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EXHIBIT 4.5
INTERCREDITOR AND COLLATERAL
AGENCY AGREEMENT
among
TRI-UNION DEVELOPMENT CORPORATION,
TRIBO PETROLEUM CORPORATION,
TRI-UNION OPERATING COMPANY
AND
EACH OF THE SUBSIDIARY GUARANTORS NOW OR HEREAFTER SIGNATORY
HERETO,
EACH OF THE APPROVED HEDGE COUNTERPARTIES OR HEDGE LIQUIDITY
PROVIDERS NOW OR HEREAFTER SIGNATORY HERETO,
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Collateral Agent,
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Trustee,
Dated as of June 18, 2001
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................................................................2
Section 1.01 Indenture Definitions.........................................................................2
Section 1.02 Other Definitions.............................................................................2
Section 1.03 Headings......................................................................................5
Section 1.04 Terms Generally...............................................................................5
ARTICLE II APPLICATION OF PROCEEDS................................................................................5
Section 2.01 Election to Pursue Remedies...................................................................5
Section 2.02 Duty of the Collateral Agent..................................................................7
Section 2.03 Application of Proceeds.......................................................................8
Section 2.04 Payments by Collateral Agent..................................................................9
Section 2.05 Notices under Related Documents...............................................................9
Section 2.06 Voting Procedure..............................................................................9
Section 2.07 Triggering Event..............................................................................9
Section 2.08 Pro Rata Treatment; Participations...........................................................10
Section 2.09 Bankruptcy Preferences.......................................................................11
Section 2.10 Marshaling...................................................................................11
Section 2.11 Additional Parties...........................................................................11
Section 2.12 Disposition of Proceeds......................................................................12
ARTICLE III COLLATERAL; CREDITORS................................................................................12
Section 3.01 Status of Liens; Collateral..................................................................12
Section 3.02 Possession, Use and Release of Collateral....................................................13
Section 3.03 Deposit, Use and Release of Collateral Account Assets........................................17
Section 3.04 Form and Sufficiency of Release..............................................................18
Section 3.05 Purchaser Protected..........................................................................18
Section 3.06 Authorization of Actions To Be Taken by the Trustee Under the Security Documents.............18
Section 3.07 Authorization of Receipt of Funds by the Trustee Under the Security Documents................19
Section 3.08 Property of Obligors.........................................................................19
Section 3.09 Legends......................................................................................19
Section 3.10 Creditor Dealings; Good Faith................................................................19
ARTICLE IV CALCULATION OF OBLIGATIONS............................................................................19
Section 4.01 Notice of Amount of Obligations..............................................................19
ARTICLE V THE COLLATERAL AGENT...................................................................................19
Section 5.01 Appointment of Collateral Agent..............................................................19
Section 5.02 Nature of Duties of Collateral Agent.........................................................20
Section 5.03 Lack of Reliance on the Collateral Agent.....................................................20
Section 5.04 Certain Rights of the Collateral Agent.......................................................21
Section 5.05 Reliance by Collateral Agent.................................................................21
Section 5.06 Collateral Agent's Reimbursements and Indemnification........................................21
Section 5.07 The Collateral Agent in its Individual Capacity..............................................22
Section 5.08 Creditors as Owners..........................................................................22
Section 5.09 Successor Collateral Agent...................................................................22
Section 5.10 Employment of Collateral Agent and Counsel...................................................23
Section 5.11 Limitation on Liability of the Creditors and Collateral Agent................................23
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ARTICLE VI MISCELLANEOUS.........................................................................................23
Section 6.01 Authority....................................................................................23
Section 6.02 Termination/Withdrawal/Redesignation of Contracts............................................23
Section 6.03 Amendments...................................................................................24
Section 6.04 Notices, etc.................................................................................24
SECTION 6.05 PAYMENT OF EXPENSES AND TAXES; INDEMNIFICATION...............................................25
Section 6.06 Applicable Law...............................................................................27
Section 6.07 Entire Agreement.............................................................................27
Section 6.08 Execution in Counterparts....................................................................27
Section 6.09 Severability.................................................................................27
Section 6.10 Conflict with Security Documents.............................................................27
Section 6.11 Limitation by Law............................................................................27
Section 6.12 Benefit of Agreement; Limitation on Assignment...............................................27
Section 6.13 Further Assurances, Recording and Opinions...................................................27
Section 6.14 No Impairment................................................................................28
Section 6.15 Status of Obligations........................................................................28
Section 6.16 Counterclaims and Defenses by Obligors.......................................................29
Annex 1 - Security Documents
Annex 2 - Supplemental
Intercreditor and Collateral Agency Agreement (Obligors)
Annex 3 - Supplemental
Intercreditor and Collateral Agency Agreement (Creditors)
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INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
THIS
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT (this "Agreement")
dated as of June 18, 2001, is among Tribo Petroleum Corporation, a Texas
corporation ("Tribo"), Tri-Union Development Corporation, a Texas corporation
(the "Company"), Tri-Union Operating Company, a Delaware corporation
("Operating"), each other Subsidiary Guarantor that hereafter executes a
Supplement hereto, the Approved Hedge Counterparties and Hedge Liquidity
Providers, Firstar Bank, National Association, as trustee under the Indenture
(the "Trustee"), and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
collateral agent hereunder (the "Collateral Agent").
RECITALS
A. On the date of this Agreement and in the future, the Obligors and
the Approved Hedge Counterparties will enter into the Approved Hedge Agreements;
and from time to time in the future, the Obligors may enter into certain
revolving credit or loan agreements or letter of credit reimbursement agreements
(each being a "Hedge Liquidity Agreement") with various financial institutions
(each being a "Hedge Liquidity Provider") to permit the Company or any of the
Restricted Subsidiaries to provide letters of credit as margin in lieu of the
Collateral to secure excess market exposure and settlement and related amounts
due on early termination under the Approved Hedge Agreements and the Security
Documents.
B. On the date of this Agreement, the Company, as issuer, and the other
Obligors, as guarantors, and the Trustee, on behalf of, and for the benefit of,
the Holders, are entering into that certain Indenture (the "Indenture"),
pursuant to which, the Company will issue its 12.50% Senior Secured Notes due
2006 (the "Notes").
C. To secure, inter alia, the Approved Hedge Counterparty Obligations,
the Hedge Liquidity Obligations, the Indenture Obligations and the Guaranty
Obligations (the Approved Hedge Agreements, the Hedge Liquidity Agreement, the
Indenture and the Guaranty Agreement collectively being the "Principal
Agreements") and the other obligations of the Obligors under the Security
Documents, the Obligors will execute and deliver the Security Documents pursuant
to the Principal Agreements.
D. The Approved Hedge Counterparties, each Hedge Liquidity Provider,
the Trustee (for itself and on behalf of the Holders), the Holders (all such
Persons, for so long as a Party to this Agreement, collectively being the
"Creditors"), and the Collateral Agent are entering into this Agreement to
establish their relative rights with respect to payment of their respective
Obligations owed by the Obligors, to agree as to the exercise of certain
remedies and to appoint a Collateral Agent for the purposes of dealing with the
Security Documents and apportioning payments among the Creditors and for other
purposes as set forth herein.
E. NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
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ARTICLE I
DEFINITIONS
Section 1.01 Indenture Definitions. Each capitalized term used, but not
defined herein, shall have the meaning ascribed such term in the Indenture.
Section 1.02 Other Definitions. The terms defined in the recitals shall
have the meanings assigned to those terms in such recitals, and the following
terms shall have the meanings assigned as follows:
"Approved Hedge Agreement" means (A) any Oil and Gas Hedging Contract
with Bank of America, N.A., and (B) any Oil and Gas Hedging Contract with any
other Approved Hedge Counterparty (i) which designates in the confirmation or
other transaction statement pursuant to which such Oil and Gas Hedging Contract
is evidenced that it is an "Approved Hedge Agreement" for purposes of the
Intercreditor Agreement, the Indenture and the Security Documents and (ii) a
copy of which has been delivered to the Collateral Agent and the Trustee, in
case of either (A) or (B) until (a) the Approved Hedge Counterparty ceases to be
an Approved Hedge Counterparty under the Intercreditor Agreement or (b) the
Approved Hedge Counterparty specifies in writing to the Collateral Agent, the
Trustee and the Company that such contract ceased to be an Approved Hedge
Agreement, and (C) any Oil and Gas Hedging Contract that is a price floor,
option for a price floor or other similar arrangement for which, upon entering
into such contract, neither Tribo nor any Restricted Subsidiary will have any
liability other than the payment of an initial premium price.
"Approved Hedge Counterparties" means (A) Bank of America, N.A., unless
it has ceased to be an Approved Hedge Counterparty, (B) any other Person that
(i) executes an Oil and Gas Hedging Contract with the Company or a Restricted
Subsidiary, (ii) has, or receives credit support in the form of an unconditional
guarantee of payment from a parent who has a long-term unsecured senior debt
rating of at least BBB- by Standard & Poor's Rating Service or Baa3 by ▇▇▇▇▇'▇
Investors Service, Inc., (iii) is designated as such by the Company in writing
to the Trustee and the Collateral Agent and (iv) if no Hedge Liquidity Provider
is then (or thereafter) providing letters of credit as collateral for the
Hedging Obligations owed to such Person, or such Person has not otherwise ceased
to be an Approved Hedge Counterparty, executes and delivers to the Collateral
Agent and the Trustee a supplement to the Intercreditor Agreement, and (C) for
purposes of the provisions of Section 4.25 of the Indenture only and the
definition of "Hedged Revenues", only the Persons in clauses (A) and (B) above
and any Person who meets the requirement set forth in subclause (B)(ii) above
and who enters into any Oil and Gas Hedging Contract with the Company or a
Restricted Subsidiary that is a price floor, option for a price floor or other
similar arrangement for which, upon entering into such contract, neither the
Company nor any Restricted Subsidiary will have any liability other than the
payment of an initial premium price.
"Approved Hedge Counterparty Obligations" means all obligations of the
Obligors under all Approved Hedge Agreements, including all unpaid amounts,
settlement amounts, indemnities, costs, expenses (including reasonable
attorneys' fees), interest on past due amounts and other liabilities and
obligations then due and unpaid by the Company or any other Obligor.
"Collateral" means the properties and rights described in the Security
Documents as security for any of the Obligations.
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"Collateral Account" shall have the meaning set forth in Section 3.03.
"Collateral Account Assets" means all financial assets from time to
time held in or credited to the Collateral Account.
"Disgorged Amount" shall have the meaning set forth in Section 2.09.
"Disgorged Creditor" shall have the meaning set forth in Section 2.09.
"Environmental Laws" means any and all Governmental Requirements
pertaining to health or the environment in effect in any and all jurisdictions
in which the Mortgagor or any of its Subsidiaries is conducting or at any time
has conducted business, or where any property of the Mortgagor or any of its
Subsidiaries is located, including without limitation, the Oil Pollution Act of
1990 ("OPA"), the Clean Air Act, as amended, CERCLA, 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, as amended
("RCRA"), the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, and other
environmental conservation or protection laws. The term "oil" shall have the
meaning specified in OPA, the terms "hazardous substance" and "release" (or
"threatened release") have the meanings specified in CERCLA, and the terms
"solid waste" and "disposal" (or "disposed") have the meanings specified in
RCRA; provided, however, that (i) in the event either OPA, 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 in which any property of the Mortgagor or any
of its Subsidiaries is located establish a meaning for "oil," "hazardous
substance," "release," "solid waste" or "disposal" which is broader than that
specified in either OPA, CERCLA or RCRA, such broader meaning shall apply, and
(iii) the terms "hazardous substance" and "solid waste" shall include 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 analogues to those statutes.
"Guaranty Agreement" means that certain Guaranty Agreement dated of
even date herewith in favor of the Trustee, each Approved Hedge Counterparty
which is a party to this Agreement, each Hedge Liquidity Provider which is a
party to this Agreement, and each Holder.
"Guaranty Obligations" means the "Liabilities" as such term is defined
in the Guaranty Agreement.
"Hedge Liquidity Obligations" means all obligations of the Obligors
under all Hedge Liquidity Agreements, including all amounts drawn under letters
of credit issued thereunder and all indemnities, costs, expenses (including
reasonable attorneys' fees), interest and other liabilities and obligations
thereunder then due and unpaid by the Company or any other Obligor.
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"Indenture Obligations" means the "Obligations" as such term is defined
in the Indenture.
"Obligations" means all Indenture Obligations, Guaranty Obligations,
Approved Hedge Counterparty Obligations and, if a Hedge Liquidity Agreement is
in place, all Hedge Liquidity Obligations, including, but not limited to, all
other sums of money which may be hereafter paid or advanced by any Creditor
under the terms and provisions of this Agreement, any Principal Agreement or the
other Security Documents as such sums of money relate either to the
administration, protection and exercise of remedies in connection with this
Agreement, any Principal Agreement or the Security Documents, or to any
reimbursement and indemnity provisions contained in this Agreement, any
Principal Agreement and the Security Documents.
"Obligor" means the Company, Tribo, Operating and each other Subsidiary
Guarantor that hereafter becomes a party hereto.
"Officers' Certificate" means an Officers' Certificate as defined in
the Indenture that is addressed to the Approved Hedge Counterparties or Hedge
Liquidity Provider, as appropriate, the Collateral Agent and the Trustee.
"Pledge and Collateral Account Agreement" means either (i) that certain
Pledge and Collateral Account Agreement dated of even date herewith among the
Company, ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as securities
intermediary, and the Collateral Agent, or (ii) such other agreement or
agreements entered into by the Company and the Collateral Agent to create
accounts and grant in favor of the Collateral Agent, for the ratable benefit of
the Creditors, a valid and perfected, first priority Lien on all assets
deposited therein and which is subject to the exclusive control and dominion of
the Collateral Agent.
"Principal Agreements" has the meaning specified in Recital C.
"Proceeds" means all cash proceeds and other Property received by the
Collateral Agent, any Approved Hedge Counterparty, any Hedge Liquidity Provider
or the Trustee from or for the account of any Obligor, from or with respect to
Principal Agreements, the Security Documents or the Collateral.
"Pro Rata Share" means as to any Creditor, an amount equal to a
fraction, (a) the numerator of which is (i) the Indenture Obligations, (ii) the
net amount of the Approved Hedge Counterparty Obligations or (iii) all Hedge
Liquidity Obligations, in each case, owed to such Creditor and (b) the
denominator of which is the sum of (i) all Indenture Obligations, (ii) the net
amount of all Approved Hedge Counterparty Obligations and (iii) all Hedge
Liquidity Obligations.
"Receivables Proceeds" means whatever property is acquired upon the
disposition of an Account Receivable.
"Required Creditors" means any of the following: (i) each of the
Approved Hedge Counterparties then a party hereto, (ii) Hedge Liquidity
Providers holding greater than 50% of aggregate commitments of the Hedge
Liquidity Providers under the Hedge Liquidity Agreement or their designated
representative and (iii) the Trustee.
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"Security Documents" means the documents set forth on Annex 1 as such.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect from time to time.
"Transaction Documents" means this Agreement, the Principal Agreements
and the Security Documents.
"Triggering Event" shall have the meaning set forth in Section 2.07.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time in the State of
New York.
Section 1.03 Headings. Article and section headings of this Agreement
are for convenience of reference only, and shall not govern the interpretation
of any of the provisions of this Agreement.
Section 1.04 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented, renewed, replaced, increased, restated or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, provided such successors and
assigns are permitted by the Principal Agreement to which such Person is a party
and such Person complies with Section 6.12 hereof, (c) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless otherwise indicated and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts, contract rights and general intangibles.
ARTICLE II
APPLICATION OF PROCEEDS
Section 2.01 Election to Pursue Remedies.
(a) The amounts payable by the Obligors to each Creditor at any time
under any of the Principal Agreements to which such Creditor is a party shall be
separate and independent debts, and each Creditor shall be entitled to enforce
any right arising out of the applicable Principal Agreement to which it is a
party, including the Guaranty Agreement, subject to the terms thereof and of
this Agreement. Each Creditor hereby agrees that no Creditor other than the
Collateral Agent (in its
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capacity as such) shall have any right individually to realize upon any Liens
granted under the Security Documents, it being understood and agreed that such
remedies may be exercised only by the Collateral Agent for the ratable benefit
of the Creditors.
(b) Upon the occurrence and during the continuance of any Triggering
Event, the Collateral Agent shall, upon the request of any Required Creditors
and subject to this Section 2.01, Section 2.02 and Article IV, take or, as
appropriate, direct the appropriate trustee or agent to take, any and all
actions provided for in the Security Documents relating to the pursuit of
remedies, including the foreclosure or disposition of Collateral.
(c) Upon the occurrence and during the continuance of any Triggering
Event, any of the Approved Hedge Counterparties, the Hedge Liquidity Providers
or the Trustee (as used in this Section 2.01, the "Directing Creditor") shall
have the right to direct the Collateral Agent to pursue any remedy or remedies
available to the Collateral Agent at law, under any Security Document or
otherwise, provided, however, that
(i) any direction shall: (A) include written instructions
specifying the particular action to be taken, (B) indemnify the
Collateral Agent as contemplated by Section 5.04, and (C) be sent to
each other Creditor (or their representative, i.e., the Trustee in the
case of the Holders);
(ii) if requested within 5 Business Days by any other Creditor
or group of Creditors (with a copy to the Collateral Agent which shall
cease to comply with the previous direction until further notice), the
Directing Creditor shall meet with such other Creditor or group of
Creditors to discuss and identify which Collateral may be foreclosed
upon or disposed of, the order of sale and such other decisions as may
be relevant in order to maximize the amounts received in respect of the
Collateral to be foreclosed on or disposed of and to maximize the value
of the remaining Collateral (provided that if such parties fail to
reach any consensus, the direction previously given the Collateral
Agent shall not be impaired and the Collateral Agent shall receive
notice directing it to proceed as previously instructed); and
(iii) the Collateral Agent shall cease to comply with any such
direction if jointly instructed to do so in writing by such Directing
Creditor and the Company on the basis that (A) such Triggering Event
has been cured or waived, (B) the amounts owed by the Obligors to such
Directing Creditor have been otherwise paid in full or otherwise
discharged and, if such Directing Creditor was at the time of giving
such direction an Approved Hedge Counterparty, either (1) the Directing
Creditor is no longer an "Approved Hedge Counterparty" (and hence a
"Creditor" hereunder) or (2) the Approved Hedge Agreement in respect of
which such amount is owed is no longer an Approved Hedge Agreement. No
Creditor or group of Creditors shall have the right to overrule or
override any directions given by an Approved Hedge Counterparty to the
Collateral Agent pursuant to this Section.
Upon receipt by the Collateral Agent of such instructions, the Collateral Agent
shall immediately commence to take or direct the instructed actions (and
continue to take such actions) relating such remedies.
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(d) Without regard to the occurrence of a Triggering Event, upon the
written instruction of any Directing Creditor, with indemnities appropriate for
such instructions as provided in Section 5.04, the Collateral Agent shall (i)
take or direct any action provided for in the Security Documents (other than
foreclosure or disposition of the Collateral) or proceed to enforce, or direct
the enforcement of, consistent with the Security Documents and applicable law
(other than foreclosure or disposition of the Collateral), the rights or powers
provided in the Security Documents and under applicable law for the benefit of
the Creditors and shall give such notice or direction or shall take such action
or exercise such right or power hereunder or under any of the Security Documents
incidental thereto as shall be reasonably specified in such instructions and
consistent with the terms of the Security Documents and this Agreement; and/or
(ii) execute such instruments or agreements or take such other action in
connection with the Security Documents as may be reasonably requested by such
Directing Creditor and consistent with the terms of the Security Documents and
this Agreement. Such action may include, but is not limited to (x) the giving of
any release, notice, approval, consent or waiver which may be called for
hereunder or under the Security Documents that the Collateral Agent is expressly
authorized to give, (y) the requiring of the execution and delivery of
additional Security Documents, or (z) employing agents or directing trustees in
order to accomplish the actions requested.
(e) If a Triggering Event is continuing and no instructions have been
delivered pursuant to Section 2.01(c), then the Collateral Agent shall take such
action as it shall deem reasonable to protect the interests of the Creditors or
as necessary to comply with any obligations imposed under any applicable law,
including, without limitation, the TIA.
(f) Nothing in this Section 2.01 shall impair the right of any Creditor
to exercise its rights of set-off or netting, if any. Nothing shall impair the
ability of the Trustee to take any action necessary to comply with any
obligations imposed under any applicable law, including, without limitation, the
TIA.
Section 2.02 Duty of the Collateral Agent.
(a) The Collateral Agent shall not be obligated to follow any
instructions of any one or more of the Creditors if: (i) such instructions
conflict with the provisions of this Agreement, any Principal Agreement, any
Security Document or any applicable law, (ii) the Collateral Agent determines,
in its sole and absolute discretion, that such instructions are ambiguous,
inconsistent, in conflict with previously received instructions or otherwise
insufficient to direct the actions of the Collateral Agent, provided that the
Collateral Agent explains the grounds for a refusal based on a deficiency of
instructions to the requesting party, or (iii) the Collateral Agent has not been
adequately indemnified to its satisfaction. Nothing in this Article II shall
impair the right of the Collateral Agent in its discretion to take any action
authorized under this Agreement or the Security Documents, to the extent that
the consent of any of the Creditors is not required or to the extent such action
is not prohibited by the terms hereof or thereof, which it deems proper and
consistent with the instructions given by the Creditors as provided for herein
or otherwise in the best interest of the Creditors. In the absence of written
instructions from any Required Creditor for any particular matter, the
Collateral Agent shall have no duty to take or refrain from taking any action
unless such action or inaction is explicitly required by the terms of this
Agreement, a Security Document or applicable law, including, without limitation,
the TIA. The Collateral Agent shall have no duty with respect to a Triggering
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Event under any Security Document unless it first receives notice that a
Triggering Event has occurred.
(b) Beyond its duties expressly provided herein or in any Security
Document and its duties to account to the Creditors and/or the Obligors for
monies and other property received by it hereunder or under any Security
Document, the Collateral Agent shall have no implied duty to the Creditors or
any Obligor as to any property belonging to an Obligor (whether or not the same
constitutes Collateral) in its possession or control or in the possession or
control of any of its agents or nominees, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto.
Section 2.03 Application of Proceeds. Upon the occurrence and during
the continuance of a Triggering Event, all Proceeds received by the Collateral
Agent from any Obligor or any Creditor under Section 2.08, including all
realizations from Collateral and Proceeds thereof and whether or not all
obligations of the Creditors are cross-collateralized (net of the costs and
expenses reasonably incurred in connection therewith and any taxes, assessments
or prior Liens) shall be applied promptly by the Collateral Agent in the
following order of priority:
(i) FIRST: to the payment and reimbursement of all fees,
expenses and indemnities owed to the Collateral Agent (including the
reasonable legal fees and expenses of its agents and counsel) pursuant
to this Agreement and the Security Documents;
(ii) SECOND: to the payment to (1) Approved Hedge
Counterparties under Approved Hedge Agreements for which an early
termination date has been designated of (A) the net amount due such
Approved Hedge Counterparty under all such terminated Approved Hedge
Agreements to which it was a party (whether as settlement amounts or
unpaid amounts) and (B) all accrued and unpaid interest thereon and all
fees, expenses, cash collateralization amounts, indemnities and other
amounts owed to such Approved Hedge Counterparty thereunder or in
respect thereof, (2) Approved Hedge Counterparties of regularly
scheduled payments under Approved Hedge Agreements for which no early
termination date has been designated or (3) Hedge Liquidity Providers
and their agent(s) or representative(s), if any, all cash
collateralization amounts, principal, interest, fees, expenses and
indemnities owed to such Hedge Liquidity Providers under their Hedge
Liquidity Agreement; provided that if such monies shall not be
sufficient to pay in full the entire amount then outstanding, then to
make pro rata payments among clauses (1) - (3), without any preference
or priority, to all such Approved Hedge Counterparties or Hedge
Liquidity Providers, as applicable;
(iii) THIRD: to the payment and reimbursement of all fees,
expenses and indemnities owed to the Trustee under or provided for
under the Indenture;
(iv) FOURTH: to the payment of accrued and unpaid interest on
the Notes payable under the Indenture, and if such monies shall not be
sufficient to pay in full the entire amount then outstanding, then to
make pro rata payments, without any preference or priority, to each
Holder;
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(v) FIFTH: to the ratable payment of the outstanding principal
balance of the Notes (including any premium then due); and if such
monies shall not be sufficient to pay in full the entire amount then
outstanding, then to make pro rata payments, without any preference or
priority, to each Holder;
(vi) SIXTH: to the Collateral Agent to hold as cash collateral
to make payments or deposits due under the Principal Agreements until
such time as it determines that all such obligations have been paid in
full or pay any other amounts which may be then due and owing
thereunder or under any Security Document; and
(vii) FINALLY: to the payment of the remainder, if any, to the
Company or as a court of competent jurisdiction may otherwise direct.
Section 2.04 Payments by Collateral Agent. All payments hereunder by
the Collateral Agent to the Trustee shall be for distribution in the manner set
forth in the Indenture. In the event any other payment is due to a group of
Creditors under a Principal Agreement to which they are a party, the Collateral
Agent shall make such payment to their representative for distribution by it in
accordance with the terms of such Principal Agreement.
Section 2.05 Notices under Related Documents.
(a) Each Creditor agrees: (i) to deliver to the Collateral Agent, at
the same time it makes delivery to the Obligors, a copy of any notice of
default, notice of intent to accelerate or notice of acceleration with respect
to any of the Obligations subject to this Agreement; and (ii) to deliver to the
Collateral Agent, at the same time it makes delivery to any other Person, a copy
of any notice of the commencement of any judicial proceeding and a copy of any
other notice with respect to the exercise of remedies with respect to the
Obligations subject to this Agreement.
(b) The Collateral Agent shall deliver to each Creditor (or their
designated representative if a group) promptly upon receipt thereof (and in any
event within two Business Days), duplicates or copies of any notice received by
it under Section 2.05(a) and all notices, requests and other instruments
received by the Collateral Agent under or pursuant to this Agreement or any
Security Document, to the extent that the same shall not have been previously
furnished to such Creditor pursuant hereto or thereto.
Section 2.06 Voting Procedure. When this Agreement or any Security
Document requires or permits a vote of the Required Creditors, the Collateral
Agent shall poll each of the Approved Hedge Counterparties, the Hedge Liquidity
Provider(s) (or their designated representative(s)), if any, and the Trustee in
order to determine the vote of the Required Creditors (and such vote shall be
binding upon the Creditors who are not among the Required Creditors). The
Obligors and the Creditors may rely on the Collateral Agent with regard to any
such vote without any duty of further inquiry.
Section 2.07 Triggering Event. The occurrence of any of the following
shall constitute a "Triggering Event":
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(a) The occurrence and continuance of an event of default under clauses
(i) and (j) of Section 6.01 of the Indenture or any similar provision(s) in any
Approved Hedge Agreement or Hedge Liquidity Agreement; or
(b) The Collateral Agent shall have received from any Approved Hedge
Counterparty written notice, which notice shall reference this Section 2.07, (i)
that either an event of default or a termination event has occurred and is
continuing under one or more of its Approved Hedge Agreements, (ii) that an
early termination date has been designated as a result thereof, (iii) that
specifies the sum of all unpaid amounts and settlement payments then due as the
result of the designation of such early termination date and the amount of
interest and other amounts then due and payable by the Obligors in respect
thereof, and (iv) that the amount set forth in clause (iii) has not been paid in
full or discharged to the satisfaction of such Approved Hedge Counterparty; or
(c) The Collateral Agent shall have received from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Notes, as
appropriate, written notice, which notice shall reference this Section 2.07, (i)
that an "Event of Default" under the Indenture has occurred and is continuing
and (ii) that the unpaid principal amount of the Notes and all interest accrued
and unpaid thereon have been declared to be then due and payable; or
(d) The Collateral Agent shall have received from one or more Hedge
Liquidity Providers (or their representative) of greater than 50% of the face
amounts of all letters of credit issued under any Hedge Liquidity Agreement,
written notice, which notice shall reference this Section 2.07, (i) that an
"Event of Default" under such Hedge Liquidity Agreement has occurred and is
continuing and (ii) that the unpaid amount owed in respect of the letters of
credit and all interest accrued and unpaid thereon have been declared to be then
due and payable.
Section 2.08 Pro Rata Treatment; Participations. The Creditors hereby
agree among themselves that (a) prior to the occurrence and continuance of a
Triggering Event, each Creditor shall be entitled to receive and retain for its
own account, and shall never be required to disgorge to the Collateral Agent or
any other Creditor hereunder or acquire direct or participating interests in
such Creditor's Obligations, scheduled payments or voluntary prepayments,
payments for the redemption or purchase of principal, interest, fees and
premium, if any, settlement payments and any other payments in respect of the
Principal Agreements, all in compliance with the terms thereof, and (b) after
the occurrence and during the continuance of a Triggering Event, all Proceeds
shall be applied by the Collateral Agent and shared by the Creditors in
accordance with the respective Pro Rata Share held by each of them and in
accordance with Section 2.03. In the event that any Creditor shall obtain
payment after the occurrence and during the continuance of a Triggering Event,
whether in whole or in part, from any source (other than (a) payments made by
the Collateral Agent in accordance with Section 2.03 or (b) the exercise by
Approved Hedge Counterparties of netting or offset rights under Approved Hedge
Agreements) in respect of its portion of the Obligations, including, without
limitation, payments by reason of the exercise of its right of offset, banker's
lien, general lien or counterclaim or otherwise through the exercise of any
remedy or any other effort to collect amounts due from any Obligor, such
Creditor shall (i) promptly notify the Collateral Agent (which may conclusively
rely on such notice) and (ii) purchase for cash from such other Creditor(s)
holding a priority claim a participation in such Obligations held by such other
Creditor(s) having a priority claim in the priority set forth in Section 2.03.
Each Obligor expressly consents to the
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foregoing arrangements and agrees that any Creditor holding such a participation
may exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by any Obligor to such Creditor as fully as
if such Creditor had made a loan directly to such Obligor in the amount of such
participation.
Section 2.09 Bankruptcy Preferences. If any payment actually received
by any Creditor is subsequently invalidated, declared to be fraudulent or
preferential or set aside and is required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or Federal law, common law or
equitable cause (any such amount required to be repaid being a "Disgorged
Amount"), then such Creditor (the "Disgorged Creditor") shall have a claim under
Section 2.03 in an amount equal to the Disgorged Amount, and the Collateral
Agent shall pay the Disgorged Amount to such Disgorged Creditor in the order of
priority set forth in Section 2.03 as if payment in respect of such Disgorged
Amount had never been made by the Collateral Agent to such Disgorged Creditor
hereunder; provided, however, that any amounts payable by the Collateral Agent
to a Disgorged Creditor pursuant to this Section 2.09 shall be payable solely
from Proceeds, if any, and no Creditor shall acquire direct or participating
interests in such Disgorged Creditor's Obligations or be required to pay to the
Collateral Agent, a Disgorged Creditor or any other Person any amounts in
respect of any Disgorged Amounts. If this Agreement or the Security Documents
have terminated and any payment actually received by any Creditor is
subsequently invalidated, rescinded, declared to be fraudulent or preferential
or set aside and is required to be repaid under any bankruptcy or other similar
law, then this Agreement and the Security Documents shall be reinstated and
their provisions will continue in effect for the benefit of such Creditor until
such amounts are fully and finally paid in cash.
Section 2.10 Marshaling. The Collateral Agent shall not be required to
marshal any present or future security (including without limitation any
Collateral described in any of the Security Documents), or guaranties of the
Obligations or any part or portion thereof, or to resort to such Collateral or
guaranties in any particular order; and all rights in respect of such Collateral
and guaranties shall be cumulative and in addition to all other rights, however
existing or arising. To the extent that they lawfully may, each Obligor hereby
agrees that it will not invoke any law relating to the marshaling of Collateral
which might cause delay or impede the enforcement of the Creditors' rights under
any Principal Agreement or the Security Documents or under any other instrument
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or guaranteed.
Section 2.11 Additional Parties. If any Person shall become an Obligor
under any of the Principal Agreements, the Company covenants and agrees to
promptly cause such Person to become a party hereto by executing and delivering
to the Collateral Agent a Supplement in the form of Annex 2 hereto. If any
Person desires to become an "Approved Hedge Counterparty" or a "Hedge Liquidity
Provider" for purposes of this Agreement and the Security Documents, then it
shall become a party hereto by delivering any documents required by the
definitions of Approved Hedge Agreement and Approved Hedge Counterparties and by
promptly executing and delivering to the Collateral Agent and the Trustee a
supplement in the form of Annex 3 hereto. In each case, upon such execution and
delivery, such Person shall be deemed a party hereto as if an original
signatory. Supplements executed pursuant to this Section 2.11 do not require the
signatures of all Creditors party to this Agreement.
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Section 2.12 Disposition of Proceeds. The Security Documents contain an
assignment by the Obligors unto and in favor of the Collateral Agent for the
benefit of the Creditors of all production and all proceeds attributable thereto
which may be produced from or allocated to the Collateral. The Security
Documents further provide in general for the application of such proceeds to the
satisfaction of the Obligations described herein and secured thereby.
Notwithstanding the assignment contained in such Security Documents, until the
occurrence of a Triggering Event, the Collateral Agent and the Creditors agree
that they will (i) neither notify the purchaser or purchasers of such production
nor take any other action to cause such proceeds to be remitted to the
Collateral Agent and the Creditors, but the Collateral Agent and the Creditors
will instead permit such proceeds to be paid to the relevant Obligor and (ii)
instruct the Collateral Agent to take (and the Collateral Agent shall take) such
action as may be requested by the Company to cause such proceeds to be so paid
to the Company.
ARTICLE III
COLLATERAL; CREDITORS
Section 3.01 Status of Liens; Collateral.
(a) Each Creditor agrees that, subject to Section 2.03 and
notwithstanding anything to the contrary contained in any Security Document, (i)
all Creditors shall rank pari passu in priority with respect to any Lien on any
Collateral securing the Obligations, and (ii) all Liens on any Collateral
securing any Obligations shall rank pari passu with one another. Notwithstanding
anything else provided herein or in the Security Documents, except as
specifically requested in writing by the Creditors (in the case of the Holders,
the Trustee on their behalf), the Collateral Agent shall have no obligation or
liability in respect of the recording, re-recording, filing or refilling of any
instruments, documents, financing statements or continuation statements or to
take any other action hereunder with respect to the security interests created
hereby or pursuant to the Security Documents, and the Collateral Agent shall
have no obligation to monitor the status of the security interests as a
perfected security interest created hereunder or under the Security Documents
other than as set forth in legal opinions delivered to the Collateral Agent
pursuant to Section 6.13.
(b) Each Creditor agrees that if such Creditor takes any additional
Collateral in respect of any Obligations, such Creditor shall take any and all
action necessary to create and perfect Liens on any such Collateral in favor of
the other Creditors for the equal and ratable benefit of all Creditors (subject
to Section 2.03), including, without limitation, executing and delivering
mortgages, security agreements, financing statements, amendments to financing
statements, and any other agreements, documents, certificates or instruments
necessary to accomplish the foregoing.
(c) Each Creditor agrees to take any and all action necessary to cause
the Collateral Agent to be designated as the sole secured party in respect of
any Lien on any Collateral securing the Obligations, including, without
limitation, executing and delivering mortgages, security agreements, financing
statements, amendments to financing statements, and any other agreements,
documents, certificates or instruments evidencing or required or permitted to be
filed to create or perfect a Lien on Collateral.
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(d) Each Creditor and each Obligor will from time to time sign,
execute, deliver and file, alone or with the Collateral Agent or any other
Creditor or any other Obligor, and hereby authorizes the Collateral Agent to
file, any financing statements, security agreements, documents, certificates or
instruments pertaining to the Collateral, or any part thereof; procure any
agreements, documents, certificates or instruments as may be requested by the
Collateral Agent; and take all further action that may be necessary or
desirable, or that the Collateral Agent may reasonably request, to confirm,
perfect, preserve and protect the security interests intended to be granted
under the Security Documents, and in addition, each of the Creditors and the
Obligors hereby authorizes the Collateral Agent to execute and deliver on behalf
of such Person and to file such other financing statements, security agreements
and other agreements, documents, certificates or instruments without the
signature of such Person either in the Collateral Agent's name or in the name of
such Person and as agent and attorney-in-fact for such Person. Each Creditor and
each Obligor shall do all such additional and further acts or things, give such
assurances and execute such agreements, documents, certificates or instruments
as the Collateral Agent requires to vest more completely in and assure to the
Collateral Agent and the Creditors their rights under this Agreement (including
this Section 3.01), including, without limiting the generality of the foregoing,
marking conspicuously each note or other instrument evidencing the Obligations
with the legend described in Section 3.09 and, at the request of the Collateral
Agent, each of its records pertaining to the Collateral with such legend.
Section 3.02 Possession, Use and Release of Collateral.
(a) Unless an "Event of Default" or "Termination Event" under any
Principal Agreement shall have occurred and be continuing, Tribo and the
Restricted Subsidiaries will have the right to remain in possession and retain
exclusive control of the Collateral securing the Obligations (other than any
cash, securities, obligations and Temporary Cash Investments constituting part
of the Collateral and deposited with the Collateral Agent in the Collateral
Account and other than as set forth in the Security Documents), to freely
operate the Collateral and to collect, invest and dispose of any income thereon
or therefrom.
(b) Upon compliance by Tribo and the Restricted Subsidiaries with the
conditions set forth below in respect of any sale, lease, transfer or other
disposition to any Person involving Collateral (including the disposition of all
of the Capital Stock of a Subsidiary Guarantor), the Collateral Agent will
release the Released Interests (as defined below) from the Lien of the Security
Documents and reconvey the Released Interests to Tribo or the relevant
Restricted Subsidiary or such other Person as Tribo or the Restricted Subsidiary
may direct in writing. Tribo and the Restricted Subsidiaries will have the right
to obtain a release of items of Collateral subject to any sale, lease, transfer
or other disposition or owned by a Subsidiary Guarantor all of the Capital Stock
of which is subject of a disposition (the "Released Interests") upon compliance
with the condition that the Company deliver to the Collateral Agent the
following:
(i) a notice from the Company requesting the release of
Released Interests:
(A) describing the proposed Released Interests; and
(B) specifying the value, as reasonably determined by
the Company, of such Released Interests on a date within 60
days of the Company notice (the "Valuation Date"); and
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(C) stating that the purchase price or other property
to be received in consideration for such Released Interests is
at least equal to the fair market value of the Released
Interests; and
(D) stating that the release of such Released
Interests will not interfere with the Collateral Agent's
ability to materially realize the value of the remaining
Collateral and will not materially impair the maintenance and
operation of the remaining Collateral; and
(E) confirming the sale, lease, transfer or other
disposition of, or an agreement to sell, lease, transfer or
dispose of, such Released Interests in a bona fide transaction
to a Person that is not an Affiliate of Tribo or, in the event
that such disposition is to a Person that is an Affiliate,
confirming that such disposition is made in compliance with
the provisions set forth in Section 4.11 of the Indenture, to
the extent applicable; and
(F) in the event there is to be a substitution of
property for the Collateral subject to the sale, lease,
transfer or other disposition, specifying the property
intended to be substituted for the Collateral to be disposed
of;
(G) attaching the form of release (the "Release")
requested by the Company to be executed by the Collateral
Agent;
(ii) an Officers' Certificate stating that:
(A) such sale, lease, transfer or other disposition
complies with the terms and conditions of any Hedge Liquidity
Agreement, Approved Hedge Agreements and Section 4.10 and
Section 4.07 of the Indenture, to the extent applicable; and
(B) all Net Available Cash from such sale, lease,
transfer or other disposition will be applied pursuant to any
Hedge Liquidity Agreement, Approved Hedge Agreements and
Section 4.10 of the Indenture, to the extent applicable; and
(C) there is no "Event of Default," "Triggering
Event" or "Termination Event" under any of the Principal
Agreements or this Agreement that is in effect or continuing
on the date thereof or the date of such sale, lease, transfer
or other disposition; and
(D) the release of the Collateral by the execution of
the Release will not result in an "Event of Default,"
"Triggering Event" or "Termination Event" under any of the
Principal Agreements or this Agreement; and
(E) upon the delivery of such Officers' Certificate,
all conditions precedent in any Principal Agreement relating
to the release in question will have been complied with; and
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(iii) all other documentation required by the TIA (provided
that any certificates and opinions addressed and delivered to the
Trustee shall also be addressed to the Collateral Agent), if any, prior
to the release of Collateral by the Collateral Agent and, in the event
there is to be a contemporaneous substitution of property for the
Collateral subject to the sale, lease, transfer or other disposition,
all documentation necessary to effect the substitution of such new
Collateral.
(c) Upon compliance by Tribo and the Restricted Subsidiaries with the
conditions set forth below in respect of any instrument governing a Working
Capital Revolver, to the extent and only to the extent such instrument involves
the creation of Permitted Liens on accounts receivable, related general
intangibles and related proceeds (as used herein, "accounts," "general
intangibles" and "proceeds" shall have the meanings given in the Uniform
Commercial Code as it exists on the date hereof) of Tribo and the Restricted
Subsidiaries to secure Indebtedness Incurred under the Working Capital Revolver,
the Collateral Agent will release the Released Working Capital Revolver Interest
(as defined below) from the Lien of the Indenture and the Security Documents and
reconvey the Released Working Capital Revolver Interests to Tribo or the
Restricted Subsidiaries or such other Person as Tribo or the Restricted
Subsidiary may direct in writing. Tribo and the Restricted Subsidiaries will
have the right to obtain a release of such accounts receivable, related general
intangibles and related proceeds of Tribo and the Restricted Subsidiaries to
secure Indebtedness Incurred under the Working Capital Revolver (the "Released
Working Capital Revolver Interests") upon compliance with the condition that the
Company deliver to the Collateral Agent the following:
(i) a notice from the Company requesting the release of the
Released Working Capital Revolver Interests and attaching the Release
requested by the Company to be executed by the Collateral Agent;
(ii) an Officers' Certificate stating that:
(A) such release complies with the terms and
conditions of any Hedge Liquidity Agreement, Approved Hedge
Agreements and Section 4.09 and Section 4.12 of the Indenture,
to the extent applicable; and
(B) there is no "Event of Default," "Triggering
Event" or "Termination Event" under any of the Principal
Agreements or this Agreement that is in effect or continuing
on the date thereof or the date of such Incurrence of
Indebtedness under the Working Capital Revolver; and
(C) the release of the Collateral by the execution of
the Release will not result in an "Event of Default,"
"Triggering Event" or "Termination Event" under any of the
Principal Agreements; and
(D) upon the delivery of such Officers' Certificate,
all conditions precedent in the Principal Agreements relating
to the release in question will have been complied with; and
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(iii) all other documentation required by the TIA (provided
that any certificates and opinions addressed and delivered to the
Trustee shall also be addressed to the Collateral Agent), if any, prior
to the release of Collateral by the Collateral Agent.
(d) Notwithstanding the provisions of this Section 3.02, so long as no
"Event of Default," or "Termination Event" under any Principal Agreement shall
have occurred and be continuing or would result therefrom, Tribo or any
Restricted Subsidiary may engage in any number of ordinary course activities in
respect of the Collateral, in limited dollar amounts specified by the TIA, upon
satisfaction of certain conditions. For example, among other things, subject to
such dollar limitations and conditions, Tribo or a Restricted Subsidiary would
be permitted to:
(i) sell or otherwise dispose of any property subject to the
Lien of the Security Documents, which may have become worn out or
obsolete; and
(ii) abandon, terminate, cancel, release or make alterations
in or substitutions of any leases or contracts subject to the Lien of
the Security Documents; and
(iii) surrender or modify any franchise, license or permit
subject to the Lien of the Security Documents which it may own or under
which it may be operating; and
(iv) alter, repair, replace, change the location or position
of and add to its structures, machinery, systems, equipment, fixtures
and appurtenances; and
(v) demolish, dismantle, tear down or scrap any Collateral or
abandon any thereof; and
(vi) grant farm-outs, leases or sub-leases in respect of real
property to the extent any of the preceding does not constitute an
Asset Disposition.
(e) The Collateral Agent, in its capacity as Collateral Agent under the
Security Documents, shall not at any time release Collateral from the Lien
created by the Security Documents unless such release is in accordance with the
provisions of this Intercreditor Agreement and the Security Documents.
(f) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under the Security
Documents in contravention of the provisions thereof if and to the extent the
Collateral is released pursuant to this Intercreditor Agreement and the Security
Documents. To the extent applicable, the Company shall cause TIA Section 314(d)
relating to the release of property from the Lien of the Security Documents and
relating to the substitution therefor of any property to be subjected to the
Lien of the Security Documents to be complied with. Any certificate or opinion
required by TIA Section 314(d) may be made by an Officer of the Company, except
in cases where TIA Section 314(d) requires that such certificate or opinion be
made by an independent Person, which Person shall be an independent engineer,
appraiser or other expert selected or approved by the Collateral Agent or a
Required Creditor in the exercise of reasonable care. For purposes of this
Section 3.02, a Person is "independent" if such Person (a) is in fact
independent, (b) does not have any direct financial interest or any material
indirect financial interest in any
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Obligor or in any Affiliate of the Parent Guarantor and (c) is not an officer,
employee, promoter, underwriter, trustee, partner or director or person
performing similar functions to any of the foregoing for any Obligor. The
Collateral Agent shall be entitled to receive and rely upon a certificate
provided by any such Person confirming that such Person is independent within
the foregoing definition.
Section 3.03 Deposit, Use and Release of Collateral Account Assets. All
Net Available Cash aggregating in excess of $1,000,000 in any fiscal year from
any Asset Dispositions involving Collateral shall be deposited into a securities
account maintained by the Collateral Agent at its corporate offices or at any
securities intermediary selected by the Trustee having a combined capital and
surplus of at least $250,000,000 and having a long-term debt rating of at ▇▇▇▇▇
"▇▇" by ▇▇▇▇▇'▇ Investors Service, Inc. and at least "A-" by Standard & Poor's
Ratings Services styled the "Tri-Union Collateral Account" (such account being
the "Collateral Account") which shall be under the exclusive dominion and
control of the Collateral Agent. All amounts on deposit in the Collateral
Account shall be treated as financial assets and cash funds on deposit in the
Collateral Account may be invested by the Collateral Agent, at the direction of
Tribo or the Company, as applicable, in Temporary Cash Investments; provided,
however, in no event shall Tribo or the Company have the right to withdraw funds
or assets from the Collateral Account except in compliance with this Section
3.03 and all assets credited to the Collateral Account shall be subject to a
perfected, first priority Lien in favor of the Collateral Agent for the benefit
of the Approved Hedge Counterparties or Hedge Liquidity Providers (as
applicable), the Trustee and the Holders.
Any such funds will be released to Tribo or the Company, as the case
may be, by its delivering to the Collateral Agent an Officers' Certificate
stating that:
(i) no "Event of Default" or "Termination Event" under any
Principal Agreement has occurred and is continuing as of the date of
the proposed release or would result therefrom; and
(ii) (A) if such Collateral Account Assets represent Net
Available Cash in respect of an Asset Disposition, that such funds will
be applied in accordance with Section 4.10 of the Indenture, to the
extent applicable, or (B) if such Collateral Account Assets do not
represent Net Available Cash in respect of an Asset Disposition, that
such amounts will be utilized in connection with the business of Tribo
and the Restricted Subsidiaries in compliance with the terms of the
Principal Agreements; and
(iii) all other terms and conditions in the Principal
Agreements relating to the release in question have been complied with;
and
(iv) all documentation required by the TIA, if any, prior to
the release of such Collateral Account Assets by the Collateral Agent
has been delivered to the Collateral Agent and the Trustee.
Notwithstanding the preceding in this Section 3.03 and subject to the
terms and conditions in the Principal Agreements, (A) if no Triggering Event has
occurred and is continuing and the Company so elects by giving written notice to
the Collateral Agent, the Collateral Agent shall apply the Collateral Account
Assets credited to the Collateral Account to the payment of amounts due
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under any Approved Hedge Agreement (whether regularly scheduled payments or
termination payments) or Hedge Liquidity Agreements (if applicable) or any Note,
including interest due on any interest payment date, and (B) if the Company so
elects, by giving written notice to the Collateral Agent, the Collateral Agent
shall, subject to Section 2.03, apply the Collateral Account Assets credited to
the Collateral Account to the payment of amounts specified in this Agreement as
being secured by the Collateral, including the principal of, and accrued and
unpaid interest on, any Notes at their Stated Maturity or upon redemption or to
the purchase of Notes upon tender or in the open market or at private sale or
upon any exchange or in any one or more of such ways, in each case in compliance
with the Indenture and at the direction of the Company.
Section 3.04 Form and Sufficiency of Release. In the event that (a) any
Obligor has sold, exchanged, or otherwise disposed of or proposes to sell,
exchange or otherwise dispose of any portion of the Collateral and (b) such
Obligor requests, pursuant to the Indenture and this Agreement, the Collateral
Agent to furnish a written disclaimer, release or quit-claim of any interest in
such property under the Security Documents, then the Collateral Agent, in its
capacity as such under the Security Documents, shall execute, acknowledge and
deliver to such Obligor (in proper form) such an instrument promptly after
satisfaction of the conditions set forth herein for delivery of any such
release. Notwithstanding the preceding sentence, all purchasers and grantees of
any property or rights purporting to be released herefrom shall be entitled to
rely upon any release executed by the Collateral Agent hereunder as sufficient
for the purpose of constituting a good and valid release of the property therein
described from the Lien of the Security Documents.
Section 3.05 Purchaser Protected. No purchaser or grantee of any
property or rights purporting to be released herefrom shall be bound to
ascertain the authority of the Collateral Agent to execute the release or to
inquire as to the existence of any conditions herein prescribed for the exercise
of such authority; nor shall any purchaser or grantee or any property or rights
permitted by the Principal Agreements to be sold or otherwise disposed of by any
Obligor be under any obligation to ascertain or inquire into the authority of
such Obligor to make such sale or other disposition.
Section 3.06 Authorization of Actions To Be Taken by the Collateral
Agent Under the Security Documents. Subject to the provisions of the applicable
Security Document, (a) the Collateral Agent may, in its sole discretion and
without the consent of the Creditors, take all actions it deems necessary or
appropriate in order to (i) enforce any of the terms of the Security Documents
and (ii) collect and receive any and all amounts payable in respect of the
Obligations of the Company, the Parent Guarantor or any Subsidiary Guarantor
hereunder and (b) the Collateral Agent shall have power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any act that may be unlawful or in violation of
the Security Documents or the Principal Agreements, and such suits and
proceedings as the Collateral Agent may deem expedient to preserve or protect
its interests and the interests of the Creditors in the Collateral (including
the power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest thereunder or be prejudicial to the interests of
the Creditors). Notwithstanding the above, the Collateral Agent may choose not
to take any action authorized by this Section 3.06 until it receives written
direction from a Required Creditor.
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Section 3.07 Authorization of Receipt of Funds by the Collateral Agent
under the Security Documents. The Collateral Agent is authorized to receive any
funds for the benefit of the Creditors distributed under the Security Documents,
and to make further distributions of such funds to the Creditors in accordance
with the provisions of this Agreement.
Section 3.08 Property of Obligors. The Creditors agree that all the
provisions of this Agreement shall apply to any and all properties and rights of
the Obligors or any other Obligor in which the Collateral Agent (in its capacity
as such) or any Creditor at any time acquires a right of set-off or Lien
pursuant to the Security Documents, the Principal Agreements or a judgment
thereunder, including, without limitation, real property or rights in, on or
over real property, notwithstanding any provision to the contrary in any
mortgage, leasehold mortgage or other document purporting to grant or perfect
any Lien in favor of any Creditor or the Collateral Agent.
Section 3.09 Legends. Each Creditor shall ▇▇▇▇, or cause to be marked,
at all times on each note or other instrument evidencing the Obligations to
which it is a holder a legend, in form and substance satisfactory to the
Collateral Agent, indicating that the rights, remedies and obligations of the
Obligors and the holders of such note or other instrument shall be limited by
and subject to the terms of this Agreement.
Section 3.10 Creditor Dealings; Good Faith. Nothing contained in this
Agreement shall prevent any Creditor from dealing directly or negotiating with
any other Creditor for any purpose, including, but not limited to, the purpose
of attempting to reach agreement as to any vote or proposed vote relating to the
Collateral Agent's actions hereunder, whether or not any Triggering Event or
other "Default", "Event of Default" or "Termination Event" has occurred under
the Principal Agreements.
ARTICLE IV
CALCULATION OF OBLIGATIONS
Section 4.01 Notice of Amount of Obligations. Upon receipt of any
Proceeds to be distributed pursuant to Section 2.03, the Collateral Agent shall
give the Creditors notice thereof, and each Creditor (or its representative)
shall within five (5) Business Days notify the Collateral Agent of the amount of
Obligations owing to it or its group. Such notification shall state the amount
of its (or their) Obligations and how much is then due and owing. If requested
by the Collateral Agent, each Creditor (or its representative) shall demonstrate
that the amounts set forth in its notice are actually owing to such Creditor to
the satisfaction of the Collateral Agent. Notwithstanding the foregoing, the
Collateral Agent may conclusively rely on information in such notices without
investigation.
ARTICLE V
THE COLLATERAL AGENT
Section 5.01 Appointment of Collateral Agent. Each Creditor hereby
designates ▇▇▇▇▇ Fargo Bank Minnesota, National Association to act as the
Collateral Agent for the Creditors under any of the Security Documents, the
enforcement of any Liens granted thereunder and the collection of Proceeds
following the disposition of any such Collateral. Each Creditor hereby
authorizes the Collateral Agent to take such action on its behalf under the
provisions of this Agreement and the
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Security Documents and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to it hereunder or under
any Security Document or required of the Collateral Agent by the terms hereof or
thereof and such other powers as are reasonably incidental thereto. The
Collateral Agent may perform any of its duties hereunder by or through its
agents or employees. The Collateral Agent agrees to act as Collateral Agent upon
the express terms and conditions contained in this Article V.
Section 5.02 Nature of Duties of Collateral Agent. The Collateral Agent
shall have no duties or responsibilities, except those expressly set forth in
this Agreement or any Security Document. The Collateral Agent shall have and may
exercise such powers hereunder and under the Security Documents as are
specifically delegated to the Collateral Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. Neither the Collateral
Agent nor any of its directors, officers, employees or agents shall be liable to
the Creditors for any action taken or omitted by it as such hereunder or under
the Security Documents, unless caused solely by its or their gross negligence or
willful misconduct. The duties of the Collateral Agent shall be mechanical and
administrative in nature; and the Collateral Agent, in its capacity as such,
shall not have by reason of this Agreement a fiduciary relationship in respect
of any Creditor. Nothing in this Agreement, expressed or implied, is intended to
or shall be so construed as to impose upon the Collateral Agent any Obligations
in respect of this Agreement and the other Security Documents except as
expressly set forth herein.
Section 5.03 Lack of Reliance on the Collateral Agent.
(a) Independently and without reliance upon the Collateral Agent or any
other Creditor, each Creditor represents to the Collateral Agent and each of the
other Creditors that such Creditor has made (i) its own independent
investigation of the financial condition and affairs of the Obligors based on
such documents and information as it has deemed appropriate in connection with
the taking or not taking of any action in connection herewith, and (ii) its own
appraisal of the credit worthiness of the Obligors. Each Creditor also
acknowledges that it will, independently and without reliance upon the
Collateral Agent or any other Person 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, the Obligations
or the Security Documents. Except as expressly provided in this Agreement and
the other Security Documents, the Collateral Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Creditor with any credit or other information concerning the affairs, financial
condition or business of the Obligors which may come into the possession of the
Collateral Agent or any of its affiliates whether now in its possession or in
its possession at any time or times hereafter; and the Collateral Agent shall
not be required to keep itself informed as to the performance or observance by
any Obligor of this Agreement, any Security Document or any other document
referred to or provided for herein or to inspect the Properties or books of any
Obligor.
(b) The Collateral Agent shall not (i) be responsible to any Creditor
for any recitals, statements, information, representations or warranties herein,
in any Security Document, or in any document, certificate or other writing
delivered in connection herewith or therewith or for the execution,
effectiveness, genuineness, validity, enforceability, collectability, priority
or sufficiency of this Agreement, the Obligations or the Security Documents or
the financial condition of the Obligors; or (ii) be required to make any inquiry
concerning the performance or observance by others of any
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of the terms, provisions or conditions of this Agreement, including the content
of notices, opinions, certificates and directions given under this Agreement
(However, the Collateral Agent shall examine such certificates, notices,
opinions and directions to determine whether or not they conform to this
Agreement and the Security Documents.), the Obligations or the Security
Documents, the financial condition of the Obligors, or the existence or possible
existence of any "Default" or "Event of Default" under the Principal Agreements;
provided, that the Collateral Agent will promptly notify each Creditor of any
Default, Event of Default or Termination Event of which a responsible officer of
the Collateral Agent has actual knowledge.
Section 5.04 Certain Rights of the Collateral Agent. If the Collateral
Agent shall request instructions from the Creditors with respect to any act or
action (including the failure to act) in connection with this Agreement, the
Obligations or the Security Documents, the Collateral Agent shall be entitled to
refrain from such act or taking such action unless and until the Collateral
Agent shall have received written instructions from any Creditor or group of
Creditors pursuant to the terms hereof; and the Collateral Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, no Creditor shall have any right of action whatsoever against the
Collateral Agent as a result of the Collateral Agent acting or refraining from
acting under this Agreement or the Security Documents in accordance with the
written instructions given in accordance with this Agreement and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all the Creditors. Except for action expressly required of the
Collateral Agent pursuant to the terms hereof, the Collateral Agent shall be
fully justified in failing or refusing to take any action hereunder or under the
Security Documents unless it shall first be indemnified to its satisfaction by
the Obligors or the Creditors against any and all liability and expense which
may be incurred by the Collateral Agent by reason of taking or continuing to
take any such action. Notwithstanding any other provision of this Article V or
any indemnity or instructions provided by any or all of the Creditors, the
Collateral Agent shall not be required to take any action which exposes the
Collateral Agent to personal liability or which is contrary to this Agreement,
the Security Documents or applicable law.
Section 5.05 Reliance by Collateral Agent. The Collateral Agent shall
be entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, statement, certificate or telecopier message, cablegram,
radiogram, order or other documentary, teletransmission or telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person. The Collateral Agent may consult with independent legal
counsel (which shall not be counsel for the Obligors), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
Section 5.06 Collateral Agent's Reimbursements and Indemnification. TO
THE EXTENT THE COLLATERAL AGENT IS NOT REIMBURSED BY THE COMPANY OR ANY OTHER
OBLIGOR, EACH PARTY HERETO WILL REIMBURSE AND INDEMNIFY THE COLLATERAL AGENT, IN
PROPORTION TO ITS PRO RATA SHARE, FOR AND AGAINST ANY AND ALL ACTIONS, SUITS,
PROCEEDINGS (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS,
DEMANDS, CAUSES OF ACTION, COSTS, LOSSES, LIABILITIES, DAMAGES OR EXPENSES OF
ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED
AGAINST THE COLLATERAL AGENT IN PERFORMING ITS DUTIES HEREUNDER OR UNDER ANY
SECURITY DOCUMENT OR OTHERWISE IN CONNECTION HEREWITH OR THEREWITH, INCLUDING
LOSSES OCCURRING FROM THE ORDINARY AND/OR
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COMPARATIVE NEGLIGENCE OF THE COLLATERAL AGENT, IN ANY WAY RELATING TO OR
ARISING OUT OF THIS AGREEMENT; PROVIDED THAT NO CREDITOR SHALL BE LIABLE FOR ANY
PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS TO THE EXTENT RESULTING FROM
THE COLLATERAL AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Section 5.07 The Collateral Agent in its Individual Capacity. The
Collateral Agent shall have the same rights and powers hereunder as any other
Creditor and may exercise the same as though it were not performing the duties
specified herein; and the term "Creditors" or any similar term shall, unless the
context clearly otherwise indicates, include the Collateral Agent, in its
individual capacity as and to the extent it is a Holder of any Note and not in
its capacity as the Collateral Agent. The Collateral Agent may accept deposits
from, lend money to, and generally engage in any kind of banking, trust,
financial advisory or other business with the Obligors as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Obligors for services in connection with this Agreement
and otherwise without having to account for the same to the Creditors except as
specified herein.
Section 5.08 Creditors as Owners. The Collateral Agent may deem and
treat each Creditor as the owner of such Creditor's Obligations for all purposes
hereof unless and until the Collateral Agent is notified of a change in
Creditors.
Section 5.09 Successor Collateral Agent.
(a) The Collateral Agent (i) may resign at any time by giving sixty
(60) days prior written notice thereof to the Creditors and the Company, (ii)
shall promptly resign if any conflict of interest arises involving any group of
Creditors and another group of Creditors for whom it is a trustee or fiduciary
under one of the Principal Agreements and (iii) may be removed at any time by
the Required Creditors, which resignation or removal, in each case, shall be
effective upon the appointment of a successor to the Collateral Agent. Upon any
such resignation or removal, the Required Creditors shall have the right to
appoint a successor Collateral Agent. If within thirty (30) days after the
retiring Collateral Agent's giving of notice of resignation or the Required
Creditors' removal of the retiring Collateral Agent, no successor Collateral
Agent shall have been so appointed by the Required Creditors and accepted such
appointment, then, the retiring Collateral Agent may, on behalf of the
Creditors, appoint a successor Collateral Agent, which shall be a bank which
maintains an office in the United States of America, or a commercial bank
organized under the laws of the United States of America or of any State
thereof, or any affiliate of such bank, having a combined capital and surplus of
at least $50,000,000 as of the date of its most recent financial statements.
(b) Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties under this Agreement. After any retiring
Collateral Agent's resignation or removal hereunder as Collateral Agent, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Collateral Agent under this Agreement.
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Section 5.10 Employment of Collateral Agent and Counsel. The Collateral
Agent may execute any of its duties as Collateral Agent hereunder or under the
Security Documents by or through employees, agents, and attorneys-in-fact and
shall not be answerable to the Creditors for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care, provided
that the Collateral Agent shall always be obligated to account for moneys or
securities received by it or its authorized agents. The Collateral Agent shall
be entitled to advice of independent counsel concerning all matters pertaining
to the agency hereby created and its duties hereunder or under the Security
Documents.
Section 5.11 Limitation on Liability of the Creditors and Collateral
Agent. The Creditors and Collateral Agent shall not be deemed, as a result of
the execution and delivery of the Security Documents or the consummation of the
transactions contemplated by this Agreement and the Security Documents, to have
assumed any obligation of any Obligor with respect to the Collateral or any
liability under or with respect to any of the contracts, agreements, leases,
instruments or documents which are, or which may hereafter be, assigned to the
Collateral Agent for the benefit of the Creditors.
ARTICLE VI
MISCELLANEOUS
Section 6.01 Authority. The parties hereto represent and warrant that
they have all requisite power to, and have been duly authorized to, enter into
this Agreement.
Section 6.02 Termination/Withdrawal/Redesignation of Contracts.
(a) Subject to Section 2.09 and Section 6.02(b), this Agreement shall
terminate upon receipt by the Collateral Agent of evidence satisfactory to it
that (i) all Obligations have been paid in full and all obligations in respect
of the Principal Agreements have been satisfied in full, and (ii) the
termination of the Principal Agreements and the Security Documents pursuant to
the terms thereof.
(b) (i) If all of the Approved Hedge Agreements with an Approved Hedge
Counterparty have been paid in full, terminated (and all settlement amounts,
unpaid amounts, interest and other amounts then due to such Approved Hedge
Counterparty have been paid in full) or the terms of all such contracts have
otherwise expired, then the Company may, by written notice to the Collateral
Agent, the Trustee and such counterparty, remove such counterparty as an
"Approved Hedge Counterparty" under this Agreement and the Security Documents;
and upon delivery of such notice, such counterparty shall cease to be an
"Approved Hedge Counterparty" for all such purposes.
(ii) Any "Approved Hedge Counterparty" under this Agreement
and the Security Documents may at any time elect to no longer be an
"Approved Hedge Counterparty" under this Agreement by giving notice to
the Collateral Agent, the Trustee and the Company; and upon delivery of
such notice, such counterparty shall cease to be an "Approved Hedge
Counterparty" for all such purposes, and each Oil and Gas Hedging
Contract shall cease to be an Approved Hedge Agreement.
(iii) If the Company has entered into a Hedge Liquidity
Agreement and has issued to an Approved Hedge Counterparty a letter of
credit (such letter of credit to be in form and substance and in an
amount and from an issuing bank satisfactory to the Approved Hedge
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Counterparty in its sole discretion) to secure payment of its
obligations under the Approved Hedge Agreements to which such Approved
Hedge Counterparty is a party, such Person shall cease to be an
Approved Hedge Counterparty for purposes of this Agreement and the
Security Documents and each such contract shall cease to be an Approved
Hedge Agreement for all purposes of this Agreement and the Security
Documents. Issuance of a letter of credit pursuant to this paragraph
(iii) must be accompanied by (A) notice to the Collateral Agent and the
Trustee and (B) the execution and delivery to the Trustee and
Collateral Agent of a supplement in the form of Annex 3 hereto making
the issuing bank party to the above referenced Hedge Liquidity
Agreement a party to this Agreement as a Hedge Liquidity Provider for
all purposes.
Section 6.03 Amendments. Amendments, modifications, supplements,
waivers, consents and approvals of or in connection with:
(a) this Agreement and any Security Document may be effectuated only
upon the written consent of each of the Approved Hedge Counterparties then a
party hereto, Hedge Liquidity Providers having greater than 50% of the aggregate
commitments of the Hedge Liquidity Providers if a Hedge Liquidity Agreement is
in place and Holders having 50% or more of the outstanding principal amount of
the then outstanding principal amount of the Notes (and, if the rights or duties
of the Collateral Agent or the Trustee or any Obligors are affected thereby, by
the Collateral Agent, the Trustee or the applicable Obligor, as the case may
be); provided, however, that (i) Section 2.03 (and the defined terms used
therein) shall not be amended without the unanimous written consent of each
Creditor (and, if the rights or duties of the Collateral Agent or the Trustee or
any Obligors are affected thereby, by the Collateral Agent, the Trustee or the
applicable Obligor, as the case may be), (ii) amendments to Security Documents
requested in connection with releases of Collateral which comply with the terms
of Section 3.02 which only amend the Security Documents to the extent necessary
to grant the release may be made without the consent of the Creditors, (iii) any
waiver of Triggering Events, Releases of Collateral (except Asset Dispositions,
Released Working Capital Revolver Interests and Releases of Collateral Account
Assets in accordance with the terms of this Agreement) and any release of an
Obligor requires approval of the Approved Hedge Counterparties and (iii) no
Security Document may be amended if the effect thereof would be (A) to secure
additional Obligations (other than additional Notes issued under clause 2.02 of
the Indenture) or any other obligations, (B) to secure indebtedness or
obligations owed in favor of any other creditor or groups of creditors, (C) to
change the priority of or subordinate the Liens created thereby, (D) to modify
any material remedy provided for therein, or (E) to cause the Indenture
Obligations, any Hedge Liquidity Obligations and the Approved Hedge Counterparty
Obligations to not be equally and ratably secured thereby (subject to the
priorities set forth herein); and
(b) the Principal Agreements may be effectuated only in accordance with
the terms contained therein.
Section 6.04 Notices, etc. All notices and other communications
hereunder shall be given in writing and shall be given to such Person at its
address or telecopy number as follows:
To the Company or any Obligor:
Tri-Union Development Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-▇▇-
▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Collateral Agent:
▇▇▇▇▇ Fargo Bank Minnesota, National Association
Corporate Trust Services
Sixth and Marquette Avenue
MAC N9303-120
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Tri-Union Administrator
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
To the Trustee:
Firstar Bank, National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or telecopy number a Person may hereafter specify by
notice to the Collateral Agent (who shall promptly notify the Obligors and the
other Creditors); provided, however, that any notices or other communications
required to be given to the Holders hereunder shall be deemed to be given to the
Holders if given to the Trustee in accordance with the terms of this Section
6.04. Each notice or other communication shall be effective (a) if given by
mail, upon receipt, (b) if given by telecopier during regular business hours,
once such telecopy is transmitted to the telecopy number provided in writing to
the Collateral Agent by each Creditor and by each Obligor, respectively, or (c)
if given by any other means, upon receipt; provided that notices to the
Collateral Agent are not effective until received.
SECTION 6.05 PAYMENT OF EXPENSES AND TAXES; INDEMNIFICATION. EACH
OBLIGOR JOINTLY AND SEVERALLY AGREES (A) TO PAY OR REIMBURSE THE COLLATERAL
AGENT AND EACH CREDITOR (OTHER THAN HOLDERS) FOR ALL OF THEIR RESPECTIVE
OUT-OF-POCKET COSTS AND EXPENSES INCURRED IN CONNECTION WITH THE DEVELOPMENT,
PREPARATION AND EXECUTION OF, AND ANY AMENDMENT, SUPPLEMENT OR MODIFICATION TO,
THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS AND ANY OTHER DOCUMENTS
PREPARED IN CONNECTION HEREWITH OR THEREWITH, AND THE CONSUMMATION AND
ADMINISTRATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, INCLUDING
THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL TO THE COLLATERAL AGENT AND
EACH CREDITOR (OTHER THAN HOLDERS) AND FILING AND RECORDING FEES AND EXPENSES,
WITH STATEMENTS WITH RESPECT TO THE FOREGOING TO BE SUBMITTED TO THE COMPANY
PRIOR TO THE CLOSING DATE (IN THE CASE OF AMOUNTS TO BE PAID ON THE CLOSING
DATE) AND FROM TIME TO TIME THEREAFTER ON A QUARTERLY BASIS OR SUCH OTHER
PERIODIC BASIS AS THE COLLATERAL AGENT SHALL DEEM APPROPRIATE, (B) TO PAY OR
REIMBURSE EACH CREDITOR (OTHER THAN HOLDERS) AND THE COLLATERAL AGENT FOR ALL OF
THEIR RESPECTIVE COSTS AND EXPENSES INCURRED IN
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CONNECTION WITH THE ENFORCEMENT OR PRESERVATION OF ANY RIGHTS UNDER THIS
AGREEMENT, THE OTHER TRANSACTION DOCUMENTS AND ANY SUCH OTHER DOCUMENTS,
INCLUDING THE FEES AND DISBURSEMENTS OF COUNSEL (AND OTHER AGENTS AND
PROFESSIONALS), TO EACH CREDITOR (OTHER THAN HOLDERS) AND TO THE COLLATERAL
AGENT, (C) TO PAY, INDEMNIFY, AND HOLD EACH CREDITOR AND THE COLLATERAL AGENT
HARMLESS FROM AND AGAINST, ANY AND ALL RECORDING AND FILING FEES AND ANY AND ALL
LIABILITIES WITH RESPECT TO, OR RESULTING FROM ANY DELAY IN PAYING, STAMP,
EXCISE AND OTHER TAXES, IF ANY, THAT MAY BE PAYABLE OR DETERMINED TO BE PAYABLE
IN CONNECTION WITH THE EXECUTION AND DELIVERY OF, OR CONSUMMATION OR
ADMINISTRATION OF ANY OF THE TRANSACTIONS CONTEMPLATED BY, OR ANY AMENDMENT,
SUPPLEMENT OR MODIFICATION OF, OR ANY WAIVER OR CONSENT UNDER OR IN RESPECT OF,
THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS AND ANY SUCH OTHER DOCUMENTS,
AND (D) TO PAY, INDEMNIFY, AND HOLD EACH CREDITOR AND THE COLLATERAL AGENT AND
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES, AGENTS AND
CONTROLLING PERSONS (EACH, AN "INDEMNITEE") HARMLESS FROM AND AGAINST ANY AND
ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER WITH RESPECT TO THE EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE AND
ADMINISTRATION OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS AND ANY SUCH
OTHER DOCUMENTS, INCLUDING ANY OF THE FOREGOING RELATING TO THE USE OF PROCEEDS
OF THE NOTES OR THE VIOLATION OF, NONCOMPLIANCE WITH OR LIABILITY UNDER, ANY
ENVIRONMENTAL LAW APPLICABLE TO THE OPERATIONS OF ANY OBLIGOR, ANY OF ITS
SUBSIDIARIES OR ANY OF THE COLLATERAL AND THE REASONABLE FEES AND EXPENSES OF
LEGAL COUNSEL IN CONNECTION WITH CLAIMS, ACTIONS OR PROCEEDINGS BY ANY
INDEMNITEE AGAINST ANY OBLIGOR UNDER ANY TRANSACTION DOCUMENT (ALL THE FOREGOING
IN THIS CLAUSE (D), COLLECTIVELY THE "INDEMNIFIED LIABILITIES"), PROVIDED, THAT
NO OBLIGOR SHALL HAVE ANY OBLIGATION HEREUNDER TO ANY INDEMNITEE WITH RESPECT TO
INDEMNIFIED LIABILITIES TO THE EXTENT SUCH INDEMNIFIED LIABILITIES ARE FOUND BY
A FINAL AND NONAPPEALABLE DECISION OF A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.
WITHOUT LIMITING THE FOREGOING, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OBLIGOR AGREES NOT TO ASSERT AND TO CAUSE ITS SUBSIDIARIES NOT TO ASSERT,
AND HEREBY WAIVES AND AGREES TO CAUSE ITS SUBSIDIARIES TO SO WAIVE, ALL RIGHTS
FOR CONTRIBUTION OR ANY OTHER RIGHTS OF RECOVERY WITH RESPECT TO ALL CLAIMS,
DEMANDS, PENALTIES, FINES, LIABILITIES, SETTLEMENTS, DAMAGES, COSTS AND EXPENSES
OF WHATEVER KIND OR NATURE, UNDER OR RELATED TO ENVIRONMENTAL LAWS, THAT ANY OF
THEM MIGHT HAVE BY STATUTE OR OTHERWISE AGAINST ANY INDEMNITEE. WITHOUT LIMITING
ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER TRANSACTION DOCUMENT, IT IS THE
EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH INDEMNITEE SHALL BE
INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL INDEMNIFIED LIABILITIES
ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH
INDEMNITEE. ALL AMOUNTS DUE UNDER THIS SECTION 6.05 SHALL BE PAYABLE PROMPTLY
AND IN ANY EVENT, NOT LATER THAN 10 DAYS AFTER WRITTEN DEMAND THEREFOR.
STATEMENTS PAYABLE BY THE OBLIGORS PURSUANT TO THIS SECTION 6.05 SHALL BE
SUBMITTED TO ▇▇▇▇▇ ▇▇▇▇▇ (TELEPHONE NO. ▇▇▇-▇▇▇-▇▇▇▇), AT THE ADDRESS OF THE
COMPANY SET FORTH IN SECTION 6.04, OR TO SUCH OTHER PERSON OR ADDRESS AS MAY BE
HEREAFTER DESIGNATED BY THE OBLIGORS IN A WRITTEN NOTICE TO THE COLLATERAL
AGENT. THE AGREEMENTS IN THIS SECTION 6.05 SHALL SURVIVE REPAYMENT OF THE NOTES,
THE APPROVED HEDGE AGREEMENTS AND ALL AMOUNTS PAYABLE HEREUNDER.
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Section 6.06 Applicable Law. THIS AGREEMENT (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 (WITHOUT
REGARD TO ANY PRINCIPLES OF LAW THAT WOULD REQUIRE THE APPLICATION OF THE LAWS
OF ANOTHER STATE).
Section 6.07 Entire Agreement. This Agreement, the Principal Agreements
and the Security Documents embody the entire agreement and understanding between
the Collateral Agent, Creditors and the Obligors and supersede all prior
agreements and understandings between such parties relating to the subject
matter hereof and thereof. There are no unwritten oral agreements between the
parties.
Section 6.08 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Any signature page of a counterpart may be detached therefrom without
impairing the legal effect of the signatures thereon and attached to another
counterpart identical in form thereto but having attached to it one or more
additional signature pages signed by other parties.
Section 6.09 Severability. If any term or provision of this Agreement
shall be determined to be illegal or unenforceable, all other terms and
provisions of this Agreement shall nevertheless remain effective and shall be
enforced to the fullest extent permitted by applicable law.
Section 6.10 Conflict with Security Documents. If there is a conflict
between the terms and provisions contained in the Security Documents and the
terms and provisions contained herein, the terms and provisions contained in
this Agreement shall control.
Section 6.11 Limitation by Law. All rights, remedies and powers
provided herein may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law; and all the provisions hereof
are intended (a) to be subject to all applicable mandatory provisions of law
which may be controlling and (b) to be limited to the extent necessary so that
they will not render this Agreement, any Principal Agreement or any Security
Document invalid under the provisions of any applicable law.
Section 6.12 Benefit of Agreement; Limitation on Assignment. The terms
and provisions of this Agreement shall be binding upon and inure to the benefit
of each Creditor and its respective successors and assigns. Except as set forth
in Section 6.02(b), the terms and provisions of this Agreement shall not inure
to the benefit of, nor be relied upon by, the Obligors or their successors or
assigns. No Approved Hedge Counterparty or Hedge Liquidity Provider shall
assign, transfer or sell any part of its portion of the Obligations, unless in
connection with such assignment, transfer or sale, such assignee, transferee or
purchaser shall first become a party to this Agreement.
Section 6.13 Further Assurances, Recording and Opinions.
(a) The parties hereto agree to take all such further actions and to
execute, acknowledge and deliver all such further documents that are necessary
or useful to carry out the purposes of this Agreement.
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(b) The Company shall furnish to the Trustee and the Collateral Agent,
at such time as required by Section 314(b) of the TIA, Opinion(s) of Counsel
either (i) substantially to the effect that, in the opinion of such counsel, the
grant of a Lien in the Collateral intended to be made by the Security Documents
and all other instruments of further assurance, including, without limitation,
financing statements, have been properly recorded and filed to the extent
necessary to perfect the Lien in the Collateral created by the Security
Documents and reciting the details of such action, and stating that as to the
Liens created pursuant to the Security Documents, such recordings and filings
are the only recordings and filings necessary to give notice thereof and that no
re-recordings or refilings are necessary to maintain such notice (other than as
stated in such opinion), or (ii) to the effect that, in the opinion of such
counsel, no such action is necessary to perfect such Lien.
(c) To the extent required by the TIA, the Company shall furnish to the
Trustee and the Collateral Agent on July 1 in each year, beginning with 2002, an
Opinion of Counsel, dated as of such date, either (i)(A) stating that, in the
opinion of such counsel, action has been taken with respect to the recording,
filing, re-recording and refiling of all supplemental mortgages, financing
statements, continuation statements and other documents as is necessary to
maintain the Lien of the Security Documents and reciting with respect to the
Lien in the Collateral the details of such action or referring to prior Opinions
of Counsel in which such details are given, and (B) stating that, based on
relevant laws as in effect on the date of such Opinion of Counsel, all financing
statements, continuation statements and other documents have been executed and
filed that are necessary as of such date and during the succeeding 24 months
fully to maintain the Lien of the Collateral Agent under the Security Documents
with respect to the Collateral, or (ii) stating that, in the opinion of such
counsel, no such action is necessary to maintain such Lien.
Section 6.14 No Impairment. The terms of this Agreement and the rights
of each Creditor in the Collateral and the obligations of the other Creditors
arising hereunder shall not be affected, modified or impaired in any manner or
to any extent by (i) any amendment or modification of or supplement to any of
the Principal Agreements, Security Documents, or any agreement, instrument or
document executed or delivered pursuant thereto, (ii) any lack of validity or
enforceability of any of the Principal Agreements, Security Documents, or other
agreements, instrument or documents referred to in clause (i) above, (iii) the
exercise of or failure to exercise any right, power or remedy under or in
respect of the Obligations or any of the Principal Agreements, Security
Documents, or other agreements, instruments or documents referred to in clause
(i) above arising at law, or (iv) any waiver, consent, release, indulgence,
extension, renewal, modification, delay or other action, inaction or omission
(other than in accordance with the provisions of this Agreement) in respect of
the Obligations or any of the Principal Agreements, Security Documents, or other
agreements, instruments or documents referred to in clause (i) above or in
respect of any of the properties or assets now or hereafter constituting
Collateral, whether or not the other Creditors shall have had notice or
knowledge of any of the foregoing and whether or not they shall have consented
thereto.
Section 6.15 Status of Obligations. Each Obligor, the Collateral Agent
and each of the Creditors represents and warrants to each of the other parties
hereto that this Agreement has been duly authorized, executed and delivered by
such representing and warranting party and is the legal, valid, binding and
enforceable obligation of such party, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and subject to general equitable principles,
including without limitation the principle that
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equitable remedies, such as the remedy of specific performance, are subject to
the discretion of the court.
Section 6.16 Counterclaims and Defenses by Obligors. Each Obligor
agrees that it will not assert against the Collateral Agent (in its capacity as
such) or the Creditors as a group any claim, defense, counterclaim, recoupment
or right of set-off which it may have solely against one or more (but not all)
of the Creditors (other than against the Collateral Agent in its capacity as
such), nor will such Obligor assert against any one of the Creditors any claim,
defense, counterclaim, recoupment or right of set-off which it may have solely
against another of the Creditors. Nothing in this Section 6.16 shall limit any
other waiver of claims, defenses, counterclaims, recoupments or rights of
set-off any Obligor may have made in any Transaction Document.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGES FOLLOW.]
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IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
CREDITORS:
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Collateral Agent
By:
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
[Intercreditor Agreement - Signature Page 1]
34
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Title: Vice President
[Intercreditor Agreement - Signature Page 2]
35
Each Obligor hereby executes this Agreement to evidence its agreement that:
1. It shall be bound by all of the terms and provisions of this
Agreement.
2. It acknowledges and agrees that the terms of this Agreement
shall control over the terms of the Security Documents to the
extent of any conflict relating to the relative rights of the
Creditors.
3. THE INDEMNITY AND REIMBURSEMENT PROVISIONS CONTAINED IN
SECTION 6.05 SHALL APPLY TO ALL MATTERS UNDER THIS AGREEMENT
AND EACH OBLIGOR JOINTLY AND SEVERALLY AGREES TO INDEMNIFY AND
REIMBURSE THE INDEMNITEES IN ACCORDANCE WITH THE TERMS
THEREOF.
4. Except as stated in Section 6.03 hereof, the terms and
provisions of this Agreement shall inure solely to the benefit
of the each Creditor and its respective successors and assigns
and the terms and provisions of this Agreement shall not inure
to the benefit of nor be enforceable by any Obligor. This
Agreement may be amended as provided herein without the
necessity of any Obligor joining in any such amendment,
provided, that no Obligor shall be bound by any amendment
which would have the effect of increasing its Obligations and
indemnities hereunder or materially affecting its rights or
duties under the Security Documents unless it shall have
consented to such amendment.
5. The Company hereby covenants and agrees to cause each new
Obligor to execute a supplemental
Intercreditor and Collateral
Agency Agreement in the form of Annex 2 hereto.
6. It at its expense will execute, acknowledge and deliver all
such agreements and instruments and take all such action as
the Collateral Agent or any Creditor from time to time may
reasonably request in order to further effectuate the purposes
of this Agreement and to carry out the terms hereof.
TRI-UNION DEVELOPMENT CORPORATION
By:
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chief Executive Officer
TRIBO PETROLEUM CORPORATION
By:
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chief Executive Officer
[Intercreditor Agreement - Signature Page 3]
36
TRI-UNION OPERATING COMPANY
By:
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chief Executive Officer
[Intercreditor Agreement - Signature Page 4]
37
BANK OF AMERICA, N.A.,
as Approved Hedge Counterparty
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
[Intercreditor Agreement - Signature Page 5]