EXHIBIT 10.2
GUARANTY
THIS GUARANTY is executed as of September 24, 1997, by each of the
undersigned (collectively, "GUARANTORS", for the benefit of CREDIT LYONNAIS NEW
YORK BRANCH (in its capacity as Agent for the Lenders now or in the future party
to the Credit Agreement described below, "AGENT").
ARAXAS SPV-I, INC, an Oklahoma corporation ("BORROWER"), Agent, and Lenders
have executed that certain Credit Agreement (as renewed, extended, amended, or
restated, the "CREDIT AGREEMENT") dated of even date herewith. Each Guarantor
either (i) owns directly, or through other Guarantors, all of the issued and
outstanding capital stock of Borrower, or (ii) is an affiliate of Borrower and
is a wholly-owned subsidiary, directly or indirectly, of the ultimate parent of
Borrower. The execution and delivery of this guaranty are requirements to
Agent's and Lenders' execution of the Credit Agreement and other Loan Documents,
are integral to the transactions contemplated by the Loan Documents, and are
conditions precedent to Lenders' obligations to extend any credit under the
Credit Agreement.
ACCORDINGLY, for adequate and sufficient consideration, each Guarantor
jointly and severally guarantees to Agent and Lenders the prompt payment of the
Guaranteed Debt (defined below) at -- and at all times after -- its maturity (by
acceleration or otherwise) as follows:
1. DEFINITIONS. Terms defined in the Credit Agreement have the same
meanings when used -- unless otherwise defined -- in this guaranty. As used in
this guaranty:
AGENT is defined in the preamble to this guaranty and includes its
successor appointed under SECTION 13 of the Credit Agreement and acting as agent
for Lenders under the Loan Documents.
BORROWER is defined in the recitals to this guaranty and includes,
without limitation, Borrower, Borrower as a debtor-in-possession, and any
receiver, trustee, liquidator, conservator, custodian, or similar party
appointed for Borrower or for all or substantially all of Borrower's assets
under any Debtor Law.
CREDIT AGREEMENT is defined in the recitals to this guaranty.
GUARANTEED DEBT means the Obligation, as defined in the Credit
Agreement, and all present and future costs, attorneys' fees, and expenses
reasonably incurred by Agent or any Lender to enforce Borrower's, any
Guarantor's, or any other obligor's payment of any of the Obligation, including,
without limitation, all present and future amounts that would become due but for
the operation of (S)(S) 502 or 506 or any other provision of Title 11 of the
United States Code and all present and future accrued and unpaid interest
(including, without limitation, all post-petition interest if Borrower or any
Guarantor voluntarily or involuntarily becomes subject to any Debtor Law).
GUARANTORS is defined in the preamble to this guaranty.
SUBORDINATED DEBT means all present and future obligations of Borrower
to any Guarantor, whether those obligations are (a) direct, indirect, fixed,
contingent, liquidated, unliquidated, joint, several, or joint and several, (b)
due or to become due to any Guarantor, (c) held by or are to be held by any
Guarantor, (d) created directly or acquired by assignment or otherwise, or (e)
evidenced in writing.
2. GUARANTY. This is an absolute, irrevocable, and continuing guaranty,
and the circumstance that at any time or from time to time the Guaranteed Debt
may be paid in full does not affect the obligation of any Guarantor with respect
to the Guaranteed Debt incurred after that. This guaranty remains in effect
until the Guaranteed Debt is fully paid and performed, each LC has expired or
been canceled, and all commitments to lend or issue LCs under the Credit
Agreement have terminated. Agent, in its own discretion or at the direction of
the Determining Lenders, shall have sole and exclusive authority to enforce this
guaranty. No Guarantor may rescind or revoke its obligations with respect to
the Guaranteed Debt. Notwithstanding any contrary provision in this guaranty,
however, each 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 any Debtor Law.
3. CONSIDERATION. Each Guarantor represents and warrants that (a) the
value of the consideration received and to be received by it is reasonably worth
at least as much as its liability under this guaranty and (b) that liability may
reasonably be expected to directly or indirectly benefit it.
4. CUMULATIVE RIGHTS. If any Guarantor becomes liable for any
indebtedness owing by Borrower to Agent or any Lender, other than under this
guaranty, that liability shall not be in any manner impaired or affected by this
guaranty. The Rights of Agent or Lenders under this guaranty are cumulative of
any and all other Rights that Agent or Lenders may ever have against each
Guarantor. The exercise by Agent or Lenders of any Right under this guaranty or
otherwise does not preclude the concurrent or subsequent exercise of any other
Right.
5. PAYMENT UPON DEMAND. If a Default exists, each Guarantor shall -- on
demand and without further notice of dishonor and without any notice having been
given to any Guarantor previous to that demand of either the acceptance by Agent
or Lenders of this guaranty or the creation or incurrence of any Guaranteed Debt
-- pay the amount of the Guaranteed Debt then due and payable to Agent for
Lenders. It is not necessary for Agent or Lenders, in order to enforce that
payment by any Guarantor, first or contemporaneously to institute suit or
exhaust remedies against Borrower or others liable on any Guaranteed Debt or to
enforce Rights against any collateral securing any Guaranteed Debt.
6. SUBORDINATION. The Subordinated Debt is expressly subordinated to the
full and final payment of the Guaranteed Debt. Each Guarantor agrees not to
accept any payment of any Subordinated Debt from Borrower if a Default or
Potential Default exists. If any Guarantor receives
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any payment of any Subordinated Debt in violation of the foregoing, that
Guarantor shall hold that payment in trust for Agent and Lenders and promptly
turn it over to Agent, in the form received (with any necessary endorsements),
to be applied to the Guaranteed Debt.
7. SUBROGATION AND CONTRIBUTION. Until no Lender is obligated to lend or
issue LCs under the Credit Agreement, all LCs have expired or been canceled, and
the Guaranteed Debt has been fully paid and performed (the "DEFERMENT DATE") (a)
no Guarantor may assert, enforce, or otherwise exercise any Right of subrogation
to any of the Rights or Liens of Agent or Lenders or any other beneficiary
against Borrower or any other obligor on the Guaranteed Debt or any collateral
or other security or any Right of recourse, reimbursement, subrogation,
contribution, indemnification, or similar Right against Borrower or any other
obligor on any Guaranteed Debt or any guarantor of it, (b) each Guarantor defers
all of the foregoing Rights (whether they arise in equity, under contract, by
statute, under common Law, or otherwise) until the Deferment Date, and (c) each
Guarantor defers the benefit of, and any Right to participate in, any collateral
or other security given to Agent or Lenders or any other beneficiary to secure
payment of any Guaranteed Debt until the Deferment Date.
8. NO RELEASE. No Guarantor's obligations under this guaranty may be
released, diminished, or affected by the occurrence of any one or more of the
following events: (a) Any taking or accepting of any other security or assurance
for any Guaranteed Debt; (b) any release, surrender, exchange, subordination,
impairment, or loss of any collateral securing any Guaranteed Debt; (c) any full
or partial release of the liability of any other obligor on the Obligation; (d)
the modification of, or waiver of compliance with, any terms of any other Loan
Document; (e) the insolvency, bankruptcy, or lack of corporate or partnership
power of any other obligor at any time liable for any Guaranteed Debt, whether
now existing or occurring in the future; (f) any renewal, extension, or
rearrangement of any Guaranteed Debt or any adjustment, indulgence, forbearance,
or compromise that may be granted or given by Agent or any Lender to any other
obligor on the Obligation; (g) any neglect, delay, omission, failure, or refusal
of Agent or any Lender to take or prosecute any action in connection with the
Guaranteed Debt; (h) any failure of Agent or any Lender to notify any Guarantor
of any renewal, extension, or assignment of any Guaranteed Debt, or the release
of any security or of any other action taken or refrained from being taken by
Agent or any Lender against Borrower or any new agreement between Agent, any
Lender, and Borrower, it being understood that neither Agent nor any Lender is
required to give any Guarantor any notice of any kind under any circumstances
whatsoever with respect to or in connection with any Guaranteed Debt, other than
any notice required to be given to Guarantors by Law or elsewhere in this
guaranty; (i) the unenforceability of any Guaranteed Debt against any other
obligor because it exceeds the amount permitted by Law, the act of creating it
is ultra xxxxx, the officers creating it exceeded their authority or violated
their fiduciary duties in connection with it, or otherwise; or (j) any payment
of the Obligation to Agent or Lenders is held to constitute a preference under
any Debtor Law or for any other reason Agent or any Lender is required to refund
that payment or make payment to someone else (and in each such instance this
guaranty will be reinstated in an amount equal to that payment).
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9. WAIVERS. Each Guarantor waives (a) all defenses to the enforcement of
this guaranty (and Rights which may be asserted as defenses to the enforcement
of this guaranty), other than complete and final payment, including, but not
limited to, (i) any Right to revoke this Guaranty with respect to future
indebtedness; (ii) any Right to require Agent or Lenders to do any of the
following before any Guarantor is obligated to pay the Guaranteed Debt or before
Agent or Lenders may proceed against that Guarantor: (A) xxx or exhaust remedies
against Borrower and other guarantors or obligors, (B) xxx on an accrued right
of action in respect of any of the Guaranteed Debt or bring any other action,
exercise any other right, or exhaust all other remedies, or (C) enforce rights
against Borrower's assets or the collateral pledged by Borrower to secure the
Guaranteed Debt; (iii) any right relating to the timing, manner, or conduct of
Agent's or Lenders' enforcement of rights against Borrower's assets or the
collateral pledged by Borrower to secure the Guaranteed Debt; (iv) if Guarantors
and Borrower (or a third party) have each pledged assets to secure the
Guaranteed Debt, any right to require Agent and Lenders to proceed first against
the other collateral before proceeding against collateral pledged by any
Guarantor; (v) notice that this Guaranty has been accepted by Agent and Lenders
and notice of any indebtedness to which this Guaranty may apply; (vi) any right
of any Guarantor to receive notice from Agent or Lenders of changes which affect
the creditworthiness of Borrower, and (vii) except as required hereby,
presentation, presentment, demand for payment, protest, notice of protest,
notice of dishonor or nonpayment of any indebtedness, notice of intent to
accelerate, notice of acceleration, notice of any suit or other action by Lender
against Borrower, any Guarantor or any other Person and any notice to any party
liable for the obligation which is the subject of the suit or action, and (b)
each of the foregoing rights or defenses regardless of whether they arise under
(i) Section 34.01 et seq. of the Texas Business and Commerce Code, as amended,
(ii) Section 17.001 of the Texas Civil Practice and Remedies Code, as amended,
(iii) Rule 31 of the Texas Rules of Civil Procedure, as amended, or (iv) common
law, in equity, under contract, by statute, or otherwise.
10. CREDIT AGREEMENT PROVISIONS. Each Guarantor acknowledges that certain
(a) representations and warranties in the Credit Agreement are applicable to it
and confirms that each such representation and warranty is true and correct, (b)
covenants, agreements, and other provisions in the Credit Agreement (INCLUDING,
WITHOUT LIMITATION, INDEMNIFICATION AND RELATED PROVISIONS IN SECTION 8.12 OF
THE CREDIT AGREEMENT) are applicable to it or are imposed upon it and agrees to
promptly and properly comply with or be bound by each of them, AND (C) IT
IRREVOCABLY CONSENTS TO AND APPROVES THE VENUE, SERVICE OF PROCESS, AND WAIVER
OF JURY TRIAL PROVISIONS OF SECTION 14.11 OF THE CREDIT AGREEMENT.
11. RELIANCE AND DUTY TO REMAIN INFORMED. Each Guarantor confirms that it
has executed and delivered this guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this guaranty. Each Guarantor confirms that it has made its own
independent investigation with respect to Borrower's creditworthiness and is not
executing and delivering this guaranty in reliance on any representation or
warranty by Agent or any Lender as to that creditworthiness. Each Guarantor
expressly assumes all responsibilities to remain informed of the financial
condition of Borrower and any circumstances affecting Borrower's ability
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to perform under the Loan Documents to which it is a party or any collateral
securing any Guaranteed Debt.
12. NO REDUCTION. The Guaranteed Debt may not be reduced, discharged, or
released because or by reason of any existing or future offset, claim, or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other obligor against Agent or Lenders or against
payment of the Guaranteed Debt, whether that offset, claim, or defense arises in
connection with the Guaranteed Debt or otherwise. Those claims and defenses
include, without limitation, failure of consideration, breach of warranty,
fraud, bankruptcy, incapacity/infancy, statute of limitations, lender liability,
accord and satisfaction, usury, forged signatures, mistake, impossibility,
frustration of purpose, and unconscionability.
13. LOAN DOCUMENT. This guaranty is a Loan Document and is subject to the
applicable provisions of SECTIONS 1 AND 14 of the Credit Agreement, all of which
are incorporated into this guaranty by reference the same as if set forth in
this guaranty verbatim.
14. COMMUNICATIONS. For purposes of SECTION 14.2 of the Credit Agreement,
each Guarantor's address and telecopy number are the same as Borrower's.
15. AMENDMENTS, ETC. No amendment, waiver, or discharge to or under this
guaranty is valid unless it is in writing and is signed by the party against
whom it is sought to be enforced and is otherwise in conformity with the
requirements of SECTION 14.8 of the Credit Agreement.
16. ENTIRETY. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS TO WHICH ANY
GUARANTOR IS A PARTY REPRESENT THE FINAL AGREEMENT BETWEEN THAT GUARANTOR,
AGENT, AND LENDERS WITH RESPECT TO THE SUBJECT MATTER OF THIS GUARANTY 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.
17. AGENT AND LENDERS. Agent is the agent for each Lender under the
Credit Agreement. All Rights granted to Agent under or in connection with this
guaranty are for each Lender's ratable benefit. Agent may, without the joinder
of any Lender, exercise any Rights in Agent's or Lenders' favor under or in
connection with this guaranty. Agent's and each Lender's Rights and obligations
vis-a-vis each other may be subject to one or more separate agreements between
those parties. However, no Guarantor is required to inquire about any such
agreement or is subject to any terms of it. Therefore, neither any Guarantor nor
its successors or assigns is entitled to any benefits or provisions of any such
separate agreement or is entitled to rely upon or raise as a defense any party's
failure or refusal to comply with the provisions of it.
18. PARTIES. This guaranty benefits Agent, Lenders, and their respective
successors and assigns and binds each Guarantor and its successors and assigns.
Upon appointment of any successor Agent under the Credit Agreement, all of the
Rights of Agent under this guaranty
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automatically vests in that new Agent as successor Agent on behalf of Lenders
without any further act, deed, conveyance, or other formality other than that
appointment. The Rights of Agent and Lenders under this guaranty may be
transferred with any assignment of the Guaranteed Debt. The Credit Agreement
contains provisions governing assignments of the Guaranteed Debt and of Rights
and obligations under this guaranty.
EXECUTED as of the date first stated above.
XPLOR ENERGY, INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
ARAXAS ENERGY CORPORATION, an Oklahoma
corporation
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
ARAXAS EXPLORATION, INC., an Oklahoma
corporation
By: /s/ W. E. Xxxxxx
---------------------------------
Name: W. E. Xxxxxx
Title: President
SOUTH COAST EXPLORATION COMPANY, a
Texas corporation
By: /s/ X. X. Xxxxxxx
---------------------------------
Name: X. X. Xxxxxxx
Title: President
INTERACTIVE EXPLORATION SOLUTIONS, INC.,
a Texas corporation
By: /s/ X. X. Xxxxxxx
-----------------------------------
Name: X. X. Xxxxxxx
Title: Vice President
SOCO EXPLORATION, L.P., a Texas limited
partnership
By: South Coast Exploration Company, its
sole general partner
By: /s/ X. X. Xxxxxxx
-------------------------------
Name: X. X. Xxxxxxx
Title: President
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