GUARANTY
Exhibit
10.7
This
GUARANTY (as amended, restated, supplemented, or otherwise
modified and in effect from time to time, this “Guaranty”) is
made as of this 10th day of September, 2007, jointly and severally, by each
of
GULF WESTERN PETROLEUM LP, a Texas limited partnership
(“Gulf Western”), XXXXXXX RESOURCES LLC, a
Delaware limited liability company (“Xxxxxxx XX”),
XXXXXXX RESOURCES CORP., a Delaware corporation
(“Xxxxxxx XX”; Gulf Western, Xxxxxxx XX and Xxxxxxx XX,
together with each other person or entity who becomes a party to this Guaranty
by execution of a joinder in the form of Exhibit A attached hereto, is
referred to individually as a “Guarantor” and collectively as
the “Guarantors”) in favor of
METAGE FUNDS LIMITED, on its own behalf and in its capacity as
collateral agent (together with its successors and assigns in such capacity,
the
“Collateral Agent”) for the benefit of the entities identified
on the Schedule of Buyers attached to the Purchase Agreement defined below,
and
NCIM LIMITED,
(in
each case together with their successors and assigns, the
“Buyers”).
W
I T N E S S E T H:
WHEREAS,
as of the date hereof, Buyers have made loans and certain other financial
accommodations (collectively, the “Loans”) to GULF
WESTERN PETROLEUM CORPORATION,
a Nevada corporation (the “Company”), as evidenced by
that certain senior secured convertible note of even date herewith in an
original principal amount of $3,700,000 (such note,
together with any promissory notes or other securities issued in exchange or
substitution therefor or replacement thereof, and as any of the same may be
amended, supplemented, restated or modified and in effect from time to time,
the
“Notes”);
WHEREAS,
the Notes are being acquired by Buyers pursuant to a Securities Purchase
Agreement dated as of even date herewith among the Buyers and the Company (as
the same may be amended, restated, supplemented or otherwise modified from
time
to time, the “Purchase Agreement”);
WHEREAS,
pursuant to a Pledge Agreement of even date herewith (as the same may be
amended, restated, supplemented or otherwise modified and in effect from time
to
time, the “Company Pledge Agreement”) by the Company in favor
of the Collateral Agent, the Company has pledged a lien on and security interest
in all of the membership interest in and capital stock as the case may be,
of
each of Xxxxxxx XX and Xxxxxxx XX;
WHEREAS,
pursuant to a Pledge Agreement of even date herewith (as the same may be
amended, restated, supplemented or otherwise modified and in effect from time
to
time, the “Xxxxxxx Pledge Agreement”; and together with the
Company Pledge Agreement, the “Pledge Agreements”) by Xxxxxxx
XX and Xxxxxxx XX in favor of the Collateral Agent, Xxxxxxx XX and Xxxxxxx
XX
have pledged a lien on and security interest in all of the partnership interests
in of Gulf Western;
WHEREAS,
pursuant to a Security Agreement of even date herewith (as the same may be
amended, restated, supplemented or otherwise modified and in effect from time
to
time, the “Security Agreement”) by the “Debtors” (as defined
therein) in favor of the Collateral Agent, such Debtors have granted the
Collateral Agent, for its benefit and the benefit of the Buyers, a first
priority security interest in, lien upon and pledge of each of their rights
in
the Collateral (as defined in the Security Agreement); and
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WHEREAS,
the Guarantors are direct or indirect subsidiaries of the Company and, as such,
will derive substantial benefit and advantage from the Loans and other financial
accommodations available to the Company set forth in the Purchase Agreement,
the
Notes and the other Transaction Documents, and it will be to each Guarantor’s
direct interest and economic benefit to assist the Company in procuring said
Loans and other financial accommodations from Buyers.
NOW,
THEREFORE, for and in consideration of the premises and in order to
induce Buyers to make the Loans, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each Guarantor
hereby jointly and severally agrees as follows:
1. Definitions: Capitalized
terms used herein without definition and defined in the Purchase Agreement
are
used herein as defined therein. In addition, as used
herein:
“Bankruptcy
Code” shall mean the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
§101, et seq.), as amended and in effect from time to time
thereunder.
“Obligations”
shall mean (i) all obligations, liabilities and indebtedness of every nature
of
the Company from time to time owed or owing to the Buyers and Collateral Agent,
under the Security Documents, the Purchase Agreement, the Notes, the Loans,
the
Warrants, the Registration Rights Agreement and the other Transaction Documents,
including, without limitation, the principal amount of all debts, claims and
indebtedness, accrued and unpaid interest and all fees, taxes, indemnities,
costs and expenses, whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and/or from time to time hereafter owing, due or
payable under the Transaction Documents, whether before or after the filing
of a
bankruptcy, insolvency or similar proceeding under applicable federal, state,
foreign or other law and whether or not an allowed claim in any such proceeding,
and (ii) all obligations, liabilities and indebtedness of every nature of
the Guarantors from time to time owed or owing to the Buyers and/or Collateral
Agent, including, without limitation, all obligations, liabilities and
indebtedness of every nature of the Guarantors under or in respect of this
Guaranty, the Pledge Agreements, the Security Agreement, the Purchase Agreement,
the Notes, the Loans, the Warrants, the Registration Rights Agreement, the
other
Security Documents and the other Transaction Documents to which they are a
party, as the case may be, including, without limitation, the principal amount
of all debts, claims and indebtedness, accrued and unpaid interest and all
fees,
taxes, indemnities, costs and expenses, whether primary, secondary, direct,
contingent, fixed or otherwise, heretofore, now and/or from time to time
hereafter owing, due or payable under the Transaction Documents, whether before
or after the filing of a bankruptcy, insolvency or similar proceeding under
applicable federal, state, foreign or other law and whether or not an allowed
claim in any such proceeding.
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2. Guaranty
of Payment.
(a) Each
Guarantor, jointly and severally, hereby unconditionally and irrevocably
guaranties the full and prompt payment and performance to Buyers and Collateral
Agent, on behalf of itself and in its capacity as agent for the benefit of
Buyers, when due, upon demand, at maturity or by reason of acceleration or
otherwise and at all times thereafter, of any and all of the
Obligations.
(b) Each
Guarantor acknowledges that valuable consideration supports this Guaranty,
including, without limitation, the consideration set forth in the recitals
above, as well as any commitment to lend, extension of credit or other financial
accommodation, whether heretofore or hereafter made by Buyers to the Company;
any extension, renewal or replacement of any of the Obligations; any forbearance
with respect to any of the Obligations or otherwise; any cancellation of an
existing guaranty; any purchase of any of the Company’s assets by any Buyer or
Collateral Agent; or any other valuable consideration.
(c) Each
Guarantor agrees that all payments under this Guaranty shall be made in United
States currency and in the same manner as provided for the
Obligations.
(d) Notwithstanding
any provision of this Guaranty to the contrary, it is intended that this
Guaranty, and any interests, liens and security interests granted by Guarantors
as security for this Guaranty, not constitute a “Fraudulent Conveyance” (as
defined below) in the event that this Guaranty or such interest is subject
to
the Bankruptcy Code or any applicable fraudulent conveyance or fraudulent
transfer law or similar law of any state. Consequently, Guarantors,
Collateral Agent and Buyers agree that if this Guaranty, or any such interests,
liens or security interests securing this Guaranty, would, but for the
application of this sentence, constitute a Fraudulent Conveyance, this Guaranty
and each such lien and security interest shall be valid and enforceable only
to
the maximum extent that would not cause this Guaranty or such interest, lien
or
security interest to constitute a Fraudulent Conveyance, and this Guaranty
shall
automatically be deemed to have been amended accordingly at all relevant
times. For purposes hereof, “Fraudulent Conveyance”
means a fraudulent conveyance under Section 548 of the Bankruptcy
Code or a
fraudulent conveyance or fraudulent transfer under the provisions of any
applicable fraudulent conveyance or fraudulent transfer law or similar law
of
any state, as in effect from time to time.
3. Costs
and Expenses. Each Guarantor, jointly and severally, agrees to pay on
demand, all costs and expenses of every kind incurred by any Buyer or Collateral
Agent: (a) in enforcing this Guaranty, (b) in collecting any of the Obligations
from the Company or any Guarantor, (c) in realizing upon or protecting or
preserving any collateral for this Guaranty or for payment of any of the
Obligations, and (d) in connection with any amendment of, modification to,
waiver or forbearance granted under, or enforcement or administration of any
Transaction Document or for any other purpose in connection with any Transaction
Document. “Costs and expenses” as used in the
preceding sentence shall include, without limitation, reasonable attorneys’ fees
incurred by any Buyer or Collateral Agent in retaining outside counsel at
reasonable rates customarily charged for such matters for advice, suit, appeal,
any insolvency or other proceedings under the Bankruptcy Code or otherwise,
or
for any purpose specified in the preceding sentence.
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4. Nature
of Guaranty: Continuing, Absolute and Unconditional.
(a) This
Guaranty is and is intended to be a continuing guaranty of payment of the
Obligations, and not of collectibility, and is intended to be independent of
and
in addition to any other guaranty, indorsement, collateral or other agreement
held by Buyers or Collateral Agent therefor or with respect thereto, whether
or
not furnished by a Guarantor. None of Buyers and Collateral Agent
shall be required to prosecute collection, enforcement or other remedies against
Company, any other Guarantor or guarantor of the Obligations or any other person
or entity, or to enforce or resort to any of the Collateral or other rights
or
remedies pertaining thereto, before calling on a Guarantor for
payment. The obligations of each Guarantor to repay the Obligations
hereunder shall be unconditional. Each Guarantor shall defer its
right of subrogation with respect to any payments made by any Guarantor
hereunder until repayment of the Obligations, and until such time hereby waives
any benefit of, and any right to participate in, any security or collateral
given to Buyers to secure payment of the Obligations, and each Guarantor agrees
that it will not take any action to enforce any obligations of the Company
to
any Guarantor prior to the Obligations being finally and irrevocably paid in
full in cash, provided that, in the event of the bankruptcy or insolvency
of the Company, Collateral Agent, for the benefit of itself and Buyers, and
Buyers shall be entitled notwithstanding the foregoing, to file in the name
of
any Guarantor or in its own name a claim for any and all indebtedness owing
to a
Guarantor by the Company (exclusive of this Guaranty), vote such claim and
to
apply the proceeds of any such claim to the Obligations.
(b) For
the further security of Buyers and without in any way diminishing the liability
of the Guarantors, following the occurrence but only during the continuation
of
an Event of Default, all debts and liabilities, present or future of the Company
to the Guarantors and all monies received from the Company or for its account
by
the Guarantors in respect thereof shall be received in trust for Buyers and
Collateral Agent and forthwith upon receipt shall be paid over to Collateral
Agent, for its benefit and in its capacity as collateral agent for the benefit
of Buyers, until all of the Obligations have been paid in full in
cash. This assignment and postponement is independent of and
severable from this Guaranty and shall remain in full effect whether or not
any
Guarantor is liable for any amount under this Guaranty.
(c) This
Guaranty is absolute and unconditional and shall not be changed or affected
by
any representation, oral agreement, act or thing whatsoever, except as herein
provided. This Guaranty is intended by the Guarantors to be the
final, complete and exclusive expression of the guaranty agreement between
the
Guarantors and Buyers. No modification or amendment of any provision
of this Guaranty shall be effective against any party hereto unless in writing
and signed by a duly authorized officer of such party.
(d) Until
irrevocable payment in full of the Obligations, each Guarantor hereby agrees
not
to assert or enforce (whether by or in a legal or equitable proceeding or
otherwise) any “claims” (as defined in Section 101(5) of the Bankruptcy Code),
whether arising under any law, ordinance, rule, regulation, order, policy or
other requirement of any domestic or foreign government or any instrumentality
or agency thereof, having jurisdiction over the conduct of its business or
assets or otherwise, to which such Guarantor is or would at any time be entitled
by virtue of its obligations hereunder, any payment made pursuant hereto or
the
exercise by any Buyer or Collateral Agent of its rights with respect to the
Collateral, including any such claims to which such Guarantor may be entitled
as
a result of any right of subrogation, exoneration or reimbursement.
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5. Certain
Rights and Obligations.
(a) Each
Guarantor acknowledges and agrees that Buyers and Collateral Agent, for its
benefit and as collateral agent for the benefit of Buyers, may, without notice,
demand or any reservation of rights against such Guarantor and without affecting
such Guarantor’s obligations hereunder, from time to time:
(i) renew,
extend, increase, accelerate or otherwise change the time for payment of, the
terms of or the interest on the Obligations or any part thereof or grant other
indulgences to the Company or others;
(ii) accept
from any person or entity and hold collateral for the payment of the Obligations
or any part thereof, and modify, exchange, enforce or refrain from enforcing,
or
release, compromise, settle, waive, subordinate or surrender, with or without
consideration, such collateral or any part thereof;
(iii) accept
and hold any indorsement or guaranty of payment of the Obligations or any part
thereof, and discharge, release or substitute any such obligation of any such
indorser or guarantor, or discharge, release or compromise any Guarantor, or
any
other person or entity who has given any security interest in any collateral
as
security for the payment of the Obligations or any part thereof, or any other
person or entity in any way obligated to pay the Obligations or any part
thereof, and enforce or refrain from enforcing, or compromise or modify, the
terms of any obligation of any such indorser, guarantor, or person or
entity;
(iv) dispose
of any and all collateral securing the Obligations in any manner as the
Collateral Agent, in its sole discretion, may deem appropriate, and direct
the
order or manner of such disposition and the enforcement of any and all
endorsements and guaranties relating to the Obligations or any part thereof
as
Collateral Agent in its sole discretion may determine;
(v) determine
the manner, amount and time of application of payments and credits, if any,
to
be made on all or any part of any component or components of the Obligations
(whether principal, interest, fees, costs, and expenses, or otherwise),
including, without limitation, the application of payments received from any
source to the payment of indebtedness other than the Obligations even though
Buyers might lawfully have elected to apply such payments to the Obligations
to
amounts which are not covered by this Guaranty; and
(vi) take
advantage or refrain from taking advantage of any security or accept or make
or
refrain from accepting or making any compositions or arrangements when and
in
such manner as Collateral Agent, in its sole discretion, may deem
appropriate;
and
generally do or refrain from doing any act or thing which might otherwise,
at
law or in equity, release the liability of such Guarantor as a guarantor or
surety in whole or in part, and in no case shall Buyers or Collateral Agent
be
responsible or shall any Guarantor be released either in whole or in part for
any act or omission in connection with Buyers or Collateral Agent having sold
any security at less than its value, except as provided under applicable
law.
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(b) Following
the occurrence of, but only during the continuation of, an Event of Default,
and
upon ten (10) days written demand by Collateral Agent, each Guarantor, jointly
and severally, hereby agrees to pay the Obligations to the extent hereinafter
provided:
(i) without
deduction by reason of any setoff, defense (other than payment) or counterclaim
of the Company or any other Guarantor;
(ii) without
requiring presentment, protest or notice of nonpayment or notice of default
to
any Guarantor, to the Company or to any other person or entity;
(iii) without
demand for payment or proof of such demand or filing of claims with a court
in
the event of receivership, bankruptcy or reorganization of the Company or any
other Guarantor;
(iv) without
requiring Buyers or Collateral Agent to resort first to the Company (this being
a guaranty of payment and not of collection), to any other Guarantor, or to
any
other guaranty or any collateral which Buyers or Collateral Agent may
hold;
(v) without
requiring notice of acceptance hereof or assent hereto by any Buyer or
Collateral Agent; and
(vi) without
requiring notice that any of the Obligations has been incurred, extended or
continued or of the reliance by any Buyer or Collateral Agent upon this
Guaranty;
all
of
which each Guarantor hereby waives.
(c) Each
Guarantor’s obligation hereunder shall not be affected by any of the following,
all of which such Guarantor hereby waives:
(i) any
failure to perfect or continue the perfection of any security interest in or
other lien on any collateral securing payment of any of the Obligations or
any
Guarantor’s obligation hereunder;
(ii) the
invalidity, unenforceability, propriety of manner of enforcement of, or loss
or
change in priority of any document or any such security interest or other lien
or other guaranty of the Obligations;
(iii) any
failure to protect, preserve or insure any such collateral;
(iv) failure
of a Guarantor to receive notice of any intended disposition of such
collateral;
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(v) any
defense arising by reason of the cessation from any cause whatsoever of
liability of the Company including, without limitation, any failure, or omission
by any Buyer or Collateral Agent in enforcing its claims against the
Company;
(vi) any
release, settlement or compromise of any obligation of the Company, any other
Guarantor or any other guarantor of the Obligations;
(vii) the
invalidity or unenforceability of any of the Obligations;
(viii) any
change of ownership of the Company, any other Guarantor or any other guarantor
of the Obligations or the insolvency, bankruptcy or any other change in the
legal status of the Company, any other Guarantor or any other guarantor of
the
Obligations;
(ix) any
change in, or the imposition of, any law, decree, regulation or other
governmental act which does or might impair, delay or in any way affect the
validity, enforceability or the payment when due of the
Obligations;
(x) the
existence of any claim, setoff or other rights which the Guarantor, Company,
any
other Guarantor or guarantor of the Obligations or any other person or entity
may have at any time against any Buyer, Collateral Agent or the Company in
connection herewith or any unrelated transaction;
(xi) any
Buyer’s or Collateral Agent’s election in any case instituted under chapter 11
of the Bankruptcy Code, of the application of section 1111(b)(2) of the
Bankruptcy Code;
(xii) any
use of cash collateral, or grant of a security interest by the Company, as
debtor in possession, under sections 363 or 364 of the Bankruptcy
Code;
(xiii) the
disallowance of all or any portion of any of any Buyer’s or Collateral Agent’s
claims for repayment of the Obligations under sections 502 or 506 of the
Bankruptcy Code; or
(xiv) any
other fact or circumstance which might otherwise constitute grounds at law
or
equity for the discharge or release of a Guarantor from its obligations
hereunder, all whether or not such Guarantor shall have had notice or knowledge
of any act or omission referred to in the foregoing clauses (i) through (xiii)
of this Section 5(c).
6. Representations
and Warranties. Each Guarantor further represents and warrants to Buyers and
Collateral Agent that: (a) such Guarantor is a corporation or other entity
duly
incorporated or organized, as applicable, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation, as
applicable, and has full power, authority and legal right to own its property
and assets and to transact the business in which it is engaged; (b) such
Guarantor has full power, authority and legal right to execute and deliver,
and
to perform its obligations under, this Guaranty, and has taken all necessary
action to authorize the guarantee hereunder on the terms and conditions of
this
Guaranty and to authorize the execution, delivery and performance of this
Guaranty; (c) this Guaranty has been duly executed and delivered by such
Guarantor and constitutes a legal, valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with its terms,
except to the extent that such enforceability is subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and moratorium
laws and other laws of general application affecting enforcement of creditors’
rights generally, or the availability of equitable remedies, which are subject
to the discretion of the court before which an action may be brought; and (d)
the execution, delivery and performance by each Guarantor of this Guaranty
do
not require any action by or in respect of, or filing with, any governmental
body, agency or official and do not violate, conflict with or cause a breach
or
a default under any provision of applicable law or regulation or of the
organizational documents of any Guarantor or of any agreement, judgment,
injunction, order, decree or other instrument binding upon it.
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7. Negative
Covenants. Each Guarantor covenants with Buyers and Collateral Agent that
such Guarantor shall not grant any security interest in or permit any lien,
claim or encumbrance upon any of its assets in favor of any person or entity
other than liens and security interests in favor of Buyers and Collateral
Agent
and Permitted Liens.
8. Termination.
This Guaranty shall terminate when all Indebtedness under the Notes shall
be
finally and irrevocably paid in full in cash or converted pursuant to the
terms
thereof. Thereafter, but subject to the following, Collateral Agent,
on its behalf and as agent for Buyers, shall take such action and execute
such
documents as the Guarantors may reasonably request (and at the Guarantors’ cost
and expense) in order to evidence the termination of this
Guaranty. Each Guarantor further agrees that, to the extent that the
Company makes a payment or payments to Buyers or Collateral Agent on the
Obligations, or Buyers or Collateral Agent receive any proceeds of collateral
securing the Obligations or any other payments with respect to the Obligations,
which payment or receipt of proceeds or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to
be returned or repaid to the Company, its estate, trustee, receiver, debtor
in
possession or any other person or entity, including, without limitation,
the
Guarantors, under any insolvency or bankruptcy law, state or federal law,
common
law or equitable cause, then to the extent of such payment, return or repayment,
the obligation or part thereof which has been paid, reduced or satisfied
by such
amount shall be reinstated and continued in full force and effect as of the
date
when such initial payment, reduction or satisfaction occurred, and this Guaranty
shall continue in full force notwithstanding any contrary action which may
have
been taken by any Buyer or Collateral Agent in reliance upon such payment,
and
any such contrary action so taken shall be without prejudice to any Buyer’s or
Collateral Agent’s rights under this Guaranty and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
9. Guaranty
of Performance. Each Guarantor also guaranties the full, prompt and
unconditional performance of all obligations and agreements of every kind
owed
or hereafter to be owed by the Company to Buyers and Collateral Agent under
the
Purchase Agreement, Registration Rights Agreement, the Warrants, Security
Documents and the Notes. Every provision for the benefit of Buyers
and Collateral Agent contained in this Guaranty shall apply to the guaranty
of
performance given in this Section 9.
10. Assumption
of Liens and Obligations. To the extent that a Guarantor has received or
shall hereafter receive distributions or transfers from the Company of property
or cash that are subject, at the time of such receipt, to liens and security
interests in favor of Buyers and/or the Collateral Agent in accordance with
the
Notes, the Security Agreement or any other Security Document, such Guarantor
hereby expressly agrees that (i) it shall hold such assets subject to such
liens
and security interests, and (ii) it shall be liable for the payment of the
Obligations secured thereby. Each Guarantor’s obligations under this
Section 10 shall be in addition to its obligations as set forth in other
Sections of this Guaranty and not in substitution therefor or in lieu
thereof.
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11. Miscellaneous.
(a) The
terms “Company” and “Guarantor” as used in this Guaranty shall include: (i) any
successor association, partnership, limited liability company or corporation
to
which all or substantially all of the business or assets of the Company or
such
Guarantor shall have been transferred and (ii) any other association,
partnership, limited liability company, corporation or entity into or with
which
the Company or such Guarantor shall have been merged, consolidated, reorganized,
or absorbed.
(b) Without
limiting any other right of any Buyer or Collateral Agent, whenever any Buyer
or
Collateral Agent has the right to declare upon the continuation of an Event
of
Default any of the Obligations to be immediately due and payable (whether or
not
such Obligations have been so declared), Collateral Agent, on its behalf and
in
its capacity as agent for the benefit of Buyers, at its sole election with
prior
written notice to the undersigned may appropriate and set off against the
Obligations upon the continuation of an Event of Default:
(i) any
and all indebtedness or other moneys due or to become due to any Guarantor
by
any Buyer or Collateral Agent in any capacity; and
(ii) any
credits or other property belonging to any Guarantor (including all account
balances, whether provisional or final and whether or not collected or
available) at any time held by or coming into the possession of any Buyer or
Collateral Agent, or any affiliate of any Buyer or Collateral Agent, whether
for
deposit or otherwise;
and
the
applicable Buyer or Collateral Agent shall be deemed to have exercised such
right of set off immediately at the time of such election even though any charge
therefor is made or entered on such Buyer’s or Collateral Agent’s records
subsequent thereto. Collateral Agent agrees to notify such Guarantor
in a reasonably practicable time of any such set-off; however, failure to so
notify such Guarantor shall not affect the validity of any set-off.
(c) Each
Guarantor’s obligation hereunder is to pay the Obligations in full in cash when
due according to the Notes, the Security Documents and the other agreements,
documents and instruments governing the Obligations to the extent provided
herein, and shall not be affected by any stay or extension of time for payment
by the Company or any other Guarantor resulting from any proceeding under the
Bankruptcy Code or any similar law.
(d) No
course of dealing between the Company or any Guarantor and Buyers or Collateral
Agent and no act, delay or omission by Buyers or Collateral Agent in exercising
any right or remedy hereunder or with respect to any of the Obligations shall
operate as a waiver thereof or of any other right or remedy, and no single
or
partial exercise thereof shall preclude any other or further exercise thereof
or
the exercise of any other right or remedy. Any Buyer or Collateral
Agent may remedy any default by the Company under any agreement with the Company
or with respect to any of the Obligations in any reasonable manner without
waiving the default remedied and without waiving any other prior or subsequent
default by the Company. All rights and remedies of Buyers and
Collateral Agent hereunder are cumulative.
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(e) This
Guaranty shall inure to the benefit of each Buyer and Collateral Agent, and
each
such entity’s successors and assigns.
(f) Captions
of the sections of this Guaranty are solely for the convenience of the parties
hereto, and are not an aid in the interpretation of this Guaranty and do not
constitute part of the agreement of the parties set forth herein.
(g) If
any provision of this Guaranty is unenforceable in whole or in part for any
reason, the remaining provisions shall continue to be effective.
(h) All
questions concerning the construction, validity, enforcement and interpretation
of this Guaranty shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State
of
New York. Each Guarantor hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York
(Borough of Manhattan), New York, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in
any
suit, action or proceeding, any claim that it is not personally subject to
the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding
is
improper. Each Guarantor hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
(i) Notices. All
notices, approvals, requests, demands and other communications hereunder shall
be delivered or made in the manner set forth in, and shall be effective in
accordance with the terms of, the Purchase Agreement or, in the case of
communications to the Collateral Agent, directed to the notice address set
forth
in the Security Agreement; provided, that any communication shall be effective
as to any Guarantor if made or sent to the Company in accordance with the
foregoing.
12. WAIVERS.
(a) EACH
GUARANTOR WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND EXEMPTION
LAWS.
(b) UPON
THE OCCURRENCE BUT ONLY DURING THE CONTINUATION OF AN EVENT OF DEFAULT, EACH
GUARANTOR HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR
TO
THE EXERCISE BY ANY BUYER OR COLLATERAL AGENT, ON ITS BEHALF AND IN ITS CAPACITY
AS AGENT FOR THE BENEFIT OF BUYERS, OF ITS RIGHTS TO REPOSSESS THE COLLATERAL
WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL
WITHOUT PRIOR NOTICE OR HEARING. EACH GUARANTOR ACKNOWLEDGES THAT IT
HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS TRANSACTION
AND
THIS GUARANTY.
10
(c) EACH
GUARANTOR, BUYERS AND COLLATERAL AGENT WAIVES ITS RIGHTS TO A TRIAL BY JURY
OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
GUARANTY, OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING
OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY BUYER OR COLLATERAL
AGENT. EACH GUARANTOR, BUYERS AND COLLATERAL AGENTS AGREES THAT ANY
SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH GUARANTOR, BUYERS AND
COLLATERAL AGENTS FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED
BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY
OF
THIS GUARANTY OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
GUARANTY.
13. Collateral
Agent. The terms and provisions of Section 5.12 of the Security
Agreement which set forth the appointment of the Collateral Agent and the
indemnifications to which the Collateral Agent is entitled are hereby
incorporated by reference herein as if fully set forth therein.
14. Payments
Free of Taxes.
(a) Definitions. In
this Section 14:
(i)
“Excluded Taxes” means, with respect to the Collateral Agent or
the Buyers, or any other recipient of any payment to be made by or on account
of
any obligations of any Guarantor under this Guaranty, or under any other
Security Document, income or franchise taxes imposed on (or measured by) its
net
income by the United States of America or such other jurisdiction under the
laws
of which such recipient is organized or in which its principal office is
located.
(ii)
“Governmental Authority” means the government of the United
States of America or any other nation, or any political subdivision thereof,
whether state or local, or any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government over the Company or any of its Subsidiaries, or any
of
their respective properties, assets or undertakings.
(iii) “Indemnified
Taxes” means Taxes other than Excluded Taxes.
11
(iv) “Taxes”
means any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.
(b) Any
and all payments by or on account of any obligation of any of the Guarantors
under this Guaranty or any other Security Document shall be made without any
set-off, counterclaim or deduction and free and clear of and without deduction
for any Indemnified Taxes; provided that if any Guarantor shall be required
to
deduct any Indemnified Taxes from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 14(b)), the Collateral Agent or Buyers, as applicable, receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) such Guarantor shall make such deductions and (iii) such Guarantor
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(c) Indemnification
by the Guarantors. Each Guarantor shall indemnify the Collateral Agent and
the Buyers, within ten (10) days after written demand therefor, for the full
amount of any Indemnified Taxes paid by the Collateral Agent or Buyers, as
applicable, on or with respect to any payment by or on account of any obligation
of such Guarantor under this Guaranty and the other Security Documents
(including Indemnified Taxes or imposed or asserted on or attributable to
amounts payable under this Section 14) and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate of the Collateral
Agent or any Buyer as to the amount of such payment or liability under this
Section 14 shall be delivered to such Guarantor and shall be conclusive
absent manifest error.
15. Counterparts.
This Guaranty may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to each other
party; provided that a facsimile, .pdf or similar electronically transmitted
signature shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an
original signature.
[Remainder
of page intentionally left blank; signature page follows]
12
IN
WITNESS WHEREOF, Guarantors have executed this Guaranty as of the date first
written above.
GUARANTORS:
|
||||
Xxxxxxx
Resources LLC,
|
||||
a
Delaware limited liability company
|
||||
By:
|
/s/ Xxxxxx
X. Xxxxxx
|
|||
Name:
|
Xxxxxx
X. Xxxxxx
|
|||
Title:
|
CFO
|
|||
Xxxxxxx
Resources Corp.,
|
||||
a
Delaware corporation
|
||||
By:
|
/s/ Xxxxxx
X. Xxxxxx
|
|||
Name:
|
Xxxxxx
X. Xxxxxx
|
|||
Title:
|
CFO
|
|||
Gulf
Western Petroleum LP,
|
||||
a
Texas limited partnership
|
||||
By:
|
Xxxxxxx
Resources, LLC,
|
|||
a
Delaware limited liability company,
|
||||
its
general partner
|
||||
By:
|
/s/
Xxxxxx X. Xxxxxx
|
|||
Name:
|
Xxxxxx
X. Xxxxxx
|
|||
Title:
|
CFO
|
Signature
Page to Guaranty
EXHIBIT
A
Form
of Joinder
Joinder
to Guaranty
The
undersigned, [__________] a [__________], hereby joins in the execution of
that
certain Guaranty dated as of September 10, 2007 (the
“Guaranty”), by each of GULF WESTERN PETROLEUM LP, a Texas
limited partnership, XXXXXXX RESOURCES LLC, a Delaware limited liability
company, XXXXXXX RESOURCES CORP., a Delaware corporation, and each other person
or entity that becomes a Guarantor thereunder after the date and pursuant to
the
terms thereof, to and in favor of Metage Funds Limited, and NCIM
Limited. By executing this Joinder, the undersigned hereby agrees
that effective as of the date hereof, it is a Guarantor thereunder with the
same
force and effect as if originally named therein as a Guarantor. The
undersigned agrees to be bound by all of the terms and provisions of the
Guaranty and represents and warrants that the representations and warranties
set
forth in Section 6 of the Guaranty are, with respect to the undersigned,
true and correct as of the date hereof. Effective as of the date
hereof, each reference to a Guarantor in the Guaranty shall be deemed to include
the undersigned.
In
Witness Whereof, the undersigned has executed this Joinder this ___ day of
_________, 200_.
Guaranty