1
EXHIBIT 10.3
GUARANTY BY CORPORATION
Norwest Bank Texas, ▇▇▇▇▇▇▇▇▇ Energy, Inc.
National Association ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower")
(the "Bank")
June 3, 1997
FOR VALUABLE CONSIDERATION, and to induce the Bank in its sole
discretion to make loans or extend other accommodations to or for the account
of the Borrower, the undersigned gives this Guaranty by Corporation (the
"Guaranty") and absolutely and unconditionally guarantees to the Bank the full
and prompt payment of each and every debt, liability or obligation which the
Borrower may now or at any time in the future owe to the Bank (the
"Indebtedness"). This Guaranty is an absolute, unconditional and continuing
guaranty of payment of the Indebtedness and shall continue to be binding upon
the undersigned, whether or not all Indebtedness is paid in full, until this
Guaranty is revoked prospectively in writing as to future transactions. Such
revocation shall not be effective until actually received in writing by the
Bank and then shall not be effective as to Indebtedness existing or committed
to at the time of revocation, and shall not be effective as to renewals,
extensions, or refinancings of existing Indebtedness, whether such Indebtedness
is renewed before or after receipt of such notice of revocation.
The liability of the undersigned under this Guaranty shall include
accrued interest and all attorneys' fees, collection costs and enforcement
expenses incurred by the Bank in collecting on and enforcing its rights under
the Indebtedness, and all such costs and expenses incurred by the Bank in
connection with the protection, defense, or enforcement of this Guaranty in any
litigation or bankruptcy proceedings. The Bank may apply any sums received by
or available to the Bank on account of the Indebtedness from Borrower or any
other person (except the undersigned), or from the Borrower's or other such
persons' properties or any collateral security or other source of payment, and
such application of proceeds or receipts shall not reduce or impair the
liability of the undersigned under this Guaranty.
Notwithstanding the preceding paragraph, the liability of the
undersigned under this Guaranty shall be limited to a principal amount of
$30,000,000.00, plus accrued interest and all attorneys' fees, collection costs
and enforcement expenses incurred by the Bank in collecting on and enforcing
its rights under the Indebtedness and incurred in connection with the
protection, defense or enforcement of this Guaranty in any litigation or
bankruptcy proceedings. The Indebtedness may be created and continued in any
amount, whether or not in excess of such principal amount, without reducing or
impairing the liability of the undersigned under this Guaranty. Any payment
made by the undersigned under this Guaranty shall be effective to reduce or
discharge the undersigned's liability only if accompanied by a written
transmittal document, received by the Bank and advising it that such payment is
made under this Guaranty for such purpose.
2
The undersigned further acknowledges and agrees with Bank that:
1. No act or event need occur to establish the liability of the
undersigned under this Guaranty, and no act or event, except full payment and
discharge of all Indebtedness, shall exonerate and discharge the liability of
the undersigned under this Guaranty.
2. If the undersigned is dissolved or changes its legal form of
organization without the prior written consent of the Bank or becomes insolvent
(however defined) then the Bank may declare immediately due and payable the
obligations of the undersigned under this Guaranty, and the undersigned shall
immediately pay to the Bank the full amount of all Indebtedness, whether due
and payable or unmatured. If the undersigned voluntarily commences or there is
commenced involuntarily against the undersigned a case under the United States
Bankruptcy Code, the obligations of the undersigned under this Guaranty shall
immediately be due and payable without the necessity of demand or notice.
3. The undersigned will not exercise or enforce any right of
contribution, reimbursement, recourse or subrogation available to the
undersigned against the Borrower or any person liable for payment of the
Indebtedness, or as to any collateral securing the Indebtedness, unless and
until all of the Indebtedness shall have first been fully paid and discharged.
4. The Bank may in its discretion enter into transactions resulting in
the creation or continuance of Indebtedness, without notice to or the consent
or approval of the undersigned, regardless of whether or not any existing
relationship between the Borrower and the undersigned has been revoked and
regardless of whether this Guaranty has been revoked.
5. The liability of the undersigned shall not be reduced or impaired by
any of the following acts or events (which the Bank is expressly authorized to
do, omit or suffer from time to time, both before and after revocation of this
Guaranty, without notice to or the consent or approval of the undersigned): (i)
any acceptance of collateral security, guarantors, accommodation parties or
sureties for any or all of the Indebtedness; (ii) any one or more extensions or
renewals of Indebtedness (whether or not for a period longer than the original
period) or any modification of the interest rate, maturity or other contractual
terms applicable to all or part of the Indebtedness; (iii) any waiver or
indulgence granted to Borrower, any delay or lack of diligence in the
enforcement of the Indebtedness, or any failure to institute proceedings, file
a claim, give any required notices or otherwise protect any of the
Indebtedness; (iv) any full or partial release of, settlement with, or
agreement not to ▇▇▇, Borrower or any other guarantor or other person liable
with respect to any of the Indebtedness; (v) any discharge of any evidence of
Indebtedness or the acceptance of any instrument renewing or refinancing the
Indebtedness; (vi) any failure to obtain collateral security (including rights
of setoff) for the Indebtedness, or to assure its proper or sufficient
creation, perfection, or priority, or to protect, insure, or enforce any
collateral security; or any modification, substitution, discharge, impairment,
or loss of such collateral security; (vii) any foreclosure or enforcement of
any collateral security by the Bank or any other creditor of the Borrower with
a security interest in the collateral security; (viii) any assignment or
transfer of
3
any Indebtedness or documentation evidencing the Indebtedness; (ix) any order
of application of any payments or credits upon the Indebtedness from the
Borrower, the undersigned, or any other person; and (x) any election by the
Bank under Section 1111(b)(2) of the United States Bankruptcy Code.
6. The undersigned waives any and all defenses, claims and discharges of
Borrower, or any other obligor, pertaining to the Indebtedness, except the
defense of discharge by payment in full. Without limiting the generality of the
preceding sentence, the undersigned will not assert, plead or enforce against
the Bank any defense of waiver, release, discharge in bankruptcy, statute of
limitations, res judicata, statute of frauds, anti-deficiency statute,
misrepresentation or fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to Borrower or any other party liable
for payment of any of the Indebtedness, or any setoff available against the
Bank to Borrower or any such other person, whether or not on account of a
related transaction. The undersigned shall be liable for any deficiency
remaining after foreclosure of any mortgage, deed of trust or security interest
securing the Indebtedness, whether or not the liability of the Borrower or any
other obligor for such deficiency is discharged pursuant to statute or judicial
decision.
7. The Bank may in its sole discretion demand that the undersigned
discharge its obligations under this Guaranty at any time, whether at the time
of the scheduled or accelerated maturity of the Indebtedness or at any earlier
or later time, and regardless of whether there has been a default with respect
to the Indebtedness. The Bank shall not be required to first resort for payment
of the Indebtedness to the Borrower or to any other person or their properties,
or to first enforce, realize upon, or exhaust any collateral security given to
secure the Indebtedness before enforcing this Guaranty. The undersigned waives
presentment, demand for payment, notice of dishonor or nonpayment, and protest
of any instrument evidencing part or all of the Indebtedness.
8. If any payment applied by the Bank to the Indebtedness is later set
aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of
the Borrower or any other obligor), the Indebtedness to which such payment was
applied shall for the purposes of this Guaranty be deemed to have continued in
existence, notwithstanding such application, and this Guaranty shall be
enforceable as to such Indebtedness as fully as if such application had never
been made.
9. The liability of the undersigned under this Guaranty is in addition to
and cumulative with all other liabilities of the undersigned to the Bank as a
guarantor or otherwise, without limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides
to the contrary.
10. This Guaranty shall be enforceable regardless of the failure of other
persons to sign other guaranties of the Indebtedness. This Guaranty shall be
effective upon delivery to the Bank, without further act, condition or
acceptance by the Bank, shall be binding upon the undersigned and the heirs,
representatives, successors and assigns of the undersigned for the
4
benefit of the Bank and its participants, successors and assigns. Any
invalidity or unenforceability of any provision or application shall not affect
other lawful provisions and applications of this Guaranty, which is severable.
This Guaranty may not be waived, modified, amended, terminated, released or
otherwise changed except by a writing signed by both the undersigned and the
Bank. This Guaranty is issued in and shall be governed by the laws of the State
of Texas.
11. The undersigned represents and warrants to the Bank that (i) the
undersigned is a corporation duly organized and existing in good standing and
has full power and authority to make and deliver this Guaranty; (ii) the
execution, delivery and performance of this Guaranty by the undersigned has
been duly authorized by all necessary action of its directors and shareholders
and does not and will not violate the provisions of, or constitute a default
under, any presently applicable law or its articles of incorporation or by-laws
or any agreement presently binding on it; (iii) this Guaranty has been duly
executed and delivered by the authorized officers of the undersigned and
constitutes its lawful, binding and legally enforceable obligation (subject to
the United States Bankruptcy Code and other similar laws generally affecting
the enforcement of creditors' rights); and (iv) the authorization, execution,
delivery and performance of this Guaranty does not require notification to,
registration with, or consent or approval by, any federal, state or local
regulatory body or administrative agency.
IN WITNESS WHEREOF, this Guaranty has been duly executed on the above date
by the undersigned.
▇▇▇▇▇▇▇▇▇ DRILLING COMPANY
By:
----------------------------
Its:
---------------------------
Address:
-------------------------------
-------------------------------
-------------------------------
5
GUARANTY BY CORPORATION
Norwest Bank Texas, ▇▇▇▇▇▇▇▇▇ Energy, Inc.
National Association ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower")
(the "Bank")
June 3, 1997
FOR VALUABLE CONSIDERATION, and to induce the Bank in its sole
discretion to make loans or extend other accommodations to or for the account
of the Borrower, the undersigned gives this Guaranty by Corporation (the
"Guaranty") and absolutely and unconditionally guarantees to the Bank the full
and prompt payment of each and every debt, liability or obligation which the
Borrower may now or at any time in the future owe to the Bank (the
"Indebtedness"). This Guaranty is an absolute, unconditional and continuing
guaranty of payment of the Indebtedness and shall continue to be binding upon
the undersigned, whether or not all Indebtedness is paid in full, until this
Guaranty is revoked prospectively in writing as to future transactions. Such
revocation shall not be effective until actually received in writing by the
Bank and then shall not be effective as to Indebtedness existing or committed
to at the time of revocation, and shall not be effective as to renewals,
extensions, or refinancings of existing Indebtedness, whether such Indebtedness
is renewed before or after receipt of such notice of revocation.
The liability of the undersigned under this Guaranty shall include
accrued interest and all attorneys' fees, collection costs and enforcement
expenses incurred by the Bank in collecting on and enforcing its rights under
the Indebtedness, and all such costs and expenses incurred by the Bank in
connection with the protection, defense, or enforcement of this Guaranty in any
litigation or bankruptcy proceedings. The Bank may apply any sums received by
or available to the Bank on account of the Indebtedness from Borrower or any
other person (except the undersigned), or from the Borrower's or other such
persons' properties or any collateral security or other source of payment, and
such application of proceeds or receipts shall not reduce or impair the
liability of the undersigned under this Guaranty.
Notwithstanding the preceding paragraph, the liability of the
undersigned under this Guaranty shall be limited to a principal amount of
$30,000,000.00, plus accrued interest and all attorneys' fees, collection costs
and enforcement expenses incurred by the Bank in collecting on and enforcing
its rights under the Indebtedness and incurred in connection with the
protection, defense or enforcement of this Guaranty in any litigation or
bankruptcy proceedings. The Indebtedness may be created and continued in any
amount, whether or not in excess of such principal amount, without reducing or
impairing the liability of the undersigned under this Guaranty. Any payment
made by the undersigned under this Guaranty shall be effective to reduce or
discharge the undersigned's liability only if accompanied by a written
transmittal document, received by the Bank and advising it that such payment is
made under this Guaranty for such purpose.
6
The undersigned further acknowledges and agrees with Bank that:
1. No act or event need occur to establish the liability of the
undersigned under this Guaranty, and no act or event, except full payment and
discharge of all Indebtedness, shall exonerate and discharge the liability of
the undersigned under this Guaranty.
2. If the undersigned is dissolved or changes its legal form of
organization without the prior written consent of the Bank or becomes insolvent
(however defined) then the Bank may declare immediately due and payable the
obligations of the undersigned under this Guaranty, and the undersigned shall
immediately pay to the Bank the full amount of all Indebtedness, whether due
and payable or unmatured. If the undersigned voluntarily commences or there is
commenced involuntarily against the undersigned a case under the United States
Bankruptcy Code, the obligations of the undersigned under this Guaranty shall
immediately be due and payable without the necessity of demand or notice.
3. The undersigned will not exercise or enforce any right of
contribution, reimbursement, recourse or subrogation available to the
undersigned against the Borrower or any person liable for payment of the
Indebtedness, or as to any collateral securing the Indebtedness, unless and
until all of the Indebtedness shall have first been fully paid and discharged.
4. The Bank may in its discretion enter into transactions resulting in
the creation or continuance of Indebtedness, without notice to or the consent
or approval of the undersigned, regardless of whether or not any existing
relationship between the Borrower and the undersigned has been revoked and
regardless of whether this Guaranty has been revoked.
5. The liability of the undersigned shall not be reduced or impaired by
any of the following acts or events (which the Bank is expressly authorized to
do, omit or suffer from time to time, both before and after revocation of this
Guaranty, without notice to or the consent or approval of the undersigned): (i)
any acceptance of collateral security, guarantors, accommodation parties or
sureties for any or all of the Indebtedness; (ii) any one or more extensions or
renewals of Indebtedness (whether or not for a period longer than the original
period) or any modification of the interest rate, maturity or other contractual
terms applicable to all or part of the Indebtedness; (iii) any waiver or
indulgence granted to Borrower, any delay or lack of diligence in the
enforcement of the Indebtedness, or any failure to institute proceedings, file
a claim, give any required notices or otherwise protect any of the
Indebtedness; (iv) any full or partial release of, settlement with, or
agreement not to ▇▇▇, Borrower or any other guarantor or other person liable
with respect to any of the Indebtedness; (v) any discharge of any evidence of
Indebtedness or the acceptance of any instrument renewing or refinancing the
Indebtedness; (vi) any failure to obtain collateral security (including rights
of setoff) for the Indebtedness, or to assure its proper or sufficient
creation, perfection, or priority, or to protect, insure, or enforce any
collateral security; or any modification, substitution, discharge, impairment,
or loss of such collateral security; (vii) any foreclosure or enforcement of
any collateral security by the Bank or any other creditor of the Borrower with
a security interest in the collateral security; (viii) any assignment or
transfer of
7
any Indebtedness or documentation evidencing the Indebtedness; (ix) any order
of application of any payments or credits upon the Indebtedness from the
Borrower, the undersigned, or any other person; and (x) any election by the
Bank under Section 1111(b)(2) of the United States Bankruptcy Code.
6. The undersigned waives any and all defenses, claims and discharges of
Borrower, or any other obligor, pertaining to the Indebtedness, except the
defense of discharge by payment in full. Without limiting the generality of the
preceding sentence, the undersigned will not assert, plead or enforce against
the Bank any defense of waiver, release, discharge in bankruptcy, statute of
limitations, res judicata, statute of frauds, anti-deficiency statute,
misrepresentation or fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to Borrower or any other party liable
for payment of any of the Indebtedness, or any setoff available against the
Bank to Borrower or any such other person, whether or not on account of a
related transaction. The undersigned shall be liable for any deficiency
remaining after foreclosure of any mortgage, deed of trust or security interest
securing the Indebtedness, whether or not the liability of the Borrower or any
other obligor for such deficiency is discharged pursuant to statute or judicial
decision.
7. The Bank may in its sole discretion demand that the undersigned
discharge its obligations under this Guaranty at any time, whether at the time
of the scheduled or accelerated maturity of the Indebtedness or at any earlier
or later time, and regardless of whether there has been a default with respect
to the Indebtedness. The Bank shall not be required to first resort for payment
of the Indebtedness to the Borrower or to any other person or their properties,
or to first enforce, realize upon, or exhaust any collateral security given to
secure the Indebtedness before enforcing this Guaranty. The undersigned waives
presentment, demand for payment, notice of dishonor or nonpayment, and protest
of any instrument evidencing part or all of the Indebtedness.
8. If any payment applied by the Bank to the Indebtedness is later set
aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of
the Borrower or any other obligor), the Indebtedness to which such payment was
applied shall for the purposes of this Guaranty be deemed to have continued in
existence, notwithstanding such application, and this Guaranty shall be
enforceable as to such Indebtedness as fully as if such application had never
been made.
9. The liability of the undersigned under this Guaranty is in addition to
and cumulative with all other liabilities of the undersigned to the Bank as a
guarantor or otherwise, without limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides
to the contrary.
10. This Guaranty shall be enforceable regardless of the failure of other
persons to sign other guaranties of the Indebtedness. This Guaranty shall be
effective upon delivery to the Bank, without further act, condition or
acceptance by the Bank, shall be binding upon the undersigned and the heirs,
representatives, successors and assigns of the undersigned for the
8
benefit of the Bank and its participants, successors and assigns. Any
invalidity or unenforceability of any provision or application shall not affect
other lawful provisions and applications of this Guaranty, which is severable.
This Guaranty may not be waived, modified, amended, terminated, released or
otherwise changed except by a writing signed by both the undersigned and the
Bank. This Guaranty is issued in and shall be governed by the laws of the State
of Texas.
11. The undersigned represents and warrants to the Bank that (i) the
undersigned is a corporation duly organized and existing in good standing and
has full power and authority to make and deliver this Guaranty; (ii) the
execution, delivery and performance of this Guaranty by the undersigned has
been duly authorized by all necessary action of its directors and shareholders
and does not and will not violate the provisions of, or constitute a default
under, any presently applicable law or its articles of incorporation or by-laws
or any agreement presently binding on it; (iii) this Guaranty has been duly
executed and delivered by the authorized officers of the undersigned and
constitutes its lawful, binding and legally enforceable obligation (subject to
the United States Bankruptcy Code and other similar laws generally affecting
the enforcement of creditors' rights); and (iv) the authorization, execution,
delivery and performance of this Guaranty does not require notification to,
registration with, or consent or approval by, any federal, state or local
regulatory body or administrative agency.
IN WITNESS WHEREOF, this Guaranty has been duly executed on the above date
by the undersigned.
▇▇▇▇▇▇▇▇▇ PETROLEUM, INC.
By:
-------------------------------
Its:
------------------------------
Address:
----------------------------------
----------------------------------
----------------------------------
9
GUARANTY BY CORPORATION
Norwest Bank Texas, ▇▇▇▇▇▇▇▇▇ Energy, Inc.
National Association ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower")
(the "Bank")
June 3, 1997
FOR VALUABLE CONSIDERATION, and to induce the Bank in its sole
discretion to make loans or extend other accommodations to or for the account
of the Borrower, the undersigned gives this Guaranty by Corporation (the
"Guaranty") and absolutely and unconditionally guarantees to the Bank the full
and prompt payment of each and every debt, liability or obligation which the
Borrower may now or at any time in the future owe to the Bank (the
"Indebtedness"). This Guaranty is an absolute, unconditional and continuing
guaranty of payment of the Indebtedness and shall continue to be binding upon
the undersigned, whether or not all Indebtedness is paid in full, until this
Guaranty is revoked prospectively in writing as to future transactions. Such
revocation shall not be effective until actually received in writing by the
Bank and then shall not be effective as to Indebtedness existing or committed
to at the time of revocation, and shall not be effective as to renewals,
extensions, or refinancings of existing Indebtedness, whether such Indebtedness
is renewed before or after receipt of such notice of revocation.
The liability of the undersigned under this Guaranty shall include
accrued interest and all attorneys' fees, collection costs and enforcement
expenses incurred by the Bank in collecting on and enforcing its rights under
the Indebtedness, and all such costs and expenses incurred by the Bank in
connection with the protection, defense, or enforcement of this Guaranty in any
litigation or bankruptcy proceedings. The Bank may apply any sums received by
or available to the Bank on account of the Indebtedness from Borrower or any
other person (except the undersigned), or from the Borrower's or other such
persons' properties or any collateral security or other source of payment, and
such application of proceeds or receipts shall not reduce or impair the
liability of the undersigned under this Guaranty.
Notwithstanding the preceding paragraph, the liability of the
undersigned under this Guaranty shall be limited to a principal amount of
$30,000,000.00, plus accrued interest and all attorneys' fees, collection costs
and enforcement expenses incurred by the Bank in collecting on and enforcing
its rights under the Indebtedness and incurred in connection with the
protection, defense or enforcement of this Guaranty in any litigation or
bankruptcy proceedings. The Indebtedness may be created and continued in any
amount, whether or not in excess of such principal amount, without reducing or
impairing the liability of the undersigned under this Guaranty. Any payment
made by the undersigned under this Guaranty shall be effective to reduce or
discharge the undersigned's liability only if accompanied by a written
transmittal document, received by the Bank and advising it that such payment is
made under this Guaranty for such purpose.
10
The undersigned further acknowledges and agrees with Bank that:
1. No act or event need occur to establish the liability of the
undersigned under this Guaranty, and no act or event, except full payment and
discharge of all Indebtedness, shall exonerate and discharge the liability of
the undersigned under this Guaranty.
2. If the undersigned is dissolved or changes its legal form of
organization without the prior written consent of the Bank or becomes insolvent
(however defined) then the Bank may declare immediately due and payable the
obligations of the undersigned under this Guaranty, and the undersigned shall
immediately pay to the Bank the full amount of all Indebtedness, whether due
and payable or unmatured. If the undersigned voluntarily commences or there is
commenced involuntarily against the undersigned a case under the United States
Bankruptcy Code, the obligations of the undersigned under this Guaranty shall
immediately be due and payable without the necessity of demand or notice.
3. The undersigned will not exercise or enforce any right of
contribution, reimbursement, recourse or subrogation available to the
undersigned against the Borrower or any person liable for payment of the
Indebtedness, or as to any collateral securing the Indebtedness, unless and
until all of the Indebtedness shall have first been fully paid and discharged.
4. The Bank may in its discretion enter into transactions resulting in
the creation or continuance of Indebtedness, without notice to or the consent
or approval of the undersigned, regardless of whether or not any existing
relationship between the Borrower and the undersigned has been revoked and
regardless of whether this Guaranty has been revoked.
5. The liability of the undersigned shall not be reduced or impaired by
any of the following acts or events (which the Bank is expressly authorized to
do, omit or suffer from time to time, both before and after revocation of this
Guaranty, without notice to or the consent or approval of the undersigned): (i)
any acceptance of collateral security, guarantors, accommodation parties or
sureties for any or all of the Indebtedness; (ii) any one or more extensions or
renewals of Indebtedness (whether or not for a period longer than the original
period) or any modification of the interest rate, maturity or other contractual
terms applicable to all or part of the Indebtedness; (iii) any waiver or
indulgence granted to Borrower, any delay or lack of diligence in the
enforcement of the Indebtedness, or any failure to institute proceedings, file
a claim, give any required notices or otherwise protect any of the
Indebtedness; (iv) any full or partial release of, settlement with, or
agreement not to ▇▇▇, Borrower or any other guarantor or other person liable
with respect to any of the Indebtedness; (v) any discharge of any evidence of
Indebtedness or the acceptance of any instrument renewing or refinancing the
Indebtedness; (vi) any failure to obtain collateral security (including rights
of setoff) for the Indebtedness, or to assure its proper or sufficient
creation, perfection, or priority, or to protect, insure, or enforce any
collateral security; or any modification, substitution, discharge, impairment,
or loss of such collateral security; (vii) any foreclosure or enforcement of
any collateral security by the Bank or any other creditor of the Borrower with
a security interest in the collateral security; (viii) any assignment or
transfer of
11
any Indebtedness or documentation evidencing the Indebtedness; (ix) any order
of application of any payments or credits upon the Indebtedness from the
Borrower, the undersigned, or any other person; and (x) any election by the
Bank under Section 1111(b)(2) of the United States Bankruptcy Code.
6. The undersigned waives any and all defenses, claims and discharges of
Borrower, or any other obligor, pertaining to the Indebtedness, except the
defense of discharge by payment in full. Without limiting the generality of the
preceding sentence, the undersigned will not assert, plead or enforce against
the Bank any defense of waiver, release, discharge in bankruptcy, statute of
limitations, res judicata, statute of frauds, anti-deficiency statute,
misrepresentation or fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to Borrower or any other party liable
for payment of any of the Indebtedness, or any setoff available against the
Bank to Borrower or any such other person, whether or not on account of a
related transaction. The undersigned shall be liable for any deficiency
remaining after foreclosure of any mortgage, deed of trust or security interest
securing the Indebtedness, whether or not the liability of the Borrower or any
other obligor for such deficiency is discharged pursuant to statute or judicial
decision.
7. The Bank may in its sole discretion demand that the undersigned
discharge its obligations under this Guaranty at any time, whether at the time
of the scheduled or accelerated maturity of the Indebtedness or at any earlier
or later time, and regardless of whether there has been a default with respect
to the Indebtedness. The Bank shall not be required to first resort for payment
of the Indebtedness to the Borrower or to any other person or their properties,
or to first enforce, realize upon, or exhaust any collateral security given to
secure the Indebtedness before enforcing this Guaranty. The undersigned waives
presentment, demand for payment, notice of dishonor or nonpayment, and protest
of any instrument evidencing part or all of the Indebtedness.
8. If any payment applied by the Bank to the Indebtedness is later set
aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of
the Borrower or any other obligor), the Indebtedness to which such payment was
applied shall for the purposes of this Guaranty be deemed to have continued in
existence, notwithstanding such application, and this Guaranty shall be
enforceable as to such Indebtedness as fully as if such application had never
been made.
9. The liability of the undersigned under this Guaranty is in addition to
and cumulative with all other liabilities of the undersigned to the Bank as a
guarantor or otherwise, without limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides
to the contrary.
10. This Guaranty shall be enforceable regardless of the failure of other
persons to sign other guaranties of the Indebtedness. This Guaranty shall be
effective upon delivery to the Bank, without further act, condition or
acceptance by the Bank, shall be binding upon the undersigned and the heirs,
representatives, successors and assigns of the undersigned for the
12
benefit of the Bank and its participants, successors and assigns. Any
invalidity or unenforceability of any provision or application shall not affect
other lawful provisions and applications of this Guaranty, which is severable.
This Guaranty may not be waived, modified, amended, terminated, released or
otherwise changed except by a writing signed by both the undersigned and the
Bank. This Guaranty is issued in and shall be governed by the laws of the State
of Texas.
11. The undersigned represents and warrants to the Bank that (i) the
undersigned is a corporation duly organized and existing in good standing and
has full power and authority to make and deliver this Guaranty; (ii) the
execution, delivery and performance of this Guaranty by the undersigned has
been duly authorized by all necessary action of its directors and shareholders
and does not and will not violate the provisions of, or constitute a default
under, any presently applicable law or its articles of incorporation or by-laws
or any agreement presently binding on it; (iii) this Guaranty has been duly
executed and delivered by the authorized officers of the undersigned and
constitutes its lawful, binding and legally enforceable obligation (subject to
the United States Bankruptcy Code and other similar laws generally affecting
the enforcement of creditors' rights); and (iv) the authorization, execution,
delivery and performance of this Guaranty does not require notification to,
registration with, or consent or approval by, any federal, state or local
regulatory body or administrative agency.
THIS GUARANTY IS SECURED BY AN EXISTING SECURITY AGREEMENT GIVEN BY THE
UNDERSIGNED.
IN WITNESS WHEREOF, this Guaranty has been duly executed on the above date
by the undersigned.
▇▇▇▇▇▇▇▇▇ DRILLING PROGRAMS, INC.
By:
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Its:
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Address:
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13
GUARANTY BY CORPORATION
Norwest Bank Texas, ▇▇▇▇▇▇▇▇▇ Energy, Inc.
National Association ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower")
(the "Bank")
June 3, 1997
FOR VALUABLE CONSIDERATION, and to induce the Bank in its sole
discretion to make loans or extend other accommodations to or for the account
of the Borrower, the undersigned gives this Guaranty by Corporation (the
"Guaranty") and absolutely and unconditionally guarantees to the Bank the full
and prompt payment of each and every debt, liability or obligation which the
Borrower may now or at any time in the future owe to the Bank (the
"Indebtedness"). This Guaranty is an absolute, unconditional and continuing
guaranty of payment of the Indebtedness and shall continue to be binding upon
the undersigned, whether or not all Indebtedness is paid in full, until this
Guaranty is revoked prospectively in writing as to future transactions. Such
revocation shall not be effective until actually received in writing by the
Bank and then shall not be effective as to Indebtedness existing or committed
to at the time of revocation, and shall not be effective as to renewals,
extensions, or refinancings of existing Indebtedness, whether such Indebtedness
is renewed before or after receipt of such notice of revocation.
The liability of the undersigned under this Guaranty shall include
accrued interest and all attorneys' fees, collection costs and enforcement
expenses incurred by the Bank in collecting on and enforcing its rights under
the Indebtedness, and all such costs and expenses incurred by the Bank in
connection with the protection, defense, or enforcement of this Guaranty in any
litigation or bankruptcy proceedings. The Bank may apply any sums received by
or available to the Bank on account of the Indebtedness from Borrower or any
other person (except the undersigned), or from the Borrower's or other such
persons' properties or any collateral security or other source of payment, and
such application of proceeds or receipts shall not reduce or impair the
liability of the undersigned under this Guaranty.
Notwithstanding the preceding paragraph, the liability of the
undersigned under this Guaranty shall be limited to a principal amount of
$30,000,000.00, plus accrued interest and all attorneys' fees, collection costs
and enforcement expenses incurred by the Bank in collecting on and enforcing
its rights under the Indebtedness and incurred in connection with the
protection, defense or enforcement of this Guaranty in any litigation or
bankruptcy proceedings. The Indebtedness may be created and continued in any
amount, whether or not in excess of such principal amount, without reducing or
impairing the liability of the undersigned under this Guaranty. Any payment
made by the undersigned under this Guaranty shall be effective to reduce or
discharge the undersigned's liability only if accompanied by a written
transmittal document, received by the Bank and advising it that such payment is
made under this Guaranty for such purpose.
14
The undersigned further acknowledges and agrees with Bank that:
1. No act or event need occur to establish the liability of the
undersigned under this Guaranty, and no act or event, except full payment and
discharge of all Indebtedness, shall exonerate and discharge the liability of
the undersigned under this Guaranty.
2. If the undersigned is dissolved or changes its legal form of
organization without the prior written consent of the Bank or becomes insolvent
(however defined) then the Bank may declare immediately due and payable the
obligations of the undersigned under this Guaranty, and the undersigned shall
immediately pay to the Bank the full amount of all Indebtedness, whether due
and payable or unmatured. If the undersigned voluntarily commences or there is
commenced involuntarily against the undersigned a case under the United States
Bankruptcy Code, the obligations of the undersigned under this Guaranty shall
immediately be due and payable without the necessity of demand or notice.
3. The undersigned will not exercise or enforce any right of
contribution, reimbursement, recourse or subrogation available to the
undersigned against the Borrower or any person liable for payment of the
Indebtedness, or as to any collateral securing the Indebtedness, unless and
until all of the Indebtedness shall have first been fully paid and discharged.
4. The Bank may in its discretion enter into transactions resulting in
the creation or continuance of Indebtedness, without notice to or the consent
or approval of the undersigned, regardless of whether or not any existing
relationship between the Borrower and the undersigned has been revoked and
regardless of whether this Guaranty has been revoked.
5. The liability of the undersigned shall not be reduced or impaired by
any of the following acts or events (which the Bank is expressly authorized to
do, omit or suffer from time to time, both before and after revocation of this
Guaranty, without notice to or the consent or approval of the undersigned): (i)
any acceptance of collateral security, guarantors, accommodation parties or
sureties for any or all of the Indebtedness; (ii) any one or more extensions or
renewals of Indebtedness (whether or not for a period longer than the original
period) or any modification of the interest rate, maturity or other contractual
terms applicable to all or part of the Indebtedness; (iii) any waiver or
indulgence granted to Borrower, any delay or lack of diligence in the
enforcement of the Indebtedness, or any failure to institute proceedings, file
a claim, give any required notices or otherwise protect any of the
Indebtedness; (iv) any full or partial release of, settlement with, or
agreement not to ▇▇▇, Borrower or any other guarantor or other person liable
with respect to any of the Indebtedness; (v) any discharge of any evidence of
Indebtedness or the acceptance of any instrument renewing or refinancing the
Indebtedness; (vi) any failure to obtain collateral security (including rights
of setoff) for the Indebtedness, or to assure its proper or sufficient
creation, perfection, or priority, or to protect, insure, or enforce any
collateral security; or any modification, substitution, discharge, impairment,
or loss of such collateral security; (vii) any foreclosure or enforcement of
any collateral security by the Bank or any other creditor of the Borrower with
a security interest in the collateral security; (viii) any assignment or
transfer of
15
any Indebtedness or documentation evidencing the Indebtedness; (ix) any order
of application of any payments or credits upon the Indebtedness from the
Borrower, the undersigned, or any other person; and (x) any election by the
Bank under Section 1111(b)(2) of the United States Bankruptcy Code.
6. The undersigned waives any and all defenses, claims and discharges of
Borrower, or any other obligor, pertaining to the Indebtedness, except the
defense of discharge by payment in full. Without limiting the generality of the
preceding sentence, the undersigned will not assert, plead or enforce against
the Bank any defense of waiver, release, discharge in bankruptcy, statute of
limitations, res judicata, statute of frauds, anti-deficiency statute,
misrepresentation or fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to Borrower or any other party liable
for payment of any of the Indebtedness, or any setoff available against the
Bank to Borrower or any such other person, whether or not on account of a
related transaction. The undersigned shall be liable for any deficiency
remaining after foreclosure of any mortgage, deed of trust or security interest
securing the Indebtedness, whether or not the liability of the Borrower or any
other obligor for such deficiency is discharged pursuant to statute or judicial
decision.
7. The Bank may in its sole discretion demand that the undersigned
discharge its obligations under this Guaranty at any time, whether at the time
of the scheduled or accelerated maturity of the Indebtedness or at any earlier
or later time, and regardless of whether there has been a default with respect
to the Indebtedness. The Bank shall not be required to first resort for payment
of the Indebtedness to the Borrower or to any other person or their properties,
or to first enforce, realize upon, or exhaust any collateral security given to
secure the Indebtedness before enforcing this Guaranty. The undersigned waives
presentment, demand for payment, notice of dishonor or nonpayment, and protest
of any instrument evidencing part or all of the Indebtedness.
8. If any payment applied by the Bank to the Indebtedness is later set
aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of
the Borrower or any other obligor), the Indebtedness to which such payment was
applied shall for the purposes of this Guaranty be deemed to have continued in
existence, notwithstanding such application, and this Guaranty shall be
enforceable as to such Indebtedness as fully as if such application had never
been made.
9. The liability of the undersigned under this Guaranty is in addition to
and cumulative with all other liabilities of the undersigned to the Bank as a
guarantor or otherwise, without limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides
to the contrary.
10. This Guaranty shall be enforceable regardless of the failure of other
persons to sign other guaranties of the Indebtedness. This Guaranty shall be
effective upon delivery to the Bank, without further act, condition or
acceptance by the Bank, shall be binding upon the undersigned and the heirs,
representatives, successors and assigns of the undersigned for the
16
benefit of the Bank and its participants, successors and assigns. Any
invalidity or unenforceability of any provision or application shall not affect
other lawful provisions and applications of this Guaranty, which is severable.
This Guaranty may not be waived, modified, amended, terminated, released or
otherwise changed except by a writing signed by both the undersigned and the
Bank. This Guaranty is issued in and shall be governed by the laws of the State
of Texas.
11. The undersigned represents and warrants to the Bank that (i) the
undersigned is a corporation duly organized and existing in good standing and
has full power and authority to make and deliver this Guaranty; (ii) the
execution, delivery and performance of this Guaranty by the undersigned has
been duly authorized by all necessary action of its directors and shareholders
and does not and will not violate the provisions of, or constitute a default
under, any presently applicable law or its articles of incorporation or by-laws
or any agreement presently binding on it; (iii) this Guaranty has been duly
executed and delivered by the authorized officers of the undersigned and
constitutes its lawful, binding and legally enforceable obligation (subject to
the United States Bankruptcy Code and other similar laws generally affecting
the enforcement of creditors' rights); and (iv) the authorization, execution,
delivery and performance of this Guaranty does not require notification to,
registration with, or consent or approval by, any federal, state or local
regulatory body or administrative agency.
THIS GUARANTY IS SECURED BY AN EXISTING SECURITY AGREEMENT GIVEN BY THE
UNDERSIGNED.
IN WITNESS WHEREOF, this Guaranty has been duly executed on the above
date by the undersigned.
▇▇▇▇▇▇▇▇▇ TRADING COMPANY, INC.
By:
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Its:
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Address:
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