1
EXHIBIT 4.2
GUARANTY
THIS GUARANTY, dated as of November 1, 1995, made separately by each
of the undersigned corporations (together with their successors and assigns,
each a "Guarantor" and collectively, the "Guarantors"), in favor of each of the
purchasers (together with their successors and assigns, including, without
limitation, any holder of a Note (as defined below), each a "Holder" and
collectively, the "Holders") listed on Annex 1 to the separate Note Agreements
(collectively, as amended from time to time, the "Note Agreement"), dated as of
June 15, 1991, between Xxxxx Corporation (the "Company"), a Delaware
corporation, and each of the Holders, pursuant to which the Company has issued
Twenty Eight Million Dollars ($28,000,000) in aggregate principal amount of its
9.72% Senior Notes due June 15, 1998 (the "9.72% Notes") and Fifty Two Million
Dollars in aggregate principal amount of its 10.16% Senior Notes due June 15,
2001 (the "10.16% Notes," the 9.72% Notes and the 10.16% Notes referred to
collectively in this Guaranty as the "Notes"),
W I T N E S S E T H:
WHEREAS, the Company owns directly, or indirectly through one or more
subsidiaries, all of the outstanding shares of stock of each Guarantor; and
WHEREAS, the Company has issued and sold its 9.72% Notes and its
10.16% Notes to the Holders pursuant to the Note Agreement; and
WHEREAS, pursuant to the terms of the Note Agreement, it is a
continuing obligation of the Company to cause each Restricted Subsidiary which
guaranties the obligations of the Company under the Revolving Credit Agreement
to execute and deliver to the Holders a satisfactory guaranty of the
obligations of the Company under the Note Agreement and the Notes; and
WHEREAS, each Guarantor a party hereto is a Restricted Subsidiary and
has guaranteed the obligations of the Company under the Revolving Credit
Agreement;
WHEREAS, the board of directors of each Guarantor has determined that
such Guarantor's execution, delivery and performance of this Guaranty may
reasonably be expected to benefit such Guarantor, directly or indirectly, and
are in the best interests of such Guarantor;
NOW, THEREFORE, in consideration of the premises and of Ten Dollars
($10) and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order to comply with the terms and
provisions of the Note Agreement and to avoid an Event of Default thereunder,
each Guarantor hereby agrees with Holders as follows:
1. DEFINITIONS.
Reference is hereby made to the Note Agreement for all purposes. All
terms used in this Guaranty that are defined in the Note Agreement and not
otherwise defined in this Guaranty have the same meanings when used in this
Guaranty. As used in this Guaranty, the following terms shall have the
following meanings:
2
"OBLIGATIONS" means collectively all of the indebtedness,
obligations, and undertakings that are guaranteed by Guarantor and
described in subsections (a) and-(b) of Section 2 hereof.
"OBLIGATION DOCUMENTS" means this Guaranty, the Note Agreement,
the Notes, all other documents and instruments under, by reason of
which, or pursuant to which any or all of the Obligations are
evidenced, governed, secured, or otherwise dealt with, heretofore or
hereafter delivered.
"OBLIGORS" means the Company, the Guarantors, and any other
endorsers, guarantors or obligors, primary or secondary, of any or all
of the Obligations.
"SECURITY" means any rights, properties, or interests of the
Holders under the Obligation Documents or otherwise, that provide
recourse or other benefits to the Holders in connection with the
Obligations or the non-payment or non-performance thereof, including,
without limitation, collateral (whether real or personal, tangible or
intangible) in which the Holders have rights under or pursuant to any
Obligation Documents, guaranties of the payment or performance of any
Obligation, bonds, surety agreements, keep-well agreements, letters of
credit, rights of subrogation, rights of offset, and rights pursuant to
which other claims are subordinated to the Obligations.
2. GUARANTY.
(a) Each Guarantor hereby irrevocably, absolutely, and
unconditionally guarantees, jointly and severally, to the Holders the
prompt, complete, and full payment when due, and no matter how the
same shall become due, of:
(i) The Notes, including all principal, all
interest thereon and all other sums payable thereunder; and
(ii) All other sums payable under the other
Obligation Documents, whether for principal, interest, fees,
delivery of cash collateral, costs, expenses or otherwise.
(b) Each Guarantor, hereby irrevocably, absolutely, and
unconditionally guarantees, jointly and severally, to the Holders the
prompt, complete and full performance, when due, and no matter how the
same shall become due, of all obligations and undertakings of the
Company to the Holder under, by reason of, or pursuant to any of the
Obligation Documents.
(c) If the Company shall for any reason fail to pay any
Obligation, as and when such Obligation shall become due and payable,
whether at its stated maturity, as a result of the exercise of any
power to accelerate, or otherwise, then each Guarantor will, forthwith
upon demand by the Required Holders, pay such Obligation in full to
the Holders. If the Company shall for any reason fail to perform
promptly any Obligation, then Guarantor will, forthwith upon demand by
the Required Holders, cause such Obligation to be performed or, if
specified by the Required Holders, provide sufficient funds, in such
amount and manner as the Required Holders shall in good faith
determine,
2
3
for the prompt, full and faithful performance of such Obligation by
the Required Holders or such other Person as the Required Holders
shall designate.
(d) If either the Company or any Guarantor fails to pay
or perform upon demand any Obligation as described in the immediately
preceding subsections (a), (b) or (c), then each Guarantor will incur
the additional obligation to pay to the Holders and each Guarantor
will forthwith upon demand by the Required Holders pay to the Holders,
the amount of any and all expenses, including fees and disbursements
of any counsel and of any experts or agents, in each case, retained by
the Required Holders on behalf of the Holders that the Holders may
incur as a result of such failure, such expenses to be incurred in
accordance with paragraph 11B of the Note Agreement.
(e) Each Guarantor shall be primarily liable hereunder
for the payment and performance of the Obligations, from each other
Guarantor.
3. UNCONDITIONAL GUARANTY.
(a) No action that the Required Holders may take or omit
to take in connection with any of the Obligation Documents, any of the
Obligations (or any other indebtedness owing by Guarantor to the
Holders), or any Security, and no course of dealing of the Holders
with any Obligor or any other Person, shall release or diminish any
Guarantor's obligations, liabilities, agreements or duties under this
Guaranty, affect this Guaranty in any way, or afford any Guarantor any
recourse against any Holder, regardless of whether any such action or
inaction may increase any risks to or liabilities of the Holders or
any Obligor or increase any risk to or diminish any safeguard of any
Security. Without limiting the foregoing, each Guarantor hereby
expressly agrees that, except as may be provided in the Note
Agreement, any Holder may, from time to time, without notice to or the
consent of Guarantor:
(i) Amend, change or modify, in whole or in part,
any one or more of the Obligation Documents and give or refuse
to give any waivers or other indulgences with respect thereto;
(ii) Neglect, delay, fail, or refuse to take or
prosecute any action for the collection or enforcement of any
of the Obligations, to foreclose or take or prosecute any
action in connection with any Security or Obligation Document,
to bring suit against any Obligor or any other Person, or to
take any other action concerning the Obligations or the
Obligation Documents;
(iii) Accelerate, change, rearrange, extend, or
renew the time, terms, or manner for payment or performance of
any one or more of the Obligations;
(iv) Compromise or settle any unpaid or
unperformed Obligation or any other obligation or amount due
or owing, or claimed to be due or owing, under any one or more
of the Obligation Documents;
(v) Take, exchange, amend, eliminate, surrender,
release, or subordinate any or all Security for any or all of
the Obligations, accept additional
3
4
or substituted Security therefor, and perfect or fail to
perfect the Holders' rights in any or all Security;
(vi) Discharge, release, substitute or add
Obligors; and
(vii) Apply all monies received from Obligors or
others, or from any Security for any of the Obligations, as
such Holder may determine to be in its best interest, without
in any way being required to xxxxxxxx Security or assets or to
apply all or any part of such monies upon any particular
Obligations.
(b) No action or inaction of any Obligor or any other
Person, and no change of law or circumstances, shall release or
diminish any Guarantor's obligations, liabilities, agreements, or
duties under this Guaranty, affect this Guaranty in any way, or afford
any Guarantor any recourse against any Holder. Without limiting the
foregoing, the obligations, liabilities, agreements, and duties of
each Guarantor under this Guaranty shall not be released, diminished,
impaired, reduced, or affected by the occurrence of any of the
following from time to time, even if occurring without notice to or
without the consent of such Guarantor:
(i) Any voluntary or involuntary liquidation,
dissolution, sale of all or substantially all assets,
marshalling of assets of liabilities, receivership,
conservatorship, assignment for the benefit of creditors,
insolvency, bankruptcy, reorganization, arrangement, or
composition of any Obligor or any other proceedings involving
any Obligor or any of the assets of any Obligor under laws
for the protection of debtors, or any discharge, impairment,
modification, release, or limitation of the liability of, or
stay of actions or lien enforcement proceedings against, any
Obligor, any properties of any Obligor, or the estate in
bankruptcy of any Obligor in the course of or resulting from
any such proceedings;
(ii) The failure by any Holder or the Required
Holders to file or enforce a claim in any proceeding described
in the immediately preceding subsection (i) or to take any
other action in any proceeding to which any Obligor is a
party;
(iii) The release by operation of law of any
Obligor from any of the Obligations or any other obligations
to the Holders;
(iv) The invalidity, deficiency, illegality, or
unenforceability of any of the Obligations or the Obligation
Documents, in whole or in part, any bar by any statute of
limitations or other law of recovery on any of the
Obligations, or any defense or excuse for failure to perform
on account of force majeure, act of God, casualty,
impossibility, impracticability, or other defense or excuse
whatsoever;
(v) The failure of any Obligor or any other
Person to sign any guaranty or other instrument or agreement
within the contemplation of any Obligor or the Holders;
(vi) The fact that any Guarantor may have incurred
directly part of the Obligations or is otherwise primarily
liable therefor; or
4
5
(vii) Without limiting any of the foregoing, any
fact or event (whether or not similar to any of the foregoing)
that in the absence of this provision would or might
constitute or afford a legal or equitable discharge or release
of or defense to a guarantor or surety other than the actual
payment and performance by each Guarantor under this Guaranty.
(c) The Required Holders may invoke the benefits of this
Guaranty before pursuing any remedies against any Obligor or any other
Person and before proceeding against any Security now or hereafter
existing for the payment or performance of any of the Obligations. The
Required Holders may maintain an action against any Guarantor on this
Guaranty without joining any other Obligor therein and without
bringing separate action against any other Obligor. The obligations of
each Guarantor under this Guaranty are not joint, but are separate and
distinct from the obligations of each other Guarantor and all other
Obligors.
(d) If any payment to the Holders by any Obligor is held
to constitute a preference or a voidable transfer under applicable
state or federal laws, or if for any other reason the Holders are
required to refund such payment to the payor thereof or to pay the
amount thereof to any other Person, then such payment to the Holders
shall not constitute a release of any Guarantor from any liability
under this Guaranty, and each Guarantor agrees to pay such amount to
the Holders on demand and agrees and acknowledges that this Guaranty
shall continue to be effective or shall be reinstated, as the case may
be, to the extent of any such payment or payments.
(e) This is a continuing guaranty and shall apply to and
cover all obligations and renewals and extensions thereof and
substitutions therefor from time to time.
4. WAIVER.
Each Guarantor hereby waives, with respect to the Obligations, this
Guaranty, and the other Obligation Documents:
(a) notice of the incurrence of any Obligation by the
Company;
(b) notice that the Holders, any Obligor, or any other
Person has taken or omitted to take any action under any Obligation
document or any other agreement or instrument relating thereto or
relating to any Obligation;
(c) notice of acceptance of this Guaranty and all rights
of the Guarantor under Section 34.02 of the Texas Business and
Commerce Code;
(d) demand, presentment for payment, and notice of
demand, dishonor, nonpayment, or nonperformance;
(e) notice of intention to accelerate, notice of
acceleration, protest, and notice of protest; and
(f) all other notices whatsoever.
5
6
5. EXERCISE OF REMEDIES.
Each Holder and the Required Holders, on behalf of the Holders, as
provided in the Note Agreement, shall have the right to enforce, from time to
time, in any order and at the sole discretion of the Required Holders's or such
Holder, as the case may be, any rights, powers and remedies that the Holders
may have under the Obligation Documents or otherwise, including, but not
limited to, judicial foreclosure, the exercise of rights of power of sale, the
taking of a deed or assignment in lieu of foreclosure, the appointment of a
receiver to collect rents, issues and profits, the exercise of remedies against
personal property, or the enforcement of any assignment of leases, rentals, oil
or gas production, or other properties or rights, whether real or personal,
tangible or intangible; and each Guarantor shall be liable to the Holders under
this Guaranty for any deficiency resulting from the exercise by any Holder of
any such right or remedy even though any rights that such Guarantor may have
against the Company or others may be destroyed or diminished by exercise of any
such right or remedy. No failure on the part of any Holder or the Required
Holders to exercise, and no delay in exercising, any right under this Guaranty
or under any other Obligation Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any right preclude any other or further
exercise thereof or the exercise of any other right. The rights, powers and
remedies of each Holder and the Required Holders provided in this Guaranty and
in the other Obligation Documents are cumulative and are in addition to, and
not exclusive of, any other rights, powers or remedies provided by law or in
equity. The rights of each Holder and the Required Holders under this Guaranty
are not conditional or contingent on any attempt by any Holder and the Required
Holders to exercise any of their rights under any other Obligation Document
against any Obligor or any other Person.
6. SUBROGATION.
Until all of the Obligations have been paid and performed in full, no
Guarantor shall have the right to exercise any right of subrogation with
respect hereto (including without limitation any right of subrogation under
Section 34.04 of the Texas Business and Commerce Code), and each Guarantor
hereby waives any rights to enforce any remedy that such Guarantor may have
against the Company and any right to participate in any Security until such
time. If any amount shall be paid to any Guarantor on account of any
subrogation rights or other remedy or Security at any time when all of the
Obligations and all other expenses guaranteed pursuant to this Guaranty shall
not have been paid in full, then such amount shall be held in trust for the
benefit of the Holders, shall be segregated from the other funds of Guarantor
and shall forthwith be paid over to the Holders as collateral for, or then or
at any time thereafter applied in whole or in part by the Holders against, all
or any portion of the Obligations, whether matured or unmatured, in such order
as each Holder shall elect. If Guarantor shall make payment to the Holders of
all or any portion of the Obligations and if all of the Obligations shall be
finally paid in full, then each Holder will, at each Guarantor's request and
expense, execute and deliver to such Guarantor (without recourse,
representation or warranty) appropriate documents necessary to evidence the
transfer by subrogation to Guarantor of an interest in the Obligations
resulting from such payment by such Guarantor.
6
7
7. SUCCESSORS AND ASSIGNS.
No Guarantor's rights or obligations under this Guaranty may be
assigned or delegated. This Guaranty shall apply to and inure to the benefit of
each Holder and such Holder's successors or assigns, including, without
limitation, any subsequent holder of Notes. Without limiting the generality of
the immediately preceding sentence, any Holder may assign its rights under this
Guaranty or grant a participation in such rights in connection with the
assignment of or the granting of a participation in the Obligations.
8. REPRESENTATIONS AND WARRANTIES.
Each Guarantor hereby represents and warrants as follows:
(a) The recitals at the beginning of this Guaranty are
true and correct in all respects as to such Guarantor.
(b) The value of the consideration received and to be
received by such Guarantor in connection herewith is reasonably worth
at least as much as the liability and obligations of such Guarantor
under this Guaranty, and the incurrence of such liability and
obligations in return for such consideration may reasonably be
expected to benefit such Guarantor, directly or indirectly.
(c) Such Guarantor is not "insolvent" on the date of the
execution and delivery by such Guarantor of this Guaranty (that is,
the sum of Guarantor's absolute and contingent liabilities, including
the Obligations, does not exceed the Fair Market Value of Guarantor's
assets). Such Guarantor's capital is adequate for the businesses in
which Guarantor is engaged and intends to be engaged. Such Guarantor
has not by this Guaranty incurred, nor does such Guarantor intend to
incur or believe that it will incur, debts that will be beyond its
ability to pay as such debts mature.
9. NO ORAL CHANGE.
No amendment of any provision of this Guaranty shall be effective
unless it is in writing and signed by each Guarantor and the Required Holders,
and no waiver of any provision of this Guaranty, and no consent to any
departure by any Guarantor from this Guaranty, shall be effective unless it is
in writing and signed by the Required Holders, and then such waiver or consent
shall be effective only in the specific instance and for the specified purpose
for which given.
10. GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) GOVERNING LAW. THIS GUARANTY IS TO BE PERFORMED IN
THE STATE OF TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
(b) JURISDICTION. EACH GUARANTOR HEREBY IRREVOCABLY
SUBMITS ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE OF NEW
YORK AND
7
0
XXXXXXX XXXXXX XX XXX XXXXX XX XXX XXXX AND AGREES AND CONSENTS THAT
SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING
RELATING HERETO BY SERVING THE SECRETARY OF STATE OF THE STATE OF
TEXAS (OR BY OTHER SERVICE) IN ACCORDANCE WITH ANY APPLICABLE
PROVISIONS OF THE TEXAS REVISED CIVIL STATUES, AS AMENDED, GOVERNING
SERVICE OF PROCESS UPON FOREIGN CORPORATIONS.
11. INVALIDITY OF PARTICULAR PROVISION.
If any term or provision of this Guaranty shall be determined to be
illegal or unenforceable, then all other terms and provisions hereof shall
nevertheless remain effective and shall be enforced to the fullest extent
permitted by applicable law.
12. HEADINGS AND REFERENCES.
The headings used in this Guaranty are for purposes of convenience
only and shall not be used in construing the provisions of this Guaranty. The
words "this Guaranty," "this instrument," "herein," "hereof," "hereby" and
words of similar import refer to this Guaranty as a whole and not to any
particular subdivision unless expressly so limited. The word "or" is not
exclusive. Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.
13. TERM.
This Guaranty shall be irrevocable and shall terminate when all of the
Obligations have been completely and finally paid and performed, the Holders
have no obligation to make any loans or other advances to the Company, and all
obligations and undertakings of the Company under, by reason of, or pursuant to
the Obligation Documents have been completely performed, and this Guaranty is
thereafter subject to reinstatement as provided in Section 3(d) of this
Guaranty. All extensions of credit and financial accommodations heretofore or
hereafter made by the Holders to the Company pursuant to the terms of the Note
Agreement, the Notes or any amendment or waiver of any provision thereof, shall
be conclusively presumed to have been made in acceptance of this Guaranty and
in reliance on this Guaranty.
14. NOTICES.
Any notice of communication required or permitted under this Guaranty
shall be given as provided in the Note Agreement.
15. LIMITATION ON INTEREST.
The Holders and each Guarantor intend to contract in strict compliance
with applicable usury law from time to time in effect, and the provisions of
the Note Agreement limiting the interest for which each Guarantor is obligated
are expressly incorporated in this Guaranty by reference.
8
9
16. COUNTERPARTS.
This Guaranty may be executed in any number of counterparts, each of
which when so executed shall be deemed to constitute one and the same Guaranty.
17. ENTIRE AGREEMENT.
THIS WRITTEN GUARANTY AND THE OTHER LOAN DOCUMENTS REPRESENT 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 AGREEMENTS BETWEEN THE PARTIES.
[Remainder of page intentionally blank. Next page is signature page.]
9
10
IN WITNESS WHEREOF, each Guarantor has executed and delivered this
Guaranty as of the date first above written.
NAVAJO CRUDE OIL MARKETING
COMPANY
By /s/ XXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
NAVAJO WESTERN ASPHALT
COMPANY
By /s/ XXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
[Signature page of the GUARANTY, dated as of November 1, 1995, in respect of
the Note Agreement, dated as of June 15, 1991, of XXXXX CORPORATION]
