EXHIBIT 10.4
INTERCREDITOR AND SUBORDINATION AGREEMENT
DATED AS OF JUNE 29, 2001
AMONG
BNP PARIBAS,
AS ADMINISTRATIVE AGENT,
THE LENDERS,
AQUILA ENERGY CAPITAL CORPORATION
AND
ATP OIL & GAS CORPORATION
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS....................................................... 2
Section 1.01. Terms Defined Above and in the Recitals........................... 2
Section 1.02. Credit Agreement Definitions...................................... 2
Section 1.03. Other Definitions................................................. 2
Section 1.04. Singular and Plural............................................... 3
Section 1.05. Miscellaneous..................................................... 3
ARTICLE II PAYMENT AND LIEN PRIORITIES....................................... 4
Section 2.01. Agreement to Subordinate.......................................... 4
Section 2.02. Payment on the Subordinated Liabilities........................... 4
Section 2.03. Priority of Liens................................................. 4
Section 2.04. Liens of Subordinated Creditor Held to Secure Senior Liabilities.. 5
ARTICLE III ACTIONS OF THE PARTIES; ENFORCEMENT OF PRIORITIES................. 5
Section 3.01. Limitation on Certain Actions by the Subordinated Creditor........ 5
Section 3.02. Change in or Disposition of Subordinated Liabilities.............. 6
Section 3.03. In Furtherance of Subordination................................... 6
Section 3.04. Payments Held in Trust............................................ 7
Section 3.05. Enforcement of Senior Liens....................................... 7
Section 3.06. Releases of Subordinate Liens..................................... 7
Section 3.07. Amendment of Subordinated Creditor Documents...................... 7
Section 3.08. Specific Performance.............................................. 7
Section 3.09. Legal Opinion..................................................... 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES.................................... 8
Section 4.01. Subordinated Creditor's Representations and Warranties............ 8
Section 4.02. Administrative Agent's and Lenders' Representations and Warranties 8
ARTICLE V MISCELLANEOUS..................................................... 9
Section 5.01. Rights of Subrogation............................................. 9
Section 5.02. Final Payment of Senior Liabilities and Basis of Subrogation...... 9
Section 5.03. Subordination Reference; Further Assurances....................... 10
Section 5.04. Defenses Similar to Suretyship Defenses........................... 10
Section 5.05. Waiver............................................................ 11
Section 5.06. Amendments, Etc................................................... 11
Section 5.07. Expenses.......................................................... 11
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Section 5.08. Addresses for Notices............................................. 11
Section 5.09. No Waiver; Remedies............................................... 12
Section 5.10. Continuing Agreement; Transfer of Senior Notes.................... 12
Section 5.11. Governing Law; Entire Agreement................................... 12
Section 5.12. Counterparts...................................................... 12
Section 5.13. No Third Party Beneficiary........................................ 12
Section 5.14. Headings.......................................................... 12
Section 5.15. Severability...................................................... 12
Section 5.16. Nominee for Perfection of Lien on Stock........................... 12
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INTERCREDITOR AND SUBORDINATION AGREEMENT
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This Intercreditor and Subordination Agreement dated as of June 29, 2001
(this "Agreement") is made by and among BNP PARIBAS (the "Administrative
Agent"), the LENDERS (as defined in Recital A below), and AQUILA ENERGY CAPITAL
CORPORATION (the "Subordinated Creditor") and ATP OIL & GAS CORPORATION (the
"Borrower").
R E C I T A L S
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A. The Borrower, the Administrative Agent, and the lenders party thereto
(the "Lenders") have entered into a Credit Agreement dated as of April 27, 2001
(as the same has been or may be from time to time amended, supplemented,
restated or otherwise modified, the "Credit Agreement") pursuant to which each
Lender has agreed, upon the terms and conditions stated therein, to make loans
and extend credit to the Borrower.
B. To secure the Senior Liabilities (as defined in Section 1.03), the
Borrower has granted Liens (as defined in the Credit Agreement) in certain of
its assets (together with any assets now or hereafter owned by the Borrower in
which a Lien is granted or attaches to secure the Senior Liabilities, the
"Collateral") in favor of the Administrative Agent pursuant to security
agreements, mortgages, deeds of trust, pledge agreements and collateral
assignments (collectively and together with any related financing statements,
and any other security agreements, mortgages, deeds of trust, pledges and other
collateral assignments or agreements now existing or hereafter executed to
secure the Senior Liabilities (as defined in Section 1.03), the "Senior Security
Instruments"), which Senior Security Documents encumber, among others, the
assets described in those certain mortgages and deeds of trust filed of record
as set forth on Schedule I attached hereto.
C. The Borrower and the Subordinated Creditor have entered into that
certain Note Purchase Agreement dated as of June 29, 2001 (as the same may be
amended, supplemented, restated or otherwise modified from time to time, the
"Note Purchase Agreement"), pursuant to which the Borrower, in accordance with
the provisions thereof, owes or may owe to the Subordinated Creditor up to
$34,320,000, plus interest and other fees and costs due thereunder.
D. As a condition to the Note Purchase Agreement, the Borrower agreed,
pursuant to mortgages, deeds of trust, collateral assignments, pledges and
security agreements (such documents together with any related financing
statements, the "Subordinated Security Instruments"), to grant second priority
Liens in the Collateral in favor of the Subordinated Creditor to secure the
Subordinated Liabilities (as defined in Section 1.03), and subject to the terms
of this Agreement, the Administrative Agent and the Lenders agree to such second
priority Liens.
E. One of the conditions of the Credit Agreement is that the indebtedness,
liabilities and obligations of the Borrower to the Lenders under the Credit
Agreement and the other Senior Loan Documents (as defined in Section 1.03), and
the Liens in the Collateral under the Senior Security Instruments, be senior to
the indebtedness, liabilities and obligations of the Borrower to
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the Subordinated Creditor under the Subordinated Creditor Documents (as defined
in Section 1.03), and to the Liens in the Collateral under the Subordinated
Security Instruments, all in the manner and to the extent provided in this
Agreement.
F. The Lenders, the Administrative Agent and the Subordinated Creditor
desire to enter into this Agreement concerning the various loans, credits and
other liabilities (actual or contingent) for which the Borrower is or shall be
obligated and the terms on which the Borrower shall pay or repay such
obligations, and the respective rights of the Lenders, the Administrative Agent
and the Subordinated Creditor with respect to the Collateral.
G. In order to induce the Lenders and the Administrative Agent to approve
the Subordinated Liabilities and the Subordinated Creditor's Liens in the
Collateral as set forth in the Subordinated Security Instruments, the
Subordinated Creditor has agreed to enter into this Agreement.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Terms Defined Above and in the Recitals. As used in this
Agreement, the terms defined in the opening paragraph hereof and in the above
Recitals shall have the meanings given to such terms therein.
Section 1.02. Credit Agreement Definitions. All capitalized terms which are
used but not defined herein shall have the same meaning as in the Credit
Agreement.
Section 1.03. Other Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below:
"Creditor Documents" shall mean this Agreement, the Senior Loan Documents
and the Subordinated Creditor Documents.
"Insolvency Proceeding" shall mean any proceeding for the purposes of
dissolution, winding up, liquidation, arrangement or reorganization of the
Borrower or its successors or assigns, whether in bankruptcy, insolvency,
arrangement, reorganization or receivership proceedings or upon an assignment
for the benefit of creditors or any other marshaling of the assets and
liabilities of the Borrower or its successors or assigns.
"Lien Priority" shall mean with respect to any Lien of the Administrative
Agent, the Lenders or the Subordinated Creditor in the Collateral, the order of
priority of such Lien as specified in Section 2.01.
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"Party" shall mean any signatory to this Agreement.
"Payment Blocking Period" means a period of time which begins on the date
that either the Administrative Agent or the Subordinated Creditor shall have
given to the other of such Parties written notice (a "Blocking Notice") of the
occurrence of a Default (as defined in the Credit Agreement) or an Event of
Default (as defined in the Note Purchase Agreement) and shall continue until the
earliest of (a) the date all Defaults or Events of Default cease to exist, or
have been waived or cured, (b) the Senior Liabilities have been indefeasibly
paid in full and the Commitments under the Credit Agreement have been canceled
or (c) the date which is 180 days after the date that the Blocking Notice is
given, provided that, not more than one such blocking period shall exist in any
360 day period.
"Payment Priority" shall mean with respect to any of the Senior Liabilities
or the Subordinated Liabilities, the order of priority in which such liabilities
are to be repaid by the Borrower, as specified in Article 2.
"Senior Liabilities" shall mean the "Obligations" as defined in the Credit
Agreement, including any reasonable costs or expenses incurred by Administrative
Agent and the Lenders subsequent to the execution and delivery of this Agreement
in connection with the performance and/or enforcement of this Agreement by such
party.
"Senior Loan Documents" shall mean the "Loan Documents", as defined or
referred to in the Credit Agreement, as any or all of the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Senior Notes" shall mean the promissory notes executed by the Borrower in
favor of the Lenders pursuant to the Credit Agreement.
"Subordinated Creditor Documents" shall mean the "Transaction Documents",
as defined or referred to in the Note Purchase Agreement, as any or all of the
same may be amended, supplemented, restated or otherwise modified from time to
time.
"Subordinated Liabilities" shall mean the "Obligations" as defined in the
Note Purchase Agreement including any reasonable costs or expenses incurred by
Subordinated Creditor subsequent to the execution and delivery of this Agreement
in connection with the performance and/or enforcement of this Agreement by such
party.
"Substitute Senior Liens" shall have the meaning set forth in Section 2.04.
Section 1.04. Singular and Plural. All definitions herein (whether set
forth herein directly or by reference to definitions in other documents) shall
be equally applicable to both the singular and the plural forms of the terms
defined.
Section 1.05. Miscellaneous. The words "hereof", "herein" or "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Article and section references are to articles and
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sections of this Agreement unless otherwise specified. The term "including"
shall mean "including, without limitation".
ARTICLE II
PAYMENT AND LIEN PRIORITIES
Section 2.01. Agreement to Subordinate. The Parties agree that, except as
provided in Section 2.02, the Subordinated Liabilities are and shall be
subordinate in right of payment to the prior payment in full of all of the
Senior Liabilities. For the purposes of this Agreement, the Senior Liabilities
shall not be deemed to have been paid in full until the Lenders shall have
received indefeasible payment of the Senior Liabilities in cash and the
Commitments under the Credit Agreement have been canceled. The Subordinated
Creditor hereby agrees that the Liens of the Subordinated Creditor in the
Collateral are and shall be subordinate in priority to the Liens of the
Administrative Agent in the Collateral. The subordination of payment and Liens
in favor of the Administrative Agent and the Lenders herein shall not be deemed
to subordinate the Subordinated Creditor's rights of payment and its Liens to
the rights of payment or Liens of any other Person.
Section 2.02. Payment on the Subordinated Liabilities. The Subordinated
Creditor agrees not to ask, demand, ▇▇▇ for, take or receive from the Borrower,
directly or indirectly, in cash or other property or by set-off or in any other
manner (including from or by way of Collateral), payment of all or any of the
Subordinated Liabilities unless and until the Senior Liabilities shall have been
indefeasibly paid in full and the Commitments under the Credit Agreement have
been canceled, except as permitted by Section 3.01(b); provided, however, that
if the Administrative Agent does not do so pursuant to its rights hereunder
after ten days' prior written request from the Subordinated Creditor, then the
Subordinated Creditor may make such demands or file such claims in respect of
the Subordinated Liabilities as may be necessary to prevent the waiver or bar of
such claims under applicable statutes of limitations, court orders or rules of
procedure, but the Subordinated Creditor shall not take any actions restricted
by Article 3 in respect of such claims until the Senior Liabilities are
indefeasibly paid in full. Notwithstanding the foregoing, (i) if no Payment
Blocking Period is in effect and (ii) if there has been a Payment Blocking
Period that has expired and no Default that resulted from non-payment of any
Senior Liabilities which existed during such expired Payment Blocking Period is
continuing, then the Subordinated Creditor may receive and retain, and the
Borrower may pay, scheduled interest payments on the Subordinated Liabilities.
Any payments received by the Subordinated Creditor in violation of the preceding
sentence are subject to the provisions of Section 3.04.
Section 2.03. Priority of Liens. Any Lien that the Subordinated Creditor
now has or hereafter acquires in the Collateral (whether such Collateral is now
owned or hereafter acquired by the Borrower), created as security for the
Subordinated Liabilities, is and shall be subordinate and inferior in every
respect to any Lien that the Administrative Agent now has or hereafter acquires
in the Collateral (whether such Collateral is now owned or hereafter acquired by
the Borrower), created as security for the Senior Liabilities. The priorities
specified herein with respect to the Liens are applicable irrespective of the
time or order of creation, attachment or
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perfection of the Liens or the time or order of filing of the Senior Security
Instruments and the Parties agree among themselves that their respective Liens
in the Collateral shall be governed by the Lien Priority, which shall be
controlling in the event of any conflict between this Agreement and any of the
Creditor Documents.
Section 2.04. Liens of Subordinated Creditor Held to Secure Senior
Liabilities. At any time prior to the indefeasible payment in full of the Senior
Liabilities and the cancellation of the Commitments under the Credit Agreement,
to the extent the Subordinated Creditor has been granted, and holds, valid Liens
in any assets of the Borrower or any Subsidiary in which the Administrative
Agent has not been granted a Lien to secure the Senior Liabilities, or for any
reason whatsoever, the Lien of the Administrative Agent in any such assets fails
to be effective or perfected (collectively, the "Substitute Senior Liens"), any
proceeds (net of the costs of obtaining such proceeds, whether by foreclosure,
realization or otherwise) obtained by the Subordinated Creditor or any other
Person on behalf of the Subordinated Creditor (i) pursuant to an Insolvency
Proceeding, (ii) in connection with the foreclosure of or realization upon the
Senior Substitute Liens or (iii) otherwise arising out of the assets encumbered
by the Senior Substitute Liens shall be paid to the Administrative Agent for
application to the Senior Liabilities.
ARTICLE III
ACTIONS OF THE PARTIES; ENFORCEMENT OF PRIORITIES
Section 3.01. Limitation on Certain Actions by the Subordinated Creditor.
So long as the Senior Liabilities remain unpaid, the Subordinated Creditor (or
any other Person acting in behalf of the Subordinated Creditor) will not,
without the prior written consent of the Administrative Agent, take any of the
following actions:
(a) Contest in any manner, or bring (or voluntarily join in) any action
or proceeding (including an Insolvency Proceeding) for the purpose of
contesting the creation, legality, validity, perfection, enforceability, or
priority (as herein provided) of, or seeking to avoid, any Lien granted to
the Administrative Agent in the Collateral.
(b) Except after a Payment Blocking Period has been initiated, such
Payment Blocking Period has expired while Events of Default are continuing
and no new Payment Blocking Period is in effect, initiate, prosecute, or
participate in any action or take any other steps to (i) enforce any rights
or remedies (under any Subordinated Creditor Document, at law or in equity)
against, foreclose, or otherwise realize upon any of the Collateral, (ii)
enforce any judgment obtained against the Borrower against any of the
Collateral, (iii) commence receivership or foreclosure proceedings against
or otherwise sell, collect or dispose of any Collateral or (iv) notify any
account debtors to make payment directly to the Subordinated Creditor or
any of its agents or other Persons acting on its behalf.
(c) Commence, or join with any creditor other than the Lenders in
commencing, any Insolvency Proceeding.
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(d) Take any action, or request the Borrower to take any action, that is
inconsistent with the Lenders' or the Administrative Agent's Liens under
the Senior Loan Documents.
(e) Take any Liens in the Borrower's property not permitted under the
Senior Loan Documents or this Agreement.
Section 3.02. Change in or Disposition of Subordinated Liabilities. The
Subordinated Creditor will not:
(a) Cancel or otherwise discharge any of the Subordinated Liabilities
(except upon payment in full of the Senior Liabilities paid to the Lenders
as contemplated by Section 2.02) or subordinate any of the Subordinated
Liabilities to any indebtedness of the Borrower other than the Senior
Liabilities.
(b) Sell, assign, pledge, encumber or otherwise dispose of any of the
Subordinated Liabilities unless such sale, assignment, pledge, encumbrance
or disposition is made expressly subject to this Agreement.
(c) Permit the terms of any of the Subordinated Liabilities to be
changed in such a manner as to have an adverse effect upon the rights or
interests of the Administrative Agent or the Lenders hereunder.
Section 3.03. In Furtherance of Subordination. The Subordinated Creditor
agrees as follows:
(a) Any distribution of all or any of the assets of the Borrower to
creditors of the Borrower (whether in cash, securities or other property)
in connection with any Insolvency Proceeding that otherwise would be
payable or deliverable upon or with respect to the Subordinated Liabilities
shall be paid or delivered directly to the Administrative Agent for
application (in the case of cash) to or as collateral (in the case of
securities or other non-cash property) for the payment or prepayment of the
Senior Liabilities until the Senior Liabilities shall have been paid in
full.
(b) If any Insolvency Proceeding is commenced by or against the
Borrower:
(i) The Subordinated Creditor will file all claims and proofs of
claims relating to the Subordinated Liabilities not later than 10 days
prior to the bar date for filing such claims and proofs of claims. If
the Subordinated Creditor fails to file such claim or proof of claim by
such date, the Administrative Agent is hereby irrevocably authorized and
empowered (as the agent and attorney in fact for the Subordinated
Creditor), to file such claims and proofs of claim on behalf of the
Subordinated Creditor.
(ii) If any Plan of Reorganization or other adjustment of debts is
subject to a vote of Borrower's creditors, the Subordinated Creditor
agrees not to
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vote its claims in favor of any such Plan or other adjustment of debts
that would render this Agreement, or any material provision hereof,
unenforceable or otherwise invalidate or nullify this Agreement or any
material provision hereof.
Section 3.04. Payments Held in Trust. All payments or distributions upon or
with respect to the Subordinated Liabilities which are received by the
Subordinated Creditor contrary to the provisions of this Agreement shall be
received in trust for the benefit of the Lenders, shall be segregated from other
funds and property held by the Subordinated Creditor and shall be forthwith paid
over to the Administrative Agent in the same form as so received (with any
necessary endorsement) to be applied (in the case of cash) to or held as
collateral (in the case of non-cash property or securities) for the payment or
prepayment of the Senior Liabilities in accordance with the terms of the Credit
Agreement.
Section 3.05. Enforcement of Senior Liens. The Administrative Agent may
from time to time in its sole discretion exercise and enforce any or all of its
rights, remedies, privileges and powers under the Senior Loan Documents, at law
or in equity, as the Administrative Agent or any Lenders in their sole
discretion may determine to be necessary or appropriate (including the making of
any sale, transfer, or other disposition of all or any portion of the Collateral
upon the occurrence of an Event of Default, whether or not in the possession of
the Administrative Agent, pursuant to foreclosure proceedings or otherwise, and
the collecting and applying towards payment of the Senior Liabilities the
proceeds and earnings thereof), in any order and manner the Administrative Agent
chooses and without any consent of or notice to, the Subordinated Creditor;
provided, that without limiting the foregoing, the Administrative Agent may
exhaust its remedies with respect to the Collateral before exercising any such
rights, remedies, powers, and privileges with respect to any other security for
or guaranty of any Senior Liabilities. The Subordinated Creditor agrees that it
shall not interfere with or challenge in any manner the exercise by the
Administrative Agent of any such rights, remedies, powers, or privileges, and
neither the Administrative Agent nor any of the Lenders shall be accountable or
liable to the Subordinated Creditor in any manner as a result of the exercise by
the Administrative Agent or the Lenders pursuant to the terms of this Agreement
or any of the other Senior Loan Documents, of any such right, remedy, power, or
privilege, or the direct or indirect consequences thereof.
Section 3.06. Releases of Subordinate Liens. Upon an arm's length sale for
fair market value of any assets of the Borrower subject to a Lien in favor of
the Subordinated Creditor, the Subordinated Creditor agrees to release or cancel
its Liens with respect to such assets and, at the expense of the Borrower, shall
execute and deliver concurrently with the consummation of such sale such
instruments of release or cancellation as may be appropriate.
Section 3.07. Amendment of Subordinated Creditor Documents. Without the
prior written consent of the Administrative Agent, the Subordinated Creditor and
the Borrower will not amend, supplement, restate or otherwise modify any of the
Subordinated Creditor Documents in any manner that could reasonably be expected
to adversely effect the Lenders.
Section 3.08. Specific Performance. The Administrative Agent is hereby
authorized to demand specific performance of this Agreement, whether or not the
Borrower shall have complied with any of the provisions hereof applicable to it,
at any time when the Subordinated
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Creditor shall have failed to comply with any of the provisions of this
Agreement applicable to it. The Subordinated Creditor hereby irrevocably waives
any defense based on the adequacy of a remedy at law, which might be asserted as
a bar to such remedy of specific performance.
Section 3.09. Legal Opinion. The Subordinated Creditor shall deliver an
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel to the Subordinated Creditor,
addressing such matters as may reasonably be requested by the Administrative
Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Subordinated Creditor's Representations and Warranties. The
Subordinated Creditor hereby represents and warrants that as of the date of this
Agreement:
(a) the Subordinated Creditor owns the Subordinated Liabilities free and
clear of any Lien;
(b) there exists no default in respect of any Subordinated Liabilities;
(c) it has all requisite corporate power and authority to enter into
this Agreement;
(d) the execution, delivery, and performance by it of this Agreement
have been duly authorized by all necessary action on its part and, to the
knowledge of the Subordinated Creditor, do not and will not violate any
provision of any law or any governmental rule or regulation applicable to
it, its charter documents or bylaws or any order, judgment, or decree of
any court or other agency of government binding on it; and
(e) this Agreement constitutes its valid, binding and enforceable
obligations, enforceable against it in accordance with the terms hereof,
except to the extent such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors' rights generally and by general principles of equity.
Section 4.02. Administrative Agent's and Lenders' Representations and
Warranties. Each of the Administrative Agent and the Lenders hereby represents
and warrants that as of the date of this Agreement:
(a) the Lenders own the Senior Liabilities free and clear of any Lien;
(b) there exists no default in respect of any Senior Liabilities;
(c) it has all requisite corporate power and authority to enter into
this Agreement;
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(d) the execution, delivery, and performance by it of this Agreement
have been duly authorized by all necessary action on its part and, to its
knowledge do not and will not violate any provision of any law or any
governmental rule or regulation applicable to it, its charter documents or
bylaws or any order, judgment, or decree of any court or other agency of
government binding on it; and
(e) this Agreement constitutes its valid, binding and enforceable
obligations, enforceable against it in accordance with the terms hereof,
except to the extent such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors' rights generally and by general principles of equity.
ARTICLE V
MISCELLANEOUS
Section 5.01. Rights of Subrogation. The Subordinated Creditor agrees that
no payment or distribution to the Administrative Agent or the Lenders pursuant
to the provisions of this Agreement shall entitle the Subordinated Creditor to
exercise any rights of subrogation in respect thereof until the Senior
Liabilities shall have been indefeasibly paid in full and the Commitments under
the Credit Agreement have been canceled.
Section 5.02. Final Payment of Senior Liabilities and Basis of Subrogation.
Borrower, Administrative Agent, the Lenders and the Subordinated Creditor agree
that where the phrases "indefeasible payment in full of the Senior Liabilities"
or "Senior Liabilities shall have been indefeasibly paid in full," or words to
that effect are used in this Agreement, it means that: (a) the Administrative
Agent and the Lenders have received, in the aggregate, payment of amounts,
either directly from the Borrower, through foreclosure of liens and/or security
interests on the Collateral, and/or from payments made by the Subordinated
Creditor pursuant to this Agreement that are sufficient to have fully repaid the
amount of the Senior Liabilities, (b) that the Lenders and the Administrative
Agent are indefeasibly entitled to retain all such payments, and (c) that the
Lenders' Commitment to advance any funds to the Borrower that would constitute
Senior Liabilities has been terminated or cancelled. Upon indefeasible payment
in full of the Senior Liabilities, to the extent that any such payment received
by the Administrative Agent and/or the Lenders was made or turned over by the
Subordinated Creditor pursuant to this Agreement and/or was derived from
foreclosure pursuant to any of the Subordinated Security Documents (collectively
the "Transferred Payments"), the aggregate amount of any such Transferred
Payments shall, at the option of the Subordinated Creditor, be deemed to
constitute either unpaid Subordinated Liabilities for which the Subordinated
Creditor may pursue its rights and remedies with respect to such Subordinated
Liabilities and the related Subordinated Security Documents, or alternatively,
unpaid Senior Liabilities with respect to which the Subordinated Creditor may
exercise its subrogation rights pursuant to Section 5.01 to pursue the rights
and remedies of the Administrative Agent and the other Lenders with respect to
such unpaid Senior Liabilities and the Senior Security Instruments securing
same.
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Section 5.03. Subordination Reference; Further Assurances. The Subordinated
Creditor will cause each Subordinated Creditor Document or instrument evidencing
the Subordinated Liabilities to reference this Agreement or otherwise be
endorsed with substantially the following legend:
"The indebtedness, liabilities and obligations described herein or
evidenced hereby are subordinated to the prior payment in full of the
Senior Liabilities (as defined in the Intercreditor and Subordination
Agreement hereinafter referred to) pursuant to, and to the extent provided
in, the Intercreditor and Subordination Agreement dated as of June 29, 2001
among BNP Paribas, the Lenders, Aquila Energy Capital Corporation and ATP
Oil & Gas Corporation."
The Subordinated Creditor will further ▇▇▇▇ its books of account in such a
manner as shall be effective to give proper notice of the effect of this
Agreement and will, in the case of any the Subordinated Liabilities which are
not evidenced by any instrument, upon the Administrative Agent's request cause
such the Subordinated Liabilities to be evidenced by an appropriate instrument
or instruments endorsed with the above legend. The Subordinated Creditor will,
at its expense and at any time and from time to time, promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Administrative Agent may reasonably
request, in order to protect any right or interest granted or purported to be
granted hereby or to enable the Administrative Agent and the Lenders to exercise
and enforce their rights and remedies hereunder and under any Senior Loan
Document.
Section 5.04. Defenses Similar to Suretyship Defenses. All rights and
interests of the Administrative Agent and the Lenders hereunder, and all
agreements and obligations of the Subordinated Creditor under this Agreement,
shall remain in full force and effect irrespective of:
(a) Any lack of validity or enforceability of the Credit Agreement or
any other Senior Loan Document.
(b) Any change in the time, manner or place of payment of, or in any
other term of, all or any of the Senior Liabilities, or any other amendment
or waiver of or any consent to departure from the Credit Agreement or any
other Senior Loan Document.
(c) Any exchange, release or non-perfection of any Collateral, or any
release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Senior Liabilities.
(d) Any failure, omission, delay or lack on the part of the
Administrative Agent or the Lenders to enforce, assert or exercise any
right, power or remedy conferred on any of them in any of the Senior Loan
Documents or this Agreement or the inability of the Administrative Agent or
the Lenders to enforce any provision of the Senior Loan Documents or this
Agreement.
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(e) The failure of the Administrative Agent to give notice to the
Subordinated Creditor of a Default or of any act or omission of the
Borrower in regard to the Senior Loan Documents.
(f) Any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Borrower in respect of the Senior
Liabilities or the Subordinated Creditor in respect of this Agreement.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Senior Liabilities is rescinded or
must otherwise be returned by the Administrative Agent or any of the Lenders
upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
all as though such payment had not been made.
Section 5.05. Waiver.
(a) With Respect to Senior Liabilities and Collateral. The Subordinated
Creditor hereby waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the Senior Liabilities and this
Agreement and any requirement that the Administrative Agent or the Lenders
protect, secure, perfect or insure any Lien or any property subject thereto
or exhaust any right or take any action against the Borrower or any other
Person or any Collateral.
(b) Rights of Set-Off. Until the Senior Liabilities have been
indefeasibly paid in full and the Commitments under the Credit Agreement
have been canceled, the Subordinated Creditor hereby waives, and agrees not
to exercise, any rights of set-off, counterclaim or other similar rights
that it may have against the Borrower for any amounts owed by the Borrower
to the Subordinated Creditor, whether such amounts arise pursuant to a
Subordinated Creditor Document or otherwise.
Section 5.06. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Subordinated Creditor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent and the Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 5.07. Expenses. The Subordinated Creditor agrees to pay, upon
demand, to the Administrative Agent the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel, which the
Administrative Agent or the Lenders may incur in connection with the contested
exercise or enforcement of any of its rights or interests hereunder.
Section 5.08. Addresses for Notices. All demands, notices and other
communications provided for hereunder shall be in writing and, mailed or sent by
facsimile or delivered to the address, as set forth below such parties'
signature on the signature pages of this Agreement, or as to any party at such
other address or facsimile number as shall be designated by such party in a
written notice to the other parties complying as to delivery with the terms of
this Section. All such demands, notices and other communications shall be
effective, when mailed, two business
11
days after deposit in the mails, postage prepaid, when sent by facsimile, when
receipt is acknowledged by the receiving equipment (or at the opening of the
next business day if receipt is after normal business hours), or when delivered,
as the case may be, addressed as aforesaid.
Section 5.09. No Waiver; Remedies. No failure on the part of the
Administrative Agent or the Lenders to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 5.10. Continuing Agreement; Transfer of Senior Notes. This
Agreement is a continuing agreement and shall (i) remain in full force and
effect until the Senior Liabilities shall have been paid in full, (ii) be
binding upon the Subordinated Creditor and its successors and assigns, and (iii)
inure to the benefit of and be enforceable by the Administrative Agent, the
Lenders and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (iii), any of the Lenders may
assign or otherwise transfer its Senior Note and rights and obligations under
the Senior Loan Documents, to any other Person, and such other Person shall
thereupon become vested with all the rights in respect thereof granted to such
Lender herein or otherwise.
Section 5.11. Governing Law; Entire Agreement. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of Texas.
This Agreement constitutes the entire agreement and understanding among the
Parties with respect to the subject matter hereof and supersedes any prior
agreements, written or oral, with respect thereto.
Section 5.12. Counterparts. This Agreement may be executed in any number of
counterparts, and it is not necessary that the signatures of all Parties be
contained on any one counterpart hereof; each counterpart will be deemed to be
an original, and all together shall constitute one and the same document.
Section 5.13. No Third Party Beneficiary. This Agreement is solely for the
benefit of the Parties (and their permitted assignees). No other Person shall be
deemed to be a third party beneficiary of this Agreement.
Section 5.14. Headings. The headings of the articles and sections of this
Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.
Section 5.15. Severability. If any of the provisions in this Agreement
shall, for any reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement and shall not invalidate the Payment Priority or
Lien Priority set forth in this Agreement.
Section 5.16. Nominee for Perfection of Lien on Stock. The Administrative
Agent holds in its possession .65 shares of the common stock of ATP Oil & Gas
(UK) Limited (the "Pledged Shares") to perfect its security interest in such
Pledged Shares. Administrative Agent
12
agrees, subject to all of its rights and all of Subordinated Creditor's
obligations under this Agreement, that it also holds such Pledged Shares as
nominee on behalf of Subordinated Creditor to perfect Subordinated Creditor's
security interest in such Pledged Shares, subject to the Lien Property.
[SIGNATURES BEGIN ON NEXT PAGE]
13
IN WITNESS WHEREOF, the Lenders, the Administrative Agent and the
Subordinated Creditor each has caused this Agreement to be duly executed and
delivered as of the date first above written.
ADMINISTRATIVE AGENT:
WITNESSES: BNP PARIBAS, INDIVIDUALLY AND
AS ADMINISTRATIVE AGENT
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
------------------------ --------------------------------------------
Printed Name: Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------ --------------------------------------------
Printed Name: Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 713.659.6915
Telephone No.: ▇▇▇.▇▇▇.▇▇▇▇
S-1
LENDER:
WITNESSES: UNION BANK OF CALIFORNIA, N.A.
By:
------------------------ --------------------------------------------
Printed Name: Name:
Title:
------------------------
Printed Name:
By:
--------------------------------------------
Name:
Title:
Address for Notices:
Energy Capital Services - Dallas ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 214.922.4209
Telephone No.: ▇▇▇.▇▇▇.▇▇▇▇
S-2
SUBORDINATED
CREDITOR:
WITNESS: AQUILA ENERGY CAPITAL CORPORATION
By:
------------------------ --------------------------------------------
Printed Name: Name:
Title:
------------------------ Address for Notices:
Printed Name: 909 Fannin, Suite ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.:
-------------------------------
Telephone No.:
-------------------------------
S-3
BORROWER:
WITNESSES: ATP OIL & GAS CORPORATION
By: /s/ T. ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------ -----------------------
Printed Name: ▇▇▇▇▇ ▇▇ Name: T. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
------------------------------ Address for Notices:
Printed Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 713.622.5101
Telephone No.: ▇▇▇.▇▇▇.▇▇▇▇
S-4
STATE OF TEXAS (S)
(S)
COUNTY OF ▇▇▇▇▇▇ (S)
LA. On this _____________ day of July, 2001, before me appeared ▇▇▇▇▇ ▇▇▇▇▇▇ to
me personally known, who, being by me duly sworn (or affirmed) did say that
she is the Vice President of BNP PARIBAS, a financial institution organized
under the laws of France, and that the instrument was signed in behalf of
the financial institution by authority of its Board of Directors (or
trustees) and that he/she acknowledged the instrument to be the free act
and deed of the financial institution, and that the financial institution
has no seal.
TX. This instrument was acknowledged before me this ____ day of July, 2001 by
▇▇▇▇▇ ▇▇▇▇▇▇, the Vice President of BNP PARIBAS, on behalf of said
financial institution.
In witness whereof I hereunto set my hand and official seal.
NOTARIAL SEAL:
____________________________________
Notary Public
STATE OF TEXAS (S)
(S)
COUNTY OF ▇▇▇▇▇▇ (S)
LA. On this _____________ day of July, 2001, before me appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
to me personally known, who, being by me duly sworn (or affirmed) did say
that he is the Vice President of BNP PARIBAS, a financial institution
organized under the laws of France, and that the instrument was signed in
behalf of the financial institution by authority of its Board of Directors
(or trustees) and that he/she acknowledged the instrument to be the free
act and deed of the financial institution, and that the financial
institution has no seal.
TX. This instrument was acknowledged before me this ____ day of July, 2001 by
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the Vice President of BNP PARIBAS, on behalf of said
corporation.
In witness whereof I hereunto set my hand and official seal.
NOTARIAL SEAL:
____________________________________
Notary Public
S-5
STATE OF TEXAS (S)
(S)
COUNTY OF ___________ (S)
LA. On this _____________ day of July, 2001, before me appeared
________________________ to me personally known, who, being by me duly
sworn (or affirmed) did say that he/she is the _______________________ of
UNION BANK OF CALIFORNIA, N.A., a national banking association and that
the instrument was signed in behalf of the national banking association by
authority of its Board of Directors (or trustees) and that he/she
acknowledged the instrument to be the free act and deed of the national
banking association, and that the national banking association has no seal.
TX. This instrument was acknowledged before me this ____ day of July, 2001 by
______________________, the __________________________ of UNION BANK OF
CALIFORNIA, N.A., on behalf of said national banking association.
In witness whereof I hereunto set my hand and official seal.
NOTARIAL SEAL:
____________________________________
Notary Public
STATE OF TEXAS (S)
(S)
COUNTY OF ___________ (S)
LA. On this _____________ day of July, 2001, before me appeared
________________________ to me personally known, who, being by me duly
sworn (or affirmed) did say that he/she is the _______________________ of
UNION BANK OF CALIFORNIA, N.A., a national banking association and that
the instrument was signed in behalf of the national banking association by
authority of its Board of Directors (or trustees) and that he/she
acknowledged the instrument to be the free act and deed of the national
banking association, and that the national banking association has no seal.
TX. This instrument was acknowledged before me this ____ day of July, 2001 by
______________________, the __________________________ of UNION BANK OF
CALIFORNIA, N.A., on behalf of said national banking association.
In witness whereof I hereunto set my hand and official seal.
NOTARIAL SEAL:
____________________________________
Notary Public
S-6
STATE OF TEXAS (S)
(S)
COUNTY OF ▇▇▇▇▇▇ (S)
LA. On this _____________ day of July, 2001, before me appeared
________________________ to me personally known, who, being by me duly
sworn (or affirmed) did say that he/she is the _______________________ of
AQUILA ENERGY CAPITAL CORPORATION, a Delaware corporation, and that the
instrument was signed in behalf of the corporation by authority of its
Board of Directors (or trustees) and that he/she acknowledged the
instrument to be the free act and deed of the corporation, and that the
corporation has no seal.
TX. This instrument was acknowledged before me this ____ day of July, 2001 by
______________________, the _____________________ of AQUILA ENERGY CAPITAL
CORPORATION, on behalf of said corporation.
In witness whereof I hereunto set my hand and official seal.
NOTARIAL SEAL:
____________________________________
Notary Public
S-7
STATE OF TEXAS (S)
(S)
COUNTY OF ▇▇▇▇▇▇ (S)
LA. On this _____________ day of July, 2001, before me appeared T. ▇▇▇▇ ▇▇▇▇▇▇▇
to me personally known, who, being by me duly sworn (or affirmed) did say
that he is the President of ATP OIL & GAS CORPORATION, a Texas corporation
and that the instrument was signed in behalf of the corporation by
authority of its Board of Directors (or trustees) and that he/she
acknowledged the instrument to be the free act and deed of the corporation,
and that the corporation has no seal.
TX. This instrument was acknowledged before me this ____ day of July, 2001 by
T. ▇▇▇▇ ▇▇▇▇▇▇▇, the President of ATP OIL & GAS CORPORATION, on behalf of
said corporation.
In witness whereof I hereunto set my hand and official seal.
NOTARIAL SEAL:
____________________________________
Notary Public
S-8
SCHEDULE I
Act of Mortgage, Assignment of Production, Security Agreement, Fixture
Filing and Financing Statement dated as of April 27, 2001, from ATP Oil & Gas
Corporation covering oil and gas properties and filed in the following parishes
and jurisdictions:
JURISDICTION FILE NO. DATE FILED
---------------------------------------------------------------------------------------------------------------------
Minerals Management Service 4/27/01
---------------------------------------------------------------------------------------------------------------------
Cameron Parish, LA #269902 4/27/01
---------------------------------------------------------------------------------------------------------------------
Iberia ▇▇▇▇▇▇, ▇▇ #▇▇-▇▇▇▇; Mortgage Book A834 and Conveyance Book 1216 4/27/01
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LA M.O.B. 3999, folio 858 4/27/01
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ #▇▇▇▇▇▇; Mortgage Book 886 4/30/01
---------------------------------------------------------------------------------------------------------------------
Plaquemines Parish, LA Mortgage Book 315, folio 970 (Inst #190) Conveyance 4/27/01
Book 999, folio 1 (Inst #1)
---------------------------------------------------------------------------------------------------------------------
St. ▇▇▇▇ ▇▇▇▇▇▇, LA #245,015; Mortgage Book 870, folio 396 4/30/01
---------------------------------------------------------------------------------------------------------------------
Terrebonne Parish, LA #1094148; Mortgage Book 1355 and Conveyance Book 1732 4/27/01
---------------------------------------------------------------------------------------------------------------------
Vermilion Parish, LA #20104384 Mortgage and Conveyance Books 4/27/01
---------------------------------------------------------------------------------------------------------------------
Mortgage, Assignment of Production, Security Agreement, Fixture Filing and
Financing Statement dated as of April 27, 2001, from ATP Oil & Gas Corporation
covering oil and gas properties and filed in the following parishes and
jurisdictions, as supplemented, amended, restated or otherwise modified from
time to time:
JURISDICTION FILE NO. DATE FILED
---------------------------------------------------------------------------------------------------------------------
Minerals Management Service 4/27/01
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ #▇▇▇▇▇; Volume 276; Page 640 4/30/01
---------------------------------------------------------------------------------------------------------------------
Galveston County, TX #2001020514 (Film Code #▇▇▇-▇▇-▇▇▇▇) Official 4/30/01
Public Records
---------------------------------------------------------------------------------------------------------------------
Jefferson County, TX #2001014925 4/27/01
Official Public Records
---------------------------------------------------------------------------------------------------------------------
Matagorda County, TX #012820; Volume 616, Page 598 4/27/01
Official Records
---------------------------------------------------------------------------------------------------------------------
Orange County, TX #222556, Volume 1228, Page 708 Official Public 4/27/01
Records
---------------------------------------------------------------------------------------------------------------------
Brazoria County, TX Clerk's File No. 01 032594 7/23/01
---------------------------------------------------------------------------------------------------------------------