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UNCONDITIONAL CONTINUING GUARANTY

Guarantee Agreement

UNCONDITIONAL CONTINUING GUARANTY | Document Parties: MANCHESTER INC | Rick Stanley You are currently viewing:
This Guarantee Agreement involves

MANCHESTER INC | Rick Stanley

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Title: UNCONDITIONAL CONTINUING GUARANTY
Governing Law: Indiana     Date: 4/16/2007
Industry: Metal Mining     Sector: Basic Materials

UNCONDITIONAL CONTINUING GUARANTY, Parties: manchester inc , rick stanley
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EXECUTION VERSION

 

UNCONDITIONAL CONTINUING GUARANTY

 

THIS UNCONDITIONAL CONTINUING GUARANTY (this "Guaranty") is made and entered into as of December 29, 2006 by Manchester Inc., a Nevada corporation (the "Guarantor") in favor of Rick Stanley, as Shareholders’ Representative, and Rick Stanley, individually (collectively, the "Holders").

 

WHEREAS, the Holders and Manchester AcquisitionCo, Inc., a Delaware corporation, (the "Purchaser") are parties to a Stock Purchase Agreement, dated as of December 2, 2006, as amended December 29, 2006 (the "Purchase Agreement"), by which all of the issued and outstanding capital stock of the Sellers is being sold and conveyed to the Purchaser.

 

WHEREAS, as a condition to the sale of assets by the Holders to the Purchaser, the Purchaser has executed a (i) a Promissory Note in the principal amount of Three Million Dollars ($3,000,000.00) from Manchester Indiana Acceptance, Inc. (the " Purchase Note ") and a Subordinated Promissory Note of even date herewith in the principal amount of One Hundred Fifty Thousand Dollars ($150,000.00) from Manchester Indiana Acceptance, Inc. (the " Subordinated Note " and referred to herein together with the Purchase Note, collectively, as the “Notes”). Pursuant to the Notes, the Purchaser is indebted to the Holders in the aggregate original principal amount of $3,150,000.00

 

WHEREAS, the Purchaser is a special purpose wholly-owned acquisition subsidiary of the Guarantor and, by execution of this Guaranty, the Guarantor acknowledges and agrees that the transactions set forth in the Purchase Agreement and the Notes will provide direct, indirect, and substantial benefits to the Guarantor, both financial and otherwise.

 

WHEREAS, to induce the Holders to agree to the terms of the Purchase Agreement and the Notes and because the Guarantor has determined that executing this Guaranty is in the Guarantor's interest and to the Guarantor's direct or indirect financial benefit, the Guarantor has agreed to guaranty the obligations of the Purchaser under the Notes and is willing, and has agreed, to execute and deliver this Guaranty to the Holders.

 

NOW THEREFORE, in consideration of the mutual premises and conditions set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as follows (capitalized terms not otherwise defined herein shall have the meaning set forth in the Purchase Agreement):

 

1.   Obligations . As used herein, the term "Obligations" shall mean any and all indebtedness, obligations, liabilities and sums which may be presently due and owing or which may become due and owing under the Promissory Notes, in accordance with their respective terms, inclusive of the principal aggregate amounts due under the Notes of $3,150,000.00 and any and all interest that accrues on the principal amounts under the terms of the Notes.

 


 

2.   Guaranty of Payment . The Guarantor hereby unconditionally guarantees to the Holders, and agrees to be primarily liable to the Holders for, the payment to the Holders of the Obligations, all without relief from valuation and appraisement laws. If the Purchaser does not timely discharge its Obligations to the Holders, the Guarantor hereby unconditionally and irrevocably guarantees to the Holders the prompt and complete payment by the Purchaser of the Obligations. If the Purchaser shall fail or refuse for any reason to timely discharge the Obligations, the Guarantor will pay the Obligations to the Holders and pay any and all expenses (including, without limitation, all fees and disbursements of counsel, including fees and expenses incurred in a suit to enforce this provision) which may be paid or incurred by the Holders in enforcing any rights under this Guaranty. If the Purchaser fails to pay or perform all or any part of the Obligations when due, the undersigned Guarantor will immediately pay the amount due and perform the obligations of the Purchaser in connection therewith as if such amount and obligations constituted the direct and primary debts and obligations of the Guarantor.

 

3.   Nature of Guaranty . This Guaranty shall be, and shall remain, a continuing, unlimited, unconditional, and absolute guaranty of payment and not of collection. This Guaranty shall remain fully enforceable irrespective of (a) any defenses (other than unconditional payment) which the Purchaser may assert on the underlying Obligations, including but not limited to failure of consideration, breach of warranty, statute of frauds, statute of limitations, accord and satisfaction and usury, (b) the absence of any attempt by the Holders to collect or enforce the Purchaser’s obligations, (c) the waiver or consent by the Holders with respect to any provision of any agreement between the Holders and the Purchaser, (d) The Holders’ failure to obtain collateral security for Obligations or to perfect and maintain a security interest in, or preserve, enforce or exhaust its rights to, or the release by the Holders of any collateral, or (e) any circumstances which might constitute a legal or equitable discharge or defense of a guarantor or surety.

 

Notice of or proof of reliance by the Holders upon this Guar


 
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