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EXHIBIT 10.Y
THIS LEASE AGREEMENT IS ALSO A MORTGAGE AND SECURITY AGREEMENT BETWEEN THE
LESSEE, EL PASO NEW CHACO COMPANY, AS MORTGAGOR AND DEBTOR, AND THE LESSOR,
STATE STREET BANK AND TRUST COMPANY, AS MORTGAGEE AND SECURED PARTY. THE
COLLATERAL SUBJECT TO THE SECURITY INTEREST INCLUDES PERSONAL PROPERTY THAT IS,
OR MAY BECOME, FIXTURES ATTACHED TO THE REAL PROPERTY DESCRIBED IN THIS LEASE
AGREEMENT. THIS LEASE AGREEMENT SHOULD BE FILED AND RECORDED IN THE REAL
ESTATE RECORDS AS A LEASE, AND AS A MORTGAGE AND FIXTURE FILING. STATE STREET
BANK AND TRUST COMPANY, SHOULD BE INDEXED AS A GRANTOR OF THE LEASE AND THE
GRANTEE OF THE MORTGAGE AND SECURITY INTEREST. EL PASO NEW CHACO COMPANY
SHOULD BE INDEXED AS THE GRANTEE OF THE LEASE AND THE GRANTOR OF THE MORTGAGE
AND SECURITY INTEREST.
_______________________________________
LEASE AGREEMENT
Dated as of February 9, 1995
Between
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as Trustee for
the Chaco Liquids Plant Trust,
as the Lessor,
and
EL PASO NEW CHACO COMPANY,
as the Lessee
_______________________________________
ADDRESSES OF PARTIES:
EL PASO NEW CHACO COMPANY STATE STREET BANK AND TRUST COMPANY
ONE PAUL KAYSER CENTER TWO INTERNATIONAL PLACE, 4TH FLOOR
100 NORTH STANTON BOSTON, MASSACHUSETTS 02110
EL PASO, TEXAS 79901 ATTENTION: CORPORATE TRUST DEPT.
ATTENTION: SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
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THIS LEASE HAS BEEN MANUALLY EXECUTED IN COUNTERPARTS NUMBERED CONSECUTIVELY
FROM 1 TO 15. TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER
(AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY
APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED
THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OF THIS LEASE OTHER THAN
COUNTERPART NUMBER 1.
This is Counterpart Number _____
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TABLE OF CONTENTS
PAGE
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Section 1. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Lease of Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4. Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5. Participation Agreement; Agency Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 6. Title to Remain in the Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 7. Maintenance of the Facility; Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 8. Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 9. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 10. Compliance with Governmental Requirements and Insurance Requirements: Related Contracts . . . . . . 8
Section 11. Condition and Use of Facility; Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 12. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 13. Permitted Contests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 14. Insurance, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 15. Termination; Cancellation; Purchase Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 16. Transfer of Title on Removal of Facility; Expenses of Transfer . . . . . . . . . . . . . . . . . . . 14
Section 17. Events of Default and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 18. Change in the Lessee's Name or Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 19. Inspection; Right to Enter Premises of the Lessee . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 20. Right to Perform the Lessee's Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 21. Participation by Co-Lessees or Sublessees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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Section 22. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 23. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 24. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 25. Federal Income Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 26. Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 27. Hart-Scott-Rodino Act Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 28. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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EXHIBITS
Exhibit A Description of Site
SCHEDULES
Schedule 1 Facility Plan
Schedule 2 Insurance Schedule
Schedule 1.02 Defined Terms
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LEASE AGREEMENT
This Lease Agreement dated as of February 9, 1995, (as the same may be
amended, modified or supplemented from time to time, the "Lease") is between
State Street Bank and Trust Company, acting not in its individual capacity but
solely as Trustee for the Chaco Liquids Plant Trust (together with its
successors and permitted assigns, the "Lessor"), and El Paso New Chaco Company,
a Delaware corporation (together with its successors and permitted assigns, the
"Lessee").
RECITALS
WHEREAS, the Lessor has entered into a ground lease of certain
real property in San Juan County, New Mexico, described in greater detail on
Exhibit A (the "Site"), purchased certain work in progress to be located on the
Site and entered into certain agreements described in greater detail in the
Participation Agreement to construct on the Site a cryogenic liquids extraction
plant; and
WHEREAS, subject to the terms and conditions of this Lease,
the Lessee desires to sublease from the Lessor the Site and lease from the
Lessor such cryogenic liquids plant beginning on the Lease Commencement Date
for the purpose of operating such plant in accordance with the terms and
conditions set forth in this Lease.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Lessor and the Lessee agree as follows:
Section 1. Certain Defined Terms.
(a) In this lease, the terms "Lease", "Lessee", "Lessor"
and "Site" shall have the meanings indicated above.
(b) As used in this Lease, all other capitalized terms
shall have the meanings assigned such terms in Schedule 1.02 to the
Participation Agreement, a copy of which is attached hereto.
Section 2. Lease of Facility.
(a) During the term of and subject to the terms and
conditions of this Lease, the Lessor hereby leases to the Lessee, and the
Lessee hereby leases from the Lessor the Facility for the Lease Term. The
entire Facility shall become subject to this lease on the Lease Commencement
Date, including work-in-progress, if any, with respect to the construction of
Phase Two.
(b) If, but only if, (i) the Maturity Date of the Loans
shall have been extended pursuant to Section 2.11 of the Participation
Agreement and (ii) the Lessee, on any day that is not less than twelve (12)
months and no more than eighteen (18) months prior to the then current Lease
Termination Date (including any extended Lease Termination Date as contemplated
hereby), shall have requested in writing to the Lessor and the Agent the
extension of the then current Lease Termination Date for a one (1) year period
expiring on the one (1) year anniversary of the then current Lease Termination
Date, then the Lessor shall consent to such extension in writing and the
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Lease Termination Date shall be extended for an additional one (1) year period
expiring on the one (1) year anniversary of the then current Lease Termination
Date. Any such extension shall be effective upon the execution of documentation
evidencing the same (which the Lessor agrees to execute promptly upon request of
the Lessee, if the Lessor's consent to such extension is to be given pursuant
hereto), and containing such additional terms as the Agent, acting in its sole
discretion, may require.
In the event it is determined at any time that the term of this Lease
will not be extended beyond the then current Lease Termination Date, the Lessee
shall give to the Lessor and the Agent written notice as provided below
specifying which of the options under Section 15(a)(ii) the Lessee intends to
exercise upon the scheduled expiration of this Lease:
(x) if the Lease Termination Date is not to be extended
because the Agent or any Participant (or assignee thereof) has refused
or is deemed to have refused the Lessee's request for extension, then
the Lessee shall give the Lessor notice within thirty (30) days of the
earlier to occur of (A) the date the Lessee receives written notice of
said refusal or (B) the date of such deemed refusal pursuant to
Section 2.11 of the Participation Agreement; and
(y) if the Lease Termination Date is not to be extended
because the Lessee chooses not to request such extension, any date
that is not less than twelve (12) months and no more than eighteen
(18) months prior to the then current Lease Termination Date.
In the event the Lessee fails to give timely written notice to the
Lessor on or before the dates herein provided, the Lessee shall be deemed to
have elected to purchase the Facility for the Option Price on the Lease
Termination Date.
Section 3. Payments.
(a) Subject to Section 4, the Lessee shall pay to the
Lessor on the Rent Payment Date for each Billing Period the amount of Rent due
for such Billing Period.
(b) In addition to the Rent, the Lessee will also pay,
from time to time, upon demand of the Lessor, as additional rent ("Additional
Rent") to the Lessor the following (but without duplication of any amounts
included in the calculation of Rent):
(i) all out-of-pocket costs and expenses reasonably
incurred by the Lessor or the Agent in connection with the
preparation, negotiation, execution, delivery, performance and
administration of this Lease and the other Operative Documents,
including, but not limited to, the following: (A) fees and expenses of
the Lessor and the Agent, including, without limitation, reasonable
attorneys' fees and expenses; (B) all other amounts, including,
without limitation, fees, indemnities, expenses, compensation in
respect of increased costs, capital adequacy or breakage of any kind
or description payable under the Participation Agreement or any other
Operative Document; (C) out-of-pocket costs and expenses incurred by
the Lessor or the Agent (and, in the case of clause (z) below, any
Participant) after the date of this Lease (including, without
limitation, reasonable attorneys' fees and expenses and other expenses
and disbursements reasonably incurred) associated with (x) negotiating
and entering into, or the giving or withholding of, any future
amendments, supplements, waivers or consents with respect to this
Lease; (y) any Loss Event, Casualty Occurrence or termination
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of this Lease; and (z) any Event of Default and the enforcement of the
rights or remedies of the Lessor under this Lease and the other
Operative Documents; and
(ii) all other amounts that the Lessee agrees herein to
pay other than Rent and amounts described in clause (i) above.
(c) This Lease is a completely net lease, and Rent,
Additional Rent and all other sums payable by the Lessee hereunder shall be
paid without notice except as otherwise expressly provided herein, and the
Lessee shall not be entitled to any abatement, reduction, setoff, counterclaim,
defense or deduction with respect to any Rent, Additional Rent or other sums
payable hereunder. The obligations of the Lessee to pay Rent, Additional Rent
and all other sums payable hereunder shall not be affected by reason of: (i)
any damage to, or destruction of, the Facility or any part thereof by any cause
whatsoever (including, without limitation, fire, casualty or act of God or
enemy or any other force majeure event); (ii) any condemnation, including,
without limitation, a temporary condemnation of the Facility or any portion
thereof; (iii) any prohibition, limitation, restriction or prevention of the
Lessee's use, occupancy or enjoyment of the Facility or any part thereof by any
Person (other than by the Lessor in violation of this Lease); (iv) any matter
affecting title to the Facility or any portion thereof; (v) any eviction of the
Lessee from, or loss of possession by the Lessee of, the Facility or any
portion thereof, by reason of title paramount or otherwise (other than by the
Lessor in violation of this Lease); (vi) any default by the Lessor hereunder or
under any other Operative Document; (vii) the invalidity or unenforceability of
any provision hereof or the impossibility or illegality of performance by the
Lessor or the Lessee or both; (viii) any action of any Governmental Authority;
or (ix) any other cause or occurrence whatsoever, whether similar or dissimilar
to the foregoing. The Lessee shall remain obliged under this Lease in
accordance with its terms and shall not take any action to terminate, rescind
or avoid this Lease, except as expressly provided in Section 15,
notwithstanding any bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding affecting the Lessor or any action with respect
to this Lease which may be taken by any trustee, receiver or liquidator or by
any court. The Lessee waives all rights to terminate or surrender this Lease,
except as expressly provided in Section 15, or to any abatement or deferment of
Rent, Additional Rent or other sums payable hereunder. The Lessee hereby
waives any and all rights now or hereafter conferred by law or otherwise to
modify or to avoid strict compliance with its obligations under this Lease.
All payments made to the Lessor hereunder as required hereby shall be final and
irrevocable, and the Lessee shall not seek to recover any such payment or any
part thereof for any reason whatsoever, absent manifest error.
(d) Subject to the Lessee's rights under Section 13, the
Lessee agrees that it will promptly pay all Impositions imposed upon or levied
or assessed against the Facility or any portion thereof, the Lessor, the Agent
or any Participant in connection with the transactions contemplated by this
Lease and the other Operative Documents, or imposed or levied upon, assessed
against or measured by any Rent, Additional Rent or other sums payable
hereunder, and will furnish to the Lessor upon request copies of official
receipts or other proof evidencing such payment; provided, however, that the
Lessee shall not be obligated to pay (i) any sales taxes or other Impositions
to the extent paid by the Lessor as part of the Funded Amount and financed
under the Participation Agreement, (ii) any Impositions which are based upon or
measured by the Lessor's, the Agent's or any Participant's income, or which are
in substitution for, or relieve the Lessor, the Agent or any Participant from,
any actual Imposition based upon or measured by the Lessor's, the Agent's or
any Participant's income (excluding, however, Impositions imposed with respect
to the payment, receipt or accrual of any indemnity payment under this Lease),
(iii) Impositions constituting Excluded Taxes
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(excluding, however, any value-added, license, property or similar
Impositions), or (iv) any Impositions attributable to the gross negligence or
wilful misconduct of the Agent or any Participant. The Lessee further agrees
that, subject to its rights under Section 13, it will, at its expense, do all
things required to be done by the Lessor in connection with the levy,
assessment, billing or payment of any Impositions it is required to pay
pursuant to the preceding sentence, and is hereby authorized by the Lessor to
act for and on behalf of the Lessor in any and all such respects and to prepare
and file, on behalf of the Lessor, all tax returns and reports required to be
filed by the Lessor (other than federal income tax returns and documents
related thereto, subject to Section 25) concerning the Facility. The Lessee's
payment obligations under this Section 3(d) shall survive the termination of
this Lease. In the event that any withholding or deduction from any payment to
be made by the Lessee hereunder is required in respect of any Imposition
pursuant to any Governmental Requirement, then the Lessee will:
(1) pay directly to the relevant Governmental Authority
the full amount required to be so withheld or deducted;
(2) promptly forward to the Lessor, if available, an
official receipt or other documentation satisfactory to the Lessor
evidencing such payment to such Governmental Authority; and
(3) pay to the Lessor such additional amount or amounts
as is necessary to ensure that the net amount actually received by the
Lessor will equal the full amount the Lessor would have received had
no such withholding or deduction been required.
(e) Except as provided in Section 4 or as otherwise
expressly provided, all payments by the Lessee pursuant to this Lease shall be
made by the Lessee to the Lessor. All such payments required to be made to the
Lessor shall be made not later than 12:00 noon, New York City time, on the date
due, in immediately available funds, to such account with the Agent as the
Lessor shall specify from time to time by notice to the Lessee. Whenever any
payment to be made shall otherwise be due on a day which is not a Business Day,
except as otherwise expressly provided herein or in the Participation
Agreement, such payment shall be made on the next succeeding Business Day and
such extension shall be included in computing Rent, Additional Rent, interest
and fees, if any, in connection with such payment.
(f) The Lessee shall pay on demand to the Lessor interest
at the Post-Default Rate on all amounts payable by the Lessee to the Lessor
hereunder in respect of overdue principal of Loans and Certificate Advances
from the due date thereof until paid in full.
Section 4. Rent. During the Phase Two Construction
Period (if the Phase Two Election shall have been made), Rent due on any Rent
Payment Date shall be paid by Loans and Certificate Advances from the
Participants to the Lessor which the Lessor shall accept, for the credit of the
Lessee, as Rent for such Rent Payment Date; and the amount of such Rent shall
be added to the Funded Amount; provided, however, that the Lessee may give the
Lessor written notice, not later than 10:00 a.m. New York City time on a day
which is at least three (3) Business Days prior to such Rent Payment Date that
it wishes to pay (and not capitalize) Rent on such Rent Payment Date, in which
case, the Lessee shall make such Rent payment for the Lessor in immediately
available funds pursuant to the terms hereof.
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Section 5. Participation Agreement; Agency Agreement.
The Lessee and the Lessor are entering into the Participation Agreement with
the Guarantor, the Agent and the Participants pursuant and subject to which the
Participants will fund for the account of the Lessor the Funded Amount for each
Phase as therein provided up to but not exceeding, however, (i) for Phase One,
the sum of the Phase One Advance Limit and the Phase One Loan Limit, and (ii)
for the entire Facility, the sum of the Aggregate Certificate Commitments and
the Aggregate Loan Commitments. In addition, the Lessee is entering into the
Agency Agreement with the Lessor pursuant to which the Lessee will act as the
Project Agent for the Lessor in causing the completion of certain enhancements
and improvements to, and the purchase, construction and installation of, the
Facility. Upon funding pursuant to the Participation Agreement, title to all
components of the Facility funded shall be and remain in the Lessor, and,
commencing with the Lease Commencement Date, the facility shall be subject to
the terms and conditions of this Lease. Each Phase of the Facility shall be
purchased, manufactured or assembled pursuant to Related Contracts entered into
by the Lessee pursuant to the Agency Agreement. After the Lease Commencement
Date, if any funding pursuant to the Participation Agreement of an initial
payment under any Related Contract is made, then the rights of the Lessee held
for the benefit of the Lessor under such Related Contract shall become subject
to the provisions of this Lease.
Section 6. Title to Remain in the Lessor. The Lessor
shall own 100% of the legal and beneficial interest in the Facility. All
accessories, equipment, parts and devices affixed or placed on the Facility
from time to time by the Lessee and all modifications, alterations, renovations
or improvements to the Facility made by the Lessee shall be and become part of
the Facility for the purposes of this Lease and shall be Property of the Lessor
subject to the terms of this Lease; provided that the Lessor's interest in any
portion of the Facility that is replaced by the Lessee in a manner not
violative of this Lease shall be deemed released from this Lease (and the
Collateral) and thereupon become the Property of the Lessee automatically,
without further action by the Lessor, and the Lessor shall perform all acts and
execute all documents that the Lessee reasonably requests to give effect to the
foregoing at the expense of the Lessee, including the execution and delivery of
bills of sale and other documents of transfer. This Lease shall not give or
grant to the Lessee any right, title or interest in or to the Facility, except
the rights expressly conferred by this Lease.
Section 7. Maintenance of the Facility; Operations.
(a) The Lessee shall, and it shall require and cause any
and all employees, contractors, subcontractors, agents, representatives,
affiliates, consultants and occupants at the Lessee's own cost and expense to:
(i) cause the Facility to be maintained in all material respects in good
operating order, repair and condition, in accordance with prudent industry
practice and any applicable manufacturer's manuals or warranties, subject to
normal wear and tear, and take all action, and make all changes and repairs,
structural and non-structural, foreseen and unforeseen, ordinary and
extraordinary, which are required pursuant to any Governmental Requirement or
Insurance Requirement at any time in effect to assure full compliance therewith
in all material respects; and (ii) cause the Facility to continue to have at
all times, in all material respects, the capacity and functional ability to
perform, on a continuing basis (subject to normal interruption in the ordinary
course of business for maintenance, inspection, service, repair and testing)
and in commercial operation, the functions for which it was designed as
specified in the Facility Plan.
(b) The Lessee shall, and it shall require and cause any
and all employees, contractors, subcontractors, agents, representatives,
affiliates, consultants and occupants at the Lessee's
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own cost and expense to, promptly replace, or cause to be replaced, the
Facility, or parts thereof which may from time to time be incorporated or
installed in or attached to the Facility, and which may from time to time
become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair, obsolete or permanently rendered unfit for use for any reason
whatsoever. All replacement parts shall be free and clear of all Liens other
than Permitted Liens, and, except for temporary replacement parts utilized
pending installation of permanent replacement parts, shall be of a type
customarily used in the industry at such time for such purpose, shall be in as
good operating condition as, and shall have a utility and useful life at least
equal to, the parts replaced (assuming such replaced parts were in the
condition and repair required to be maintained by the terms hereof) and shall
have a value at least equal to the parts replaced (assuming such replaced parts
were in the condition and repair required to be maintained by the terms
hereof).
(c) Notwithstanding the provisions of Section 8 and the
foregoing provisions of this Section 7, the Lessee shall not (except as may be
required by any Governmental Requirement) remove, replace or alter any portion
of the Facility or affix or place any accessory, equipment, part or device on
any portion of the Facility, if such removal, replacement, alteration or
addition would impair the originally intended function or use of the Facility
so as to materially reduce the value of the Facility taken as a whole, or
materially and adversely affect the estimated useful life of the Facility.
(d) The Lessor shall not be required in any way to
maintain, repair or rebuild the Facility or any portion thereof and the Lessee
waives any right it may now or hereafter have to make any repairs at the
expense of the Lessor pursuant to any Governmental Requirement at any time in
effect or otherwise.
(e) The Lessee shall, and it shall require and cause any
and all employees, contractors, subcontractors, agents, representatives,
affiliates, consultants and occupants at the Lessee's own cost and expense to:
(i) comply with all applicable Environmental Laws with regard to the Facility
and all parts thereof except where the failure to comply with such laws would
not have a Material Adverse Effect; and (ii) use, employ, process, emit,
generate, store, handle, transport, dispose of and/or arrange for the disposal
of, any and all hazardous substances in, on or, directly or indirectly, related
to or in connection with the Facility or any part thereof in a manner
consistent with prudent industry practice and in compliance with any applicable
Environmental Law, except where the failure to comply with the foregoing would
not have a Material Adverse Effect. The Lessor and the Lessee hereby
acknowledge and agree that the Lessee's obligations hereunder with respect to
Environmental Laws are intended to bind the Lessee with respect to matters and
conditions involving the Facility or any part thereof.
Section 8. Modifications.
(a) Subject to the terms of Section 8(b), the Lessee
shall have the right to make modifications, alterations, renovations or
improvements to the Facility so long as such modifications, alterations,
renovations or improvements do not (except as may be required by any
Governmental Requirement) (i) materially reduce the value of the Facility as a
whole; (ii) materially and adversely affect the capacity and performance of the
Facility on a continuing basis in commercial operation of the function for
which the Facility was designed as specified in the Facility Plan; (iii)
materially deviate from the Facility Plan; and (iv) materially and adversely
affect the estimated useful life of the Facility. Within ten (10) Business
Days of the end of each calendar quarter, an Authorized Officer
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of the Lessee shall deliver to the Lessor and the Agent a schedule certifying
to the Agent's satisfaction: (x) the nature of the repairs, replacements,
modifications, alterations, renovations or improvements to the Facility made
during such quarter having a cost of at least $1,000,000 at the time made, and
(y) that the Facility continues to have, in all material respects, the capacity
and functional ability to perform on a continuing basis (subject to normal
interruption in the ordinary course of business for maintenance, inspection,
service, repair and testing) and in commercial operation, the functions for
which it was designed as specified in the Facility Plan or, if not, specifying
the reason for any such deficiency, including, without limitation, the
existence and nature of any Loss Event or Casualty Occurrence with respect to
the Facility.
(b) If the Lessee determines that any part of the
Facility is no longer necessary for the performance of the Facility on a
continuing basis in commercial operation of the function for which the Facility
was designed as specified in the Facility Plan, then the Lessee (except when
such action or removal may be required by any applicable Governmental
Requirement, in which event, the Lessee shall promptly give the Agent notice of
such action or removal) shall give the Lessor and the Agent at least thirty
(30) days' notice prior to taking any action as the result of such
determination and shall not remove any such portion unless and until the Agent
has determined that (i) such portion is no longer necessary for the performance
of the Facility on a continuing basis in commercial operation of the function
for which the Facility was designed in all material respects as specified in
the Facility Plan, (ii) removal of such portion does not materially reduce the
value of the Facility as a whole, and (iii) removal of such portion does not
materially and adversely affect the estimated useful life of the Facility;
provided, however, that the Lessee may remove any parts or portion of the
Facility determined to be no longer necessary for the performance of the
Facility as aforesaid at any one time having aggregate book values not
exceeding $2,500,000 or at all times during the term of this Lease having
aggregate book values not exceeding $5,000,000. This Section 8(b) shall not
apply to worn out or obsolete Property or damaged Property (to the extent such
damage does not constitute a Casualty Occurrence or Loss Event) removed and
replaced in the ordinary course of business by the Lessee.
Section 9. Further Assurances. The Lessee, at its
expense, shall execute, acknowledge and deliver from time to time such further
counterparts of this Lease or such affidavits, certificates, certificates of
title, bills of sale, financing and continuation statements, consents and other
instruments as may be required by applicable law or reasonably requested by the
Lessor in order to evidence the Lessor's title to the Facility and the Lessor's
interests in this Lease, and shall, at the Lessee's expense, cause such
documents to be recorded, filed or registered in such places as the Lessor may
request and to be re-recorded, refiled or re-registered in such places as may
be required by applicable law or at such times as may be required by applicable
law in order to maintain and continue in effect the recordation, filing or
registration thereof. The Lessor shall not grant or create any Lien on the
Facility to any Person except Permitted Liens, Liens in favor of the Agent and
the Participants and Liens pursuant to this Lease, the Security Instruments and
the other Operative Documents.
Section 10. Compliance with Governmental Requirements and
Insurance Requirements: Related Contracts. The Lessee, at its expense, will
comply with all Governmental Requirements applicable to the Facility or any
portion thereof or the ownership, construction, operation, mortgaging,
occupancy, possession, use, non-use or condition of the Facility or any portion
thereof, all Insurance Requirements, and all instruments, contracts or
agreements affecting title to ownership of the Facility or any portion thereof
except, in each case above, to the extent such non-
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compliance would not have a Material Adverse Effect. In addition, the Lessee,
so long as no Event of Default has occurred and is continuing, is hereby
authorized by the Lessor to, and shall, fully and promptly keep, observe,
perform and satisfy on behalf of the Lessor any and all obligations,
conditions, covenants and restrictions of or on the Lessor or the Lessee under
any and all Related Contracts so that there will be no default thereunder that
would have a Material Adverse Effect and so that the other parties thereunder
shall be, and remain at all times, obliged to perform their obligations
thereunder the failure to perform which would have a Material Adverse Effect,
and the Lessee, to the extent within its control, shall not permit to exist any
condition, event or fact that could allow or serve as a basis or justification
for any such Person to avoid such performance, if such avoidance would have a
Material Adverse Effect.
Section 11. Condition and Use of Facility; Quiet
Enjoyment.
(a) THE FACILITY IS LEASED AS IS, WHERE IS, AND WITH ALL
FAULTS AND IN THE CONDITION THEREOF AND SUBJECT TO THE RIGHTS OF ANY PARTIES IN
POSSESSION THEREOF, THE STATE OF THE TITLE THERETO, AND THE RIGHTS OF OWNERSHIP
THEREIN, IN EACH CASE AS IN EXISTENCE WHEN THE SAME FIRST BECOMES SUBJECT TO
THIS LEASE, WITHOUT REPRESENTATIONS AND WARRANTIES OF ANY KIND AS TO TITLE BY
THE LESSOR, THE AGENT, ANY PARTICIPANT OR ANY PERSON ACTING ON BEHALF OF ANY OF
THEM. THE LESSEE ACKNOWLEDGES AND AGREES THAT THE FACILITY HAS NOT BEEN
SELECTED BY THE LESSOR, THE AGENT OR ANY PARTICIPANT, THAT NEITHER THE LESSOR,
NOR THE AGENT NOR ANY PARTICIPANT HAS SUPPLIED ANY SPECIFICATIONS WITH RESPECT
TO THE MANUFACTURE OF ANY EQUIPMENT AND THAT NEITHER THE LESSOR, THE AGENT NOR
ANY PARTICIPANT (I) IS A MANUFACTURER OF, OR VENDOR OF, OR MERCHANT WITH
RESPECT TO, ANY OF SUCH EQUIPMENT OR ANY PROPERTY OF SUCH KIND, (II) HAS MADE
ANY RECOMMENDATION, GIVEN ANY ADVICE OR TAKEN ANY OTHER ACTION WITH RESPECT TO
THE CHOICE OF ANY MANUFACTURER, SUPPLIER OR TRANSPORTER OF, OR ANY VENDOR OF OR
OTHER CONTRACTOR, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO EQUIPMENT
COMPRISING THE FACILITY, (III) HAS AT ANY TIME HAD PHYSICAL POSSESSION OF ANY
SUCH EQUIPMENT, (IV) HAS MADE OR IS MAKING ANY WARRANTY, EXPRESS OR IMPLIED,
RELATING TO THE FACILITY, INCLUDING WITHOUT LIMITATION, WITH RESPECT TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE, THE DESIGN,
CONDITION, QUALITY OF MATERIAL OR WORKMANSHIP, CONFORMITY TO SPECIFICATIONS,
FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT, ABSENCE OF ANY LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, WHETHER ARISING PURSUANT TO THE UCC OR
ANY OTHER PRESENT OR FUTURE LAW OR OTHERWISE, OR (V) SHALL BE LIABLE FOR
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LIABILITY IN TORT, STRICT OR
OTHERWISE). IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN THE
FACILITY OR ANY EQUIPMENT OR FIXTURE OR OTHER ITEM CONSTITUTING A PORTION
THEREOF, WHETHER PATENT OR LATENT, NEITHER THE LESSOR, NOR THE AGENT NOR ANY
PARTICIPANT SHALL HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO.
THE PROVISIONS OF THIS SECTION 11 HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A
COMPLETE EXCLUSION AND NEGATION OF ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED,
BY THE LESSOR, THE AGENT AND THE PARTICIPANTS WITH RESPECT TO THE FACILITY OR
ANY EQUIPMENT, FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER
ARISING PURSUANT TO THE UCC OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT.
(b) The Lessor hereby assigns to the Lessee, until the
occurrence of an Event of Default, Cancellation Event or Termination Event
hereunder, the benefits in respect of any
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manufacturer's or Vendor's warranties or undertakings, express or implied,
relating to the Facility (including any labor, equipment or parts supplied
therewith), and, to the extent assignment of the same is prohibited or
precludes enforcement of any such warranty or undertaking, the Lessor hereby
subrogates the Lessee to its rights in respect thereof. The Lessor hereby
authorizes the Lessee, at the Lessee's expense, to assert any and all claims
and to prosecute any and all suits, actions and proceedings, in its own name or
in the name of the Lessor, in respect of any such warranty or undertaking and,
except during the continuance of an Event of Default, or after the occurrence
of a Cancellation Event or Termination Event hereunder, to retain the proceeds
received, and after the termination of this Lease or after the occurrence and
during the continuation of an Event of Default, or after the occurrence of a
Cancellation Event or Termination Event, to pay the same in the form received
(with any necessary endorsement) to the Lessor.
(c) The Lessee may use the Facility for any lawful
purpose consistent with the Facility Plan provided that the value of the
Facility is not diminished by any such use other than as a result of normal
wear and tear in the ordinary course of business. During the term of this
Lease, the Lessor covenants that unless an Event of Default, a Cancellation
Event or a Termination Event has occurred and is continuing, the Lessor will
not, and will not permit any party claiming by, through or under the Lessor to,
interfere with the peaceful and quiet possession and enjoyment of the Facility
by the Lessee; provided, however, that the Lessor, the Agent, the Participants
and their respective successors, assigns, representatives and agents may, upon
reasonable notice to the Lessee, enter upon and examine the Facility or any
part thereof at reasonable times, subject to the provisions of Section 19. Any
failure by the Lessor to comply with the foregoing provisions of this Section
11(c) shall not give the Lessee any right to cancel or terminate this Lease, or
to abate, reduce or make reduction from or offset against any Rent, Additional
Rent or other sum payable under this Lease, or to fail to perform or observe
any other covenant, agreement or obligation hereunder. The Lessee will not do,
or fail to do, or permit or suffer to exist any act or thing, which action or
thing or failure might impair the value or usefulness of the Facility for the
safe and lawful handling of hydrocarbons and other functions contemplated by
the design of such Facility, ordinary wear and tear excepted.
Section 12. Liens.
(a) The Lessee will not directly or indirectly create, or
permit to be created or to remain, and will discharge promptly, at the Lessee's
expense, any Lien upon the Lease or the Facility except (i) any Lien being
contested as permitted by Section 13, or (ii) Permitted Liens. The Lessor
agrees that the Lessee shall have during the term of this Lease the exclusive
right (so long as no Default has occurred and is continuing) to grant, create
or suffer to exist Permitted Liens in the ordinary course of business and in
accordance with prudent industry practices, provided that the fair market value
or use of the Facility or the applicable portion thereof is not materially
lessened thereby. The Lessor agrees to execute such documents and take all
other actions as shall be reasonably necessary, and otherwise to cooperate with
the Lessee in connection with the matters described above, provided that all
reasonable out-of-pocket costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by the Lessor in connection
therewith shall be borne by the Lessee, and the Lessor shall not be required to
execute any document which would, in the opinion of the Lessor, materially and
adversely affect the value or use of the Facility or any portion thereof or
otherwise materially and adversely affect the transactions contemplated by the
Operative Documents or the interests of the Lessor, the Agent or the
Participants.
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(b) The Lessor will not directly or indirectly sell,
transfer or otherwise dispose of, or create, or permit to be created or to
remain, and will discharge, any Lien of any nature whatsoever on, in or with
respect to its interest in the Facility arising by or through it or its
actions, except Permitted Liens.
(c) The Lessee will not directly or indirectly sell,
transfer, or otherwise dispose of, or create, or permit to be created or to
remain, and will discharge, any Lien of any nature whatsoever on, in or with
respect to its interest in the Facility, except Permitted Liens.
(d) The Lessee acknowledges and agrees that this Lease is
subsequent, inferior, junior and subordinate in all respects to the Liens
created pursuant to the Security Instruments. The Lessee will not contest or
otherwise challenge through litigation or by any other means the agreement of
the parties hereto that the right, title and interest of the Agent, on behalf
of the Participants, as the secured party under the Security Instruments in and
to the Facility is senior and superior to the right, title and interest of the
Lessee under this Lease.
Section 13. Permitted Contests. Notwithstanding any
other provision of this Lease to the contrary, after prior written notice to
the Lessor and provided there is no material risk of sale, forfeiture or loss
of the Facility or any material part thereof, the Lessee may at its expense
contest any Imposition which it is required to pay hereunder, by appropriate
proceedings conducted in good faith and with due diligence, so long as such
proceedings are effective to prevent the collection of such Imposition from the
Lessor, the Agent, the Participants or against the Facility or any portion
thereof; provided, however, that the actions of the Lessee, as authorized by
this Section 13, shall be subject to the express written consent of the Agent
and the Lessor if such actions would subject the Agent, the Lessor or any such
Participant to any liability not indemnified in full by the Lessee hereunder or
any sanction, criminal or otherwise, for failure to pay any such Imposition.
The Lessee will pay, and save the Lessor, the Agent and each such Participant
harmless against, all losses, Judgments and reasonable costs, including
attorneys' fees and expenses, in connection with any such contest and will,
promptly after the final determination of such contest, pay and discharge the
amounts which shall be imposed or determined to be payable therein, together
with all penalties, costs and expenses incurred in connection therewith. The
Lessee shall prevent any foreclosure, judicial sale or forfeiture of the
Facility or any material portion thereof, or any interference with or
deductions from any Rent, Additional Rent or any other sum required to be paid
by the Lessee hereunder by reason of such nonpayment or nondischarge of an
Imposition. The Lessor shall cooperate with the Lessee in any contest and
shall allow the Lessee to conduct such contest (in the name of the Lessor, if
necessary) at the Lessee's sole cost and expense. The Lessee shall notify the
Lessor of each such proceeding within ten (10) days after the commencement
thereof, which notice shall describe such proceeding in reasonable detail.
Section 14. Insurance, etc.
(a) The Lessee will, at its own expense, purchase and
maintain, or cause to be purchased and maintained, throughout the term of this
Lease insurance with respect to its business and the Facility in accordance
with the requirements of Schedule 2.
(b) The Lessee shall bear all risk of loss, whether by
casualty, theft, taking or other confiscation, with respect to the Facility or
any portion thereof, at all times during the term of this Lease until
possession of the Facility has been accepted by the Lessor pursuant to Section
17.
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(c) So long as a Termination Event or Cancellation Event
shall not have occurred or an Event of Default shall have not occurred and be
continuing, any payments, whether constituting insurance proceeds, amounts paid
by any Governmental Authority or otherwise, received by the Lessee or the
Lessor upon the occurrence of any loss with respect to the Facility or portion
thereof (other than a Loss Event or Casualty Occurrence), whether as a result
of casualty, theft, taking or other confiscation, shall be applied in payment
for necessary repairs and replacement to the Facility in accordance with
Section 7 or, to the extent the costs of such repairs and replacement shall
have been paid by the Lessee, to reimburse the Lessee. The Lessee shall be
entitled to retain any excess funds remaining after necessary repairs and
replacements have been completed and all costs therefor paid in full. Upon the
occurrence of any Termination Event or Cancellation Event or upon the
occurrence and during the continuance of any Event of Default, the Lessor shall
be entitled to receive and retain any such payments for application to the
obligations of the Lessee hereunder.
(d) Upon a Casualty Occurrence, the Lessee shall give
prompt notice thereof to the Lessor and shall within ninety (90) days of the
date of such Casualty Occurrence either (i) offer to purchase the whole of the
Facility for the Option Price as provided in Section 15(c) or (ii) provide the
Lessor with a replacement plan acceptable to the Agent setting forth how the
Lessee shall replace, or cause to be replaced, at the Lessee's own cost and
expense, within twelve (12) months (but in no event later than the Lease
Termination Date) after the date of such Casualty Occurrence, such portion of
the Facility which is the subject of a Casualty Occurrence in accordance with
this Section 14(d) and Section 7. If the Lessee chooses the latter option,
within the later to occur of (x) 120 days after the date of the Casualty
Occurrence and (y) satisfaction of all applicable Governmental Requirements,
and obtaining all authorizations of Governmental Authorities, required therefor
(but in no event later than 180 days after the date of the Casualty
Occurrence), the Lessee shall have commenced repairs or replacements as
specified in the replacement plan. After completion of the repairs and
replacements, the Lessee shall demonstrate to the satisfaction of the Agent
that operations, capacity and production from the Facility have been restored
to the standards required for Completion.
(e) All replacement parts of the Facility (other than
temporary replacement parts installed pending installation of permanent
replacement parts) installed pursuant to Section 14(d) shall be free and clear
of all Liens except Permitted Liens, and shall be in as good operating
condition as, and shall have a value and utility at least equal to, the parts
replaced immediately prior to the Casualty Occurrence to which such parts were
subject. For purposes of this Lease (including without limitation Section
14(d) and Section 7), the Funded Amount and the Book Value of the replacement
parts shall be deemed to equal the Funded Amount and the Book Value of the
part(s) replaced thereby. All parts of the Facility at any time removed from
this Lease pursuant to Section 14(d) and Section 7 shall remain the property of
the Lessor, no matter where located, until such time as insurance proceeds have
been received by the Lessor at least equal to the Book Value of such portion of
the Facility or such portion shall be replaced by suitable items which have
been incorporated or installed on or attached to the Facility and which meet
the requirements specified above. Immediately upon any permanent replacement
parts becoming incorporated or installed on or attached to the Facility as
provided above, without further act, such permanent replacements shall become
subject to this Lease and be deemed part of the Facility for all purposes
hereof to the same extent as any other parts of the Facility. All amounts of
insurance proceeds for Property losses and all other proceeds (whether
resulting from damage or destruction or from condemnation, confiscation or
seizure) relating to the Facility shall be deposited into the Restoration
Account from any losses exceeding $5,000,000 per occurrence and held and
released, together with accrued interest thereon, as hereinafter provided. So
long as a Cancellation Event or Termination Event shall not have
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occurred or an Event of Default shall not have occurred and be continuing, and
provided that the Lessor and the Agent shall have received a written
application of the Lessee accompanied by a certificate of an Authorized Officer
of the Lessee showing in reasonable detail the nature of any necessary repair,
rebuilding and restoration, the actual cash expenditures necessary for such
repair, rebuilding and restoration, the expected total expenditures required to
complete such work and evidence that sufficient funds are or will be available
to complete such work on a timely basis (such certificate to be acceptable to
the Agent in all respects), then the amounts available in the Restoration
Account, together with accrued interest thereon, shall be released by the
Lessor immediately upon receipt of such certification or, if applicable, from
time to time on the last Business Day of each month during the period of
repair, rebuilding and restoration in payment therefor against presentation to
the Lessor of a certificate executed by an Authorized Officer of the Lessee to
the effect that expenditures have been made, or costs incurred, by or for the
account of the Lessee or are reasonably anticipated to be made during the
immediately following three month period in a specified amount for the purposes
of making repairs, rebuilding and restoration in the amounts specified, that no
Event of Default, Cancellation Event or Termination Event exists and all
conditions precedent herein provided relating to such withdrawal and payment
have been satisfied. Upon the occurrence of any Event of Default, Termination
Event or Cancellation Event, the Lessor shall be entitled to retain all amounts
in the Restoration Account for application to the obligations of the Lessee
hereunder.
(f) If any Loss Event shall occur, the Lessee shall
promptly notify the Lessor and the Agent of such event in writing.
Section 15. Termination; Cancellation; Purchase Option.
(a) (i) The termination of this Lease in accordance with
Section 2(b) (whether upon the scheduled expiration hereof or by the
refusal to agree to extend the then current Lease Termination Date)
shall be a "Termination Event", the effect of which shall be to cause
this Lease to terminate on the then current Lease Termination Date.
(ii) If a Termination Event occurs, the Lessee, on
the Lease Termination Date, shall, in accordance with the terms of
Section 2(b), without further notice or demand to the Lessee, either
(A) purchase the Facility from the Lessor for the Option
Price; or
(B) so long as no Default has occurred and is continuing:
(1) pay to the Lessor the Residual Guaranty Amount
for the Facility; and
(2) attempt to sell (until such time as the Lessor
shall have terminated, in accordance with the Agency Agreement, the
Lessee's obligation to so attempt to sell the Facility), subject to
the Agent's prior written approval, the Facility, as agent for the
Lessor, without recourse or warranty by the Lessor, for a net cash
purchase price not less than, and remit to the Lessor the net cash
sales proceeds equal to, the Funded Amount less any amount paid
pursuant to Section 15(a)(ii)(B)(1). The Lessor and/or the Agent
shall also have the right (but not the obligation) to sell the
Facility and/or solicit bids, each in its sole and absolute
discretion.
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(b) (i) Each of the following events shall be a
"Cancellation Event", the effect of which shall be to cause this Lease to be
terminated in accordance with the following provisions on the "Cancellation
Date" specified:
(A) the existence of an Event of Default and the delivery
by the Agent to the Lessee of a notice stating that the Lessor elects
to terminate this Lease by reason of the existence of such Event of
Default, in which case the Cancellation Date will be the fifth (5th)
Business Day after the date of delivery of said notice to the Lessee;
or
(B) the occurrence of a Loss Event, in which case the
Cancellation Date shall be the tenth (10th) Business Day after such
event occurs; or
(C) upon the occurrence of a Casualty Occurrence in
respect of the Facility and the failure of the Lessee to purchase the
Facility or to replace or repair the Facility or such portion thereof
in accordance with, and within the time required by, Section 14 and
the delivery by the Agent to the Lessee of a notice after the
expiration of such time stating that the Lessor elects to terminate
this Lease by reason of the existence of such Casualty Occurrence, in
which case the Cancellation Date shall be the tenth (10th) Business
Day after the date of delivery of said notice.
(ii) If a Cancellation Event occurs, the Lessee,
on the Cancellation Date, shall, without further notice or demand to
the Lessee, purchase the Facility from the Lessor for the Option
Price.
(c) The Lessee may, from time to time and at any time,
deliver to the Lessor and the Agent notice of its intent to terminate this
Lease, in which case the Lessee shall purchase the Facility from the Lessor for
the Option Price on any Business Day which is not less than thirty (30) nor
more than sixty (60) days after such notice (the "Option Date"). Upon payment
in full of the Option Price, this Lease shall terminate.
(d) This Lease shall cease and terminate on the Lease
Termination Date, Cancellation Date or Option Date, as appropriate, except with
respect to obligations and liabilities of the Lessee, actual or contingent,
which arose under this Lease on or prior to its termination, and which have not
been satisfied (which obligations shall continue until satisfied and which
include, but are not limited to, obligations for Rent, Additional Rent, the
Option Price and the Residual Guaranty Amount), and except for obligations of
the Lessee which by the terms of this Lease expressly survive termination.
Promptly after either the Lessee or the Lessor shall learn of the happening of
any Termination Event or Cancellation Event, such party shall give notice
thereof to the other party hereto and to the Agent.
Section 16. Transfer of Title on Removal of Facility;
Expenses of Transfer.
(a) Upon any sale or purchase permitted by Section 15,
the Lessor will transfer to the Lessee or the appropriate Third Party all of
its title to and legal and beneficial ownership interest in the Facility, free
of any Liens created by, through or under the Lessor, but otherwise without
representation or warranty of any nature whatsoever.
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(b) Whenever the Lessee has the right to purchase or
transfer to itself the Facility pursuant to any provision of this Lease, the
Lessee may cause such purchase to be effected by, or such transfer to be
effected to, any other Person specified by the Lessee, but in no event shall
the Lessee be relieved from any of its obligations hereunder as a result
thereof.
(c) Upon any sale or transfer of the Facility pursuant to
any provision of this Lease, the Lessee shall pay the expenses of the Agent and
the Lessor, including, without limitation, reasonable attorneys' fees and
expenses, in connection with such sale or transfer.
(d) If, on the Lease Termination Date, the Lessee or any
of its Affiliates has not elected to acquire the Facility, the Lessee shall
surrender the Facility to the Lessor free from all Liens other than Permitted
Liens, in the same operating condition (except for ordinary wear and tear) and
having the same capacity, efficiency and original estimated useful life as the
Facility had on the Lease Commencement Date (except to the extent, if any,
increased by the Phase Two Completion), and in compliance in all material
respects with all Environmental Laws. To evidence the foregoing and accomplish
the surrender of the Facility, the Lessee shall provide the following items
within nine (9) months prior to the then current Lease Termination Date, with
final confirmation of the same at least thirty (30) days but not more than
sixty (60) days prior thereto:
(i) evidence satisfactory to the Agent that all
Applicable Permits, Related Contracts, patents, trademarks and
copyrights, and all other rights and services reasonably required to
operate the Facility have been, or on or prior to the Lease
Termination Date shall be, transferred to the Lessor (or the Lessor
has been, or on or prior to the Lease Termination Date shall be, given
the right to use each such item) and can be transferred to (or used
by) any successor or assignee of the Lessor without further consent or
approval by any Person (subject only to normal Governmental
Requirements);
(ii) conveyancing, assignment, transfer, termination and
other documents that, in the sole discretion of the Lessor, the Agent
and the Participants, are sufficient to (A) convey to the Lessor good
and marketable title to the Facility, free and clear of all Liens
except Permitted Liens (other than those described in clause (ii) of
the definition of Permitted Liens), (B) terminate the rights of the
Lessee and all other Persons in and to the Facility, and (C) ensure
the continued validity and enforceability of the Ground Lease;
(iii) evidence satisfactory to the Agent that the Facility
has been operated and maintained in accordance with the requirements
of the Operative Documents, all Governmental Requirements, all
Applicable Permits and prudent industry practices;
(iv) evidence satisfactory to the Agent that the Facility
is operating in accordance with the requirements set forth in the
Facility Plan, meets or exceeds the original design specifications and
is capable of operating as a cryogenic liquids extraction plant with
the capacity set forth in the Facility Plans for Phase One (and Phase
Two, to the extent undertaken), and has the original estimated useful
life contemplated by the Facility Plans;
(v) evidence satisfactory to the Agent, in its sole
discretion, that (A) no default exists under the Support Agreement,
(B) all agreements and arrangements to provide the services and rights
contemplated by the Support Agreement are in place, executed by the
parties thereto, and are valid, enforceable and in full force and
effect on or before the Lease
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Termination Date, and (C) such agreements and arrangements adequately
provide for the services and other rights contemplated by the Support
Agreement;
(vi) a Phase One environmental audit, conducted by an
independent environmental engineering firm reasonably acceptable to
the Lessor and the Agent, in scope and substance satisfactory to the
Lessor and the Agent, reflecting compliance in all material respects
of the Facility with all applicable Environmental Laws;
(vii) an executed through put agreement to satisfy the
obligations of the Lessee under Section 3 of the Support Agreement;
and
(viii) such other documents, instruments, legal opinions,
surveys and other items as the Lessor and/or the Agent may reasonably
request to evidence to the satisfaction of each of the Lessor, the
Agent and the Participants (in each case, in their sole discretion)
that (A) the Lessor has all Property, services, Permits, assets and
rights necessary to own, operate and maintain the Facility from and
after the Lease Termination Date, and (B) no Default, Loss Event or
Casualty Occurrence then exists.
To the extent the Facility is not in the condition required by this
Section 16(d), the Lessee will pay to the Lessor such additional
amounts as are reasonably required to place it in compliance. The
Lessee shall also pay all costs and expenses relating to the surrender
and clean-up in connection with the surrender of the Facility as may
be required by Governmental Requirements or Insurance Requirements or
which are otherwise necessary to consummate the delivery of possession
of the Facility to the Lessor hereunder.
Section 17. Events of Default and Remedies.
(a) Each of the following acts or occurrences shall
constitute an "Event of Default" hereunder:
(i) default in the payment of the Option Price on the
Option Date or the Cancellation Date, as appropriate, or the payment
of the Residual Guaranty Amount on the Lease Termination Date; or the
default in the payment when due of any Rent and the continuance of
such default for five (5) Business Days thereafter; or the default in
the payment when due of any Additional Rent, the amount of any
Indemnified Risk or any other amount due hereunder and the continuance
of such default for thirty (30) days thereafter; or
(ii) any representation or warranty made or deemed made by
the Lessee herein, in any other Operative Document or otherwise in
writing in connection with or pursuant to this Lease, shall be false
or misleading in any material respect on the date made or deemed made;
or
(iii) an Event of Default under the Participation
Agreement; or
(iv) (A) the Lessee shall (1) generally not pay its debts
as such debts become due; or (2) admit in writing its inability to pay
its debts generally; or (3) make a general assignment for the benefit
of creditors; or (B) any proceeding shall be instituted or consented
to by the Lessee seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation,
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winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any
substantial part of its property; or (C) any such proceeding shall
have been instituted against the Lessee and either such proceeding
shall not be stayed or dismissed for 60 consecutive days or any of the
actions sought in such proceeding (including, without limitation, the
entry of an order for relief against it or the appointment of a
receiver, trustee, custodian or other similar official for it or any
substantial part of its property) shall occur; or (D) the Lessee shall
take any corporate action to authorize any of the actions set forth
above in this subsection (iv).
(b) Upon the occurrence and during the continuance of any
Event of Default, the Lessor may do any one or more of the following:
(i) proceed by appropriate judicial proceedings, either
at law, in equity or in bankruptcy, to enforce performance or
observance by the Lessee of the applicable provisions of this Lease,
or to recover damages for the breach of any such provisions, or any
other equitable or legal remedy, all as the Lessor shall deem
necessary or advisable; or
(ii) by notice to the Lessee, either (x) cancel this Lease
in accordance with Section 15, whereupon the Lessee's interest and all
rights of the Lessee to the use of the Facility shall forthwith
terminate subject to the Lessee's rights under such Section 15 to
acquire the Facility on the Cancellation Date as provided herein, but
the Lessee shall remain liable with respect to its obligations and
liabilities hereunder; or (y) terminate the Lessee's right to
possession of the Facility or any portion thereof.
(c) After the occurrence and during the continuance of a
Cancellation Event or Termination Event, in the event the Lessor elects not to
terminate this Lease and the Lessee has not exercised its options under Section
15(c), this Lease shall continue in effect and the Lessor may enforce all of
the Lessor's rights and remedies under this Lease, including, without
limitation, the right to recover the Rent and Additional Rent as it becomes due
under this Lease. For the purposes hereof, the following do not constitute a
cancellation or termination of this Lease: (i) acts of maintenance or
preservation of the Facility or any portion thereof, (ii) efforts by the Lessor
or the Agent to relet the Facility or any portion thereof, including, without
limitation, termination of any sublease of the Facility and removal of any
subtenant from the Facility, (iii) or the appointment of a receiver upon the
initiative of the Lessor to protect the Lessor's interest under this Lease.
(d) If (i) on the Lease Termination Date, the Facility is
not acquired by the Lessee or its designee, or (ii) on the Cancellation Date or
Option Date, the Lessee or its designee has defaulted in its obligation to
acquire the Facility, then the Lessor shall have the immediate right of
possession of the Facility and the right to enter onto the Site, and the Lessor
may thenceforth hold, possess and enjoy the Facility free from any rights of
the Lessee and any Person claiming by, through or under the Lessee. The Lessor
shall be under no liability by reason of any such repossession or entry onto
the premises of the Lessee.
(e) Should the Lessor elect to repossess the Facility or
any portion thereof upon cancellation or termination of this Lease or otherwise
in the exercise of the Lessor's remedies, the Lessee shall peaceably quit and
surrender the Facility or any such portion thereof to the Lessor and
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either (i) deliver possession of the Facility to the Lessor or (ii) allow
Lessor or its agents or assigns to enter onto the Facility and the lands upon
which the Facility is located to remove any and all of such Facility at the
expense of the Lessee, and neither the Lessee nor any person claiming through
or under the Lessee shall thereafter be entitled to possession or to remain in
possession of the Facility or any portion thereof but shall forthwith peaceably
quit and surrender the Facility to the Lessor.
(f) At any time after the repossession of the Facility or
any portion thereof, whether or not this Lease shall have been cancelled or
terminated, the Lessor may (but shall be under no obligation to) relet the
Facility or the applicable portion thereof without notice to the Lessee, for
such term or terms and on such conditions and for such usage as the Lessor in
its sole and absolute discretion may determine. The Lessor may collect and
receive any rents payable by reason of such reletting, and the Lessor shall not
be liable for any failure to relet the Facility or for any failure to collect
any rent due upon any such reletting.
(g) The remedies herein provided in case of an Event of
Default shall not be deemed to be exclusive, but shall be cumulative and shall
be in addition to all other remedies existing at law, in equity or in
bankruptcy. Lessor may exercise any remedy without waiving its right to
exercise any other remedy hereunder or existing at law, in equity or in
bankruptcy.
(h) No waiver by the Lessor hereunder of any Default
shall constitute a waiver of any other or subsequent Default. To the extent
permitted by applicable law, the Lessee waives any right it may have at any
time to require the Lessor to mitigate the Lessor's damages upon the occurrence
of a Default by taking any action or exercising any remedy which may be
available to the Lessor, the exercise of remedies hereunder being at the
discretion of the Lessor.
Section 18. Change in the Lessee's Name or Structure.
The Lessee will not change its name, identity or corporate structure
(including, without limitation, any merger, consolidation or sale of
substantially all of its assets) without notifying Lessor of such change in
writing at least thirty (30) days prior to the effective date of such change.
Section 19. Inspection; Right to Enter Premises of the
Lessee. The Agent, the Lessor, any Participant or their respective authorized
representatives may (but without any obligation to do so) (i) enter upon the
Facility or any premises of the Lessee at reasonable times upon reasonable
advance notice in order to inspect the Facility (subject to the availability
thereof for inspection and compliance with applicable safety requirements of
Lessee and applicable Governmental Requirements) and to inspect, audit and make
copies of all documents and instruments in the possession of the Lessee
relating to the Facility that are reasonably necessary or appropriate for the
Agent, the Lessor or such authorized representatives to determine the truth and
accuracy of any schedule, annex, exhibit or representation delivered or made
hereunder, or compliance by the Lessee with any of the agreements herein
contained, and (ii) discuss the condition and performance of the Facility with
the Authorized Officers of the Lessee.
Section 20. Right to Perform the Lessee's Covenants.
Subject to Section 13, if the Lessee shall fail to make any payment or perform
any act required to be made or performed by it hereunder, the Agent or the
Lessor, upon notice to or demand upon the Lessee but without waiving or
releasing any obligation or Default, may (but shall be under no obligation to)
at any time thereafter make such payment or perform such act for the account
and at the expense of the Lessee as, at the Lessor's sole discretion, may be
necessary or appropriate therefor and, upon the occurrence and
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during the continuance of a Cancellation Event or Termination Event, may enter
upon the Facility for such purpose and take all such action thereon as, at the
Lessor's sole discretion, may be necessary or appropriate therefor. No such
entry shall be deemed an eviction of the Lessee. All sums so paid by the
Lessor and all costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses so incurred) shall be paid by the Lessee to the
Lessor on demand as Additional Rent.
Section 21. Participation by Co-Lessees or Sublessees.
(a) Except as otherwise permitted in this Section 21 or
the Declaration or in Section 9.01(e) of the Participation Agreement, neither
the Lessor nor the Lessee may assign its rights or obligations under this Lease
without the prior consent of all of the Participants and the Agent. The Lessor
has granted a Lien on this Lease to the Agent for the benefit of the
Participants to secure the obligation of the Lessor under the Participation
Agreement. The Agent, acting on behalf of the Participants, shall be entitled
to exercise all of the rights, remedies, powers and privileges herein conferred
upon Lessor (including, without limitation, in any bankruptcy proceeding), to
give or withhold all consents required to be obtained from Lessor hereunder, to
give all notices on behalf of the Lessor including notices regarding Rent and
Additional Rent due hereunder, to receive all payments to be made to the Lessor
hereunder and to approve any sale of the Facility pursuant to Section 15 to a
Person other than the Lessee or any designee of the Lessee or for a price less
than the Option Price.
(b) The Lessor and the Lessee may from time to time, so
long as no Event of Default, Cancellation Event or Termination Event shall have
occurred and be continuing, enter into documentation amending this Lease and,
as necessary, the Operative Documents, to evidence the undertaking of a Person
(a "Co-Lessee") to be responsible for all or certain obligations of the Lessee
and the attendant reduction in the obligations of the Lessee hereunder, subject
in every case to (i) the prior written approval of the Lessor, the Agent and
each Participant, each acting in its sole discretion in approving said
Co-Lessee and the documentation amending this Lease and the Operative
Documents, it being understood that any of the Lessor, the Agent or the
Participants may for any reason whatsoever elect not to grant such approval, in
which case this Lease shall not be amended; (ii) such documentation shall
expressly state that such assignment is subject and subordinate to the terms of
this Lease and the Liens created by the Security Instruments; and (iii) the
Lessee remaining primarily liable for all obligations of the tenant of the
Facility under this Lease. Any assignment made otherwise than as expressly
permitted by this Section 21 shall be null and void and of no force and effect.
(c) The Lessee may, from time to time, so long as no
Event of Default, Cancellation Event or Termination Event shall have occurred
and be continuing, enter into a sublease and such other documentation as may be
necessary with one or more Persons (each a "Sublessee"). In any event, any
documentation executed by the Lessee in connection with the subletting of the
Facility (i) shall expressly state that such sublease is subject and
subordinate to the terms of this Lease and the Liens created by the Security
Instruments and (ii) shall not provide for a sublease term ending after the
then current Lease Termination Date. Upon request of the Lessor, the Lessee
will furnish to the Lessor copies of all subleases and related documentation
entered into by the Lessee from time to time. No sublease permitted by the
terms hereof will reduce in any respect the obligations of the Lessee
hereunder, it being the intent of the Lessee and the Lessor that the Lessee be
and remain directly and primarily liable as a principal for its obligations
hereunder. Any sublease
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made otherwise than as expressly permitted by this Section 21(c) shall be null
and void and of no force or effect.
Section 22. Notices. Except as otherwise provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and other readable communication) and mailed by
certified mail, return receipt requested, telecopied or otherwise transmitted
or delivered, if to the Lessee, at 1 Paul Kayser Center, 100 North Stanton
Street, El Paso, Texas 79901, Attention: Senior Vice President and Chief
Financial Officer, Telecopier: (915) 541-5008; if to the Lessor, at Two
International Place, 4th Floor, Boston, Massachusetts 02110, Attention:
Corporate Trust Department, Telecopier: (617) 664-5371; with copies to the
Agent at 270 Park Avenue, New York, New York 10017, Attention: John Gehebe,
Telecopier: (212) 270-4892; or, as to each party, at such other address as
shall be designated by such party in a written notice to the other parties.
All such notices and communications shall, if so mailed, telecopied or
otherwise transmitted, be effective when received, if mailed, or when the
appropriate answerback or other evidence of receipt is given, if telecopied or
otherwise transmitted, respectively. A notice received by the Lessor or the
Agent by telephone shall be effective if the Lessor or the Agent believes in
good faith that it was given by an authorized representative of the Lessee and
acts pursuant thereto, notwithstanding the absence of written confirmation or
any contradictory provision thereof.
Section 23. Amendments and Waivers. The provisions of
this Lease may from time to time be amended, modified or waived only if such
amendment, modification or waiver is in writing and consented to by the Lessee,
the Lessor and the Agent and, if applicable, in accordance with Section 21.
Section 24. Severability. Any provision of this Lease
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.
Section 25. Federal Income Tax Considerations. It is the
understanding of the parties that for income tax purposes this transaction will
be treated as a financing and the Lessee will be treated as the owner of the
Facility; and the Lessee and the Lessor agree not to take any action
inconsistent with such treatment, subject to the following sentence.
Notwithstanding anything in this Section to the contrary, the Lessor and/or the
Agent retain the right to assert that it is the owner of the Facility subject
to this Lease for income tax purposes in the event that there is a
determination (within the meaning of Section 1313 of the Internal Revenue Code
of 1986, as amended, or with respect to state or local income tax, a comparable
determination under state or local law) that the Lessee is not to be treated as
the owner of the Facility.
Section 26. Other Provisions. In order to protect the
rights and remedies of the Lessor and the Lessee both during the term of this
Lease and following a Default, an Event of Default, a Termination Event or a
Cancellation Event, and for the purposes of Federal, state and local income and
ad valorem taxes and Title 11 of the United States Code (or any other
applicable Federal, state or local insolvency, reorganization, moratorium,
fraudulent conveyance or similar law now or hereafter in effect for the relief
of debtors), the parties hereto intend that (a) this Lease be treated as the
repayment and security provisions of a loan by Lessor to Lessee in the amount
of the Facility Costs, (b) all payments of Rent, Additional Rent, the Residual
Guaranty Amount and the Option Price
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25
be treated as payments of principal, interest and other amounts owing with
respect to such loan, respectively, (c) the Lessee should be treated as
entitled to all benefits of ownership of the Facility or any part thereof, (d)
this Lease be treated as a mortgage and security agreement or other similar
instrument (the "Mortgage") from Lessee, as mortgagor, and as a security
agreement from the Lessee, as debtor, to the Lessor, as secured party,
encumbering the Facility, and that the Lessee, as debtor, hereby grants to the
Lessor, for the use and benefit of the Agent and the Participants, as
beneficiaries, (collectively, the "Secured Party") a first and prior Lien on
and security interest in the equipment, fixtures, and any and all other
personal property of any kind or character comprising the Facility and all
proceeds therefrom, in each case being effective as of the date of this Lease.
In such event, the Lessor shall have all of the rights, powers and remedies of
a mortgagee and a secured party available under applicable law, including,
without limitation, judicial or nonjudicial foreclosure or power of sale, and
the amounts secured by the Liens and security interests shall be the Funded
Amount plus any other amounts owing to the Lessor, the Agent or the
Participants under the Operative Documents. The filing of this Lease shall be
deemed to constitute the filing of a mortgage and the filing of any financing
statement in connection with this Lease shall be deemed to constitute the
filing of a financing statement to perfect the mortgage lien and security
interests in the Facility as aforesaid to secure the payment of all amounts due
from time to time from the Lessee to the Lessor under this Lease and the other
Operative Documents. If this transaction is treated as a financing, the
obligation arising hereunder shall be with full recourse to the Lessee and
shall not be treated as recourse only to the Facility. To the fullest extent
permitted by applicable law, the Lessor and the Lessee intend that the Facility
(other than the real property constituting the Site) be and remain at all times
personal property regardless of the manner or extent to which any of the
Facility (other than the real property constituting the Site) may be attached
or affixed to any real property. Except as required by applicable law, the
Lessee shall not under any circumstances take any action or make any filing or
recording which would cause the Facility (other than the real property
constituting the Site) to be deemed to be real property or permit any Person to
obtain any interest in the Facility (other than the real property constituting
the Site) as a result of the Facility (other than the real property
constituting the Site) being deemed to be in whole or in part real property.
For purposes of New Mexico law, THIS MORTGAGE SECURES FUTURE
ADVANCES UP TO A MAXIMUM OF $80,000,000. Lessee agrees that, pursuant to N.M.
Stat. Ann. Section 39-5-19 (1978), the period of redemption after any
foreclosure sale shall be one (1) month in lieu of nine (9) months.
In order to preserve the security interest provided for
herein, each of the Lessor and the Lessee agrees to abide by the following
provisions with regard to the Facility (for purposes of this Section,
hereinafter referred to as "Collateral"):
(a) Change in Location of Collateral or the Lessee. The
Lessee will notify the Secured Party on or before the date of any change in
location of the Collateral with a value in excess of $5,000,000 and will, on or
before the date of any change in location of the Collateral, prepare and file
new or amended financing statements as necessary so that the Secured Party
shall continue to have a first and prior perfected Lien subject to Permitted
Liens in such Collateral after such change in location. The Lessee will give
the Secured Party thirty (30) days' prior written notice of any change in the
location of the Lessee's chief executive office or address.
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26
(b) Documents; Collateral in Possession of Third Parties.
If certificates of title or other documents evidencing ownership or possession
of the Collateral are issued or outstanding, the Lessee will cause the interest
of the Secured Party to be properly noted thereon and will, forthwith upon
receipt, deliver same to the Secured Party. If any Collateral with a value in
excess of $5,000,000 is at any time in the possession or control of any
warehouseman, bailee, agent or independent contractor, the Lessee shall notify
such Person of the Secured Party's security interest in such Collateral. Upon
the Secured Party's request, the Lessee shall instruct any such Person to hold
all such Collateral for the Secured Party's account subject to the Lessee's
instructions, or, if an Event of Default shall have occurred and be continuing,
subject to the Secured Party's instructions.
(c) Sale, Disposition or Encumbrance of Collateral.
Except for Permitted Liens, as permitted by any of the Operative Documents or
with the Secured Party's prior written consent, the Lessee will not in any way
encumber any of the Collateral (or permit or suffer any of the Collateral to be
encumbered) or sell, assign, lend, rent, lease or otherwise dispose of or
transfer any of the Collateral to or in favor of any Person other than the
Secured Party.
(d) Proceeds of Collateral. Except as permitted by any
of the Operative Documents, the Lessee will deliver to the Secured Party
promptly upon receipt all proceeds delivered to the Lessee from the sale or
disposition of any Collateral. This Section shall not be construed to permit
sales or dispositions of the Collateral except as may be elsewhere expressly
permitted by this Lease or the other Operative Documents.
(e) Further Assurances. Upon the request of the Secured
Party, Lessee shall (at Lessee's expense) execute and deliver all such
mortgages, deeds of trust, assignments, certificates, financing statements or
other documents and give further assurances and do all other acts and things as
the Secured Party may reasonably request to perfect the Secured Party's
interest in the Collateral or to protect, enforce or otherwise effect the
Secured Party's rights and remedies hereunder, all in form and substance
satisfactory to the Secured Party.
(f) Collateral Attached to Other Property. In the event
that the Collateral is to be attached or affixed to any real property, the
Lessee hereby agrees that a financing statement which is a fixture filing may
be filed for record in any appropriate real estate records. If the Lessee is
not the record owner of such real property, it will provide the Secured Party
with any additional security documents or financing statements necessary for
the perfection of the Secured Party's Lien in the Collateral, as requested by
the Secured Party.
(g) Lease. The Lease will not be amended, supplemented
or modified without the written consent of the Secured Party. All payments
under the Lease shall be made only to such account as specified by the Secured
Party.
Section 27. Hart-Scott-Rodino Act Compliance. The Lessee
shall make all necessary filings and notifications under the HSR Act, if any,
and fully comply with the terms of the HSR Act (including any applicable
interpretations thereunder) in connection with any purchase or sale of the
Facility.
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Section 28. Miscellaneous.
(a) THIS LEASE AND THE OTHER OPERATIVE DOCUMENTS EMBODY
THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE LESSEE AND THE LESSOR AND
SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING
TO THE SUBJECT MATTER HEREOF. THIS WRITTEN LEASE AND THE OTHER OPERATIVE
DOCUMENTS 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.
(b) Notwithstanding anything to the contrary contained in
this Lease, the execution of this Lease and any other instrument or document
executed in connection herewith shall not impose upon any director, officer or
employee of the Lessee, the Agent or the Lessor personal liability for the
Lessee's, the Agent's and the Lessor's respective obligations under this Lease
or any other instrument or document executed in connection herewith; provided
the foregoing shall not relieve any such director, officer or employee of
personal liability for his or her fraud or intentional misconduct.
(c) Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
(d) THIS LEASE AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO RELATING TO THE FACILITY SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW (OR ANY SIMILAR SUCCESSOR PROVISION
THERETO) BUT EXCLUDING ALL OTHER CONFLICT-OF-LAWS RULES; EXCEPT THAT, TO THE
EXTENT REQUIRED BY THE LAWS OF THE STATE OF NEW MEXICO, THE LAWS OF THE STATE
OF NEW MEXICO SHALL GOVERN (I) THE CREATION AND EXISTENCE OF THIS LEASE, (II)
SECTION 26 OF THIS LEASE, AND (III) THE ENFORCEMENT OF THE RIGHTS OF LESSOR TO
REPOSSESS THE FACILITY FROM LESSEE AFTER THE EARLIER OF THE TERMINATION OF THIS
LEASE OR THE TERMINATION OF LESSEE'S RIGHT TO POSSESSION OF THE FACILITY.
(e) Nothing in this Lease, express or implied, shall give
to any Person, other than the parties hereto and the Agent and their respective
successors and permitted assigns, any benefit or any legal or equitable right,
remedy or claim under this Lease including, without limitation, under any
provision of this Lease regarding the priority or application of any amounts
payable hereunder.
(f) This Lease may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
(g) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS LEASE OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
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RELATIONSHIP EXISTING IN CONNECTION WITH THIS LEASE, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
(h) In the event that any one or more of the provisions
contained in this Lease shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of the Lease.
(i) Notwithstanding anything to the contrary contained in
this Lease or any of the Operative Documents, the amounts which the Lessee is
obliged to pay pursuant to this Lease and the other Operative Documents, and
the amounts which the Lessor, the Agent and the Participants are entitled to
receive pursuant to this Lease and the other Operative Documents, are subject
to the limitations set forth in Section 12.15 of the Participation Agreement.
(j) Time is of the essence in connection with the payment
of Rent, Additional Rent and all other amounts payable hereunder and the
performance of the Lessee's other obligations hereunder.
(k) No recourse shall be had against the Lessor or its
successors and assigns and their directors, officers, shareholders, employees
or agents for any claim based on any failure by the Lessor in the performance
or observance of any of the agreements, covenants or provisions contained in
this Lease; and in the event of any such failure, recourse shall be had solely
against the rights and interests of the Lessor in the Trust Estate; provided
that nothing contained in this Lease or other any Operative Document shall be
taken to prevent enforcement of any claim against the Lessor or any other
Person arising out of or in connection with the Lease or any other Operative
Document based upon fraud, gross negligence or willful misconduct of the Lessor
or any director, officer, shareholder, employee or agent of the Lessor or its
successors and assigns.
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IN WITNESS WHEREOF, the parties have caused this Lease to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
LESSEE:
EL PASO NEW CHACO COMPANY
By
-------------------------------------
John M. Green, Jr.
Vice President and Treasurer
LESSOR:
STATE STREET BANK AND TRUST
COMPANY, not in its
individual capacity but solely
as Trustee
By:
-------------------------------------
Arthur J. MacDonald
Assistant Vice President
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STATE OF TEXAS Section
Section
COUNTY OF HARRIS Section
This instrument was acknowledged before me on February ___,
1995 by John M. Green, Jr., as Vice President and Treasurer of El Paso New
Chaco Company, a Delaware corporation, on behalf of such corporation.
-------------------------------
Notary Public for the State of Texas
My commission expires: ------------
COMMONWEALTH OF MASSACHUSETTS Section
Section
COUNTY OF SUFFOLK Section
This instrument was acknowledged before me on February ___,
1995 by Arthur J. MacDonald, as Assistant Vice President of State Street Bank
and Trust Company, on behalf of such bank and trust company, not in its
individual capacity but as Trustee for the Chaco Liquids Plant Trust.
-------------------------------
Notary Public for the Commonwealth
of Massachusetts
My commission expires: ------------
25
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EXHIBIT A
Description of Site
A parcel of land located in the Southwest quarter of Section 16,
Township 26 North, Range 12 West, N.M.P.M., New Mexico. Being more
particularly described as:
COMMENCING at the Southwest corner of said Section 16, THENCE: N
88-15-01 E a distance of 1897.04 feet to the "TRUE POINT OF BEGINNING".
THENCE: N 00-06-54 W a distance of 450.00 feet,
THENCE: N 89-53-03 E a distance of 360.00 feet,
THENCE: S 00-06-54 E a distance of 450.00 feet,
THENCE: S 89-53-03 W a distance of 360.00 feet to the "TRUE POINT OF
BEGINNING".
Containing 3.72 Acres.
A-1
32
SCHEDULE 2
Insurance Requirements
The Lessee will provide, or cause to be provided, insurance in
accordance with the terms of this Schedule, which insurance shall be placed and
maintained with Permitted Insurers.
(a) Insurance Coverages and Limits
At all times subsequent to the Phase One Completion Date, the Lessee
shall provide, or cause to be provided, the following property and liability
coverages with respect to the Facility:
(i) all-risk property coverage, with limits of coverage
at least equal to the replacement cost (which limits shall be not less
than $56,000,000, or, if the Phase Two Election is made, $80,000,000
for the Facility), which insurance coverage may, at the Lessee's
option, be included under any "blanket" policy maintained by Guarantor
so long as such "blanket" policy provides for all-risk property
coverage with respect to the Facility and any other Property covered
thereby, with limits of coverage at least equal to the aggregate
replacement cost of the Facility (provided, however, that such
insurance, in either case, shall provide for replacement cost
coverage, provided that the insured property is replaced, and,
provided further, that the insurance shall not have the effect of
causing the Lessee or any of its Affiliates to be deemed a
co-insurer), with respect to the Lessee and any Affiliate of the
Lessee providing services with respect to the Facility, or if the
Lessee elects to effect the coverage required by this Paragraph under
a "blanket" policy, Lessee, Guarantor and its Affiliates insured
thereby, such insurance to include, coverage for (x) floods,
windstorms, hurricanes, tornados, earthquakes, collapse and other
perils (including debris removal and cleanup) and such insurance to
cover equipment separated from the Facility, transit of equipment and
consumables to and from the Facility, labor claims, in each case with
respect to the Facility, and such insurance to include coverage for
all other risks and occurrences customarily included under all-risk
policies available with respect to Property similar in construction,
location, occupancy and operation to the Facility (or the Facility and
all other Property insured thereby if all are covered under a
"blanket" policy), and (y) "boiler and machinery" property damage
insurance on a comprehensive basis with respect to damage to the
machinery, plants, equipment or similar apparatus (including
production machinery) included in the Facility (or the Facility and
all other Property insured thereby if all are covered under a
"blanket" policy), from risks and in amounts normally insured against
under machinery policies.
(ii)
(1) statutory workers' compensation and
occupational disease insurance in accordance with applicable
state and federal law, and employer's liability insurance with
primary and excess coverage limits of not less than
$5,000,000;
(2) commercial general liability insurance
covering operations of the Lessee, contractual liability
coverage, contingent liability coverage arising out of the
operations of the Facility, cross-liabilities coverage, sudden
and accidental seepage
(Schedule 2) - 1
33
and pollution coverage, and other coverage for hazards
customarily insured with respect to Property similar in
construction, location, occupancy and operation to the
Facility, with limits complying with the underlying
requirements of the excess liability policy described in
Paragraph (a)(ii)(3);
(3) excess commercial liability insurance in
excess of the liability policies described in Paragraphs
(a)(ii)(1) and (2) to bring to limits of not less than
$25,000,000 for each occurrence and in the aggregate per year
with respect to the Lessee, Guarantor and its Affiliates.
(iii) The policy or policies providing the coverage
required by paragraphs (a)(i) and (a)(ii)(2) and (a)(ii)(3) may
include deductible amounts for the account of the Lessee or its
Affiliates, as the case may be, not to exceed $5,000,000 in the
aggregate for all such coverages.
(b) Insurance Endorsements - Any insurance carried in accordance
herewith shall, except as hereinafter permitted, provide or be endorsed to
provide that:
(i) the Lessor and the Agent on behalf of the
Participants, as their interests may appear, shall be included as
additional insureds or named as loss payees but only with respects
coverages required by Paragraphs (a)(i), with the understanding that
any obligation imposed upon the insured (including, without
limitation, the liability to pay premiums) under any policy required
by this Schedule shall be the obligation of the Lessee (or Guarantor)
and its Affiliates) and not that of the Lessor, the Agent or any
Participant;
(ii) except with respect to the coverage required by
Paragraphs (a)(i) and (a)(ii), there shall be a cross-liability and
severability of interest endorsement providing that to the extent the
policy is written to cover more than one insured, all terms,
conditions, insuring agreements and endorsements, with the exception
of limits of liability and deductibles shall operate in the same
manner as if there were a separate policy covering each insured;
(iii) the insurer thereunder waives all rights of
subrogation against the Lessor, the Agent or the Participants;
(iv) such insurance shall be primary without right of
contribution of any other insurance carried by or on behalf of the
Lessor, the Agent or the Participants with respect to its or their
interests in the Facility; and
(v) if such insurance is cancelled for any reason
whatsoever (including, without limitation, nonpayment of premium) or
any material change is made in the coverage that affects the interests
of the Lessor, the Agent or the Participants, such cancellation or
change shall not be effective as to the Lessor, the Agent and the
Participants for 10 days for nonpayment of premiums and otherwise for
45 days, in both cases after receipt by the Lessor and the Agent (at
the address provided pursuant to Section 22 of the Lease) of written
notice sent by certified mail from such insurer of such cancellation
or change.
(c) Adjustment of Property Losses - After the occurrence and
during the continuation of an Event of Default or after the occurrence of a
Cancellation Event or Termination Event, the loss,
(Schedule 2) - 2
34
if any, under any property insurance covering the Facility required to be
carried by this Schedule shall be adjusted with the insurance companies or
otherwise collected, including, without limitation, the filing of appropriate
proceedings, by the Lessee in consultation with the Lessor and the Agent.
(d) Reinstatement of Limits - The Lessee shall, or shall cause its
insurance broker to, notify promptly the Lessor and the Agent at any time when
the limits of the excess commercial liability insurance required by Paragraph
(a)(ii)(3) shall have been reduced, either by reason of payments of, or the
establishment of reserves for the ultimate payment of, claims which have been
asserted during the term of such insurance, by an aggregate amount in excess of
$10,000,000. At such time, the Lessee shall, if so requested by the Lessor,
use its best efforts to reinstate such insurance so as to comply with the
requisite limits prescribed herein.
(e) Upon request, the Lessee will furnish the Lessor and the Agent
evidence of such insurance relating to the Facility, as the case may be.
(f) Additional Insurance by the Participants or the Lessee -
Nothing in this Schedule shall prohibit the Lessor, the Agent, any Participant
or the Lessee or the Guarantor, as their respective interests may appear, from
maintaining for its own account, at the expense of the Person purchasing such
insurance, additional insurance on or with respect to the Facility, or any part
thereof, with coverage exceeding that otherwise required under this Schedule,
unless such insurance would conflict with or limit the insurance otherwise
required under this Schedule.
(Schedule 2) - 3
35
SUPPORT AGREEMENT
BETWEEN
EL PASO NEW CHACO COMPANY
AND
STATE STREET BANK AND TRUST COMPANY,
NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE
DATED AS OF FEBRUARY 9, 1995
36
SUPPORT AGREEMENT (this "Agreement") dated as of February 9, 1995 (as
it may be amended or supplemented from time to time, this "Agreement"), by and
between EL PASO NEW CHACO COMPANY, a Delaware corporation (the "Company"), and
STATE STREET BANK AND TRUST COMPANY, not in its individual capacity but solely
as Trustee of the Chaco Liquids Plant Trust (the "Trustee"). Capitalized terms
used herein and not defined herein shall have the meanings assigned to them in
Schedule 1.02 to that certain Participation and Credit Agreement, dated of even
date herewith (the "Participation Agreement"), among the Trustee, the Company,
El Paso Natural Gas Company, a Delaware corporation, as Guarantor (the
"Guarantor"), the participants thereto (the "Participants"), and Chemical Bank,
as agent for the Participants (the "Agent").
RECITALS
A. The Trustee and the Company are parties to that
certain Lease dated of even date herewith (as amended, supplemented or
otherwise modified, the "Lease") pursuant to which the Company, as Lessee, has
agreed to sublease the Site (as defined in the Lease) and lease the Facility
after its completion for the purpose of operating such plant in accordance with
the terms and conditions set forth in the Lease.
B. To induce the Trustee to enter into the Lease and the
other Operative Documents, the Company has agreed to provide, or cause to be
provided, to the Trustee all the rights, services, and other matters as may be
necessary from time to time for the maintenance and operation, including an
agreement to dedicate certain throughput, of the Facility, all as hereinafter
provided.
NOW, THEREFORE, in consideration of the premises and intending
to be legally bound by this Agreement, the Company and the Trustee hereby agree
as follows:
Section 1. Basic Services, Contracts and Rights, Etc.
(a) Plans and Design Specifications. As soon as
available, the Company, at no cost to the Trustee, shall deliver, or cause to
be delivered, to the Trustee a complete set of "as-built" plans, drawings and
specifications for the Facility, as well as all design information on all
equipment, safety systems, and associated facilities, that to the best of the
Company's knowledge shall be true, correct and complete.
(b) Access and Parking. Subject to existing safety
regulations on the Site and applicable Governmental Requirements, the Company,
at no cost to the Trustee, shall provide vehicular (including maintenance and
construction equipment) and pedestrian access routes to the Site from a public
street and shall make such parking space available thereon as may be necessary
for the full use and enjoyment of the Site and the Facility.
- 1 -
37
(c) Easements, Utilities, Services and Contracts. Within
120 days prior to the scheduled Lease Termination Date (or as soon as available
if the Lease terminates on a day which is not the then scheduled Lease
Termination Date), and provided that the Company shall not have elected to
purchase, or purchased, the Facility pursuant to the terms of the Lease, the
Company shall provide, either directly or indirectly, to the Trustee, in
compliance with all Governmental Requirements (including, without limitation,
all Environmental Laws), as confirmed by the Agent, (i) for the term of this
Agreement, all rights of ingress and egress, rights-of-way, easements (which
easements shall be reasonably direct and shall provide for access over any
servient estate created thereby, including the rights to use existing
transmission lines), access and real property licenses and rights in real
property (including, without limitation, line pipe in place, fixtures and
appurtenances) over or to the Site, (ii) product pipelines, steam pipelines,
conveyors and all other necessary transportation facilities, fixtures and
appurtenances, (iii) supplies (other than feedstock or throughput) necessary
for the full and efficient operation of the Facility, and (iv) services
(whether on- or off-site, including any shared off-site facilities), including,
without limitation, water, electricity, steam, waste water treatment and
sanitation, receiving and shipping facilities (including the use of dock, rail
and trucking facilities) as such rights, licenses, easements, services and
utilities are or may be necessary for the full and efficient operation of the
Facility, and (v) for the first nine (9) years after the termination of the
Lease, any and all necessary feedstock contracts and any and all necessary
contracts for the sale of natural gas processed by the Facility as are or may
be necessary for the full and efficient operation of the Facility.
(d) Equipment and Other Rights. Within 120 days prior to
the scheduled Lease Termination Date (or as soon as available if the Lease
terminates on a day which is not the then scheduled Lease Termination Date),
and provided that the Company shall not have elected to purchase, or purchased,
the Facility pursuant to the Lease, the Company shall provide to the Trustee,
until the Facility is sold or leased to a Person other than the Trustee (or the
Agent and the Participants), by rent-free lease or other similar arrangement,
any and all equipment and maintenance tools, and, for a price equal to the
Company's cost therefor, all spare parts (including, without limitation,
rebuilt parts and major components) and mobile maintenance equipment not
covered by the services provided, or caused to be provided, pursuant to Section
2(b)(i), as are or may be customarily maintained on the Site by the Company for
the operation of the Facility in the manner described in Section 2. Within the
period set forth above, the Company, in compliance with all Governmental
Requirements, shall also transfer, or cause to be transferred, to the Trustee
any and all equipment inspection reports and maintenance records and all
licenses and Applicable Permits required to operate the Facility and all such
equipment located on the Site as confirmed by the Agent. Within the period set
forth above, the Company shall provide, or cause to be provided, to the
Trustee, by non-exclusive, royalty free license or other similar arrangement,
rights to all patents, patent applications, proprietary computer software,
operating and other manuals, laboratory test procedures and methods,
"know-how", copyrights or other intellectual property (excluding trade names
and trademarks) as are or may be necessary for the operation of the Facility in
the manner described in Section 2. The Company represents and warrants to the
Trustee that as of the Closing Date, the construction and operation of the
Facility and equipment in accordance with the uses permitted by any necessary
licenses and Applicable Permits held by the Company does not and will not cause
a violation of any laws.
- 2 -
38
(e) Cost of Services and Rights.
(i) Any and all services described in Section 1(c)(iv)
and all easements and other rights in real property existing or
necessary for the full and efficient operation of the Facility during
the term of this Agreement shall be provided (x) to the Trustee at the
cost specified in Section 2(c), and (y) on the terms set forth in
Section 1(e)(iii) to any Person acquiring title or use of the Facility
other than the Trustee (or the Agent and the Participants).
(ii) Any and all easements and other rights in real property
which do not exist and are unnecessary for the full and efficient
operation of the Facility prior to the date this Agreement terminates
but which become necessary subsequent thereto shall be priced at an
amount equal to the Company's cost including Other Taxes associated
with the acquisition thereof but excluding any profit margin.
(iii) Unless otherwise provided herein, any and all
throughput, feedstock and sales contracts, permits, utilities and
other services now or hereafter provided by the Company pursuant to
this Section 1 (A) which are generally commercially available shall be
priced at fair market value, including Other Taxes directly associated
with the provisions of services or products hereunder (including,
without limitation, all items referred to in Section 1(c)(v)), and on
arms-length terms and conditions subject to applicable provisions of
agreements with producers, shippers and suppliers and Governmental
Requirements, or (B) which are not generally commercially available
shall be priced at an amount equal to the Company's cost, including
Other Taxes directly associated with the provisions of services
hereunder (excluding any profit margin).
(iv) At the Company's expense, after the Lease Termination
Date and if this Agreement then remains in effect, the Company and the
Trustee shall select a third party to review, on an annual basis, the
books and records of the Company's operation of the Facility and the
Company hereby agrees to permit access to such books and records, in
order to verify that the charges paid by the Trustee for such
throughput, feedstock, utilities and other services during the
immediately preceding twelve (12) month period reflect the costs
incurred by the Company in supplying the same (exclusive of any profit
margin).
Section 2. Operation and Management of the Facility.
(a) Engagement. From the date on which the Lease
terminates until the earliest of such time as the Trustee terminates this
Agreement as provided in Section 7(d) or this Agreement otherwise terminates in
accordance with Section 7(d) or the Facility is sold or leased to a Person
other than the Trustee (or the Agent and the Participants), the Company hereby
agrees to provide and perform, or cause to be provided or performed, all
services, labor, supervision, management, maintenance, repairs, common
facilities and consummables necessary for the operation of the Facility for the
purposes and within the capacity range set forth in the Facility Plans,
including all treated water and steam, supplemental fuel, control systems,
plant air, instrument air, electricity, chemicals
- 3 -
39
and other services and common facilities, and to perform the additional duties
as set forth in this Agreement.
(b) Duties and Responsibilities of the Company as
Operator of the Facility.
During the period specified in Section 2(a):
(i) Services. The Company shall (A) perform, or cause to
be performed on behalf of Trustee, all operation and maintenance of
the Facility whatsoever, (B) supply, or cause to be supplied, all
services, goods and materials required to operate and maintain the
Facility, including without limitation, those services, goods and
materials referenced in Section 1, and (C) provide such additional
services as may be reasonably requested by the Trustee or the Agent
for the full and efficient operation of the Facility, all of the
foregoing to be done or performed in accordance with the terms and
conditions set forth herein.
(ii) Standard of Care. The Company shall perform all of
its duties and obligations under this Section 2 in accordance with the
standards mandated under Section 7 of the Lease as if fully set forth
herein (which standards are hereby incorporated, mutatis mutandis,
herein by reference) and in a good, workmanlike and commercially
reasonable manner. The Company shall exercise such care and shall in
the same manner as a prudent person engaged in the business of
managing and operating a cryogenic liquids extraction plant similar to
the Facility would in the advancement and protection of such person's
own economic interests and the maximization of such person's profits
therefrom. Maintenance shall be scheduled so as to minimize
interference with the operation of the Facility and cost consistent
with good industry operating and safety standards.
(iii) Compliance with Insurance Requirements and Applicable
Law. The Company shall comply with, and cause the Facility (including
the operation thereof) and all personnel of the Company to comply
with, the Insurance Requirements (which Insurance Requirements are
hereby incorporated, mutatis mutandis, herein by reference as if fully
set forth herein) and all Governmental Requirements.
(iv) Personnel. The Company shall at all times employ, or
cause to be employed, qualified and properly trained personnel to
perform the Company's obligations under this Agreement, and shall pay
all wages and benefits required by law or contract. The Company shall
be responsible for all matters relating to labor relations, working
conditions, training, employee benefits, safety programs and related
matters pertaining to such employees. The Trustee and the Agent shall
have the right to request the removal of any personnel from the site
deemed unqualified by the Trustee or the Agent.
(v) Warranties and Guarantees. The Company shall use its
best reasonable efforts consistent with good industry practices to
obtain warranties for the Trustee for parts, equipment, materials or
services provided by third-party suppliers in fulfilling the Company's
obligations under this Agreement. The Company shall comply with all
applicable warranties and guarantees presented by manufacturers or
contractors, and shall take no action that in any
- 4 -
40
way impairs any rights or claims of the Trustee under this Agreement
or any manufacturer's, supplier's or other party's warranty. Without
limiting the foregoing, the Company shall use spare parts that will
not adversely affect the Trustee's protection or rights under such
warranties or guarantees.
(vi) Consultations. Notwithstanding any other provision
of this Agreement, the Company will consult with the Trustee and/or
the Agent and any other independent experts appointed by or on behalf
of the Trustee or the Agent to review any matter pertaining directly
or indirectly to the performance of the Company's obligations under
this Agreement and the Company shall provide them with access, during
normal business hours and upon no less than thirty (30) days' prior
written notice, to the Facility and shall make available to such
experts, at the Company's expense, all information, reports, logs and
other documents, and shall make the Company's personnel available for
consultation with such experts, all as requested by the Trustee or the
Agent.
(vii) Permits. The Company shall apply for, at the cost
and expense of the Company, any and all Applicable Permits required to
be obtained, maintained or held by either the Company or the Trustee
as and when required by law to be obtained and in proper form therefor
and maintain all such Applicable Permits in full force and effect.
(viii) Annual Operating Plan and Annual Budget.
(A) Sixty (60) days following the Trustee's or
the Agent's request that the Company operate the Facility
hereunder and sixty (60) days before the first day of each
calendar year commencing thereafter, the Company shall prepare
and submit to Trustee and the Agent a proposed annual budget
(each an "Annual Budget") and annual operating plan (each an
"Annual Operating Plan") for such calendar year (the "Current
Year") and for each of the two calendar years immediately
following the Current Year, whether or not such subsequent two
calendar years occur beyond the scheduled expiration date of
this Agreement (the "Out Years"). The Annual Budgets for the
Out Years shall be presented in detail and form acceptable to
Trustee and the Agent. The Annual Budget for the Current Year
shall be established on a monthly basis, and shall include the
projections of revenues, all expenses for each month and a
separate capital budget and shall set forth, in detail and
form acceptable to Trustee and the Agent, anticipated
operations, repairs and capital improvements, routine
maintenance and overhaul schedules, procurement (including
equipment acquisitions and spare parts and consumable
inventories indicating a breakdown of capital items and
expense items) staffing, personnel and labor activities
(including salaries for labor and holidays to be observed),
administrative activities, data regarding expected
environmental and other work proposed to be undertaken by the
Company, together with an itemized estimate, in detail
reasonably acceptable to Trustee and the Agent of all costs to
be incurred in connection therewith.
(B) Within sixty (60) days after the Trustee and
the Agent receive the Company's proposed Annual Budget and
Annual Operating Plan, the Agent and the
- 5 -
41
Company shall meet and agree upon a final Annual Budget and
Annual Operating Plan, which shall be approved in writing by
all parties, such approval not to be unreasonably withheld.
The Annual Budget and Annual Operating Plan shall remain in
effect throughout the applicable calendar year, subject to
quarterly updates provided by Company and such other updating,
revision and amendment as may be reasonably proposed, in
accordance with prudent industry practices, by any party and
consented to in writing by the other parties.
(C) The Company shall notify the Trustee and the
Agent as soon as practicable after it becomes aware of any
significant deviations or discrepancies from the projections
contained in the Annual Operating Plan and shall provide a
certificate of an Authorized Officer explaining the cause for
the same and the steps it proposes to take to remedy the same.
(ix) Compliance with Law; Certain Agreements.
(A) The Company shall comply with, and cause the
Facility (and its operation) to comply with, all Governmental
Requirements.
(B) The Company shall also comply with, and cause
the Facility (and its operation) to comply with, the various
requirements imposed on the Lessee set forth in Sections 7,
10, and 14 of the Lease (which sections are hereby
incorporated mutatis mutandis herein by reference as if fully
set forth herein).
(C) The Company shall also not take or fail to
take any action which would result in other cryogenic liquids
extraction plants or similar facilities owned or operated by
the Guarantor or any of its Subsidiaries being utilized to
process natural gas liquids such that the Facility is not
being operated in sufficient volumes to ensure commercial
operation of the Facility on a continuing basis in the
function for which the Facility was designed as specified in
the Facility Plan.
(c) Compensation to Company for Performance. The Company
shall be entitled to receive as compensation for its services under this
Section 2, and in accordance with Section 1(c)(iv), an amount equal to its
cost, including Other Taxes directly associated with the provisions of services
hereunder, (but excluding any profit margin).
(d) Removal. The Trustee may at any time, upon five (5)
days written notice, terminate its engagement of the Company under this
Agreement; provided, however, that the Trustee shall, upon three (3) months
written notice be entitled to request the Company to resume its duties under
this Agreement for the duration of the term of this Agreement.
(e) Independent Contractor Status. The Trustee
acknowledges that the Company, in performing its duties under this Section 2 to
maintain and operate the Facility, is acting as an independent contractor and
except as otherwise expressly provided by this Agreement, the Trustee shall
have no right to control the conduct of the Company or its personnel in the
proper performance
- 6 -
42
of the obligations of the Company under this Agreement. The Company
acknowledges that the Trustee is the owner of the Facility and, as such, is
entitled to control the Facility and its use, subject to the provisions of this
Agreement and of the Lease.
Section 3. Agreement to Dedicate Throughput. The Company
agrees: (a) to dedicate, or cause to be dedicated, to the Facility natural gas
owned or acquired by the Company or its Affiliates equal to the lesser of (i)
the daily amount thereof attributable to the Company's gathering facilities in
the San Juan Basin in excess of amounts otherwise dedicated to other Persons
prior to the date of this Agreement, and (ii) 400 mcf per day (if Phase One
Completion has occurred and Phase Two Completion has not occurred) or 600 mcf
per day (if Phase One Completion has occurred, the Phase Two Election has been
made and Phase Two Completion has occurred), (b) to reserve, or cause to be
reserved, capacity on pipelines sufficient to transport the volumes described
in Section 3(a); and (c) in the event the provisions of Section 3(a) or (b) are
not fully complied with, to pay liquidated damages as set forth in such through
put agreement to be entered into pursuant to this Section 3.
Section 4. Indemnification. The Company hereby agrees to
indemnify each Indemnified Party from and against any and all losses which may
be imposed on, incurred by, or asserted against any Indemnified Party in any
way relating to or arising out of this Agreement or any act or omission by or
on behalf of the Company, its contractors, employees, agents, licensees,
representatives or any other Person for whose conduct the Company is
responsible in connection herewith under this Agreement; provided, that, the
Company shall not be liable to the Indemnified Party for any portion of such
losses resulting from the Indemnified Party's gross negligence or willful
misconduct. The indemnities hereunder shall be governed by the procedures for
indemnities set forth under Section 12.03 of the Participation Agreement, which
procedures are hereby incorporated herein, mutatis mutandis, by reference as if
fully set forth herein. The obligations of the Company under this Section 4
shall survive the expiration or any termination of the Ground Lease, the Lease
or this Agreement (whether by operation of law or otherwise) for all matters
described in this Section 4 which either (i) occur or arise prior to such
expiration or termination or (ii) arise out of or result from facts, events,
claims, liabilities, actions or conditions occurring, arising or existing on or
before such expiration or termination.
Section 5. Reversion of Rights and Contracts. Upon payment
of the Option Price as provided in Section 15 of the Lease: (a) the various
agreements, licenses, Applicable Permits and contracts to be provided hereunder
by Company to the Trustee shall revert to the Company (or be transferred to
such purchaser), (b) service contracts with the Company, property rights and
licenses granted by the Company to the Trustee shall terminate or be
transferred to such purchaser, and (c) third-party service contracts shall be
assigned by the Trustee to the Company or such purchaser, without recourse and
without any representation or warranty whatsoever. Upon the termination of the
Lease and the failure of the Company, the Guarantor or one of their Affiliates
to purchase the Facility as provided in Section 15 of the Lease, all such
agreements, Applicable Permits, contracts, property rights and licenses and
third-party service contracts shall remain in place unless terminated by the
Trustee or the Agent.
- 7 -
43
Section 6. Certain Rights With Respect to Other Improvements.
In the event that neither the Company, nor the Guarantor nor one of their
Affiliates purchases the Facility from the Trustee pursuant to the Lease, the
parties hereto agree to negotiate in good faith to provide to the Trustee
reasonable access to the other improvements necessary to operate the Facility
and rights to construct, operate, maintain, repair and replace such
improvements.
Section 7. Miscellaneous.
(a) Governing Law; Assignability, etc. THIS AGREEMENT
(INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN
THE CONFLICT OF LAWS RULES THEREOF. This Agreement supersedes all prior
agreements among or between the parties with respect to the matters addressed
herein and shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto. After the
expiration or the termination of the Lease, and provided that the Company or
the Guarantor (or an Affiliate thereof) shall not have purchased the Facility
in accordance with the terms of the Lease, the Trustee may, at any time, assign
its rights hereunder to any permitted sublessee of the Site or assignee of the
Trustee under the Lease, without the prior written consent of the Company. The
Company may not delegate all or any part of its obligations or assign any of
its rights hereunder without the prior written consent of the Trustee and the
Agent except to a wholly-owned Subsidiary of the Guarantor.
(b) Jurisdiction. Jurisdiction hereunder shall be
governed by the provisions governing jurisdiction set forth in Section 12.14 of
the Participation Agreement which provisions are hereby incorporated herein,
mutatis mutandis, by reference as if fully set forth herein.
(c) Amendments. No change, waiver, amendment or
modification of any of the provisions of this Agreement shall be valid unless
set forth in a written instrument signed by the parties hereto, in compliance
with the requirements set forth in the Participation Agreement.
(d) Term; Option. Except as otherwise expressly provided
herein, this Agreement and the parties' obligations hereunder shall terminate
upon the expiration or other termination of the Lease; provided, however, that
upon the termination of the Lease, and provided that the Company or the
Guarantor (or an Affiliate thereof) shall not have purchased the Facility in
accordance with the terms of the Lease, this Agreement shall continue in full
force and effect, subject to the right (but not the obligation of the Trustee)
to terminate this Agreement as provided in Section 2(d).
(e) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, and all of which
together shall constitute but one and the same instrument. This Agreement may
be delivered by facsimile transmission of the relevant signature pages hereof.
(f) Further Assurances. The Company shall take all
appropriate actions and shall execute any documents, instruments or conveyances
of any kind which may be necessary or advisable to carry out the provisions
hereof, including, without limitation, all documents required by
- 8 -
44
Governmental Authorities, and respond to all inquiries of Governmental
Authorities concerning the Facility.
- 9 -
45
IN WITNESS WHEREOF, the parties hereto have caused this Support
Agreement hereto to be entered into by one of its officers thereunto duly
authorized.
EL PASO NEW CHACO COMPANY
By:
-----------------------------------
John M. Green, Jr.
Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:
------------------------------------
Arthur J. MacDonald
Assistant Vice President
- 10 -
46
STATE OF TEXAS Section
Section
COUNTY OF HARRIS Section
The foregoing instrument was acknowledged before me this ____th day of
February, 1995, by John M. Green, Jr., Vice President and Treasurer of El Paso
New Chaco Company, a Delaware corporation, on behalf of said corporation.
----------------------------------------
Notary Public in and for the
State of Texas
----------------------------------------
Printed Name
[Notarial Seal]
My Commission Expires:
-----------------
COMMONWEALTH OF MASSACHUSETTS Section
Section
COUNTY OF SUFFOLK Section
The foregoing instrument was acknowledged before me this ___th day of
February, 1995, by Arthur J. MacDonald, Assistant Vice President of State
Street Bank and Trust Company, on behalf of said bank and trust company, not in
its individual capacity but solely as Trustee.
--------------------------------------
Notary Public in for the
Commonwealth of Massachusetts
--------------------------------------
Printed Name
[Notarial Seal]
My Commission Expires:
---------------
- 11 -
47
GUARANTY AGREEMENT
(PAYMENT AND PERFORMANCE)
by
EL PASO NATURAL GAS COMPANY
in favor of
CHEMICAL BANK,
as Agent,
and
EACH OF THE PARTICIPANTS
as of
February 9, 1995
48
ARTICLE I
General Terms
Section 1.01 Terms Defined Above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.03 Participation Agreement Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
The Guaranty
Section 2.01 Obligations Guaranteed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.02 Nature of Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.03 Agent's Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.04 Guarantor's Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.05 Maturity of Obligations; Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.06 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.07 Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.08 Events and Circumstances Not Reducing or Discharging Guarantor's Obligations. . . . . . . . 6
ARTICLE III
Representations and Warranties
Section 3.01 By Guarantor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
Section 4.01 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.02 Notices and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.03 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.04 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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GUARANTY AGREEMENT
(PAYMENT AND PERFORMANCE)
THIS GUARANTY AGREEMENT by EL PASO NATURAL GAS COMPANY, a Delaware
corporation ("Guarantor"), is in favor CHEMICAL BANK, as Agent for each of the
entities which is now or hereafter either a Note Holder or a Certificate Holder
(collectively, the "Participants") under that certain Participation and Credit
Agreement of even date herewith (as the same may be amended, modified or
supplemented from time to time, the "Participation Agreement") among the
Guarantor, El Paso New Chaco Company, a Delaware corporation (the "Company"),
the Agent, the Participants and State Street Bank and Trust Company, as Trustee
(the "Trustee").
RECITALS
WHEREAS, the Trustee has entered into a ground lease of
certain real property in San Juan County, New Mexico, (the "Site"), purchased
certain work in progress to be located on the Site and entered into certain
agreements described in greater detail in the Participation Agreement to
construct on the Site a cryogenic liquids extraction plant; and
WHEREAS, the Trustee and the Company have entered into a Lease
Agreement of even date herewith (as the same may be amended, modified or
supplemented from time to time, the "Lease") pursuant to which the Company will
sublease from the Trustee the Site and lease from the Trustee such cryogenic
liquids plant after its completion for the purpose of operating such plant in
accordance with the terms and conditions set forth in such Lease; and
WHEREAS, in order to finance the acquisition of the Trustee's
leasehold estate in the Site, the acquisition of such work in progress, the
enhancements and improvements to be made to the Site and the construction and
installation of said plant for the ultimate use and benefit of the Company in
accordance with the Lease, the Guarantor and the Company have requested that
the Trustee, the Participants and the Agent enter into the Participation
Agreement; and
WHEREAS, to induce the Trustee, the Agent and the Participants
to enter into the Participation Agreement and other agreements relating to the
transactions contemplated thereby, Guarantor has agreed to guarantee the
obligations of the Trustee under the Participation Agreement to the Note
Holders and the Certificate Holders;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
General Terms
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Section 1.01 Terms Defined Above. As used in this
Guaranty Agreement, the terms defined above shall have the meanings indicated
above.
Section 1.02 Certain Definitions. As used in this
Guaranty Agreement, the following terms shall have the following meanings:
"Guaranty Agreement" shall mean this Guaranty Agreement, as
the same may from time to time be amended, modified or supplemented.
"Obligations" shall mean: (i) all of the outstanding
aggregate amount of the Loans and aggregate amount of the Certificate Advances
made to the Trustee under the Participation Agreement, including without
limitation, and any and all renewals, extensions for any period, rearrangements
or enlargements thereof; (ii) the performance of all obligations and agreements
of the Company or the Trustee to or in favor of the Agent or the Participants
under the Operative Documents, including this Guaranty Agreement; and (iii) all
interest (pre-petition or post-petition), yield (pre-petition or
post-petition), and fees accruing thereon or with respect thereto under the
Participation Agreement, and (iv) all amounts payable by the Trustee to the
Agent or any Participant pursuant to the Participation Agreement, and (v) all
attorneys' or other fees and any other sums payable to or incurred by either
the Agent or any of the Participants in connection with the execution,
administration or enforcement of their rights and remedies hereunder or any
other Operative Documents.
Section 1.03 Participation Agreement Definitions. Unless
otherwise defined herein, all terms beginning with a capital letter have the
meaning set forth in Schedule 1.02 of the Participation Agreement.
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ARTICLE II
The Guaranty
Section 2.01 Obligations Guaranteed.
(a) Payment. Guarantor hereby irrevocably and
unconditionally guarantees the full and prompt payment at maturity of the
Obligations; provided the guaranty contained herein shall not extend to, and
the Guarantor shall not be required to make any payment under this Guaranty
Agreement on:
(i) principal on the Tranche B Loans or contributions on
or face amount of the Certificates at any time prior to the date that
is one (1) year prior to the Maturity Date unless an Event of Default
under clauses (a), (b), (c) (with respect to the Participation
Agreement, the Lease, the Agency Agreement or the Construction
Contract), (d), (e), (f), (j), (k) or (l) of Section 10.01 of the
Participation Agreement shall have occurred and be continuing or an
Event of Default under clauses (i), (ii) or (iv) of Section 17(a) of
the Lease shall have occurred and be continuing; and
(ii) principal on the Tranche B Loans or contributions on
or face amount of the Certificates at any time during the period
commencing on and following the date that is one (1) year prior to the
Maturity Date unless an Event of Default under clauses (a) or (e) of
Section 10.01 of the Participation Agreement shall have occurred and
be continuing or an Event of Default under clauses (i) or (iv) of
Section 17(a) of the Lease shall have occurred and be continuing.
Guarantor acknowledges and agrees that in consideration for entering into the
Participation Agreement and making the facilities therein described available
to the Trustee for the ultimate benefit of the Company, the Guarantor has
provided this Guaranty Agreement as an independent and additional security for
the Obligations. Guarantor further agrees that this Guaranty Agreement may be
enforced by the Participants without first resorting to or exhausting any other
security or collateral or without first having recourse to the Notes or the
Certificates or any security or collateral through foreclosure or otherwise.
(b) Performance. Guarantor hereby irrevocably and
unconditionally guarantees (i) that the construction and installation of the
Facility and other works to be completed pursuant to the Facility Plans shall
be completed substantially to the specifications and on the time schedules
specified in the Facility Plans, and that in any event Phase One of the
Facility will be completed and ready for operations in accordance with the
Facility Plans no later than the Phase One Completion Date, and, if the Phase
Two Election is made, Phase Two of the Facility will be completed and ready for
operations in accordance with the Facility Plans no later than the Phase Two
Completion Date, and (ii) the performance of all obligations and agreements of
the Company under each and every
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contract or agreement relating to the construction, installation and operation
of the Facility. If (x) Phase One Completion does not occur by the Phase One
Completion Date, the Guarantor shall, or shall cause an Affiliate to, purchase
the Facility for the Option Price as of such date in accordance with Section 15
of the Lease, and (y) if the Phase Two Election is made, Phase Two Completion
does not occur by the Phase Two Completion Date, the Guarantor shall, or shall
cause an Affiliate to, purchase the Facility for the Option Price as of such
date in accordance with Section 15 of the Lease.
Section 2.02 Nature of Guaranty. Subject to the limits
set forth in Section 2.01(a), it is the intent of Guarantor that this guaranty
be an absolute, irrevocable and continuing guaranty of payment and not a
guaranty of collection, and no notice of the Obligations or any extension of
credit or financial accommodation already or hereafter contracted by or
extended to the Trustee need be given to Guarantor and all Loans and
Certificate Advances by the Participants in connection with the transactions
contemplated under the Participation Agreement shall be prima facie presumed to
have been made or acquired in acceptance hereof. To the fullest extent
permitted by law, this guaranty may not be revoked by Guarantor and shall
continue to be effective with respect to debt under the Obligations arising or
created after any attempted revocation by Guarantor and shall remain in full
force and effect until the Obligations are paid in full and the Commitments are
terminated. The Company, the Trustee and the Participants may, in accordance
with the terms of the Participation Agreement, modify, alter, rearrange, extend
for any period and/or renew from time to time, the Obligations and the
Participants may waive any Default or Event of Default without notice to the
Guarantor and in such event Guarantor will remain fully bound hereunder on the
Obligations. Subject to the limitations in Section 2.01(a), it is the intent
of Guarantor that this guaranty remain in full force and effect until such time
as the Obligations shall have been paid in full and otherwise satisfied
completely, and, to the fullest extent permitted by applicable law, this
Guaranty Agreement shall not be subject to reduction, termination or other
impairment by reason of any setoff, recoupment, counterclaim or defense or for
any other reason, other than the defense of payment. This guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of the Obligations is annulled, set aside, invalidated, declared to
be fraudulent or preferential, rescinded or must otherwise be returned by the
Participants upon the insolvency, bankruptcy or reorganization of the Trustee,
the Company or otherwise, all as though such payment had not been made. This
Guaranty Agreement may be enforced by the Agent or the Note Holders and any
subsequent holder of the Notes and shall not be discharged by the assignment or
negotiation of all or part of the Obligations.
Section 2.03 Agent's Rights. Guarantor authorizes the
Agent, for the benefit of the Participants, without notice or demand and
without affecting Guarantor's liability hereunder, to take and hold security
for the payment of the Obligations and exchange, enforce, waive and release any
such security; and to apply such security and direct the order or manner of
sale thereof as the Participants in their discretion may determine; and to
obtain a guaranty of the Obligations from any one or more Persons and at any
time or times to enforce, waive, rearrange, modify, limit or release any of
such other Persons from their obligations under such guaranties.
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Section 2.04 Guarantor's Waivers. To the fullest extent
permitted by applicable law, Guarantor hereby expressly waives presentment,
demand, notice of non-payment, protest and notice of protest and dishonor,
notice of Event of Default, notice of intent to accelerate the maturity and
notice of acceleration of the maturity and any other notice in connection with
the Obligations, and also notice of acceptance of this Guaranty Agreement,
acceptance on the part of the Participants being conclusively presumed by their
request for this Guaranty Agreement and delivery of the same to the Agent.
Guarantor waives any right to require the Agent or the Participants to (a)
proceed against the Trustee, the Company or any other Person liable on the
Obligations, (b) enforce their rights against any other guarantor of the
Obligations, (c) proceed or enforce their rights against or exhaust any
security given to secure the Obligations, (d) have the Trustee, the Company
joined with Guarantor in any suit arising out of this Guaranty Agreement and/or
the Obligations, or (e) pursue any other remedy in their powers whatsoever.
Neither the Agent nor the Participants shall be required to take any action to
reduce, collect or enforce the Obligations. To the fullest extent permitted by
applicable law, Guarantor waives any defense arising by reason of any
disability, lack of corporate authority or power, or other defense of the
Trustee, the Company or any other guarantor of the Obligations, and shall
remain liable hereon regardless of whether the Trustee, the Company or any
other guarantor be found not liable thereon for any reason. Until the
Obligations shall have been paid in full, Guarantor shall have no right of
subrogation, and waives any right to enforce any remedy which the Participants
now have or may hereafter have against the Company or the Trustee and waives
the benefit of any right to participate in any security now or hereafter held
by the Agent or the Participants.
Section 2.05 Maturity of Obligations; Payment. Guarantor
agrees that if the maturity of the Obligations is accelerated by bankruptcy or
otherwise, such maturity shall also be deemed accelerated for the purpose of
this Guaranty Agreement without demand or notice to Guarantor. Guarantor will,
forthwith upon notice from the Agent of the Trustee's failure to pay the
Obligations at maturity, pay to the Agent, for the account of the Participants,
the amount due and unpaid by the Trustee and guaranteed hereby. The failure of
the Agent to give this notice shall not in any way release Guarantor hereunder.
If acceleration of the time for payment of any amount by the Trustee under the
Participation Agreement is stayed upon the insolvency, bankruptcy or
reorganization of the Trustee, all such amounts otherwise subject to
acceleration under the terms of the Participation Agreement shall nonetheless
be payable by the Guarantor hereunder forthwith on demand by the Agent.
Section 2.06 Expenses. If Guarantor fails to pay the
Obligations after notice from the Agent of the Trustee's failure to pay any
Obligations at maturity, and if the Agent obtains the services of an attorney
for collection of amounts owing by Guarantor hereunder, or obtaining advice of
counsel in respect of any of the rights of the Agent or the Participants under
the guaranty, or if suit is filed to enforce this Guaranty Agreement, or if
proceedings are had in any bankruptcy, probate, receivership or other judicial
proceedings for the establishment or collection of any amount owing by
Guarantor hereunder, or if any amount owing by Guarantor hereunder is collected
through such proceedings, Guarantor agrees to pay to the Agent, for the benefit
of the Participants, the Agent's and the Participants' reasonable attorneys'
fees.
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54
Section 2.07 Liability. It is expressly agreed that the
liability of the Guarantor for the payment of the Obligations guaranteed hereby
shall be primary and not secondary.
Section 2.08 Events and Circumstances Not Reducing or
Discharging Guarantor's Obligations. Guarantor hereby consents and agrees to
each of the following to the fullest extent permitted by law, and Guarantor
further agrees, to the fullest extent permitted by law, that Guarantor's
obligations under this Guaranty Agreement shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives, to
the fullest extent permitted by law, any rights (including without limitation
rights to notice) which Guarantor might otherwise have as a result of or in
connection with any of the following:
(a) Modifications, etc. Any renewal, extension,
modification, increase, decrease, alteration or rearrangement of all or any
part of the Obligations, or of the Notes and Certificates, including without
limitation, any change in the time, manner, terms or place of performance, or
the Participation Agreement or any Operative Document all in accordance with
the provisions thereof and of Section 2.02 hereof, or any contract or
understanding between the Trustee, the Company, the Participants or any of them
or any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence,
forbearance, waiver, departure or compromise that might be granted or given by
the Participants to the Trustee or any other Person primarily or contingently
liable on the Obligations;
(c) Condition of Trustee, Company or Guarantor. The
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition,
liquidation, dissolution, death or lack of power of the Trustee, the Company or
any other Person at any time liable for the payment of all or part of the
Obligations; or any sale, lease or transfer of any or all of the assets of the
Trustee, the Company or any other Person at any time liable for the payment of
all or part of the Obligations, or any changes in the shareholders of the
Company, or any other Person at any time liable for the payment of all or part
of the Obligations;
(d) Invalidity of Obligations. To the fullest extent
permitted by applicable law, the invalidity, illegality or unenforceability of
all or any part of the Obligations, or any Operative Document for any reason
whatsoever, including without limitation the fact that the Obligations or any
part thereof, exceed the maximum amount permitted by law, the act of creating
the Obligations or any part thereof is ultra vires, the officers or
representatives executing the documents or otherwise creating the Obligations
acted in excess of their authority, the Obligations violate applicable usury
laws, the creation, performance or repayment of the Obligations (or the
execution, delivery and performance of any document or instrument representing
part of the Obligations or executed in connection with the Obligations, or
given to secure the repayment of the Obligations) is illegal, uncollectible,
legally impossible or unenforceable, or the Participation Agreement or other
documents or instruments pertaining to the Obligations have been forged or
otherwise are irregular or not genuine or authentic;
6
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(e) Release of Obligors. Any release of the Trustee or
any other Person now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform, guarantee or
assure the payment of the Obligations or any part thereof, other than upon the
payment in full of the Obligations, it being recognized, acknowledged and
agreed by Guarantor that Guarantor may be required to pay the Obligations in
full without assistance or support of any other Person, and Guarantor has not
been induced to enter into this Guaranty Agreement on the basis of a
contemplation, belief, understanding or agreement that other parties other than
the Trustee will be liable to perform the Obligations, or that the Participants
will look to other parties to perform the Obligations;
(f) Other Security. The taking or accepting of any other
security, collateral or guaranty, or other assurance of payment, for all or any
part of the Obligations;
(g) Release of Collateral, etc. Any sale, release,
surrender, exchange, subordination, deterioration, waste, loss or impairment
(including without limitation negligent, willful, unreasonable or unjustifiable
impairment) of any collateral or security, at any time existing in connection
with, or assuring or securing payment of, all or any part of the Obligations;
(h) Care and Diligence. The failure of the Participants
or any other Person to exercise diligence or reasonable care in the
preservation, protection, enforcement, sale or other handling or treatment of
all or any part of such collateral or security, other than the gross negligence
or wilful misconduct of the Participants;
(i) Status of Liens. The fact that any collateral,
security, security interest or Lien contemplated or intended to be given,
created or granted as security for the repayment of the Obligations shall not
be properly perfected or created, or shall prove to be unenforceable or
subordinate to any other security interest or Lien, it being recognized and
agreed by Guarantor that Guarantor is not entering into this Guaranty Agreement
in reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectability or value of any of the collateral for the
Obligations;
(j) Payments Rescinded. Any payment by the Trustee to
the Participants is held to constitute a preference under bankruptcy laws, or
for any reason the Participants are required to refund such payment or pay such
amount to the Trustee or someone else;
(k) Existence of Claims. To the fullest extent permitted
by law, the existence of any claim, set- off or other rights which the
Guarantor may have at any time against the Trustee or any of the Note Holders
or the Certificate Holders, or any other Person, whether or not arising in
connection with the Guaranty Agreement, the Participation Agreement, the Notes,
the Certificates or any other Operative Document;
(l) Other Actions Taken or Omitted. Any other action
taken or omitted to be taken with respect to the Participation Agreement, the
Obligations, or the security and collateral
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therefor, whether or not such action or omission prejudices Guarantor or
increases the likelihood that Guarantor will be required to pay the Obligations
pursuant to the terms hereof; it being the unambiguous and unequivocal
intention of Guarantor that Guarantor shall be obligated to pay the Obligations
when due, notwithstanding any occurrence, circumstance, event, action, or
omission whatsoever, whether contemplated or uncontemplated, and whether or not
otherwise or particularly described herein, except for the full and final
payment and satisfaction of the Obligations.
ARTICLE III
Representations and Warranties
Section 3.01 By Guarantor. In order to induce the
Participants to accept this Guaranty Agreement, Guarantor represents and
warrants to the Participants (which representations and warranties will survive
the creation of the Obligations and any extension of credit thereunder) that:
(a) Benefit to Guarantor. The Guarantor's guaranty
pursuant to this Guaranty Agreement reasonably may be expected to benefit,
directly or indirectly, Guarantor;
(b) Solvency. Upon giving effect to the execution of
this Guaranty Agreement and the consummation of the transactions contemplated
under this Guaranty Agreement, the following are true and correct after
diligent investigation: (i) the fair saleable value of the assets of Guarantor
exceeds the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including, without limitation, pending or
overtly threatened litigation in amounts in excess of effective insurance
coverage and the real exposure under this Guaranty Agreement and all other
contingent liabilities) of the Guarantor as they mature; (ii) the assets of the
Guarantor do not constitute unreasonably small capital for the Guarantor to
carry out its business as now conducted and as proposed to be conducted
including the capital needs of the Guarantor, taking into account the
particular capital requirements of the business conducted by the Guarantor, and
projected capital requirements and capital availability thereof; (iii) the
Guarantor does not intend to incur, or believe it will incur, debts beyond its
ability to pay as such debts mature (taking into account the timing and amounts
of cash to be received by the Guarantor, and of amounts to be payable on or in
respect of its debt); and (iv) the fair saleable value of the assets of the
Guarantor is greater than the total fair value of the liabilities, including
contingent, subordinated, absolute, fixed, matured or unmatured, and liquidated
or unliquidated liabilities, of the Guarantor.
(c) No Representation by Participants. Neither the
Participants nor any other Person has made any representation, warranty or
statement to the Guarantor in order to induce the Guarantor to execute this
Guaranty Agreement other than its agreements to perform its respective
obligations under the Participation Agreement.
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ARTICLE IV
Miscellaneous
Section 4.01 Successors and Assigns. This Guaranty
Agreement is and shall be in every particular available to the successors and
assigns of the Participants and is and shall always be fully binding upon the
legal representatives, heirs, successors and assigns of Guarantor,
notwithstanding that some or all of the monies, the repayment of which this
Guaranty Agreement applies, may be actually advanced after any bankruptcy,
receivership, reorganization or other event affecting Guarantor.
Section 4.02 Notices and Waivers. Any notice or demand to
Guarantor under or in connection with this Guaranty Agreement may be given in
the manner specified in the Participation Agreement to the address of the
Guarantor specified on the signature page hereof. No amendment or waiver of
any provision hereof nor consent to any departure by the Guarantor therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Participants in the manner set forth in the Participation Agreement. No
failure or delay on the part of the Agent or the Note Holders to exercise any
right hereunder shall operate as a waiver hereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. No course of dealing between the
Trustee, the Company and the Participants shall operate as a waiver of any
right of Participants. The remedies herein provided are cumulative and not
exclusive of any remedies herein or provided by law.
Section 4.03 Governing Law. THIS GUARANTY AGREEMENT
(INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK OTHER THAN THE CONFLICT OF LAWS RULES THEREOF.
Section 4.04 ENTIRE AGREEMENT. THIS WRITTEN GUARANTY
AGREEMENT AND OTHER OPERATIVE DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND
UNDERSTANDING BETWEEN THE AGENT, THE PARTICIPANTS AND THE GUARANTOR AND
SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING
TO THE SUBJECT MATTER HEREOF. THIS WRITTEN GUARANTY AGREEMENT AND OTHER
OPERATIVE DOCUMENTS 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.
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WITNESS THE EXECUTION HEREOF, as of this the 9th day of February, 1995.
GUARANTOR:
EL PASO NATURAL GAS COMPANY
By:
------------------------------------
H. Brent Austin
Senior Vice President and
Chief Financial Officer
Address:
1 Paul Kayser Center
100 North Stanton Street
El Paso, Texas 79901
Attention: Senior Vice President and
Chief Financial Officer
Telecopier: (915) 541-5008
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SPONSOR AGREEMENT
by
EL PASO NATURAL GAS COMPANY
in favor of
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as Trustee
for the Chaco Liquids Plant Trust
as of
February 9, 1995
60
SPONSOR AGREEMENT
SPONSOR AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Sponsor Agreement"), dated as of February 9,
1995, made by EL PASO NATURAL GAS COMPANY, a Delaware corporation (the
"Sponsor"), is made to STATE STREET BANK AND TRUST COMPANY, not in its
individual capacity but solely as Trustee for the Chaco Liquids Plant Trust
(the "Trustee").
RECITALS
A. On even date herewith, El Paso New Chaco Company, a
Delaware corporation (the "Company"), the Sponsor, Trustee, Chemical Bank, as
Agent (the "Agent"), and other Persons (the "Participants") are executing a
Participation and Credit Agreement (such agreement, as may from time to time be
amended or supplemented, being the "Participation Agreement") pursuant to
which, upon the terms and conditions stated therein, the Participants agree to
make loans and advances to the Trustee.
B. On even date herewith, the Trustee has entered into a
ground lease of the Site, agreed to purchase certain work in progress relating
to improvements to be located on the Site and to construct on the Site a
cryogenic liquids extraction plant; and
C. On even date herewith, the Trustee has contracted to
sublease the Site and lease the improvements thereon, after completion, to the
Company pursuant to a Lease Agreement of even date herewith (as the same may be
amended or supplemented from time to time, the "Lease"); and
D. The Company, acting as the Trustee's project agent
under an Agency Agreement and Limited Power of Attorney dated of even date
herewith (as the same may be amended or supplemented from time to time, the
"Agency Agreement"), will, on behalf of the Trustee, purchase such work in
progress and complete the construction and installation of all enhancements and
improvements to the Facility; and
E. The Company will further provide operations,
maintenance and management support under a Support Agreement dated of even date
herewith (as the same may be amended or supplemented from time to time, the
"Support Agreement"); and
F. In order to finance the acquisition of the Trustee's
leasehold estate in the Site, the acquisition of such work in progress, the
enhancements and improvements to be made to the Site and the construction and
installation of the Facility for the ultimate use and benefit of the Company in
accordance with the Lease, the Company has requested that the Trustee, the
Participants and the Agent enter into the Participation Agreement and the
Declaration of Trust of even date herewith (as the same may be amended or
supplemented from time to time, the "Declaration"); and
G. To induce the Trustee to enter into the Participation
Agreement, the Declaration and other agreements relating to the transactions
contemplated hereby, Guarantor has agreed to guarantee
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61
the obligations of the Company to the Trustee under the Lease, the Agency
Agreement, Support Agreement and the other Operative Documents between the
Company and the Trustee;
H. Now, therefore, in consideration of the premises and
the mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Defined Terms. Capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in
Schedule 1.02 to the Participation Agreement.
Section 2. Agreement. The Sponsor agrees not to
allow any of its direct or indirect Subsidiaries to take any action
authorizing, supporting or permitting the rejection of any Operative Document
in a bankruptcy case in which the Company is the "Debtor" without the prior
written consent of the Majority Participants.
Section 3. Guaranty. The Sponsor hereby jointly
and severally absolutely, irrevocably and unconditionally guarantees (a) the
payment when due, of all obligations of the Company under the Lease and (b) the
prompt performance of all obligations and agreements of the Company under the
Lease, the Agency Agreement, the Support Agreement, the Construction Contract,
and each and every contract or agreement relating to the construction,
installation and operation of the Facility (all such obligations guaranteed
hereby by the Sponsor being the "Guaranteed Obligations") and agrees to pay any
and all expenses (including any reasonable attorneys' fees and expenses)
incurred by the Trustee, its successors, transferees and assigns in enforcing
any rights under this Sponsor Agreement. Without limiting the generality of
the foregoing, the Sponsor's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by the Company
to the Trustee but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving the Company. For purposes of determining when an obligation is "due"
for purposes of this Sponsor Agreement, such term shall be interpreted to mean
due in accordance with the terms of this Sponsor Agreement as in effect on the
date hereof and without regard to the amendment, modification or rejection of
any Guaranteed Obligation in any bankruptcy or other reorganization proceeding.
Section 4. Guaranty Absolute. The Sponsor guarantees
that the Guaranteed Obligations will be paid and performed strictly in
accordance with their terms, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Company with respect thereto. The obligations of the Sponsor
under this Sponsor Agreement are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against the Sponsor
to enforce this Sponsor Agreement, irrespective of whether any action is
brought against the Company or any of its Affiliates or whether the Company or
any of its Affiliates is joined in any such action or actions. The liability
of the Sponsor under this Sponsor Agreement shall be absolute, unconditional,
irrevocable and continuing irrespective of:
(a) any lack of validity or enforceability of the
Participation Agreement or any other Operative Document;
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(b) any change in the time, manner or place of payment
of, or in any other term of, or any other amendment or waiver of or any consent
to departure from the Participation Agreement or an increase in the principal
amount of the Obligations;
(c) any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any change, restructuring or termination of the
corporate structure or existence of the Company or any of its Affiliates or the
Sponsor or any of the Subsidiaries of any one of them;
(e) the genuineness, validity, regularity, enforceability
or any future amendment of, or change in the Sponsor Agreement, the
Participation Agreement or the other Operative Documents;
(f) the absence of any action to enforce this Sponsor
Agreement or the Participation Agreement, or the other Operative Documents;
(g) any bankruptcy, insolvency, reorganization,
arrangement, adjustment, composition, liquidation or the like of the Company or
any of its Affiliates or any of the Subsidiaries of any one of them;
(h) any circumstance which might constitute a defense
available to, or a discharge of, the Company or any of its Affiliates or a
surety;
(i) any sale, transfer or other disposition (i) by the
Sponsor of any stock of the Subsidiaries or any of its Affiliates; or (ii) by
the Company of any stock of any of its Affiliates or Subsidiaries;
(j) whether the Agent, the Trustee or any other Person
shall have taken or failed to have taken any steps to collect or enforce any
obligation or liability from, or shall have otherwise exercised any rights,
powers or remedies against the Company or any other Person;
(k) any lack of genuineness, authorization, validity,
legality or enforceability of the Participation Agreement or any other
Operative Document for any reason, or the disaffirmance or rejection or
purported disaffirmance or purported rejection of the Participation Agreement
or any other Operative Document in any insolvency, bankruptcy or reorganization
proceedings relating to the Company or otherwise;
(l) any law, regulation or decree now or hereafter in
effect which might in any manner affect any of the terms or provisions of the
Participation Agreement or any other Operative Document or any of the Company's
rights, powers or remedies thereunder, or which might cause or permit to be
invoked any alteration in the time, amount or manner of payment or performance
of any of the Company's obligations and liabilities thereunder;
(m) whether the Company shall have taken or failed to
have taken any steps to mitigate its damages;
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(n) any other circumstances which might otherwise
constitute a defense available to or a discharge of the Company in respect of
its obligations or liabilities under the Participation Agreement or any other
Operative Document;
(o) any other act or omission to act by the Company or
any other Person;
(p) any failure of the Company to comply with the
requirements of any law, regulation or order of any Governmental Authority;
(q) the occurrence of any Default, Event of Default,
Termination Event or Cancellation Event;
(r) the merger or consolidation of the Company into or
with any corporation, or the sale by the Company of all or any part of its
assets; or
(t) any other circumstances (including, without
limitation, any statute of limitations) that might otherwise constitute a
defense available to, or a discharge of, the Sponsor or the Company or any of
its Affiliates.
This Sponsor Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Company upon the insolvency,
bankruptcy or reorganization of the Sponsor or otherwise, all as though such
payment had not been made. This Sponsor Agreement shall be one of payment and
not of collection.
Section 5. Waivers.
(a) The Sponsor hereby expressly waives all rights it may
have now or in the future under any statute, or at common law, or at law or in
equity, or otherwise, to compel the Trustee to proceed in respect of the
Guaranteed Obligations against the Company or any of its Affiliates or any
other party or against any security for the payment and performance of the
Guaranteed Obligations before proceeding against, or as a condition to
proceeding against, the Sponsor. The Sponsor agrees that any notice or
directive given at any time to the Trustee or to the Agent which is
inconsistent with the waiver in the immediately preceding sentence shall be
null and void and may be ignored by the Trustee and/or the Agent, and, in
addition, may not be pleaded or introduced as evidence in any litigation
relating to this Sponsor Agreement for the reason that such pleading or
introduction would be at variance with the written terms of this Sponsor
Agreement. It is agreed between the Sponsor and the Trustee that the foregoing
waivers are of the essence in connection with the transactions contemplated by
the Participation Agreement and that, but for this Sponsor Agreement and such
waivers, the Trustee would decline to request Loans and Advances under the
Participation Agreement.
(b) The Sponsor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Sponsor Agreement and any requirement that the Trustee or
any other Person protect, secure, perfect or insure any Lien or any Property
subject thereto or exhaust any right or take any action against the Company or
any of its Affiliates or any other Person or pursue any other remedy in the
power of the Sponsor or the Agent.
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(c) The Sponsor hereby irrevocably waives any defense
arising by reason of any claim or defense based upon an election of remedies
which in any manner impairs, reduces, releases or otherwise adversely affects
the subrogation, contribution or reimbursement rights, if any, or other rights
to proceed against the Company or any of its Affiliates, any other guarantor or
any other Person.
(d) The Sponsor hereby irrevocably waives until the later
to occur of the Lease Termination Date, the Cancellation Date or the Option
Date, any claim or other rights which it may now or hereafter acquire against
the Company or any of its Affiliates that arises from the existence, payment,
performance or enforcement of the Sponsor's obligations under this Sponsor
Agreement, or any agreements or instruments executed and delivered in
connection herewith and therewith, including, without limitation, any right
(direct or indirect) of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of the
Company or any of its Affiliates against the Agent, the Participants or the
Trustee which the Company now has or hereafter acquires, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company or any of its Affiliates, directly or indirectly, in cash or other
Property or by set-off or in any other manner, payment or security on account
of such claim, remedy or other rights. If any amount shall be paid to the
Sponsor in violation of the preceding sentence at any time prior to the later
of (i) the payment in full of the Guaranteed Obligations and other amounts
payable under this Sponsor Agreement in cash and (ii) the Lease Termination
Date, the Cancellation Date or the Option Date, such amount shall be deemed to
have been paid to the Sponsor for the benefit of, and held in trust for the
benefit of, the Agent, and shall forthwith be paid to the Agent to be credited
and applied to the Guaranteed Obligations and all other amounts payable under
this Sponsor Agreement, whether matured or unmatured.
Section 6. Amendments, Etc. No amendment or waiver of
any provision of this Sponsor Agreement and no consent to any departure by the
Sponsor therefrom shall in any event be effective unless the same shall be in
writing and signed by the Trustee, at the direction of the Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
Section 7. Notices, Etc. All notices and other
communications provided for hereunder shall be given in accordance with the
terms of Section 12.02 of the Participation Agreement.
Section 8. No Waiver; Remedies. No failure on the part
of the Trustee to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Section 9. Continuing Agreement. This Sponsor Agreement
is a continuing guaranty and shall (a) remain in full force and effect until
the Guaranteed Obligations have been satisfied, (b) be binding upon the
Sponsor, its permitted successors and assigns, and (c) inure to the benefit of
and be enforceable by the Trustee and its successors, indorsees, transferees
and assigns.
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Section 10. GOVERNING LAW. THIS SPONSOR AGREEMENT
(INCLUDING THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN THE
CONFLICTS OF LAWS RULES THEREOF.
IN WITNESS WHEREOF, the Sponsor has caused this Sponsor
Agreement to be duly executed and delivered as of the date first above written.
EL PASO NATURAL GAS COMPANY
By:
-----------------------------------
H. Brent Austin
Senior Vice President and
Chief Financial Officer
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WHEN RECORDED, RETURN TO:
Vinson & Elkins L.L.P.
2500 First City Tower
1001 Fannin
Houston, Texas 77002-6760
Attention: Anne Griffin
THIS MORTGAGE SECURES FUTURE ADVANCES UP TO A MAXIMUM OF $80,000,000.
THIS MORTGAGE, ASSIGNMENT, SECURITY AGREEMENT AND FINANCING STATEMENT
GRANTS A SECURITY INTEREST IN GOODS THAT ARE OR MAY BECOME FIXTURES ON OR TO
THE REAL ESTATE DESCRIBED HEREIN. IT SHOULD BE FILED AND RECORDED IN THE REAL
ESTATE RECORDS AS BOTH A MORTGAGE AND FIXTURE FILING.
MORTGAGE, ASSIGNMENT,
SECURITY AGREEMENT AND FINANCING STATEMENT
(CHACO CRYOGENIC LIQUIDS EXTRACTIONS PLANT)
(San Juan County, New Mexico)
The name and address of the Mortgagor: The name and address of the Mortgagee:
State Street Bank and Trust Company, Chemical Bank, as Agent
as Trustee of the Chaco Liquids Plant Trust 270 Park Avenue, 8th Floor
Two International Place, 4th Floor New York, New York 10017
Boston, Massachusetts 02110 Attention: W. King Grant
Attention: Corporate Trust Department
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THIS MORTGAGE, ASSIGNMENT, SECURITY AGREEMENT AND FINANCING STATEMENT
(this Mortgage") is entered into as of the effective time and date hereinafter
stated (the "Effective Date") by and between State Street Bank and Trust
Company, not in its individual capacity but solely as Trustee for the Chaco
Liquids Plant Trust, whose address for notice is Two International Place, 4th
Floor, Boston, Massachusetts 02110, Attention: Corporate Trust Department
("Mortgagor"), in favor of CHEMICAL BANK, as Agent, whose address for notice is
270 Park Avenue, 8th Floor, New York, New York 10017 (the "Agent").
RECITALS
A. On even date herewith, El Paso New Chaco Company, a
Delaware corporation (the "Company"), El Paso Natural Gas Company, a Delaware
corporation, as guarantor (the "Guarantor"), Mortgagor, the Agent and other
persons (the "Participants") are executing a Participation and Credit Agreement
(such agreement, as may from time to time be amended or supplemented, being the
"Participation Agreement") pursuant to which, upon the terms and conditions
stated therein, the Participants agree to make loans and advances to the
Mortgagor.
B. The Participants have conditioned their respective
obligations under the Participation Agreement upon the execution and delivery
by Mortgagor of this Mortgage and Mortgagor has agreed to enter into this
Mortgage.
C. Therefore, in order to comply with the terms and
conditions of the Participation Agreement, to induce the Participants to make
loans and advances to Mortgagor, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Mortgagor hereby
agrees as follows:
ARTICLE I
Definitions
Section 1.01 Terms Defined Above or in the Participation
Agreement. As used in this Mortgage, the terms defined above shall have the
meanings respectively assigned to them. Other capitalized terms which are
defined in Schedule 1.02 of the Participation Agreement but which are not
defined herein shall have the same meanings as defined in the Participation
Agreement.
Section 1.02 Certain Definitions. As used in this
Mortgage, the following terms shall have the following meanings, unless the
context otherwise requires:
"Facility" shall have the meaning assigned such term in
Section 2.01(a).
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"Land" shall mean the real estate or interests therein
described in Exhibit "A" attached hereto, and all rights, titles and interests
appurtenant thereto.
"Lease" shall mean that certain Ground Lease dated of even
date herewith of the Land between El Paso Natural Gas Company, as lessor, and
Mortgagor, as lessee.
"Mortgaged Property" shall have the meaning assigned such
term in Section 2.01.
"Obligations" shall mean: (i) all of the outstanding
aggregate amount of the Loans and aggregate amount of the Certificate Advances
made to the Mortgagor under the Participation Agreement, including without
limitation, and any and all renewals, extensions for any period, rearrangements
or enlargements thereof; (ii) the performance of all obligations and
agreements of the Company, the Guarantor and the Mortgagor to the Agent or the
Participants under the Operative Documents; and (iii) all interest
(pre-petition or post-petition), yield (pre-petition or post-petition), taxes,
indemnities, losses, compensation, reimbursement, charges, expenses, attorneys'
or other fees and any other sums payable to or incurred by either the Agent or
any of the Participants in connection with the execution, administration or
enforcement of their rights and remedies hereunder or any other Operative
Documents.
"Plant Contracts" shall have the meaning assigned such term
in Section 2.01(c).
"Remitters" shall have the meaning assigned such term in
Section 4.01(a).
"Rents" shall mean all of the rents, revenues, income,
proceeds, profits, security and other types of deposits, and other benefits
paid or payable by parties to the Sublease other than Mortgagor for using,
leasing, licensing, possessing, operating from, residing in or otherwise
enjoying the Mortgaged Property.
"Sublease" shall mean all of Mortgagor's interest in and to
any and all leases of the Facility or subleases of the Land now in effect or
hereafter entered into covering or relating to the Facility and improvements
now or hereafter constructed on or made to the Land, and any and all Rents
arising from the Sublease, and all amendments and renewals thereof.
ARTICLE II
Grant of Lien; Security Interest
Section 2.01 Grant of Lien. To secure payment and
performance of the Obligations, Mortgagor does by these presents hereby GRANT,
BARGAIN, SELL,
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ASSIGN, MORTGAGE, WARRANT, TRANSFER and CONVEY unto AGENT, for its benefit and
the benefit of the Participants, all of Mortgagor's rights, titles, interests
and estates in and to the real and personal property described in Section
2.01(a) and (b) (collectively, the "Mortgaged Property"), but excluding any
payments to the Mortgagor in its individual capacity:
(a) Chaco Cryogenic Liquids Extraction Plant.
Mortgagor's undivided one hundred percent (100%) interest in and to the
leasehold estate created pursuant to the Lease comprising the ground lease of
the plant site of the Chaco Cryogenic Liquids Extraction Plant, together with
any and all other rights, titles and interests of Mortgagor of whatever kind or
character (whether now owned or hereafter acquired by operation of law or
otherwise) in and to the Lease, together with all improvements now or hereafter
acquired and located on the Site, including without limitation that certain
cryogenic turbo-expander plant, and all compressors, scrubbers, absorbers,
dehydrators, tanks, reabsorbers, accumulators, stills, condensers, cooling
towers, regulators, meters, heaters, coolers, deethanizers, depropanizers,
debutanizers, boilers, pumps, heat exchangers, valves, controls, pipes and
lines, floating racks, heating, lighting and power plants, transmission lines,
buildings, housing and improvements, together with all other machinery,
equipment and apparatus of whatsoever character or description, and all
replacements, substitutions and additions to said property, owned by Mortgagor
and located on the Lease or located elsewhere and used in the operation,
conduct and maintenance of that certain cryogenic turbo-expander plant located
thereon (all of the property referred to above, hereinafter collectively
referred to as the "Facility").
(b) Miscellaneous. All of Mortgagor's interests in, to
and under all contracts, franchises, licenses and permits, whether now existing
or hereafter entered into and relating to the ownership and operation of the
Facility, relating to the sale of any products extracted or resulting from gas
processing activities at the Facility (the "Plant Contracts"), together with
any and all other lands, interests in land, leaseholds, rights-of-way,
easements, servitudes, advantages, or real estate interests of whatsoever
nature or kind whether now owned or hereafter acquired by Mortgagor or on
Mortgagor's behalf and used or to be used in connection with the Facility, and
all interests now owned or hereafter acquired by Mortgagor or on its behalf in
any plants, buildings, structures, towers, absorbers, equipment, machinery,
drums, engines, motors, regulators, meters, exchangers, tanks, docks, racks,
heaters, storage facilities, loading facilities, fractionation facilities,
absorption equipment, distillation equipment, deethanizers, depropanizers,
debutanizers, stills, power plants, disposal pits, warehouses, dwelling houses,
cooling equipment, compressors, pipelines, piping flow lines, wiring, boilers,
vessels, dehydration equipment, or any of them, whether now owned or hereafter
acquired and located or to be located upon the Land and used or held for use in
connection with said gas processing activities at the Facility, it being the
intent of both Mortgagor and the Agent that this Mortgage cover and affect any
and all real or personal property (both tangible and intangible) whether now
owned or hereafter acquired by Mortgagor or on behalf of Mortgagor and
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used or held for use in connection with Mortgagor's ownership and operation of
the Facility.
THIS MORTGAGE SECURES FUTURE ADVANCES UP TO A MAXIMUM OF $80,000,000.
Section 2.02 Grant of Security Interest. With respect to
all personal property (both tangible and intangible) and any fixtures
constituting a part of the Mortgaged Property, this Mortgage shall likewise be
a security agreement and a financing statement; for the purpose of further
securing payment of the Obligations, Mortgagor hereby grants to the Agent, for
its benefit and the benefit of the Participants, a security interest in all of
Mortgagor's rights, titles and interests in and to the Mortgaged Property
insofar as the Mortgaged Property consists of equipment, contract rights,
general intangibles, hydrocarbons, documents, instruments, chattel paper,
fixtures and any and all other personal property of any kind or character
defined in and subject to the provisions of the applicable Uniform Commercial
Code, including the proceeds, profits, rents, revenues and products from any
and all of such personal property.
Section 2.03 Assignment of Sublease and Rents. To further
secure the Obligations, Mortgagor does hereby ABSOLUTELY GRANT, SELL, CONVEY,
ASSIGN, TRANSFER, SET OVER and DELIVER all currently existing and future
Subleases and Rents unto the Agent, for its benefit and the benefit of the
Participants, TO HAVE AND TO HOLD such currently existing and future Subleases
and Rents unto the Agent, forever, and Mortgagor does hereby bind itself, its
successors and assigns and to WARRANT and FOREVER DEFEND the title to the
Subleases and the Rents unto Agent against every person whomsoever lawfully
claiming or to claim the same or any part thereof.
ARTICLE III
Representations, Warranties and Covenants
Section 3.01 Representations, Warranties. Mortgagor
hereby represents and warrants as follows:
(a) First Priority Lien. This Mortgage is, and always
will be kept, a direct first lien and security interest upon the Mortgaged
Property and Mortgagor will not create or suffer to be created or permit to
exist any lien, security interest or charge prior or junior to or on parity
with the lien and security interest of this Mortgage upon the Mortgaged
Property or any part thereof or upon the rents, issues, revenues, profits or
other income therefrom, except for Liens permitted under the Participation
Agreement and Liens approved in writing by the Agent.
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(b) Lease and Sublease. Mortgagor will observe and
perform all the obligations imposed upon the Mortgagor under the Lease and the
Sublease and not to do or permit to be done anything to impair the security
thereof.
(c) Further Assurances. Mortgagor will execute and
deliver all such further instruments and do such further acts as may be
necessary or desirable or as may be reasonably requested by the Agent to carry
out more effectively the purposes of this Mortgage and to subject to the lien
created hereby any properties, rights and interests covered or intended to be
covered hereby. At the request of the Agent, Mortgagor will deliver to the
Agent an inventory and/or financing statements describing and showing the make,
model, serial number and location of all equipment and machinery forming a part
of the Mortgaged Property.
(d) Rights of Agent. Mortgagor agrees that if Mortgagor
fails to perform any act or to take any action which Mortgagor is required to
perform or take hereunder or under the Participation Agreement or any other
Operative Document or pay any money which Mortgagor is required to pay
hereunder or thereunder, the Agent in Mortgagor's name or its own name may, but
shall not be obligated to, perform or cause to perform such act or take such
action or pay such money, and any expenses so incurred by the Agent and any
money so paid by the Agent (or the Participants) shall be a demand obligation
owing by Mortgagor to the Agent and, upon making such payment, shall be
subrogated to all of the rights of the Person receiving such payment. Each
amount due and owing by Mortgagor under this Section 3.01(d) shall bear
interest from the date of such expenditure or payment or other occurrence which
gives rise to such amount being owed to the Agent until paid at the Post
Default Rate, and all such amounts together with such interest thereon shall be
a part of the Obligations and shall be secured by this Mortgage.
ARTICLE IV
Section 4.01 Assignment of Proceeds.
(a) Mortgagor does hereby absolutely and unconditionally
assign, transfer, set over and deliver to the Agent all of its rights, titles,
and interests in and to the proceeds derived from the processing, gathering,
transportation or marketing of natural gas and other hydrocarbons processed at
or transported through the Mortgaged Property, all inventory which Mortgagor
owns, processes, gathers and transports through the Mortgaged Property, all
proceeds from services performed at the Facility and the sale of such
inventory, and the immediate and continuing right to collect and receive any
and all of such above-described proceeds. Mortgagor directs and instructs any
and all remitters of proceeds to the Mortgagor ("Remitters") upon receipt of
written notice from the Agent to pay to the Agent all of the proceeds accruing
for the benefit of Mortgagor until such time as such Remitters have been
furnished with evidence that all of the Obligations have been
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paid and that the liens evidenced hereby have been released. Mortgagor agrees
that no Remitters shall have any responsibility for the application of any
funds paid to the Agent.
(b) Independent of the foregoing provisions and
authorities, Mortgagor agrees to execute and deliver any and all instruments
that may be requested by the Agent or that may be required by Remitters for the
purpose of effectuating payment of such proceeds to the Agent upon receipt of
written notice from the Agent. All proceeds under processing, purchase,
transportation, delivery or sales agreements and all other proceeds which for
any reason may be paid to Mortgagor shall, when received by Mortgagor,
constitute trust funds in Mortgagor's hands and shall be immediately paid over
to the Agent.
(c) The Agent is fully authorized to receive and receipt
for said revenues and proceeds; to endorse and cash any and all checks and
drafts payable to the order of Mortgagor or the Agent for the account of
Mortgagor received from or in connection with said revenues or proceeds and
apply the proceeds thereof to the payment of the Obligations, when received,
regardless of the maturity of any of the Obligations, or any installment
thereof; and to execute transfer and division orders in the name of Mortgagor,
or otherwise, with warranties binding Mortgagor. The Agent shall not be liable
for any delay, neglect, or failure to effect collection of any proceeds or to
take any other action in connection therewith or hereunder; but shall have the
right, at its election, in the name of Mortgagor or otherwise, to prosecute and
defend any and all actions or legal proceedings deemed advisable by the Agent
in order to collect such funds and to protect the interests of the Agent and/or
Mortgagor, with all costs, expenses and attorney's fees incurred in connection
therewith being paid by Mortgagor. Mortgagor hereby agrees to indemnify Agent
against all claims, actions, liabilities, judgments, costs, charges and
attorneys' fees made against or incurred by them or either of them, based on
the assertion that they have had and received funds from the processing,
transporting or marketing of natural gas and other hydrocarbons processed at or
transported through the Mortgaged Property claimed by third persons either
before or after the payment in full of the Obligations. Agent shall have the
right to defend against any such claims, actions and judgments, employing their
attorneys therefor, and if they are not furnished with reasonable indemnity,
they shall have the right to compromise and adjust any such claims, actions and
judgments. Mortgagor agrees to indemnify and pay to Agent any and all such
claims, judgments, costs, charges and attorney's fees as may be paid in any
judgment, release or discharge thereof or as may be adjudged against Agent.
Such obligation shall be payable on demand and shall bear interest from the
date of demand therefor until paid at the Post-Default Rate. Mortgagor hereby
appoints Agent as its attorney-in-fact to pursue any and all rights of
Mortgagor to liens on and security interests in the inventory or the proceeds.
In addition to the rights granted to Agent in Section 2.01, Mortgagor hereby
further transfers and assigns to Agent any and all such liens, security
interests,
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financing statements or similar interests of Mortgagor attributable to its
interest in the inventory and proceeds therefrom arising under or created by
said statutory provision, judicial decision or otherwise. The power of
attorney granted to Agent in this Section 4.01(c) being coupled with an
interest, shall be irrevocable so long as the Obligations or any part thereof
remains unpaid.
(d) Nothing herein contained shall modify or otherwise
alter the obligation of Mortgagor to make prompt payment of all Obligations
when and as the same become due regardless of whether the proceeds described in
this Section 4.01 are sufficient to pay the same and the rights provided in
accordance with the foregoing assignment provision shall be cumulative of all
other security of any and every character now or hereafter existing to secure
payment of the Obligations.
ARTICLE V
Remedies
Section 5.01 Remedies.
(a) Upon the occurrence and during the continuance of any
Event of Default, the Agent shall have the right and power to proceed by a suit
or suits in equity or at law, whether for the specific performance of any
covenant or agreement herein contained or in aid of the execution of any power
herein granted, or for any foreclosure hereunder or for the sale of the
Mortgaged Property under the judgment or decree of any court or courts of
competent jurisdiction, or for the appointment of a receiver pending any
foreclosure hereunder or the sale of the Mortgaged Property under the order of
a court or courts of competent jurisdiction or under executory or other legal
process, or for the enforcement of any other appropriate legal or equitable
remedy. Any money advanced by the Agent in connection with any such
receivership shall be a demand obligation (which obligation Mortgagor hereby
expressly promises to pay) owing by Mortgagor to the Agent and shall bear
interest from the date of making such advance by the Agent until paid at the
Post Default Rate. Mortgagor agrees to the full extent that it lawfully may,
that, in case one or more of the Events of Default shall have occurred and
shall not have been remedied, then, and in every such case, the Agent shall
have the right and power to enter into and upon and take possession of all or
any part of the Mortgaged Property in the possession of Mortgagor, its
successors or assigns, or its or their agents or servants, and may exclude
Mortgagor, its successors or assigns, and all persons claiming under Mortgagor,
and its or their agents or servants wholly or partly therefrom; and, holding
the same, the Agent may use, administer, manage, operate and control the
Mortgaged Property and conduct the business thereof to the same extent as
Mortgagor, its successors or
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assigns, might at the time do and may exercise all rights and powers of
Mortgagor, in the name, place and stead of Mortgagor, or otherwise as the Agent
shall deem best. All costs, expenses and liabilities of every character
incurred by the Agent in administering, managing, operating, and controlling
the Mortgaged Property shall constitute a demand obligation (which obligation
Mortgagor hereby expressly promises to pay) owing by Mortgagor to the Agent and
shall bear interest from date of expenditure until paid at the Post Default
Rate, all of which shall constitute a portion of the Obligations and shall be
secured by this Mortgage and by any other instrument securing the Obligations.
IN CONNECTION WITH ANY ACTION TAKEN BY THE AGENT PURSUANT TO THIS SECTION
5.01(A), THE AGENT SHALL NOT BE LIABLE FOR ANY LOSS SUSTAINED BY MORTGAGOR
RESULTING FROM ANY ACT OR OMISSION OF THE AGENT IN ADMINISTERING, MANAGING,
OPERATING OR CONTROLLING THE MORTGAGED PROPERTY, INCLUDING A LOSS ARISING FROM
THE ORDINARY NEGLIGENCE OF THE AGENT, UNLESS SUCH LOSS IS CAUSED BY ITS OWN
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AND BAD FAITH, NOR SHALL THE AGENT BE
OBLIGATED TO PERFORM OR DISCHARGE ANY OBLIGATION, DUTY OR LIABILITY OF
MORTGAGOR. MORTGAGOR SHALL AND DOES HEREBY AGREE TO INDEMNIFY THE AGENT FOR,
AND TO HOLD THE AGENT HARMLESS FROM, ANY AND ALL LIABILITY, LOSS OR DAMAGE
WHICH MAY OR MIGHT BE INCURRED BY THE AGENT BY REASON OF THIS MORTGAGE OR THE
EXERCISE OF RIGHTS OR REMEDIES HEREUNDER, INCLUDING A LOSS ARISING FROM THE
ORDINARY NEGLIGENCE OF THE AGENT, EXCEPT AS SUCH LIABILITY, LOSS OR DAMAGE IS
OCCASIONED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; SHOULD THE AGENT MAKE
ANY EXPENDITURE ON ACCOUNT OF ANY SUCH LIABILITY, LOSS OR DAMAGE, THE AMOUNT
THEREOF, INCLUDING COSTS, EXPENSES AND REASONABLE ATTORNEYS' FEES, SHALL BE A
DEMAND OBLIGATION (WHICH OBLIGATION MORTGAGOR HEREBY EXPRESSLY PROMISES TO PAY)
OWING BY MORTGAGOR TO THE AGENT AND SHALL BEAR INTEREST FROM THE DATE EXPENDED
UNTIL PAID AT THE POST DEFAULT RATE SHALL BE A PART OF THE OBLIGATIONS AND
SHALL BE SECURED BY THIS MORTGAGE AND ANY OTHER INSTRUMENT SECURING THE SECURED
INDEBTEDNESS. Mortgagor hereby assents to, ratifies and confirms any and all
actions of the Agent with respect to the Mortgaged Property taken under this
Section 5.01(a).
(b) If a foreclosure suit is commenced, the Agent,
without notice to the Mortgagor, and without regard to the value of the
Mortgaged Property or the solvency of Mortgagor, shall be entitled to the
immediate appointment of a receiver, having the usual powers, to take
possession of the Mortgaged Property and to manage directly the pendency of the
foreclosure suite.
(c) Any sale or sales of the Mortgaged Property or any
part thereof shall operate to divest all right, title, interest, claim and
demand whatsoever, either at law or in equity, of Mortgagor of, in and to the
premises and the property sold, and shall be a perpetual bar, both at law and
in equity, against Mortgagor, its successors and assigns, and
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against any and all persons claiming or who shall thereafter claim all or any
of the property sold from, through or under Mortgagor, its successors and
assigns; and Mortgagor, if requested by the Agent to do so, shall join in the
execution and delivery of all proper conveyances, assignments and transfers of
the properties so sold. The proceeds of any sale of the Mortgaged Property or
any part thereof and all other moneys received by the Agent in any proceedings
for the enforcement hereof, whose application has not elsewhere herein been
specifically provided for, shall be applied in the manner specified in Section
2.08(b) of the Participation Agreement.
(d) The Agent may resort to any security given by this
Mortgage or to any other security now existing or hereafter given to secure the
payment of any of the Obligations secured hereby, in whole or in part, and in
such portions and in such order as may seem best to the Agent in its sole and
uncontrolled discretion, and any such action shall not in anywise be considered
as a waiver of any of the rights, benefits or liens created by this Mortgage.
Mortgagor agrees, to the full extent that it may lawfully so agree, that it
will not at any time insist upon or plead or in any manner whatever claim or
take the benefit or advantage of any appraisement, valuation, stay, extension
or redemption law now or hereafter in force, in order to prevent or hinder the
enforcement or foreclosure of this Mortgage or the absolute sale of the
Mortgaged Property or the possession thereof by any purchaser at any sale made
pursuant to any provision hereof, or pursuant to the decree of any court of
competent jurisdiction; but Mortgagor, for itself and all who may claim through
or under it, so far as it or they now or hereafter lawfully may, hereby waives
the benefit of all such laws. PURSUANT TO N.M. STAT. ANN. SECTION 39-5-19
(1978), MORTGAGOR AGREES THAT THE PERIOD OF REDEMPTION AFTER ANY FORECLOSURE
SALE SHALL BE ONE (1) MONTH IN LIEU OF NINE (9) MONTHS. Mortgagor, for itself
and all who may claim through or under it, waives to the extent that it may
lawfully do so, any and all right to have the property included in the
Mortgaged Property marshaled upon any foreclosure of the lien hereof, and
agrees that any court having jurisdiction to foreclose such lien may sell the
Mortgaged Property as an entirety. If any law referred to herein and now in
force, of which Mortgagor or its successor or successors might take advantage
despite the provisions hereof, shall hereafter be repealed or cease to be in
force, such law shall not thereafter be deemed to constitute any part of the
contract herein contained or to preclude the operation or application of the
provisions hereof. If the proceeds of any sale or other lawful disposition of
the Mortgaged Property by the Agent are insufficient to pay the Obligations,
then Mortgagor shall pay or cause to be paid any deficiency.
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(e) Without in any manner limiting the generality of any
of the other provisions of this Mortgage: (i) some portions of the goods
described or to which reference is made herein are or are to become fixtures on
the Land; (ii) this instrument is to be filed of record in the real estate
records as a financing statement; (iii) Mortgagor is the record owner of the
Lease and other interests in the Land comprised of the Mortgaged Property; and
(iv) a carbon, photographic or other reproduction of this Mortgage shall be
sufficient as a financing statement covering the Mortgaged Property.
(f) Upon the occurrence and during the continuance of any
of the Events of Default, the Agent is and shall be entitled to all of the
rights, powers and remedies afforded a secured party by the applicable Uniform
Commercial Code with reference to the personal property and fixtures in which
the Agent has been granted a security interest herein, or the Agent may proceed
as to both the real and personal property covered hereby in accordance with the
rights and remedies granted under this Mortgage in respect of the real property
covered hereby. Such rights, powers and remedies shall be cumulative and in
addition to those granted to the Agent under any other provision of this
instrument or under any other instrument executed in connection with or as
security for the Notes, the Certificates or any of the Obligations. Written
notice mailed to Mortgagor as provided herein at least ten (10) days prior to
the date of public sale of any part of the Mortgaged Property which is personal
property subject to the provisions of the Uniform Commercial Code, or prior to
the date after which private sale of any such part of the Mortgaged Property
will be made, shall constitute reasonable notice. A carbon or photographic or
other reproduction of this Mortgage shall be sufficient as a financing
statement covering the Mortgaged Property.
(g) The lien, security interest and other security rights
of the Agent hereunder shall not be impaired by any indulgence, moratorium or
release granted by the Agent including, but not limited to, any renewal,
extension or modification which the Agent may grant with respect to any
Obligations, or any surrender, compromise, release, renewal, extension,
exchange or substitution which the Agent may grant in respect of the Mortgaged
Property, or any part thereof or any interest therein, or any release or
indulgence granted to any endorser, guarantor or surety of any Obligations.
(h) In the event there is a foreclosure sale hereunder
and at the time of such sale Mortgagor or Mortgagor's successors or assigns or
any other person claiming any interest in the Mortgaged Property by, through or
under Mortgagor, are occupying or using the Mortgaged Property or any part
thereof, each and all shall immediately become the tenant of the purchaser at
such sale, which tenancy shall be a tenancy from day to day, terminable at the
will of either the landlord or tenant, or at a reasonable rental per day based
upon the value of the property occupied, such rental to be due daily to the
purchaser; to the extent permitted by applicable law, the purchaser at such
sale shall,
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notwithstanding any language herein apparently to the contrary, have the sole
option to demand immediate possession following the sale or to permit the
occupants to remain as tenants at will. In the event the tenant fails to
surrender possession of said property upon demand, the purchaser shall be
entitled to institute and maintain a summary action for possession of the
Mortgaged Property (such as an action for forcible entry and detainer) in any
court having jurisdiction. The purchaser or purchasers at foreclosure shall
have the right to affirm or disaffirm any lease of the Mortgaged Property or
any part thereof.
Section 5.02 Remedies Regarding Sublease and Rent.
(a) Mortgagor expressly acknowledges and agrees that upon
or any time after the occurrence and continuation of an Event of Default so
long as such Default remains uncured, Agent's right, title and interest in and
to the Subleases and Rents shall be and remain absolute and inviolate in
accordance with the provisions of this Mortgage. Moreover, without limiting,
altering, affecting or impairing in any manner or to any extent the absolute
right, title and interest of Agent as provided herein, upon the occurrence and
continuation of an Event of Default so long as such Default remains uncured,
Agent shall have the complete right, power and authority hereunder, then or
thereafter, to exercise and enforce any or all of the following rights and
remedies, in addition to (but not in lieu of) the remedies set forth in the
other Security Instruments:
(i) without taking possession of the Mortgaged Property,
in Mortgagor's own name, to demand, collect, receive, sue for, attach
and levy on the Rents and give proper receipts, releases and
acquittances therefor, and after deducting all necessary and proper
costs and expenses of operation and collection, as reasonably
determined by Agent, including without limitation reasonable
attorneys' fees, and apply the net proceeds thereof, together with any
funds of Mortgagor deposited with Agent, in reduction or repayment of
the Obligations, and any such net proceeds actually received by Agent
shall be treated as a pro tanto reduction or repayment of the
Obligations (it being specifically agreed that the mere existence of
this absolute assignment shall not be treated as pro tanto discharge,
credit, reduction or repayment or discharge of the Obligations); and
(ii) Without regard to the adequacy of the security, with
or without any action or proceeding through any Person or by any
agent, or by a receiver to be appointed by a court of competent
jurisdiction, and irrespective of the Mortgagor's possession, to enter
upon, take possession of, manage and operate the Mortgaged Property or
any part thereof as Agent deems to be prudent and reasonable under the
circumstances; make, modify, enforce, cancel or accept surrender of
any Sublease now in effect or hereafter in effect on the Mortgaged
Property or any part thereof; remove and evict any sublessee; increase
or decrease Rents; decorate, clean, repair,
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and make such improvements, alterations and additions as the Agent
shall deem necessary or desirable; and otherwise do any act or incur
any cost or expense which the Agent may deem reasonably necessary to
protect the status and value of the Mortgaged Property as fully and to
the same extent as Mortgagor could do if Mortgagor was in possession
thereof; and in such event, to apply the Rents so collected in
accordance with the provisions of this Mortgage.
(b) No Waiver or Election of Remedies.
(i) Neither the collection of the Rents and application
as provided for in this Section 5.02 nor the entry upon and taking
possession of the Mortgaged Property by Agent shall be deemed to cure
or waive any Event of Default or waive, modify or affect any notice of
default under any Operative Document or invalidate any act done
pursuant to any such notice. The enforcement of any such right or
remedy by Agent, once exercised, shall continue for so long as the
Agent shall elect, notwithstanding that the collection and application
of the Rents may have cured the original Event of Default. If the
Agent shall thereafter elect to discontinue the exercise of any such
right or remedy, the same or any other right or remedy hereunder may
be reasserted at any time and from time to time following any
subsequent Event of Default.
(ii) The failure of the Agent to assert any of the terms,
covenants and conditions of this Mortgage for any period of time or at
any time or times shall not be construed or deemed to be a waiver of
any such right, and nothing herein contained nor anything done or
omitted to be done by the Agent pursuant to this Mortgage shall be
deemed to be an election of remedies or a waiver by the Agent of any
of its rights and remedies under any other Operative Document or under
the law. The right of the Agent to collect and enforce the payment of
the Obligations and performance of the obligations and to enforce any
security therefor may be exercised by the Agent either prior to or
simultaneously with or subsequent to any action taken hereunder.
Section 5.03 Remedies Cumulative. Every right, power and
remedy herein given to the Agent shall be cumulative and in addition to every
other right, power and remedy herein specifically given or now or hereafter
existing in equity, at law or by statute; and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time and so often and in such order as may be deemed expedient by
the Agent, and the exercise, or the beginning of the exercise, of any such
right, power or remedy shall not be deemed a waiver of the right to exercise,
at the same time or thereafter any other right, power or remedy. No delay or
omission by the Agent in the exercise of any right, power
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or remedy shall impair any such right, power or remedy or operate as a waiver
thereof or of any other right, power or remedy then or thereafter existing.
ARTICLE VI
Miscellaneous
Section 6.01 Termination. If all Obligations secured
hereby shall be performed and satisfied, this Mortgage shall become null and
void and the Mortgaged Property shall revert to Mortgagor, and the Agent shall
forthwith cause satisfaction and discharge of this Mortgage to be entered upon
the record at the expense of Mortgagor and shall execute and deliver or cause
to be executed and delivered such instruments of satisfaction and reassignment
as may be appropriate. Otherwise, this Mortgage shall remain and continue in
full force and effect.
Section 6.02 Invalidity. If any provision hereof is
invalid or unenforceable in any jurisdiction, the other provisions hereof shall
remain in full force and effect in such jurisdiction and the remaining
provisions hereof shall be liberally construed in favor of the Agent in order
to effectuate the provisions hereof, and the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the validity or
enforceability of any such provision in any other jurisdiction. If any part of
the secured Obligations cannot be lawfully secured by this Mortgage or if any
part of the Mortgaged Property cannot be lawfully subject to the lien and
security interest hereof to the full extent of such Obligations, then all
payments made shall be applied on said Obligations first in discharge of that
portion thereof which is not secured by this Mortgage.
Section 6.03 Construction; Governing Law. This instrument
may be construed as a mortgage, chattel mortgage, conveyance, assignment,
security agreement, pledge, financing statement, hypothecation or contract, or
any one or more of them, in order fully to effectuate the lien hereof and the
purposes and agreements herein set forth. The term "Mortgagor" as used herein
shall mean and include all and each of the individuals, partnerships,
corporations or other legal entities or persons executing this Mortgage. The
number and gender of pronouns used in referring to Mortgagor shall be construed
to mean and correspond with the number and gender of the individuals,
partnerships, corporations or other legal entities or persons executing this
Mortgage as Mortgagor. The terms used to designate the Agent and Mortgagor
shall be deemed to include the respective heirs, legal representatives,
successors and assigns of such parties. This instrument shall be governed by
and construed in accordance with the laws of the State of New Mexico, without
regard to principals of conflicts of laws.
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Section 6.04 Waivers; Etc. The Agent and the Participants
may waive any Event of Default without waiving any other prior or subsequent
Event of Default. The Agent and the Participants may remedy any Event of
Default without waiving the Event of Default remedied. No single or partial
exercise by the Agent of any right, power or remedy hereunder shall exhaust the
same or shall preclude any other or further exercise thereof, and every such
right, power or remedy hereunder may be exercised at any time and from time to
time. No modification or waiver of any provision hereof nor consent to any
departure by Mortgagor therefrom shall in any event be effective unless the
same shall be in writing and signed by the Agent and the Participants as
provided in the Participation Agreement and then such waiver or consent shall
be effective only in the specific instances, for the purpose for which given
and to the extent therein specified. No notice to nor demand on Mortgagor in
any case shall of itself entitle Mortgagor to any other or further notice of
demand in similar or other circumstances. Acceptance by the Agents of any
payment in an amount less than the amount then due on any Obligations shall be
deemed an acceptance on account only and shall not in any way excuse the
existence of an Event of Default hereunder.
Section 6.05 Successors. In the event the ownership of
the Mortgaged Property or any part thereof becomes vested in a person other
than Mortgagor, the Agent may, without notice to Mortgagor, deal with such
successor or successors in interest with reference to this Mortgage and to the
Obligations in the same manner as with Mortgagor, without in any way vitiating
or discharging Mortgagor's liability hereunder or for the payment of the
Obligations or performance of the obligations secured hereby. No transfer of
the Mortgaged Property, no forbearance on the part of the Agent, and no
extension of the time for the payment of the Obligations given by any holder of
the Obligations, in whole or in part, shall affect the liability of Mortgagor
hereunder or for obligations secured hereby or the liability of any other
person hereunder or for obligations secured hereby or the liability of any
other person hereunder or for the payment of the Obligations.
Section 6.06 Notices; Etc. All notices, requests,
consents, demands and other communications required or permitted hereunder
shall be given in accordance with the terms of the Participation Agreement.
Section 6.07 Discretion of Agent. Except where otherwise
expressly provided herein, in any instance hereunder where the approval,
consent or the exercise of judgment of the Agent is required, the granting or
denial of such approval or consent and the exercise of such judgment shall be
within the sole discretion of the Agent, and the Agent shall not, for any
reason or to any extent, be required to grant such approval or consent or
exercise such judgment in any particular manner, regardless of the
reasonableness of either the request or the Agent's judgment.
Section 6.08 Counterparts. This instrument may be
executed in several counterparts, all of which are identical. Each of such
counterparts shall for all purposes
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be deemed to be an original and all such counterparts shall together constitute
but one and the same instrument.
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[INTENTIONALLY LEFT BLANK]
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EXECUTED on the ___ day of February, 1995 to be effective as
of the 9th day of February, 1995 (the "Effective Date").
MORTGAGOR:
---------
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity
but solely as Trustee for the Chaco
Liquids Plant Trust
By:
---------------------------------
Arthur J. MacDonald
Assistant Vice President
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COMMONWEALTH OF MASSACHUSETTS Section
Section
COUNTY OF SUFFOLK Section
The foregoing instrument was acknowledged before me on this the ____th day of
February, 1995, by Arthur J. MacDonald, Assistant Vice President, of State
Street Bank and Trust Company, acting herein not in its individual capacity but
solely as Trustee.
---------------------------------------
Notary Public in and for the
Commonwealth of Massachusetts
My Commission expires:
----------------
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EXHIBIT A
Legal Description of Site
A parcel of land located in the Southwest quarter of Section 16,
Township 26 North, Range 12 West, N.M.P.M., New Mexico. Being more
particularly described as:
COMMENCING at the Southwest corner of said Section 16, THENCE: N
88-15-01 E a distance of 1897.04 feet to the "TRUE POINT OF BEGINNING".
THENCE: N 00-06-54 W a distance of 450.00 feet,
THENCE: N 89-53-03 E a distance of 360.00 feet,
THENCE: S 00-06-54 E a distance of 450.00 feet,
THENCE: S 89-53-03 W a distance of 360.00 feet to the "TRUE POINT OF
BEGINNING".
Containing 3.72 Acres.
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SECURITY AGREEMENT
(General Intangibles)
Among
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but solely as Trustee
for the Chaco Liquids Plant Trust,
and
CHEMICAL BANK, as Agent
February 9, 1995
87
SECURITY AGREEMENT
General Intangibles
THIS SECURITY AGREEMENT (this Security Agreement") is made as of
February 9, 1995 by STATE STREET BANK AND TRUST COMPANY acting not in its
individual capacity but solely as Trustee for the Chaco Liquids Plant Trust
("Debtor") with offices at Two International Place, 4th Floor, Boston,
Massachusetts 02110, in favor of CHEMICAL BANK, as Agent, with offices at 270
Park Avenue, 8th Floor, New York, New York 10017 ("Secured Party") for itself
and the Participants which now or hereafter become parties to the Participation
Agreement referred to below.
RECITALS
A. On even date herewith, El Paso New Chaco Company, a
Delaware corporation (the "Company"), El Paso Natural Gas Company, a Delaware
corporation, as guarantor (the "Guarantor"), Debtor, Secured Party, and other
persons (the "Participants") are executing a Participation and Credit Agreement
(such agreement, as may from time to time be amended or supplemented, being the
"Participation Agreement") pursuant to which, upon the terms and conditions
stated therein, the Participants agree to make loans and advances to the
Debtor.
B. The Participants have conditioned their respective
obligations under the Participation Agreement upon the execution and delivery
by Debtor of this Security Agreement, and Debtor has agreed to enter into this
Security Agreement.
C. Therefore, in order to comply with the terms and
conditions of the Participation Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Debtor hereby agrees with Secured Party as follows:
ARTICLE I
Definitions
Section 1.01 Terms Defined Above or in the Participation
Agreement. As used in this Security Agreement, the terms defined above shall
have the meanings respectively assigned to them. Other capitalized terms which
are defined in Schedule 1.02 of the Participation Agreement but which are not
defined herein shall have the same meanings as defined in the Participation
Agreement.
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Section 1.02 Certain Definitions. As used in this
Security Agreement, the following terms shall have the following meanings,
unless the context otherwise requires:
"Chattel Paper" shall mean all chattel paper, as defined in
the Code, at any time included in the Collateral.
"Code" shall mean the Uniform Commercial Code as presently in
effect in the State of New York. Unless otherwise indicated by the context
herein, all uncapitalized terms which are defined in the Code shall have their
respective meanings as used in Article 9 of the Code.
"Collateral" shall mean the following types or items of
Property (including Property hereafter acquired by the Debtor as well as
Property which Debtor now owns or in which Debtor has rights but excluding any
payments made to State Street in its individual capacity):
(a) the Lease, to the extent the Lease constitutes
Chattel Paper;
(b) all General Intangibles, including, without
limitation, all contracts and agreements described on Schedule I; and
(c) all proceeds, products, replacements, additions to,
substitutions for, of any of the foregoing.
"Event of Default" shall mean any event specified in Section
6.01.
"General Intangibles" shall mean all general intangibles, as
defined in the Code, at any time included in the Collateral.
"Obligations" shall mean: (i) all of the outstanding
aggregate amount of the Loans and aggregate amount of the Certificate Advances
made to the Debtor under the Participation Agreement, including without
limitation, any and all renewals, extensions for any period, rearrangements or
enlargements thereof; (ii) the performance of all obligations and agreements
by the Company and the Trustee to or in favor of the Agent or the Participants
under the Operative Documents, including this Security Agreement; and (iii) all
interest (pre-petition or post-petition), yield (pre-petition or
post-petition), taxes, indemnities, losses, compensation, reimbursement,
charges, expenses, attorneys' or other fees and any other sums payable to or
incurred by either the Agent or any of the Participants in connection with the
execution, administration or enforcement of their rights and remedies hereunder
or any other Operative Documents.
"Obligor" shall mean Debtor and any Person, other than Debtor,
liable (whether directly or indirectly, primarily or secondarily) for the
payment or performance of any of the Obligations whether as maker, co-maker,
endorser, guarantor,
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accommodation party or otherwise.
"Security Agreement" shall mean this Security Agreement, as
the same may from time to time be amended or supplemented.
ARTICLE II
Security Interest
Section 2.01 Grant of Security Interest. To secure the
prompt payment and performance of the Obligations, the Debtor hereby assigns
and grants to Secured Party a security interest in and right of set-off against
the Collateral.
ARTICLE III
Representations and Warranties
In order to induce Secured Party to accept this Security
Agreement, Debtor represents and warrants to Secured Party (which
representations and warranties will survive the creation and payment of the
Obligations) that:
Section 3.01 Ownership of Collateral; Encumbrances. The
Debtor is the legal and beneficial owner of the Collateral free and clear of
any adverse claim, Lien, security interest, option or other charge or
encumbrance except for the security interest created by this Security
Agreement. Debtor has full right, power and authority to assign and grant a
security interest in the Collateral to Secured Party.
Section 3.02 First Priority Security Interest. The grant
of the security interest in the Collateral pursuant to this Security Agreement
creates a valid and perfected first priority security interest in the
Collateral, enforceable against Debtor and all third parties and securing
payment of the Obligations, subject only to Permitted Liens.
Section 3.03 No Filings By Third Parties. No financing
statement or other public notice or recording covering the Collateral is on
file in any public office (other than any financing statement or other public
notice or recording naming Secured Party as the secured party therein), and
Debtor will not execute any such financing statement or other public notice or
recording so long as any of the Obligations are outstanding.
Section 3.04 No Name Changes. Debtor has not, during the
preceding five (5) years, entered into any contract, agreement, security
instrument or other document using a name other than, or been known by or
otherwise used any name other than, the name used by Debtor herein.
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Section 3.05 Location of Debtor and Collateral. The
Debtor's office and records concerning the Collateral are located at the
addresses or locations set forth in the opening paragraph hereof. The
Collateral is located at the location(s) specified on Exhibit A. Any
Collateral not at such location(s) nevertheless remains subject to Secured
Party's security interest.
ARTICLE IV
Covenants and Agreements
Debtor will at all times comply with the covenants and
agreements contained in this Article IV, from the date hereof and for so long
as any part of the Obligations are outstanding.
Section 4.01 Change in Location of the Debtor. The Debtor
will give Secured Party thirty (30) days' prior written notice of (i) the
opening or closing of any place of the Debtor's business or (ii) any change in
the location of the Debtor's chief executive office or address.
Section 4.02 Change in the Company's Name or Structure.
The Debtor will not change its name, identity or structure (including, without
limitation, any merger, consolidation or sale of substantially all of its
assets) without notifying Secured Party of such change in writing at least
thirty (30) days prior to the effective date of such change.
Section 4.03 Sale, Disposition or Encumbrance of
Collateral. Except as permitted by any of the Operative Documents or with
Secured Party's prior written consent, Debtor will not in any way encumber any
of the Collateral (or permit or suffer any of the Collateral to be encumbered)
or sell, assign, lend, rent, lease or otherwise dispose of or transfer any of
the Collateral to or in favor of any Person other than Secured Party.
Section 4.04 Proceeds of Collateral. Except as permitted
by any of the Operative Documents, the Debtor will deliver to Secured Party
promptly upon receipt all proceeds delivered to the Debtor from the sale or
disposition of any Collateral. If chattel paper, documents or instruments are
received as proceeds, which are required to be delivered to Secured Party, they
will be, immediately upon receipt, properly endorsed or assigned and delivered
to Secured Party as Collateral. This Section 4.04 shall not be construed to
permit sales or dispositions of Collateral except as may be elsewhere expressly
permitted by this Agreement or the other Operative Documents.
Section 4.05 Further Assurances. Upon the request of
Secured Party, Debtor shall (at the Company's expense) execute and deliver all
such mortgages, deeds of trust, assignments, certificates, financing statements
or other documents and give further
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assurances and do all other acts and things as Secured Party may reasonably
request to perfect Secured Party's interest in the Collateral or to protect,
enforce or otherwise effect Secured Party's rights and remedies hereunder all
in form and substance satisfactory to Secured Party.
Section 4.06 Lease. The Debtor will not default in its
performance under the Lease. The Debtor will not extend payments under the
Lease or make any allowance, forbearance, waiver or adjustment thereto and the
Lease will not be amended, supplemented or modified, in each case above,
without the written consent of Secured Party. All payments under the Lease
shall be made only to such account as specified by Secured Party.
ARTICLE V
Rights, Duties and Powers of Secured Party
The following rights, duties and powers of Secured Party are
applicable irrespective of whether an Event of Default occurs and is
continuing:
Section 5.01 Discharge Encumbrances. Secured Party may,
at its option, but is not required to, take any action permitted to be taken by
the Debtor under the Lease.
Section 5.02 Transfer of Collateral. Secured Party or any
Participant may transfer any or all of the Obligations, and upon any such
transfer Secured Party or such Participant may transfer its interest in any or
all of the Collateral and shall be fully discharged thereafter from all
liability therefor. Any transferee of the Collateral shall be vested with all
rights, powers and remedies of its transferor hereunder.
Section 5.03 Licenses and Rights to Use Collateral. In
connection with any transfer or sale (to Secured Party or any other Person) of
the Collateral, Secured Party is hereby granted a transferable license or other
right to use, without any charge, any of the Debtor's labels, patents,
copyrights, trade names, trade secrets, trademarks or other similar property in
completing production, advertising or selling such Collateral. The Debtor's
rights under all licenses and franchise agreements shall inure to the benefit
of Secured Party and any transferee of all or any part of the Collateral.
Section 5.04 Cumulative and Other Rights. The rights,
powers and remedies of Secured Party hereunder are in addition to all rights,
powers and remedies given by law or in equity. The exercise by Secured Party
of any one or more of the rights, powers and remedies herein shall not be
construed as a waiver of any other rights, powers and remedies, including,
without limitation, any other rights of set-off.
Section 5.05 Disclaimer of Certain Duties.
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(a) The powers conferred upon Secured Party by this
Security Agreement are to protect its and the Participants' interest in the
Collateral and shall not impose any duty upon Secured Party or any Participant
to exercise any such powers. Debtor hereby agrees that Secured Party and the
Participants shall not be liable for, nor shall the indebtedness evidenced by
the Obligations be diminished by, their delay or failure to collect upon,
foreclose, sell, take possession of or otherwise obtain value for the
Collateral.
(b) Neither Secured Party nor any Participant shall be
under any duty whatsoever to make or give any presentment, notice of dishonor,
protest, demand for performance, notice of non-performance, notice of intent to
accelerate, notice of acceleration, or other notice or demand in connection
with any Collateral or the Obligations, or to take any steps necessary to
preserve any rights against any Obligor, Account Debtor or other Person.
Debtor waives any right of marshaling in respect of any and all Collateral, and
waives any right to require Secured Party or any Participant to proceed against
any Obligor, Account Debtor or other Person, exhaust any Collateral or enforce
any other remedy which Secured Party or any Participant now has or may
hereafter have against any Obligor or other Person. Except as may be expressly
required in the Participation Agreement, this Security Agreement or the Code,
Debtor hereby waives any demand, notice of default, notice of acceleration of
the maturity of the Obligations, notice of intention to accelerate the maturity
of the Obligations, presentment, protest and notice of dishonor as to any
action taken by Secured Party or any Participant in connection with this
Security Agreement, or any instrument or document.
Section 5.06 Modification of Obligations; Other Security.
Debtor waives (i) any and all notice of acceptance, creation, modification,
rearrangement, renewal or extension for any period of any instrument executed
by any Obligor in connection with the Obligations and (ii) any defense of any
Obligor by reason of disability, lack of authorization, cessation of the
liability of any Obligor or for any other reason. Debtor authorizes Secured
Party, without notice or demand and without any reservation of rights against
Debtor and without affecting Debtor's liability hereunder or on the
Obligations, from time to time to (x) take and hold other property, other than
the Collateral, as security for the Obligations, and exchange, enforce, waive
and release any or all of the Collateral, (y) apply the Collateral in the
manner permitted by this Security Agreement and (z) renew, extend for any
period, accelerate, amend or modify, supplement, enforce, compromise, settle,
waive or release the obligations of any Obligor or any instrument or agreement
of such other Person with respect to any or all of the Obligations or
Collateral.
ARTICLE VI
Events of Default
Section 6.01 Events of Default. An "Event of Default"
under the Participation Agreement shall constitute an Event of Default under
this Security
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Agreement.
Section 6.02 Remedies. Upon the occurrence and during the
continuance of any Event of Default, Secured Party or, in the case of
subsection (g), Secured Party or any Participant may take any or all of the
following actions without notice (except where expressly required below or in
the Participation Agreement) or demand to Debtor:
(a) Declare all or part of the indebtedness pursuant to
the Obligations immediately due and payable and enforce payment of the same by
Debtor or any Obligor.
(b) Take possession of the Collateral, or at Secured
Party's request the Debtor shall, at the Company's cost, assemble the
Collateral and make it available at a location to be specified by Secured Party
which is reasonably convenient to the Debtor and Secured Party.
(c) Sell or lease, in one or more sales or leases and in
one or more parcels, or otherwise dispose of any or all of the Collateral in
its then condition or in any other commercially reasonable manner as Secured
Party may elect, in a public or private transaction, at any location as deemed
reasonable by Secured Party (including, without limitation, the Company's or
the Debtor's premises), either for cash or credit or for future delivery at
such price as Secured Party may deem fair, and (unless prohibited by the Code,
as adopted in any applicable jurisdiction) Secured Party or any Participant may
be the purchaser of any or all Collateral so sold and may apply upon the
purchase price therefor any Obligations secured hereby. Any such sale or
transfer by Secured Party either to itself or to any other Person shall be
absolutely free from any claim of right by the Debtor, including any equity or
right of redemption, stay or appraisal which the Debtor has or may have under
any rule of law, regulation or statute now existing or hereafter adopted. Upon
any such sale or transfer, Secured Party shall have the right to deliver,
assign and transfer to the purchaser or transferee thereof the Collateral so
sold or transferred. It shall not be necessary that the Collateral or any part
thereof be present at the location of any such sale or transfer. Secured Party
may, at its discretion, provide for a public sale, and any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as Secured Party may fix in the notice of such sale. Secured
Party shall not be obligated to make any sale pursuant to any such notice.
Secured Party may, without notice or publication, adjourn any public or private
sale by announcement at any time and place fixed for such sale, and such sale
may be made at any time or place to which the same may be so adjourned. In the
event any sale or transfer hereunder is not completed or is defective in the
opinion of Secured Party, such sale or transfer shall not exhaust the rights of
Secured Party hereunder, and Secured Party shall have the right to cause one or
more subsequent sales or transfers to be made hereunder. In the event that any
of the Collateral is sold or transferred on credit, or to be held by Secured
Party for future delivery to a purchaser or transferee, the Collateral so sold
or transferred may be retained by Secured Party until the purchase price or
other consideration is paid by the purchaser or transferee thereof, but in the
event that such purchaser or transferee fails to
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pay for the Collateral so sold or transferred or to take delivery thereof,
neither Secured Party nor any Participant shall incur any liability in
connection therewith. If only part of the Collateral is sold or transferred
such that the Obligations remain outstanding (in whole or in part), Secured
Party's rights and remedies hereunder shall not be exhausted, waived or
modified, and Secured Party is specifically empowered to make one or more
successive sales or transfers until all the Collateral shall be sold or
transferred and all the Obligations are paid. In the event that Secured Party
elects not to sell the Collateral, Secured Party retains its rights to lease or
otherwise dispose of or utilize the Collateral or any part or parts thereof in
any manner authorized or permitted by law or in equity, and to apply the
proceeds of the same towards payment of the Obligations. Each and every method
of disposition of the Collateral described in this subsection or in subsection
(f) shall constitute disposition in a commercially reasonable manner.
(d) Take possession of all books and records of the
Debtor pertaining to the Collateral. Secured Party shall have the authority to
enter upon any real property or improvements thereon in order to obtain any
such books or records, or any Collateral located thereon, and remove the same
therefrom without liability.
(e) Apply proceeds of the disposition of the Collateral
to the Obligations in any manner elected by Secured Party and permitted by the
Code or otherwise permitted by law or in equity and consistent with the
provisions of the Participation Agreement. Such application may include,
without limitation, the reasonable expenses of retaking, holding, preparing for
sale or other disposition, and the reasonable attorneys' fees and legal
expenses incurred by Secured Party and the Participants.
(f) Appoint any Person as agent to perform any act or
acts necessary or incident to any sale or transfer by Secured Party of the
Collateral. Additionally, any sale or transfer hereunder may be conducted by
an auctioneer or any officer or agent of Secured Party.
(g) Apply and set-off (i) any deposits of the Debtor now
or hereafter held by Secured Party or any Participant; (ii) all claims of the
Debtor or the Company against Secured Party or any Participant, now or
hereafter existing; (iii) any other property, rights or interests of the Debtor
which come into the possession or custody or under the control of Secured Party
or any Participant; and (iv) the proceeds of any of the foregoing as if the
same were included in the Collateral. Secured Party agrees to notify the
Debtor, as the case may be, promptly after any such set-off or application (or
after learning thereof in the case of such action by a Participant); provided,
however, the failure of Secured Party to give any notice shall not affect the
validity of such set-off or application.
(h) Receive, change the address for delivery, open and
dispose of mail addressed to Debtor, and to execute, assign and endorse
negotiable and other instruments for the payment of money or other evidences of
payment for any form of Collateral on behalf of and in the name of Debtor.
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Section 6.03 Attorney-in-Fact. Debtor hereby irrevocably
appoints Secured Party as Debtor's attorney-in-fact, with full authority in the
place and stead of Debtor and in the name of Debtor or otherwise, from time to
time in Secured Party's discretion upon the occurrence and during the
continuance of an Event of Default, but at the Company's cost and expense and
without notice to Debtor to take any action and to execute any assignment,
certificate, financing statement, notification, document or instrument which
Secured Party may deem necessary or advisable to accomplish the purposes of
this Security Agreement, including, without limitation, to receive, endorse and
collect all instruments made payable to Debtor representing any payment or
other distribution in respect of the Collateral or any part thereof and to give
full discharge for the same.
Section 6.04 Liability for Deficiency. If any sale or
other disposition of Collateral by Secured Party or any other action of Secured
Party or any Participant hereunder results in reduction of the Obligations,
such action will not release Debtor from its liability to Secured Party and the
Participants for any unpaid Obligations, including costs, charges and expenses
incurred in the liquidation of Collateral, together with interest thereon, and
the same shall be immediately due and payable to Secured Party at Secured
Party's address set forth in the opening paragraph hereof.
Section 6.05 Reasonable Notice. If any applicable
provision of any law requires Secured Party or any Participant to give
reasonable notice of any sale or disposition or other action, Debtor hereby
agrees that five days' prior written notice shall constitute reasonable notice
thereof. Such notice, in the case of public sale, shall state the time and
place fixed for such sale and, in the case of private sale, the time after
which such sale is to be made.
Section 6.06 Non-judicial Enforcement. Secured Party may
enforce its rights hereunder without prior judicial process or judicial
hearing, and to the extent permitted by law Debtor expressly waives any and all
legal rights which might otherwise require Secured Party to enforce its rights
by judicial process.
ARTICLE VII
Miscellaneous
Section 7.01 Notices. Any notice required or permitted to
be given under or in connection with this Security Agreement shall be given as
provided for in Section 12.02 of the Participation Agreement.
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Section 7.02 Amendments and Waivers. Secured Party's
acceptance of partial or delinquent payments or any forbearance, failure or
delay by Secured Party in exercising any right, power or remedy hereunder shall
not be deemed a waiver of any obligation of Debtor or any Obligor, or of any
right, power or remedy of Secured Party; and no partial exercise of any right,
power or remedy shall preclude any other or further exercise thereof. Secured
Party may remedy any Event of Default hereunder or in connection with the
Obligations without waiving the Event of Default so remedied. Debtor hereby
agrees that if Secured Party agrees to a waiver of any provision hereunder, or
an exchange of or release of the Collateral, or the addition or release of any
Obligor or other Person, any such action shall not constitute a waiver of any
of Secured Party's other rights or of Debtor's obligations hereunder. This
Security Agreement may be amended only by an instrument in writing executed
jointly by Debtor and Secured Party and may be supplemented only by documents
delivered or to be delivered in accordance with the express terms hereof.
Section 7.03 Copy as Financing Statement. A photocopy or
other reproduction of this Security Agreement or any financing statement
covering the Collateral is sufficient as a financing statement, and the same
may be filed with any appropriate filing authority for the purpose of
perfecting Secured Party's security interest in the Collateral.
Section 7.04 Possession of Collateral. Secured Party
shall be deemed to have possession of any Collateral in transit to it or set
apart for it (or, in either case, any of its agents, affiliates or
correspondents).
Section 7.05 Redelivery of Collateral. If any sale or
transfer of Collateral by Secured Party results in full satisfaction of the
Obligations, and after such sale or transfer and discharge there remains a
surplus of proceeds, Secured Party will deliver to the Company or such other
Person as required by Governmental Requirements such excess proceeds in a
commercially reasonable time; provided, however, that neither Secured Party nor
any Participant shall have any liability for any interest, cost or expense in
connection with any delay in delivering such proceeds to the Company.
Section 7.06 Amounts. Notwithstanding anything to the
contrary contained in this Agreement or any of the Operative Documents, the
amounts which the Debtor, the Company and the Guarantor are obliged to pay
pursuant to this Security Agreement and the other Operative Documents, and the
amounts which the Debtor, the Agent and the Participants are entitled to
receive pursuant to this Security Agreement and the other Operative Documents,
are subject to the limitations set forth in Section 12.15 of the Participation
Agreement.
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Section 7.07 Governing Law. THIS SECURITY AGREEMENT AND
THE SECURITY INTEREST GRANTED HEREBY (INCLUDING, WITHOUT LIMITATION, THE
ENFORCEABILITY AND VALIDITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN THE CONFLICTS OF
LAWS RULES THEREOF (EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER
JURISDICTION GOVERN THE PERFECTION AND PRIORITY OF THE SECURITY INTERESTS
GRANTED HEREBY).
Section 7.08 Continuing Security Agreement.
(a) Except as may be expressly applicable pursuant to
Section 9-505 of the Code, no action taken or omission to act by Secured Party
or the Participants hereunder, including, without limitation, any action taken
or inaction pursuant to Section 6.02, shall be deemed to constitute a retention
of the Collateral in satisfaction of the Obligations or otherwise to be in full
satisfaction of the Obligations, and the Obligations shall remain in full force
and effect, until Secured Party and the Participants shall have applied
payments (including, without limitation, collections from Collateral) towards
the Obligations in the full amount then outstanding or until such subsequent
time as is hereinafter provided in subsection (b) below.
(b) To the extent that any payments on the Obligations or
proceeds of the Collateral are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a Debtor,
debtor in possession, receiver or other Person under any bankruptcy law, common
law or equitable cause, then to such extent the Obligations so satisfied shall
be revived and continue as if such payment or proceeds had not been received by
Secured Party or the Participants, and Secured Party's and the Participants'
security interests, rights, powers and remedies hereunder shall continue in
full force and effect. In such event, this Security Agreement shall be
automatically reinstated if it shall theretofore have been terminated pursuant
to Section 7.09.
Section 7.09 Termination. The grant of a security
interest hereunder and all of Secured Party's and the Participants' rights,
powers and remedies in connection therewith shall remain in full force and
effect until Secured Party has retransferred and delivered all Collateral in
its possession to Debtor, and executed a written release or termination
statement and reassigned to the Debtor without recourse or warranty any
remaining Collateral and all rights conveyed hereby. Upon the complete payment
of the Obligations and the compliance by Debtor with all covenants and
agreements hereof, Secured Party, at the written request and expense of the
Company, will release, reassign and transfer the Collateral to the Company and
declare this Security Agreement to be of no further force or effect.
Notwithstanding the foregoing, the provisions of Section 7.08(b) shall survive
the termination of this Security Agreement.
Section 7.10 Counterparts, Effectiveness. This Security
Agreement may be executed in two or more counterparts, and it shall not be
necessary that the signatures of
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all parties hereto be contained on any one counterpart hereof. Each
counterpart is deemed an original, but all such counterparts taken together
constitute one and the same instrument. This Security Agreement becomes
effective upon the execution hereof by Debtor and delivery of the same to
Secured Party or the Participants, and it is not necessary for Secured Party or
any Participant to execute any acceptance hereof or otherwise signify or
express its acceptance hereof.
Section 7.11 Lease. Debtor hereby acknowledges that the
Lease is subordinate and inferior to this Security Agreement and any other
security documents executed as security for the Obligations. Any foreclosure
on any part of the Facility shall be free and clear of the terms of the Lease
and shall terminate the Lease as to such portion of the Facility.
Section 7.12 Non-Recourse. No recourse shall be had
against the Debtor or its successors and assigns and their directors, officers,
shareholders, employees or agents for any claim based on any failure by the
Debtor in the performance or observance of any of the agreements, covenants or
provisions contained in any of the Operative Documents; and in the event of any
such failure, recourse shall be had solely against the rights and interests of
the Debtor in the Trust Estate; provided that nothing contained in this
Security Agreement or other any Operative Document shall be taken to prevent
enforcement of any claim against the Debtor or any other Person arising out of
or in connection with the Security Agreement or any other Operative Document
based upon fraud, gross negligence or willful misconduct of the Debtor or any
director, officer, shareholder, employee or agent of Debtor or its successors
and assigns.
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DEBTOR: STATE STREET BANK AND TRUST COMPANY,
- ------
not in its individual capacity but solely
as Trustee for the Chaco Liquids Plant Trust
By:
----------------------------
Arthur J. MacDonald
Assistant Vice President
SECURED PARTY: CHEMICAL BANK, as Agent
- -------------
By:
----------------------------
W. King Grant
Vice President
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Exhibit A
Location of Collateral
Two International Place, 4th Floor
Boston, Massachusetts 02210
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Schedule I
Contracts and Agreements
1. Lease Agreement dated of even date herewith between Debtor, as lessor,
and El Paso New Chaco Company, as lessee, relating to real property
and related facilities on the Site.
2. Agency Agreement dated of even date herewith between Debtor, as
principal, and El Paso New Chaco Company, as agent.
3. Support Agreement dated of even date herewith between Debtor and El
Paso New Chaco Company.
4. Construction Contract dated of even date herewith between Debtor and
El Paso New Chaco Company.
5. Sponsor Agreement dated of even date herewith between Debtor and El
Paso Natural Gas Company.
6. Ground lease between El Paso Natural Gas Company, as lessor, and
Debtor, as lessee relating to the Site.
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SCHEDULE 1.02
Defined Terms
The following terms shall have the following meanings (all
terms defined in this Agreement in the singular to have the same meanings when
used in the plural and vice versa).
"Additional Rent" shall have the meaning assigned such term in
Section 3(b) of the Lease.
"Advance Notice" shall mean in connection with any Borrowing
or any Certificate Advance or any continuation or Conversion of any Loan,
notice given by telecopy or telephone (and if by telephone, confirmed promptly
by telecopier) to be received by the Agent not later than (i) 10:00 a.m. New
York time on the Business Day for the Borrowing of or Conversion into Base Rate
Loans or the making of a Base Rate Advance, and (ii) 12:00 noon New York time
on the third Business Day before the requested date of the Borrowing of
Eurodollar Loans, or Conversion into Eurodollar Loans or continuation thereof
or the making of a Eurodollar Advance.
"Affiliate" with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. For purposes of
the foregoing definition, "control" means the direct or indirect ownership of
more than 50% of the outstanding capital stock or other equity interests having
ordinary voting power.
"Agent" shall mean Chemical, or its successor, as agent, under
the Participation Agreement.
"Agency Agreement" shall mean the Agency Agreement and Limited
Power of Attorney between the Trustee and the Company, as Project Agent, of
even date with the Participation Agreement, substantially in the form of
Exhibit C to the Participation Agreement, as the same may be amended or
supplemented from time to time.
"Aggregate Certificate Commitments" shall mean $2,400,000, as
the same may be reduced at the request of the Company in accordance with
Section 2.03 of the Participation Agreement.
103
"Aggregate Loan Commitments" shall mean $77,600,000, as the
same may be reduced at the request of the Company in accordance with Section
2.03 of the Participation Agreement.
"Aggregate Use Charge" shall mean for any Billing Period, the
sum of Daily Use Charges for that Billing Period.
"Alternate Program" shall mean any other program providing for
the sale or other disposition of trade or other receivables entered into by the
Guarantor which is in addition to or in replacement of the program evidenced by
the Receivables Purchase and Sale Agreement, provided that such program is on
terms (a) substantially similar to the Receivables Purchase and Sale Agreement
or (b) customary for similar transactions as reasonably determined by the
Agent.
"Applicable Funding Office" shall mean, for each Participant,
and for each Type of Loan or Certificate Advance, the funding office of such
Participant (or an affiliate of such Participant) designated for such Type of
Loan or Certificate Advance on the signature pages hereof (or in an Assignment
Agreement executed by such Participant pursuant to Section 12.06 of the
Participation Agreement) or such other offices of such Participant (or of an
affiliate of such Participant) as such Participant may from time to time
specify to the Agent, the Trustee and the Company as the office by which its
Loans or Certificate Advances, as applicable, of such Type are to be made and
maintained.
"Applicable Margin" shall mean:
(a) with respect to Loans for each day such Loan is
outstanding:
(i) with respect to Eurodollar Loans outstanding prior to
the fifth (5th) anniversary of the Closing Date, the following rate
per annum as is applicable based upon the S&P Bond Rating and the
Moody's Bond Rating:
Bond Rating Level Applicable
(S&P/Moody's) Margin
------------------- ----- ----------
BBB+/Baa1 or better I 0.370%
BBB/Baa2 II 0.435%
BBB-/Baa3 III 0.500%
BB+/Ba1 or below IV 0.625%
and
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(ii) with respect to Eurodollar Loans outstanding after
the fifth (5th) anniversary of the Closing Date, the following rate
per annum as is applicable based upon the S&P Bond Rating and the
Moody's Bond Rating:
Bond Rating Applicable
(S&P/Moody's) Level Margin
------------------- ----- ----------
BBB+/Baa1 or better I 0.450%
BBB/Baa2 II 0.515%
BBB-/Baa3 III 0.580%
BB+/Ba1 or below IV 0.705%
provided that if the ratings of such rating agencies do not fall within the
same Level, the Applicable Margin for Eurodollar Loans under each of clause (i)
and (ii) above applicable to such day will be the lower Applicable Margin and
provided, further, that in the event a rating is not available from either
rating agency, such rating agency will be deemed to have assigned its lowest
rating; and
(b) (i) with respect to Certificate Advances that are
Eurodollar Advances, the following rate per annum as is applicable based upon
the S&P Bond Rating and the Moody's Bond Rating:
Bond Rating Applicable
(S&P/Moody's) Level Margin
------------------- ----- ----------
BBB+/Baa1 or better I 2.000%
BBB/Baa2 II 2.065%
BBB-/Baa3 III 2.130%
BB+/Ba1 or below IV 2.255%
provided that if the ratings of such rating agencies do not fall within the
same Level, the Applicable Margin for Eurodollar Advances applicable to such
day will be the lower Applicable Margin and provided, further, that in the
event a rating is not available from either rating agency, such rating agency
will be deemed to have assigned its lowest rating; and
(ii) with respect to Certificate Advances that are Base Rate
Advances, 1.0% per annum.
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"Applicable Permit" shall mean any Permit that is or may be
necessary to own, construct, start-up, test, maintain, operate, lease or use
all or any part of the Facility or any portion thereof in accordance with the
Operative Documents, and the failure to obtain or maintain which would have a
Material Adverse Effect.
"Approved Appraisal" shall mean any appraisal, ordered by the
Agent, but at the Company's cost, from an appraiser or appraisers reasonably
acceptable to the Agent, which: (i) complies with Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as amended, 12
U.S.C. 3331, et seq., and The Regulations and Statements of General Policy on
Appraisals promulgated by the Federal Deposit Insurance Corporation, 12 C.F.R.
Part 32, as amended, (ii) is performed by a state certified real estate
appraiser certified under the laws of any State, and (iii) reflects the Market
Value of each of Phase One and Phase Two on an "as completed" basis.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit I hereto entered into by a Note Holder or
Certificate Holder, as applicable, and an Eligible Assignee.
"Authorized Officers" shall mean relative to the Company or
the Guarantor, the officers whose signatures and incumbency shall have been
certified to the Agent and the Trustee in a certificate certified by its
Secretary in form and substance satisfactory to the Agent.
"Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, the numerator of which
is one and the denominator of which is one minus the C/D Reserve Percentage and
(b) the C/D Assessment Rate.
"Base Rate" shall mean, for any day, a rate per annum
(adjusted to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%,
rounded upwards to the next highest 1/16 of 1%) equal to the greatest of (a)
the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1/2 of 1% and (c) the Effective Federal Funds Rate in effect on such
day plus 1/2 of 1%. Any change in the Base Rate due to a change in the Prime
Rate, the Three-Month Secondary CD Rate or the Effective Federal Funds Rate
shall be effective as of the opening of business on the effective day of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the Effective
Federal Funds Rate, respectively.
"Base Rate Advances" shall mean advances made by Certificate
Holders pursuant to Section 2.01(b) of the Participation Agreement, the yield
for which is determined based upon the Base Rate.
"Base Rate Loans" shall mean loans made by the Note Holders
pursuant to Section 2.01(a) of the Participation Agreement, which bear interest
at rates based upon the Base Rate.
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"Billing Period" shall mean with respect to any of the
following periods ending on or after the Lease Commencement Date:
(a) with respect to Rent calculated by reference to
Eurodollar Loans or Eurodollar Advances made to the Trustee under the
Participation Agreement, the period which corresponds to the Eurodollar Period
for such Eurodollar Loan or Eurodollar Advance, unless such Eurodollar Period
is longer than three months, in which case, the Billing Period shall be the
three-month intervals following the first day of such Eurodollar Period, or if
such day is not a Business Day, on the next succeeding Business Day; and
(b) with respect to Rent calculated by reference to Base
Rate Loans and Base Rate Advances made to the Trustee under the Participation
Agreement or by reference to the yield, fees and all other amounts owing by the
Trustee, other than amounts referred to in the calculation of Additional Rent,
each three month period ending on a Quarterly Date.
"Book Value" shall mean as of any date of determination with
respect to the Facility, the aggregate Funded Amount paid through and including
such date of determination.
"Borrowing" shall mean a borrowing consisting of Loans of the
same Type made on the same day by the Note Holders, it being understood that
there may be more than one Borrowing on a particular day.
"Burlington" shall mean Burlington Resources Inc., a Delaware
corporation.
"Business Day" shall mean (a) for all purposes other than as
covered by clause (b) below, any day except Saturday, Sunday and any day which
shall be in New York, New York a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close, and (b) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans and payments
of the face amount of and yield on Eurodollar Advances, any day which is a
Business Day described in clause (a) above and which is also a day for trading
by and between banks in the London interbank eurodollar market.
"Cancellation Date" shall have the meaning assigned such term
in Section 15(b) of the Lease.
"Cancellation Event" shall have the meaning assigned such term
in Section 15(b) of the Lease.
"Capitalization" shall mean the sum (without duplication) of
(a) consolidated Debt of the Guarantor and its Consolidated Subsidiaries, plus
(b) the aggregate amount of Financial Guaranties entered into by the Guarantor
and its Consolidated Subsidiaries, plus (c) the Guarantor's common and
preferred stockholders' equity.
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"Casualty Occurrence" shall mean any of the following events
in respect of the Facility, (i) any material loss of the Facility or material
loss of use thereof which does not constitute a Loss Event, or (ii) the
condemnation, confiscation or seizure of, or requisition of title to or use of,
any material part of the Facility which action does not constitute a Loss
Event.
"C/D Assessment Rate" shall mean for any day as applied to any
Base Rate Loan or Base Rate Advance, the annual assessment rate determined by
Chemical to be payable on such day to the Federal Deposit Insurance Corporation
(the "FDIC") for the FDIC's (or any successor's) insuring time deposits at
offices of Chemical in the United States.
"C/D Reserve Percentage" shall mean for any day as applied to
any Base Rate Loan or Base Rate Advance, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) (the "Board"), for
determining the then current reserve requirement for the Agent in respect of
new non-personal time deposits in Dollars having a maturity of 30 days or more.
"Certificate Advance" shall mean a Base Rate Advance or a
Eurodollar Advance or any or all of them.
"Certificate Commitment" shall mean, as to each Certificate
Holder, an amount equal to such Certificate Holder's Certificate Percentage
Share of the Aggregate Certificate Commitments then in effect.
"Certificate Holder" shall mean any Person who from time to
time is the holder of a Certificate.
"Certificates" shall mean the Certificates provided for by
Section 2.05(b) of the Participation Agreement, substantially in the form of
Exhibit L to the Participation Agreement, as the same may be amended,
supplemented, renewed, extended for any period, increased or rearranged from
time to time.
"Certificate Percentage Share" shall mean the percentage of
the Certificate Advances and Certificate Commitment to be provided by a
Certificate Holder under this Agreement as indicated on Exhibit J hereto, as
modified from time to time to reflect any assignments permitted by Section
12.06(b).
"Chaco Liquids Plant Trust" shall mean the trust created
pursuant to the Declaration.
"Chemical" shall mean Chemical Bank, a New York banking
corporation.
"Closing Date" shall mean February 9, 1995.
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"Code" shall mean the Internal Revenue Code of 1986, as
amended and any successor statute.
"Collateral" shall have the meaning assigned such term in
Section 26 of the Lease.
"Co-Lessee" shall have the meaning assigned such term in
Section 21(b) of the Lease.
"Commitments" shall mean, as to each Participant, an amount
equal to such Participant's Loan Commitment or Certificate Commitment, as
applicable, then in effect.
"Company" shall mean El Paso New Chaco Company, a Delaware
corporation.
"Completion" shall mean the occurrence and satisfaction of all
of the events and conditions described on Schedule 1.02(b) to the Participation
Agreement on a single date to the reasonable satisfaction of the Majority
Participants.
"Completion Certificate" shall mean, with respect to either
Phase One or Phase Two, a certificate of the Company in substantially the form
of Exhibit M to the Participation Agreement, certifying that Completion of the
relevant Phase of the Facility has occurred.
"Completion Date" shall mean, with respect to Phase One, the
Phase One Completion Date; and with respect to Phase Two, the Phase Two
Completion Date.
"Consolidated Subsidiary" shall mean a Subsidiary, the
accounts of which are customarily consolidated with those of the Guarantor for
the purpose of reporting to stockholders of the Guarantor or, in the case of a
recently acquired Subsidiary, the accounts of which would, in accordance with
the Guarantor's regular practice, be so consolidated for that purpose.
"Construction Contract" shall mean the Construction Contract
between the Company and the Trustee, of even date with the Participation
Agreement, pursuant to which the Company agrees to design and construct Phase
One and, if the Phase Two Election is made, Phase Two of the Facility,
substantially in the form of Exhibit F to the Participation Agreement, as the
same may be amended or supplemented from time to time.
"Contingent Guaranty" shall have the meaning assigned such
term in the definition of "Financial Guaranty" contained in this Schedule 1.02.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Loans or Certificate Advances of one Type into Loans or
Certificate Advances of another Type pursuant to Sections 2.09, 2.10, 5.02 and
5.05 of the Participation Agreement.
"Daily Use Charge" shall mean for any day (whether or not a
Business Day) during the term of the Lease the sum of (a) all liabilities of
the Trustee for interest and yield accruing for
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such day pursuant to the Participation Agreement, and (b) all liabilities of
the Trustee for commitment and other fees accruing for such day pursuant to the
Participation Agreement.
"Debt" shall mean, as to any Person, all Indebtedness of such
Person other than (a) any Project Financing of such Person and (b) in the case
of the Guarantor, any liabilities of the Guarantor under the Receivables
Purchase and Sale Agreement or any Alternate Program, or any document executed
by the Guarantor in connection therewith; provided, however, that for purposes
of Article VIII and Article IX of the Participation Agreement, "Debt" shall not
include up to an aggregate amount of $100,000,000 of (i) the amount of optional
payments in lieu of asset repurchase or other payments to similar effect,
including extension or renewal payments, on off balance sheet leases and (ii)
the amount of the purchase price for optional acquisition of such asset (in
either case, calculated at the lower amount payable in respect of such asset
under clause (i) or (ii) above.
"Declaration" shall mean the Declaration of Trust, of even
date with the Participation Agreement, for the Chaco Liquids Plant Trust with
the Trustee as trustee, in substantially the form of Exhibit E to the
Participation Agreement, as the same may be amended or supplemented from time
to time.
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"Effective Federal Funds Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by the Agent from
three (3) Federal funds brokers of recognized standing selected by it.
"Eligible Assignee" shall mean, with respect to any particular
assignment under Section 12.06 of the Participation Agreement, any bank or
other financial institution approved in writing by the Guarantor expressly with
respect to such assignment and, except as to such an assignment by Chemical so
long as Chemical is the Agent, the Agent as an Eligible Assignee for purposes
of the Participation Agreement, provided that neither the Agent's nor the
Guarantor's approval shall be unreasonably withheld.
"Environmental Laws" shall mean as to any Person, any and all
laws, statutes, ordinances, rules, regulations or orders of any Governmental
Authority pertaining to health or the environment in effect from time to time
in any and all jurisdictions in which such Person is conducting or at any time
has conducted business, or where any Property of such Person is located now or
in the future, or where any hazardous substances generated or disposed of by
such Person are
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located now or in the future, including, without limitation, the Clean Air Act,
as amended, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 ("RCRA"), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, and other environmental conservation or protection laws. The terms
"hazardous substance" and "release" (or "threatened release") have the meanings
specified in CERCLA, the terms "solid waste" and "disposal" (or "disposed")
have the meanings specified in RCRA; provided, however, that (i) in the event
either CERCLA or RCRA is amended so as to broaden the meaning of any term
defined thereby, such broader meaning shall apply subsequent to the effective
date of such amendment, (ii) to the extent the laws of the state or other
jurisdiction in which any Property of any applicable Person is located
establish a meaning for "hazardous substance," "release," "solid waste" or
"disposal" which is broader than that specified in either CERCLA or RCRA, such
broader meaning shall apply, and (iii) the terms "hazardous substance" and
"solid waste" shall include, solely for purposes of this Schedule, the
Participation Agreement and the Lease, all oil and gas exploration and
production wastes that may present an endangerment to public health or welfare
or the environment, even if such wastes are specifically exempt from
classification as hazardous substances or solid wastes pursuant to CERCLA or
RCRA or the state analogs to those statutes.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued from time to time thereunder.
"ERISA Affiliate" shall mean any Person who is a member of the
Guarantor's controlled group within the meaning of Section 4001(a)(14)(A) of
ERISA.
"ERISA Termination Event" shall mean (a) a "reportable event,"
as such term is described in Section 4043 of ERISA (other than a "reportable
event" not subject to the provision for 30-day notice to the PBGC under
subsections .11, .12, .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section
2615), or an event described in Section 4062(e) of ERISA, or (b) the withdrawal
of the Guarantor or any ERISA Affiliate from a Multiple Employer Plan during a
plan year in which it was a "substantial employer," as such term is defined in
Section 4001(a)(2) of ERISA or the incurrence of liability by the Guarantor or
any ERISA Affiliate under Section 4064 of ERISA upon the termination of a
Multiple Employer Plan, or (c) the filing of a notice of intent to terminate a
Plan or the treatment of a Plan amendment as a termination under Section 4041
of ERISA, or (d) the institution of proceedings to terminate a Plan by the PBGC
under Section 4042 of ERISA, or (e) the conditions set forth in Section
302(f)(1)(A) and (B) of ERISA to the creation of a lien upon property or rights
to property of the Guarantor or any ERISA Affiliate for failure to make a
required payment to a Plan are satisfied, or (f) the adoption of an amendment
to a Plan requiring the provision of security to such Plan, pursuant to Section
307 of ERISA, or (q) the occurrence of any other event or the existence of any
other condition which would reasonably be expected to result in the termination
of, or the appointment of a trustee to administer, any Plan under Section 4042
of ERISA.
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"Eurocurrency Liabilities" shall have the meaning assigned to
that term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Advances" shall mean advances made by Certificate
Holders pursuant to Section 2.01(b) of the Participation Agreement, the yield
for which is determined on the basis of rates referred to in the definition of
"Eurodollar Rate" in this Schedule 1.02.
"Eurodollar Loans" shall mean loans made by the Note Holders
pursuant to Section 2.01(a) of the Participation Agreement, the interest rates
for which are determined on the basis of rates referred to in the definition of
"Eurodollar Rate" in this Schedule 1.02.
"Eurodollar Period" shall mean:
(a) with respect to each Eurodollar Loan, the period
beginning on the date of such Loan or the date of the Conversion of
any Base Rate Loan into a Eurodollar Loan and ending on the
numerically corresponding date (or, if applicable, last calendar date)
one, two, three or six months, or, subject to availability to each
Note Holder, nine or twelve months thereafter and, thereafter, each
subsequent period commencing on the last day of the immediately
preceding Eurodollar Period and ending on the numerically
corresponding date (or, if applicable, last calendar date) one, two,
three or six months, or, subject to availability to each Note Holder,
nine or twelve months thereafter, in each case as the Company may,
upon Advance Notice, select; provided, however, that:
(i) the duration of any Eurodollar Period which commences
before the Maturity Date and would otherwise end after the Maturity
Date shall end on the Maturity Date;
(ii) if the last day of such Eurodollar Period would
otherwise occur on a day which is not a Business Day, such last day
shall be extended to the next succeeding Business Day, except if such
extension would cause such last day to occur in a new calendar month,
then such last day shall occur on the next preceding Business Day; and
(iii) Eurodollar Periods commencing on the same date for
Loans comprising the same Borrowing shall be of the same duration; and
(b) with respect to each Eurodollar Advance, the period
beginning on the date of such Eurodollar Advance or the date of the
Conversion of any Base Rate Advance into a Eurodollar Advance and
ending on the numerically corresponding date (or, if applicable, last
calendar day) in the next calendar month and, thereafter, each
subsequent period commencing on the last day of the immediately
preceding Eurodollar Period and ending on the numerically
corresponding date (or, if applicable, last calendar day) in the next
calendar month thereafter; provided, however, that:
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(i) the duration of any Eurodollar Period which commences
before the Maturity Date and would otherwise end after the Maturity
Date shall end on the Maturity Date; and
(ii) if the last day of such Eurodollar Period would
otherwise occur on a day which is not a Business Day, such last day
shall be extended to the next succeeding Business Day, except if such
extension would cause such last day to occur in a new calendar month,
then such last day shall occur on the next preceding Business Day.
"Eurodollar Rate" shall mean, for any Eurodollar Period for
each Eurodollar Rate Loan or Eurodollar Advance comprising part of the same
Borrowing or Certificate Advance, an interest rate per annum equal to the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum,
if such average is not such a multiple) of the rate per annum at which deposits
in Dollars are offered by the principal office of each of the Reference Lenders
in London, England, to prime banks in the London interbank market at 11:00 a.m.
(London, England time) two Business Days before the first day of such
Eurodollar Period (if applicable or appropriate, in an amount comparable to the
amount of such Borrowing) and for a period equal to such Eurodollar Period.
The Eurodollar Rate for the Eurodollar Period for each Eurodollar Loan or
Eurodollar Advance comprising part of the same Borrowing or Certificate
Advance, as applicable, shall be determined by the Agent on the basis of
applicable rates furnished to and received by the Agent from the Reference
Lenders two Business Days before the first day of such Eurodollar Period,
subject, however, to the provisions of Section 5.02 of the Participation
Agreement.
"Eurodollar Reserve Percentage" shall mean for any Participant
for any Eurodollar Period means the reserve percentage applicable during such
Eurodollar Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or if more than one such percentage
shall be so applicable, the daily average of such percentages for those days in
such Eurodollar Period during which any such percentage shall be so applicable)
for determining the maximum reserve requirement (including, but not limited to,
any emergency, supplemental or other marginal reserve requirement) for such
Participant with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Eurodollar Period.
"Event of Default" shall have the meaning assigned to that
term in Section 10.01 of the Participation Agreement or as assigned to that
term in Section 17 of the Lease.
"Excluded Acquisition Debt" shall mean (a) Debt, Financial
Guaranties or reimbursement obligations of any corporation acquired by the
Guarantor or any of its Subsidiaries and which Debt, Financial Guaranties or
reimbursement obligations exist immediately prior to such acquisition (provided
that (i) such Debt, Financial Guaranties or reimbursement obligations are not
incurred solely in anticipation of such acquisition and (ii) immediately prior
to such acquisition such corporation is not a Subsidiary of the Guarantor) or
(b) Debt, Financial Guaranties or reimbursement obligations in respect of any
asset acquired by the Guarantor or its Subsidiaries and which Debt, Financial
Guaranties or reimbursement obligations exists immediately prior to such
acquisition (provided that (i) such Debt, Financial Guaranties or reimbursement
obligations are not incurred solely
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in anticipation of such acquisition and (ii) immediately prior to such
acquisition such asset is not an asset of the Guarantor or any of its
Subsidiaries).
"Excluded Taxes" shall have the meaning assigned such term in
Section 4.06(a) of the Participation Agreement.
"Facility" shall mean the whole of Phase One and, if the Phase
Two Election is made, Phase Two.
"Facility Costs" shall mean all of the capitalized costs and
expenses of any kind or character incurred to design, construct, and implement
the Facility, including, without limitation, all professional fees and
expenses, and other "soft costs" of a nature ordinarily and reasonably incurred
in connection with the construction and completion of liquids extraction plants
substantially similar to the Facility (including, without limitation, such soft
costs previously incurred by the Company or the Guarantor as mutually agreed by
the Company, the Agent and the Participants), and all interest, yield and
commitment fees accrued prior to the Phase II Completion Date on Loans and
Certificate Advances.
"Facility Plan" shall mean the plan for the Facility
designated as Schedule 1.02(a) to the Participation Agreement, in the form
furnished to the Trustee and the Agent, as the same may be amended or
supplemented from time to time.
"FERC" shall mean the Federal Energy Regulatory Commission, or
any agency or authority of the United States from time to time succeeding to
its function.
"Financial Guaranty" shall mean, any act by which any Person
assumes, guarantees, endorses or otherwise incurs direct or contingent
liability in connection with, or agrees to purchase or otherwise acquire or
otherwise assures a creditor against loss in respect of, any Debt or Project
Financing of any Person other than the Guarantor or any of its Consolidated
Subsidiaries (excluding (a) any liability by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, (b) any liability in connection with obligations of the
Guarantor or any of its Consolidated Subsidiaries, including, without
limitation, obligations under any conditional sales agreement, equipment trust
financing or equipment lease, and (c) any such act in connection with a Project
Financing that either (i) guarantees performance of the completion of the
project which is financed by such Project Financing, until such time, if any,
that such guaranty becomes a guaranty of payment of such Project Financing
(other than a guaranty of payment of the type referred to in subclause (ii)
below) or (ii) is contingent upon, or the obligation to pay or perform under
which is contingent upon, the occurrence of any event other than or in addition
to the passage of time or any Project Financing becoming due (any such act
referred to in this clause (c) being a "Contingent Guaranty"); provided,
however, that for purposes of this definition the liability of the Guarantor or
any of its Subsidiaries with respect to any obligation as to which a third
party or parties are jointly, or jointly and severally, liable as a guarantor
or otherwise as contemplated hereby and have not defaulted on its or their
portions thereof, shall be only its pro rata portion of such obligation.
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"Financial Statements" shall mean the financial statement or
statements of the Guarantor described or referred to in Section 7.01(e) of the
Participation Agreement.
"Funded Amount" shall mean the aggregate amount of principal,
interest, fees and expenses owing or to be owing by the Trustee to the Note
Holders, plus the aggregate amount of principal, yield, fees and expenses owing
or to be owing by the Trustee to the Certificate Holders, and all other amounts
owed by the Trustee to the Agent or the Participants pursuant to the
Participation Agreement or any other Operative Document.
"Governmental Authority" shall include the country, the state,
county, city and political subdivisions in which any Person or such Person's
property is located or which exercises valid jurisdiction over any such Person
or such Person's property, and any court, agency, department, commission,
board, bureau or instrumentality of any of them including monetary authorities
which exercises valid jurisdiction over any such Person or such Person's
property. Unless otherwise specified, all references to Governmental Authority
herein shall mean a Governmental Authority having jurisdiction over, where
applicable, the Company, the Guarantor, the Site or the Facility or any
Participant or any Applicable Funding Office.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or other
direction or requirement (whether or not having the force of law), including,
without limitation, Environmental Laws, energy regulations and occupational,
safety and health standards or controls, of any Governmental Authority.
"Ground Lease" shall mean the Ground Lease between the
Guarantor (or any successor, transferee or assignee thereof), as lessor, and
the Trustee, as lessee, of even date with the Participation Agreement, pursuant
to which the Trustee has leased the Site.
"Guarantees" shall mean (i) the Sponsor Agreement, of even
date with the Participation Agreement, executed by the Guarantor in favor of
the Trustee, substantially in the form of Exhibit H to the Participation
Agreement, pursuant to which the Guarantor has guaranteed the Company's
obligations under the Lease, the Agency Agreement, the Support Agreement and
the Construction Contract; and (ii) the Parent Guarantee, of even date with the
Participation Agreement, executed by the Guarantor in favor of the Agent and
the Note Holders, substantially in the form of Exhibit G to the Participation
Agreement, pursuant to which the Guarantor has guaranteed the completion of the
Facility and the payment in full of the Loans and the Certificate Advances,
subject to the limitations set forth therein.
"Guarantor" shall mean El Paso Natural Gas Company, a Delaware
corporation.
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"Highest Lawful Rate" shall mean, with respect to each
Participant, the maximum nonusurious interest rate, if any, that at any time or
from time to time may be contracted for, taken, reserved, charged or received
on the Notes, the Certificates or on other amounts owing hereunder under laws
applicable to such Participant which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws now
allow.
"HSR Act" shall mean The Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and all rules and regulations promulgated
thereunder.
"Impositions" shall mean, without duplication, as to any
Person, (i) all Other Taxes, assessments, levies, fees, water and sewer rents
and charges, inspection fees and other authorization fees and all other
governmental charges, general and special, ordinary and extraordinary, foreseen
and unforeseen, of every character (including all penalties and interest
thereon) which, at any time prior or subsequent to the Closing Date are imposed
or levied upon or assessed against or may be or constitute a Lien upon such
Person or such Person's Property, or which arise in respect of the ownership,
operation, occupancy, possession, use, non-use, condition, leasing or
subleasing of such Person's Property; (ii) all charges, levies, fees, rents or
assessments for or in respect of utilities, communications and other services
rendered or used on or about such Person's Property; and (iii) payments
required in lieu of any of the foregoing; but excluding any penalties or fines
imposed on the Lessor, the Agent or any Participant for violation of any
banking laws or securities law.
"Indemnified Risks" shall have the meaning assigned in Section
12.03(b) of the Participation Agreement.
"Indebtedness" of any Person shall mean, without duplication
(a) indebtedness of such Person for borrowed money, (b) obligations of such
Person (other than any portion of any trade payable obligation of such Person
which shall not have remained unpaid for 91 days or more from the original due
date of such portion) to pay the deferred purchase price of Property or
services (it being understood and agreed that the obligation of a Person, with
respect to Property leased by it, to purchase such Property upon the
termination of the lease agreement with respect thereto (or to repay as rent
loans made to the lessor or lessee of such Property with respect to any such
lease agreement) shall constitute an obligation to pay the deferred purchase
price of Property in the amount of the purchase price or rent so payable from
time to time), and (c) obligations of such Person as lessee under leases which
shall have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, except that where such indebtedness or
obligation of such Person is made jointly, or jointly and severally, with any
third party or parties other than any Consolidated Subsidiary of such Person,
the amount thereof for the purposes of this definition only shall be the pro
rata portion thereof payable by such Person, so long as such third party or
parties have not defaulted on its or their joint and several portions thereof.
"Initial Advances" shall mean the Certificate Advances made
pursuant to Section 2.01 of the Participation Agreement on the Initial Funding
Date.
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"Initial Funding Date" shall mean the Closing Date, or such
later date on which the conditions precedent set forth in Sections 6.01 and
6.02 of the Participation Agreement have been satisfied.
"Initial Loans" shall mean the Loans made pursuant to Section
2.01 of the Participation Agreement on the Initial Funding Date.
"Insolvency Event" shall mean, with respect to the Lessee, any
event of the types described in Section 10.01(e) of the Participation
Agreement.
"Insurance Requirements" shall mean all terms of any insurance
policy (including, without limitation, casualty and general liability) covering
or applicable to the Facility or any portion thereof and all requirements of
the issuer of any such policy.
"Judgment" shall mean any judgment, decree or order of any
court or other Governmental Authority.
"Lease" shall mean the Lease, of even date with the
Participation Agreement, in substantially the form of Exhibit B to the
Participation Agreement, as amended, supplemented or otherwise modified,
pursuant to which the Company, as Lessee, has agreed to sublease the Site and
lease the Facility after the Lease Commencement Date for the purpose of
operating the Facility in accordance with the terms and conditions set forth in
the Lease.
"Lease Commencement Date" shall mean the Phase One Completion
Date.
"Lease Term" shall mean the period of time commencing on the
Lease Commencement Date and ending on the earlier to occur of the (i) the
Option Date, (ii) Cancellation Date and (iii) the Lease Termination Date.
"Lease Termination Date" shall mean initially, October 31,
2002, and thereafter, in the event of any one (1) year extensions of the term
of the Lease, pursuant and subject to the conditions set forth in Section 2(b)
of the Lease, the day which numerically corresponds to the anniversary date one
(1) year after the then applicable Lease Termination Date.
"Lessee" shall mean the Company and any successor or permitted
assign under the terms of the Participation Agreement or the Lease.
"Lessor" shall mean the Trustee and any successor permitted by
the terms of the Participation Agreement, the Lease and the Declaration.
"Lien" shall mean any mortgage, attachment, lien (including,
without limitation, any lien arising in connection with any Imposition),
charge, security interest, conditional sale or other title retention agreement
or other encumbrance on, in or with respect to any Property.
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"Loan" shall mean a Base Rate Loan or a Eurodollar Loan or any
or all of them.
"Loan Commitment" shall mean, as to each Note Holder, an
amount equal to such Note Holder's Loan Percentage Share of the Aggregate Loan
Commitments then in effect.
"Loan Percentage Share" shall mean the percentage of the Loans
and Loan Commitment to be provided by a Note Holder under this Agreement as
indicated on Exhibit J hereto, as modified from time to time to reflect any
assignments permitted by Section 12.06(b) of the Participation Agreement.
"Loss Event" shall mean any of the following events in respect
of the Facility: (i) the total loss of the Facility or the total loss of use
thereof due to destruction, damage beyond repair or rendition of the Facility
permanently unfit for normal use for any reason whatsoever; (ii) any damage to
the Facility which results in an insurance settlement with respect to the
Facility on the basis of a total loss; or (iii) the permanent condemnation,
confiscation or seizure of, or requisition of title to or use of, all or
substantially all of the Facility including, but not limited to, a permanent
taking by eminent domain of such scope that the untaken portion of the Facility
is insufficient to permit the restoration of the Facility for continued use in
the Company's business or that causes the remaining portion of the Facility to
be incapable of being restored to a condition that would permit the remaining
portion of the Facility (without the portion of the Facility taken by eminent
domain) to continue to have the capacity and functional ability to perform on a
continuing basis (subject to normal interruptions in the ordinary course of
business for maintenance, inspection, service, repair and testing) and in
commercial operation, the function for which the Facility (as a whole) was
designed as specified in the Facility Plan; or (iv) the occurrence of any event
or the discovery of any condition in, on, beneath or involving the Facility or
any portion thereof (including, but not limited to the presence of hazardous
substances or the violation of any applicable Environmental Law) that would
have a material adverse effect on the use, occupancy, possession, value or
condition of the Facility or any portion thereof, which event or condition
requires remediation (A) the cost of which is anticipated, in the opinion of
the Agent, in consultation with an independent environmental engineering firm,
to exceed 20% of the Option Price, and (B) that could not reasonably be
expected to be completed substantially in its entirety prior to the date that
is 30 days prior to the Lease Termination Date or is not actually completed
substantially in its entirety on or before the date that is 30 days prior to
the Lease Termination Date.
"Majority Certificate Holders" shall mean, at any time while
no Certificate Advances are outstanding, Certificate Holders having at least
fifty-one percent (51%) of the amount of the Aggregate Certificate Commitments
and, at any time while Certificate Advances are outstanding, Certificate
Holders holding at least fifty-one percent (51%) of the outstanding aggregate
principal amount of the Certificate Advances (without regard to any sale by a
Certificate Holder of a participation in any Certificate Advance under Section
12.06(f) of the Participation Agreement).
"Majority Note Holders" shall mean, at any time while no Loans
are outstanding, Note Holders having at least fifty-one percent (51%) of the
amount of the Aggregate Loan Commitments
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and, at any time while Loans are outstanding, Note Holders holding at least
fifty-one percent (51%) of the outstanding aggregate principal amount of the
Loans (without regard to any sale by a Note Holder of a participation in any
Loan under Section 12.06(f) of the Participation Agreement).
"Majority Participants" shall mean, at any time while no Loans
or Certificate Advances are outstanding, Participants having at least fifty-one
percent (51%) of the aggregate amount of the Aggregate Loan Commitments and the
Aggregate Certificate Commitments and, at any time while Loans or Certificate
Advances are outstanding, Participants holding at least fifty-one percent (51%)
of the aggregate outstanding principal amount of Loans and Certificate Advances
(the Loans and Certificate Advances being considered as a single class and not
separately, and without regard to any sale by a Participant of a participation
in any Loan or Certificate Advance under Section 12.06(f) of the Participation
Agreement).
"Margin Stock" shall mean "margin stock" as defined in
Regulations U or G of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Market Value" shall have the meaning assigned such term in
Section 323.2(f) of the Regulations and Statements of General Policy on
Appraisals promulgated by the Federal Deposit Insurance Corporation, 12 C.F.R.
Section 323.2(f), as amended from time to time.
"Material Adverse Effect" shall mean a material adverse effect
on either (i) the financial condition or operations of the Guarantor and its
consolidated Subsidiaries on a consolidated basis or (ii) the condition or
operations of the Facility.
"Maturity Date" shall mean, unless extended pursuant to the
terms of Section 2.11 of the Participation Agreement, October 31, 2002.
"Mojave" shall mean Mojave Pipeline Company.
"Mojave Northward Expansion Project" shall mean the expansion
(by construction, acquisition or otherwise) of the natural gas transmission
system owned or to be owned by the Guarantor, Mojave or any Subsidiary which
was not a Principal Subsidiary on August 10, 1994, to extend such system from
Topock, Arizona to the vicinity of San Francisco, California and Sacramento,
California and the related looping and increased compression facilities.
"Moody's" shall mean Moody's Investors Service, Inc.
"Moody's Bond Rating" shall mean for any day, the rating of
the Guarantor's senior long-term unsecured debt by Moody's in effect at 11:00
A.M., New York City time, on such day.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Guarantor or any ERISA
Affiliate is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or
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accrued an obligation to make contributions and in respect of which the
Guarantor or an ERISA Affiliate has any liability (contingent or otherwise),
such plan being maintained pursuant to one or more collective bargaining
agreements.
"Multiple Employer Plan" shall mean a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which (a) is maintained for employees
of the Guarantor or an ERISA Affiliate and at least one Person other than the
Guarantor and its ERISA Affiliates or (b) was so maintained and in respect of
which the Guarantor or an ERISA Affiliate could have liability under Section
4064 or 4069 of ERISA in the event such plan has been or were to be terminated.
"Net Worth" shall mean with respect to the Guarantor, as of
any date of determination, the sum of the preferred stock and stockholders'
equity of the Guarantor as shown on the most recent consolidated balance sheet
of the Guarantor delivered pursuant to Section 8.02 of the Participation
Agreement.
"Note Holder" shall mean any Person who from time to time
becomes a holder of a Note.
"Notes" shall mean the Notes provided for by Section 2.05(a)
of the Participation Agreement, substantially in the form of Exhibit K to the
Participation Agreement, together with any and all renewals, extensions for any
period, increases, rearrangements, substitutions or modifications thereof.
"Operative Documents" shall mean the Participation Agreement,
the Lease, the Support Agreement, the Agency Agreement, the Ground Lease, the
Construction Contract, the Guarantees, the Declaration, the Notes, the
Certificates, the Security Instruments and any and all other agreements or
instruments now or hereafter executed and delivered by the Trustee, the Company
or the Guarantor in connection with the Notes, the Certificates or this
Agreement, as such agreements or instruments may be amended, supplemented,
renewed, extended or increased from time to time.
"Option Date" shall have the meaning assigned such term in
Section 15(c) of the Lease.
"Option Price" shall mean, at any time of determination, the
Funded Amount plus all unpaid Impositions payable in connection with the
purchase of the Facility pursuant to Section 14(d) of the Lease or any
provision of Section 15 of the Lease.
"Other Taxes" shall have the meaning assigned to such term in
Section 4.06(b) of the Participation Agreement.
"Participant" shall mean a Note Holder or a Certificate Holder
and "Participants" shall mean the Note Holders and the Certificate Holders
collectively.
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"Participation Agreement" shall mean the Participation and
Credit Agreement among the Guarantor, the Company, the Trustee, the Agent and
the Participants now or hereafter parties thereto dated as of the Closing Date,
as the same may be amended or supplemented from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Percentage Share" shall mean the percentage of the Loans,
Certificate Advances and Commitments to be provided by a Participant under the
Participation Agreement as indicated on Exhibit J hereto, as modified from time
to time to reflect any assignments permitted by Section 12.06(b) of the
Participation Agreement.
"Permit" shall mean any approval, consent, waiver, exemption,
variance, franchise, order, permit, authorization, right or license of or from
any Governmental Authority or other Person.
"Permitted Claims" shall have the meaning assigned to such
term in Section 12.14(b) of the Participation Agreement.
"Permitted Insurers" shall mean insurers with ratings of A- or
better and Class VIII or better according to Best's Insurance Reports, or other
insurers acceptable to the Agent.
"Permitted Liens" shall mean with respect to any Property, any
of the following:
(i) rights reserved to or vested in any Governmental
Authority by the terms of any right, power, franchise, grant, license,
permit or provision of law affecting such Property to (a) terminate,
or take any other action which has the effect of modifying, such
right, power, franchise, grant, license, permit or provision of law,
provided that such termination or other action, when taken, shall not
have resulted in a Loss Event and shall not have had a Material
Adverse Effect, or (b) purchase, condemn, appropriate or recapture, or
designate a purchaser of, such Property;
(ii) any Liens thereon for Impositions or Taxes and any
Liens of mechanics, materialmen and laborers for work or services
performed or materials furnished which (a) are not over due, or (b)
are being contested in good faith in the manner described in Section
13 of the Lease;
(iii) rights reserved to or vested in any Governmental
Authority to control or regulate the use of such Property or to use
such Property in any manner;
(iv) in the case of real property, encumbrances,
easements, mineral rights and other similar rights the exercise of
which shall not have had a Material Adverse Effect; and
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(v) any Liens created under the Operative Documents and
any financing statements filed in connection therewith.
"Person" shall mean an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a country or any political
subdivision thereof or any agency or instrumentality of such country or
subdivision.
"Phase" shall mean either Phase One or Phase Two.
"Phase One" shall mean (a) the Trustee's leasehold estate in
the Site granted pursuant to the Ground Lease, (b) the Chaco cryogenic liquids
extraction plant constructed on the Site in accordance with the Facility Plan
having capacity to process 400 Mmcf/d of natural gas, together with all
accessories, equipment, parts and devices necessary to achieve Phase One
Completion, and (c) all plans, specifications, warranties and related rights
and operating, maintenance and repair manuals related thereto and all
replacements of any of the above.
"Phase One Advance Limit" shall mean $1,680,000.00.
"Phase One Advance" shall mean any Certificate Advance made
for the construction and completion of Phase One.
"Phase One Completion" shall mean the satisfaction of the
requirements set forth on Schedule 1.02(b) to the Participation Agreement
relating to Phase One.
"Phase One Completion Certificate" shall mean a Completion
Certificate issued in connection with Phase One Completion.
"Phase One Completion Date" shall mean the earlier to occur of
(i) the date on which the Company, as Project Agent for the Trustee, delivers
the Phase One Completion Certificate and (ii) December 31, 1996.
"Phase One Loan Limit" shall mean $54,320,000.00.
"Phase One Loans" shall mean any Loan made for the
construction and completion of Phase One.
"Phase Two" shall mean (a) the additional improvements to the
Chaco cryogenic liquids extraction plant constructed on the Site pursuant to
the Facility Plan, together with all accessories, equipment, parts and devices
necessary to achieve Phase Two Completion, and (b) all plans, specifications,
warranties and related rights and operating, maintenance and repair manuals
related thereto and all replacements of and improvements to any of the above;
provided however that Phase Two shall not begin unless the Phase Two Election
is made.
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"Phase Two Advance" shall mean any Certificate Advance made
for the construction and completion of Phase Two.
"Phase Two Completion" shall mean the satisfaction of the
requirements set forth on Schedule 1.02(b) to the Participation Agreement
relating to Phase Two.
"Phase Two Completion Certificate" shall mean a Completion
Certificate issued in connection with Phase Two Completion.
"Phase Two Completion Date" shall mean the earlier to occur of
(i) the date on which the Company, as Project Agent for the Trustee, delivers
the Phase Two Completion Certificate and (ii) June 30, 1997.
"Phase Two Construction Period" shall mean the period
commencing on the Lease Commencement Date and ending on the Phase Two
Completion Date.
"Phase Two Election" shall mean the election by the Board of
Directors of the Guarantor, on or before June 1, 1995, to initiate Phase Two.
"Phase Two Loans" shall mean any Loan made for the
construction and completion of Phase Two.
"Plan" shall mean a Single Employer Plan or a Multiple
Employer Plan.
"Post-Default Rate" shall mean in respect of any principal of
any Loan or Certificate Advance that is not paid when due (whether at stated
maturity, by acceleration or otherwise), a rate per annum equal at all times
(i) from such due date to the last day of the then existing Eurodollar Period
in the case of, and for, each Eurodollar Loan or Eurodollar Advance, to 1% per
annum above the interest rate per annum required to be paid on such Eurodollar
Loan or Eurodollar Advance immediately prior to the date on which such amount
became due, and (ii) from and after the last day of the then existing
Eurodollar Period for such Eurodollar Loan or Eurodollar Advance, and in the
case of any Base Rate Loan or Base Rate Advance, to 1% per annum above the sum
of the Base Rate in effect from time to time plus the Applicable Margin, if
any.
"Prime Rate" shall mean the rate of interest from time to time
announced by Chemical at the Principal Office as its prime commercial lending
rate. Such rate is set by Chemical as a general reference rate of interest,
taking into account such factors as Chemical may deem appropriate, it being
understood that many of Chemical's commercial or other loans are priced in
relation to such rate, that it is not necessarily the lowest or best rate
actually charged to any customer and that Chemical may make various commercial
or other loans at rates of interest having no relationship to such rate.
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"Principal Office" shall mean the principal office of the
Agent and Chemical presently located at 270 Park Avenue, New York, New York
10017 or any other office designated by Chemical.
"Principal Subsidiary" shall mean, at any time, any Subsidiary
of the Guarantor (other than a Project Financing Subsidiary) having assets at
such time greater than or equal to 5% of the consolidated assets of the
Guarantor and its Consolidated Subsidiaries at such time.
"Process Agent" shall have the meaning assigned such term in
Section 12.14(b) of the Participation Agreement.
"Progress Report" shall mean a Progress Report reflecting a
comparison of the actual construction and development of the Facility through
the date of such Progress Report with the schedule for such construction and
development set forth in the Facility Plan.
"Project Agent" shall mean the Company, in its capacity as
Project Agent for the Trustee under the Agency Agreement.
"Project Financing" shall mean any Indebtedness incurred to
finance a project, other than any portion of such Indebtedness permitting or
providing for recourse against the Guarantor or any of its Subsidiaries other
than (a) recourse to the stock or assets of the Project Financing Subsidiary,
if any, incurring or guaranteeing such Indebtedness, and (b) such recourse as
exists under any Contingent Guaranty.
"Project Financing Subsidiary" shall mean any Subsidiary of
the Guarantor whose principal purpose is to incur Project Financing, or to
become a partner in a partnership so created, and substantially all the assets
of which Subsidiary or partnership are limited to those assets being financed
(or to be financed) in whole or in part by a Project Financing.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last day of each March, June,
September and December in each year, the first of which shall be March 31,
1995, provided that if any such day is not a Business Day, then such Quarterly
Date shall be the next Business Day.
"Receivables Purchase and Sale Agreement" shall mean the
Receivables Purchase and Sale Agreement dated as of January 14, 1992 among the
Guarantor, CIESCO L.P., a New York limited partnership, Corporate Asset Funding
Company, a Delaware corporation and Citicorp North America, Inc., as agent, as
such Agreement may be amended, supplemented, restated or otherwise modified
from time to time which amendment, supplement, restatement or modification will
not extend the purchase of receivables and other assets thereunder to
receivables and assets other than
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present and future gas purchase contract take-or-pay buyout and buydown
receivables, the collateral and other support therefor and the collections
therefrom.
"Reference Lenders" shall mean Chemical, The Bank of New York
and Royal Bank of Canada.
"Register" shall have the meaning assigned such term in
Section 12.06(d) of the Participation Agreement.
"Related Contract" shall mean any agreement for the purchase,
construction or installation of either Phase or any portion thereof or the
provision of enhancements and improvements to the Facility, made pursuant to
the Agency Agreement by the Company on behalf of the Trustee or by the Company
and assigned to the Trustee, with one or more Vendors.
"Rent" shall mean, with respect to any Billing Period, the
Aggregate Use Charge for such Billing Period.
"Rent Payment Date" shall mean the last day of any Billing
Period.
"Residual Guaranty Amount" shall mean, as of any date of
determination, amount of principal then outstanding on account of the Tranche A
Loan plus all accrued and unpaid interest thereon.
"Restoration Account" shall mean an interest bearing account
maintained with the Agent by the Trustee pursuant to Section 14(e) of the Lease
and styled the "Restoration Account."
"S&P" shall mean Standard & Poor's Ratings Group.
"S&P Bond Rating" shall mean for any day, the rating of the
Guarantor's senior long-term unsecured debt by S&P in effect at 11:00 A.M., New
York City time, on such day.
"Security Agreement" shall mean the Security Agreement
executed by the Trustee for the benefit of the Agent as agent for the
Participants, of even date with the Participation Agreement, substantially in
the form of Exhibit N to the Participation Agreement, as the same may be
amended or supplemented from time to time.
"Security Instruments" shall mean the Security Agreement and
any and all agreements or instruments, including, without limitation, financing
statements, now or hereafter executed and delivered by the Company or the
Guarantor as security for the payment or performance of the Notes and the
Certificates or the Participation Agreement, as such agreements or instruments
may be amended or supplemented from time to time.
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"Single Employer Plan" shall mean a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees
of the Guarantor or an ERISA Affiliate and no Person other than the Guarantor
and its ERISA Affiliates or (b) was so maintained and in respect of which the
Guarantor or an ERISA Affiliate could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Site" shall mean the real property in San Juan County, New
Mexico, described in greater detail on Exhibit A to the Lease.
"State Street" shall mean State Street Bank and Trust Company.
"Sublessee" shall have the meaning assigned such term in
Section 21(c) of the Lease.
"Subsidiary" shall mean, as to any Person, any corporation of
which at least a majority of the outstanding stock having by the terms thereof
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether or not at the time stock of any other
class or classes of such corporation shall or might have voting power by reason
of the happening of any contingency) is at the time directly or indirectly
beneficially owned or controlled by such Person or one or more of its
Subsidiaries or such Person and one or more of the Subsidiaries of such Person.
"Support Agreement" shall mean the Support Agreement between
the Company and the Trustee, of even date with the Participation Agreement,
substantially in the form of Exhibit D to the Participation Agreement, as the
same may be amended or supplemented from time to time.
"Survey" means a current certified survey of the Site in form
and substance satisfactory to the Agent, and containing such certifications as
the Agent may request.
"Taxes" shall have the meaning assigned such term in Section
4.06(a) of the Participation Agreement.
"Termination Event" shall have the meaning assigned such term
in Section 15(a) of the Lease.
"Third Parties" shall mean any Person other than (i) the
Trustee, (ii) the Company, (iii) the Guarantor, or (iv) any Affiliate of any of
the foregoing.
"Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate (adjusted to the basis of a year of 365 or 366 days, as
the case may be) for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board of Governors of the Federal Reserve System
(the "Board") through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on
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such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 A.M., New York City
time, on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.
"Tranche A Loans" shall mean all Loans made to the Trustee in
an aggregate principal amount equal to 89% of the Aggregate Loan Commitments.
"Tranche B Loans" shall mean all Loans made to the Trustee in
an aggregate principal amount equal to 11% of the Aggregate Loan Commitments.
"Trust" shall mean the Chaco Liquids Plant Trust, created
pursuant to the Declaration.
"Trustee" shall mean State Street, as Trustee of the Trust,
and its successors, and assigns, as Trustee, pursuant to the provisions of the
Declaration.
"Type" shall mean, with respect to Loans, either a Base Rate
Loan or a Eurodollar Loan, each a "Type" of Loan, and with respect to Advances,
either a Base Rate Advance or a Eurodollar Advance, each a "Type" of
Certificate Advance.
"UCC" shall mean the Uniform Commercial Code as enacted in the
State of New York and any other jurisdiction whose laws may be mandatorily
applicable.
"Unguaranteed Amount" shall mean, as of any date of
determination, the aggregate amount of principal then owing by the Trustee to
the Note Holders on account of the Tranche B Loans and by the Trustee to
Certificate Holders on account of the Certificates.
"Vendor" shall mean any supplier or manufacturer of, or
provider of services with respect to, either Phase or part thereof.
"Withdrawal Liability" shall mean a withdrawal liability as
defined under Part I of Subtitle E of Title IV of ERISA.
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PARTICIPATION AND CREDIT AGREEMENT
Dated as of February 9, 1995
Among
EL PASO NATURAL GAS COMPANY,
EL PASO NEW CHACO COMPANY,
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity
but solely as Trustee for the Chaco Liquids Plant Trust,
CHEMICAL BANK,
as Agent,
THE NOTE HOLDERS SIGNATORIES HERETO
and
THE CERTIFICATE HOLDERS SIGNATORIES HERETO
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TABLE OF CONTENTS
ARTICLE I Page
Defined Terms and Accounting Matters
Section 1.01 Terms Defined Above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.03 Accounting Terms and Determinations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
Commitments
Section 2.01 Loans; Certificate Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.02 Fundings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.03 Changes of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.04 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.05 Notes; Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.06 Several Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.07 Funding Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.08 Applications of Payments and Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.09 Continuation Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.10 Conversion Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.11 Extension of Notes and Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
Payments of Notes and Redemption of
Certificates; Payment of Interest and Yield
Section 3.01 Repayment of the Notes and Redemption of the Certificates . . . . . . . . . . . . . . . . . . 10
Section 3.02 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.03 Interest on Notes; Yield on Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.04 Payments by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
Payments; Computations; Etc.
Section 4.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.02 Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.03 Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.04 Non-receipt of Funds by the Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.05 Sharing of Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.06 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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ARTICLE V
Yield Protection and Illegality
Section 5.01 Additional Interest and Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.02 Interest Rate and Yield Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.03 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.04 Increased Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.05 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.06 Payments and Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.07 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VI
Conditions Precedent
Section 6.01 Conditions Precedent to Effectiveness of this Agreement . . . . . . . . . . . . . . . . . . . 21
Section 6.02 Initial and Subsequent Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.03 Condition Precedent to Phase Two Loans and Phase Two Advances. . . . . . . . . . . . . . . . . 24
Section 6.04 Conditions Precedent for the Benefit of Participants . . . . . . . . . . . . . . . . . . . . . 24
Section 6.05 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VII
Representations and Warranties
Section 7.01 Company and the Guarantor Representations and Warranties . . . . . . . . . . . . . . . . . . . 25
Section 7.02 Representations and Warranties of State Street . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VIII
Affirmative Covenants
Section 8.01 Affirmative Covenants of Company and Guarantor . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 8.02 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.03 Covenants of State Street. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE IX
Negative Covenants
Section 9.01 Negative Covenants of Company and Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE X
Events of Default
Section 10.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 10.02 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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ARTICLE XI
The Agent
Section 11.01 Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 11.02 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 11.03 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 11.04 Rights as a Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 11.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 11.06 Non-Reliance on Agent and other Participants . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 11.07 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 11.08 Resignation or Removal of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE XII
Miscellaneous
Section 12.01 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 12.03 Payment of Expenses, Indemnities, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 12.04 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 12.05 Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 12.06 Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 12.07 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.08 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.09 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.10 Successors; Survivals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.13 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.14 GOVERNING LAW; SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.15 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 12.16 Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 12.17 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 12.18 Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 12.19 The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 12.20 The Certificate Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 12.21 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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EXHIBITS
Exhibit A - Legal Description of Subject Property
Exhibit B - Form of Lease Agreement
Exhibit C - Form of Agency Agreement
Exhibit D - Form of Support Agreement
Exhibit E - Form of Declaration of Trust
Exhibit F - Form of Construction Contract
Exhibit G - Form of Parent Guarantee in favor of Agent
and Note Holders (Completion and Payment)
Exhibit H - Form of Sponsor Agreement in favor of Trustee
Exhibit I - Form of Assignment and Acceptance Agreement
Exhibit J - Commitments and Percentage Shares
Exhibit K - Form of Note
Exhibit L - Form of Certificate
Exhibit M - Form of Completion Certificate
Exhibit N - Form of Security Agreement
Exhibit O - Form of legal opinion of Associate General Counsel of
Guarantor
Exhibit P - Form of legal opinion of Fried, Frank, et. al.
Exhibit Q - Form of legal opinion of Montgomery & Andrews
Exhibit R - Form of legal opinion of counsel for Trustee
SCHEDULES
Schedule 1.02 - Defined Terms
Schedule 1.02(a) - Facility Plan and List of Facility Plan Documents
Schedule 1.02(b) - Requirements for Completion
Schedule 7.01(f) - Litigation
Schedule 7.01(o) - Environmental Matters
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PARTICIPATION AND CREDIT AGREEMENT (as the same may be amended
or supplemented from time to time, the "Agreement") dated as of February 9,
1995 among EL PASO NEW CHACO COMPANY, a Delaware corporation (the "Company"),
EL PASO NATURAL GAS COMPANY, a Delaware corporation (the "Guarantor"), STATE
STREET BANK AND TRUST COMPANY (in its individual capacity, "State Street"), as
Trustee for the Chaco Liquids Plant Trust (in such capacity, the "Trustee");
each of the Note Holders that is a signatory hereto or becomes a signatory
hereto as provided in Section 12.06 (individually, together with its successors
and assigns, a "Note Holder," and collectively, together with their successors
and assigns, the "Note Holders"); each of the Certificate Holders that is a
signatory hereto or becomes a signatory hereto as provided in Section 12.06
(individually, together with its successors and assigns, a "Certificate
Holder," and collectively, together with their successors and assigns, the
"Certificate Holders"), and CHEMICAL BANK (in its individual capacity,
"Chemical "), as agent for the Note Holders and Certificate Holders (in such
capacity, together with its successors in such capacity, the "Agent").
RECITALS
WHEREAS, the Trustee has entered into a ground lease of certain real
property in San Juan County, New Mexico, described in greater detail on Exhibit
A attached hereto (the "Site"), to purchase certain work in progress relating
to improvements to be located on the Site and to construct on the Site a
cryogenic liquids extraction plant; and
WHEREAS, the Trustee has subleased the Site and leased the
improvements thereon, after completion, to the Company pursuant to a Lease
Agreement of even date herewith substantially in the form of Exhibit B hereto
(as the same may be amended or supplemented from time to time, the "Lease");
and
WHEREAS, the Company, acting as the Trustee's project agent under an
Agency Agreement and Limited Power of Attorney dated of even date herewith
substantially in the form of Exhibit C hereto (as the same may be amended or
supplemented from time to time, the "Agency Agreement"), will sublease the
Site, on behalf of the Trustee, purchase such work in progress and complete the
construction and installation of all enhancements and improvements to the
Facility; and
WHEREAS, the Company will further provide operations, maintenance and
management support under a Support Agreement dated of even date herewith
substantially in the form of Exhibit D hereto (as the same may be amended or
supplemented from time to time, the "Support Agreement"); and
WHEREAS, in order to finance the acquisition of the Trustee's
leasehold estate in the Site, the acquisition of such work in progress, the
enhancements and improvements to be made to the Site and the construction and
installation of the Facility for the ultimate use and benefit of the Company in
accordance with the Lease, the Company has requested that the Trustee, the Note
Holders, the Certificate Holders and the Agent enter into this Agreement and
the Declaration of Trust of even date herewith substantially in the form of
Exhibit E hereto (as the same may be amended or supplemented from time to time,
the "Declaration"); and
WHEREAS, to induce the Trustee, the Agent, the Note Holders and the
Certificate Holders to enter into this Agreement and other agreements relating
to the transactions contemplated hereby, Guarantor has agreed to guarantee the
obligations of the Company to the Trustee and certain of the obligations of the
Trustee under this Agreement to the Note Holders and the Certificate Holders;
133
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE I
Defined Terms and Accounting Matters
Section 1.01 Terms Defined Above. As used in this Agreement,
the terms defined in the recitals above shall have the meanings indicated
above.
Section 1.02 Certain Defined Terms. As used herein, all
capitalized terms used, but not otherwise defined herein, shall have the
meaning specified for such terms in Schedule 1.02.
Section 1.03 Accounting Terms and Determinations. All
accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles either (a) consistent
with those principles applied in the preparation of the financial statements
referred to in Section 7.01(e), or (b) not materially inconsistent with such
principles (so that no covenant contained in Articles VIII or IX would be
calculated or construed in a materially different manner or with materially
different results than if such covenant were calculated or construed in
accordance with clause (a) of this Section 1.03).
ARTICLE II
Commitments
Section 2.01 Loans; Certificate Advances.
(a) Loans. Each Note Holder severally agrees, on the
terms of this Agreement:
(i) to make Phase One Loans to the Trustee during the
period from and including the later of (y) the Initial Funding Date or
(z) the date that such Note Holder becomes a party to this Agreement
as provided in Section 12.06(b), up to and including the Phase One
Completion Date, in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount of such Note Holder's
Loan Percentage Share of the Phase One Loan Limit; provided, however,
that the aggregate principal amount of all such Phase One Loans by all
Note Holders under this Section 2.01(a)(i) at any one time outstanding
shall not exceed the Phase One Loan Limit.
(ii) if the Phase Two Election is made, to make Phase Two
Loans to the Trustee during the period from and including the later of
(y) the Initial Funding Date or (z) the date that such Note Holder
becomes a party to this Agreement as provided in Section 12.06(b), up
to and including the Phase Two Completion Date, in an aggregate
principal amount at any one time outstanding up to but not exceeding
the amount of such Note Holder's Loan Percentage Share of such Phase
Two Loan; provided, however, that the aggregate principal amount of
all Phase One Loans and Phase Two Loans by all Note Holders under this
Section
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2.01(a) at any one time outstanding shall not exceed the lesser of (y)
ninety-seven percent (97%) of the Facility Costs as incurred or
invoiced or (z) the Aggregate Loan Commitments.
(b) Certificate Advances. Each Certificate Holder
severally agrees, on the terms of this Agreement:
(i) to make a Phase One Advance to the Trustee on the
Initial Funding Date in an amount equal to such Certificate Holder's
Certificate Percentage Share of the Phase One Advance Limit.
(ii) if the Phase Two Election is made, to make a Phase
Two Advance to the Trustee on the earlier to occur of (A) any Business
Day during the period from and including the Business Day one (1)
Business Day following the date the Company gives the Agent and the
Participants written notice that the Phase Two Election has been made
up to and including the Phase One Completion Date or (B) the date on
which physical construction of Phase Two has commenced, in the
aggregate principal amount of $720,000, and as to each Certificate
Holder in the amount of such Certificate Holder's Certificate
Percentage Share of such amount.
(c) Capitalized Interest, Yield, etc.
(i) It is intended that prior to the Phase One Completion
Date, all interest, yield, commitment fees and other amounts due by
the Trustee under this Agreement shall be paid by Loans and
Certificate Advances. The Company, as agent for the Trustee, shall
give Advance Notice in connection with any Loan made to pay such
amounts or of the amount of Certificate Advances to be applied
thereto. Notwithstanding the foregoing, the aggregate amount of all
Loans and Certificate Advances for Phase One of the Facility shall not
exceed the sum of the Phase One Loan Limit and the Phase One Advance
Limit.
(ii) It is intended that on and after the Phase One
Completion Date and prior to the Phase Two Completion Date, all
interest, yield, commitment fees and other amounts due by the Trustee
under this Agreement may be paid by Loans and/or Certificate Advances
at the discretion of the Company. If the Company elects to pay such
amounts in a manner other than the Borrowing of Loans or application
of the proceeds of Certificate Advances, the Company, as agent for the
Trustee, shall give written notice to the Agent in the manner set
forth in Section 2.02(a) that such interest, yield, commitment fees or
other amounts to be due and payable hereunder will not be paid with
Loans or Certificate Advances; otherwise such amounts shall be paid
with the proceeds of Loans or the application of the proceeds of
Certificate Advances. Notwithstanding the foregoing, the aggregate
amount of all Loans and Certificate Advances for the Facility shall
not exceed the sum of the Aggregate Certificate Commitments and the
Aggregate Loan Commitments.
(d) Limitations on Reborrowing, etc. Loans repaid may
not be reborrowed. Loans may be Base Rate Loans or Eurodollar Loans, provided
that no more than six (6) Eurodollar Loans may be outstanding from any Note
Holder at any time. Certificate Advances repaid may not be readvanced.
Subject to Section 2.01(b)(iii), all Certificate Advances shall be Eurodollar
Advances, and no more than one (1) Eurodollar Advance may be outstanding from
any Certificate Holder in respect of its Certificate Advances at any time.
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Section 2.02 Fundings.
(a) The Company, as agent for the Trustee, shall give the
Agent (which shall promptly notify the Participants) Advance Notice (which may
be telephonic if confirmed promptly in writing) of each requested funding of a
Loan or a Certificate Advance, which notice shall be irrevocable and effective
only upon receipt by the Agent, shall specify the aggregate amount and the date
of the Loans and Certificate Advances to be funded, the Type of the Loans or
Certificate Advances requested and in the case of Eurodollar Loans, the
duration of the initial Eurodollar Period for such Borrowing. Not later than
1:00 p.m. New York time on the date specified for each funding hereunder, each
Participant shall make available the amount of the Loan and/or Certificate
Advance to be made by it on such date at an account which the Agent shall
specify, in immediately available funds, for the account of the Trustee. The
amounts so received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Company as agent for the Trustee by
depositing the same, in immediately available funds, in an account of the
Company, designated by the Trustee and maintained with the Agent at its
Principal Office. There shall be no more than two Borrowings of Loans per
calendar month; provided, however, that subject to the terms and conditions of
this Agreement, if on any Business Day (including the last day of a Eurodollar
Period or a Quarterly Date) prior to the Phase One Completion Date, or, if
Phase Two is undertaken, prior to the Phase Two Completion Date: (i) interest,
yield or fees are due and payable by the Trustee, and (ii) the Company, as
agent for the Trustee, has not requested on such day a Borrowing of Loans to be
applied to pay such interest, yield or fees, then, unless the Company, as agent
for the Trustee, has given written notice not later than 1:00 p.m. New York
City time on a day which is three (3) Business Days prior to such Business Day
that it intends to pay, or to apply proceeds of Certificate Advances to pay,
such interest, yield or fees to be due and payable, the Company, as agent for
the Trustee, shall have been deemed to have requested a Base Rate Loan in the
aggregate amount of the interest, yield or fees due on such day to be funded by
the Note Holders, and the making of any such Base Rate Loan shall not
constitute one of the two permitted Borrowings for such month.
(b) All Base Rate Loan Borrowings under Section 2.02(a)
shall be in amounts of at least $1,000,000 or in integral multiples of $500,000
in excess thereof, or the remaining balance of the Aggregate Loan Commitments,
if less; and all Eurodollar Loans resulting from Borrowings under Section
2.02(a) shall be in amounts of at least $3,000,000 or in integral multiples of
$500,000 in excess thereof; provided, however that any Base Rate Loans
resulting from the capitalization of interest, yield, fees and other amounts
payable under Section 2.01(c) may be in a lesser amount equal to the interest,
yield, fees and other amounts to be capitalized. If at any time the aggregate
principal amount of the Base Rate Loans outstanding equals or exceeds
$3,000,000, then an amount thereof equal to $3,000,000, or an integral multiple
of $500,000 in excess thereof, may be Converted into a Eurodollar Loan.
(c) On the Phase One Completion Date, and if the Phase
Two Election is made, on the Phase Two Completion Date, all Loans and
Certificate Advances shall have been funded by the Participants as herein
provided on a pro rata basis so that 3% of the aggregate amount of all funds
lent or advanced by the Participants will be comprised of Certificate Advances
made by the Certificate Holders and 97% of the aggregate amount of all funds
lent or advanced by the Participants will be comprised of Loans made by the
Note Holders. On the Phase One Completion Date, and if the Phase Two Election
is made, on the Phase Two Completion Date (but, in either case, subject to the
terms of Section 2.08), if the Certificate Advances exceed 3% of the aggregate
amount of all Loans and Certificate Advances, the Company shall either (i)
subject to the other terms and conditions of this Agreement, borrow Loans from
the Note Holders or (ii) repay the excess amount of Certificate
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Advances, such that, in either case, after giving effect to such Loans or
repayment, 3% of the aggregate amount of all Loans and Certificate Advances
will be comprised of Certificate Advances made by the Certificate Holders.
Section 2.03 Changes of Commitments. The Company, as agent
for the Trustee, shall have the right to terminate or to reduce the amount of
the Aggregate Loan Commitments and the Aggregate Certificate Commitments, at
any time or from time to time upon not less than three (3) Business Days' prior
notice to the Agent (which shall promptly notify the Participants) of each such
termination or reduction, which notice shall specify the effective date thereof
and the amount of any such reduction (which shall not be less than $3,000,000
or any multiple of $1,000,000 in excess thereof) and shall be irrevocable and
effective only upon receipt by the Agent. Any request for a reduction in the
amount of the Commitments shall be pro rata among the Aggregate Loan
Commitments and the Aggregate Certificate Commitments so that, at all times, 3%
of the Commitments will be comprised of the Aggregate Certificate Commitments
and 97% of the Commitments will be comprised of the Aggregate Loan Commitments.
The Aggregate Loan Commitments and the Aggregate Certificate Commitments once
terminated or reduced may not be reinstated. No prepayment of Loans or
Certificate Advances shall be required in connection with any termination or
reduction of the Aggregate Loan Commitments or the Aggregate Certificate
Commitments.
Section 2.04 Fees.
(a) The Trustee shall pay or cause to be paid to the
Agent for the account of each Participant a commitment fee on the daily average
amount of the unused portion of such Participant's Loan Commitment and/or
Certificate Commitment, for the period from and including the later of (i) the
Closing Date or (ii) the date such Participant becomes a party to this
Agreement as provided in Section 12.06(b), up to and including the earlier of
the date the unused Aggregate Loan Commitments and the unused Aggregate
Certificate Commitments are terminated by the Company, as agent for the
Trustee, or the Phase Two Completion Date, at the following rate per annum as
is applicable based upon the S&P Bond Rating and Moody's Bond Rating:
Bond Rating Commitment
(S&P/Moody's) Level Fee
------------------- ----- ----------
BBB+/Baa1 or better I 0.120%
BBB/Baa2 II 0.160%
BBB-/Baa3 III 0.200%
BB+/Ba1 or below IV 0.250%
provided that if the ratings of such rating agencies do not fall within the
same Level, the rate applicable to such day will be the lower commitment fee
rate and provided, further, that in the event a rating is not available from
either rating agency, such rating agency will be deemed to have assigned its
lowest rating. Accrued commitment fees shall be payable on each Quarterly Date
and on the earlier of the date the Aggregate Loan Commitments and the Aggregate
Certificate Commitments are terminated or the Maturity Date.
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(b) The Company shall pay, or cause to be paid, as Loans
and Certificate Advances on the Initial Funding Date to the Agent for the
Agent's account the fees specified in the fee letter agreement dated November
18, 1994 between the Agent and the Guarantor.
(c) The Company or the Guarantor shall pay, or cause to
be paid, out of or as Loans and Certificate Advances to the Trustee, or
otherwise, for the Trustee's account the fees specified in the fee letter
agreement dated of even date herewith between the Trustee and the Guarantor on
the dates specified therein.
Section 2.05 Notes; Certificates.
(a) The Loans made by each Note Holder under Section
2.01(a) shall be evidenced by a single promissory note of the Trustee in
substantially the form of Exhibit K hereto, dated as of the date such Note
Holder becomes a party to this Agreement, payable to the order of such Note
Holder in a principal amount equal to its Loan Commitment as originally in
effect and otherwise duly completed. The date, amount, Type, Conversion into
another Type, interest rate (and, if applicable, Eurodollar Period) and
maturity date of each Loan made by each Note Holder, and all payments made on
account of the principal thereof, shall be recorded by such Note Holder on its
books and, prior to any transfer of the Note, on the schedules attached to its
Note or any continuation thereof.
(b) The Certificate Advances made by each Certificate
Holder under Section 2.01(b) shall be evidenced by a single Certificate of the
Trustee in substantially the form of Exhibit L, dated the date such Certificate
Holder becomes a party to this Agreement, in a face amount equal to its
Certificate Commitment and otherwise duly completed. The date, amount, Type,
Conversion into another Type, yield (and, if applicable, Eurodollar Period) and
redemption date of each Certificate Advance made by each Certificate Holder,
and all payments made on account of the principal thereof, shall be recorded by
such Certificate Holder on its books and the Certificate Advances made by each
Certificate Holder and, prior to any transfer of the Certificate, on the
schedules attached to its Certificate or any continuation thereof.
Section 2.06 Several Obligations. The failure of any
Participant to make any Loan or Certificate Advance to be made by it on the
date specified therefor shall not relieve any other Participant of its
obligation to make its Loan and/or Certificate Advance on such date, but no
Participant shall be responsible for the failure of any other Participant to
make a Loan or Certificate Advance to be made by such other Participant.
Section 2.07 Funding Offices. The Loans and Certificate
Advances of each Type made by each Participant shall be made and maintained at
such Participant's Applicable Funding Office for Loans or Certificate Advances
of such Type.
Section 2.08 Applications of Payments and Proceeds.
(a) Upon (i) the occurrence and during the continuance of
an Event of Default, (ii) a Cancellation Event, (iii) a Termination Event (and
the Company elects pursuant to Section 15(a) of the Lease to exercise its
option to purchase the Facility for the Option Price), or (iv) the Company
otherwise electing to acquire the Facility for the Option Price, all monies
received by the Trustee or the Agent pursuant to or in connection with the
Lease, this Participation Agreement or any other
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Operative Document shall be applied to prepay the Loans and redeem the
Certificates in the following order:
(1) first, to pay or reimburse all costs and expenses,
including, without limitation, those in connection with Indemnified
Risks, increased costs, Taxes or Other Taxes, then due and owing to
the Agent, the Trustee, the Note Holders and the Certificate Holders
hereunder or under the other Operative Documents, pro rata to each
such Person;
(2) second, to pay all accrued, unpaid interest and fees
on the Notes, pro rata, to the Note Holders;
(3) third, to pay the outstanding principal balance of
the Tranche B Loans, pro rata, to the Note Holders;
(4) fourth, to pay the outstanding principal balance of
the Tranche A Loans, pro rata, to the Note Holders;
(5) fifth, to pay all accrued, unpaid yield on the
Certificates, pro rata, to the Certificate Holders; and
(6) sixth, to pay the outstanding principal balance of
the Certificate Advances, pro rata, to the Certificate Holders.
Any proceeds remaining after payment in full of the foregoing amounts shall be
paid to the Trustee for distribution to the Company in accordance with the
Declaration.
(b) If a Termination Event has occurred, a Default does
not exist and the Company elects pursuant to Section 15(a) of the Lease to pay
the Residual Guaranty Amount and not to purchase the Facility, then (i) the
Residual Guaranty Amount shall be applied to pay all accrued, unpaid interest
and fees on the Tranche A Loans, pro rata, to the Note Holders, and to pay the
outstanding principal balance of the Tranche A Loans, pro rata, to the Note
Holders; and (ii) all other monies received by the Trustee or the Agent
pursuant to or in connection with the Lease, this Participation Agreement or
any other Operative Document shall be applied as follows:
(1) first, to pay or reimburse all costs and expenses,
including, without limitation, those in connection with Indemnified
Risks, increased costs, Taxes or Other Taxes, then due and owing to
the Agent, the Trustee, the Note Holders and the Certificate Holders
hereunder or under the other Operative Documents, pro rata to each
such Person;
(2) second, to pay all accrued, unpaid interest and fees
on the Tranche B Loans, pro rata, to the Note Holders;
(3) third, to pay the outstanding principal balance of
the Tranche B Loans, pro rata, to the Note Holders;
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(4) fourth, to pay all accrued, unpaid yield on the
Certificates, pro rata, to the Certificate Holders;
(5) fifth, to pay the outstanding principal balance of
the Certificate Advances, pro rata, to the Certificate Holders.
Any proceeds remaining after payment in full of the foregoing amounts shall be
paid to the Trustee for distribution to the Company in accordance with the
Declaration.
Section 2.09 Continuation Options.
(a) The Company, as agent for the Trustee, may elect to
continue all or any part of any Eurodollar Loan or Eurodollar Advance beyond
the expiration of the then current Eurodollar Period relating thereto by giving
Advance Notice (which may be telephonic, if confirmed promptly in writing) to
the Agent of such election, specifying the amount of such Eurodollar Loan or
Eurodollar Advance to be continued and the applicable Eurodollar Period
therefor. In the absence of such a timely and proper election with respect to
Eurodollar Loans, the Trustee and the Company shall be deemed to have elected
to Convert such Eurodollar Loan on the last day of the Eurodollar Period
therefor into a Base Rate Loan. In the absence of such a timely and proper
election with respect to Eurodollar Advances, the Trustee and the Company shall
be deemed to have elected to continue such Eurodollar Advance on the last day
of the Eurodollar Period therefor as a Eurodollar Advance having a one (1)
month Eurodollar Period.
(b) All or any part of any Eurodollar Loan may be
continued as provided herein, provided that (i) any continuation of a
Eurodollar Loan which is either part of any Eurodollar Loan or which aggregates
(A) two or more Eurodollar Loans or (B) one or more Eurodollar Loans and one or
more Base Rate Loans being Converted into a Eurodollar Loan and having the same
Eurodollar Period commencing on the same date shall be (as to each Loan or
aggregate of Loans as continued or as continued and Converted for an applicable
Eurodollar Period) in an amount not less than $3,000,000 and in integral
multiples of $500,000, and (ii) no Default shall have occurred and be
continuing. If a Default shall have occurred and be continuing, each
Eurodollar Loan shall be Converted to a Base Rate Loan on the last day of the
Eurodollar Period applicable thereto.
Section 2.10 Conversion Options. The Company, as agent for
the Trustee, may on any Business Day, by giving Advance Notice (which may be
telephonic, if confirmed promptly in writing) to the Agent, not later than
10:00 a.m. (New York City time) on the Business Day of the proposed Conversion
of Eurodollar Loans to Base Rate Loans and not later than 12:00 noon (New York
City time) on the third Business Day prior to the date of the proposed
Conversion in the case of a Conversion of Base Rate Loans to Eurodollar Loans
and subject to the provisions of Sections 5.02, 5.03, and 5.05, either (A)
Convert all or a portion of the Loans of one Type comprising one or more
Borrowings into Loans of another Type or (B) Convert all or a portion of the
Loans of more than one Type comprising one or more Borrowings into Loans of
another Type; provided, however, that any Conversion of any Eurodollar Loans
into Base Rate Loans made on any day other than the last day of an Eurodollar
Period for such Eurodollar Loans shall be subject to the provisions of Section
5.07. Each such notice of a Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Loans or
portions thereof to be Converted, and (iii) if such Conversion is into
Eurodollar Loans, the duration of the Eurodollar Period for each such Loan.
Any such Conversion shall be (as to the aggregate amount of the Loan or Loans
into which there is a
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Conversion or a continuation and Conversion for an applicable Eurodollar
Period) in an amount not less than $3,000,000 and in integral multiples of
$500,000 in excess thereof. If no Default shall have occurred and be
continuing, all or any portion of a Base Rate Loan may be Converted into a
Eurodollar Loan as provided in this Section. If a Default shall have occurred
and be continuing, no Loan may be Converted into a Eurodollar Loan.
Section 2.11 Extension of Notes and Certificates. On any day
that is not less than twelve (12) months and no more than eighteen (18) months
prior to the then current Maturity Date (including any extended Maturity Date
as contemplated hereby), the Company, as agent for the Trustee, may request in
writing to the Agent (which shall promptly notify the Participants) that the
then current Maturity Date be extended for a one (1) year period to expire on
the one (1) year anniversary of the then current Maturity Date. Any such
extension shall require (i) the unanimous written consent of each Participant
and the Agent, each acting in its sole and absolute discretion, and (ii) the
agreement of the Lessor to extend the term of the Lease in accordance with
Section 2(b) thereof. In the event such an extension is requested and the
requirements set forth in the immediately preceding sentence are met, such
extension shall be effective upon the execution of documentation evidencing the
same and containing such additional terms as the Company, the Agent and each
Participant, each acting in its sole discretion, may agree. If any Participant
or the Agent shall fail to respond to the Company's written request for
extension within sixty (60) days of receipt, such failure to respond shall be
deemed a denial of such request for extension.
ARTICLE III
Payments of Notes and Redemption of
Certificates; Payment of Interest and Yield
Section 3.01 Repayment of the Notes and Redemption of the
Certificates.
(a) The principal balance outstanding on the Notes and
the face amount outstanding on the Certificates shall be paid in full on the
Maturity Date.
(b) If, on the Maturity Date, the Company or the
Guarantor (or any of their Affiliates) shall exercise the option to purchase
the Facility in its entirety, then the purchase price shall be equal to the
Option Price. The proceeds of such sale shall be applied in the order
specified in Section 2.08(a). If, on the Maturity Date, the Company or the
Guarantor (or any of their Affiliates) shall choose to pay the Residual
Guaranty Amount and not to purchase the Facility, all amounts received by the
Trustee pursuant to or in connection with the Lease, this Participation
Agreement or any other Operative Document shall be used the repay the Notes,
redeem the Certificates and pay the other amounts specified in this Section
3.01(b) in the order specified in Section 2.08(b).
Section 3.02 Prepayments. On or after the Phase One
Completion Date, the Company may upon (a) in the case of Eurodollar Loans or
Eurodollar Advances, at least two (2) Business Days' notice and (b) in the case
of Base Rate Loans or Base Rate Advances, telephonic notice not later than
12:00 noon (New York City time) on the date of prepayment, to the Agent which
specifies the proposed date and aggregate principal amount of the prepayment
and the Type of Loans or Certificate Advances to be prepaid, and if such notice
is given the Company, as agent for the Trustee, shall, prepay the outstanding
principal amounts of the Loans comprising the same Borrowing in whole or
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ratably in part, together with accrued interest to the date of such prepayment
on the amount prepaid or the outstanding principal amounts of the Certificate
Advances in whole or in part, together with accrued yield to the date of such
prepayment on the amount prepaid; provided, however, that (i) each partial
prepayment of Loans shall be in an aggregate principal amount not less than
$3,000,000 or an integral multiple of $500,000 in excess thereof, and (ii) in
the event of any such prepayment of any Eurodollar Loan or Eurodollar Advance
on any day other than the last day of the Eurodollar Period for such Eurodollar
Loan or Eurodollar Advance, the Company, as agent for the Trustee, shall be
obligated to reimburse the Note Holders and/or Certificate Holders (as
applicable) in respect thereof pursuant to, and to the extent required by,
Section 5.07; provided, further, however, that the Company will use its best
efforts to give notice to the Agent of the proposed prepayment of Base Rate
Loans or Base Rate Advances on the Business Day prior to the date of such
proposed prepayment. Any prepayment pursuant to this Section 3.02 shall be
allocated among the Loans and Certificate Advances to achieve or maintain
consistency with the ratio set forth in Section 2.02(c); or if, after giving
effect to such prepayment, it is not possible to achieve or maintain such
ratio, then such prepayment will be allocated among the Loans and Certificate
Advances in the manner which most closely approximates such ratio. In no event
shall any prepayment be allowed which results in the Certificate Advances being
less than 3% of the aggregate amount of all Loans and Certificate Advances then
outstanding.
Section 3.03 Interest on Notes; Yield on Certificates.
(a) The Trustee will pay or cause to be paid to the Agent
for the account of each Note Holder interest on the unpaid principal amount of
each Loan made by such Note Holder for the period commencing on the date of
such Loan to but excluding the date such Loan shall be paid in full, at the
following rates per annum:
(i) if such Loan is a Base Rate Loan, the Base Rate (as
in effect from time to time), but in no event to exceed the Highest
Lawful Rate; and
(ii) if such Loan is a Eurodollar Loan, for each
Eurodollar Period relating thereto, the Eurodollar Rate for such Loan
plus the Applicable Margin for Eurodollar Loans, but in no event to
exceed the Highest Lawful Rate.
(b) The Trustee will pay or cause to be paid to the Agent
for the account of each Certificate Holder the yield on the face amount of each
Certificate Advance made by such Certificate Holder for the period commencing
on the date of such Certificate Advance to but excluding the date such
Certificate Advance shall be paid in full, at the following rates per annum:
(i) if such Certificate Advance is a Base Rate Advance,
the Base Rate (as in effect from time to time) plus the Applicable
Margin for Base Rate Advances, but in no event to exceed the Highest
Lawful Rate; and
(ii) if such Certificate Advance is a Eurodollar Advance,
for each Eurodollar Period relating thereto, the Eurodollar Rate for
such Eurodollar Advance plus the Applicable Margin for Eurodollar
Advances, but in no event to exceed the Highest Lawful Rate.
(c) Notwithstanding the foregoing, the Trustee will pay
or cause to be paid to the Agent for the account of each Participant interest
at the applicable Post-Default Rate on any principal
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of any Loan or Certificate Advance made by such Participant which shall not be
paid in full when due (whether at stated maturity, by acceleration or
otherwise), for the period commencing on the due date thereof until the same is
paid in full.
(d) Accrued interest or yield on each Eurodollar Loan or
Eurodollar Advance, as the case may be, shall be payable on the last day of the
Eurodollar Period therefor and, if such Eurodollar Period is longer than three
months, at three-month intervals following the first day of such Eurodollar
Period, except that interest payable at the Post-Default Rate shall be payable
from time to time on demand and interest on any Eurodollar Loan or yield on any
Eurodollar Advance that is Converted into a Base Rate Loan or Base Rate
Advance, as applicable, (pursuant to Section 5.02(b) or 5.05) shall be payable
on the date of Conversion (but only to the extent accrued on the amount so
Converted). Interest on Base Rate Loans and yield on Base Rate Advances shall
be payable on each Quarterly Date commencing on March 31, 1995, and at the
maturity of the Notes and Certificates.
(e) Promptly after the determination of the rate of any
interest or yield provided for herein or any change therein, the Agent shall
notify the Participants to which such interest or yield is payable and the
Company thereof.
Section 3.04 Payments by Trustee. All moneys received by the
Trustee pursuant to the Lease including, but not limited to, payment of Rent,
Additional Rent, the Option Price or the Residual Guaranty Amount, except for
amounts allocable to (a) fees of the Trustee pursuant to Section 2.04(c), or
(b) indemnity payments to the Trustee or State Street pursuant to Section
12.03, shall be paid to the Agent and the Participants in accordance with the
terms of Section 2.08 and Section 4.01.
ARTICLE IV
Payments; Computations; Etc.
Section 4.01 Payments. The Company, as agent for the
Trustee, shall make each payment under this Agreement, the Notes or the
Certificates, whether the amount so paid is owing to any or all of the
Participants or to the Agent, not later than 12:00 noon (New York City time)
without setoff, counterclaim, or any other deduction whatsoever, on the day
when due in Dollars to the Agent at its address at 270 Park Avenue, New York,
New York 10017, Reference: El Paso New Chaco Company - Chaco Liquids Plant
Trust, or at such other location designated by notice to the Company from the
Agent and agreed to by the Company, in same day funds. The Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal, interest, yield or fees ratably (other than amounts payable pursuant
to Section 4.06 or Article V) according to the respective amounts of such
principal, interest, yield or fees then due and owing to the Participants, and
like funds relating to the payment of any other amount payable to any
Participant to such Participant, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
pursuant to Section 12.06(d), from and after the effective date specified in
such Assignment and Acceptance, the Agent shall make all payments under this
Agreement, the Notes or the Certificates in respect of the interest assigned
thereby to the assignee thereunder, and the parties to such Assignment and
Acceptance shall make all appropriate adjustments in such payments for periods
prior to such effective date directly between themselves. Any payments and
prepayments
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received hereunder other than after the occurrence and during the continuation
of an Event of Default, or after the occurrence of a Cancellation Event or a
Termination Event, shall be applied in accordance with the purpose for which
such payment or prepayment is made.
Section 4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein: (a) each Loan from the Note Holders under Section
2.01 shall be made from the Note Holders, each payment of commitment fees with
respect to unfunded Aggregate Loan Commitments under Section 2.04(a) shall be
made for the account of the Note Holders and each termination or reduction of
the Aggregate Loan Commitments under Section 2.03 shall be applied to the Loan
Commitment of each Note Holder, pro rata according to the amount of each Note
Holder's respective Loan Commitment; (b) each payment of Loans by or for the
account of the Trustee shall be made for the account of the Note Holders pro
rata in accordance with the respective unpaid amount of the Notes held by the
Note Holders; (c) each payment of interest on Loans by or for the account of
the Trustee shall be made for the account of the Note Holders pro rata in
accordance with the amounts of interest due and payable to the respective Note
Holders; and (d) each Loan shall be allocated pro rata among the Tranche A
Loans and the Tranche B Loans so that at all times 89% of the Loans shall be
Tranche A Loans and 11% of the Loans shall be Tranche B Loans; and (i) each
Certificate Advance from the Certificate Holders under Section 2.01 shall be
made from the Certificate Holders, each payment of commitment fees with respect
to unfunded Aggregate Certificate Commitments under Section 2.04(a) shall be
made for the account of the Certificate Holders, and each termination or
reduction of the Aggregate Certificate Commitments under Section 2.03 shall be
applied to the Certificate Commitment of each Certificate Holder, pro rata
according to the amount of each Certificate Holder's respective Certificate
Commitment; (ii) each payment of Certificate Advances by or for the account of
the Trustee shall be made for the account of the Certificate Holders pro rata
in accordance with the respective unpaid amount of the Certificates held by the
Certificate Holders; and (iii) each payment of yield on Certificate Advances by
or for the account of the Trustee shall be made for the account of the
Certificate Holders pro rata in accordance with the amounts of yield due and
payable to the respective Certificate Holders.
Section 4.03 Computations. All computations of interest and
yield based on the Base Rate and of commitment fees shall be made by the Agent
on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest and yield based on the Eurodollar Rate or the
Effective Federal Funds Rate shall be made by the Agent, and all computations
of interest pursuant to Section 5.01 shall be made by each Note Holder with
respect to its own Loans or each Certificate Holder with respect to its own
Certificate Advances, on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, yield or fees are payable.
Whenever any payment hereunder or under the Notes or the Certificates shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or yield; provided,
however, that if such extension would cause payment of interest on or principal
of any Eurodollar Loan or of yield on or principal of any Eurodollar Advance to
be made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
Section 4.04 Non-receipt of Funds by the Agent. Unless the
Agent shall have received notice from the Company prior to the date on which
any payment is due to the Participants hereunder that the Company will not make
such payment in full, the Agent may assume that the Company has made such
payment in full to the Agent on such date and the Agent may, in reliance
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upon such assumption, cause to be distributed to each Participant on such due
date an amount equal to the amount then due such Participant. If and to the
extent the Company shall not have so made such payment in full to the Agent,
each Participant shall repay to the Agent forthwith on demand such amount
distributed to such Participant together with interest thereon, for each day
from the date such amount is distributed to such Participant until the date
such Participant repays such amount to the Agent, at a rate equal to the
Effective Federal Funds Rate for such day.
Section 4.05 Sharing of Payments. If any Participant shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Loans or Certificate Advances
made by it (other than pursuant to Section 4.06 or Article V) in excess of its
ratable share of payments then due and owing to it in accordance with the
payment orders specified in Section 2.08 or Section 4.01 on account of the
Loans or Certificate Advances obtained by all the Participants, such
Participant shall forthwith purchase from the other Participants participations
in such Loans or Certificate Advances made by them as shall be necessary to
cause such purchasing Participant to share the excess payment ratably with each
of them (or, if necessary, to cause such purchasing Participant to assume the
payment priority specified in Section 2.08), provided, however, that if all or
any portion of such excess payment is thereafter recovered from such purchasing
Participant, such purchase from each Participant shall be rescinded and each
Participant shall repay to the purchasing Participant the purchase price to the
extent of such recovery together with an amount equal to such Participant's
ratable share (according to the proportion of (a) the amount of such
Participant's required repayment to (b) the total amount so recovered from the
purchasing Participant) of any interest, yield or other amount paid or payable
by the purchasing Participant in respect of the total amount so recovered. The
Company and the Trustee agree that any Participant so purchasing a
participation from another Participant pursuant to this Section may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Participant were the direct creditor of Trustee and the Company in the amount
of such participation.
Section 4.06 Taxes.
(a) Any and all payments by the Company hereunder or
under the Notes or the Certificates to each Indemnified Party shall be made, in
accordance with Section 4.01, free and clear of, and without deduction for, any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, all taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, imposed by the jurisdiction under the laws of which such
Indemnified Party is organized, domiciled, resident or doing business, or any
political subdivision thereof or by any jurisdiction in which such Indemnified
Party holds any interest in connection with this Agreement or its Note or its
Certificate (including, without limitation, in the case of each Participant,
the jurisdiction of such Participant's Applicable Funding Office) or any
political subdivision thereof, other than by any jurisdiction with which the
Indemnified Party's connection arises solely from having executed, delivered or
performed obligations or received a payment under, or enforced, this Agreement
or its Note or Certificate (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes" and all such excluded items being referred to as "Excluded Taxes").
If the Company shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note or Certificate to any
Indemnified Party, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable
to additional sums payable under this Section 4.06) such Indemnified Party
receives an amount equal to the sum
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it would have received had no such deductions been made, (ii) the Company shall
make or cause to be made such deductions and (iii) the Company shall pay or
cause to be paid the full amount deducted to the relevant taxation authority or
other Governmental Authority in accordance with applicable law, provided that
the Company shall not be required to pay any additional amount (and shall be
relieved of any liability with respect thereto) pursuant to this subsection (a)
to any Indemnified Party that either (A) on the date such Participant became an
Indemnified Party hereunder, (y) was not entitled to submit a U.S. Internal
Revenue Service Form 1001 (relating to such Indemnified Party, and entitling it
to a complete exemption from United States withholding taxes on all amounts to
be received by such Indemnified Party pursuant to this Agreement or any other
Operative Document) and a U.S. Internal Revenue Service form 4224 (relating to
all amounts to be received by such Indemnified Party pursuant to this Agreement
or any other Operative Document) and (z) was not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) or (B) has failed to
submit any form or certificate that it was required to file or provide pursuant
to subsection (d) of this Section 4.06 and is entitled to file or give, as
applicable, under applicable law, provided, further, that should an Indemnified
Party become subject to Taxes because of its failure to deliver a form required
hereunder, the Company shall take such steps as such Indemnified Party shall
reasonably request to assist such Indemnified Party to recover such Taxes, and
provided, further, that each Indemnified Party, with respect to itself, agrees
to indemnify and hold harmless the Company from any taxes, penalties, interest
and other expenses, costs and losses incurred or payable by the Company as a
result of the failure of the Company to comply with its obligations under
clause (ii) or (iii) above in reliance on any form or certificate provided to
it by such Indemnified Party pursuant to this Section 4.06. If any Indemnified
Party receives a net credit or refund in respect of such Taxes or amounts so
paid by the Company, it shall promptly notify the Agent and the Company of such
net credit or refund and shall promptly pay such net credit or refund to the
Company, provided that the Company agrees to return such net credit or refund
if the Indemnified Party to which such net credit or refund is applicable is
required to repay it.
(b) In addition, the Company agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made by the Company
hereunder or under the Notes or the Certificates or from the execution,
delivery or performance of, or otherwise with respect to, this Agreement, the
Notes or the Certificates (hereinafter referred to as "Other Taxes").
(c) The Company will indemnify each Indemnified Party and
the Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 4.06) paid by such Indemnified Party and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto except as a result of the gross negligence (which shall in
any event include the failure of such Indemnified Party to provide to the
Company any form or certificate that it was required to provide pursuant to
subsection (d) below) or willful misconduct of such Indemnified Party, whether
or not such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within thirty (30) days from the date such
Indemnified Party makes written demand therefor.
(d) On or prior to the date on which each Indemnified
Party organized under the laws of a jurisdiction outside the United States
becomes an Indemnified Party hereunder, such Indemnified Party shall provide
the Company with U.S. Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the U.S. Internal Revenue
Service, certifying that such Indemnified Party is fully exempt from United
States withholding taxes with respect to all
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payments to be made to such Indemnified Party hereunder, or other documents
satisfactory to the Company indicating that all payments to be made to such
Indemnified Party hereunder are fully exempt from such taxes. Thereafter and
from time to time (but only so long as such Indemnified Party remains lawfully
able to do so), each such Indemnified Party shall submit to the Company such
additional duly completed and signed copies of one or the other of such forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may be (i) notified by the Company to such
Indemnified Party and (ii) required under then current United States law or
regulations to avoid United States withholding taxes on payments in respect of
all amounts to be received by such Indemnified Party pursuant to this
Agreement, the Notes or the Certificates. Upon the request of the Company from
time to time, each Indemnified Party that is a United States person (as such
term is defined in Section 7701(a)(30) of the Code) shall submit to the Company
a certificate to the effect that it is such a United States person. If any
Indemnified Party determines, as a result of any change in applicable law,
regulation or treaty, or in any official application or interpretation thereof,
that it is unable to submit to the Company any form or certificate that such
Indemnified Party is obligated to submit pursuant to this subsection (d), or
that such Indemnified Party is required to withdraw or cancel any such form or
certificate previously submitted, such Indemnified Party shall promptly notify
the Company of such fact.
(e) Any Indemnified Party claiming any additional amounts
payable pursuant to this Section 4.06 shall use its best efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Funding Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
which may thereafter accrue and would not, in the reasonable judgment of such
Indemnified Party, be otherwise disadvantageous to such Indemnified Party.
(f) Without prejudice to the survival of any other
agreement of the Company hereunder, the agreements and obligations of the
Company and each Indemnified Party contained in this Section 4.06 shall survive
the payment in full of principal and interest hereunder and under the Notes and
the Certificates.
(g) Any other provision of this Agreement to the contrary
notwithstanding, any amounts which are payable by the Company under this
Section 4.06 shall not be payable under Section 5.03.
ARTICLE V
Yield Protection and Illegality
Section 5.01 Additional Interest and Yield. If any
Participant shall determine in good faith that reserves under regulations of
the Board of Governors of the Federal Reserve System are required to be
maintained by it in respect of, or a portion of its costs of maintaining
reserves under such regulations is properly attributable to, one or more of its
Eurodollar Loans or Eurodollar Advances, the Company shall pay to such
Participant additional interest or yield on the unpaid principal amount of each
such Eurodollar Loan or Eurodollar Advance (other than any such additional
interest or yield accruing to a particular Participant in respect of periods
prior to the 30th day preceding the date notice of such interest or yield is
given by such Participant as provided in this Section 5.01), payable on the
same day or days on which interest or yield is payable on such
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Eurodollar Loan or Eurodollar Advance, at an interest rate or yield per annum
equal at all times during each Eurodollar Period for such Eurodollar Loan or
Eurodollar Advance to the excess of (i) the rate obtained by dividing the
Eurodollar Rate for such Eurodollar Period by a percentage equal to 100% minus
the Eurodollar Reserve Percentage, if any, for such Participant for such
Eurodollar Period over (ii) the Eurodollar Rate for such Eurodollar Period.
The amount of such additional interest or yield (if any) shall be determined by
each Participant, and such Participant shall furnish written notice of the
amount of such additional interest or yield to the Company, the Guarantor and
the Agent, which notice shall be conclusive and binding for all purposes,
absent manifest error.
Section 5.02 Interest Rate and Yield Determination.
(a) Each Reference Lender agrees to furnish to the Agent
timely information for the purpose of determining the Eurodollar Rate. If any
one or more of the Reference Lenders shall not furnish such timely information
to the Agent for the purpose of determining any such rate, the Agent shall
determine such rate on the basis of timely information furnished by the
remaining Reference Lenders.
(b) The Agent shall give prompt notice to the Company and
the Participants of the applicable interest rate or yield determined by the
Agent for purposes of Section 3.03(a)(i) and 3.03(b)(i), and the applicable
rate, if any, furnished by each Reference Lender for the purpose of determining
the applicable interest rate under Section 3.03(a)(ii) and the applicable yield
under Section 3.03(b)(ii).
(c) If fewer than two Reference Lenders furnish timely
information to the Agent for determining the Eurodollar Rate for any Eurodollar
Loan or Eurodollar Advance,
(i) the Agent shall give the Company and each Participant
prompt notice thereof by telephone (confirmed in writing) that the
rate cannot be determined for such Eurodollar Loans or Eurodollar
Advances,
(ii) each such Loan or Eurodollar Advance will
automatically, on the last day of the then existing Eurodollar Period
therefor, Convert into a Base Rate Loan or Base Rate Advance, as
applicable, (or, if such Loan or Certificate Advance is then a Base
Rate Loan or a Base Rate Advance, as applicable, will continue as a
Base Rate Loan or Base Rate Advance), and
(iii) the obligations of the Participants to make, or to
Convert Loans or Certificate Advances into, Eurodollar Loans or
Eurodollar Advances shall be suspended until the Agent shall notify
the Company and the Participants that the circumstances causing such
suspension no longer exist.
(d) If with respect to any Eurodollar Loans the Majority
Note Holders, or with respect to any Eurodollar Advances, the Majority
Certificate Holders, determine and give notice to the Agent that, as a result
of conditions in or generally affecting the London interbank eurodollar market,
the rates or yield determined on the basis of the Eurodollar Rate for any
Eurodollar Period for Eurodollar Loans or Eurodollar Advances will not
adequately reflect the cost to either the Majority Note Holders or Majority
Certificate Holders of making, funding or maintaining their respective
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Eurodollar Loans or Eurodollar Advances for such Eurodollar Period, the Agent
shall forthwith so notify the Company, the Guarantor and the Participants,
whereupon,
(i) in the case of such notice from the Majority Note
Holders, each such Eurodollar Loan, or in the case of such notice from
the Majority Certificate Holders, each such Eurodollar Advance, will
automatically, on the last day of the then existing Eurodollar Period
therefor, Convert into a Base Rate Loan or Base Rate Advance, as
applicable, and
(ii) the obligation of the Majority Note Holders or the
Majority Certificate Holders, as applicable, to make, or to Convert
Base Rate Loans or Base Rate Advances, as applicable, into,
Eurodollar Loans or Eurodollar Advances, as applicable, shall be
suspended until the Agent shall notify the Company, the Guarantor and
the Participants that the circumstances causing such suspension no
longer exist.
(e) If any Reference Lender shall for any reason no
longer have a Commitment or any Loans, such Reference Lender shall thereupon
cease to be a Reference Lender, and if, as a result, there shall only be one
Reference Lender remaining, the Agent (after consultation with the Company and
the Participants) shall, by notice to the Company and the Participants,
designate another Note Holder as a Reference Lender so that there shall at all
times be at least two Reference Lenders.
Section 5.03 Increased Costs.
(a) If, due to either (i) the introduction after the date
of this Agreement of or any change after the date of this Agreement (including
any change by way of imposition or increase of reserve requirements or
assessments other than those referred to in the definition of "Eurodollar
Reserve Percentage," "C/D Reserve Percentage" or "C/D Assessment Rate"
contained in Schedule 1.02) in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request issued or made
after the date of this Agreement from or by any central bank or other
Governmental Authority (whether or not having the force of law), in each case
above other than those referred to in Section 5.04, there shall be any increase
in the cost to any Participant of agreeing to make, fund or maintain, or of
making, funding or maintaining, Eurodollar Loans or Eurodollar Advances funded
in the interbank eurodollar market, then the Company shall from time to time,
upon demand by such Participant (with a copy of such demand to the Agent), pay
to the Agent for the account of such Participant additional amounts sufficient
to reimburse such Participant for all such increased costs (except those costs
incurred more than 60 days prior to the date of such demand; for the purposes
hereof any cost or expense allocable to a period prior to the publication or
effective date of such an introduction, change, guideline or request shall be
deemed to be incurred on the later of such publication or effective date).
Each Participant agrees to use its best efforts promptly to notify the Company
of any event referred to in clause (i) or (ii) above, provided that the failure
to give such notice shall not affect the rights of any Participant under this
Section 5.03 (except as otherwise expressly provided above in this Section
5.03(a)). A certificate as to the amount of such increased cost, submitted to
the Company and the Agent by such Participant, shall be conclusive and binding
for all purposes, absent manifest error. After one or more Participants have
notified the Company of any increased costs pursuant to this Section 5.03, the
Company may specify by notice to the Agent and the affected Participants that,
after the date of such notice whenever the election of a Eurodollar Loan or
Eurodollar Advance by the Company for any Eurodollar Period or portion thereof
would give rise to such increased costs, such election shall not apply to the
Eurodollar Loans or Eurodollar Advances of such Participants during such
Eurodollar Period or portion thereof, and, in lieu thereof,
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such Loans or Certificate Advances, as applicable, shall during such Eurodollar
Period or portion thereof be Base Rate Loans or Base Rate Advances, as
applicable. Each Participant agrees to use its best efforts (including,
without limitation, a reasonable effort to change its Applicable Funding Office
or to transfer its affected Loans or Certificate Advances to an Affiliate of
such Participant) to avoid, or minimize the amount of, any demand for payment
from the Company under this Section 5.03.
(b) In the event that any Participant shall change its
Applicable Funding Office and such change results (at the time of such change)
in increased costs to such Participant, the Company shall not be liable to such
Participant for such increased costs incurred by such Participant to the
extent, but only to the extent, that such increased costs shall exceed the
increased costs which such Participant would have incurred if the Applicable
Funding Office of such Participant had not been so changed, but, subject to
subsection (a) above and to Section 5.05, nothing herein shall require any
Participant to change its Applicable Funding Office for any reason.
Section 5.04 Increased Capital. If either (a) the
introduction of or any change in or in the interpretation of any law or
regulation or (b) compliance by any Participant with any guideline or request
from any central bank or other Governmental Authority (whether or not having
the force of law) affects or would affect the amount of capital required or
expected to be maintained by such Participant or any corporation controlling
such Participant and such Participant determines that the amount of such
capital is increased by or based upon the existence of such Participant's
commitment to lend or make contributions hereunder and other commitments of
this type, then, within ten (10) days after demand, and delivery to the Company
of the certificate referred to in the last sentence of this Section 5.04 by
such Participant (with a copy of such demand to the Agent), the Company shall
pay to the Agent for the account of such Participant, from time to time as
specified by such Participant, additional amounts sufficient to compensate such
Participant or such corporation in the light of such circumstances, to the
extent that such Participant reasonably determines such increase in capital to
be allocable to the existence of such Participant's commitment to lend or make
contributions hereunder (except any such increase in capital incurred more
than, or compensation attributable to the period before, 90 days prior to the
date of such demand; for the purposes hereof any increase in capital allocable
to, or compensation attributable to, a period prior to the publication or
effective date of such an introduction, change, guideline or request shall be
deemed to be incurred on the later of such publication or effective date).
Each Participant agrees to use its best efforts promptly to notify the Company
of any event referred to in clause (a) or (b) above; provided that the failure
to give such notice shall not affect the rights of any Participant under this
Section 5.04 (except as otherwise expressly provided above in this Section
5.04). A certificate in reasonable detail as to the basis for, and the amount
of, such compensation submitted to the Company by such Participant shall, in
the absence of manifest error, be conclusive and binding for all purposes.
Section 5.05 Illegality. Notwithstanding any other provision
of this Agreement, if the introduction of or any change in or in the
interpretation of any law or regulation shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Participant or its Applicable Funding Office to perform its obligations
hereunder to make Eurodollar Loans or Eurodollar Advances or to continue to
fund or make or maintain such Eurodollar Loans or Eurodollar Advances
hereunder, such Participant may, by notice to the Company and the Agent,
suspend the right of the Company to elect Eurodollar Loans or Eurodollar
Advances, as applicable, from such Participant and, if necessary in the
reasonable opinion of such Participant to comply with such law or regulation,
Convert all such Eurodollar Loans of such Note Holder to Base Rate Loans, or
Convert all such Eurodollar Advances of such Certificate Holder to Base Rate
Advances, as
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applicable, at the latest time permitted by the applicable law or regulation,
and such suspension and, if applicable, such Conversion shall continue until
such Participant notifies the Company and the Agent that the circumstances
making it unlawful for such Participant to perform such obligations no longer
exist (which such Participant shall promptly do when such circumstances no
longer exist). So long as the obligation of any Participant to make Eurodollar
Loans or Eurodollar Advances, as applicable, has been suspended under this
Section 5.05: (a) all Advance Notices specifying Loans or Certificate Advances
of such Type, and (b) each deemed election to continue a Eurodollar Advance
pursuant to Section 2.09(a), shall be deemed, as to such Participant, to be
requests for Base Rate Loans or Base Rate Advances, as applicable. Each
Participant agrees to use its best efforts (including, without limitation, a
reasonable effort to change its Applicable Funding Office or to transfer its
affected Loans or Certificate Advances to an Affiliate) to avoid any such
illegality.
Section 5.06 Payments and Computations. Each determination
by the Agent (or, in the case of Section 5.01, 5.02, 5.03, 5.04, 5.05 or 5.07
by each Note Holder with respect to its own Loans, or Certificate Holder with
respect to its own Certificate Advances) of an interest rate or yield, or an
increased cost or increased capital or of illegality hereunder shall be
conclusive and binding for all purposes (absent manifest error) if made
reasonably and in good faith.
Section 5.07 Compensation. If any payment of principal of,
or Conversion of, any Eurodollar Loan or Eurodollar Advance is made by the
Company to or for the account of any Participant on any day other than the last
day of the Eurodollar Period for such Eurodollar Loan or Eurodollar Advance, as
a result of a repayment pursuant to Section 2.08, a prepayment pursuant to
Section 3.02, or a Conversion pursuant to Section 5.02(b) or Section 5.05 or
due to acceleration of the maturity of the Notes and Certificates pursuant to
Section 10.02 or due to any other reason attributable to the Company, the
Company shall, upon demand by such Participant (with a copy of such demand to
the Agent), pay to the Agent for the account of such Participant any amounts
required to compensate such Participant for any additional losses, costs or
expenses which it may reasonably incur as a result of such payment or
Conversion, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Participant to fund or
maintain such Eurodollar Loan or Eurodollar Advance.
ARTICLE VI
Conditions Precedent
Section 6.01 Conditions Precedent to Effectiveness of this
Agreement. This Agreement shall become effective when (i) it shall have been
executed by the Trustee, the Company, the Guarantor and the Agent, (ii) the
Agent and the Company either shall have been notified by each Note Holder and
each Certificate Holder that it has executed this Agreement or shall have
received a counterpart of this Agreement executed by such Participant, and
(iii) the Agent shall, on or before March 30, 1995, have received the
following, each being in form and substance satisfactory to the Agent and
(except for the Notes and the Certificates) in sufficient copies for each
Participant:
(a) Certificate of Company and Guarantor. Certificates
of the Secretary or Assistant Secretary of each of the Company and the
Guarantor setting forth (i) resolutions of its board of directors authorizing
the execution, delivery and performance of the obligations contained in this
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Agreement and the other Operative Documents to which it is a party, (ii) the
officers of the Company and the Guarantor specified in such Secretary's
Certificate that are authorized to sign this Agreement and the other Operative
Documents to which it is a party and, until replaced by another officer or
officers duly authorized for that purpose, to act as its respective
representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the Operative
Documents, and (iii) true and correct copies of articles or certificate of
incorporation and the bylaws of each of the Company and the Guarantor. The
parties to this Agreement may conclusively rely on such certificate until the
Agent (who shall promptly notify all other parties) receives notice in writing
from the Company or the Guarantor, as the case may be, to the contrary.
(b) Certificate of Trustee. A certificate of the
Secretary or Assistant Secretary of the Trustee setting forth (i) resolutions
of its board of directors authorizing the execution, delivery and performance
of the obligations contained in this Agreement and the other Operative
Documents to which it is a party, (ii) the officers of the Trustee specified in
such Secretary's Certificate that are authorized to sign this Agreement and the
other Operative Documents to which it is a party and, until replaced by another
officer or officers duly authorized for that purpose, to act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the Operative
Documents, and (iii) true and correct copies of articles or certificate of
incorporation and the bylaws of the Trustee. The parties to this Agreement may
conclusively rely on such certificate until the Agent (who shall promptly
notify all other parties) receives notice in writing from the Trustee to the
contrary.
(c) Opinion of Company and Guarantor's Associate General
Counsel. A favorable opinion of Eldon J. Mitrisin, Esq., the Associate
General Counsel of the Guarantor, in substantially the form of Exhibit O
hereto, and as to such other matters as any Participant, through the Agent, may
reasonably request.
(d) Opinion of Company and Guarantor's Counsel. A
favorable opinion of Fried, Frank, Harris, Shriver & Jacobson, New York counsel
to the Company, in substantially the form of Exhibit P hereto, and as to such
other matters as any Participant, through the Agent, may reasonably request.
(e) Opinion of New Mexico Counsel. A favorable opinion
of Montgomery & Andrews, special New Mexico counsel to the Company and the
Guarantor, in substantially the form of Exhibit Q hereto, and as to such other
matters as any Participant, through the Agent, may reasonably request.
(f) Opinion of Trustee's Counsel. A favorable opinion of
Bingham, Dana & Gould, special counsel to the Trustee, in substantially the
form of Exhibit R hereto, and as to such other matters as any Participant,
through the Agent, may reasonably request.
(g) Execution of Notes. The Notes payable to the Note
Holders duly completed and executed.
(h) Execution of Certificates. The Certificates issued
to the Certificate Holders duly completed and executed.
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(i) Execution and Delivery of Operative Documents. Each
of the other Operative Documents, duly completed and executed in sufficient
number of counterparts for recording where appropriate.
(j) Execution and Delivery of Security Instruments. The
Security Agreement and all related financing statements shall have been duly
filed in the appropriate offices and, to the fullest extent allowed by
applicable law, all costs and taxes associated with such filing shall have been
paid or provided for by the Company.
(k) Insurance Certification. The Agent and the Trustee
shall have received a report by a firm of independent insurance brokers or
consultants chosen by the Company (i) setting forth the insurance obtained and
to be obtained pursuant to the Lease with respect to the Facility and the
Company's operations with respect thereto, and (ii) certifying that in the
opinion of such firm, such insurance complies with the requirements of the
Lease and, as to amounts, coverage and provisions, constitutes reasonable and
customary coverage against risks customarily insured against affecting the
Facility.
(l) Receipt of Facility Plan. The Agent shall have
received a copy of the Facility Plan.
(m) Environmental Matters. The Agent and the Trustee
shall have received a Phase One environmental site assessment on the Site,
conducted by an engineering firm approved by the Participants, demonstrating to
their satisfaction that there is no evidence of any hazardous or toxic material
or substance which has been generated, treated, stored, released or disposed of
on the Site, and that there is no evidence of any violation of any
Environmental Law and no evidence of any environmental damages on or pertaining
to the Property.
(n) Soil Tests. The Agent shall have received soil test
reports as to soil borings on the Site by a soil testing firm satisfactory to
the Participants. The number and location of such borings shall be in
accordance with the recommendations of the soil testing firm and also
satisfactory to the Participants. The report shall include the recommendations
of the soil testing firm as to the preparation of the soil needed to adequately
support the Facility.
(o) Survey. The Agent shall have received the Survey of
the Site.
(p) Appraisal. The Participants shall have received an
Approved Appraisal of the Property, which Approved Appraisal shall be in form
and substance satisfactory to the Participants.
(q) Other. Such other documents as the Agent or any
Participant or special counsel to the Agent may reasonably request.
Section 6.02 Initial and Subsequent Loans. The obligation of
the Participants to make the Initial Loans, the Initial Advances and each
subsequent Loan and Certificate Advance pursuant to this Agreement is subject
to the following further conditions precedent:
(a) Receipt of Advance Notice. The Agent shall have
received Advance Notice pursuant to a funding request with regard to each Loan
and Certificate Advance containing the information required by Section 2.02
which shall be true and correct and shall be duly and properly
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executed and completed by the Company as agent for the Trustee. Such Advance
Notice shall specify the amount of the Loans and Certificate Advances being
utilized to acquire work in progress and itemize such work in progress in
reasonable detail.
(b) No Default. The fact that immediately before and
after such Loan and Certificate Advance, no Default shall have occurred and be
continuing.
(c) Accuracy of Representations, etc. The
representations and warranties of the Company, the Guarantor and the Trustee
contained in this Agreement or any other Operative Document are true and
correct in all material respects on and as of the date of such Loan and
Certificate Advance to the Trustee (except for any representations which were
correct on the date of this Agreement but are not correct on the date of any
Loan and Certificate Advance because of a change permitted by the terms of this
Agreement or the Operative Documents).
(d) Title. The Trustee shall have good and marketable
title to the Facility, and all of the Trustee's contract rights under contracts
entered into in connection with the acquisition, construction, development and
installation of the Facility by the Company as agent for the Trustee pursuant
to the Agency Agreement shall have been pledged to the Agent for the benefit of
the Participants so that the Agent shall have a first priority, perfected Lien
on all such contract rights, subject to the Permitted Liens.
(e) Receipt of Applicable Permits. All Permits that are
or will become Applicable Permits shall have been obtained, except Applicable
Permits customarily obtained or which are permitted by Governmental
Requirements to be obtained after the date of the requested Loan or Certificate
Advance (in which case the Company, having completed all appropriate due
diligence in connection therewith, shall have no reason to believe that such
Permits will not be granted in the usual course of business prior to the date
that such Permits are required by Governmental Requirements). All such
obtained Permits shall be in proper form, in full force and effect and not
subject to any appeal or other unsatisfied contest that may allow modification
or revocation thereof.
(f) Casualties. The Facility shall not have suffered (i)
a Loss Event or (ii) a Casualty Occurrence other than a Casualty Occurrence for
which a plan acceptable to the Agent for replacing, or causing to be replaced,
the portions of Facility that are the subject of such Casualty Occurrence has
been provided to the Trustee.
Each acceptance of a funding hereunder shall be deemed to be a representation
and warranty by the Company on the date of such funding as to the facts
specified in subsections (b), (c), (d), and (e) of this Section 6.02.
Section 6.03 Condition Precedent to Phase Two Loans and Phase
Two Advances. The obligation of the Participants to make the initial Phase Two
Loans, the Phase Two Advance and each subsequent Phase Two Loan pursuant to
this Agreement is subject to the following further condition precedent that the
Guarantor shall deliver a certificate of the Secretary or Assistant Secretary
of Guarantor setting forth resolutions of its board of directors making the
Phase Two Election and authorizing the construction and operation of Phase Two
of the Facility.
Section 6.04 Conditions Precedent for the Benefit of
Participants. All conditions precedent to the obligations of the Participants
to make any Loan or Certificate Advance are imposed
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hereby solely for the benefit of the Participants, and no other Person may
require satisfaction of any such condition precedent or be entitled to assume
that the Participants will refuse to make any Loan or Certificate Advance in
the absence of strict compliance with such conditions precedent.
Section 6.05 Closing. The closing of the transactions
contemplated by this Agreement shall take place on the Closing Date at such
place as the parties hereto shall agree. On the Closing Date, the following
transactions shall be consummated simultaneously:
(a) This Agreement and each of the Operative Documents
shall be duly executed and delivered by the parties to such documents.
(b) Subject to the satisfaction of the conditions
precedent specified in Section 6.01 and Section 6.02 of this Agreement, the
Note Holders shall make the Initial Loans and the Certificate Holders shall
make the Initial Advances, each in the amounts as is set forth in the Advance
Notice given by the Company, in immediately available funds to the account of
the Trustee at such account of the Trustee as the Company, as agent for the
Trustee, may direct.
(c) The Trustee shall pay, or cause to be paid or
disbursed, to the Guarantor in immediately available funds, all amounts then
due and payable under the Ground Lease, and the Company, as agent for the
Trustee, shall cause such Ground Lease to be delivered to the Agent for
recording.
ARTICLE VII
Representations and Warranties
Section 7.01 Company and the Guarantor Representations and
Warranties. The Company and the Guarantor represent and warrant to each Person
who now is or hereafter becomes a party to this Agreement that:
(a) Existence. Each of the Guarantor and the Company is
a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware. Each Principal Subsidiary is duly
incorporated, validly existing and in good standing in the jurisdiction of its
incorporation. Each of the Guarantor and the Company possess all corporate
powers and all other authorizations and licenses necessary to engage in its
business and operations as now conducted, the failure to obtain or maintain
which would have a Material Adverse Effect.
(b) Action. The execution, delivery and performance by
each of the Guarantor and the Company of this Agreement and the other Operative
Document to which it is a party are within its corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene (i) its
charter or by-laws, (ii) any law, applicable Governmental Requirement, or
contractual restriction binding on or affecting the Guarantor or the Company,
or (iii) result in the creation or imposition of any Lien (except for Permitted
Liens or Liens under the Operative Documents) upon the Facility pursuant to the
terms of any agreement or instrument.
(c) Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required for (i) the due execution and delivery and (ii)
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the performance by the Guarantor and the Company of this Agreement and the
other Operative Documents to which it is a party, or for the validity or
enforceability thereof, except those Applicable Permits or other
authorizations, approvals, actions, notices or filings necessary to comply with
laws, rules, regulations and orders required in the ordinary course to comply
with ongoing obligations of the Guarantor and the Company under Section 8.01(a)
and Section 8.01(b), and in the case of clause (ii) above, the Applicable
Permits and those the failure to obtain, perform or make which would not have a
Material Adverse Effect or impair the validity or enforceability of any
Operative Document.
(d) Binding Effect. This Agreement and the Operative
Documents to which it is a party when delivered hereunder shall constitute, the
legal, valid and binding obligations of each of the Guarantor and the Company
enforceable against the Guarantor or the Company in accordance with their
respective terms, except as may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general principles of equity.
(e) Financial Condition. The consolidated balance sheet
of the Guarantor and its Consolidated Subsidiaries as at December 31, 1993, and
the related consolidated statements of income and cash flows of the Guarantor
and its Consolidated Subsidiaries for the fiscal year then ended, reported on
by Coopers & Lybrand, independent public accountants, copies of which have been
furnished to the Agent and the Participants prior to the date hereof, fairly
present the consolidated financial condition of the Guarantor and its
Consolidated Subsidiaries as at such date and the consolidated results of the
operations of the Guarantor and its Consolidated Subsidiaries for the period
ended on such date, all in accordance with generally accepted accounting
principles, consistently applied, and since December 31, 1993, there has been
no material adverse change in such condition or operations. The unaudited
consolidated balance sheet of the Guarantor and its Consolidated Subsidiaries
as of September 30, 1994, and the related consolidated statements of income and
cash flows of the Guarantor and its Consolidated Subsidiaries for the nine
months then ended, certified by the chief financial officer of the Guarantor,
copies of which have been furnished to the Agent and the Participants prior to
the date hereof, fairly present the consolidated results of operations of the
Guarantor and its Consolidated Subsidiaries for the nine months then ended, all
in accordance with generally accepted accounting principles, consistently
applied, and subject to normal year-end audit adjustments.
(f) Litigation. Except as set forth in Schedule 7.01(f),
there is no action, suit or proceeding pending, or to the knowledge of the
Guarantor or the Company, threatened, against or involving the Guarantor or the
Company or any Principal Subsidiary in any court, or before any arbitrator of
any kind, or before or by any Governmental Authority, which in the reasonable
judgment of the Guarantor or the Company (taking into account the exhaustion of
all appeals) would have a Material Adverse Effect, or which purports to affect
the legality, validity, binding effect or enforcement of this Agreement or any
of the Operative Documents.
(g) Taxes. The Guarantor, the Company and each Principal
Subsidiary have duly filed all tax returns required to be filed, and have duly
paid and discharged all taxes, assessments and governmental charges upon it or
against its properties now due and payable, the failure to pay which would have
a Material Adverse Effect, unless and to the extent only that the same are
being contested in good faith and by appropriate proceedings by the Guarantor,
the Company or the appropriate Subsidiary.
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(h) Titles; Etc. The Guarantor, the Company and each
Principal Subsidiary have good title to their respective properties and assets,
free and clear of all mortgages, liens and encumbrances, except for mortgages,
liens and encumbrances (including covenants, restrictions, rights, easements
and minor irregularities in title) which do not materially interfere with the
business or operations of the Guarantor, the Company or such Principal
Subsidiary as presently conducted or which are permitted by Section 9.01(a),
and except that no representation or warranty is being made with respect to
Margin Stock. As of the Initial Funding Date, the Guarantor owns legal and
beneficial title to 100% of the record title interest in and to the Site, free
and clear of all Liens except Permitted Liens and the interest of the Trustee
in the Ground Lease. None of the Permitted Liens will interfere with the use
or possession of the Facility or the use of or exercise by the Trustee of its
rights under any Operative Document or with respect to the Facility, except to
the extent such interference would not be reasonably expected to have a
Material Adverse Effect.
(i) ERISA.
(i) No ERISA Termination Event has occurred or is
reasonably expected to occur with respect to any Plan which, with the
giving of notice or lapse of time, or both, would constitute an Event
of Default under Section 10.01(g).
(ii) Each Plan has complied with the applicable provisions
of ERISA and the Code where the failure to so comply would reasonably
be expected to result in an aggregate liability that would exceed 10%
of the Net Worth of the Guarantor.
(iii) The statement of assets and liabilities of each Plan
and the statements of changes in fund balance and in financial
position, or the statement of changes in net assets available for plan
benefits, for the most recent plan year for which an accountant's
report with respect to such Plan has been prepared, copies of which
report have been furnished to the Agent, fairly present the financial
condition of such Plan as at such date and the results of operations
of such Plan for the plan year ended on such date.
(iv) Neither the Guarantor nor any ERISA Affiliate has
incurred, or is reasonably expected to incur, any Withdrawal Liability
to any Multiemployer Plan which, when aggregated with all other
amounts required to be paid to Multiemployer Plans in connection with
Withdrawal Liability (as of the date of determination), would exceed
10% of the Net Worth of the Guarantor.
(v) Neither the Guarantor nor any ERISA Affiliate has
received any notification that any Multiemployer Plan is in
reorganization, insolvent or has been terminated, within the meaning
of Title IV of ERISA, and no Multiemployer Plan is reasonably expected
to be in reorganization, insolvent or to be terminated within the
meaning of Title IV of ERISA the effect of which reorganization,
insolvency or termination would be the occurrence of an Event of
Default under Section 10.01(g).
(j) Use of Proceeds. The proceeds of the Loans and the
Certificate Advances are being used to finance the Facility, the enhancements
and improvements to be made thereto and the design, construction and
installation thereof, including all Facility Costs. Neither the Company nor
the Trustee is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, and no proceeds of any Loan or Certificate
Advance will be used to extend credit to
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others for the purpose of purchasing or carrying Margin Stock and no part of
the proceeds of any Loan or Certificate Advance hereunder will be used to buy
or carry any stock or acquire any security in any transaction which is subject
to Section 13 or 14 of the Securities Exchange Act of 1934.
(k) Investment Company Act. Neither the Guarantor nor
any of its Subsidiaries is an "investment company" or a "company" controlled by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
(l) Public Utility Holding Company Act. Neither the
Guarantor nor any of its Subsidiaries is a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(m) No Material Misstatements. All information and data
concerning the Guarantor and any Subsidiary or Affiliate of the Guarantor set
forth in the Confidential Information Memorandum dated as of November, 1994
from the Agent describing the transactions contemplated by this Agreement was,
when delivered, complete and correct in all material respects and did not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements were made.
(n) Location of Business and Offices. The principal
place of business and chief executive offices of the Company are located at the
respective addresses therefor set forth on its signature page hereto.
(o) Environmental Matters. Except as disclosed in
Schedule 7.01(o):
(i) neither any Property of the Company nor the Facility
nor the operations conducted thereon violate any Environmental Laws or
any Governmental Requirement of any Governmental Authority with
respect to Environmental Laws which violation would have a Material
Adverse Effect;
(ii) without limitation of clause (i) above, no Property
of the Company nor the Facility nor the operations currently conducted
thereon or by any prior owner or operator of such Property or the
Facility, are in violation of or subject to any existing or pending
action, suit, investigation, inquiry or proceeding by or before any
Governmental Authority or to any on-site or off-site remedial
obligations under Environmental Laws which, in any of the foregoing
cases, would have a Material Adverse Effect;
(iii) all Permits or similar authorizations, if any,
required to have been obtained, as of the date the representation
contained in this Section 7.01(o) is made or deemed made, in
connection with the operation or use of any Property of the Company or
the Facility have been duly obtained or filed, except for those
necessary to comply with Environmental Laws required in the ordinary
course to comply with ongoing obligations of the Guarantor and the
Company under Section 8.01(b), and those the failure to obtain or make
which would not have a Material Adverse Effect; and the Company has
been, is now, and expects to continue to be in compliance with the
terms and conditions of all such Permits and similar authorizations,
unless the failure to so obtain, file or comply would not have a
Material Adverse Effect;
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(iv) all hazardous substances or solid waste generated at
any and all Property of the Company and the Facility have at all times
been transported, treated and disposed of in compliance with
Environmental Laws except where failure to comply would not have a
Material Adverse Effect; and
(v) no environmental conditions exist with respect to any
of the Properties owned by the Guarantor or the Company which would
have a Material Adverse Effect.
(p) Facility Plan. The Facility Plan has been prepared
in good faith on the basis of assumptions deemed reasonable by the Company and
accurately reflects in all respects all material costs currently anticipated to
be incurred in connection with achieving Phase One Completion and Phase Two
Completion. The Facility Plan sets forth the Company's good faith estimation
of the schedule for achieving Phase One Completion and Phase Two Completion.
All material agreements and instruments comprising the Facility Plan are in
full force and effect and the Company is not in default of its obligations
thereunder in any respect that would have a Material Adverse Effect. To the
best knowledge of the Company, there are no agreements, instruments, licenses
or other rights necessary to own, operate, lease or use the Facility the
failure to obtain which would result in a Material Adverse Effect, other than
the Applicable Permits, the documents and instruments comprising the Facility
Plan, and the Operative Documents; and construction, ownership, operation,
leasing or use of the Facility by the Company (and after the expiration or
termination of the Lease, the construction, ownership, operation, leasing or
use of the Facility by the Trustee or its successors or assigns) does not and
will not infringe on, or otherwise violate, any patents, patent applications,
trademarks (whether registered or not), trademark applications, trade names,
proprietary computer software, or copyrights of any Person in any manner that
would have a Material Adverse Effect.
(q) Ownership of the Company. On the Initial Funding
Date, the Guarantor owns, directly or indirectly, legal and beneficial title to
100% of the shares of common stock of the Company, free and clear of all Liens,
except Liens permitted by Section 9.01(a).
Section 7.02 Representations and Warranties of State Street.
State Street, in its individual capacity and not as Trustee, represents and
warrants to the Company, the Agent and the Participants that:
(a) Existence. State Street is a national banking
association duly organized, validly existing and in good standing under the
laws of the United States of America.
(b) Litigation. There are no legal or arbitral
proceedings or any proceedings by or before any Governmental Authority, now
pending or (to the knowledge of State Street) threatened against State Street
which contests the validity or enforceability of the Operative Documents or
which, if adversely determined, could have a material adverse effect on the
Facility or the performance of the Trustee's obligations under the Operative
Documents.
(c) No Breach. The execution and delivery of this
Agreement, the Notes, the Certificates and the other Operative Documents, the
transactions herein and therein contemplated and compliance with the terms and
provisions hereof and thereof will not conflict with, or result in a breach of,
or require any consent of any Person not already obtained, under the charter or
bylaws of State Street, or any Governmental Requirement of the Commonwealth of
Massachusetts or the United States of America governing its banking and trust
powers, or any agreement or instrument to which
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State Street is a party or by which it is bound or to which it is subject, or
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien (except under the Operative Documents and
other Permitted Liens) upon any of the revenues or Property of the Trustee,
including the Facility, pursuant to the terms of any such agreement or
instrument.
(d) Action. State Street has all necessary corporate
power and authority to execute, deliver and perform its obligations under this
Agreement, the Notes, the Certificates, the other Operative Documents to which
it is a party; and the execution, delivery and performance by it of this
Agreement, the Notes, the Certificates, the other Operative Documents to which
it is a party have been duly authorized by all necessary corporate action on
its part; and this Agreement, the Notes, the Certificates and the other
Operative Documents constitute the legal, valid and binding obligations of the
Trustee, enforceable against it in accordance with their terms, except as may
be limited by any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally or by general principles
of equity.
(e) Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any Governmental Authority of the
Commonwealth of Massachusetts or the United States of America governing its
banking and trust powers are necessary for the execution, delivery or
performance by the Trustee of this Agreement, the Notes, the Certificates, the
other Operative Documents to which it is a party, or for the validity or
enforceability thereof.
ARTICLE VIII
Affirmative Covenants
Section 8.01 Affirmative Covenants of Company and Guarantor.
The Guarantor and the Company covenant and agree to the Agent and each
Participant that until either (i) the Facility has been purchased by the
Company or the Guarantor (or one of its Affiliates) for the Option Price or
(ii) the Lease has been terminated, the Facility has been returned to the
Trustee and all amounts due under the Lease upon such occurrence have been paid
in full, the Company and the Guarantor shall:
(a) Preservation of Corporate Existence, Etc. Preserve
and maintain, and, in the case of the Guarantor, cause each Principal
Subsidiary to preserve and maintain, its corporate existence, rights (charter
and statutory) and material franchises, except as otherwise permitted by
Section 9.01(d) or 9.01(e).
(b) Compliance with Laws, Etc. Comply, and, in the case
of the Guarantor, cause each Principal Subsidiary to comply, in all material
respects with all applicable laws, rules, regulations and orders (including,
without limitation, all Environmental Laws and laws requiring payment of all
Impositions on the Facility and other taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith by appropriate proceedings) the failure to comply with which would
have a Material Adverse Effect.
(c) Visitation Rights. At any reasonable time and from
time to time, and upon reasonable notice, permit the Agent or any of the
Participants or any agents or representatives thereof, to make copies of and
abstracts from the records and books of account of the Guarantor and any of
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its Subsidiaries, to visit and inspect the Facility in accordance with the
Lease, and to discuss the affairs, finances and accounts of the Guarantor and
any of its Subsidiaries with any of their officers and with their independent
certified public accountants.
(d) Books and Records. Keep, and, in the case of the
Guarantor, cause each of its Subsidiaries to keep, proper books of record and
account, in which full and correct entries shall be made of all its respective
financial transactions and the assets and business of the Guarantor and each of
its Subsidiaries, as applicable, in accordance with generally accepted
accounting principles either (i) consistently applied or (ii) applied in a
changed manner provided such change shall have been disclosed to the Agent and
shall have been consented to by the accountants which (as required by Section
8.02(b) hereof) report on the financial statements of the Guarantor and its
Consolidated Subsidiaries for the fiscal year in which such change shall have
occurred. The Company will keep books of record and account regarding the
Lease and shall maintain, on a current basis, books of proper record and
account in conformity with generally accepted accounting principles,
consistently applied, (to the extent applicable) which books shall contain the
Book Value of the Facility as of the immediately preceding Rent Payment Date
and copies of all Related Contracts and any amendments thereto.
(e) Maintenance of Properties, Etc. Maintain and
preserve, and, in the case of the Guarantor, cause each Principal Subsidiary to
maintain and preserve, all of its Properties which are used in the conduct of
its business in good working order and condition, ordinary wear and tear
excepted, to the extent that any failure to do so would not have a Material
Adverse Effect. Without limitation of the foregoing, the Company shall
maintain the Facility in accordance with the requirements of the Lease.
(f) Maintenance of Insurance. Maintain, and, in the case
of the Guarantor, cause each Principal Subsidiary to maintain, insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Guarantor or such Subsidiary operates. Without limitation of the foregoing,
the Company shall maintain or cause to be maintained, with Permitted Insurers,
insurance with respect to the Facility and its business in connection therewith
of the types and in the amounts specified in the Lease. The Company will
deliver or cause to be delivered to the Agent and the Trustee promptly upon
request of Agent, and in any event on January 1st of each calendar year,
commencing with January 1, 1996 a report by a firm of independent insurance
brokers or consultants chosen by the Company and acceptable to the Agent (a)
setting forth the insurance or self-insurance obtained pursuant to the Lease,
including, without limitation, the amounts thereof, the names of the insurers
and the property, hazards and risks covered thereby, and certifying that the
same comply with the requirements of the Lease, that all premiums then due and
payable thereon have been paid and that the same are in full force and effect,
and (b) certifying that in the opinion of such firm, such insurance or
self-insurance complies with the requirements of the Lease and, as to amounts,
coverage and provisions, constitutes reasonable and customary coverage against
risks customarily insured against which would affect the Facility, or setting
forth any recommendations of such independent insurance brokers as to
additional insurance, if any, reasonably required for the protection of the
interests of the Company, the Trustee, the Agent and the Participants in light
of available insurance coverage and practice in the business of being engaged
in by the Company at the Facility. The Agent shall be entitled to rely on such
reports without further investigation of the facts and circumstances set forth
therein.
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(g) Agreement to Pledge, Etc. The Company and the
Guarantor acknowledge that the Trustee shall grant to the Agent for the benefit
of the Participants a first and prior Lien on and security interest in and to
the Ground Lease, the Lease and the Facility securing the Notes and the
Certificates and other amounts owing under the Operative Documents, subject
only to Permitted Liens.
(h) Environmental Covenant. The Company shall operate
the Facility in such a manner that the Facility and all operations conducted
thereon will at all times be in compliance with all Environmental Laws except
to the extent the failure to comply therewith would not have a Material Adverse
Effect. The Company shall promptly notify the Agent and the Trustee in writing
of any existing, pending or threatened action, investigation or inquiry by any
Governmental Authority concerning the Company in connection with the Facility
under any Environmental Laws which would reasonably be expected to have a
Material Adverse Effect.
(i) Further Assurances. The Company and the Guarantor
will cure promptly any defects in the due execution and delivery of the
Operative Documents, including this Agreement. The Company and the Guarantor
at their expense will promptly execute and deliver to the Agent upon request
all such other and further documents, agreements and instruments in compliance
with or accomplishment of the covenants and agreements of the Company and/or
the Guarantor in the Operative Documents, including this Agreement, or to
further evidence and more fully describe the collateral relating to the
Facility intended as security for the Notes and Certificates, or to correct any
item that the Company and the Agent agree constitutes an omission or error in
the Operative Documents, or more fully to state the existing security
obligations set out herein or in any of the Operative Documents, or to perfect,
protect or preserve any Liens created pursuant to any of the Operative
Documents, or to make any recordings, to file any notices, or obtain any
consents, required by the terms of the Operative Documents, all as may be
necessary or appropriate in connection therewith.
(j) Completion; Etc. The Company will use the proceeds
of the Loans and the Certificate Advances for the purposes specified in Section
7.01(j) and will proceed to achieve Phase One Completion on or prior to the
Phase One Completion Date and, if the Phase Two Election is made, Phase Two
Completion on or prior to the Phase Two Completion Date. The Company will
perform and observe in all material respects its obligations under the
agreements and instruments comprising the Facility Plan and all Applicable
Permits the failure to perform or observe which will have a Material Adverse
Effect. The Company will preserve, protect and maintain in effect all
Applicable Permits unless the failure to maintain such Applicable Permits would
not be reasonably be expected to have a Material Adverse Effect.
(k) Maintenance; Etc. The Company shall preserve,
protect and maintain in accordance with prudent industry practices their rights
in and to the Applicable Permits and all patents, patent applications,
trademarks (whether registered or not), trademark applications, trade names,
proprietary computer software, or copyrights used in the ordinary course of
business of the Facility that are necessary for and material to the operation
of the Facility the failure to have or maintain which would have a Material
Adverse Effect; and the Company shall defend and hold harmless the Trustee, the
Agent and each Participant from and against any cost, liability or expense
arising from any claim of infringement, misuse, or misappropriation of any of
the foregoing.
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(l) Encroachments. The Facility, when completed, shall
be situated wholly within the boundary lines of the Site and shall not encroach
upon any contiguous or adjoining Property (other than those portions of the
Facility for which the Trustee has the right to locate and operate such
portions pursuant to use or operating agreements); and the Facility shall not
violate any other easements, rights-of-way, licenses or other agreements
affecting the Site, or violate any rights granted under the Ground Lease, and
any violations will not result in a reversion or forfeiture of the Ground
Lease, right of re-entry or power of termination.
Section 8.02 Reporting Requirements. The Guarantor and the
Company covenant and agree that until either (i) the Facility has been
purchased by the Company or the Guarantor (or one of its Affiliates) for the
Option Price or (ii) the Lease has been terminated, the Facility has been
returned to the Trustee and all amounts due under the Lease upon such
occurrence have been paid in full, they shall deliver, or cause to be
delivered, to the Agent and each Participant the following in such reasonable
quantities as shall from time to time be requested by such Participant:
(a) Quarterly Financial Statements. As soon as publicly
available and in any event within 60 days after the end of each of the first
three fiscal quarters of each fiscal year of the Guarantor, a consolidated
balance sheet of the Guarantor and its Consolidated Subsidiaries as of the end
of such quarter, and consolidated statements of income and cash flows of the
Guarantor and its Consolidated Subsidiaries each for the period commencing at
the end of the previous fiscal year and ending with the end of such quarter,
certified (subject to normal year-end adjustments) that such financial
statements fairly present the financial condition of the Guarantor and its
Consolidated Subsidiaries as of the date thereof in accordance with generally
accepted accounting principles, consistently applied, by the chief financial
officer, controller or treasurer of the Guarantor and accompanied by a
certificate of such officer stating (i) whether or not such officer has
knowledge of the occurrence of any Event of Default which is continuing
hereunder or of any event not theretofore remedied which with notice or lapse
of time or both would constitute such an Event of Default and, if so, stating
in reasonable detail the facts with respect thereto, (ii) all relevant facts in
reasonable detail to evidence, and the computations as to, whether or not the
Company is in compliance with the requirements set forth in subsections (b) and
(c) of Section 9.01. and (iii) a listing of all Principal Subsidiaries and
Consolidated Subsidiaries of the Guarantor showing the extent of its direct and
indirect holdings of their stocks;
(b) Annual Financial Statements. As soon as publicly
available and in any event within 120 days after the end of each fiscal year of
the Guarantor, a copy of the annual report for such year for the Guarantor and
its Consolidated Subsidiaries containing financial statements for such year
reported by nationally recognized independent public accountants acceptable to
the Agent, accompanied by (i) a report signed by said accountants stating that
such financial statements have been prepared in accordance with generally
accepted accounting principles, and (ii) a letter from such accountants stating
that in making the investigations necessary for such report they obtained no
knowledge, except as specifically stated therein, of any Event of Default which
is continuing hereunder or of any event not theretofore remedied which with
notice or lapse of time or both would constitute such an Event of Default;
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(c) Annual Certification. Within 120 days after the
close of each of the Guarantor's fiscal years, a certificate of the chief
financial officer, controller or treasurer of the Guarantor stating (i) whether
or not he has knowledge of the occurrence of any Event of Default which is
continuing hereunder or of any event not theretofore remedied which with notice
or lapse of time or both would constitute such an Event of Default and, if so,
stating in reasonable detail the facts with respect thereto, (ii) all relevant
facts in reasonable detail to evidence, and the computations as to, whether or
not the Guarantor is in compliance with the requirements set forth in
subsections (b) and (c) of Section 9.01 and (iii) a listing of all Principal
Subsidiaries and Consolidated Subsidiaries of the Guarantor showing the extent
of its direct and indirect holdings of their stocks;
(d) Filings; etc. Promptly after the sending or filing
thereof, copies of all publicly available reports which the Guarantor or any
Principal Subsidiary sends to any of its security holders and copies of all
publicly available reports and registration statements which the Guarantor or
any Principal Subsidiary files with the Securities and Exchange Commission or
any national securities exchange other than registration statements relating to
employee benefit plans and to registrations of securities for selling security
holders;
(e) FERC Filings. Within 10 days after sending or filing
thereof, a copy of FERC Form No. 2: Annual Report of Major Natural Gas
Companies, sent or filed by the Guarantor to or with the FERC with respect to
each fiscal year of the Guarantor;
(f) Litigation. Promptly in writing, notice of all
litigation and of all proceedings before any Governmental Authority against or
involving the Guarantor or any Principal Subsidiary, except any litigation or
proceeding which in the reasonable judgment of the Guarantor (taking into
account the exhaustion of all appeals) is not likely to have a Material Adverse
Effect;
(g) Defaults. Within three (3) Business Days after an
executive officer of the Guarantor obtains knowledge of the occurrence of any
Event of Default which is continuing or of any event not theretofore remedied
which with notice or lapse of time, or both, would constitute an Event of
Default, notice of such occurrence together with a detailed statement by a
responsible officer of the Guarantor of the steps being taken by the Guarantor
or the appropriate Subsidiary to cure the effect of such event;
(h) ERISA.
(i) As soon as practicable and in any event (i) within 30
days after the Guarantor or any ERISA Affiliate knows or has reason to
know that any ERISA Termination Event described in clause (a) of the
definition of ERISA Termination Event with respect to any Plan has
occurred and (ii) within 10 days after the Guarantor or any ERISA
Affiliate knows or has reason to know that any other ERISA Termination
Event has occurred, a statement of the chief financial officer or
treasurer of the Guarantor describing such ERISA Termination Event and
the action, if any, which the Guarantor or such ERISA Affiliate
proposes to take with respect thereto;
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(ii) Promptly and in any event within two (2) Business
Days after receipt thereof by the Guarantor or any ERISA Affiliate,
copies of each notice received by the Guarantor or any ERISA Affiliate
from the PBGC stating its intention to terminate any Plan or to have a
trustee appointed to administer any Plan;
(iii) Promptly and in any event within 30 days after the
filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500
Series) with respect to each Single Employer Plan; and
(iv) promptly and in any event within five (5) Business
Days after receipt thereof by the Guarantor or any ERISA Affiliate
from the sponsor of a Multiemployer Plan, a copy of each notice
received by the Guarantor or any ERISA Affiliate concerning (A) the
imposition of Withdrawal Liability by a Multiple Employer Plan, (B)
the determination that a Multiemployer Plan is, or is expected to be,
in reorganization or insolvent within the meaning of Title IV of
ERISA, (C) the termination of a Multiple Employer Plan within the
meaning of Title IV of ERISA, or (D) the amount of liability incurred,
or expected to be incurred, by the Guarantor or any ERISA Affiliate in
connection with any event described in clause (A), (B) or (C) above.
(i) Other Information. As soon as practicable but in any
event within 60 days of any notice of request therefor, such other information
respecting the financial condition and results of operations of the Guarantor
or any Subsidiary of the Guarantor as any Participant through the Agent may
from time to time reasonably request.
(j) Environmental Matters. Promptly upon obtaining the
same, copies of any environmental assessment or other study undertaken after
the Closing Date with regard to the Facility or any portion thereof by the
Company as agent for the Trustee under the Agency Agreement or under the Lease.
(k) Progress Report. Within ten (10) Business days of
each and every June 30th and December 31st, commencing on June 30, 1995, until
the Phase One Completion Date, or if Phase Two Election is made, the Phase Two
Completion Date, furnish to the Agent a Progress Report through the period
ending on such June 30th or December 31st and dated as of such June 30th or
December 31st.
(l) Form of Financial Statements. Each balance sheet and
other financial statement furnished pursuant to subsections (a) and (b) of this
Section 8.02 shall contain comparative financial information which conforms to
the presentation required in Form 10-Q and 10-K, as appropriate, under the
Securities Exchange Act of 1934, as amended.
(m) Notice of Loss Event or Casualty Occurrence.
Promptly upon becoming aware of the occurrence of either a Loss Event or a
Casualty Occurrence, or any other event or condition requiring notice under
either Section 7 or Section 8 of the Lease, the Company shall give the Agent
and each Participant written notice thereof which notice shall specify the
damage or loss to the Facility in reasonable detail.
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Section 8.03 Covenants of State Street. State Street
covenants and agrees that so long as the trust formed pursuant to the
Declaration remains in existence and that it remains Trustee thereunder, State
Street shall preserve and maintain its corporate existence and material rights,
privileges and franchises, and perform every act and discharge all of its
obligations hereunder and under the Operative Documents; provided the sole
remedy of the parties to this Agreement for breach by State Street of its
obligations shall be to cause a successor Person satisfactory to the Majority
Participants to assume the rights, duties and obligations of the Trustee
hereunder and under the other Operative Documents.
ARTICLE IX
Negative Covenants
Section 9.01 Negative Covenants of Company and Guarantor.
The Guarantor and the Company covenant and agree to the Agent and each
Participant that until either (i) the Facility has been purchased by the
Company or the Guarantor (or one of its Affiliates) for the Option Price or
(ii) the Lease has been terminated, the Facility has been returned to the
Trustee and all amounts due under the Lease upon such occurrence have been paid
in full, the Company and the Guarantor shall not:
(a) Liens, Etc. (i) In the case of the Guarantor,
create, assume or suffer to exist, or permit any Principal Subsidiary to
create, assume or suffer to exist, any Liens upon or with respect to any of the
capital stock of any Principal Subsidiary, whether now owned or hereafter
acquired, or (ii) in the case of the Guarantor, create or assume, or permit any
Principal Subsidiary to create or assume, any Liens upon or with respect to any
of its other assets material to the consolidated operations of the Guarantor
and its Consolidated Subsidiaries taken as a whole securing the payment of Debt
and Financial Guaranties in an aggregate amount (determined without duplication
of amount (so that the amount of a Financial Guaranty will be excluded to the
extent the Debt guaranteed thereby is included in computing such aggregate
amount)) exceeding $100,000,000; provided, however, that this subsection (a)
shall not apply to:
(A) Liens on the stock or assets of any Project Financing
Subsidiary (or any partnership interest in or assets of any
partnership of which the Project Financing Subsidiary is a partner)
securing the payment of a Project Financing and related obligations;
(B) Liens on assets acquired by the Guarantor or any of
its Subsidiaries after February 11, 1992 to the extent that such Liens
existed at the time of such acquisition and were not placed thereon by
or with the consent of the Guarantor in contemplation of such
acquisition;
(C) Liens created by the Receivables Purchase and Sale
Agreement, any Alternate Program or any document executed by any
Principal Subsidiary in connection therewith;
(D) Liens on Margin Stock;
(E) Liens for taxes, assessments or governmental charges
or levies not yet overdue; and
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(F) Liens on the stock or assets of Mojave created in
connection with the Mojave Northward Expansion Project.
(b) Consolidated Debt and Guaranties to Capitalization.
In the case of the Guarantor, permit the ratio of (i) the sum of (A) the
aggregate amount of consolidated Debt of the Guarantor and its Consolidated
Subsidiaries plus (B) the aggregate amount of consolidated Financial Guaranties
of the Guarantor and its Consolidated Subsidiaries to (ii) Capitalization to
exceed .7 to 1.
(c) Debt, Etc. In the case of the Guarantor, permit any
of its Consolidated Subsidiaries to create or suffer to exist any Debt, any
Financial Guaranty or any reimbursement obligation with respect to any letter
of credit (other than any Project Financing), if, immediately after giving
effect to such Debt, Financial Guaranty or reimbursement obligation and the
receipt and application of any proceeds thereof or value received in connection
therewith, the aggregate amount (determined without duplication of amount) of
Debt, Financial Guaranties and letter of credit reimbursement obligations of
the Guarantor's Consolidated Subsidiaries (other than any Project Financing)
determined on a consolidated basis would exceed $75,000,000; provided, however,
that the following Debt, Financial Guaranties or reimbursement obligations
shall be excluded from the application of, and calculation set forth in, this
clause (c): (A) Debt, Financial Guaranties or reimbursement obligations
incurred by (x) Mojave or (y) any other Subsidiary of the Guarantor in
connection with the Mojave Northward Expansion Project, (B) Debt, Financial
Guaranties or reimbursement obligations arising under the Revolving Credit and
Competitive Advance Facility Agreement, dated as of August 10, 1994, between
Chemical, as agent, the Guarantor and the institutional lenders party thereto;
(C) Debt, Financial Guaranties or reimbursement obligations incurred by the
Company up to an amount not to exceed at any time outstanding the tangible net
worth of the Company; provided that such Debt may be guaranteed by the
Guarantor (such guarantee to also be excluded hereunder), (D) Excluded
Acquisition Debt and (E) successive extensions, refinancing or replacements of
Debt, Financial Guaranties or reimbursement obligations referred to in clauses
(A) and (D) above and in an amount not in excess of the amounts so extended,
refinanced or replaced.
(d) Sale, Etc. of Assets. Sell, lease or otherwise
transfer, or, in the case of the Guarantor, permit any Principal Subsidiary to
sell, lease or otherwise transfer, (in either case, whether in one transaction
or in a series of transactions) assets constituting a material portion of the
consolidated assets of the Guarantor and its Principal Subsidiaries taken as a
whole, provided that provisions of this subsection (d) shall not apply to:
(i) any sale of the San Juan Basin Gathering System and
related facilities in accordance with the procedures set forth in the
Master Separation Agreement dated as of January 15, 1992 between the
Company, Meridian Oil Holding Inc., a Delaware corporation, and
Burlington;
(ii) any sale of receivables and related rights pursuant
to the Receivables Purchase and Sale Agreement or any Alternate
Program;
(iii) any Project Financing Subsidiary and the assets
thereof;
(iv) sales, leases or other transfers of assets or capital
stock of any Subsidiary of the Guarantor other than any Principal
Subsidiary;
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(v) any sale of Margin Stock;
(vi) any sale of up to 20% of the equity of El Paso Field
Services Company, a Delaware corporation, in an initial public
offering of such corporation's equity securities;
(vii) any sale, lease or other transfer to the Guarantor or
any Principal Subsidiary, or to any corporation which after giving
effect to such transfer will become and be either (A) a Principal
Subsidiary in which the Guarantor's direct or indirect equity interest
will be at least as great as its direct or indirect equity interest in
the transferor immediately prior thereto or (B) a directly or
indirectly wholly-owned Principal Subsidiary; and
(viii) any transfer permitted by Section 9.01(e).
(e) Mergers, etc. Merge or consolidate with any person,
or, in the case of the Guarantor, permit any of its Principal Subsidiaries to
merge or consolidate with any Person, except that (i) the Company or any
Principal Subsidiary may merge or consolidate with (or liquidate into) any
other Subsidiary (other than a Project Financing Subsidiary, unless the
successor corporation is not treated as a Project Financing Subsidiary under
this Agreement) or may merge or consolidate with (or liquidate into) the
Guarantor; provided that (A) if the Company or such Principal Subsidiary merges
or consolidates with (or liquidates into) the Guarantor, the Guarantor shall be
the continuing or surviving corporation and (B) if the Company or any such
Principal Subsidiary merges or consolidates with (or liquidates into) any other
Subsidiary of the Guarantor, one of such Subsidiaries is the surviving
corporation and, if either such Subsidiary is not wholly-owned by the
Guarantor, such merger or consolidation is on an arm's length basis, and (ii)
the Company, the Guarantor or any Principal Subsidiary may merge or consolidate
with any other corporation (that is, in addition to the Guarantor or any
Principal Subsidiary of the Guarantor), provided that (A) if the Guarantor
merges or consolidates with any such other corporation, the Guarantor is the
surviving corporation, (B) if any Principal Subsidiary merges or consolidates
with any such other corporation, the surviving corporation is a wholly-owned
Principal Subsidiary of the Guarantor, and if the Company merges or
consolidates with any such other corporation (other than the Guarantor), the
Company is the surviving corporation, and (C) if either the Company, the
Guarantor or any Principal Subsidiary merges or consolidates with any such
other corporation, after giving effect to such merger or consolidation no Event
of Default, and no event which with lapse of time or the giving of notice, or
both, would constitute an Event of Default, shall have occurred and be
continuing.
(f) Proceeds of Notes and Certificates. The Company as
agent for the Trustee will not permit the proceeds of the Notes and the
Certificates to be used for any purpose other than those specified in Section
7.01(j).
(g) Environmental Matters. The Company shall not cause
or permit any of its Property or the Facility to be in violation of, or do
anything or permit anything to be done which would subject any of its Property
or the Facility to any remedial obligations under, any Environmental Laws,
assuming disclosure to the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to such Property or the
Facility, in any case above where such violations or remedial obligations would
have a Material Adverse Effect. The Company shall not use or allow use of any
of its Property or the Facility in a manner which will result in (i) violation
of any order or requirement of any Governmental Authority or any Environmental
Laws, (ii) the disposal or other release of any solid waste, petroleum,
pollutant, or contaminant except in compliance with
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Environmental Laws, (iii) a release of a hazardous substance in a quantity
equal to or exceeding the quantity which requires reporting pursuant to Section
103 of CERCLA, or (iv) the release of any hazardous substance so as to pose an
imminent and substantial endangerment to public health or welfare or the
environment, in any case in clause (i), (ii), (iii) or (iv) above which would
have a Material Adverse Effect.
(h) Facility Plan. The Company shall not amend or revise
the Facility Plan in any manner which would materially and adversely affect the
operation, design or capacity of the Facility without the prior written consent
of the Majority Note Holders. The Company shall not under any circumstance
undertake to operate or otherwise initiate the operations at the Facility
except in accordance in all material respects with the Facility Plan. The
Company shall be fully and solely responsible for funding all costs in
connection with the acquisition, development, construction and installation of
the Facility in excess of the limits contained in Section 2.01, it being
understood and agreed that neither the Trustee, the Agent nor any Participant
shall under any circumstances whatsoever be obligated to fund any amount for
any of the Facility Costs in excess of the limits contained in Section 2.01.
ARTICLE X
Events of Default
Section 10.01 Events of Default. The occurrence and
continuation of any one or more of the following events shall constitute an
"Event of Default".
(a) The Company as agent for the Trustee shall default in
the payment of any principal of any Loan or the principal amount of any
Certificate Advance when due; or default in the payment of any interest on any
Loan or yield on any Certificate Advance, or any fees or other amount payable
by it hereunder or under the Operative Documents, to the Agent and the
Participants when due and the continuance of such default for five (5) Business
Days thereafter; or default in the payment of any other amounts payable
hereunder or under any Security Instruments to agents, attorneys and
consultants of the Agent or any Participant when due and the continuance of
such nonpayment for thirty (30) days thereafter; or
(b) Any representation or warranty made or deemed made by
the Company, the Guarantor or the Trustee herein or in any other Operative
Document or otherwise in writing in connection with or pursuant to this
Agreement shall be false or misleading in any material adverse respect on the
date as of which made or reaffirmed; provided, however, that in the event any
representation or warranty made by the Trustee herein or in any other Operative
Document shall be false or misleading in any material adverse respect on the
date as of which made or reaffirmed, the same shall not constitute an Event of
Default hereunder if within sixty (60) days after notice thereof to the Company
by the Agent such Default is cured to the satisfaction of the Majority
Participants in their sole discretion or the Company shall have caused a
successor Person satisfactory to the Majority Participants to assume the
rights, duties and obligations of the Trustee hereunder and under the other
Operative Documents, all pursuant to documentation in form and substance
satisfactory to the Majority Participants; or
(c) The Company or the Guarantor shall default in the
performance of any other term, covenant or agreement contained in this
Agreement or any of the other Operative Documents
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and such default shall continue unremedied for a period of thirty (30) days
after written notice thereof shall have been given to the Company, the
Guarantor and the Trustee by the Agent; or
(d) The Company, the Guarantor or any Principal
Subsidiary shall fail to pay any Debt or Financial Guaranty (excluding Debt
incurred pursuant hereto) of the Company, the Guarantor or such Principal
Subsidiary (as the case may be) in an aggregate principal amount of $25,000,000
or more, or any installment of principal thereof or interest or premium
thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt or Financial Guaranty; or any other default under any
agreement or instrument relating to any such Debt or Financial Guaranty, or any
other event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such
default or event is to accelerate, or to permit the acceleration of, the
maturity of such Debt or Financial Guaranty; or any such Debt shall be required
to be prepaid (other than by a regularly scheduled required prepayment), prior
to the stated maturity thereof, as a result of either (i) any default under any
agreement or instrument relating to any such Debt or (ii) the occurrence of any
other event the effect of which would otherwise accelerate or to permit the
acceleration of the maturity of such Debt: provided that, notwithstanding any
provision contained in this subsection (d) to the contrary, to the extent that
pursuant to the terms of any agreement or instrument relating to any Debt or
Financial Guaranty referred to in this subsection (d) (or in the case of any
such Financial Guaranty, relating to any obligations guaranteed thereby), any
sale, pledge or disposal of Margin Stock, or utilization of the proceeds of
such sale, pledge or disposal, would result in a breach of any covenant
contained therein or otherwise give rise to a default or event of default
thereunder and/or acceleration of the maturity of the Debt or obligations
extended pursuant thereto, or payment pursuant to any Financial Guaranty, and
as a result of such terms or of such sale, pledge, disposal, utilization,
breach, default, event of default or acceleration or nonpayment under such
Financial Guaranty, or the provisions thereof relating thereto, this Agreement
or any Loan or Certificate Advance hereunder would otherwise be subject to the
margin requirements or any other restriction under Regulation U, G, T or X
issued by the Board of Governors of the Federal Reserve System, then such
breach, default, event of default or acceleration, or nonpayment under any
Financial Guaranty, shall not constitute a default or Event of Default under
this subsection (d); or
(e)(i) The Company, the Guarantor or any Principal
Subsidiary shall (A) generally not pay its debts as such debts become due; or
(B) admit in writing its inability to pay its debts generally; or (C) make a
general assignment for the benefit of creditors; or (ii) any proceeding shall
be instituted or consented to by the Company, the Guarantor or any such
Principal Subsidiary seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its property; or
(iii) any such proceeding shall have been instituted against the Company, the
Guarantor or any such Principal Subsidiary and either such proceeding shall not
be stayed or dismissed for 60 consecutive days or any of the actions sought in
such proceeding (including, without limitation, the entry of an order for
relief against it or the appointment of a receiver, trustee, custodian or other
similar official for it or any substantial part of its property) shall occur;
or (iv) the Company, the Guarantor or any such Principal Subsidiary shall take
any corporate action to authorize any of the actions set forth above in this
subsection (e); or
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(f) Any judgment or order of any court for the payment of
money in excess of $25,000,000 shall be rendered against the Company, the
Guarantor or any Principal Subsidiary and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order (other
than any enforcement proceedings consisting of the mere obtaining and filing of
a judgment lien or obtaining of a garnishment or similar order so long as no
foreclosure, levy or similar process in respect of such lien, or payment over
in respect of such garnishment or similar order, has commenced) or (ii) there
shall be any period of 30 consecutive days during which a stay of execution or
of enforcement proceedings (other than those referred to in the parenthesis in
clause (i) above) in respect of such judgment or order, by reason of a pending
appeal, bonding or otherwise, shall not be in effect; or
(g)(i) Any ERISA Termination Event with respect to a Plan
shall have occurred and, 30 days after notice thereof shall have been given to
the Guarantor by the Agent, such ERISA Termination Event shall still exist; or
(ii) the Guarantor or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan; or (iii) the Guarantor or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization, or is insolvent or is being
terminated, within the meaning of Title IV of ERISA; or (iv) any Person shall
engage in a "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan; and in each case in clauses (i)
through (iv) above, such event or condition, together with all other such
events or conditions, if any, would result in an aggregate liability of the
Guarantor or any ERISA Affiliate that would exceed 10% of the Net Worth of the
Guarantor.
(h) Upon completion of, and pursuant to, a transaction,
or a series of transactions (which may include prior acquisitions of capital
stock of the Guarantor in the open market or otherwise), involving a tender
offer (i) a "person" (within the meaning of Section 13(d) of the Securities
Exchange Act of 1934) other than Burlington, the Guarantor, a Subsidiary of the
Guarantor or any employee benefit plan maintained for employees of the
Guarantor and/or any of its Subsidiaries or the trustee therefor, shall have
acquired direct or indirect ownership of and paid for in excess of 50% of the
outstanding capital stock of the Guarantor entitled to vote in elections for
directors of the Guarantor and (ii) at any time before the later of (A) six
months after the completion of such tender offer and (B) the next annual
meeting of the shareholders of the Guarantor following the completion of such
tender offer more than half of the directors of the Guarantor consists of
individuals who (y) were not directors before the completion of such tender
offer and (z) were not appointed, elected or nominated by the Board of
Directors in office prior to the completion of such tender offer (other than
any such appointment, election or nomination required or agreed to in
connection with, or as a result of, the completion of such tender offer); or
(i) Any event of default shall occur under any agreement
or instrument relating to or evidencing any Debt now or hereafter existing of
the Guarantor or any Principal Subsidiary as the result of any change of
control of the Guarantor; or
(j) Any of the Operative Documents shall cease, for any
reason, to be in full force and effect or the Company or the Guarantor shall so
assert; or
(k) The failure of the Company to satisfy or cause to be
satisfied any condition precedent to the Initial Loans and Initial Advances
within ninety (90) days from the Closing Date; or
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(l) The Company shall abandon the Facility or the
construction and development thereof; or Completion of Phase One shall not have
occurred on or before the Phase One Completion Date; or, if the Phase Two
Election is made, Completion of Phase Two shall not have occurred on or before
the Phase Two Completion Date, unless in any event, the Company or the
Guarantor (or any Affiliate thereof) acquires the Facility within five (5)
Business Days after the occurrence of such event or existence of such
condition.
Section 10.02 Remedies. Upon the occurrence and continuation
of any Event of Default:
(a) in the case of an Event of Default (other than one
referred to in Section 10.01(e)(i)(B)or (C), (ii), (iii) or (iv)), the Agent
may and, upon request of the Majority Note Holders, shall, by notice to the
Trustee and the Company, cancel the Commitments and/or declare the principal
amount then outstanding of and the accrued interest on the Loans and the
principal amount of and accrued yield on the Certificate Advances and all other
amounts payable by the Trustee or the Company as agent for the Trustee
hereunder, under the Notes and under the Certificates to be forthwith due and
payable, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other formalities of any kind, all of which are hereby
expressly waived by the Company and the Trustee; and
(b) in the case of the occurrence of an Event of Default
referred to in Section 10.01(e)(i)(B)or (C), (ii), (iii) or (iv), the
Commitments shall be automatically cancelled and the principal amount then
outstanding of and the accrued interest on the Loans and the principal amount
of and accrued yield on the Certificate Advances and all other amounts payable
by the Trustee or the Company as agent for the Trustee hereunder, under the
Notes and under the Certificates shall become automatically immediately due and
payable without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or other formalities of any kind, all of which are
hereby expressly waived by the Company and the Trustee.
(c) Notwithstanding Sections 10.02(a) and (b), the
Company or the Guarantor may cure any Default or Event of Default under Section
10.01 by purchasing the Facility as provided in Section 15(c) of the Lease for
the Option Price.
(d) No Certificate Holder may initiate or pursue remedies
unless and until the Agent and the Note Holders have initiated remedies against
the Facility, the Company or the Guarantor. In the event the Agent and the
Note Holders have initiated remedies, the Certificate Holders may join in
enforcement of remedies against the Facility, the Company or the Guarantor.
(e) If the Majority Note Holders shall have instructed
the Agent so to cause the Trustee to sell or otherwise dispose of the Facility
in accordance with the Declaration or to foreclose on the Facility in
accordance with the Security Instruments, then (i) the net cash sales or
foreclosure proceeds to be received must at least equal an amount equal to the
Funded Amount, plus all other amounts then owing to the Participants hereunder
and under the other Operative Documents; and (ii) the Majority Note Holders may
not, without the consent of each Certificate Holder, instruct the Trustee to
sell the Facility or any portion thereof for an amount less than the
Unguaranteed Amount, or instruct the Agent to foreclose on the Facility in
accordance with the Security Instruments unless the Note Holders intend to make
a cash bid to purchase the Facility for an amount not less than the
Unguaranteed Amount. In the event that all of the Note Holders have been
repaid in full in accordance with this Agreement with respect to amounts owing
to them as Note Holders, or if the
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Company or any of its Affiliates shall have acquired all of the Notes, the
Agent shall act or refrain from acting, and shall be fully protected in acting
or refraining from acting, in accordance with instructions signed solely by the
Majority Certificate Holders. Instructions of the Majority Participants, the
Majority Note Holders or the Majority Certificate Holders, as the case may be,
and any action taken or failure to act pursuant thereto, shall be binding on
all of the Participants.
(f) The Agent and the Participants agree not to exercise
their remedies against the Facility under the Security Instruments unless an
Event of Default has occurred and is continuing hereunder and the Lease has
terminated and the Company or the Guarantor (or any Affiliate thereof) shall
not have purchased the Facility on or before the Cancellation Date.
ARTICLE XI
The Agent
Section 11.01 Appointment, Powers and Immunities. Each
Participant hereby appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement of this Agreement or
collection of the Notes and the Certificates), the Agent shall not be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Note Holders, and such
instructions shall be binding upon all Participants and all holders of Notes or
the Certificates; provided, however, that the Agent shall not be required to
take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or applicable law. The Agent agrees to give to each
Participant prompt notice of each notice given to it by the Trustee, the
Company or the Guarantor pursuant to the terms of this Agreement.
Section 11.02 Reliance by Agent. None of the Agent or any of
its respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agent:
(a) may treat the payee of any Note or Certificate as the holder thereof until
the Agent receives and accepts an Assignment and Acceptance entered into by the
Participant which is the payee of such Note or Certificate, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 12.06; (b) may consult
with legal counsel (including counsel for the Company or the Guarantor),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes
no warranty or representation to any Participant and shall not be responsible
to any Participant for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement or any of the
other Operative Documents; (d) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or any of the other Operative Documents on the
part of the Company or the Guarantor or to inspect the Facility or the property
(including the books and records) of the Company or the Guarantor; (e) shall
not be responsible to any Participant for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other
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Operative Documents or any other instrument or document furnished pursuant
hereto; (f) shall incur no liability under or in respect of this Agreement or
the Operative Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telegram, telecopier, cable or
telex) believed by it to be genuine and signed or sent by the proper party or
parties; and (g) shall act or refrain from acting, and shall be fully protected
in acting or refraining from acting, in causing the Trustee to sell or
otherwise dispose of the Facility in accordance with the Declaration, or in
foreclosing on the Facility in accordance with the Security Instruments, upon
receiving instructions signed by either the Majority Note Holders.
Section 11.03 Defaults. The Agent shall not be deemed to
have knowledge of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans, the face amount of or yield on Certificates
or of fees) unless the Agent has received notice from a Participant, the
Company or the Trustee specifying such Default and stating that such notice is
a "Notice of Default." In the event that the Agent receives such a notice of
the occurrence of a Default, the Agent shall give prompt notice thereof to the
Participants (and shall give each Participant prompt notice of each such
non-payment). The Agent shall (subject to Section 11.07) take such action with
respect to such Default as shall be directed by the Majority Note Holders or
the Majority Certificate Holders, as appropriate, as provided in Section 11.02,
provided that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interest of the Participants.
Section 11.04 Rights as a Participant. With respect to its
Commitment, the Loans made by it and the Note issued to it, Chemical shall have
the same rights and powers under this Agreement as any other Note Holder and
may exercise the same as though it were not the Agent; and the term "Note
Holder" or "Note Holders" shall, unless otherwise expressly indicated, include
Chemical in its individual capacity. Chemical and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Guarantor, any of its Subsidiaries and
any Person who may do business with or own securities of the Guarantor or any
of its Subsidiaries, all as if Chemical were not the Agent and without any duty
to account therefor to the other Participants.
Section 11.05 Indemnification. The Participants agree to
indemnify the Agent (to the extent not reimbursed by the Company), ratably
according to the respective principal amounts of the Notes or Certificates then
held by each of them (or if no Notes and Certificates are at the time
outstanding or if any Notes or Certificates are held by Persons which are not
Participants, ratably according to the respective amounts of the Aggregate Loan
Commitments and Aggregate Certificate Commitments), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or any of the Operative Documents
or any action taken or omitted by the Agent under this Agreement or any of the
Operative Documents, provided that no Participant shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Participant agrees to reimburse the Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including reasonable counsel fees)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings, in
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bankruptcy or insolvency proceedings, or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or the other
Operative Documents, to the extent that the Agent is not reimbursed for such
expenses by the Company or the Guarantor.
Section 11.06 Non-Reliance on Agent and other Participants.
Each Note Holder acknowledges that it has, independently and without reliance
upon the Agent or any other Participant and based on the financial statements
referred to in Section 7.01 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Note Holder also acknowledges that it will, independently
and without reliance upon the Agent or any other Participant and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taken or not taking action under this
Agreement. Except for notices, reports and other documents and information
expressly required to be furnished to the Participants by the Agent hereunder,
the Agent shall not have any duty or responsibility to provide any Participant
with any credit or other information concerning the affairs, financial
condition or business of the Company, the Trustee or the affiliates of either
of them, which may come into the possession of the Agent or any of its
affiliates.
Section 11.07 Failure to Act. The Agent shall in all cases
be fully justified in failing or refusing to act hereunder or under the
Operative Documents unless it shall be indemnified to its satisfaction by the
Participants against any and all liability and expenses which may be incurred
by it by reason of taking or continuing to take any such action.
Section 11.08 Resignation or Removal of Agent. The Agent may
resign at any time by giving written notice thereof to the Participants, the
Trustee and the Company and may be removed at any time with or without cause by
the Majority Participants. Upon any such resignation or removal, the Majority
Participants shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Majority Participants and
shall have accepted such appointment, within 30 days after the retiring Agent's
giving of notice of resignation or the Majority Participant's removal of the
retiring Agent, then such retiring Agent may, on behalf of the Participants,
appoint a successor Agent, which shall be a Note Holder and a commercial bank
organized, or authorized to conduct a banking business, under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $500, 000,000. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, each successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement and the Operative Documents. After
any retiring Agent's resignation or removal hereunder as Agent, the provisions
of this Article XI shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
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ARTICLE XII
Miscellaneous
Section 12.01 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, the Notes or the Certificates, and no consent to
any departure by the Company or the Trustee therefrom, shall be effective
against the Company, the Trustee, the Agent and the Participants unless it
shall be in writing and signed by the Company and the Majority Participants,
and no amendment or waiver of any provision of any Operative Documents, and no
consent to any departure by the Company or the Trustee therefrom, shall be
effective against the Company, the Trustee, the Agent and the Participants
unless signed by the Persons executing such Operative Document, the Company and
the Agent with the consent of the Majority Participants; and in any event, any
such a waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall, unless in writing and signed by the Company
and all the Participants, be effective to: (a) waive any of the conditions
specified in Article VI, (b) increase the Aggregate Loan Commitments or
Aggregate Certificate Commitments or subject the Participants to any additional
obligations, (c) reduce the principal of, or interest on, the Notes, or the
face amount or yield on the Certificates or any commitment fees hereunder, (d)
postpone any date fixed for any payment of principal of, or interest on, the
Notes, or the face amount or yield on the Certificates or any commitment fees
hereunder, (e) change the percentage of the Aggregate Loan Commitments or
Aggregate Certificate Commitments or of the aggregate unpaid principal amount
of the Notes or Certificates, or the number of Note Holders, Certificate
Holders or Participants which shall be required for the Participants or any of
them to take any action under this Agreement, (f) amend this Section 12.01, (g)
except as otherwise permitted in the Declaration or the other Operative
Documents, permit the creation of any Lien (other than Permitted Liens) on the
Collateral and the Trust Estate equal to or prior to the interests of the
Participants, sell or otherwise dispose of any portion of the Collateral and
the Trust Estate or release any Lien created under the Operative Documents, (h)
waive the terms of any payment obligation, amend or modify the order of
application of payments and proceeds, (i) amend, modify or waive any provision
of the either of the Guaranties, or (j) change the requirements set forth in
Schedule 1.02(b) necessary to achieve Completion; provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by the Agent
in addition to the Participants required hereinabove to take such action,
affect the rights or duties of the Agent under this Agreement, any Note or any
Certificate.
Section 12.02 Notices. Except as otherwise provided in
Article II or Article V, all notices and other communications provided for
hereunder shall be in writing (including telecopier and other readable
communication) and mailed by certified mail, return receipt requested,
telecopied or otherwise transmitted or delivered, if to the Company or the
Guarantor, at 1 Paul Kayser Center, 100 North Stanton Street, El Paso, Texas
79901, Attention: Senior Vice President and Chief Financial Officer,
Telecopier: (915) 541-5008; if to any Participant, at its address set forth
under its name on its signature page hereto; if to the Agent, at 270 Park
Avenue, New York, New York 10017, Attention: John Gehebe, Telecopier: (212)
270-4892; if to the Trustee at State Street Bank and Trust Company, not in its
individual capacity but solely as Trustee for the Chaco Liquids Plant Trust,
Two International Place, 4th Floor, Boston, Massachusetts 02110, Attention:
Corporate Trust Department, Telecopier: (617) 664-5371; or, as to each party at
such other address as shall be designated by such party in a written notice to
the other parties. All such notices and communications shall, if so mailed,
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telecopied or otherwise transmitted, be effective when received, if mailed, or
when the appropriate answerback or other evidence of receipt is given, if
telecopied or otherwise transmitted, respectively. A notice received by the
Agent or a Participant by telephone pursuant to Article II or Article V shall
be effective if the Agent or Participant believes in good faith that it was
given by an authorized representative of the Company and acts pursuant thereto,
notwithstanding the absence of written confirmation or any contradictory
provision thereof.
Section 12.03 Payment of Expenses, Indemnities, etc.
(a) The Company agrees to pay on demand (i) all
reasonable fees and out-of-pocket expenses of counsel for the Agent in
connection with the preparation, execution and delivery of this Agreement, the
Notes, the Certificates, the other Operative Documents and the other documents
to be delivered hereunder and the fulfillment or attempted fulfillment of
conditions precedent hereunder, (ii) all reasonable costs and expenses incurred
by the Agent and its Affiliates in initially syndicating all or any portion of
the Commitments hereunder, including, without limitation, the related
reasonable fees and out-of-pocket expenses of counsel for the Agent or its
Affiliates, travel expenses, duplication and printing costs and courier and
postage fees, and excluding any syndication fees paid to other parties joining
the syndicate and (iii) all out-of-pocket costs and expenses, if any, incurred
by the Agent and the Participants in connection with the enforcement (whether
through negotiations, legal proceedings in bankruptcy or insolvency
proceedings, or otherwise) of this Agreement, the Notes, the Certificates, the
other Operative Documents and the other documents to be delivered hereunder and
thereunder, including the reasonable fees and out-of-pocket expenses of
counsel.
(b) The Company and the Guarantor, jointly and severally,
agree, in addition to any other indemnity obligations of the Company set forth
in any Operative Document, to indemnify and save harmless, the Trustee, State
Street, the Agent, each Participant and any of their successors and assigns,
and their respective officers, directors, incorporators, shareholders,
employees, agents, partners, attorneys, affiliates and servants (individually
an "Indemnified Party" and collectively the "Indemnified Parties") from and
against all liabilities, Liens, Taxes, losses, obligations, claims, damages
(including, without limitation, penalties, fines, court costs and
administrative service fees), penalties, demands, causes of action, suits,
proceedings (including any investigations, litigation or inquiries), Judgments,
sums paid in settlement of claims, and costs and expenses of any kind or nature
whatsoever, including, without limitation, reasonable attorneys' fees and
expenses and all other expenses incurred in connection with investigating,
defending or preparing to defend any cause of action, suit or proceeding
(including any investigations, litigation or inquiries) or claim which may be
incurred by or asserted against or involve any of them (whether or not any of
them is named as a party thereto) as a result of, arising directly or
indirectly out of or in any way related to (i) any actual or proposed use by
the Trustee or the Company of the proceeds of any of the Loans or Certificate
Advances, (ii) any other aspect of this Agreement, the Notes, the Certificates
and the other Operative Documents, (iii) the operations of the business of the
Company, (iv) the failure of the Company to comply with any Governmental
Requirement, (v) the breach of any representation or warranty set forth herein
regarding Environmental Laws, (vi) the failure of the Company as agent for the
Trustee to pay any amount required to be paid hereunder, including, without
limitation, principal and interest on the Notes and the face amount and yield
on the Certificates (whether or not the Lease has terminated), (vii) the
failure of the Company to perform any obligation herein required to be
performed pursuant to Environmental Laws, (viii) the Trustee's ownership and
leasing of the Facility pursuant to the Lease and the Trustee's lease of the
Site under the Ground Lease, (ix) the sale of any portion of the Facility
either to the Company or any other Person pursuant to the provisions of the
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Lease, (x) all acts or omissions of the Company or any Sublessee, (xi) any
Imposition, Lien, Judgment, Tax, or other payment which the Company is
obligated to discharge or pay to any Person, (xii) any action or omission of
the Company pursuant to the Agency Agreement, (xiii) any injury to, or death
of, any Person, or damage to or loss of Property, or any other thing occurring
on or resulting from activities on the Facility or any portion thereof, (xiv)
the construction, leasing, subleasing, operation, occupancy, possession, use or
non-use by the Company (whether in its individual capacity or as agent for the
Trustee) of the Facility or any portion thereof, or the condition of the
Facility or any portion thereof, (xv) any Default or Event of Default under the
Lease or this Agreement, (xvi) any act or omission of the Company or its
agents, contractors, licensees, Sublessees, invitees, representatives or any
other Person on or relating to, or in connection with, the ownership,
construction, leasing, subleasing, operation, management, maintenance,
occupancy, possession, use, non-use or condition of the Facility or any portion
thereof, (xvii) performance of any labor or services or furnishing of any
materials or other Property in respect of the Facility or any portion thereof,
(xviii) any permitted contest referred to in Section 13 of the Lease, (xix) any
claims for patent, trademark, trade name or copyright infringement, or (xx) any
violation by the Company or the Guarantor of any Operative Document or any
Related Contracts or any other contract or agreement to which the Company or
the Guarantor is a party, or of any Insurance Requirement, in each case
affecting any Indemnified Party, the Facility or any portion thereof or the
ownership, operation, occupancy, possession, use, non-use or condition thereof,
in each case regardless of the acts, omissions or negligence of any Indemnified
Party, it being the intent of the Company and the Guarantor to indemnify the
Indemnified Parties for their own negligent acts or omissions (other than gross
negligence or wilful misconduct) in connection with any of the foregoing
(collectively, the "Indemnified Risks"); provided, however, that no Indemnified
Party shall be entitled to indemnity (or any other payment or reimbursement)
for any Indemnified Risks to the extent such Indemnified Risks result from or
arise out of one or more of the following: (1) any representation or warranty
by such Indemnified Party in the Operative Documents being incorrect; (2) the
willful misconduct or gross negligence of such Indemnified Party; (3) the
failure on the part of the Trustee or the Agent to distribute in accordance
with the Participation Agreement any amounts received and distributable by it
thereunder, or of the Certificate Holder to distribute in accordance with this
Agreement any amounts received and distributable by it thereunder; (4) a claim
arising from the offer, sale or delivery of a Certificate or interest in a Note
or this Agreement by such Indemnified Party (other than State Street or the
Trustee, subject nevertheless to clause (2) above) for a violation of any
Governmental Requirement unless such violation was caused by some performance
or nonperformance of the Company or the Guarantor; (5) claims of such
Indemnified Party which is a Note Holder or the Agent arising because of a
claim against such Indemnified Party brought by another Note Holder or the
Agent; and (6) any claim for economic losses based upon the rate of return of
the Loans.
(c) If any cause of action, suit, proceeding or claim
arising from any of the foregoing is brought against any Indemnified Party,
whether such action, proceeding, suit or claim shall be actual or threatened,
or in preparation therefor, the Company and the Guarantor will have the right,
at their expense, to assume the resistance and defense of such cause of action,
suit, proceeding or claim or cause the same to be resisted and defended;
provided that such Indemnified Party shall be entitled (but not obligated) to
participate jointly in such defense, in which case such Indemnified Party will
be responsible for its own legal fees or other expenses, if any, related to
such defense incurred subsequent to the joint participation by such party in
such defense. Notwithstanding the foregoing, if any Indemnified Party shall
have been advised by counsel chosen by it that there may be one or more legal
defenses available to such Indemnified Party that are different from or
additional to those available to the Company or the Guarantor, the Indemnified
Party may assume the defense
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of such action and the Company and the Guarantor, jointly and severally, agree
to reimburse such Indemnified Party for the reasonable fees and expenses of any
counsel retained by the Indemnified Party. The Company and/or the Guarantor
may settle any action which it defends hereunder on such terms as it may deem
advisable in its sole discretion, subject to its ability promptly to perform in
full the terms of such settlement. No Indemnified Party may seek
indemnification or other reimbursement or payment, including attorneys' fees or
expenses, from the Company or the Guarantor for any cause of action, suit,
proceeding or claim settled, compromised or in any way disposed of by the
Indemnified Party without the Company's and the Guarantor's prior written
consent, which will not be unreasonably withheld.
(d) The obligations of the Company and the Guarantor
under this Section 12.03 shall survive the expiration or any termination of
this Agreement (whether by operation of law or otherwise) and the payment of
amounts owed by the Company under this Agreement, the Notes, the Certificates
and the other Operative Documents.
(e) Upon demand for payment by any Indemnified Party of
any Indemnified Risks incurred by it for which indemnification is sought, the
Company and the Guarantor shall pay when due and payable the full amount of
such Indemnified Risks to the appropriate party, unless and only so long as:
(i) the Company and/or the Guarantor shall have assumed the defense of such
action and is diligently prosecuting the same; (ii) the Company and the
Guarantor are financially able to pay all their obligations outstanding and
asserted against the Company and the Guarantor at that time, including the full
amount of the Indemnified Risks; and (iii) the Company and the Guarantor have
taken all action as may be reasonably necessary to prevent (1) the collection
of such Indemnified Risks from the Indemnified Party; (2) the sale, forfeiture
or loss of the Facility or any portion thereof during such defense of such
action; and (3) the imposition of any civil or criminal liability for failure
to pay such Indemnified Risks when due and payable.
(f) The Company and the Guarantor acknowledge and agree
that (i) their obligations under this Section 12.03 are intended to include and
extend to any and all liabilities, Liens, Taxes, Other Taxes, losses,
obligations, claims, damages (including, without limitation, penalties, fines,
court costs and administrative service fees), penalties, demands, causes of
action, suits, proceedings (including any investigations, litigation or
inquiries), Judgments, sums paid in settlement of claims, costs and expenses
(including, without limitation, response and mediation costs, stabilization
costs, encapsulation costs, and treatment, storage or disposal costs), imposed
upon or incurred by or asserted at any time against any Indemnified Party
(whether or not indemnified against by any other party) as a result of, arising
directly or indirectly out of or in any way related to (A) the treatment,
storage, disposal, generation, use, transport, movement, presence, release,
threatened release, spill, installation, sale, emission, injection, leaching,
dumping, escaping or seeping of any hazardous substance or material containing
or alleged to contain hazardous substance at or from the Facility or any part
thereof; (B) the violation or alleged violation of any Environmental Laws
relating to or in connection with the Facility or any part thereof or any acts
or omissions thereon or relating thereto; (C) all other federal, state and
local laws designed to protect the environment or persons or property therein,
whether now existing or hereinafter enacted, promulgated or issued by any
Governmental Authority relating to or in connection with the Facility or any
part thereof or any acts or omissions thereon or relating thereto; (D) the
Company's failure to comply with its obligations under Section 7 of the Lease;
and (E) any abandonment of the Facility by the Company; provided however that
no Indemnified Party shall be entitled to indemnity or any other payment or
reimbursement for any of the types of claims enumerated in this Section
12.03(f) to the extent such
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claims result from or arise out of the willful misconduct or gross negligence
of such Indemnified Party; and (ii) the indemnification provided for under this
Section 12.03(f) shall be governed by the procedures set forth in Sections
12.03(c)-(e) above.
(g) Without limiting the generality of the foregoing
provisions of this Section 12.03, the Company and the Guarantor, jointly and
severally, agree to pay or reimburse, promptly upon demand, and protect,
indemnify and save harmless, the Trustee, as Lessor under the Lease, following
the occurrence of a Termination Event, from any action by any Sublessee or
other owner of an interest in the Facility (other than a Co-Lessee) which
causes the Trustee (as "Lessor" under the Lease) any delay in exercising its
remedies, or results in the reduction of the Trustee's remedies under, the
Lease. Upon demand of the Lessor for indemnification pursuant to this Section
12.03(g), the Company and the Guarantor agree that they will, within twenty
(20) days of such demand from the Trustee, (a) purchase the Notes from the Note
Holders for a purchase price equal to the principal balance, accrued, unpaid
interest, fees and expenses, and all other amounts then owing by the Trustee to
the Note Holders as advised to the Company and the Guarantor in writing by the
Agent, and (b) purchase the Certificates from the Certificate Holders for a
purchase price equal to the outstanding face amount, accrued, unpaid yield,
fees and expenses, and all other amounts then owing by the Trustee to the
Certificate Holders as advised to the Company and the Guarantor in writing by
the Agent.
(h) In case any action shall be brought against any
Indemnified Party in respect of which indemnity may be sought against the
Company or the Guarantor, such Indemnified Party shall promptly notify the
Company and the Guarantor in writing, but the failure to give such prompt
notice shall not relieve the Company and the Guarantor from liability
hereunder.
Section 12.04 No Waiver; Remedies. No failure on the part of
any Participant, the Agent or the Trustee to exercise, and no delay in
exercising, any right hereunder or under any Note, any Certificate or any
Operative Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder or under any Note, Certificate or
Operative Document preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Section 12.05 Right of Set-Off. Upon the declaration of the
Notes and the Certificates as due and payable pursuant to the provisions of
Section 10.02, each Participant is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Participant to or
for the credit or the account of the Company against any and all of the
obligations of the Company now or hereafter existing under this Agreement, the
Notes or the Certificates of the Company held by such Participant, irrespective
of whether or not such Participant shall have made any demand under this
Agreement, such Notes or Certificates and although such obligations may be
unmatured. Each Participant agrees promptly to notify the Company after any
such set-off and application made by such Participant, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Participant under this Section 12.05 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Participant may have.
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Section 12.06 Assignments and Participations.
(a) Neither the Trustee nor the Company may assign its
rights or obligations hereunder or under the Notes or the Certificates without
the prior consent of all of the Participants and the Agent, except that the
Trustee may make such assignments to any co-trustee or successor trustee
provided in the Declaration and the Company may engage in a transaction
permitted by Section 9.01(e).
(b) Each Participant may assign to one or more banks or
other financial institutions all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Loan Commitment or Certificate, the Loans or Certificate Advances owing to it
and the Note or Certificate held by it); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all rights
and obligations under this Agreement, (ii) the amount of the Loan Commitment or
Certificate Commitment of the assigning Participant being assigned pursuant to
each such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$5,000,000, or integral multiples of $1,000,000 in excess thereof, in the case
of assignments of Loan Commitments, or $150,000 in the case of Certificate
Commitments, or integral multiples of $50,000 in excess thereof (or, if less,
in either case, the entire Commitment of the assigning Participant), (iii) each
such assignment shall be to an Eligible Assignee, and (iv) the parties to each
such assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Certificate subject to such assignment and a processing and recordation fee
of $2,500, and shall send to the Company an executed counterpart of such
Assignment and Acceptance. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (A) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Note
Holder or Certificate Holder, as appropriate, hereunder and (B) the assigning
Participant thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Participant's rights and obligations under this
Agreement, such Participant shall cease to be a party hereto).
(c) By executing and delivering an Assignment and
Acceptance, each assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than
as provided in such Assignment and Acceptance, such assigning Participant makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Participant makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Guarantor or the Company or the performance or
observance by the Company of any of its obligations under this Agreement or any
other Operative Document; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 7.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Participant or any other
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Participant and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is
an Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be performed by it as
either a Note Holder or Certificate Holder, as appropriate.
(d) The Agent shall maintain at its address referred to
in Section 12.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Participants and the Loan Commitment or Certificate Commitment of, and
principal amount of the Loans or Certificate Advances owing to, each
Participant from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
the Company, the Guarantor, the Trustee, the Agent and the Participants may
treat each Person whose name is recorded in the Register as a Participant
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Company, the Guarantor or any Participant at any
reasonable time and from time to time upon reasonable prior notice. Upon the
acceptance of any Assignment and Acceptance for recordation in the Register,
Exhibit J hereto shall be deemed to be amended to reflect either the revised
Loan Commitments of the Note Holders or the revised Certificate Commitments of
the Certificate Holders parties to such Assignment and Acceptance as well as
administrative information with respect to any new Participant as such
information is recorded in the Register.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Participant and an assignee representing that it is an
Eligible Assignee, together with any Note or Certificate subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit I hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Trustee, the Company and
the Guarantor; within five (5) Business Days after its receipt of such notice
and its receipt of an executed counterpart of such Assignment and Acceptance,
the Trustee, at the expense of the Company, shall execute and deliver to the
Agent in exchange for the surrendered Note or Certificate, a new Note or
Certificate, as appropriate, to the order of such Eligible Assignee in an
amount equal to the Loan Commitment or Certificate Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Participant
has retained either a Loan Commitment or Certificate Commitment hereunder, a
new Note or Certificate, as appropriate, to the order of the assigning
Participant in an amount equal to the Loan Commitment or Certificate
Commitment, as appropriate, retained by it hereunder. Such new Note or
Certificate shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Certificate, shall be dated the
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of Exhibits K and L hereto.
(f) Each Note Holder may sell participations to one or
more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Loan Commitment, and the Loans owing to it and the Notes held by
it); provided, however, that (i) such Note Holder's obligations under this
Agreement (including, without limitation, its Loan Commitment to the Trustee
hereunder) shall remain unchanged, (ii) such Note Holder shall remain solely
responsible to the other parties hereto for the performance of such
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obligations, (iii) such Note Holder shall remain the holder of any such Notes
for all purposes of this Agreement, (iv) the Company, the Guarantor, the Agent
and the other Note Holders shall continue to deal solely and directly with such
Note Holder in connection with its rights and obligations under this Agreement,
(v) such Note Holder shall continue to be able to agree to any modification or
amendment of this Agreement or any waiver hereunder without the consent,
approval or vote of any such participant or group of participants, other than
modifications, amendments and waivers which (A) postpone any date fixed for any
payment of, or reduce any payment of, principal of or interest on such Note
Holder's Notes or any fees payable under this Agreement, or (B) increase the
amount of such Note Holder's Loan Commitment in a manner which would have the
effect of increasing the amount of a participant's participation, or (C) reduce
the interest rate payable under this Agreement and such Note Holder's Note, or
(D) consent to the assignment or the transfer by the Company or the Trustee of
any of its rights and obligations under the Agreement, and (vi) except as
contemplated by the immediately preceding clause (v), no participant shall be
deemed to be or to have any of the rights or obligations of a "Note Holder"
hereunder.
(g) Any Participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 12.06, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Company or the
Guarantor furnished to such Participant by or on behalf of the Company or the
Guarantor; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree in writing for the
benefit of the Company and the Guarantor to preserve the confidentiality of any
confidential information relating to the Company and the Guarantor received by
it from such Participant a manner consistent with Section 12.13.
(h) Anything in this Agreement to the contrary
notwithstanding, any Participant may at any time create a security interest in
all or any portion of its rights under this Agreement (including, without
limitation, the Loans or Certificate Advances owing to it) and the Note or
Certificate issued to it hereunder in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System (or any successor regulation) and the applicable operating circular of
such Federal Reserve Bank.
(i) Notwithstanding any other provision of this Agreement
or any other Operative Document, neither the Company nor any of its Affiliates
(i) may acquire any of the Notes unless the Company or such Affiliate acquires
all of the Notes in a single transaction and thereby become bound by the
provisions of Sections 11.02 and 12.01 or (ii) may acquire any of the
Certificates unless the Company or such Affiliate acquires all of the
Certificates in a single transaction and has previously acquired all of the
Notes in a single transaction.
Section 12.07 Invalidity. In the event that any one or more
of the provisions contained in the Notes, the Certificates, this Agreement or
in any other Operative Document shall, for any reason, be held invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of the Notes, the
Certificates, this Agreement or any other Operative Document.
Section 12.08 Entire Agreement. THE NOTES, THE CERTIFICATES,
THIS AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS EMBODY THE ENTIRE AGREEMENT
AND UNDERSTANDING BETWEEN THE PARTICIPANTS, THE TRUSTEE, THE AGENT, THE COMPANY
AND THE GUARANTOR AND SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN
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SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF. THIS WRITTEN
PARTICIPATION AGREEMENT, THE NOTES, THE CERTIFICATES AND THE OTHER OPERATIVE
DOCUMENTS 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.
Section 12.09 References. The words "herein," "hereof,"
hereunder" and other words of similar import when used in this Agreement refer
to this Agreement as a whole, and not to any particular article, section or
subsection. Any reference herein to a Section or Subsection shall be deemed to
refer to the applicable Section or Subsection of this Agreement unless
otherwise stated herein. Any reference herein to an exhibit or schedule shall
be deemed to refer to the applicable exhibit or schedule attached hereto unless
otherwise stated herein.
Section 12.10 Successors; Survivals. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. The obligations of the Trustee
and the Company under Section 4.06, Article V, and Section 12.03 shall survive
the repayment of the Loans and Certificate Advances and the termination of the
Commitments.
Section 12.11 Captions. Captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
Section 12.12 Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument and any of the parties hereto may execute this
Agreement by signing any such counterpart. Delivery to the Agent of a
counterpart executed by a Participant shall constitute delivery of such
counterpart to all of the Participants. This Agreement may be delivered by
facsimile transmission of the relevant signature pages hereof.
Section 12.13 Confidentiality. Each Participant, the Agent
and the Trustee (each, a "Party") agrees that it will use its best efforts not
to disclose, without the prior consent of the Company (other than to its, or
its Affiliates, employees, auditors, accountants, counsel or other
representatives, whether existing at the date of this Agreement or any
subsequent time), any information with respect to Guarantor or any of its
Subsidiaries which is furnished pursuant to this Agreement; provided that any
Party may disclose any such information (i) as has become generally available
to the public, (ii) as may be required or appropriate in any report, statement
or testimony submitted to any municipal, state or Federal regulatory body
having or claiming to have jurisdiction over such party or to the Board of
Governors of the Federal Reserve System or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (iii) as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation or
regulatory proceeding, (iv) in order to comply with any law, order, regulation
or ruling applicable to such party, or (v) to any prospective assignee or
participant in connection with any contemplated assignment of any rights or
obligations hereunder, or any sale of any participation therein, by such Party
pursuant to Section 12.06, if such prospective assignee or participant, as the
case may be, executes an agreement with the Company containing provisions
substantially similar to those contained in this Section 12.13; provided,
however, that the Guarantor and the Company acknowledge that the Agent has
disclosed and may continue to disclose such
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information as the Agent in its sole discretion determines is appropriate to
the Participants from time to time.
Section 12.14 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT, THE NOTES AND THE CERTIFICATES
(INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF AND
THEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, OTHER THAN THE CONFLICT OF LAWS RULES THEREOF.
(B) EACH OF THE GUARANTOR AND THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT
SITTING IN NEW YORK CITY AND ANY APPELLATE COURT FROM ANY THEREOF IN ANY ACTION
OR PROCEEDING BY THE AGENT OR ANY PARTICIPANT IN RESPECT OF, BUT ONLY IN
RESPECT OF, ANY CLAIMS OR CAUSES OF ACTION ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES, THE CERTIFICATES OR THE OTHER OPERATIVE DOCUMENTS (SUCH
CLAIMS AND CAUSES OF ACTION, COLLECTIVELY, BEING "PERMITTED CLAIMS"), AND EACH
OF THE GUARANTOR AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT ALL PERMITTED
CLAIMS MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR IN SUCH
FEDERAL COURT. EACH OF THE GUARANTOR AND THE COMPANY HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY
AFOREMENTIONED COURT IN RESPECT OF PERMITTED CLAIMS. EACH OF THE GUARANTOR AND
THE COMPANY HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEM (THE "PROCESS
AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW YORK
10019, AS ITS AGENT TO RECEIVE ON BEHALF OF THE GUARANTOR AND THE COMPANY AND
ITS PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS WHICH MAY BE SERVED BY THE AGENT OR THE PARTICIPANTS IN ANY SUCH ACTION
OR PROCEEDING IN ANY AFOREMENTIONED COURT IN RESPECT OF PERMITTED CLAIMS. SUCH
SERVICE MAY BE MADE BY DELIVERING A COPY OF SUCH PROCESS TO THE GUARANTOR AND
THE COMPANY BY COURIER AND BY CERTIFIED MAIL (RETURN RECEIPT REQUESTED), FEES
AND POSTAGE PREPAID, BOTH (I) IN CARE OF THE PROCESS AGENT AT THE PROCESS
AGENT'S ABOVE ADDRESS AND (II) AT THE GUARANTOR'S AND THE COMPANY'S ADDRESS
SPECIFIED PURSUANT TO SECTION 12.02, AND EACH OF THE GUARANTOR AND THE COMPANY
HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH
SERVICE ON ITS BEHALF. EACH OF THE GUARANTOR AND THE COMPANY AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
(C) NOTHING IN THIS SECTION 12.14(C): (I) SHALL AFFECT
THE RIGHT OF ANY PARTICIPANT OR THE AGENT TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR AFFECT ANY RIGHT OTHERWISE EXISTING OF ANY
PARTICIPANT OR THE AGENT TO BRING ANY ACTION OR PROCEEDING AGAINST EITHER THE
GUARANTOR, THE COMPANY OR EITHER OF THEIR PROPERTY IN THE COURTS OF OTHER
JURISDICTIONS OR (II) SHALL BE DEEMED TO BE A GENERAL CONSENT TO JURISDICTION
IN ANY PARTICULAR COURT OR A GENERAL WAIVER OF ANY DEFENSE OR A CONSENT TO
JURISDICTION OF THE COURTS EXPRESSLY REFERRED TO IN SUBSECTION (A) ABOVE IN ANY
ACTION OR PROCEEDING IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION OTHER THAN
PERMITTED CLAIMS.
Section 12.15 Interest. It is the intention of the parties
hereto that each Participant shall conform strictly to usury laws applicable to
it. Accordingly, if the transactions contemplated hereby would be usurious as
to any Participant under laws applicable to it (including the laws of the
United States of America and the State of New York or any other jurisdiction
whose laws may be
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mandatorily applicable to such Participant notwithstanding the other provisions
of this Agreement), then, in that event, notwithstanding anything to the
contrary in the Notes, the Certificates, this Agreement or in any other
Operative Document or any other agreement entered into in connection with or
as security for the Notes or the Certificates, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under law
applicable to any Participant that is contracted for, taken, reserved, charged
or received by such Participant under the Notes, the Certificates, this
Agreement or under any of the other aforesaid Operative Documents or other
agreements or otherwise in connection with the Notes or the Certificates shall
under no circumstances exceed the maximum amount allowed by such applicable
law, and any excess shall be cancelled automatically and if theretofore paid
shall be credited by such Participant on the principal or face amount of the
Notes or Certificates, as the case may be (or, to the extent that the principal
or face amount of the Notes or Certificates shall have been or would thereby be
paid in full, refunded by such Participant to the Trustee); and (ii) in the
event that the maturity of the Notes or Certificates is accelerated by reason
of an election of the holder thereof resulting from any Event of Default under
this Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under law
applicable to any Participant may never include more than the maximum amount
allowed by such applicable law, and excess interest, if any, provided for in
this Agreement or otherwise shall be cancelled automatically by such
Participant as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Participant on the principal or
face amount of the Notes or Certificates, as the case may be (or, to the extent
that the principal or face amount of the Notes or Certificates shall have been
or would thereby be paid in full, refunded by such Participant to the Trustee).
All sums paid or agreed to be paid to any Note Holder for the use, forbearance
or detention of sums due hereunder shall, to the extent permitted by law
applicable to such Note Holder, be amortized, prorated, allocated and spread in
equal parts throughout the full term of the Loans evidenced by the Notes, and
all sums paid or agreed to be paid to any Certificate Holder for the use,
forbearance or detention of sums due hereunder shall, to the extent permitted
by law applicable to such Certificate Holder, be amortized, prorated, allocated
and spread in equal parts throughout the full term of the Certificate Advances
evidenced by the Certificates, in each case until payment in full so that the
rate or amount of interest on account of any Loans and Certificate Advances
hereunder does not exceed the maximum amount allowed by such applicable law.
If at any time and from time to time (i) the amount of interest or yield
payable to any Participant on any date shall be computed at the Highest Lawful
Rate applicable to such Participant pursuant to this Section 12.15 and (ii) in
respect of any subsequent interest or yield computation period the amount of
interest or yield otherwise payable to such Participant would be less than the
amount of interest or yield payable to such Participant computed at the Highest
Lawful Rate applicable to such Participant, then the amount of interest or
yield payable to such Participant in respect of such subsequent interest or
yield computation period shall continue to be computed at the Highest Lawful
Rate applicable to such Participant until the total amount of interest or yield
payable to such Participant shall equal the total amount of interest or yield
which would have been payable to such Participant if the total amount of
interest or yield had been computed without giving effect to this Section.
To the extent that Article 5069-1.04 of the Texas Revised Civil Statutes is
relevant to any Participant for the purpose of determining the Highest Lawful
Rate, each such Participant hereby elects to determine the applicable rate
ceiling under such Article by the indicated (weekly) rate ceiling from time to
time in effect.
Section 12.16 Characterization.
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(a) In order to protect the rights and remedies of the
Trustee, the Agent and the Participants following a Default, an Event of
Default, a Termination Event, or Cancellation Event, and for the purposes of
Federal, state and local income and ad valorem taxes and Title 11 of the United
States Code (or any other applicable Federal, state or local insolvency,
reorganization, moratorium, fraudulent conveyance or similar law now or
hereafter in effect for the relief of debtors), the parties hereto intend that
(i) the Lease be treated as the repayment and security provisions of a loan by
the Trustee to the Company in the amount of the Facility Costs, (ii) all
payments of Rent, Additional Rent, the Residual Guaranty Amount and the Option
Price be treated as payments of principal, interest and other amounts owing
with respect to such loan, respectively, and (iii) the Company be treated as
entitled to all benefits of ownership of the Property or any part thereof. In
addition, the parties acknowledge that after payment in full of the Notes and
the Certificates, the interest and yield accrued thereon and any other
obligations of the Company under the Operative Documents, any remaining
proceeds of the Facility and other Property included in the Trust Estate shall
be distributed to the Company in accordance with the Declaration.
(b) The Company agrees that neither it nor any of its
Affiliates (whether or not consolidated or combined returns are filed for any
such Affiliate and the Company for federal, state or local income tax purposes)
will at any time take any action, directly or indirectly, or file any return or
other document inconsistent with the intended income tax treatment set forth in
the preceding sentence, and the Company agrees that the Company and any such
Affiliates will file such returns, maintain such records, take such action and
execute such documents (as reasonably requested by the Trustee, the Agent or
the Participants from time to time) as may be appropriate to facilitate the
realization of such intended income tax treatment. Each of the Trustee, the
Agent and the Participants agrees that neither it nor any affiliate (whether or
not consolidated or combined returns are filed for such affiliate and the
Trustee, the Agent or any Participant, as the case may be, for federal, state
or local income tax purposes) will at any time take any action, directly or
indirectly, or file any return or other document claiming, or asserting that it
is entitled to, the income tax benefits, deductions and/or credits which,
pursuant to the intended income tax treatment set forth herein, would otherwise
be claimed or claimable by the Company, and that it and any such affiliates
will file such returns, maintain such records, take such actions, and execute
such documents (as reasonably requested by the Company from time to time) as
may be appropriate to facilitate the realization of, and as shall be consistent
with, such intended income tax treatment, and if any such filing, maintenance,
action or execution requested by the Company would result in any additional
income tax liability payable by it or any affiliate, or could reasonably be
expected to result in liability payable by it or any affiliate, unrelated to
the intended income tax treatment set forth herein, then the Company will
provide an indemnity against such unrelated income tax liability satisfactory
to the Trustee, the Agent or any Participant, as the case may be, in its sole
opinion.
(c) The Company acknowledges that neither any
Participant, the Agent, the Trustee or any Affiliate of any thereof is making
any representation, nor is it required to make any disclosure, now or in the
future, with respect to the parties' tax or accounting treatment of the
Facility or the financing thereof, nor is any Participant, the Agent, the
Trustee or any Affiliate or any thereof responsible, nor will it be responsible
in the future, for tax and accounting advice with respect to the Facility or
the financing thereof, and the Company has had or will have the benefit of the
advice of its own independent tax and accounting advisors with respect to such
matters.
Section 12.17 Compliance. Neither the Trustee, the Agent nor
any Participant has any responsibility for compliance by the Facility or the
Company with any Governmental
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Requirement or other matters. The Company expressly assumes such
responsibilities and shall indemnify and hold harmless the Trustee, the Agent
and the Participants with respect thereto in the manner provided in the Lease.
Section 12.18 Facility. Upon payment by the Company or the
Guarantor of the Option Price in connection with its purchase of all of the
Facility in accordance with the Lease or the Support Agreement, or the
repayment in full of all amounts then due and owing by the Company under the
Operative Documents, and promptly upon the request of the Company, (i) the
Agent shall give to the Trustee the notice contemplated by Section 3.01 of the
Declaration and (ii) the Trustee will convey the Facility to the Company or its
designee, as provided in the Declaration, free and clear of any Lien or other
adverse interest of any kind created by the Trustee or any Person claiming by,
through or under the Trustee, including, without limitation, the Agent and the
Participants (except as consented to by the Company).
Section 12.19 The Trustee. Except for liability for its own
representations and warranties in Section 7.02 hereof, for its own gross
negligence and willful misconduct and as otherwise expressly provided in any of
the Operative Documents, the Company, the Agent and the Participants hereby
agree that (a) this Agreement, the other Operative Documents to which the
Trustee is a party are being executed and delivered by State Street not in its
individual capacity but solely as Trustee under the Declaration, (b) each of
the undertakings and agreements herein made on the part of the Trustee are
intended for the purpose of binding the trust estate created by the Declaration
and not as personal undertakings of State Street, and (c) nothing contained
herein or in the other Operative Documents shall be construed to create any
liability on State Street, individually, to perform any obligation of the
Trustee contained herein or in the other Operative Documents. The Company, the
Agent and the Participants hereby expressly waive all liability on the part of
State Street except as provided in the preceding sentence and agree that State
Street shall under no circumstances be personally liable for the payment of the
Notes, the Certificates or any other obligations of the Trustee or be liable
for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Trustee under this Agreement or the other
Operative Documents except as provided above. The Trustee agrees that all
payments to be made to the Agent or the Trustee under any of the Operative
Documents which originate from the Company shall be made directly by the
Company to the Agent and all fundings to be made to the Trustee hereunder shall
be made directly to the Company.
Section 12.20 The Certificate Holder. No recourse under
any obligation, covenant or agreement of the Certificate Holder contained in
this Agreement, any Operative Document or any agreement or document executed in
connection herewith or therewith or the transactions contemplated hereby or
thereby shall be had against any shareholder, employee, officer, director,
affiliate or incorporator of the Certificate Holder. The obligations,
covenants and agreements of the Certificate Holder under any of the foregoing
agreements and documents are solely the corporate obligations of the
Certificate Holder, and the other parties hereto agree to look solely to the
Certificate Holder for payment of all obligations, including, without
limitation, any fees or other amounts due hereunder or thereunder, and claims
arising out of or relating to any of the foregoing agreements and documents.
The provisions of this Section shall survive the termination of this Agreement.
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Section 12.21 Waiver of Jury Trial. EACH OF THE PARTIES
HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR TO DEFEND ANY RIGHTS
UNDER THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT OR UNDER AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
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The parties hereto have caused this Agreement to be duly executed as
of the day and year first above written.
The Guarantor: EL PASO NATURAL GAS COMPANY
By:
----------------------------------
H. Brent Austin
Senior Vice President and
Chief Financial Officer
The Company: EL PASO NEW CHACO COMPANY
By:
----------------------------------
John M. Green, Jr.
Vice President and Treasurer
Principal Place of Business:
P.O. Box 1492
El Paso, Texas 79978
Chief Executive Offices:
P.O. Box 1492
El Paso, Texas 79978
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Trustee: STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By:
-------------------------------
Arthur J. MacDonald
Assistant Vice President
Agent: CHEMICAL BANK, as Agent
By:
-------------------------------
W. King Grant
Vice President
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Note Holders: CHEMICAL BANK
By:
-----------------------------------
W. King Grant
Vice President
Funding Office for Base Rate
Loans and Eurodollar Loans:
270 Park Avenue, 8th Floor
New York, New York 10017
Address for Notices:
140 East 45th Street, 29th Floor
New York, New York 10017
Telecopier No.: (212) 622-0002
Telephone No.: (212) 622-8433
Attention: Maggie Swales
Copy To:
270 Park Avenue, 8th Floor
New York, New York 10017
Telecopier No.: (212) 270-4892
Telephone No.: (212) 270-3531
Attention: John Gehebe
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THE BANK OF NEW YORK
By:
--------------------------------
Raymond J. Palmer
Vice President
Funding Office for Base Rate
Loans and Eurodollar Loans:
One Wall Street
New York, New York 10288
Address for Notices:
One Wall Street
New York, New York 10288
Telecopier No.: (212) 635-7923
Telephone No.: (212) 635-_________
Attention: Nina Russo-Valdes
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INDUSTRIAL BANK OF JAPAN
By:
-----------------------------------
Robert W. Ramage
Vice President
Funding Office for Base Rate
Loans and Eurodollar Loans:
245 Park Avenue, 23rd Floor
New York, New York 10167
Address for Notices:
245 Park Avenue, 23rd Floor
New York, New York 10167
Telecopier No.: (212) 856-9450
Telephone No.: (212) 309-6443
Attention: Steve Pottle
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KREDIETBANK, N.V.
By:
------------------------------------
Robert Snauffer
Vice President and
Senior Credit Officer
Funding Office for Base Rate
Loans and Eurodollar Loans:
125 W. 55th Street, 10th Floor
New York, New York 10019
Address for Notices:
125 W. 55th Street, 10th Floor
New York, New York 10019
Telecopier No.: (212) 956-5580
Telephone No.: (212) 541-0657
Attention: Lynda Resuma
Copy To:
Ms. Linda L. Stanley
Vice President
Kredietbank, N.V.
1349 W. Peachtree Street
Suite 1750
Atlanta, Georgia 30309
Telephone: (404) 876-2566
Telecopy: (404) 876-3212
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THE SUMITOMO BANK, LIMITED
By:
------------------------------------
Tatsuo Ueda
General Manager
Funding Office for Base Rate
Loans and Eurodollar Loans:
700 Louisiana, Suite 1750
Houston, Texas 77002
Address for Notices:
700 Louisiana, Suite 1750
Houston, Texas 77002
Telecopier No.: (713) 759-0020
Telephone No.: (713) 759-0136
Attention: Robert Quezada
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ROYAL BANK OF CANADA
By:
----------------------------------
Everett M. Harner
Manager - Corporate Banking
Funding Office for Base Rate
Loans and Eurodollar Loans:
600 Wilshire Blvd, Suite 800
Los Angeles, California 90017
Address for Notices:
600 Wilshire Blvd., Suite 800
Los Angeles, California 90017
Telecopier No.: (213) 955-5350
Telephone No.: (213) 955-5322
Attention: Mr. Everett M. Harner
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SOCIETE GENERALE, SOUTHWEST AGENCY
By:
----------------------------------
Mark A. Cox
Vice President
Funding Office for Base Rate
Loans and Eurodollar Loans:
Trammel Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Address for Notices:
Trammel Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Telephone No.: (214) 979-2764
Telecopier No.: (214) 754-0171
Attention: Ralph Saheb
Copy To:
Societe Generale, Southwest Agency
1111 Bagby
Suite 2020
Houston, Texas 77002
Attention: Mark A. Cox
Telephone: (713) 759-6315
Telecopy: (713) 650-0824
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Certificate Holder: SOCIETE GENERALE FINANCIAL CORPORATION
By:
------------------------------------
Name:
Title:
Funding Office for Base Rate
Advances and Eurodollar Advances:
1221 Avenue of the Americas
New York, New York 10020
Address for Notices:
1221 Avenue of the Americas
New York, New York 10020
Telephone No.: (212) 278-6450
Telecopier No.: (212) 278-6178
Attention: David Brunson
Copy To:
Societe Generale, Chicago Branch
181 W. Madison Street
Suite 3400
Chicago, Illinois 60602
Attention: John Castellano
Telephone: (312) 578-5168
Telecopier: (312) 578-5199
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