Exhibit 10.11
GUARANTY
(Individual)
New York, New York March __, 2006
WHEREAS, a condition precedent to Laurus Master Fund, Ltd.'s ("Lender")
agreement to make loans or extend credit to or for the account of Texaurus
Energy, Inc. ("Borrower") from time to time or at any time (the "Loan
Transaction") the undersigned ("Guarantor" or "the undersigned") agreed to
contribute or cause to be contributed not less than $2,000,000 to the capital of
Borrower. Guarantor has advised Lender that it will not be able to satisfy this
condition at or prior to closing. Lender has agreed to enter into the Loan
Transaction notwithstanding Guarantor's inability to satisfy the foregoing
condition at or prior to closing in consideration of Guarantor's agreement to
enter into this Guaranty.
FOR VALUE RECEIVED, and in consideration of loans made or to be made or
credit otherwise extended or to be extended by Lender to or for the account of
Borrower from time to time and at any time and for other good and valuable
consideration, and to induce Lender to make such loans or extensions of credit
and to make or grant such renewals, extensions, releases of collateral or
relinquishments of legal rights as Lender may deem advisable, the Guarantor
hereby unconditionally and irrevocably guarantees, as primary obligor, to
Lender, its successors, endorsees and assigns, the full and punctual payment
when due of each of the following obligations (collectively, the "Obligations"),
and irrespective of the genuineness, validity, regularity or enforceability of
such Obligations, or of any instrument evidencing any of the Obligations or of
any collateral therefor or of the existence or extent of such collateral, and
irrespective of the allowability, allowance or disallowance of any or all of the
Obligations in any case commenced by or against Borrower under Xxxxx 00, Xxxxxx
Xxxxxx Code: (a) the contribution by the Guarantor of $300,000 to the capital of
Texaurus, which shall be made on or prior to March 31, 2006; (b) in the event
the Borrower does not consummate the purchase from Polaris Development Corp. of
the Little White Lake oil and gas assets (the "Little White Lake Transaction")
on or prior to June 30, 2006, the contribution by the Guarantor of an additional
$400,000 to the capital of Texaurus, which shall be made on or prior to June 30,
2006 and (c) in the event the Little White Lake Transaction is consummated, the
contribution to the capital of Texaurus of the difference between (i) $2,000,000
minus (ii) the total contributions to the capital of Texaurus previously made by
the Guarantor pursuant to the foregoing clauses "(a)" and "(b)". In furtherance
of the foregoing, the undersigned hereby agrees as follows:
1. No Impairment. Lender may at any time and from time to time, either
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before or after the maturity thereof, without notice to or further consent of
the undersigned, extend the time of payment of, exchange or surrender any
collateral for, renew or extend any of the Obligations, and may also make any
agreement with Borrower or with any other party to or person liable on any of
the Obligations, or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between Lender and
Borrower or any such other party or person, or make any election of rights
Lender may deem desirable under the United States Bankruptcy Code, as amended,
or any other federal or state bankruptcy, reorganization, moratorium or
insolvency law relating to or affecting the enforcement of creditors' rights
generally (any of the foregoing, an "Insolvency Law") without in any way
impairing or affecting this Guaranty. This instrument shall be effective
regardless of the subsequent incorporation, merger or consolidation of Borrower,
or any change in the composition, nature, personnel or location of Borrower and
shall extend to any successor entity to Borrower, including a debtor in
possession or the like under any Insolvency Law.
2. Guaranty Absolute. The undersigned guarantees that the Obligations will
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be paid strictly in accordance with the terms hereof, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms. Guarantor hereby knowingly accepts the full range of risk
encompassed within a contract of "continuing guaranty". The undersigned
acknowledges that (i) no oral representations, including any representations to
extend credit or provide other financial accommodations to Borrower, have been
made by Lender to induce the undersigned to enter into this Guaranty and (ii)
any extension of credit to the Borrower shall be governed solely by the
provisions of the documents, instruments and agreements evidencing the Loan
Transaction (as amended, modified and supplemented from time, the "Loan
Documents"). The liability of the undersigned under this Guaranty shall be
absolute and unconditional, in accordance with its terms, and shall remain in
full force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation: (a) any waiver, indulgence, renewal,
extension, amendment or modification of or addition, consent or supplement to or
deletion from or any other action or inaction under or in respect of the Loan
Documents or any other instruments or agreements relating to the Obligations or
any assignment or transfer of any thereof, (b) any lack of validity or
enforceability of any Loan Document or other documents, instruments or
agreements relating to the Obligations or any assignment or transfer of any
thereof, (c) any furnishing of any additional security to Lender or its
assignees or any acceptance thereof or any release of any security by Lender or
its assignees, (d) any limitation on any party's liability or obligation under
the Loan Documents or any other documents, instruments or agreements relating to
the Obligations or any assignment or transfer of any thereof or any invalidity
or unenforceability, in whole or in part, of any such document, instrument or
agreement or any term thereof, (e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Borrower, or any action taken with respect to this Guaranty by any
trustee or receiver, or by any court, in any such proceeding, whether or not the
undersigned shall have notice or knowledge of any of the foregoing, (f) any
exchange, release or nonperfection of any collateral, or any release, or
amendment or waiver of or consent to departure from any guaranty or security,
for all or any of the Obligations, or (g) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, the undersigned.
Any amounts due from the undersigned to Lender shall bear interest until such
amounts are paid in full at the highest rate then applicable to the Obligations.
Obligations include post-petition interest whether or not allowed or allowable.
3. Waivers. This Guaranty is a guaranty of payment and not of collection.
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Lender shall be under no obligation to institute suit, exercise rights or
remedies or take any other action against Borrower or any other person liable
with respect to any of the Obligations or resort to any collateral security held
by it to secure any of the Obligations as a condition precedent to the
undersigned being obligated to perform as agreed herein and Guarantor hereby
waives any and all rights which it may have by statute or otherwise which would
require Lender to do any of the foregoing. Guarantor further consents and agrees
that Lender shall be under no obligation to marshal any assets in favor of
Guarantor, or against or in payment of any or all of the Obligations. The
undersigned hereby waives all suretyship defenses and any rights to interpose
any defense, counterclaim or offset of any nature and description which the
undersigned may have or which may exist between and among Lender, Borrower
and/or the undersigned with respect to the undersigned's obligations under this
Guaranty, or which Borrower may assert on the underlying debt, including but not
limited to failure of consideration, breach of warranty, fraud, payment (other
than cash payment in full of the Obligations), statute of frauds, bankruptcy,
infancy, statute of limitations, accord and satisfaction, and usury.
(b) The undersigned further waives (i) notice of the acceptance of
this Guaranty, of the making of any such loans or extensions of credit, and
of all notices and demands of any kind to which the undersigned may be
entitled, including, without limitation, notice of adverse change in
Borrower's financial condition or of any other fact which might materially
increase the risk of the undersigned and (ii) presentment to or demand of
payment from anyone whomsoever liable upon any of the Obligations, protest,
notices of presentment, non-payment or protest and notice of any sale of
collateral security or any default of any sort.
(c) Notwithstanding any payment or payments made by the undersigned
hereunder, or any setoff or application of funds of the undersigned by
Lender, the undersigned shall not be entitled to be subrogated to any of
the rights of Lender against Borrower or against any collateral or
guarantee or right of offset held by Lender for the payment of the
Obligations, nor shall the undersigned seek or be entitled to seek any
contribution or reimbursement from Borrower in respect of payments made by
the undersigned hereunder, until all amounts owing to Lender by Borrower on
account of the Obligations are paid in full and the Loan Documents have
been terminated. If, notwithstanding the foregoing, any amount shall be
paid to the undersigned on account of such subrogation rights at any time
when all of the Obligations shall not have been paid in full and the Loan
Documents shall not have been terminated, such amount shall be held by the
undersigned in trust for Lender, segregated from other funds of the
undersigned, and shall forthwith upon, and in any event within two (2)
business days of, receipt by the undersigned, be turned over to Lender in
the exact form received by the undersigned (duly endorsed by the
undersigned to Lender, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as Lender may determine,
subject to the provisions of the Loan Documents. Any and all present and
future debts and obligations of Borrower to any of the undersigned are
hereby waived and postponed in favor of, and subordinated to the full
payment and performance of, all present and future debts and obligations of
Borrower to Lender.
(d) The undersigned further waives the right to renounce any
disposition or transfer of assets whether created under a will, trust
agreement or intestacy statute, with respect to any devise, bequest,
distributive share, trust account, life insurance or annuity contract,
employee benefit plan (including, without limitation, any pension,
retirement, death benefit, stock bonus or profit sharing plan, system or
trust), or any other disposition or transfer created by any testamentary or
nontestamentary instrument or by operation of law, and any of the foregoing
created or increased by reason of a renunciation made by another person.
4. Security. All sums at any time to the credit of the undersigned and any
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property of the undersigned in Lender's possession or in the possession of any
bank, financial institution or other entity that directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under common
control with, Lender (each such entity, an "Affiliate") shall be deemed held by
Lender or such Affiliate, as the case may be, as security for any and all of the
undersigned's obligations to Lender and to any Affiliate of Lender, no matter
how or when arising and whether under this or any other instrument, agreement or
otherwise.
5. Representations and Warranties. The undersigned hereby represents and
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warrants (all of which representations and warranties shall survive until all
Obligations are indefeasibly satisfied in full, that:
(a) Legal Capacity. The undersigned has full legal capacity to execute
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and deliver this Guaranty and to perform the obligations of the undersigned
under this Guaranty.
(b) Legal, Valid and Binding Character. This Guaranty constitutes the
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legal, valid and binding obligation of the undersigned enforceable in
accordance with its terms, except as enforceability may be limited by
applicable Insolvency Law.
(c) Violations. The execution, delivery and performance of this
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Guaranty will not violate any requirement of law applicable to the
undersigned or any material contract, agreement or instrument to which the
undersigned is a party or by which the undersigned or any property of the
undersigned is bound or result in the creation or imposition of any
mortgage, lien or other encumbrance other than to Lender on any of the
property or assets of the undersigned pursuant to the provisions of any of
the foregoing.
(d) Consents or Approvals. No consent of any other person or entity
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(including, without limitation, any creditor of the undersigned) and no
consent, license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required in connection with the execution,
delivery, performance, validity or enforceability of this Guaranty.
(e) Litigation. No litigation, arbitration, investigation or
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administrative proceeding of or before any court, arbitrator or
governmental authority, bureau or agency is currently pending or, to the
best knowledge of the undersigned, threatened (i) with respect to this
Guaranty or any of the transactions contemplated by this Guaranty or (ii)
against or affecting the undersigned, or any property or assets of the
undersigned, which, if adversely determined, would have a material adverse
effect on the business, operations, assets or condition, financial or
otherwise, of the undersigned.
(f) Financial Benefit. The undersigned has derived or expects to
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derive a financial or other advantage from each and every loan, advance or
extension of credit made under the Note or other Obligation incurred by
Borrower to Lender.
The foregoing representations and warranties (other than that set forth in
paragraph (f) above) shall be deemed to have been made by the undersigned on the
date of each borrowing by Borrower under the Note or any other Loan Document on
and as of such date of such borrowing as though made hereunder on and as of such
date.
6. Acceleration. If any breach of any covenant or condition or other event
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of default shall occur and be continuing under any agreement made by Borrower or
the undersigned to Lender, or either Borrower or the undersigned should at any
time become insolvent, or make a general assignment, or if a proceeding in or
under any Insolvency Law shall be filed or commenced by, or in respect of, the
undersigned, or if a notice of any lien, levy, or assessment is filed of record
with respect to any assets of the undersigned by the United States of America or
any department, agency, or instrumentality thereof, or if any taxes or debts
owing at any time or times hereafter to any one of them becomes a lien or
encumbrance upon any assets of the undersigned in Lender's possession, or
otherwise, any and all Obligations shall for purposes hereof, at Lender's
option, be deemed due and payable without notice.
(b) The undersigned will promptly notify Lender of any default by the
undersigned in the performance or observance of any term or condition of any
agreement to which the undersigned is a party if the effect of such default is
to cause, or permit the holder of any obligation under such agreement to cause,
such obligation to become due prior to its stated maturity and, if such an event
occurs, Lender shall have the right to accelerate the undersigned's obligations
hereunder.
7. Payments from Guarantor. Lender, in its sole and absolute discretion,
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with or without notice to the undersigned, may apply on account of the
Obligations any payment from the undersigned or any other guarantor, or amounts
realized from any security for the Obligations, or may deposit any and all such
amounts realized in a non-interest bearing cash collateral deposit account to be
maintained as security for the Obligations.
8. Costs. The undersigned shall pay on demand, all costs, fees and expenses
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(including expenses for legal services of every kind) relating or incidental to
the enforcement or protection of the rights of Lender hereunder or under any of
the Obligations.
9. No Termination. This is a continuing irrevocable guaranty and shall
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remain in full force and effect and be binding upon the undersigned, and the
undersigned's heirs, administrators, executors, successors and assigns, until
all of the Obligations have been paid in full. If any of the present or future
Obligations are guarantied by persons, partnerships or corporations in addition
to the undersigned, the death, release or discharge in whole or in part or the
bankruptcy, merger, consolidation, incorporation, liquidation or dissolution of
one or more of them shall not discharge or affect the liabilities of the
undersigned under this Guaranty. The death of the undersigned shall not effect a
termination of this Guaranty.
10. Recapture. Anything in this Guaranty to the contrary notwithstanding,
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if Lender receives any payment or payments on account of the liabilities
guaranteed hereby, which payment or payments or 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 Insolvency Law, common law or equitable doctrine, then to the extent of any
sum not finally retained by Lender, the undersigned's obligations to Lender
shall be reinstated and this Guaranty shall remain in full force and effect (or
be reinstated) until payment shall have been made to Lender, which payment shall
be due on demand.
11. Books and Records. The books and records of Lender showing the account
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between Lender and Borrower shall be admissible in evidence in any action or
proceeding, shall be binding upon the undersigned for the purpose of
establishing the items therein set forth and shall constitute prima facie proof
thereof.
12. No Waiver. No failure on the part of Lender to exercise, and no delay
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in exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by Lender of any right, remedy
or power hereunder preclude any other or future exercise of any other legal
right, remedy or power. Each and every right, remedy and power hereby granted to
Lender or allowed it by law or other agreement shall be cumulative and not
exclusive of any other, and may be exercised by Lender at any time and from time
to time.
13. Waiver of Jury Trial. THE UNDERSIGNED DOES HEREBY KNOWINGLY,
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VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO. THE UNDERSIGNED DOES
HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
14. Governing Law; Jurisdiction; Amendments. THIS INSTRUMENT CANNOT BE
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CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETED
AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. THE UNDERSIGNED EXPRESSLY CONSENTS TO THE
JURISDICTION AND VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF
NEW YORK, AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR ALL PURPOSES IN CONNECTION HEREWITH. ANY JUDICIAL PROCEEDING BY THE
UNDERSIGNED AGAINST LENDER INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR CLAIM
IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED HEREWITH SHALL BE BROUGHT
ONLY IN THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK OR THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE
UNDERSIGNED FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR
PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION
TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY NOTICE IN
CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR OUTSIDE OF
THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED A
REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER AS MAY BE
PERMISSIBLE UNDER THE RULES OF SAID COURTS. THE UNDERSIGNED WAIVES ANY OBJECTION
TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREON AND SHALL NOT ASSERT
ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON FORUM NON
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CONVENIENS.
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15. Severability. To the extent permitted by applicable law, any provision
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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.
16. Amendments, Waivers. No amendment or waiver of any provision of this
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Guaranty nor consent to any departure by the undersigned therefrom shall in any
event be effective unless the same shall be in writing executed by the
undersigned and Lender.
17. Notice. All notices, requests and demands to or upon the undersigned,
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shall be in writing and shall be deemed to have been duly given or made (a) when
delivered, if by hand, (b) three (3) days after being sent, postage prepaid, if
by registered or certified mail, (c) when confirmed electronically, if by
facsimile, or (d) when delivered, if by a recognized overnight delivery service
in each event, to the numbers and/or address set forth beneath the signature of
the undersigned.
18. Successors. Lender may, from time to time, without notice to the
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undersigned, sell, assign, transfer or otherwise dispose of all or any part of
its rights under this Guaranty. In each such event, Lender, its Affiliates and
each and every immediate and successive purchaser, assignee, transferee or
holder of all or any part of the Obligations shall have the right to enforce
this Guaranty, by legal action or otherwise, for its own benefit as fully as if
such purchaser, assignee, transferee or holder were herein by name specifically
given such right.
19. Release. Nothing except cash payment in full of the Obligations shall
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release the undersigned from liability under this Guaranty.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned this
23 day of March, 2006.
/s/ Xxxxx X. Xxxxxx
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Xxxxxxxxxx X. Xxxxxx
Address: 0000-0000 Xxxx Xxxxxx
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Vancounver B.C.
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Telephone No.:000-000-0000
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Facsimile No.:000-000-0000
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PROVINCE OF British Columbia)
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): ss.:
COUNTY OF N/A )
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On the 23 day of March, 2006, before me personally came Xxxxxxxxxx X.
Xxxxxx to me known, who being by me duly sworn, did depose and say that he
resides at Vancouver, B.C. , that he has read the foregoing instrument and is
fully familiar with the contents thereof; that he signed his name thereto of his
own free will and volition.
/s/ Xxxx Xxxxxx
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Notary Public
