CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP
EXHIBIT
10.2
THIS CONTINUING
AGREEMENT OF GUARANTY AND SURETYSHIP (this "Guaranty"), dated as of this 12th
day of December, 2008, is given by HALLADOR
PETROLEUM COMPANY ("HALLADOR"), AND JOINTLY AND SEVERALLY BY EACH OF THE OTHER
PERSONS WHICH BECOME GUARANTORS HEREUNDER FROM TIME TO TIME (each a
"Guarantor" and collectively with Hallador (except as otherwise noted) the
"Guarantors") in favor of PNC
BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (the
"Administrative Agent") in connection with that Credit Agreement, dated as of
even date herewith, by and among Sunrise Coal, LLC, an Indiana limited liability
company (the "Borrower"), the Administrative Agent, the Lenders now or hereafter
party thereto (the "Lenders") and the Guarantors (as amended, restated,
modified, or supplemented from time to time hereafter, the "Credit
Agreement"). Capitalized terms not otherwise defined herein shall
have the respective meanings ascribed to them by the Credit Agreement and the
rules of construction set forth in Section 1.2 [Construction] of the Credit
Agreement shall apply to this Guaranty.
1. Guarantied
Obligations. To induce the Administrative Agent and the
Lenders to make loans and grant other financial accommodations to the Borrower
under the Credit Agreement, each Guarantor hereby jointly and severally
unconditionally, and irrevocably, guaranties to the Administrative Agent, each
Lender and any provider of a Lender Provided Interest Rate Hedge or any provider
of Other Lender Provided Financial Service Products; and becomes surety, as
though it was a primary obligor for, the full and punctual payment and
performance when due (whether on demand, at stated maturity, by acceleration, or
otherwise and including any amounts which would become due but for the operation
of an automatic stay under the federal bankruptcy code of the United States or
any similar laws of any country or jurisdiction) of all Obligations, including,
without limiting the generality of the foregoing, all obligations, liabilities,
and indebtedness from time to time of the Borrower or any other Guarantor to the
Administrative Agent or any of the Lenders or any Affiliate of any Lender under
or in connection with the Credit Agreement or any other Loan Document, whether
for principal, interest, fees, indemnities, expenses, or otherwise, and all
refinancings or refundings thereof, whether such obligations, liabilities, or
indebtedness are direct or indirect, secured or unsecured, joint or several,
absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising (and including obligations,
liabilities, and indebtedness arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization, or similar proceeding with respect to
the Borrower or any Guarantor or which would have arisen or accrued but for the
commencement of such proceeding, even if the claim for such obligation,
liability, or indebtedness is not enforceable or allowable in such proceeding,
and including all Obligations, liabilities, and Indebtedness arising from any
extensions of credit under or in connection with any Loan Document from time to
time, regardless of whether any such extensions of credit are in excess of the
amount committed under or contemplated by the Loan Documents or are made in
circumstances in which any condition to extension of credit is not satisfied)
(all of the foregoing obligations, liabilities and indebtedness are referred to
herein collectively as the "Guarantied Obligations" and each as a "Guarantied
Obligation"). Without limitation of the foregoing, any of the
Guarantied Obligations shall be and remain Guarantied Obligations entitled to
the benefit of this Guaranty if the Administrative Agent or any of the Lenders
(or any one or more assignees or transferees thereof) from time to time assign
or otherwise transfer all or any portion of their respective rights and
obligations under the Loan Documents, or any other Guarantied Obligations, to
any other Person. In furtherance of the foregoing, Hallador
individually, and each other Guarantor jointly and severally agrees as
follows.
2. Guaranty. Each
Guarantor hereby promises to pay and perform all such Guarantied Obligations
immediately upon demand of the Administrative Agent and the Lenders or any one
or more of them (if such Guarantied Obligations are then due and
payable). All payments made hereunder shall be made by each Guarantor
in immediately available funds in U.S. Dollars and shall be made without setoff,
counterclaim, withholding, or other deduction of any nature.
3. Obligations
Absolute. The obligations of the Guarantors hereunder shall
not be discharged or impaired or otherwise diminished by the failure, default,
omission, or delay, willful or otherwise, by any Lender, the Administrative
Agent, or any Borrower or any other obligor on any of the Guarantied
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
any Guarantor or would otherwise operate as a discharge of any Guarantor as a
matter of law or equity. Each of the Guarantors agrees that the
Guarantied Obligations will be paid and performed strictly in accordance with
the terms of the Loan Documents. Without limiting the generality of
the foregoing, each Guarantor hereby consents to, at any time and from time to
time, and the joint and several obligations of each Guarantor hereunder shall
not be diminished, terminated, or otherwise similarly affected by any of the
following:
(a) Any lack of
genuineness, legality, validity, enforceability or allowability (in a
bankruptcy, insolvency, reorganization or similar proceeding, or otherwise), or
any avoidance or subordination, in whole or in part, of any Loan Document or any
of the Guarantied Obligations and regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of the Guarantied
Obligations, any of the terms of the Loan Documents, or any rights of the
Administrative Agent or the Lenders or any other Person with respect
thereto;
(b) Any increase,
decrease, or change in the amount, nature, type or purpose of any of, or any
release, surrender, exchange, compromise or settlement of any of the Guarantied
Obligations (whether or not contemplated by the Loan Documents as presently
constituted); any change in the time, manner, method, or place of payment or
performance of, or in any other term of, any of the Guarantied Obligations; any
execution or delivery of any additional Loan Documents; or any amendment,
modification or supplement to, or refinancing or refunding of, any Loan Document
or any of the Guarantied Obligations;
(c) Any failure to
assert any breach of or default under any Loan Document or any of the Guarantied
Obligations; any extensions of credit in excess of the amount committed under or
contemplated by the Loan Documents, or in circumstances in which any condition
to such extensions of credit has not been satisfied; any other exercise or
non-exercise, or any other failure, omission, breach, default, delay, or
wrongful action in connection with any exercise or non-exercise, of any right or
remedy against the Borrower or any other Person under or in connection with any
Loan Document or any of the Guarantied Obligations; any refusal of payment or
performance of any of the Guarantied Obligations, whether or not with any
reservation of rights against any Guarantor; or any application of collections
(including but not limited to collections resulting from realization upon any
direct or indirect security for the Guarantied Obligations) to other
obligations, if any, not entitled to the benefits of this Guaranty, in
preference to Guarantied Obligations entitled to the benefits of this Guaranty,
or if any collections are applied to Guarantied Obligations, any application to
particular Guarantied Obligations;
(d) Any taking,
exchange, amendment, modification, waiver, supplement, termination,
subordination, compromise, release, surrender, loss, or impairment of, or any
failure to protect, perfect, or preserve the value of, or any enforcement of,
realization upon, or exercise of rights, or remedies under or in connection
with, or any failure, omission, breach, default, delay, or wrongful action by
the Administrative Agent or the Lenders, or any of them, or any other Person in
connection with the enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or, any other action or inaction by the
Administrative Agent or the Lenders, or any of them, or any other Person in
respect of, any direct or indirect security for any of the Guarantied
Obligations. As used in this Guaranty, "direct or indirect security"
for the Guarantied Obligations, and similar phrases, includes any collateral
security, guaranty, suretyship, letter of credit, capital maintenance agreement,
put option, subordination agreement, or other right or arrangement of any nature
providing direct or indirect assurance of payment or performance of any of the
Guarantied Obligations, made by or on behalf of any Person;
(e) Any merger,
consolidation, liquidation, dissolution, winding-up, charter revocation, or
forfeiture, or other change in, restructuring or termination of the corporate
structure or existence of, the Borrower or any other Person; any bankruptcy,
insolvency, reorganization or similar proceeding with respect to the Borrower or
any other Person; or any action taken or election made by the Administrative
Agent or the Lenders, or any of them (including but not limited to any election
under Section 1111(b)(2) of the United States Bankruptcy Code), the Borrower, or
any other Person in connection with any such proceeding;
(f) Any defense,
setoff, or counterclaim which may at any time be available to or be asserted by
the Borrower or any other person with respect to any Loan Document or any of the
Guarantied Obligations; or any discharge by operation of law or release of the
Borrower or any other Person from the performance or observance of any Loan
Document or any of the Guarantied Obligations; or
(g) Any other event or
circumstance, whether similar or dissimilar to the foregoing, and whether known
or unknown, which might otherwise constitute a defense available to, or limit
the liability of, any Guarantor, a guarantor or a surety, excepting only full,
strict, and indefeasible payment and performance of the Guarantied
Obligations.
Each Guarantor
acknowledges, consents, and agrees that new Guarantors may join in this Guaranty
pursuant to Section 8.2.9 [Subsidiaries, Partnerships and Joint Ventures]
of the Credit Agreement and each Guarantor affirms that its obligations shall
continue hereunder undiminished.
4. Waivers,
etc. Each of the Guarantors hereby waives any defense to or
limitation on its obligations under this Guaranty arising out of or based on any
event or circumstance referred to in Section 3 hereof. Without
limitation and to the fullest extent permitted by applicable law, each Guarantor
waives each of the following:
(a) All notices,
disclosures and demand of any nature which otherwise might be required from time
to time to preserve intact any rights against any Guarantor, including the
following: any notice of any event or circumstance described in
Section 3 hereof; any notice required by any law, regulation or order now or
hereafter in effect in any jurisdiction; any notice of nonpayment,
nonperformance, dishonor, or protest under any Loan Document or any of the
Guarantied Obligations; any notice of the incurrence of any Guarantied
Obligation; any notice of any default or any failure on the part of the Borrower
or any other Person to comply with any Loan Document or any of the Guarantied
Obligations or any direct or indirect security for any of the Guarantied
Obligations; and any notice of any information pertaining to the business,
operations, condition (financial or otherwise) or prospects of the Borrower or
any other Person;
(b) Any right to any
marshalling of assets, to the filing of any claim against the Borrower or any
other Person in the event of any bankruptcy, insolvency, reorganization or
similar proceeding, or to the exercise against the Borrower or any other Person
of any other right or remedy under or in connection with any Loan Document or
any of the Guarantied Obligations or any direct or indirect security for any of
the Guarantied Obligations; any requirement of promptness or diligence on the
part of the Administrative Agent or the Lenders, or any of them, or any other
Person; any requirement to exhaust any remedies under or in connection with, or
to mitigate the damages resulting from default under, any Loan Document or any
of the Guarantied Obligations or any direct or indirect security for any of the
Guarantied Obligations; any benefit of any statute of limitations; and any
requirement of acceptance of this Guaranty or any other Loan Document, and any
requirement that any Guarantor receive notice of any such
acceptance;
(c) Any defense or
other right arising by reason of any law now or hereafter in effect in any
jurisdiction pertaining to election of remedies (including but not limited to
anti-deficiency laws, "one action" laws or the like), or by reason of any
election of remedies or other action or inaction by the Administrative Agent or
the Lenders, or any of them (including but not limited to commencement or
completion of any judicial proceeding or nonjudicial sale or other action in
respect of collateral security for any of the Guarantied Obligations), which
results in denial or impairment of the right of the Administrative Agent or the
Lenders, or any of them, to seek a deficiency against the Borrower or any other
Person or which otherwise discharges or impairs any of the Guarantied
Obligations; and
(d) Any and all
defenses it may now or hereafter have based on principles of suretyship,
impairment of collateral, or the like.
5. Reinstatement. This
Guaranty is a continuing obligation of the Guarantors and shall remain in full
force and effect notwithstanding that no Guarantied Obligations may be
outstanding from time to time and notwithstanding any other event or
circumstance. Upon termination of all Commitments, the expiration of
all Letters of Credit and indefeasible payment in full of all Guarantied
Obligations, this Guaranty shall terminate; provided, however, that this
Guaranty shall continue to be effective or be reinstated, as the case may be,
any time any payment of any of the Guarantied Obligations is rescinded,
recouped, avoided, or must otherwise be returned or released by any Lender or
Administrative Agent upon or during the insolvency, bankruptcy, or
reorganization of, or any similar proceeding affecting, the Borrower or for any
other reason whatsoever, all as though such payment had not been made and was
due and owing.
6. Subrogation. Each
Guarantor waives and agrees it will not exercise any rights against Borrower or
any other Guarantor arising in connection with, or any Collateral securing, the
Guarantied Obligations (including rights of subrogation, contribution, and the
like) until the Guarantied Obligations have been indefeasibly paid in full, and
all Commitments have been terminated and all Letters of Credit have
expired. If any amount shall be paid to any Guarantor by or on behalf
of the Borrower or any other Guarantor by virtue of any right of subrogation,
contribution, or the like, such amount shall be deemed to have been paid to such
Guarantor for the benefit of, and shall be held in trust for the benefit of, the
Administrative Agent and the Lenders and shall forthwith be paid to the
Administrative Agent to be credited and applied upon the Guarantied Obligations,
whether matured or unmatured, in accordance with the terms of the Credit
Agreement.
7. No
Stay. Without limitation of any other provision of this
Guaranty, if any declaration of default or acceleration or other exercise or
condition to exercise of rights or remedies under or with respect to any
Guarantied Obligation shall at any time be stayed, enjoined, or prevented for
any reason (including but not limited to stay or injunction resulting from the
pendency against the Borrower or any other Person of a bankruptcy, insolvency,
reorganization or similar proceeding), the Guarantors agree that, for the
purposes of this Guaranty and their obligations hereunder, the Guarantied
Obligations shall be deemed to have been declared in default or accelerated, and
such other exercise or conditions to exercise shall be deemed to have been taken
or met.
8. Taxes.
(a) No
Deductions. All payments made by any Guarantor under any of
the Loan Documents shall be made free and clear of and without deduction for any
present or future taxes, levies, imposts, deductions, charges, or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on the net
income of any Lender and all income and franchise taxes of the United States or
any State applicable to any Lender (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings, and liabilities being hereinafter
referred to as "Taxes"). If any Guarantor shall be required by law to
deduct any Taxes from or in respect of any sum payable under any of the Loan
Documents, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Subsection (a) such Lender 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 timely pay the full amount deducted to the relevant tax
authority or other authority in accordance with applicable law.
(b) Stamp
Taxes. In addition, each Guarantor agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges, or similar levies which arise from any payment made hereunder or from
the execution, delivery, or registration of, or otherwise with respect to, any
of the Loan Documents (hereinafter referred to as "Other Taxes").
(c) Indemnification for Taxes
Paid by any Lender. Each Guarantor shall indemnify each Lender
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Subsection) paid by any Lender and any liability (including penalties, interest,
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within thirty (30) days from the date a Lender
makes written demand therefor.
(d) Certificate. Within
thirty (30) days after the date of any payment of any Taxes by any Guarantor,
such Guarantor shall furnish to each Lender, the original or a certified copy of
a receipt evidencing payment thereof. If no Taxes are payable in
respect of any payment by such Guarantor, such Guarantor shall, if so requested
by a Lender, provide a certificate of an officer of such Guarantor to that
effect.
9. Notices. Each
Guarantor agrees that all notices, statements, requests, demands and other
communications under this Guaranty shall be given to such Guarantor at the
address set forth on a Schedule to, or in a Guarantor Joinder and Assumption
Agreement given under, the Credit Agreement and in the manner provided in
Section 11.5 [Notices; Effectiveness; Electronic Communication] of the
Credit Agreement. The Administrative Agent and the Lenders may rely
on any notice (whether or not made in a manner contemplated by this Guaranty)
purportedly made by or on behalf of a Guarantor, and the Administrative Agent
and the Lenders shall have no duty to verify the identity or authority of the
Person giving such notice.
10. Counterparts; Telecopy
Signatures. This Guaranty may be executed in any number of
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same
instrument. Each Guarantor acknowledges and agrees that a telecopy
transmission to Administrative Agent or any Lender of signature pages hereof
purporting to be signed on behalf of any Guarantor shall constitute effective
and binding execution and delivery hereof by such Guarantor.
11. Setoff, Default Payments by
Borrower.
(a) In the event that
at any time any obligation of the Guarantors now or hereafter existing under
this Guaranty shall have become due and payable, the Administrative Agent and
the Lenders, or any of them, shall have the right from time to time, without
notice to any Guarantor, to set off against and apply to such due and payable
amount any obligation of any nature of any Lender or the Administrative Agent,
or any subsidiary or affiliate of any Lender or Administrative Agent, to any
Guarantor, including but not limited to all deposits (whether time or demand,
general or special, provisionally credited or finally credited, however
evidenced) now or hereafter maintained by any Guarantor with the Administrative
Agent or any Lender. Such right shall be absolute and unconditional
in all circumstances and, without limitation, shall exist whether or not the
Administrative Agent or the Lenders, or any of them, shall have given any notice
or made any demand under this Guaranty or under such obligation to the
Guarantor, whether such obligation to the Guarantor is absolute or contingent,
matured or unmatured (it being agreed that the Administrative Agent and the
Lenders, or any of them, may deem such obligation to be then due and payable at
the time of such setoff), and regardless of the existence or adequacy of any
collateral, guaranty, or other direct or indirect security or right or remedy
available to the Administrative Agent or any of the Lenders. The
rights of the Administrative Agent and the Lenders under this Section are in
addition to such other rights and remedies (including, without limitation, other
rights of setoff and banker's lien) which the Administrative Agent and the
Lenders, or any of them, may have, and nothing in this Guaranty or in any other
Loan Document shall be deemed a waiver of or restriction on the right of setoff
or banker's lien of the Administrative Agent and the Lenders, or any of
them. Each of the Guarantors hereby agrees that, to the fullest
extent permitted by law, any affiliate or subsidiary of the Administrative Agent
or any of the Lenders and any holder of a participation in any obligation of any
Guarantor under this Guaranty, shall have the same rights of setoff as the
Administrative Agent and the Lenders as provided in this Section (regardless
whether such affiliate or participant otherwise would be deemed a creditor of
the Guarantor).
(b) Upon the occurrence
and during the continuation of any default under any Guarantied Obligation, if
any amount shall be paid to any Guarantor by or for the account of Borrower,
such amount shall be held in trust for the benefit of each Lender and
Administrative Agent and shall forthwith be paid to the Administrative Agent to
be credited and applied to the Guarantied Obligations when due and
payable.
12. Construction. The
section and other headings contained in this Guaranty are for reference purposes
only and shall not affect interpretation of this Guaranty in any
respect. This Guaranty has been fully negotiated between the
applicable parties, each party having the benefit of legal counsel, and
accordingly neither any doctrine of construction of guaranties or suretyships in
favor of the guarantor or surety, nor any doctrine of construction of
ambiguities in agreement or instruments against the party controlling the
drafting thereof, shall apply to this Guaranty.
13. Successors and
Assigns. This Guaranty shall be binding upon each Guarantor,
its successors and assigns, and shall inure to the benefit of and be enforceable
by the Administrative Agent and the Lenders, or any of them, and their
successors and permitted assigns; provided, however, that no
Guarantor may assign or transfer any of its rights or obligations hereunder or
any interest herein and any such purported assignment or transfer shall be null
and void. Without limitation of the foregoing, the Administrative
Agent and the Lenders, or any of them (and any successive assignee or
transferee), from time to time may assign or otherwise transfer all or any
portion of its rights or obligations under the Loan Documents (including all or
any portion of any commitment to extend credit), or any other Guarantied
Obligations, to any other person and such Guarantied Obligations (including any
Guarantied Obligations resulting from extension of credit by such other Person
under or in connection with the Loan Documents) shall be and remain Guarantied
Obligations entitled to the benefit of this Guaranty, and to the extent of its
interest in such Guarantied Obligations such other Person shall be vested with
all the benefits in respect thereof granted to the Administrative Agent and the
Lenders in this Guaranty or otherwise.
14. Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial.
(a) Governing
Law. This Guaranty shall be governed by, construed, and
enforced in accordance with, the internal laws of the Commonwealth of
Pennsylvania, without regard to conflict of laws principles.
(b) Certain
Waivers. Each Guarantor hereby irrevocably:
(i) Submits to the
nonexclusive jurisdiction of the courts of the Commonwealth of Pennsylvania
sitting in Allegheny County and the United States District Court for the Western
District of Pennsylvania, and any appellate court from any thereof.
(ii) Waives any
objection to jurisdiction and venue of any action instituted against it as
provided herein and agrees not to assert any defense based on lack of
jurisdiction or venue; and
(iii) WAIVES TRIAL BY
JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM OF ANY KIND ARISING OUT OF
OR RELATED TO THIS GUARANTY, THE CREDIT AGREEMENT, OR ANY OTHER LOAN DOCUMENT TO
THE FULLEST EXTENT PERMITTED BY LAW.
15. Severability; Modification
to Conform to Law.
(a) It is the intention
of the parties that this Guaranty be enforceable to the fullest extent
permissible under applicable law, but that the unenforceability (or modification
to conform to such law) of any provision or provisions hereof shall not render
unenforceable, or impair, the remainder hereof. If any provision in
this Guaranty shall be held invalid or unenforceable in whole or in part in any
jurisdiction, this Guaranty shall, as to such jurisdiction, be deemed amended to
modify or delete, as necessary, the offending provision or provisions and to
alter the bounds thereof in order to render it or them valid and enforceable to
the maximum extent permitted by applicable law, without in any manner affecting
the validity or enforceability of such provision or provisions in any other
jurisdiction or the remaining provisions hereof in any
jurisdiction.
(b) Without limitation
of the preceding subsection (a), to the extent that applicable law (including
applicable laws pertaining to fraudulent conveyance or fraudulent or
preferential transfer) otherwise would render the full amount of the Guarantor's
obligations hereunder invalid, voidable, or unenforceable on account of the
amount of a Guarantor's aggregate liability under this Guaranty, then,
notwithstanding any other provision of this Guaranty to the contrary, the
aggregate amount of such liability shall, without any further action by the
Administrative Agent or any of the Lenders or such Guarantor or any other
Person, be automatically limited and reduced to the highest amount which is
valid and enforceable as determined in such action or proceeding, which (without
limiting the generality of the foregoing) may be an amount which is equal to the
greater of:
(i) the fair
consideration actually received by such Guarantor under the terms and as a
result of the Loan Documents and the value of the benefits described in this
Section 15 (b) hereof, including (and to the extent not inconsistent with
applicable federal and state laws affecting the enforceability of guaranties)
distributions, commitments, and advances made to or for the benefit of such
Guarantor with the proceeds of any credit extended under the Loan Documents,
or
(ii) the excess of
(A) the amount of the fair value of the assets of such Guarantor as of the
date of this Guaranty as determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors as in effect on
the date hereof, over (B) the amount of all liabilities of such Guarantor
as of the date of this Guaranty, also as determined on the basis of applicable
federal and state laws governing the insolvency of debtors as in effect on the
date hereof.
(c) Notwithstanding
anything to the contrary in this Section or elsewhere in this Guaranty, this
Guaranty shall be presumptively valid and enforceable to its full extent in
accordance with its terms, as if this Section (and references elsewhere in this
Guaranty to enforceability to the fullest extent permitted by law) were not a
part of this Guaranty, and in any related litigation the burden of proof shall
be on the party asserting the invalidity or unenforceability of any provision
hereof or asserting any limitation on any Guarantor's obligations hereunder as
to each element of such assertion.
16. Additional
Guarantors. At any time after the initial execution and
delivery of this Guaranty to the Administrative Agent and the Lenders,
additional Persons may become parties to this Guaranty and thereby acquire the
duties and rights of being Guarantors hereunder by executing and delivering to
the Administrative Agent and the Lenders a Guarantor Joinder pursuant to the
Credit Agreement. No notice of the addition of any Guarantor shall be
required to be given to any pre-existing Guarantor and each Guarantor hereby
consents thereto.
17. Joint and Several
Obligations. The obligations and additional liabilities of the
Guarantors under this Guaranty are joint and several obligations of the
Guarantors, and each Guarantor hereby waives to the full extent permitted by law
any defense it may otherwise have to the payment and performance of the
Obligations that its liability hereunder is limited and not joint and
several. Each Guarantor acknowledges and agrees that the foregoing
waivers and those set forth below serve as a material inducement to the
agreement of the Administrative Agent and the Lenders to make the Loans, and
that the Administrative Agent and the Lenders are relying on each specific
waiver and all such waivers in entering into this Guaranty. The
undertakings of each Guarantor hereunder secure the obligations of itself and
the other Guarantors. The Administrative Agent and the Lenders, or
any of them, may, in their sole discretion, elect to enforce this Guaranty
against any Guarantor without any duty or responsibility to pursue any other
Guarantor and such an election by the Administrative Agent and the Lenders, or
any of them, shall not be a defense to any action the Administrative Agent and
the Lenders, or any of them, may elect to take against any
Guarantor. Each of the Lenders and Administrative Agent hereby
reserve all right against each Guarantor.
18. Receipt of Credit Agreement,
Other Loan Documents, Benefits.
(a) Each Guarantor
hereby acknowledges that it has received a copy of the Credit Agreement and the
other Loan Documents and each Guarantor (other than Hallador) certifies that the
representations and warranties made therein with respect to such Guarantor are
true and correct. Further, each Guarantor acknowledges and agrees to
perform, comply with, and be bound by all of the provisions of the Credit
Agreement and the other Loan Documents.
(b) Each Guarantor
hereby acknowledges, represents, and warrants that it receives synergistic
benefits by virtue of its affiliation with Borrower and the other Guarantors and
that it will receive direct and indirect benefits from the financing
arrangements contemplated by the Credit Agreement and that such benefits,
together with the rights of contribution and subrogation that may arise in
connection herewith are a reasonably equivalent exchange of value in return for
providing this Guaranty.
19. Representations and
Warranties. Each Guarantor (other than Hallador)
represents and warrants jointly and severally, and Hallador
represents and warrants severally and not with respect to any other Guarantor,
as follows:
(a) Organization and
Qualification; Power and Authority; Compliance With Laws; Title to
Properties. Such Guarantor (i) is a corporation duly
organized, validly existing and in good standing, or a partnership or limited
liability company existing in good standing, under the laws of its jurisdiction
of organization, (ii) has the lawful power to own or lease its properties and to
engage in the business it presently conducts, (iii) is duly licensed or
qualified and in good standing in each jurisdiction listed on the Schedule attached
hereto and in all other jurisdictions where the property owned or leased by it
or the nature of the business transacted by it or both makes such licensing or
qualification necessary, except where such failure would not constitute a
Material Adverse Change, (iv) has full power to enter into, execute, deliver and
carry out this Agreement and the other Loan Documents to which it is a party, to
incur the Indebtedness contemplated by the Loan Documents to which it is a
party, and to perform its Obligations under the Loan Documents to which it is a
party, and all such actions have been duly authorized by all necessary
proceedings on its part, (v) is in compliance in all material respects with all
applicable Laws in all jurisdictions in which such Guarantor is presently doing
business except where the failure to do so would not constitute a Material
Adverse Change. No Event of Default or Potential Default with respect
to such Guarantor exists or is continuing.
(b) Subsidiaries and Owners;
Investment Companies. Such Guarantor and each Subsidiary of
any such Guarantor (other than Hallador) has good and marketable title to all of
the equity interests it purports to own, free and clear in each case of any Lien
and all such equity interests been validly issued, fully paid and
nonassessable. Such Guarantor and the Subsidiaries of such Guarantor
(other than Hallador) are not an "investment company" registered or required to
be registered under the Investment Company Act of 1940 or under the "control" of
an "investment company"
as such terms are defined in the Investment Company Act of 1940 and shall not
become such an "investment company" or under such "control." Such
Guarantor is not a "holding company" or an "affiliate" of a "holding company" or
of a "subsidiary company" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 2005, as amended. Such
Guarantor is not subject to any other federal or state statute or regulation
limiting its ability to incur Indebtedness for borrowed money.
(c) Validity and Binding
Effect. This Guaranty, the Credit Agreement and each of the
other Loan Documents to which such Guarantor is a party (i) has been duly and
validly executed and delivered by such Guarantor, and (ii) constitutes, or will
constitute, legal, valid and binding obligations of such Guarantor which is or
will be a party thereto, enforceable against such Guarantor in accordance with
its terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws in effect from time to
time relating to or affecting the enforcement of creditors’ rights generally and
by general principles of equity.
(d) Conflict; Material
Agreements; Consents. Neither the execution and delivery of
this Guaranty, the Credit Agreement or the other Loan Documents by such
Guarantor nor the consummation of the transactions herein or therein
contemplated or compliance with the terms and provisions hereof or thereof by
such Guarantor will conflict with, constitute a default under or result in any
breach of (i) the terms and conditions of the certificate of incorporation,
bylaws, certificate of limited partnership, partnership agreement, certificate
of formation, limited liability company agreement or other organizational
documents of such Guarantor or (ii) any Law or any material agreement or
instrument or order, writ, judgment, injunction or decree to which such
Guarantor or any of the Subsidiaries of such Guarantor (other than Hallador) is
a party or by which it or any of the Subsidiaries of such Guarantor (other than
Hallador) is bound or to which it is subject, or result in the creation or
enforcement of any Lien upon any property (now or hereafter acquired) of such
Guarantor or any of the Subsidiaries of such Guarantor (other than Hallador)
(other than Liens granted under the Loan Documents or Permitted
Liens). There is no default under such material agreements to which
such Guarantor or any of the Subsidiaries of such Guarantor (other than
Hallador) is a party or by which it or any of the Subsidiaries of such Guarantor
(other than Hallador) is bound), and no such Guarantor or any of the
Subsidiaries of such Guarantor (other than Hallador) is bound by any contractual
obligation, or subject to any restriction in any organization document, or any
requirement of Law which could result in a Material Adverse Change with respect
to such Guarantor or any of the Subsidiaries of such Guarantor (other than
Hallador). No consent, approval, exemption, order or authorization
of, or a registration or filing with, any Official Body or any other Person is
required by any Law or any agreement in connection with the execution, delivery
and carrying out by such Guarantor of this Guaranty, the Credit Agreement and
the other Loan Documents to which such Guarantor is a party.
(e) Litigation. There
are no actions, suits, proceedings or investigations pending or, to the
knowledge of such Guarantor, threatened against such Guarantor or any Subsidiary
of such Guarantor (other than Hallador) at law or in equity before any Official
Body which individually or in the aggregate may result in any Material Adverse
Change with respect to such Guarantor or any of the Subsidiaries of such
Guarantor (other than Hallador). Such Guarantor and the Subsidiaries
of such Guarantor (other than Hallador) are not in violation of any order, writ,
injunction or any decree of any Official Body which may result in any Material
Adverse Change with respect to such Guarantor or any of the Subsidiaries of such
Guarantor (other than Hallador).
(f) Financial
Statements.
(i) Historical
Statements. Hallador has delivered to the Administrative Agent
copies of its audited consolidated year-end financial statements for and as of
the end of the three (3) fiscal years ended December 31,
2007. In addition, Hallador has delivered to the Administrative Agent
copies of its unaudited consolidated interim financial statements for the fiscal
year to date and as of the end of the fiscal quarter ended September 30, 2008
(all such annual and interim statements being collectively referred to as the
"Statements"). The Statements were compiled from the books and
records maintained by Hallador's management, are correct and complete in all
material respects and fairly represent the consolidated financial condition of
Hallador as of the respective dates thereof and the results of operations for
the fiscal periods then ended and have been prepared in accordance with GAAP
consistently applied, subject (in the case of the interim statements) to normal
year-end audit adjustments.
(ii) Accuracy of Financial
Statements. Hallador does not have any material liabilities,
contingent or otherwise, or forward or long-term commitments that are not
disclosed in the Statements or in the notes thereto, and except as disclosed
therein there are no unrealized or anticipated losses from any commitments of
Hallador which may cause a Material Adverse Change. Since January 1,
2008, no Material
Adverse Change has occurred.
(g) Full
Disclosure. Neither this Guaranty, nor any other Loan Document
to which such Guarantor is a party to, nor any certificate, statement, agreement
or other documents furnished to the Administrative Agent or any Lender by such
Guarantor in connection herewith or therewith, contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to such
Guarantor which materially adversely affects the business, property, assets,
financial condition, or results of operations of such Guarantor, any Subsidiary
of such Guarantor (other than Hallador), Borrower or any Subsidiary of Borrower
which has not been set forth in this Guaranty, the Credit Agreement or in the
certificates, statements, agreements or other documents furnished in writing to
the Administrative Agent and the Lenders prior to or at the date hereof in
connection with the transactions contemplated hereby.
(h) Solvency. Such
Guarantor is Solvent.
20. Miscellaneous.
(a) Generality of Certain
Terms. As used in this Guaranty, the terms "hereof", "herein"
and terms of similar import refer to this Guaranty as a whole and not to any
particular term or provision; the term "including", as used herein, is not a
term of limitation and means "including without limitation".
(b) Amendments,
Waivers. No amendment to or waiver of any provision of this
Guaranty, and no consent to any departure by any Guarantor herefrom, shall in
any event be effective unless in a writing manually signed by or on behalf of
the Administrative Agent and the Lenders. Any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No delay or failure of the Administrative Agent or
the Lenders, or any of them, in exercising any right or remedy under this
Guaranty shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy. The rights and
remedies of the Administrative Agent and the Lenders under this Guaranty are
cumulative and not exclusive of any other rights or remedies available
hereunder, under any other agreement or instrument, by law, or
otherwise.
(c) Telecommunications. Each
Lender and Administrative Agent shall be entitled to rely on the authority of
any individual making any telecopy or telephonic notice, request, or signature
without the necessity of receipt of any verification thereof.
(d) Expenses. Each
Guarantor unconditionally agrees to pay all out-of-pocket costs and expenses,
including reasonable attorney's fees incurred by the Administrative Agent or any
of the Lenders in enforcing this Guaranty against any Guarantor and each
Guarantor shall pay and indemnify each Lender and Administrative Agent for, and
hold it harmless from and against, any and all obligations, liabilities, losses,
damages, costs, expenses (including disbursements and reasonable legal fees of
counsel to any Lender or Administrative Agent), penalties, judgments, suits,
actions, claims, and disbursements imposed on, asserted against, or incurred by
any Lender or Administrative Agent:
(i) relating to the
preparation, negotiation, execution, administration, or enforcement of or
collection under this Guaranty or any document, instrument, or agreement
relating to any of the Obligations, including in any bankruptcy, insolvency, or
similar proceeding in any jurisdiction or political subdivision
thereof;
(ii) relating to any
amendment, modification, waiver, or consent hereunder or relating to any
telecopy or telephonic transmission purporting to be by any Guarantor or
Borrower; and
(iii) in any way relating
to or arising out of this Guaranty, or any document, instrument, or agreement
relating to any of the Guarantied Obligations, or any action taken or omitted to
be taken by any Lender or Administrative Agent hereunder, and including those
arising directly or indirectly from the violation or asserted violation by any
Guarantor or Borrower or Administrative Agent or any Lender of any law, rule,
regulation, judgment, order, or the like of any jurisdiction or political
subdivision thereof (including those relating to environmental protection,
health, labor, importing, exporting, or safety) and regardless whether asserted
by any governmental entity or any other Person.
Provided that the
Guarantors shall have no liability for any obligations, liabilities, losses,
damages, costs, expenses (including disbursements and reasonable legal fees of
counsel to any Lender or Administrative Agent), penalties, judgments, suits,
actions, claims, and disbursements imposed on, asserted against, or incurred by
any Lender or Administrative Agent arising from gross negligence or willful
misconduct of Administrative Agent or the Lenders.
(e) Prior
Understandings. This Guaranty and the Credit Agreement
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersede any and all other prior and contemporaneous
understandings and agreements.
(f) Survival. All
representations and warranties of a Guarantor made in connection with this
Guaranty shall survive, and shall not be waived by, the execution and delivery
of this Guaranty, any investigation by or knowledge of the Administrative Agent
and the Lenders, or any of them, any extension of credit, or any other event or
circumstance whatsoever.
[SIGNATURE
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4434657
[SIGNATURE
PAGE - CONTINUING
AGREEMENT
OF GUARANTY AND SURETYSHIP]
IN WITNESS WHEREOF,
the undersigned party intending to be legally bound, has executed this Guaranty
as of the date first above written with the intention that this Guaranty shall
constitute a sealed instrument.
By:/S/▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ [Seal]
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and
CEO