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AMENDED AND RESTATED BARNICO GUARANTY

Guarantee Agreement

AMENDED AND RESTATED BARNICO GUARANTY | Document Parties: WENTWORTH ENERGY, INC. | BARNICO DRILLING, INC | CASTLERIGG MASTER INVESTMENTS LTD | Wentworth Energy, Inc | Wentworth Oil & Gas, Inc You are currently viewing:
This Guarantee Agreement involves

WENTWORTH ENERGY, INC. | BARNICO DRILLING, INC | CASTLERIGG MASTER INVESTMENTS LTD | Wentworth Energy, Inc | Wentworth Oil & Gas, Inc

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Title: AMENDED AND RESTATED BARNICO GUARANTY
Date: 11/6/2007

AMENDED AND RESTATED BARNICO GUARANTY, Parties: wentworth energy  inc. , barnico drilling  inc , castlerigg master investments ltd , wentworth energy  inc , wentworth oil & gas  inc
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Exhibit 4.21

AMENDED AND RESTATED BARNICO GUARANTY

AMENDED AND RESTATED BARNICO GUARANTY, dated as of October 31, 2007 (as amended, restated or otherwise modified from time to time in accordance with the terms hereof, this “ Guaranty ”), made by BARNICO DRILLING, INC., a Texas corporation (“ Guarantor ” or “ Barnico ”), in favor of CASTLERIGG MASTER INVESTMENTS LTD., a company organized under the laws of the British Virgin Islands, in its capacity as collateral agent (in such capacity, the “ Collateral Agent ”) for the benefit of the Buyers (as defined below).

W I T N E S S E T H :

WHEREAS, Wentworth Energy, Inc., an Oklahoma corporation (the “ Parent ”), and each party listed as a “Buyer” on the Schedule of Buyers attached thereto (collectively, the “ Buyers ”) are parties to that certain Securities Purchase Agreement, dated as of July 24, 2006 (as amended, restated or otherwise modified from time to time prior to the date hereof, the “ Existing Securities Purchase Agreement ”), pursuant to which, among other things, the Buyers purchased from the Parent an aggregate original principal amount of $32,350,000 of senior secured convertible notes (as amended, restated or otherwise modified from time to time prior to the date hereof, the “ Existing Notes ”);

 

WHEREAS, contemporaneously with the consummation of the transactions contemplated by the Existing Securities Purchase Agreement, the following transactions (among others) occurred: (i) the Parent and Wentworth Oil & Gas, Inc., a Nevada corporation and subsidiary of the Parent (“ WOG ”), entered into that certain Security Agreement, dated as of July 25, 2006, in favor of the Collateral Agent for the benefit of the Buyers, as subsequently amended by that certain Joinder Agreement, dated as of August 8, 2006 (the “ 2006 Joinder Agreement ”), in favor of the Collateral Agent for the benefit of the Buyers, to join Barnico as a party thereto and collateral grantor thereunder (said security agreement, as amended by the 2006 Joinder Agreement, and as otherwise amended, restated or otherwise modified from time to time prior to the date hereof, the “ Existing Security Agreement ”); (ii) WOG entered into that certain Guaranty, dated as of July 25, 2006, in favor of the Collateral Agent for the benefit of the Buyers (said guaranty, as amended, restated or otherwise modified from time to time prior to the date hereof, the “ Existing WOG Guaranty ”); and (iii) the Parent and WOG entered into that certain Pledge Agreement, dated as of July 25, 2006, in favor of Collateral Agent for the benefit of the Buyers, as amended by that certain Pledge Amendment, dated August 8, 2006 (the “ 2006 Pledge Amendment ”), to include as collateral thereunder the shares of Barnico capital stock referenced in the 2006 Pledge Amendment (said pledge agreement, as amended by the 2006 Pledge Amendment, and as otherwise amended, restated or otherwise modified from time to time prior to the date hereof, the “ Existing Pledge Agreement ”);

 

WHEREAS, the Parent entered into certain deeds of trust encumbering certain real property and personal property of the Parent (said deeds of trust, as amended, restated or otherwise modified from time to time prior to the date hereof, the “ Existing Deeds of Trust ”), in favor of the trustee referenced therein for the benefit of the Collateral Agent for the benefit of the Buyers;

 

 



WHEREAS, contemporaneously with Guarantor’s execution and delivery of the 2006 Joinder Agreement, Guarantor entered into that certain Guaranty, dated as of August 8, 2006 (said guaranty, as amended, restated or otherwise modified from time to time prior to the date hereof, the “ Existing Barnico Guaranty ”), in favor of the Collateral Agent for the benefit of the Buyers;

WHEREAS, the Parent and the Buyers, severally, are entering into those certain Amendment Agreements, each dated as of the date hereof (the “ Amendment Agreements ”), pursuant to which (among other things) the Parent and the Buyers have agreed to amend the Existing Securities Purchase Agreement (as so amended, and as thereafter amended, restated or otherwise modified from time to time, the “ Securities Purchase Agreement ”) to provide for, among other things, the amendment and restatement of the Existing Barnico Guaranty by Guarantor’s execution and delivery of this Guaranty and the following additional transactions (among others) contemporaneously therewith: (i) the amendment and restatement of all of the Existing Notes by the Parent’s issuance of amended and restated notes therefor, in the form attached as an exhibit to the Amendment Agreements (said amended and restated notes, as executed and delivered, and as thereafter, amended, restated or otherwise modified from time to time, the “ Amended and Restated Notes ”); (ii) the Parent’s issuance and sale to one of the Buyers of a new senior secured convertible note in the form attached as an exhibit to the Amendment Agreements (said new note, as executed and delivered, and as thereafter amended, restated or otherwise modified from time to time, the “ New Note ”; collectively with the Amended and Restated Notes, the “ Notes ”); (iii) the amendment and restatement of the Existing Pledge Agreement in the form attached as an exhibit to the Amendment Agreements (said amended and restated pledge agreement, as executed and delivered, and as thereafter amended, restated or otherwise modified from time to time, the “ Pledge Agreement ”); (iv) the amendment and restatement of the Existing Security Agreement in the form attached as an exhibit to the Amendment Agreements (said amended and restated security agreement, as executed and delivered, and as thereafter amended, restated or otherwise modified from time to time, the “ Security Agreement ”); (v) the amendment and restatement of the Existing Deeds of Trust heretofore filed in Anderson, Freestone, Jones and Leon Counties, Texas, in the form attached as an exhibit to the Amendment Agreements (said amended and restated deeds of trust, as executed and delivered, and as thereafter amended, restated or otherwise modified from time to time, the “ Deeds of Trust ”); and (vi) to the extent not heretofore terminated, the termination of the Existing Deeds of Trust filed in Archer, Pecos and Wichita Counties, Texas;

WHEREAS, WOG has been dissolved and, prior hereto or contemporaneously herewith, WOG is being released from all of its obligations under the Existing WOG Guaranty, the Existing Pledge Agreement and the Existing Security Agreement;

WHEREAS, to induce each of the Buyers to execute and deliver its respective Amendment Agreement and perform its respective obligations under the Securities Purchase Agreement, Guarantor has agreed to execute and deliver to the Collateral Agent, for the benefit of the Buyers, this Guaranty, which amends, restates and supersedes the Existing Barnico Guaranty; and

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WHEREAS, Guarantor has determined that the execution, delivery and performance of this Guaranty directly benefits, and is in the best interest of, Guarantor;

NOW, THEREFORE, in consideration of the premises and the agreements herein, and in order to induce each of the Buyers to execute and deliver its respective Amendment Agreement and perform its respective obligations under the Securities Purchase Agreement, Guarantor hereby agrees, for the benefit of the Collateral Agent for the further benefit of each Buyer, as follows:

SECTION 1.     Definitions .  Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof.  All terms used in this Guaranty, which are defined in the Securities Purchase Agreement or the Notes and not otherwise defined herein, shall have the same meanings herein as set forth therein.

SECTION 2.     Guaranty .  Guarantor hereby absolutely, unconditionally and irrevocably guarantees the punctual payment, as and when due and payable, by stated maturity or otherwise, of all “Obligations” (as defined in the Security Agreement) of the Parent from time to time owing by the Parent in respect of the Securities Purchase Agreement, the Notes and the other Transaction Documents, including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding (as defined in the Security Agreement) of the Parent, whether or not the payment of such interest is unenforceable or is not allowable due to the existence of such Insolvency Proceeding, and all fees, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under any of the Transaction Documents (such obligations, to the extent not paid by the Parent, being the “ Guaranteed Obligations ”), and agrees to pay any and all expenses (including reasonable counsel fees and expenses) reasonably incurred by the Collateral Agent in enforcing any rights under this Guaranty.  Without limiting the generality of the foregoing, Guarantor’s liability hereunder shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Parent to the Collateral Agent (for the benefit of the Buyers) under the Securities Purchase Agreement and the Notes but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving the Parent or any other guarantor of all or any part of the Guaranteed Obligations (the Parent and any other guarantor, each a “ Transaction Party ”).

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SECTION 3.     Guaranty Absolute; Continuing Guaranty; Assignments .

(a)           Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Transaction Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Collateral Agent with respect thereto.  The obligations of Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against Guarantor to enforce such obligations, irrespective of whether any action is brought against any Transaction Party or whether any Transaction Party is joined in any such action or actions.  The liability of Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and Guarantor hereby irrevocably waives, to the extent permitted by law, any defenses it may now or hereafter have in any way relating to, any or all of the following:

(i)            any lack of validity or enforceability of any Transaction Document or any agreement or instrument relating thereto;

(ii)           any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Transaction Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Transaction Party or otherwise;

(iii)          any taking, exchange, release or non-perfection of any Collateral (as defined in any Security Document), or any taking, release or amendment or waiver of or consent to departure from any other guaranty for all or any of the Guaranteed Obligations;

(iv)          any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Transaction Party; or

(v)           any other circumstance (including any statute of limitations) or any existence of or reliance on any representation by the Collateral Agent that might otherwise constitute a defense available to, or a discharge of, a Transaction Party or any other guarantor or surety.

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the Collateral Agent or any other Person upon the insolvency, bankruptcy or reorganization of any Transaction Party or otherwise, all as though such payment had not been made.

(b)           This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until the indefeasible cash payment in full of the Guaranteed Obligations (other than inchoate indemnity obligations) and/or complete conversion of all of the Parent’s obligations under the Notes to equity securities of the Parent and payment of all other amounts payable under this Guaranty (other than inchoate indemnity obligations) and shall not terminate for any reason prior to the respective Maturity Date of each Note (other than payment in full of the Notes and/or complete conversion of all of the Parent’s obligations under the Notes to equity securities of the Parent) and (ii) be binding upon Guarantor and its respective successors and assigns.  This Guaranty shall inure to the benefit of and be enforceable by the Collateral Agent (for the benefit of the Buyers) and the Collateral Agent’s successors, and permitted pledgees, transferees and assigns.  Without limiting the generality of the foregoing sentence, the Collateral Agent or any Buyer may pledge, assign or otherwise transfer all or any portion of its rights and obligations under and subject to the terms of any Transaction Document to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to the Collateral Agent or such Buyer (as the case may be) herein or otherwise, in each case as provided in the Securities Purchase Agreement or such other Transaction Document.

SECTION 4.     Waivers .

(a)           To the extent permitted by applicable law, Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Collateral Agent exhaust

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any right or take any action against any Transaction Party or any other Person or any Collateral.  Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 4(a) is knowingly made in contemplation of such benefits.  Guarantor hereby waives any right to revoke this Guaranty, a







 
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