Exhibit 10.9
[Promissory Note]
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GUARANTEE
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1. The undersigned (each, a "Guarantor"), jointly and severally, for good
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and valuable consideration and to induce Capstone Capital, LLC, a Delaware
Limited Liability Company, to lend $900,000 to West Star Energy Group, formerly
known as Mid-State Fuels, Inc., a California corporation and LLO-Gas, Inc., a
California corporation, and LLC-Gas, Inc. a Delaware corporation ("Lender"), in
consideration of the issuance to Lender of Borrower's Promissory Note of even
date herewith in such principal amount which Note is secured by certain
collateral in accordance with a Security Agreement of even date herewith (the
"Security Agreement") hereby (a) makes and affirms to Lender that each of the
representations and warranties made by Borrower in the Note and the Security
Agreement are and shall be true and correct at all times, and (b) irrevocably
and unconditionally guarantees to Lender the faithful and timely performance and
satisfaction of all of the indebtedness, obligations, covenants and conditions
required to be performed or satisfied by Borrower under the Note and the
Security Agreement, including without limitation the payment of all amounts when
due under such agreements, (all of which are herein collectively referred to as
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, including, without limitation, obligations or
indebtedness of Borrower for post-petition interest, fees, cost, and charges
that would have accrued or been added to Borrower's Obligations to Agent and the
Lenders but for the commencement of such case if Borrower fails at any time
promptly and fully to perform or satisfy any of such Obligations, covenants or
conditions, Guarantors shall perform or satisfy the same as provided therein.
Lender may at any time require Guarantors to perform or satisfy any such
obligation, covenant or condition that Borrower has not performed or satisfied
by giving notice to such effect to Guarantors in any manner prescribed for the
giving of notices to Borrower under the Note and the Security Agreement,
addressed to Guarantors at the address below.
The obligations of Guarantors hereunder are primary and direct, and are in
addition to, and independent of, the obligations, covenants and conditions
required to be performed or satisfied by Borrower under the Note and the
Security Agreement and the Supply Agreement. This is a guaranty of payment and
not of collection. Guarantors hereby waive all rights that they might otherwise
have to require Lender to commence any proceeding against Borrowers or the
Collateral (as defined in the Security Agreement) or to exhaust Lender's
remedies against Borrower before seeking to enforce this Guarantee.
The validity of this Guarantee and the obligations of Guarantors hereunder shall
in no manner be terminated, impaired, or in any way modified or affected by
reason of
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(a) the enforcement by Lender against Borrower of any of Lender's rights
or remedies under the Note or the Security Agreement;
(b) the granting to Lender, under the Security Agreement or otherwise, of
any collateral security for the performance or satisfaction of any of Borrower's
obligations, covenant or conditions under the Note, any action or inaction on
the part of Lender to proceed against or realize upon such collateral security,
or an impaired impairment or release of any such collateral security;
(c) commencement by or against Borrower of any bankruptcy or other
insolvency proceeding or any stay, discharge or other relief granted or issued
thereunder;
(d) any extension of time or other indulgence or forbearance by Lender, or
an amendment, modification, renewal or extension of the Note or Security
Agreement or waiver of any of the Obligations, covenants or conditions of the
Borrower under the Note or Security Agreement, increase or decrease in the
interest rate thereunder
(e) any other defense, set-off, counterclaim or discharge that might
otherwise be available to Borrower or any Guarantor 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.
(f) any release (full or partial) of Borrower's obligations under the
Note, Security Agreement or Supply Agreement or any release of collateral
securing the Obligations
2. Each Guarantor hereby represents and warrants to Lender that:
(a) Each Guarantor has full legal power and authority to make this
Guarantee and to assume and perform his Obligations hereunder. This Guarantee
has been duly executed and delivered by each Guarantor, and is a legally valid
and binding obligation of each Guarantor, enforceable against each Guarantor in
accordance with its terms, except to the extent such enforceability may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and
equitable principles limiting the availability of certain remedies.
(b) Each Guarantor either (i) owns outstanding Capital Stock of the
Borrower, or (ii) is an affiliate of the Borrower and will directly benefit from
the loans and other extensions of credit made by Lender to Borrower.
3. If Lender prevails in any action, suit or other proceeding against any
Guarantor to enforce this Guarantee, (Guarantors jointly and severally) shall
pay to Lender and indemnify Lender for Lender's reasonable attorneys' fees and
disbursements so incurred. All rights of Lender hereunder shall inure to the
benefit of Lender and its successors and assigns, and shall be
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binding upon Guarantors and their heirs, distributees, legal representatives,
successors and assigns. This Guarantee shall be governed by, and interpreted and
enforced in accordance with, the laws of the State of New York without regard to
principles of choice of law or conflicts of laws. Guarantors hereby irrevocably
consent and submit to the same provisions relating to arbitration and remedies,
and the jurisdiction of the same courts, the same venue and the same manner of
service of process, to which Borrowers consent and submit in Section 10 of the
Security Agreement. All such provisions shall be deemed to be incorporated
herein.
4. The undersigned further consents and agrees that lender shall be under
NO obligation to marshal any assets in favor of the undersigned, or against or
in payment of any or all of the Obligations.
5. 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. 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 any 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 Note, the Security Agreement and the Supply Agreement 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 Note. 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 foil payment
and performance of, all present and future debts and obligations of Borrower to
Lender.
6. Anything in this Guarantee to the contrary notwithstanding, 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 repaired to a trustee, receiver, or any other party under any
bankruptcy 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 guarantee shall remain in full force and effect (or be
reinstated) until payment shall have been
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made to Lender, which payment shall be due on demand.
7. Lender may, from time to time, without notice to the undersigned,
sell, assign, transfer or otherwise dispose of all or any part of the
Obligations and/or rights under this Guarantee. Without limiting the generality
of the foregoing, Lender may assign, or grant participations to, one or more
banks, financial institutions or other entities all of any part of any of the
Obligations. In each such event, Lender, its Affiliates and each and every
immediate and successive purchaser, assignee, transferee or holder were herein
by name specifically given such right. Lender shall have au unimpaired right to
enforce this Guarantee for its benefit with respect to that portion of the
Obligations which Lender has not disposed of, sold, assigned, or otherwise
transferred.
IN WITNESS WHEREOF, the undersigned has duly executed this Guarantee on August
2, 1999.
/s/ Xxxx X. Xxxxxxxxxxx
/s/ [Illegible] ------------------------------------------
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Witness Xxxx X. Xxxxxxxxxxx, President
West Star Energy Group
/s/ Xxxx X. Xxxxxxxxxxx
/s/ [Illegible] ------------------------------------------
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Witness Xxxx X. Xxxxxxxxxxx, President
LLO-Gas, Inc., a Delaware corporation
/s/ Xxxx X. Xxxxxxxxxxx
/s/ [Illegible] ------------------------------------------
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Witness Xxxx X. Xxxxxxxxxxx, President
LLO-Gas, Inc., a California corporation
/s/ Xxxx X. Xxxxxxxxxx
/s/ Illegible] ------------------------------------------
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Witness Xxxx X. Xxxxxxxxxxx, Individually
as Guarantor
Address For Notices:
West Star Energy
Atwater
000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
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LLO-Gas, Inc.
Laws Bulk Plant
108 Dehy-Laws
Xxxxxx, XX 00000
LLO-Gas, Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
LLO-Gas, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxx X. Xxxxxxxxxxx
0000 Xxxxx Xxxx
Xxxxxx, XX 00000
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