Exhibit 10.5
GUARANTY
dated as of
February __, 2005
by
[Name of Subsidiary]
as Guarantor
for the benefit of
THE PURCHASERS REFERRED TO HEREIN
as the Lenders
GUARANTY
This GUARANTY (this "Guaranty"), dated as of February __, 2005, is made by
______________________, a __________ corporation ("Guarantor"), in favor of
the Purchasers named on Exhibit A to the Purchase Agreement (collectively,
"Lenders").
All capitalized terms appearing and not defined herein shall have the same
meanings ascribed to them in that certain Securities Purchase Agreement, dated
as of the date hereof (as hereafter amended or otherwise modified, the
"Purchase Agreement"), by and among Consolidated Energy, Inc., a Wyoming
corporation ("Borrower"), and the Lenders.
W I T N E S E T H:
WHEREAS, the Borrower has requested the Lenders to make loans to it in the
aggregate principal amount of up to $14,000,000 (the "Loans") in accordance
with the Purchase Agreement;
WHEREAS, the Loans will be evidenced by the Notes;
WHEREAS, Guarantor is an operating Subsidiary of the Borrower, and Guarantor
will benefit from the making of the Loans;
WHEREAS, to induce the Lenders to make the Loans pursuant to the Purchase
Agreement, and to accept the Notes, the Guarantor has agreed to execute and
deliver this Guaranty to be binding upon the Guarantor and its successors and
assigns;
WHEREAS, the Lenders is unwilling to extend credit to the Borrower unless this
Guaranty is executed by the Guarantor and delivered to the Lenders; and
WHEREAS, it is a condition to the obligations of the Lenders to make the Loans
to the Borrower pursuant to the Purchase Agreement that this Guaranty is
executed by the Guarantor and delivered to the Lenders.
NOW, THEREFORE, in consideration of the Loans to the Borrower, in order to
induce the Lenders to execute and deliver the Purchase Agreement and to accept
the Notes, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor, for itself and
its successors and assigns, hereby covenants and agrees with the Lenders, for
the benefit of the Lenders and their successors and assigns, as follows:
1. Guaranty Obligations. "Guaranty Obligations" shall mean the prompt,
absolute and unconditional payment in full of the following:
(a) the aggregate outstanding principal amount of the Loans;
(b) all interest on the aggregate outstanding principal amount of the Loans;
and
(c) all other amounts due and payable by the Borrower under the Notes and the
other Transaction Documents.
2. Guaranty. The Guarantor unconditionally and irrevocably guarantees the
Guaranty Obligations to the Lenders. If an "Event of Default" under any Note
occurs, the Guarantor shall, within five (5) days following written notice
from any Lender to Guarantor demanding payment hereunder, pay to such Lender,
in immediately available funds, such amount of the Guaranty Obligations as
such Lender shall specify in such notice.
3. Representations, Warranties and Covenants of Guarantor. Guarantor hereby
represents, warrants and covenants to the Lenders as follows:
(a) Guarantor is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of __________ and has the requisite
corporate power to own, lease and operate its properties and assets and to
conduct its business as it is now being conducted. Guarantor is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except for any jurisdiction(s)
(alone or in the aggregate) in which the failure to be so qualified will not
have a Material Adverse Effect.
(b) Guarantor has the requisite corporate power and authority to enter into
and perform this Guaranty, and each other agreement and document contemplated
hereby. The execution, delivery and performance of this Guaranty by Guarantor
and the consummation by it of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action, and no further
consent or authorization of Guarantor, its Board of Directors or its
stockholders is required. This Guaranty has been duly executed and delivered
by Guarantor, and constitutes a valid and binding obligation of Guarantor
enforceable against Guarantor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium, liquidation, conservatorship, receivership or similar laws
relating to, or affecting generally the enforcement of, creditor's rights and
remedies or by other equitable principles of general application.
(c) Guarantor is not insolvent, and Guarantor will not be rendered insolvent
by execution of this Guaranty or any other Transaction Document to which
Guarantor is a party or by the consummation of the transactions contemplated
hereby or thereby.
(d) The consummation of the transactions contemplated hereby and the
performance by Guarantor of its obligations under this Guaranty or any other
Transaction Document to which Guarantor is a party will not result in any
breach of, give rise to a lien under, or constitute a default under, any
mortgage, deed of trust, lease, bank loan or credit agreement, any operating
agreement, partnership agreement, corporate charter, by-laws, shareholder
agreement or other agreement or instrument to which Guarantor is a party or by
which Guarantor or its properties or assets may be bound or affected.
(e) Except as disclosed in writing to the Lenders, there are no actions, suits
or proceedings pending, or, to the knowledge of Guarantor, threatened against
or affecting Guarantor, at law or in equity, before or by any governmental
authority, and Guarantor is not subject to, in default of or in violation with
respect to any order, writ, injunction, decree or demand of any court or any
governmental authority that could materially adversely affect Guarantor's
obligations hereunder.
(f) Guarantor is deriving or expects to derive a financial or other advantage
from each and every obligation incurred by the Borrower to the Lenders.
(g) Guarantor hereby acknowledges receipt of copies of, and hereby approves,
the Purchase Agreement and the other Transaction Documents.
(h) Guarantor acknowledges and agrees that the Lenders may apply any payments
(other than payments made by Guarantor hereunder) or recoveries received after
a default under any of the Transaction Documents to principal, interest, fees,
expenses and other sums due with respect to the Loans in such order as may be
provided in the Purchase Agreement or the other Transaction Documents or, to
the extent not so provided, in such order as the Lenders, in their sole
discretion, may elect.
4. Waiver of Election of Remedies. Guarantor waives (to the extent permitted
by law) any right to require or compel any Lender to (a) proceed against the
Borrower or any other guarantor; (b) proceed against or exhaust any security
for the Loans or the Guaranty Obligations; or (c) pursue any other remedy in
any Lender's power whatsoever; and failure of the Lenders to do any of the
foregoing shall not exonerate, release or discharge Guarantor from its
absolute, unconditional and independent liabilities to the Lenders hereunder.
Guarantor hereby waives (to the extent permitted by law) any and all legal
requirements that any Lender shall institute any action or proceedings at law
or in equity against the Borrower or anyone else in respect of the Loans or
the Purchase Agreement or any other Transaction Document or resort to or seek
to realize upon any security held by any Lender, as a condition precedent to
bringing an action against Guarantor upon this Guaranty.
5. Right of Separate Actions. Each Lender may bring and prosecute a separate
action against Guarantor to enforce the Guarantor's liabilities hereunder,
whether or not any action is brought against any other person and whether or
not any other person is joined in any such action or actions. Nothing shall
prohibit any Lender from exercising its rights against Guarantor, the
Borrower, or any other person, simultaneously, jointly and/or severally.
6. Waiver of Rights of Subrogation. Guarantor hereby irrevocably waives any
rights to be subrogated to the rights of the Lenders with respect to the
Guaranty Obligations and the Notes or any other Transaction Document.
Guarantor hereby agrees that Guarantor will not institute or take any action
seeking reimbursement against the Borrower or any other guarantor until such
time as the Lenders shall have received payment in full in cash in
satisfaction of all the obligations of the Borrower under the Notes and the
other Transaction Documents. No failure on the part of any Lender to
exercise, and no delay in exercising, any right, remedy or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise by
any Lender of any right, remedy or power hereunder preclude any other or
future exercise of any other right, remedy or power.
7. Waiver of Notice, Consent, etc.
(a) This Guaranty shall be construed as a continuing, absolute and
unconditional guaranty of payment.
(b) Guarantor hereby waives acceptance and notice of acceptance of this
Guaranty by the Lenders and notice of presentment, demand, protest, notice of
protest and of dishonor, notices of default and all other notices relative to
this Guaranty of every kind and description now or hereafter provided by any
agreement between the Borrower and the Lenders or any statute or rule of law,
except those specifically required by this Guaranty.
(c) Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the obligations of the Borrower under any of the Transaction
Documents. The obligations of the Borrower under any of the Transaction
Documents, and each of them, shall conclusively be deemed to have been
created, contracted or incurred in reliance upon this Guaranty and all
dealings between the Borrower and the Lenders shall likewise be conclusively
presumed to have been made or consummated in reliance upon this Guaranty.
(d) Guarantor hereby agrees that the terms, covenants and provisions contained
in the Purchase Agreement, the Notes or in any other Transaction Document may
be altered, extended, modified, waived, released or cancelled by the Lenders,
and the Guarantor agrees that this Guaranty and Guarantor's liability
hereunder shall be in no way affected, diminished or released by any such
alteration, extension, modification, release, waiver or cancellation.
8. No Discharge; Remedies Cumulative. Guarantor shall not be discharged,
released or exonerated, in any way, from Guarantor's absolute, unconditional
and independent liabilities hereunder, even though any rights or defenses that
Guarantor may have against the Lenders or others may be destroyed, diminished
or otherwise affected by:
(a) any declaration by any Lender of a default in respect of any of the
obligations of the Borrower under any of the Transaction Documents;
(b) the exercise by any Lender of any rights or remedies against the Borrower,
Guarantor ("Loan Party") or any other person;
(c) the failure of any Lender to exercise any rights or remedies against the
Borrower, any Loan Party or any other person;
(d) any bankruptcy or reorganization of the Borrower or the voluntary or
involuntary participation by the Borrower in any settlement or composition for
the benefit of such Borrower's creditors either in liquidation, readjustment,
receivership, bankruptcy or otherwise;
(e) the release of any other guarantor by agreement, operation of law or
otherwise; or
(f) any such action by any Lender that would release or limit the liability of
any guarantor to the Lenders even if the effect of that action is to deprive
the Guarantor of the right to collect reimbursement from the Borrower or any
other guarantor for any sums paid to the Lenders.
All rights and remedies of the Lenders hereunder or under any of the
Transaction Documents shall be cumulative and may be exercised singularly or
concurrently. The rights of the Lenders under this Guaranty are in addition to
and not in diminution of the rights of the Lenders under any other Transaction
Document.
9. Entire Agreement; Modification and Waiver. This Guaranty represents the
entire agreement among the Guarantor and the Lenders with respect to the
matters referred to herein and therein together with the Purchase Agreement to
the extent referenced herein, and no waiver or modification hereof or thereof
shall be effective unless in writing and signed by the party against whom
enforcement of the same is sought.
10. Governing Law; Venue. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES AND OTHER PERSONS BENEFITTED HEREUNDER SHALL BE CONSTRUED, ENFORCED,
AND INTERPRETED ACCORDING TO THE LAWS OF THE STATE OF TEXAS, APPLICABLE TO
CONTRACTS MADE IN AND PERFORMED IN THE STATE OF TEXAS, WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICT OF LAWS. Guarantor (i) hereby irrevocably submits to
the non-exclusive jurisdiction of the United States District Court sitting in
the Northern District of Texas and the courts of the State of Texas located in
Dallas, Texas, for the purposes of any suit, action or proceeding arising out
of or relating to this Guaranty or the transactions contemplated hereby, and
(ii) hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper.
11. Successors and Assigns. This Guaranty shall be binding upon the Guarantor
and upon its successors and assigns, and shall inure to the benefit of each
Lender and its successors and assigns; provided, however, that this Guaranty
shall not be assignable by Guarantor without the written consent of all
Lenders.
12. Time of the Essence. Time shall be of the essence with regard to the
performance by Guarantor of its obligations under this Guaranty.
13. Singular and Plural. As used in this Guaranty, the singular shall include
the plural as the context requires, and the masculine, feminine and neuter
pronouns shall each include the other as the context requires.
14. Waiver of Trial by Jury. GUARANTOR HEREBY IRREVOCABLY WAIVES TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF OR IN ANY WAY CONNECTED TO THE LOANS, THIS GUARANTY
OR ANY OF THE OTHER TRANSACTION DOCUMENTS.
15. Severability. If any term or provision of this Guaranty or any
application thereof shall be held to be invalid, illegal or unenforceable, the
remainder of this Guaranty and any other application of such term or provision
shall not be affected thereby.
16. Enforcement Expenses. Guarantor hereby agrees to pay all reasonable
out-of-pocket costs and expenses of the Lenders in connection with the
enforcement of this Guaranty and any amendment, waiver or consent relating
hereto (including, without limitation, the fees and disbursements of counsel
employed by any Lender).
17. Headings. The headings in this Guaranty are for purposes of reference only
and shall not limit or define the meaning hereof.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned as of
the date first above written.
Guarantor:
[Name of Guarantor]
By:__________________________________
Name:
Title:
