EXHIBIT E
SUBSIDIARY GUARANTEE
This SUBSIDIARY GUARANTEE, dated as of June 30, 2006 (the "Guarantee"),
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, (the "Guarantors"), in favor of the
purchasers signatory (the "Purchasers") to that certain Securities Purchase
Agreement, dated as of the date hereof, between Consolidated Energy, Inc., a
Wyoming corporation (the "Company") and the Purchasers.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Securities Purchase Agreement, dated as
of the date hereof, by and between the Company and the Purchasers (the "Purchase
Agreement"), the Company has agreed to sell and issue to the Purchasers, and the
Purchasers have agreed to purchase from the Company, the Company's Variable Rate
Original Issue Discount Convertible Secured Debentures, due June 30, 2008 (the
"Debentures"), subject to the terms and conditions set forth therein; and
WHEREAS, each Guarantor will directly benefit from the extension of credit
to the Company represented by the issuance of the Debentures; and
NOW, THEREFORE, in consideration of the premises and to induce the
Purchasers to enter into the Purchase Agreement and to carry out the
transactions contemplated thereby, each Guarantor hereby agrees with the
Purchasers as follows:
1. Definitions. Unless otherwise defined herein, terms defined in the
Purchase Agreement and used herein shall have the meanings given to them in the
Purchase Agreement. The words "hereof," "herein," "hereto" and "hereunder" and
words of similar import when used in this Guarantee shall refer to this
Guarantee as a whole and not to any particular provision of this Guarantee, and
Section and Schedule references are to this Guarantee unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The following
terms shall have the following meanings:
"Guarantee" means this Subsidiary Guarantee, as the same may be
amended, supplemented or otherwise modified from time to time.
"Obligations" means the collective reference to all liabilities and
obligations (primary, secondary, direct, contingent, sole, joint or
several) due or to become due, or that are now or may be hereafter
contracted or acquired, or owing to, of the Company to the Purchasers,
including, without limitation, obligations and undertakings of the Company
of whatever nature, monetary or otherwise, under the Debentures, the
Purchase Agreement, the Security Agreement, the Registration Rights
Agreement or any other future agreement or obligations undertaken by the
Company to the Purchasers, together with all reasonable attorneys' fees,
disbursements and all other costs and expenses of collection incurred by
Purchasers in enforcing any of such Obligations and/or this Guarantee.
2. Guarantee.
(a) Guarantee.
(i) The Guarantors hereby, jointly and severally, unconditionally
and irrevocably, guarantee to the Purchasers and their respective
successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Company when due (whether at
the stated maturity, by acceleration or otherwise) of the Obligations.
(ii) Anything herein or in any other Transaction Document to the
contrary notwithstanding, the maximum liability of each Guarantor
hereunder and under the other Transaction Documents shall in no event
exceed the amount which can be guaranteed by such Guarantor under
applicable federal and state laws, including laws relating to the
insolvency of debtors, fraudulent conveyance or transfer or laws
affecting the rights of creditors generally (after giving effect to
the right of contribution established in Section 2(b)).
(iii) Each Guarantor agrees that the Obligations may at any time
and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this
Section 2 or affecting the rights and remedies of the Purchasers
hereunder.
(iv) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Obligations and the obligations of
each Guarantor under the guarantee contained in this Section 2 shall
have been satisfied by payment in full.
(v) No payment made by the Company, any of the Guarantors, any
other guarantor or any other Person or received or collected by the
Purchasers from the Company, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or
any set-off or appropriation or application at any time or from time
to time in reduction of or in payment of the Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of
any Guarantor hereunder which shall, notwithstanding any such payment
(other than any payment made by such Guarantor in respect of the
Obligations or any payment received or collected from such Guarantor
in respect of the Obligations), remain liable for the Obligations up
to the maximum liability of such Guarantor hereunder until the
Obligations are paid in full.
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(vi) Notwithstanding anything to the contrary in this Guarantee,
with respect to any defaulted non-monetary Obligations the specific
performance of which by the Guarantors is not reasonably possible
(e.g. the issuance of the Company's Common Stock), the Guarantors
shall only be liable for making the Purchasers whole on a monetary
basis for the Company's failure to perform such Obligations in
accordance with the Transaction Documents.
(b) Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which
has not paid its proportionate share of such payment. Each Guarantor's
right of contribution shall be subject to the terms and conditions of
Section 2(c). The provisions of this Section 2(b) shall in no respect limit
the obligations and liabilities of any Guarantor to the Purchasers and each
Guarantor shall remain liable to the Purchasers for the full amount
guaranteed by such Guarantor hereunder.
(c) No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Purchasers, no Guarantor shall be entitled to be subrogated to any of the
rights of the Purchasers against the Company or any other Guarantor or any
collateral security or guarantee or right of offset held by the Purchasers
for the payment of the Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Company or any
other Guarantor in respect of payments made by such Guarantor hereunder,
until all amounts owing to the Purchasers by the Company on account of the
Obligations are paid in full. If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by
such Guarantor in trust for the Purchasers, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Purchasers in the exact form received by such Guarantor
(duly indorsed by such Guarantor to the Purchasers, if required), to be
applied against the Obligations, whether matured or unmatured, in such
order as the Purchasers may determine.
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(d) Amendments, etc. With Respect to the Obligations. Each Guarantor
shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Purchasers may be rescinded by the Purchasers and
any of the Obligations continued, and the Obligations, or the liability of
any other Person upon or for any part thereof, or any collateral security
or guarantee therefor or right of offset with respect thereto, may, from
time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the
Purchasers, and the Purchase Agreement and the other Transaction Documents
and any other documents executed and delivered in connection therewith may
be amended, modified, supplemented or terminated, in whole or in part, as
the Purchasers may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Purchasers
for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. The Purchasers shall have no obligation to
protect, secure, perfect or insure any Lien at any time held by them as
security for the Obligations or for the guarantee contained in this Section
2 or any property subject thereto.
(e) Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Purchasers upon the
guarantee contained in this Section 2 or acceptance of the guarantee
contained in this Section 2; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Company and any
of the Guarantors, on the one hand, and the Purchasers, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor
waives to the extent permitted by law diligence, presentment, protest,
demand for payment, and notice of default or nonpayment to or upon the
Company or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that the guarantee contained in this
Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability
of the Purchase Agreement or any other Transaction Document, any of the
Obligations or any other collateral security therefor or guarantee or right
of offset with respect thereto at any time or from time to time held by the
Purchasers, (b) any defense, set-off or counterclaim (other than a defense
of payment or performance or fraud or misconduct by Purchasers) which may
at any time be available to or be asserted by the Company or any other
Person against the Purchasers, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Company or such Guarantor)
which constitutes, or might be construed to constitute, an equitable or
legal discharge of the Company for the Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any
other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Purchasers may,
but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as they may have against the Company, any
other Guarantor or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect thereto,
and any failure by the Purchasers to make any such demand, to pursue such
other rights or remedies or to collect any payments from the Company, any
other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any
release of the Company, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Purchasers against any Guarantor. For the purposes
hereof, "demand" shall include the commencement and continuance of any
legal proceedings.
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(f) Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded
or must otherwise be restored or returned by the Purchasers upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
the Company or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
(g) Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Purchasers without set-off or counterclaim in U.S.
Dollars at the address set forth or referred to in the Purchase Agreement.
3. Representations and Warranties. Each Guarantor hereby makes the
following representations and warranties to Purchasers as of the date hereof:
(a) Organization and Qualification. The Guarantor is a corporation,
duly incorporated, validly existing and in good standing under the laws of
the applicable jurisdiction set forth on Schedule 1, with the requisite
corporate power and authority to own and use its properties and assets and
to carry on its business as currently conducted. The Guarantor has no
subsidiaries other than those identified as such on the Disclosure
Schedules to the Purchase Agreement. The Guarantor is duly qualified to do
business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to
be so qualified or in good standing, as the case may be, could not,
individually or in the aggregate, (x) adversely affect the legality,
validity or enforceability of any of this Guarantee in any material
respect, (y) have a material adverse effect on the results of operations,
assets, prospects, or financial condition of the Guarantor or (z) adversely
impair in any material respect the Guarantor's ability to perform fully on
a timely basis its obligations under this Guarantee (a "Material Adverse
Effect").
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(b) Authorization; Enforcement. The Guarantor has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by this Guarantee, and otherwise to carry out its
obligations hereunder. The execution and delivery of this Guarantee by the
Guarantor and the consummation by it of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the
part of the Guarantor. This Guarantee has been duly executed and delivered
by the Guarantor and constitutes the valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors' rights
and remedies or by other equitable principles of general application.
(c) No Conflicts. The execution, delivery and performance of this
Guarantee by the Guarantor and the consummation by the Guarantor of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of its Certificate of Incorporation or By-laws or
(ii) conflict with, constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Guarantor is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental
authority to which the Guarantor is subject (including Federal and state
securities laws and regulations), or by which any material property or
asset of the Guarantor is bound or affected, except in the case of each of
clauses (ii) and (iii), such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as could not, individually or
in the aggregate, have or result in a Material Adverse Effect. The business
of the Guarantor is not being conducted in violation of any law, ordinance
or regulation of any governmental authority, except for violations which,
individually or in the aggregate, do not have a Material Adverse Effect.
(d) Consents and Approvals. The Guarantor is not required to obtain
any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local, foreign or
other governmental authority or other person in connection with the
execution, delivery and performance by the Guarantor of this Guarantee.
(e) Purchase Agreement. The representations and warranties of the
Company set forth in the Purchase Agreement as they relate to such
Guarantor, each of which is hereby incorporated herein by reference, are
true and correct as of each time such representations are deemed to be made
pursuant to such Purchase Agreement, and the Purchasers shall be entitled
to rely on each of them as if they were fully set forth herein, provided,
that each reference in each such representation and warranty to the
Company's knowledge shall, for the purposes of this Section 3, be deemed to
be a reference to such Guarantor's knowledge.
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(f) Foreign Law. Each Guarantor has consulted with appropriate foreign
legal counsel with respect to any of the above representations for which
non-U.S. law is applicable. Such foreign counsel have advised each
applicable Guarantor that such counsel knows of no reason why any of the
above representations would not be true and accurate. Such foreign counsel
were provided with copies of this Subsidiary Guarantee and the Transaction
Documents prior to rendering their advice.
4. Covenants.
(a) Each Guarantor covenants and agrees with the Purchasers that, from
and after the date of this Guarantee until the Obligations shall have been
paid in full, such Guarantor shall take, and/or shall refrain from taking,
as the case may be, each commercially reasonable action that is necessary
to be taken or not taken, as the case may be, so that no Event of Default
is caused by the failure to take such action or to refrain from taking such
action by such Guarantor.
(b) So long as any of the Obligations are outstanding, each Guarantor
will not directly or indirectly on or after the date of this Guarantee:
a. other than Permitted Indebtedness, enter into, create, incur,
assume, guarantee or suffer to exist any indebtedness for borrowed money of
any kind, including but not limited to, a guarantee, on or with respect to
any of its property or assets now owned or hereafter acquired or any
interest therein or any income or profits therefrom;
b. other than Permitted Liens, enter into, create, incur, assume or
suffer to exist any Liens of any kind, on or with respect to any of its
property or assets now owned or hereafter acquired or any interest therein
or any income or profits therefrom;
c. amend its charter documents, including without limitation, the
certificate of incorporation and bylaws, in any manner that adversely
affects any rights of the Holder;
d. repay, repurchase or offer to repay, repurchase or otherwise
acquire more than a de minimis number of shares of its Common Stock or
Common Stock Equivalents;
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e. enter into any transaction with any Affiliate of the Company or any
Guarantor which would be required to be disclosed in any public filing with
the Commission, unless such transaction is made on an arm's-length basis
and expressly approved by a majority of the disinterested directors of the
Company (even if less than a quorum otherwise required for board approval);
f. enter into any agreement with respect to any of the foregoing;
g. pay cash dividends or distributions on any equity securities of the
Guarantor except to the Company; or
h. incur any past-due taxes imposed by any federal, state or local
government, other than those which are the subject of a bona fide dispute
and as to which lawful procedures for contesting the same are being
diligently pursued.
5. Miscellaneous.
(a) Amendments in Writing. None of the terms or provisions of this
Guarantee may be waived, amended, supplemented or otherwise modified except
in writing by the Purchasers.
(b) Notices. All notices, requests and demands to or upon the
Purchasers or any Guarantor hereunder shall be effected in the manner
provided for in the Purchase Agreement, provided that any such notice,
request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 5(b).
(c) No Waiver By Course Of Conduct; Cumulative Remedies. The
Purchasers shall not by any act (except by a written instrument pursuant to
Section 5(a)), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any default
under the Transaction Documents or Event of Default. No failure to
exercise, nor any delay in exercising, on the part of the Purchasers, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Purchasers of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Purchasers would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights
or remedies provided by law.
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(d) Enforcement Expenses; Indemnification.
(i) Each Guarantor agrees to pay, or reimburse the Purchasers
for, all its costs and expenses incurred in collecting against such
Guarantor under the guarantee contained in Section 2 or otherwise
enforcing or preserving any rights under this Guarantee and the other
Transaction Documents to which such Guarantor is a party, including,
without limitation, the reasonable fees and disbursements of counsel
to the Purchasers.
(ii) Each Guarantor agrees to pay, and to save the Purchasers
harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable in connection
with any of the transactions contemplated by this Guarantee.
(iii) Each Guarantor agrees to pay, and to save the Purchasers
harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this
Guarantee to the extent the Company would be required to do so
pursuant to the Purchase Agreement.
(iv) This Section 5(d) shall survive repayment of the Obligations
and all other amounts payable under the Purchase Agreement and the
other Transaction Documents.
(e) Successor and Assigns. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of
the Purchasers and their respective successors and assigns; provided that
no Guarantor may assign, transfer or delegate any of its rights or
obligations under this Guarantee without the prior written consent of the
Purchasers, which consent shall not be unreasonably withheld.
(f) Set-Off. Each Guarantor hereby irrevocably authorizes the
Purchasers at any time and from time to time while an Event of Default
under any of the Transaction Documents shall have occurred and be
continuing, without notice to such Guarantor or any other Guarantor, any
such notice being expressly waived by each Guarantor, to set-off and
appropriate and apply any and all deposits, credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute
or contingent, matured or unmatured, at any time held or owing by the
Purchasers to or for the credit or the account of such Guarantor, or any
part thereof in such amounts as the Purchasers may elect, against and on
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account of the obligations and liabilities of such Guarantor to the
Purchasers hereunder and claims of every nature and description of the
Purchasers against such Guarantor, in any currency, whether arising
hereunder, under the Purchase Agreement, any other Transaction Document or
otherwise, as the Purchasers may elect, whether or not the Purchasers have
made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The Purchasers shall notify such
Guarantor promptly of any such set-off and the application made by the
Purchasers of the proceeds thereof, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The
rights of the Purchasers under this Section 5(f) are in addition to other
rights and remedies (including, without limitation, other rights of
set-off) which the Purchasers may have.
(g) Counterparts. This Guarantee may be executed by one or more of the
parties to this Guarantee on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.
(h) Severability. Any provision of this Guarantee 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.
(i) Section Headings. The Section headings used in this Guarantee are
for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
(j) Integration. This Guarantee and the other Transaction Documents
represent the agreement of the Guarantors and the Purchasers with respect
to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Purchasers relative to
subject matter hereof and thereof not expressly set forth or referred to
herein or in the other Transaction Documents.
(k) Governing Law. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICT OF LAWS.
(l) Submission to Jurisdictional; Waiver. Each Guarantor hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Guarantee and the other Transaction
Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, located in
Manhattan, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
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(ii) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Guarantor at its address referred to in the Purchase
Agreement or at such other address of which the Purchasers shall have
been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section 5(l) any special, exemplary,
punitive or consequential damages.
(m) Acknowledgements. Each Guarantor hereby acknowledges that:
(i) it has been advised by counsel in the negotiation, execution
and delivery of this Guarantee and the other Transaction Documents to
which it is a party;
(ii) the Purchasers have no fiduciary relationship with or duty
to any Guarantor arising out of or in connection with this Guarantee
or any of the other Transaction Documents, and the relationship
between the Guarantors, on the one hand, and the Purchasers, on the
other hand, in connection herewith or therewith is solely that of
debtor and creditor; and
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(iii) no joint venture is created hereby or by the other
Transaction Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Guarantors and the
Purchasers.
(n) Additional Guarantors. The Company shall cause each of its
subsidiaries formed or acquired on or subsequent to the date hereof to
become a Guarantor for all purposes of this Guarantee by executing and
delivering an Assumption Agreement in the form of Annex 1 hereto.
(o) Release of Guarantors. Subject to Section 5(d), each Guarantor
will be released from all liability hereunder concurrently with the
repayment in full of all amounts owed under the Purchase Agreement, the
Debentures and the other Transaction Documents.
(p) Seniority. The Obligations of each of the Guarantors hereunder
rank senior in priority to any other Indebtedness (as defined in the
Purchase Agreement) of such Guarantor, except as expressly set forth in the
Security Agreement.
(q) Waiver of Jury Trial. EACH GUARANTOR AND, BY ACCEPTANCE OF THE
BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be
duly executed and delivered as of the date first above written.
EASTERN CONSOLIDATED ENERGY, INC.
By:_________________________________
Name:
Title:
CEI HOLDINGS, INC.
By:_________________________________
Name:
Title:
XXXXXX MINING, INC.
By:_________________________________
Name:
Title:
XXXXXXXX PROCESSING, INC.
By:_________________________________
Name:
Title:
EASTERN COAL ENERGIES, INC.
By:_________________________________
Name:
Title:
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SCHEDULE 1
GUARANTORS
The following are the names, notice addresses and jurisdiction of
organization of each Guarantor.
COMPANY
JURISDICTION OF OWNED BY
INCORPORATION PERCENTAGE
------------- ----------
----------
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Annex 1 to
SUBSIDIARY GUARANTEE
ASSUMPTION AGREEMENT, dated as of ____ __, ______ made by
______________________________, a ______________ corporation (the "Additional
Guarantor"), in favor of the Purchasers pursuant to the Purchase Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Purchase Agreement.
W I T N E S S E T H :
WHEREAS, Consolidated Energy, Inc., a Wyoming corporation (the "Company")
and the Purchasers have entered into a Securities Purchase Agreement, dated as
of June ___, 2006 (as amended, supplemented or otherwise modified from time to
time, the "Purchase Agreement");
WHEREAS, in connection with the Purchase Agreement, the Company and its
Subsidiaries (other than the Additional Guarantor) have entered into the
Subsidiary Guarantee, dated as of June ____, 2006 (as amended, supplemented or
otherwise modified from time to time, the "Guarantee") in favor of the
Purchasers;
WHEREAS, the Purchase Agreement requires the Additional Guarantor to become
a party to the Guarantee; and
WHEREAS, the Additional Guarantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee. By executing and delivering this Assumption Agreement, the
Additional Guarantor, as provided in Section 5(n) of the Guarantee, hereby
becomes a party to the Guarantee as a Guarantor thereunder with the same force
and effect as if originally named therein as a Guarantor and, without limiting
the generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Guarantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedule 1 to the
Guarantee. The Additional Guarantor hereby represents and warrants that each of
the representations and warranties contained in Section 3 of the Guarantee is
true and correct on and as the date hereof as to such Additional Guarantor
(after giving effect to this Assumption Agreement) as if made on and as of such
date.
2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to
be duly executed and delivered as of the date first above written.
[ADDITIONALGUARANTOR]
By:____________________________
Name:
Title:
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