Exhibit 10.114
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY, dated as of August 30, 1996 made by the
undersigned (each a "Guarantor" and collectively, the "Guarantors"). Except
as otherwise defined herein, terms used herein and defined in the Credit
Agreement (as hereinafter defined) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Reading & Xxxxx Corporation, Reading & Xxxxx Drilling Co.
(the "Borrower"), various financial institutions from time to time party
thereto (the "Banks"), Credit Lyonnais New York Branch, as Co-Agent and
Christiania Bank og Kreditkasse, New York Branch, as Agent (the "Agent") have
entered into a Credit Agreement, dated as of April 30, 1996 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), providing
for the making of Loans and the issuance of, and participation in, Letters of
Credit as contemplated therein (the Banks, the Agent, the Letter of Credit
Issuer, the Collateral Agent and the Trustee are herein collectively called
the "Creditors");
WHEREAS, the Borrower owns, directly or indirectly, 100% of the
capital stock of each Guarantor;
WHEREAS, it is a condition to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that
each Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence
of Loans by the Borrower and the issuance of Letters of Credit under the
Credit Agreement and, accordingly, desires to execute this Guaranty in order
to satisfy the conditions described in the preceding paragraph and to induce
the Banks to make Loans to the Borrower and the Letter of Credit Issuer to
issue Letters of Credit;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Creditors and hereby covenants and agrees with each
Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally, guarantees, as primary obligor and not merely as surety, to
the Creditors the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of (x) the principal of and interest
on the Notes issued by, and the Loans made to, the Borrower under the Credit
Agreement, and all reimbursement obligations and Unpaid Drawings with respect
to the Letters of Credit issued under the Credit Agreement and (y) all other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing
by the Borrower to the Creditors under the Credit Agreement (including, with-
out limitation, indemnities, Fees and interest thereon) now existing or
hereafter incurred under, arising out of or in connection with the Credit
Agreement or any other Credit Document and the due performance and compliance
with the terms of the Credit Documents by the Borrower (all such principal,
interest, liabilities and obligations being herein collectively called the
"Guaranteed Obligations"). Each Guarantor understands, agrees and confirms
that the Creditors may enforce this Guaranty up to the full amount of the
Guaranteed Obligations against each Guarantor without proceeding against any
other Guarantor or the Borrower, against any security for the Guaranteed
Obligations, or under any other guaranty covering all or a portion of the
Guaranteed Obligations. All payments by each Guarantor under this Guaranty
shall be made on the same basis as payments by the Borrower under Sections
4.03 and 4.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence in respect of the Borrower of any
of the events specified in Section 9.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money
of the United States. This Guaranty shall constitute a guaranty of payment,
and not of collection.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by (a) any direction as to application of
payment by the Borrower or by any other party, (b) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any
other party as to the indebtedness of the Borrower, (c) any payment on or in
reduction of any such other guaranty or undertaking, (d) any dissolution,
termination or increase, decrease or change in personnel by the Borrower, (e)
any payment made to any Creditor on the indebtedness which any Creditor repays
the Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each Guarantor
waives any right to the deferral or modification of its obligations hereunder
by reason of any such proceeding, (f) any action or inaction by the Creditors
as contemplated in Section 6 hereof, or (g) any invalidity, irregularity or
unenforceability of all or part of the Guaranteed Obligations or of any
security therefor.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or the Borrower,
and a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower and whether or not any other Guarantor, any
other guarantor or the Borrower be joined in any such action or actions. Any
payment by the Borrower or other circumstance which operates to toll any
statute of limitations as to the Borrower shall operate to toll the statute of
limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Agent or any other Creditor against, and any other notice to, any party
liable thereon (including such Guarantor, any other guarantor or the
Borrower).
6. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such
Guarantor hereunder, upon or without any terms or conditions and in whole or
in part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew or alter, any of the
Guaranteed Obligations, any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended,
renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the
Borrower;
(e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Creditors regardless
of what liabilities of the Borrower remain unpaid;
(f) release or substitute any one or more endorsers, guarantors,
any Credit Party or other obligors;
(g) consent to or waive any breach of, or any act, omission or
default under, any of the Credit Documents or any of the instruments or
agreements referred to therein, or otherwise amend, modify or supplement
any of the Credit Documents or any of such other instruments or agree-
ments; and/or
(h) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against the Borrower to recover full indemnity for any payments made
pursuant to this Guaranty.
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or
equitable discharge of a surety or guarantor except payment in full of the
Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which
it applies or may apply under the terms hereof shall be conclusively presumed
to have been created in reliance hereon. No failure or delay on the part of
any Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein expressly specified are cumulative and not exclusive of
any rights or remedies which any Creditor would otherwise have. No notice to
or demand on any Guarantor in any case shall entitle such Guarantor to any
other further notice or demand in similar or other circumstances or constitute
a waiver of the rights of any Creditor to any other or further action in any
circumstances without notice or demand. It is not necessary for any Creditor
to inquire into the capacity or powers of the Borrower or any of its
Subsidiaries or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Agent, after an Event of Default has occurred, so requests, shall be
collected, enforced and received by such Guarantor as trustee for the
Creditors and be paid over to the Creditors on account of the indebtedness of
the Borrower to the Creditors, but without affecting or impairing in any
manner the liability of such Guarantor under the other provisions of this
Guaranty. Prior to the transfer by any Guarantor of any note or negotiable
instrument evidencing any indebtedness of the Borrower to such Guarantor, such
Guarantor shall xxxx such note or negotiable instrument with a legend that the
same is subject to this subordination. Without limiting the generality of the
foregoing, each Guarantor hereby agrees with the Creditors that it will not
exercise any right of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be
required by applicable law and cannot be waived) to require the Creditors to
(A) proceed against the Borrower, any other Guarantor, any other guarantor or
any other party, (B) proceed against or exhaust any security held from the
Borrower, any other Guarantor, any other guarantor or any other party or (C)
pursue any other remedy in the Creditors' power whatsoever. Each Guarantor
waives any defense based on or arising out of any defense of the Borrower, any
other Guarantor, any other guarantor or any other party other than payment in
full of the Guaranteed Obligations, including without limitation any defense
based on or arising out of the disability of the Borrower, any other
Guarantor, any other guarantor or any other party, or the unenforceability of
the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower other than payment
in full of the Guaranteed Obligations. The Creditors may, at their election,
foreclose on any security held by the Agent or the other Creditors by one or
more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Guaranteed Obligations have been paid in full. Each Guarantor
waives any defense arising out of any such election by the Creditors, even
though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new
or additional indebtedness. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks which
such Guarantor assumes and incurs hereunder, and agrees that the Creditors
shall have no duty to advise any Guarantor of information known to them
regarding such circumstances or risks.
11. The Creditors agree that this Guaranty may be enforced only
by the action of the Agent or the Collateral Agent, in each case acting upon
the instructions of the Required Banks and that no Creditor shall have any
right individually to seek to enforce or to enforce this Guaranty, it being
understood and agreed that such rights and remedies may be exercised by the
Agent or the Collateral Agent for the benefit of the Creditors upon the terms
of this Guaranty. The Creditors further agree that this Guaranty may not be
enforced against any director, officer, employee or stockholder of any
Guarantor (except to the extent such stockholder is also a Guarantor
hereunder).
12. Each Guarantor covenants and agrees that on and after the
date hereof and until the termination of the Total Commitment and when no
Letter of Credit or Note remains outstanding and all Guaranteed Obligations
have been paid in full, such Guarantor shall take, or will refrain from
taking, as the case may be, all actions that are necessary to be taken or not
taken so that no violation of any provision, covenant or agreement contained
in Section 7 or 8 of the Credit Agreement, and so that no Event of Default, is
caused by the actions of such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses (x), after an Event of Default
shall have occurred and be continuing, of each Creditor in connection with the
enforcement of this Guaranty and the protection of such Creditor's rights
hereunder (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) employed by any of the
Creditors) and (y) of the Agent in connection with any amendment, waiver or
consent relating hereto (including, without limitation, the reasonable fees
and disbursements of counsel (including in-house counsel) employed by the
Agent.
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and
their successors and assigns.
15. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of
the Required Banks (or to the extent required by Section 12.12 of the Credit
Agreement, with the written consent of each Bank) and each Guarantor affected
thereby (it being understood that the addition or release of any Guarantor
hereunder shall not constitute a change, waiver, discharge or termination
affecting any Guarantor other than the Guarantor so added or released).
16. Each Guarantor acknowledges that an executed (or conformed)
copy of each of the Credit Documents has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement
continuing after any applicable grace period), each Creditor is hereby
authorized at any time or from time to time, without notice to any Guarantor
or to any other Person, any such notice being expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any
other indebtedness at any time held or owing by such Creditor to or for the
credit or the account of such Guarantor, against and on account of the
obligations and liabilities of such Guarantor to such Creditor under this
Guaranty, irrespective of whether or not such Creditor shall have made any
demand hereunder and although said obligations, liabilities, deposits or
claims, or any of them, shall be contingent or unmatured.
18. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to
such party at (i) in the case of any Creditor, as provided in the Credit
Agreement and (ii) in the case of any Guarantor, at its address set forth
opposite its signature below; or in any case at such other address as any of
the Persons listed above may hereafter notify the others in writing.
19. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part
of said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revoca-
tion hereof or of any other instrument evidencing any liability of the
Borrower, and such Guarantor shall be and remain liable to the aforesaid
payees hereunder for the amount so repaid or recovered to the same extent as
if such amount had never originally been received by any such payee.
20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Guaranty or any other Credit Document may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery
of this Guaranty, each Guarantor hereby accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the aforesaid
courts and hereby irrevocably waives any right it may have to object to the
laying of venue of any such action or proceeding in the aforesaid courts and
hereby further irrevocably waives and agrees not to plead or claim that any
such action or proceeding has been brought in an inconvenient forum. Each
Guarantor hereby irrevocably designates, appoints and empowers the Borrower,
with offices on the date hereof at 000 Xxxxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000 as its designee, appointee and agent to receive, accept and acknowledge
for any on its behalf, and in respect of its property, service or any and all
legal process, summons, notices and documents which may be served in any such
action or proceeding. If for any reason such designee, appointee and agent
shall cease to be available to act as such, each Guarantor agrees to designate
a new designee, appointee and agent in New York City on the terms and for the
purposes of this provision satisfactory to the Agent for the Banks under this
Guaranty. Each Guarantor further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to each Guarantor at its address set forth opposite its
signature below. Nothing herein shall affect the right of any of the
Creditors to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against each Guarantor in any other
jurisdiction.
(b) Each Guarantor hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Guaranty or
any other credit document brought in the courts referred to in clause (a)
above and hereby further irrevocably waives and agrees not to plead or claim
in any such court that such action or proceeding brought in any such court has
been brought in an inconvenient forum.
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with
the requirements of Section 8.02 of the Credit Agreement (or such sale or
other disposition has been approved in writing by the Required Banks (or all
Banks if required by Section 12.12 of the Credit Agreement)) and the proceeds
of such sale, disposition or liquidation are applied in accordance with the
provisions of the Credit Agreement, to the extent applicable, such Guarantor
shall be released from this Guaranty and this Guaranty shall, as to each such
Guarantor or Guarantors, terminate, and have no further force or effect (it
being understood and agreed that the sale of any Person that owns, directly or
indirectly, the capital stock of any Guarantor shall be deemed to be a sale of
such Guarantor for the purposes of this Section 21).
22. At any time a payment in respect of the Guaranteed Obli-
gations is made under this Guaranty, the right of contribution, if any, of
each Guarantor against any other Guarantor required to make any payment to
such Guarantor pursuant to this Section 22 (a "Contributor") shall be
determined as provided in the immediately following sentence, with the right
of contribution of each Guarantor to be revised and restated as of each date
on which a payment (a "Relevant Payment") is made on the Guaranteed
Obligations under this Guaranty. At any time that a Relevant Payment is made
by a Guarantor that results in the aggregate payments made by such Guarantor
in respect of the Guaranteed Obligations to and including the date of the
Relevant Payment exceeding such Guarantor's Contribution Percentage (as
hereinafter defined) of the aggregate payments made by all Guarantors in
respect of the Guaranteed Obligations to and including the date of the
Relevant Payment (such excess, the "Aggregate Excess Amount"), each such
Guarantor shall have a right of contribution against each Contributor who has
made payments in respect of the Guaranteed Obligations to and including the
date of the Relevant Payment in an aggregate amount less than such
Contributor's Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate
Deficit Amount") in an amount equal to (x) a fraction the numerator of which
is the Aggregate Excess Amount of such Guarantor and the denominator of which
is the Aggregate Excess Amount of all Guarantors multiplied by (y) the
Aggregate Deficit Amount of such Contributor. A Guarantor's right of
contribution, if any, pursuant to the preceding sentences shall arise at the
time of each computation, subject to adjustment to the time of any subsequent
computation; provided, that no Guarantor may take any action to enforce such
right until the Guaranteed Obligations have been paid in full, all Letters of
Credit have terminated and the Total Commitment has been terminated, it being
expressly recognized and agreed by all parties hereto that any Guarantor's
right of contribution arising pursuant to this Section 22 against any
Contributor shall be expressly junior and subordinate to such Contributor's
obligations and liabilities in respect of the Guaranteed Obligations and any
other obligations owing under this Guaranty. As used in this Agreement, (i)
each Contributor's "Contribution Percentage" shall mean the percentage
obtained by dividing (x) the Adjusted Net Worth of such Contributor by (y) the
aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net Worth"
of each Guarantor shall mean the greater of (x) the Net Worth of such
Guarantor or (y) zero; and (iii) the "Net Worth" of each Guarantor shall mean
the amount by which the fair salable value of such Guarantor's assets on the
Initial Borrowing Date exceeds its existing debts and other liabilities
(including contingent liabilities, but without giving effect to any Guaranteed
Obligations arising under this Guaranty), in each case after giving effect to
all transactions occurring on the Initial Borrowing Date.
23. Each Guarantor recognizes and agrees that, except for any
right of contribution arising pursuant to Section 22, until the Guaranteed
Obligations have been paid in full, each Guarantor who makes any payment in
respect of the Guaranteed Obligations shall have no right of contribution or
subrogation against any other Guarantor in respect of such payment, any such
right of contribution or subrogation arising under law or otherwise being
expressly waived by all Guarantors until the Guaranteed Obligations have been
paid in full.
24. Each Guarantor recognizes and acknowledges that the rights to
contribution arising hereunder shall constitute an asset in favor of the party
entitled to such contribution. In this connection, each Guarantor has the
right to waive its contribution right against any other Guarantor to the
extent that after giving effect to such waiver such Guarantor would remain
solvent, in the determination of the Required Banks.
25. This Guaranty may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Guarantors and the
Agent.
26. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
27. It is understood and agreed that any Subsidiary of the
Borrower that is required to execute a counterpart of this Guaranty pursuant
to the Credit Agreement shall automatically become a Guarantor hereunder by
executing a counterpart hereof and delivering the same to the Agent.
28. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address for each Guarantor
c/o Reading & Xxxxx Drilling Co. READING & XXXXX DEVELOPMENT CO.
000 Xxxxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000 By_______________________________
Attention: General Counsel Title:
Tel: (000) 000-0000
Fax: (000) 000-0000
Accepted and Agreed to:
CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH,
as Agent
By____________________________
Title:
By____________________________
Title:
