1
EXHIBIT 10.14
MASTER COMMODITY
SWAP AGREEMENT
DATED AS OF MAY 15, 1998
BETWEEN
CHRISTIANIA BANK OG KREDITKASSE ASA
AND
▇▇▇▇▇▇▇ PETROLEUM CORPORATION
CHRISTIANIA BANK OG KREDITKASSE ASA ("BANK") may from time to time
enter into commodity swaps based on fixed and floating rates of interest or on
fixed and floating prices of crude oil, natural gas or related products (each, a
"SWAP") with ▇▇▇▇▇▇▇ PETROLEUM CORPORATION, a Texas corporation (the
"COUNTERPARTY"). The specific terms and conditions of each Swap shall be set
forth in Bank's telex or facsimile confirmation in the form of Exhibit A hereto
("CONFIRMATION"), reconfirmed by telex or facsimile by the Counterparty in the
form of Exhibit B hereto ("RECONFIRMATION"), which telexes and/or facsimiles
together with the following terms and conditions shall constitute the terms and
conditions of each such Swap, and all Swaps at any time and from time to time
outstanding shall collectively constitute a single agreement (the "AGREEMENT")
between Bank and the Counterparty, it being understood that the parties would
not otherwise enter into any Swap. Counterparty and Bank intend that each such
Swap and the Agreement, (i) shall constitute swap agreements that comply with
the safe harbor standards set forth in the Commodity Futures Trading Commission
("CFTC") Policy Statement Concerning Swap Transactions, 54 Fed. Section Reg.
30694 (1989), (ii) shall constitute options that are within the trade option
exemption promulgated by the CFTC, 17 C.F.R. 32.4(a), and (iii) shall constitute
swap agreements that comply with the standards set forth in Part 35 of Chapter 1
of Title 17 of the Code of Federal Regulations.
Accordingly, Bank and the Counterparty agree as follows:
1. DEFINED TERMS. The terms "BANK," "SWAP," "COUNTERPARTY,"
"CONFIRMATION," "RECONFIRMATION," and "AGREEMENT" are defined in the immediately
preceding paragraph.
The terms (if applicable) "FIXED PRICE," "FIXED PRICE PAYOR," "FLOATING
PRICE PAYOR," "QUANTITY PER DETERMINATION PERIOD," "QUANTITY MEASUREMENT,"
"COMMODITY TYPE," "EFFECTIVE DATE," "TERMINATION DATE," "DETERMINATION PERIOD,"
"PRICE SOURCE" and "FIXED PRICE PER QUANTITY MEASUREMENT," among others, have
the meanings, if any, attributed to them in the Confirmation.
"ACCELERATED TERMINATION DATE" is defined in Section 9.
"ALTERNATE PRICE SOURCE" in respect of any Trading Day means the
Alternate Price Source specified in a Confirmation.
"AVERAGE FLOATING PRICE" is defined in Section 2.
"BUSINESS DAY" means a day other than a Saturday, Sunday or a day on
which commercial banks in New York City are required or authorized by law to
close.
1
2
"CALCULATION AGENT" means Bank.
"COLLATERAL" is defined in the Loan Agreement; provided, however, upon
the payment in full of all of Counterparty's Obligations (other than Obligations
pertaining to this Agreement and any other hedge to the extent that Section
11.16 of the Loan Agreement has been satisfied with respect to such hedge) under
the Loan Agreement and other Loan Documents and termination of the commitments
of the Lenders (as defined in the Loan Agreement) thereunder, the term
"COLLATERAL" shall mean either cash collateral or other collateral acceptable to
Bank in an amount equal to 110% of Counterparty's "EXPOSURE" (as defined in the
ISDA form Master Swap Agreement and determined by Bank at its discretion)
pursuant to the terms and provisions of the Standard ISDA form of Credit Support
Annex (with such modifications as may be agreed to between Bank and
Counterparty).
"CUSTODIAN" is defined in Section 6.
"DEBTOR RELIEF LAWS" is defined in the Loan Agreement.
"DEFAULTING PARTY" is defined in Section 8.
"DEFAULT RATE" is defined in the Loan Agreement.
"DESIGNATED ACCOUNT" means the bank account located in the U.S. from
time to time designated by a party from which or to which payments under this
Agreement shall be made.
"EARLY TERMINATION DATE" is defined in Section 8.
"EVENT OF CHANGE" is defined in Section 7.
"EVENT OF DEFAULT" is defined in Section 6.
"FEDERAL FUNDS RATE" is defined in the Loan Agreement.
"FIXED AMOUNT" is defined in Section 2.
"FLOATING AMOUNT" is defined in Section 2.
"FLOATING PRICE" in respect of a Trading Day means the closing price or
settlement price, as the case may be, per Quantity Measurement for the Commodity
Type quoted by or determined from the Price Source. If the Price Source fails to
publish or quote the price information required to calculate the Floating Price,
then the Alternate Price Source shall be used to calculate the Floating Price in
respect of such Trading Day.
"ILLEGALITY" is defined in Section 7.
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to such
recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organized, present or engaged in a trade
or business in such jurisdiction, or having had a permanent establishment or
fixed place
2
3
of business in such jurisdiction, but excluding a connection arising solely from
such recipient or related person having executed, delivered, performed its
obligations or received a payment under, or enforced, this Agreement).
"LIEN" means any lien, encumbrance, mortgage or security interest.
"LOAN AGREEMENT" means the Credit Agreement dated as of May 15, 1998,
among the Counterparty, the Lenders named therein and Bank, as Administrative
Agent for such Lenders, as the same may hereafter be amended, supplemented or
modified from time to time.
"LOAN DOCUMENTS" is defined in the Loan Agreement.
"MERGER EVENT" is defined in Section 7.
"NON-DEFAULTING PARTY" is defined in Section 8.
"NYMEX" means the New York Mercantile Exchange.
"OBLIGATIONS" is defined in the Loan Agreement.
"PAYMENT DATE" shall have the meaning attributed to it in the
Confirmation; if no meaning is given the term in the Confirmation it shall mean,
with respect to each Swap, the fifth Business Day next succeeding the last
Trading Day of each Determination Period.
"REFERENCE MARKET-MAKERS" means four leading dealers in relevant
commodity swap transactions, two chosen by Bank and two chosen by the
Counterparty, each selected in good faith from among recognized swap dealers
which satisfy substantially all of the criteria that Bank and/or Counterparty
applies generally at the time in deciding whether to offer or to make an
extension of credit or to enter into transactions similar in nature to the
Swaps.
"TAX" means any present or future tax, levy, import, duty, charge,
assessment or fee of any nature (including interest, penalties and additions
thereto) that is imposed by any government or other taxing authority in respect
of any payment under this Agreement other than a stamp, registration,
documentation or similar tax.
"TAX EVENT" is defined in Section 7.
"TRADING DAY" means a day for which the Floating Price for a Swap is
determinable.
"$" and "DOLLARS" each means the lawful currency of the U.S.
"U.S." means the United States of America.
2. CALCULATION OF SWAP PRICES/AMOUNTS.
(a) the "FIXED AMOUNT" in respect of a Determination Period shall
be the product of (i) the quantity per Determination Period of a particular
Commodity Type, multiplied by (ii) the Fixed Price.
3
4
(b) The "FLOATING AMOUNT" in respect of a Determination Period,
unless otherwise specified in a Confirmation, shall be the product of (i) the
quantity per Determination Period of a particular Commodity Type, multiplied by
(ii) the Average Floating Price for that Commodity Type (where the "AVERAGE
FLOATING PRICE" equals (x) the sum of the Floating Price for each Trading Day in
the Determination Period, divided by (y) the number of Trading Days in the
Determination Period).
3. PAYMENT.
(a) On the Business Day next succeeding the last Trading Day of a
Determination Period, the Calculation Agent shall promptly determine the Fixed
Amount and the Floating Amount and shall notify Bank and the Counterparty of the
amount that each respectively owes or is owed. If the Fixed Amount is greater
than the Floating Amount, the Fixed Price Payor shall pay to the Floating Price
Payor on the Payment Date the amount by which the Fixed Amount exceeds the
Floating Amount. If the Floating Amount is greater than the Fixed Amount, the
Floating Price payor shall pay to the Fixed Price Payor on the Payment Date the
amount by which the Floating Amount exceeds the Fixed Amount.
(b) Notwithstanding Section 3(a), if (i) the Payment Dates for two
or more Swaps between Bank and the Counterparty shall fall on the same day, and
(ii) each party is required to pay an amount under such Swaps, then such amounts
with respect to each party shall be aggregated and the party obligated to pay
the larger aggregate amount will be obligated to pay on the Payment Date to the
other party the excess of the larger aggregate amount over the smaller aggregate
amount.
(c) Amounts owed pursuant to Section 3(a) or 3(b) shall be due and
payable on the applicable Payment Date. If such amounts or any other amounts
payable under this Agreement are not paid when due, such overdue amounts shall
bear interest for each day until paid in full, payable on demand, at a rate per
annum equal to the Default Rate in effect from time to time on the basis of the
actual number of days elapsed from the due date thereof and on the basis of a
year of 360 days.
(d) All payments under this Agreement shall be made in U.S.
dollars via wire transfer in Federal or other funds immediately available in New
York City to the owed party's Designated Account. All payments under this
Agreement will be made without any deduction or withholding for or on account of
any Tax unless such deduction or withholding is required by any applicable law,
as modified by the practice of any relevant governmental revenue authority, then
in effect. If a party is so required to deduct or withhold, then the party ("X")
will:
1) promptly notify the other party ("Y") of such
requirement;
2) pay to the relevant authorities the full amount
required to be deducted or withheld (including the full amount required
to be deducted or withheld from any additional amount paid by X to Y
under this Section 3(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that such
amount has been assessed against Y;
3) promptly forward to Y an official receipt (or a
certified copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
4) if such Tax is an Indemnifiable Tax, pay to Y, in
addition to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure that the
net amount actually received by Y (free and clear of Indemnifiable
Taxes, whether assessed
4
5
against X or Y) will equal the full amount Y would have received had no
such deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that Y would
not be required to be paid for:
A) the failure by Y to comply with Sections
4(b) and 4(c) or
B) the failure of the representations made by Y
in Section 5(h), 5(i) or 5(j), as appropriate, to be accurate
and true unless such failure would not have occurred but for
an Event of Change described in Section 7(a).
4. COVENANTS
(a) Each party covenants that it will comply in all material
respects with all applicable laws and orders to which it may be subject if
failure so to comply would materially impair its ability to perform its
obligations under this Agreement.
(b) Each party covenants that it will deliver to the other party
any forms, documents or certificates reasonably requested by the other party in
order to reduce or eliminate any required withholding or deduction for or on
account of any Taxes.
(c) Each party covenants that it will give notice of any failure
of a representation made by it under Sections 5(h), 5(i) or 5(j), as
appropriate, to be true and accurate promptly upon learning of such failure.
(d) The Counterparty covenants that at any time and from time to
time, at the expense of the Counterparty, the Counterparty will promptly execute
and deliver all further instruments and documents, and take all further action
to perfect and protect the security interests granted in the Collateral under
the other Loan Documents and hereunder or to enable Bank to exercise and enforce
rights, remedies and powers of Bank hereunder with respect to any Collateral.
(e) Each party covenants that all obligations arising out of this
Agreement shall be paid and settled in cash and that neither party shall have
any obligations, nor shall it be permitted, to deliver in physical form any
commodity underlying a Swap.
5. REPRESENTATIONS AND WARRANTIES. On the date hereof and at the
time of entering into this Agreement, each party represents and warrants that:
(a) it has been duly incorporated or chartered, as applicable, and
is validly existing as a corporation or bank in good standing under the laws of
the jurisdiction of its incorporation or chartered, as applicable;
(b) it has the requisite power and authority to enter into and
perform this Agreement and the Confirmations or Reconfirmations, as the case may
be, hereunder;
(c) it has taken all necessary action to authorize the entering
into and performance of this Agreement and the Confirmations or Reconfirmations,
as the case may be, hereunder;
(d) the entering into and performance of this Agreement and the
Confirmations or Reconfirmations hereunder, as the case may be, do not and will
not violate or conflict with its charter or
5
6
by-laws (or comparable constituent documents) or any material agreement to which
it is a party or by which it or any of its property is bound or, to the best of
its knowledge after reasonable inquiry, any order of a court or other agency of
government applicable to it;
(e) this Agreement constitutes its legal, valid and binding
obligation enforceable in accordance with its terms (except as enforcement may
be limited by Debtor Relief Laws);
(f) it is entering into this Agreement in connection with its line
of business or, with respect to Bank, in connection with financial
intermediation services and is not entering into the agreement for speculative
purposes;
(g) the material terms of this Agreement have been individually
tailored and negotiated;
(h) the forms, documents and certificates provided pursuant to
Section 4(b) hereof, if any, are true, correct and complete in all material
respects;
(i) solely with respect to the Counterparty, the Counterparty is a
company incorporated under the laws of a state within the United States of
America and does not maintain a permanent establishment or otherwise do business
in Norway;
(j) solely with respect to Bank, each payment received by it in
connection with this Agreement is effectively connected with its conduct of a
trade or business in the U.S.;
(k) no Event of Default (as defined herein) or Default (as defined
in the Loan Agreement) or event or condition which, with the giving of notice or
lapse of time or both, would constitute an Event of Default (as defined herein)
or Default (as defined in the Loan Agreement) or, to its knowledge, Event of
Change with respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or performing is
obligations under this Agreement;
(l) solely with respect to the Counterparty, all present and
future obligations of the Counterparty hereunder and under each Swap are secured
by Bank's first priority perfected lien on and security interest in the
Collateral and are not supported by the credit of a clearing organization. The
Counterparty has good and indefeasible title to or valid leasehold interests in
its properties, assets, and leasehold interests, which meet title standards
customarily accepted in the oil and gas industry with respect to its working
interests and net revenue interests, and none of the Collateral is subject to
any Lien except as permitted by the Loan Agreement; and
(m) it is entering into this Agreement as principal, and it has
not advertised or marketed interest rate or exchange transactions, forward rate
agreements, or other exchange, commodity price, interest rate protection
transactions or options with respect to any such transactions to members of the
general public.
These representations and warranties shall be deemed to be restated by
each party at the time each Confirmation and Reconfirmation shall be delivered
hereunder.
6
7
6. EVENT OF DEFAULT. "EVENT OF DEFAULT" shall mean:
(a) the failure by Bank or by the Counterparty to make, when due,
any payment under this Agreement which failure shall continue for a period of
three Business Days after notice from the other party;
(b) any event of default by Bank or by the Counterparty under any
rate swap, rate cap, rate floor, rate collar, currency exchange transaction,
forward rate agreement, or other exchange of rate protection transaction, or any
commodities-related swap or any combination of such transactions or agreements
between the other party hereto and the defaulting party if such event of default
has resulted in the designation or occurrence of the early termination of such
agreement;
(c) any of the representations and warranties by the party making
such representations and warranties under Section 5 shall prove to have been
untrue in any material respect when made or deemed made;
(d) solely with respect to the Counterparty as the defaulting
party, a Default or Potential Default (as defined in the Loan Agreement), shall
have occurred;
(e) the failure by Bank or the Counterparty to observe any
material agreement, other than one dealt with in the preceding subsections,
contained in this Agreement for thirty (30) days after written notice thereof
has been given by the other party;
(f) Bank or the Counterparty consolidates or amalgamates with, or
merges with or into, or transfers all or substantially all of its assets to,
another entity, and, at the time of such consolidation, amalgamation, merger or
transfer, the resulting, surviving or transferee entity fails to assume all
obligations of Bank or the Counterparty, as the case may be, under this
Agreement by operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement;
(g) Bank or the Counterparty (i) is generally not paying its debts
as they become due, (ii) files, or consents by answer or otherwise to the filing
against it of, any petition or case seeking relief under any existing or future
Debtor Relief Law, (iii) makes a general assignment for the benefit of its
creditors, (iv) applies for or consents to the appointment of a custodian,
receiver, trustee, conservator or other officer with similar powers over it or
over any substantial part of its property ("CUSTODIAN") or (v) takes corporate
action for the purpose of any of the foregoing;
(h) a court or governmental authority, agency, instrumentality or
official of competent jurisdiction enters or issues an order or decree with
respect to Bank or the Counterparty (i) appointing a Custodian, (ii)
constituting an order for relief under, or approving a petition or case for
relief or reorganization or any other petition or case to take advantage of, any
Debtor Relief Laws or (iii) ordering its dissolution, winding-up or liquidation;
or
(i) a petition or case for any purpose specified in Section 6(g)
or (h) above is filed against Bank or the Counterparty and is not dismissed or
undischarged within thirty (30) days.
7. EVENT OF CHANGE. "EVENT OF CHANGE" shall mean:
(a) the enactment, promulgation, execution or ratification of, or
any change in or amendment to, any law (or the application or interpretation of
any law, as determined by a court or regulatory authority
7
8
of competent jurisdiction or as determined by the opinion of independent counsel
mutually acceptable to Bank and the Counterparty) that occurs after the date on
which a Swap is entered into which would result in the imposition of a tax in a
material amount by any government or taxing authority upon a party hereto with
respect to a payment under this Agreement which would require a party (the
"AFFECTED PARTY") to make an additional payment hereunder in a material amount
pursuant to Section 3(d) hereof (a "TAX EVENT");
(b) the enactment, promulgation, execution or ratification of, or
any change in or amendment to, any law (or the application or interpretation of
any law, as determined by a court or regulatory authority of competent
jurisdiction or as determined by the opinion of independent counsel mutually
acceptable to Bank and the Counterparty) that occurs after the date on which a
Swap is entered into which would result in the execution and delivery of this
Agreement or the performance of any obligation of either of the parties under
this Agreement being unlawful (an "ILLEGALITY"); and
(c) a party consolidates or merges with or into, or transfers all
or substantially all its assets to another entity and such action does not
constitute an Event of Default under Section 6(f) and in the case of such event
with respect to a party (the "MERGED PARTY"), the other party (the "TERMINATING
PARTY") determines, in its sole and reasonable discretion, that the
creditworthiness of the Merged Party is not acceptable to the Terminating Party
(a "MERGER EVENT").
8. EARLY TERMINATION.
(a) If an Event of Default pursuant to subsection (a), (b), (c),
(d), (e), (f), (g) or (h) of Section 6 shall have occurred and be continuing,
the non-defaulting party ("NON-DEFAULTING PARTY") may designate an early
termination date ("EARLY TERMINATION DATE") upon two Business Days' notice to
the defaulting party ("DEFAULTING PARTY"); if an Event of Default pursuant to
subsection (i) of Section 6 shall have occurred, the Early Termination Date
shall automatically be the day immediately preceding the date of such Event of
Default and no notice to the Defaulting Party shall be required. Upon the Early
Termination Date, the parties' obligations under this Agreement shall terminate,
except for the obligations contained in Section 8(b).
(b) Upon the Early Termination Date, (i) the Defaulting Party
shall owe the Non-Defaulting Party the sum of (I) the aggregate amount, if any,
owed by the Defaulting Party to the Non-Defaulting Party under this Agreement
and (II) any damages, costs, losses or expenses (or gain, in which case is
expressed as a negative number) resulting from the designation of the Early
Termination Date incurred by the Non-Defaulting Party, determined in a
commercially reasonable manner, and including (without limitation) any damages,
losses, costs, or expenses (or gain) incurred in obtaining, liquidating or
employing ▇▇▇▇▇▇ against the Swap positions and in replacing the terminated
Swaps with equivalent positions; and (ii) the Non-Defaulting Party shall owe
the Defaulting Party the aggregate amount, if any, owed by the Non-Defaulting
Party to the Defaulting Party under this Agreement. Notwithstanding the
foregoing, if the amount calculated above in clauses (i) and (II) in this
Section 8(b) is a positive number, the Defaulting Party will pay it to the
Non-Defaulting Party; provided, however, that if such amount is a negative
number, the Non-Defaulting Party will pay the absolute value of that amount to
the Defaulting Party. For purposes of calculating amounts owed pursuant to
Section 3(a) of this Agreement in the event of early termination under this
Section, the Early Termination Date shall be deemed to be the last day of the
final Determination Period. Along with its designation of an Early Termination
Date, the Non-Defaulting Party shall provide its computation of damages, costs,
losses and expenses pursuant to clause (i)(II) above, in reasonable detail and
accompanied by reasonable corroborating documentation; however, the amount due
under clause (i)(II) above shall be only that amount mutually agreed upon by the
parties or, failing such agreement, that amount determined to be the average of
the calculations from Reference Market-makers, discarding the highest and lowest
quotations.
8
9
The party owing the higher amount under clauses (i) and (ii) above
shall pay to the other party within two business days of the Early Termination
Date the excess of the higher amount over the smaller amount.
9. ACCELERATED TERMINATION.
(a) Upon the occurrence of an Event of Change, the party becoming
aware thereof shall promptly notify the other party specifying the nature
thereof and the affected Swaps, and both parties shall make reasonable efforts
to make arrangements to avoid the imposition of any tax contemplated by Section
7(a) or to avoid the performance of any of the obligations of either of the
parties under this Agreement from being unlawful as contemplated by Section
7(b); provided that this subsection shall not impose on either party any
obligation other than to negotiate in good faith to make such arrangements as
will not adversely affect either of the parties.
(b) If an Event of Change shall have occurred and be continuing,
and if an arrangement is not made pursuant to Section 9(a) within fifteen (15)
days, then the Affected Party (in the event of a Tax Event), the Terminating
Party (in the event of a Merger Event), or either party (in the event of an
Illegality) may designate an accelerated termination date ("ACCELERATED
TERMINATION DATE") upon two Business Days' notice to the other party. Upon the
Accelerated Termination Date, the parties' obligations under this Agreement
shall terminate, except for the obligations contained in the remainder of this
subsection. The party having the larger net gain or smaller net loss as a
consequence of the termination of the parties' obligations under this Agreement
shall pay to the other party an amount equal to one-half of the difference
between such net gain and net loss. Such net gain and net loss shall be
determined in a commercially reasonable manner and shall include (without
limitation) any damages, losses, costs, or expenses incurred in obtaining,
liquidating or employing ▇▇▇▇▇▇ against the Swap positions and in replacing the
terminated Swaps with equivalent positions. Along with its designation of an
Accelerated Termination Date, the party making such designation shall provide
its computation of such net gain or net loss to both parties as a consequence of
the termination of the parties' obligations under this Agreement, in reasonable
detail and accompanied by reasonable corroborating documentation; however, the
amount due under this subsection shall be only that amount mutually agreed upon
by the parties or, failing such agreement, that amount determined to be the
average of the calculations from Reference Market-makers, discarding the highest
and lowest quotations. The intent of this subsection is to leave each party in
an equal financial position (vis-a-vis this Agreement) as a result of an Event
of Change.
10. COLLATERAL. The obligations of the Counterparty hereunder are
secured by the Collateral, and the Counterparty shall deliver to Bank such
documents as shall be reasonably requested by Bank to perfect and enforce the
Bank's liens and security interests with respect thereto.
11. OFFICER'S CERTIFICATE. Promptly after the execution of this
Agreement, each party shall deliver to the other party an officer's certificate
as to the due authorization, execution and delivery of this Agreement, including
the specimen signature(s) of the officer(s) executing this Agreement.
12. WAIVERS. Any failure or delay by either party to exercise any
right, in whole or in part, hereunder shall not be construed as a waiver of the
right to exercise the same or any other right at any time and from time to time
hereunder.
13. ASSIGNMENT. Except as may be contemplated for purposes of
Section 9(a), neither this Agreement, any right or interest herein nor any
payment due to either party hereunder may be assigned as security or otherwise
by the Counterparty and any purported assignment in violation of this provision
shall
9
10
be null and void; provided, however, that Bank may assign its rights hereunder
to (i) any affiliate of Bank, or (ii) another financial institution or
accredited investor, which in either case shall have a similar credit rating as
Bank.
14. OPINION OF COUNSEL. Promptly after execution of this
Agreement, the Counterparty shall deliver to Bank an opinion of counsel in form
and substance acceptable to Bank and its counsel.
15. NOTICES. All notices and other communications provided for in
this Agreement shall be given or made in writing and telecopied, mailed by
certified mail return receipt requested, or delivered to the intended recipient
at the address set out below; or, as to any party at such other address as shall
be designated by such party in a notice to the other party given in accordance
with this Section. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopy, subject to telephone confirmation of receipt, or when personally
delivered or, in the case of a mailed notice, when duly deposited in the mails,
in each case given or addressed as follows:
(i) if to Bank, at
Christiania Bank og Kreditkasse ASA
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Counterparty, at
▇▇▇▇▇▇▇ Petroleum Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President - Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
16. SET-OFF; COUNTERCLAIM. Without affecting the provisions of
Sections 3(b), 8(b) and 9(b), all payments under this Agreement will be made
without set-off or counterclaim, provided, however, that Bank shall have the
right without prior notice to the Counterparty, any such notice being expressly
waived by Counterparty to the extent permitted by applicable law, upon any
amount becoming due and payable by the Counterparty (whether at the stated
maturity, by acceleration or otherwise) to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provision in final) in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by Bank to or for
the credit or the account of the Counterparty. Bank agrees promptly to notify
the Counterparty after any such setoff and application made by Bank, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.
17. AMENDMENTS. No amendment or modification of this Agreement
shall be effective unless in writing and signed by both parties.
10
11
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO ANY CONFLICTS OF LAW RULES).
19. JURISDICTION. Each party irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York and to the Federal courts
situated in the Southern District of New York (without recourse to arbitration)
and irrevocably waives, to the fullest extent permitted by law, any defense to
any such claim brought in such courts based on such claim's having been brought
in an inconvenient forum. This Agreement has been entered into in New York, New
York, and it shall be performable for all purposes in New York. Each party
irrevocably consents to the service of process or other summons relating to any
such action or proceeding by registered or certified mail, postage prepaid, to
it at the address given in or pursuant to Section 15, provided the postal
service is then in operation. To the extent that either party or any of its
property or revenues has or hereafter may acquire any immunity for set off,
jurisdiction, suit, judgment, attachment prior to judgment or in aid of
execution, or execution, on the grounds of sovereignty or other grounds, each
party irrevocably waives such right of immunity in respect of its obligations
under this Agreement. The foregoing waiver is intended to be effective to the
fullest extent now or hereafter permitted by applicable law in any jurisdiction.
Nothing herein or in any of the other Loan Documents shall affect the right of
Bank to serve process in any other manner permitted by law or shall limit the
right of Bank to bring any action or proceeding against the Counterparty with
respect to any of the Counterparty's property in courts in other jurisdictions.
20. ENTIRE AGREEMENT. THIS AGREEMENT EMBODIES THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
ALL PROPOSALS, NEGOTIATIONS AND REPRESENTATIONS RELATING TO THIS AGREEMENT AND
THE SUBJECT MATTER HEREOF ARE MERGED HEREIN.
21. SEVERABILITY. Except as otherwise provided in Sections 7 and
9, any provision of this Agreement which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction.
22. COUNTERPARTS. This Agreement be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
23. INCONSISTENCIES. In the event of any inconsistency between the
provisions of any Confirmation and this document, the provisions of such
Confirmation shall prevail.
24. SINGLE AGREEMENT. Bank and the Counterparty expressly
acknowledge that they have entered into this Agreement with the intention that
this Agreement and all Swaps at any time and from time to time outstanding shall
collectively constitute a single agreement between them, it being understood
that the parties would not otherwise enter into any Swap.
11
12
25. CANCELLATION. The parties may cancel any Swap hereunder on
such terms as may be mutually agreed. In such event, the Payment Date with
respect to any such canceled Swap shall be three (3) Business Days after the
effective date of such cancellation unless a different Payment Date is specified
in the mutual agreement to cancel, in which case the specified date shall be the
Payment Date.
26. WAIVER OF JURY TRIAL. THE COUNTERPARTY AND BANK HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE THE RIGHT TO DEMAND A TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO OR ARISING UNDER THIS AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.
27. MARKET DISRUPTION. The parties agree that, with respect to any
provision under this Agreement or under any Swap hereunder with respect to which
a price quoted by NYMEX is necessary and for which such price is not
determinable due to material disruption or suspension in the trading of such
contract, if such disruption or suspension is likely to continue for the
foreseeable future, unless otherwise provided in the relevant Confirmation, the
parties shall use all reasonable efforts to agree on a comparable successor
index.
28. SECURITIES LAWS. The parties agree that neither this Agreement
nor any Confirmation or Reconfirmation is intended to evidence a purchase or
sale of a security within the meaning of any law (or the application or
interpretation of any law, as determined by a court or regulatory authority).
[The remainder of this page has been left blank.
Signatures are on the following page.]
12
13
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CHRISTIANIA BANK OG KREDITKASSE ASA ▇▇▇▇▇▇▇ PETROLEUM CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------- --------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ ------------------------------
Title: Vice President Title: President
----------------------------- -----------------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Title: First Vice President
-----------------------------
Exhibit "A" - Page 1
1
