EXHIBIT 4.10
SECURED
GUARANTY
THIS SECURED GUARANTY
(this “ Guaranty
”) is made as of December 28, 2006 by PRB ENERGY, INC.
and PRB GATHERING, INC. (each a “ Guarantor
” and together the “ Guarantors
”).
WHEREAS , PRB OIL & GAS, INC . (the “
Company ”) has on even date herewith issued senior
secured debentures (the “ Debentures ”) to the
Holders, as defined therein, pursuant to the terms of that certain
Securities Purchase Agreement dated as of even date herewith (as
amended, modified, supplemented or extended from time to time, the
“ Securities Purchase Agreement ” and, together
with all related agreements and documents issued or delivered
thereunder or pursuant thereto, the “ Transaction
Documents ”);
WHEREAS , it is a condition to the willingness of the
Holders to purchase the Debentures from the Company as contemplated
under the Securities Purchase Agreement that the Guarantors enter
into this Guaranty for the benefit of the Holders;
WHEREAS, the Guarantors will each receive either a direct
or indirect benefit from the credit provided to the Company under
the Transaction Documents; and
NOW THEREFORE, the parties hereto,
intending to be legally bound, and in consideration of the
foregoing and the mutual covenants contained herein, hereby agree
as follows:
Section 1.
Guaranty .
(a)
Each of the Guarantors, jointly and severally, as primary obligor
and not merely as surety, hereby absolutely, unconditionally and
irrevocably guarantees: (i) the performance of all obligations of
the Company under the Transaction Documents, including without
limitation the due and punctual payment in full (and not merely the
collectibility) of all obligations under the Debentures, including
all principal thereof and all interest payable thereon, at the
interest rate provided therein, in each case regardless of the
extent allowed as a claim in any proceeding in respect of the
bankruptcy, reorganization or insolvency of the Company, any
Guarantor or any of their respective Affiliates (a “
Reorganization ”), in each case when due and payable,
according to the terms of the Debentures and the other Transaction
Documents, whether at stated maturity, by reason of acceleration or
otherwise; (ii) the due and punctual payment in full (and not
merely the collectibility) of all other sums and charges which may
at any time be due and payable by the Company in accordance with,
or under the terms of, the Debentures or the other Transaction
Documents, whether at stated maturity, by reason of acceleration or
otherwise; (iii) the due and punctual payment in full (and not
merely the collectibility), performance and/or observance of all
other indebtedness, liabilities, obligations, terms, covenants and
conditions contained in the Transaction Documents, whether now or
hereafter existing, on the part of the Company to be paid,
performed or observed; and (iv) the due and punctual payment and
performance in full (and not merely the collectibility) of any and
all other future advances and other obligations, indebtedness,
obligations and liabilities of the Company to each of the Holders
of every kind and
description, whether now existing or
hereafter arising, whether direct, indirect or contingent, whether
secured or unsecured, and howsoever evidenced, incurred or arising,
including without limitation any future loans and advances made to
the Company by any Holder prior to, during or following any
Reorganization (all of the foregoing being hereinafter collectively
called the “ Guaranteed Obligations
”).
(b)
Notwithstanding any provision contained in this Guaranty or any
other Guaranty Document (as defined in Section 2) to the
contrary (except as set forth in clause (c) below), it is the
intention and guaranty of the Guarantors and the Company that the
obligations of each of the Guarantors under this Guaranty shall be
valid and enforceable against each such Guarantor to the maximum
extent permitted by applicable law. Accordingly, if any
provision of this Guaranty creating any obligation of a Guarantor
in favor of the Holders shall be declared to be invalid or
unenforceable in any respect or to any extent, it is the stated
intention and agreement of the Guarantors and the Holders that any
balance of the obligation created by such provision and all other
obligations of the Guarantors to the Holders created by other
provisions of this Guaranty shall remain valid and
enforceable. Likewise, if any sums which any Holder may
be otherwise entitled to collect from a Guarantor under this
Guaranty shall be declared to be in excess of those permitted under
any law (including any federal or state fraudulent conveyance or
like statute or rule of law) applicable to such Guarantor’s
obligations under this Guaranty, it is the stated intention and
agreement of such Guarantor and such Holder that all sums not in
excess of those permitted under such applicable law shall remain
fully collectible by such Holder from such Guarantor and such
excess sums shall nevertheless survive as a subordinate obligation
of such Guarantor, junior in right to the claims of general
unsecured creditors, but prior to the claims of equityholders in
the Guarantor. This provision shall control every other
provision of the Guaranty Documents.
Section 2.
Security . This Guaranty (as the same may be amended,
modified, supplemented, replaced or extended from time to time) and
all obligations, indebtedness or liabilities of the Guarantors
arising hereunder, as well as the obligations under the other
Transaction Documents, shall be secured by the Pledge and Security
Agreement of even date herewith (as the same may be amended,
restated, renewed, replaced, supplemented or otherwise modified
from time to time, the “ Pledge Agreement ”; the
Pledge Agreement, together with this Guaranty and any and all other
agreements now or hereafter securing this Guaranty, being
collectively referred to herein as the “ Guaranty
Documents ”).
Section 3.
Subsequent Changes . Each Guarantor expressly agrees
that each Holder may, in its sole and absolute discretion, without
notice to or further assent of the Guarantors and without in any
way releasing, affecting or impairing the Guaranteed Obligations
and liabilities of the Guarantors hereunder: (a) waive compliance
with, or any default under, or grant any other indulgences with
respect to, the Guaranteed Obligations; (b) modify, amend or change
any provisions of the Guaranteed Obligations; (c) grant extensions
or renewals of or with respect to the Guaranteed Obligations,
and/or effect any release, compromise or settlement in connection
therewith; (d) agree to the substitution, exchange, release or
other disposition of any Guarantor or of all or any part of the
collateral securing the Guaranteed Obligations; (e) make advances
for the purpose of performing any term or covenant contained in the
Guaranty Documents or any other Transaction Documents evidencing
the Guaranteed Obligations, with respect to which the
Company shall be in default; (f)
subject to the provisions of the Debentures, assign or otherwise
transfer the Guaranteed Obligations, including, without limitation,
the assignment and transfer of any Holder’s rights and
remedies under this Guaranty, or any interest therein; (g) deal in
all respects with the Company and the Guarantors, the Guaranteed
Obligations or any collateral securing the Guaranteed Obligations
as if this Guaranty were not in effect; (h) extend credit to the
Company or the Guarantors whether or not (1) notice of election to
terminate any of the Transaction Documents or any other agreement
among the Holders and the Company or the Guarantors has been given
by the Holders, or by the Company or the Guarantors, or (2) any
Event of Default, or any event which with notice or lapse of time,
or both, would constitute an Event of Default, has occurred under
the Debentures or any other agreement among the Holders and the
Company or the Guarantors; (i) replace any existing obligations and
the documentation therefore with an amended and restated obligation
and the documentation therefor; and (j) settle or compromise any or
all of the Guaranteed Obligations with the Company or the
Guarantors, and/or any other person or persons liable therein,
and/or subordinate the payment of same or any part hereof to the
payment of any other debts or claims which may at any time be due
or owing to the Holders and/or other person.
Section 4.
Direct and Absolute Obligation . The liability of each
Guarantor under this Guaranty shall be primary, direct and
immediate and not conditional or contingent upon pursuit by the
Holders of any remedies it may have against the Company or the
Guarantors or any other party with respect to the Guaranteed
Obligations, whether pursuant to the terms of the Debentures or
otherwise. The obligations of each Guarantor under this
Guaranty shall be absolute and unconditional, irrespective of the
genuineness, validity, regularity, enforceability or priority of
the Debentures or the Transaction Documents, the Guaranteed
Obligations or any other circumstances which might otherwise
constitute a legal or equitable discharge of a surety or guarantor
and without regard to any counterclaim, setoff, declaration or
defense of any kind which any party obligated under the Debentures
or any other document evidencing or securing any of the Guaranteed
Obligations may have or assert. No exercise or nonexercise by
any Holder of any right given to it hereunder or under the
Debentures, and no change, impairment or suspension of any right or
remedy of any Holder, shall in any way affect any of either
Guarantor’s obligations hereunder or give any Guarantor any
recourse against any Holder. Without limiting the generality
of the foregoing, no Holder shall be required to make any demand on
the Company, its Affiliates and/or any other party, or otherwise
pursue or exhaust its remedies against the Company or any other
party, before, simultaneously with or after, enforcing its rights
and remedies hereunder against the Guarantors. Any one or
more successive and/or concurrent actions may be brought hereon
against any Guarantor, either in the same action, if any, brought
against the Company and/or any other party, or in separate actions,
as often as a Holder, in its sole discretion, may deem
advisable.
Section 5.
Waivers .
(a)
Each Guarantor hereby expressly waives: (i) diligence, presentment
and demand for payment and protest of nonpayment; (ii) notice of
acceptance of this Guaranty and of presentment, demand, dishonor
and protest; (iii) notice of any default hereunder or under the
Debentures or any other Guaranteed Obligations and of all
indulgences; (iv) all other notices and demands otherwise required
by law which the Guarantors may lawfully waive; (v) the right
to
assert in any action or proceeding
hereupon any setoff, counterclaim or other claim which it may have
against the Holders; and (vi) the benefit of all other principles
or provisions of law, statutory or otherwise, which are or might be
in conflict with the terms hereof. As further consideration
for the purchase of the Debentures by the Holders from the Company
and as a material inducement to the Holders to purchase the
Debentures and accept this Guaranty, each Guarantor hereby
irrevocably waives, disclaims and relinquishes all claims, whether
based in equity or law, whether by contract, statute or otherwise,
that such Guarantor might now or hereafter have against the Company
or any other person that is primarily or contingently liable on the
Guaranteed Obligations guarantied hereby or that arise from the
existence or performance of such Guarantor’s obligations
under this Guaranty, including, but not limited to, any right of
subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim or remedy of the
Company o
