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Exhibit 2.7
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT dated as of December 30, 1993 is
made by and among (i) the banks and other financial institutions (the "Canadian
Lenders") which are or may from time to time become parties to the Canadian
Credit Agreement (as hereinafter defined), by Chemical Bank of Canada, as their
administrative agent (the "Canadian Agent"); (ii) the banks and other financial
institutions (the "U.S. Lenders") which are or may from time to time become
parties to the U.S. Credit Agreement (as hereinafter defined), by Texas
Commerce Bank National Association, as their agent (the "U.S. Agent"); (iii)
Seagull Energy Canada Ltd., as borrower under the Canadian Credit Agreement
(the "Canadian Borrower"); and (iv) Seagull Energy Corporation, as borrower
under the U.S. Credit Agreement (the "U.S. Borrower") and guarantor of the
obligations of the Canadian Borrower (in such capacity, the "Guarantor").
RECITALS:
The Canadian Lenders and the U.S. Lenders have agreed that they shall
rank pari passu with one another in respect of certain payments or recoveries
and that certain matters related to the administration of the Canadian Credit
Agreement or the U.S. Credit Agreement (together, the "Credit Agreements")
shall be made on the basis of their Combined Commitments (hereinafter defined).
In order to achieve the pari passu sharing described above, it may be
necessary for the Canadian Lenders or the U.S. Lenders to purchase from each
other participations in the Loans and Letter of Credit Obligations issued
pursuant to the other Credit Agreement.
THE PARTIES HERETO AGREE AS FOLLOWS:
SECTION 1: DEFINITIONS AND INTERPRETATION
1.1 CERTAIN DEFINITIONS
When used herein, terms and expressions defined in the U.S. Credit
Agreement shall have those meanings unless they are also defined in a different
manner in the Canadian Credit Agreement (other than any difference arising
solely from conforming changes, such as the substitution of "Parent" for
"Company"), in which case the respective definitions set forth in the
respective Credit Agreements shall apply as required by the context; terms and
expressions defined in the Canadian Credit Agreement which are not defined in
the U.S. Credit Agreement shall have those meanings; and the following
additional terms and expressions shall have the meanings respectively set forth
below (such definitions to be equally applicable in the singular and plural):
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"ACCELERATION" means either (i) the maturity of the Loans under a
Credit Agreement by reason of its stated maturity date or (ii) the acceleration
(after the occurrence of Event of Default) of the due date for payment of the
principal amount then outstanding of and accrued interest on the Loans under a
Credit Agreement automatically or by reason of a declaration or demand;
"ADMINISTRATIVE AGENT" means, in respect of the Canadian Credit
Agreement, Chemical and, in respect of the U.S. Credit Agreement, TCB;
"AGREEMENT" means this Intercreditor Agreement, as the same may be
amended, modified, restated or supplemented from time to time;
"BORROWER" means the Canadian Borrower or the U.S. Borrower;
"CANADIAN CREDIT AGREEMENT" means the credit agreement dated as of
December 30, 1993 by and among the Canadian Borrower, the Banks signatory
thereto, Chemical as arranger and administrative agent, The Bank of Nova Scotia
as paying agent and co-agent and Canadian Imperial Bank of Commerce as
co-agent;
"CANADIAN CREDIT OUTSTANDINGS" of a Canadian Lender as at any date of
determination thereof means the Equivalent U.S. Dollar Amount of the aggregate
principal amount of Loans outstanding from such Lender under the Canadian
Credit Agreement plus the Equivalent U.S. Dollar Amount of such Lender's
Commitment Percentage (under the Canadian Credit Agreement) of the amount
available for drawing under Letters of Credit issued thereunder plus the
Equivalent U.S. Dollar Amount of such Lender's Commitment Percentage (under the
Canadian Credit Agreement) of any other liabilities, obligations or
indebtedness of the applicable Borrower or any other Relevant Party under the
Loan Documents (as defined in the Canadian Credit Agreement);
"CHEMICAL" means Chemical Bank of Canada, a Schedule II bank under the
Bank Act (Canada), with an office in Toronto, Ontario;
"COLLATERAL" means any and all property, security or other interests,
present or future, tangible or intangible, now or hereafter securing the
obligations of the Borrower under the Credit Agreement to which it is a party;
"COMBINED COMMITMENTS" means, at any time, the aggregate of the
Commitments of the Canadian Lenders and the U.S. Lenders under both Credit
Agreements at such time;
"COMBINED MAJORITY LENDERS" at any time means Lenders having greater
than 66-2/3% of the aggregate amount of the Combined Commitments at such time;
"COMBINED OUTSTANDINGS" means the aggregate of all Canadian Credit
Outstandings and
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all U.S. Credit Outstandings;
"COMBINED REQUESTING LENDERS" at any time means Lenders having greater
than 50% of the aggregate amount of the Combined Commitments at such time;
"COMBINED SUPER MAJORITY LENDERS" at any time means Lenders having 75%
or greater of the aggregate amount of the Combined Commitments at such time;
"CREDIT AGREEMENTS" means the Canadian Credit Agreement and the U.S.
Credit Agreement;
"DEFAULT" means any event or circumstance which, after notice or lapse
of time or a relevant determination being made (or any combination thereof),
would constitute an Event of Default under a Credit Agreement;
"ENFORCING LENDER" has the meaning ascribed thereto in Section 2.7;
"EVENT OF DEFAULT" means an Event of Default under (and as defined in)
either Credit Agreement;
"GOVERNMENTAL AUTHORITY" as to Canadian Lenders shall have the meaning
ascribed thereto in the Canadian Credit Agreement and to U.S. Lenders shall
have the meaning ascribed thereto in the U.S. Credit Agreement;
"LENDERS" means the Canadian Lenders and the U.S. Lenders;
"OPERATIVE SHARING PERCENTAGES" means the Sharing Percentages of the
U.S. Lenders and the Canadian Lenders determined as of the applicable Reference
Date. The Operative Sharing Percentages of the Lenders shall be recalculated
as of each January 1, April 1, June 1 and September 1 using the Combined
Outstandings as of the applicable Reference Date but using the then current
Equivalent U.S. Dollar Amount with respect to any of such Combined Outstandings
denominated in Canadian Dollars;
"POST DEFAULT PROPORTION" means, at any time:
a. for the U.S. Lenders, a percentage determined by dividing:
i. the aggregate of the U.S. Credit Outstandings at such
time plus any amounts paid by the applicable Lender
pursuant toSection 3.3.c. and plus any amounts
distributed by the applicable Lender to the Canadian
Lenders as holders of participation interests in the
U.S. Credit Outstandings to such time and less any
amounts received by the applicable Lender pursuant to
Section 3.3.c. and less any amounts received by the
applicable
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Lender from the Canadian Lenders by virtue of the
applicable U.S. Lender's holding risk sharing
interests in the Canadian Credit Outstandings to such
time, by
ii. the Combined Outstandings at such time;
b. for the Canadian Lenders, a percentage obtained by dividing:
i. the aggregate of the Canadian Credit Outstandings at
such time plus any amounts paid by the applicable
Lender pursuant toSection 3.3.c. and plus any amounts
distributed by the applicable Lender to the U.S.
Lenders as holders of risk sharing interests in the
Canadian Credit Outstandings to such time andless any
amounts received by the applicable Lender pursuant to
Section 3.3.c. and less any amounts received by the
applicable Lender from the U.S. Lenders by virtue of
the applicable Canadian Lender's holding
participation interests in the U.S. Credit
Outstandings to such time, by
ii. the Combined Outstandings at such time;
"REALLOCABLE PAYMENT" means any amount received by a Lender, after the
applicable Reference Date, in respect of a Credit Agreement by virtue of any
payment or prepayment (other than amounts received as Cover or otherwise in the
nature of collateral under either of the Credit Agreement) made by or for the
account of a Borrower (including for greater certainty any payment made under a
Guaranty of such Borrower's obligations and all amounts realized from the
exercise of any foreclosure or similar rights in respect of any collateral,
together with all proceeds of insurance in respect of the Collateral which are
received by a Lender and which such Lender applies to reduce any Combined
Outstandings) or by virtue of an exercise of any right of set-off, combination,
zero-balancing or similar mechanisms;
"REFERENCE DATE" means the first to occur of (i) the date on which any
Acceleration has occurred or (ii) the date on which any Event of Default
arising under Section 11.1(a) of either of the Credit Agreements has occurred.
"SHARING PERCENTAGE" means, at any time:
a. for the U.S. Lenders, the percentage determined by dividing
the U.S. Credit Outstandings by the Combined Outstandings at
such time; and
b. for the Canadian Lenders, the percentage determined by
dividing the Canadian Outstandings by the Combined
Outstandings at such time;
"TCB" means Texas Commerce Bank National Association, a national
banking
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association;
"U.S. CREDIT AGREEMENT" means the amended and restated credit
agreement dated as of June 25, 1993 by and among the U.S. Borrower, the Banks
signatory thereto and TCB as agent, as amended by amending agreement dated
December 30, 1993; and
"U.S. CREDIT OUTSTANDINGS" of a U.S. Lender as at any date of
determination thereof means the aggregate principal amount of Loans outstanding
from such Lender under the U.S. Credit Agreement plus such Lender's Commitment
Percentage (as defined under the U.S. Credit Agreement) of amounts available
for drawing pursuant to Letters of Credit issued thereunder plus such Lender's
Commitment Percentage (under the U.S. Credit Agreement) of any other
liabilities, obligations or indebtedness of the applicable Borrower or any
other Relevant Party under the Loan Documents (as defined in the U.S. Credit
Agreement).
1.2 HEADINGS AND AGREEMENT REFERENCES
a. The division of this Agreement into Sections, the inclusion of
a table of contents and the insertion of headings is for
convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
b. The term "this Agreement", "hereof", "hereunder" and similar
expressions refer to this Agreement and not to any particular
Article, Section or other portion hereof and include any
amendments or supplements hereto. Unless otherwise stated,
references herein to "Sections" are to Sections of this
Agreement.
SECTION 2: CO-OPERATIVE ADMINISTRATION
2.1 COMBINED VOTING
Notwithstanding anything to the contrary provided in the Canadian
Credit Agreement or the U.S. Credit Agreement:
a. no decision, determination, instruction, action, consent,
waiver or amendment under Sections 2.9 or 3.2(b) of the U.S.
Credit Agreement, with respect to the Borrowing Base or any
component of the Borrowing Base or under Sections 9, 10 or 11
of the Canadian Credit Agreement or the U.S. Credit Agreement
which, by the terms of the applicable Credit Agreement,
requires approval, agreement or consent by or from the
"Majority Banks" (as such expression is used in the respective
Credit Agreement), and no amendment of such requirement for
such approval, agreement or consent by or from such "Majority
Banks", shall be made, taken, implemented, given or effective
unless the same shall have been approved, agreed or consented
to by the Combined Majority Lenders;
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b. no decision, determination, instruction, action, consent,
waiver or amendment under the U.S. Credit Agreement which, by
the terms of such Credit Agreement, requires approval,
agreement or consent by or from the "Requesting Banks" (as
such expression is used in the U.S. Credit Agreement) shall be
made, taken, implemented, given or effective unless the same
shall have been approved, agreed or consented to by the
Combined Requesting Lenders;
c. no decision, determination, instruction, action, consent,
waiver or amendment under the U.S. Credit Agreement which, by
the terms of such Credit Agreement, requires approval,
agreement or consent by or from the "Super Majority Banks" (as
such expression is used in the U.S. Credit Agreement) shall be
made, taken, implemented, given or effective unless the same
shall have been approved, agreed or consented to by the
Combined Super Majority Lenders.
2.2 GOOD FAITH DETERMINATIONS
Each Lender shall, in giving consideration to any request for any
approval, agreement or consent under a Credit Agreement referred to in Section
2.1 above, act in good faith with a view to the effect of this Agreement;
provided, however that such obligation is intended to run to the benefit of the
respective Lenders and not, except to the extent such obligation is imposed by
applicable laws, to the benefit of any Borrower or any Relevant Party under
either Credit Agreement.
2.3 NOTICES AND COMMUNICATIONS (GENERAL)
The Administrative Agents shall without request, to the extent not
delivered by the relevant Borrower, promptly provide to each other, for
distribution to the Lenders under the applicable Credit Agreement, copies of
any material notices or other communications from the Canadian Borrower or the
U.S. Borrower and material information received or determinations made by them
and, in particular, any designation by the Canadian Borrower of the Maximum
Outstanding Amount pursuant to the Canadian Credit Agreement; any designation
or removal of Oil and Gas Subsidiaries; each determination of the Borrowing
Base; each determination of the amount of Borrowing Base Debt; termination or
reduction of Commitments under a Credit Agreement; actions taken by a Borrower
to cure a Borrowing Base Deficiency; provision of Cover; execution and delivery
of Security Documents; all financial statements or other reports provided by
the Canadian Borrower or the U.S. Borrower; each Engineering Report, Parent
Report or Company Report delivered under a Credit Agreement; each certificate
delivered pursuant to Section 9.2 of the Canadian Credit Agreement or the U.S.
Credit Agreement; all calculations or material furnished by a Borrower or
prepared by an Administrative Agent with respect to covenants contained in a
Credit Agreement; determinations made pursuant to Section 10.4 of either Credit
Agreement; notifications pursuant to Section 10.8 of either Credit Agreement;
and all actions contemplated and material steps in proceedings or payments
received in respect of any of the Combined Obligations following an Event of
Default.
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2.4 NOTICE REQUIREMENTS
Without restricting the obligations of the Administrative Agents
underSection 2.3, each Administrative Agent agrees with the other
Administrative Agent that it will:
a. concurrently with the delivery thereof to a Borrower, give the
other Administrative Agent a copy of any written notice of any
Default or Event of Default or any intention to exercise
remedies available under the applicable Credit Agreement with
respect thereto;
b. in the case of TCB, concurrently with the delivery thereof to
the U.S. Borrower, give Chemical a copy of any written notice
of a Borrowing Base Deficiency;
c. promptly after receipt thereof from a Borrower, give the other
Administrative Agent a copy of any written notice received
from a Borrower under Section 9.11 of its Credit Agreement;
d. give the other Administrative Agent prompt written notice of
any declaration of Acceleration or determination that
Acceleration has occurred under its Credit Agreement or that
all or any portion of the Commitments under its Credit
Agreement are terminated;
e. give the other Administrative Agent prompt written notice of
the commencement of any legal actions or proceedings taken by
it against a Borrower by reason of or arising out of any
Default or Event of Default;
f. in the case of TCB, give Chemical prompt written notice of any
determination or redetermination of the Borrowing Base (if
any) under the U.S. Credit Agreement; and
g. in the case of Chemical, give TCB prompt written notice of any
change in the Maximum Outstanding Amount under the Canadian
Credit Agreement.
2.5 PERMITTED ACTION BY THE LENDERS
Notwithstanding any other provision of this Agreement, either
Administrative Agent or (subject to the terms of the relevant Credit Agreement)
any Lender may, without instruction from the Administrative Agent or Lenders
under the other Credit Agreement (but in no event shall be required to), take
action permitted by applicable law to preserve its rights and security
including but not limited to curing any default or alleged default under any
contract entered into by the relevant Borrower, paying any tax, fee or expense
on behalf of the relevant Borrower and paying insurance premiums on behalf of
the relevant Borrower.
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2.6 CO-OPERATION
Each Administrative Agent (and, where applicable, the Lenders under
the respective Credit Agreements) agrees with the other Administrative Agent
(and, where applicable, the Lenders under the other Credit Agreement) that:
a. to the extent available, it will from time to time promptly
provide such information to the other Administrative Agent as
may be reasonably necessary to enable the other Administrative
Agent to make any calculation referred to in or necessary to
implement Section 3 or otherwise reasonably required by the
other Administrative Agent for any other purpose hereof;
b. to the extent reasonably possible, it will from time to time
consult with the other Administrative Agent in good faith
regarding the enforcement of its and each of the Lender's
rights and remedies under its Credit Agreement with a view to
recovering amounts due under the Credit Agreements in an
effective and cost-efficient manner;
c. if, after an Event of Default, it gains access to a Borrower's
property, assets, financial information or data bases pursuant
to the exercise of its secured rights, it will provide
reasonable access to the other Administrative Agent to the
extent it may legally do so; and
d. each Lender will promptly notify its Administrative Agent in
writing of the receipt by such Lender of any Reallocable
Payment and the applicable Administrative Agent will promptly
notify the other Administrative Agent of such receipt.
2.7 ENFORCEMENT
From and after Acceleration:
a. where reasonably practicable in the circumstances and in any
event prior to the appointment of a receiver or
receiver-manager or filing a bankruptcy petition in respect of
its Borrower, the Administrative Agent proposing to do so (the
"Enforcing Lender") agrees to consult and cooperate with the
other Administrative Agent in good faith regarding the
enforcement of its and each of its Lenders' rights with a view
to recovering amounts due under the Credit Agreements in an
efficient and cost-efficient manner;
b. any receiver or receiver-manager or bankruptcy trustee or
custodian appointed by an Enforcing Lender must be an
insolvency firm of national standing in Canada and the United
States of America (and, where applicable, each Enforcing
Lender
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agrees that it will request any applicable court to similarly
appoint an insolvency firm of national standing in Canada and
the United States of America); and
c. if a receiver or receiver-manager is appointed pursuant to
clause b. above, the Lenders under each of the Credit
Agreements shall cause to be provided any reasonable indemnity
which may be necessary for such receiver or receiver-manager
or trustee, to the extent of their respective Operative
Sharing Percentages in respect to the obligations to which the
indemnity relates.
SECTION 3: PARI PASSU SHARING
3.1 OVERALL INTENT
It is the intention of the Lenders that, following the occurrence of
any Borrowing Base Deficiency or the Reference Date, they shall share in any
required payments or Security Documents delivered by the U.S. Borrower or the
Canadian Borrower to cure such Borrowing Base Deficiency and in any Reallocable
Payments received following the Reference Date pro rata to their respective
proportions of the Combined Outstandings.
3.2 PAYMENTS TO CURE BORROWING BASE DEFICIENCY
Upon the delivery of a notice of Borrowing Base Deficiency to the U.S.
Borrower under Section 3.2(b)(2) of the U.S. Credit Agreement, the
Administrative Agents shall determine the Sharing Percentages of the Canadian
Lenders and the U.S. Lenders at the time of such notice. The U.S. Borrower and
the Canadian Borrower agree that any payments required to cure such Borrowing
Base Deficiency shall be made by the U.S. Borrower to the U.S. Lenders and by
the Canadian Borrower to the Canadian Lenders (with the Maximum Outstanding
Amount--as such term is defined in the Canadian Credit Agreement--to be reduced
by the amount of such payments by the Canadian Borrower) in accordance with
their respective Sharing Percentages as so determined. For this purpose, if
any such payment is made in Canadian Dollars under the Canadian Credit
Agreement, the Equivalent U.S. Dollar Amount thereof shall be considered to
have been made. For purposes of this Section 3.2, the Sharing Percentages of
the Lenders shall be recalculated as of each January 1, April 1, June 1 and
September 1 using the Combined Outstandings at the time of the applicable
notice of Borrowing Base Deficiency but using the then current Equivalent U.S.
Dollar Amount with respect to any of such Combined Outstandings denominated in
Canadian Dollars.
3.3 EQUALIZATION FOLLOWING THE OCCURRENCE OF THE REFERENCE DATE
a. As of the Reference Date, the Operative Sharing Percentages of
the respective Lenders shall be determined.
b. Upon any receipt by any Administrative Agent (or by the Paying
Agent under the
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Canadian Credit Agreement) of any Reallocable Payments (after
giving effect to application of such receipts), the Post
Default Proportions of the U.S. Lenders and the Canadian
Lenders shall be determined.
c. If the Post Default Proportion of the U.S. Lenders and the
Post Default Proportion of the Canadian Lenders calculated
pursuant to Section 3.3.b above are not equal to their
respective Operative Sharing Percentages, then the Lenders
whose Post Default Proportion is less than their Operative
Sharing Percentages shall firstly, repurchase participations
previously sold by them to other Lenders (such participation
interests to be allocated pro rata among the sellers in
accordance with their respective Operative Sharing
Percentages) and then purchase participations in the U.S.
Credit Outstandings or the Canadian Credit Outstandings, as
the case may be (such participation interests to be allocated
pro rata among the sellers in accordance with their respective
Operative Sharing Percentages), in U.S. Dollars on a
non-recourse basis so that, after such payment by the
purchasing Lenders and receipt thereof by the selling Lenders,
their respective Post Default Proportions shall equal their
Operative Sharing Percentages; provided, however, that if
after any amount is paid under this Section 3.3.c. a Borrower
or any trustee, liquidator, receiver or receiver-manager or
Person with analogous powers recovers any amount from any
Lenders ("Disgorging Lenders") in respect of any amount
theretofore applied to the U.S. Credit Outstandings or the
Canadian Credit Outstandings, then such amount (including any
interest paid by the Lenders) shall be treated for all
purposes:
i. as between the relevant Borrower and the Disgorging
Lenders; and
ii. as between the Disgorging Lenders and the other
Lenders (the "Non-Disgorging Lenders"),
to be outstanding as U.S. Credit Outstandings or Canadian
Credit Outstandings (as applicable), in which case the Post
Default Proportions shall thereupon be adjusted and this
Section 3.3.c. again applied.
d. Notwithstanding anything contained in this Agreement or the
Credit Agreements, the purchase of participations in the
Canadian Credit Outstandings hereunder by the U.S. Lenders and
the acquisition of an undivided interest in any property by
the U.S. Lenders from any Canadian Lender or the Canadian
Agent or the Paying Agent, as the case may be, pursuant to
Section 6.12 hereof shall not constitute an acquisition by the
U.S. Lenders of any beneficial interest in the Canadian Credit
Agreement or any amount owing thereunder but shall constitute
risk sharing payments among the Canadian Lenders and the U.S.
Lenders and the beneficial interest in the Canadian Credit
Agreement and all amounts owing thereunder shall at all times
remain with the Canadian Lenders.
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3.4 INFORMATION
From time to time following the occurrence of an Acceleration, each
Lender shall promptly provide its Administrative Agent with all necessary
information to enable the Administrative Agent to calculate Canadian Credit
Outstandings or U.S. Credit Outstandings, Operative Sharing Percentages and
Post Default Proportions of the Lenders, including any payments received.
3.5 PARAMOUNTCY OF PRO RATA TREATMENT
The arrangements contemplated by this Agreement shall apply
notwithstanding the time of any Event of Default or any Acceleration under a
Credit Agreement or demand under a Guaranty; the date of execution, delivery,
attachment, perfection or registration of any Security Document (or lack of any
thereof); the priority of any Security Document; the date of advance of any
funds; the date of creation, perfection or determination of any charges or
security interests; the date of appointment of any receiver or receiver-manager
or bankruptcy trustee or of taking any other enforcement proceedings; the date
of obtaining any judgment; the date of notification in respect of any account
receivable; any provision of applicable law or requirement of any Governmental
Authority; any defence, claim or any right not provided under this Agreement;
or the terms of any agreement between any Lender and/or a Borrower under any
other document or instrument between or among such parties, whether or not
bankruptcy, receivership or insolvency proceedings shall at any time have been
commenced.
SECTION 4: RIGHTS OF LENDERS
4.1 RIGHTS OF LENDERS
Subject to the terms of this Agreement, each Administrative Agent and
Lender shall be entitled to:
a. deal with its Borrower and with others in connection with its
Credit Agreement, give notices to and accept notices from its
Borrower thereunder and administer its Credit Agreement free
from interference by any other Lender;
b. enforce the provisions of its Credit Agreement and Loan
Documents referred to therein to which it is a party,
including suing for enforcement of the representations,
covenants and payment obligations therein contained, whether
or not it accelerates the maturity of any payment obligations;
c. demand repayment or accelerate the maturity of any payment
obligation under the Credit Agreement to which it is a party;
d. amend or otherwise modify the Credit Agreement to which it is
a party;
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e. accept new security for the obligations of its Borrower under
its Credit Agreement;
f. provide any releases of its Security Documents in connection
with a disposition of collateral by its Borrower; or
g. consent to any plan of arrangement or plan of reorganization
involving its Borrower under any bankruptcy or insolvency law.
SECTION 5: ASSIGNMENT
5.1 ASSIGNEES
No provision of this Agreement shall restrict in any manner the
assignment, participation or other transfer by a Lender of all or part of its
right, title or interest under its Credit Agreement; provided that, unless the
assignee becomes a Lender for purposes hereof in accordance with Section 13.5
of the Credit Agreements, the assigning Lender shall remain responsible for
performance of this Agreement with respect to the interest assigned, all as
more fully set forth herein. All participations purchased or sold pursuant to
the terms hereof shall be consummated in accordance with the terms of Section
13.5 of the applicable Credit Agreement.
SECTION 6: MISCELLANEOUS
6.1 NO PARTNERSHIP OR JOINT VENTURE
Nothing contained in this Agreement, and no action taken by the
Administrative Agents or the Lenders (or any of them) pursuant hereto, is
intended to constitute or shall be deemed to constitute the Administrative
Agents or the Lenders a partnership, association, joint venture or other
entity.
6.2 NOTICES
All notices, requests and other communications to any party hereunder
shall be given in accordance withSection 13.2 of the applicable Credit
Agreement.
6.3 AMENDMENTS AND WAIVERS
Any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed by the Combined Majority
Lenders; provided, however, that:
(i) the provisions of Section 3 of this Agreement and of this
Section 6.3 may only be amended with the unanimous written
consent of all of the Lenders;
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(ii) the provisions hereof relating to "Requesting Banks" or to
"Combined Requesting Banks" may only be amended with the
unanimous written consent of the Combined Requesting Lenders;
and
(iii) the provisions hereof relating to "Super Majority Banks" or to
"Combined Super Majority Banks" may only be amended with the
unanimous written consent of the Combined Super Majority
Lenders.
6.4 CURRENCY AND PAYMENT MATTERS
All payments hereunder shall be made in immediately available funds in
United States Dollars. All payments to any Lender hereunder shall be made to
it, to the extent practicable, in accordance with the provisions of the
relevant Credit Agreement.
6.5 COUNTERPARTS; EFFECTIVENESS
This Agreement may be signed in any number of counterparts, each of
which shall be an original, and all of which taken together shall constitute a
single agreement, with the same effect as if the signatories thereto and hereto
were upon the same instrument. This Agreement shall become effective when:
a. executed by each of the parties listed on the signature pages
hereof; and
b. the first advance under the Canadian Credit Agreement shall
have been made.
6.6 BENEFITS
This Agreement is solely for the benefit of and shall be binding upon
the Lenders and their successors or assigns, and neither the Borrowers nor any
other third party shall have any right, benefit, priority or interest under or
by reason of this Agreement.
6.7 GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE APPLICABLE LAWS (OTHER THAN THE CONFLICT OF LAWS RULES) OF THE STATE OF
TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT. EACH PARTY
HERETO IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF TEXAS FOR PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT THAT MAY BE BROUGHT OR INSTITUTED
AGAINST IT.
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6.8 ENTIRE AGREEMENT
This Agreement supersedes any conflicting provisions in any other
agreements or instruments to which the Lenders are parties, with respect to the
rights, duties and obligations of the Lenders to each other.
6.9 TIME OF THE ESSENCE
Time is of the essence of this Agreement.
6.10 SEVERABILITY
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
6.11 ADMINISTRATIVE AGENTS AND PAYING AGENT ENTITLED TO BENEFITS OF SECTION
12 OF CREDIT AGREEMENTS
Each of the Administrative Agents, and the Paying Agent under the
Canadian Credit Agreement, shall be entitled to the benefits of Section 12 of
its Credit Agreement and also to the benefits of Section 12 of the other Credit
Agreement as if it were the named "Administrative Agent" (or a named "Agent" in
the case of the Canadian Credit Agreement) under such other Credit Agreement
(provided that any payment under the indemnification provisions of Section 12.5
of either Credit Agreement relating to the collection of the Combined
Obligations shall be shared by all Lenders as herein provided), in connection
with the performance under this Agreement.
6.12 CERTAIN MATTERS RELATING TO COLLATERAL GENERALLY
If any collateral or security shall be taken in respect of any of the
Combined Outstandings (other than Cover provided under either of the Credit
Agreements and other than collateral rights in deposit accounts and other
similar liquid assets held by any Lender in the normal course of business), the
rights of the Lenders with regard to such collateral shall be exercised through
a collateral agent to be selected by the Canadian Administrative Agent and the
U.S. Administrative Agent and approved by the Combined Majority Banks. If any
property shall be conveyed to the Canadian Administrative Agent (or the Paying
Agent under the Canadian Credit Agreement) or the U.S. Administrative Agent or
any Lender by deed-in-lieu of foreclosure or under similar arrangement for the
satisfaction of any of the Combined Obligations, the property so acquired shall
be appraised as of the date of acquisition, the appraised value shall be
treated as a Reallocable Payment for purposes of Section 3 and the applicable
Lender or Administrative
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Agent or the Paying Agent, as the case may be, shall convey undivided interests
in such property in lieu of the purchase and sale of participation interests
provided for in Section 3.
6.13 JOINDER BY U.S. BORROWER, GUARANTOR AND CANADIAN BORROWER
The U.S. Borrower, the Guarantor and the Canadian Borrower consent to
the provisions of this Agreement, including without limitation the disclosure
of information provided for herein, the sharing of payments provided for herein
and the purchase and sale of participations in the U.S. Credit Agreement and
the Canadian Credit Agreement provided for herein. The U.S. Borrower, the
Guarantor and the Canadian Borrower agree to do all things and take all such
actions as shall be reasonably necessary to give effect to the provisions of
this Agreement. To the extent the application of the provisions hereof give
rise to any liability for any withholding tax payments in connection with any
payments made by the Canadian Borrower, the U.S. Borrower, the Guarantor or any
other Relevant Party under either of the Credit Agreements, then
(notwithstanding any provisions to the contrary set forth in either of the
Credit Agreements), the Borrowers, jointly and severally, shall indemnify each
of the applicable Lenders and shall hold each of the applicable Lenders
harmless from and against any such liability; provided, however, that each of
the Lenders (if so requested by the Borrower under its Credit Agreement through
the Administrative Agent) will use good faith efforts to accommodate any
reasonable request by such Borrower in order to avoid the need for, or reduce
the amount of, such compensation so long as the request will not, in the sole
opinion of the applicable Lender, be disadvantageous to such Bank.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date hereof by their respective officers thereunto
duly authorized.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE Section 26.02
THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS (AS DEFINED IN THE
RESPECTIVE CREDIT AGREEMENTS) EXECUTED BY ANY OF THE PARTIES BEFORE OR
SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE EXECUTION HEREOF TOGETHER CONSTITUTE A
WRITTEN LOAN AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Administrative
Agent under the U.S. Credit
Agreement and on behalf of the
U.S. Lenders
By: _____________________________________________
Robert C. Mertensotto,
Senior Vice President
CHEMICAL BANK OF CANADA, as
Administrative Agent under the
Canadian Credit Agreement and
on behalf of the Canadian Lenders
By: _____________________________________________
Name: ___________________________________________
Title: __________________________________________
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JOINDER:
SEAGULL ENERGY CORPORATION
(as Borrower under the U.S. Credit
Agreement and as a guarantor in respect
of the Canadian Credit Agreement)
By: _________________________________
Robert M. King,
Vice President, Corporate
Development and Treasurer
SEAGULL ENERGY CANADA LTD.
(as Borrower under the Canadian
Credit Agreement)
By: _________________________________
Robert M. King,
Vice President
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