GUARANTEE
To: BANK OF MONTREAL Date: May __, 1999
To induce Bank of Montreal (the "Bank") to establish financing arrangements
with and consider making loans and extending credit from time to time to
Fidelity Leasing Canada Inc. (the "Borrower") pursuant to the terms and
conditions of a loan agreement dated the date hereof between the Bank and the
Borrower ( the "Loan Agreement"), each of the Undersigned, intending to be
legally bound, hereby, jointly and severally, guarantees to the Bank and becomes
surety for the unconditional and prompt payment and performance of all present
and future debts and liabilities, direct or indirect, now or at any time and
from time to time hereafter due or owing from the Borrower to the Bank (the
"Obligations"). The Undersigned shall also pay or reimburse the Bank on demand
for all reasonable out-of-pocket costs and expenses, including without
limitation, legal fees and costs on a solicitor and client basis incurred by the
Bank at any time to enforce, protect, preserve, or defend its rights hereunder
and with respect to any other security granted by the Borrower to and in favour
of the Bank. Unless otherwise defined herein, all capitalized terms shall have
the respective meanings given to such terms in the Loan Agreement.
Each of the Undersigned further undertakes and agrees as follows:
(1) Each of the Undersigned represents and warrants that:
(a) The Undersigned's execution and performance of this Guarantee
shall not (i) violate or result in a default or breach (immediately or with the
passage of time) under any contract, agreement or instrument to which any of the
Undersigned are a party or by which any of the Undersigned are bound, (ii)
violate or result in a default or breach under any order, decree, award,
injunction, judgment, law, regulation or rule, (iii) cause or result in the
imposition or creation of any lien upon any property of any of the Undersigned,
or (iv) violate or result in a breach of the articles of incorporation or
by-laws of any of the Undersigned.
(b) Each of the Undersigned has the full power and capacity to enter
into and perform under this Guarantee, which has been authorized by all
necessary corporate action on behalf of the Undersigned.
(c) No consent, license or approval of, or filing or registration
with, any governmental authority is necessary for the execution and performance
hereof by the Undersigned.
(d) This Guarantee constitutes the valid and binding obligation of
each of the Undersigned enforceable in accordance with its terms.
(e) This Guarantee promotes and furthers the business and interests
of each of the Undersigned and the creation of the obligations hereunder will
result in direct financial benefit to each of the Undersigned.
(2) Each of the Undersigned hereby waives all notices with respect to this
Guarantee, including without limitation, notices of (a) acceptance of this
Guarantee, and (b) the existence or incurring from time to time of any
Obligations guaranteed hereunder.
(3) Each of the Undersigned hereby consents and agrees that the Bank may at
any time or from time to time in its sole discretion (a) extend or change the
time of payment, and/or the manner, place or terms of payment of any or all
Obligations, (b) amend, supplement or replace the Loan Agreement or any related
agreements, (c) renew, extend, modify, increase or decrease loans and extensions
of credit to Borrower, (d) modify the terms and conditions under which loans and
extensions of credit may be made to Borrower, (e) settle, compromise, waive or
grant releases, in whole or in part, for liabilities of Borrower and/or any
other person or persons liable with Undersigned for any Obligations, (f)
exchange, release, surrender, sell, subordinate, or compromise any collateral of
any party now or hereafter securing any of the Obligations, and (g) apply any
and all payments received by the Bank at any time against the Obligations in any
order as you may determine; all of the foregoing in such manner and upon such
terms as the Bank may see fit and without notice to or further consent from any
of the Undersigned, who hereby agree to be and shall remain bound under this
Guarantee notwithstanding any such action(s) by the Bank. Without limiting the
generality of the foregoing, the Undersigned shall not be discharged nor shall
the liability of the Undersigned be effected by any act, thing, omission or
means whatsoever which would not have resulted in the discharge or release of
the liability of the Undersigned under the Guarantee if the Undersigned had been
liable for payment of the Obligations as principal debtor.
(4) The liability of the Undersigned hereunder is absolute and
unconditional and joint and several and shall not be reduced, impaired or
affected in any way by reason of (a) any failure to obtain, register, retain,
perfect or preserve, or the lack of prior enforcement of, any rights against any
person or persons (including, without limitation, Borrower and any of the
Undersigned) or in any property, (b) the invalidity or unenforceability of any
Obligations or rights in any Collateral, (c) any delay in making demand upon
Borrower or any delay in enforcing, or any failure to enforce, any rights
against Borrower or in any Collateral even if such rights are thereby lost, (d)
any failure, neglect or omission on behalf of the Bank to obtain or perfect any
lien upon, protect, exercise rights against, or realize on, any property of
Borrower, any of the Undersigned or any other party securing the Obligations,
(e) the existence or nonexistence of any defences which may be available to the
Borrower with respect to the Obligations, (f) the commencement of any
bankruptcy,
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reorganization, liquidation, dissolution or receivership proceeding or case
filed by or against Borrower, or (g) any change in the corporate existence,
structure, ownership or control of the Borrower (including any of the foregoing
arising from any merger, consolidation, amalgamation, reorganization or similar
transaction). This Guarantee shall be a continuing guarantee and shall secure
the Obligations and any ultimate balance thereof, notwithstanding that the
Borrower may from time to time satisfy the Obligations in whole or in part and
thereafter incur further Obligations.
(5) If any or all payments made from time to time to the Bank with respect
to any Obligation hereby guaranteed are recovered from, or repaid by, the Bank
in whole or in part in any bankruptcy, reorganization, insolvency or similar
proceeding instituted by or against Borrower, this Guarantee shall continue to
be fully applicable to such Obligation to the same extent as if the recovered or
repaid payment(s) had never originally made on such Obligation.
(6) All rights and remedies hereunder and under the Loan Agreement and
related agreements are cumulative and not alternative, and the Bank may proceed
in any order from time to time against Borrower, any of the Undersigned and/or
any other obligor of Borrower's Obligations and their respective assets.
(7) Any and all rights of any nature of the Undersigned to subrogation,
reimbursement or indemnity and any right of the Undersigned to recourse to any
assets or property of Borrower (the "Subordinated Indebtedness") for any reason
shall be unconditionally subordinated to all of the Bank's rights under the Loan
Agreement and none of the Undersigned shall at any time exercise any of such
rights unless and until all of the Obligations have been unconditionally paid in
full. If the Undersigned, now or in the future, holds any security in respect of
the Subordinated Indebtedness (the "Subordinated Security"), the security
interests constituted thereby shall be postponed to all present and future
security interests held by the Bank in respect of the Obligations,
notwithstanding the order of execution, delivery, registration or perfection of
the said security interests, the order of crystallization of the security, or
any other matters which may affect the relative priorities of such security
interests. The Undersigned may not initiate or take any action to enforce the
Subordinated Security without the prior written consent of the Bank. As
additional security for the obligations of the Undersigned to the Bank under
this Guarantee, the Undersigned hereby assigns to and in favour of the Bank the
Subordinated Indebtedness and the Subordinated Security. Notwithstanding the
foregoing provisions of this paragraph 7, unless an Event of Default occurs and
is continuing under the Loan Agreement or an Event of Default under the Loan
Agreement will result from giving effect to any such payment by the Borrower,
the Borrower may pay to a Guarantor, and a Guarantor may receive for its own
account, payments in respect of unsecured intercompany indebtedness of the
Borrower to such Guarantor.
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(8) The Bank's books and records of any and all of Xxxxxxxx's Obligations,
absent manifest error, shall be prima facie evidence against the Undersigned of
the indebtedness due the Bank or become due to the Bank hereunder.
(9) This Guarantee shall constitute a continuing surety obligation and the
Bank may continue to act in reliance hereon until all of the Obligations and the
Bank may continue to act in reliance hereon until all of the Obligations have
been paid and satisfied in full. The Bank shall not have any obligation to
proceed against, or exhaust any or all of its rights against, Borrower prior to
proceeding against any of the Undersigned hereunder.
(10) Each of the Undersigned agrees that the Bank shall have a right of
setoff against any and all property of each of the Undersigned now or at any
time in the Bank's possession, including without limitation, deposit accounts,
and the proceeds thereof, as security for the obligations of the Undersigned
hereunder.
(11) If an Event of Default or default occurs and is continuing under the
Loan Agreement, then all of the Undersigneds' liabilities to the Bank hereunder
shall, at the option of the Bank, become immediately due and payable and the
Bank may at any time and from time to time take any and/or all actions and
enforce all rights and remedies available hereunder or under applicable law to
collect the Undersigned's liabilities hereunder.
(12) Failure or delay in exercising any right or remedy against any of the
Undersigned hereunder shall not be deemed a waiver thereof or preclude the
exercise of any other right or remedy hereunder. No waiver of any breach of or
provision of this Guarantee shall be construed as a waiver of any subsequent
breach or of any other provision. The invalidity or unenforceability of any
provision hereof shall not affect the remaining provisions which shall remain in
full force and effect.
(13) This Guarantee shall (a) be legally binding upon each of the
Undersigned and each of the Undersigned's successors and assigns, provided that
the Undersigned's obligations hereunder may not be delegated or assigned without
the Bank's prior written consent and (b) benefit any and all of the Bank's
successors and assigns.
(14) This Guarantee embodies the whole agreement and understanding of the
parties hereto relative to the subject matter hereof. No modification of any
provision hereof shall be enforceable unless approved by the Bank in writing.
(15) This Guarantee shall in all respects be interpreted, construed and
governed by the laws of the Commonwealth of Pennsylvania. Without prejudice to
the right of the Bank to commence any proceedings with respect to this Guarantee
in any other proper jurisdiction, each of the Undersigned hereby irrevocably
attorns and submits to the jurisdiction of the courts of the Province of
Ontario.
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(16) (a) In any action or proceeding brought by you to enforce the terms
hereof, each of the Undersigned waives personal service of the summons,
complaint, and any motion or other process, and agrees that notice thereof may
be served by registered or certified mail, return receipt requested or by
nationally recognized overnight courier at the address of the applicable
Undersigned set forth on the signature page hereof. Such service shall be deemed
made on the date of delivery at such address.
(b) Any and all notices which may be given to the Undersigned by the
Bank hereunder shall be sent to the applicable Undersigned at the address of
such Undersigned set forth on the signature page hereof and shall be deemed
given to and received (on the date delivered) by the Undersigned if personally
delivered or if sent by facsimile transmission or if sent in the manner provided
for service of process in paragraph 16(a) above.
DATED the date and year first above written.
RESOURCE AMERICA, INC.
By:
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Name:
Title:
FIDELITY LEASING, INC.
By:
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Name:
Title:
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