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EXHIBIT 10.23
GUARANTY
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THIS GUARANTY ("Guaranty") is made as of the 10th day of December, 1996, by
HANOVER CAPITAL SECURITIES, INC.,having an address at c/o Hanover Capital
Partners, Ltd., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (as used herein, "the
Guarantor"), to with FLEET NATIONAL BANK, a national banking association, having
its principal office at 111 Westminster, Providence, Rhode Island 02903 (the
"Lender").
W I T N E S S T H:
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WHEREAS, contemporaneously herewith, subject to certain terms and
conditions, Lender has agreed to enter into a revolving Credit agreement (the
"Loan Agreement"), with Hanover Capital Partners, Ltd. (the "Obligor"),
regarding certain indebtedness due and owing Lender evidenced by that certain
promissory note (the "Note") executed by the Obligor in favor of Lender of even
date herewith in the original principal amount of $2,000,000.00 (the
"Obligations"); and
WHEREAS, Guarantor is a subsidiary of the Obligor and thus the Guarantor
has a substantial interest in Obligor; and
WHEREAS, Lender has advised Guarantor that it will not enter into the Loan
Agreement with the Obligor unless all of the Obligations and certain other
agreements as hereinafter referenced, including without limitation the punctual
payment of both principal and interest of the Obligations to be paid, is
guaranteed by the Guarantor; and
WHEREAS, Guarantor is willing and has agreed to guarantee the payment of
the Obligations of the Obligor, as hereinafter provided.
NOW THEREFORE, in order to induce Lender to enter into the Loan Agreement
and for other good and valuable consideration, the receipt of which is hereby
acknowledged by the Guarantor, the Guarantor agrees as follows:
1. Guarantor hereby unconditionally and irrevocably, guarantees: (i) the
due and punctual payment in full (and not merely the collectability) of the
principal of the Obligations and the interest thereon, in each case when due and
payable, according to the terms of the Loan Agreement, and the Note; (ii) the
due and punctual payment in full (and not merely the collectability) of all
other sums and charges which may at any time be due and payable in accordance
with, or under the terms of, the Loan Agreement and the Note; (iii) the accuracy
of the representations and warranties made by the Obligor in the Loan Agreement
and the Note; and (iv) the due and punctual performance and observance of all of
the other terms, covenants, and conditions contained in the Loan Agreement, the
Note and any
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other security instruments and agreements relating to the Obligations now or
hereafter existing on the part of the Obligor to be performed or observed (the
Loan Agreement, the Note and all security instruments and all related agreements
are collectively referred to herein as the "Documents").
2. Guarantor expressly agrees that Lender may, in its sole absolute
discretion, without notice to or further assent of Guarantor, and without in any
way releasing, affecting or impairing the obligations and liabilities of
Guarantor under this Guaranty: (i) waive compliance with, or any default under,
or grant any other indulgences with respect to, the Documents; (ii) modify,
amend, or change any provisions of the Documents; (iii) agree to the
substitution, exchange, release or other disposition of the Guarantor or any
part of the collateral securing the Obligations; (iv) make advances for the
purpose of performing any term or covenant contained in the Documents, with
respect to which the Obligor shall be deemed by the Lender to be in default; (v)
assign or otherwise transfer the Documents, including without limitation this
Guaranty, or any interest therein or herein; and (vi) deal in all respects with
the Obligor as if this Guaranty were not in effect. The obligations of Guarantor
under this Guaranty shall be unconditional, irrespective of the genuineness,
validity, regularity or enforceability of the Documents or any other
circumstances which might otherwise constitute a legal or equitable discharge of
a surety or guarantor.
3. The liability of Guarantor under this Guaranty shall be primary,
direct, and immediate, and not conditional or contingent upon pursuit by Lender
of any remedies it may have against the Obligor or any other party with respect
to the Documents, whether pursuant to the terms thereof or otherwise. No
exercise or nonexercise by Lender of any right given to it hereunder or under
the Documents, and no change, impairment, or suspension of any right or remedy
of Lender shall in any way affect the Guarantor's obligations hereunder or give
the Guarantor any recourse against Lender. without limiting the generality of
the foregoing, Lender shall not be required to make any demand on the Obligor
and/or any other party, before, simultaneously with or after, enforcing its
rights and remedies hereunder against Guarantor. Any one or more successive
and/or concurrent actions may be brought hereon against Guarantor, either in the
same action, if any, brought against the Guarantor and/or any other party, or in
separate actions, as often as Lender, in its sole discretion, may deem
advisable.
4. As to the Obligations, Guarantor hereby expressly waives: (i)
presentment and demand for payment and protest of nonpayment; (ii) notice of
acceptance of this Guaranty and of presentment, demand and protest; (iii) notice
of any default hereunder or under the Documents and of all indulgences; (iv)
demand for observance or performance of, or enforcement of, any
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terms or provisions of this Guaranty or the Documents; (v) all other notices and
demands otherwise required by law which Guarantor may lawfully waive; (vi) the
right to assert in any action or proceeding hereupon by Lender, or in the event
that an action or proceeding has not been commenced, any set-off, counterclaim
or other claim which it may have against Lender or the Obligor; (vii) all rights
of indemnity, reimbursement, contribution, or subrogation from the Obligor; and
(viii) the benefit of all other principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms hereof; and (ix)
notice of set-off against any property of the Guarantor in the possession of the
Lender.
5. If Guarantor shall advance any sums to Obligor, its successors or
assigns, or if the Obligor, its successors or assigns shall be or shall
hereafter become indebted to Guarantor such sums and indebtedness shall be
subordinate in all respects the amounts then or thereafter due and owing to
Lender. Nothing herein contained shall be construed to give Guarantor, any right
of subrogation in and to the rights of Lender under the Documents until all
amounts owing to Lender under the Obligations been paid in full.
6. Any notice, demand, request, or other communication given hereunder or
in connection herewith (hereinafter "Notices") [.shall be deemed sufficient if
in writing and sent by certified mail, postage prepaid, return receipt
requested, addressed to the party to receive such Notice at its address first
above set forth or at such other address as the Guarantor may hereafter
designate by Notice given in like fashion. Notices to the Lender shall be sent
Attention: Xxxxxxx X. Xxxxxxx, Vice President. Notices shall be deemed given
when mailed.
7. Any payments made by Guarantor under the provision of this Guaranty
shall, if made to Lender be made at its principal office at its address first
set forth above, unless some other address is hereafter designated by Lender.
8. All rights and remedies afforded to Lender by reason of this Guaranty
and the Documents, or by law are separate and cumulative and the exercise of one
shall not in any way limit or prejudice the exercise of any other such rights or
remedies. No delay or omission by Lender in exercising any such right or remedy
shall operate as a waiver thereof. No waiver of any rights and remedies
hereunder, and no modification or amendment hereof, shall be deemed made by
Lender unless in writing and duly executed. Any such written waiver shall apply
only to the particular instance specified therein and shall not impair the
further exercise of such right or remedy or of any other right or remedy of
Lender, and no single or partial exercise of any right or remedy hereunder shall
preclude further exercise of any other right or remedy.
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9. The obligations of Guarantor to make payment in accordance with the
terms of this Guaranty shall not be impaired, modified, changed, released, or
limited in any manner whatsoever by any impairment, modification, change,
release or limitation of the liability of the Obligor or its respective estates
in bankruptcy or reorganization resulting from the operation of any present or
future provision of the Federal Bankruptcy Code or other statute or from the
decision of any court. Guarantor agrees that in the event any amounts referred
to herein are paid in whole or in part by the Obligor or by the Guarantor,
Guarantor's liability hereunder shall continue and remain in full force and
effect in the event that all or any part of any such payment is recovered from
Lender as a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency, or similar law. Guarantor further agrees that the
Obligations of the Guarantor under this Guaranty shall include, but not be
limited to, the costs incurred by Lender in defending any claim or suit seeking
such recovery further including, but not limited to, reasonable attorneys' fees.
10. The Guarantor hereby covenants and agrees not to dispose of all or any
substantial part of its assets nor cause nor suffer any substantial diminution
of its net worth as the same exists on the date hereof, and that any of the
foregoing shall, at the option of Lender, its successors and assigns, be void
and of no effect. Lender shall be entitled, without limiting any other rights
which Lender may have under this Guaranty, to enjoin any breach or threatened
breach of this paragraph.
11. Guarantor represents and warrants that Guarantor is not now insolvent
and the Guarantor's obligations under this Guaranty do not render Guarantor
insolvent; Guarantor is not contemplating either the filing of a petition by
Guarantor under any state or federal bankruptcy or insolvency laws and the
liquidation of all or a major portion of the Guarantor's property; and the
Guarantor has no knowledge of any person contemplating the filing of any such
petition against Guarantor.
12. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO
JURISDICTION IN THE STATE OF RHODE ISLAND OVER ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY, AND (B) WAIVES ANY AND ALL RIGHTS
UNDER THE LAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO TRIAL BY JURY, () TO
OBJECT TO JURISDICTION WITHIN THE STATE OF RHODE ISLAND OR VENUE IN ANY
PARTICULAR FORUM WITHIN THE STATE OF RHODE ISLAND, AND (III) TO THE RIGHT, IF
ANY, TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES. GUARANTOR AGREES THAT, IN
ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW,
ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO
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THE GUARANTOR AT THE ADDRESS SET FORTH ABOVE, AND SERVICE SO MADE SHALL BE
DEEMED COMPLETE FIFTEEN (15) DAYS AFTER THE SAME SHALL BE SO MAILED. NOTHING
CONTAINED HEREIN, HOWEVER, SHALL PREVENT LENDER FROM BRINGING ANY SUIT, ACTION
OR PROCEEDING OR EXERCISING ANY RIGHTS, INCLUDING SET-OFF, AGAINST ANY SECURITY
IN POSSESSION OF LENDER WHICH RIGHTS TO NOTICE THE GUARANTOR EXPRESSLY WAIVES
AND AGAINST GUARANTOR, AND AGAINST ANY PROPERTY OF GUARANTOR, IN ANY OTHER
STATE. INITIATING SUCH SUIT, ACTION OR PROCEEDING OR SETTING-OFF AGAINST THE
GUARANTOR'S PROPERTY IN POSSESSION OF THE LENDER OR TAKING SUCH ACTION IN ANY
STATE, INCLUDING, BUT NOT LIMITED TO RHODE ISLAND, SHALL IN NO EVENT CONSTITUTE
A WAIVER OF THE AGREEMENT CONTAINED HEREIN. THE LAWS OF THE STATE OF RHODE
ISLAND SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF GUARANTOR AND LENDER HEREUNDER
OR THE SUBMISSION HEREIN MADE BY GUARANTOR TO JURISDICTION WITHIN THE STATE OF
RHODE ISLAND. GUARANTOR AGREES THAT IN THE EVENT THIS GUARANTY SHALL BE ENFORCED
BY SUIT OR OTHERWISE, OR IF LENDER SHALL EXERCISE OR ENDEAVOR TO EXERCISE ANY OF
ITS REMEDIES UNDER THE DOCUMENTS, GUARANTOR WILL REIMBURSE LENDER, UPON DEMAND,
FOR ALL EXPENSES AND DAMAGES INCURRED IN CONNECTION THEREWITH, INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES. AT THE LENDER'S SOLE DISCRETION,
THE GUARANTOR HEREBY IRREVOCABLY DESIGNATES AND APPOINTS XXXXXXX X. XXX, XX.,
ESQ., HAVING AN ADDRESS AT XXXXX XXXXXX-XXXXX & XXXXXXXXX, P.C., RESERVOIR
PLACE, 0000 XXXXXXX XXXX, XXXXXXX, XX 00000, AS GUARANTOR'S ATTORNEY-IN-FACT TO
RECEIVE SERVICE OF PROCESS IN ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF
GUARANTOR'S OBLIGATIONS UNDER OR WITH RESPECT TO THIS GUARANTY, IT BEING
EXPRESSLY STIPULATED AND AGREED BY GUARANTOR THAT SERVICE UPON SUCH
ATTORNEY-IN-FACT SHALL CONSTITUTE SERVICE UPON GUARANTOR. CONCURRENTLY, WITH THE
SERVICE OF PROCESS UPON EITHER SUCH ATTORNEY-IN-FACT, COPIES OF THE PAPERS SO
SERVED SHALL BE SENT CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED,
TO GUARANTOR AT ITS ADDRESS FIRST ABOVE SET FORTH OR AT SUCH OTHER ADDRESS AS
THE GUARANTOR MAY HEREAFTER DESIGNATE BY NOTICE.
13. This Guaranty shall be construed in accordance with the laws of the
State of Rhode Island. All words herein of singular number shall extend to and
include words of the plural number; reference to the masculine gender shall
extend to and include the female gender as well as corporate and neuter status.
14. The Guarantor represents and warrants that it approves the terms and
conditions herein, which the Guarantor has caused to be read, fully understands
and finds to be fair and equitable. Further, the Guarantor acknowledges it is
causing this Guaranty to be executed voluntarily, freely and without duress.
15. This Guaranty shall inure to the benefit of, and be enforceable by,
Lender and its successors and assigns, and shall be binding upon, and
enforceable against, Guarantor and its respective successors and assigns.
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16. In case any one or more of the provisions contained herein shall for
any reason be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof but this Guaranty shall be construed as if such invalid, illegal, or
unenforceable provision had never been included.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed by
its duly representative as of the day and year first above written.
WITNESS: HANOVER CAPITAL SECURITIES, INC.
By: /s/
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Its: President
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