GUARANTY
Exhibit
10.1
THIS
GUARANTY (the “Guaranty”)
is made as
of this __ day of December, 2008 by AMERICA WEST RESOURCES,
INC.,
a Nevada Corporation, having a place of business at 00 Xxxx 000 Xxxxx, Xxxxx
000, Xxxx Xxxx Xxxx, Xxxx 00000 (the “Guarantor”), in favor
of the OFFICIAL COMMITTEE OF
UNSECURED CREDITORS OF HIDDEN SPLENDOR RESOURCES, INC., AND MID-STATE SERVICES,
INC., appointed by the United States Trustee in the below-referenced
bankruptcy case on October 30, 2007 as representative of the General Unsecured
Creditors (the “Committee”) and the
UNITED STATES INTERNAL
REVENUE
SERVICE (the “IRS”).
RECITALS
A.
Reference is hereby made to the Joint-Consolidated Hidden Splendor Resources,
Inc. / Mid-State Services, Inc. Plan filed on November 18, 2008 in the United
States Bankruptcy Court for the District of Nevada (the “Court”) at Jointly
Administered Case No. BK-N-07-51378-GWZ, as amended (the “Plan”). For
purposes of this Guaranty, the capitalized terms used herein without definition
shall have the respective meanings set forth for such terms in the Plan,
a copy
of which is attached hereto and incorporated herein as Exhibit A.
B.
Guarantor is the owner of all of the issued and outstanding stock of Hidden
Splendor Resources, Inc., a Nevada corporation and debtor in the
above-referenced bankruptcy case (“Hidden Splendor”) and
the parent company of Hidden Splendor.
C.
Pursuant to Article V(A)(1)(B) of the Plan, after the initial distribution
under
the Plan, Guarantor has agreed to guarantee (i) the Plan payment obligations
to
General Unsecured Creditors up to the next twenty-five percent (25%) of the
collective amount of allowed Class 7 Claims, and (ii) the Plan payment
obligations to the IRS up to the next twenty-five percent (25%) of its Allowed
Priority Claim (pre-petition).
ARTICLE
I - GUARANTY
Section
1.01 The
Guaranty. In consideration of the IRS’s consent to the terms
of the Plan and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Guarantor, in accordance with
the
Plan, hereby unconditionally and irrevocably guarantees: (i) the payment,
after
the ten percent (10%) initial distribution is made to the holders of Allowed
Class 7 Claims under the Plan on the Distribution Date, of the next twenty-five
percent (25%) of the collective amount of Allowed Class 7 Claims; and (ii)
the
payment, after the ten percent (10%) initial distribution is made to the
IRS
under the Plan on the Distribution Date, of the next twenty-five percent
(25%)
of the IRS’s prepetition Allowed Priority Claim (such guaranteed obligations
being hereinafter referred to as the “Liabilities”).
Section
1.02 Liabilities
Guaranteed. In the event Hidden Splendor fails to timely pay any
part or all of the Liabilities guaranteed when due in strict accordance with
the
Plan, Guarantor, upon demand of the Committee and/or the IRS, shall pay the
Liabilities in the same manner as if they constituted the direct and primary
obligation of Guarantor.
ARTICLE
II - WAIVERS
AND CONSENTS
Section
2.01 General
Waivers
of Guarantor. Guarantor hereby waives each of the
following:
(i) any
requirement that the Committee and/or the IRS institute suit or other action,
or
otherwise exhaust their rights or remedies against Hidden Splendor or against
any other person, guarantor, or under any security agreement or other collateral
guaranteeing or securing all or any part of the Liabilities, prior to enforcing
any rights it has under this Guaranty
or
otherwise against Guarantor;
(ii) any
defenses arising out of the absence, impairment or loss of any right of
reimbursement or subrogation or other right or remedy of Guarantor against
Hidden Splendor or against any security resulting from the exercise or election
of any remedy or remedies by the Committee and/or the IRS, and any defense
arising by reason of any disability or other defense of Hidden Splendor or
by
reason of the cessation, from any cause other than full payment of the
Liabilities in strict accordance with the Plan, of the liability of Hidden
Splendor;
(iii) any
defense based upon failure by any entity to disclose to Guarantor any
information concerning Hidden Splendor’s financial condition or any other
circumstances bearing on Hidden Splendor’s ability to pay all sums payable under
the Plan;
(iv) any
defense based upon any legal disability or other defense of Hidden Splendor,
or
by reason of the cessation or limitation of the liability of Hidden Splendor
from any cause other than full payment of the Liabilities in strict accordance
with the Plan;
(v) any
defense based upon any lack of authority of the officers, directors, partners
or
agents acting or purporting to act on behalf of Hidden Splendor or any principal
of Hidden Splendor or any defect in the formation of Hidden Splendor or any
principal of Hidden Splendor;
(vi) any
defense based upon the modification
of the Plan, default on the Plan, the filing of a petition under Title 11
of the
United States Code by or against the reorganized Debtor, commencement of
a case
under Title 11 of the United States Code by or against the reorganized Debtor,
the appointment of a receiver, conservator or similar court officer, an
assignment for the benefit of creditors, or any other insolvency
proceeding;
(vii) any
defense based upon the failure to take any action permitted hereunder, or
the
waiver of any conditions hereinabove set forth by the Committee and/or the
IRS
or any person acting on behalf of the Committee and/or the IRS; and
(viii) the
rights, benefits and defenses arising from alteration,
impairment or suspension in any respect or by any means of any of Hidden
Splendor’s obligations under the Plan or any of the Committee’s and/or the IRS’
rights or remedies under the Plan without Guarantor’s prior
consent.
2
Section
2.02 Consent
to
Jurisdiction. Guarantor hereby expressly agrees that any legal
action or proceeding with respect to this Guaranty may be brought in the
United
States Bankruptcy Court for the District of Nevada, and, by execution and
delivery of this Guaranty, Guarantor hereby irrevocably accepts for itself
and
in respect of its property, generally and unconditionally, the jurisdiction
to
the aforesaid court. Guarantor hereby further irrevocably waives any
claim that such court lacks personal jurisdiction over the Guarantor, and
agrees
not to plead or claim, in any legal action or proceeding with respect to
this
Guaranty or the Plan brought in the aforementioned court, that such court
lacks
personal jurisdiction over the Guarantor. Guarantor further
irrevocably consents to the service of process out of the aforementioned
court
in any such action or proceeding by, in addition to such other methods as
are
permitted under applicable laws, the delivery of copies at the address and
in
the manner required by Article IV hereof. Guarantor hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of the Committee
and/or the IRS to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against Guarantor in any
other
jurisdiction.
Section
2.03 Waiver
of
Objection to Venue; Forum Non Conveniens. Guarantor hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out
of or
in connection with this Guaranty or the Plan brought in the court referred
to in
Section 2.02 above and hereby further irrevocably waives and agrees not to
plead
or claim in any such court that any such action or proceeding brought in
any
such court has been brought in an inconvenient forum.
Section
2.04 Waiver
of Right
to Jury Trial; Waiver of Statute of Limitations. GUARANTOR AND
THE COMMITTEE/IRS EACH WAIVE ALL RIGHTS TO TRIAL BY JURY OF ANY SUITS, CLAIMS,
COUNTERCLAIMS, ACTIONS OR OTHER PROCEEDINGS OF ANY KIND ARISING UNDER OR
RELATING TO THIS GUARANTY AND THE PLAN (INCLUDING, WITHOUT LIMITATION, ANY
PRESENT OR FUTURE MODIFICATION THEREOF) OR IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
TO THE PLAN (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT
OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING,
AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. GUARANTOR AND THE
COMMITTEE/IRS EACH ACKNOWLEDGES THAT THIS IS A WAIVER OF A LEGAL RIGHT AND
REPRESENTS TO THE OTHER THAT THIS WAIVER IS MADE KNOWINGLY AND
VOLUNTARILY. GUARANTOR AND THE COMMITTEE/IRS EACH AGREE THAT ALL SUCH
SUITS, CLAIMS COUNTERCLAIMS, ACTIONS OR OTHER PROCEEDINGS SHALL BE TRIED
BEFORE
A JUDGE OF A COURT OF COMPETENT JURISDICTION, WITHOUT A
JURY. GUARANTOR AND THE COMMITTEE/IRS EACH AGREE THAT THIS PARAGRAPH
CONSTITUTES WRITTEN CONSENT THAT TRIAL BY JURY SHALL BE WAIVED IN ANY SUCH
SUIT,
CLAIM, COUNTERCLAIM, ACTION OR OTHER PROCEEDING AND AGREE THAT GUARANTOR
AND THE
COMMITTEE/IRS EACH SHALL HAVE THE RIGHT AT ANY TIME TO FILE THIS GUARANTY
OR THE
PLAN WITH THE CLERK OR JUDGE OF ANY COURT IN WHICH ANY SUCH SUIT, CLAIM,
COUNTERCLAIM, ACTION OR OTHER PROCEEDING MAY BE PENDING AS STATUTORY WRITTEN
CONSENT TO WAIVER OF TRIAL BY JURY. GUARANTOR HEREBY WAIVES THE
BENEFIT OF ANY STATUTE OF LIMITATIONS AFFECTING THE LIABILITY OF GUARANTOR
UNDER
THIS GUARANTY.
3
ARTICLE
III - FURTHER
AGREEMENTS OF PARTIES
Section
3.01 Rights
of the
Committee and/or the IRS. The Committee and/or the IRS shall
have the right without demand of or notice to Guarantor to deal in any manner
with the Liabilities, including without limitation the right to resort to
Guarantor for payment of all or any of the Liabilities, whether or not the
Committee and/or the IRS shall have resorted first to any property of Hidden
Splendor or shall have proceeded against any other guarantors or any other
party
primarily or secondarily liable with respect to any of the
Liabilities. The obligations of Guarantor hereunder shall not be
released, discharged or affected in any way, nor shall Guarantor have any
recourse against the Committee and/or the IRS by reason of any action which
the
Committee and/or the IRS may take or omit to take under these powers or
otherwise existing with respect to the Liabilities.
ARTICLE
IV - NOTICES
Any
notice which any party hereto may desire or may be required to give to any
other
party shall be in writing and either (a) mailed by certified mail, return
receipt requested, or (b) sent by a nationally recognized overnight carrier
which provides for a return receipt. Any such notice shall be sent to
the respective party’s addresses as set forth below or to such other address as
such party may, by notice in writing, designate as its address:
00
Xxxx 000 Xxxxx, Xxxxx 000
Xxxx
Xxxx Xxxx,
Xxxx 00000
The
Official Committee of Unsecured Creditors
Xxxxxxx
X. Xxxxxxxxxxxxxx, Esq.
McGuireWoods
LLP
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxxxxx,
Xxxxxxxxxxxx 00000
Xxxxxx
Xxxxxx Internal Revenue Service
Any
such
notice shall constitute service of notice hereunder three (3) days after the
mailing thereof by certified mail or one (1) day after the sending thereof
by
overnight carrier.
ARTICLE
V - MISCELLANEOUS
Section
5.01 Successors
and
Assigns. This Guaranty cannot be assigned by the Guarantor
absent the express written consent of the Committee and the IRS. Notwithstanding
the foregoing, Guarantor
may, without
express written consent
of the Committee and the
IRS, enter into a change of control transaction,
so long as (i) the
controlling entity agrees to assume the obligations
under this Guaranty, (ii)
the change of control transaction is
an arms length transaction, (iii) the
change of control transaction is
an exchange of reasonably equivalent
value, (iv) the change of control
does not result in the
insolvency of the Guarantor and/or (v)the change
of control transaction does not
leave the
Guarantor with insufficient
funds or capital to
4
pay
its debts as they become due.
(The guarantor agrees
that conditions (i) through (v) do not constitute awaiver,
or otherwise limit, the Committee's
and IRS's rights in law or equity).
This Guaranty shall bind Guarantor and the heirs, devisees, personal
representatives, successors and assigns of Guarantor and shall inure to
the
benefit of the holders of Allowed Class 7 Claims and the IRS, all successors
and
assigns of the holders of Allowed Class 7 Claims and/or the IRS and all
transferees of the holders of Allowed Class 7 Claims and/or the IRS’ interests
under the Plan and this Guaranty; it being agreed that the holders of Allowed
Class 7 Claims and/or the IRS may, without notice of any kind, sell, assign
or
transfer all or any of the Liabilities and in such event, each and every
immediate and successor assignee, transferee or holder of all or any of
the
Liabilities, shall have the rights under this Guaranty if such assignee,
transferee or holder were herein by name specifically given such, rights,
powers
and benefits; provided that the Committee and/or the IRS shall have the
unimpaired right, prior and superior to that of any such assignee, transferee
or
holder, to enforce this Guaranty for the benefit of the holders of Allowed
Class
7 Claims and/or the IRS as to the remaining Liabilities.
Section
5.02 No
Waiver. No delay on the part of the Committee and/or the IRS
in the exercise of any right or remedy shall operate as a waiver thereof, and
no
single or partial exercise by the Committee and/or the IRS of any right or
remedy shall preclude any other or further exercise thereof or the exercise
of
any other right or remedy. No action of the Committee and/or the IRS
permitted hereunder shall in any way impair or affect this
Guaranty.
Section
5.03 Governing
Law. This Guaranty shall be governed by and construed and
interpreted in accordance with the laws of the State of Nevada.
Section
5.04 Severability. If
any provision hereof is determined to be held illegal, unenforceable or void
for
any reason, the validity of the remaining provisions hereof shall not be
affected thereby.
Section
5.05 Captions. The
captions used in this Guaranty are for convenience only and shall not be deemed
part of the text of the respective Sections and shall not vary, by implication
or otherwise, any of the provisions of this Guaranty.
Section
5.06 No
Oral
Modification. No waiver, amendment, release or modification of
this Guaranty shall be made orally or shall be established by conduct, custom
or
course of dealing, but only by an instrument in writing duly executed by each
the Committee, the IRS and the Guarantor.
Section
5.07 Costs
and
Expense. Guarantor agrees to pay all reasonable attorneys’
fees and other costs and expenses which may be incurred by the Committee
and/or
the IRS in the enforcement of this Guaranty, including without limitation those
incurred in connection with any case, action, proceeding, claim or otherwise
under Chapters 7, 11 or 13 of the Bankruptcy Code or any successor statute
or
statutes thereto whether the same be commenced or filed by Hidden Splendor,
Guarantor or any other person or entity.
Section
5.08 No
Modifications. No term or provision of this Guaranty may be
changed, waived, revoked or amended without the Committee and/or the IRS’s prior
express written consent. This Guaranty is irrevocable absent payment
of the payment of the Liabilities in strict accordance with the
Plan.
5
Section
5.09 Counterparts. This
Guaranty may be executed by the parties hereto in any number of counterparts
and
each such counterpart shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
Section
5.10 Termination. Upon
payment of the Liabilities in strict accordance with the Plan, this Guaranty
shall be of no further force or effect.
Section
5.11 Time
of
Essence. Time is of the essence in the performance of each and
every provision of this Guaranty.
Section
5.12 Recitals,
Exhibits, Etc. The recitals set forth in this Guaranty and all
exhibits and attachments to this Guaranty are incorporated herein and shall
be deemed an integral part of this Guaranty.
THIS
GUARANTY is being executed and
delivered as of the day and year first above written.
GUARANTOR:
a
Nevada
corporation
By:______________________________
Name:____________________________
Title:_____________________________
6
EXHIBIT
A
Joint-Consolidated
Hidden Splendor Resources, Inc. / Mid-State Services, Inc. Plan
\6745124.2
