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EXHIBIT 10.27
SWAP AGREEMENT
THIS SWAP AGREEMENT (together with Schedules A, B, C, D and E the
"Agreement") made and entered by and between NOMECO Oil & Gas Co., a Michigan
corporation ("NOGC") and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Exchanges Ltd., a Delaware corporation
("LDEL");
RECITAL
LDEL and NOGC have entered into a transaction pursuant to which
payments will be made based on fixed and floating prices of natural gas.
AGREEMENTS
LDEL and NOGC agree as follows:
ARTICLE I.
DEFINITIONS
For the purposes of this Agreement, the terms set forth below
shall have the meanings indicated:
1.1 "BUSINESS DAY" shall mean a day on which commercial banks
in New York are open for business.
1.2 "COMMODITY" shall mean natural gas.
1.3 "DEFAULTING PARTY" shall mean a Party with respect to
which an Event of Default has occurred.
1.4 "DETERMINATION DAY" shall mean each Business Day during
the period that commences on the Effective Date and ends on the date on which
all of the obligations of LDEL and NOGC under this Agreement have been
performed.
1.5 "DOLLARS" (and the symbol "$") shall mean dollars in the
lawful currency of the United States of America.
1.6 "EARLY TERMINATION DATE" shall mean a date that is
designated as such by a Party pursuant to Article V.
1.7 "EARLY TERMINATION EVENT" shall mean any event which
permits the establishment of an Early Termination Date.
1.8 "EFFECTIVE DATE" shall mean May 8, 1992.
1.9 "EVENT OF DEFAULT" shall mean each of the events set forth
in Section 5.1(c).
1.10 "EXPOSURE AMOUNT" shall be the amount computed pursuant to
Schedule C.
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1.11 "EXPOSED PARTY" shall be the Party which is described as
the Exposed Party in Schedule C.
1.12 "FIXED AMOUNT" shall mean with respect to a Settlement
Period the product, in Dollars, of the Quantity Per Settlement Period and the
Fixed Price for that Settlement Period.
1.13 "FIXED PRICE" shall mean for the Settlement Period ending
on:
December 31, 2001 -- $2.82
December 31, 2002 -- $3.04
December 31, 2003 -- $3.28
December 31, 2004 -- $3.55
December 31, 2005 -- $3.83
December 31, 2006 -- $4.14
1.14 "FLOATING AMOUNT" shall mean with respect to a Settlement
Period the product, in Dollars, of the Quantity Per Settlement Period and the
Floating Price for that Settlement Period.
1.15 "FLOATING PRICE" shall mean for a Settlement Period the
amount computed to two decimal places using the Floating Price Determinant.
1.16 "FLOATING PRICE DETERMINANT" shall mean the formulas, set
of calculations, or indices designated in Schedule B to be used to calculate
the Floating Price.
1.17 "GUARANTY" shall mean the guaranty substantially in the
form of Schedule E duly executed and delivered by LDNG to NOGC.
1.18 "INDEMNIFIABLE TAX" shall mean a Tax that is imposed in
respect of a payment made under this Agreement as a result of a present or
former connection (and that would not be imposed but for that connection)
between the jurisdiction of the government or taxing authority imposing that
Tax and the person to whom that payment is made or a person related to that
person including without limitation, a connection arising from that person's or
that related person's being or having been (a) a citizen or resident of, (b)
organized, present or engaged in a trade or business, or (c) having or having
had a permanent establishment or fixed place of business in that jurisdiction;
but excluding a connection arising solely from that recipient's having
executed, delivered, enforced, or performed obligations or received a payment
under this Agreement.
1.19 "LETTER OF CREDIT" shall mean irrevocable letter of credit
in the form of Schedule D appropriately completed and with such changes in that
form as the issuing bank may require.
1.20 "LOCAL BANKING DAY" shall mean a day on which commercial
banks are open for business in the locality to which a notice or communication
under this Agreement is addressed in accordance with this Agreement.
1.21 "LDNG" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇▇ Natural Gas Corp., a
Delaware corporation.
1.22 "NOT EXPOSURE AMOUNT" shall mean the excess of the
Exposure Amount over $2 million.
1.23 "NON-DEFAULTING PARTY" shall have the meaning set forth in
Section 5.1(a).
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1.24 "NON-EXPOSED PARTY" shall be the Party which is not the
Exposed Party.
1.25 "OBLIGATED PARTY" shall mean for a Payment Date (i) LDEL
if the Floating Price exceeds the Fixed Price and (ii) NOGC if the Fixed Price
exceeds the Floating Price.
1.26 "PARTY" shall mean either LDEL or NOGC; and "PARTIES"
shall mean LDEL and NOGC.
1.27 "PAYMENT DATE" shall mean for the Period End Date of:
December 31, 2001 - January 3, 2002
December 31, 2002 - January 3, 2003
December 31, 2003 - January 2, 2004
December 31, 2004 - January 3, 2005
December 31, 2005 - January 3, 2006
December 31, 2006 - January 3, 2007
except that if the Floating Amount is not determinable on the Calendar Day
immediately preceding the Payment Date, then the Payment Date shall be the
Business Day immediately following the day on which LDEL notifies NOGC of the
Floating Amount in accordance with Section 2.1.
1.28 "PERIOD END DATE" shall mean the December 31 in each of
the years 2001 through 2006, both inclusive.
1.29 "PROCEEDINGS" shall mean any suit, action or proceedings
between the Parties relating to this Agreement.
1.30 "QUANTITY PER SETTLEMENT PERIOD" shall mean 3,650,000
MMBtu's.
1.31 "RECEIVING PARTY" shall mean (i) NOGC if LDEL is the
Obligated Party and (ii) LDEL if NOGC is the Obligated Party.
1.32 "SETTLEMENT PERIOD" shall mean each period that ends on a
Period End Date, the first of which commences on January 1, 2001 and continues
through the first Period End Date, and the remainder of each of which commences
on the calendar day immediately following each Period End Date and continues
to, and includes, the next following Period End Date.
1.33 "TAX" shall mean any existing or future tax, levy, impost,
duty charge, assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any government or other taxing authority
in respect of any payment made under this Agreement other than a stamp,
registration, documentation or similar tax.
1.34 "TERMINATION DATE" shall mean February 23, 2007.
1.35 "TERMINATION NOTICE" shall mean the notice designating an
Early Termination Date that is sent pursuant to Section 5.1(a).
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ARTICLE II.
PAYMENTS
2.1 No later than 10:00 a.m., Connecticut time, on the Calendar
Day immediately preceding each Payment Date LDEL shall determine and notify
NOGC of the Floating Amount for the Settlement Period then ended, the
calculation of the Floating Amount and the difference between the Floating
Amount and the Fixed Amount; except that if the Floating Amount is not
determinable in accordance with the Floating Price Determinant on the Calendar
Day immediately preceding a Payment Date, then LDEL shall determine and notify
NOGC of the Floating Amount on the first Calendar Day on which the Floating
Amount is determinable. If (a) the Floating Amount is greater than the Fixed
Amount, then LDEL shall pay to NOGC a sum equal to the difference between the
two amounts and, (b) the Fixed Amount is greater than the Floating Amount, then
NOGC shall pay to LDEL a sum equal to the difference between the two amounts
and (c) there is no difference between the Fixed Amount and the Floating
Amount, then, no payment shall be made.
2.2 All payments under Section 2.1 shall be made on a same day
basis in immediately available funds, by wire transfer on the applicable
Payment Date to the account designated on Schedule A no later than 10:00 A.M.
in the place where such account is located on the Payment Date, except that
neither Party shall be obligated to make the payment on the Payment Date if an
Event of Default or an event which with the giving of notice or lapse of time
or both could become an Event of Default with respect to the Party otherwise
entitled to receive the payment has occurred and is continuing (but shall pay
or be entitled to a credit on account of that payment on an Early Termination
Date as is provided in Section 5.3(b)) Notwithstanding the failure of LDEL to
give the notice as set forth in Section 2.1, payment shall be deemed to be due
by either Party at 12 Noon New York City time on the Payment Date. Payments
that are not made when due by either Party shall bear interest at the rate set
forth in Section 2.7. Any Failure by LDEL to give the notice pursuant to
Section 2.1 shall not be deemed to be an Event of Default. If LDEL fails to
give the notice required in Section 2.1 then, unless LDEL has given that
notice, NOGC may make the determinations that LDEL was obligated to make and
give the notice to LDEL, which determination and notice will have the same
effect as the notice that was to have been given by LDEL.
2.3 No payment that is made or accepted by either Party
pursuant to Section 2.2 and based on LDEL's notice (pursuant to Section 2.1) or
NOGC's notice (pursuant to Section 2.2) shall constitute acceptance by either
Party of the correctness of the calculations set forth in the notice. Either
Party may request a recalculation or adjustment if it believes the calculations
were made incorrectly, and any adjustments in payments by either Party due to
incorrect calculations will be made promptly by the Parties; except that no
such adjustment in payment will be made after two years from rendition of the
notice on account of which the payments were made. The provisions of this
Section 2.3 will survive any termination of this Agreement for a period of two
years from the date of such termination.
2.4 All payments shall be made without any deduction or
withholding for, or on account of any Tax unless that deduction or withholding
is required by any law (as modified by the practice or regulation of any
relevant governmental revenue authority) in effect at the time at which the
payment is made. If an Obligated Party is required to deduct or withhold on
account of any Tax, then the obligated Party will (a) pay to the relevant
authority the full amount required to be deducted or withheld (including the
full amount required to be deducted or withheld from any additional amount paid
by the obligated Party to the Receiving Party under this Section 2.4) promptly
upon the later of the last date on which that amount is required to be paid to
the relevant authority and the date on which the Obligated Party receives
notice that the amount (i) is payable to the relevant authority or (ii) has
been assessed against the Receiving
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Party; (b) promptly forward to the Receiving Party an official receipt (or a
certified copy) or other documentation reasonably acceptable to the Receiving
Party evidencing the payment to the relevant authority; and (c) if the Tax is
an Indemnifiable Tax, pay to the Receiving Party, in addition to the payment to
which the Receiving Party otherwise is entitled, such additional amount as is
necessary to ensure that the net amount actually received by the Receiving
Party (free and clear of Indemnifiable Taxes whether assessed against either
Party) will equal the full amount that the Receiving Party would have received
if no such deduction or withholding had been required.
2.5 The Receiving Party will deliver to the Obligated Party
promptly upon request at any time (unless such delivery is reasonably likely to
prejudice the Receiving Party's Tax position) any Tax certificates or documents
reasonably requested to enable the Obligated Party to make payments without
deduction or withholding for or on account of Taxes or to make such deduction
or withholding at a reduced rate. If the Receiving Party subsequently
receives a Tax credit resulting from a payment which includes an additional
amount under Section 2.4, then promptly upon its receipt of that Tax credit, it
will pay to the Obligated Party such amount as the Receiving Party reasonably
determines will leave it (after such payment) in the same position as it would
have been if no additional amount had been required to be paid.
2.6 If the Obligated Party would not be required to deduct or
withhold for or on account of Taxes but for the failure by the Receiving Party
to deliver any certificate or document referred to in Section 2.5, then the
Obligated Party shall not be required to pay to the Receiving Party any
additional amount referred to above. If, in such circumstances, a liability is
assessed directly against the Obligated Party for not so deducting or
withholding, then, except to the extent the Receiving Party has satisfied or
then satisfies the liability resulting from such Tax, promptly upon demand
therefor by the Obligated Party the Receiving Party will promptly pay to the
Obligated Party the amount of the liability so assessed against it, including
any related liability for penalties.
2.7 If either Party fails to pay the full amount payable by it
when due, then interest on the unpaid portion shall accrue (both before and
after judgment) at a rate equal to 1 1/2 percent per annum above the base rate
from time to time of Citibank N.A. from the date on which the payment was due
until the date of payment. If either Party fails to make timely payment of any
amount due under this Agreement, then the other Party, in addition to any other
remedy it may have, shall have the right to suspend its performance hereunder
until such amount, including interest, has been paid.
2.8 All obligations arising out of this Agreement shall be
paid and settled in cash. LDEL and NOGC shall have no obligation to deliver or
receive any Commodity in its physical form.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Each Party represents and warrants to the other that on
the date of this Agreement:
(a) It is duly organized and validly existing in good
standing under the laws of the jurisdiction of its organization or
incorporation;
(b) It has the corporate power to execute and deliver
and perform its obligations under this Agreement;
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(c) Such execution, delivery and performance does not
and will not violate or conflict with its charter or by-laws (or comparable
constitutive documents), any law applicable to it or any order or judgment of
any court or other agency of government applicable to it or any agreement to
which it is a party or by which it or any of its property is bound;
(d) This Agreement constitutes its legal, valid and
binding obligation enforceable in accordance with its terms (except as
enforcement may be limited by bankruptcy, reorganization, insolvency,
moratorium or other laws affecting the enforcement of creditors' rights
generally and subject, as to enforceability, to equitable principles of general
application);
(e) It is entering into this Agreement in connection
with business or the financing of its business;
(f) The material terms of this Agreement have been
individually tailored and negotiated;
(g) It has obtained all governmental, regulatory or
other consents, authorizations or clearances that are required to be obtained
by it in respect of its entry into and its performance of this Agreement, and
all of those consents are in full force and effect and any conditions have been
complied with;
(h) No Early Termination Event with respect to it has
occurred and is continuing and no such event would occur by its entry into or
its performance of its obligations under this Agreement; and
(i) Information provided to the other Party in writing
relating to itself in connection with this Agreement is, as of the date of the
information, true, accurate and complete in every material respect.
3.2 LDEL represents and warrants to NOGC that LDEL is a
wholly-owned subsidiary of LDNG.
ARTICLE IV.
UNDERTAKINGS
4.1 Concurrently with its execution and delivery of this
Agreement, (a) each Party shall furnish the other Party with evidence
reasonably satisfactory to the other Party as to the names, the signatures and
authority of its officers or officials signing this Agreement and the Guaranty,
and (b) LDEL will deliver to NOGC the Guaranty.
4.2 So long as it has or may have any obligation under this
Agreement, each Party will (a) pay any stamp, registration, documentation or
similar tax that is levied or imposed upon it in respect of its execution or
performance of this Agreement by a jurisdiction in which it is incorporated,
organized, managed and controlled, or considered to have its seat, or in which
a branch or office through which it is acting for the purpose of this Agreement
is located, and (b) indemnify the other Party against any such tax that is
levied or imposed upon the other Party or in respect of the other Party's
execution or performance of this Agreement by any jurisdiction in which the
indemnifying Party is and the indemnified Party is not incorporated, organized,
managed and controlled.
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ARTICLE V.
EARLY TERMINATION
5.1 (a) If any of the events set forth below in Section
5.1(c) or (d) occurs (an "Event of Default"), and is continuing with respect to
either Party, then that Party shall be deemed the Defaulting Party and the
other Party (the "Non-Defaulting Party") may, subject to Section 5.1 (b), by
notice which, if applicable, specifies the relevant event to the Defaulting
Party, designate a Business Day as an Early Termination Date which shall be no
earlier than the date such notice is received or deemed to have been received
by the Defaulting Party and no later than 30 days after giving that Termination
Notice, on which all obligations under this Agreement with respect to amounts
payable pursuant to Section 2.1 on all Payment Dates falling after the Early
Termination Date shall be terminated, whereupon such obligations shall
terminate (without regard to subsequent events, and without affecting the
Party's other obligations under this Agreement).
(b) If the Event of Default is one that is described in
Sections 5.1(c)(i), (ii), (iii), (iv), (v), or (xi), then the Non-Defaulting
Party may designate the Early Termination Date by sending a Termination Notice
to the Defaulting Party. If the Event of Default is one that is described in
Sections 5.1(c)(vi) [other than Section 5.1(c)(vi)(z)), (vii), (viii), or (x),
then an Early Termination Date shall be deemed to occur upon the occurrence of
that Early Termination Event without the giving of a Termination Notice and if
the Event of Default is one that is described in Section 5.1(c)(vi)(z) or
5.1(c)(ix), then an Early Termination Date shall be deemed to have occurred
immediately preceding the institution of the relevant proceeding or the
presentation of the relevant petition.
(c) Each of the following shall be an Event of Default:
(i) The Party fails to make a payment required
under this Agreement and does not remedy the failure to pay within a period of
three Business Days after receipt of notice of that failure from the other
Party;
(ii) Any representation or warranty made by a
Party in this Agreement or in any document required to be delivered by it
hereunder proves to have been false or misleading in any material respect when
made or whenever deemed to be repeated and remains so false or misleading at
the time at which the Termination Notice is given;
(iii) The Party fails to perform, observe or
comply with any covenant, condition or provision (other than one dealt with in
the preceding subsections) contained in this Agreement and fails to cure the
failure ten Business Days after receipt of notice of that failure from the
other Party;
(iv) The Party fails in the (x) payment when due
(whether at maturity, by acceleration or otherwise) of an aggregate amount that
exceeds $2 million with respect to obligations in respect of money borrowed
from or guaranteed to any person or persons and fails to remedy the non-payment
or failure within any applicable grace period; or (y) performance of, or
occurrence of any other event of default, however defined, under any agreement
in which those obligations are created, evidenced or secured, if that failure
or event of default is not remedied within any applicable grace period and the
effect of that failure or event of default is to cause an amount that exceeds
$2 million of those obligations to become, or to permit the holder or holders
of those obligations (or a trustee or agent on behalf of such holder or
holders) to declare such an amount of those obligations, due and payable before
they would otherwise have become due;
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(v) The Party becomes insolvent or fails or is
unable to pay its debts as they become due or admits in writing its inability
generally to pay its debts as they become due or is adjudicated a bankrupt or
insolvent;
(vi) The Party (w) applies for or consents to the
appointment of, or the taking of possession by, a receiver, receiver manager,
custodian, trustee, liquidator, administrator or other similar official for
itself or for all or a substantial part of its property, (x) makes an
assignment or any general arrangement for the benefit of its creditors, (y)
files a petition or otherwise commences, authorizes or acquiesces in the
commencement of a proceeding or cause under any bankruptcy, insolvency or
similar law for the protection from creditors or have such petition or
proceeding commenced against it; or (z) in the absence of such application,
consent, assignment, filing, failure or acquiescence, a trustee, custodian or
receiver is appointed for the Party or for a substantial part of its property
and is not discharged within 30 days;
(vii) The Party winds up its affairs;
(viii) The Party takes any corporate action to
authorize any of the actions towards winding-up its affairs or liquidating;
(ix) Any bankruptcy, reorganization, debt
arrangement, or other proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding is instituted against the Party, or any
material event comparable to any of the foregoing shall occur under the laws of
any competent jurisdiction, and the proceeding is consented to or acquiesced in
by the Party and remains for 30 days undismissed, or an order for relief
against the Party is entered under applicable bankruptcy law or other law for
the relief of debtors;
(x) Any event occurs with respect to the Party
which, under the applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in Sections 5(c)(v) to (ix) both inclusive; or
(xi) The Party consolidates or amalgamates with or
merges into, or transfers all or substantially all of its assets to another
entity and either (i) the resulting survivor or transferee entity fails to
assume (by operation of law or otherwise) all of the obligations of that Party
under this Agreement, or (ii) the creditworthiness of the resulting, surviving
or transferee entity is materially less than was the creditworthiness of the
Party immediately before the consolidation, amalgamation, merger or transfer.
(d) The occurrence of any event described -in (i)
Sections 5.1(c)(i), (ii) or (iii) by or in respect of the Guarantor under the
Guaranty (except that for the purpose of applying those three sections to the
Guarantor the words "this Agreement" as used in those three sections shall read
"the Guaranty") or (ii) Sections 5.1(c)(iv) through (xi), both inclusive, by or
in respect of the Guarantor in each case shall constitute an Event of Default
by LDEL.
5.2 If an event occurs such as (a) the adoption of, or any
change in a law or regulation or in the interpretation or application thereof
which makes it unlawful for a Party to perform any of its material obligations
under this Agreement, or (b) it is reasonably foreseeable that a Party will be
required on the next succeeding date on which a payment is due under this
Agreement to pay to the other Party an additional amount in respect of an
Indemnifiable Tax under Section 2.4 (except on account of interest on any past
due payment), or (c) if the prices at which the Commodity may be bought and
sold are fixed by federal, state or local government so that the Floating Price
Determinant does not reflect the normal free market response to supply and
demand which would exist if prices were not so fixed, or (d) there is an
increase of more than 30 cents in the Daily Determination Price of the
Commodity as is described in
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paragraph (c) of Schedule B, then either Party, by appropriate notice may
designate an Early Termination Date.
5.3 (a) Upon the designation of an Early Termination Date
pursuant to Section 5.1, the terminating Party shall (i) promptly calculate an
amount that is equal to the then present value of the total of all actual
damages suffered and costs and expenses reasonably incurred and reasonably
expected to be incurred by the terminating Party as a result of the occurrence
of the Early Termination Date including, without limitation, any loss, cost or
expense that would be incurred to preserve for the terminating Party the
economic equivalent of the payment obligations of the Parties under this
Agreement in respect of each Payment Date that is scheduled to occur after the
Early Termination Date, which may be the costs and expenses to replace this
Agreement with one or more swap agreements or arrangements which will provide
the terminating Party with equivalent payment obligations in respect of each
Payment Date, and (ii) send a statement of its calculation to the other Party.
(b) On the Early Termination Date pursuant to Section
5.1, (i) the Defaulting Party shall owe to the Non-Defaulting Party the sum of
the amount payable under Section 5.3(a), and the aggregate amount, if any, owed
by the Defaulting Party pursuant to Article II up to the Early Termination Date
if such amounts remain unpaid as of the Early Termination Date for any reason,
including under the provisions of Section 2.2, and (ii) the Non-Defaulting
Party shall owe the Defaulting Party the aggregate amount, if any, owed by the
Non-Defaulting Party to the Defaulting Party pursuant to Article II up to the
Early Termination Date if such amounts remain unpaid as of the Early
Termination Date. The Party owing the greater amount under clauses (i) and
(ii) of the immediately preceding sentence shall pay to the other Party the
excess of the greater amount over the lesser amount on demand.
(c) Upon the designation of an Early Termination Date
pursuant to Section 5.2, each Party shall (i) promptly calculate an amount that
is equal to the then present value of the total of all actual damages suffered
or actual gains or benefits received and costs and expenses reasonably incurred
or avoided or reasonably expected to be incurred or avoided by that Party as a
result of the occurrence of the Early Termination Date including, without
limitation, any gain, loss, cost or expense that would be incurred to preserve
for such Party the economic equivalent of the payment obligations of the
Parties hereunder in respect of each Settlement Date scheduled to occur after
the Early Termination Date, which may be the costs and expenses to replace this
Agreement with one or more swap agreements or arrangements which will provide
such Party with equivalent payment obligations in respect of each Settlement
Date, and (ii) send a statement of its calculation to the other Party.
(d) (i) The Party having the larger gain or smaller lose
pursuant to Section 5.3(c) shall pay to the other Party an amount equal to
one-half of the difference between that gain or loss and (ii) each Party shall
pay the aggregate amount owed to the other Party under Article II up to the
Early Termination Date.
5.4 All amounts payable pursuant to Section 5.3 shall be
calculated as of the Early Termination Date and be payable upon demand after
the amounts payable are determined, together with interest on the amounts from
the Early Termination Date to the date of payment at the rate specified in
Section 2.7.
5.5 If either Party disagrees with the calculation of any
amounts payable under this Article V, then two independent experts agreeable to
both Parties shall mutually determine the matter and those experts'
determination shall be binding save for fraud or manifest error. If the
Parties fail to agree promptly upon the independent experts or if the
independent experts agreed upon fail to mutually determine the matter promptly,
then each Party shall promptly nominate one independent expert (if they have
not been nominated previously) and the two experts so nominated shall promptly
in turn nominate a third
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independent expert and the determination of the third independent expert shall
be binding upon the Parties save for fraud or manifest error. All of the
independent experts shall be at the time at which they act under this Section
5.5 persons who are actually engaged in business as swap dealers in the
Commodity. Each Party shall be entitled to (a) submit to the independent
experts written briefs setting forth their views on the matter submitted for
the determination; if copies of those briefs are forwarded to the other Party,
and (b) make to the independent experts oral arguments, but only in the
presence of the other Party.
ARTICLE VI.
FINANCIAL RESPONSIBILITY
6.1 On each Determination Day LDEL shall determine an Exposure
Amount and shall send a notice of its determination to NOGC.
6.2 (a) If on any Determination Day a Net Exposure Amount
exists for an Exposed Party, then, within seven Business Days after that
Determination Date the Non-Exposed Party shall establish and thereafter
maintain so long as there is a Net Exposure Amount for that Exposed Party a
Letter of Credit from a major U.S. commercial bank acceptable to the Exposed
Party (which shall not unreasonably withhold its acceptance) for the benefit of
the Exposed Party that is equal to the Net Exposure Amount rounded to the next
highest integral multiple of $500,000.
(b) If on any Determination Day the aggregate amount of
existing Letters of Credit that have been established by the Non-Exposed Party
exceeds the Net Exposure Amount rounded to the next highest integral multiple
of $500,000, then the Exposed Party shall do whatever the Non-Exposed Party
reasonably requests as being necessary to authorize the appropriate reduction
in the aggregate amount of the Letters Of Credit.
(c) If on any Determination Day the aggregate amount of
existing Letters of Credit is less than the Net Exposure Amount rounded to the
next highest integral multiple of $500,000, then the Non-Exposed Party shall do
whatever is necessary to cause an appropriate increase in the aggregate amount
of the Letters of Credit or the issuance of additional Letters of Credit so
that the aggregate amount of all Letters of Credit in favor of the Exposed
Party equals the Net Exposure Amount rounded to the next highest integral
multiple of $500,000.
6.3 Notwithstanding the foregoing, neither Party shall be
required to provide a Letter of Credit in excess Of $10 million.
6.4 Within 120 days after the end of each of its fiscal years,
(a) NOGC will provide to LDEL a copy of NOGC's audited financial statements
(including, without limitation, its balance sheet and income statement) for
that fiscal year, and (b) LDEL will deliver or cause to be delivered to NOGC a
copy of LDNG's audited financial statements (including, without limitation, its
balance sheet and income statement) for that fiscal year. In the event that at
any time (a) NOGC has shareholders, equity below $125 million, positive working
capital (current assets minus current liabilities, excluding deferred taxes and
current maturities on long-term debt) below $1 million or total liabilities
exceeding twice the amount of its shareholders, equity, or (b) LDNG has
shareholders, equity below $20 million, positive working capital below $1
million or (c) the sum of LDNG's earnings before income taxes for any fiscal
year of LDNG, plus depreciation, amortization and other items that were
deducted in determining those earnings before taxes, but were not paid in cash,
is less than one sixth of the amount at the end of that fiscal year of LDNG's
total indebtedness for money borrowed which is not subordinated in right of
payment to LDNG's obligations under the Guaranty or (d) any event that is
described in Sections 5.1(c)(v)(vi)(vii)(viii)
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or (ix) of this Agreement which if that event occurred with respect to a Party
would constitute an Event of Default, occurs with respect to any entity
("Controlling Entity") that directly or indirectly controls the right to vote
the majority of the shares of that Party or owns the majority of the equity
interest in that Party or to LDNG (whether or not LDNG controls the right to
vote the majority of the shares of LDEL or owns the majority of the equity
interest in LDEL at the time at which that event occurs), then in any of those
four events, and without affecting any other rights or remedies a Party may
have under this Agreement because of the occurrence of any such event, the
Letter of Credit to be provided by NOGC (if the events are those described in
clause (a) or clause (d) of this sentence; but, as to clause (d), only to the
extent the events relate to NGOC's Controlling Entity) or by LDEL (if the
events are those described in clause (b), (c) or (d) of this sentence; but, as
to clause (d), only to the extent the events relate to LDNG or to any other
Controlling Entity of LDEL) under Section 6.2 shall equal the Exposure Amount
and not the Net Exposure Amount, without giving effect to Section 6.3.
6.5 All of the financial statements referred to in Section 6.4
shall be prepared in accordance with generally accepted accounting principles
in the United States as in effect at the time at which the financial statements
are prepared. Each of the Parties will deliver or cause to be delivered to the
other party upon the other Party's request, unaudited interim financial
statements of the types described in Section 6.4 if and to the extent that
those interim financial statements are prepared in the normal course of
business of NOGC or LDNG, as the case may be.
ARTICLE VII.
ASSIGNMENT
7.1 Either Party may assign all or part of its rights to
receive payments under this Agreement, subject to the agreement by the Parties
to procedures which will ensure compliance by the assignor with the terms and
obligations of this Agreement, otherwise no assignment of this Agreement or any
of the rights or obligations under this Agreement will be made unless or until
the Party seeking the assignment obtains the written consent thereto of the
non-assigning Party. No transfer or succession to the interest of either Party
under this Agreement, wholly or partially, will affect or bind the
non-assigning Party until it has been furnished with written notice and a true
copy of such assignment or with other proper proof that the claimant is legally
entitled to such interest.
ARTICLE VIII.
WAIVER
8.1 No waiver by either Party of any one or more defaults by
the other Party in the performance of any of the provisions of this Agreement
shall operate or be construed to be a waiver of any other default or defaults
whether of a like kind or different nature.
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ARTICLE IX.
APPLICABLE LAW
9.1 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CONNECTICUT WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
9.2 Each Party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds to which it or its revenues or assets
might otherwise be entitled in any Proceedings in the courts of any
jurisdiction and irrevocably agrees, to the extent permitted by applicable law,
that it will not claim any such immunity in any Proceedings.
ARTICLE X.
NOTICES
10.1 Any notice or communication in respect of this Agreement
will be sufficiently given to a Party if in writing and delivered in person,
sent by recorded delivery or registered mail (airmail if overseas) or the
equivalent or by overnight courier or given by telex or by facsimile (in each
case with answerback received) at the address or telex number or facsimile
number specified in Schedule A. A notice or communication will be effective:
(a) if delivered by hand or sent by overnight courier, on
the day on which it is delivered;
(b) if transmitted by telex or facsimile, at the time of
transmission; or
(c) if sent by recorded delivery or registered mail
(airmail, if overseas) or the equivalent, two Local Banking Days after despatch
if the recipient's address for service is in the same country as the place of
despatch and otherwise seven Local Banking Days after despatch;
except that, in the case of delivery by hand or by courier or by transmission
or by telex or facsimile that is made after 4:00 PM on a Local Banking Day in
the locality to which the delivery is made, or that is made on a day which is
not a Local Banking Day in that locality, service shall be deemed to occur at
9:00 AM on the next Local Banking Day in that locality.
10.2 In proving the making of service under Section 10.1 it
shall be sufficient to prove that delivery by hand or by courier was made, or
that the envelope containing such notice or communication was correctly
addressed and posted, or that the telex was transmitted with the correct
answerback, or that a facsimile transmission report (or other appropriate
evidence) was obtained that the facsimile had been fully and legibly
transmitted to and received by the addressee and no notification was received
from the addressee that the transmission was incomplete or illegible by 4:00 PM
on the Local Banking Day in the locality to which the transmission was
addressed immediately following the day of transmission.
10.3 Either Party may, by notice to the other, change the
address, telex number or facsimile number at which notices or communications
are to be given to it as provided in Schedule A.
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ARTICLE XI.
MISCELLANEOUS
11.1 The kinds of the remedies and their extent provided for in
this Agreement are the sole and exclusive kinds and extent of the remedies that
are available to and that may be asserted by either Party under or on account
of the breach of this Agreement (whether statutory or otherwise), and each of
the Parties waives any right to seek any other remedy' Each of the Parties
acknowledges that those remedies will provide appropriate and the only relief
to it for a breach by the other Party of its obligations under this Agreement,
notwithstanding that those remedies may not provide any or complete
compensation for such breach. In no event shall either Party be liable to the
other for, and each of the Parties waives the right to seek, incidental,
consequential or punitive damages, except that either Party shall be entitled
to reimbursement from the other Party for the attorneys, fees and expenses that
it incurs in successfully enforcing this Agreement against the other.
11.2 This Agreement may be executed in counterparts, each of
which when executed and delivered shall be deemed to be an original and all of
which taken together shall constitute one and the same instrument. No
amendment, waiver, modification or supplement of any provision of this
Agreement and no consent to any departure from such a provision shall be
effective unless in writing and signed by both Parties and designated as an
amendment or, in the case of a waiver or consent, by the Party granting it.
11.3 This Agreement is not intended, and shall not be
construed, to confer any benefits on, or result in any responsibility to, any
third party except an approved successor or assignee of a Party pursuant to an
assignment valid under Article VII.
11.4 This Agreement constitutes the entire agreement between
the Parties relating to the subject matter hereof and supersedes all prior
communications between the Parties relating thereto.
11.5 All payments of any kind under this Agreement shall be in
Dollars.
11.6 The existence of this Agreement, its contents, and the
existence of and contents of all other instruments and documents relating
hereto and any information made available by one Party to the other Party with
respect to this transaction are confidential and will not be discussed with or
disclosed to any third party, nor shall any public announcement or press
release be made by either Party, except with the express prior written consent
of the other Party or as may be required by contract or law, except for such
information (a) as may become generally available to the public, (b) as may be
required or appropriate in response to any summons, subpoena or in connection
with any litigation or to comply with any applicable law, order, regulation or
ruling, (c) as may be obtained from a non-confidential source, (d) as may be
required to be furnished to that Party's (i) affiliated companies, (ii)
auditors, (iii) third party lawyer's, (iv) financial institutions, or (v)
prospective business parties with which the Party has a written agreement to
keep the information that is disclosed in confidence.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in multiple originals as of May 8, 1992.
▇▇▇▇▇ ▇▇▇▇▇▇▇ Exchanges Ltd.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Title: Vice President
-------------------------------------------
NOMECO Oil & Gas Co.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Title: Vice President, Secretary & Treasurer
-------------------------------------------
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SCHEDULE A
TO
SWAP AGREEMENT
NOTICE AND COMMUNICATION
Notice to LDEL: Notice to NOGC:
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇ Exchanges Ltd. NOMECO Oil & Gas CO.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Telex: 62205218
Telex: 981937 Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Payments to LDEL: Payments to NOGC:
Wire Transfer to ▇▇▇▇▇▇ Wire Transfer to NBD Bank, N.A.
Guaranty Trust Company for account of NOMECO
for the account of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Oil & Gas Co.
Exchanges Ltd. A/C # 09430
A/C ▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation ABA 1072-000326
Account #▇▇▇-▇▇-▇▇▇
Billing and Accounting Matters Billing and Accounting Matters
To LDEL: to NOGC:
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇ Exchanges Ltd. c/o NOMECO Oil & Gas Co.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇ Telex: 62205218
Telex: 981937 Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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SCHEDULE B
FLOATING PRICE DETERMINANT
The Floating Price Determinant for a Settlement Period shall be
an amount (rounded to the second decimal place) computed for the Settlement
Period that is equal to the Daily Average Price.
(a) The "Daily Average Price" shall be the sum of the Daily
Determination Price for each calendar day during the
Settlement Period (each, a "Calendar Day") divided by the
number of Calendar Days in the Settlement Period.
(b) The "Daily Determination Price" shall be:
(i) For each Calendar Day when natural gas futures
contracts (the "Gas Contracts") are being regularly
traded on the New York Mercantile Exchange
("NYMEX"), the Daily Determination Price for each
Calendar Day on which the Gas Contracts (x) were
traded shall be the closing price of the one of the
Gas Contracts the last trading date of which occurs
(m) on that Calendar Day or (n) if no Gas Contracts
have a last trading day on that Calendar Day, then
the closing price on that Calendar Day of the Gas
Contract having a last trading day most nearly
following that Calendar Day (the "Prompt Contract")
and (y) were not traded because of a temporary,
short-term suspension of trading not exceeding five
consecutive Calendar Days (Such as on a Saturday,
Sunday or holiday on which NYMEX did not conduct
trading) the closing price of the Prompt Contract
on the most recent Calendar Day on which the Gas
Contracts were traded (in either case, the "NYMEX
Price").
(ii) For each Calendar Day for which the provisions of
paragraph (b) (i) are not applicable to establish
the Daily Determination Price, the Daily
Determination Price Shall be the arithmetic average
of the Index prices of spot gas delivered to
pipelines for the following pipelines and markets,
as each is reported in Inside F.E.R.C.'s Gas Market
Report for the first day of the calendar month in
which that Calendar Day fell: (q) ANR Pipeline Co.,
Louisiana; (r) Columbia Gulf Transmission Co.,
Louisiana; (s) Florida Gas Transmission Co.,
Louisiana; (t) Natural Gas Pipeline Co. of America,
Louisiana; (u) Tennessee Gas Pipeline Co.,
Louisiana; (v) Trunkline Gas Co., Field Zone; (w)
United Gas Pipe Line Co., Louisiana; (x) Texas
Eastern Transmission Corp., Louisiana; (y) Texas
Gas Transmission Corp., Zone SL; and (z) The
Transcontinental Gas Pipe Line Corporation, the
average price for Zones 2 and 3 (pooling points).
If at any time the provisions of this paragraph
b(ii) would be applicable but for the fact that
Inside F.E.R.C. has not reported such an Index
price for all the pipelines referred to above, but
has reported such an Index price for at least
[five] of such pipelines, then the Daily
Determination Price shall be calculated as provided
herein but using only such of those Index prices
for such of those pipelines as were reported.
(iii) For each Calendar Day for which the provisions of
paragraph (b) (i) or (b) (ii) are not applicable to
determine a Daily Determination Price, but for
which Natural Gas Week (the "Report") reports
"spot" prices for "Gulf Coast, Onshore" in the
"Delivered to Pipeline" column in the Louisiana
section under
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the heading "Gas Price Report ($/MMBtu)", the Daily
Determination Price shall be the Report Price, for
the first day of the calendar month in which that
Calendar Day fell, regardless of the date of the
issue of the Report in which the report price is
published.
(iv) If the Daily Determination Price for any Calendar
Day cannot be determined in the manner contemplated
above by the tenth Business Day after a Period End
Date, then the price for that Calendar Day to be
used in calculating the Floating Price shall be the
amount mutually determined by NOGC and LDEL to
reflect most closely the average spot price for
that Calendar Day for natural gas delivered to an
interstate pipeline in the Louisiana market.
(v) If, NOGC and LDEL are unable to agree upon the
Daily Determination Price pursuant to paragraph
(b)(iv) on or before the Payment Date, but in no
event later than ten days after a Period End Date,
then either Party may submit the matter to
arbitration by written notification to the other
Party of its desire to submit the matter to
arbitration and in that notification shall name its
arbitrator. The Party receiving a notification for
arbitration shall notify the other Party of the
name of its arbitrator within ten calendar days
thereafter. The two arbitrators so named shall
choose a third arbitrator. If the Party receiving
the notification for arbitration fails to name an
arbitrator within ten calendar days, then the
arbitration shall be heard and determined by the
single arbitrator which has been named. If two
arbitrators are named but fail to name a third
arbitrator, then the ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of New York shall
name the third arbitrator. The arbitration shall
be conducted in accordance with the Commercial
Rules of Arbitration of the American Arbitration
Association. All arbitrators shall be individuals
who are qualified by education, knowledge and
experience to determine the issue being arbitrated.
The decision of the arbitrators (a) shall be within
the positions of the parties, (b) shall clearly
state the Daily Determination Price, (c) if the
arbitration was required because the sources of
prices set forth in paragraph (b) are unavailable
due to termination of trading of Gas Contract or
termination of publication of prices, shall provide
the parties with a method for calculating the Daily
Determination Price for the remaining term of the
Agreement, (d) shall be written and (e) shall be
rendered within 15 days after all evidence has been
submitted and arguments concluded. After the date
of a notification of a Party's desire to submit a
matter to arbitration until the matter is finally
resolved by arbitration or by agreement of the
parties, no payments attributable to the Settlement
Period in question shall be due. Upon resolution
of the matter, payment shall made within five
business days and shall include interest accruing
from the Payment Date until the date on which
payment is made at a rate that is equal to the
lesser of the then effective prime rate of interest
for large U.S. Money Center Commercial Banks,
published under "Money Rates" by The Wall Street
Journal, and the maximum applicable non-usurious
rate.
(c) If any tax or similar charge that is imposed on the
Commodity by any governmental body or agency after the
date of the Agreement results in any increase in the Daily
Determination Price that, but for that tax or charge would
not have occurred at that time, then, for so long as that
tax or charge and increase remain in effect, the Floating
Price for each Settlement Period after the date on which
that increase first
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occurs shall be the Floating Price calculated using the
Daily Determination Price for each Calendar Day of the
Settlement Period less an amount which shall be the
lesser, determined for each such Calendar Day, of:
(i) one half of the amount of the increase in
effect on such Calendar Day, and
(ii) 15 cents per MMBtu.
If that increase exceeds 30 cents per MMBtu at any time
during the term of this Agreement, then that increase
shall constitute an event on account of which either Party
shall have the option to exercise its rights under Section
5.2 of the Agreement. If NOGC and LDEL are unable to
agree if such an increase in the Daily Determination Price
has occurred or upon the amount, duration or other aspects
of such increase relevant to the calculation of the
Floating Price, on or before the Payment Date then either
Party may submit the matter to arbitration in the same
manner and under the same procedures as are described in
paragraph (b)(v).
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SCHEDULE C
EXPOSURE AMOUNT COMPUTATION
On any Determination Day:
(a) The Exposure Amount shall be equal to the positive number
(in which case LDEL will be the Exposed Party) or the negative number (in which
case NOGC will be the Exposed Party) that is calculated by adding each of the
Settlement Period Exposure Amounts for that Determination Day.
(b) The Settlement Period Exposure Amount for each Settlement
Period shall be the positive or negative amount that is equal to the present
value on the Determination Date of the Settlement Period Price Amount
Difference for that Settlement Period from the Period End Date of that
Settlement Period which is computed using a discount rate that is equal to the
effective interest rate return that a purchaser would receive if it purchased
on that Determination Date U.S. government securities that mature, as nearly as
are available, on the Period End Date of that Settlement Period.
(c) The Settlement Period Price Amount Difference for each
Settlement Period shall be the product of multiplying (i) the Settlement Period
Measurement Unit Price Difference for that Settlement Period by (ii) the
Quantity per Settlement Period for that Settlement Period.
(d) The Settlement Period Price Measurement Unit Difference
for a Settlement Period shall be the difference of subtracting (i) the
Escalated Collateral Base Price for that Settlement Period from (ii) the Fixed
Price for that Settlement Period.
(e) The Escalated Collateral Base Price for a Settlement
Period shall be the Collateral Base Price on that Determination Day increased
by compounding that Collateral Base Price from that Determination Day at the
annual rate of eight percent on (i) each January 1 after that Determination Day
to and including the first day of that Settlement Period and (ii) on the Period
End Date of that Settlement Period.
(f) The Collateral Base Price shall mean, (i) if there are
futures contracts for natural gas ("Gas Contracts") regularly traded on the New
York Mercantile Exchange ("NYMEX") on that Determination Day, the quotient of
dividing (x) the sum of adding each of the closing prices on that Determination
Day (or if there was no trading on the Determination Day because the NYMEX did
not conduct trading on that Determination Day, the most recent day before the
Determination Day on which there was trading conducted on NYMEX) of the 12 Gas
Contracts for which the last trading day occurs most nearly after the month in
which the Determination Day falls (except if a Gas Contract has a last trading
day on that Determination date, that Gas Contract shall be the first of those
12 Gas Contracts) by (y) 12; or (ii) if there is no Gas Contract being traded
on NYMEX on that Determination Day, then the prices that would be used to
determine the Daily Determination Price under Schedule B if the prices of Gas
Contracts are not available for determination of the Daily Determination Price
shall be used to determine the Collateral Base Price in lieu of the prices of
the Gas Contracts.
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SCHEDULE D
LETTER OF CREDIT FORMAT
To:
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
We hereby authorize you to draw at sign on ourselves for the account of
for any sum or sums not exceeding in the aggregate _________________________.
Drafts must be accompanied by a statement signed by an officer of
_____________________________________ stating that:
1. An Early Termination has [designate whichever of the following
applies]:
(a) Been declared by [the Party drawing upon the Letter
of Credit] by a Notice given in accordance with Section 5.1(a) of the Swap
Agreement between ▇▇▇▇▇ ▇▇▇▇▇▇▇ Exchanges Ltd. and NOMECO Oil & Gas Co. dated
as of May 8, 1992; or
(b) Been deemed to have occurred pursuant to Section
5.l(b) of the Swap Agreement between ▇▇▇▇▇ ▇▇▇▇▇▇▇ Exchanges Ltd. and NOMECO
Oil & Gas Co. dated as of May 8, 1992.
2. [The Party drawing under the Letter of Credit] has notified
_________________________________pursuant to Section 5.3(a) or 5.3(c) of the
Agreement that _______________________________ is obligated to [the Party
drawing upon the Letter of Credit] in the amount of $______________________;
and
3. _____________________________________ has failed to make the
payment to [the Party drawing upon the Letter of Credit] in the amount of
$__________________________________ as is required by Article 5 of the
Agreement.
Partial drawings are permitted.
This letter of credit will expire on the 180th day after the date of its
issuance, but will automatically extend without amendment for an additional
180-day period from that 180th day, or any future expiration date, if you as
beneficiary, and the applicant have not received due notice by certified mail,
registered mail, telegram, fax, telex, or hand delivery of our intention not to
renew this letter of credit at least 30 days before that 180th day and each
subsequent expiration date.
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SCHEDULE E
GUARANTY
1. In order to induce NOMECO Oil & Gas Co., ("NOGC") to enter in the Swap
Agreement (the "Agreement") dated as of May 8, 1992, between NOGC and
▇▇▇▇▇ ▇▇▇▇▇▇▇ Exchanges Ltd. ("LDEL"), ▇▇▇▇▇ ▇▇▇▇▇▇▇ Natural Gas Corp.
(the "Guarantor") guarantees and promises (a) to pay to NOGC, on demand,
all amounts which LDEL becomes obligated to pay to NOGC under the
Agreement and including, without limitation, obligations and liabilities
of LDEL made, incurred or created under the Agreement for principal,
interest, expenses, damages or otherwise, whether voluntary or
involuntary and whether the obligations become unenforceable due to the
bankruptcy or insolvency of LDEL (the "Obligations") as and when any of
the Obligations become due; and (b) that all payments made to or
received by NOGC on account of the obligations will, when made, be
final, and if any such payment is recovered from or is repaid by NOGC in
whole or in part in any bankruptcy, insolvency or similar proceeding
that is instituted by or against LDEL or under any other circumstance,
then this Guaranty shall continue to apply to those Obligations to the
same extent as though the payment so recovered or repaid never had been
made or received on account of those Obligations.
2. This is a continuing and irrevocable guaranty relating to the
obligations, irrespective of (a) any lack of validity or enforceability
of any of the Obligations resulting from the bankruptcy or insolvency of
LDEL, (b) any present or future law or order of any government or of any
agency that purports to reduce, amend or otherwise affect any of the
Obligations or their terms of payment of, (c) any release of, or
granting of time or any other indulgence to LDEL and (d) any other
circumstance which might otherwise constitute a defense available to, or
a legal or equitable discharge of, a guarantor under a guaranty given by
it.
3. The obligations of the Guarantor under this Guaranty are independent of
the Obligations and at NOGC's election a separate action or actions may
be brought and prosecuted against the Guarantor alone or joined in an
action brought against LDEL. The Guarantor will indemnify NOGC on
demand if any amount due under Section 1 is not recoverable on the basis
of a guaranty for any reason whatsoever.
4. The Guarantor authorizes NOGC, without notice to, without consent from
or demand of the Guarantor, and without affecting the liability of the
Guarantor under this Guaranty, from time to time to (a) renew,
compromise, extend, accelerate or otherwise change the time for payment
of, or otherwise change the terms of, the obligations or any part
thereof, including any increase or decrease of the rate of interest
thereon; (b) take and hold security for the payment of the obligations,
and exchange, enforce, waive and release any such security; and (c)
apply such security and direct the order or manner of sale thereof as
NOGC in its discretion determines. This is a guaranty of payment. NOGC
may with notice to the Guarantor assign this Guaranty to a party to
which it has assigned its interest in the Agreement in accordance with
the terms of the Agreement.
5. The Guarantor waives (a) any right to require NOGC to (i) proceed
against LDEL, (ii) proceed against or exhaust any security, or (iii)
pursue any other remedy that is available to NOGC; and (b) all
presentments, demands for performance, notices of non-performance,
protests, notices of protest, notices of dishonor, notices of
acceleration of or intent to accelerate the maturity of any
indebtedness, notices of acceptance of this Guaranty and of the
existence, creation, or incurring of new or additional obligations and
all other notices expressly set forth in this Guaranty.
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6. Until all of the Obligations have been paid in full, the Guarantor shall
have no right of subrogation and waives any right to enforce any remedy
which NOGC now has or may hereafter have against LDEL under the
Agreement, and waives any benefit of, and any right to participate in,
any security now or hereafter held by. NOGC. NOGC may foreclose, either
by judicial foreclosure or by exercise of power of sale, any mortgage,
deed of trust or other similar documents or other collateral securing
the obligations and, even though the foreclosure may destroy or diminish
the Guarantor's rights against LDEL, the Guarantor shall be liable to
NOGC for any part of the obligations that remains unpaid after the
foreclosure.
7. Every lien and right of setoff given to NOGC by law may be exercised by
NOGC without demand upon or notice to the Guarantor. No lien or right
of setoff shall be deemed to have been waived by any act or conduct on
the part of NOGC, or by any neglect to exercise such right of setoff or
to enforce such lien, or by any delay in so doing, and every right of
setoff and lien shall continue in full force and effect until that right
of setoff or lien is specifically waived or released by an instrument in
writing duly signed by an authorized officer of NOGC.
8. The Guarantor represents and warrants to NOGC that (a) all
authorizations, approvals, notices, filings and other actions required
by the internal documents governing the Guarantor and the regulatory
authorities having jurisdiction over the Guarantor in connection with
the due authorization, execution and delivery of this Guaranty have been
duly obtained or made and are in full force and effect; (b) this
Guaranty has been duly executed and delivered by the Guarantor; and (c)
it owns all of the issued and outstanding capital stock of LDEL.
9. The Guarantor will pay reasonable attorneys, fees and other costs and
expenses which are incurred by NOGC in the enforcement of this Guaranty.
10. All of the Guarantor's agreements in this Guaranty shall be binding upon
the Guarantor and its successors and assigns and shall inure to the
benefit of NOGC and its successor and assigns under assignments that
have been made in accordance with the Agreement.
11. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF CONNECTICUT WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
12. None of the terms or provisions of the Guaranty may be waived, altered,
modified or amended except by a writing duly signed by an authorized
officer of NOGC and by an authorized officer of the Guarantor. If any
term of this Guaranty is held to be invalid, illegal or unenforceable in
any jurisdiction, the validity of all other terms shall in no way be
affected thereby in that jurisdiction, and the unenforceability in that
jurisdiction shall in no way affect the validity or enforceability of
that or any other term hereof in any other jurisdiction.
13. The Guarantor reserves to itself all rights, setoffs, counterclaims and
other defenses which LDEL has, or may be entitled to, arising from or
out of the Agreement.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
signed on its behalf by its duly authorized representatives as of the 8th day
of May, 1992.
▇▇▇▇▇ ▇▇▇▇▇▇▇ Natural Gas Corp.
By:
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Name:
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Title:
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SCHEDULE E
GUARANTY
1. In order to induce NOMECO Oil & Gas Co., ("NOGC") to enter in the Swap
Agreement (the "Agreement") dated as of May 8, 1992, between NOGC and
▇▇▇ is Dreyfus Exchanges Ltd. ("LDEL"), ▇▇▇▇▇ ▇▇▇▇▇▇▇ Natural Gas Corp.
(the "Guarantor") guarantees and promises (a) to pay to NOGC, on demand,
all amounts which LDEL becomes obligated to pay to NOGC under the
Agreement and including, without limitation, obligations and liabilities
of LDEL made, incurred or created under the Agreement for principal,
interest, expenses, damages or otherwise, whether voluntary or
involuntary and whether the obligations become unenforceable due to the
bankruptcy or insolvency of LDEL (the "Obligations") as and when any of
the Obligations become due; and (b) that all payments made to or
received by NOGC on account of the obligations will, when made, be
final, and if any such payment is recovered from or is repaid by NOGC in
whole or in part in any bankruptcy, insolvency or similar proceeding
that is instituted by or against LDEL or under any other circumstance,
then this Guaranty shall continue to apply to those Obligations to the
same extent as though the payment so recovered or repaid never had been
made or received on account of those Obligations.
2. This is a continuing and irrevocable guaranty relating to the
Obligations, irrespective of (a) any lack of validity or enforceability
of any of the obligations resulting from the bankruptcy or insolvency of
LDEL, (b) any present or future law or order of any government or of any
agency that purports to reduce, amend or otherwise affect any of the
Obligations or their terms of payment of, (c) any release of, or
granting of time or any other indulgence to LDEL and (d) any other
circumstance which might otherwise constitute a defense available to, or
a legal or equitable discharge of, a guarantor under a guaranty given by
it.
3. The obligations of the Guarantor under this Guaranty are independent of
the obligations and at NOGC's election a separate action or actions may
be brought and prosecuted against the Guarantor alone or joined in an
action brought against LDEL. The Guarantor will indemnify NOGC on
demand if any amount due under Section 1 is not recoverable on the basis
of a guaranty for any reason whatsoever.
4. The Guarantor authorizes NOGC, without notice to, without consent from
or demand of the Guarantor, and without affecting the liability of the
Guarantor under this Guaranty, from time to time to (a) renew,
compromise, extend, accelerate or otherwise change the time for payment
of, or otherwise change the terms of, the obligations or any part
thereof, including any increase or decrease of the rate of interest
thereon; (b) take and hold security for the payment of the Obligations,
and exchange, enforce, waive and release any such security; and (c)
apply such security and direct the order or manner of sale thereof as
NOGC in its discretion determines. This is a guaranty of payment. NOGC
may with notice to the Guarantor assign this Guaranty to a party to
which it has assigned its interest in the Agreement in accordance with
the terms of the Agreement.
5. The Guarantor waives (a) any right to require NOGC to (i) proceed
against LDEL, (ii) proceed against or exhaust any security, or (iii)
pursue any other remedy that is available to NOGC; and (b) all
presentments, demands for performance, notices of non-performance,
protests, notices of protest, notices of dishonor, notices of
acceleration of or intent to accelerate the maturity of any
indebtedness, notices of acceptance of this Guaranty and of the
existence, creation, or incurring of new or additional obligations and
all other notices expressly set forth in this Guaranty.
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6. Until all of the Obligations have been paid in full, the Guarantor shall
have no right of subrogation and waives any right to enforce any remedy
which NOGC now has or may hereafter have against LDEL under the
Agreement, and waives any benefit of, and any right to participate in,
any security now or hereafter held by NOGC. NOGC may foreclose, either
by judicial foreclosure or by exercise of power of sale, any mortgage,
deed of trust or other similar documents or other collateral securing
the Obligations and, even though the foreclosure may destroy or diminish
the Guarantor's rights against LDEL, the Guarantor shall be liable to
NOGC for any part of the obligations that remains unpaid after the
foreclosure.
7. Every lien and right of setoff given to NOGC by law may be exercised by
3NOGC without demand upon or notice to the Guarantor. No lien or right
of setoff shall be deemed to have been waived by any act or conduct on
the part of NOGC, or by any neglect to exercise such right of setoff or
to enforce such lien, or by any delay in so doing, and every right of
setoff and lien shall continue in full force and effect until that right
of setoff or lien is specifically waived or released by an instrument in
writing duly signed by an authorized officer of NOGC.
8. The Guarantor represents and warrants to NOGC that (a) all
authorizations, approvals, notices, filings and other actions required
by the internal documents governing the Guarantor and the regulatory
authorities having jurisdiction over the Guarantor in connection with
the due authorization, execution and delivery of this Guaranty have been
duly obtained or made and are in full force and effect; (b) this
Guaranty has been duly executed and delivered by the Guarantor; and (c)
it owns all of the issued and outstanding capital stock of LDEL.
9. The Guarantor will pay reasonable attorneys' fees and other costs and
expenses which are incurred by NOGC in the enforcement of this Guaranty.
10. All of the Guarantor's agreements in this Guaranty shall be binding upon
the Guarantor and its successors and assigns and shall inure to the
benefit of NOGC and its successors and assigns under assignments that
have been made in accordance with the Agreement.
11. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF CONNECTICUT WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
12. None of the terms or provisions of the Guaranty may be waived, altered,
modified or amended except by a writing duly signed by an authorized
officer of NOGC and by an authorized officer of the Guarantor. If any
term of this Guaranty is held to be invalid, illegal or unenforceable in
any jurisdiction, the validity of all other terms shall in no way be
affected thereby in that jurisdiction, and the unenforceability in that
jurisdiction shall in no way affect the validity or enforceability of
that or any other term hereof in any other jurisdiction.
13. The Guarantor reserves to itself all rights, setoffs, counterclaims and
other defenses which LDEL has, or may be entitled to, arising from or
out of the Agreement.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
signed on its behalf by its duly authorized representatives as of the 8th day
of May, 1992.
▇▇▇▇▇ ▇▇▇▇▇▇▇ Natural Gas Corp.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇▇▇▇
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Title: Vice President
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