GUARANTY
dated as of
January 13, 2006
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 January 13, 2006, is made
by ______________________, a __________ corporation ("Guarantor"), in favor of
the Purchasers signatory 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 $5,000,000 (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.
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(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.
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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
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(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.
18. 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 Guaranty by executing and delivering an Assumption
Agreement in the form of Annex 1 hereto.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned as
of the date first above written.
Company: Guarantor:
Consolidated Energy, Inc. Eastern Consolidated Energy, Inc.
By:/s/ Xxxxx Xxxxxxx
-------------------------
Name: Xxxxx Xxxxxxx
Title: President By:/s/ Xxxxx Xxxxxxx
---------------------
Name: Xxxxx Xxxxxxx
Title: President
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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.
18. 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 Guaranty by executing and delivering an Assumption
Agreement in the form of Annex 1 hereto.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned as
of the date first above written.
Company: Guarantor:
Consolidated Energy, Inc. CEI Holdings, Inc.
By:/s/ Xxxxx Xxxxxxx
-------------------------
Name: Xxxxx Xxxxxxx
Title: President By:/s/ Xxxxx Xxxxxxx
--------------------
Name: Xxxxx Xxxxxxx
Title: President
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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.
18. 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 Guaranty by executing and delivering an Assumption
Agreement in the form of Annex 1 hereto.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned as
of the date first above written.
Company: Guarantor:
Consolidated Energy, Inc. Eastern Consolidated Oil &
By: /s/ Xxxxx Xxxxxxx Gas Inc.
-------------------------
Name: Xxxxx Xxxxxxx
Title: President By: /s/ Xxxxx Xxxxxxx
-----------------------
Name: Xxxxx Xxxxxxx
Title: President
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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.
18. 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 Guaranty by executing and delivering an Assumption
Agreement in the form of Annex 1 hereto.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned as
of the date first above written.
Company: Guarantor:
Consolidated Energy, Inc. Xxxxxx Mining, Inc.
By:/s/ Xxxxx Xxxxxxx
-------------------------
Name: Xxxxx Xxxxxxx
Title: President By: /s/ Xxxxx Xxxxxxx
-----------------------
Name: Xxxxx Xxxxxxx
Title: President
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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.
18. 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 Guaranty by executing and delivering an Assumption
Agreement in the form of Annex 1 hereto.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned as
of the date first above written.
Company: Guarantor:
Consolidated Energy, Inc. Xxxxxxxx Processing, Inc.
By: /s/ Xxxxx Xxxxxxx
--------------------------
Name: Xxxxx Xxxxxxx
Title: President By: /s/ Xxxxx Xxxxxxx
---------------------
Name: Xxxxx Xxxxxxx
Title: President
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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.
18. 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 Guaranty by executing and delivering an Assumption
Agreement in the form of Annex 1 hereto.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned as
of the date first above written.
Company: Guarantor:
Consolidated Energy, Inc. Eastern Coal Energies Inc.
By: /s/ Xxxxx Xxxxxxx
--------------------------
Name: Xxxxx Xxxxxxx
Title: President By:/s/ Xxxxx Xxxxxxx
----------------------
Name: Xxxxx Xxxxxxx
Title: President
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Annex 1 to
SUBSIDIARY GUARANTY
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, [COMPANY], a Delaware corporation (the "Company") and the
Purchasers have entered into a Securities Purchase Agreement, dated as of
January 13, 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 Guaranty, dated as of December 30, 2005 (as amended, supplemented or
otherwise modified from time to time, the "Guaranty") in favor of the
Purchasers;
WHEREAS, the Purchase Agreement requires the Additional Guarantor to become
a party to the Guaranty; and
WHEREAS, the Additional Guarantor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Guaranty;
NOW, THEREFORE, IT IS AGREED:
1. Guaranty. By executing and delivering this Assumption Agreement, the
Additional Guarantor, as provided in Section 18 of the Guaranty, hereby becomes
a party to the Guaranty 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 Additional Guarantor hereby
represents and warrants that each of the representations and warranties
contained in the Guaranty 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 TEXAS.
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to
be duly executed and delivered as of the date first above written.
[ADDITIONAL GUARANTOR]
By:
----------------------------------
Name:
Title:
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