GUARANTY AGREEMENT
(Interline)
This Guaranty Agreement (this
“Guaranty”) is made as of the ____ day of September,
2007, by Interline Resources Corporation, a Utah corporation,
(“Guarantor”), in favor of Private Capital Group,
Inc., a Utah corporation, as servicing agent for loan
Participants (together with its successors and assigns
“Lender”).
PRELIMINARY STATEMENTS
Lender and NorthCut Refining, LLC, a Wyoming
limited liability company (“Borrower”), have entered
into, are entering into concurrently herewith, or contemplate
entering into, that certain Construction Loan Agreement dated as
of September ___, 2007 (herein called, as it may hereafter be
modified, supplemented, restated, extended, or renewed and in
effect from time to time, the “Loan Agreement”),
which Loan Agreement sets forth the terms and conditions of a
loan (the “Loan”) to Borrower for the construction
of the Improvements on, and with respect to, land located in
Converse County, Wyoming, more particularly described in the
Loan Agreement and identified therein as the Land.
A condition precedent to Lender’s
obligation to make the Loan to Borrower is Guarantor’s
execution and delivery to Lender of this Guaranty.
The Loan is, or will be, evidenced by that
certain Deed of Trust Note of even date with the Loan Agreement,
executed by Borrower and payable to the order of Lender in the
principal face amount of Eleven Million Five Hundred Thousand
and No/100 Dollars ($11,500,000) (such note, as it may hereafter
be renewed, extended, supplemented, increased or modified and in
effect from time to time, and all other notes given in
substitution therefor, or in modification, renewal, or extension
thereof, in whole or in part, is herein called the
“Note”).
Any capitalized term used and not defined in
this Guaranty shall have the meaning given to such term in the
Loan Agreement. This Guaranty is one of the Loan Documents
described in the Loan Agreement.
STATEMENT OF AGREEMENTS
For good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, and as a material
inducement to Lender to extend credit to Borrower, Guarantor
hereby guarantees to Lender the prompt and full payment and
performance of the indebtedness and obligations described below
in this Guaranty (collectively called the “Guaranteed
Obligations”), this Guaranty being upon the following
terms and conditions:
1.
Guaranty of Payment .
Guarantor hereby unconditionally and irrevocably
guarantees to Lender the punctual payment when due, whether by
lapse of time, by acceleration of maturity, or otherwise, of all
principal, interest (including interest accruing after the
commencement of any bankruptcy or insolvency proceeding by or
against Borrower, whether or
not allowed in such proceeding), fees, late
charges, costs, expenses, indemnification indebtedness, and
other sums of money now or hereafter due and owing, or which
Borrower is obligated to pay, pursuant to (a) the terms of the
Note, the Loan Agreement, the Deed of Trust, the Environmental
Agreement, any application, agreement, note or other document
executed and delivered in connection with any Letter of Credit,
[any Interest Rate Protection Agreement] or any other Loan
Documents, including the making of required Borrower’s
Deposits, and any indemnifications contained in the Loan
Documents, now or hereafter existing, and (b) all renewals,
extensions, refinancings, modifications, supplements or
amendments of such indebtedness, or any of the Loan Documents,
or any part thereof (the indebtedness described in clauses (a)
and (b) above in this Section 1 is herein collectively called
the “Indebtedness”). This Guaranty covers the
Indebtedness, whether presently outstanding or arising
subsequent to the date hereof, including all amounts advanced by
Lender in stages or installments. The guaranty of
Guarantor as set forth in this Section 1 is a continuing
guaranty of payment and not a guaranty of collection.
2.
Guaranty of Performance .
Guarantor additionally hereby unconditionally and
irrevocably guarantees to Lender the timely performance of all
other obligations of Borrower under all of the Loan Documents,
including, without limiting the generality of the foregoing:
(a)
that the Improvements will be constructed in
accordance with the Loan Agreement and with the Plans;
(b)
that the Improvements will be completed and
ready for occupancy, including delivery of any certificates
required by law or the Loan Agreement, on or before the
Completion Date required in the Loan Agreement; and
(c)
that Borrower will duly and punctually perform
and observe all other terms, covenants, and conditions of the
Note, the Deed of Trust, the Loan Agreement, the Environmental
Agreement or any other Loan Document, [or any Interest Rate
Protection Agreement] whether according to the present
terms thereof, at any earlier or accelerated date or dates as
provided therein, or pursuant to any extension of time or to any
change or changes in the terms, covenants, or conditions
thereof now or hereafter made or granted.
If any of such obligations of Borrower are not
complied with, in any respect whatsoever, and without the
necessity of any notice from Lender to Guarantor, Guarantor
agrees to (i) assume all responsibility for the completion of
the Improvements and, at Guarantor’s own cost and expense,
cause the Improvements to be fully completed in accordance with
the Plans and the Loan Documents; (ii) pay all bills in
connection with the construction of the Improvements; and (iii)
indemnify and hold Lender harmless from any and all loss, cost,
liability or expense that Lender may suffer by reason of any
such non-compliance. So long as all of such obligations
are being performed by Borrower or Guarantor and no Default
exists, Lender will make the Loan proceeds available under and
subject to the terms of the Loan Agreement. If after the
occurrence of a Default, and without limiting Lender’s
rights and remedies, Lender, in its sole and absolute
discretion, is dissatisfied with the progress of construction by
Borrower and/or Guarantor, Lender may, at its option, without
notice to Guarantor or anyone else, complete the
Improvements either before or after commencement
of foreclosure proceedings or before or after exercise of any
other right or remedy of Lender against Borrower or Guarantor,
with such changes or modifications in the Plans as Lender deems
necessary and expend such sums as Lender, in its sole and
absolute discretion, deems necessary or advisable to complete
the Improvements, and Guarantor hereby waives any right to
contest any such expenditures by Lender. The amount of any
and all expenditures made by Lender for the foregoing purposes
shall bear interest from the date made until repaid to Lender,
at a rate per annum equal to the interest rate provided for in
the Note and, together with such interest, shall be due and
payable by Guarantor to Lender upon demand. Lender does
not have and shall never have any obligation to complete the
Improvements or take any such action. The obligations and
liability of Guarantor under this Section 2 shall not be limited
or restricted by the existence of (or any terms of) the guaranty
of payment under Section 1.
3.
Primary Liability of Guarantor .
(a)
This Guaranty is an absolute, irrevocable and
unconditional guaranty of payment and performance.
Guarantor shall be liable for the payment and performance
of the Guaranteed Obligations as a primary obligor. This
Guaranty shall be effective as a waiver of, and Guarantor hereby
expressly waives, any and all rights to which Guarantor may
otherwise have been entitled under any suretyship laws in effect
from time to time, including any right or privilege, whether
existing under statute, at law or in equity, to require Lender
to take prior recourse or proceedings against any collateral,
security or Person (hereinafter defined) whatsoever.
(b)
Guarantor hereby agrees that in the event of (i)
default by Borrower in payment or performance of the Guaranteed
Obligations, or any part thereof, when such indebtedness or
performance becomes due, either by its terms or as the result of
the exercise of any power to accelerate; (ii) the failure of
Guarantor to perform completely and satisfactorily the
covenants, terms and conditions of any of the Guaranteed
Obligations; (iii) the death, incompetency, dissolution or
insolvency of Guarantor; (iv) the inability of Guarantor to pay
debts as they mature; (v) an assignment by Guarantor for the
benefit of creditors; (vi) the institution of any proceeding by
or against Guarantor in bankruptcy or for a reorganization or an
arrangement with creditors, or for the appointment of a
receiver, trustee or custodian for any of them or for any of
their respective properties; (vii) the determination by Lender
in good faith that a material adverse change has occurred in the
financial condition of Guarantor; (viii) the entry of a judgment
against Guarantor; (ix) a writ or order of attachment, levy or
garnishment is issued against Guarantor; (x) the falsity in any
material respect of, or any material omission in, any
representation made to Lender by Guarantor; or (xi) any transfer
of assets of any Guarantor, without the Lender’s prior
consent (except for transfers of assets for estate planning
purposes valued at less than $50,000 per year per Guarantor,
customary political and charitable contributions, and transfers
for which the Guarantor receives consideration substantially
equivalent to the fair market value of the transferred asset)
(individually and collectively an “Event of
Default”); then upon the occurrence of such Event of
Default, the Guaranteed Obligations, for purposes of this
Guaranty, shall be deemed immediately due and payable at the
election of Lender, and Guarantor shall, on
demand and without presentment, protest, notice of protest,
further notice of nonpayment or of dishonor, default or
nonperformance, or notice of acceleration or of intent to
accelerate, or any other notice whatsoever, without any notice
having been given to Guarantor previous to such demand of the
acceptance by Lender of this Guaranty, and without any notice
having been given to Guarantor previous to such demand of the
creating or incurring of such indebtedness or of such obligation
to perform, all such notices being hereby waived by Guarantor,
pay the amount due to Lender or perform or observe the
agreement, covenant, term or condition, as the case may be, and
pay all damages and all costs and expenses that may arise in
consequence of such Event of Default (including, without
limitation, all attorneys’ fees and expenses,
investigation costs, court costs, and any and all other costs
and expenses incurred by Lender in connection with the
collection and enforcement of the Note or any other Loan
Document), whether or not suit is filed thereon, or whether at
maturity or by acceleration, or whether before or after
maturity, or whether in connection with bankruptcy, insolvency
or appeal. It shall not be necessary for Lender, in order
to enforce such payment or performance by Guarantor, first to
institute suit or pursue or exhaust any rights or remedies
against Borrower or others liable on such indebtedness or for
such performance, or to enforce any rights against any security
that shall ever have been given to secure such indebtedness or
performance, or to join Borrower or any others liable for the
payment or performance of the Guaranteed Obligations or any part
thereof in any action to enforce this Guaranty, or to resort to
any other means of obtaining payment or performance of the
Guaranteed Obligations; provided, however, that nothing herein
contained shall prevent Lender from suing on the Note or
foreclosing the Deed of Trust or from exercising any other
rights thereunder, and if such foreclosure or other remedy
is availed of, only the net proceeds therefrom, after
deduction of all charges and expenses of every kind and nature
whatsoever, shall be applied in reduction of the amount due on
the Note and Deed of Trust, and Lender shall not be required to
institute or prosecute proceedings to recover any deficiency as
a condition of payment hereunder or enforcement hereof. At
any sale of the Property or other collateral given for the
Indebtedness or any part thereof, whether by foreclosure or
otherwise, Lender may at its discretion purchase all or any part
of the Property or collateral so sold or offered for sale for
its own account and may, in payment of the amount bid therefor,
deduct such amount from the balance due it pursuant to the terms
of the Note and Deed of Trust.
(c)
Suit may be brought or demand may be made
against Borrower or against all parties who have signed this
Guaranty or any other guaranty covering all or any part of the
Guaranteed Obligations, or against any one or more of them,
separately or together, without impairing the rights of Lender
against any party hereto. Any time that Lender is entitled to
exercise its rights or remedies hereunder, it may in its
discretion elect to demand payment and/or performance. If
Lender elects to demand performance, it shall at all times
thereafter have the right to demand payment until all of the
Guaranteed Obligations have been paid and performed in full.
If Lender elects to demand payment, it shall at all times
thereafter have the right to demand performance until all of the
Guaranteed Obligations have been paid and performed in full.
4.
Certain Agreements and Waivers by
Guarantor .
(a)
Guarantor hereby agrees that neither
Lender’s rights or remedies nor Guarantor’s
obligations under the terms of this Guaranty shall be released,
diminished, impaired, reduced or affected by any one or more of
the following events, actions, facts, or circumstances, and the
liability of Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(1)
any limitation of liability or recourse in any
other Loan Document or arising under any law;
(2)
any claim or defense that this Guaranty was made
without consideration or is not supported by adequate
consideration;
(3)
the taking or accepting of any other security or
guaranty for, or right of recourse with respect to, any or all
of the Guaranteed Obligations;
(4)
any homestead exemption or any other exemption
under applicable law;
(5)
any release, surrender, abandonment, exchange,
alteration, sale or other disposition, subordination,
deterioration, waste, failure to protect or preserve,
impairment, or loss of, or any failure to create or perfect any
lien or security interest with respect to, or any other dealings
with, any collateral or security at any time existing or
purported, believed or expected to exist in connection with any
or all of the Guaranteed Obligations, including any impairment
of Guarantor’s recourse against any Person or
collateral;
(6)
whether express or by operation of law, any
partial release of the liability of Guarantor hereunder, or if
one or more other guaranties are now or hereafter obtained by
Lender covering all or any part of the Guaranteed Obligations,
any complete or partial release of any one or more of such
guarantors under any such other guaranty, or any complete or
partial release of Borrower or any other party liable, directly
or indirectly, for the payment or performance of any or all of
the Guaranteed Obligations;
(7)
the death, insolvency, bankruptcy, disability,
dissolution, liquidation, termination, receivership,
reorganization, merger, consolidation, change of form, structure
or ownership, sale of all assets, or lack of corporate,
partnership or other power of Borrower or any other party at any
time liable for the payment or performance of any or all of the
Guaranteed Obligations;
(8)
either with or without notice to or consent of
Guarantor: any renewal, extension, modification, supplement,
subordination or rearrangement of the terms of any or all of the
Guaranteed Obligations and/or any of the Loan Documents,
including, without limitation, material alterations of the terms
of payment (including changes in maturity date(s) and interest
rate(s)) or performance (including changes in the Plans and
other terms or aspects of
construction of the Improvements) or any other
terms thereof, or any waiver, termination, or release of, or
consent to departure from, any of the Loan Documents or any
other guaranty of any or all of the Guaranteed Obligations, or
any adjustment, indulgence, forbearance, or compromise that may
be granted from time to time by Lender to Borrower, Guarantor,
and/or any other Person at any time liable for the payment or
performance of any or all of the Guaranteed Obligations;
(9)
any neglect, lack of diligence, delay, omission,
failure, or refusal of Lender to take or prosecute (or in taking
or prosecuting) any action for the collection or enforcement of
any of the Guaranteed Obligations, or to foreclose or take
or prosecute any action to foreclose (or in foreclosing or
taking or prosecuting any action to foreclose) upon any security
therefor, or to exercise (or in exercising) any other right or
power with respect to any security therefor, or to take or
prosecute (or in taking or prosecuting) any action in connection
with any Loan Document, or any failure to sell or otherwise
dispose of in a commercially reasonable manner any collateral
securing any or all of the Guaranteed Obligations;
(10)
any failure of Lender to notify Guarantor of any
creation, renewal, extension, rearrangement, modification,
supplement, subordination, or assignment of the Guaranteed
Obligations or any part thereof, or of any Loan Document, or of
any release of or change in any security, or of any other action
taken or refrained from being taken by Lender against Borrower
or any security or other recourse, or of any new agreement
between Lender and Borrower, it being understood that Lender
shall not be required to give Guarantor any notice of any kind
under any circumstances with respect to or in connection with
the Guaranteed Obligations, any and all rights to notice
Guarantor may have otherwise had being hereby waived by
Guarantor, and the Guarantor shall be responsible for obtaining
for itself information regarding the Borrower, including, but
not limited to, any changes in the business or financial
condition of the Borrower, and the Guarantor acknowledges and
agrees that the Lender shall have no duty to notify the
Guarantor of any information which the Lender may have
concerning the Borrower.
(11)
if for any reason Lender is required to refund
any payment by Borrower to any other party liable for the
payment or performance of any or all of the Guaranteed
Obligations or pay the amount thereof to someone else;
(12)
the making of advances by Lender to protect its
interest in the Property, preserve the value of the Property or
for the purpose of performing any term or covenant contained in
any of the Loan Documents;
(13)
the existence of any claim, counterclaim,
set-off or other right that Guarantor may at any time have
against Borrower, Lender, or any other Person, whether or not
arising in connection with this Guaranty, the Note, the Loan
Agreement, or any other Loan Document;
(14)
the unenforceability of all or any part of the
Guaranteed Obligations against Borrower, whether because the
Guaranteed Obligations exceed the amount
permitted by law or violate any usury law, or
because the act of creating the Guaranteed Obligations, or any
part thereof, is ultra vires , or because the officers or
Persons creating the Guaranteed Obligations acted in excess of
their authority, or because of a lack of validity or
enforceability of or defect or deficiency in any of the Loan
Documents, or because Borrower has any valid defense, claim or
offset with respect thereto, or because Borrower’s
obligation ceases to exist by operation of law, or because of
any other reason or circumstance, it being agreed that Guarantor
shall remain liable hereon regardless of whether Borrower or any
other Person be found not liable on the Guaranteed Obligations,
or any part thereof, for any reason (and regardless of any
joinder of Borrower or any other party in any action to obtain
payment or performance of any or all of the Guaranteed
Obligations); or
(15)
any order, ruling or plan of reorganization
emanating from proceedings under Title 11 of the United States
Code with respect to Borrower or any other Person, including any
extension, reduction, composition, or other alteration of the
Guaranteed Obligations, whether or not consented to by
Lender.
(b)
In the event any payment by Borrower or any
other Person to Lender is held to constitute a preference,
fraudulent transfer or other voidable payment under any
bankruptcy, insolvency or similar law, or if for any other
reason Lender is required to refund such payment or pay the
amount thereof to any other party, such payment by Borrower or
any other party to Lender shall not constitute a release of
Guarantor from any liability hereunder, and this Guaranty shall
continue to be effective or shall be reinstated (notwithstanding
any prior release, surrender or discharge by Lender of this
Guaranty or of Guarantor), as the case may be, with respect to,
and this Guaranty shall apply to, any and all amounts so
refunded by Lender or paid by Lender to another Person (which
amounts shall constitute part of the Guaranteed Obligations),
and any interest paid by Lender and any attorneys’ fees,
costs and expenses paid or incurred by Lender in connection with
any such eve
