|
Guaranty Agreement,
dated as of December 11, 2007, made by each of the signatories
hereto (together with
any other entity that may become a
party hereto as provided herein, the “ Guarantors
”), in favor of Sheridan Asset
Management, LLC (the "
Lender ") relating to that certain Loan Agreement, dated as
of the date hereof (the “ Loan
Agreement ”), by and among
Continental Fuels, Inc. , a Nevada corporation (the “
Company ”), Universal Property
Development and Acquisition
Corporation, a Nevada corporation (“ UPDA ”),
Timothy Brink (“ Brink ”), a US
citizen
and resident of the state of Texas, and
the Lender.
WHEREAS, pursuant to
the Loan Agreement, the Lender has agreed to make a term loan to
the Company
evidenced by the Company’s Senior
Secured Promissory Note, due December __, 2010 (the “ Term
Note ”) and a
revolving loan to the Company evidenced
by the Company’s Secured Revolving Promissory Notes due
December __,
2010 (the “ Revolving
Note ” and collectively with the Term Note, the
“ Notes ”), subject to the terms and conditions
set
forth therein; and
WHEREAS, it is a
condition precedent to the determination of the Lender to make
loans to the Company
pursuant to the Loan Agreement that the
Guarantors shall have executed and delivered the Guaranty to the
Lender; and
WHEREAS, each
Guarantor will directly benefit from the extension of credit to the
Company represented by
the issuance of the Notes;
and
NOW, THEREFORE, in
consideration of the premises and to induce the Lender to enter
into the Loan
Agreement and to carry out the
transactions contemplated thereby, each Guarantor hereby agrees
with the Lender as
follows:
1. Definitions
. Unless otherwise defined herein, terms defined in the Loan
Agreement and used herein
shall have the meanings given to them
in the Loan Agreement. The words “hereof,”
“herein,” “hereto” and
“hereunder”
and words of similar import when used
in this Guaranty shall refer to this Guaranty as a whole and not to
any particular
provision of this Guaranty, and Section
and Schedule references are to this Guaranty unless otherwise
specified. The
meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms
of such terms.
The following terms shall have the
following meanings:
“
Action ” shall have the meaning set forth in Section
3(f) of this Guaranty.
“
Company ” shall have the meaning set forth in the
Preamble of this Guaranty.
“
Financial Information ” shall have the meaning set
forth in Section 3(d) of this Guaranty.
“
Guaranty ” means this Guaranty Agreement, as the same
may be amended, supplemented or
otherwise modified from time to
time.
“
Guarantors ” shall have the meaning set forth in the
Preamble of this Guaranty.
“
Lender ” shall have the meaning set forth in the
Preamble of this Guaranty.
“
Loan Agreement ” shall have the meaning set forth in
the Preamble of this Guaranty.
“
Material Adverse Effe ct” means (x) the adverse effect
on the legality, validity or enforceability of
this Guaranty in any material respect,
(y) a material adverse effect on the financial condition of each
Guarantor, or (z)
the adverse impairment in any material
respect of each Guarantor’s ability to perform fully on a
timely basis its
obligations under this
Guaranty.
“
Notes ” shall have the meaning set forth in the
Recitals of this Guaranty.
“
Obligations ” means the collective reference to all
obligations and undertakings of the Company of
whatever nature, monetary or otherwise,
under the Notes, the Loan Agreement, the Security Agreement, the
other
Transaction Documents or any other
future agreement or obligations undertaken by the Company to the
Lender,
together with all reasonable
attorneys’ fees, disbursements and all other costs and
expenses of collection incurred by
Lender in enforcing any of such
Obligations and/or this Guaranty.
2. Guaranty
.
(a)
Guaranty .
(i) The
Guarantors hereby, jointly and severally, unconditionally and
irrevocably
guarantee to the Lender and its
respective successors, indorsees, transferees and assigns, the
prompt and complete
payment and performance by the Company
when due (whether at the stated maturity, by acceleration or
otherwise) of
the Obligations.
(ii)
Anything herein or in any other Transaction Document to the
contrary
notwithstanding, the maximum liability
of each Guarantor hereunder and under the other Transaction
Documents shall
in no event exceed the amount which can
be guaranteed by such Guarantor under applicable federal and state
laws,
including laws relating to the
insolvency of debtors, fraudulent conveyance or transfer or laws
affecting the rights of
creditors generally (after giving
effect to the right of contribution established in Section
2(b)).
(iii)
Each Guarantor agrees that the Obligations may at any time and from
time to
time exceed the amount of the liability
of such Guarantor hereunder without impairing the guarantee
contained in this
Section 2 or affecting the rights and
remedies of the Lender hereunder.
(iv)
The guarantee contained in this Section 2 shall remain in full
force and effect
until all the Obligations and the
obligations of each Guarantor under the guarantee contained in this
Section 2 shall
have been satisfied by payment in
full.
(v) No
payment made by the Company, any of the Guarantors, any other
guarantor
or any other Person or received or
collected by the Lender from the Company, any of the Guarantors,
any other
guarantor or any other Person by virtue
of any action or proceeding or any set-off or appropriation or
application at any
time or from time to time in reduction
of or in payment of the Obligations shall be deemed to modify,
reduce, release or
otherwise affect the liability of any
Guarantor hereunder which shall, notwithstanding any such payment
(other than
any payment made by such Guarantor in
respect of the Obligations or any payment received or collected
from such
Guarantor in respect of the
Obligations), remain liable for the Obligations up to the maximum
liability of such
Guarantor hereunder until the
Obligations are paid in full.
(vi)
Notwithstanding anything to the contrary in this Guaranty, with
respect to any
defaulted non-monetary Obligations the
specific performance of which by the Guarantors is not reasonably
possible,
the Guarantors shall only be liable for
making the Lender whole on a monetary basis for the Company’s
failure to
perform such Obligations in accordance
with the Transaction Documents.
(b) Right
of Contribution . Each Guarantor hereby agrees that, to the
extent that a Guarantor
shall have paid more than its
proportionate share of any payment made hereunder, such Guarantor
shall be entitled to
seek and receive contribution from and
against any other Guarantor hereunder which has not paid its
proportionate
share of such payment. Each
Guarantor’s right of contribution shall be subject to the
terms and conditions of Section
2(c). The provisions of this Section
2(b) shall in no respect limit the obligations and liabilities of
any Guarantor to the
Lender, and each Guarantor shall remain
liable to the Lender for the full amount guaranteed by such
Guarantor
hereunder.
(c) No
Subrogation . Notwithstanding any payment made by any Guarantor
hereunder or any
set-off or application of funds of any
Guarantor by the Lender, no Guarantor shall be entitled to be
subrogated to any of
the rights of the Lender against the
Company or any other Guarantor or any collateral security or
guarantee or right of
offset held by the Lender for the
payment of the Obligations, nor shall any Guarantor seek or be
entitled to seek any
contribution or reimbursement from the
Company or any other Guarantor in respect of payments made by
such
Guarantor hereunder, until all amounts
owing to the Lender by the Company on account of the Obligations
are paid in
full. If any amount shall be paid to
any Guarantor on account of such subrogation rights at any time
when all of the
Obligations shall not have been paid in
full, such amount shall be held by such Guarantor in trust for the
Lender,
segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to
the Lender in the exact form received
by such Guarantor (duly indorsed by such Guarantor to the Lender if
required), to
be applied against the Obligations,
whether matured or unmatured, in such order as the Lender may
determine.
(d)
Amendments, Etc. With Respect to the Obligations . Each
Guarantor shall remain
obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and
without notice to
or further assent by any Guarantor, any
demand for payment of any of the Obligations made by the Lender may
be
rescinded by the Lender and any of the
Obligations continued, and the Obligations, or the liability of any
other Person
upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with
respect thereto, may,
from time to time, in whole or in part,
be renewed, extended, amended, modified, accelerated, compromised,
waived,
surrendered or released by the Lender,
and the Loan Agreement and the other Transaction Documents and any
other
documents executed and delivered in
connection therewith may be amended, modified, supplemented or
terminated, in
whole or in part, as the Lender may
deem advisable from time to time, and any collateral security,
guarantee or right of
offset at any time held by the Lender
for the payment of the Obligations may be sold, exchanged, waived,
surrendered
or released. The Lender shall have no
obligation to protect, secure, perfect or insure any Lien at any
time held by them
as security for the Obligations or for
the guarantee contained in this Section 2 or any property subject
thereto.
(e)
Guaranty Absolute and Unconditional . Each Guarantor waives
any and all notice of the
creation, renewal, extension or accrual
of any of the Obligations and notice of or proof of reliance by the
Lender upon
the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the
Obligations,
and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed,
extended,
amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the
Company
and any of the Guarantors, on the one
hand, and the Lender, on the other hand, likewise shall be
conclusively presumed
to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each
Guarantor waives to
the extent permitted by law
diligence,
presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Company
or any of the
Guarantors with respect to the
Obligations. Each Guarantor understands and agrees that the
guarantee contained in this
Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without
regard to (a) the
validity or enforceability of the Loan
Agreement or any other Transaction Document, any of the Obligations
or any
other collateral security therefor or
guarantee or right of offset with respect thereto at any time or
from time to time
held by the Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or
performance or fraud
or misconduct by Lender) which may at
any time be available to or be asserted by the Company or any other
Person
against the Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of
the Company
or such Guarantor) which constitutes,
or might be construed to constitute, an equitable or legal
discharge of the
Company for the Obligations, or of such
Guarantor under the guarantee contained in this Section 2, in
bankruptcy or in
any other instance. When making any
demand hereunder or otherwise pursuing its rights and remedies
hereunder
against any Guarantor, the Lender may,
but shall be under no obligation to, make a similar demand on or
otherwise
pursue such rights and remedies as it
may have against the Company, any other Guarantor or any other
Person or
against any collateral security or
guarantee for the Obligations or any right of offset with respect
thereto, and any
failure by the Lender to make any such
demand, to pursue such other rights or remedies or to collect any
payments
from the Company, any other Guarantor
or any other Person or to realize upon any such collateral security
or guarantee
or to exercise any such right of
offset, or any release of the Company, any other Guarantor or any
other Person or any
such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation
or liability
hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or
available as a matter of
law, of the Lender against any
Guarantor. For the purposes hereof, "demand" shall include the
commencement and
continuance of any legal
proceedings.
(f)
Reinstatement . The guarantee contained in this Section 2
shall continue to be effective,
or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the
Obligations is rescinded
or must otherwise be restored or
returned by the Lender upon the insolvency, bankruptcy,
dissolution, liquidation or
reorganization of the Company or any
Guarantor, or upon
|
