Exhibit 10.58
LIMITED GUARANTY
This
LIMITED GUARANTY ,
dated as of October 24, 2007 (this "
Guaranty "),
is made by
MARK S. WESTERN ("
Guarantor "),
in favor of
J. ARON & 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 "),
J. ARON & COMPANY ,
as Lead Arranger and Syndication Agent, and
J. ARON & 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;
(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.
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.
Section
7.
Waiver of Subrogation, Contribution, etc. Guarantor
hereby waives any claim, right or remedy, di
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