Exhibit 10.43


 


GUARANTEE
AGREEMENT


 


 


Between


 


 


GAINSCO,
INC.


as
Guarantor,


 


 


and


 


 


WILMINGTON
TRUST COMPANY


as
Guarantee Trustee,


 


 


Dated as
of January 13, 2006


 





















 


GAINSCO CAPITAL TRUST I


 


Certain
Sections of this Guarantee Agreement relating to


Sections 310
through 318 of the


Trust
Indenture Act of 1939:


 


	
  Trust Indenture

  	
   

  	
   

  	
   

  	
  Guarantee Agreement

  
	
  Act Section

  	
   

  	
   

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 310

  	
   

  	
  (a) (1)

  	
   

  	
  4.1 (a)

  
	
   

  	
   

  	
  (a) (2)

  	
   

  	
  4.1 (a)

  
	
   

  	
   

  	
  (a) (3)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (a) (4)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.8, 4.1 (c)

  
	
  Section 311

  	
   

  	
  (a)

  	
   

  	
  2.2(c)

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.2(c)

  
	
  Section 312

  	
   

  	
  (a)

  	
   

  	
  2.2 (a)

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.2 (c)

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Not Applicable

  
	
  Section 313

  	
   

  	
  (a)

  	
   

  	
  2.3

  
	
   

  	
   

  	
  (a) (4)

  	
   

  	
  2.3

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.3

  
	
   

  	
   

  	
  (c)

  	
   

  	
  2.3

  
	
   

  	
   

  	
  (d)

  	
   

  	
  2.3

  
	
  Section 314

  	
   

  	
  (a)

  	
   

  	
  2.4

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.4

  
	
   

  	
   

  	
  (c) (1)

  	
   

  	
  2.5

  
	
   

  	
   

  	
  (c) (2)

  	
   

  	
  2.5

  
	
   

  	
   

  	
  (c) (3)

  	
   

  	
  2.5

  
	
   

  	
   

  	
  (e)

  	
   

  	
  1.1, 2.5, 3.2

  
	
  Section 315

  	
   

  	
  (a)

  	
   

  	
  3.1 (d)

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.7

  
	
   

  	
   

  	
  (c)

  	
   

  	
  3.1 (c)

  
	
   

  	
   

  	
  (d)

  	
   

  	
  3.1 (d)

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Not Applicable

  
	
  Section 316

  	
   

  	
  (a)

  	
   

  	
  1.1, 2.6, 5.4

  
	
   

  	
   

  	
  (a) (1) (A)

  	
   

  	
  5.4

  
	
   

  	
   

  	
  (a) (1) (B)

  	
   

  	
  5.4

  
	
   

  	
   

  	
  (a) (2)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (b)

  	
   

  	
  5.3

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Not Applicable

  
	
  Section 317

  	
   

  	
  (a) (1)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (a) (2)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Not Applicable

  
	
  Section 318

  	
   

  	
  (a)

  	
   

  	
  2.1

  



 


Note: This
reconciliation and tie shall not, for any purpose, be deemed to be a part of
the Guarantee Agreement.


 


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TABLE OF CONTENTS


 


	
  ARTICLE I. DEFINITIONS

  	
  1

  
	
  SECTION 1.1.

  	
  Definitions

  	
  1

  
	
  ARTICLE II. TRUST INDENTURE ACT

  	
  4

  
	
  SECTION 2.1.

  	
  Trust
  Indenture Act; Application

  	
  4

  
	
  SECTION 2.2.

  	
  List of
  Holders

  	
  5

  
	
  SECTION 2.3.

  	
  Reports
  by the Guarantee Trustee

  	
  5

  
	
  SECTION 2.4.

  	
  Periodic
  Reports to the Guarantee Trustee

  	
  5

  
	
  SECTION 2.5.

  	
  Evidence
  of Compliance with Conditions Precedent

  	
  5

  
	
  SECTION 2.6.

  	
  Events
  of Default; Waiver

  	
  6

  
	
  SECTION 2.7.

  	
  Event
  of Default; Notice

  	
  6

  
	
  SECTION 2.8.

  	
  Conflicting
  Interests

  	
  6

  
	
  ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

  	
  6

  
	
  SECTION 3.1.

  	
  Powers
  and Duties of the Guarantee Trustee

  	
  6

  
	
  SECTION 3.2.

  	
  Certain
  Rights of Guarantee Trustee

  	
  8

  
	
  SECTION 3.3.

  	
  Indemnity

  	
  9

  
	
  SECTION 3.4.

  	
  Expenses

  	
  9

  
	
  ARTICLE IV. GUARANTEE TRUSTEE

  	
  10

  
	
  SECTION 4.1.

  	
  Guarantee
  Trustee; Eligibility

  	
  10

  
	
  SECTION 4.2.

  	
  Appointment,
  Removal and Resignation of the Guarantee Trustee

  	
  10

  
	
  ARTICLE V. GUARANTEE

  	
  11

  
	
  SECTION 5.1.

  	
  Guarantee

  	
  11

  
	
  SECTION 5.2.

  	
  Waiver
  of Notice and Demand

  	
  11

  
	
  SECTION 5.3.

  	
  Obligations
  Not Affected

  	
  11

  
	
  SECTION 5.4.

  	
  Rights
  of Holders

  	
  12

  
	
  SECTION 5.5.

  	
  Guarantee
  of Payment

  	
  13

  
	
  SECTION 5.6.

  	
  Subrogation

  	
  13

  
	
  SECTION 5.7.

  	
  Independent
  Obligations

  	
  13

  
	
  ARTICLE VI. COVENANTS AND SUBORDINATION

  	
  13

  
	
  SECTION 6.1.

  	
  Subordination

  	
  13

  
	
  SECTION 6.2.

  	
  Pari
  Passu Guarantees

  	
  13

  
	
  ARTICLE VII. TERMINATION

  	
  14

  
	
  SECTION 7.1.

  	
  Termination

  	
  14

  
	
  ARTICLE VIII. MISCELLANEOUS

  	
  14

  
	
  SECTION 8.1.

  	
  Successors
  and Assigns

  	
  14

  
	
  SECTION 8.2.

  	
  Amendments

  	
  14

  
	
  SECTION 8.3.

  	
  Notices

  	
  14

  
	
  SECTION 8.4.

  	
  Benefit

  	
  16

  
	
  SECTION 8.5.

  	
  Interpretation

  	
  16

  
	
  SECTION 8.6.

  	
  Governing
  Law

  	
  16

  
	
  SECTION 8.7.

  	
  Counterparts

  	
  17

  



 


ii





















 


GUARANTEE
AGREEMENT


 


THIS GUARANTEE
AGREEMENT, dated as of January 13, 2006, is executed and delivered by GAINSCO,
INC., a Texas corporation (the “Guarantor”), having its principal office
at 3333 Lee Parkway, Suite 1200, Dallas, Texas 75219, and WILMINGTON TRUST
COMPANY, a Delaware banking corporation, as trustee (“Wilmington Trust
Company”), for the benefit of the Holders (as defined herein) from time to time
of the Capital Securities (as defined herein) of GAINSCO CAPITAL TRUST I, a
Delaware statutory trust (the “Issuer Trust”).


 


Pursuant to an
Amended and Restated Trust Agreement (the “Trust Agreement”), dated of
even date herewith, among Gainsco, Inc., as Depositor, and Wilmington Trust
Company, as Property Trustee and Delaware Trustee, the Administrators named
therein and the Holders from time to time of undivided beneficial interests in
the assets of the Issuer Trust, the Issuer Trust is issuing up to $25,000,000
aggregate Liquidation Amount (as defined herein) of its Floating Rate Capital
Securities, representing preferred undivided beneficial interests in the assets
of the Issuer Trust and having the terms set forth in the Trust Agreement (the “Capital
Securities”);


 


The Capital
Securities will be issued by the Issuer Trust and the proceeds thereof,
together with the proceeds from the issuance of the Issuer Trust’s Common
Securities (the “Common Securities”), representing common undivided
beneficial interests in the assets of the Issuer Trust, will be used to
purchase the Junior Subordinated Debentures of the Guarantor due March 31, 2036
(the “Junior Subordinated Debentures”), which will be deposited with
Wilmington Trust Company, as Property Trustee under the Trust Agreement, as
trust assets; and


 


As an inducement
to the Holders to purchase the Capital Securities, the Guarantor is willing to
irrevocably and unconditionally agree, to the extent set forth herein, to pay
to the Holders of the Capital Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein.


 


NOW, THEREFORE, in
consideration of the purchase of the Capital Securities by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor, intending to be legally bound hereby, executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time of the
Capital Securities.


 


ARTICLE
I.  DEFINITIONS


 


SECTION 1.1.                                               Definitions.


 


As
used in this Guarantee Agreement, the terms set forth below shall have the
following meanings.  Capitalized terms
used but not otherwise defined herein shall have the meanings assigned to such
terms in the Trust Agreement.


 


“Affiliate”
of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person.  For
the purposes of this definition, “control” when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether


 





















 


through the
ownership of voting securities, by contract or otherwise; and the terms “controlling”
and “controlled” have meanings correlative to the foregoing.


 


“Debenture Redemption Date” means, with respect to any Junior
Subordinated Debenture to be redeemed, the date fixed for such redemption by or
pursuant to the Indenture.


 


“Event of
Default” means (i) a default by the Guarantor in any of
its payment obligations under this Guarantee Agreement, or (ii) a default
by the Guarantor in any other obligation hereunder that remains unremedied for
30 days after receipt by Guarantor of written notice of such default.


 


“Guarantee
Agreement” means this Guarantee Agreement, as modified,
amended or supplemented from time to time.


 


“Guarantee
Payments” means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and
unpaid Distributions (as defined in the Trust Agreement) required to be paid on
the Capital Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time, (ii) the Redemption Price, with respect
to the Capital Securities called for redemption by the Issuer Trust, to the
extent that the Issuer Trust shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary dissolution,
termination, winding-up or liquidation of the Issuer Trust, unless the Junior
Subordinated Debentures are distributed to the Holders, the lesser of
(a) the aggregate of the Liquidation Amount of all outstanding Trust
Securities and all accumulated and unpaid Distributions to the date of payment,
to the extent the Issuer Trust shall have funds on hand available to make such
payment at such time and (b) the amount of assets of the Issuer Trust
remaining available for distribution to Holders on liquidation of the Issuer Trust
(in either case, the “Liquidation Distribution”).


 


“Guarantee
Trustee” means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.


 


“Guarantor”
shall have the meaning specified in the first paragraph of
this Guarantee Agreement.


 


“Holder” means
any holder, as registered on the books and records of the Issuer Trust, of any
Capital Securities; provided, however, that,
in determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, “Holder”
shall not include the Guarantor, the Guarantee Trustee, or any Affiliate of the
Guarantor or the Guarantee Trustee.


 


“Indenture”
means the Junior Subordinated Indenture, dated of even date
herewith, between the Guarantor and Wilmington Trust Company, as trustee, as it
may be modified, amended or supplemented from time to time.


 


2





















 


“Issuer
Trust” shall have the meaning specified in the first
paragraph of this Guarantee Agreement.


 


“Like
Amount” means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities based upon the relative Liquidation
Amounts of such classes and (b) with respect to a distribution of Junior
Subordinated Debentures to Holders of Trust Securities in connection with a
dissolution or liquidation of the Issuer Trust, Junior Subordinated Debentures
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Junior Subordinated Debentures are
distributed.


 


“Liquidation
Amount” means the stated amount of $1,000 per Capital
Security and $1,000 per Common Security.


 


“Majority
in Liquidation Amount of the Capital Securities” means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount of all then-outstanding
Capital Securities.


 


“Officers’
Certificate” means a certificate signed by the Chairman of
the Board, Vice Chairman of the Board, Chief Executive Officer, President,
Executive Vice President or a Senior Vice President or Vice President, and by
the Treasurer, an Assistant Treasurer, the Chief Financial Officer, the
Secretary or an Assistant Secretary of the Guarantor, and delivered to the
Guarantee Trustee.  Any Officers’
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:


 


(a)           a
statement by each officer signing the Officers’ Certificate that such officer
has read the covenant or condition and the definitions relating thereto;


 


(b)           a
brief statement of the nature and scope of the examination or investigation
undertaken by such officer in rendering the Officers’ Certificate;


 


(c)           a
statement that such officer has made such examination or investigation as, in
such officer’s opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and


 


(d)           a
statement as to whether, in the opinion of such officer, such condition or
covenant has been complied with.


 


“Person” means
a legal person, including any individual, corporation, estate, partnership,
joint venture, association, joint stock company, limited liability company,
trust, unincorporated association, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.


 


3





















 


“Redemption
Date” means, with respect to any Capital Security to be
redeemed, the date fixed for such redemption by or pursuant to the Trust
Agreement; provided that each Debenture Redemption
Date and the stated maturity date of the Junior Subordinated Debentures shall
be a Redemption Date for a Like Amount of Capital Securities, including, but
not limited to any date of redemption pursuant to the occurrence of any Special
Event.


 


“Redemption
Price” shall have the meaning specified in the Trust Agreement.


 


“Responsible
Officer” means, when used with respect to the Guarantee
Trustee, any officer assigned to the Corporate Trust Office of the Guarantee
Trustee, including any managing director, vice president, principal, assistant
vice president, assistant treasurer, assistant secretary or any other officer
of the Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Guarantee Agreement, and also,
with respect to a particular matter, any other officer of the Guarantee Trustee
to whom such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject.


 


“Senior
Indebtedness” shall have the meaning specified in the
Indenture.


 


“Special Event” shall have the meaning specified in the
Indenture.


 


“Successor
Guarantee Trustee” means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Article IV
hereof.


 


“Trust
Agreement” has the meaning specified in the recitals hereto.


 


“Trust
Indenture Act” means the Trust Indenture Act of 1939 (15
U.S.C. §§ 77aaa-77bbbb) and any successor statute, in each case as
amended.


 


“Trust
Securities” means the Common Securities and the Capital
Securities.


 


ARTICLE
II.  TRUST INDENTURE ACT


 


SECTION 2.1.                Trust Indenture Act; Application.


 


If and to the
extent any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Guarantee Agreement, the provision of the Trust Indenture Act shall
control.  If any provision of this
Guarantee Agreement modifies or excludes any provision of the Trust Indenture
Act that may be so modified or excluded, the latter provision shall be deemed
to apply to this Guarantee Agreement as so modified or excluded, as the case
may be.


 


4





















 


SECTION 2.2.                List of Holders.


 


(a)           The
Guarantor will furnish or cause to be furnished to the Guarantee Trustee a list
of Holders at the following times:


 


(i)  quarterly, not more than 15 days after the
last day of February, May, August and November, in each year, a list, in such
form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders as of the last day of February, May, August and
November, as applicable; and


 


(ii)  at such other times as the Guarantee Trustee
may request in writing, within 30 days after the receipt by the Guarantor of
any such request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished.


 


(b)           Notwithstanding
Section 2.2(a), no such list need be furnished, if and so long as the Guarantee
Trustee is the Securities Registrar (as defined in the Trust Agreement).


 


(c)           The
Guarantee Trustee shall comply with the requirements of Section 311(a), 311(b)
and 312(b) of the Trust Indenture Act.


 


SECTION 2.3.                Reports by the
Guarantee Trustee.


 


Not later than January 31
of each year, commencing January 31, 2006, the Guarantee Trustee shall
provide to the Holders such reports, if any, as are required by
Section 313 of the Trust Indenture Act in the form and in the manner
provided by Section 313 of the Trust Indenture Act.  If this Guarantee Agreement shall have been
qualified under the Trust Indenture Act, the Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.


 


SECTION 2.4.                Periodic Reports to the Guarantee Trustee.


 


The Guarantor
shall provide to the Guarantee Trustee and the Holders such documents, reports
and information, if any, as required by Section 314 of the Trust Indenture
Act and the compliance certificate required by Section 314 of the Trust
Indenture Act, in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act, provided that such documents,
reports and information shall be required to be provided to the Securities and
Exchange Commission only if this Guarantee Agreement shall have been qualified
under the Trust Indenture Act.


 


SECTION 2.5.                Evidence of Compliance with Conditions Precedent.


 


The Guarantor
shall provide to the Guarantee Trustee such evidence of compliance with such
conditions precedent, if any, provided for in this Guarantee Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act.  Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1)
may be given in the form of an Officers’ Certificate.


 


5





















 


SECTION 2.6.                Events of Default; Waiver.


 


The Holders of a
Majority in Liquidation Amount of the Capital Securities may, by vote, on
behalf of the Holders, waive any past Event of Default and its
consequences.  Upon such waiver, any such
Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.


 


SECTION 2.7.                Event of Default; Notice.


 


(a)           The
Guarantee Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders, notice
of all Events of Default known to the Guarantee Trustee, unless such Events of
Default have been cured or waived before the giving of such notice; provided that, except in the case of a default in the
payment of a Guarantee Payment, the Guarantee Trustee shall be protected in
withholding such notice if and so long as the Board of Directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders.


 


(b)           The
Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
unless the Guarantee Trustee or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have received written notice
of such Event of Default.


 


SECTION 2.8.                Conflicting
Interests.


 


The Trust
Agreement shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.


 


ARTICLE
III.  POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE


 


SECTION 3.1.                Powers and Duties
of the Guarantee Trustee.


 


(a)           This
Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of
the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant
to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee hereunder.  The right, title and
interest of the Guarantee Trustee, as such, hereunder shall automatically vest
in any Successor Guarantee Trustee upon acceptance by such Successor Guarantee
Trustee of its appointment hereunder, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.


 


6





















 


(b)           If
an Event of Default has occurred and is continuing, the Guarantee Trustee shall
enforce this Guarantee Agreement for the benefit of the Holders.


 


(c)           The
Guarantee Trustee, before the occurrence of any Event of Default and after the
cure or waiver of all Events of Default that may have occurred, shall be
obligated to perform only such duties as are specifically set forth in this
Guarantee Agreement (including pursuant to Section 2.1), and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee.  If an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.


 


(d)           No
provision of this Guarantee Agreement shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:


 


(i)  Prior to the occurrence of any Event of
Default and after the curing or waiving of all such Events of Default that may
have occurred:


 


(A)  the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions of this Guarantee
Agreement (including pursuant to Section 2.1), and the Guarantee Trustee shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement (including pursuant to
Section 2.1); and


 


(B)  in the absence of bad faith on the part of
the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee Agreement; but in the case of
any such certificates or opinions that by any provision hereof or of the Trust
Indenture Act are specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Guarantee
Agreement;


 


(ii)  The Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;


 


(iii)  The Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
Liquidation Amount of the Capital Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and


 


(iv)  No provision of this Guarantee Agreement
shall require the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any


 


7





















 


of its duties or
in the exercise of any of its rights or powers if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not reasonably assured to
it.


 


SECTION 3.2.                Certain Rights of
Guarantee Trustee.


 


(a)           Subject
to the provisions of Section 3.1:


 


(i)  The Guarantee Trustee may conclusively rely
and shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.


 


(ii)  Any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be sufficiently evidenced by an
Officers’ Certificate unless otherwise prescribed herein.


 


(iii)  Whenever, in the administration of this
Guarantee Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request
and conclusively rely upon an Officers’ Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.


 


(iv)  The Guarantee Trustee may consult with legal
counsel, and the written advice or written opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it hereunder
in good faith and in accordance with such advice or opinion.  Such legal counsel may be legal counsel to
the Guarantor or any of its Affiliates and may be one of its employees.  The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction.


 


(v)  The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such security and indemnity
as would satisfy a reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys’ fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee; provided that nothing contained in this Section 3.2(a)(v)
shall be taken to relieve the Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers vested in
it by this Guarantee Agreement.


 


(vi)  The Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,


 


8





















 


request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit.


 


 (vii) 
The Guarantee Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through its agents or
attorneys, and the Guarantee Trustee shall not be responsible for any
negligence or willful misconduct on the part of any such agent or attorney
appointed with due care by it hereunder.


 


(viii)  Whenever in the administration of this
Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request instructions from
the Holders, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received and (C) shall be fully
protected in acting in accordance with such instructions.


 


(b)           No
provision of this Guarantee Agreement shall be deemed to impose any duty or
obligation on the Guarantee Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation.  No permissive power or authority available to
the Guarantee Trustee shall be construed to be a duty to act in accordance with
such power and authority.


 


SECTION 3.3.                Indemnity.


 


The Guarantor
agrees to indemnify the Guarantee Trustee (which for purposes of this
Section 3.3 shall include its officers, directors, employees and agents)
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence, willful misconduct or bad faith on the part of the
Guarantee Trustee, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.  The Guarantee Trustee will not claim or exact
any lien or charge on any Guarantee Payments as a result of any amount due to
it under this Guarantee Agreement.  The
provisions of this Section 3.3 shall survive the termination of this
Guarantee Agreement or the resignation or removal of the Guarantee Trustee.


 


SECTION 3.4.                Expenses.


 


The Guarantor
shall from time to time reimburse the Guarantee Trustee for its expenses and
costs (including reasonable attorneys’ or agents’ fees) incurred in connection
with the performance of its duties hereunder, except for such expenses and
costs as may be attributable to its negligence, willful misconduct or bad
faith.


 


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ARTICLE
IV.  GUARANTEE TRUSTEE


 


SECTION 4.1.                Guarantee Trustee;
Eligibility.


 


(a)           There
shall at all times be a Guarantee Trustee, which shall:


 


(i)  not be an Affiliate of the Guarantor; and


 


(ii)  be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and surplus of at
least $100,000,000, and shall be a corporation meeting the requirements of
Section 310(a) of the Trust Indenture Act. 
If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority, then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.


 


(b)           If
at any time the Guarantee Trustee shall cease to be eligible to so act under
Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2.


 


(c)           If
the Guarantee Trustee has or shall acquire any “conflicting interest” within
the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee
Trustee and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.


 


SECTION 4.2.                Appointment,
Removal and Resignation of the Guarantee Trustee.


 


(a)  No resignation or removal of the Guarantee
Trustee and no appointment of a Successor Guarantee Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
Successor Guarantee Trustee by written instrument executed by the Successor
Guarantee Trustee and delivered to the Holders and the Guarantee Trustee.


 


(b)  Subject to the immediately preceding
paragraph, a Guarantee Trustee may resign at any time by giving written notice
thereof to the Holders and the Guarantor. 
The Guarantee Trustee shall appoint a successor by requesting from at
least three Persons meeting the eligibility requirements of Section 4.1(a) such
Persons’ expenses and charges to serve as the Guarantee Trustee, and selecting
the Person who agrees to the lowest expenses and charges.  If the instrument of acceptance by the
Successor Guarantee Trustee shall not have been delivered to the Guarantee
Trustee within 30 days after the giving of such notice of resignation, the
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for the appointment of a Successor Guarantee Trustee.


 


(c)           The
Guarantee Trustee may be removed without cause by the Guarantor at any time
except during an Event of Default, and at any time by Act (within the meaning
of Section 6.8 of the Trust Agreement) of the Holders of at least a Majority in
Liquidation Amount of the Capital


 


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Securities,
delivered to the Guarantee Trustee and the Guarantor (i) for cause or (ii) if a
Debenture Event of Default shall have occurred and be continuing at any time.


 


(d)           If
a resigning Guarantee Trustee shall fail to appoint a successor, or if a
Guarantee Trustee shall be removed or become incapable of acting as Guarantee
Trustee, or if any vacancy shall occur in the office of any Guarantee Trustee
for any cause, the Holders of the Capital Securities, by Act of the Holders of
record of not less than 25% in aggregate Liquidation Amount of the Capital
Securities then outstanding delivered to such Guarantee Trustee, shall promptly
appoint a Successor Guarantee Trustee. 
If no Successor Guarantee Trustee shall have been so appointed by the
Holders of the Capital Securities and such appointment accepted by the
Successor Guarantee Trustee, any Holder, on behalf of himself and all others
similarly situated, may petition any court of competent jurisdiction for the
appointment of a Successor Guarantee Trustee.


 


ARTICLE
V. GUARANTEE


 


SECTION 5.1.                                               Guarantee.


 


The Guarantor
irrevocably and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by or on
behalf of the Issuer Trust), as and when due, regardless of any defense, right
of set-off or counterclaim which the Issuer Trust may have or assert, except
the defense of payment.  The Guarantor’s
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Guarantor to the Holders or by causing the Issuer
Trust to pay such amounts to the Holders. 
The Guarantor shall give prompt written notice to the Guarantee Trustee
in the event it makes any direct payment hereunder.


 


SECTION 5.2.                Waiver of Notice and Demand.


 


The Guarantor
hereby waives notice of acceptance of the Guarantee Agreement and of any
liability to which it applies or may apply, presentment, demand for payment,
any right to require a proceeding first against the Guarantee Trustee, the
Issuer Trust or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.


 


SECTION 5.3.                Obligations Not Affected.


 


The obligations,
covenants, agreements and duties of the Guarantor under this Guarantee
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:


 


(a)           the
release or waiver, by operation of law or otherwise, of the performance or
observance by the Issuer Trust of any express or implied agreement, covenant,
term or condition relating to the Capital Securities to be performed or
observed by the Issuer Trust;


 


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(b)           the
extension of time for the payment by the Issuer Trust of all or any portion of
the Distributions (other than an extension of time for payment of Distributions
that results from an election to defer any interest payment on the Junior
Subordinated Debentures as so provided in the Indenture), Redemption Price,
Liquidation Distribution or any other sums payable under the terms of the
Capital Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Capital
Securities;


 


(c)           any
failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred on
the Holders pursuant to the terms of the Capital Securities, or any action on
the part of the Issuer Trust granting indulgence or extension of any kind;


 


(d)           the
voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, conservatorship, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer Trust or any of
the assets of the Issuer Trust;


 


(e)           any
invalidity of, or defect or deficiency in, the Capital Securities;


 


(f)            the
settlement or compromise of any obligation guaranteed hereby or hereby
incurred; or


 


(g)           any
other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a guarantor (other than payment of the
underlying obligation), it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and unconditional
under any and all circumstances.


 


There shall be no
obligation of the Holders to give notice to, or obtain the consent of, the
Guarantor with respect to the happening of any of the foregoing.


 


SECTION 5.4.                Rights of Holders.


 


The Guarantor
expressly acknowledges that: (i) this Guarantee Agreement will be
deposited with the Guarantee Trustee to be held for the benefit of the Holders;
(ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly
against the Guarantor to enforce its rights under this Guarantee Agreement,
without first instituting a legal proceeding against the Guarantee Trustee, the
Issuer Trust or any other Person.


 


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SECTION 5.5.                Guarantee of Payment.


 


This Guarantee
Agreement creates a guarantee of payment and not of collection.  This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer Trust) or upon the
distribution of Junior Subordinated Debentures to Holders as provided in the
Trust Agreement.


 


SECTION 5.6.                Subrogation.


 


The Guarantor
shall be subrogated to all rights (if any) of the Holders against the Issuer
Trust in respect of any amounts paid to the Holders by the Guarantor under this
Guarantee Agreement; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee Agreement, if at the time of
any such payment, any amounts are due and unpaid under this Guarantee
Agreement.  If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees
to hold such amount in trust for the Holders and to pay over such amount to the
Holders.


 


SECTION 5.7.                Independent Obligations.


 


The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer Trust with respect to the Capital Securities and that the
Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.


 


ARTICLE
VI.  COVENANTS AND SUBORDINATION


 


SECTION 6.1.                Subordination.


 


This Guarantee
Agreement will constitute an unsecured obligation of the Guarantor and will
rank subordinate and junior in right of payment to all Senior Indebtedness of
the Guarantor to the same extent and in the same manner set forth in the
Indenture with respect to the Junior Subordinated Debentures, and the
provisions of Article XIII of the Indenture will apply, mutatis
mutandis, to the obligations of the Guarantor hereunder.  The obligations of the Guarantor hereunder do
not constitute Senior Indebtedness of the Guarantor.


 


SECTION 6.2.                Pari Passu Guarantees.


 


The obligations of
the Guarantor under this Guarantee Agreement shall rank pari passu with
any similar guarantee agreements issued by the Guarantor on behalf of the
holders of Trust Securities and any other security, guarantee or other
obligation that is expressly stated to rank pari passu with
the obligations of the Guarantor under this Guarantee Agreement.


 


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ARTICLE
VII.  TERMINATION


 


SECTION 7.1.                Termination.


 


This Guarantee
Agreement shall terminate and be of no further force and effect upon
(i) full payment of the Redemption Price of all outstanding Capital
Securities, (ii) the distribution of Junior Subordinated Debentures to the
Holders in exchange for all of the outstanding Capital Securities or
(iii) full payment of the amounts payable in accordance with Article IX of
the Trust Agreement upon liquidation of the Issuer Trust.  Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder is required to restore payment of any sums paid
under the Capital Securities or this Guarantee Agreement.


 


ARTICLE
VIII.  MISCELLANEOUS


 


SECTION 8.1.                Successors and
Assigns.


 


All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, conservators, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Capital Securities then outstanding.  Except in connection with a consolidation,
merger or sale involving the Guarantor that is permitted under Article VIII of
the Indenture and pursuant to which the assignee agrees in writing to perform
the Guarantor’s obligations hereunder, the Guarantor shall not assign its
obligations hereunder without the prior approval of the Holders of at least a
Majority in Liquidation Amount of the Capital Securities, and any purported
assignment that is not in accordance with these provisions shall be void.


 


SECTION 8.2.                Amendments.


 


Except with
respect to any changes that do not materially adversely affect the rights of
the Holders (in which case no consent of the Holders will be required), this
Guarantee Agreement may only be amended with the prior approval of the Holders
of not less than a Majority in Liquidation Amount of the Capital
Securities.  The provisions of Article VI
of the Trust Agreement concerning meetings of the Holders shall apply to the
giving of such approval.


 


SECTION 8.3.                Notices.


 


Any notice,
request or other communication required or permitted to be given hereunder
shall be in writing, duly signed by the party giving such notice, and
delivered, telecopied (confirmed by delivery of the original) or mailed by
first class mail as follows:


 


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(a)           if
given to the Guarantor, to the address or telecopy number set forth below or
such other address or telecopy number or to the attention of such other Person
as the Guarantor may give notice to the Holders:


 


GAINSCO, INC.


3333 Lee Parkway,
Suite 1200


Dallas, Texas
75219


Facsimile
No.:  (972) 629-4401


Attention:  Chief Financial Officer


 


(b)           if given
to the Issuer Trust, in care of the Guarantee Trustee, at the Issuer Trust’s
(and the Guarantee Trustee’s) address set forth below or such other address or
telecopy number or to the attention of such other Person as the Guarantee
Trustee on behalf of the Issuer Trust may give notice to the Holders:


 


GAINSCO Capital
Trust I


c/o GAINSCO, INC.


3333 Lee Parkway,
Suite 1200


Dallas, Texas
75219


Facsimile
No.:  (972) 629-4401


Attention:  Chief Financial Officer


 


with a copy to:


 


Wilmington Trust
Company


1100 North Market
Street


Rodney Square
North


Wilmington,
Delaware 19890-0001


Facsimile
No.:  (302) 636-4140


Attention:  Corporate Trust Administration


 


(c)           if
given to the Guarantee Trustee:


 


Wilmington Trust
Company


1100 North Market
Street


Rodney Square
North


Wilmington,
Delaware 19890-0001


Facsimile
No.:  (302) 636-4140


Attention:  Corporate Trust Administration


 


(d)           if
given to any Holder of record, at the address set forth on the books and
records of the Issuer Trust.


 


15





















 


All notices
hereunder shall be deemed to have been given when received in person,
telecopied with receipt confirmed, or mailed by first class mail, postage
prepaid, except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the
date of such refusal or inability to deliver.


 


SECTION 8.4.                Benefit.


 


This Guarantee
Agreement is solely for the benefit of the Holders and is not separately
transferable from the Capital Securities.


 


SECTION 8.5.                Interpretation.


 


In this Guarantee
Agreement, unless the context otherwise requires:


 


(a)           capitalized
terms used in this Guarantee Agreement but not defined in the preamble hereto
have the respective meanings assigned to them in Section 1.1;


 


(b)           a
term defined anywhere in this Guarantee Agreement has the same meaning
throughout;


 


(c)           all
references to “the Guarantee Agreement” or “this Guarantee Agreement” are to
this Guarantee Agreement as modified, supplemented or amended from time to
time;


 


(d)           all
references in this Guarantee Agreement to Articles and Sections are to Articles
and Sections of this Guarantee Agreement unless otherwise specified;


 


(e)           a
term defined in the Trust Indenture Act has the same meaning when used in this
Guarantee Agreement unless otherwise defined in this Guarantee Agreement or
unless the context otherwise requires;


 


(f)            a
reference to the singular includes the plural and vice versa; and


 


(g)           the
masculine, feminine or neuter genders used herein shall include the masculine,
feminine and neuter genders.


 


SECTION 8.6.                Governing Law.


 


THIS
GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.


 


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SECTION 8.7.                Counterparts.


 


This instrument
may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument. 
The exchange of copies of this Guarantee and of signature pages by
facsimile or electronic transmission shall constitute effective execution and
delivery of this Guarantee as to the parties hereto, and may be used in lieu of
the original signature pages to this Guarantee for all purposes.


 


 


[Signatures
on Next Page]


 


17





















 


THIS GUARANTEE
AGREEMENT is executed as of the day and year first above written.


 


 


	
   

  	
  GAINSCO, INC.

  
	
   

  	
  as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn W. Anderson

  	
   

  
	
   

  	
  Name: Glenn W. Anderson

  
	
   

  	
  Title:   President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as Guarantee Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Janel R. Havrilla

  	
   

  
	
   

  	
  Name: /s/ Janel R.
  Havrilla

  
	
   

  	
  Title: Senior Financial
  Services Officer

  
					



 


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