UNCONDITIONAL CONTINUING GUARANTY
EXECUTION
VERSION
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 ▇▇▇▇ ▇▇▇▇▇▇▇, as Shareholders’ Representative, and ▇▇▇▇ ▇▇▇▇▇▇▇,
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 Guaranty or acceptance of this
Guaranty, the Obligations, and any of them, shall conclusively be deemed to
have
been created, contracted or incurred in reliance upon this Guaranty; and all
dealings between the Purchaser or the Guarantor, on the one hand, and the
Holders, on the other hand, shall likewise be conclusively presumed to have
been
had or consummated in reliance upon this Guaranty.
4. Action
Regarding Obligations.
The
undersigned Guarantor hereby grants to the Holders full power, in its
uncontrolled discretion and without notice to the undersigned Guarantor to
deal
in any manner with the Obligations including, without limitation, the following
powers: (a) to modify or otherwise change any terms of the Obligations or to
grant any extension or renewal thereof, and any other indulgence with respect
thereto, and to effect any release, compromise, or settlement with respect
thereto; or (b) to forbear from enforcing payment or any term of the
Obligations. The obligations of the undersigned Guarantor hereunder shall not
be
released, discharged, or in any way affected, nor shall the undersigned have
any
rights or recourse against the Holders by reason of any action the Holders
may
take, omit to take, or delay in taking under the foregoing powers.
5. Waivers
of the Guarantor.
The
undersigned Guarantor hereby waives (a) notice to the undersigned or the
Purchaser of (i) acceptance of this Guaranty by the Holders, and (ii) the amount
of the Obligations at any time outstanding; (b) presentment for payment, demand,
protest, notice to the undersigned or the Purchaser of dishonor, nonpayment,
default, and non-performance with respect to any of the Obligations; (c) any
and
all rights to require the Holders to marshal assets of the Purchaser; (d) any
defense which the Purchaser may have against the Holders other than payment;
(e)
all defenses given to sureties or guarantors at law or in equity other than
payment; and (f) all errors and omissions in connection with the Holders'
administration of the Obligations.
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All
remedies or actions by the Holders for payment or fulfillment of the Obligations
are cumulative and the pursuit of one shall not preclude the exercise of any
other rights or remedies. The Holders shall not be required to make any demand
upon or pursue or exhaust any of their rights or remedies against the Purchaser
or others with respect to the payment or performance of any of the Obligations
or to pursue or exhaust any of its rights or remedies with respect to any
collateral held by the Purchaser.
6. Reinstatement.
If the
Holders receive any payment or payments on account of the Obligations, which
payment or payments of 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 bankruptcy act or code, state
or
federal law, common law or equitable doctrine, then to the extent of any sum
not
finally retained by the Holders, the Guarantor's obligations to the Holders
hereunder shall be reinstated and this Guaranty shall remain in full force
and
effect (or be reinstated) until payment of the Obligations shall have been
made
to the Holders, which payment shall be due on demand. If any action or
proceeding seeking such repayment is pending or, in the Holders' sole judgment,
threatened, this Guaranty shall remain in full force and effect, notwithstanding
that Purchaser may not then be obligated to The Holders.
7. Discharge.
The
Guarantor hereby agrees that this Guaranty shall remain in full force and effect
until either (a) the Holders have released the Guarantor in writing from the
Obligations ("Release") or (b) the Obligations are paid and satisfied in full.
8. Representations
and Warranties.
The
undersigned Guarantor represents and warrants to the Holders, upon which
representations the Holders are entitled to rely and the Guarantor hereby
acknowledges that the Holders are relying, that:
(a) this
Guaranty has been duly executed and delivered by the Guarantor, and this
Guaranty constitutes a legal, valid, and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity which may limit
the availability of equitable remedies;
(b) the
execution, delivery, and performance of this Guaranty will not violate any
provision of any contractual obligation of the Guarantor; and
(c) this
Guaranty is the valid and binding obligation of the undersigned, enforceable
in
accordance with its terms.
9. Consent
to Jurisdiction.
The
Guarantor hereby irrevocably and unconditionally:
(a) submits
that in any legal action or proceeding relating to this Guaranty, or for
recognition and enforcement of any judgment in respect therefor, to the
non-exclusive general jurisdiction of the courts of the State of Indiana, the
courts of the United States of America in the State of Indiana and appellate
courts from any thereof; and
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(b) consents
that any such action or proceeding may be brought in such courts, and waives
any
objection that he or she may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agree not to plead or claim the
same.
10. Governing
Law.
The
validity of this Guaranty, its construction, interpretation and enforcement
and
the rights of the parties hereto shall be determined under, governed by and
construed in accordance with the laws of the State of Indiana, without regard
to
principles of conflicts of law.
11. Waiver
of Jury Trial.
Each
party hereto hereby irrevocably waives any right to have a jury participate
in
resolving any suit, action or proceeding arising out of or relating to this
Guaranty.
12. Miscellaneous.
This
Guaranty shall extend to and bind the successors and assigns of the undersigned
Guarantor. This Guaranty shall inure to the benefit of all transferees,
assignees and/or endorsees of the Holders of any part or parts or all of the
Obligations and of the Holders' successors and assigns. The use of headings
shall not limit the provisions of this Guaranty. Whenever possible, each
provision of this Guaranty shall be interpreted in such a manner as to be
effective and valid under applicable law, but if such provision shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or remaining provisions of this
or
any related agreement or instrument. No course of dealing, course of performance
or trade usage, and no parole evidence of any nature, shall be used to
supplement or modify any terms hereof. This Guaranty may be modified only by
an
instrument in writing signed by the party against whom enforcement of the
modification is sought.
[SIGNATURE
PAGES FOLLOW]
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IN
WITNESS WHEREOF, the undersigned have executed this Unconditional Continuing
Guaranty effective as of this 29th
day of
December, 2006.
| MANCHESTER INC., "GUARANTOR" | ||
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| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
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Printed: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
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Title:
Corporate Secretary
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|
ACCEPTED,
this 29th
day of December 2006.
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| /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ | |||
|
▇▇▇▇
▇▇▇▇▇▇▇, Individually
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| ▇▇▇▇ ▇▇▇▇▇▇▇, as Shareholders Representative | ||||
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ | |||
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Name:
▇▇▇▇ ▇▇▇▇▇▇▇
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Title:
Shareholders Representative
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