CONTINUING GUARANTY
Big
West Oil,
LLC
A
FLYING
J INC Company
0000
Xxxxxxx Xxxxx Xxxxx, Xxxxx Xxxx 00000 Phone
000-000-0000
Contract:
# P-148-0106
1.
Guaranty; Definitions.
For
valuable consideration, the undersigned Big West Oil, LLC a limited liability
company (“Guarantor”), absolutely and unconditionally, guarantees and promises
to pay to Xxxxx Petroleum Company, a Delaware corporation (“Xxxxx”), or order,
on demand in lawful money of the United States of America and in immediately
available funds, any Indebtedness of Big West of California, LLC, (“Big West”)
to Xxxxx. Guarantor is financially interested in Big West and acknowledges
that
financial accommodations extended to Big West will be of substantial benefit
to
Guarantor. Big West has entered into that certain Crude Oil Purchase Contract
dated November 14, 2005 (“Contract”), pursuant to which Big West will purchase
substantially all of Xxxxx’x crude oil production in California and Xxxxx is
willing to enter into such Contract, but only upon the condition that Guarantor
executes this Guaranty. In order to induce Xxxxx to enter into the Contract,
and
in consideration thereof, Guarantor hereby agrees to this Guaranty. The term
“Indebtedness” is used herein in its most comprehensive sense and includes the
Contract and any and all advances, debts, obligations and liabilities of
Big
West to Xxxxx, including, without limitation, any obligation heretofore,
now or
hereafter made, incurred or created, whether voluntary or involuntary and
however arising, whether due or not due, absolute or contingent, liquidated,
determined or undetermined, and whether Big West may be liable individually
or
jointly, or whether recovery upon such Indebtedness may be or hereafter become
unenforceable. Notwithstanding anything herein to the contrary, the aggregate
amount payable by the Guarantor under this Guaranty shall not exceed
Seventy-Five Million Dollars ($75,000,000.00).
2.
Continuing Guaranty.
This is
a continuing guaranty and all rights, powers and remedies hereunder shall
apply
to all past, present and future Indebtedness of Big West to Xxxxx, including
that arising under successive transactions which shall either continue the
Indebtedness, increase or decrease it, or from time to time create new
Indebtedness after all or any prior Indebtedness has been satisfied, and
notwithstanding the dissolution, liquidation or bankruptcy of Xxxxx or Guarantor
or any other event or proceeding affecting Xxxxx or Guarantor. The obligations
of Guarantor hereunder shall be in addition to any obligations of Guarantor
under any other guaranties of any liabilities or obligations of Big West
or any
other persons heretofore or hereafter given to Xxxxx unless said other
guaranties are modified or revoked in writing; and this Guaranty shall not,
unless herein provided, affect or invalidate any such other guaranties. The
liability of Guarantor to Xxxxx shall at all times be deemed to be the aggregate
liability of Guarantor under the terms of this Guaranty and of any other
guaranties heretofore given by Guarantor to Xxxxx and not expressly revoked,
modified or invalidated.
3.
Obligations Joint and Several; Separate Actions; Waiver of Statute of
Limitations; Reinstatement of Liability.
The
obligations hereunder are joint and several and independent of the obligations
of Big West, and a separate action or actions may be brought and prosecuted
against Guarantor whether action is brought against Big West or any other
person
or whether Big West or any other person is joined in any such action or actions.
Guarantor acknowledges that there are no conditions precedent to the
effectiveness of this Guaranty, and that this Guaranty is in full force and
effect and is binding on Guarantor as of the date written below, regardless
of
whether Xxxxx obtains collateral or any guaranties from others or takes any
other action contemplated by Guarantor. Guarantor waives the benefit of any
statute of limitations affecting Guarantor’s liability hereunder or the
enforcement thereof, and Guarantor agrees that any payment of any Indebtedness
or other act which shall toll any statute of limitations applicable thereto
shall similarly operate to toll such statute of limitations applicable to
Guarantor’s’ liability hereunder. The liability of Guarantor hereunder shall be
reinstated and revived and the rights of Xxxxx shall continue if and to the
extent for any reason any amount at any time paid on account of any Indebtedness
guaranteed hereby is rescinded or must be otherwise restored by Xxxxx, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise,
all
as though such amount had not been paid. The determination as to whether
any
amount so paid must be rescinded or restored shall be made by Xxxxx in its
sole
discretion; provided, however, that if Xxxxx chooses to contest any such
matter
at the request of Guarantor, Guarantor agrees to indemnify and hold Xxxxx
harmless from and against all costs and expenses, including reasonable attorney
fees, expended or incurred by Xxxxx in connection therewith, including, without
limitation, in any litigation with respect thereto.
4.
Authorizations to Xxxxx.
Guarantor authorizes Xxxxx, either before or after revocation hereof, without
notice to or demand on Guarantor and without affecting Guarantor’s liability
hereunder, from time to time to: (a) alter, compromise, renew, extend,
accelerate or otherwise change the time for payment of, or otherwise change
the
terms of the Indebtedness or any part thereof, including increase or decrease
of
the rate of interest thereon; (b) take and hold security for the payment
of this
Guaranty or the Indebtedness or any portion thereof, and exchange, enforce,
waive and release any such security; (c) apply such security and direct the
order or manner of sale thereof, including, without limitation, a nonjudicial
sale permitted by the terms of any controlling security agreement or deed
of
trust, as Xxxxx in its discretion may determine; (d) release or substitute
any
one or more of the endorsers or any other Guarantors of the Indebtedness;
and
(e) apply payments received by Xxxxx from Big West to any Indebtedness of
Big
West to Xxxxx, in such order as Xxxxx shall determine in its sole discretion,
whether or not any such Indebtedness is covered by this Guaranty, and Guarantor
hereby waives any provision of law regarding application of payments which
specifies otherwise. Xxxxx may without notice assign this Guaranty in whole
or
in part.
5.
Representations and Warranties.
Guarantor represents and warrants that; (a) this Guaranty is executed at
Big
West’s request; (b) Guarantor has not sold, leased, assigned, encumbered,
hypothecated, transferred or otherwise disposed of all or a substantial or
material part of Guarantor’s assets other than in the ordinary course of
business; and (c) Guarantor has established adequate means of obtaining from
Big
West on a continuing basis financial and other information pertaining to
Big
West’s financial condition. Guarantor agrees to keep adequately informed from
such means of any facts, events or circumstances that might in any way affect
Guarantor’s risks hereunder, and Guarantor further agrees that Xxxxx shall have
no obligation to disclose to Guarantor any information or material about
Big
West that is acquired by Xxxxx in any manner. As an ongoing obligation and
as a
material condition to Xxxxx to enter into the Indebtedness with Big West,
Guarantor agrees to provide to Xxxxx copies of Guarantor’s annual audited and
quarterly unaudited financial statements within 90 days for the annual and
within 45 days for the quarterly after the end of the reporting period reflected
in such statements at all times and so long as this Guaranty is in effect
with
such financial statements to be accompanied with a certification in a form
reasonably satisfactory to Xxxxx by the Chief Financial Officer of Guarantor
certifying that the financial statements are accurate and not misleading
and, to
the extent that the financial statements reflect a Big West Equity of at
least
Four Hundred Million Dollars ($400,000,000.00), a certification that there
have
been no material adverse changes in the business of Guarantor that would
reduce
Guarantor’s Equity (Equity is defined as members’ or shareholders’ equity as
defined by generally accepted accounting principles) below Four Hundred Million
Dollars ($400,000,000.00). Xxxxx agrees to keep said financial statements
confidential other than for purposes of enforcing this Guaranty or to provide
to
Xxxxx’x lenders, if required by such lenders.
6.
Guarantor Waivers.
Guarantor waives any right to require Xxxxx to: (a) proceed against or exhaust
any security, if any, held by Xxxxx or any other person; (b) give notice
of the
terms, time and place of any public or private sale of personal property
security held from Big West or any other person, or otherwise comply with
the
provisions of Section 9611 of the California Uniform Commercial Code; (c)
pursue
any other remedy in Xxxxx’x power; or (d) make any presentments or demands for
performance, or give any notices of nonperformance, protests, notices of
protest
or notices of dishonor.
Guarantor
waives any defense based upon: (a) any disability of Big West or any other
person; (b) the cessation or limitation from any cause whatsoever, other
than
payment in full, of the Indebtedness of Big West or any other person; (c)
any
lack of authority of any officer, director, partner, agent or any other person
acting or purporting to act on behalf of Big West which is a corporation,
partnership, limited liability company or other type of entity, or any defect
in
the formation of such Big West; (d) any act or omission by Xxxxx which directly
or indirectly results in or aids the discharge of Big West or any Indebtedness
by operation of law or otherwise; or (e) any modification of the terms of
the
Indebtedness.
Without
limiting the generality of the foregoing, Guarantor expressly waives any
and all
benefits and defenses under Civil Code Section 2822, which provides that
in
instances where Xxxxx accepts a partial payment of the indebtedness from
Big
West, Big West may designate the portion of the indebtedness that is to be
satisfied by such partial payment.
Unless
relinquished by agreement, guarantor normally has the right to proceed against
borrower for the reimbursement of funds that guarantor pays to the beneficiary
of the guarantee for the benefit of the borrower (called
“subrogation”).
Guarantor
has certain protection, under the California Code of Civil Procedure, against
personal liability for the repayment of the Indebtedness after Xxxxx forecloses
on any real property that may be security for the Contract. Xxxxx may foreclose
either by (i) court proceeding (a “judicial foreclosure”) or (ii) the power of
sale provision in the deed of trust (a “non-judicial foreclosure”).
Should
Xxxxx choose to foreclose on any real property through a non-judicial sale
and
should the proceeds of such foreclosure sale(s) not satisfy the Indebtedness
in
full, Code of Civil Procedure Section 580d and court rulings do not allow
Xxxxx
to recover the difference between the Indebtedness and the proceeds of such
foreclosure sale(s) from Guarantor. In other words, Xxxxx, by foreclosing
by
non-judicial sale, would not be able to obtain a judgment against Guarantor
personally to pay the difference between the Indebtedness and the proceeds
of
such foreclosure sale(s).
GUARANTOR
WAIVES ALL RIGHTS AND DEFENSE ARISING OUT OF AN ELECTION OF REMEDIES BY THE
CREDITOR, EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS A NON-JUDICIAL
FORECLOSURE WITH RESPECT TO SECURITY FOR A GUARANTEED OBLIGATION, HAS DESTROYED
THE GUARANTOR’S RIGHT OF SUBROGATION AND REIMBURSEMENT AGAINST THE PRINCIPAL BY
THE OPERATION OF SECTION 580d OF THE CODE OF CIVIL PROCEDURE OR
OTHERWISE.
7.
Guarantor’s Understanding With Respect to Waivers.
Guarantor agrees that each of the waivers set forth above are made with
Guarantor’s full knowledge of its significance and consequences, and agrees that
the waivers are reasonable and not contrary to public policy or law. If any
of
said waivers are determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by
law.
8.
This
Section intentionally left blank.
9.
Bankruptcy of Big West.
Notwithstanding any modification, discharge or extension of the Indebtedness
or
any amendment, modification, stay or cure of Xxxxx’x rights which may occur in
any bankruptcy or reorganization case or proceeding concerning Big West,
whether
permanent or temporary, and whether assented to by Xxxxx, Guarantor hereby
agrees that Guarantor shall be obligated hereunder to pay and perform the
Indebtedness and discharge its other indebtedness in accordance with the
terms
of the obligations and the terms of this Guaranty in effect on the date hereof.
Guarantor understands and acknowledges that by virtue of this Guaranty, it
has
specifically assumed any and all risks of a bankruptcy or reorganization
case or
proceeding with respect to Big West. As an example and not in any way of
limitation, a subsequent modification of the Indebtedness in any reorganization
case concerning Big West shall not affect the Indebtedness of Guarantor to
pay
and perform the Indebtedness in accordance with the original terms.
10.
Financial Condition of Big West. Guarantor
acknowledges that certain facts concerning Big West and Big West’s financial
condition may be known or become known to Xxxxx. Guarantor waivers any right
to
require Xxxxx to furnish such information to Guarantor and agrees not to
assert
any defense Guarantor may have based upon Xxxxx’x failure to furnish such
information. Guarantor acknowledges that, in executing this Guaranty and
at all
times hereafter, Guarantor has relied and will continue to rely upon its
own
investigation and sources other than Xxxxx for all information and facts
relating to Big West and Big West’s financial condition.
11.
Waiver of Authentication of Validity of Acts of Corporation, Partnership
or
Limited Liability Company. As
Big
West is a limited liability company, it is not necessary for Xxxxx to inquire
into the power of Big West or the officers, directors, partners or agents
acting
or purporting to act in its behalf, and any Indebtedness made or created
in
reliance upon the professed exercise of such power shall be guaranteed
hereunder.
12.
Disclosure of Information. Guarantor
acknowledges that Xxxxx has the right to sell, assign, transfer, negotiate
or
grant participations in all or any part of, or any interest in, any Indebtedness
of Big West to Xxxxx and any obligations with respect thereto, including
this
Guaranty. In connection therewith, Xxxxx may disclose all documents and
information which Xxxxx now has or hereafter requires relating to Guarantor
and
this Guaranty, whether furnished by Big West, Guarantor or otherwise. Guarantor
further agrees that Xxxxx may disclose such documents and information to
Big
West.
13.
Costs, Expenses and Attorney Fees. All
payments, advances, charges, costs and expenses, including reasonable attorney
fees, made or incurred by Xxxxx in the enforcement of this Guaranty or in
the
collection of any of the Indebtedness of Big West to Xxxxx shall be paid
by
Guarantor immediately and without demand, together with interest at a rate
per
annum equal to the greater of ten percent (10%) or the interest rate being
charged by Xxxxx’x primary lender to Xxxxx under outstanding credit
facilities.
14.
Arbitration.
a.
Mandatory
Arbitration.
Any
controversy or claim (in an amount in excess of the small claims court maximum
jurisdictional limit) arising out of or relating to this Guaranty or any
agreements or instruments relating hereto or delivered in connection herewith,
or arising out of or relating to any aspect of the past, present or future
relationships of the parties hereto, including but not limited to a claim
based
on or arising from an alleged tort, shall, at the request of any party, be
determined by arbitration by a single neutral arbitrator in accordance with
California arbitration procedure (California Code of Civil Procedure Section
1280 et seq.) And under the rules of the American Arbitration Association
(but
not under the auspices of the American Arbitration Association). Judgment
upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction.
The
institution and maintenance of an action for judicial relief or pursuit of
a
provisional or ancillary remedy shall not constitute a waiver of the right
of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial
relief.
This
paragraph shall apply if and only if at the time of the proposed submission
none
of the obligations to Xxxxx described in this Guaranty are secured by real
property collateral. No controversy or claim shall be submitted to arbitration
without the consent of all parties if, at the time of the proposed submission,
any such obligation is secured by real property collateral.
b.
Judicial
Reference.
In any
judicial action or proceeding arising out of or relating to this Guaranty
or any
agreements or instruments relating hereto or delivered in connection herewith,
including but not limited to a claim based on or arising from an alleged
tort,
if the controversy or claim is not submitted to arbitration as provided and
limited in paragraph a of this Section, all decisions of fact and law shall
be
determined by a reference in accordance with California Code of Civil Procedure
Section 638 et seq.
The
parties shall designate to the court a referee in the same manner as arbitrators
are selected in American Arbitration Association-sponsored proceedings and
pursuant to California Code of Civil Procedure Section 1281.6.
Judgment
upon the award rendered by such referee shall be entered in the court in
which
such proceedings was commenced in accordance with California Code of Civil
Procedure Sections 644 and 645.
c.
Provisional
Remedies Self-help and Foreclosure.
Neither
paragraph a nor any other provision of this arbitration section shall limit
the
right of any party to this Guaranty to foreclosure against or sell any real
or
personal property collateral or security or to obtain provisional or ancillary
remedies such as attachment, injunctive relief for the appointment of a receiver
from a court of competent jurisdiction before, after or during the pendency
of
any arbitration. At Xxxxx’x option, foreclosure under a deed of trust or
mortgage may be accomplished either by exercise of power of sale under the
deed
of trust or mortgage or by judicial foreclosure.
d.
Miscellaneous
Arbitration Provisions.
(1)
In
the event of any dispute governed by this Section, each of the parties shall
pay
all of its own expenses, and, subject to the award of the arbitrator or referee,
shall pay an equal share of the arbitrator’s or referee’s fees. The arbitrator
or referee shall award recovery of all costs and fees (including attorney
fees,
administrative fees, arbitrator’s or referee’s fees, and court costs) to the
prevailing party.
(2)
All
statutes of limitations which would otherwise be applicable shall apply to
any
arbitration or reference proceeding under this Section.
(3)
In
any arbitration or reference proceeding subject to these provisions, the
arbitrator or referee is specifically empowered to decide (by documents only,
or
with a hearing, at the arbitrator’s or referee’s sole discretion) pre-hearing
motions which are substantially similar to demurrers, motions to dismiss
and
motions for summary adjudication.
(4)
Any
arbitrator or referee selected pursuant to this Section shall be knowledgeable
in the subject matter of the dispute, and shall be an active attorney or
retired
judge.
15. Successors, Assigns; Governing Law.
This
Guaranty shall be binding upon and inure to the benefit of the successors
and
assigns of the parties, and shall be governed by and construed in accordance
with the laws of this State of California.
IN
WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as
of the
date stated below.
DATE:
November 14, 2005
|
BIG
WEST OIL, LLC, a limited liability
company
|
|
By:
Xxxx Xxxxxxx
|
Its:
EVP
