GUARANTY OF PAYMENT AND PERFORMANCE
THIS GUARANTY is made as of August 1, 1999, by Xxxxxx X.
Xxxxxx, Xx. ("Guarantor"), with an address of 000 00xx Xxxxxx,
Xxxxx 0000, Xxxxxx, XX 00000 to Labyrinth Enterprises LLC, its
successors and assigns ("Lender"), with an address of 0000
Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000.
RECITALS:
A. Delta Petroleum ("Borrower") has executed a Promissory
Note of even date herewith (the "Note"), to the order of Lender,
in the original principal amount of $2,000,000.00 (the "Loan").
B. As a material inducement to Lender to make the Loan to
Borrower, Guarantor has agreed to unconditionally guarantee the
full and punctual payment and performance of the "Guaranteed
Obligations" (defined below). As used in this Guaranty, the term
"Guaranteed Obligations" means all debts, duties, undertakings,
obligations, covenants and conditions to be paid or performed by
Borrower in connection with the Loan, including without
limitation all of Borrower's obligations under the Note, and any
and all extensions, renewals or modifications thereof, including
the obligations to pay as and when due principal, interest,
attorneys' fees and all other debts of Borrower arising under and
by reason of the Note.
AGREEMENT:
For good and valuable consideration, the receipt and
sufficiency of which are acknowledged, and to induce Lender to
make the Loan to Borrower, Guarantor agrees as follows:
1. Guaranty. Guarantor unconditionally guarantees to and
for the benefit of Lender the full, prompt and complete payment
and performance by Borrower of the Guaranteed Obligations. If
any of Borrower's obligations, covenants, and agreements under
the Note are not paid or performed as and when such payment or
performance is due or required, on demand from Lender, Guarantor
will pay or perform the same.
2. Independent Obligation. This Guaranty is an
independent obligation of Guarantor, separate and distinct from
the Guaranteed Obligations. A separate action may be brought or
prosecuted against the Guarantor, whether or not any such action
is brought or prosecuted against Borrower or whether Borrower is
joined in any such action or actions. This Guaranty is an
absolute guarantee of payment and performance, and not a
guarantee of collection. The obligations of Guarantor under this
Guaranty are direct and primary, regardless of the validity or
enforceability of the Note or any renewal, extension or
modification thereof. Guarantor shall continue to be liable
under this Guaranty even if all or part of the Guaranteed
Obligations become uncollectible from Borrower by operation of
law or otherwise.
3. Waivers. Guarantor waives (a) notice of Lender's
acceptance of this Guaranty, (b) notice of any advances made by
Lender pursuant to the Note, or pursuant to any extension,
renewal or modification thereof, (c) any defense arising from or
out of the exercise by Lender of any right or remedy Guarantors
may have with respect to the Guaranteed Obligations, (d) grace,
demand, presentment, notice of dishonor and protest with respect
to the Guaranteed Obligations, (e) any defense based upon any
change in the type of business conducted by Borrower, or any
other change in the financial condition of Borrower, (f) the
benefit of suretyship defenses generally, and (g) any defense
based upon any failure by Lender to obtain a similar guaranty
from any other person or entity, or file a creditor's claim in
the estate of any person or entity, including Borrower, whether
in administration, bankruptcy or any other proceeding.
4. Rights of Lender. Lender shall not be bound to exhaust
its recourse or take any action against Borrower or against any
other person or entity, or proceed against any collateral or
against any particular collateral, but Lender may make such
demands and take such actions as it deems advisable, and Lender,
without affecting the liability of Guarantor under this Guaranty,
may with or without notice or consideration (a) release any other
person or entity liable for the Guaranteed Obligations, (b)
extend the maturity, modify the terms, grant any indulgence or
forbearance or postpone the time of payment of the Guaranteed
Obligations or otherwise amend or modify the terms of any
agreement or instrument giving rise to all or any of the
Guaranteed Obligations, or (c) release all or any part of the
existing or any future security for the Guaranteed Obligations.
All rights and remedies of Lender under this Guaranty, at law or
in equity are separate and cumulative and may be pursued
separately, successively, or concurrently, or not pursued,
without affecting or limiting any other right or remedy of Lender
and without affecting or impairing the liability of Guarantor
under this Guaranty.
5. Waiver of Subrogation and Reimbursement Rights. To the
fullest extent permitted by applicable law, Guarantor releases
and waives any claim, right or remedy which Guarantor may have
against Borrower arising from this Guaranty and/or from the
performance by Guarantor of his obligations under this Guaranty,
including any claim, remedy or right of subrogation,
reimbursement, exoneration, contribution, indemnification or
participation in any claim, right or remedy of Lender against
Borrower, or any security which Lender now has or hereafter
acquires, whether such claim, right or remedy arises under
contract, by statute, under common law or otherwise.
6. Subordination of Debt. Any present or future
indebtedness of Borrower to Guarantor is hereby subordinated to
the Guaranteed Obligations. Any payment of such indebtedness of
Borrower to Guarantors shall be collected, enforced and received
by Guarantor in trust for the benefit of Lender and promptly paid
over to Lender on account of the Guaranteed Obligations, but
without reducing or affecting in any manner the liability of such
Guarantor under the other provisions of this Guaranty.
7. Representations of Guarantor. Guarantor represents and
warrants to Lender that:
(a) Guarantor is adequately informed of the financial
condition of Borrower, has not relied on any financial
information about Borrower furnished by Lender, and does not
expect Lender to provide any such information in the future;
(b) GUARANTOR ACKNOWLEDGES LENDER WOULD NOT MAKE THE LOAN
TO BORROWER WITHOUT THIS GUARANTY, AND GUARANTOR HAS REVIEWED THE
NOTE AND IS OTHERWISE FULLY FAMILIAR WITH THE GUARANTEED
OBLIGATIONS.
8. Application of Payments. Lender may apply any payments
received by it from any source against any portion of the
Guaranteed Obligations in such order and priority as Lender may
deem appropriate.
9. Continuing Guaranty. This Guaranty covers any and all
of the Guaranteed Obligations, whether presently outstanding or
arising subsequent to the date of this Guaranty. This Guaranty
shall continue until each and every Guaranteed Obligation is paid
and performed in full. If at any time payment or performance of
all or any part of the Guaranteed Obligations is rescinded or
must otherwise be restored or returned by Lender as a result of
the insolvency or bankruptcy of Borrower or otherwise, this
Guaranty shall be reinstated. Guarantors hereby assign to Lender
all rights against Borrower which Guarantor may have (whether or
not related to the Guaranteed Obligations) in any proceedings
under the United States Bankruptcy Code or in any receivership or
other insolvency proceeding. This Guaranty is binding upon
Guarantor, his heirs and assigns. This Guaranty is intended for
and shall be binding upon and inure to the benefit of Lender and
each and every person or entity who, by assignment, endorsement,
participation agreement or otherwise, succeeds to all or any part
of Lender's rights under the Guaranteed Obligations, irrespective
whether such transfer is voluntary or involuntary or occurs for
operation of law.
10. Governing Law, Jurisdiction, Venue. This Guaranty
shall be governed by and construed in accordance with the laws of
the State of Colorado. Guarantor hereby submits irrevocably to
the non-exclusive jurisdiction and venue of any state or federal
court in the State of Colorado selected by Lender in any action
relating to or arising out of the enforcement or interpretation
of this Guaranty and Guarantor hereby irrevocably agrees that all
claims in respect to any such action or proceeding may be heard
and determined in such Colorado State Court or such United States
District Court sitting in the State of Colorado and to all the
courts to which an appeal may be taken from such courts.
Guarantor expressly waives, to the fullest extent such Guarantor
may effectively do so under applicable law, any objection
Guarantor may at any time have: (a) as to venue in such courts,
(b) that any action or proceeding therein has been brought in an
inconvenient forum, (c) that any such court lacks jurisdiction
over such Guarantor, or (d) as to service of process upon such
Guarantor in accordance with applicable law.
11. Costs and Expenses. Whether or not suit is brought,
Guarantor shall pay on demand all costs and expenses, including
attorneys' fees and allocated costs of in-house counsel, incurred
by or on behalf of Lender in connection with the enforcement
against or collection from Borrower of all or any of the
Guaranteed Obligations, or any security therefor, or in
connection with the enforcement, interpretation or defense of
this Guaranty. Without limiting the generality of the foregoing,
if Borrower or any Guarantor becomes the subject of any
bankruptcy or other insolvency proceeding, Guarantor shall pay
all costs and expenses incurred by Lender in connection with such
bankruptcy or insolvency proceeding.
EXECUTED as of the day and year written above.
s/Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxx, Xx.
