LIMITED GUARANTY
Exhibit
10.58
This
LIMITED
GUARANTY,
dated
as of October 24, 2007 (this "Guaranty"),
is
made by XXXX
X. WESTERN
("Guarantor"),
in
favor of X.
XXXX & COMPANY, as
administrative agent ("Administrative
Agent")
for
the benefit of the Beneficiaries (as defined in the Credit Agreement referred
to
below).
RECITALS:
WHEREAS,
reference is made to that certain Credit and Guaranty Agreement, dated as of
May 11, 2007 (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit
Agreement"),
by
and among Tekoil and Gas Gulf Coast, LLC, a Delaware limited liability company
("Borrower";
together with the Guarantor, the Parent, and all Subsidiaries of the Borrower,
the "Obligors"),
Tekoil & Gas Corporation (the "Parent")
the
lenders party thereto from time to time (the "Lenders"),
X.
XXXX & COMPANY,
as Lead
Arranger and Syndication Agent, and X.
XXXX & COMPANY,
as
Administrative Agent for such Lenders (capitalized terms not otherwise defined
herein shall have the meanings assigned to them in the Credit
Agreement);
WHEREAS,
subject
to the terms and conditions of the Credit Agreement, certain Obligors may enter
into one or more Hedging Contracts with one or more Lender
Counterparties;
WHEREAS,
the
Guarantor (a) is a principal shareholder of the Parent, which in turn owns
75%
of the equity interests of the Borrower, and (b) will derive substantial
direct and indirect benefit from (i) the transactions contemplated by the Credit
Agreement and the other Transaction Documents and (ii) the Hedging Contracts
entered into with a Lender Counterparty.
WHEREAS,
reference is made to that certain Amendment No. 3 and Waiver, dated as of the
date hereof, by and among the Borrower, the Parent, the lenders party thereto,
the Administrative Agent and the Lender Counterparty (the "Waiver"),
amending certain provisions of the Credit Agreement and waiving certain Events
of Default thereunder and under the Hedging Contracts.
WHEREAS,
in
consideration of the Waiver, the Guarantor has agreed to guarantee the
Borrower's and the other Guarantor's obligations under the Transaction Documents
and the Hedging Contracts as set forth herein and is executing and delivering
this Guaranty (i) to induce the Lenders to grant the Waiver, and (ii) intending
it to be a legal, valid, binding, enforceable and continuing obligation of
Guarantor, whether or not Guarantor derives any benefit from the Credit
Agreement, the Waiver, any other Transaction Document, or the Hedging
Contracts.
NOW,
THEREFORE,
in
consideration of the premises and the agreements, provisions and covenants
herein contained, the Guarantor and the Administrative Agent agree as
follows:
Section
1. Definitions.
All
capitalized terms not otherwise defined in this Guaranty that are defined in
the
Credit Agreement shall have the meanings assigned to such terms by the Credit
Agreement.
Section
2. Guaranty
of
the Obligations.
Guarantor hereby irrevocably and unconditionally guarantees to Administrative
Agent for the ratable benefit of the Beneficiaries the due and punctual payment
in full of all Obligations when the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
§ 362(a)) (collectively, the "Guaranteed
Obligations").
Without
limiting the generality of the foregoing, Guarantor's liability shall extend
to
all amounts that constitute part of the Guaranteed Obligations and would be
owed
by the Borrower to the any of the Beneficiaries under the Transaction Documents
and by the Borrower to the Lender Counterparties but for the fact that they
are
unenforceable or not allowable due to insolvency or the existence of a
bankruptcy, reorganization or similar proceeding involving the
Borrower.
Section
3. Limitation.
NOTWITHSTANDING THE FOREGOING OR ANY PROVISION HEREOF TO THE CONTRARY,
ADMINISTRATIVE AGENT’S RIGHT OF RECOVERY AGAINST GUARANTOR UNDER THIS AGREEMENT
IS LIMITED TO $1,000,000 (exclusive of any amounts payable by Guarantor under
Section 11(c) and/or Section 17 hereof). The foregoing limitation shall not
imply any limitation of which outstanding Guaranteed Obligations are guaranteed,
and Lender may request from Guarantor the payment of any, including the last,
outstanding Guaranteed Obligations, subject to the foregoing limitation on
total
recovery under this Agreement.
Section
4. Payment
by Guarantor.
Guarantor hereby agrees, in furtherance of the foregoing and not in limitation
of any other right which any Beneficiary may have at law or in equity against
Guarantor by virtue hereof, that upon the failure of the Borrower to pay any
of
the Guaranteed Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand
or
otherwise (including amounts
that
would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)),
Guarantor will upon demand pay, or cause to be paid, in immediately available
funds, to Administrative Agent for the ratable benefit of Beneficiaries, an
amount equal to the sum of the unpaid principal amount of all Guaranteed
Obligations then due as aforesaid, all accrued and unpaid interest on such
Guaranteed Obligations (including interest which, but for Borrower's becoming
the subject of a case under the Bankruptcy Code, would have accrued on such
Guaranteed Obligations, whether or not a claim is allowed against Borrower
for
such interest in the related bankruptcy case) and all other Guaranteed
Obligations then owed to Beneficiaries as aforesaid.
Section
5. Liability
of Guarantor Absolute.
Guarantor agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than payment in full of the Guaranteed Obligations. In furtherance of the
foregoing and without limiting the generality thereof, Guarantor agrees as
follows:
(a) This
Guaranty is a guaranty of payment when due and not of collectability. This
Guaranty is a primary obligation of Guarantor and not merely a contract of
surety;
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(b) Administrative
Agent may enforce this Guaranty upon the occurrence of an Event of Default
notwithstanding the existence of any dispute between Borrower and any
Beneficiary with respect to the existence of such Event of Default.
(c) The
obligations of Guarantor hereunder are independent of the obligations of
Borrower and the obligations of any other guarantor (including the Parent)
of
the obligations of Borrower, and a separate action or actions may be brought
and
prosecuted against Guarantor whether or not any action is brought against
Borrower or any of such other guarantors and whether or not Borrower is joined
in any such action or actions.
(d) Any
Beneficiary, upon such terms as it deems appropriate, without notice or demand
and without affecting the validity or enforceability hereof or giving rise
to
any reduction, limitation, impairment, discharge or termination of Guarantor's
liability hereunder, from time to time may (i) renew, extend, accelerate,
increase the rate of interest on, or otherwise change the time, place, manner
or
terms of payment of the Guaranteed Obligations; (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with respect
to, or substitutions for, the Guaranteed Obligations or any agreement relating
thereto, or subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the Guaranteed
Obligations and take and hold security for the payment hereof or the Guaranteed
Obligations; (iv) release, surrender, exchange, substitute, compromise,
settle, rescind, waive, alter, subordinate or modify, with or without
consideration, any security for payment of the Guaranteed Obligations, any
other
guaranties of the Guaranteed Obligations, or any other obligation of any Person
(including the Parent) with respect to the Guaranteed Obligations;
(v) enforce and apply any security now or hereafter held by or for the
benefit of such Beneficiary in respect hereof or the Guaranteed Obligations
and
direct the order or manner of sale thereof, or exercise any other right or
remedy that such Beneficiary may have against any such security, in each case
as
such Beneficiary in its discretion may determine consistent herewith or the
applicable Hedging Contract and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable,
and even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of Guarantor against
Borrower or any security for the Guaranteed Obligations; and (vi) exercise
any other rights available to it under the Transaction Documents or the Hedging
Contracts.
(e) This
Guaranty and the obligations of Guarantor hereunder shall be valid and
enforceable and shall not be subject to any reduction, limitation, impairment,
discharge or termination for any reason (other than payment in full of the
Guaranteed Obligations), including the occurrence of any of the following,
whether or not Guarantor shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce or agreement or election
not to assert or enforce, or the stay or enjoining, by order of court, by
operation of law or otherwise, of the exercise or enforcement of, any claim
or
demand or any right, power or remedy (whether arising under the Transaction
Documents or the Hedging Contracts, at law, in equity or otherwise) with respect
to the Guaranteed Obligations or any agreement relating thereto, or with respect
to any other guaranty of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or
any consent to departure from, any of the terms or provisions (including
provisions relating to events of default) hereof, any of the other Transaction
Documents, any of the Hedging Contracts or any agreement or instrument executed
pursuant thereto, or of any other guaranty or security for the Guaranteed
Obligations, in each case whether or not in accordance with the terms hereof
or
such Transaction Document, such Hedging Contract or any agreement relating
to
such other guaranty or security; including, without limitation, any increase
in
the Guaranteed Obligations resulting from the extension of additional credit
to
the Borrower or otherwise; (iii) the Guaranteed Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid
or
unenforceable in any respect; (iv) the application of payments received
from any source (other than payments received pursuant to the other Transaction
Documents or any of the Hedging Contracts or from the proceeds of any security
for the Guaranteed Obligations, except to the extent such security also serves
as collateral for indebtedness other than the Guaranteed Obligations) to the
payment of indebtedness other than the Guaranteed Obligations, even though
any
Beneficiary might have elected to apply such payment to any part or all of
the
Guaranteed Obligations; (v) any change, restructuring or termination of the
corporate structure or existence of any Obligor or any of its Subsidiaries,
including without limitation as a result of any Beneficiary's consent to the
change, reorganization or termination of the corporate structure or existence
of
any Obligor or any of its Subsidiaries and to any corresponding restructuring
of
the Guaranteed Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Guaranteed Obligations; (vii) any taking, exchange, release or non-perfection
of
any collateral for all or any of the Guaranteed Obligations; (viii) any manner
of application of collateral, or proceeds thereof, to all or any of the
Guaranteed Obligations, or any manner of sale or other disposition of any
collateral for all or any of the Guaranteed Obligations or any other obligations
of any other Person under the Transaction Documents or Hedging Contracts or
any
other assets of the Borrower, the Parent or any of their respective
Subsidiaries; (ix) any failure of any Beneficiary to disclose to any Obligor
any
information relating to the business, condition (financial or otherwise),
operations, properties or prospects of any Person now or in the future known
to
such Beneficiary (and Guarantor hereby irrevocably waives any duty on the part
of any Beneficiary to disclose such information); (x) any defenses, set-offs
or
counterclaims which Borrower may allege or assert against any Beneficiary in
respect of the Guaranteed Obligations, including failure of consideration,
breach of warranty, payment, statute of frauds, statute of limitations, accord
and satisfaction and usury; (xi) any other act or thing or omission, or delay
to
do any other act or thing, which may or might in any manner or to any extent
vary the risk of Guarantor as an obligor in respect of the Guaranteed
Obligations; and (xii) any other circumstance or any existence of or reliance
on
any representation by any Beneficiary that might otherwise constitute a defense
available to, or a discharge of, the Borrower, Guarantor or any other guarantor,
surety or other Person.
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Section
6. Waivers
by Guarantor.
Guarantor hereby waives, for the benefit of Beneficiaries: (a) any right to
require any Beneficiary, as a condition of payment or performance by Guarantor,
to (i) proceed against Borrower, any other guarantor (including the Parent)
of
the Guaranteed Obligations or any other Person, (ii) proceed against or exhaust
any security held from Borrower, any such other guarantor or any other Person,
(iii) proceed against or have resort to any balance of any Deposit Account
or
credit on the books of any Beneficiary in favor of Borrower or any other Person,
or (iv) pursue any other remedy in the power of any Beneficiary whatsoever;
(b)
any defense arising by reason of the incapacity, lack of authority or any
disability or other defense of Borrower or any other guarantor including any
defense based on or arising out of the lack of validity or the unenforceability
of the Guaranteed Obligations or any agreement or instrument relating thereto
or
by reason of the cessation of the liability of Borrower or any other guarantor
from any cause other than payment in full of the Guaranteed Obligations; (c)
any
defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in other respects more
burdensome than that of the principal; (d) any defense based upon any
Beneficiary's errors or omissions in the administration of the Guaranteed
Obligations, except behavior which amounts to bad faith; (e) (i) any principles
or provisions of law, statutory or otherwise, which are or might be in conflict
with the terms hereof and any legal or equitable discharge of Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations affecting
Guarantor's liability hereunder or the enforcement hereof, (iii) any rights
to
set-offs, recoupments and counterclaims, and (iv) promptness, diligence and
any requirement that any Beneficiary protect, secure, perfect or insure any
security interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices
of
any action or inaction, including acceptance hereof, notices of default
hereunder, the Hedging Contracts or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Guaranteed Obligations
or any agreement related thereto, notices of any extension of credit to Borrower
and notices of any of the matters referred to in Section 5 and any right to
consent to any thereof; and (g) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors
or
sureties, or which may conflict with the terms hereof.
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Section
7. Waiver
of Subrogation, Contribution, etc.
Guarantor hereby waives any claim, right or remedy, direct or indirect, that
Guarantor now has or may hereafter have against Borrower or any other guarantor
or any of its assets in connection with this Guaranty or the performance by
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that Guarantor now has or may hereafter have
against Borrower with respect to the Guaranteed Obligations, (b) any right
to
enforce, or to participate in, any claim, right or remedy that any Beneficiary
now has or may hereafter have against Borrower, and (c) any benefit of, and
any
right to participate in, any collateral or security now or hereafter held by
any
Beneficiary. In addition, until the Guaranteed Obligations shall have been
indefeasibly paid in full and the Commitments shall have terminated, Guarantor
shall withhold exercise of any right of contribution Guarantor may have against
any other guarantor (including the Parent) of the Guaranteed Obligations.
Guarantor further agrees that, to the extent the waiver or agreement to withhold
the exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification Guarantor may have against Borrower or against any collateral
or security, and any rights of contribution Guarantor may have against any
such
other guarantor, shall be junior and subordinate to any rights any Beneficiary
may have against Borrower, to all right, title and interest any Beneficiary
may
have in any such collateral or security, and to any right any Beneficiary may
have against such other guarantor. If any amount shall be paid to Guarantor
on
account of any such subrogation, reimbursement, indemnification or contribution
rights at any time when all Guaranteed Obligations shall not have been finally
and indefeasibly paid in full and the Credit Agreement is still in effect,
such
amount shall be held in trust for Administrative Agent on behalf of
Beneficiaries and shall forthwith be paid over to Administrative Agent for
the
benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms
hereof.
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Section
8. Subordination
of Other Obligations.
Any
Indebtedness of Borrower or any other guarantor now or hereafter held by
Guarantor is hereby subordinated in right of payment to the Guaranteed
Obligations, and any such indebtedness collected or received by Guarantor after
an Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid
over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations but without affecting, impairing
or
limiting in any manner the liability of Guarantor under any other provision
hereof.
Section
9. Authority
of Guarantor or Borrower.
It is
not necessary for any Beneficiary to inquire into the capacity or powers of
Guarantor or Borrower or the officers, directors or any agents acting or
purporting to act on behalf of any of them.
Section
10. Financial
Condition of Borrower.
Any
Credit Extension may be made to Borrower or continued from time to time, and
any
Hedging Contracts may be entered into from time to time, in each case without
notice to or authorization from Guarantor regardless of the financial or other
condition of Borrower at the time of any such grant or continuation or at the
time such Hedging Contract is entered into, as the case may be. No Beneficiary
shall have any obligation to disclose or discuss with Guarantor its assessment,
or Guarantor's assessment, of the financial condition of Borrower. Guarantor
acknowledges that it has adequate means to obtain information from Borrower
on a
continuing basis concerning the financial condition of Borrower and its ability
to perform its obligations under the Transaction Documents and the Hedging
Contracts, and Guarantor assumes the responsibility for being and keeping
informed of the financial condition of Borrower and of all circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations. Guarantor hereby
waives and relinquishes any duty on the part of any Beneficiary to disclose
any
matter, fact or thing relating to the business, operations or conditions of
Borrower now known or hereafter known by any Beneficiary.
Section
11. Bankruptcy,
etc.
(a) So
long
as any Guaranteed Obligations remain outstanding, Guarantor shall not, without
the prior written consent of Administrative Agent acting pursuant to the
instructions of Required Lenders, commence or join with any other Person in
commencing any bankruptcy, reorganization or insolvency case or proceeding
of or
against Borrower or any other guarantor. The obligations of Guarantor hereunder
shall not be reduced, limited, impaired, discharged, deferred, suspended or
terminated by any case or proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of Borrower or any other guarantor or by any defense which Borrower or any
other
guarantor may have by reason of the order, decree or decision of any court
or
administrative body resulting from any such proceeding.
(b) Guarantor
acknowledges and agrees that any interest on any portion of the Guaranteed
Obligations which accrues after the commencement of any case or proceeding
referred to in clause (a) above (or, if interest on any portion of the
Guaranteed Obligations ceases to accrue by operation of law by reason of the
commencement of such case or proceeding, such interest as would have accrued
on
such portion of the Guaranteed Obligations if such case or proceeding had not
been commenced) shall be included in the Guaranteed Obligations because it
is
the intention of Guarantor and Beneficiaries that the Guaranteed Obligations
which are guaranteed by Guarantor pursuant hereto should be determined without
regard to any rule of law or order which may relieve Borrower of any portion
of
such Guaranteed Obligations. Guarantor will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or similar
person to pay Administrative Agent, or allow the claim of Administrative Agent
in respect of, any such interest accruing after the date on which such case
or
proceeding is commenced.
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(c) In
the
event that all or any portion of the Guaranteed Obligations are paid, the
obligations of Guarantor hereunder shall continue and remain in full force
and
effect or be reinstated, as the case may be, in the event that all or any part
of such payment(s) are rescinded or recovered directly or indirectly from any
Beneficiary as a preference, fraudulent transfer or otherwise, and any such
payments which are so rescinded or recovered shall constitute Guaranteed
Obligations for all purposes hereunder. GUARANTOR
SHALL DEFEND AND INDEMNIFY EACH BENEFICIARY FROM AND AGAINST ANY CLAIM, DAMAGE,
LOSS, LIABILITY, COST OR EXPENSE UNDER THIS SECTION 11(c) (INCLUDING REASONABLE
ATTORNEYS' FEES AND EXPENSES) IN THE DEFENSE OF ANY SUCH ACTION OR SUIT
INCLUDING SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE ARISING AS
A
RESULT OF THE INDEMNIFIED BENEFICIARY'S OWN NEGLIGENCE BUT EXCLUDING SUCH CLAIM,
DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE THAT IS FOUND IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM SUCH INDEMNIFIED BENEFICIARY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
ANY
AMOUNTS PAYABLE BY GUARANTOR PURSUANT TO THIS SECTION SHALL BE EXCLUDED FROM
CALCULATION OF THE LIMITATION SET FORTH IN SECTION 3
ABOVE.
Section
12. Representations
and Warranties.
Guarantor hereby represents and warrants as follows:
(a) There
are
no conditions precedent to the effectiveness of this Guaranty. Guarantor
acknowledges that it will receive substantial direct and indirect benefits
from
the financing arrangements involving the Borrower contemplated by the
Transaction Documents and the Hedging Contracts with a Lender Counterparty
and
that the waivers set forth in this Guaranty are knowingly made in contemplation
of such benefits.
(b) Guarantor
has, independently and without reliance upon any Beneficiary and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Guaranty.
(c) The
obligations of Guarantor under this Guaranty are the valid, binding and legally
enforceable obligations of Guarantor, and this Guaranty has been duly and
validly executed and delivered by Guarantor.
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Section
13. Right
of Set-Off.
Upon
the occurrence and during the continuance of any Event of Default, any
Beneficiary is hereby authorized at any time, to the fullest extent permitted
by
law, to set off and apply any deposits (general or special, time or demand,
provisional or final) and other indebtedness owing by such Beneficiary to the
account of Guarantor against any and all of the obligations of Guarantor under
this Guaranty, irrespective of whether or not such Beneficiary shall have made
any demand under this Guaranty and although such obligations may be contingent
and unmatured. Such Beneficiary shall promptly notify Guarantor after any such
set-off and application is made, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
the
Beneficiaries under this Section 13 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which any Beneficiary
may have.
Section
14. Amendments,
Etc.
Other
than to the extent required under the Credit Agreement, no amendment or waiver
of any provision of this Guaranty and no consent to any departure by Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by Guarantor, the Administrative Agent and the Required Lenders,
and
then such waiver or consent shall be effective only in the specific instance
and
for the specific purpose for which given.
Section
15. Notices,
Etc. All
notices and other communications provided for hereunder shall be sent in the
manner provided for in Section 10.1 of the Credit Agreement and if to Guarantor,
at its address specified on the signature page hereto and if to the
Administrative Agent or any Lender, at its address specified in or pursuant
to
the Credit Agreement, and if to a Lender Counterparty, at its address specified
in the applicable Hedging Contract. All such notices and communications shall
be
effective when delivered, except that notices and communications to the
Administrative Agent shall not be effective until received by the Administrative
Agent.
Section
16. Continuing
Guaranty: Assignments under the Credit Agreement.
This
Guaranty is a continuing guaranty and applies to all Guaranteed Obligations,
whether existing now or in the future and shall (a) remain in full force and
effect until the payment in full of all Guaranteed Obligations and all other
amounts payable under the Transaction Documents and the Hedging Contracts,
the
termination the Credit Agreement, and the termination of all the Commitments,
(b) be binding upon Guarantor and its successors and assigns, (c) inure to
the
benefit of and be enforceable by the Administrative Agent, each Lender, and
their respective successors, and, in the case of transfers and assignments
made
in accordance with the Credit Agreement, transferees and assigns, and (d) inure
to the benefit of and be enforceable by a Lender Counterparty and each of its
successors, transferees and assigns to the extent such successor, transferee
or
assign is a Lender or an Affiliate of a Lender. Without limiting the generality
of the foregoing clause (c), subject to the Credit Agreement, any Lender may
assign or otherwise transfer all or any portion of its rights and obligations
under the Credit Agreement (including, without limitation, all or any portion
of
its Commitment, the Loans owing to it and the Note or Notes held by it) to
any
other Person, and such other Person shall thereupon become vested with all
the
benefits in respect thereof granted to such Lender herein or otherwise, subject,
however, in all respects to the provisions of the Credit Agreement. Guarantor
acknowledges that upon any Person becoming a Lender or the Administrative Agent
in accordance with the Credit Agreement, such Person shall be entitled to the
benefits hereof.
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Section
17. INDEMNITY.
Guarantor agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless, Royalty Owner and each Beneficiary and the
officers, partners, directors, trustees, employees, agents and Affiliates of
each Beneficiary (each, an "Indemnitee"),
from
and against any and all Indemnified Liabilities, INCLUDING
WITHOUT LIMITATION ANY INDEMNIFIED LIABILITIES CAUSED, IN WHOLE OR IN PART,
BY
THE NEGLIGENCE OF SUCH INDEMNIFIED PARTY (IN EACH CASE WHETHER ALLEGED, ARISING
OR IMPOSED IN A LEGAL PROCEEDING BROUGHT BY OR AGAINST ANY OBLIGOR,
ANY INDEMNITEE, OR ANY OTHER PERSON),
provided,
Guarantor shall have no obligation to any Indemnitee hereunder with respect
to
any Indemnified Liabilities to the extent such Indemnified Liabilities arise
from the gross negligence or willful misconduct of that Indemnitee. To the
extent that the undertakings to defend, indemnify, pay and hold harmless set
forth in this Section 17 may be unenforceable in whole or in part because they
are violative of any law or public policy, Guarantor shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law
to
the payment and satisfaction of all Indemnified Liabilities incurred by
Indemnitees or any of them. Any amounts payable by Guarantor pursuant to this
Section shall be excluded from calculation of the limitation set forth in
Section 3 above.
Section
18. WAIVER
OF PUNITIVE DAMAGES.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR SHALL NOT ASSERT, AND
HEREBY WAIVES, ANY CLAIM AGAINST ANY BENEFICIARY OR ANY BENEFICIARY'S
AFFILIATES, DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS, ON ANY THEORY OF
LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED
TO DIRECT OR ACTUAL DAMAGES) (WHETHER OR NOT THE CLAIM THEREFOR IS BASED ON
CONTRACT, TORT OR DUTY IMPOSED BY ANY APPLICABLE LEGAL REQUIREMENT) ARISING
OUT
OF, IN CONNECTION WITH, ARISING OUT OF, AS A RESULT OF, OR IN ANY WAY RELATED
TO, THIS GUARANTY OR ANY TRANSACTION DOCUMENT OR ANY AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY OR THEREBY, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY,
ANY LOAN OR THE USE OF THE PROCEEDS THEREOF OR ANY ACT OR OMISSION OR EVENT
FROM
TIME TO TIME OCCURRING IN CONNECTION THEREWITH, AND GUARANTOR HEREBY WAIVES,
RELEASES AND AGREES NOT TO XXX UPON ANY SUCH CLAIM OR ANY SUCH DAMAGES, WHETHER
OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.
GUARANTOR FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH
ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY GIVES THIS WAIVER
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY
OR
IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO
THIS
SECTION 18 AND EXECUTED BY GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH OTHER
BENEFICIARY), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR TO ANY OF THE OTHER TRANSACTION
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER.
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Section
19. Survival
of Representations, Warranties and Agreements; Termination.
All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of Guarantor set forth in Section 17 shall survive the payment of
the
Loans, the termination of the Credit Agreement and the termination
hereof.
Section
20. No
Waiver; Remedies Cumulative. No
failure or delay on the part of any Beneficiary in the exercise of any power,
right or privilege hereunder or under any other Transaction Document or any
Hedging Contract shall impair such power, right or privilege or be construed
to
be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. The rights, powers
and remedies given to any Beneficiary hereby are cumulative and shall be in
addition to and independent of all rights, powers and remedies existing by
virtue of any statute or rule of law or in any of the other Transaction
Documents or any Hedging Contract. Any forbearance or failure to exercise,
and
any delay in exercising, any right, power or remedy hereunder shall not impair
any such right, power or remedy or be construed to be a waiver thereof, nor
shall it preclude the further exercise of any such right, power or
remedy.
Section
21. Severability.
In case
any provision in or obligation hereunder shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability
of
the remaining provisions or obligations, or of such provision or obligation
in
any other jurisdiction, shall not in any way be affected or impaired
thereby.
Section
22. Headings.
Section headings herein are included herein for convenience of reference
only and shall not constitute a part hereof for any other purpose or be given
any substantive effect.
Section
23. APPLICABLE
LAW. THIS
GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE OBLIGORS AND THE BENEFICIARIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF
LAWS PRINCIPLES THEREOF.
Section
24. CONSENT
TO JURISDICTION.
ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY OBLIGOR ARISING
OUT OF OR RELATING HERETO OR ANY OTHER TRANSACTION DOCUMENT, OR ANY OF THE
OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX.
BY EXECUTING AND DELIVERING THIS GUARANTY, GUARANTOR,
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS
GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS; (b) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES THAT SERVICE
OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE
GUARANTOR AT
ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 16; (d) AGREES THAT SERVICE
AS
PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION
OVER
THE APPLICABLE OBLIGOR IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND
BINDING SERVICE IN EVERY RESPECT; AND (e) AGREES BENEFICIARIES RETAIN THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST ANY OBLIGOR IN
THE COURTS OF ANY OTHER JURISDICTION.
-10-
Section
25. WAIVER
OF JURY TRIAL.
GUARANTOR, AND EACH BENEFICIARY HEREOF, AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER
OR
UNDER ANY OF THE OTHER TRANSACTION DOCUMENTS OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER
RELATIONSHIP THAT IS BEING ESTABLISHED.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER
OF
THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
GUARANTOR AND EACH BENEFICIARY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP THAT EACH HAS ALREADY
RELIED ON THIS WAIVER IN ENTERING INTO THIS GUARANTY, AND THAT EACH WILL
CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE
DEALINGS.
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY
OR
IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO
THIS
SECTION 25 AND EXECUTED BY GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS HERETO OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE CREDIT EXTENSIONS MADE UNDER
THE
CREDIT AGREEMENT.
IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT
TO A
TRIAL BY THE COURT.
Section
26. Usury
Savings Clause.
Notwithstanding any other provision herein, the aggregate interest rate charged
with respect to any of the Guaranteed Obligations, including all charges or
fees
in connection therewith deemed in the nature of interest under applicable law,
shall not exceed the Highest Lawful Rate. If the rate of interest (determined
without regard to the preceding sentence) under the Credit Agreement at any
time
exceeds the Highest Lawful Rate, the outstanding amount of the Loans made
thereunder shall bear interest at the Highest Lawful Rate until the total amount
of interest due hereunder equals the amount of interest which would have been
due hereunder if the stated rates of interest set forth in the Credit Agreement
had at all times been in effect. In addition, if when the Loans made thereunder
are repaid in full the total interest due hereunder (taking into account the
increase provided for above) is less than the total amount of interest which
would have been due hereunder if the stated rates of interest set forth in
the
Credit Agreement had at all times been in effect, then to the extent permitted
by law, Borrower shall pay to Administrative Agent an amount equal to the
difference between the amount of interest paid and the amount of interest which
would have been paid if the Highest Lawful Rate had at all times been in effect.
Notwithstanding the foregoing, it is the intention of the Beneficiaries, the
Borrower and the Guarantor to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Loans made under
the
Credit Agreement or be refunded to Borrower.
-11-
Section
27. Counterparts.
This
Guaranty may be executed in any number of counterparts, each of which when
so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
Section
28. USA
Patriot Act Notice.
Each
Beneficiary that is subject to the Act (as hereinafter
defined) and Administrative Agent (for itself and not on behalf of any
Beneficiary) hereby notifies Guarantor that pursuant to the requirements of
the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the "Act"),
it is
required to obtain, verify and record information that identifies Guarantor,
which information includes the name and address of such Persons and other
information that will allow such Beneficiary or Administrative Agent, as
applicable, to identify such Persons in accordance with the Act.
THIS
GUARANTY AND THE TRANSACTION DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG
THE
BENEFICIARIES AND THE GUARANTOR WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[Remainder
of this page intentionally left blank.]
-12-
Guarantor
has caused this Guaranty to be duly executed as of the date first above
written.
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GUARANTOR:
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Xxxx
X.
Western
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/s/
Xxxx X. Western
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Address
of Guarantor:
0000
Xx. Xxxxxxxx Xxxx, #000
Xxxxxxx,
Xxxxxxx 00000
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