EXHIBIT 10.11
FORM OF
SUBORDINATED GUARANTY
This Subordinated Guaranty dated as of July 31, 2002 ("Guaranty") is
by ▇▇▇▇▇▇▇▇ Production Holdings LLC, a Delaware limited liability company
("Guarantor"), in favor of the Financial Institutions (as defined below).
Capitalized terms used in this Guaranty but not defined herein shall have the
meanings set forth for such terms in the Credit Agreement dated as of July 31,
2002 (the "New Credit Agreement"), executed by The ▇▇▇▇▇▇▇▇ Companies, Inc., as
borrower (the "Company"), Citicorp USA, Inc., as agent and collateral agent,
Bank of America N.A. as syndication agent, Citibank, N.A. and Bank of America
N.A. as issuing bank, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as arranger, and the banks
named therein.
INTRODUCTION
A. The Company and/or its Subsidiaries (i) have entered into certain
financing transactions with and (ii) prior to the date hereof, have caused
certain other existing letters of credit to be issued by, certain lenders and
financial institutions (such lenders and financial institutions collectively,
the "Financial Institutions;" provided, however, no such lender or financial
institution shall be deemed a "Financial Institution" hereunder until such
lender or financial institution executes this Guaranty). Such financing
transactions, including those entered into in connection with the New Credit
Agreement, and the existing letters of credit are documented by certain credit,
security, and letter of credit documents, all as more fully set forth on
Schedule I attached hereto (collectively, as the same may be amended and
modified from time to time, the "Credit Documents"). "Borrowers" as used herein
shall mean the borrowers under any one or more of the Credit Documents.
B. It is a condition to certain transactions under the Credit Documents that
the Guarantor shall have executed and delivered this Guaranty.
C. From time to time the Company has made capital contributions and advances
to the Guarantor. The Guarantor is a wholly owned Subsidiary of the Company and
will derive substantial direct or indirect benefit from the transactions
contemplated by the Credit Documents.
Therefore, in order to induce the Financial Institutions to enter into certain
financing transactions and letters of credit described in the Credit Documents,
the Guarantor hereby agrees for the ratable benefit of the Financial
Institutions as follows:
Section 1. Guaranty. Guarantor hereby unconditionally and irrevocably guarantees
the punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of the obligations and indebtedness of the Company under the Credit
Documents (such obligations being referred to herein as the "Guaranteed
Obligations"). Without limiting the generality of the foregoing, Guarantor's
liability shall extend to all amounts which constitute part of the
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Guaranteed Obligations even if such Guaranteed Obligations are declared
unenforceable or not allowable in a bankruptcy, reorganization, or similar
proceeding involving a Borrower, or any guarantor of any portion of the
foregoing Guaranteed Obligations (collectively such guarantors together with the
Guarantor and the Borrowers are referred to herein as the "Obligors"). This
Guaranty is a guarantee of payment, not of collection, and Guarantor is
primarily liable for the payment of the Guaranteed Obligations.
Section 2. Limit of Liability. The liabilities and obligations of the Guarantor
hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render such Guarantor's obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law.
Section 3. Guaranty Absolute. Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the Credit Documents,
regardless of any law, regulation, or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any Financial
Institution with respect thereto. The obligations of Guarantor under this
Guaranty are independent of the Guaranteed Obligations in each and every
particular, and a separate action or actions may be brought and prosecuted
against any other Obligor, or any other Person regardless of whether any other
Obligor or any other Person is joined in any such action or actions. The
liability of Guarantor under this Guaranty shall be absolute and unconditional
irrespective of:
(a) The lack of validity or unenforceability of the Guaranteed
Obligations or any Credit Document (other than this Guaranty against the
Guarantor) for any reason whatsoever, including that the act of creating the
Guaranteed Obligations is ultra ▇▇▇▇▇, that the officers or representatives
executing the documents creating the Guaranteed Obligations exceeded their
authority, that the Guaranteed Obligations violate usury or other laws, or that
any Obligor has defenses to the payment of the Guaranteed Obligations, including
breach of warranty, statute of frauds, bankruptcy, statute of limitations,
lender liability, or accord and satisfaction;
(b) Any change in the time, manner, or place of payment of, or in any
term of, any of the Guaranteed Obligations, any increase, reduction, extension,
or rearrangement of the Guaranteed Obligations, any amendment, supplement, or
other modification of the Credit Documents, or any waiver or consent granted
under the Credit Documents, including waivers of the payment and performance of
the Guaranteed Obligations;
(c) Any release, exchange, subordination, waste, or other impairment
(including negligent impairment) of any collateral securing payment of the
Guaranteed Obligations; the failure of any Financial Institution or any other
person to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale, or other handling of the collateral; the fact that any
security interest, lien, or assignment related to any collateral for the
Guaranteed Obligations shall not be properly perfected, or shall prove to be
unenforceable or subordinate to any other security interest, lien, or
assignment;
(d) Any full or partial release of any Obligor (other than the full or
partial release of the Guarantor);
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(e) The failure to apply or the manner of applying collateral or
payments of the proceeds of collateral against the Guaranteed Obligations;
(f) Any change in the organization or structure of any Obligor; any
change in the shareholders, directors, or officers of any Obligor; or the
insolvency, bankruptcy, liquidation, or dissolution of any Obligor or any
defense that may arise in connection with or as a result of any such insolvency,
bankruptcy, liquidator or dissolution;
(g) The failure to give notice of any extension of credit made by any
Financial Institution to any Obligor, notice of acceptance of this Guaranty,
notice of any amendment, supplement, or other modification of any Credit
Document, notice of the execution of any document or agreement creating new
Guaranteed Obligations, notice of any default or event of default, however
denominated, under the Credit Documents, notice of intent to demand, notice of
demand, notice of presentment for payment, notice of nonpayment, notice of
intent to protest, notice of protest, notice of grace, notice of dishonor,
notice of intent to accelerate, notice of acceleration, notice of bringing of
suit, notice of any Financial Institution's transfer of the Guaranteed
Obligations, notice of the financial condition of or other circumstances
regarding any Obligor, or any other notice of any kind relating to the
Guaranteed Obligations;
(h) Any payment or grant of collateral by any Obligor to any Financial
Institution being held to constitute a preference under bankruptcy laws, or for
any reason any Financial Institution is required to refund such payment or
release such collateral;
(i) Any other action taken or omitted which affects the Guaranteed
Obligations, whether or not such action or omission prejudices the Guarantor or
increases the likelihood that the Guarantor will be required to pay the
Guaranteed Obligations pursuant to the terms hereof;
(j) The fact that all or any of the Guaranteed Obligations cease to
exist by operation of law, including, without limitation, by way of discharge,
limitation or tolling thereof under applicable bankruptcy laws; and
(k) Any other circumstances which might otherwise constitute a defense
available to, or a discharge of any Obligor (other than the discharge of the
Guarantor).
Section 4. Financial Institutions' Rights and Certain Waivers.
4.01 Notice and Other Remedies. Guarantor hereby waives promptness,
diligence, notice of acceptance, notice of acceleration, notice of intent to
accelerate, and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that any Financial Institution
protect, secure, perfect or insure any security interest or other Lien or any
property subject thereto or exhaust any right to take any action against any
Obligor or any other Person or any collateral.
4.02. Waiver of Subrogation and Contribution. (a) Until such time as
the Guaranteed Obligations are irrevocably paid in full, Guarantor hereby
irrevocably waives any claim or other rights which it may acquire against any
Obligor that arise from the Guarantor's Guaranteed
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Obligations under this Guaranty or any other Credit Document, including, without
limitation, any right of subrogation (including, without limitation, any
statutory rights of subrogation under Section 509 of the Bankruptcy Code, 11
U.S.C. Section 509), reimbursement, exoneration, contribution, indemnification,
or any right to participate in any claim or remedy of any Financial Institution
against any Obligor, or any collateral which any Financial Institution now has
or acquires. If any amount shall be paid to Guarantor in violation of the
preceding sentence and the Guaranteed Obligations shall not have been paid in
full, such amount shall be held in trust for the benefit of the Financial
Institutions, and shall promptly be paid to the Financial Institutions to be
applied to the Guaranteed Obligations, whether matured or unmatured. Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Documents and that the waiver
set forth in this Section 4.02(a) is knowingly made in contemplation of such
benefits.
(b) Guarantor agrees that, to the extent that any Borrower makes
payments to any Financial Institution, or any Financial Institution receives any
proceeds of collateral, and such payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
or otherwise required to be repaid, then to the extent of such repayment the
Guaranteed Obligations shall be reinstated and continued in full force and
effect as of the date such initial payment or collection of proceeds occurred.
GUARANTOR SHALL INDEMNIFY EACH FINANCIAL INSTITUTION AND EACH AFFILIATE THEREOF
AND THEIR RESPECTIVE DIRECTORS, OFFICERS AND EMPLOYEES FROM, AND DISCHARGE,
RELEASE, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL ACTUAL LOSSES,
LIABILITIES, GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, DISBURSEMENTS, CLAIMS OR DAMAGES TO WHICH ANY OF THEM MAY BECOME SUBJECT,
INSOFAR AS SUCH LOSSES, LIABILITIES, GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, DISBURSEMENTS, CLAIMS OR DAMAGES ARISE OUT OF OR RESULT
FROM (I) ANY ACTUAL OR PROPOSED USE BY ANY BORROWER, OR ANY AFFILIATE OF ANY
BORROWER OF THE PROCEEDS OF ANY ADVANCE, (II) ANY BREACH BY GUARANTOR OF ANY
PROVISION OF THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT, (III) ANY
INVESTIGATION, LITIGATION OR OTHER PROCEEDING (INCLUDING ANY THREATENED
INVESTIGATION OR PROCEEDING) RELATING TO THE FOREGOING, OR (IV) ANY
ENVIRONMENTAL CLAIM OR REQUIREMENT OF ENVIRONMENTAL LAWS CONCERNING OR RELATING
TO THE PRESENT OR PREVIOUSLY-OWNED OR OPERATED PROPERTIES, OR THE OPERATIONS OR
BUSINESS, OF ANY OBLIGOR, AND GUARANTOR SHALL REIMBURSE EACH FINANCIAL
INSTITUTION, AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE DIRECTORS, OFFICERS
AND EMPLOYEES, UPON DEMAND FOR ANY REASONABLE OUT-OF-POCKET EXPENSES (INCLUDING
LEGAL FEES) INCURRED IN CONNECTION WITH ANY SUCH INVESTIGATION, LITIGATION OR
OTHER PROCEEDING; AND EXPRESSLY INCLUDING ANY SUCH LOSSES, LIABILITIES,
GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
DISBURSEMENTS, CLAIMS, DAMAGES, OR EXPENSE INCURRED BY REASON OF THE PERSON
BEING INDEMNIFIED'S OWN NEGLIGENCE, BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES,
GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
DISBURSEMENTS, CLAIMS, DAMAGES OR EXPENSES INCURRED BY REASON OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, ANY PAYMENTS DUE WITH RESPECT
TO THIS SECTION 4.02(b) SHALL BE SUBJECT TO THE PRIOR PAYMENT IN FULL OF THE
SENIOR OBLIGATIONS.
4.03. Modifications and Amendment to the Credit Documents. As provided
in Section 1 above, certain increases in the principal indebtedness outstanding
under the Credit Documents
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shall not constitute Guaranteed Obligations. Except as to the foregoing, the
parties to the Credit Documents shall have the right to amend or modify such
Credit Agreements without affecting the rights provided for in this Guaranty.
4.04 Limitation on Enforcement. By acceptance of the benefits provided
hereunder, each Financial Institution acknowledges and agrees that it will not
file, or join in or support the filing of, an involuntary proceeding or petition
in bankruptcy against Guarantor; provided such restriction shall not limit any
Financial Institution from making claims in or taking any other actions in
connection with any such proceeding which takes place.
Section 5. Representations and Warranties. Guarantor hereby represents and
warrants as follows:
(a) Business Existence. Guarantor is duly organized, validly existing,
and in good standing under the laws of Delaware and is in good standing and
qualified to do business in each jurisdiction where its ownership or lease of
property or conduct of its business requires such qualification and where a
failure to be qualified could reasonably be expected to cause a material adverse
effect.
(b) Power. The execution, delivery, and performance by Guarantor of
this Guaranty and the consummation of the transactions contemplated hereby (a)
are within Guarantor's limited liability company powers, (b) have been duly
authorized by all necessary limited liability company action, and (c) do not
contravene (i) Guarantor's certificate of formation or limited liability company
agreement or (ii) any law or any contractual restriction binding on or affecting
Guarantor or its property.
(c) Authorization and Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Guarantor of
this Guaranty or the consummation of the transactions contemplated hereby.
(d) Enforceable Obligations. This Guaranty has been duly executed and
delivered by Guarantor. This Guaranty is the legal, valid, and binding
obligation of Guarantor and is enforceable against Guarantor in accordance with
its terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium, or similar law affecting
creditors' rights generally.
(e) Solvency. After giving effect to this Guaranty and the concurrent
amendments to various financing arrangements and agreements of the Company and
its Subsidiaries and the concurrent asset sales by the Company and/or its
Subsidiaries, Guarantor, individually and together with its Subsidiaries, is
Solvent.
Section 6. Covenants.
(a) In the event that a Financial Institution wishes to enforce the
guarantee contained in Section 1 hereof against Guarantor, then subject in all
cases to Section 7 below, it shall make
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written demand for payment from Guarantor, provided that no such demand shall be
required if Guarantor is in bankruptcy, liquidation, or other insolvency
proceedings, and provided that failure by a Financial Institution to make such
demand shall not affect Guarantor's obligations under this Guaranty.
(b) From and after the repayment in full of the Senior Obligations, the
following shall apply: All indebtedness of Guarantor to another Obligor or any
Borrower or any Subsidiary of a Borrower shall be subordinated to all
indebtedness of Guarantor to any Financial Institution under any of the Credit
Documents (the "Designated Indebtedness"), as follows:
(i) In the event of any insolvency or bankruptcy proceedings,
or any receivership liquidation, reorganization, or other similar
proceedings in connection therewith, relative to Guarantor, or to its
property, or in the event of any proceedings for voluntary liquidation,
dissolution, or other winding up of Guarantor, whether or not involving
insolvency or bankruptcy, then the holders of the Designated
Indebtedness shall be entitled to receive payment in full of all
Designated Indebtedness before any Obligor or any Subsidiary of a
Borrower shall receive any payment on account of principal or interest
due such Person from Guarantor;
(ii) After the occurrence and during the continuance of any
default or event of default, however denominated, under any Credit
Document (an "Event of Default"), Guarantor shall not exercise or
attempt to exercise any right of offset or counterclaim in respect of
any of its obligations to any other Obligor or any Subsidiary of a
Borrower if the effect thereof shall be to reduce the amount of any
payment to which the holders of Designated Indebtedness would be
entitled in the absence of such offset or counterclaim; and if and to
the extent that, notwithstanding the foregoing, Guarantor is required
by any mandatory provisions of law to exercise any such right of offset
or counterclaim, each reduction of the amount owing on the account of
the principal of or premium (if any) or interest owed to any Obligor or
any Subsidiary of a Borrower by reason of such offset or counterclaim
shall be deemed to be a payment by Guarantor in a like amount in
respect of such amounts which clause (iv) below shall apply;
(iii) Following the occurrence and during the continuance of
any Event of Default, (A) payment of the principal or interest upon any
indebtedness owed to any Obligor or any Subsidiary of a Borrower shall
not be made thereunder until payment in full of all Designated
Indebtedness has been made and (B) the holders of the Designated
Indebtedness shall be entitled to receive payment in full of all
Designated Indebtedness prior to the entitlement of any Obligor or any
Subsidiary of a Borrower to receive any payment of the principal or
interest (except for payments which have been made prior to the
occurrence of such event of default);
(iv) If, notwithstanding the provisions of the foregoing
subparagraphs (i) through (iii), any payment or distribution on any
indebtedness shall be received by Guarantor or any Obligor or any
Subsidiary of a Borrower while a Event of Default exists and before the
holders of the Designated Indebtedness shall have received payment in
full on all Designated Indebtedness, such payment or distribution shall
be (and shall be
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deemed to be) held in trust for the benefit of, and shall be paid over
or delivered or transferred to, the holders of the Designated
Indebtedness for application to the payment of all Designated
Indebtedness held by such holder to the extent necessary to satisfy
such Designated Indebtedness; and
(v) No present or future holder of Designated Indebtedness
shall be prejudiced in its right to enforce subordination of any
Obligor or any Subsidiary of a Borrower by any act or failure to act on
the part of Guarantor whether or not such act or failure shall give
rise to any right of rescission or other claim or cause of action on
the part of Guarantor or any Borrower or any Subsidiary of a Borrower.
The provisions of the foregoing paragraphs with respect to
subordination are solely for the purpose of defining the relative
rights of the holders of Designated Indebtedness on the one hand, and
any Obligor or any Subsidiary of a Borrower on the other hand, and none
of such provisions shall impair, as between Guarantor and any Obligor
or any Subsidiary of a Borrower, the obligation of Guarantor, which is
unconditional and absolute, to pay to any Obligor or any Subsidiary of
a Borrower the principal and interest of any indebtedness in accordance
with its terms, nor shall anything in such provisions prevent any other
Obligor or any Subsidiary of a Borrower from exercising all remedies
otherwise permitted by applicable law or hereunder upon default
hereunder, subject to the rights of holders of Designated Indebtedness
under such provisions.
The terms of Section 6(b) shall not be applicable during the period
that the Senior Obligations remain outstanding.
(c) The Guarantor will not create, assume, incur or suffer to exist any
Lien on or in respect of any of its property, whether now owned or hereafter
acquired, or assign or otherwise convey any right to receive income except
pursuant to documents entered into in connection with the Senior Credit
Documents or as otherwise permitted therein on the date hereof.
(d) The Guarantor will not create, incur, assume or suffer to exist any
Debt other than Debt that (i) constitutes Senior Obligations or (ii) is
permitted pursuant to the Senior Credit Documents on the date hereof.
(e) The Guarantor will not create, incur, assume or suffer to exist any
obligation or liability other than (i) this Guaranty, (ii) any obligation or
liability that constitutes Senior Obligations, (iii) any obligation or liability
that is permitted pursuant to the Senior Credit Documents on the date hereof.
and (iv) other obligations not exceeding $100,000 in the aggregate.
Section 7. Subordination.
(a) By acceptance of this Guaranty, each Financial Institution hereby
acknowledges that payments made by the Guarantor under this Guaranty with
respect to the Guaranteed Obligations shall be subordinated to all of the Senior
Obligations (as defined below), and that the Guarantor shall not make payments
to the Financial Institutions under this Guaranty with respect to the Guaranteed
Obligations in whole or in part until the Senior Obligations have been paid in
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full. No Financial Institution shall accept any payment from the Guarantor of or
on account of any Guaranteed Obligations at any time in contravention of the
foregoing. Upon the occurrence and during the continuance of any default or
event of default, however denominated, under any Credit Document or the Senior
Credit Agreement (as defined below) (an "Event of Default"), each Financial
Institution shall pay to the Senior Agent (as defined below) any payment made by
Guarantor pursuant to this Guaranty of all or any part of the Guaranteed
Obligations and any amount so paid to the Senior Agent shall be applied to
payment of the Senior Obligations. Each payment made by Guarantor pursuant to
this Guaranty on the Guaranteed Obligations received in violation of any of the
provisions hereof shall be deemed to have been received by the Financial
Institutions as trustee for the Senior Agent and shall be paid over to the
Senior Agent immediately on account of the Senior Obligations. The Financial
Institutions agree not to ask, demand, ▇▇▇ for, take or receive from Guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner (including, without limitation, from or by way of collateral), any
payment by the Guarantor under this Guaranty unless and until the Senior
Obligations are paid in full. Senior Agent is hereby authorized to demand
specific performance by the Financial Institutions of its agreements set forth
in this Section at any time the Financial Institutions shall have failed to
comply with any of the provisions of this Section. The Financial Institutions
hereby irrevocably waive any defense based on the adequacy of remedies at law,
which might be asserted as a bar to such remedy of specific performance.
(b) The Financial Institutions shall only be entitled to take any
remedial or enforcement actions against the Guarantor under this Guaranty upon
or after the earliest to occur of (i) the payment in full of all Senior
Obligations or (ii) the taking of any remedial or enforcement remedy by the
Senior Agent.
(c) As used in this Guaranty, the following terms shall have the
following meanings:
"Senior Agent" means the administrative agent under the Senior Credit
Agreement.
"Senior Credit Agreement" means that certain Credit Agreement, dated as
of July 31, 2002, among The ▇▇▇▇▇▇▇▇ Companies, Inc., a Delaware corporation,
▇▇▇▇▇▇▇▇ Production Holdings LLC, a Delaware limited liability company, ▇▇▇▇▇▇▇▇
Production RMT Company, a Delaware corporation, the Lenders party thereto from
time to time, ▇▇▇▇▇▇ Brothers Inc., as Arranger, and ▇▇▇▇▇▇ Commercial Paper
Inc., as Syndication Agent and as Administrative Agent.
"Senior Credit Documents" means the Senior Credit Agreement, the Senior
Guaranty, all other Loan Documents (as defined in the Senior Credit Agreement)
and all other documents evidencing or creating any Senior Obligations, and all
documents and instruments delivered in connection with or pursuant thereto or
under which rights or remedies with respect to any of the foregoing are
governed, as any such document or instrument may from time to time be amended,
renewed, restated, supplemented or otherwise modified.
"Senior Guaranty" means the guaranty of the Guarantor under that
certain Guarantee and Collateral Agreement, dated as of July 31, 2002, by
▇▇▇▇▇▇▇▇ Production RMT Company, the
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Guarantor and each of the other signatories thereto in favor of the Senior
Agent.
"Senior Obligations" means all obligations of the Guarantor under the
Senior Credit Documents, and all other amounts, obligations, covenants and
duties owing by the Guarantor to any lender under the Senior Credit Documents.
Section 8. Miscellaneous.
8.01. Amendments, Etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by any of the Guarantors therefrom shall
be effective unless the same shall be in writing and signed by the Financial
Institutions holding at least 51% of the principal amount of the Guaranteed
Obligations at the time thereof and shall be effective only in the specific
instance and for the specific purpose for which given. Provided, however, that
any amendment or waiver releasing any Guarantor from any liability hereunder
shall require the unanimous consent of all Financial Institutions and be
effective only in the specific instance and for the specific purpose for which
given.
8.02. Addresses for Notices. All notices and other communications to
Guarantor shall be delivered to the address set forth beneath its signature on
the signature page hereto, or to such other address as shall be designated by
the Guarantor by written notice to all of the Financial Institutions. All
notices and other communications provided for under this Guaranty shall be in
writing (including telecopy communication), shall be mailed, telecopied, or
delivered, and shall, when mailed or telecopied, be effective when received in
the mail or sent by telecopier.
8.03. No Waiver; Remedies. No failure on the part of any Financial
Institution 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.
8.04. Right of Set-Off. From and after the repayment in full of the
Senior Obligations, the following shall apply: Upon the occurrence and during
the continuance of any default or event of default however described under a
Credit Document, each Financial Institution party to such Credit Document is
hereby authorized at any time, to the fullest extent permitted by law, to set
off and apply any deposits (general or special, time or demand, provisional or
final) and other indebtedness owing by such Financial Institution to the
accounts of the Guarantor against any and all of the obligations of the
Guarantor under this Guaranty, irrespective of whether or not such Financial
Institution shall have made any demand under this Guaranty and although such
obligations may be contingent and unmatured. Each Financial Institution agrees
promptly to notify the Guarantor after any such set-off and application made by
such Financial Institution provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of the
Financial Institutions under this Section 8.04 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which the
Financial Institutions may have.
8.05. Continuing Guaranty; Assignments under Credit Documents. This
Guaranty is a
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continuing guaranty and shall (a) remain in full force and effect until the
indefeasible payment in full of the Guaranteed Obligations and all other amounts
payable under this Guaranty, (b) be binding upon Guarantor and its respective
successors and assigns, (c) inure to the benefit of, and be enforceable by, each
of the Financial Institutions and their respective successors, transferees and
assigns, and (d) not be terminated by Guarantor or any other Person. Without
limiting the generality of the foregoing clause (c), any Financial Institution
may assign or otherwise transfer all or any portion of its rights and Guaranteed
Obligations and the assignee shall thereupon become vested with all the benefits
in respect thereof granted to such Financial Institution herein or otherwise.
Upon the indefeasible payment in full and termination of the Guaranteed
Obligations, each guaranty granted hereby shall terminate and all rights
hereunder shall revert to the Guarantor to the extent such rights have not been
applied pursuant to the terms hereof. Upon any such termination, each Financial
Institution will, at Guarantor's expense, execute and deliver to Guarantor such
documents as Guarantor shall reasonably request and take any other actions
reasonably requested to evidence or effect such termination. This Guaranty is
not assignable by Guarantor without the written consent of each Financial
Institution.
8.06 Incorporated Definitions. All defined terms that are incorporated
from other agreements into this Guaranty by reference shall have the meanings
assigned to such terms as of the date hereof but shall not be modified by any
subsequent amendment or modification that takes place after the date hereof
unless consented to by the parties hereto.
8.07. Governing Law; Submission to Jurisdiction; Suits and Claims.
(a) This Guaranty shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, except to the extent
provided in Section 8.07(b) hereof and to the extent that the federal laws of
the United States of America may otherwise apply.
(b) Notwithstanding anything in Section 8.07(a) hereof to the contrary,
nothing in this Guaranty shall be deemed to constitute a waiver of any rights
which any of the Financial Institutions may have under the National Bank Act or
other federal law, including without limitation the right to charge interest at
the rate permitted by the laws of the State where the applicable Financial
Institution is located.
(c) ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, ANY CREDIT DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE FINANCIAL
INSTITUTIONS OR GUARANTOR IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF NEW YORK AT THE ADDRESS SET FORTH BENEATH ITS SIGNATURE ON THE
SIGNATURE PAGE HERETO. GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND
-10-
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO
THE EXTENT THAT GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, GUARANTOR HEREBY IRREVOCABLY
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS GUARANTY AND THE CREDIT DOCUMENTS.
(d) GUARANTOR AND THE FINANCIAL INSTITUTIONS HEREBY IRREVOCABLY WAIVE
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
(e) The provisions set forth in this Guaranty shall only be enforceable
by the Financial Institutions and their respective successors and assigns, and
no other Person shall have the right to bring any claim or cause of action based
on this Guaranty.
-11-
Guarantor has caused this Guaranty to be duly executed as of the date
first above written.
▇▇▇▇▇▇▇▇ PRODUCTION HOLDINGS L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: President
-----------------------------------
Address for Notices:
One ▇▇▇▇▇▇▇▇ Center
Attn: Treasurer
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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ACKNOWLEDGED AND AGREED by the following parties as of the date first written
above:
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
By:
-----------------------------------------
Name:
Title:
-13-
CITICORP USA, INC., as Agent and Collateral Agent under the New Credit Agreement
By:
-----------------------------------------
Name:
Title:
-14-
CITIBANK, N.A., as Bank and Issuing Bank under the New Credit Agreement
By:
-----------------------------------------
Name:
Title:
-15-
[ADD SIGNATURE BLOCKS FOR EACH FINANCIAL INSTITUTION]
-16-
SCHEDULE I
CREDIT DOCUMENTS
NEW CREDIT FACILITY:
Credit Agreement dated as of July 31, 2002 executed by The ▇▇▇▇▇▇▇▇ Companies,
Inc., as borrower, Citicorp USA, Inc., as agent and collateral agent, Bank of
America N.A. as syndication agent, Citibank, N.A. and Bank of America N.A. as
issuing bank, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as arranger, and the banks named
therein.
All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with the foregoing.
PROGENY AGREEMENTS
$200,000,000 Parent Support Agreement dated as of December 23, 1998, made by The
▇▇▇▇▇▇▇▇ Companies, Inc. in favor of Castle Associates L. P. and Colchester LLC
and the other Indemnified Persons listed therein, as amended.
Amended and Restated Guarantee dated as of July 25, 2000, issued by The ▇▇▇▇▇▇▇▇
Companies, Inc. for the benefit of The Commonwealth Plan, Inc. and CBL Capital
Corporation, as amended. WFS-Pipeline Company, as lessee and Commonwealth, as
lessor entered into a Lease Agreement dated as of December 29, 1995.
WFS-Offshore Gathering Company, as lessee, and CBL, as lessor, entered into a
Lease Agreement dated December 29, 1995, as amended and restated.
$400,000,000 Term Loan Agreement dated as of April 7, 2000, among The ▇▇▇▇▇▇▇▇
Companies, Inc., as Borrower, and Credit Lyonnais New York Branch, as
Administrative Agent, and the Lenders named therein, as amended.
$192,570,931 aggregate Second Amended and Restated Participation Agreements (2
separate leases) dated as of January 28, 2002, among ▇▇▇▇▇▇▇▇ Oil Gathering,
L.L.C. and ▇▇▇▇▇▇▇▇ Field Services - Gulf Coast Company, L.P., as Lessees,
▇▇▇▇▇▇▇▇ Field Services Company, as Construction Agent, The ▇▇▇▇▇▇▇▇ Companies,
Inc., as Guarantor, First Security Bank, N.A. as
Certificate Trustee, ▇▇▇▇▇ Fargo Bank Nevada, N.A., as Collateral Agent, Bank of
America, N.A., as Administrative Agent and Administrator, and financial
institutions named therein as Certificate Holders, as amended.
$200,000,000 Term Loan Agreement dated as of January 29, 1999, among The
▇▇▇▇▇▇▇▇ Companies, Inc., as Borrower, and The Fuji Bank, Limited, as
Administrative Agent, and the Banks named therein, as amended.
$611,788,868 Joint Venture Sponsor Agreement dated as of December 28, 2000,
among The ▇▇▇▇▇▇▇▇ Companies, Inc., as Sponsor and ▇▇▇▇▇▇▇▇ Field Services
Company, in favor of Prairie Wolf Investors, Arctic Fox Assets, L.L.C., ▇▇▇▇▇▇▇▇
Energy (Canada), Inc. and the other Indemnified Persons listed therein, as
amended.
-17-
Letter of Credit and Reimbursement Agreement dated as of May 15, 1994, among
Tulsa Parking Authority, The ▇▇▇▇▇▇▇▇ Companies, Inc., Bank of Oklahoma,
National Association, and Bank of America, N.A. (formerly Nationsbank of Texas,
N.A.), relative to Tulsa Parking Authority First Mortgage Revenue Bonds, as
amended.
$127,000,000 Master Agreement dated as of March 6, 2000, among The ▇▇▇▇▇▇▇▇
Companies, Inc., as Guarantor, ▇▇▇▇▇▇▇▇ TravelCenters, Inc., as Lessee, Atlantic
Financial Group, Ltd., as Lessor, SunTrust Bank, as Agent, and the Lenders named
therein, as amended.
$100,000.000 PPH Sponsor Agreement dated as of December 31, 2001, by The
▇▇▇▇▇▇▇▇ Companies, Inc., as Sponsor, in favor of Piceance Production Holdings
LLC, Plowshare Investors LLC, and other Indemnified Persons listed in the
agreement, as amended.
All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with any of the foregoing.
LEGACY L/CS
See Attachment 1 attached hereto,
All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with the letters of credit described on
Attachment I.
-18-
ATTACHMENT 1
OUTSTANDING LETTERS OF CREDIT
▇▇▇▇▇▇▇▇ ENERGY MARKETING & TRADING EUROPE LIMITED
AS OF 7-31-02
-----------------------------------------------------------------------------------------------------------------------------
LETTER OF ACCOUNT
CREDIT # PARTY NOTE BENEFICIARY
--------- ------- ---- -----------
KBC - CASH COLLATERALISED BY E. 1 MILLION CASH ON JULY 31ST
▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited The Belgian State
▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited The Belgian State
RBS - RCF
G259106 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited RWE NET AG
G260899 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited LPX LEIPZIG POWER EXCHANGE GMBH
G261340 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited RESEAU DE TRANSPORT D'ELECTRICITE
G261666 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited RESEAU DE TRANSPORT D'ELECTRICITE
G262939 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited ELTRA
G263181 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited TENNE T BV
G263374 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited EDF SERVICE NATIONAL
G264373 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited ELEXON CLEAR LIMITED
G264757 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited SHELL INTERNATIONAL
G264860 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited NATIONAL GRID COMPANY PLC
G265433 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
G265560 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited APCS Power Clearing and Settlement AG
G265977 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited ENMO LTD
G266468 ▇▇▇▇▇▇▇▇ Petroleos Espana SLU Vitol Espana SA
G266531 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited Texaco Limited
G266528 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited Federal Tax Administration Dept for VAT
G266763 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited Texaco Limited
RBS - BONDING LINE
G265142 ▇▇▇▇▇▇▇▇ Petroleos Espana SLU TERMINALES PORTUARIAS
G265147 ▇▇▇▇▇▇▇▇ Petroleos Espana SLU DECAL ESPANA S.A.
G265151 ▇▇▇▇▇▇▇▇ Petroleos Espana SLU EUROENERGO ESPANA S.L.
G266709 ▇▇▇▇▇▇▇▇ Energy Marketing & Trading Europe Limited Sibneft Oil Trade Company Ltd
TOTAL LC'S OUTSTANDING EM&T EUROPE LIMITED
---------------------------------------------------------------------------------------------
LETTER OF EXPIRY
CREDIT # AMOUNT CONVERSION DOLLARS DATED DATE
--------- ------ ---------- ---------- ----- ----------
KBC - CASH COLLATERALISED BY E. MILLION CASH ON JULY 31ST
E.2,144,000 1.02 $2,099,902 No Fxd Exp
E.4,037,000 1.02 $3,953,967 No Fxd Exp
RBS - RCF
G259106 E.400,000 1.02 $391,773 No Fxd Exp
G260899 E.1,100,000 1.02 $1,077,375 No Fxd Exp
G261340 E.170,000 1.02 $166,503 11/8/2002
G261666 E.170,000 1.02 $166,503 3/31/2003
G262939 E.300,000 1.02 $293,830 2/28/2003
G263006 kr2,000,000 7.62 $262,330 3/31/2003
G263181 E.250,000 1.02 $244,858 No Fxd Exp
G263374 E.550,000 1.02 $538,688 7/21/2002
G264373 L.100,000 0.64 $155,743 3/25/2007
G264757 $250,000 1.00 $250,000 10/15/2002
G264860 L.20,000 0.64 $31,149 1/31/2003
G265433 E.39,580 1.02 $38,766 No Fxd Exp
G265560 E.600,000 1.02 $587,659 No Fxd Exp
G265977 L.500,000 0.64 $778,715 6/11/2003
G266468 $1,000,000 1.00 $1,000,000 8/12/2002
G266531 $3,360,000 1.00 $3,360,000 8/9/2002
G266528 CHF250,000 1.50 $167,133 Open Ended
G266763 $3,520,000 1.00 $3,520,000 8/12/2002
RBS - BONDING LINE
G265142 E.9,992,442.00 1.02 $9,786,917 10/31/2002
G265147 E.5,538,378.00 1.02 $5,424,464 10/31/2002
G265151 E.3,029,742.00 1.02 $2,967,426 10/31/2002
G266709 $6,000,000.00 1.00 $6,000,000 8/12/2002
----------------- -----------
N/A $43,263,700
================= ===========
-19-