UNLIMITED GUARANTY
THIS UNLIMITED GUARANTY ("Guaranty") is made as of the 28th day of March,
2002, by Guarantor (as hereinafter defined) for the benefit of the "Bank(s)",
"Agent" and "LC Issuer" (as such terms are hereinafter defined).
1. Definitions. As used in this Guaranty, the following terms shall have
the meanings indicated below:
(a) The term "Agent" shall mean, individually and collectively, (i)
Guaranty Bank, FSB, as Collateral Agent for the Banks under the Credit
Agreement (as hereinafter defined), whose address is 333 Clay Street, Suite
4430, Houston, Texas 77002, Attn: Richard Menchaca, (ii) Union Bank of
California, N.A., as Administrative Agent for the Banks under the Credit
Agreement, whose address is 500 North Akard, Suite 4200, Dallas, Texas
75201, Attn: John Clark, and (iii) Fortis Capital Corp., as Syndication
Agent for the Banks under the Credit Agreement, whose address is 100
Crescent Court, Suite 1777, Dallas, Texas 75201, Attn: Christopher S.
Prada, and each successor Collateral Agent, Administrative Agent and
Syndication Agent.
(b) The term "Bank(s)" shall have the same meaning as that term has in
the Credit Agreement, including each Bank's successors and assigns as
provided for in Section 9.05 thereof.
(c) The term "Borrower" shall mean Continental Resources, Inc., an
Oklahoma corporation.
(d) The term "Credit Agreement" shall mean that certain Fourth Amended
and Restated Credit Agreement dated as of March 28, 2002 by and among
Continental Resources, Inc., as Borrower, Guaranty Bank, FSB, as
Collateral/Documentation Agent, Co-Arranger and a Bank, Union Bank of
California, N.A., as Administrative Agent, LC Issuer, Lead Arranger,
Fronting Bank and a Bank, Fortis Capital Corp., as Syndication Agent,
Co-Arranger and a Bank, and the Banks and financial institutions from time
to time parties to the Credit Agreement.
(e) The term "Guaranteed Indebtedness" shall mean (i) all
indebtedness, obligations and liabilities of Borrower arising under the
Credit Agreement and other Loan Documents (as defined in the Credit
Agreement) to the Bank(s), the LC Issuer and/or the Agent of any kind or
character, now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several or joint and several, and regardless of whether such indebtedness,
obligations and liabilities may, prior to their acquisitions by the
Bank(s), the LC Issuer and/or the Agent, respectively, be or have been
payable to or in favor of a third party and subsequently acquired by the
Bank(s), the LC Issuer and/or the Agent (it being contemplated that the
Bank(s), the LC Issuer and/or the Agent may make such acquisitions from
third parties), including without limitation all indebtedness, obligations
and liabilities of Borrower to the Bank(s), the LC Issuer and/or the Agent
now existing or hereafter arising under the Loan Documents by note, draft,
acceptance, guaranty, endorsement, letter of credit, assignment, purchase,
overdraft, discount, indemnity agreement or otherwise, (ii) all accrued but
unpaid interest on any of the indebtedness described in (i) above, (iii)
all costs and expenses incurred by the Bank(s), the LC Issuer and/or the
Agent in connection with the collection and administration of all or any
part of the indebtedness and obligations described in (i), (ii) and (iii)
above or the protection or preservation of, or realization upon, the
collateral securing all or any part of such indebtedness and obligations,
including without limitation all reasonable attorneys' fees, and (iv) all
renewals, extensions, modifications and rearrangements of the indebtedness
and obligations described in (i), (ii) and (iii) above.
(f) The term "Guarantor" shall mean, individually and collectively,
Continental Gas, Inc., an Oklahoma corporation, Continental Resources of
Illinois, Inc., an Oklahoma corporation, and Continental Crude Co., an
Oklahoma corporation, whose addresses for notice purposes are as follows:
Continental Gas, Inc.
c/o Continental Resources, Inc.
302 N. Independence, Suite 300
Enid, Oklahoma 73701
Attn: Randy E. Moeder
Telephone: (580) 233-8955
Telecopy: (580) 548-5188
Continental Resources of Illinois, Inc.
c/o Continental Resources, Inc.
302 N. Independence, Suite 300
Enid, Oklahoma 73701
Attn: Randy E. Moeder
Telephone: (580) 233-8955
Telecopy: (580) 548-5188
Continental Crude Co.
c/o Continental Resources, Inc.
302 N. Independence, Suite 300
Enid, Oklahoma 73701
Attn: Randy E. Moeder
Telephone: (580) 233-8955
Telecopy: (580) 548-5188
(g) The term "LC Issuer" shall mean Union Bank of California, N. A.
(or any subsidiary or affiliate of Union Bank of California, N.A.
designated by Union Bank of California, N.A. and reasonably acceptable to
Borrower) in it's capacity as issuer of Facility LCs (as defined in the
Credit Agreement).
2. Obligations. As an inducement to Bank(s), the LC Issuer and/or the Agent
to extend or continue to extend credit and other financial accommodations to
Borrower, Guarantor, for value received, does hereby unconditionally and
absolutely guarantee the prompt and full payment and performance of the
Guaranteed Indebtedness when due or declared to be due and at all times
thereafter.
3. Character of Obligations. This is an absolute, continuing and
unconditional guaranty of payment and performance and not of collection and if
at any time or from time to time there is no outstanding Guaranteed
Indebtedness, the obligations of Guarantor with respect to any and all
Guaranteed Indebtedness incurred thereafter shall not be affected. All
Guaranteed Indebtedness heretofore, concurrently herewith or hereafter made by
Bank(s), the LC Issuer and/or the Agent to Borrower shall be conclusively
presumed to have been made or acquired in acceptance hereof. Guarantor shall be
liable, jointly and severally, with Borrower and any other guarantor of all or
any part of the Guaranteed Indebtedness.
4. Representations and Warranties. Guarantor hereby represents and warrants
the following to the Agent and to the Bank(s):
(a) The Board of Directors of Guarantor has determined that this
Guaranty may reasonably be expected to benefit, directly or indirectly,
Guarantor, and that the value of the benefits that Guarantor will derive
from giving this Guaranty are reasonably equivalent to the value of the
Guaranty; and
(b) Guarantor is familiar with, and has independently reviewed the
books and records regarding, the financial condition of Borrower and is
familiar with the value of any and all collateral intended to be security
for the payment of all or any part of the Guaranteed Indebtedness;
provided, however, Guarantor is not relying on such financial condition or
collateral as an inducement to enter into this Guaranty; and
(c) Guarantor has adequate means to obtain from Borrower on a
continuing basis information concerning the financial condition of Borrower
and Guarantor is not relying on the Agent, the Bank(s) or the LC Issuer to
provide such information to Guarantor either now or in the future; and
(d) Guarantor has the power and authority to execute, deliver and
perform this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith, and the execution, delivery and performance of
this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith do not and will not violate (i) any agreement or
instrument to which Guarantor is a party, (ii) any law, rule, regulation or
order of any governmental authority to which Guarantor is subject, or (iii)
its articles or certificate of incorporation or bylaws; and
(e) Neither the Agent, the Bank(s), the LC Issuer nor any other party
has made any representation, warranty or statement to Guarantor in order to
induce Guarantor to execute this Guaranty; and
(f) The financial statements and other financial information regarding
Guarantor heretofore and hereafter delivered to the Agent, the LC Issuer
and/or the Bank(s) are and shall be true and correct in all material
respects and fairly present the financial position of Guarantor as of the
dates thereof, and no material adverse change has occurred in the financial
condition of Guarantor reflected in the financial statements and other
financial information regarding Guarantor heretofore delivered to the
Agent, the LC Issuer and/or the Bank(s) since the date of the last
statement thereof; and
(g) As of the date hereof, and after giving effect to this Guaranty
and the obligations evidenced hereby, (i) Guarantor is and will be solvent,
(ii) the fair saleable value of Guarantor's assets exceeds and will
continue to exceed its liabilities (both fixed and contingent), (iii)
Guarantor is and will continue to be able to pay its debts as they mature,
and (iv) Guarantor has and will continue to have sufficient capital to
carry on its business and all businesses in which it is about to engage.
5. Covenants. Guarantor hereby covenants and agrees with the Agent, the LC
Issuer and the Bank(s) as follows:
(a) Guarantor shall not, so long as its obligations under this
Guaranty continue, transfer or pledge any material portion of its assets
for less than full and adequate consideration; and
(b) Guarantor shall promptly furnish to the Agent at any time and from
time to time such financial statements and other financial information of
Guarantor as required by the Credit Agreement, in form and substance
satisfactory to Agent; and
(c) Guarantor shall comply with all terms and provisions of the Loan
Documents (as defined in the Credit Agreement) that apply to Guarantor; and
(d) Promptly upon a responsible officer of Guarantor becoming aware,
Guarantor shall promptly inform the Agent of (i) any litigation or
governmental investigation against Guarantor or affecting any security for
all or any part of the Guaranteed Indebtedness or this Guaranty which, if
determined adversely, might have a material adverse effect upon the
financial condition of Guarantor or upon such security or might cause a
default under any of the Loan Documents, (ii) any claim or controversy
which might become the subject of such litigation or governmental
investigation, and (iii) any material adverse change in the financial
condition of Guarantor.
6. Consent and Waiver.
(a) Guarantor waives (i) promptness, diligence and notice of
acceptance of this Guaranty and notice of the incurring of any obligation,
indebtedness or liability to which this Guaranty applies or may apply and
waives presentment for payment, notice of nonpayment, protest, demand,
notice of protest, notice of intent to accelerate, notice of acceleration,
notice of dishonor, diligence in enforcement and indulgences of every kind,
and (ii) the taking of any other action by the Agent, the LC Issuer and/or
the Bank(s), including without limitation, giving any notice of default or
any other notice to, or making any demand on, Borrower, any other guarantor
of all or any part of the Guaranteed Indebtedness or any other party except
as required by the Credit Agreement.
(b) Guarantor waives any rights Guarantor has under, or any
requirements imposed by, Chapter 34 of the Texas Business and Commerce
Code, as in effect on the date of this Guaranty.
(c) The Agent, the LC Issuer and/or the Bank(s) may at any time,
without the consent of or notice to Guarantor, without incurring
responsibility to Guarantor and without impairing, releasing, reducing or
affecting the obligations of Guarantor hereunder: (i) change the manner,
place or terms of payment of all or any part of the Guaranteed
Indebtedness, or renew, extend, modify, rearrange or alter all or any part
of the Guaranteed Indebtedness; (ii) change the interest rate accruing on
any of the Guaranteed Indebtedness (including, without limitation, any
periodic change in such interest rate that occurs because such Guaranteed
Indebtedness accrues interest at a variable rate which may fluctuate from
time to time); (iii) sell, exchange, release, surrender, subordinate,
realize upon or otherwise deal with in any manner and in any order any
collateral for all or any part of the Guaranteed Indebtedness or this
Guaranty or setoff against all or any part of the Guaranteed Indebtedness;
(iv) neglect, delay, omit, fail or refuse to take or prosecute any action
for the collection of all or any part of the Guaranteed Indebtedness or
this Guaranty or to take or prosecute any action in connection with any of
the Loan Documents; (v) exercise or refrain from exercising any rights
against Borrower or others, or otherwise act or refrain from acting; (vi)
settle or compromise all or any part of the Guaranteed Indebtedness and
subordinate the payment of all or any part of the Guaranteed Indebtedness
to the payment of any obligations, indebtedness or liabilities which may be
due or become due to the Bank(s), the LC Issuer and/or the Agent or others;
and (vii) apply any sums paid to the Bank(s), the LC Issuer and/or the
Agent by Guarantor, Borrower or others to the Guaranteed Indebtedness in
such order and manner as the Agent, in their sole discretion, may
determine.
(d) Should the Agent, the LC Issuer or the Bank(s) seek to enforce the
obligations of Guarantor hereunder by action in any court or otherwise,
Guarantor waives any requirement, substantive or procedural, that (i) the
Agent, the LC Issuer or the Bank(s) first enforce any rights or remedies
against Borrower or any other person or entity liable to any of such
parties for all or any part of the Guaranteed Indebtedness, including
without limitation that a judgment first be rendered against Borrower or
any other person or entity, or that Borrower or any other person or entity
should be joined in such cause, or (ii) the Agent, the LC Issuer or the
Bank(s) shall first enforce rights against any collateral which shall ever
have been given to secure all or any part of the Guaranteed Indebtedness or
this Guaranty. Such waiver shall be without prejudice to the Agent's, the
LC Issuer's or the Bank(s)' right, at its option, to proceed against
Borrower or any other person or entity, whether by separate action or by
joinder.
(e) In addition to any other waivers, agreements and covenants of
Guarantor set forth herein, Guarantor hereby further waives and releases
all claims, causes of action, defenses and offsets for any act or omission
of the Agent and/or the Agent's directors, officers, employees,
representatives or agents in connection with Agent's administration of the
Guaranteed Indebtedness, except for the Agent's willful misconduct and
gross negligence.
7. Obligations Not Impaired.
(a) Guarantor agrees that its obligations hereunder shall not be
released, diminished, impaired, reduced or affected by the occurrence of
any one or more of the following events: (i) the death, disability or lack
of corporate power of Borrower, Guarantor (except as provided in paragraph
11 herein) or any other guarantor of all or any part of the Guaranteed
Indebtedness, (ii) any receivership, insolvency, bankruptcy or other
proceedings affecting Borrower, Guarantor or any other guarantor of all or
any part of the Guaranteed Indebtedness, or any of their respective
property; (iii) the partial or total release or discharge of Borrower or
any other guarantor of all or any part of the Guaranteed Indebtedness, or
any other person or entity from the performance of any obligation contained
in any instrument or agreement evidencing, governing or securing all or any
part of the Guaranteed Indebtedness, whether occurring by reason of law or
otherwise; (iv) the taking or accepting of any collateral for all or any
part of the Guaranteed Indebtedness or this Guaranty; (v) the taking or
accepting of any other guaranty for all or any part of the Guaranteed
Indebtedness; (vi) any failure by the Agent, the LC Issuer or the Bank(s)
to acquire, perfect or continue any lien or security interest on collateral
securing all or any part of the Guaranteed Indebtedness or this Guaranty;
(vii) the impairment of any collateral securing all or any part of the
Guaranteed Indebtedness or this Guaranty; (viii) any failure by the Agent,
the LC Issuer or the Bank(s) to sell any collateral securing all or any
part of the Guaranteed Indebtedness or this Guaranty in a commercially
reasonable manner or as otherwise required by law; (ix) any invalidity or
unenforceability of or defect or deficiency in any of the Loan Documents;
or (x) any other circumstance which might otherwise constitute a defense
available to, or discharge of, Borrower or any other guarantor of all or
any part of the Guaranteed Indebtedness.
(b) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of all or any part of the
Guaranteed Indebtedness is rescinded or must otherwise be returned by the
Agent, the LC Issuer or the Bank(s) upon the insolvency, bankruptcy or
reorganization of Borrower, Guarantor, or any other guarantor of all or any
part of the Guaranteed Indebtedness, or otherwise, all as though such
payment had not been made.
(c) None of the following shall affect Guarantor's liability
hereunder: (i) the unenforceability of all or any part of the Guaranteed
Indebtedness against Borrower by reason of the fact that the Guaranteed
Indebtedness exceeds the amount permitted by law; (ii) the act of creating
all or any part of the Guaranteed Indebtedness is ultra vires; or (iii) the
officers or partners creating all or any part of the Guaranteed
Indebtedness acted in excess of their authority. Guarantor hereby
acknowledges that withdrawal from, or termination of, any ownership
interest in Borrower now or hereafter owned or held by Guarantor shall not
alter, affect or in any way limit the obligations of Guarantor hereunder.
8. Actions against Guarantor. In the event of a default in the payment or
performance of all or any part of the Guaranteed Indebtedness when such
Guaranteed Indebtedness becomes due, whether by its terms, by acceleration or
otherwise, Guarantor shall, without notice or demand, promptly pay the amount
due thereon to the Agent, in lawful money of the United States, at Agent's
address set forth in subparagraph 1(a) above. One or more successive or
concurrent actions may be brought against Guarantor, either in the same action
in which Borrower is sued or in separate actions, as often as Agent deem
advisable. The exercise by the Agent, the LC Issuer or the Bank(s) of any right
or remedy under this Guaranty or under any other agreement or instrument, at
law, in equity or otherwise, shall not preclude concurrent or subsequent
exercise of any other right or remedy. The books and records of the Agent, the
LC Issuer or the Bank(s) shall be admissible in evidence in any action or
proceeding involving this Guaranty and shall be prima facie evidence of the
payments made on, and the outstanding balance of, the Guaranteed Indebtedness.
9. Payment by Guarantor. Whenever Guarantor pays any sum which is or may
become due under this Guaranty, written notice must be delivered to the Agent
contemporaneously with such payment. Such notice shall be effective for purposes
of this paragraph when contemporaneously with such payment the Agent receive
such notice either by: (a) personal delivery to the address of the Agent
identified in subparagraph 1(a) above, or (b) United States mail, certified or
registered, return receipt requested, postage prepaid, addressed to the Agent at
the address shown in subparagraph 1(a) above. In the absence of such notice to
the Agent by Guarantor in compliance with the provisions hereof, any sum
received by the Agent on account of the Guaranteed Indebtedness shall be
conclusively deemed paid by Borrower.
10. Notice of Sale. In the event that Guarantor is entitled to receive any
notice under the Uniform Commercial Code, as it exists in the state governing
any such notice, of the sale or other disposition of any collateral securing all
or any part of the Guaranteed Indebtedness or this Guaranty, reasonable notice
shall be deemed given when such notice is deposited in the United States mail,
postage prepaid, at the address for Guarantor set forth in subparagraph 1(d)
above, ten (10) days prior to the date any public sale, or after which any
private sale, of any such collateral is to be held; provided, however, that
notice given in any other reasonable manner or at any other reasonable time
shall be sufficient.
11. Waiver by Agent or Bank(s). No delay on the part of the Agent, the LC
Issuer or the Bank(s) in exercising any right hereunder or failure to exercise
the same shall operate as a waiver of such right. In no event shall any waiver
of the provisions of this Guaranty be effective unless the same be in writing
and signed by an officer of the Agent, the LC Issuer or the Bank(s), and then
only in the specific instance and for the purpose given.
12. Successors and Assigns. This Guaranty is for the benefit of the Agent,
each successor Agent, the LC Issuer, each successor LC Issuer, the Bank(s), and
each Bank's successors and assigns. This Guaranty is binding upon Guarantor and
Guarantor's successors and assigns, including without limitation any person or
entity obligated by operation of law upon the reorganization, merger,
consolidation or other change in the organizational structure of Guarantor.
13. Costs and Expenses. Guarantor shall pay on demand by the Agent all
costs and expenses, including without limitation, all reasonable attorneys' fees
incurred by the Agent, the LC Issuer and/or the Bank(s) in connection with the
preparation, administration, enforcement and/or collection of this Guaranty.
This covenant shall survive the payment of the Guaranteed Indebtedness.
14. Severability. If any provision of this Guaranty is held by a court of
competent jurisdiction to be illegal, invalid or unenforceable under present or
future laws, such provision shall be fully severable, shall not impair or
invalidate the remainder of this Guaranty and the effect thereof shall be
confined to the provision held to be illegal, invalid or unenforceable.
15. No Obligation. Nothing contained herein shall be construed as an
obligation on the part of the Agent, the LC Issuer or the Bank(s) to extend or
continue to extend credit to Borrower.
16. Amendment. No modification or amendment 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 an officer of the
Agent, the LC Issuer or the Bank(s), and then shall be effective only in the
specific instance and for the purpose for which given.
17. Cumulative Rights. All rights and remedies of the Agent, the LC Issuer
or the Bank(s) hereunder are cumulative of each other and of every other right
or remedy which the Agent, the LC Issuer or the Bank(s) may otherwise have at
law or in equity or under any instrument or agreement, and the exercise of one
or more of such rights or remedies shall not prejudice or impair the concurrent
or subsequent exercise of any other rights or remedies.
18. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS.
19. Venue. This Guaranty has been entered into in the county in Texas where
the Agent's address for notice purposes is located, and it shall be performable
for all purposes in such county. Courts within the State of Texas shall have
jurisdiction over any and all disputes arising under or pertaining to this
Guaranty and venue for any such disputes shall be in the county or judicial
district where the Agent's address for notice purposes is located.
20. Compliance with Applicable Usury Laws. Notwithstanding any other
provision of this Guaranty or of any instrument or agreement evidencing,
governing or securing all or any part of the Guaranteed Indebtedness, Guarantor
and the Agent, the LC Issuer and the Bank(s) by their acceptance hereof agree
that Guarantor shall never be required or obligated to pay interest in excess of
the maximum nonusurious interest rate as may be authorized by applicable law for
the written contracts which constitute the Guaranteed Indebtedness. It is the
intention of Guarantor and the Agent, LC Issuer and the Bank(s) to conform
strictly to the applicable laws which limit interest rates, and any of the
aforesaid contracts for interest, if and to the extent payable by Guarantor,
shall be held to be subject to reduction to the maximum nonusurious interest
rate allowed under said law.
21. Descriptive Headings. The headings in this Guaranty are for convenience
only and shall not define or limit the provisions hereof.
22. Entire Agreement. This Guaranty contains the entire agreement between
Guarantor and the Agent, the LC Issuer and the Bank(s) regarding the subject
matter hereof and supersedes all prior written and oral agreements and
understandings, if any, regarding same; provided, however, this Guaranty is in
addition to and does not replace, cancel, modify or affect any terms of the
Credit Agreement or any Loan Documents (as defined therein), or any other
guaranty of Guarantor now or hereafter held by the Agent, the LC Issuer or the
Bank(s) that relates to Borrower or any other person or entity.
[Signature page follows.]
EXECUTED as of the date first above written.
GUARANTORS:
CONTINENTAL GAS, INC.
By: RANDY E. MOEDER
Randy E. Moeder, President
CONTINENTAL RESOURCES OF ILLINOIS, INC.
By: ROGER CLEMENT
Roger Clement, Sr. Vice President
and Chief Financial Officer
CONTINENTAL CRUDE CO.
By: ROGER CLEMENT
Roger Clement, Sr. Vice President
and Chief Financial Officer
[THIS IS THE SIGNATURE PAGE TO THE GUARANTY]