EXHIBIT 99.2
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT by XXXXXX CORPORATION (hereinafter called
"Guarantor"), is in favor of BANK OF MONTREAL, as agent (the "Agent") for the
lenders (the "Lenders") that are or become parties to the Credit Agreement
defined below.
W I T N E S S E T H:
WHEREAS, on even date herewith, XXXXXX PETROLEUM CORPORATION, a
Delaware corporation (hereinafter called "Borrower"), the Agent and the
Lenders have entered into that certain Credit Agreement (as the same may be
amended from time to time, the "Credit Agreement"); and
WHEREAS, one of the terms and conditions stated in the Credit Agreement
for the making of the loans described therein is the execution and delivery
to the Agent for the benefit of the Lenders of this Guaranty Agreement;
NOW, THEREFORE, (i) in order to comply with the terms and conditions of
the Credit Agreement, (ii) to induce the Lenders, at any time or from time to
time, to loan monies, with or without security to or for the account of
Borrower in accordance with the terms of the Credit Agreement, (iii) at the
special insistence and request of the Lenders, and (iv) for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Guarantor hereby agrees as follows:
ARTICLE 1
General Terms
ARTICLE 1 General Terms
Section 1.1 Terms Defined Above. As used in this Guaranty Agreement,
the terms "Agent", "Borrower", "Credit Agreement", "Guarantor" and "Lenders"
shall have the meanings indicated above.
Section 1.2 Certain Definitions. As used in this Guaranty Agreement,
the following terms shall have the following meanings, unless the context
otherwise requires:
"Guarantor Claims" shall have the meaning indicated in Section
4.1 hereof.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the
same may from time to time be amended or supplemented.
"Liabilities" shall mean (a) any and all indebtedness,
obligations and liabilities of the Borrower pursuant to the
Credit Agreement, including without limitation, the unpaid
principal of and interest on the Notes, including without
limitation, interest accruing subsequent to the filing of a
petition or other action concerning bankruptcy or other similar
proceeding; (b) payment of and performance of any and all Hedging
Agreements, if any, entered into by the Borrower with a Lender;
(c) all reimbursements and other obligations with respect to
Letters of Credit; and (d) all renewals, rearrangements,
increases, extensions for any period, amendments or supplement in
whole or in part of the Notes or any documents evidencing the
above.
"Loan Documents" shall mean the Credit Agreement, the Notes, the
Letters of Credit and the other Loan Documents.
Section 1.3 Credit Agreement Definitions. Unless otherwise defined
herein, all terms beginning with a capital letter which are defined in the
Credit Agreement shall have the same meanings herein as therein.
ARTICLE 2
The Guaranty
ARTICLE 2 The Guaranty
Section 2.1 Liabilities Guaranteed. Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment at maturity of the Liabilities.
Section 2.2 Nature of Guaranty. This Guaranty Agreement is an
absolute, irrevocable, completed and continuing guaranty of payment and not a
guaranty of collection, and no notice of the Liabilities or any extension of
credit already or hereafter contracted by or extended to Borrower need be
given to Guarantor. This Guaranty Agreement may not be revoked by Guarantor
and shall continue to be effective with respect to debt under the Liabilities
arising or created after any attempted revocation by Guarantor and shall
remain in full force and effect until the Liabilities are paid in full and
the Commitments are terminated, notwithstanding that from time to time prior
thereto no Liabilities may be outstanding. Borrower and the Lenders may
modify, alter, rearrange, extend for any period and/or renew from time to
time, the Liabilities, and the Lenders may waive any Default or Events of
Default without notice to the Guarantor and in such event Guarantor will
remain fully bound hereunder on the Liabilities. This Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, if at
any time any payment of the Liabilities is rescinded or must otherwise be
returned by any of the Lenders upon the insolvency, bankruptcy or
reorganization of Borrower or otherwise, all as though such payment had not
been made. This Guaranty Agreement may be enforced by the Agent and any
subsequent holder of any of the Liabilities and shall not be discharged by
the assignment or negotiation of all or part of the Liabilities. Guarantor
hereby expressly waives presentment, demand, notice of non-payment, protest
and notice of protest and dishonor, notice of Default or Event of Default,
notice of intent to accelerate the maturity and notice of acceleration of the
maturity and any other notice in connection with the Liabilities, and also
notice of acceptance of this Guaranty Agreement, acceptance on the part of
the Lenders being conclusively presumed by the Lenders' request for this
Guaranty Agreement and delivery of the same to the Agent.
Section 2.3 Agent's Rights. Guarantor authorizes the Agent, without
notice or demand and without affecting Guarantor's liability hereunder, to
take and hold security for the payment of this Guaranty Agreement and/or the
Liabilities, and exchange, enforce, waive and release any such security; and
to apply such security and direct the order or manner of sale thereof as the
Agent in its discretion may determine; and to obtain a guaranty of the
Liabilities from any one or more Persons and at any time or times to enforce,
waive, rearrange, modify, limit or release any of such other Persons from
their obligations under such guaranties.
Section 2.4 Guarantor's Waivers.
(a) General. Guarantor waives any right to require any of
the Lenders to (i) proceed against Borrower or any other person liable
on the Liabilities, (ii) enforce any of their rights against any other
guarantor of the Liabilities (iii) proceed or enforce any of their
rights against or exhaust any security given to secure the Liabilities
(iv) have Borrower joined with Guarantor in any suit arising out of
this Guaranty Agreement and/or the Liabilities, or (v) pursue any other
remedy in the Lenders' powers whatsoever. The Lenders shall not be
required to mitigate damages or take any action to reduce, collect or
enforce the Liabilities. Guarantor waives any defense arising by
reason of any disability, lack of corporate authority or power, or
other defense of Borrower or any other guarantor of the Liabilities,
and shall remain liable hereon regardless of whether Borrower or any
other guarantor be found not liable thereon for any reason. Whether
and when to exercise any of the remedies of the Lenders under any of
the Loan Documents shall be in the sole and absolute discretion of the
Agent, and no delay by the Agent in enforcing any remedy, including
delay in conducting a foreclosure sale, shall be a defense to the
Guarantor's liability under this Guaranty Agreement.
(b) Subrogation. Until the Liabilities have been paid in
full, the Guarantor waives all rights of subrogation or reimbursement
against the Borrower, whether arising by contract or operation of law
(including, without limitation, any such right arising under any
federal or state bankruptcy or insolvency laws) and waives any right to
enforce any remedy which the Lenders now have or may hereafter have
against the Borrower, and waives any benefit or any right to
participate in any security now or hereafter held by the Agent or any
Lender.
Section 2.5 Maturity of Liabilities; Payment. Guarantor agrees that if
the maturity of any of the Liabilities is accelerated by bankruptcy or
otherwise, such maturity shall also be deemed accelerated for the purpose of
this Guaranty Agreement without demand or notice to Guarantor. Guarantor
will, forthwith upon notice from the Agent, pay to the Agent the amount due
and unpaid by Borrower and guaranteed hereby. The failure of the Agent to
give this notice shall not in any way release Guarantor hereunder.
Section 2.6 Agent's Expenses. If Guarantor fails to pay the
Liabilities after notice from the Agent of Borrower's failure to pay any
Liabilities at maturity, and if the Agent obtains the services of an attorney
for collection of amounts owing by Guarantor hereunder, or obtains advice of
counsel in respect of any of their rights under this Guaranty Agreement, or
if suit is filed to enforce this Guaranty Agreement, or if proceedings are
had in any bankruptcy, probate, receivership or other judicial proceedings
for the establishment or collection of any amount owing by Guarantor
hereunder, or if any amount owing by Guarantor hereunder is collected through
such proceedings, Guarantor agrees to pay to the Agent the Agent's reasonable
attorneys' fees.
Section 2.7 Liability. It is expressly agreed that the liability of
the Guarantor for the payment of the Liabilities guaranteed hereby shall be
primary and not secondary.
Section 2.8 Events and Circumstances Not Reducing or Discharging
Guarantor's Obligations. Guarantor hereby consents and agrees to each of the
following to the fullest extent permitted by law, and agrees that Guarantor's
obligations under this Guaranty Agreement shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives
any rights (including without limitation rights to notice) which Guarantor
might otherwise have as a result of or in connection with any of the
following:
(a) Modifications, etc. Any renewal, extension,
modification, increase, decrease, alteration or rearrangement of
all or any part of the Liabilities, or of the Notes, or the
Credit Agreement or any instrument executed in connection
therewith, or any contract or understanding between Borrower and
any of the Lenders, or any other Person, pertaining to the
Liabilities;
(b) Adjustment, etc. Any adjustment, indulgence,
forbearance or compromise that might be granted or given by any
of the Lenders to Borrower or Guarantor or any Person liable on
the Liabilities;
(c) Condition of Borrower or Guarantor. The insolvency,
bankruptcy arrangement, adjustment, composition, liquidation,
disability, dissolution, death or lack of power of Borrower or
Guarantor or any other Person at any time liable for the payment
of all or part of the Liabilities; or any dissolution of Borrower
or Guarantor, or any sale, lease or transfer of any or all of the
assets of Borrower or Guarantor, or any changes in the
shareholders, partners, or members of Borrower or Guarantor; or
any reorganization of Borrower or Guarantor;
(d) Invalidity of Liabilities. The invalidity,
illegality or unenforceability of all or any part of the
Liabilities, or any document or agreement executed in connection
with the Liabilities, for any reason whatsoever, including
without limitation the fact that the Liabilities, or any part
thereof, exceed the amount permitted by law, the act of creating
the Liabilities or any part thereof is ultra xxxxx, the officers
or representatives executing the documents or otherwise creating
the Liabilities acted in excess of their authority, the
Liabilities violate applicable usury laws, the Borrower has valid
defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Liabilities wholly or partially
uncollectible from Borrower, the creation, performance or
repayment of the Liabilities (or the execution, delivery and
performance of any document or instrument representing part of
the Liabilities or executed in connection with the Liabilities,
or given to secure the repayment of the Liabilities) is illegal,
uncollectible, legally impossible or unenforceable, or the Credit
Agreement or other documents or instruments pertaining to the
Liabilities have been forged or otherwise are irregular or not
genuine or authentic;
(e) Release of Obligors. Any full or partial release of
the liability of Borrower on the Liabilities or any part thereof,
of any co-guarantors, or any other Person now or hereafter
liable, whether directly or indirectly, jointly, severally, or
jointly and severally, to pay, perform, guarantee or assure the
payment of the Liabilities or any part thereof, it being
recognized, acknowledged and agreed by Guarantor that Guarantor
may be required to pay the Liabilities in full without assistance
or support of any other Person, and Guarantor has not been
induced to enter into this Guaranty Agreement on the basis of a
contemplation, belief, understanding or agreement that other
parties other than the Borrower will be liable to perform the
Liabilities, or the Lenders will look to other parties to perform
the Liabilities.
(f) Other Security. The taking or accepting of any other
security, collateral or guaranty, or other assurance of payment,
for all or any part of the Liabilities;
(g) Release of Collateral, etc. Any release, surrender,
exchange, subordination, deterioration, waste, loss or impairment
(including without limitation negligent, willful, unreasonable or
unjustifiable impairment) of any collateral, property or
security, at any time existing in connection with, or assuring or
securing payment of, all or any part of the Liabilities;
(h) Care and Diligence. The failure of the Lenders or
any other Person to exercise diligence or reasonable care in the
preservation, protection, enforcement, sale or other handling or
treatment of all or any part of such collateral, property or
security;
(i) Status of Liens. The fact that any collateral,
security, security interest or lien contemplated or intended to
be given, created or granted as security for the repayment of the
Liabilities shall not be properly perfected or created, or shall
prove to be unenforceable or subordinate to any other security
interest or lien, it being recognized and agreed by Guarantor
that Guarantor is not entering into this Guaranty Agreement in
reliance on, or in contemplation of the benefits of, the
validity, enforceability, collectibility or value of any of the
collateral for the Liabilities;
(j) Payments Rescinded. Any payment by Borrower to the
Lenders is held to constitute a preference under the bankruptcy
laws, or for any reason the Lenders are required to refund such
payment or pay such amount to Borrower or someone else; or
(k) Other Actions Taken or Omitted. Any other action
taken or omitted to be taken with respect to the Credit
Agreement, the Liabilities, or the security and collateral
therefor, whether or not such action or omission prejudices
Guarantor or increases the likelihood that Guarantor will be
required to pay the Liabilities pursuant to the terms hereof; it
being the unambiguous and unequivocal intention of Guarantor that
Guarantor shall be obligated to pay the Liabilities when due,
notwithstanding any occurrence, circumstance, event, action, or
omission whatsoever, whether contemplated or uncontemplated, and
whether or not otherwise or particularly described herein, except
for the full and final payment and satisfaction of the
Liabilities.
ARTICLE 3
Representations and Warranties
Section 3.1 By Guarantor. In order to induce the Lenders to accept
this Guaranty Agreement, Guarantor represents and warrants to the Lenders
(which representations and warranties will survive the creation of the
Liabilities and any extension of credit thereunder) that:
(a) Benefit to Guarantor. Guarantor's guaranty pursuant
to this Guaranty Agreement reasonably may be expected to benefit,
directly or indirectly, Guarantor.
(b) Corporate Existence. Guarantor is a corporation duly
organized, legally existing and in good standing under the laws
of the State of Delaware and is duly qualified all jurisdictions
wherein the failure to be so organized, existing and in good
standing would have a Material Adverse Effect.
(c) Corporate Power and Authorization. Guarantor is duly
authorized and empowered to execute, deliver and perform this
Guaranty Agreement and all corporate action on Guarantor's part
requisite for the due execution, delivery and performance of this
Guaranty Agreement has been duly and effectively taken.
(d) Binding Obligations. This Guaranty Agreement
constitutes valid and binding obligations of Guarantor,
enforceable in accordance with its terms (except that enforcement
may be subject to any applicable bankruptcy, insolvency or
similar laws generally affecting the enforcement of creditors'
rights).
(e) No Legal Bar or Resultant Lien. This Guaranty
Agreement will not violate any provisions of Guarantor's articles
or certificate of incorporation, bylaws, or any contract,
agreement, law, regulation, order, injunction, judgment, decree
or writ to which Guarantor is subject, or result in the creation
or imposition of any Lien upon any Properties of Guarantor.
(f) No Consent. Guarantor's execution, delivery and
performance of this Guaranty Agreement does not require the
consent or approval of any other Person, including without
limitation any regulatory authority or governmental body of the
United States or any state thereof or any political subdivision
of the United States or any state thereof.
(g) Solvency. The Guarantor hereby represents that (i)
it is not insolvent as of the date hereof and will not be
rendered insolvent as a result of this Guaranty Agreement, (ii)
it is not engaged in business or a transaction, or about to
engage in a business or a transaction, for which any property or
assets remaining with such Guarantor is unreasonably small
capital, and (iii) it does not intend to incur, or believe it
will incur, debts that will be beyond its ability to pay as such
debts mature.
(h) Financial Condition. The audited consolidated balance
sheet of the Guarantor and its Consolidated Subsidiaries as at
December 31,1996 and the related consolidated statement of income,
stockholders' equity and cash flow of the Guarantor and its
Consolidated Subsidiaries for the fiscal year ended on said date,
with the opinion thereon of Deloitte & Touche LLP heretofore
furnished to each of the Lenders and the unaudited consolidated
balance sheet of the Guarantor and its Consolidated Subsidiaries
as at September 30, 1997 and their related consolidated statements
of income, stockholders' equity and cash flow of the Guarantor and
its Consolidated Subsidiaries for the ninth month period ended on
such date heretofore furnished to the Agent, are complete and
correct and fairly present the consolidated financial condition of
the Guarantor and its Consolidated Subsidiaries as at said dates
and the results of its operations for the fiscal year and the ninth
month period on said dates, all in accordance with GAAP, as applied
on a consistent basis(subject, in the case of the interim financial
statements, to normal year-end adjustments). Neither the Guarantor
nor any of its Subsidiaries has on the Closing Date any material
Debt, material contingent liabilities, material liabilities for
taxes, material unusual forward or long-term commitments or
material unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in
the Financial Statements or in Schedule 7.02 of the Credit Agreement.
Since December 31, 1996, there has been no change or event having a
Material Adverse Effect. Since the date of the Financial Statements,
neither the business nor the Properties of the Guarantor or any of
its material Subsidiaries have been materially and adversely
affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance,
embargo, requisition or taking of Property or cancellation of
contracts, permits or concessions by any Governmental Authority,
riot, activities of armed forces or acts of God or of any public
enemy.
(i) Litigation. Except as disclosed to the Lenders in Schedule
7.03 of the Credit Agreement, at the Closing Date there is no
material litigation, legal, administrative or arbitral proceeding,
investigation or other action of any nature pending or, to the
knowledge of the Guarantor threatened against or affecting the
Guarantor or any of its Subsidiaries which involves the reasonable
possibility of any judgment or liability against the Guarantor or
any of its Subsidiaries not fully covered by insurance (except for
normal deductibles).
(j) No Breach. Neither the execution and delivery of this
Guaranty Agreement or any other Loan Documents, nor compliance with
the terms and provisions hereof or thereof will conflict with or
result in a breach of, or require any consent which has not been
obtained as of the Closing Date under, the respective charter or
by-laws of the Guarantor or any of its Subsidiaries, or any
Governmental Requirement or any agreement or instrument to which
the Guarantor or any of its Subsidiaries is a party or by which it
is bound or to which it or its Properties are subject, or
constitute a default under any such agreement or instrument, or
result in the creation or imposition of any Lien upon any of the
revenues or assets of the Guarantor or any of its Subsidiaries
pursuant to the terms of any such agreement or instrument other than
the Liens created by the Loan Documents.
(k) ERISA.
(1) No act, omission or transaction has occurred with
respect to any Plan which would have a Material Adverse Effect.
(2) No Plan (other than a defined contribution plan) or
any trust created under any such Plan has been terminated since
September 2, 1974. No liability to the PBGC (other than for the
payment of current premiums which are not past due) by the
Guarantor, any of its Subsidiaries or any ERISA Affiliate has
been or is expected by the Guarantor, any of its Subsidiaries or
any ERISA Affiliate to be incurred with respect to any Plan. No
ERISA Event with respect to any Plan has occurred that would have
a Material Adverse Effect.
(3) Full payment when due has been made of all amounts
which the Guarantor, any of its Subsidiaries or any ERISA
Affiliate is required under the terms of each Plan or applicable
law to have paid as contributions to such Plan, and no
accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists
with respect to any Plan.
(4) The actuarial present value of the benefit
liabilities under each Plan which is subject to Title IV of ERISA
does not, as of the end of the Guarantor's most recently ended
fiscal year, exceed the current value of the assets (computed on
a plan termination basis in accordance with Title IV of ERISA) of
such Plan allocable to such benefit liabilities. The term
"actuarial present value of the benefit liabilities" shall have
the meaning specified in section 4041 of ERISA.
(5) None of the Guarantor, any of its Subsidiaries or any
ERISA Affiliate sponsors, maintains, or contributes to an
employee welfare benefit plan, as defined in section 3(1) of
ERISA, including, without limitation, any such plan maintained to
provide benefits to former employees of such entities, that may
not be terminated by the Guarantor, a Subsidiary or any ERISA
Affiliate in its sole discretion at any time without any material
liability.
(6) None of the Guarantor, any of its Subsidiaries or any
ERISA Affiliate sponsors, maintains or contributes to, or has at
any time in the preceding six calendar years, sponsored,
maintained or contributed to, any Multiemployer Plan.
(7) None of the Guarantor, any of its Subsidiaries or any
ERISA Affiliate is required to provide security under section
401(a)(29) of the Code due to a Plan amendment that results in an
increase in current liability for the Plan.
(l) Taxes. Except as set out in Schedule 7.09 of the Credit
Agreement, each of the Guarantor and its Subsidiaries has filed all
United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all
material taxes due pursuant to such returns or pursuant to any
assessment received by the Guarantor or any of its Subsidiaries. The
charges, accruals and reserves on the books of the Guarantor and its
Subsidiaries in respect of taxes and other governmental charges are, in
the opinion of the Guarantor, adequate. No material tax lien (other
than any Excepted Lien) has been filed and, to the knowledge of the
Guarantor, no material claim is being asserted with respect to any such
tax, fee or other charge.
(m) Title to Capital Stock of Borrower. The Guarantor has good
and unencumbered title to all of the capital stock of the Borrower.
(n) Investment Company Act. Neither the Guarantor nor any of
its Subsidiaries is an "investment company" or a company "controlled"
by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
(o) Public Utility Holding Company Act. Neither the Guarantor
nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," or a
"public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
(p) Subsidiaries. Except as set forth on Schedule 1 hereto,
the Guarantor has no Subsidiaries other than the Borrower.
(q) Compliance with the Law. Neither the Guarantor nor any of
its Subsidiaries has violated any Governmental Requirement or failed to
obtain any license, permit, franchise or other governmental
authorization necessary for the ownership of any of its Properties or
the conduct of its business, which violation or failure would have (in
the event such violation or failure were asserted by any Person through
appropriate action) a Material Adverse Effect.
Section 3.2 No Representation by LendersSection. Neither the Lenders
nor any other Person has made any representation, warranty or statement to
the Guarantor in order to induce the Guarantor to execute this Guaranty
Agreement.
ARTICLE 4
Subordination of Indebtedness
ARTICLE 4 Subordination of Indebtedness
Section 4.1 Subordination of All Guarantor Claims. As used herein, the
term "Guarantor Claims" shall mean all debts and liabilities of Borrower to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligation of Borrower thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the person or
persons in whose favor such debts or liabilities may, at their inception,
have been, or may hereafter be created, or the manner in which they have been
or may hereafter be acquired by Guarantor. The Guarantor Claims shall
include without limitation all rights and claims of Guarantor against
Borrower arising as a result of subrogation or otherwise as a result of
Guarantor's payment of all or a portion of the Liabilities. It is understood
that the Guarantor Claims are expressly made subordinate and junior in right
of payment to the prior payment and performance of the Liabilities and
accordingly no payment or prepayment of any principal, interest or other
amount on account of the Guarantor Claims shall be made, if at the time of
such payment or prepayment or immediately after giving affect thereto (a)
there shall exist a default in the payment or prepayment with respect to any
of the Liabilities or (b) there shall have occurred an Event of Default and
such Event of Default shall not have been cured or waived; and further, until
the Liabilities shall be paid and satisfied in full and no Commitments remain
outstanding under the Credit Agreement, no payment or prepayment of any
principal, interest or other amount on account of that certain indebtedness
the principal amount of $64,296,029.00 owing by the Borrower to Guarantor
shall be received or collected, directly or indirectly except as permitted by
Section 9.20 of the Credit Agreement.
Section 4.2 Claims in Bankruptcy. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving Borrower, as debtor, the Lenders shall have the right
to prove their claim in any proceeding, so as to establish its rights
hereunder and receive directly from the receiver, trustee or other court
custodian, dividends and payments which would otherwise be payable upon
Guarantor Claims. Guarantor hereby assigns such dividends and payments to
the Lenders. Should the Agent or any Lender receive, for application upon
the Liabilities, any such dividend or payment which is otherwise payable to
Guarantor, and which, as between Borrower and Guarantor, shall constitute a
credit upon the Guarantor Claims, then upon payment in full of the
Liabilities, Guarantor shall become subrogated to the rights of the Lenders
to the extent that such payments to the Lenders on the Guarantor Claims have
contributed toward the liquidation of the Liabilities, and such subrogation
shall be with respect to that proportion of the Liabilities which would have
been unpaid if the Agent or a Lender had not received dividends or payments
upon the Guarantor Claims.
Section 4.3 Payments Held in Trust. In the event that notwithstanding
Sections 4.1 and 4.2 above, Guarantor should receive any funds, payments,
claims or distributions which is prohibited by such Sections, Guarantor
agrees to hold in trust for the Lenders an amount equal to the amount of all
funds, payments, claims or distributions so received, and agrees that it
shall have absolutely no dominion over the amount of such funds, payments,
claims or distributions except to pay them promptly to the Agent, and
Guarantor covenants promptly to pay the same to the Agent.
Section 4.4 Liens Subordinate. Guarantor agrees that any liens,
security interests, judgment liens, charges or other encumbrances upon
Borrower's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any liens, security interests, judgment
liens, charges or other encumbrances upon Borrower's assets securing payment
of the Liabilities, regardless of whether such encumbrances in favor of
Guarantor, the Agent or the Lenders presently exist or are hereafter created
or attach. Without the prior written consent of the Lenders, Guarantor shall
not (a) exercise or enforce any creditor's right it may have against the
Borrower, or (b) foreclose, repossess, sequester or otherwise take steps or
institute any action or proceeding (judicial or otherwise, including without
limitation the commencement of or joinder in any liquidation, bankruptcy,
rearrangement, debtor's relief or insolvency proceeding) to enforce any lien,
mortgages, deeds of trust, security interest, collateral rights, judgments or
other encumbrances on assets of Borrower held by Guarantor.
Section 4.5 Notation of Records. All promissory notes, accounts
receivable ledgers or other evidence of the Guarantor Claims accepted by or
held by Guarantor shall contain a specific written notice thereon that the
indebtedness evidenced thereby is subordinated under the terms of this
Guaranty Agreement.
ARTICLE 5
Certain Additional Covenants
Section 5.1 Capital Stock of Borrower. The Guarantor will not permit
any of the capital stock of the Borrower to be owned or controlled (other
than through stock ownership of the Guarantor) by any Person other than the
Guarantor.
Section 5.2 LiensSection. The Guarantor will not create, incur, assume
or permit to exist any Lien on any of the capital stock of the Borrower other
than Excepted Liens.
ARTICLE 6
Miscellaneous
Section 6.1 Successors and Assigns. This Guaranty Agreement is and
shall be in every particular available to the successors and assigns of the
Lenders and is and shall always be fully binding upon the legal
representatives, successors and assigns of Guarantor, notwithstanding that
some or all of the monies, the repayment of which this Guaranty Agreement
applies, may be actually advanced after any bankruptcy, receivership,
reorganization or other event affecting Guarantor.
Section 6.2 Notices. Any notice or demand to Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively
be deemed and considered to have been given and received in accordance with
Section 12.02 of the Credit Agreement, addressed to Guarantor at the address
on the signature page hereof or at such other address provided to the Agent
in writing.
Section 6.3 Business and Financial Information. The Guarantor will
promptly furnish to the Agent and the Lenders from time to time upon request
such information regarding the business and affairs and financial condition
of the Guarantor and its subsidiaries as the Agent and the Lenders may
reasonably request.
Section 6.4 Construction. This Guaranty Agreement is a contract made
under and shall be construed in accordance with and governed by the laws of
the State of Texas.
Section 6.5 Invalidity. In the event that any one or more of the
provisions contained in this Guaranty Agreement shall, for any reason, be
held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Guaranty Agreement.
Section 6.6 ENTIRE AGREEMENT. THIS WRITTEN GUARANTY AGREEMENT EMBODIES
THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE LENDERS AND THE GUARANTOR
AND SUPERSEDES ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF. THIS WRITTEN GUARANTY
AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
WITNESS THE EXECUTION HEREOF, as of this the 17th day of December, 1997.
XXXXXX CORPORATION
By:____________________________
Name:
Title:
1500 Xxxxxx Building
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention:__________________
