS RIGHT
TO JURY TRIAL WAIVER. GUARANTOR ACKNOWLEDGES THAT SECURED PARTY HAS BEEN INDUCED
TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS
SUBSECTION 11(L).
(m) ALL NOTICES, REQUESTS AND OTHER COMMUNICATIONS TO GUARANTOR OR
SECURED PARTY HEREUNDER SHALL BE GIVEN IN WRITING (INCLUDING BANK WIRE, TELEX OR
SIMILAR WRITING) AND SHALL BE GIVEN AT THE ADDRESSES PROVIDED IN, AND SHALL BE
EFFECTIVE IN ACCORDANCE WITH THE PROVISIONS, OF THE NOTE.
(n) All capitalized terms not otherwise defined herein shall have the
meanings set forth in the Note.
IN WITNESS WHEREOF, the undersigned has executed this Continuing Guaranty
as of the date first written above.
GUARANTOR:
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EGX FUNDS TRANSFER, INC.
By:
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Name:
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Title:
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