GUARANTY
EXHIBIT
99.6
This
GUARANTY
(this
“Guaranty”)
is
made as of this 19th day of September, 2008, by Southern Texas Oil Company,
a
Texas corporation, STO Operating Company, a Texas corporation formerly known
as
Leexus Operating Company, STO Properties LLC, a Texas limited liability company,
and STO Drilling Company, a Texas corporation, (each such entity, together
with
each other entity that becomes a party to this Guaranty, is referred to
individually as a “Guarantor”
and
collectively as the “Guarantors”)
in
favor of Viking Asset Management, LLC, a California limited liability company
(“Collateral
Agent”),
in
its capacity as collateral agent for the benefit of the entities identified
on
the Schedule of Buyers attached to the Purchase Agreement defined below
(together
with their successors and assigns, the “Buyers”).
A. WHEREAS,
South Texas Oil Company, a Nevada corporation (“Company”),
and
Buyers have entered into that certain Securities Purchase Agreement dated
as of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the "Purchase
Agreement"),
pursuant to which, among other things, the Company is issuing to Buyers the
Bridge Notes (as defined in the Purchase Agreement) (the Bridge Notes are
referred to herein collectively as the “Notes”);
B. WHEREAS,
pursuant to a Security Agreement of even date herewith (as same may be amended,
restated, modified or supplemented and in effect from time to time, the
“Security
Agreement”)
among
the Company, the Guarantors and Collateral Agent, the Guarantors have granted
the Collateral Agent, for the benefit of the Buyers, a first priority security
interest in, lien upon and pledge of each of their rights in the Collateral
(as
defined in the Security Agreement).
C. WHEREAS,
the Guarantors are direct or indirect subsidiaries or affiliates of Company
and,
as such, will derive substantial benefit and advantage from the funds received
from the sale of the Notes, and it will be to each Guarantor’s direct interest
and economic benefit to assist the Company in procuring such funds.
NOW,
THEREFORE,
for and
in consideration of the premises and in order to induce Buyers to purchase
the
Notes, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Guarantor hereby agrees
as
follows:
1. Definitions:
Capitalized
terms used herein without definition and defined in the Purchase Agreement
are
used herein as defined therein. In addition, as used herein:
“Bankruptcy
Code” shall mean the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et
seq.), as amended and in effect from time to time thereunder.
“Event
of
Default” shall have the meaning set forth in the Notes.
“Obligations”
shall
have the meaning set forth in the Security Agreement.
2. Guaranty
of Payment.
(a) Each
Guarantor, jointly and severally, hereby unconditionally and irrevocably
guarantees the full and prompt payment and performance to Collateral Agent,
for
the
benefit of Buyers, when due, upon demand, at maturity or by reason of
acceleration or otherwise and at all times thereafter, of any and all of the
Obligations.
(b) Each
Guarantor acknowledges that valuable consideration supports this Guaranty,
including, without limitation, the consideration set forth in the recitals
above, as well as any commitment to lend, extension of credit or other financial
accommodation, whether heretofore or hereafter made by Collateral Agent to
the
Company; any extension, renewal or replacement of any of the Obligations; any
forbearance with respect to any of the Obligations or otherwise; any
cancellation of an existing guaranty; any purchase of any of the Company’s
assets by the Collateral Agent; or any other valuable
consideration.
(c) Each
Guarantor agrees that all payments under this Guaranty shall be made in United
States currency and in the same manner as provided for the
Obligations.
(d) Notwithstanding
any provision of this Guaranty to the contrary, it is intended that this
Guaranty, and any interests, liens and security interests granted by Guarantors
as security for this Guaranty, not constitute a “Fraudulent Conveyance” (as
defined below) in the event that this Guaranty or such interest is subject
to
the Bankruptcy Code or any applicable fraudulent conveyance or fraudulent
transfer law or similar law of any state. Consequently, Guarantors and
Collateral Agent agree that if this Guaranty, or any such interests, liens
or
security interests securing this Guaranty, would, but for the application of
this sentence, constitute a Fraudulent Conveyance, this Guaranty and each such
lien and security interest shall be valid and enforceable only to the maximum
extent that would not cause this Guaranty or such interest, lien or security
interest to constitute a Fraudulent Conveyance, and this Guaranty shall
automatically be deemed to have been amended accordingly at all relevant times.
For purposes hereof, “Fraudulent
Conveyance”
means
a
fraudulent conveyance under Section 548 of the Bankruptcy Code or a fraudulent
conveyance or fraudulent transfer under the provisions of any applicable
fraudulent conveyance or fraudulent transfer law or similar law of any state,
as
in effect from time to time.
3. Costs
and Expenses.
Each
Guarantor, jointly and severally, agrees to pay on demand, all costs and
expenses of every kind incurred by the Collateral Agent: (a) in enforcing this
Guaranty, (b) in collecting any of the Obligations from the Company or any
Guarantor, (c) in realizing upon or protecting any collateral for this Guaranty
or for payment of any of the Obligations, and (d) in connection with any
amendment of, modification to, waiver or forbearance granted under, or
enforcement or administration of any Transaction Document or for any other
purpose in connection with any Transaction Document to the extent Company or
any
Guarantor has an obligation to reimburse the Collateral Agent for same pursuant
to the terms thereof. The term “costs
and expenses”
as
used
in the preceding sentence shall include, without limitation, reasonable
attorneys’ fees incurred by any Collateral Agent in retaining counsel for
advice, suit, appeal, any insolvency or other proceedings under the Bankruptcy
Code or otherwise, or for any purpose specified in the preceding
sentence.
4. Nature
of Guaranty: Continuing, Absolute and Unconditional.
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(a) This
Guaranty is and is intended to be a continuing guaranty of payment of the
Obligations, and not of collectibility, and is and is intended to be independent
of and in addition to any other guaranty, indorsement, collateral or other
agreement held by Collateral Agent therefor or with respect thereto, whether
or
not furnished by a Guarantor. Collateral Agent shall not be required to
prosecute collection, enforcement or other remedies against Company, any
Guarantor or guarantor of the Obligations or any other person or entity, or
to
enforce or resort to any of the Collateral (as defined in the Security
Agreement) or other rights or remedies pertaining thereto, before calling on
a
Guarantor for payment. The obligations of each Guarantor to repay the
Obligations hereunder shall be unconditional. Each Guarantor shall have no
right
of subrogation with respect to any payments made by any Guarantor hereunder
until the termination of this Guaranty in accordance with Section 8 below,
and
hereby waives any benefit of, and any right to participate in, any security
or
collateral given to Collateral Agent to secure payment of the Obligations,
and
each Guarantor agrees that it will not take any action to enforce any
obligations of the Company to any Guarantor prior to the Obligations being
finally and irrevocably paid in full in cash, provided
that, in
the event of the bankruptcy or insolvency of the Company, Collateral Agent
shall
be entitled notwithstanding the foregoing, to file in the name of any Guarantor
or in its own name a claim for any and all indebtedness owing to a Guarantor
by
the Company (exclusive of this Guaranty), vote such claim and to apply the
proceeds of any such claim to the Obligations.
(b) For
the
further security of Collateral Agent and without in any way diminishing the
liability of the Guarantors, following the occurrence of an Event of Default,
all debts and liabilities, present or future of the Company to the Guarantors
and all monies received from the Company or for its account by the Guarantors
in
respect thereof shall be received in trust for Collateral Agent and forthwith
upon receipt shall be paid over to Collateral Agent until all of the Obligations
have been paid in full in cash. This assignment and postponement is independent
of and severable from this Guaranty and shall remain in full effect whether
or
not any Guarantor is liable for any amount under this Guaranty.
(c) This
Guaranty is absolute and unconditional and shall not be changed or affected
by
any representation, oral agreement, act or thing whatsoever, except as herein
provided. This Guaranty is intended by the Guarantors to be the final, complete
and exclusive expression of the guaranty agreement between the Guarantors and
Collateral Agent. No modification or amendment of any provision of this Guaranty
shall be effective against any party hereto unless in writing and signed by
a
duly authorized officer of such party.
(d) Each
Guarantor hereby releases the Company from all, and agrees not to assert or
enforce (whether by or in a legal or equitable proceeding or otherwise) any
“claims” (as defined in Section 101(5) of the Bankruptcy Code), whether arising
under any law, ordinance, rule, regulation, order, policy or other requirement
of any domestic or foreign Governmental Authority or any instrumentality or
agency thereof, having jurisdiction over the conduct of its business or assets
or otherwise, to which the Guarantors are or would at any time be entitled
by
virtue of its obligations hereunder, any payment made pursuant hereto or the
exercise by Collateral Agent of its rights with respect to the Collateral,
including any such claims to which such Guarantors may be entitled as a result
of any right of subrogation, exoneration or reimbursement.
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5. Certain
Rights and Obligations.
(a) Each
Guarantor acknowledges and agrees that Collateral Agent (or, in the case of
clause (i) below, Collateral Agent or any Buyer, as applicable) may, without
notice, demand or any reservation of rights against such Guarantor and without
affecting such Guarantor’s obligations hereunder, from time to
time:
(i) renew,
extend, increase, accelerate or otherwise change the time for payment of, the
terms of or the interest on the Obligations or any part thereof or grant other
indulgences to the Company or others;
(ii) accept
from any person or entity and hold collateral for the payment of the Obligations
or any part thereof, and modify, exchange, enforce or refrain from enforcing,
or
release, compromise, settle, waive, subordinate or surrender, with or without
consideration, such collateral or any part thereof;
(iii) accept
and hold any indorsement or guaranty of payment of the Obligations or any part
thereof, and discharge, release or substitute any such obligation of any such
indorser or guarantor, or discharge, release or compromise any Guarantor, or
any
other person or entity who has given any security interest in any collateral
as
security for the payment of the Obligations or any part thereof, or any other
person or entity in any way obligated to pay the Obligations or any part
thereof, and enforce or refrain from enforcing, or compromise or modify, the
terms of any obligation of any such indorser, guarantor, or person or
entity;
(iv) dispose
of any and all collateral securing the Obligations in its sole discretion,
as it
may deem appropriate, and direct the order or manner of such disposition and
the
enforcement of any and all endorsements and guaranties relating to the
Obligations or any part thereof as it in its sole discretion may
determine;
(v) determine
the manner, amount and time of application of payments and credits, if any,
to
be made on all or any part of any component or components of the Obligations
(whether principal, interest, fees, costs, and expenses, or otherwise),
including, without limitation, the application of payments received from any
source to the payment of indebtedness other than the Obligations even though
Collateral Agent might lawfully have elected to apply such payments to the
Obligations to amounts which are not covered by this Guaranty; and
(vi) take
advantage or refrain from taking advantage of any security or accept or make
or
refrain from accepting or making any compositions or arrangements when and
in
such manner as it, in its sole discretion, may deem appropriate;
and
generally do or refrain from doing any act or thing which might otherwise,
at
law or in equity, release the liability of such Guarantor as a guarantor or
surety in whole or in part, and in no case shall Collateral Agent be
responsible, nor shall any Guarantor be released either in whole or in part
for
any act or omission in connection with the sale of any security at less than
its
face or fair market value by Collateral Agent.
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(b) Following
the occurrence of an Event of Default, and upon demand by Collateral Agent,
each
Guarantor, jointly and severally, hereby agrees to pay the Obligations to the
extent hereinafter provided:
(i) without
deduction by reason of any setoff, defense (other than payment) or counterclaim
of the Company or any other Guarantor;
(ii) without
requiring presentment, protest or notice of nonpayment or notice of default
to
any Guarantor, to the Company or to any other person or entity;
(iii) without
demand for payment or proof of such demand or filing of claims with a court
in
the event of receivership, bankruptcy or reorganization of the Company or any
other Guarantor;
(iv) without
requiring Collateral Agent to resort first to the Company (this being a guaranty
of payment and not of collection), to any other Guarantor, or to any other
guaranty or any collateral which Collateral Agent may hold;
(v) without
requiring notice of acceptance hereof or assent hereto by Collateral Agent;
and
(vi) without
requiring notice that any of the Obligations has been incurred, extended or
continued or of the reliance by Collateral Agent upon this
Guaranty;
all
of
which each Guarantor hereby waives.
(c) Each
Guarantor’s obligation hereunder shall not be affected by any of the following,
all of which such Guarantor hereby waives:
(i) any
failure to perfect or continue the perfection of any security interest in or
other lien on any collateral securing payment of any of the Obligations or
any
Guarantor’s obligation hereunder;
(ii) the
invalidity, unenforceability, propriety of manner of enforcement of, or loss
or
change in priority of any document or any such security interest or other lien
or guaranty of the Obligations;
(iii) any
failure to protect, preserve or insure any such collateral;
(iv) failure
of a Guarantor to receive notice of any intended disposition of such
collateral;
(v) any
defense arising by reason of the cessation from any cause whatsoever of
liability of the Company including, without limitation, any failure, negligence
or omission by Collateral Agent in enforcing its claims against the
Company;
(vi) any
release, settlement or compromise of any obligation of the Company, any other
Guarantor or any other guarantor of the Obligations;
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(vii) the
invalidity or unenforceability of any of the Obligations;
(viii) any
change of ownership of the Company, any other Guarantor or any other guarantor
of the Obligations or the insolvency, bankruptcy or any other change in the
legal status of the Company, any other Guarantor or any other guarantor of
the
Obligations;
(ix) any
change in, or the imposition of, any law, decree, regulation or other
governmental act which does or might impair, delay or in any way affect the
validity, enforceability or the payment when due of the
Obligations;
(x) the
existence of any claim, setoff or other rights which the Guarantor, Company,
any
other Guarantor or guarantor of the Obligations or any other person or entity
may have at any time against Collateral Agent or the Company in connection
herewith or any unrelated transaction;
(xi) Collateral
Agent’s election, in any case instituted under chapter 11 of the Bankruptcy
Code, of the application of section 1111(b)(2) of the Bankruptcy
Code;
(xii) any
use
of cash collateral, or grant of a security interest by the Company, as debtor
in
possession, under sections 363 or 364 of the Bankruptcy Code;
(xiii) the
disallowance of all or any portion of any of Collateral Agent’s claims for
repayment of the Obligations under sections 502 or 506 of the Bankruptcy Code;
or
(xiv) any
other
fact or circumstance which might otherwise constitute grounds at law or equity
for the discharge or release of a Guarantor from its obligations hereunder,
all
whether or not such Guarantor shall have had notice or knowledge of any act
or
omission referred to in the foregoing clauses (i) through (xiii) of this
subsection 5(c).
6. Representations
and Warranties.
Each
Guarantor further represents and warrants to Collateral Agent that: (a) such
Guarantor is a corporation or other entity duly organized, validly existing
and
in good standing under the laws of the jurisdiction of its incorporation or
formation, as applicable, and has full power, authority and legal right to
own
its property and assets and to transact the business in which it is engaged;
(b)
such Guarantor has full power, authority and legal right to execute and deliver,
and to perform its obligations under, this Guaranty, and has taken all necessary
action to authorize the guarantee hereunder on the terms and conditions of
this
Guaranty and to authorize the execution, delivery and performance of this
Guaranty; (c) this Guaranty has been duly executed and delivered by such
Guarantor and constitutes a legal, valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with its terms,
except to the extent that such enforceability is subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and moratorium
laws and other laws of general application affecting enforcement of creditors’
rights generally, or the availability of equitable remedies, all of which are
subject to the discretion of the court before which an action may be brought;
and (d) none of the execution, delivery and performance by each Guarantor of
this Guaranty require any action by or in respect of, or filing with, any
Governmental Authority or official thereof, nor violate, conflict with or cause
a breach or a default under any provision of applicable law or regulation
or
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of
the
organizational documents of any Guarantor, of any agreement, judgment,
injunction, order, decree or other instrument binding upon each Guarantor of
this Guaranty.
7. Negative
Covenants.
Each
Guarantor covenants with Collateral Agent that such Guarantor shall not grant
any security interest in or permit any lien, claim or encumbrance upon any
of
its assets in favor of any person or entity other than liens and security
interests in favor of Collateral Agent and liens permitted to exist under the
Purchase Agreement. Each Guarantor agrees that it shall not take any action
or
engage in any transaction that Company is prohibited from taking or engaging
in
pursuant to the terms of the Purchase Agreement. In addition, each Guarantor
agrees to comply with the terms of Sections
5
and
6
of the
Purchase Agreement to the same extent that Company is required to comply with
such Sections of the Purchase Agreement. Company, by its signature hereto,
hereby acknowledges and agrees that any breach by a Guarantor of any term or
provision of this Guaranty or the Security Agreement shall constitute an “Event
of Default” under the Purchase Agreement.
8. Termination.
This
Guaranty shall remain in full force and effect until all of the Obligations
shall be finally and irrevocably paid in full in cash and any and all
commitments to lend under the Purchase Agreement shall have terminated.
Thereafter, but subject to the following, Collateral Agent shall take such
action and execute such documents as the Guarantors may request (and at the
Guarantors’ cost and expense) in order to evidence the termination of this
Guaranty. Payment of all of the Obligations from time to time shall not operate
as a discontinuance of this Guaranty. Each Guarantor further agrees that, to
the
extent that the Company makes a payment or payments to Collateral Agent on
the
Obligations, or Collateral Agent receives any proceeds of collateral securing
the Obligations or any other payments with respect to the Obligations, which
payment or receipt of proceeds or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be returned
or repaid to the Company, its estate, trustee, receiver, debtor in possession
or
any other person or entity, including, without limitation, the Guarantors,
under
any insolvency or bankruptcy law, state or federal law, common law or equitable
cause, then to the extent of such payment, return or repayment, the obligation
or part thereof which has been paid, reduced or satisfied by such amount shall
be reinstated and continued in full force and effect as of the date when such
initial payment, reduction or satisfaction occurred, and this Guaranty shall
continue in full force notwithstanding any contrary action which may have been
taken by Collateral Agent in reliance upon such payment, and any such contrary
action so taken shall be without prejudice to Collateral Agent’s rights under
this Guaranty and shall be deemed to have been conditioned upon such payment
having become final and irrevocable.
9. Guaranty
of Performance.
Each
Guarantor also guaranties the full, prompt and unconditional performance of
all
obligations and agreements of every kind owed or hereafter to be owed by the
Company to Collateral Agent under the Purchase Agreement, the Notes and the
other Transaction Documents.
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Every
provision for the benefit of Collateral Agent contained in this Guaranty shall
apply to the guaranty of performance given in this paragraph.
10. Assumption
of Liens and Obligations.
To
the
extent that a Guarantor has received or shall hereafter receive distributions
or
transfers from the Company of property or cash that are subject, at the time
of
such contribution, to liens and security interests in favor of Collateral Agent
in accordance with the Notes, the Security Agreement entered into by Company
in
favor of Collateral Agent or any other Transaction Document, such Guarantor
hereby expressly agrees that (i) it shall hold such assets subject to such
liens
and security interests, and (ii) it shall be liable for the payment of the
Obligations secured thereby. Each Guarantor’s obligations under this Section 10
shall be in addition to its obligations as set forth in other sections of this
Guaranty and not in substitution therefor or in lieu thereof.
11. Miscellaneous.
(a) The
terms
“Company” and “Guarantor” as used in this Guaranty shall include: (i) any
successor individual or individuals, association, partnership, limited liability
company or corporation to which all or substantially all of the business or
assets of the Company or such Guarantor shall have been transferred and (ii)
any
other association, partnership, limited liability company, corporation or entity
into or with which the Company or such Guarantor shall have been merged,
consolidated, reorganized, or absorbed.
(b) Without
limiting any other right of Collateral Agent, whenever Collateral Agent has
the
right to declare any of the Obligations to be immediately due and payable
(whether or not it has been so declared), Collateral Agent, at its sole
election, and without notice to the undersigned may appropriate and set off
against the Obligations:
(i) any
and
all indebtedness or other moneys due or to become due to any Guarantor by any
Collateral Agent in any capacity; and
(ii) any
credits or other property belonging to any Guarantor (including all account
balances, whether provisional or final and whether or not collected or
available) at any time held by or coming into the possession of Collateral
Agent, or any affiliate of Collateral Agent, whether held for deposit or
otherwise;
whether
or not the Obligations or the obligation to pay such moneys owed by Collateral
Agent is then due, and the Collateral Agent shall be deemed to have exercised
such right of set off immediately at the time of such election even though
any
charge therefor is made or entered on Collateral Agent’s records subsequent
thereto. Collateral Agent agrees to notify such Guarantor in a reasonably
practicable time of any such set-off; however, failure to so notify such
Guarantor shall not affect the validity of any set-off.
(c) Each
Guarantor’s obligation hereunder is to pay the Obligations in full in cash when
due according to the Notes, the Transaction Documents, this Guaranty and the
other agreements, documents and instruments governing the Obligations to the
extent provided herein,
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and
shall
not be affected by any stay or extension of time for payment by the Company
or
any other Guarantor resulting from any proceeding under the Bankruptcy Code
or
any similar law.
(d) No
course
of dealing between the Company or any Guarantor and Collateral Agent and no
act,
delay or omission by Collateral Agent in exercising any right or remedy
hereunder or with respect to any of the Obligations shall operate as a waiver
thereof or of any other right or remedy, and no single or partial exercise
thereof shall preclude any other or further exercise thereof or the exercise
of
any other right or remedy. The Collateral Agent may remedy any default by the
Company under any agreement with the Company or with respect to any of the
Obligations in any reasonable manner without waiving the default remedied and
without waiving any other prior or subsequent default by the Company. All rights
and remedies of Collateral Agent hereunder are cumulative.
(e) This
Guaranty shall inure to the benefit of Collateral Agent and each such entity’s
successors and assigns.
(f) Collateral
Agent may assign its rights hereunder without the consent of Guarantors, in
which event such assignee shall be deemed to be Collateral Agent hereunder
with
respect to such assigned rights.
(g) Captions
of the sections of this Guaranty are solely for the convenience of the parties
hereto, are not intended to be nor should be construed to be an aid in the
interpretation of this Guaranty and do not constitute part of the agreement
of
the parties set forth herein.
(h) If
any
provision of this Guaranty is unenforceable in whole or in part for any reason,
the remaining provisions shall continue to be effective.
(i) Each
Guarantor hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in the City of New York, Borough of Manhattan, for
the adjudication of any dispute hereunder or in connection herewith or with
any
transaction contemplated hereby or discussed herein, and each Guarantor hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Each Guarantor
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
to
such party at the address for such notices to it under this Agreement and each
Guarantor agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to
limit
in any way any right to serve process in any manner permitted by law.
(j) Notices.
All
notices, approvals, requests, demands and other communications hereunder shall
be delivered or made in the manner set forth in, and shall be effective in
accordance with the terms of, the Purchase Agreement; provided, however, that
any communication shall be effective as to any Guarantor if made or sent to
the
Company in accordance with the foregoing.
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12. WAIVERS.
(a) EACH
GUARANTOR WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND EXEMPTION
LAWS.
(b) UPON
THE OCCURRENCE OF A DEFAULT OR EVENT OF DEFAULT, EACH GUARANTOR HEREBY WAIVES
ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY LENDER
OF
ITS RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS OR TO REPLEVY,
ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR HEARING. EACH
GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH
RESPECT TO THIS TRANSACTION AND THIS GUARANTY.
(c) EACH
GUARANTOR WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY, OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY LENDER. EACH GUARANTOR AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,
EACH GUARANTOR FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY
OF
THIS GUARANTY OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
GUARANTY.
13. Counterparts;
Headings.
This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to each other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if
the
signature were an original, not a facsimile signature.
The
headings in this Agreement are for convenience of reference only and shall
not
alter or otherwise affect the meaning hereof.
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IN
WITNESS WHEREOF, Guarantors have executed this Guaranty as of the date first
written above.
SOUTHERN
TEXAS OIL COMPANY,
a Texas
corporation
By:_______________________________
Name: ____________________________
Title: ____________________________
STO
OPERATING COMPANY,
a Texas
corporation
By:_______________________________
Name: ____________________________
Title: ____________________________
STO
PROPERTIES LLC,
a
Texas
limited liability company
By:_______________________________
Name: ____________________________
Title: ____________________________
STO
DRILLING COMPANY,
a
Texas
corporation
By:_______________________________
Name: ____________________________
Title: ____________________________
Acknowledged
and Agreed to
For
Purposes of Section 7 hereof:
SOUTH
TEXAS OIL COMPANY,
a
Nevada
corporation
By:_______________________________
Name: ____________________________
Title: ____________________________
EXHIBIT
A
Form
of Joinder
Joinder
to Guaranty
The
undersigned, [__________] a [__________], hereby joins in the execution of
that
certain Guaranty dated as of September 19, 2008 (the “Guaranty”),
by
Southern Texas Oil Company, a Texas corporation, STO Operating Company, a Texas
corporation formerly known as Leexus Operating Company, STO Properties LLC,
a
Texas limited liability company, STO Drilling Company, a Texas
corporation,
and each
other person or entity that becomes a Guarantor thereunder after the date and
pursuant to the terms thereof, to and in favor of Viking Asset Management,
LLC,
a California limited liability company, as Collateral Agent. By executing this
Joinder, the undersigned hereby agrees that it is a Guarantor thereunder with
the same force and effect as if originally named therein as a Guarantor. The
undersigned agrees to be bound by all of the terms and provisions of the
Guaranty and represents and warrants that the representations and warranties
set
forth in Section 6 of the Guaranty are, with respect to the undersigned, true
and correct as of the date hereof. Each reference to a Guarantor in the Guaranty
shall be deemed to include the undersigned.
In
Witness Whereof, the undersigned has executed this Joinder this ___ day of
_________, 200_.
___________________________
