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EXHIBIT 99.4
GUARANTY
GUARANTY, dated as of September 27, 1996, made by XXXXXXXXX ENERGY,
INC., a corporation organized and existing under the laws of the State of
Delaware (the "Guarantor") in favor of THE CIT GROUP/EQUIPMENT FINANCING, INC.,
a corporation organized and existing under the laws of the State of New York
(the "Lender").
WHEREAS, XXXXXXXXX DRILLING COMPANY, a Delaware corporation (the
"Borrower"), wishes to borrow funds in an aggregate amount up to USD 22,000,000
(the "Loan") from the Lender pursuant to the terms of the Loan Agreement dated
as of September 27, 1996 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Loan Agreement") by and among the Borrower,
the Guarantor and the Lender; and
WHEREAS, the Borrower is a wholly owned subsidiary of the Guarantor
and it is to the corporate benefit of the Guarantor that the Borrower obtain
the Loan; and
WHEREAS, the Loan will be evidenced by the promissory note of the
Borrower in favor of the Lender (as the same may be amended, supplemented as
otherwise modified from time to time, the "Note"); and
WHEREAS, in order to induce the Lender to make the Loan, the Guarantor
is prepared to guarantee the performance by the Borrower of its obligations
under the Loan Agreement and the Note; and
WHEREAS, the Lender is prepared to make the Loan in consideration,
among other things, of such guaranty by the Guarantor;
NOW, THEREFORE, in consideration of the premises, the Guarantor hereby
agrees as follows:
SECTION 1. Guaranty. As independent and additional security for the
Loan, the Guarantor hereby unconditionally and irrevocably guarantees the
payment by the Borrower of all amounts due and to become due from the Borrower
under the Loan Agreement and the Note (the "Obligations") and agrees to pay any
and all expenses incurred by the Lender in enforcing any of its respective
rights under this Guaranty.
SECTION 2. Guaranty Absolute. (a) The Guarantor hereby guarantees
that the Obligations will be paid strictly in accordance with the terms of the
Loan Agreement and the Note, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Lender with respect thereto. The liability of the Guarantor
under this Guaranty shall be absolute and unconditional irrespective of:
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(i) any lack of validity or enforceability of the Loan
Agreement, the Note or any other agreement or instrument entered into
between the Borrower, the Lender or the Guarantor;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to departure from the Loan
Agreement or the Note;
(iii) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower in respect of
the Obligations or the Guarantor in respect of this Guaranty.
(b) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Obligations is
rescinded or must otherwise be returned by the Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
SECTION 3. Waiver. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Guaranty and any requirement that the Lender or any other
person exhaust any right or take any action against the Borrower or any other
person or entity or any collateral. This is a guaranty of payment and not of
collection only.
SECTION 4. Subrogation. The Guarantor will not exercise any rights
which it may acquire by way of subrogation under this Guaranty, by any payment
made hereunder or otherwise, until all the Obligations shall have been paid in
full. If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all the Obligations shall not have been
paid in full, such amount shall be forthwith paid to the Lender to be credited
and applied against the Obligations. If (i) the Guarantor shall make payment
to the Lender, of all or any part of the Obligations and (ii) all the
Obligations shall be paid in full, the Lender will, at the Guarantor's request,
execute and deliver to the Guarantor appropriate documents, without recourse
and without representation or warranty, transferring to the Guarantor any and
all rights the Lender, may have against the Borrower or necessary to evidence
the transfer by subrogation to the Guarantor of any interest in the Obligations
resulting from such payment by the Guarantor.
SECTION 5. Payments Free and Clear of Taxes, Etc. (a) All sums
payable by the Guarantor under this Guaranty, whether of principal, interest,
fees or otherwise, shall be paid in full without set-off or counterclaim and in
such amounts as may be necessary in order that
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all such payments (after deduction or withholding for or on account of any
present or future taxes, levies, imposts, duties or other charges of whatsoever
nature imposed by any Governmental Agency or taxing authority thereof, other
than any tax or fee on or measured by the net income of the Lender;
collectively the "Taxes") shall not be less than the amounts otherwise
specified to be paid under this Guaranty.
(b) A certificate as to any additional amounts payable to the Lender
under this Section 5 submitted to the Guarantor by the Lender shall show in
reasonable detail the amount payable and the calculations used to determine in
good faith such amount and shall be deemed prima facie correct.
(c) With respect to each deduction or withholding for or on account
of any Taxes, the Guarantor shall promptly furnish to the Lender such
certificates, receipts and other documents as may be required (in the
reasonable judgment of the Lender) to establish any income tax credit to which
any of the Lender may be entitled.
SECTION 6. APPLICABLE LAW AND JURISDICTION. THIS GUARANTY
(INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, OTHER THAN CONFLICT OF LAWS RULES THEREOF. ANY LEGAL ACTION OR
PROCEEDING AGAINST THE GUARANTOR WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK, THE U.S. FEDERAL COURTS IN SUCH STATE,
SITTING IN THE COUNTY OF NEW YORK, OR IN THE COURTS OF ANY OTHER JURISDICTION
WHERE SUCH ACTION OR PROCEEDING MAY BE PROPERLY BROUGHT.
SECTION 7. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) It is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, duly qualified to do
business wherever its business or ownership of property requires it to be so
qualified.
(b) The execution, delivery and performance by the Guarantor of this
Guaranty and any other documents contemplated herein and the completion of all
other transactions herein contemplated are within the Guarantor's corporate
authority, are in furtherance of its corporate purposes, have been duly
authorized by all necessary corporate action and will not contravene any
applicable law or regulation nor violate the Guarantor's Articles of
Incorporation or By-Laws nor any agreement binding on the Guarantor nor any
applicable law or regulation or order or decree of any governmental authority
or agency of the State of Texas, the United States of America or the State of
New York.
(c) This Guaranty is supported by adequate and sufficient
consideration, has been validly
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signed on behalf of the Guarantor and represents the valid and binding
obligation of the Guarantor, enforceable in accordance with its terms and will
not result in the Guarantor's liabilities (including the maximum amount of
liabilities that may be reasonably expected to result from all contingent
liabilities and giving effect to rights of contribution and subrogation)
exceeding the fair market value of its assets. The enforceability of this
Guaranty, however, is subject to all applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the rights of creditors
generally and to general equity principles.
(d) The legality, validity, enforceability or admissibility of this
Guaranty are not subject to or conditional upon this Guaranty being filed,
recorded or enrolled with any governmental authority or agency or stamped with
any stamp, duty or similar transaction tax of the State of Texas, the United
States of America or the State of New York.
(e) There are no pending, or to the best of the Guarantor's
knowledge, any threatened actions or proceedings affecting the Guarantor or any
of the Guarantor's subsidiaries before any court, governmental agency or
arbitrator in any country, which may materially adversely affect the financial
condition or operations of the Guarantor.
SECTION 8. The Loan Agreement and the Note. The Guarantor hereby
acknowledges receipt of the Loan Agreement and the Note in execution form and
hereby consents and agrees to the Loan Agreement and the Note and to all the
terms and provisions thereof.
SECTION 9. Amendments, Etc. No amendment or waiver of any provision
of this Guaranty nor consent to any departure by the Guarantor therefrom shall
in any event be effective unless the same shall be in writing and signed by the
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 10. Notices. All notices, requests, consents, demands and
other communications provided for or permitted hereunder shall be made as
required in Section 5.01 of the Loan Agreement.
SECTION 11. No Waiver; Remedies. No failure on the part of the
Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 12. Continuing Guaranty. This Guaranty is a continuing
guaranty and shall (i) remain in full force and effect until payment in full of
the Obligations and payment in full of all other amounts due under this
Guaranty, (ii) be binding upon the Guarantor, its successors or assigns, as the
case may be, and (iii) inure to the benefit of and be enforceable by the Lender
and its respective successors, transferees and assigns, provided, however, that
the Guarantor may not transfer this Guaranty or any part of it without the
prior written consent of the Lender.
SECTION 13. Capitalized Terms. All capitalized terms used in this
Guaranty which are not defined herein shall have the meanings given to them in
the Loan Agreement.
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IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty, as of the date first above written.
XXXXXXXXX ENERGY, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Vice President-Finance
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ACCEPTED:
THE CIT GROUP/EQUIPMENT FINANCING, INC.
By: /s/ Xxxxxx X. Pitch
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Name: Xxxxxx X. Pitch
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Title: Vice President
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