Document:

Exhibit 10.34

 

PLEDGE AMENDMENT

This Pledge
Amendment, dated August 8, 2006 is delivered pursuant to Section 4 of
the Pledge Agreement referred to below. The undersigned hereby agrees that this
Pledge Amendment may be attached to the Pledge Agreement, dated as of
July    , 2006, made by WENTWORTH ENERGY, INC. and WENTWORTH OIL & GAS, INC. in favor of
CASTLERIGG MASTER INVESTMENTS LTD., as Collateral Agent for the Buyers, (the “Collateral Agent”) as it may heretofore have been or
hereafter may be amended or otherwise modified or supplemented from time to
time and that the shares or other equity interests listed on this Pledge
Amendment shall be hereby pledged and assigned to the Collateral Agent and
become part of the Collateral referred to in such Pledge Agreement and shall
secure all of the Obligations referred to in such Pledge Agreement.

Pledged Shares

 

	
  Pledgor

  	
   

  	
  Name of Issuer

  	
   

  	
  Number of Shares or 

  Other Equity Interests

  	
   

  	
  Class

  	
   

  	
  Certificate No(s)

  
	
  Wentworth Energy, Inc.

  	
   

  	
  Barnico Drilling Inc.

  	
   

  	
  5,000

  15,000

  	
   

  	
  Class A Voting

  Class B Non-Voting

  	
   

  	
  A3

  B7

  

 

 

	
  

  	
  WENTWORTH ENERGY, INC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:Exhibit
10.35

GUARANTY

GUARANTY, dated as of
August 8, 2006 made by BARNICO DRILLING, INC., a Texas corporation (the “New  Guarantor”, and
together with the Existing Guarantor (as defined below), the “Guarantors”), in favor of CASTLERIGG MASTER INVESTMENTS LTD.,
a company organized under the laws of the British Virgin Islands, in its
capacity as collateral agent (in such capacity, the “Collateral
Agent”) for the “Buyers” (as defined below) party to the  Securities Purchase Agreement, dated as of
July 25, 2006 (as amended, restated or otherwise modified from time to time,
the “Securities Purchase Agreement”).

W  I  T
N  E  S  S  E  T  H :

WHEREAS, Wentworth
Energy, Inc., an Oklahoma corporation (the “Parent”),
and each party listed as a “Buyer” on the Schedule of Buyers attached thereto
(each a “Buyer”, and collectively,
the “Buyers”) are parties to the
Securities Purchase Agreement;

WHEREAS, a certain
subsidiary of the Parent (the “Existing Guarantor”),
executed and delivered a guaranty dated July 25, 2006, guaranteeing all of the
obligations of the Parent under the Securities Purchase Agreement, the Notes
and the Transaction Documents (as defined in the Securities Purchase
Agreement);

WHEREAS, pursuant to
Section 5(m) of the Security Agreement dated July 25, 2006, made by the Parent
and the Existing Guarantor in favor of the Collateral Agent for the Buyers (the
“Security Agreement”), the New Guarantor
is required to execute and deliver to the Collateral Agent a guaranty
guaranteeing all of the obligations of the Parent under the Securities Purchase
Agreement, the Notes and the Transaction Documents; and

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

NOW, THEREFORE, in
consideration of the premises and the agreements herein and in order to induce
the Buyers to perform under the Securities Purchase Agreement, the New
Guarantor hereby agrees with each Buyer as follows:

SECTION 1.   Definitions.  Reference is hereby made to the Securities
Purchase Agreement and the “Notes” (as defined therein which may be amended,
restated, replaced or otherwise modified from time to time in accordance with
the terms thereof, collectively, the “Notes”)
issued pursuant thereto for a statement of the terms thereof.  All terms used in this Guaranty, which are
defined in the Securities Purchase Agreement or the Notes and not otherwise
defined herein, shall have the same meanings herein as set forth therein.

SECTION 2.   Guaranty.  The New Guarantor hereby unconditionally and
irrevocably, guarantees, jointly and severally with the Existing Guarantor, the
punctual payment, as and when due and payable, by stated maturity or otherwise,
of all Obligations (as defined in the Security Agreement) of the Parent from
time to time owing by it in respect of the Securities Purchase Agreement, the
Notes and the other Transaction Documents, including, without 

 

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

SECTION 3.   Guaranty
Absolute; Continuing Guaranty; Assignments.

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

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

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

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

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

(v)           any other circumstance (including any statute of
limitations) or any existence of or reliance on any representation by the
Collateral Agent that might otherwise 

 

constitute a defense available to, or a discharge
of, any Transaction Party or any other guarantor or surety.

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

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

SECTION 4.   Waivers.  To the extent permitted by applicable law,
the New Guarantor hereby waives promptness, diligence, notice of acceptance and
any other notice with respect to any of the Guaranteed Obligations and this
Guaranty and any requirement that the Collateral Agent exhaust any right or
take any action against any Transaction Party or any other Person or any
Collateral.  The New Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated herein and that the waiver set forth in
this Section 4 is knowingly made in contemplation of such benefits.  The New Guarantor hereby waives any right to
revoke this Guaranty, and acknowledges that this Guaranty is continuing in
nature and applies to all Guaranteed Obligations, whether existing now or in
the future.

SECTION 5.   Subrogation.  The New Guarantor may not exercise any rights
that it may now or hereafter acquire against any Transaction Party or any other
guarantor that arise from the existence, payment, performance or enforcement of
the New Guarantor’s obligations under this Guaranty, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of
the  Collateral Agent against any
Transaction Party or any other guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any
Transaction Party or any other guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security solely
on account of such claim, remedy or right, unless and until all of the
Guaranteed Obligations (other than inchoate indemnity obligations) and all
other amounts payable under this Guaranty (other than inchoate indemnity 

 

obligations) shall have
indefeasibly been paid in full in cash.  If
any amount shall be paid to the New Guarantor in violation of the immediately
preceding sentence at any time prior to the later of the payment in full in
cash of the Guaranteed Obligations and all other amounts payable under this
Guaranty, such amount shall be held in trust for the benefit of the Collateral
Agent and shall forthwith be paid to the Collateral Agent to be credited and
applied to the Guaranteed Obligations and all other amounts payable under this
Guaranty, whether matured or unmatured, in accordance with the terms of the
Transaction Document, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter
arising.  If (a) the New Guarantor
shall make payment to the Collateral Agent of all or any part of the Guaranteed
Obligations, and (b) all of the Guaranteed Obligations (other than
inchoate indemnity obligations) and all other amounts payable under this
Guaranty (other than inchoate indemnity obligations) shall indefeasibly be paid
in full in cash, the Collateral Agent will, at the New Guarantor’s request and
expense, execute and deliver to the New Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to the New Guarantor of an interest in the
Guaranteed Obligations resulting from such payment by the New Guarantor.

SECTION 6.   Representations,
Warranties and Covenants.

(a)          The
New Guarantor hereby represents and warrants as of the date first written above
as follows:

(i)            The New Guarantor (A) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization as set forth on the signature pages hereto, (B) has all requisite
corporate power and authority to conduct its business as now conducted and as
presently contemplated and to execute and deliver this Guaranty and each other
Transaction Document to which the New Guarantor is a party, and to consummate
the transactions contemplated hereby and thereby and (C) is duly qualified to
do business and is in good standing in each jurisdiction in which the character
of the properties owned or leased by it or in which the transaction of its
business makes such qualification necessary except where the failure to be so
qualified would not result in a Material Adverse Effect.

(ii)           The execution, delivery and performance by the New
Guarantor of this Guaranty and each other Transaction Document to which the New
Guarantor is a party (A) have been duly authorized by all necessary corporate,
limited liability company or limited partnership action, (B) do not and will
not contravene its charter or by-laws, its limited liability company or
operating agreement or its certificate of partnership or partnership agreement,
as applicable, or any applicable law or any contractual restriction binding on
the New Guarantor or its properties (except where the contravention of such
contractual restriction would not result in a Material Adverse Effect), (C) do
not and will not result in or require the creation of any lien (other than
pursuant to any Transaction Document) upon or with respect to any of its
properties, and (D) do not and will not result in any default, noncompliance,
suspension, revocation, impairment, forfeiture or nonrenewal of any material
permit, license, authorization or approval applicable to it or its operations
or any of its properties.

 

(iii)          No authorization or approval or other action by, and no
notice to or filing with, any governmental authority is required in connection
with the due execution, delivery and performance by the New Guarantor of this
Guaranty or any of the other Transaction Documents to which the New Guarantor
is a party (other than expressly provided for in any of the Transaction
Documents).

(iv)          Each of this Guaranty and the other Transaction Documents
to which the New Guarantor is or will be a party, when delivered, will be, a
legal, valid and binding obligation of the New Guarantor, enforceable against
the New Guarantor in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, suretyship or other similar laws and equitable principles
(regardless of whether enforcement is sought in equity or at law).

(v)           There is no pending or, to the knowledge of the New
Guarantor, threatened action, suit or proceeding against the New Guarantor or
to which any of the properties of the New Guarantor is subject, before any
court or other governmental authority or any arbitrator that (A) if adversely
determined, could reasonably be expected to have a Material Adverse Effect or
(B) relates to this Guaranty or any of the other Transaction Documents to which
the New Guarantor is a party or any transaction contemplated hereby or thereby.

(vi)          The New Guarantor (A) has read and understands the terms
and conditions of the Securities Purchase Agreement and the other Transaction
Documents, and (B) now has and will continue to have independent means of
obtaining information concerning the affairs, financial condition and business
of the Parent and the other Transaction Parties, and has no need of, or right
to obtain from any Buyer, any credit or other information concerning the
affairs, financial condition or business of the Parent or the other Transaction
Parties that may come under the control of any Buyer.

(b)           The
New Guarantor covenants and agrees that until indefeasible full and final
payment of the Guaranteed Obligations and/or complete conversion of all of the
Parent’s obligations under the Notes to equity securities of the Parent, it
will comply with Sections 4(j), (k), (l), (n) and (o)of the Securities Purchase
Agreement as if the New Guarantor were a party thereto.

SECTION 7.   Right
of Set-off.  Upon the
occurrence and during the continuance of any Event of Default, any Buyer
may, and is hereby authorized to, at any time and from time to time, without
notice to the Guarantors (any such notice being expressly waived by the New
Guarantor) and to the fullest extent permitted by law, set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by any Buyer to or for
the credit or the account of any Guarantor against any and all obligations of
the Guarantors now or hereafter existing under this Guaranty or any other
Transaction Document, irrespective of whether or not any Buyer shall have made
any demand under this Guaranty or any other Transaction Document and although
such obligations may be contingent or unmatured.  Each Buyer agrees to notify the relevant
Guarantor promptly after any such set-off and application made by such Buyer,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.  The rights
of any Buyer under this Section 7 are in addition to other rights and remedies
(including, without limitation, other rights 

 

of set-off) which such
Buyer may have under this Guaranty or any other Transaction Document in law or
otherwise.

SECTION 8.   Notices,
Etc.  All notices and other
communications provided for hereunder shall be in writing and shall be mailed,
telecopied or delivered, if to the New Guarantor, to it at its address set
forth on the signature page hereto, or if to the Collateral Agent or any Buyer,
to it at its respective address set forth in the Securities Purchase Agreement;
or as to either such Person at such other address as shall be designated by
such Person in a written notice to such other Person complying as to delivery
with the terms of this Section 8.  All
such notices and other communications shall be effective (i) if mailed (by
certified mail, postage prepaid and return receipt requested), when received or
three Business Days after deposited in the mails, whichever occurs first; (ii)
if telecopied, when transmitted and confirmation is received, provided same is
on a Business Day and, if not, on the next Business Day; or (iii) if delivered
by hand, upon delivery, provided same is on a Business Day and, if not, on the
next Business Day.

SECTION 9.   CONSENT TO JURISDICTION; SERVICE
OF PROCESS AND VENUE.  ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER TRANSACTION
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GUARANTOR
HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  THE NEW
GUARANTOR HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF
NEW YORK AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY
OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT
ITS ADDRESS FOR NOTICES AS SET FORTH ON THE SIGNATURE PAGE HERETO AND TO THE
SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH SERVICE TO BECOME EFFECTIVE
TEN (10) DAYS AFTER SUCH MAILING. 
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT TO SERVICE
OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE NEW GUARANTOR IN ANY OTHER
JURISDICTION.  THE NEW GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.  TO THE EXTENT THAT THE NEW
GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE NEW GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH 

 

IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER TRANSACTION
DOCUMENTS.

SECTION 10.   WAIVER OF JURY TRIAL, ETC.  THE NEW GUARANTOR HEREBY WAIVES ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS
UNDER THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS, OR UNDER ANY AMENDMENT,
WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN
THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING
FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY OR
THE OTHER TRANSACTION DOCUMENTS, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  THE NEW GUARANTOR CERTIFIES THAT NO OFFICER,
REPRESENTATIVE, AGENT OR ATTORNEY OF THE COLLATERAL AGENT OR ANY BUYER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY BUYER WOULD NOT, IN THE EVENT OF
ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING
WAIVERS.  THE NEW GUARANTOR HEREBY
ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT ENTERING INTO THIS
AGREEMENT.

SECTION 11.   Taxes.

(a)           All
payments made by the New Guarantor hereunder or under any other Transaction
Document shall be made in accordance with the terms of the respective
Transaction Document and shall be made without set-off, counterclaim, deduction
or other defense.  All such payments
shall be made free and clear of and without deduction for any present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on the net
income of any Buyer by the jurisdiction in which such Buyer is organized or
where it has its principal lending office (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities, collectively or
individually, “Taxes”).  If the New Guarantor shall be required to
deduct or to withhold any Taxes from or in respect of any amount payable
hereunder or under any other Transaction Document;

(i)      the amount so payable shall be increased
to the extent necessary so that after making all required deductions and
withholdings (including Taxes on amounts payable to any Buyer pursuant to this
sentence) each Buyer receives an amount equal to the sum it would have received
had no such deduction or withholding been made,

(ii)     the New Guarantor shall make such deduction
or withholding,

(iii)    the New Guarantor shall pay the full amount
deducted or withheld to the relevant taxation authority in accordance with applicable
law, and

(iv)    as promptly as possible thereafter, the New
Guarantor shall send the Buyers an official receipt (or, if an official receipt
is not available, such other documentation as shall be satisfactory to the
Collateral Agent, as the case may be) 

 

showing payment.  In
addition, the New Guarantor agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution, delivery,
registration or enforcement of, or otherwise with respect to, this Agreement or
any other Transaction Document (collectively, “Other Taxes”).

(b)           The New Guarantor hereby, on a joint
and several basis with the Guarantors, indemnifies and agrees to hold the
Collateral Agent and each Buyer (each an “Indemnified
Party”) harmless from and against Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 11) paid by any Indemnified Party  as a
result of any payment made hereunder or from the execution, delivery,
registration or enforcement of, or otherwise with respect to, this Agreement or
any other Transaction Document, and any liability (including penalties,
interest and expenses for nonpayment, late payment or otherwise) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted.  This indemnification shall be paid
within 30 days from the date on which the Collateral Agent or such Buyer makes
written demand therefore, which demand shall identify the nature and amount of
such Taxes or Other Taxes.

(c)           If the New Guarantor fails to perform
any of its obligations under this Section 11, the New Guarantor shall
indemnify the Collateral Agent and each Buyer for any taxes, interest or
penalties that may become payable as a result of any such failure.  The obligations of the New Guarantor under
this Section 11 shall survive the termination of this Guaranty and the
payment of the Obligations and all other amounts payable hereunder.

SECTION 12.   Miscellaneous.

(a)           The
New Guarantor will make each payment hereunder in lawful money of the United
States of America and in immediately available funds to each Buyer, at such
address specified by such Buyer from time to time by notice to the Guarantors.

(b)           No
amendment or waiver of any provision of this Guaranty and no consent to any
departure by the New Guarantor therefrom shall in any event be effective unless
the same shall be in writing and signed by the New Guarantor and each Buyer,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

(c)           No
failure on the part of any Buyer to exercise, and no delay in exercising, any
right hereunder or under any other Transaction Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
or under any Transaction Document preclude any other or further exercise thereof
or the exercise of any other right.  The
rights and remedies of the Collateral Agent and the Buyers provided herein and
in the other Transaction Documents are cumulative and are in addition to, and
not exclusive of, any rights or remedies provided by law.  The rights of the Collateral Agent and the
Buyers under any Transaction Document against any party thereto are not
conditional or contingent on any attempt by the Collateral Agent or any Buyer
to exercise any of their respective rights under any other Transaction Document
against such party or against any other Person.

 

(d)           Any
provision of this Guaranty that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
portions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

(e)           This
Guaranty shall (i) be binding on the New Guarantor and its respective
successors and assigns, and (ii) inure, together with all rights and remedies
of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the
Buyers and their respective successors, transferees and assigns.  Without limiting the generality of clause
(ii) of the immediately preceding sentence, the Collateral Agent and any Buyer
may assign or otherwise transfer its rights and obligations under the
Securities Purchase Agreement or any other Transaction Document to any other
Person in accordance with the terms thereof, and such other Person shall
thereupon become vested with all of the benefits in respect thereof granted to
the Collateral Agent or Buyer, as the case may be, herein or otherwise.  None of the rights or obligations of the New
Guarantor hereunder may be assigned or otherwise transferred without the prior
written consent of each Buyer.

(f)    This
Guaranty reflects the entire understanding of the transaction contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, entered into before the date hereof.

(g)           Section headings herein are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

(h)           THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

[REMAINDER OF THIS PAGE INTENTIONALLY
LEFT BLANK]

 

IN WITNESS WHEREOF, the
New Guarantor has caused this Guaranty to be executed by its respective duly
authorized officer, as of the date first above written.

 

	
  

  	
  BARNICO
  DRILLING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  Address:

  
	
   

  	
  Jurisdiction:
  Texas

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