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EXHIBIT 4.3.2
Execution
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
This Amended and Restated Intercreditor Agreement (this
"Agreement") is made as of September 11, 1998, by the signatories hereto.
RECITALS:
1. Inland Production Company, a Texas corporation
("Borrower"), and Parent (as defined below) have entered into a Credit
Agreement dated as of September 23, 1997 (as amended, supplemented, or restated
to the date hereof, the "Original Bank Agreement") with the Banks (as defined
below), pursuant to which the Banks have agreed to extend credit to Borrower.
2. Borrower and Parent have also entered into a Credit
Agreement dated as of September 23, 1997 (as amended, supplemented, or restated
to the date hereof, the "Original TCW Agreement") with Trust Company of the
West ("Trustco") and TCW Asset Management Company ("Tamco"), each acting in
various capacities, pursuant to which the Noteholders (as defined below) have
agreed to extend credit to Borrower.
3. Borrower, Parent, Agent Lender (as defined below), Banks,
Agent Noteholder (as defined below), and Noteholders have entered into that
certain Intercreditor Agreement dated as of September 23, 1997 (as amended,
supplemented, or restated to the date hereof, the "Original Intercreditor
Agreement").
4. Borrower and Parent are entering into an Amended and
Restated Credit Agree ment of even date herewith which amends and restates the
Original Bank Agreement in its entirety (as from time to time supplemented or
amended in compliance with the terms hereof, the "Bank Agreement") with Agent
Lender and Banks, pursuant to which the Banks have agreed to extend credit to
Borrower.
5. Borrower and Parent are entering into an Amended and
Restated Credit Agree ment of even date herewith which amends and restates the
Original TCW Agreement in its entirety (as from time to time supplemented or
amended in compliance with the terms hereof, the "TCW Agreement") with Agent
Noteholder and Noteholders.
6. The execution and delivery of the Original Intercreditor
Agreement were conditions precedent to the extension of credit under both the
Original Bank Agreement and the Original TCW Agreement and the execution and
delivery of this Agreement are conditions precedent to the extension of credit
under the Bank Agreement and the TCW Agreement.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in
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order to induce the Banks and the Noteholders to extend credit to Borrower, the
parties hereto hereby agree as follows:
Section 1. Definitions and References.
(a) Specific Definitions. As used herein, the terms "Bank
Agreement," "Borrower," "Tamco," "TCW Agreement" and "Trustco" have the
meanings indicated above, and the following additional terms have the following
meanings:
"100% Dedication Quarter" means any Calculation Quarter
during which a "Coverage Deficiency" (as defined in the TCW Agreement), a TCW
Default or a Bank Default exists or in which Borrower is unable to make the
Scheduled Minimum Principal Payment (as defined in the TCW Agreement).
"Affiliates' ANCF" means, with respect to any Calculation
Quarter, the remainder of:
(a) the sum of all revenues and receipts of Parent and any
Subsidiary of Parent (including Inland Refining but excluding Borrower
and any Subsidiary of Borrower) from any source or activity (excluding
any funds received by Parent or any of its Subsidiaries from Approved
Sales or Financings or from sales of equity of Parent or from advances
under the Production/Refining Credit Agreement) accounted for under
GAAP during any Calculation Quarter, beginning with the Calculation
Quarter which starts April 1, 1998
less,
(b) the sum of all expenses and expenditures of Parent and
any Subsidiary of Parent (including Inland Refining but excluding
Borrower and any Subsidiary of Borrower), which expenditures shall be
approved by all Banks and Noteholders in their sole discretion,
accounted for under GAAP during such Calculation Quarter (excluding
any payments financed by funds described in the parenthetical phrase
contained in the immediately preceding subparagraph (a) above) for:
(i) applicable federal, state, or local income, ad
valorem, or franchise or other taxes;
(ii) operating expenses;
(iii) capital expenditures;
(iv) general and administrative expenses; and
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(v) amounts necessary for working capital purposes in the
ordinary course of business;
provided, however, that with respect to any Calculation Quarter for which
Affiliates' ANCF is less than zero, Affiliates' ANCF for such Calculation
Quarter shall be deemed to be zero and any such negative amount shall be
included in the calculation of Affiliate ANCF for the next Calculation Quarter.
"Agent Lender" means ING (U.S.) Capital Corporation, in its
capacity as Agent under the Bank Agreement, together with its successors in
such capacity.
"Agent Noteholder" means Tamco, in its capacity as Agent
under the TCW Agreement, together with its successors in such capacity.
"Allowed Bank Indebtedness" means:
(i) all principal indebtedness for loans made by, and letters
of credit issued by, the Banks under the Bank Documents, provided that
if loans made and letters of credit issued under the Bank Documents
during any applicable period set forth in the following table, when
added to loans outstanding and the undrawn amount of outstanding
letters of credit, exceed the amount set out opposite such period in
the following table, then (unless otherwise expressly agreed by Agent
Noteholder) the amount of such excess shall be excluded from Allowed
Bank Indebtedness:
Period Amount
------ ------
Prior to January 1, 1998 $45,000,000
January 1, 1998 through December 31, 1998 $70,000,000
January 1, 1999 through March 31, 2000 $80,000,000
April 1, 2000 through June 30, 2000 $77,500,000
July 1, 2000 through September 30, 2000 $75,000,000
October 1, 2000 through December 31, 2000 $72,500,000
January 1, 2001 through March 31, 2001 $70,000,000
April 1, 2001 through June 30, 2001 $66,250,000
July 1, 2001 through September 30, 2001 $62,500,000
October 1, 2001 through December 31, 2001 $58,750,000
January 1, 2002 through March 31, 2002 $55,000,000
April 1, 2002 through June 30, 2002 $51,250,000
July 1, 2002 through September 30, 2002 $47,500,000
October 1, 2002 through December 31, 2002 $43,750,000
January 1, 2003 through March 31, 2003 $40,000,000
April 1, 2003 through June 30, 2003 $30,000,000
July 1, 2003 through September 30, 2003 $20,000,000
October 1, 2003 through December 31, 2003 $10,000,000;
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it being expressly understood and agreed that (A) any conversion
between loans accruing interest based upon a prime or base rate of
interest and loans accruing interest based upon a eurodollar or
interbank offered rate or between loans with different eurodollar or
interbank offered rate interest periods, shall not be treated as a
funding of a new loan, (B) loans which constitute Allowed Bank
Indebtedness and are outstanding on the date of a decrease in the
amount of Allowed Bank Indebtedness in the foregoing table (as
contrasted with a new funding after such date) shall continue to be
Allowed Bank Indebtedness, and (C) the obligation of the Borrower to
make reimbursement under a drawing of any letter of credit and any
loan for the purpose of reimbursing any Bank for any amount drawn upon
a letter of credit (to the extent the loan does not exceed such amount
drawn) shall not be treated as a funding of a new loan and shall
continue to be treated as Allowed Bank Indebtedness,
and
(ii) all interest, fees, indemnifications, and expenses owing
by Borrower to any Bank under the Bank Documents, provided that there
shall be excluded from Allowed Bank Indebtedness any interest owing on
any loans which are themselves excluded from Allowed Bank Indebtedness
under the immediately preceding subsection (i) and any fees,
indemnifications, and expenses relating to any such excluded loans or
excluded interest,
and
(iii) obligations and liabilities in respect of Permitted
Interest Rate Xxxxxx.
Any allowed claim in an Insolvency Proceeding of Borrower for any of
the foregoing Allowed Bank Indebtedness shall also constitute 'Allowed
Bank Indebtedness', but any disallowed claim in such a proceeding
shall cease to constitute 'Allowed Bank Indebtedness'.
"ANCF" means the sum of Borrower's ANCF plus Affiliates'
ANCF; provided, however, that no particular item of revenue, receipt, expense,
or expenditure is intended to be accounted for more than one time in the
calculation of Borrower's ANCF and Affiliates' ANCF for any Calculation
Quarter.
"ANCF Capital Expenditures" means capital expenditures made
or to be made in cash during the Calculation Quarter by Borrower on the
Eligible Mortgaged Properties to the extent the same have been included in the
Plan of Development as then in effect or approved at the time in question by
means of an Approval Letter, in either case, only if the expenditures are
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specified in such Plan of Development or Approval Letter as being payable from
ANCF rather than from advances under the TCW Agreement or the Bank Agreement.
"ANCF Hierarchy" has the meaning given in Section 3(a) hereof.
"ANCF XXX" means leasehold operating expenses and other field
level or lease level charges for operations on the Eligible Mortgaged
Properties, other than capital expenditures, to the extent the same have been
approved at the time in question by means of an Approval Letter.
"ANCF Overhead Costs" means general and administrative costs
of Borrower and Parent, and up front costs of or premium paid for Permitted
Commodity Xxxxxx, to the extent the same have been approved at the time in
question by means of an Approval Letter.
"ANCF Transportation Costs" means (i) the actual costs of
gathering, processing, transporting and marketing production from the Eligible
Mortgaged Properties from the wellhead to the point of sale, provided that all
such costs are negotiated with, and payable to, third parties in arms' length
transactions on terms which are reasonable in the area of operations at the
time such prices are agreed to, and (ii) any other gathering, processing,
transportation or marketing costs, to the extent the same have been approved at
the time in question by means of an Approval Letter.
"Approval Letter" means, until the end of the Revolver Period
and the Bank Indebtedness is paid in full, any letter agreement substantially
in the form of Exhibit A hereto which is from time to time entered into by (a)
the Agent Noteholder, acting on behalf of the Noteholders, (b) the Agent
Lender, acting on behalf of the Banks, and (c) Borrower, and after the Bank
Indebtedness has been paid in full, any letter agreement substantially in the
form of Exhibit F to the TCW Agreement which is from time to time entered into
by the Agent Noteholder, acting on behalf of the Noteholders and Borrower . It
is anticipated that ANCF XXX, ANCF Overhead Costs and ANCF Transportation Costs
will be submitted by Borrower and approved in such Approval Letter in a
calendar year budget format (i) for the period from September 30, 1997 through
December 31, 1998 and (ii) thereafter for each succeeding calendar year,
subject to the right of Borrower to seek approval for modifications from time
to time by means of another Approval Letter.
"Approved Sales or Financings" means any sale of Properties
or other assets owned by Borrower, Parent or any Related Person or any
borrowing by Borrower, Parent or any Related Person (with Noteholders, Banks or
a third party) which is from time to time approved by the Agent Noteholder and
the Agent Lender and which is designated as an "Approved Sale or Financing" in
such approvals.
"Bank Default" means any "Event of Default" under the Bank
Agreement and any other event which causes or allows the acceleration of the
Allowed Bank Indebtedness.
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"Bank Documents" means the Bank Agreement, any Commodity
Hedge Agreement entered into with a Bank, the Bank Interest Rate Hedge
Agreement, and each note, mortgage, security agreement, pledge agreement,
guarantee or other agreement, certificate, document, instrument and writing at
any time delivered in connection therewith or pursuant thereto.
"Bank Interest Rate Hedge Agreement" means an ISDA Master
Agreement or other agreement and related confirmations providing for swaps,
caps, floors or other xxxxxx of interest rates entered into from time to time
between Borrower and one or more of the Banks.
"Bank Indebtedness" means all Allowed Bank Indebtedness and
any Excess Bank Indebtedness.
"Banks" means (a) the Agent Lender, and (b) all Persons which
now or hereafter constitute "Banks" under the Bank Agreement.
"Borrower's ANCF" means, with respect to any Calculation
Quarter, the remainder of:
(a) the sum of (i) all revenues and receipts of Borrower and
any Subsidiary of Borrower from any source or activity (excluding any
funds received by Borrower from Approved Sales or Financings or by
Borrower under the TCW Agreement or from advances under the Bank
Agreement or receipts from sales of equity of Parent) accounted for
under GAAP during any Calculation Quarter (and specifically including,
without limiting the generality of the foregoing, receipts from
Permitted Interest Rate Xxxxxx and Permitted Commodity Xxxxxx),
beginning with the Calculation Quarter which starts April 1, 1998 and
(ii) after the occurrence of two (2) consecutive 100% Dedication
Quarters, any of Borrower's Working Capital which exceeds the minimum
Working Capital required under the TCW Agreement or under the Bank
Agreement,
less,
(b) the sum of all expenses and expenditures of Borrower and
any Subsidiary of Borrower, net to the interest of Borrower and any
Subsidiary of Borrower, accounted for under GAAP during such
Calculation Quarter (excluding any payments financed by funds
described in the parenthetical phrase contained in the immediately
preceding subparagraph (a) above) for:
(i) Direct Taxes on the Borrower's Properties;
(ii) ANCF XXX;
(iii) ANCF Transportation Costs;
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(iv) ANCF Capital Expenditures;
(v) ANCF Overhead Costs; and
(vi) Delay rentals payable with respect to Borrower's
Properties.
"Calculation Quarter" means the three-month period (December
through February, March through May, June through August, or September through
November) immediately prior to each Quarterly Payment Date. The initial
calculation quarter shall be the period from September 1, 1997 through November
30, 1997.
"Commodity Hedge Agreement" means an ISDA Master Agreement or
other agreement and related confirmations providing for swaps, caps, floors or
other xxxxxx of hydrocarbon prices entered into from time to time by Borrower.
"Direct Taxes" means any severance, ad valorem, or other
direct taxes on the Properties or the production therefrom or the proceeds of
such production; provided that federal, state or local income or franchise
taxes shall in no event be considered to be Direct Taxes.
"Enforcement Action" means any acceleration of any or all of
the TCW Indebtedness or the Bank Indebtedness, any enforcement or foreclosure
of Liens granted by Borrower, Parent or any Related Person to secure any or all
of the TCW Indebtedness or the Bank Indebtedness, the institution of any
Insolvency Proceeding with respect to Borrower, Parent or any Related Person,
or any other effort of any kind (whether by set-off, by self-help, in court, or
otherwise) to collect the TCW Indebtedness or the Bank Indebtedness from
Borrower, Parent or any Related Person or from the assets or properties of
Borrower, Parent or any Related Person; provided, however, that none of the
following shall constitute an Enforcement Action: (i) collection of any of the
TCW Indebtedness or any of the Allowed Bank Indebtedness from ANCF in
accordance with Section 3 hereof, (ii) the filing of proofs of claim or other
pleadings in any Insolvency Proceeding (other than an Insolvency Proceeding
brought in contravention hereof by or on behalf of the Person filing such
proofs of claim or other pleadings), (iii) actions to obtain possession of
Permitted Junior Securities in exchange for or on account of TCW Indebtedness,
(iv) enforcement of Liens, guaranties, or other rights granted by Persons other
than Borrower, Parent or any Related Person, or (v) notifying Borrower, Parent
or any other Person of any amounts which are due and owing under the Bank
Documents or the TCW Documents, making demand with respect to any such amounts
due and owing, and giving any other notice or taking other actions in respect
to any future remedy or to preserve any rights or remedies.
"Excess Bank Indebtedness" means all indebtedness and
obligations owing by Borrower to any Bank other than Allowed Bank Indebtedness.
"Initial TCW Amortization Date" means the earliest to occur
of the following: (i) the Quarterly Payment Date in December, 2003, (ii) the
first date on which all Allowed Bank
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Indebtedness has been paid (and if paid in full before the end of the Revolver
Period, all commitments to extend credit under the Bank Documents have been
terminated), (iii) the date of any acceleration of any Allowed Bank
Indebtedness, and (iv) the date of any acceleration of TCW Indebtedness which
is made in accordance herewith.
"Inland Refining" means Inland Refining, Inc., a Utah
corporation.
"Insolvency Proceeding" means any voluntary or involuntary
liquidation, dissolution, sale of all or substantially all assets, marshaling
of assets or liabilities, receivership, conservatorship, general assignment for
the benefit of creditors, insolvency, bankruptcy, reorganization, arrangement
or composition of Borrower, Parent or any Related Person which is either a
guarantor of any obligation of Borrower to the Noteholders or the Banks or a
mortgagor or encumbrancer of any property to secure any such obligation.
"Lien" means, with respect to any property or assets, any
right or interest therein of a creditor to secure indebtedness owed to him or
any other arrangement with such creditor which provides for the payment of such
indebtedness out of such property or assets or which allows him to have such
indebtedness satisfied out of such property or assets prior to the general
creditors of any owner thereof, including any lien, mortgage, security
interest, pledge, deposit, production payment, rights of a vendor under any
title retention or conditional sale agreement or lease substantially equivalent
thereto, tax lien, mechanic's or materialman's lien, or any other charge or
encumbrance for security purposes, whether arising by law or agreement or
otherwise, but excluding any right of offset which arises without agreement in
the ordinary course of business. "Lien" also means any filed financing
statement, any registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or action which would
serve to perfect a Lien described in the preceding sentence, regardless of
whether such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.
"Noteholders" means (a) the Agent Noteholder, and (b) all
Persons which now or hereafter constitute "Noteholder" under the TCW Agreement.
Trustco, acting as Sub-Custodian for Mellon Bank for the benefit of Account No.
CPFF 873-3032, is initially the only Noteholders, but the parties hereto
recognize and agree that future assignees and successors thereof will also be
"Noteholders" hereunder.
"Parent" means Inland Resources, Inc., a Washington
corporation, which owns 100% of the outstanding shares of common stock of
Borrower.
"Quarterly Payment Date" means the second to last business
day of each March, June, September and December, beginning with December 29,
1997.
"Permitted Commodity Xxxxxx" means any transaction under a
Commodity Hedge Agreement except to the extent prohibited by the TCW Agreement
and not otherwise
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approved by the Agent Noteholder or prohibited by the Bank Agreement and not
otherwise approved by the Agent Lender.
"Permitted Interest Rate Xxxxxx" means any transaction under
a Bank Interest Rate Hedge Agreement.
"Permitted Junior Securities" means any equity securities or
subordinated debt securities of Borrower or any successor obligor with respect
to the TCW Indebtedness provided for by a plan of reorganization or
readjustment that, in the case of any such subordinated debt securities, are
subordinated in right of payment to all Allowed Bank Indebtedness that may at
the time be outstanding to the same degree as, or to a greater extent than, the
TCW Indebtedness is so subordinated under this Agreement.
"Person" means an individual, corporation, partnership,
limited liability company, association, joint stock company, trust or trustee
thereof, estate or executor thereof, unincorporated organization or joint
venture, court or governmental unit or any agency or subdivision thereof, or
any other legally recognizable entity.
"Production/Refining Credit Agreement" means that certain
Credit Agreement by and between Borrower and Parent dated as of May 29, 1998,
as amended, supplemented, or restated.
"Properties" means, collectively, those undivided interests
in oil and gas properties and interests in other real and personal property
which are, at the time in question, owned by Borrower, Parent or any Related
Person.
"Related Person" means any of Parent, Borrower or any
Subsidiary of Parent, whether now existing or hereafter formed or acquired.
"Revolver Period" means the period from the date hereof until
March 31, 1999 or such earlier date on which the commitment of the Banks to
make revolving credit available to the Borrower is terminated pursuant to the
Bank Agreement.
"Scheduled Bank Payments" has the meaning given to such term
in Section 3 hereof.
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership, joint venture, or other business or
corporate entity, enterprise or organization which is directly or indirectly
(through one or more intermediaries) controlled by or owned fifty percent or
more by such Person, provided that associations, joint ventures or other
relationships (a) which are established pursuant to a standard form operating
agreement or similar agreement or which are partnerships for purposes of
federal income taxation only, (b) which are not corporations or partnerships
(or subject to the Uniform Partnership Act) under applicable state
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law, and (c) whose businesses are limited to the exploration, development and
operation of oil, gas or mineral properties and interests owned directly by the
parties in such associations, joint ventures or relationships, shall not be
deemed to be "Subsidiaries" of such Person.
"TCW Default" means any "Event of Default" under the TCW
Agreement and any other event which causes or allows the acceleration of the
TCW Indebtedness.
"TCW Documents" means the TCW Agreement and each note,
mortgage, security agreement, pledge agreement, guarantee, or other agreement,
certificate, document instrument and writing at any time delivered in
connection therewith or pursuant thereto.
"TCW Indebtedness" means any and all indebtedness (whether
for principal, interest, fees, indemnifications, expenses, or otherwise) owing
by Borrower to any Noteholder under any TCW Document, provided that (unless
otherwise expressly agreed by the Agent Lender) there shall be excluded from
TCW Indebtedness (i) any loans made by the Noteholders to Borrower on or after
the date hereof which in the aggregate exceed $75,000,000 and (ii) all interest
owing on any loans which are themselves excluded from TCW Indebtedness and any
fees, indemnifications, and expenses relating to any such excluded loans or
excluded interest.
(b) References and Headings. Unless the context otherwise
requires or unless otherwise provided herein, references in this Agreement to a
particular agreement, instrument or document (including references to
promissory notes, loan agreements, guaranties and security documents) also
refer to and include all renewals, extensions, amendments, modifications,
supplements or restatements of any such agreement, instrument or document which
are made in writing by the parties thereto, provided that nothing contained in
this Section shall be construed to authorize any party hereto to execute or
enter into any such renewal, extension, amendment, modification, supplement or
restatement. The headings used herein are for purposes of convenience only and
shall not be used in construing the provisions hereof. The words "this
Agreement," "this instrument," "herein," "hereof," "hereby" and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. The word "or" is not exclusive, and
the word "including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires. Use of the terms "Bank" is for ease of reference only, it being
understood that ING (U.S.) Capital Corporation is not a commercial bank and the
other "Banks" under the Bank Agreement may or may not be commercial banks.
Section 2. Subordination of Liens.
All Liens granted by Borrower, Parent or any Related Person
which at any time secure any TCW Indebtedness are hereby made -- and will at
all times prior to the full payment or discharge of all Allowed Bank
Indebtedness be -- subject and subordinate to all Liens at any time granted by
Borrower, Parent, or any Related Person to secure Allowed Bank Indebtedness
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(but only to the extent that such Liens granted to or for the benefit of the
Banks secure Allowed Bank Indebtedness). All Liens granted by Borrower, Parent
or any Related Person which at any time secure any Excess Bank Indebtedness are
hereby made -- and will at all times prior to the full payment or discharge of
all TCW Indebtedness be -- subject and subordinate to all Liens granted by
Borrower, Parent or any Related Person which at any time secure any TCW
Indebtedness (but only to the extent that such Liens granted to or for the
benefit of the Banks secure Excess Bank Indebtedness and such Liens granted to
or for the benefit of TCW secure TCW Indebtedness). The foregoing
subordinations shall be to the same extent as if (i) all such Liens securing
Allowed Bank Indebtedness had been properly recorded, filed and otherwise
perfected prior to all such Liens securing TCW Indebtedness and (ii) all such
Liens securing TCW Indebtedness had been properly recorded, filed and otherwise
perfected prior to all such Liens securing Excess Bank Indebtedness, all
regardless of the relative priority of any such Liens as determined without
regard to this Agreement. In furtherance of the foregoing, any and all proceeds
of any policies of title insurance with respect to any Collateral shall be
treated as proceeds of recourse against the Lien on such Collateral.
Section 3. Required Payments from ANCF; Limitations on
Indebtedness.
(a) Schedule 1 attached hereto sets forth the amounts and
dates for payment of all principal payments of Allowed Bank Indebtedness which
are required under the Bank Documents (herein called the "Scheduled Bank
Payments"). All parties hereto acknowledge and agree that on or before the
Quarterly Payment Date following each Calculation Quarter, all ANCF with
respect to such Calculation Quarter (and any proceeds from Approved Sales or
Financings, proceeds from sales of equity of Parent and any other sources of
funds received by Borrower, Parent or any other Related Person, in each case to
the extent used to pay, redeem, purchase or discharge Bank Indebtedness or TCW
Indebtedness) shall be applied in the following order (the "ANCF Hierarchy"):
(i) first, to any Scheduled Bank Payments, payments in
respect of Permitted Interest Rate Xxxxxx and any interest or fees on,
or other non-principal items of, Allowed Bank Indebtedness, to the
extent such Scheduled Bank Payments, payments in respect of Permitted
Interest Rate Xxxxxx, interest, fees or other non-principal items are
due on or before such Quarterly Payment Date,
(ii) second, to any Allowed Bank Indebtedness which has been
accelerated and become due in accordance with the terms of both this
Agreement and the Bank Documents,
(iii) third, to any interest or fees on, or other
non-principal items of, TCW Indebtedness, to the extent such interest,
fees or other items are due (whether due to acceleration thereof or
otherwise) on or before such Quarterly Payment Date,
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(iv) fourth, to any payments of principal (other than those
described in subsections (i) and (ii) above) which are due on the
Allowed Bank Indebtedness on or before such Quarterly Payment Date,
(v) fifth (but only on or after the Initial TCW Amortization
Date), to any payments of principal which are due on the TCW
Indebtedness (whether due to acceleration thereof or otherwise) on or
before such Quarterly Payment Date,
(vi) sixth, except during any 100% Dedication Quarter, up to
ten percent (10%) of the ANCF for such Calculation Quarter may be
retained by Borrower and used in Borrower's business,
(vii) seventh, (x) if made during the Revolver Period to
prepay Allowed Bank Indebtedness, subject to the Borrower's ability to
obtain subsequent advance pursuant to the terms of the Bank Documents
or the TCW Documents or (y) if made after the Revolver Period to
prepay any Scheduled Bank Payments (other than those described in
subsection (i), (ii) or (iv) above), in inverse order of maturity,
(viii) eighth, after all Scheduled Bank Payments and other
Allowed Bank Indebtedness have been paid (or if the Banks elect not to
accept any prepayments under the preceding subsection (vii)), to
prepay or repay any TCW Indebtedness,
(ix) ninth, after all TCW Indebtedness has been paid (or if
the Noteholders elect, in their sole and absolute discretion not to
accept any prepayments under the preceding section (viii)), to repay
any Excess Bank Indebtedness, to the extent Excess Bank Indebtedness
is due (whether due to acceleration or otherwise), and
(x) tenth, the remainder may be retained by Borrower and used
in Borrower's business.
This Section 3(a) is intended only to create an obligation of Borrower to pay
and apply ANCF and other amounts described therein in the order and the
respective amounts set forth therein, and to create an obligation on the Banks
and the Noteholders to turnover funds improperly received or collected as more
particularly set forth in Section 9. No failure of Borrower to make payment or
application of ANCF or any other amount to the Indebtedness in the manner
provided in Section 3(a), and no failure of the Banks or Agent Lender to
enforce such payment or application nor any other act or omission by Borrower
or Banks or Agent Lender shall cause any Allowed Bank Indebtedness to be deemed
to have been paid nor to otherwise no longer be entitled to the priority of
payment set forth in this Section 3(a) nor affect any other right or privilege
of the Banks or the Agent Lender. No failure of Borrower to make payment or
application of ANCF or any other amount to the Indebtedness in the manner
provided in Section 3(a), and no failure of the Noteholders or the Agent
Noteholder to enforce such payment or application nor any other act or omission
by Borrower or the Noteholders or the Agent Noteholder shall cause any TCW
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Indebtedness to be deemed paid nor to otherwise no longer be entitled to the
priority of payment set forth in this Section 3(a) nor affect any other right
or privilege of the Noteholders or the Agent Noteholder.
(b) As further provided in Sections 5 and 6, (i) neither the
amount nor the date for payment of any Scheduled Bank Payment may be modified
and no provision of the Bank Documents may be amended or modified to increase
the rate or the manner of determining interest, fees, expenses or other
non-principal items due on the Allowed Bank Indebtedness, without the prior
consent of the Agent Noteholder, and (ii) the scheduled dates for payment of
the principal of the TCW Indebtedness shall not be modified to occur prior to
the Initial TCW Amortization Date and no provision of the TCW Documents may be
amended or modified to increase the rate or the manner of determining interest,
fees, expenses or other non-principal items due on the TCW Indebtedness,
without the consent of the Agent Lender, if either the Revolver Period has not
ended or there is any outstanding Allowed Bank Indebtedness . No Excess Bank
Indebtedness shall be lent to or incurred by Borrower, Parent or any Related
Person without the consent of the Agent Noteholder until all TCW Indebtedness
has been paid in full, and no loans in excess of $75,000,000 shall be made to
Borrower, Parent or any Related Person or borrowed by Borrower under the TCW
Documents without the consent of the Agent Lender until all Allowed Bank
Indebtedness has been paid in full.
(c) Interest on each Eurodollar Loan, as defined and provided
for under the Bank Agreement, is payable on the last day of the Interest Period
for such Eurodollar Loan and, in the case of any Interest Period in excess of
90 days, on the 90th day of such Interest Period. Payments on Permitted
Interest Rate Xxxxxx may come due on a day other than a Quarterly Payment Date.
Notwithstanding Section 3(a), such Interest on each Eurodollar Loan shall be
paid when due under the Bank Agreement and payments on Permitted Interest Rate
Xxxxxx shall be paid when due under the Bank Interest Rate Hedge Agreement and
each shall, for purposes of the ANCF Hierarchy, be accounted for out of ANCF as
if paid on the next succeeding Quarterly Payment Date.
Section 4. Rights to Cure Defaults.
(a) Within two Business days after determining that any Bank
Default has occurred, the Borrower will give notice of such Bank Default to the
Agent Noteholder. Agent Lender may, but is not obligated to, give notice of any
Bank Default to the Agent Noteholder. Although no Noteholder has any obligation
to cure any Bank Default, Borrower hereby authorizes each Noteholder to make
any such cure, if any Noteholder so elects, and the Banks hereby agree that
they will allow such Noteholder to make any such cure on behalf of Borrower,
provided such cure is in compliance with the Bank Agreement and does not
otherwise cause a Bank Default. The Banks further agree that without the
consent of the Agent Noteholder no Bank shall commence or continue any
Enforcement Action with respect to any Bank Default until the earlier to occur
of (i) the ninetieth (90th) day after the date upon which the Agent Lender
receives notice of such Bank Default from the Borrower or the Agent Noteholder
(and
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then only if such Bank Default remains uncured and otherwise continues to
exist) and (ii) any acceleration of the TCW Indebtedness or any enforcement by
any Noteholder of any Lien upon assets of Borrower in compliance with the terms
hereof.
(b) Within two Business days after determining that any TCW
Default has occurred, the Borrower will give notice of such TCW Default to the
Agent Lender. Agent Noteholder may, but is not obligated to, give notice of any
TCW Default to the Agent Lender. Although no Bank has any obligation to cure
any TCW Default, Borrower hereby authorizes each Bank to make any such cure, if
any Bank so elects, and the Noteholders hereby agree that they will allow such
Bank to make any such cure on behalf of Borrower, provided such cure is in
compliance with the TCW Agreement and does not otherwise cause a TCW Default.
The Noteholders further agree that without the consent of the Agent Lender, no
Noteholder shall commence or continue any TCW Enforcement Action with respect
to any TCW Default until the earlier to occur of (i) the ninetieth (90th) day
after the date upon which the Agent Noteholder receives notice of such TCW
Default from the Borrower or the Agent Lender (and then only if such TCW
Default remains uncured and otherwise continues to exist) and (ii) any
acceleration of the Bank Indebtedness or any enforcement by any Bank of any
Lien upon assets of Borrower in compliance with the terms hereof.
Section 5. Amendments to Bank Documents. No provision of the
Bank Documents shall, without the prior written consent of the Agent
Noteholder, be amended, supplemented, modified or waived if the effect of such
amendment, supplement, modification or wavier would be to (a) increase the rate
of interest or the manner of determining prepayment charges, fees, expenses or
other amounts payable with respect to (or constituting items of) the Allowed
Bank Indebtedness (provided that the foregoing shall not prevent the interest
rate applicable to any past due Allowed Bank Indebtedness from increasing by up
to two percent per annum as presently provided in the Bank Agreement), (b)
change the date on which any Scheduled Bank Payment becomes due or change the
amount thereof, (c) change the scheduled payment date of any other Allowed Bank
Indebtedness, (d) add new covenants or events of default, (e) extend the
Commitment Period or allow a loan under the Bank Documents after March 31,
1999, or (f) otherwise change the terms of the Bank Documents in any way which
is more onerous to Borrower, Parent or any Related Person or causes, or
increases the likelihood of, the occurrence of a Bank Default The parties
recognize that the Bank Agreement is a revolving credit agreement until March
31, 1999, with floating interest rate options, and neither (i) the borrowing of
loans under such revolving credit feature (provided the aggregate outstanding
amounts thereof do not exceed the limits set forth above in the definition of
"Allowed Bank Indebtedness") nor (ii) any fluctuations in the underlying
eurodollar rate or prime rate on which are based the interest rate provisions
of the Bank Agreement, nor (iii) the occurrence of any event triggering
Eurodollar Rate costs or a late payment rate, shall be deemed to be a violation
of this Section 5.
Nothing to the contrary contained in this Agreement shall (i)
restrict, prohibit or regulate the determinations which may be made from time
to time by the Banks or the Agent
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Lender under the Bank Agreement, including specifically, but without
limitation, the right of the Banks and/or Agent Lender to determine the
Borrowing Base from time to time in accordance with the provisions of the Bank
Agreement. Any amount required to be repaid under the Bank Agreement as a
result of a Borrowing Base determination shall be paid pursuant to clause (iv)
of Section 3(a) of this Agreement. Such required payment shall not be
considered a modification within the meaning of Section 3(b). Borrower
acknowledges and agrees that the Scheduled Bank Payments are based upon the
Borrowing Base currently in existence under the Bank Agreement and the Banks
will not increase the Borrowing Base under the Bank Agreement (i) without an
amendment to such Scheduled Bank Payments as determined by the Banks in
connection with such Borrowing Base increase and (ii) the consent of the Agent
Noteholder to such amendment to such Scheduled Bank Payments.
Section 6. Amendments to TCW Documents. No provision of the
TCW Documents shall, without the prior written consent of the Agent Lender, be
amended, supplemented, modified or waived if the effect of such amendment,
supplement, modification or wavier would be to (a) increase the rate of
interest, prepayment charges, fees, expenses or other amounts payable with
respect to (or constituting items of) the TCW Indebtedness (provided that the
foregoing shall not prevent the interest rate applicable to any past due TCW
Indebtedness from increasing to twelve percent per annum as presently provided
in the TCW Agreement), (b) provide for scheduled principal payments on the TCW
Indebtedness prior to the Initial TCW Amortization Date, (c) change the
scheduled payment date of any non- principal items of TCW Indebtedness, (d) add
new covenants or events of default, or (e) otherwise change the terms of the
TCW Documents in any way which causes, or increases the likelihood of, the
occurrence of a TCW Default. The parties further recognize that, pursuant to
the TCW Agreement, Parent and Warrantholder entered into that certain Warrant
Agreement and Parent issued to Warrantholder certain Warrants as described in
the Warrant Agreement and that any exercise by Warrantholder of such Warrants
or any rights under the TCW Warrant Documents or any enforcement thereof shall
not be deemed to be a violation of this Section 6.
Section 7. Insolvency Proceedings. Upon any distribution of
properties or assets of Borrower in any Insolvency Proceeding, or upon any
payment on behalf of Borrower in any Insolvency Proceeding:
(a) The Banks shall be entitled to receive payment in full in
cash of the Allowed Bank Indebtedness, or provision must be made for immediate
payment in full in cash of the Allowed Bank Indebtedness, before the
Noteholders are entitled to receive any direct or indirect payment or
distribution of properties or assets of Borrower of any kind or character
(whether in cash, property or securities and by set-off or otherwise), other
than Permitted Junior Securities, on account of the TCW Indebtedness.
(b) Any direct or indirect payment or distribution of
properties or assets of Borrower of any kind or character, other than a payment
or distribution in the form of Permitted Junior Securities, to which the
Noteholders would be entitled but for the provisions of this
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Agreement shall be paid by Borrower or by any liquidating trustee or agent or
other Person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to the
Banks or their representative or representatives, ratably according to the
aggregate unpaid amounts of Allowed Bank Indebtedness held or represented by
each, to the extent necessary to make payment in full of all Allowed Bank
Indebtedness after giving effect to any concurrent payment or distribution to
the Banks.
(c) If, notwithstanding the foregoing provisions of this
Section 7, any Noteholder shall receive any payment or distribution of
properties or assets of Borrower of any kind or character, other than a payment
or distribution in the form of Permitted Junior Securities, on account of the
TCW Indebtedness before all Allowed Bank Indebtedness is paid or provided for
in full, then such payment or distribution shall be received and held in trust
for and shall be paid over or delivered forthwith to the Banks remaining unpaid
or their representatives, to the extent necessary to pay all Allowed Bank
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the Banks.
(d) Except as provided in subsections (a), (b) and (c) of
this Section 7, the Banks and the Noteholders will be entitled to freely
exercise all rights and remedies available to them in any Insolvency
Proceeding. Furthermore, nothing in this Section 7 or any other provision of
this Agreement shall be deemed or construed to constitute a waiver by Agent
Noteholder or any Noteholder of any right to vote for or against or to propose
any plan of reorganization in any Insolvency Proceeding, all of which are
expressly reserved and retained by Agent Noteholder and the Noteholders.
Section 8. Notice of Acceleration; Right to Purchase
Indebtedness.
(a) Within one business day after any acceleration of the
maturity of any Allowed Bank Indebtedness, the Agent Lender will give notice
thereof to the Agent Noteholder. Within one business day after any acceleration
of the maturity of any TCW Indebtedness, the Agent Noteholder will give notice
thereof to the Agent Lender.
(b) The Banks will at any time during the continuance of any
Bank Default or Insolvency Proceeding, upon request by the Agent Noteholder,
assign all of the Allowed Bank Indebtedness and all appurtenant Liens, rights,
documents and instruments to the Noteholders for a price equal to 100% of the
Allowed Bank Indebtedness.
(c) Before any Noteholder sells any TCW Indebtedness, it
shall first give written offer to the Agent Lender to sell such TCW
Indebtedness, specifying the amount of TCW Indebtedness to be sold and all
material terms of such sale. The Banks shall have the right to purchase such
TCW Indebtedness on such offered terms for a period of 45 days ("Offer Period")
after receipt by the Agent Lender of such notice. If the Banks do not purchase
such TCW Indebtedness during such Offer Period, the Noteholder may sell the TCW
Indebtedness to any third party on the same terms which were offered to the
Banks for a period of 180 days following
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the end of such Offer Period. Such Noteholder must again provide the Banks an
offer to sell TCW Indebtedness as a condition to (i) any sale of TCW
Indebtedness after such 180 day period or (ii) any sale of TCW Indebtedness on
terms more favorable to the proposed purchaser than the terms offered the
Banks; provided that such offer on more favorable terms to a proposed purchaser
within such 180 day period shall be limited to an Offer Period of 15 days after
receipt by Agent Lender of notice of such offer. The provisions of this Section
8(c) does not apply to any sale by a Noteholder to an Affiliate or to any
transfer by a Noteholder to any party having a beneficial interest in such
Noteholder or in any Note or to any custodian, sub-custodian, investment
manager or designee of such beneficial owner.
Section 9. Turnover of Payments Wrongly Received. If Borrower
shall make any payment to a Noteholder which is prohibited hereby or any
Noteholder shall collect any payment as a result of an Enforcement Action which
is prohibited hereby, then such payment shall be paid over and delivered
forthwith by such Noteholder to the Agent Lender. If Borrower shall make any
payment to a Bank which is prohibited hereby or any Bank shall collect any
payment as a result of an Enforcement Action which is prohibited hereby, then
such payment shall be paid over and delivered by such Bank to the Agent
Noteholder.
Section 10. Payments and Enforcement Actions Otherwise
Permitted. Except as expressly provided herein, nothing shall prevent Borrower
from making, or any Noteholder or Bank from receiving, any payments on the TCW
Indebtedness or Allowed Bank Indebtedness, as applicable, or limit the rights
of the Banks or the Noteholders to take Enforcement Actions.
Section 11. Subrogation to Rights of Banks. After the payment
in full of all Allowed Bank Indebtedness, the Noteholders shall be subrogated
to the rights of the Banks to receive payments and distributions of cash,
property and securities applicable to Allowed Bank Indebtedness and the Liens
securing the Allowed Bank Indebtedness until all amounts owing on the TCW
Indebtedness shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of Allowed Bank Indebtedness by or on
behalf of Borrower or by or on behalf of the Noteholders by virtue of this
Agreement which otherwise would have been made to the Noteholders shall, as
between Borrower, its creditors other than the Banks, and the Noteholders, be
deemed to be a payment or distribution by Borrower to or on account of the
Allowed Bank Indebtedness.
Section 12. Provisions Solely to Define Relative Rights. The
provisions of this Agreement are, and are intended solely, for the purpose of
defining the relative rights of the Noteholders on the one hand and of the
Banks on the other hand. Nothing contained in this Agreement is intended to or
shall (a) impair, as between Borrower and the Noteholders, the obligation of
Borrower, which is absolute and unconditional, to pay all TCW Indebtedness as
and when the same shall become due and payable in accordance with its terms;
(b) affect the relative rights against Borrower of the Noteholders and any
creditors of Borrower other than the Banks; or (c) prevent the Noteholders from
exercising all remedies otherwise permitted by applicable law upon default
under the TCW Agreement, subject to the rights of the Banks, if
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applicable, under this Agreement. Nothing contained in this Agreement is
intended to or shall (a) impair, as between Borrower and the Banks, the
obligation of Borrower, which is absolute and unconditional, to pay all Bank
Indebtedness as and when the same shall become due and payable in accordance
with its terms; (b) affect the relative rights against Borrower of the Banks
and any creditors of Borrower other than the Noteholders; or (c) prevent the
Banks from exercising all remedies otherwise permitted by applicable law upon
default under the Bank Agreement, subject to the rights of the Noteholders, if
applicable, under this Agreement. Without the consent of the Borrower, the
provisions of this Agreement defining the relative rights of the Noteholders
and the Banks may be modified by the Noteholders and the Banks without
modifying the rights of the Borrower, provided that Agent Noteholder and Agent
Lender shall give notice thereof to the Borrower.
Section 13. Possession of Stock and other Collateral. ING
(U.S.) Capital Corporation ("ING") acknowledges that it holds the stock of each
of Borrower and Inland Refining and the Sound Refining Deed of Trust and Sound
Refining Note (collectively, the "Pledged Collateral") pursuant to certain
Security Documents (as such term is defined in both the TCW Agreement and the
Bank agreement) for ING, as Agent for the Banks, and for the Collateral Agent
(as defined in the TCW Agreement), as agent for the Noteholders, to perfect the
security interest granted in each relevant Security Document. ING shall have no
obligation or duty to such Collateral Agent or Noteholders as a result thereof;
provided that upon payment in full of the Allowed Bank Indebtedness and the end
of the Revolving Period, ING shall not surrender such Pledged Collateral to
Parent or Inland Refining, as applicable, but shall deliver the same to
Collateral Agent.
Section 14. No Waiver. No right of any Bank or Noteholder to
enforce its rights as herein provided shall at any time or in any way be
prejudiced or impaired by any act or failure to act on the part of any other
party hereto or by any non-compliance by any other party with the terms of this
Agreement, regardless of any knowledge thereof which any such Bank or
Noteholder may have or otherwise be charged with (provided that in all events
the Noteholders may conclusively rely on the authority of the Agent Lender to
act for the Banks and that the Banks may conclusively rely on the authority of
the Agent Noteholder to act for the Noteholders). The rights and duties of the
parties hereto shall continue in effect and apply to the Bank Indebtedness and
the TCW Indebtedness and to the Bank Documents and the TCW Documents, as each
is from time to time amended or modified or waived, subject to the provisions
of Sections 3, 5 and 6.
Section 15. No Oral Change. No amendment of any provision of
this Agreement shall be effective unless it is in writing and signed by
Borrower, the Agent Noteholder and the Agent Lender. No waiver of any provision
of this Agreement, and no consent to any departure by Borrower, any Noteholder
or any Bank therefrom, shall be effective unless it is in writing and signed by
both the Agent Noteholder and the Agent Lender, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
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Section 16. Governing Law. This Agreement shall be deemed a
contract and instrument made under the laws of the State of New York and shall
be construed and enforced in accordance with and governed by the laws of such
state and the laws of the United States of America, without regard to
principles of conflicts of law.
Section 17. Invalidity of Particular Provisions. If any term
or provision of this Agreement shall be determined to be illegal or
unenforceable, all other terms and provisions hereof shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by applicable
law.
Section 18. Notices. All notices, requests, consents, demands
and other communications to Borrower, any Noteholder or any Bank which are
required or permitted under this Agreement shall be in writing and shall be
deemed sufficiently given or furnished if delivered by personal delivery, by
telecopy, by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, at the addresses listed below
(unless changed by similar notice in writing given by the particular Person
whose address is to be changed). Any such notice or communication shall be
deemed to have been given (a) in the case of personal delivery or delivery
service, as of the date of first attempted delivery at the address and in the
manner provided herein, (b) in the case of telecopy, upon receipt, or (c) in
the case of registered or certified United States mail, three days after
deposit in the mail. Any such notice to any Noteholder may be delivered in care
of the Agent Noteholder, and any such notice to any Bank may be delivered in
care of the Agent Lender.
Borrower's Address:
Inland Production Company
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx
Attention: Xxxx Xxxxxx
Telecopy: 000-000-0000
Agent Noteholder's Addresses:
TCW Asset Management Company
000 Xxxxx Xxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: 213/244-0604
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with a copy to:
TCW Asset Management Company
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telecopy: 713/615-7460
Agent Lender's Address:
ING (U.S.) Capital Corporation
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
Section 19. Successors and Assigns. This Agreement shall pass
to and be fully binding upon and inure to the benefit of the successors and
assigns of each party hereto.
Section 20. Agent Lender and Agent Noteholder Consents.
References to consent by Agent Lender means such consent with such approval or
concurrence of the Banks except as otherwise provided in the Bank Agreement.
References to consent by Agent Noteholder means such consent with such approval
or concurrence of the Noteholders as may be required or permitted from time to
time under the TCW Agreement.
Section 21. Consent. Agent Noteholder hereby consents to the
execution by Agent Lender, Banks, Borrower, and Parent of that certain Amended
and Restated Credit Agreement of even date herewith. Agent Lender hereby
consents to the execution by Agent Noteholder, Noteholders, Borrower, and
Parent of that certain Amended and Restated Credit Agreement of even date
herewith.
Section 22. Amendment and Restatement. This Agreement amends
and restates in its entirety the Original Intercreditor Agreement.
Section 23. Counterparts. This Agreement may be separately
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
constitute one and the same Agreement.
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IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.
Borrower: INLAND PRODUCTION COMPANY
By:
----------------------------------------
Xxxx X. Xxxxxxxxxx
Chief Financial Officer
Parent: INLAND RESOURCES, INC.
By:
----------------------------------------
Xxxx X. Xxxxxxxxxx
Chief Financial Officer
Agent Noteholder: TCW ASSET MANAGEMENT COMPANY, a
California corporation, as Investment
Manager under that certain Agreement
dated as of June 13, 1994, between TCW
Asset Management and Xxxxxx Xxxxxxx
Group, Inc.
By:
----------------------------------------
Xxxxxx X. Xxxxxxx
Managing Director
By:
----------------------------------------
Xxxx XxxXxxxx
Senior Vice President
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Noteholders: TRUST COMPANY OF THE WEST, acting in its
capacity as sub-custodian for Mellon Bank
for the benefit of Account No. CPFF873-3032
By:
----------------------------------------
Xxxxxx X. Xxxxxxx
Managing Director
By:
----------------------------------------
Xxxx XxxXxxxx
Senior Vice President
Agent Lender: ING (U.S.) CAPITAL CORPORATION, in its
capacity as Agent
By:
----------------------------------------
Xxxxxxxxxxx X. Xxxxxx
Senior Vice President
Banks: ING (U.S.) CAPITAL CORPORATION
By:
----------------------------------------
Xxxxxxxxxxx X. Xxxxxx
Senior Vice President
U.S. BANK NATIONAL ASSOCIATION
By:
----------------------------------------
Name:
Title:
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MEESPIERSON CAPITAL CORP.
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
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SCHEDULE 1
SCHEDULED BANK PAYMENTS
Quarterly Amount
Payment Date of Payment
------------ ----------
June 29, 1999 $6,222,222
Sept 29, 1999 $6,222,222
Dec 30, 1999 $6,222,222
Mar 30, 2000 $4,666,666
June 29, 2000 $4,666,666
Sept 28, 2000 $4,666,666
Dec 28, 2000 $4,666,666
Mar 29, 2001 $3,888,889
June 28, 2001 $3,888,889
Sept 27, 2001 $3,888,889
Dec 28, 2001 $3,888,889
Mar 28, 2002 $3,500,000
June 27, 2002 $3,500,000
Sept 27, 2002 $3,500,000
Dec 30, 2002 $3,500,000
Mar 28, 2003 $3,111,114
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EXHIBIT A
APPROVAL LETTER
[Date]
Inland Production Company
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention:
------------------------------
Gentlemen:
Reference is made to the Amended and Restated Intercreditor Agreement
dated September 11, 1998, among Inland Production Company, Inland Resources,
Inc., Trust Company of the West, as Noteholder, TCW Asset Management Company,
as Agent and Collateral Agent and ING (US) Capital Corporation, as Agent and
Banks. (Such Intercreditor Agreement, as from time to time amended, is herein
called the "Intercreditor Agreement"). Reference is hereby made to the
Intercreditor Agreement for all purposes, and terms defined therein shall have
the same meanings when used herein.
The Intercreditor Agreement contemplates that certain Approval Letters
may be given from time to time in connection therewith in order to specify
certain ANCF Capital Expenditures, ANCF XXX, ANCF Overhead Costs, or ANCF
Transportation Costs. This letter is such an Approval Letter and is given by
the undersigned in order so to approve the ANCF _____________ which are
specified in the schedule attached hereto.
This letter [is in addition to/supersedes] all previous Approval
Letters dealing with ANCF _____________.
This letter is a Loan Document under the TCW Agreement and the Bank
Agreement, and all provisions of the TCW Agreement and the Bank Agreement which
apply to Loan Documents shall apply hereto.
This letter may be separately executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of which
when so executed shall be deemed to constitute one and the same Approval
Letter.
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Please execute a counterpart of this letter in the place provided
below to evidence your agreement to the foregoing and your continuing
ratification of the TCW Agreement and the Bank Agreement and the other TCW
Documents and Bank Documents in consideration of the approval herein contained.
Yours truly,
TCW ASSET MANAGEMENT COMPANY, as
Agent under the TCW Agreement
By:
----------------------------------------
Name:
Title:
ING (U.S.) CAPITAL CORPORATION, as Agent
under the Bank Agreement
By:
----------------------------------------
Name:
Title:
Accepted and agreed to as
of the date first written
above
INLAND PRODUCTION COMPANY
By:
-----------------------------------
Name:
Title:
2
