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EXHIBIT 10.4
PROMISSORY NOTE
$505,488,085
Alexandria, Virginia
August 10, 1999
FOR VALUE RECEIVED, in the manner and in the amounts hereinafter provided for,
the undersigned, Eastern States Oil & Gas, Inc. a Virginia corporation
("Borrower") promises to pay to the order of Statoil Energy Holdings, Inc., a
Delaware corporation, its heirs and assigns ("Noteholder"), the principal sum
of Five Hundred Five Million Four Hundred Eighty Eight Thousand Eighty Five
Dollars ($505,488,085) or the actual principal amount due from the undersigned
(the "Principal Indebtedness"), at the time of payment provided for
hereinafter, and to pay interest on the unpaid Principal Indebtedness at the
times and at the rate per annum established in accordance with all the terms
and provisions of this Note until all the indebtedness evidenced by this Note
has been fully satisfied. Payment of principal and interest shall be made at
the place which the Noteholder from time to time shall direct in writing.
1. This Note shall bear interest at the annual rate of eight percent (8%)
payable semi-annually on January 1 and July 1 each year during the term of this
note.
2. Unless otherwise extended, the Borrower agrees to pay to the Noteholder
all outstanding principal and interest, not previously paid, on December 31,
2001.
3. THIS IS A BALLOON NOTE. Notwithstanding the principal amount of this
Note as stated on the face hereof, the actual principal amount due from the
undersigned to Statoil Energy Holdings, Inc., on account of this Note, as of
any date of computation shall be the sum of all advances made to the Borrower
less all payments of principal actually received by Statoil Energy Holdings,
Inc. in collected funds during the same period, but in any event shall not
exceed the face amount of this Note plus accrued and unpaid interest.
4. The Borrower reserves the right at any time to prepay, in whole or in
part, the Principal Indebtedness set forth above without premium or penalty.
Any such prepayment shall be applied first to interest accrued through the date
of prepayment, and then to the Principal Indebtedness.
5. Interest shall be calculated on the basis of a year of three hundred
sixty (360) days, and for the actual number of days elapsed, and shall, from
the date(s) of any partial prepayment(s), be computed on the outstanding unpaid
balance of Principal Indebtedness after application of such prepayment(s) in
accordance with Section 4 hereof. If any date for payment of any payment is
other than a business day, such payment shall be due on the next succeeding
business day.
6. Any payment due under this Note, whether of the Principal Indebtedness
or interest thereon, which is not paid in accordance with the terms hereof,
shall bear interest from the date due until paid at an annual interest rate
equal to eight percent (8%).
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7. The Borrower waives notice, presentment, demand or protest.
8. The Borrower hereby agrees to pay all expenses incurred, including all
reasonable attorneys' fees and court costs, all of which shall become a part of
the Principal Indebtedness, if this Note is placed in the hands of an attorney
for collection or is collected by suit or through any bankruptcy or any other
legal proceedings.
9. In the event one or more of the provisions contained in this Note shall
be for any reason be held to be invalid, illegal or unenforceable, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
10. It is the intention of the parties to comply with the usury laws of the
Commonwealth of Virginia and the United States federal government, and any
other applicable usury law. Accordingly, it is agreed that no provision in this
Note shall require the payment or permit the collection of interest or late
charges in excess of the maximum non-usurious interest permitted by applicable
law (the "Maximum Rate"). If any interest in excess of the Maximum Rate is
provided for, or shall be adjudicated to be so provided for, then in such event
(i) the provisions of this Section shall govern, (ii) neither the Borrower, nor
its legal representatives, successors or permitted assigns, nor any other party
liable for the payment thereof, shall be obligated to pay interest to the
extent that it is in excess of the Maximum Rate, (iii) any excess interest
which may have been collected shall, at the Borrower's election, be either
applied as a credit against the unpaid principal amount hereof, without
penalty, or refunded to the Borrower, and (iv) the effective rate of interest
shall be automatically reduced to the Maximum Rate.
11. The provisions of this Note shall bind and inure to the benefit of the
Borrower and the Noteholder, and their respective legal representatives,
legatees, heirs, successors and assigns; provided, however, that this Note may
be assigned by the Borrower.
12. This Note shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia.
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13. The rights and remedies of the Noteholder under this Note and
applicable law shall be cumulative and concurrent, and the exercise of any one
or more of said rights and remedies shall not preclude the simultaneous or
later exercise by the Noteholder of any or all such other rights or remedies.
No modification or waiver of any provision of this Note shall be effective
unless it is in writing and signed by the Noteholder, and any such waiver shall
be effective only in the specific instance for which it is given. The failure
of the Noteholder to exercise any option right or remedy in any on or more
instances, or the acceptance by the Noteholder of partial payments or partial
performance, shall not constitute a waiver of the right to exercise any option,
right or remedy at any time.
14. Any notice to Borrower provided for in this Note shall be given by
mailing such notice by certified mail to Borrower at 2800 Eisenhower Avenue,
Alexandria, Virginia 22314 or to such other address as Borrower may designate
by notice to the Noteholder. Any notice to the Noteholder shall be given by
mailing such notice by certified mail, return receipt requested, to the
Noteholder at 103 Foulk Road, Suite 202, Wilmington, Delaware 19803 or to such
other address as Noteholder may designate by notice to the Borrower.
15. This Promissory Note is not a negotiable instrument.
IN WITNESS HEREOF, the Borrower has caused this Note to be executed by its duly
authorized representative as of the date first above written.
EASTERN STATES OIL & GAS, INC.,
a Virginia corporation
By: /s/ STEVENS V. GILLESPIE
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Stevens V. Gillespie
Senior Vice President and CFO
ATTEST:
By: /s/ KERRY W. ECKSTEIN
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Kerry W. Eckstein
Secretary
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