GUARANTY
This Guaranty is given pursuant to the provisions of a Loan Agreement
(the "LOAN AGREEMENT") of even date herewith by and between CROWN ASPHALT
PRODUCTS COMPANY, a Utah corporation (as "BORROWER") and COMMUNITY FIRST
NATIONAL BANK, a national banking association (as "LENDER") and CROWN ENERGY
CORPORATION, a Utah corporation, (hereinafter the "GUARANTOR ") pursuant to
which the Lender is making a loan to the Borrower in the principal amount of
$1,800,000.00 (the "LOAN"). This Guaranty is intended to guarantee payment
and performance of all obligations and covenants arising under such Loan
Agreement, including, without limitation, the obligations and covenants
arising under the Promissory Note and the Collateral Documents as described
in the Loan Agreement. The Loan Agreement, the Promissory Note, and the
Collateral Documents are, by this reference, incorporated herein.
As an inducement to Lender to make the Loan to Borrower on the terms
and conditions set forth in the Loan Agreement, and for other good and
valuable consideration, which consideration includes benefits accruing to the
Guarantor as a result of the loan by Lender to Borrower, Guarantor hereby
covenants and agrees with Lender as follows:
1. DEFINITIONS. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings set forth in the Loan Agreement.
2. GUARANTY. (a) Guarantor hereby absolutely, irrevocably and
unconditionally guarantees to Lender the due and punctual payment of the
Indebtedness (as such term is defined in the Loan Agreement) as and when it
shall become due and payable, after an Event of Default, whether by lapse of
time, by acceleration of maturity or otherwise, irrespective of the validity,
regularity or enforceability of the Loan Agreement, the Note or the Collateral
Documents. The obligations of Guarantor herein shall remain in effect as long as
the Indebtedness is outstanding, including all extensions or modifications
thereof.
(b) This is an absolute, irrevocable and unconditional guaranty of
payment and performance, and not of collection. Guarantor agrees that
immediately upon the occurrence of an Event of Default and written demand by
Lender, Guarantor shall pay to Lender the full amount of the Indebtedness, 'as
if the Indebtedness constituted the direct and primary obligations of Guarantor.
Lender shall be entitled to proceed directly against Guarantor for payment of
the Indebtedness,
without first pursuing or exhausting any remedy that Lender then may have
against Borrower or any other guarantor of the Indebtedness. Guarantor agrees
that any failure of Lender to exercise their right to proceed directly against
Guarantor, or any delay in the exercise thereof, shall not be construed as a
waiver by Lender with respect thereto and shall not release Guarantor from its
liability hereunder, and that Lender may proceed directly against Guarantor at
any time after the occurrence of an Event of Default and Failure of Cure.
Guarantor waives any defenses based upon any election of remedies by Lender
under this Guaranty, the Agreement, the Note or Collateral Documents.
(c) Guarantor hereby waives notice of acceptance, presentment for
payment, demand for payment, protest or notice of protest and dishonor, notice
of demand and all other notices and demands of any kind and description now or
hereafter provided by any law or statute, and all other rights and defenses, the
assertion or exercise of which would in any way diminish the liability of
Guarantor hereunder.
(d) Guarantor assumes full responsibility for keeping fully informed with
respect to the business, operation, condition, and assets of Borrower and all
circumstances bearing on the risk of non-payment of the Indebtedness. Guarantor
waives any duty on the part of Lender to disclose or report to Guarantor any
information now or hereafter known to Lender relating to the business,
operation, condition or assets of Borrower, regardless of whether Lender have
reason to believe that any such facts materially increase the risk beyond that
which Guarantor intends to assume or has reason to believe that such facts are
unknown to Guarantor or has a reasonable opportunity to communicate such facts
to Guarantor.
(e) Guarantor agrees that this Guaranty and the liability of Guarantor
hereunder shall not be affected, diminished or released by: (1) any extension,
forbearance or leniency extended by Lender to Borrower with respect to the Note,
without notice to or consent by Guarantor, including notice of any default by
Borrower; (2) any amendment, modification or extension of the terms and
conditions of the Loan Agreement, the Note and the Collateral Documents, without
notice to or consent by Guarantor; or (3) any release by Lender of any other
guarantor of the Note, without notice to or consent by Guarantor. Guarantor
agrees that any joinder, waiver, consent or agreement by Borrower, by their own
operation, shall be deemed to be a joinder, consent, waiver or agreement by
Guarantor with respect thereto and that Guarantor shall continue as Guarantor
with respect to the Loan Agreement, the Note and the Collateral Documents as so
modified, extended, amended or otherwise affected.
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GUARANTY BY CROWN ENERGY CORPORATION
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(f) If at any time any whole or partial payment of the Indebtedness is
sought to be rescinded or must otherwise be restored or returned by the Lender
as a result of the insolvency, bankruptcy, dissolution, liquidation or
reorganization of Borrower or the appointment of a receiver, intervenor or
conservator or trustee or similar officer for Borrower or any substantial part
of its property or otherwise, then this Guaranty shall continue to be effective
or shall be reinstated, as the case may be, all as though such payments and
performance had not been made.
(g) Nothing herein contained is intended or shall be construed to give to
Guarantor any right of subrogation in or under the Note, the Loan Agreement or
the Collateral Documents, or any right to participate in any way therein, or in
the right, title and interest of Lender in and to any property covered by or
transferred under the Loan Agreement and/or the Collateral Documents,
notwithstanding any payments made by Guarantor under this Guaranty. Until
payment in full of the Indebtedness, Guarantor shall have no right of
subrogation.
(h) Guarantor waives and releases all rights of participation,
contribution, reimbursement, recourse, and subrogation available to it, now or
hereafter, against any person liable for payment of the Indebtedness or as to
any collateral security, until the Indebtedness is fully paid and discharged.
(i) Guarantor, Borrower, and Lender retain any right to make additional
advances or to negotiate modifications in the loan.
3. REPRESENTATIONS AND COVENANTS. Guarantor represents and warrants to
Lender that:
(a) Guarantor has received copies of the Note, the Loan Agreement and the
Collateral Documents and is familiar with and fully understands all of their
terms and conditions; and
(b) Lender have not made any representations or warranties to Guarantor
regarding the credit-worthiness of Borrower or the prospects of repayment from
sources other than Borrower; and
(c) Guarantor has established adequate means of obtaining from Borrower,
on a continuing basis, financial and other information pertaining to the
business of Borrower.
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GUARANTY BY CROWN ENERGY CORPORATION
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(d) Guarantor will perform each obligation required of a Guarantor under
the Loan Agreement.
4. MISCELLANEOUS. (a) The remedies of Lender as provided in this Guaranty
are separate and cumulative and are in addition to any other legal or equitable
remedy which Lender may have under this Guaranty, the Note, the Collateral
Documents or the Loan Agreement and may be pursued separately, successively,
concurrently, independently or together against Borrower, Guarantor, any other
Guarantors, or any one or more of them, at the sole discretion of Lender, and
may be exercised as often as occasion therefor shall arise. The failure to
exercise any such remedy shall in no event be construed as a waiver or release
thereof, nor shall the choice of one remedy be deemed an election of remedies to
the exclusion of other remedies. Nothing in this Guaranty is intended to prevent
Lender, upon the occurrence of an Event of Default, in their sole discretion,
from enforcing the provisions of the Note, Loan Agreement or Collateral
Documents.
(b) Any notice required or permitted to be given pursuant hereto, or in
connection herewith, shall be deemed to have been duly given when deposited in
the U.S. Mail, certified mail - return receipt requested addressed:
Community First National Bank
000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
Crown Energy Corporation
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
(c) The warranties, representations, covenants and agreements set forth
in this Guaranty shall survive the delivery hereof and shall continue in full
force and effect until the Indebtedness is paid in full.
(d) The parties intend this writing to be a final expression of their
agreements and a complete and exclusive statement of the terms and conditions
with respect to the subject matter hereof and the transactions contemplated
hereby. No course of prior dealings between the parties, no usage of the trade
and no
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GUARANTY BY CROWN ENERGY CORPORATION
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extrinsic evidence of any nature shall be used or be relevant to supplement or
explain or modify any term used in this Guaranty.
(e) Guarantor agrees to pay reasonable attorneys' fees and costs of
collection (through and including full collection of the Indebtedness, any
appellate fees and costs, and any fees and costs incurred in enforcing the Note,
the Loan Agreement, or this Guaranty or any of the Collateral Documents in any
proceedings, including bankruptcy or insolvency proceedings) incurred by Lender
in collecting or enforcing the Note, the Loan Agreement, or this Guaranty or any
of the Collateral Documents.
(f) This Guaranty shall be binding upon and shall inure to the benefit of
the successors and assigns of the parties.
(g) This Guaranty shall be governed by, and construed and enforced in
accordance with, the laws of the State of Wyoming.
Guarantor has executed this Guaranty of his own free act and deed this
12th day of May, 1999.
Crown Energy Corporation, a Utah
Corporation
By: /s/ X. Xxxxxx
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Title: President
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GUARANTY BY CROWN ENERGY CORPORATION
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