GUARANTY AGREEMENT
by
XXXXXX XXXXXX ENERGY PARTNERS, L.P.
in favor of
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, AS AGENT
FEBRUARY 14, 1997
TABLE OF CONTENTS
Page
ARTICLE 1 General Terms
Section 1.1 Terms Defined Above..................1
Section 1.2 Certain Definitions..................1
Section 1.3 Credit Agreement Definitions.........2
ARTICLE 2 The Guaranty
Section 2.1 Liabilities Guaranteed...............3
Section 2.2 Nature of Guaranty...................3
Section 2.3 Agent's Rights.......................3
Section 2.4 Guarantor's Waivers..................3
Section 2.5 Maturity of Liabilities; Payment.....4
Section 2.6 Agent's Expenses.....................4
Section 2.7 Liability............................4
Section 2.8 Events and Circumstances Not Reducing
or Discharging Guarantor's
Obligations..........................4
Section 2.9 Subrogation..........................7
ARTICLE 3 Representations, Warranties and Covenants
Section 3.1 By Guarantor.........................7
Section 3.2 No Representation by Lenders.........8
Section 3.3 Covenants............................8
ARTICLE 4 Subordination of Indebtedness
Section 4.1 Subordination of All Guarantor Claims11
Section 4.2 Claims in Bankruptcy................12
Section 4.3 Payments Held in Trust..............12
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Section 4.4 Liens Subordinate.......................12
Section 4.5 Notation of Records.................12
ARTICLE 5 Miscellaneous
Section 5.1 Successors and Assigns..............13
Section 5.2 Notices.............................13
Section 5.3 Business and Financial Information..13
Section 5.4 Construction........................13
Section 5.5 Invalidity..........................13
Section 5.6 ENTIRE AGREEMENT....................13
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GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT by XXXXXX XXXXXX ENERGY PARTNERS, L.P. (formerly
known as Enron Liquids Pipeline, L.P.), a Delaware limited partnership (the
"Guarantor"), is in favor of FIRST UNION NATIONAL BANK OF NORTH CAROLINA, 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 XXXXXX OPERATING L.P. "B" (formerly
known as Enron Transportation Services, L.P.), a Delaware limited partnership
(the "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
Section 1.1 Terms Defined Above. As used in this Guaranty Agreement, the
terms "Borrower", "Guarantor", "Credit Agreement" 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) any
additional loans made by the Lenders to the Borrower; (c) payment of and
performance of any and all present or future obligations of the Borrower
according to the terms of any present or future interest or currency rate
swap, rate cap, rate floor, rate collar, exchange transaction, forward rate
agreement or other exchange or rate protection agreements or any option
with respect to any such transaction now existing or hereafter entered into
between the Borrower and any of the Lenders; (d) payment of and performance
of any and all present or future obligations of the Borrower according to
the terms of any present or future swap agreements, cap, floor, collar,
exchange transaction, forward agreement or other exchange or protection
agreements relating to crude oil, natural gas or other hydrocarbons or any
option with respect to any such transaction now existing or hereafter
entered into between the Borrower and any of the Lenders; (e) all
reimbursement obligations for drawn or undrawn portions under any letter of
credit now outstanding or hereafter issued under the Credit Agreement,
including without limitation, the Support Letter of Credit and the
Replacement Letter of Credit and any letters of credit issued in
replacement thereof and all principal and interest on the Replacement Term
Note and the Support Term Note, including without limitation, interest
accruing subsequent to the filing of a petition or other action concerning
bankruptcy or other similar proceeding; (f) any and all other indebtedness,
obligations and liabilities of any kind of the Borrower to the Lenders, now
or hereafter existing, arising directly between the Borrower and the
Lenders or acquired outright, as a participation, conditionally or as
collateral security from another by the Lenders, absolute or contingent,
joint and/or several, secured or unsecured, due or not due, arising by
operation of law or otherwise, or direct or indirect, including
indebtedness, obligations and liabilities to the Lenders of the Borrower as
a member of any partnership, syndicate, association or other group, and
whether incurred by the Borrower as principal, surety, endorser, guarantor,
accommodation party or otherwise and (g) 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 Letter of Credit, the Fee Letter,
the Notes and the Security Instruments.
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.
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ARTICLE 2
The Guaranty
Section 2.1 Liabilities Guaranteed. Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment of the Liabilities when due,
whether at maturity or otherwise.
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 Aggregate Credit 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 dis-
charged 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. To the extent permitted by applicable law,
Guarantor waives any right to require Agent or 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
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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 to the extent permitted by applicable law 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 Agent and Lenders under any of the Loan
Documents shall be in the sole and absolute discretion of the Agent or the
Majority Lenders, 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. To the extent allowed by applicable
law, the Guarantor hereby waives any good faith duty on the part of the Agent in
exercising any remedies provided in the Loan Documents.
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 obtaining 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
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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
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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 Agent, 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.
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Section 2.9 Subrogation. Guarantor shall not enforce its rights against the
Borrower to any repayment by way of subrogation or by exercising its rights of
contribution or reimbursement or the right to participate in any security now or
hereafter held by or for the benefit of the Lenders until the Liabilities have
been paid in full.
ARTICLE 3
Representations, Warranties and Covenants
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) Existence. Guarantor is a partnership duly organized, legally
existing and in good standing under the laws of the State of Delaware and
is duly qualified in all jurisdictions wherein the property owned or the
business transacted by it makes such qualification necessary.
(c) Partnership Power and Authorization. Guarantor is duly authorized
and empowered to execute, deliver and perform this Guaranty Agreement and
all 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 agreement of limited partnership, 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
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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.
Section 3.2 No Representation by Lenders. 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.
Section 3.3 Covenants.
(a) Debt. The Guarantor will not incur,
create, assume or suffer to exist any Debt,
except:
(i) the Liabilities or other
Indebtedness arising under the Loan
Documents;
(ii) accounts payable (for the deferred purchase price of Property
or services) from time to time incurred in the ordinary course of
business which, if greater than 90 days past the invoice or billing
date, are being contested in good faith by appropriate proceedings if
reserves adequate under GAAP shall have been established therefor;
(iii) Debt under capital leases (as required to be reported on the
financial statements of the Guarantor pursuant to GAAP) not to exceed,
when combined with the Debt of the Borrower permitted under Section
9.01(d) of the Credit Agreement, $150,000 outstanding at any one time;
(iv) other Debt of the Guarantor not to exceed, when combined with
the Debt of the Borrower permitted under Section 9.01(g) of the Credit
Agreement, $1,000,000 in the aggregate outstanding at any time
(excluding Debt owed to Wachovia Bank of Georgia, N.A. under the Letter
of Credit and Reimbursement Agreement dated June 25, 1996 between
Borrower and Wachovia Bank of Georgia, N.A. pending issuance of the
Replacement Letter of Credit); and
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(v) Debt of the Guarantor existing on the Closing Date disclosed
on Schedule 3.3 hereof and any renewals or extensions (but not
increases) thereof.
(b) Liens. The Guarantor will not create, incur, assume or permit to
exist any Lien on any of its Properties (now owned or hereafter acquired),
except:
(i) Liens securing the payment of any
Indebtedness or Liabilities; and
(ii) Excepted Liens;
(iii) Liens securing leases allowed
under paragraph (a)(iii) above but only
on the Property under lease; and
(iv) Liens disclosed on Schedule
3.3 hereof.
(c) Investments, Loans and Advances. The Guarantor will not make or
permit to remain outstanding any loans or advances to or investments in any
Person, except that the foregoing restriction shall not apply to:
(i) investments, loans or advances
reflected in the Financial Statements or
which are disclosed to the Lenders;
(ii) accounts receivable arising in the
ordinary course of business;
(iii) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof, in each case maturing within one year from the date of
creation thereof;
(iv) commercial paper maturing within one year from the date of
creation thereof rated in the highest grade by Standard & Poors
Corporation or Xxxxx'x Investors
Service, Inc.;
(v) deposits maturing within one year from the date of creation
thereof with, including certificates of deposit issued by, any Lender
or any office located in the United States of any other bank or trust
company which is organized under the laws of the United States or any
state thereof, has capital, surplus and undivided profits aggregating
at least $100,000,000.00 (as of the date of such Lender's or bank or
trust company's most recent financial reports) and has a short term
deposit
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rating of no lower than A2 or P2, as such rating is set forth from time
to time, by Standard & Poors Corporation or Xxxxx'x Investors Service,
Inc., respectively;
(vi) deposits in money market funds
investing exclusively in investments
described in paragraphs (iii), (iv) or (v);
(vii) other investments, loans or advances not to exceed, when
combined with the investments, loans or advances of the Borrower
permitted by Section 9.03 (g) of the Credit Agreement, $500,000 in the
aggregate at any time.
(d) Dividends, Distributions and Redemptions. The Guarantor will not
declare or pay any dividend, purchase, redeem or otherwise acquire for
value any of its partnership interests now or hereafter outstanding, return
any capital to its - partners or make any distribution of its assets to its
partners, except that the Guarantor may make distributions to its partners
provided that no Default shall have occurred and be continuing or would
result from such distribution.
(e) Sales and Leasebacks. The Guarantor will not enter into any
arrangement, directly or indirectly, with any Person whereby the Guarantor
shall sell or transfer any of its Property, whether now owned or hereafter
acquired, and whereby the Guarantor shall then or thereafter rent or lease
as lessee such Property or any part thereof or other Property which the
Guarantor intends to use for substantially the same purpose or purposes as
the Property sold or transferred.
(f) Limitation on Leases. The Guarantor will not create, incur, assume
or suffer to exist any obligation for the payment of rent or hire of
Property of any kind whatsoever (real or personal including capital
leases), under leases or lease agreements which would cause the aggregate
amount of all payments made by the Guarantor pursuant to all such leases or
lease agreements to exceed, when combined with the payments made by the
Borrower permitted by Section 9.07 of the Credit Agreement, $50,000 in any
period of twelve consecutive calendar months during the life of such
leases.
(g) Sale or Discount of Receivables. The Guarantor will not discount or
sell (with or without recourse) any of its notes receivable or accounts
receivable.
(h) Nature of Business. The Guarantor
will not allow any material change to be made in
the character of its business.
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(i) Mergers, Etc. The Guarantor will not merge into or with or
consolidate with any other Person, or sell, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its Property or assets to any other Person.
(j) Sale of Properties. The Guarantor will not sell, assign, convey or
otherwise transfer any Property except for non Mortgaged Property and which
shall not exceed, when combined with the sale, assignment, conveyance or
transfer of any Property by the Borrower permitted by Section 9.14 of the
Credit Agreement, $150,000 in the aggregate in any fiscal year.
(k) Transactions with Affiliates. The Guarantor will not enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate
unless such transactions are otherwise permitted under the Credit
Agreement, are in the ordinary course of its business and are upon fair and
reasonable terms no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
(l) Partnership Agreement. The Guarantor
will not amend or permit to be amended its
partnership agreement without the prior written
consent of the Majority Lenders.
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. Until the Liabilities shall be paid and satisfied in full
and Guarantor shall have performed all of its obligations hereunder, Guarantor
shall not receive or collect, directly or indirectly, from Borrower or any other
party any amount upon the Guarantor Claims. Notwithstanding the foregoing so
long as no Default exists under the Credit Agreement, Guarantor may collect
amounts due from Borrower in the ordinary course of business.
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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 Majority 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.
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ARTICLE 5
Miscellaneous
Section 5.1 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, heirs,
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, death, disability
or other event affecting Guarantor.
Section 5.2 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 5.3 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 5.4 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 5.5 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 5.6 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.
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WITNESS THE EXECUTION HEREOF, as of this the 14th day of February, 1997.
XXXXXX XXXXXX ENERGY PARTNERS, L.P.
By: Kinder Xxxxxx X.X., Inc.,
its General Partner
By:____________________________
Name: Xxxxxx X. Xxxx
Title: President
Address: 0000 XxXxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
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