GUARANTY
Exhibit 10.19
EXECUTION COPY
This GUARANTY (this “Guaranty”), dated as of December 19, 2008 (the “Effective
Date”), is made by TRIBECA LENDING CORP., a New York corporation (“the “Guarantor”), in
favor of THE HUNTINGTON NATIONAL BANK, a national banking association (the “Lender”).
RECITALS
WHEREAS, pursuant to (i) that certain First Amended and Restated Forbearance Agreement and
Amendment to Credit Agreements, dated as of December 19, 2008, between Lender, the borrowers party
thereto (the “Franklin Borrowers”), Franklin Credit Management Corporation
(“FCMC”), Franklin Credit Asset Corporation (“Franklin Asset”), and Franklin Credit
Holding Corporation (“Holding”) (as amended, supplemented or otherwise modified from time
to time in accordance with the provisions thereof, the “Franklin Forbearance Agreement”)
and (ii) that certain First Amended and Restated Tribeca Forbearance Agreement and Amendment to
Credit Agreements, dated as of December 19, 2008, between Lender, the borrowers party thereto (the
“Tribeca Borrowers”), the Guarantor, FCMC, and Holding (as amended, supplemented or
otherwise modified from time to time in accordance with the provisions thereof, the “Tribeca
Forbearance Agreement”) (the Franklin Forbearance Agreement and the Tribeca Forbearance
Agreement are referred to as the “Forbearance Agreements” and the Franklin Borrowers and
the Tribeca Borrowers are referred to collectively as the “Borrowers”), at the request of
Holding, Franklin Asset, FCMC, and Tribeca, Lender has agreed to consent to the assignment to
Holding and the assumption by Holding (by way of that certain Assignment Agreement dated December
19, 2008, between FCMC, Holding and Lender, the “SWAP Assignment Agreement”) of all of
FCMC’s rights and obligations under each Interest Rate Hedge Agreement (as defined below), and the
Lender has agreed to make and/or maintain Advances and other financial accommodations to and for
the benefit of the Borrowers, Franklin Asset, Holding, Tribeca and FCMC, upon the terms and subject
to the conditions set forth in the Forbearance Agreements; and
WHEREAS, it is a condition precedent to Lender’s entering into the Forbearance Agreements and
the SWAP Assignment Agreement that the Guarantor shall have executed and delivered this Guaranty to
the Lender; and
WHEREAS, the Guarantor acknowledges that the entering into one or more Interest Rate Hedge
Agreements will inure to the substantial benefit of the Guarantor;
NOW, THEREFORE, in consideration of the premises and in order to induce the Lender to consent
to the execution and delivery of the SWAP Assignment Agreement and the transactions contemplated
therein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Guarantor hereby agrees with the Lender as follows:
1. Guaranty. (a) The Guarantor hereby unconditionally and irrevocably guarantees to
the Lender, and its successors, endorsees, transferees and assigns, the prompt and
complete payment and performance by Holding and FCMC of all Obligations when and as the same
shall become due (whether at stated maturity, by acceleration or otherwise). The Guarantor further
agrees to pay any and all expenses (including, without limitation, all reasonable fees and
disbursements of counsel) that may be paid or incurred by the Lender in enforcing any rights with
respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect
to, or collecting against, the Guarantor under this Guaranty. This Guaranty shall remain in full
force and effect until the Obligations are paid in full in cash, notwithstanding that from time to
time prior thereto FCMC , Holding, Franklin Asset, or the Borrowers may be free from any
Obligations.
“Obligations” shall mean all obligations, indebtedness and liabilities of FCMC and/or
Holding to Lender, whether direct or indirect, joint or several, absolute or contingent, due or to
become due, and whether now existing or hereafter incurred, which may arise under, out of or in
connection with one or more Interest Rate Hedge Agreements between FCMC and/or Holding and Lender
dated February 27, 2008, evidenced by one or more ISDA Master Agreements, one or more Schedules to
any such ISDA Master Agreement, one or more Confirmations in connection with any of the foregoing,
and any other Loan Document executed in connection therewith, each as amended, supplemented,
assigned (by way of the SWAP Assignment Agreement or otherwise) or otherwise modified from time to
time in accordance with the provisions of such Loan Document, on account of any payment due,
indebtedness, obligation or other liability pursuant to any such Interest Rate Hedge Agreement, and
any interest, reimbursement obligations, fees, indemnities arising under any such Loan Document,
including without limitation, any interest, fee, cost and expense arising under such Loan Document
accrued or incurred after the filing of any petition under any bankruptcy or insolvency law.
“Interest Rate Hedge Agreement” shall mean an interest rate swap, cap or collar
agreement or any other hedging arrangements providing for protection against fluctuations in
interest rates or the exchange of nominal interest obligations, either generally or under specific
contingencies and shall include without limitation any transaction (including an agreement and/or
assignment with respect thereto) now existing or hereafter entered into by or among FCMC, Holding,
Franklin Asset, any Borrower, or any Subsidiary thereof, on the one hand, and Lender or any
affiliate of Lender, or any of its subsidiaries or affiliates or their successors, on the other
hand, which is a basis swap, forward rate transaction, interest rate option, floor transaction,
collar transaction, forward transaction, cross-currency rate swap transaction, or any other similar
transaction (including any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates or other financial measures.
(b) The Guarantor agrees that whenever, at any time or from time to time, it shall make any
payment to the Lender on account of its liability hereunder, it will notify the Lender in writing
that such payment is made under this Guaranty for such purpose; provided, however,
that no payment made by the Guarantor through or on behalf of FCMC and/or Holding shall be applied
to reduce the Obligations unless and until the Lender shall have made a demand for payment under
this Guaranty.
2. Reserved.
3. Right of Set-off. Upon the occurrence of a Forbearance Default, the Guarantor
hereby irrevocably authorizes the Lender (and its Affiliates), at any time and from
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time to time and without notice to the Guarantor, any such notice being expressly waived by
the Guarantor, to set-off and appropriate and apply any and all property and deposits (general or
special, time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Lender (or any of its
Affiliates) to or for the credit or the account of the Guarantor, or any part thereof in such
amounts as the Lender may elect, against and on account of the obligations and liabilities of the
Guarantor to the Lender hereunder and claims of every nature and description of the Lender (or any
of its Affiliates) against the Guarantor, in any currency, whether arising hereunder or under any
other Loan Document, as the Lender (or any of its Affiliates) may elect, regardless of whether the
Lender (or such Affiliate) has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Lender (or its Affiliate) shall notify
the Guarantor promptly of any such set-off and the application made by the Lender or such
Affiliate; provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Lender (and its Affiliates) under this Section 3
are in addition to other rights and remedies (including, without limitation, other rights of
set-off) that the Lender (and such Affiliates) may have under the Forbearance Agreements, any
Interest Rate Hedge Agreements, at law or in equity.
4. No Subrogation. Notwithstanding any payment or payments made by the Guarantor
hereunder or any set-off or application of funds of the Guarantor by the Lender (or any of its
Affiliates), the Guarantor shall be not be entitled to be subrogated to any of the rights of the
Lender (or any of its Affiliates) against FCMC, Holding, Franklin Asset, the Borrowers or any other
guarantor or any Collateral or guarantee or right of offset held by the Lender (or its Affiliates)
for the payment of the Obligations, nor shall the Guarantor seek or be entitled to seek any
contribution or reimbursement from FCMC, Holding, Franklin Asset, any Borrower or any other
guarantor in respect of payments made by the Guarantor hereunder, in each case until all amounts
owing to the Lender (or its Affiliates) on account of the Obligations are paid in full and the
Forbearance Agreements, the Credit Agreements and all other Loan Documents are terminated. If any
amount shall be paid to the Guarantor on account of such subrogation rights at any time when all of
the Obligations shall not have been paid in full, such amount shall be held by the Guarantor in
trust for the Lender (and its Affiliates), segregated from other funds of the Guarantor, and shall,
forthwith upon receipt by the Guarantor, be turned over to the Lender in the exact form received by
the Guarantor (duly indorsed by the Guarantor to the Lender, if required), to be applied against
the Obligations, whether matured or unmatured, in such order as the Lender may determine.
5. Amendments, Etc. with Respect to the Obligations. The Guarantor shall remain
obligated hereunder notwithstanding that, without any reservation of rights against the Guarantor
and without notice to or further assent by the Guarantor, any demand for payment of any of the
Obligations made by the Lender may be rescinded by the Lender and any of the Obligations continued,
and the Obligations, or the liability of any other party upon or for any part thereof, or any
collateral security or guarantee therefore or right of offset with respect thereto, may, from time
to time and in whole or in part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Lender, and the Forbearance Agreements, any Interest Rate
Hedge Agreements, and any other documents executed and delivered in connection therewith may be
amended, restated, modified, supplemented or
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terminated, in whole or in part, as the Lender may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the Lender (and its
Affiliates) for the payment of the Obligations may be sold, exchanged, waived, surrendered or
released. The Lender shall not have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Obligations or for this Guaranty or any assets subject
thereto. When making any demand hereunder against the Guarantor, the Lender may, but shall be
under no obligation to, make a similar demand on FCMC, Holding, Franklin Asset, any Borrower or any
other guarantor, and any failure by the Lender to make any such demand or to collect any payments
from FCMC, Holding, Franklin Asset, any Borrower or any such other guarantor or any release of
FCMC, Holding, Franklin Asset, a Borrower or such other guarantor shall not relieve the Guarantor
of its respective obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Lender against the Guarantor. For
the purposes hereof “demand” shall include the commencement and continuance of any legal
proceedings.
6. Waiver of Rights. The Guarantor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations, and notice of or proof of reliance by the
Lender upon this Guaranty or acceptance of this Guaranty. The Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended
or waived, in reliance upon this Guaranty, and all dealings between the FCMC, Holding, Franklin
Asset, or any Borrower and the Guarantor, on the one hand, and the Lender, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in reliance upon this
Guaranty. The Guarantor waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon FCMC, Holding, Franklin Asset, the Borrowers or the Guarantor with
respect to the Obligations.
7. Guaranty Absolute and Unconditional. The Guarantor understands and agrees that
this Guaranty shall be construed as a continuing, absolute, unconditional guarantee of the full and
punctual payment and performance by FCMC and Holding of the Obligations and not of their
collectibility only and is in no way conditioned upon any requirement that the Lender or any other
party first attempt to collect any of the Obligations from FCMC, Holding, Franklin Asset, or any
Borrower or other guarantor, without regard to (a) the validity, regularity or enforceability of
any Interest Rate Hedge Agreement, any other Loan Document executed in connection therewith, any of
the Obligations or any other Collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Lender or any Affiliate of Lender, (b)
any defense, set-off or counterclaim (other than a defense of payment or performance) that may at
any time be available to or be asserted by FCMC, Holding, Franklin Asset, any Borrower or any other
guarantor against the Lender or any of its Affiliates, (c) any document presented in connection
with any Interest Rate Hedge Agreement or any other Loan Documents executed in connection therewith
or this Guaranty proving to be forged, fraudulent, invalid or insufficient in any respect of any
statement therein being untrue or inaccurate in any respect, or (d) any other circumstance
whatsoever (with or without notice to or knowledge of FCMC, Holding, Franklin Asset, any Borrowers,
any other guarantor, or the Guarantor) that constitutes, or might be construed to constitute, an
equitable or legal discharge of FCMC and/or Holding from the Obligations, or of the Guarantor from
this Guaranty, in bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against the Guarantor, the Lender may, but shall be under no obligation to, pursue such
rights and
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remedies as it may have against FCMC, Holding, Franklin Asset, the Borrowers or any other
Person or against any collateral security or guarantee for the Obligations or any right of offset
of Lender or any of its Affiliates with respect thereto, and any failure by the Lender to pursue
such other rights or remedies or to collect any payments from FCMC, Holding, Franklin Asset, the
Borrowers or any such other Person or to realize upon any such collateral security or guarantee or
to exercise any such right of offset, or any release of FCMC, Holding, Franklin Asset, the
Borrowers or other Person or any such collateral security, guarantee or right of offset, shall not
relieve the Guarantor of any liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the Lender (or any of its
Affiliates) against any Guarantor. This Guaranty shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon the Guarantor and the successors and
assigns thereof, and shall inure to the benefit of the Lender (and its Affiliates) and its
respective successors, endorsees, transferees and assigns, in each case until all the Obligations
and the obligations of the Guarantor under this Guaranty shall have been satisfied by payment in
full, notwithstanding that from time to time during the term of such agreement FCMC, Holding,
Franklin Asset, any Borrower or any other guarantor may be free from any Obligations.
8. Reinstatement. This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by the Lender or any of its Affiliates upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of FCMC, Holding, Franklin
Asset, any Borrower, any other guarantor, or the Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, FCMC,
Holding, Franklin Asset, any Borrower, any other guarantor, or the Guarantor or any substantial
part of its respective assets, or otherwise, all as though such payments had not been made.
9. Payments. The Guarantor hereby guarantees that payments hereunder will be paid to
the Lender without set-off or counterclaim in United States dollars in accordance with the wiring
instructions of the Lender. Payments and performance required under this Guaranty shall be payable
and performed whenever any amount or performance guaranteed hereunder has not been promptly made to
the Lender in accordance with the Forbearance Agreements, or other Loan Documents. When pursuing
its rights and remedies hereunder against the Guarantor, the Lender may, but shall be under no
obligation to, pursue the rights, remedies, powers and privileges as it may have against FCMC,
Holding, Franklin Asset, the Borrowers or any other Person or against any collateral security or
guaranty for the Obligations or any right of offset with respect thereto. Any failure by Lender or
any of its Affiliates to pursue the other rights, remedies, powers or privileges or to collect any
payments from FCMC, Holding, Franklin Asset, the Borrowers or any other Person or to realize upon
any collateral security or guaranty or to exercise any right of offset, or any release of FCMC,
Holding, Franklin Asset, the Borrowers or any other Person or of any collateral security, guaranty
or right of offset, shall not relieve the Guarantor of any liability hereunder, and shall not
impair or affect the rights, remedies, powers or privileges, whether express, implied or available
as a matter of law, of the Lender against the Guarantor.
10. Indemnification. The Guarantor hereby agrees to:
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(i) pay or reimburse the Lender on demand for all reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution of, and any
amendment, modification or supplement to, or any waiver under, this Guaranty and any other
document prepared in connection herewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including without limitation the reasonable
fees and disbursements of counsel to the Lender;
(ii) pay on demand all reasonable costs and expenses of the Lender, including without
limitation the reasonable fees and disbursements of counsel to the Lender, in connection
with the occurrence or continuance of a default under this Guaranty and the enforcement,
collection, protection or preservation (whether through negotiations, legal proceedings or
otherwise) of this Guaranty, any Obligation or any right, remedy, power or privilege of the
Lender hereunder or under any other Loan Document;
(iii) pay and hold the Lender (and its Affiliates) harmless from and against any and
all present and future stamp, excise, recording or other similar taxes or fees payable in
connection with the execution, delivery, recording and filing of this Guaranty and hold the
Lender (and its Affiliates) harmless from and against any and all liabilities with respect
to or resulting from any delay or omission to pay such taxes or fees; and
(iv) indemnify the Lender, its Affiliates, and each of their respective directors,
officers, employees and agents and hold each of them harmless from and against, any and all
liabilities, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements, including without limitation the reasonable fees and disbursement of
counsel to the Lender, and such other parties, that are incurred by any of them in
connection with, arising out of or in any way relating to any investigation, claim,
litigation or other proceeding, pending or threatened (regardless of whether any of them is
designated a party thereto), in any such case arising out of or principally with respect to
this Guaranty or any other Loan Document or the transactions contemplated herein or therein;
provided that neither the Lender nor any of its Affiliates shall be entitled to any
indemnification for any of the foregoing resulting from its gross negligence or willful
misconduct.
If and to the extent that the indemnification obligations of the Guarantor under this Section
10 may be unenforceable for any reason, the Guarantor hereby agrees to make the maximum
contribution to the payment and satisfaction of each of such indemnity obligations that is
permissible under applicable law. This indemnification and contribution shall survive the
termination of this Guaranty and the other Loan Documents.
11. Notices. All notices, requests and other communications provided for herein
(including without limitation any modifications of, or waivers, requests or consents under, this
Guaranty) shall be given or made in writing (including without limitation by telex or telecopy) and
delivered to the intended recipient at the applicable address set forth on the signature pages of
the Tribeca Forbearance Agreement; or, as to any party, at such other address
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as shall be designated by such party in a written notice to each other party. All such
communications shall be deemed to have been duly given when transmitted by telex or telecopy or
personally delivered or, in the case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
12. Severability. 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.
13. Integration. This Guaranty, the Interest Rate Hedge Agreements and the other Loan
Documents executed in connection herewith or therewith represent the agreement of the Guarantor
with respect to the subject matter hereof and thereof and there are no promises or representations
by the Lender relative to the subject matter hereof or thereof not reflected herein or therein.
14. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the terms or
provisions of this Guaranty may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by the Guarantor and the Lender; provided that any provision of
this Guaranty may be waived by the Lender.
(b) Neither the Lender nor any of its Affiliates shall by any act of (except by a written
instrument pursuant to Section 14(a) hereof) delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Forbearance Default or Event
of Default or in any breach of any of the terms and conditions hereof or of the Interest Rate Hedge
Agreements, the Forbearance Agreements or any other Loan Document. No failure to exercise, nor any
delay in exercising, on the part of the Lender or any of its Affiliates, any right, power or
privilege hereunder or under any Interest Rate Hedge Agreement, the Forbearance Agreements or any
other Loan Document shall operate as a waiver thereof. No single or partial exercise, on the part
of the Lender, of any right, power or privilege hereunder or under any Interest Rate Hedge
Agreement, the Forbearance Agreements or any other Loan Document shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege. A waiver by the
Lender of any right or remedy hereunder or under any Interest Rate Hedge Agreement, the Forbearance
Agreements or any other Loan Document on any one occasion shall not be construed as a bar to any
right or remedy that the Lender would otherwise have on any future occasion.
(c) The rights and remedies provided herein and in any Interest Rate Hedge Agreement, the
Forbearance Agreements and the other Loan Documents are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by law.
15. Section Headings. The section headings used in this Guaranty are for convenience
of reference only and are not to affect the construction hereof or be taken into consideration in
the interpretation hereof.
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16. Successors and Assigns. This Guaranty shall be binding upon the respective
successors and assigns of the Guarantor and shall inure to the benefit of the Lender and its
successors and assigns; provided that this Guaranty may not be assigned by the Guarantor
without the express written consent of the Lender.
17. Governing Law. This Guaranty shall be governed by the local laws of the State of
Ohio without reference to the choice of laws doctrines thereof.
18. Termination. This Guaranty shall terminate upon the final payment in full of the
Obligations.
19. Recourse. The Guarantor and the Lender agree that the Obligations shall be
recourse obligations of FCMC and Holding as and to the extent set forth in the Interest Rate Hedge
Agreements, the SWAP Assignment Agreement, and in the other Loan Documents executed in connection
therewith.
20. Defined Terms. Capitalized terms used but not defined herein (except when each
letter is capitalized for emphasis) shall adopt their respective meanings as set forth in the
Tribeca Forbearance Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed and delivered
by its duly authorized officer as of the day and year first above written.
| TRIBECA LENDING CORP. | ||||||
| By: Name: Title: |
/s/ Xxxxxxxxx Xxxxxx Jardin
Chief Executive Officer |
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Signature Page to Guaranty
