Exhibit 10.4
GUARANTY
THIS GUARANTY (this "Guaranty") is dated as of the 4th day of May, 2005,
by MPC INC., a Tennessee corporation ("Guarantor"), in favor of PROSPECT
ENERGY CORPORATION, a Maryland corporation, as administrative agent
("Administrative Agent") for the benefit of the Lenders (herein defined) and
each of their respective successors and assigns as permitted pursuant to the
Credit Agreement (hereinafter defined).
W I T N E S S E T H:
WHEREAS, Xxxxxx Petroleum, Inc., a Tennessee corporation (the
"Borrower"), Guarantor, Administrative Agent and the financial institutions
party thereto (the "Lenders") have entered into that certain Credit Agreement
of even date herewith (such agreement, as may from time to time be amended,
supplemented, restated or otherwise modified, the "Credit Agreement").
(Unless otherwise defined herein, all terms used herein with their initial
letter capitalized shall have the meaning given such terms in the Credit
Agreement); and
WHEREAS, Administrative Agent and the Lenders have required, as a
condition to the continued extension of credit under the Credit Agreement,
that Guarantor execute and deliver this Guaranty; and
WHEREAS, Guarantor has determined that valuable benefits will be derived
by it as a result of the Credit Agreement and the extension of credit made
(and to be made) by the Lenders thereunder; and
WHEREAS, Guarantor has further determined that the benefits accruing to
it from the Credit Agreement exceed Guarantor's anticipated liability under
this Guaranty.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged and confessed, Guarantor hereby covenants and
agrees as follows:
1. Guarantor hereby absolutely and unconditionally guarantees the
prompt, complete and full payment when due, no matter how such shall become
due, of the Obligations, and further guarantees that Borrower will properly
and timely perform the Obligations. Notwithstanding any contrary provision in
this Guaranty, however, Guarantor's maximum liability under this Guaranty is
limited, to the extent, if any, required so that its liability is not subject
to avoidance under applicable Debtor Relief Laws (as such term is defined in
Paragraph 8 hereof).
2. If Guarantor is or becomes liable for any indebtedness owing by
Borrower to Administrative Agent or any Lender by endorsement or otherwise
than under this Guaranty, such liability shall not be in any manner impaired
or affected hereby, and the rights of Administrative Agent and the Lenders
hereunder shall be cumulative of any and all other rights that Administrative
Agent and the Lenders may ever have against Guarantor. The exercise by
Administrative Agent or any Lender of any right or remedy hereunder or under
any other instrument, at law or in equity, shall not preclude the concurrent
or subsequent exercise of any other right or remedy.
3. In the event of default by Borrower in payment of the Obligations,
or any part thereof, when such Obligations become due, either by their terms
or as the result of the exercise of any power to accelerate, Guarantor shall,
on demand, and without further notice of dishonor and without any notice
having been given to Guarantor previous to such demand of the acceptance by
Administrative Agent or the Lenders of this Guaranty, and without any notice
having been given to such Guarantor previous to such demand of the creating or
incurring of such Obligations, pay the amount due thereon to Administrative
Agent for the ratable account of the Lenders at Administrative Agent's office
as set forth in the Credit Agreement, and it shall not be necessary for
Administrative Agent or any Lender, in order to enforce such payment by
Guarantor, first, to institute suit or exhaust its remedies against Borrower
or others liable on such Obligations, to have Borrower joined with Guarantor
in any suit brought under this Guaranty or to enforce their rights against any
security which shall ever have been given to secure such indebtedness;
provided, however, that in the event Administrative Agent and the Lenders
elect to enforce and/or exercise any remedies they may possess with respect to
any security for the Obligations prior to demanding payment from Guarantor,
Guarantor shall nevertheless be obligated hereunder for any and all sums still
owing to the Lenders on the Obligations and not repaid or recovered incident
to the exercise of such remedies.
4. Each payment on the Obligations shall be deemed to have been made
by Borrower unless express written notice is given to Administrative Agent at
the time of such payment that such payment is made by Guarantor as specified
in such notice.
5. If all or any part of the Obligations at any time are secured,
Guarantor agrees that Administrative Agent and the Lenders may at any time and
from time to time, at their discretion and with or without valuable
consideration, allow substitution or withdrawal of collateral or other
security and release collateral or other security or compromise or settle any
amount due or owing under the Credit Agreement or amend or modify in whole or
in part the Credit Agreement or any Loan Document executed in connection with
same without impairing or diminishing the obligations of Guarantor hereunder.
Guarantor further agrees that if Borrower executes in favor of Administrative
Agent or the Lenders any collateral agreement, mortgage or other security
instrument, the exercise by Administrative Agent and the Lenders of any right
or remedy thereby conferred on Administrative Agent and the Lenders shall be
wholly discretionary with Administrative Agent and the Lenders, and that the
exercise or failure to exercise any such right or remedy shall in no way
impair or diminish the obligation of Guarantor hereunder. Guarantor further
agrees that the Administrative Agent shall not be liable for any failure to
use diligence in the collection of the Obligations or in preserving the
liability of any person liable for the Obligations, and Guarantor hereby
waives presentment for payment, notice of nonpayment, protest and notice
thereof (including, notice of acceleration), and diligence in bringing suits
against any Person liable on the Obligations, or any part thereof.
6. Guarantor agrees that Administrative Agent and the Lenders, in
their sole discretion, may (i) bring suit against all guarantors (including,
without limitation, Guarantor hereunder) of the Obligations jointly and
severally or against any one or more of them, (ii) compound or settle with any
one or more of such guarantors for such consideration as Administrative Agent
and the Lenders may deem proper, and (iii) release one or more of such
guarantors from liability hereunder, and that no such action shall impair the
rights of Administrative Agent and the Lenders to collect the Obligations (or
the unpaid balance thereof) from other such guarantors of the Obligations, or
any of them, not so sued, settled with or released. Guarantor agrees,
however, that nothing contained in this paragraph, and no action by
Administrative Agent and the Lenders permitted under this paragraph, shall in
any way affect or impair the rights or obligations of such guarantors among
themselves.
7. Guarantor represents and warrants to Administrative Agent and the
Lenders that, to the extent Guarantor is not an individual, Guarantor is (i) a
corporation, limited liability company or partnership duly organized and
validly existing under the laws of the jurisdiction of its incorporation or
formation; and (ii) Guarantor possesses all requisite authority and power to
authorize, execute, deliver and comply with the terms of this Guaranty; this
Guaranty has been duly authorized and approved by all necessary action on the
part of Guarantor and constitutes a valid and binding obligation of Guarantor
enforceable in accordance with its terms, except as the enforcement thereof
may be limited by applicable Debtor Relief Laws; and no approval or consent of
any court or governmental entity is required for the authorization, execution,
delivery or compliance with this Guaranty which has not been obtained (and
copies thereof delivered to Lender). As used in this Guaranty, the term,
"Debtor Relief Laws" means the Bankruptcy Code of the United States of America
and all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of
payments or similar debtor relief laws from time to time in effect affecting
the rights of creditors generally.
8. Guarantor covenants and agrees that until the Obligations are paid
and performed in full, except as otherwise provided in the Credit Agreement or
unless Administrative Agent and each of the Lenders gives their prior written
consent to any deviation therefrom, it will (i) at all times maintain its
existence and authority to transact business in any State or jurisdiction
where Guarantor has assets and operations, (ii) promptly deliver to
Administrative Agent such information respecting its business affairs, assets
and liabilities as Administrative Agent may reasonably request, and (iii) duly
and punctually observe and perform all covenants applicable to Guarantor under
the Credit Agreement and the other Loan Documents. The failure of Guarantor
to comply with the terms of this paragraph and to the extent such failure
shall continue unremedied for a period of ten (10) days after the earlier of
(i) the date upon which Guarantor knew or reasonably should have known of such
failure or (ii) the date upon which written notice thereof is given to
Guarantor by any Lender, shall be an Event of Default under the Credit
Agreement.
9. This Guaranty is for the benefit of Administrative Agent and the
Lenders, their successors and assigns, and in the event of an assignment by
any of the Lenders (or its successors or assigns) of the Obligations, or any
part thereof, the rights and benefits hereunder, to the extent applicable to
the Obligations so assigned, may be transferred with such Obligations. This
Guaranty is binding upon Guarantor and its successors and assigns.
10. No modification, consent, amendment or waiver of any provision of
this Guaranty, nor consent to any departure by Guarantor therefrom, shall be
effective unless the same shall be in writing and signed by Administrative
Agent, each Lender and Guarantor, and then shall be effective only in the
specific instance and for the purpose for which given. No delay or omission
by Administrative Agent and the Lenders in exercising any power or right
hereunder shall impair any such right or power or be construed as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise
of any such power preclude other or further exercise thereof, or the exercise
of any other right or power hereunder. All rights and remedies of
Administrative Agent and the Lenders hereunder are cumulative of each other
and of every other right or remedy which Administrative Agent and the Lenders
may otherwise have at law or in equity or under any other contract or
document, and the exercise of one or more rights or remedies shall not
prejudice or impair the concurrent or subsequent exercise of other rights or
remedies.
11. No provision herein or in any promissory note, instrument or any
other Loan Document executed by Borrower or Guarantor evidencing the
Obligations shall require the payment or permit the collection of interest in
excess of the Maximum Lawful Rate. If any excess of interest in such respect
is provided for herein or in any such promissory note, instrument, or any
other Loan Document, the provisions of this paragraph shall govern, and
neither Borrower nor Guarantor shall be obligated to pay the amount of such
interest to the extent that it is in excess of the amount permitted by law.
The intention of the parties being to conform strictly to any applicable
federal or state usury laws now in force, all promissory notes, instruments
and other Loan Documents executed by Borrower or Guarantor evidencing the
Obligations shall be held subject to reduction to the amount allowed under
said usury laws as now or hereafter construed by the courts having
jurisdiction.
12. If Guarantor should breach or fail to perform any provision of
this Guaranty, Guarantor agrees to pay Administrative Agent and the Lenders
all costs and expenses (including court costs and reasonable attorneys fees)
incurred by Administrative Agent and the Lenders in the enforcement hereof.
13. (a) The liability of Guarantor under this Guaranty shall in no
manner be impaired, affected or released by the insolvency, bankruptcy, making
of an assignment for the benefit of creditors, arrangement, compensation,
composition or readjustment of Borrower, or any proceedings affecting the
status, existence or assets of Borrower or other similar proceedings
instituted by or against Borrower and affecting the assets of Borrower.
(b) Guarantor acknowledges and agrees that any interest on any
portion of the Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Obligations if said proceedings had not been commenced) shall
be included in the Obligations because it is the intention of Guarantor,
Administrative Agent and the Lenders that the Obligations which are guaranteed
by Guarantor pursuant to this Guaranty should be determined without regard to
any rule of law or order which may relieve Borrower of any portion of such
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 and the Lenders, or allow the claim of
Administrative Agent and the Lenders in respect of, any such interest accruing
after the date on which such proceeding is commenced.
(c) In the event that all or any portion of the Obligations are
paid by Borrower, 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 Administrative Agent or the Lenders as a
preference, fraudulent transfer or otherwise, and any such payments which are
so rescinded or recovered shall constitute Obligations for all purposes under
this Guaranty.
14. Guarantor understands and agrees that any amounts of Guarantor on
account with Administrative Agent or any Lender may be offset to satisfy the
obligations of Guarantor hereunder.
15. Guarantor hereby subordinates and makes inferior any and all
indebtedness now or at any time hereafter owed by Borrower to Guarantor to the
Obligations evidenced by the Credit Agreement and agrees after the occurrence
of a Default under the Credit Agreement, or any event which with notice, lapse
of time, or both, would constitute a Default under the Credit Agreement, not
to permit Borrower to repay, or to accept payment from Borrower of, such
indebtedness or any part thereof without the prior written consent of
Administrative Agent and the Lenders.
16. During the period that any Lender has any commitment to lend under
the Loan Documents, or any amount payable under any Note remains unpaid, and
throughout any additional preferential period subsequent thereto, Guarantor
hereby waives any and all rights of subrogation to which Guarantor may
otherwise be entitled against Borrower, or any other guarantor of the
Obligations, as a result of any payment made by Guarantor pursuant to this
Guaranty.
17. As of the date hereof, Guarantor is solvent and able to pay all of
its liabilities as such liabilities mature.
18. If any provision of this Guaranty is held to be illegal, invalid,
or unenforceable, such provision shall be fully severable; this Guaranty shall
be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance herefrom.
19. (a) Except to the extent required for the exercise of the
remedies provided in the other security instruments, Guarantor hereby
irrevocably waives, to the fullest extent permitted by Law, any objection
which it may now or hereafter have to the laying of venue of any Litigation
arising out of or in connection with this Guaranty or any of the Loan
Documents brought in district courts of Xxxxxx County, Texas, or in the United
States District Court for the Southern District of Texas, Houston Division.
Guarantor hereby irrevocably consents to the service of process out of any of
the aforementioned courts in any such Litigation by the mailing of copies
thereof by certified mail, return receipt requested, postage prepaid, to
Guarantor's office. Nothing herein shall affect the rights of Administrative
Agent or the Lenders to commence legal proceedings or otherwise proceed
against Guarantor in any jurisdiction or to serve process in any manner
permitted by applicable law. As used herein, the term "Litigation" means any
proceeding, claim, lawsuit or investigation (i) conducted or threatened by or
before any court or governmental department, commission, board, bureau, agency
or instrumentality of the United States or of any state, commonwealth, nation,
territory, possession, county, parish, or municipality, whether now or
hereafter constituted or existing, or (ii) pending before any public or
private arbitration board or panel.
(b) To the extent that Guarantor has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
Guarantor hereby irrevocably waives such immunity in respect of its
obligations under this Guaranty and the other Loan Documents.
20. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS COLLECTIVELY REPRESENT
THE FINAL AGREEMENT BY AND AMONG ADMINISTRATIVE AGENT, THE LENDERS AND
GUARANTOR AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF ADMINISTRATIVE AGENT, THE LENDERS AND
GUARANTOR. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG ADMINISTRATIVE AGENT,
THE LENDERS AND GUARANTOR.
21. GUARANTOR, FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ITS RIGHT TO A
JURY TRIAL, IN ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THIS
GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS. ANY DISPUTES HEREUNDER SHALL BE
RESOLVED THROUGH BINDING ARBITRATION AS MORE PARTICULARLY DESCRIBED IN THE
CREDIT AGREEMENT.
22. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
[Signature page follows]
EXECUTED and effective as of the date first above written.
GUARANTOR:
MPC INC.,
a Tennessee corporation
By:____________________
Xxxxx Xxxxxx
Chief Executive Officer
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HOU_539236_3.DOC
