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EXHIBIT 10.2
(MULTICURRENCY--CROSS BORDER)
ISDA(R)
International Swap Dealers Association. Inc.
MASTER AGREEMENT
dated as of June 18, 2001
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BANK OF AMERICA, N.A. and TRI-UNION DEVELOPMENT CORPORATION
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have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the
relevant Confirmation or otherwise pursuant to this Agreement, in
freely transferable funds and in the manner customary for payments in
the required currency. Where settlement is by delivery (that is, other
than by payment), such delivery will be made for receipt on the due
date in the manner customary for the relevant obligation unless
otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement.
Copyright (C)1992 by International Swap Dealers Association, Inc.
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(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that
party ("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required
to be deducted or withheld (including the full amount required
to be deducted or withheld from any additional amount paid by
X to Y under this Section 2(d)) promptly upon the earlier of
determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure
that the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will
equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that
it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true
unless such failure would not have occurred but for
(I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or
after the date on which a Transaction is entered into
(regardless of whether such action is taken or
brought with respect to a party to this Agreement) or
(II) a Change in Tax Law.
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(ii) LIABILITY. If:--
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to
make any deduction or withholding in respect of which X would
not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its
assets or any contractual restriction binding on or affecting it or any
of its assets;
(iv) CONSENTS. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
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(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the
other party or, in certain cases under subparagraph (iii) below, to such
government or taxing authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and (iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing in
order to allow such other party or its Credit Support Provider to make
a payment under this Agreement or any applicable Credit Support
Document without any deduction or withholding for or on account of any
Tax or with such deduction or withholding at a reduced rate (so long as
the completion, execution or submission of such form or document would
not materially prejudice the legal or commercial position of the party
in receipt of such demand), with any such form or document to be
accurate and completed in a manner reasonably satisfactory to such
other party and to be executed and to be delivered with any reasonably
required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
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organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day after
notice of such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of
such party to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is
continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of
this Agreement (in either case other than in accordance with
its terms) prior to the satisfaction of all obligations of
such party under each Transaction to which such Credit Support
Document relates without the written consent of the other
party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party
in this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated
or deemed to have been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified
Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace
period) or (3) disaffirms, disclaims, repudiates or rejects, in whole
or in part, a Specified Transaction (or such action is taken by any
person or entity appointed or empowered to operate it or act on its
behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however
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described) in respect of such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party under one
or more agreements or instruments relating to Specified Indebtedness of
any of them (individually or collectively) in an aggregate amount of
not less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness becoming,
or becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in
an aggregate amount of not less than the applicable Threshold Amount
under such agreements or instruments (after giving effect to any
applicable notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such party
or any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or
petition instituted or presented against it, such proceeding
or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making
of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case
within 30 days of the institution or presentation thereof; (5)
has a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its
assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its
assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (8) causes
or is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:--
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its
obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent jurisdiction
of any applicable law after such date, it becomes unlawful (other than
as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):--
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of such
party to perform, any contingent or other obligation which the
party (or such Credit Support Provider) has under any Credit
Support Document relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will,
or there is a substantial likelihood that it will, on the next
succeeding Scheduled Payment Date (1) be required to pay to the other
party an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is
required to be deducted or withheld for or on account of a Tax (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
additional amount is required to be paid in respect of such Tax under
Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
(B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has
been deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
either case as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of
X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and
such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or
transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party);
or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
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6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the Affected Party, the Affected Party will, as a condition to its
right to designate an Early Termination Date under Section 6(b)(iv),
use all reasonable efforts (which will not require such party to incur
a loss, excluding immaterial, incidental expenses) to transfer within
20 days after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such other party's
policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1)
or a Tax Event occurs and there are two Affected Parties, each party
will use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) RIGHT TO TERMINATE. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after
an Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event
Upon Merger or an Additional Termination Event occurs, or a
Tax Event Upon Merger occurs and the Burdened Party is not the
Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination Event
if there is only one Affected Party may, by not more than 20 days
notice to the other party and provided that the relevant Termination
Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving
details of the relevant account to which any amount payable to it is to
be paid. In the absence of written confirmation from the source of a
quotation obtained in determining a Market Quotation, the records of
the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including)
the relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of
days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs. the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from an
Event of Default:--
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if
a positive number, the Non-defaulting Party's Loss in respect
of this Agreement.
(3) Second Method and Market Quotation. If the Second Method
and Market Quotation apply, an amount will be payable equal to
(A) the sum of the Settlement Amount (determined by the
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Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that
amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non- defaulting
Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively,
and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be
payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party
with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower
Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its
Loss in respect of this Agreement (or, if fewer than
all the Transactions are being terminated, in respect
of all Terminated Transactions) and an amount will be
payable equal to one-half of the difference between
the Loss of the party with the higher Loss ("X") and
the Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to
X; if it is a negative number, X will pay the absolute value
of that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies
in respect of a party, the amount determined under this Section 6(e)
will be subject to such adjustments as are appropriate and permitted by
law to reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other party) during
the period from the relevant Early Termination Date to the date for
payment determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies
an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such
losses.
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7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into this Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
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9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
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to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in
New York City, if this Agreement is expressed to be governed by the
laws of the State of New York; and
(ii) waives any objection which it may have at any time to the laying
of venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
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reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
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"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
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been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
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"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross- currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
ISDA(R) 1992
17
18
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
BANK OF AMERICA, N.A. TRI-UNION DEVELOPMENT CORPORATION
- ---------------------------------- -----------------------------------
(Name of Party) (Name of Party)
By: By:
------------------------------- ---------------------------
Name: Roger H. Heintzelman Name:
Title: Vice President Title:
Date: June 18, 2001 Date: June 18, 2001
Tribo Petroleum Corporation is executing this Master Agreement for the sole and
limited purpose of evidencing its agreement to be bound by its representations,
warranties, covenants and agreements contained in the Schedule and Annexes
hereto.
TRIBO PETROLEUM CORPORATION
- ---------------------------------- -----------------------------------
By:
------------------------------- ---------------------------
Name:
Title:
Date: June 18, 2001 June 18, 2001
ISDA(R) 1992
18
19
(MULTICURRENCY--CROSS BORDER)
ISDA(R)
International Swap Dealers Association, Inc.
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of June 18, 2001
among BANK OF AMERICA, N.A., TRI-UNION DEVELOPMENT CORPORATION, and
("Party A") ("Party B")
TRIBO PETROLEUM CORPORATION (the "Parent")
PART 1: TERMINATION PROVISIONS
(a) "INDENTURE" means the Indenture, as amended, modified, restated or
replaced from time to time.
(b) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:
Section 5(a)(v) (Default under Specified Transaction), none;
Section 5(a)(vi) (Cross Default), none;
Section 5(a)(vii) (Bankruptcy), none; and
Section 5(b)(iv) (Credit Event Upon Merger), none;
in relation to Party B for the purpose of:
Section 5(a)(v) (Default under Specified Transaction) none;
Section 5(a)(vi) (Cross Default), none;
Section 5(a)(vii) (Bankruptcy), none; and
Section 5(b)(iv) (Credit Event Upon Merger), none.
(c) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.
(d) The "CROSS-DEFAULT" provisions of Section 5(a)(vi) (as amended in Part
5(i))
will apply to Party A and
will apply to Party B.
1
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In connection therewith, "SPECIFIED INDEBTEDNESS" will not have the
meaning specified in Section 14, and such definition shall be replaced
by the following: "any Indebtedness (as such term is defined in the
Indenture on the date hereof)."
"THRESHOLD AMOUNT" means with respect to Party A an amount equal to
three percent (3%) of the Shareholders' Equity of Bank of America
Corporation and with respect to Party B, $5,000,000.
With respect to Party B, any Event of Default (as such term is defined
in the Indenture on the date hereof) shall be an Event of Default under
this Agreement.
"SHAREHOLDERS' EQUITY" means with respect to an entity, at any time,
the sum (as shown in the most recent annual audited financial
statements of such entity) of (i) its Capital Stock (including
preferred stock) outstanding, taken at par value, (ii) its capital
surplus and (iii) its retained earnings, minus (iv) treasury stock,
each to be determined in accordance with generally accepted accounting
principles.
(e) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv)
will apply to Party A
will apply to Party B.
(f) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a)
will not apply to Party A
will not apply to Party B.
(g) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(h) "TERMINATION CURRENCY" means United States Dollars.
(i) "ADDITIONAL TERMINATION EVENT." Additional Termination Event will
apply. The following events will constitute Additional Termination
Events, with respect to which Party B shall be the Affected Party:
(i) Any representation or warranty in Annex A proves to have been
incorrect or misleading in any material respect when made or
repeated or deemed to have been made or repeated; or
(ii) Failure by the Parent or Party B to comply with or perform any
covenant or agreement contained in Annex B and, with respect
to the covenants or agreements contained in Section 1.6(a) of
Annex B, if such failure is not remedied on or before the
thirtieth day after notice of such failure is given to Party B
by Party A; or
(iii) The occurrence of a Change of Control (as such term is defined
in the Indenture on the date hereof); or
2
21
(iv) Failure by the Parent or Party B to deliver local counsel
opinions for Collateral located in Louisiana and California,
reasonably satisfactory in form and substance to Party A, on
or before June 25, 2001.
(j) ADDITIONAL EVENTS OF DEFAULT. Each of the following shall constitute an
additional Event of Default that permits Party A to terminate this
Agreement pursuant to Section 6:
(i) Any of the Credit Support Documents shall cease, for any
reason, to be in full force and effect, or any Credit Party or
any affiliate of any Credit Party shall so assert, or any Lien
created by any of the Credit Support Documents shall cease to
be enforceable and of the same effect and priority purported
to be created thereby; or
(ii) The Confirmation Order shall be (a) stayed, (b) revoked or
terminated, or (c) amended, modified or supplemented in any
way materially adverse to Party A or its rights in the
Collateral; or
(iii) The Plan of Reorganization shall be (a) stayed, (b)
terminated, or (c) amended, modified or supplemented in any
manner that is materially adverse to Party A or its rights in
the Collateral; or
(iv) Any default shall occur by Party B under or with respect to
the Plan of Reorganization that is in any way materially
adverse to Party A or its rights in the Collateral; or
(v) The Case shall be converted to a case under Chapter 7 of the
United States Bankruptcy Code or a trustee shall be appointed
in the Case.
(k) EXISTENCE OF CASE. The Case shall not constitute an Event of Default or
Potential Event of Default, provided that if any of the events
described in Section 5(a)(vii) occur with respect to Party B or any of
its assets (whether pursuant to or in connection with the Case or
otherwise) after the Effective Date has occurred, including, without
limitation, any seeking of relief by Party B in the Case or any other
bankruptcy or insolvency proceeding, each such event shall constitute
an Event of Default under Section 5(a)(vii).
PART 2: Tax Representations
(a) PAYER TAX REPRESENTATIONS. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will make the following representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
under this Agreement. In making this representation, it may rely on (x)
the accuracy of any representations made by the other party pursuant to
Section 3(f) of this Agreement, (y) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (z) the
satisfaction of the agreement of the other party contained in Section
4(d) of this Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (y) and the other
party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.
3
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(b) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement, Party A and Party B will make the following representations
specified below, if any:
(i) The following representations will apply to Party A:
Party A is a national banking association created or organized under
the laws of the United States of America and the federal taxpayer
identification number is 94-1687665.
(ii) The following representations will apply to Party B:
Party B is a corporation created or organized under the laws of the
State of Texas and the federal taxpayer identification number is
76-0503660.
PART 3: AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents:
(a) Tax forms, documents or certificates to be delivered are:
<Table>
<Caption>
PARTY REQUIRED TO
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE DELIVERED
----------------- ------------------------- -----------------------------
Party A and Party B Any form, document or Upon request
certificate as may be requested
pursuant to Section 4(a)(iii) of
this Agreement.
</Table>
(b) Other documents to be delivered are:
<Table>
<Caption>
PARTY REQUIRED TO DATE BY WHICH TO COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE BE DELIVERED 3(d) REPRESENTATION
----------------- ------------------------- ---------------- -------------------
Party B Certified copies of all corporate Upon execution Yes
authorizations, all constitutive and delivery of
documents of Party B and the Credit this Agreement
Support Providers, certificates of
good standing and existence for
Party B and each Credit Support
Provider, and any other documents
with respect to the execution,
delivery and performance of this
Agreement and any Credit Support
Document
</Table>
4
23
<Table>
<Caption>
PARTY REQUIRED TO DATE BY WHICH TO COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE BE DELIVERED 3(d) REPRESENTATION
----------------- ------------------------- ---------------- -------------------
Party B Certificate of authority and Upon execution Yes
specimen signatures of individuals and delivery of
executing this Agreement, any Credit this Agreement
Support Document and Confirmations and thereafter
upon request of
the other party
Party B Opinion of counsel to Party B and Upon execution No
each Credit Support Provider and delivery of
satisfactory to Party A this Agreement
Party B Copies of the Credit Support Upon execution Yes
Documents duly executed and and delivery of
delivered to the Collateral Agent by this Agreement
the Credit Support Providers
Party B Due diligence reports and lien Upon execution No
searches reasonably satisfactory to and delivery of
Party A regarding the Collateral this Agreement
Party B Payment of the reasonable fees and Upon the No
expenses of Party A's legal counsel execution and
delivery of this
Agreement
Party B Certified copies of (a) the Plan of Upon execution Yes
Reorganization and (b) the and delivery of
Confirmation Order this Agreement
Party B Evidence satisfactory to Party A Upon execution Yes
that (a) the Confirmation Order is a and delivery of
final non-appealable order and that this Agreement
no appeals with respect to the
Confirmation Order have been made;
and (b) the Plan of Reorganization
and the Confirmation Order are in
full force and effect and neither of
them has been reversed, modified,
stayed, vacated, or amended, as the
case may be
Party B Evidence satisfactory to Party A On the Effective Yes
that the Effective Date has occurred Date
</Table>
5
24
<Table>
<Caption>
PARTY REQUIRED TO DATE BY WHICH TO COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE BE DELIVERED 3(d) REPRESENTATION
----------------- ------------------------- ---------------- -------------------
Party B An executed copy of the Indenture Upon execution Yes
and all amendments and supplements and delivery of
thereto, certified by a Responsible this Agreement
Officer of Party B
Party B A copy of the Offering Memorandum, Upon execution Yes
certified by a Responsible Officer and delivery of
of Party B this Agreement
Party B Evidence that Party B has received Upon execution Yes
cash proceeds from the issuance of and delivery of
the Senior Notes of at least this Agreement
$130,000,000 in accordance with the
Plan of Reorganization
Party B Such additional information Upon reasonable Yes
regarding the business, condition request of Party A
(financial or otherwise),
operations, performance, properties
or prospects of the Parent or any of
its Subsidiaries as Party A may from
time to time reasonably request
</Table>
PART 4: MISCELLANEOUS
(a) ADDRESS FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:
Address for notice or communications to Party A:
Bank of America, N.A.
Sears Tower
233 South Wacker Drive, Suite 2800
Chicago, IL 60606
Attention: Swap Operations
Telex No.: 49663210 Answerback: NATIONSBANK CHA
Reuters Dealing Code: NBCH
6
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with a copy to:
Bank of America, N.A.
100 N. Tryon St., NC1-007-13-01
Charlotte, North Carolina 28255
Attention: Capital Markets Documentation
(Telex No.: 9663210; Answerback: NATIONSBK CHA)
Facsimile No.: 704-386-4113
Address for financial statements to Party A:
Bank of America, N.A.
40 East 42nd Street
New York, New York 10022
Attention: Normand Tourangeau
Telephone No.: 212-836-5523
Facsimile No.: 212-836-5191
Address for notice or communications to Party B:
Tri-Union Development Corporation
530 Lovett Boulevard
Houston, TX 77006
Attention: Chief Financial Officer
Telephone No.: (713) 533-4000
Facsimile No.: (713) 627-2769
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10 of this Agreement:
Party A is a Multibranch Party and may act through its Charlotte, North
Carolina, Chicago, Illinois, San Francisco, California or New York, New
York or such other Office as may be agreed to by the parties in
connection with a Transaction.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:
Each of the following, as amended, supplemented, modified, renewed,
replaced, consolidated, substituted or extended from time to time, is a
"Credit Support Document":
The Security Documents (as such term is defined in Annex C).
Party B agrees that the Liens in Collateral granted to the Collateral
Agent for the benefit of the Creditors under the Credit Support
Documents shall secure all present and future obligations of
7
26
the Credit Parties, and each of them, to Party A under this Agreement
and the other Transaction Documents as contemplated by the
Intercreditor Agreement.
(g) CREDIT SUPPORT PROVIDER.
Credit Support Provider means in relation to Party A: Not applicable.
Credit Support Provider means in relation to Party B: Each Credit Party
(other than Party B).
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
its conflict of laws doctrine).
(i) NETTING OF PAYMENTS. All amounts payable on the same date, in the same
currency and in respect of the same Transaction shall be netted in
accordance with Section 2(c) of this Agreement. The election contained
in the last paragraph of Section 2(c) of this Agreement shall not apply
for the purposes of this Agreement.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
(k) ADDITIONAL DEFINITIONS. Additional defined terms that are used in this
Schedule and the Annexes attached hereto are set forth in Annex C
attached hereto.
(l) PARENT EXECUTION. The Parent is executing this Schedule solely for the
purpose of making the representations and warranties contained in Annex
A hereto, agreeing to be bound by the covenants contained in Annex B
hereto, and agreeing to be bound by Sections 5(h) and 5(k) of this
Schedule.
PART 5: OTHER PROVISIONS
(a) SET-OFF. Any amount (the "Early Termination Amount") payable to one
party (the Payee) by the other party (the Payer) under Section 6(e), in
circumstances where there is a Defaulting Party or one Affected Party
in the case where a Termination Event under Section 5(b)(iv) or (v) has
occurred, will, at the option of the party ("X") other than the
Defaulting Party or the Affected Party (and without prior notice to the
Defaulting Party or the Affected Party), be reduced by its set-off
against any amount(s) (the "Other Agreement Amount") payable (whether
at such time or in the future or upon the occurrence of a contingency)
by the Payee to the Payer (irrespective of the currency, place of
payment or booking office of the obligation) under any other
agreement(s) between the Payee and the Payer or instrument(s) or
undertaking(s) issued or executed by one party to, or in favor of, the
other party (and the Other Agreement Amount will be discharged promptly
and in all respects to the extent it is so set-off). X will give notice
to the other party of any set-off effected under this Part 5(a).
For this purpose, either the Early Termination Amount or the Other
Agreement Amount (or the relevant portion of such amounts) may be
converted by X into the currency in which the other is denominated at
the rate of exchange at which such party would be able, acting in a
reasonable manner and in good faith, to purchase the relevant amount of
such currency.
If an obligation is unascertained, X may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the
relevant party accounting to the other when the obligation is
ascertained.
8
27
Nothing in this Part 5(a) shall be effective to create a charge or
other security interest. This Part 5(a) shall be without prejudice and
in addition to any right of set-off, combination of accounts, lien or
other right to which any party is at any time otherwise entitled
(whether by operation of law, contract or otherwise).
(b) DELIVERY OF CONFIRMATIONS. For each Transaction entered into hereunder,
Party A shall promptly send to Party B a Confirmation via facsimile
transmission. Party B agrees to respond to such Confirmation within two
(2) Local Business Days, either confirming agreement thereto or
requesting a correction of any error(s) contained therein. Failure by
Party A to send a Confirmation or of Party B to respond within such
period shall not affect the validity or enforceability of such
Transaction. Absent manifest error, there shall be a presumption that
the terms contained in such Confirmation are the terms of the
Transaction.
(c) RECORDING OF CONVERSATIONS. Each party to this Agreement acknowledges
and agrees to the tape recording of conversations between trading and
marketing personnel of the parties to this Agreement whether by one or
other or both of the parties or their agents, and that any such tape
recordings may be submitted in evidence in any Proceedings (as defined
in Section 13(b) of this Agreement) relating to the Agreement.
(d) FURNISHING SPECIFIED INFORMATION. Section 4(a)(iii) is hereby amended
by inserting "promptly upon the earlier of (i)" in lieu of the word
"upon" at the beginning thereof and inserting "or (ii) such party
learning that the form or document is required" before the word "any"
on the first line thereof.
(e) NOTICE BY FACSIMILE TRANSMISSION. Section 12(a) is hereby amended by
inserting the words "2(b)," between the word "Section" and the number
"5" and inserting the words "or 13(c)" between the number "6" and the
word "may" in the second line thereof.
(f) Section 3(a) of this Agreement is amended by (i) deleting the word
"and" at the end of clause (iv); (ii) deleting the period at the end of
clause (v) and inserting therein "; and " ; and (iii) by inserting the
following additional representation:
"(vi) ELIGIBLE CONTRACT PARTICIPANT. Each party represents to the
other party (which representation will be deemed to be
repeated by each party on each date on which a Transaction is
entered into) that it is an "eligible contract participant" as
defined in Section 1a(12) of the U.S. Commodity Exchange Act,
7 U.S.C. Section 1a(12)."
(g) Section 3 is revised so as to add the following Section (g) at the end
thereof:
"(g) RELATIONSHIP BETWEEN PARTIES. Each party represents to the
other party and will be deemed to represent to the other party
on the date on which it enters into a Transaction that (absent
a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):
(i) NON-RELIANCE. It is acting for its own account, and
it has made its own independent decisions to enter
into that Transaction and as to whether that
Transaction is appropriate or proper for it based
upon its own judgment and upon advice from such
advisors as it has deemed necessary. It is not
relying on any communication (written or oral) of the
other party as investment advice or as a
recommendation to enter into that Transaction; it
being understood that information and explanations
related to the terms and conditions of a Transaction
9
28
shall not be considered investment advice or a
recommendation to enter into that Transaction.
Further, such party has not received from the other
party any assurance or guarantee as to the expected
results of that Transaction.
(ii) EVALUATION AND UNDERSTANDING. It is capable of
evaluating and understanding (on its own behalf or
through independent professional advice), and
understands and accepts, the terms, conditions and
risks of that Transaction. It is also capable of
assuming, and assumes, the financial and other risks
of that Transaction.
(iii) STATUS OF PARTIES. The other party is not acting as
an agent, fiduciary or advisor for it in respect of
that Transaction."
(h) WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY (INCLUDING THE PARENT)
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH
RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(i) CROSS DEFAULT. Section 5(a)(vi) of this Agreement is hereby amended
adding the following after the semicolon at the end thereof:
"provided, however, that notwithstanding the foregoing (but subject to
any provision to the contrary contained in any such agreement or
instrument), an Event of Default shall not occur under either (1) or
(2) above if the default, event of default or other similar condition
or event referred to in (1) or the failure to pay referred to in (2) is
caused not (even in part) by the unavailability of funds but is caused
solely due to a technical or administrative error which has been
remedied within three Local Business Days after notice of such failure
is given to the party."
(j) INCORPORATION BY REFERENCE OF TERMS OF INDENTURE. The Indenture
Covenants (together with all terms utilized therein) are hereby
incorporated by reference in, and made part of, this Agreement to the
same extent as if the Indenture Covenants (together with all terms
utilized therein) were set forth in full herein, provided that
reference to delivery to the Trustee of each notice, document,
certificate, or report shall mean delivery to Party A at the address
for notice provided in Part 4 of this Schedule. Party B hereby agrees
that, during the period commencing with the date of this Agreement
through and including the date on which all of Party B's obligations
under this Agreement are fully paid and performed, Party B will
observe, perform, and fulfill each of the Indenture Covenants as so
incorporated. In the event the Indenture terminates or becomes no
longer binding on Party B prior to the termination of this Agreement,
the Indenture Covenants (together with all terms utilized therein) as
so incorporated will remain in force and effect for purposes of this
Agreement as though set forth in full herein until the date on which
all obligations of the Parent and Party B under this Agreement are
fully performed, and this Agreement is terminated. Each certification,
statement, representation, or warranty made from time to time by Party
B to the Trustee, the holders of Senior Notes and/or the Collateral
Agent shall be deemed a certification, statement, representation or
warranty (as the case may be), by Party B directly to Party A pursuant
to this Agreement and may be relied upon by Party A. If the Indenture
shall have terminated and the Senior Notes shall have been paid in
full, with respect to Section 4.10 of the Indenture, any Net Available
Cash that would otherwise be required for an Excess Proceeds Payment or
a Major Asset Sale Offer shall be distributed to Party B, provided that
the date of such distribution shall be deemed to be a Collateral
Coverage Ratio Test Date (both before and immediately after giving
effect to such distribution) and no Default or Event of Default shall
exist or shall result from such distribution.
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(k) PAYMENT OF EXPENSES AND TAXES; INDEMNIFICATION. Each of the Parent and
Party B jointly and severally agrees (a) to pay or reimburse Party A
for all of its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other
Transaction Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
Transactions contemplated hereby and thereby, including the reasonable
fees and disbursements of counsel to Party A, with statements with
respect to the foregoing to be submitted to Party A prior to the
Closing Date (in the case of amounts to be paid on the Closing Date)
and from time to time thereafter on a quarterly basis or such other
periodic basis as Party A shall deem appropriate, (b) to pay or
reimburse Party A for all of its reasonable costs and expenses incurred
in connection with the enforcement or preservation of any rights under
this Agreement, the other Transaction Documents and any such other
documents, including the fees and disbursements of counsel to Party A,
(c) to pay, indemnify, and hold Party A harmless from and against, any
and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and
other taxes, if any, that may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent
under or in respect of, this Agreement, the other Transaction Documents
and any such other documents, and (d) to pay, indemnify, and hold Party
A and its respective officers, directors, employees, Affiliates, agents
and controlling persons (each, an "Indemnitee") harmless from and
against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this
Agreement, the other Transaction Documents and any such other
documents, including any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable
to the operations of any Credit Party, any of its Subsidiaries or any
of the Collateral and the reasonable fees and expenses of legal counsel
in connection with claims, actions or proceedings by any Indemnitee
against any Credit Party under any Transaction Document, including
(without limitation, any and all of the foregoing arising out of or
resulting from the sole or contributory negligence of the Indemnitee)
(all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that neither the Parent nor Party B shall have
any obligation under this Section 5(k) to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities
are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, each of the Parent and Party B
agrees not to assert and to cause its Subsidiaries not to assert, and
hereby waives and agrees to cause its Subsidiaries to so waive, all
rights for contribution or any other rights of recovery with respect to
all claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute
or otherwise against any Indemnitee. All amounts due under this Section
5(k) shall be payable immediately after written demand therefor.
Statements payable by the Parent or Party B pursuant to this Section
5(k) shall be submitted to Party B, at the address of the Party B set
forth in Section 4(a) of this Schedule, or to such other person or
address as may be hereafter designated by Party B in a written notice
to Party A. The agreements in this Section 5(k) shall survive the
termination of this Agreement and the payment of all amounts hereunder.
(l) Additional Representations of Party B and the Parent. Additional
representations and warranties of Party B and the Parent are contained
in Annex A attached hereto.
11
30
(m) Covenants of Party B and the Parent. Additional covenants of Party B
and the Parent are contained in Annex B attached hereto.
ACCEPTED AND AGREED:
PARTY A: PARTY B:
BANK OF AMERICA, N.A. TRI-UNION DEVELOPMENT CORPORATION
By: By:
------------------------------- --------------------------------
Name: Roger H. Heintzelman Name:
Title: Vice President Title:
PARENT:
TRIBO PETROLEUM CORPORATION
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
12
31
Annex A to Schedule
to Master Agreement
REPRESENTATIONS AND WARRANTIES
In addition to the representations in Section 3 of this Agreement, the
Parent and Party B hereby jointly and severally represent and warrant to Party A
on and as of the Effective Date and on each Trade Date (subject to matters
disclosed by each financial statement and written disclosure delivered to Party
A by the Parent or Party B prior to such Trade Date) that:
1.1 Representations and Warranties in Purchase Agreement. As of the
Effective Date, the representations and warranties of Party B and the other
Credit Parties contained in the Purchase Agreement are true and correct.
1.2 No Change. Since December 31, 2000, except as described in the
Offering Memorandum, there has been no development or event that has had or
could reasonably be expected to have a Material Adverse Effect.
1.3 Corporate Existence; Compliance with Law. The Parent and each of
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, and (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and is in compliance with all Requirements of Law except to the extent that the
failure to so qualify as a foreign corporation or to so comply with any
Requirements of Law would not, in the aggregate, have a Material Adverse Effect.
1.4 Corporate Power; Authorization; Enforceable Obligations. Each
Credit Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Transaction Documents to which it is a party,
grant the Liens granted by it pursuant to the Security Documents and, in the
case of Party B, to enter into Transactions hereunder. Each Credit Party has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Transaction Documents to which it is a party (including the
granting of the Liens to be granted by it pursuant to the Security Documents)
and, in the case of Party B, to authorize the Transactions on the terms and
conditions of this Agreement. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the Transactions hereunder or with
the execution, delivery, performance, validity or enforceability of this
Agreement or any of the other Transaction Documents, except (i) consents,
authorizations, filings and notices have been duly obtained or made and are in
full force and effect and (ii) the filings referred to in Section 1.15. Each
Transaction Document has been duly executed and delivered on behalf of each
Credit Party that is a party thereto. This Agreement constitutes, and each other
Transaction Document upon execution will constitute, a legal, valid and binding
obligation of each Credit Party that is a party thereto, enforceable against
each such Credit Party in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency,
32
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
1.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Transaction Documents, and the Transactions hereunder
will not violate any Requirement of Law or any Contractual Obligation of the
Parent or any of its Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Credit Support Documents).
1.6 Litigation. Except as disclosed in the Offering Memorandum and as
pertains to the Case, and subject to the occurrence of the Effective Date, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of Party B, threatened by
or against the Parent or any of its Subsidiaries or against any of their
respective properties or revenues (a) with respect to any of the Transaction
Documents or any of the transactions contemplated hereby or thereby, or any of
the Transactions hereunder, or (b) that would have a Material Adverse Effect.
1.7 No Default. Neither the Parent nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect that would have a Material Adverse Effect. No Event of Default or
Potential Event of Default has occurred and is continuing.
1.8 Ownership of Property; Liens. The Parent and each of its
Subsidiaries has good and defensible title to all its real property and
interests in real property (including all leasehold estates in real property),
and good and defensible title to, a valid leasehold interest in or a license to
use, all its other property, and none of such property is subject to any Lien,
charge, encumbrance or other restriction except (a) Permitted Liens, and (b) to
the extent failure to have such title or the existence of such Liens, charges,
encumbrances, or restrictions would not have a Material Adverse Effect.
1.9 Taxes. The Parent and each of its Subsidiaries has filed or caused
to be filed all Federal, state and other material tax returns that are required
to be filed except where failure to file such returns would not have a Material
Adverse Effect and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of that are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Parent or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of the Parent, no claim is being asserted,
with respect to any such tax, fee or other charge.
1.10 Labor Matters. Except as, in the aggregate, would not have a
Material Adverse Effect: (a) there are no strikes or other labor disputes
against the Parent or any of its Subsidiaries pending or, to the knowledge of
the Parent, threatened; (b) hours worked by and payment made to employees of the
Parent and its Subsidiaries have not been in violation of the Fair Labor
2
33
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from Parent or any of its Subsidiaries on
account of employee health and welfare insurance have been paid or accrued as a
liability on the books of the Parent or the relevant Subsidiary.
1.11 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Parent nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Parent nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
1.12 Investment Company Act; Public Utility Holding Company Act; Other
Regulations. No Credit Party is (a) an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended, or (b) a "holding company" as defined in, or
otherwise subject to regulation under, the Public Utility Holding Company Act of
1935. No Credit Party is subject to regulation under any Requirement of Law
(other than Regulation X of the Board) that limits its ability to incur
Indebtedness.
1.13 Subsidiaries. (a) The Offering Memorandum sets forth the name and
jurisdiction of incorporation of each Subsidiary and, as to each such
Subsidiary, the percentage of each class of Capital Stock owned by any Credit
Party and (b) there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors and directors' qualifying shares) of any nature relating
to any Capital Stock of any Subsidiary.
1.14 Accuracy of Information, etc. No statement or information
contained in this Agreement, the Purchase Agreement, the Indenture, any other
Transaction Document, the Offering Memorandum or any other document, certificate
or statement furnished by or on behalf of any Credit Party to Party A or the
Collateral Agent for use in connection with the transactions contemplated by
this Agreement or the other Transaction Documents, contained as of the date such
statement, information, document or certificate was so furnished (or, in the
case of the Offering Memorandum, as of the date of the Effective Date), any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained herein or therein not misleading,
except for statements or omissions made in reliance on and in conformity
3
34
with information furnished by the initial purchaser of the Senior Notes for use
in the Offering Memorandum. The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Parent to be reasonable at the
time made, it being recognized by Party A that such financial information as it
relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount.
1.15 Mortgage. The Mortgage is effective to create in favor of the
Collateral Agent, for the benefit of the Creditors, a legal, valid and
enforceable Lien on the Collateral described therein and proceeds thereof, and
when the Mortgage is filed in each county or parish in the States of Texas,
Louisiana and California where any portion of the Mortgaged Property (as defined
in the Mortgage) is located (or in the case of properties located in the outer
continental shelf, in the adjacent county or parish and with the Minerals
Management Service and when Uniform Commercial Code financing statements have
been filed in the offices of the Secretaries of State of the States of Texas and
California and the Parish Clerk for East Baton Rouge Parish, Louisiana, the
Mortgage shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Credit Parties in the Collateral described
therein and the proceeds thereof, as security for the Obligations, in each case
prior and superior in right to any other Person (except holders of Permitted
Liens).
1.16 Solvency. Each Credit Party is, and after giving effect to each
Transaction, the issuance of the Senior Notes, and the incurrence of all
indebtedness and obligations being incurred in connection herewith and therewith
will be and will continue to be, Solvent.
1.17 Certain Documents. The Parent has delivered to Party A complete
and correct copies of the Indenture, the Purchase Agreement, the Offering
Memorandum, the Plan of Reorganization and the Confirmation Order.
1.18 Plan of Reorganization and Confirmation Order. The Plan of
Reorganization and Confirmation Order are in full force and effect and have not
been appealed, reversed, vacated, modified, amended or stayed. The Effective
Date (as such term is defined in the Plan of Reorganization) has occurred.
1.19 Hedge Agreements. Except for this Agreement, neither the Parent
nor any of its Subsidiaries has entered into any Hedge Agreements which are
currently outstanding.
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35
Annex B to Schedule
to Master Agreement
COVENANTS
The Parent agrees that so long as this Agreement has not been
terminated or any amount is owing to Party A under this Agreement, the Parent
and Party B shall comply and cause compliance with the following covenants:
1.1 Limitation on Approved Hedge Contracts and Hedge Liquidity
Agreements. Neither the Parent nor any of its Restricted Subsidiaries will enter
into any Approved Hedge Agreement (other than this Agreement or a Transaction
hereunder) or Hedge Liquidity Agreement without the prior written consent of
Party A unless the Parent has caused a bank satisfactory to Party A in its sole
discretion to issue to Party A, as security for this Agreement and the
Transactions hereunder, a letter of credit in form, substance and amount
satisfactory to Party A in its sole discretion.
1.2 Collateral Coverage Ratio. The Parent shall not permit the
Collateral Coverage Ratio to be less than 6.0 to 1.0 on any Collateral Coverage
Ratio Test Date.
1.3 Party B as a Wholly-Owned Subsidiary. The Parent will cause Party B
to be at all times a Wholly-Owned Subsidiary of the Parent.
1.4 Notices. The Parent shall promptly upon becoming aware of it, give
notice to Party A of:
(a) the occurrence of any Event of Default or Potential Event of
Default;
(b) any amendment, modification or supplement to, or termination or
revocation of, the Confirmation Order;
(c) any amendment, modification or supplement to the Plan of
Reorganization, or any termination of the Plan of Reorganization; or
(d) any litigation or proceeding affecting the Parent, Party A or any
of the other Restricted Subsidiaries in which the amount involved is $5,000,000
or more and not covered by insurance or in which injunctive or similar relief is
sought.
1.6 Certificates. The Parent shall furnish to Party A:
(a) concurrently with the delivery of annual financial statements of
the Parent and its Subsidiaries to Party A pursuant to this Agreement, a
certificate of a Responsible Officer of the Parent stating that, to the best of
such Responsible Officer's knowledge, each Credit Party during such period has
observed or performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Transaction Documents
to which it is a party to be observed, performed or satisfied by it, and that no
Event of Default or Potential Event of Default has occurred and is continuing
except as specified in such certificate; and
(b) on each Collateral Coverage Ratio Test Date, a certificate of a
Responsible Officer of the Parent stating that the Parent and Party B are in
compliance with Section 1.2 of
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this Annex B and containing in reasonable detail information sufficient to
demonstrate such compliance.
2
37
Annex C to Schedule
to Master Agreement
DEFINED TERMS
1.1 Defined Terms. As used in this Agreement (including Annexes A, B
and C to the Schedule to this Agreement), the terms listed in this Annex C shall
have the respective meanings set forth in this Annex C.
"Agreement": the ISDA Master Agreement (Multi-Currency - Cross
Border) dated June 18, 2001, among Party A, Party B and the Parent, together
with the Schedule thereto and Annexes A, B and C thereto, and each Confirmation
confirming a Transaction, as the same may be amended, restated, modified, or
supplemented from time to time.
"Approved Hedge Agreement": has the meaning specified in the
Intercreditor Agreement on the date hereof.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Case": In re: Tri-Union Development Corp., Debtor, Case No.
00-32498-H4-11, Chapter 11, United States Bankruptcy Court, Southern District of
Texas, Houston Division.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all property of the Credit Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Credit
Support Document.
"Collateral Account": has the meaning specified in the
Intercreditor Agreement on the date hereof.
"Collateral Account Assets": has the meaning specified in the
Intercreditor Agreement on the date hereof.
"Collateral Agent": Wells Fargo Bank Minnesota, National
Association, or any successor, as the collateral agent for the Creditors
pursuant to the Intercreditor Agreement, together with any of its successors.
"Collateral Coverage Ratio": at any date of determination, the
ratio of (a) the sum of (i) the aggregate PV-10 Value of the Oil and Gas Assets
of the Parent, Party B and the Subsidiary Guarantors constituting Collateral
subject to first priority perfected Liens (except for Permitted Encumbrances) in
favor of the Collateral Agent pursuant to the Security Documents
38
plus (ii) all Collateral Account Assets subject to a first priority perfected
security interest in favor of the Collateral Agent pursuant to the Security
Documents less (iii) the greater of (A) zero or (B) 200 percent of the
Performance Exposure to (b) $25,000,000.
"Collateral Coverage Ratio Test Date": (a) the date of any
prepayment, redemption, defeasance, or repurchase of the Senior Notes or any
part thereof pursuant to an Excess Proceeds Payment or a Major Asset Sale Offer
(both before and immediately after giving effect to any such prepayment,
redemption, defeasance or repurchase), and (b) the date of any release of
Collateral Account Assets from the Collateral Account for the purpose of making
any payment, redemption, defeasance, or repurchase of the Senior Notes pursuant
to clause (a) of this definition (before and immediately after giving effect to
such release).
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Party A within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Confirmation Order": the order dated May 23, 2001, of the
United States Bankruptcy Court for the Southern District of Texas, Houston
Division, confirming the Plan of Reorganization.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Creditors": has the meaning specified in the Intercreditor
Agreement on the date hereof.
"Credit Parties": the Parent, Party B and each Subsidiary
Guarantor.
"Dollars" and "$": dollars in lawful currency of the United
States.
"Effective Date": has the meaning specified in the Plan of
Reorganization.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Excess Proceeds Payment": has the meaning specified in
Section 4.10 of the Indenture on the date hereof.
"GAAP": has the meaning specified in the Indenture on the date
hereof.
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39
"Governmental Authority": any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.
"Guarantors": the collective reference to the Parent and the
Subsidiary Guarantors.
"Guaranty Agreement": has the meaning specified in the
Indenture on the date hereof.
"Hedge Agreements": all swaps, forwards, futures, options,
caps, floors or collar agreements, or similar arrangements or combinations of
any of the foregoing, entered into by the Parent or its Subsidiaries with the
intent of protecting against fluctuations in interest rates, commodity prices,
or currency exchange rates, or the exchange of notional interest foreign
exchange or commodity obligations, either generally or under specific
contingencies.
"Hedge Liquidity Agreement": has the meaning specified in the
Indenture on the date hereof.
"Incurrence": has the meaning specified in the Indenture on
the date hereof.
"Indenture": the Indenture dated June 18, 2001, among the
Trustee, Party B and the Parent, pursuant to which the Senior Notes have been
issued, as the same may be amended, restated, supplemented or otherwise modified
from time to time.
"Indenture Covenants": Sections 4.03 through 4.14, 4.16, 4.17,
and 4.20 through 4.26 of the Indenture as in effect on the date hereof and not
as thereafter amended or modified.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intercreditor Agreement": the Intercreditor and Collateral
Agency Agreement dated as of June 18, 2001, among the Parent, Party B, each
Subsidiary Guarantor party thereto, the Approved Hedge Counterparties and Hedge
Liquidity Providers party thereto, the Collateral Agent and the Trustee.
"Lien": has the meaning specified in the Indenture on the date
hereof.
"Major Asset Sale Offer": has the meaning specified in Section
4.10 of the Indenture on the date hereof.
"Material Adverse Effect": a material adverse effect on (a)
the business, property, operations, or condition (financial or otherwise) of the
Parent and its Restricted Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other
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40
Transaction Documents or the rights or remedies of Party A or the Collateral
Agent hereunder or thereunder.
"Mortgage": has the meaning specified in the Indenture on the
date hereof.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Available Cash": has the meaning specified in the
Indenture on the date hereof.
"Obligations": has the meaning specified in the Intercreditor
Agreement on the date hereof.
"Offering Memorandum": the final Offering Memorandum dated
June 13, 2001, for the Senior Notes issued pursuant to the Indenture.
"Oil and Gas Assets": has the meaning specified in the
Indenture on the date hereof.
"Parent": Tribo Petroleum Corporation, a Texas corporation.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Performance Exposure": at any date of determination, the
amount, if any, determined by Party A in good faith and in a commercially
reasonable manner, which would be payable to Party A pursuant to Section
6(e)(i)(3) of this Agreement if this Agreement were terminated as of such date
as a result of an Event of Default.
"Permitted Encumbrances": the items listed in the definition
of "Permitted Liens" in the Indenture on the date hereof, except for the items
described in clauses (e), (g), (i), (j) and (o) thereof.
"Permitted Liens": has the meaning specified in the Indenture
on the date hereof.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Plan of Reorganization": Party B's First Amended Plan of
Reorganization in the Case.
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41
"Purchase Agreement": the Purchase Agreement dated as of June
13, 2001, among Jefferies & Company, Inc., Party B and the Parent.
"PV-10 Value": has the meaning specified in the Indenture on
the date hereof, except that instead of using commodity price assumptions based
on the most recent year-end prices, the commodity price assumptions (i) for the
two year period then in place under the Approved Hedge Agreements, will be based
upon relevant forward delivery price on such valuation date for each applicable
commodity, whether crude oil, natural gas or otherwise, determined by Party A in
a manner consistent with the determination of Performance Exposure, and (ii) for
the period after such two year period, will be based upon the average of such
two year period held constant.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. Section 4043.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the chief executive officer, president
or chief financial officer of Party B, but in any event, with respect to
financial matters, the chief financial officer of Party B.
"Restricted Subsidiary": has the meaning specified in the
Indenture on the date hereof.
"Security Documents": the collective reference to the Security
Documents (as such term is defined in the Intercreditor Agreement), the Guaranty
Agreement, and all other security documents hereafter delivered to Party A or
the Collateral Agent that guaranty, or grant a Lien on any property to secure,
the Obligations or any part thereof or this Agreement.
"Senior Notes": the Notes (as such term is defined in the
Indenture).
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that
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will be required to pay the liability of such Person on its debts as such debts
become absolute and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and (d)
such Person will be able to pay its debts as they mature. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim" means any
(x) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (y) right to an equitable
remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Parent.
"Subsidiary Guarantor": has the meaning specified in the
Indenture.
"Trade Date": in respect of a Transaction, the date on which
Party A and Party B enter into such Transaction.
"Transaction Documents": this Agreement, the Intercreditor
Agreement, and the Credit Support Documents.
"Trustee": the trustee under the Indenture.
"Wholly Owned Subsidiary": has the meaning specified in the
Indenture on the date hereof.
1.2 Other Definitional Provisions. (a) The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, Annex, and Schedule references are to this Agreement
unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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