1
EXHIBIT 10(x)
LOAN AGREEMENT
BETWEEN
SEVEN SEAS PETROLEUM INC.
AND
STILLWATER NATIONAL BANK
AND TRUST COMPANY, N.A.
DECEMBER 20, 2000
[SELF, XXXXXXX & XXXX, INC. LETTERHEAD]
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TABLE OF CONTENTS
Page
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1. Definition of Terms......................................................................................1
1.1 Change of Control...........................................................................1
1.2 Closing Date................................................................................2
1.3 Collateral..................................................................................2
1.4 Default.....................................................................................2
1.5 Guarantees..................................................................................2
1.6 Guarantor Collateral........................................................................2
1.7 Guarantors..................................................................................2
1.8 Guarantor Security Agreement................................................................2
1.9 Loan........................................................................................3
1.10 Loan Documents..............................................................................3
1.11 Note........................................................................................3
1.12 Obligations.................................................................................3
1.13 Person......................................................................................3
1.14 Pledged Stock...............................................................................3
1.15 Reference Rate..............................................................................4
1.16 Stock Pledge Agreement......................................................................4
1.17 Subsidiaries................................................................................4
2. Lending Agreement........................................................................................4
3. Loan.....................................................................................................4
3.1 Term........................................................................................5
3.2 Interest....................................................................................5
3.3 Payments....................................................................................5
3.4 Voluntary Prepayment........................................................................5
4. Advances; Payments.......................................................................................5
4.1 Use of Proceeds.............................................................................5
4.2 Request for Advance.........................................................................5
4.3 Place of Advances and Payments..............................................................5
5. Collateral Security......................................................................................6
6. Conditions of Lending....................................................................................6
6.1 Loan Documents..............................................................................6
6.2 Authority...................................................................................6
6.3 No Default..................................................................................6
6.4 Opinion of Counsel..........................................................................6
6.5 Arrangement Fee.............................................................................6
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6.6 Other Information...........................................................................6
6.7 Prohibitive Orders..........................................................................7
6.8 Information and Consents....................................................................7
6.9 Assignments.................................................................................7
7. Representations..........................................................................................7
7.1 Existence...................................................................................7
7.2 Authorized Capital Stock....................................................................7
7.3 Financial Condition.........................................................................7
7.4 Liabilities.................................................................................8
7.5 Ownership...................................................................................8
7.6 Permits.....................................................................................8
7.7 Taxes.......................................................................................8
7.8 Litigation..................................................................................8
7.9 No Default..................................................................................9
7.10 Full Disclosure.............................................................................9
7.11 Survival of Representations.................................................................9
7.12 Solvency....................................................................................9
8. Affirmative Covenants....................................................................................9
8.1 Performance of Obligations..................................................................9
8.2 Notifications...............................................................................9
8.3 Records Inspections........................................................................10
8.4 Financial Information......................................................................10
8.4.1 Financial Statements.........................................................10
8.4.2 Other Information............................................................10
8.5 Accounts...................................................................................11
8.6 Additional Documents.......................................................................11
8.7 Governmental Approvals.....................................................................11
8.8 Taxes......................................................................................11
8.9 Access.....................................................................................11
8.10 Operation..................................................................................11
8.11 Qualification; Licenses....................................................................11
8.12 Insurance..................................................................................11
8.13 Operation, Title, Pledge...................................................................12
8.14 Compliance with Applicable Law.............................................................12
8.15 Legal Existence............................................................................12
9. Negative Covenants......................................................................................12
9.1 Creation of Liens..........................................................................12
9.2 Liquidation, Merger or Sale of Assets......................................................12
9.3 Creation of Debt...........................................................................12
9.4 Loans and Guaranties.......................................................................13
9.5 Transfers..................................................................................13
9.6 Other Agreements...........................................................................13
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9.7 Limitation on Distributions and Redemptions................................................13
9.8 Transactions with Affiliates...............................................................13
9.9 Subsidiaries...............................................................................13
10. Default.................................................................................................13
10.1 Nonpayment of Note.........................................................................14
10.2 Other Nonpayment...........................................................................14
10.3 Breach of Agreement........................................................................14
10.4 Lien Filings...............................................................................14
10.5 Other Agreements...........................................................................14
10.6 Representations............................................................................14
10.7 Bankruptcy.................................................................................14
10.8 Judgment...................................................................................14
10.9 Maturity of Other Debt.....................................................................14
10.10 Failure of Liens...........................................................................15
10.11 Indenture..................................................................................15
10.12 Change of Control..........................................................................15
10.13 Opportunity to Cure........................................................................15
11. Remedies................................................................................................15
11.1 Acceleration of Note.......................................................................15
11.2 Selective Enforcement......................................................................15
11.3 Performance by Bank........................................................................15
11.4 Waiver of Default..........................................................................16
11.5 Deposits; Setoff...........................................................................16
12. Miscellaneous...........................................................................................16
12.1 Participating Banks........................................................................16
12.2 Cumulative Remedies........................................................................16
12.3 Survival of Representations................................................................16
12.4 Expenses...................................................................................17
12.5 Notices....................................................................................17
12.6 Construction...............................................................................17
12.7 Binding Effect.............................................................................18
12.8 No Third Party Beneficiaries...............................................................18
12.9 Assignment.................................................................................18
12.10 Time.......................................................................................18
12.11 Severability...............................................................................18
12.12 Verbal Change..............................................................................18
12.13 No Waiver..................................................................................18
12.14 Acknowledgments and Admissions.............................................................18
12.15 JOINT ACKNOWLEDGMENT.......................................................................19
12.16 INDEMNITY..................................................................................19
12.17 WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC................................................20
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Schedule "1.5" - Guaranty Agreement
Schedule "1.8" - Guarantor Security Agreement
Schedule "1.11" - Promissory Note
Schedule "1.14" - Subsidiaries and Pledged Stock
Schedule "1.16" - Stock Pledge Agreement
Schedule "9.9" - Other Subsidiaries
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made effective the
20th day of December, 2000, between SEVEN SEAS PETROLEUM INC., a Yukon
Territory, Canada corporation (the "Borrower"), and STILLWATER NATIONAL BANK AND
TRUST COMPANY, N.A. (the "Bank").
WITNESSETH:
WHEREAS, the Borrower has requested that the Bank loan the
Borrower funds to provide a working capital line of credit, which the Bank is
willing to do subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the funds to be advanced by the Bank under the Note
(as hereinafter defined) and other good and valuable consideration, the receipt
and sufficiency of all of which are hereby acknowledged, the Borrower and the
Bank hereby agree as follows:
1. Definition of Terms. All terms defined in this Agreement will have the
defined meaning when used in any of the Loan Documents (as hereinafter defined)
unless the context otherwise requires. Each accounting term not defined herein,
and each accounting term partly defined herein to the extent not defined, will
have the meaning given to it under generally accepted accounting principles. As
used in this Agreement, the following terms will have the meanings indicated:
1.1 Change of Control. The occurrence of any of the following
events: (a) any Person other than the Borrower or one of the
Borrower's wholly-owned Subsidiaries acquires or holds any
legal or beneficial ownership of any Subsidiary; (b) any
Person or two or more Persons acting as a group acquires
beneficial ownership (within the meaning of Rule 13d-3 of the
SEC under the Securities Exchange Act of 1934, as amended, and
including holding proxies to vote for the election of
directors other than proxies held by the Borrower's management
or their designees to be voted in favor of Persons nominated
by the Borrower's Board of Directors) of fifty percent (50%)
or more of the outstanding voting securities of the Borrower,
measured by voting power (including both common stock and any
preferred stock or other equity securities entitling the
holders thereof to vote with the holders of common stock in
elections for directors of the Borrower); (c) one-third or
more of the directors of the Borrower consists of Persons not
nominated by the Borrower's Board of Directors (not including
as Board nominees any directors which the Board is obligated
to nominate pursuant to shareholders agreements, voting trust
arrangements or similar arrangements); or (d) the merger or
consolidation of the Borrower with or into another Person or
the merger or consolidation of another Person into the
Borrower, or the sale of all or substantially all of the
assets of the Borrower and the Subsidiaries to another Person
(other than a Person that is controlled by the Borrower or one
or more of
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the Subsidiaries), and, in the case of any such merger or
consolidation, the securities of the Borrower that are
outstanding immediately prior to such transaction and which
represent one hundred percent (100%) of the aggregate voting
power of the voting stock of the Borrower are changed into or
exchanged for cash, securities or property, unless pursuant to
such transaction such securities are changed into or exchanged
for, in addition to any other consideration, securities of the
surviving corporation that represent immediately after such
transaction, at least a majority of the aggregate voting power
of the voting stock of the surviving corporation.
1.2 Closing Date. The date upon which the Loan Documents are
signed by the Borrower and the Guarantors and accepted by the
Bank at the Bank's office in Oklahoma City, Oklahoma, all in
form and substance satisfactory to the Bank.
1.3 Collateral. All of the Borrower's and the Guarantors' right,
title and interest in and to the property described in the
Loan Documents whether now owned or hereafter acquired
including without limitation: (a) the Guarantor Collateral;
(b) the Pledged Stock; and (c) all additions and accessions
to, replacements of, substitutions for, dividends on and
proceeds from any of the items listed in the foregoing parts
(a) and (b).
1.4 Default. The occurrence of any of the events specified in
paragraph 10 of this Agreement.
1.5 Guarantees. The agreement to be executed by the Guarantors in
favor of the Bank in substantially the form of Schedule "1.5"
attached hereto as a part hereof, whereby the Guarantors
unconditionally guarantee to the Bank payment of all
Obligations now or hereafter owing to the Bank by the Borrower
in connection with the Loan Documents and the full and
complete performance by the Borrower of the Loan Documents.
1.6 Guarantor Collateral. The certificates of deposit or
government securities in form and substance satisfactory to
the Bank owned by one or more of the Guarantors and pledged to
the Bank to secure payment of the Obligations.
1.7 Guarantors. The joint and several reference to (a) Xxxxxx X.
Xxxxxx III, an individual ("Xxxxxx"), (b) The GHK Company
L.L.C., an Oklahoma limited liability company ("GHK"), and (c)
Ramiiilaj A Limited Partnership, a Texas limited partnership
("Ramiiilaj").
1.8 Guarantor Security Agreement. The instrument and all
extensions, renewals and modifications thereof, executed and
delivered to the Bank by the Guarantors granting to the Bank a
first perfected security interest in and to the Guarantor
Collateral in substantially the form of Schedule "1.8"
attached hereto as a part hereof.
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1.9 Loan. The loan by the Bank to the Borrower evidenced by the
Note in the principal amount not to exceed TEN MILLION DOLLARS
($10,000,000.00).
1.10 Loan Documents. This Agreement, the Guarantees, the Guarantor
Security Agreement, the Note, the Stock Pledge Agreement and
all other instruments executed and delivered by the Borrower,
the Guarantors or any other Person or entity in connection
with the Loan contemplated by this Agreement, all instruments
issued pursuant to the foregoing documents and all extensions,
renewals, modifications and amendments thereof.
1.11 Note. The promissory note and all extensions, renewals,
modifications, consolidations and increases thereof executed
by the Borrower and delivered to the Bank pursuant to this
Agreement to evidence the Loan and advances thereunder
contemplated by this Agreement in the principal amount of TEN
MILLION DOLLARS ($10,000,000.00). The Note will be payable on
the terms stated in paragraph 3 of this Agreement and will be
in substantially the form of Schedule "1.11" attached hereto
as a part hereof.
1.12 Obligations. The obligation of the Borrower to: (a) pay the
principal of and interest on the Note in accordance with the
terms thereof and to satisfy all of the Borrower's other
liabilities to the Bank, whether under this Agreement or
otherwise, whether now existing or hereafter incurred, matured
or unmatured, direct or contingent, joint or several,
including any extensions, modifications, renewals, or
increases thereof and substitutions therefor; (b) repay to the
Bank all amounts advanced by the Bank under this Agreement or
otherwise on behalf of the Borrower including, without
limitation, overdrafts and advances for principal or interest
payments to other secured parties, mortgagees, lessors or
lienors, or for taxes, levies, insurance, rent, repairs to or
maintenance or storage of any of the Collateral; (c) reimburse
the Bank, on demand, for all of the Bank's expenses and costs
including reasonable fees and expenses of the Bank's counsel
in connection with the preparation, negotiation, amendment,
modification, or enforcement of this Agreement and the Loan
Documents including, without limitation, any proceeding
brought or threatened to enforce payment of any of the
obligations referred to in this paragraph 1.12; and (d)
perform all other obligations of the Borrower under the Loan
Documents.
1.13 Person. An individual, corporation, partnership, limited
liability company, association, joint stock company, trust or
trustee thereof, estate or executor thereof, unincorporated
organization or joint venture, tribunal, or any other legally
recognizable entity.
1.14 Pledged Stock. All of the issued and outstanding capital stock
of the Subsidiaries owned by the Borrower and certain of the
Borrower's Subsidiaries as set forth at Schedule "1.14"
attached hereto as a part hereof.
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1.15 Reference Rate. The national prime fluctuating rate of
interest published from time to time in The Wall Street
Journal (whether or not charged or published by the Bank). It
is a rate recognized by the Bank based on various factors,
including the Bank's costs and desired return, general
economic conditions and other factors and is used as a
reference point by the Bank for pricing some loans. The Bank
may price loans at, above or below the Reference Rate. Any
change in the Reference Rate will take effect, without notice
(which notice is hereby waived), on the day such change is
published in The Wall Street Journal.
1.16 Stock Pledge Agreement. The instrument and all extensions,
renewals and modifications thereof, executed and delivered to
the Bank by the Borrower and certain of the Borrower's
Subsidiaries granting to the Bank a first perfected security
interest in and to the Pledged Stock in substantially the form
of Schedule "1.16" attached hereto as a part hereof.
1.17 Subsidiaries. The wholly owned subsidiaries of the Borrower
listed at Schedule "1.14" attached hereto as a part hereof.
2. Lending Agreement. Subject to the terms and conditions of this Agreement, the
Bank agrees to lend to the Borrower and the Borrower agrees to borrow from the
Bank up to the principal amount of the Note which represents the total amount of
the Loan. Notwithstanding any other provision of the Loan Documents, any advance
herein provided for will not be required to be made by the Bank if since the
Closing Date and up to the date of such requested advance: (a) any event of
Default, or any event which, with notice or passage of time, would constitute an
event of Default, has occurred and has not been cured by the Borrower or waived
by the Bank; (b) Xxxxxx has died or has been judicially declared incompetent;
(c) the Borrower's right to do business has been suspended by Yukon Territory,
Canada, and has not been continued in the Cayman Islands; (d) the Borrower
requests such additional advance for any purpose other than the purposes set
forth at paragraph 4.1 of this Agreement; (e) there has been, in the reasonable
opinion of the Bank, a material adverse change in the financial condition of any
Guarantor from that shown by the financial statements referenced in this
Agreement; (f) any litigation or governmental proceeding has been instituted
involving the Collateral which, in the opinion of the Bank will, to a material
extent, adversely affect the value of the Collateral; or (g) if, since the date
of this Agreement and up to the date of the advance request, any liens, claims
or encumbrances against the Collateral have been made or filed and have not been
removed or settled to the satisfaction of the Bank. On the Bank's request, prior
to the making of any such advance, the Borrower will furnish to the Bank a
certificate dated the requested date of such advance and signed by the Borrower
to the effect that no change or event referred to in clauses (a), (b), (c), (d),
(e), (f) and (g) of this paragraph 2 has occurred.
3. Loan. The Borrower and the Bank specifically agree that the aggregate of
advances made during the term of the Note may exceed the face amount thereof,
but the unpaid principal balance at any time will not exceed such face amount.
The Loan will be evidenced by the Note and will be payable as follows:
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3.1 Term. The term of the Note will be for the period commencing
on the Closing Date and ending on December 31, 2001 (the
"Maturity Date").
3.2 Interest. Prior to Default, advances under the Note will bear
interest from the date of advance at the per annum rate equal
to the Reference Rate plus 75/100 percent (.75%). After
Default, all amounts due under the Note will bear interest at
the greater of: (a) fifteen percent (15%) per annum; or (b)
the Reference Rate plus five percent (5%) per annum. All
interest will be computed for the actual number of days
elapsed at a per diem charge based on a year consisting of
three hundred sixty (360) days.
3.3 Payments. Provided that no event of Default has occurred or is
continuing under any of the Loan Documents, there will be no
required principal payments on the Note until the Maturity
Date. Commencing on January 31, 2001, and on the last day of
each successive month thereafter until the Note is paid in
full, the Borrower will pay to the Bank all accrued unpaid
interest on the Note. The entire unpaid principal balance of
the Note plus all accrued and unpaid interest thereon will be
due and payable on the Maturity Date.
3.4 Voluntary Prepayment. The Borrower will have the right at any
time to prepay the Note in whole or in part, without premium
or penalty, but with interest accrued to the date of
prepayment.
4. Advances; Payments. Advances under the Note will be made by the Bank for the
following purposes and subject to the following limitations:
4.1 Use of Proceeds. All proceeds of each advance under the Note
will be used solely for: (a) working capital purposes; and (b)
payment of costs incurred by the Borrower or the Bank in
connection with the preparation, administration and
enforcement of the Loan Documents.
4.2 Request for Advance. Not later than 11:00 a.m. on the date of
advance, the Borrower will notify the Bank in writing of the
total amount of the requested advance under the Note.
4.3 Place of Advances and Payments. Advances under the Note will
be made at the Bank's office or by wire transfer of
immediately available funds to a bank account designated by
the Borrower in the advance request. All payments and
prepayments of principal or interest on the Note will be made
to the Bank in collected and freely transferable funds at or
before 11:00 a.m. Oklahoma City, Oklahoma time on the date due
at the Bank's office at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxx Xxxx, Xxxxxxxx. All payments will be paid in full
without set off or counterclaim and without reduction for, and
free from, any and all taxes, levies, imposts, duties, fees,
charges, deductions, withholdings, restrictions or conditions
of any nature imposed by any government or any political
subdivision
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or taxing authority thereof. If any payment under the Note or
this Agreement becomes due and payable on a day other than a
business day, the maturity thereof will be extended to the
next succeeding business day and such extension of time will
in such case be included in the computation of payments of
interest.
5. Collateral Security. Payment and performance of the Obligations will be
secured by the Guarantees, all of the Collateral and such other or additional
property as is agreed to by the Borrower and the Bank.
6. Conditions of Lending. The obligation of the Bank to perform this Agreement
to make the initial or any future advances under the Note is subject to the
satisfaction and continued performance by the Borrower and the Guarantors of the
following conditions precedent:
6.1 Loan Documents. The execution, acknowledgment (where
appropriate) and delivery by the appropriate parties of the
Loan Documents, all in form and substance satisfactory to the
Bank, and delivery of possession to the Bank of any Collateral
the possession of which is necessary to perfect the Bank's
security interest including, without limitation, any
certificates evidencing the Pledged Stock.
6.2 Authority. The Bank will have received: (a) certified copies
of the instruments creating the Borrower, GHK and Ramiiilaj
and/or governing the operation of the Borrower, GHK and
Ramiiilaj, complete with all amendments thereto and
certificates to be filed in connection therewith; and (b)
certified copies of resolutions and other documents reasonably
required to authorize the execution, delivery and performance
of the Loan Documents, all in form and substance satisfactory
to the Bank.
6.3 No Default. The representations and warranties set forth in
paragraph 7 of this Agreement will be true and correct on and
as of the date of the initial advance of funds under the Note
and each additional advance with the same effect as if such
representations and warranties had been made on and as of such
date and there will have occurred and be continuing no
Default.
6.4 Opinion of Counsel. The Bank will have received the opinion or
opinions of the Borrower's and the Guarantors' counsel in form
and substance reasonably acceptable to the Bank and the Bank's
counsel.
6.5 Arrangement Fee. The Bank will have received a non-refundable
arrangement fee from the Borrower in the amount of Twelve
Thousand Five Hundred Dollars ($12,500.00) as reimbursement to
the Bank for processing the Loan.
6.6 Other Information. The Bank will have received current
financial statements for the Borrower and the Guarantors and
such other information, documents and
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instruments concerning the Borrower, the Subsidiaries, the
Guarantors and the Collateral, as the Bank reasonably
requests.
6.7 Prohibitive Orders. No order, writ or injunction of any court
or administrative agency is in effect or is being sought
prohibiting the transactions contemplated by this Agreement or
the other Loan Documents.
6.8 Information and Consents. The Borrower and the Guarantors will
have furnished to the Bank any consents of third parties to
the transactions contemplated by this Agreement which may be
required under any other agreements binding on the Borrower,
any of the Subsidiaries or the Guarantors.
6.9 Assignments. With respect to any secured indebtedness being
paid off out of an advance under the Note, the Bank will have
received an assignment, in form and substance satisfactory to
the Bank, of all liens, encumbrances and security interests
securing such indebtedness.
7. Representations. The Borrower represents and warrants to the Bank that the
following circumstances exist on the date of this Agreement and will continually
exist throughout the term of the Loan:
7.1 Existence. The Borrower is and will continue to be a
corporation duly organized and validly existing under the laws
of Yukon Territory, Canada until such corporate existence is
duly and validly continued in the Cayman Islands. Each of the
Subsidiaries is and will continue to be a corporation duly
organized and validly existing under the laws of the
jurisdiction under which such Subsidiary was formed. GHK is
and will continue to be a limited liability company duly
organized and validly existing under the laws of the State of
Oklahoma. Ramiiilaj is and will continue to be a limited
partnership duly organized and validly existing under the laws
of the State of Texas. The Borrower, GHK and Ramiiilaj and
have adequate power, authority and legal right to enter into
and carry out the provisions of the Loan Documents, to borrow
money and to give security for borrowings as required by this
Agreement and to consummate the transactions hereby
contemplated. The Loan Documents, upon their execution and
delivery, will constitute valid, legal and binding obligations
of the Borrower and the Guarantors, enforceable in accordance
with their terms, subject only to applicable bankruptcy,
insolvency or similar laws generally affecting the enforcement
of creditor's rights.
7.2 Authorized Capital Stock. The authorized capital stock and
outstanding capital stock of each of the Subsidiaries is as
set forth at Schedule "1.14" attached hereto as a part hereof
and there are no outstanding options, warrants or other
convertible securities issued or outstanding with respect to
any of the Subsidiaries.
7.3 Financial Condition. The Borrower's consolidated financial
statements dated as of September 30, 2000, and the Guarantors'
financial statements dated as of June
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30, 2000, copies of which have been furnished to the Bank, are
correct and complete and fairly reflect the financial
condition of the Borrower, the Subsidiaries and the Guarantors
as of the date thereof and have been prepared in conformity
with accounting principles applied on a basis consistent with
that of preceding periods. There has occurred no material
adverse change in the financial condition of the Borrower, any
of the Subsidiaries or the Guarantors from the date of such
financial statements to the date of execution of this
Agreement.
7.4 Liabilities. Neither the Borrower, any of the Subsidiaries nor
any Guarantor has any material liabilities, direct or
contingent, except those disclosed in the financial statements
referred to in paragraph 7.3 of this Agreement.
7.5 Ownership. The Borrower has good and marketable title to the
Pledged Stock, free and clear of all liens, security interest,
claims or encumbrances, except for liens and security
interests in favor of the Bank. The Guarantors have good and
marketable title to the Guarantor Collateral, free and clear
of all liens, security interest, claims or encumbrances,
except for liens and security interests in favor of the Bank.
7.6 Permits. The Borrower and each of the Subsidiaries has, or
will obtain, all governmental and private permits,
certificates, consents and franchises which are material to
the business, property, assets, operations or condition,
financial or otherwise, of the Borrower or the Subsidiaries,
to carry on their respective businesses as now being conducted
and to own or lease and operate their respective properties as
now owned or leased. All such governmental and private
permits, certificates, consents and franchises are, or will
be, valid and subsisting, and, to the best knowledge of the
Borrower and the Guarantors, there is no existing violation
thereof.
7.7 Taxes. The Borrower, each of the Subsidiaries and the
Guarantors have filed all Canadian, foreign, federal, state
and local tax returns which are required to be filed and has
paid or made provisions for payment of all taxes which have or
may become due pursuant to said returns or pursuant to any
assessment, except such taxes as are being contested in good
faith and as to which adequate reserves have been provided.
Neither the Borrower nor the Guarantors know of any basis for
the assessment of any deficiency taxes.
7.8 Litigation. There is no action, suit, proceeding or
investigation pending, or, to their knowledge, threatened
against the Borrower, any of the Subsidiaries, any Guarantor
or the Collateral which will: (a) materially and adversely
affect the Borrower, the Guarantors or the Collateral; (b)
impair the ability of the Borrower or the Subsidiaries to
carry on their respective businesses as presently
contemplated; or (c) result in any substantial liability not
adequately covered by insurance.
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7.9 No Default. The execution, delivery and performance by the
Borrower and the Guarantors of this Agreement and the Loan
Documents will not violate any provision or constitute a
default under any indenture, agreement or instrument to which
the Borrower, any of the Subsidiaries or any Guarantor is a
party or by which the Borrower, any of the Subsidiaries, any
Guarantor or the Collateral is bound or affected.
7.10 Full Disclosure. Neither this Agreement nor any statement or
instrument referred to herein nor any other information,
report or statement delivered to the Bank by the Borrower or
the Guarantors contains any untrue statement or omits to state
a material fact necessary to make the statements herein or
therein not misleading.
7.11 Survival of Representations. All representations and
warranties made by the Borrower and the Guarantors herein will
survive the delivery of the Loan Documents and the making of
the Loan evidenced thereby, and any investigation at any time
made by or on behalf of the Bank will not diminish the Bank's
right to rely thereon. All statements contained in any
certificate or other instrument delivered by or on behalf of
the Borrower or the Guarantors under or pursuant to this
Agreement or in connection with the transactions contemplated
hereby will constitute representations and warranties made by
the Borrower and the Guarantors hereunder.
7.12 Solvency. Upon giving effect to the issuance of the Note, the
execution of the Loan Documents by the Borrower and the
Guarantors and the consummation of the transactions
contemplated hereby, the Borrower and the Guarantors will be
solvent (as such term is used in applicable bankruptcy,
liquidation, receivership, insolvency or similar laws).
8. Affirmative Covenants. Until the expiration of the Bank's obligation to
advance funds under this Agreement and the payment in full of the Obligations,
unless the Bank otherwise consents in writing, the Borrower agrees to perform or
cause to be performed the following:
8.1 Performance of Obligations. The Borrower will pay and perform
all Obligations under the Loan Documents. The Borrower and the
Subsidiaries will perform all obligations under all material
contracts and agreements relating to their respective
businesses, and will enforce the performance of the
obligations of the other parties thereto.
8.2 Notifications. The Borrower will give prompt written notice to
the Bank of: (a) any event of Default; (b) any change of
management of the Borrower; (c) all material litigation
affecting the Borrower, the Subsidiaries, the Guarantors or
the Collateral; and (d) any other matter which has resulted
in, or might result in (i) a material adverse change in the
consolidated financial condition of the Borrower, the
Subsidiaries or the Guarantors or (ii) a material adverse
change in the ability
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15
of the Borrower to perform the Obligations, warranties,
covenants and conditions of the Loan Documents.
8.3 Records Inspections. The Borrower and the Subsidiaries will
maintain full and accurate accounts and records of operations
on a basis consistent with prior periods. The Borrower will
permit the Bank and the Bank's designated representatives to
have access to the records and accounts of the Borrower and
the Subsidiaries at all reasonable times to perform such
inspections, audits and examinations as the Bank might
reasonably request from time to time.
8.4 Financial Information. The Borrower and the Guarantors will
furnish to the Bank:
8.4.1 Financial Statements. Accurate books and records of
account will be kept by the Borrower and the
Guarantors in accordance with accounting principles
consistently applied. The Bank will have the right to
examine and copy such books and records and the
Canadian, foreign, federal and state income tax
returns of the Borrower and the Guarantors, to
discuss the affairs, finances and accounts of the
Borrower and the Guarantors, and to be informed as to
the same at such times and intervals as the Bank
might reasonably request. The Borrower will furnish
to the Bank no later than ninety (90) days after the
close of the Borrower's fiscal year, year end annual
audited consolidated financial statements of the
Borrower. The annual audited financial statements of
the Borrower will be prepared by an independent
certified public accounting firm selected by the
Borrower and approved by the Bank, will be prepared
in accordance with generally accepted accounting
principles consistently applied and will be certified
to the Bank. The Guarantors will furnish to the Bank
annual year end financial statements. The financial
statements of the Guarantors will be certified to the
Bank, will be prepared in accordance with generally
accepted accounting principles consistently applied
and will be in form and substance satisfactory to the
Bank. Within thirty (30) days after request by the
Bank, the Borrower and the Guarantors will furnish to
the Bank complete copies of all Canadian, foreign,
federal and state income tax returns for the
preceding year with all schedules attached.
8.4.2 Other Information. At the Bank's request from time to
time, the Borrower and the Guarantors will provide
the Bank with such other information as the Bank may
reasonably request regarding the business affairs and
financial condition of the Borrower, the Subsidiaries
and the Guarantors and the Borrower and the
Guarantors will provide access to the Bank at all
reasonable times to all documents and information
relating to the Collateral.
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16
8.5 Accounts. The Borrower will maintain the Borrower's primary
accounts on deposit with a financial institution approved by
the Bank which approval will not be unreasonably withheld.
8.6 Additional Documents. The Borrower and the Guarantors will
promptly, on demand by the Bank, perform or cause to be
performed such actions and execute or cause to be executed all
such additional agreements, contracts, indentures, documents
and instruments as might be reasonably requested by the Bank
to satisfy the requirements of this Agreement and the
disbursement of funds hereunder.
8.7 Governmental Approvals. The Borrower will obtain and
continuously maintain and will cause each of the Subsidiaries
to obtain and continuously maintain all permits, licenses,
easements, rights-of-way and governmental authorities
necessary for the proper operation of their respective
businesses.
8.8 Taxes. All taxes, assessments, governmental charges and levies
imposed on the Borrower, the Subsidiaries or the Guarantors or
the assets, income or profits of the Borrower, the
Subsidiaries or the Guarantors, will be paid prior to the date
on which penalties attach thereto, provided that neither the
Borrower, the Subsidiaries nor the Guarantors will be required
to pay any such charge which is being contested in good faith
by proper proceedings and for which adequate reserves have
been established under generally accepted accounting
principles.
8.9 Access. Any representative of the Bank will have reasonable
access to the Collateral and any other business property owned
by the Borrower or the Guarantors.
8.10 Operation. The Borrower agrees to operate its business and to
cause each of the Subsidiaries to operate their respective
businesses in a prudent and efficient manner consistent with
normal industry practices.
8.11 Qualification; Licenses. The Borrower will take such actions
or cause such actions to be taken as might be required to
maintain the existence of the Borrower and each of the
Subsidiaries and all governmental and private permits,
licenses and authorities of the Borrower and the Subsidiaries
necessary or desirable to the continuation of their respective
businesses and will comply with all statutes and governmental
regulations.
8.12 Insurance. Policies of insurance will be maintained by the
Borrower and the Subsidiaries with companies, in amounts, and
against reasonable risks satisfactory to the Bank. The
Borrower and the Guarantors will furnish the Bank with a
schedule of all insurance policies in effect and, upon request
of the Bank, evidence of payment of the premium for each
insurance policy.
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17
8.13 Operation, Title, Pledge. The Borrower agrees to grant to the
Bank first perfected security interests covering all of the
Collateral and to promptly deliver to the Bank such security
documents and other instruments as might be required by the
Bank to subject the Collateral to liens in favor of the Bank.
The Borrower will maintain and defend good and marketable
title to the Collateral free and clear of all claims, liens or
encumbrances except those in favor of the Bank.
8.14 Compliance with Applicable Law. The Borrower and the
Guarantors will continuously comply with all applicable
regulations, rules, ordinances or orders of the United States
of America, any state, or any other jurisdiction, or of any
agency of federal state and local taxing authority or other
agency which might materially and adversely affect the
business, operations or financial condition of the Borrower.
8.15 Legal Existence. The Borrower will take such actions or cause
such actions to be taken as might be required to maintain the
legal existence of the Borrower and each of the Subsidiaries
and the right to conduct their respective businesses in those
countries and states in which the nature of the business
requires qualification to do business therein, will comply
with and will cause each of the Subsidiaries to comply with
all valid and applicable statutes, rules and regulations and
will continue to conduct the respective businesses of the
Borrower and the Subsidiaries in substantially the same manner
and field as such businesses are now conducted.
9. Negative Covenants. The Borrower agrees that until the expiration of the
obligation of the Bank to advance funds under this Agreement and payment in full
of the Obligations, unless the Bank waives compliance in writing:
9.1 Creation of Liens. Neither the Borrower, any of the
Subsidiaries nor the Guarantors will create, assume or suffer
to exist any pledge, security interest, encumbrance or other
lien (including the lien of an attachment, judgment or
execution) securing a charge or obligation affecting any or
all of the Collateral, excluding only the liens granted to the
Bank.
9.2 Liquidation, Merger or Sale of Assets. Neither the Borrower
nor any of the Subsidiaries will liquidate, dissolve or
convey, sell, assign or otherwise dispose of any substantial
part of their respective assets, except for sales in the
ordinary course of business. None of the Subsidiaries will
enter into any consolidation, merger, partnership, syndicate,
pool or other combination, except with the Borrower or another
Subsidiary.
9.3 Creation of Debt. The Borrower will not incur, create or
suffer to exist any indebtedness for borrowed money, or issue,
discount or sell any obligation of the Borrower, excluding
only: (a) the indebtedness to the Bank contemplated by this
Agreement; (b) current accounts payable arising in the
ordinary course of the Borrower's business; (c) indebtedness
outstanding as of the Closing Date; and (d)
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18
other indebtedness of the Borrower and the Subsidiaries not to
exceed Twenty-five Million Dollars ($25,000,000.00) in the
aggregate.
9.4 Loans and Guaranties. The Borrower will not make any loans,
advances or extensions of credit to any Person, firm or
corporation nor become a guarantor or surety directly or
indirectly, except loans, advances and extensions of credit to
or among the Borrower and the Subsidiaries and loans to
employees relating to their employment.
9.5 Transfers. The Borrower will not transfer or permit to be
transferred voluntarily or by operation of law any interest in
the Collateral and the Borrower will not sell, transfer or
otherwise dispose of or create, assume or suffer to exist any
pledge, lien, security interest, charge or encumbrance on any
interest in any of the Subsidiaries owned by the Borrower.
9.6 Other Agreements. The Borrower will not enter into any
agreement that limits or restricts the ability of the Borrower
to comply with the terms of the Loan Documents.
9.7 Limitation on Distributions and Redemptions. The Borrower will
not: (a) declare, pay or make any dividends or other
distributions in respect of any class of capital stock or
other interest in the Borrower; or (b) enter into any
management agreement with any affiliate or other Person except
in the ordinary course of business. Excluding any such items
by, between or among the Borrower and the Subsidiaries,
neither the Borrower nor any of the Subsidiaries will directly
or indirectly make any capital contribution to or purchase,
redeem, acquire or retire any of the capital stock of the
Borrower or the Subsidiaries (whether such capital stock is
now or hereafter issued, outstanding or created).
9.8 Transactions with Affiliates. The Borrower will not engage in
any material transaction with any affiliate of the Borrower on
terms which are less favorable to the Borrower than those
which would have been obtainable at the time in arm's-length
dealing with Persons other than such affiliates.
9.9 Subsidiaries. The Borrower will not create or own any
subsidiaries other than the Subsidiaries and subsidiaries
listed on Schedule "9.9" attached hereto as a part hereof. The
Borrower will not permit any of the Subsidiaries to issue any
additional capital stock of any class or series or incur any
secured indebtedness without the Bank's written consent.
10. Default. The Bank may terminate all obligations of the Bank to make further
disbursements under the Note and the Bank may declare the Note and all other
indebtedness and Obligations of the Borrower owing to the Bank to be due and
payable if any of the following events occur and are not remedied by the
Borrower or waived by the Bank in writing:
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19
10.1 Nonpayment of Note. A default in payment when due of any
interest on or principal of the Note; or
10.2 Other Nonpayment. A default in payment when due of any other
amount payable to the Bank under the terms of any of the Loan
Documents; or
10.3 Breach of Agreement. A default by the Borrower or the
Guarantors in the performance or observance of any agreement
contained in the Loan Documents, or under the terms of any
other instrument delivered to the Bank in connection with this
Agreement; or
10.4 Lien Filings. The existence of any lien on the Collateral
without indemnification therefor satisfactory to the Bank; or
10.5 Other Agreements. The rescission, abandonment, disclaimer or
breach of the Guarantees or other agreement affecting any part
of the Collateral or the Guarantees; or
10.6 Representations. Any representation, statement, certificate,
schedule or report made or furnished to the Bank by the
Borrower or the Guarantors proves to be false or erroneous in
any material respect at the time of the making thereof or any
representation or warranty ceases to be complied with in any
material respect; or
10.7 Bankruptcy. The Borrower, any of the Subsidiaries or any
Guarantor becomes bankrupt or makes a general assignment for
the benefit of creditors; or the Borrower, any of the
Subsidiaries or any Guarantor applies for, or consents to, the
appointment of a trustee, receiver or liquidator or authorizes
such application or consent, or if proceedings seeking such
appointment are commenced against the Borrower, any of the
Subsidiaries or any Guarantor and remain undismissed and
unstayed for ninety (90) days; or the Borrower, any of the
Subsidiaries or any Guarantor authorizes or files a voluntary
petition in bankruptcy or applies for or consents to the
application of any bankruptcy, reorganization, readjustment of
debt, insolvency, dissolution, liquidation or other similar
law of any jurisdiction; or
10.8 Judgment. Entry by any court of judgment against the Borrower,
any of the Subsidiaries or any Guarantor in excess of One
Million Dollars ($1,000,000.00) which is not adequately
covered by insurance or secured by a supersedes bond, or any
attachment of any material portion of the assets of the
Borrower, any of the Subsidiaries or any Guarantor which is
not discharged to the satisfaction of the Bank within thirty
(30) days thereof; or
10.9 Maturity of Other Debt. The occurrence of an event of default
under or the acceleration of the maturity of the indebtedness
of the Borrower or any Guarantor
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to any other Person in an amount in excess of One Million
Dollars ($1,000,000.00); or
10.10 Failure of Liens. Failure of the Bank's liens and security
interests covering the Collateral to constitute a first and
prior lien on any material portion of the Collateral; or
10.11 Indenture. The occurrence of an event of default under the
Borrower's Indenture covering the Borrower's $110,000,000
12.5% Senior Notes due 2005 or any action by the holders of
such Senior Notes to amend the Borrower's Indenture; or
10.12 Change of Control. Any Change of Control occurs.
10.13 Opportunity to Cure. In the event the Borrower cures or causes
to be cured such Default within thirty (30) days after receipt
of written notice thereof, the parties will be restored to
their respective rights and obligations under this Agreement
as if no Default had occurred, except that no right to cure or
notice of Default will be given as to events of Default in
paragraphs 10.1, 10.4, 10.5, 10.7, 10.8, 10.10, 10.11 or
10.12. The Borrower's opportunity to cure will be applicable
as herein set forth notwithstanding any contrary provisions
contained in any of the other Loan Documents.
11. Remedies. In the event of Default, the Bank will have the following
remedies:
11.1 Acceleration of Note. The Bank may, at the Bank's option,
declare the Note and all other Obligations to be immediately
due and payable, and the Bank will be entitled to proceed to
selectively and successively enforce the Bank's rights under
the Loan Documents or any one or more of them.
11.2 Selective Enforcement. In the event the Bank elects to
selectively and successively enforce the Bank's rights under
any one or more of the instruments securing payment of the
Obligations, such action will not be deemed a waiver or
discharge of any other lien or encumbrance securing payment of
the Obligations until such time as the Bank has been paid in
full all sums owing to the Bank.
11.3 Performance by Bank. In the event the Borrower fails to cure
any Default in the time provided, the Bank will at any time
thereafter have the right (but not the obligation) to: (a)
take possession of the Collateral and dispose of the
Collateral in such manner as the Bank determines in the Bank's
sole discretion (subject to the Bank's obligations to make a
rights offering); (b) make such payments and perform such acts
as might be determined by the Bank to be necessary or
appropriate to perform or to cure any default in performance
by the Borrower under all agreements affecting the Collateral;
and (c) make advances under the Note without the consent of
the Borrower to pay interest accrued thereon and all costs of
such operation. If the Bank exercises such option, all costs
will be paid
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21
to the Bank by the Borrower. The Borrower and the Guarantors
hereby authorize the Bank to increase the indebtedness owing
by the Borrower to the Bank by such costs and agrees that the
Loan Documents will evidence and secure payment of such costs
whether or not the total funds advanced exceed the face amount
of the Loan Documents.
11.4 Waiver of Default. The Bank may, by an instrument in writing
signed by the Bank, waive any Default which has occurred and
any of the consequences of such Default, and in such event,
the Bank, the Borrower and the Guarantors will be restored to
their respective former positions, rights and obligations
hereunder. Any Default so waived will, for the purposes of
this Agreement, be deemed to have been cured and not to be
continuing; but no such waiver will extend to any subsequent
or other Default or impair any consequence of such subsequent
or other Default.
11.5 Deposits; Setoff. Regardless of the adequacy of any other
collateral security held by the Bank, any deposits or other
sums credited by or due from the Bank to the Borrower or the
Guarantors (excluding any funds held in escrow by the Bank
pursuant to a written escrow agreement) will at all times
constitute collateral security for all indebtedness and
obligations of the Borrower and the Guarantors to the Bank and
may be set off against any and all liabilities of the Borrower
and the Guarantors to the Bank. The rights granted by this
paragraph 11.5 are in addition to the rights of the Bank under
any statutory banker's lien now or hereafter in effect.
12. Miscellaneous. It is further agreed as follows:
12.1 Participating Banks. The Borrower and the Guarantors agree
that although the Loan Documents name the Bank as the holder
thereof, the Bank is authorized to sell participation
interests in the Loan to other financial institutions (a
"Participating Bank") and the Borrower and the Guarantors
agree that, subject to the terms of the agreements of
participation, each Participating Bank will be entitled to
rely on the terms of the Loan Documents as if the
Participating Bank had been named as an original party to the
Loan Documents.
12.2 Cumulative Remedies. No failure on the part of the Bank to
exercise and no delay in exercising any right hereunder will
operate as a waiver thereof, nor will any single or partial
exercise by the Bank of any right hereunder preclude any other
or further right of exercise thereof or the exercise of any
other right.
12.3 Survival of Representations. All representations and
warranties made herein will survive the making of the Loan
hereunder and the delivery of the Loan Documents.
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22
12.4 Expenses. On the Closing Date, the Borrower will (except where
prohibited by applicable law) pay all reasonable fees, costs,
expenses (including legal expenses and attorneys' fees) and
disbursements of the Bank incident to: (a) the preparation,
negotiation, amendment, modification, or enforcement of this
Agreement and the Loan Documents or the protection of the
rights of the Bank in connection with the Loan Documents and
the transactions contemplated thereby; and (b) the collection
or enforcement of the Loan Documents whether by judicial
proceedings, proceedings under Chapter 7 or 11 of the
Bankruptcy Code or any successor statute thereto, or
otherwise.
12.5 Notices. Any notice, demand or communication required or
permitted to be given by any provision of this Agreement will
be in writing and will be deemed to have been given and
received when delivered personally or by telefacsimile to the
party designated to receive such notice, or on the date
following the day sent by overnight courier, or on the third
(3rd) business day after the same is sent by certified mail,
postage and charges prepaid, directed to the following
addresses or to such other or additional addresses as any
party might designate by written notice to the other parties:
The Bank: Stillwater National Bank and Trust Company, N.A.
Attention: Xx. X.X. Xxxxxxx Xxxxxxxxx
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
with copy to: C. Xxx Xxxx, Esquire
Self, Xxxxxxx & Xxxx, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
The Borrower: Seven Seas Petroleum Inc.
Attention: Xxxxx X. Xxx, President
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
with copy to: Xxxx X. Xxxxxx, Esquire
McAfee & Xxxx
000 Xxxxx Xxxxxxxx, 00xx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
12.6 Construction. The Loan Documents are intended to constitute
contracts made under the laws of the State of Oklahoma and to
be construed in accordance with the internal laws of said
state. Nothing in this Agreement will be construed to
constitute the Bank as a joint venturer with the Borrower or
to constitute a partnership. The descriptive headings of the
paragraphs of this Agreement (except the terms defined at
paragraph 1 hereof) are for convenience only and are not to
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23
be used in the construction of the content of this Agreement.
This Agreement may be executed in multiple counterparts, each
of which will constitute one agreement.
12.7 Binding Effect. This Agreement will be binding on and will
inure to the benefit of the Bank, the Borrower and their
respective heirs, successors and assigns.
12.8 No Third Party Beneficiaries. Nothing in this Agreement,
express or implied, is intended to confer upon any Person,
other than the parties hereto and their respective heirs,
successors and assigns, any rights or remedies under or by
reason of this Agreement or to constitute such Person a third
party beneficiary of this Agreement.
12.9 Assignment. Neither this Agreement, the Loan Documents nor the
proceeds from the Loan will be assigned without the Bank's
prior written consent, and without such consent, there will be
no right to designate a payee of the proceeds from the Loan.
12.10 Time. Time is of the essence of this Agreement and each
provision of the other Loan Documents.
12.11 Severability. In case any one or more of the provisions
contained in the Loan Documents should be invalid, illegal or
unenforceable in any respect in any jurisdiction, the
validity, legality and enforceability of such provision or
provisions will not in any way be affected or impaired thereby
in any other jurisdiction; and the validity, legality and
enforceability of the remaining provisions contained herein
and therein will not in any way be affected or impaired
thereby.
12.12 Verbal Change. The Loan Documents may not be amended, altered,
modified or changed verbally, but only by an agreement in
writing signed by the party against whom enforcement of any
amendment, waiver, change, modification or discharge is
sought.
12.13 No Waiver. No advance of the proceeds from the Loan under any
of the Loan Documents will constitute a waiver of any of the
representations, warranties, conditions or covenants of the
Borrower or the Guarantors under the Loan Documents. In the
event the Borrower or any Guarantor is unable to satisfy any
warranty, condition or covenant contained in the Loan
Documents, no advance of the proceeds from the Loan will
preclude the Bank from thereafter declaring such inability to
be an event of Default.
12.14 Acknowledgments and Admissions. The Borrower and the
Guarantors hereby represent, warrant, acknowledge and admit
that: (a) each of them has made an independent decision to
enter into this Agreement and the other Loan Documents to
which it is a party, without reliance on any representation,
warranty, covenant
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24
or undertaking by the Bank, whether written, oral or implicit,
other than as expressly set out in this Agreement or in
another Loan Document delivered on or after the date hereof;
(b) there are no representations, warranties, covenants,
undertakings or agreements by the Bank as to the Loan
Documents except as expressly set out in this Agreement or in
another Loan Document delivered on or after the date hereof;
(c) the Bank has no fiduciary obligation toward the Borrower
or the Guarantors with respect to any Loan Document or the
transactions contemplated thereby; (d) the relationship
pursuant to the Loan Documents between the Borrower and the
Guarantors, on the one hand, and the Bank, on the other hand,
is and will be solely that of debtor and creditor,
respectively; (e) no partnership or joint venture exists with
respect to the Loan Documents between the Borrower or the
Guarantors and the Bank; (f) should a Default occur or exist,
the Bank will determine in its sole discretion and for its own
reasons what remedies and actions it will or will not exercise
or take at the time; (g) without limiting any of the
foregoing, neither the Borrower nor any Guarantor is relying
upon any representation or covenant by the Bank, or any
representative thereof, and no such representation or covenant
has been made, that the Bank will, at the time of an event of
Default, or at any other time, waive, negotiate, discuss or
take or refrain from taking any action permitted under the
Loan Documents with respect to any such event of Default or
any other provision of the Loan Documents; and (h) the Bank
has relied upon the truthfulness of the acknowledgments in
this paragraph 12.14 in deciding to execute and deliver this
Agreement and to become obligated hereunder.
12.15 JOINT ACKNOWLEDGMENT. THIS WRITTEN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
12.16 INDEMNITY. THE BORROWER AND THE GUARANTORS AGREE TO INDEMNIFY
THE BANK, UPON DEMAND, FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES, PENALTIES,
FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES
OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS,
ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE
WHATSOEVER (IN THIS PARAGRAPH COLLECTIVELY CALLED "LIABILITIES
AND COSTS") WHICH TO ANY EXTENT (IN WHOLE OR IN PART) MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE BANK GROWING
OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH THE
COLLATERAL, THE LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS
- 19 -
25
(INCLUDING THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME
ASSOCIATED THEREWITH OR CONTEMPLATED THEREIN (WHETHER ARISING
IN CONTRACT OR TORT OR OTHERWISE AND INCLUDING ANY VIOLATION
OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY THE BORROWER,
THE GUARANTORS OR THE BANK OR ANY LIABILITIES OR DUTIES OF THE
BORROWER, THE GUARANTORS OR THE BANK WITH RESPECT TO HAZARDOUS
MATERIALS FOUND IN OR RELEASED INTO THE ENVIRONMENT).
THE FOREGOING INDEMNIFICATION WILL APPLY WHETHER OR NOT SUCH
LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN
WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT
LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE BANK, PROVIDED
ONLY THAT THE BANK WILL NOT BE ENTITLED UNDER THIS PARAGRAPH
TO RECEIVE INDEMNIFICATION FOR THAT PORTION, IF ANY, OF ANY
LIABILITIES AND COSTS WHICH IS PROXIMATELY CAUSED BY ITS OWN
INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS
DETERMINED IN A FINAL JUDGMENT OR WHICH RELATES TO ACTIONS
TAKEN BY THE BANK AFTER THE BANK HAS TAKEN TITLE TO THE
COLLATERAL. IF ANY PERSON (INCLUDING THE BORROWER, ANY OF ITS
AFFILIATES OR ANY GUARANTOR) EVER ALLEGES SUCH GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT BY THE BANK, THE
INDEMNIFICATION PROVIDED FOR IN THIS PARAGRAPH WILL
NONETHELESS BE PAID UPON DEMAND, SUBJECT TO LATER ADJUSTMENT
OR REIMBURSEMENT, UNTIL SUCH TIME AS A COURT OF COMPETENT
JURISDICTION ENTERS A FINAL JUDGMENT AS TO THE EXTENT AND
EFFECT OF THE ALLEGED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
AS USED IN THIS PARAGRAPH THE TERM "BANK" WILL REFER NOT ONLY
TO THE PERSON DESIGNATED AS SUCH BUT ALSO TO EACH DIRECTOR,
OFFICER, AGENT, ATTORNEY, EMPLOYEE, PARTICIPATING BANK,
REPRESENTATIVE AND AFFILIATE OF THE BANK.
12.17 WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF THE
BORROWER, THE GUARANTORS AND THE BANK HEREBY KNOWINGLY,
VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY (A) WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR
IN CONNECTION WITH THE LOAN DOCUMENTS OR
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26
ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH,
BEFORE OR AFTER MATURITY, (B) WAIVES, TO THE MAXIMUM EXTENT
NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY "SPECIAL DAMAGES," AS
DEFINED BELOW, (C) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS
AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS PARAGRAPH. AS USED IN THIS PARAGRAPH, "SPECIAL
DAMAGES" INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT
INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS
EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY
HERETO.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective the date first above written.
SEVEN SEAS PETROLEUM INC., a Yukon
Territory, Canada corporation
By /s/ XXXXX X. XXX
-----------------------------------------------
Xxxxx X. Xxx, President
(the "Borrower")
STILLWATER NATIONAL BANK AND TRUST
COMPANY, N.A.
By /s/ X.X. XXXXXXX XXXXXXXXX
-----------------------------------------------
X.X. Xxxxxxx Xxxxxxxxx, Senior Vice President
(the "Bank")
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27
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT is made effective the 20th day of
December, 2000, by XXXXXX X. XXXXXX III, an individual, THE GHK COMPANY L.L.C.,
an Oklahoma limited liability company, and RAMIIILAJ A LIMITED PARTNERSHIP, a
Texas limited partnership (jointly and severally referred to herein as the
"Guarantors"), each having a mailing address at c/o The GHK Company L.L.C., 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxxxx 00000, in favor of
STILLWATER NATIONAL BANK AND TRUST COMPANY, N.A. (the "Lender"), having a
mailing address at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxxxx
00000.
WITNESSETH:
WHEREAS, Seven Seas Petroleum Inc., a Yukon Territory, Canada
corporation (the "Borrower"), and the Lender have entered into that certain Loan
Agreement of even date herewith (the "Loan Agreement"), pursuant to which the
Lender has agreed to extend certain credit (the "Loan") to the Borrower
evidenced by that certain Promissory Note of even date herewith in the principal
amount of Ten Million Dollars ($10,000,000.00); and
WHEREAS, this Agreement is executed by the Guarantors and
delivered to the Lender to induce the Lender to make the Loan and in
satisfaction of a material condition precedent to such extension of credit by
the Lender.
NOW, THEREFORE, in consideration of the Loan by the Lender to
the Borrower and the benefits to be derived by the Guarantors therefrom, it is
agreed as follows:
1. Definitions. Except as otherwise defined herein, all terms defined in the
Loan Agreement will have the same meanings herein as therein defined unless the
context otherwise requires. All references herein to any Loan Document, or other
document or instrument refer to the same as from time to time amended,
supplemented or restated. As used in this Agreement, "Obligors" means, jointly
and severally, the Borrower, the Guarantors and any other endorsers, guarantors
or obligors, primary or secondary, of any or all of the Obligations.
2. Guaranty. The Guarantors jointly and severally irrevocably and
unconditionally guarantee to the Lender the payment of the Obligations of the
Borrower contained in the Loan Documents including, without implied limitation,
the payment of all principal, interest, attorneys' fees, expenses of collection
and other sums now or hereafter owing by the Borrower to the Lender thereunder.
The obligation of the Guarantors hereunder is an absolute, unconditional,
irrevocable and continuing guaranty of payment and performance and will not
terminate until the Borrower has paid in full all amounts owing to the Lender
under the Loan Documents and has performed all of the Borrower's Obligations
under the Loan Documents. Without limiting the generality of the foregoing, each
Guarantor's liability hereunder will extend to and include all post-petition
interest, expenses and other duties and liabilities of the Borrower described
above in this paragraph which would be owed by the Borrower but for the fact
that such Obligations are unenforceable or not allowable due to the existence of
a bankruptcy, reorganization, or similar proceeding involving the Borrower. If
the
28
Borrower for any reason fails to pay any Obligation, as and when such Obligation
will become due and payable, whether at its stated maturity, as a result of the
exercise of any power to accelerate, or otherwise, the Guarantors will, upon
demand by the Lender, pay such Obligation in full to the Lender. If the Borrower
for any reason fails to perform promptly any Obligation, the Guarantors will,
upon demand by the Lender, cause such Obligation to be performed or, if
specified by the Lender, provide sufficient funds, in such amount and manner as
the Lender determines in good faith, for the prompt, full and faithful
performance of such Obligation by the Lender or such other Person as the Lender
designates. As between each of the Guarantors and the Lender, this Agreement
will be considered a primary and liquidated liability of each Guarantor.
3. Unconditional Guaranty. No action which the Lender may take or omit to take
in connection with any of the Loan Documents, any of the Obligations (or any
other indebtedness owing by the Borrower to the Lender), or any Collateral, and
no course of dealing of the Lender with any Obligor or any other Person, will
release or diminish any Guarantor's obligations, liabilities, agreements or
duties hereunder, affect this Agreement in any way, or afford any Guarantor any
recourse against the Lender, regardless of whether any such action or inaction
may increase any risks to or liabilities of the Lender or any Obligor or
increase any risk to or diminish any safeguard of any Collateral. Without
limiting the foregoing, each of the Guarantors hereby expressly agrees that the
Lender may, from time to time, without notice to or the consent of such
Guarantor, do any or all of the following: (a) amend, change or modify, in whole
or in part, any one or more of the Loan Documents and give or refuse to give any
waivers or other indulgences with respect thereto; (b) neglect, delay, fail, or
refuse to take or prosecute any action for the collection or enforcement of any
of the Obligations, to foreclose or take or prosecute any action in connection
with any Collateral or Loan Document, to bring suit against any Obligor or any
other Person, or to take any other action concerning the Obligations or the Loan
Documents; (c) accelerate, change, rearrange, extend or renew the time, rate,
terms or manner for payment or performance of any one or more of the Obligations
(whether for principal, interest, fees, expenses, indemnifications, affirmative
or negative covenants, or otherwise); (d) compromise or settle any unpaid or
unperformed Obligation or any other obligation or amount due or owing, or
claimed to be due or owing, under any one or more of the Loan Documents; (e)
take, exchange, amend, eliminate, surrender, release, or subordinate any or all
Collateral for any or all of the Obligations, accept additional or substituted
Collateral therefor, and perfect or fail to perfect the Lender's rights in any
or all Collateral; (f) discharge, release, substitute or add Obligors; or (g)
apply all monies received from Obligors or others, or from any Collateral for
any of the Obligations, as the Lender may determine to be in the Lender's best
interest, without in any way being required to xxxxxxxx Collateral or assets or
to apply all or any part of such monies upon any particular Obligations. No
action or inaction of any Obligor or any other Person, and no change of law or
circumstances, will release or diminish any Guarantor's obligations,
liabilities, agreements or duties hereunder, affect this Agreement in any way,
or afford any Guarantor any recourse against the Lender.
4. No Release. The Guarantors agree that the Guarantors' liability hereunder
will not be released, reduced, impaired or affected by the occurrence of any one
or more of the following events: (a) the Lender obtaining collateral from the
Borrower or any other Obligor to secure payment or performance under the Loan
Documents; (b) the assumption of liability by any other Person (whether as
guarantor or otherwise) for payment or performance under the Loan Documents; (c)
the release, surrender, exchange, loss, termination, waiver or other discharge
of any collateral securing payment
- 2 -
29
or performance under the Loan Documents; (d) the subordination, relinquishment
or discharge of the Lender's rights relating to the Loan Documents or any
collateral described therein; (e) the dissolution, insolvency, bankruptcy,
reorganization or disability of the Borrower, any other Obligor or any other
Person now or hereafter liable for payment or performance under the Loan
Documents; (f) the increase, renewal, consolidation, extension, modification,
rearrangement or amendment from time to time of the Loan or of the terms of any
one or more of the Loan Documents; (g) the sale, encumbrance, transfer or other
modification of the ownership of the Borrower or the Borrower's assets or the
change in the financial condition or management of the Borrower; (h) the
invalidity, unenforceability or insufficiency of any one or more of the Loan
Documents or any collateral securing payment or performance thereunder; or (i)
the release of any Person from any personal liability with respect to all or
part of the guaranteed Obligations.
5. Enforcement. The Lender may invoke the benefits of this Agreement and any
Collateral pledged by the Guarantors before pursuing any remedies against any
Obligor or any other Person and before proceeding against any other Collateral
now or hereafter existing for the payment or performance of any of the
Obligations. The Lender may maintain an action against any Guarantor on this
Agreement or the Guarantor Security Agreement without joining any other Obligor
therein and without bringing a separate action against any other Obligor. If any
payment to the Lender by any Obligor is held to constitute a preference or a
voidable transfer under applicable state or federal laws, or if for any other
reason the Lender is required to refund such payment to the payor thereof or to
pay the amount thereof to any other Person, such payment to the Lender will not
constitute a release of any Guarantor from any liability hereunder, and each
Guarantor agrees to pay such amount to the Lender on demand and agrees and
acknowledges that this Agreement will continue to be effective or will be
reinstated, as the case may be, to the extent of any such payment or payments.
Any transfer by subrogation which is made as contemplated in this Agreement
prior to any such payment or payments will (regardless of the terms of such
transfer) be automatically voided upon the making of any such payment or
payments, and all rights so transferred will thereupon revert to and be vested
in the Lender. This is a continuing guaranty and will apply to and cover all
Obligations and renewals and extensions thereof and substitutions therefor from
time to time.
6. Waiver of Rights. The Guarantors waive notice of the incurrence of any
Obligation by the Borrower, and notice of any kind concerning the assets,
liabilities, financial condition, creditworthiness, businesses, prospects, or
other affairs of the Borrower (it being understood and agreed that: (a) each
Guarantor will take full responsibility for informing itself of such matters,
(b) the Lender will not have any responsibility of any kind to inform any
Guarantor of such matters, and (c) the Lender is hereby authorized to assume
that each Guarantor, by virtue of its relationships with the Borrower which are
independent of this Agreement, has full and complete knowledge of such matters
whenever the Lender extends credit to the Borrower or take any other action
which may change or increase such Guarantor's liabilities or losses hereunder).
The Guarantors waive diligence, presentment, protest, notice of dishonor, notice
of acceptance of this Agreement and all other notices of any nature except as
provided in the Loan Documents or this Agreement. Performance by the Guarantors
hereunder will not entitle the Guarantors to any payment by the Borrower or any
other Obligor of the Obligations of the Borrower whether under the Loan
Documents or otherwise by reason of any claim for contribution, indemnification,
reimbursement, subrogation or otherwise, until such time as the Borrower and any
other Obligor of the Obligations of the Borrower under the Loan Documents have
paid in full all amounts owing to the Lender and have performed all of the
- 3 -
30
Borrower's Obligations under the Loan Documents. Notwithstanding anything herein
to the contrary, except as specifically provided herein, the Guarantors hereby
waive all rights of subrogation, contribution, reimbursement or indemnity
against the Borrower (but not against any other party). If any Guarantor makes
payment to the Lender of all or any portion of the Obligations and if all of the
Obligations will be finally paid in full, the Lender will, at such Guarantor's
request and expense, execute and deliver to such Guarantor (without recourse,
representation or warranty) appropriate documents necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the Obligations
resulting from such payment by such Guarantor; provided that such transfer will
be subject to the provisions of this Agreement and the rights of any other
Obligor (excluding the Borrower) paying a portion of the Obligations.
7. Expenses of Collection. The Guarantors agree that in any action brought to
enforce this Agreement, the Guarantors will pay to the Lender the reasonable
attorneys' fees, court costs and other litigation expenses incurred by the
Lender.
8. Cumulative Remedies. On the occurrence of any event of Default under the Loan
Documents or this Agreement, the Lender will be entitled to selectively and
successively enforce any one or more of the rights held by the Lender, and such
action will not be deemed a waiver of any other right held by the Lender. Except
as provided herein or in the Loan Documents, all of the remedies of the Lender
under this Agreement and the Loan Documents are cumulative and not alternative.
Each Guarantor will be liable to the Lender hereunder for any deficiency
resulting from the exercise by the Lender of any rights or remedies even though
any rights which the Guarantors may have against the Borrower or others may be
destroyed or diminished by exercise of any such right or remedy. No failure on
the part of the Lender to exercise, and no delay in exercising, any right
hereunder or under any other Loan Document will operate as a waiver thereof; nor
will any single or partial exercise of any right preclude any other or further
exercise thereof or the exercise of any other right. The rights, powers and
remedies of the Lender provided herein and in the other Loan Documents are
cumulative and are in addition to, and not exclusive of, any other rights,
powers or remedies provided by law or in equity. The rights of the Lender
hereunder are not conditional or contingent on any attempt by the Lender to
exercise any of its rights under any other Loan Document against any Obligor or
any other Person.
9. Successors and Assigns. No Guarantor's rights or obligations hereunder may be
assigned or delegated, but this Agreement and such obligations will pass to and
be fully binding upon the successors of each Guarantor, as well as each
Guarantor. This Agreement will apply to and inure to the benefit of the Lender
and the Lender's successors or assigns. Without limiting the generality of the
immediately preceding sentence, the Lender may assign, grant a participation in,
or otherwise transfer any Obligation held by it or any portion thereof, and the
Lender may assign or otherwise transfer its rights or any portion thereof under
any Loan Document, to any other Person, and such other Person will thereupon
become vested with all of the benefits in respect thereof granted to the Lender
hereunder unless otherwise expressly provided by the Lender in connection with
such assignment or transfer.
10. Subordination. Each Guarantor hereby subordinates and makes inferior to the
Obligations any and all indebtedness now or at any time hereafter owed by the
Borrower to any Guarantor except for services actually rendered by the
Guarantors, or any of them, to the Borrower or reimbursement
- 4 -
31
of expenses Lender actually paid by the Guarantors, or any of them. Each
Guarantor agrees that after the occurrence of any event of Default such
Guarantor will neither permit the Borrower to repay such indebtedness or any
part thereof nor accept payment from the Borrower of such indebtedness or any
part thereof without the prior written consent of the Lender. If any Guarantor
receives any such payment without the prior written consent of the Lender, the
amount so paid will be held in trust for the benefit of the Lender, will be
segregated from the other funds of such Guarantor, and will forthwith be paid
over to the Lender to be held by the Lender as collateral for, or then or at any
time thereafter applied in whole or in part by the Lender against, all or any
portions of the Obligations, whether matured or unmatured, in such order as the
Lender elects.
11. Representations and Warranties. Each Guarantor hereby represents and
warrants to the Lender as follows: (a) the recitals at the beginning of this
Agreement are true and correct in all respects; (b) each Guarantor which is not
a natural Person is a limited partnership, limited liability company or
corporation duly organized, validly existing and in good standing under the laws
of the state of its organization or incorporation and such Guarantor has all
requisite partnership, limited liability company or corporate power and
authority to execute, deliver and perform this Agreement and pledge the
Guarantor Collateral; (c) the execution, delivery and performance by each
Guarantor of this Agreement have been duly authorized by all necessary
partnership, limited liability company or corporate action and do not and will
not contravene its certificate of limited partnership or limited partnership
agreement, articles of organization or operating agreement or certificate or
articles of incorporation or bylaws; (d) the execution, delivery and performance
by each Guarantor of this Agreement do not and will not contravene any law or
governmental regulation or any contractual restriction binding on or affecting
such Guarantor, or any of its affiliates or properties including, without
limitation, the Guarantor Collateral, and do not and will not result in or
require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to the Guarantor Collateral or any other
properties; (e) no authorization or approval or other action by, and no notice
to or filing with, any governmental authority or other regulatory body or third
party is required for the due execution, delivery and performance by any
Guarantor of this Agreement or the Guarantor Security Agreement; (f) this
Agreement is a legal, valid and binding obligation of each Guarantor,
enforceable against such Guarantor in accordance with its terms except as
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights; (g) there is no action, suit
or proceeding pending or, to the knowledge of any Guarantor, threatened against
or otherwise affecting any Guarantor or any of the Guarantor Collateral before
any court, arbitrator or governmental department, commission, board, bureau,
agency or instrumentality which may materially and adversely affect any
Guarantor's financial condition or its ability to perform its obligations
hereunder; (h) the direct or indirect value of the consideration received and to
be received by each Guarantor in connection herewith and the incurrence of such
liability and obligations in return for such consideration may reasonably be
expected to benefit such Guarantor, directly or indirectly; (i) no Guarantor is
"insolvent" on the date hereof (that is, the sum of such Guarantor's absolute
and contingent liabilities, including the Obligations, does not exceed the fair
market value of such Guarantor's assets), each Guarantor's capital is adequate
for the businesses in which such Guarantor is engaged and intends to be engaged
and no Guarantor has incurred (whether hereby or otherwise), nor does any
Guarantor intend to incur or believe that it will incur, debts which will be
beyond its ability to pay as such debts mature; and (j) all balance sheets,
earning statements, financial data and other information concerning the
Guarantors which have been furnished to the Lender to induce the Lender to
accept this Agreement (or otherwise furnished to the Lender in connection with
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32
the transactions contemplated hereby or associated herewith) fairly represent
the financial condition of each Guarantor as of the dates and the results of
such Guarantor's operations for the periods for which the same are furnished.
None of such balance sheets, earnings and cash flow statements, financial data
and other information contains any untrue statement of a material fact or omits
to state any material fact which is necessary to make any statements contained
therein not misleading.
12. Loan Agreement Provisions. Each of the Guarantors hereby represents,
warrants, acknowledges and agrees that: (a) such Guarantor has reviewed and is
familiar with all of the terms and conditions of the Loan Agreement and all of
the other Loan Documents; (b) all of the representations and warranties set
forth in the Loan Agreement pertaining to the Guarantors are true and correct;
(c) the Loan Agreement contains covenants and conditions relating to the
Guarantors and binding on the Guarantors; and (d) such Guarantor will comply
with all of the terms, covenants, conditions and agreements set forth in the
Loan Agreement applicable to such Guarantor in the same manner and to the same
extent as if such Guarantor was an original party to the Loan Agreement.
13. Acknowledgments and Admissions. The Guarantors hereby represent, warrant,
acknowledge and admit that: (a) each of them has made an independent decision to
enter into this Agreement and the other Loan Documents to which it is a party,
without reliance on any representation, warranty, covenant or undertaking by the
Lender, whether written, oral or implicit, other than as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof; (b) there are no representations, warranties, covenants, undertakings or
agreements by the Lender as to the Loan Documents except as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof; (c) the Lender has no fiduciary obligation toward the Borrower or the
Guarantors with respect to any Loan Document or the transactions contemplated
thereby; (d) the relationship pursuant to the Loan Documents between the
Borrower and the Guarantors, on the one hand, and the Lender, on the other hand,
is and will be solely that of debtor and creditor, respectively; (e) no
partnership or joint venture exists with respect to the Loan Documents between
the Borrower or the Guarantors and the Lender; (f) should a Default occur or
exist, the Lender will determine in its sole discretion and for its own reasons
what remedies and actions it will or will not exercise or take at the time; (g)
without limiting any of the foregoing, no Guarantor is relying upon any
representation or covenant by the Lender, or any representative thereof, and no
such representation or covenant has been made, that the Lender will, at the time
of an event of Default, or at any other time, waive, negotiate, discuss or take
or refrain from taking any action permitted under the Loan Documents with
respect to any such event of Default or any other provision of the Loan
Documents; and (h) the Lender has relied upon the truthfulness of the
acknowledgments in this paragraph in deciding to execute and deliver the Loan
Documents and to become obligated hereunder.
14. JOINT ACKNOWLEDGMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
15. INDEMNITY. THE GUARANTORS AGREE TO INDEMNIFY THE LENDER, UPON DEMAND, FROM
AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
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33
CLAIMS, LOSSES, DAMAGES, PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS,
SETTLEMENTS, COSTS, EXPENSES OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF
ATTORNEYS, ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER
(IN THIS PARAGRAPH COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY
EXTENT (IN WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST
THE LENDER GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH
THE COLLATERAL, THE LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS (INCLUDING
THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME ASSOCIATED THEREWITH OR
CONTEMPLATED THEREIN (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE AND
INCLUDING ANY VIOLATION OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY THE
BORROWER, THE GUARANTORS OR THE LENDER OR ANY LIABILITIES OR DUTIES OF THE
BORROWER, THE GUARANTORS OR THE LENDER WITH RESPECT TO HAZARDOUS MATERIALS FOUND
IN OR RELEASED INTO THE ENVIRONMENT).
THE FOREGOING INDEMNIFICATION WILL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE LENDER, PROVIDED ONLY THAT THE
LENDER WILL NOT BE ENTITLED UNDER THIS PARAGRAPH TO RECEIVE INDEMNIFICATION FOR
THAT PORTION, IF ANY, OF ANY LIABILITIES AND COSTS WHICH IS PROXIMATELY CAUSED
BY ITS OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED IN A
FINAL JUDGMENT OR WHICH RELATES TO ACTIONS TAKEN BY THE LENDER AFTER THE LENDER
HAS TAKEN TITLE TO THE COLLATERAL. IF ANY PERSON (INCLUDING THE BORROWER, ANY OF
ITS AFFILIATES OR ANY GUARANTOR) EVER ALLEGES SUCH GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT BY THE LENDER, THE INDEMNIFICATION PROVIDED FOR IN THIS PARAGRAPH
WILL NONETHELESS BE PAID UPON DEMAND, SUBJECT TO LATER ADJUSTMENT OR
REIMBURSEMENT, UNTIL SUCH TIME AS A COURT OF COMPETENT JURISDICTION ENTERS A
FINAL JUDGMENT AS TO THE EXTENT AND EFFECT OF THE ALLEGED GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. AS USED IN THIS PARAGRAPH THE TERM "LENDER" WILL REFER NOT
ONLY TO THE PERSON DESIGNATED AS SUCH BUT ALSO TO EACH DIRECTOR, OFFICER, AGENT,
ATTORNEY, EMPLOYEE, PARTICIPATING LENDER, REPRESENTATIVE AND AFFILIATE OF THE
LENDER.
16. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF THE GUARANTORS AND THE
LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY (A) WAIVES,
TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
A JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT
ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR ANY
TRANSACTION CONTEMPLATED THEREBY OR
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34
ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY, (B) WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY "SPECIAL DAMAGES," AS DEFINED BELOW, (C) CERTIFIES THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS PARAGRAPH.
AS USED IN THIS PARAGRAPH, "SPECIAL DAMAGES" INCLUDES ALL SPECIAL,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES
NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED
TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.
17. Miscellaneous. This Agreement has been negotiated, executed and delivered in
Oklahoma City, Oklahoma County, Oklahoma, and is intended to be construed in
accordance with the laws of the State of Oklahoma. All actions relating to or
arising under this Agreement, whether filed by the Lender or the Guarantors,
will be instituted only in a state court sitting in Oklahoma County, Oklahoma,
or a federal court sitting in Oklahoma City, Oklahoma. If any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect or
application for any reason, such invalidity, illegality or unenforceability will
not affect any other provisions herein contained and such other provisions will
remain in full force and effect. This Agreement cannot be amended except by an
agreement in writing signed by the Guarantors and the Lender.
IN WITNESS WHEREOF, the Guarantors and the Lender have
executed this Agreement effective the date first above written.
/s/ XXXXXX X. XXXXXX, III
-----------------------------------
XXXXXX X. XXXXXX, III, individually
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35
THE GHK COMPANY L.L.C., an Oklahoma
limited liability company
By /s/ XXXXXX X. XXXXXX, III
------------------------------------------------
Xxxxxx X. Xxxxxx, III, Manager
RAMIIILAJ A LIMITED PARTNERSHIP, a Texas
limited partnership
By Xxxxxx Investment Company, a Texas
corporation, its General Partner
By /s/ XXXXXX X. XXXXXX, III
-----------------------------------
Xxxxxx X. Xxxxxx, III, President
(the "Guarantors")
STILLWATER NATIONAL BANK AND TRUST
COMPANY, N.A.
By /s/ X.X. XXXXXXX XXXXXXXXX
------------------------------------------------
X.X. Xxxxxxx Xxxxxxxxx, Senior Vice President
(the "Lender")
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36
GUARANTOR SECURITY AGREEMENT
THIS GUARANTOR SECURITY AGREEMENT is executed effective the
20th day of December, 2000, among XXXXXX X. XXXXXX III, an individual
("Xxxxxx"), THE GHK COMPANY L.L.C., an Oklahoma limited liability company
("GHK"), RAMIIILAJ A LIMITED PARTNERSHIP, a Texas limited partnership
("Ramiiilaj" and jointly and severally with Xxxxxx and GHK, the "Debtors"), each
having a notice address at c/o The GHK Company L.L.C., 0000 Xxxxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxxxx 00000, and STILLWATER NATIONAL BANK AND TRUST
COMPANY, N.A. (the "Secured Party"), having a notice address at 0000 Xxxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxxxx 00000.
WITNESSETH:
WHEREAS, Seven Seas Petroleum Inc., a Yukon Territory, Canada
corporation (the "Borrower"), is liable to the Secured Party under that certain
Promissory Note of even date herewith in the principal amount of Ten Million
Dollars ($10,000,000.00) (the "Note") in connection with that certain Loan
Agreement of even date herewith (the "Loan Agreement") between the Borrower and
the Secured Party which Note is unconditionally guaranteed by the Debtors
pursuant to that certain Guaranty Agreement of even date herewith; and
WHEREAS, as a material condition precedent to the Secured
Party entering into the Loan Agreement, the Debtors have agreed to secure
payment of the Note and all other Obligations of the Borrower to the Secured
Party by granting the Secured Party a lien, security interest and pledge
covering certain assets of the Debtors.
NOW, THEREFORE, (i) in order to comply with the terms and
conditions of the Loan Agreement; (ii) for and in consideration of the premises
and the agreements herein contained; and (iii) for other good and valuable
consideration, the receipt and sufficiency of all of which are hereby
acknowledged, the Debtors hereby agree with the Secured Party as follows:
1. Definitions. Unless otherwise defined herein, all terms which are defined in
the Loan Agreement will have the same meanings herein as therein unless the
context otherwise requires, and all terms used herein which are defined in the
Oklahoma Uniform Commercial Code (the "UCC") will have the same meanings herein
unless the context otherwise requires.
2. Security Interest. The Debtors hereby grant to the Secured Party a security
interest in, an assignment of, a general lien upon and a right of set-off
against the following described property (the "Property"):
2.1 all of the Debtors' right, title and interest in and to the
certificates of deposit and government securities described in
Schedule "A" attached hereto as a part hereof and all
additions and accessions to, replacements of, substitutions
for, dividends on and proceeds therefrom and any other
deposits, certificated or uncertificated securities, treasury
notes, bonds or other similar items;
37
2.2 any additional assets or property from time to time delivered
to or deposited with the Secured Party as security for the
Obligations or otherwise pursuant to the terms of this
Agreement; and
2.3 all proceeds, products, additions to, replacements of,
substitutions for and accessions of any and all Property
described in subparagraphs 2.1 and 2.2 in this paragraph 2.
3. Secured Indebtedness. The security interest granted hereby in the Property is
given to secure the Borrower's payment of: (a) the Note together with interest
thereon; (b) any and all other or additional Obligations of the Borrower to the
Secured Party; (c) all extensions, renewals, amendments, modifications,
substitutions and changes in form to the Note; (d) all costs and expenses
incurred in connection with the collection of the Note and any other Obligations
and enforcement of the Loan Documents and the Secured Party's rights under this
Agreement and all other Loan Documents including, without limitation, the
collection or enforcement of the Loan Documents whether by judicial proceedings,
proceedings under Chapter 7 or 11 of the Bankruptcy Code or any successor
statute thereto, or otherwise, and including attorneys' fees and expenses; (e)
all advances made by the Secured Party to protect the security hereof, including
advances made for or on account of levies, insurance, repairs, taxes and for
maintenance or recovery of the Property, together with interest thereon at the
Default rate specified in the Note; (f) any and all other indebtedness,
liabilities and obligations of the Borrower to the Secured Party whether now
owing or hereafter incurred; and (g) performance of the agreements herein set
forth (the foregoing items (a) through (g) are collectively referred to herein
as the "Secured Indebtedness").
4. Debtors' Representations and Covenants. The Debtors hereby warrant, represent
and agree as follows:
4.1 Principal Place of Business. Xxxxxx and GHK's principal place
of business is in the State of Oklahoma. Ramiiilaj's principal
place of business is in the State of Texas.
4.2 Title. The Debtors have absolute title to the Property free
and clear of all liens, encumbrances and security interests
except the security interest hereby granted to the Secured
Party and such other rights, if any, of the Secured Party, and
the Debtors warrant and will defend the same unto the Secured
Party against the claims and demands of all persons and
parties whomsoever.
4.3 Transfers. Without the prior written consent of the Secured
Party, the Debtors agree that the Debtors will not: (a) sell,
exchange, lease or in any manner dispose of any of the
Property or any interest therein; or (b) permit any lien,
encumbrance or security interest to attach thereto except
those contemplated herein.
4.4 Value of Property. The Debtors will not, in any event, permit
anything to be done that may impair the value of the Property
or the security intended to be afforded by this Agreement.
4.5 Secured Party's Security Interest. This Agreement creates a
valid and binding security interest in the Property securing
the Secured Indebtedness. All filings and
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other actions necessary or appropriate (other than notation on
any certificate of title or title registration) to perfect or
protect such security interest will be or have been duly
taken. No further or subsequent filing, recording,
registration or other public notice of such security interest
(other than notation on any certificate of title or title
registration) is necessary in any office or jurisdiction in
order to perfect such security interest or to continue,
preserve or protect such security interest except for
continuation statements.
4.6 Inspection of Records. The Secured Party may from time to
time, upon request, inspect all of the Debtors' records
concerning the Property.
4.7 Further Assurances. The Debtors will from time to time: (a)
sign, execute, deliver and file, alone or with the Secured
Party, any financing statements, security agreements or other
documents; (b) procure any instruments or documents as may be
reasonably requested by the Secured Party; and (c) take all
further action that may be necessary or desirable, or that the
Secured Party may request, to confirm, perfect, preserve and
protect the security interests intended to be granted hereby.
In addition, the Debtors hereby authorize the Secured Party to
execute and deliver on behalf of the Debtors and file such
financing statements, security agreements and other documents
without the signature of the Debtors either in the Secured
Party's name or in the name of the Debtors and as agent and
attorney-in-fact for the Debtors. The Debtors will do all such
additional and further acts or things, give such assurances
and execute such documents or instruments as the Secured Party
requires to vest more completely in and assure to the Secured
Party its rights under this Agreement including, without
limiting the generality of the foregoing, marking
conspicuously each of its records pertaining to the Property
with a legend, in form and substance satisfactory to the
Secured Party, indicating that such Property is subject to the
security interest granted by this Agreement.
4.8 Filing Reproductions. At the option of the Secured Party, a
carbon, photographic or other reproduction of this Agreement
or of a financing statement covering the Property will be
sufficient as a financing statement and may be filed as a
financing statement.
4.9 Financing Statement Filings; Notifications. The Debtors will
immediately notify the Secured Party of any condition or event
that may change the proper location for the filing of any
financing statements or other public notice or recordings for
the purpose of perfecting a security interest in the Property.
Without limiting the generality of the foregoing, the Debtors
will: (a) immediately notify the Secured Party of any change
to a jurisdiction other than the States of Oklahoma or Texas
in the location of the Debtors' principal place of business;
(b) notify the Secured Party monthly of any change in the
location any of the Property to another state; and (c)
immediately notify the Secured Party of any change in any
Debtor's name or identity. In any notice furnished pursuant to
this paragraph 4.9, the Debtors will expressly state that the
notice is required by this Agreement and contains facts that
will or may require
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39
additional filings of financing statements or other notices
for the purpose of continuing perfection of the Secured
Party's security interest in the Property.
5. Secured Party's Expenditures. If the Debtors fail to make any expenditure or
pay any sum necessary to discharge any lien, encumbrance, levy, security
interest or other charge on the Property, the Secured Party may but will not be
required to make any expenditure for such purpose or purposes and all sums so
expended will be payable on demand, will bear interest at the rate specified in
the Note and all such sums and interest will additionally be secured hereby. The
Debtors will pay all costs of filing any financing, continuation or termination
statements with respect to the security interest granted hereby in the Property.
6. Default; Remedies. On the occurrence of any event of Default or if the
Borrower or the Debtors fail to keep, observe, comply with and perform all of
the obligations and undertakings under this Agreement or any of the other Loan
Documents or fail to pay any principal or interest on the Note when due, then,
and in any such event, the Secured Party may, at its option and without notice
to any party, declare all or any portion of the Secured Indebtedness to be
immediately due and payable and may proceed to enforce payment of the same, to
exercise any or all rights and remedies provided herein, in the other Loan
Documents, and by the UCC and otherwise available at law or in equity. The
Secured Party may at any time and from time to time sell, resell, assign and
deliver, in the Secured Party's discretion, all or any part of the Property, in
one or more parcels at the same or different times, and all right, title and
interest, claim and demand therein and right of redemption thereof, at public or
private sale. Whenever an event of Default exists, the Debtors on demand by the
Secured Party, will assemble any part of the Property in the Debtors' control
and make it available to the Secured Party at a place reasonably convenient to
the parties hereto. All remedies hereunder are cumulative, and any indulgence or
waiver by the Secured Party will not be construed as an abandonment of any other
right hereunder or of the power to enforce the same or another right at a later
time. Whether the Secured Party elects to exercise any other rights or remedies
under this Agreement or applicable law, the Secured Party will be entitled to
have a receiver appointed to take possession of any part of the Property in the
Debtors' control without notice, which notice the Debtors hereby waive,
notwithstanding anything contained in this Agreement or any law heretofore or
hereafter enacted.
7. Power of Attorney. The Secured Party is hereby fully authorized and empowered
(without the necessity of any further consent or authorization from the Debtors)
and the right is expressly granted to the Secured Party, and the Debtors hereby
constitute, appoint and make the Secured Party as the Debtors' true and lawful
attorney-in-fact and agent for the Debtors and in the Debtors' name, place and
stead with full power of substitution, in the Secured Party's name or the
Debtors' name or otherwise, for the Secured Party's sole use and benefit, but at
the Debtors' cost and expense, to exercise, without notice, all or any of the
following powers at any time with respect to all or any of the Property after
the occurrence of any Default under this Agreement or any of the other Loan
Documents: (a) to liquidate all of the Property and collect, receive and give
acquittance for any and all monies due or to become due by virtue thereof and
otherwise deal with proceeds; (b) to receive, take, endorse, assign and deliver
any and all checks, notes, drafts, documents and other negotiable and
non-negotiable instruments and chattel paper taken or received by the Secured
Party in connection therewith; (c) to sell, transfer, assign or otherwise deal
in or with the Property or the proceeds or avails thereof, as fully and
effectively as if the Secured Party were the absolute owner
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40
thereof; and (d) to exercise any and all rights and remedies available to the
Secured Party under the Loan Documents and applicable law and apply all
collected proceeds from the Property to the Secured Indebtedness in such order
and amounts as the Secured Party determines in the Secured Party's sole
discretion; provided, however, the Secured Party will be under no obligation or
duty to exercise any of the powers hereby conferred upon it and will be without
liability for any act or failure to act in connection with the collection of, or
the preservation of any rights under, any Property.
8. Sale Procedure. Except as expressly provided for herein, no demand or
advertisement, all of which are hereby expressly waived by the Debtors, will be
required in connection with any sale or other disposition of any part of the
Property which threatens to decline speedily in value or which is of a type
customarily sold on a recognized market. In all other events, the Secured Party
will give the Debtors, at least ten (10) days prior notice of the time and place
of any public sale and of the time after which any private sale or other
disposition is to be made, which notice the Debtors agree is reasonable, all
other demands and advertisements being hereby waived. The Secured Party will not
be obligated to make any sale of Property, regardless of the fact that notice of
sale may have been given. The Secured Party may adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for sale, and such sale may be made at the time and place
to which the same was so adjourned. Upon each public or private sale of
Property, the Secured Party or any holder of the Note, or any of their
respective affiliates, may purchase all or any of the Property being sold, free
from any equity or right of redemption, which is hereby waived and released by
the Debtors, and may make payment therefor in cash or, at the Secured Party's or
such holder's option (by endorsement without recourse), by tendering or
releasing principal or accrued and unpaid interest on the Note, in lieu of cash,
in a face amount equal to the amount of the purchase price. The Debtors agree to
pay all reasonable costs and expenses of every kind for sale or delivery,
including brokers' and attorneys' fees, and after deducting such costs and
expenses from the proceeds of sale, the Secured Party will apply any residue to
the payment of the Secured Indebtedness and the Debtors will continue to be
liable for any deficiency in accordance with the Loan Documents. The balance, if
any, remaining after payment in full of all of the Secured Indebtedness will be
paid to the Debtors or as otherwise directed by any court having appropriate
jurisdiction.
9. Secured Party's Duties. The powers conferred upon the Secured Party by this
Agreement are solely to protect its interest in the Property and will not impose
any duty upon the Secured Party to exercise any such powers. The Secured Party
will be under no duty whatsoever to make or give any presentment, demand for
performance, notice of nonperformance, protest, notice of protest, notice of
dishonor, or other notice or demand in connection with any of the Property or
the Secured Indebtedness, or to take any steps necessary to preserve any rights
against other parties. The Secured Party will not be liable for failure to
collect or realize upon any or all of the Secured Indebtedness or Property, or
for any delay in so doing, nor will the Secured Party be under any duty to take
any action whatsoever with regard thereto.
10. Continuing Agreement. This is a continuing agreement and the grant of a
security interest hereunder will remain in full force and effect and all the
rights, powers and remedies of the Secured Party hereunder will continue to
exist until all of the Secured Indebtedness is paid in full as the same becomes
due and payable and until the Secured Party, upon written request of the
Debtors, has executed a written termination statement, reassigned to the
Debtors, without recourse, the Property
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and all rights conveyed hereby and returned possession of any Property in the
Secured Party's possession to the Debtors.
11. Preservation of Liability. Neither this Agreement nor the exercise by the
Secured Party of (or the failure to so exercise) any right, power or remedy
conferred herein or by law will be construed as relieving any person liable on
the Secured Indebtedness from liability on the Secured Indebtedness and for any
deficiency thereon.
12. Notices. Any notice or demand under this Agreement or in connection with
this Agreement may be given at the addresses set forth in the initial paragraph
of this Agreement or by telefacsimile, but actual notice, however given or
received, will always be effective.
13. Successors and Assigns. The covenants and agreements herein contained by or
on behalf of the Debtors will bind the Debtors, and the Debtors' legal
representatives, successors and assigns and will inure to the benefit of the
Secured Party and the Secured Party's successors and assigns.
14. Invalidity. If any provision hereof will for any reason be held to be
invalid or unenforceable, such invalidity or unenforceability will not affect
any other provision hereof.
15. Construction. This Agreement will be construed and interpreted in accordance
with the laws of the State of Oklahoma.
IN WITNESS WHEREOF, this Agreement is executed effective the date first
above written.
/s/ XXXXXX X. XXXXXX, III
-------------------------------------------
XXXXXX X. XXXXXX, III, individually
THE GHK COMPANY L.L.C., an Oklahoma limited
liability company
By /s/ XXXXXX X. XXXXXX, III
-----------------------------------------
Xxxxxx X. Xxxxxx, III, Manager
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RAMIIILAJ A LIMITED PARTNERSHIP, a Texas
limited partnership
By Xxxxxx Investment Company, a Texas
corporation, its General Partner
By /s/ XXXXXX X. XXXXXX, III
------------------------------------
Xxxxxx X. Xxxxxx, III, President
(jointly and severally, the "Debtors")
STILLWATER NATIONAL BANK AND TRUST
COMPANY, N.A.
By /s/ X.X. XXXXXXX XXXXXXXXX
---------------------------------------------
X.X. Xxxxxxx Xxxxxxxxx, Senior Vice President
(the "Secured Party")
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