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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
--------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported)...........................................April 5, 1994
ASSOCIATED NATURAL GAS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-10381 84-1006841
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(Commission File Number) (I.R.S. Employer
Identification Number)
370 17th Street, Suite 900
Denver, Colorado 80202
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number
including area code:(303) 595-3331
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ITEM 5. Other Events
------------
On April 5, 1994 Associated Natural Gas Corporation ("ANGC") closed on
the sale of $40,000,000 of its Senior Notes ("Notes") to Connecticut General
Life Insurance Company ("CIGNA"). The Notes were sold at par, bear interest
at the rate of 6.30% per annum and mature at various dates beginning April 15,
1999 and ending on April 15, 2003. The Notes contain certain terms and
conditions which are substantially equivalent to those in ANGC's existing
long-term indebtedness.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ASSOCIATED NATURAL GAS CORPORATION
(Registrant)
Date: April 5, 1994 By: /s/ J. Roger Grace
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J. Roger Grace, Vice President/Treasurer
(Principal Accounting Officer)
2
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
EXHIBITS
to
REPORT TO FORM 8-K
AS OF APRIL 5, 1994
UNDER THE SECURITIES ACT OF 1934
------------------------------------
ASSOCIATED NATURAL GAS CORPORATION
A DELAWARE CORPORATION
COMMISSION NUMBER I.R.S. EMPLOYER I.D. NUMBER 84-1006841
1-10381
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INDEX TO EXHIBITS
Page
10.1 $40,000,000 Senior Notes agreement dated April 5, 1994 among ANGC
and CIGNA.
<PAGE>
Exhibit 10.1
ASSOCIATED NATURAL GAS CORPORATION
370 17th Street, Suite 900
Denver, Colorado 80202
As of April 5, 1994
To Each of the Purchasers Identified
on the Signature Pages of this Agreement
$40,000,000 Senior Notes
------------------------
Gentlemen:
The undersigned, Associated Natural Gas Corporation, a Delaware
corporation (the "Company" and as further defined in Paragraph 10), hereby
agrees with you as follows:
PARAGRAPH 1. AUTHORIZATION OF ISSUE OF NOTES.
1. Authorization of Issue of Notes. The Company will authorize the
issue of its senior promissory notes (the "Notes") in the aggregate principal
amount of $40,000,000, to be dated the date of issue thereof, to mature on
April 15, 2003, to bear interest on the unpaid balance thereof from the date
thereof until the principal thereof shall have become due and payable at the
rate of 6.30% per annum, and on overdue principal, premium, if any, and interest
at the rate specified in the Notes, and to be substantially in the form of
Exhibit A attached hereto. The term "Notes" as used herein shall include each
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Note delivered pursuant to any provision of this Agreement and each Note
delivered in substitution or exchange for any such Note pursuant to any such
provision. Capitalized terms used herein have the meanings specified in
Paragraph 10.
PARAGRAPH 2. PURCHASE AND SALE OF NOTES.
2. Purchase and Sale of Notes. The Company hereby agrees to sell to
you and, subject to the terms and conditions herein set forth, you severally
agree to purchase from the Company, the aggregate principal amount of Notes set
forth opposite your name in Schedule I hereto at 100% of such aggregate
principal amount. The Company will deliver to you, at the offices of Baker &
Botts, L.L.P. at 800 Trammell Crow Center, 2001
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Ross Avenue, Dallas, Texas 75201, one or more Notes registered in your name or
(if so specified) in the name of your nominee, evidencing the aggregate
principal amount of the Notes to be purchased by you and in the denomination or
denominations specified with respect to you in Schedule I hereto, against
payment of the purchase price thereof by wire transfer of immediately available
funds for credit to the Company's account #7656971 at Continental Bank N.A., ABA
No. 071000039, 231 South LaSalle Street, Chicago, Illinois 60697, on the date of
closing, which shall be April 7, 1994 (the "Closing" or the "Date of Closing").
PARAGRAPH 3. CONDITIONS PRECEDENT.
3. Conditions Precedent. Your obligation to purchase and pay for the
Notes to be purchased by you hereunder is subject to the satisfaction, on or
before the Date of Closing, of the following conditions:
3A. Certain Documents. You shall have received the following:
(i) The Notes to be purchased by you;
(ii) Certified copies of the resolutions of the Board of
Directors of the Company approving this Agreement and the Notes, and
of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and the
Notes;
(iii) A certificate of the Secretary or an Assistant Secretary of
the Company certifying the names and true signatures of the officers
of the Company authorized to sign this Agreement and the Notes and the
other documents to be delivered hereunder;
(iv) Certified copies of the Restated Certificate of
Incorporation and bylaws of the Company as in effect on the Date of
Closing; and
(v) A favorable opinion of Erik B. Carlson, Esq., General Counsel
of the Company, reasonably satisfactory to you and substantially in
the form of Exhibit B attached hereto and as to such other matters as
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you may reasonably request (and the Company hereby instructs its
counsel to deliver such opinion to you and acknowledges that you are
relying on such opinion).
3B. Opinion of Purchasers' Special Counsel. You shall have received
from Baker & Botts, L.L.P., who are acting as special counsel for you in
connection with this transaction, a favorable opinion reasonably satisfactory to
you as to: (i) the due incorporation, existence and good standing of the
Company; (ii) the due authorization by
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all requisite corporate action, execution and delivery and the validity, legally
binding character and enforceability of this Agreement and the Notes; (iii) the
absence of any requirement to register the Notes under the Securities Act; and
(iv) such other matters incident to the matters herein contemplated as you may
reasonably request, including the form of all papers and the validity of all
proceedings. In rendering such opinion, such counsel may rely, to the extent
appropriate, upon the opinion referred to in Paragraph 3A. Such opinion shall
also state that, based upon such investigation and inquiry as is deemed relevant
and appropriate by such counsel, the opinion referred to in Paragraph 3A is
satisfactory in form and scope to such counsel and, while such investigation and
inquiry into the matters covered by such opinion (other than the matters
specified in clauses (ii) and (iii) above) were not sufficient to enable such
counsel independently to render such opinion, nothing has come to the attention
of such counsel that has caused them to question the legal conclusions expressed
in the opinion referred to in Paragraph 3A and such counsel believe that you are
justified in relying on such opinion.
3C. Representations and Warranties; No Default. The representations
and warranties contained in Paragraph 8 shall be true on and as of the Date of
Closing, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on the Date of Closing no Event of Default or
Default; and the Company shall have delivered to you an Officer's Certificate,
dated the Date of Closing, to both such effects.
3D. Purchase Permitted By Applicable Laws. The purchase of and
payment for the Notes to be purchased by you on the Date of Closing on the terms
and conditions herein provided (including the use of the proceeds of the Notes
by the Company) shall not violate any applicable law or governmental regulation
(including, without limitation, section 5 of the Securities Act or Regulation G,
T or X of the Board of Governors of the Federal Reserve System) and shall not
subject you to any tax, penalty, liability or other adverse condition under or
pursuant to any applicable law or governmental regulation, and you shall have
received such certificates or other evidence as you may request to establish
compliance with this condition.
3E. Proceedings. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all documents
incident thereto shall be reasonably satisfactory in substance and form to you,
and you shall have received all such counterpart originals or certified or other
copies of such documents as you may reasonably request.
3F. Sale of Notes to All Purchasers. At the Closing, the Company
shall sell to each Purchaser the Note or Notes to be purchased by it at the
Closing and shall receive payment in full therefor.
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3G. Application of Proceeds. The Company shall apply, at the
Closing, approximately $40,000,000 of the proceeds of the sale of the Notes to
the reduction of the Debt outstanding under the Revolving Credit Agreement; and
the Company shall have delivered to you an Officer's Certificate, dated the Date
of Closing, to such effect.
3H. Private Placement Number. The Company shall have obtained a
private placement number for the Notes from the CUSIP Service Bureau of Standard
& Poor's Corporation (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners).
3I. Compliance With Outstanding Debt Limitations. The Company shall
have delivered to you an Officer's Certificate of an authorized financial
officer of the Company describing any instrument or agreement to which the
Company or any Subsidiary is a party or by which the Company or any Subsidiary
is bound that limits the amount of, or otherwise imposes restrictions on the
incurring of, indebtedness of the type to be evidenced by the Notes, together
with such evidence as you may reasonably request showing that, after giving
effect to the reduction of the Debt outstanding under the Revolving Credit
Agreement as contemplated by Paragraph 3G, the execution, delivery and
performance by the Company of this Agreement and the Notes will not conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in the creation of any Lien on any
property owned by the Company or any Subsidiary pursuant to, or otherwise
violate, any agreement or instrument evidencing the indebtedness of the Company
or any Subsidiary or any agreement relating thereto.
PARAGRAPH 4. PREPAYMENTS.
4. Prepayments. The Notes shall be subject to prepayment only with
respect to the required prepayments specified in Paragraph 4A and also under the
circumstances set forth in Paragraph 4B. The Notes shall also be subject to
purchase by the Company under the circumstances set forth in Paragraph 4E.
4A. Required Prepayments of Notes. Until the Notes shall be paid in
full, the Company shall apply to the prepayment of the Notes, without premium,
the sum of $8,000,000 on April 15 in each of the years 1999 to 2002, inclusive,
and such principal amounts of the Notes, together with interest thereon to the
prepayment dates, shall become due and payable on such prepayment dates. Any
prepayment made by the Company pursuant to any other provision of this Paragraph
4 shall not reduce or otherwise affect its obligation to make any prepayment
required by this Paragraph 4A. The remaining $8,000,000 principal amount of the
Notes, together with interest accrued thereon, shall become due on the maturity
date of the Notes.
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4B. Optional Prepayment of Notes With Yield-Maintenance Premium. The
Notes shall be subject to prepayment, in whole at any time or from time to time
in part (in integral multiples of $1,000,000), at the option of the Company, at
100% of the principal amount so prepaid plus interest thereon to the prepayment
date and the Yield-Maintenance Premium, if any, with respect to each Note. If
the Company and the holder of any Note shall prior to the prepayment date
designate in writing a lower premium, the premium so designated shall be payable
on the prepayment date in lieu of the Yield-Maintenance Premium with respect to
such Note; provided that the premium provided for in such designation shall have
--------
been offered to each holder of a Note and each such holder shall have at least
five Business Days to consider such premium prior to the prepayment date and
provided further that the availability of such premium shall not be conditional
- - -------- -------
upon or subject to any agreement on the part of any holder of a Note to waive or
amend any term or provision of this Agreement or the Notes.
4C. Notice of Optional Prepayment. The Company shall give the holder
of each Note irrevocable written notice of any prepayment pursuant to Paragraph
4B not less than 15 Business Days, or more than 60 Business Days, prior to the
prepayment date, specifying such prepayment date and the principal amount of the
Notes, and of the Notes, if any, held by such holder, to be prepaid on such date
and stating that such prepayment is to be made pursuant to Paragraph 4B. Notice
of prepayment having been given as aforesaid, the principal amount of the Notes
specified in such notice, together with interest thereon to the prepayment date
and together with the premium, if any, provided in Paragraph 4B, shall become
due and payable on such prepayment date. The Company shall furnish to the
holder of each Note that is to be prepaid pursuant to Paragraph 4B, (i) not more
than five and not fewer than three Business Days prior to the prepayment date, a
preliminary written estimate (with supporting calculations) of the Yield-
Maintenance Premium with respect to such Note, and (ii) not later than 1:00
p.m., New York City time, on the Business Day next preceding the prepayment
date, a written calculation of the Yield-Maintenance Premium with respect to
such Note. So long as you shall hold any Note, the Company shall, (i) at the
time at which it gives written notice of any prepayment pursuant to Paragraph 4B
in respect of any Note held by you, advise you, in the manner set forth in
Schedule I hereto, of the principal amount of the Notes held by you to be
prepaid and the prepayment date, and (ii) at the time at which it gives any
preliminary estimate or any calculation described in the preceding sentence,
provide the same to you in the manner set forth in Schedule I hereto.
4D. Partial Payments Pro Rata. Upon any partial prepayment of the
Notes, the principal amount so prepaid shall be allocated to all Notes at the
time outstanding (including, for the purpose of this Paragraph 4D only, all
Notes prepaid or otherwise retired or purchased or otherwise acquired by the
Company or any Subsidiary or Affiliate other than by prepayment pursuant to
Paragraphs 4A and 4B), in proportion to the respective outstanding principal
amounts thereof.
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4E. Right to Put.
(i) Granting of Put. The Company hereby gives and grants to
each Significant Holder (and, solely under the circumstances contemplated by the
second proviso of Paragraph 4E(ii), to the holder of each Note) the option,
right and privilege (such option, right and privilege herein collectively
referred to as the "Right to Put") to require the Company, upon or after the
occurrence of any Designated Event, to purchase from such holder on the terms
and conditions hereinafter set forth, and the Company agrees so to purchase from
such holder, for an amount equal to the Agreed Put Consideration, all, but not
less than all, of the Notes held by such holder.
(ii) Exercise of Put. Within 10 Business Days after any
executive officer of the Company has knowledge of the occurrence of any
Designated Event, the Company shall give the holder of each Note written notice
thereof describing such Designated Event, and the facts and circumstances
surrounding the occurrence thereof, in reasonable detail. At any time prior to
90 days after any Significant Holder shall receive such notice, such Significant
Holder may exercise its Right to Put by delivering to the Company a notice of
sale substantially in the form of Exhibit C attached hereto (a "Notice of
---------
Sale"); provided, that after the first such Notice of Sale is given as to a
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particular Designated Event, the Company shall deliver a copy of such Notice of
Sale to each Purchaser at its address specified in Schedule I hereto and to each
other Significant Holder and each other Significant Holder shall have until the
later of (a) the expiration of such ninety-day period or (b) 20 days after its
receipt of the first such Notice of Sale to exercise its Right to Put in the
manner specified above; and, provided, further, that the Company shall deliver a
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copy of each other Notice of Sale to each Purchaser at its address specified in
Schedule I hereto and to each other Significant Holder and if the Company
receives one or more Notices of Sale from a Significant Holder or Significant
Holders that hold, in the aggregate, 20% or more of the aggregate principal
amount of the Notes at the time outstanding, the Company shall give the holder
of each Note prompt written notice thereof, whereupon the holder of each Note
shall have until the later of (x) the expiration of such ninety-day period or
(y) 20 days after its receipt of such notice from the Company to exercise its
Right to Put by delivering to the Company a Notice of Sale. If the holder of a
Note shall deliver a Notice of Sale pursuant to any provision of the preceding
sentence, the Company shall purchase the Notes then held by such holder on the
date specified in such notice (which shall be not less than 30 days after
delivery of such Notice of Sale), and such holder shall sell such Notes to the
Company without recourse, representation or warranty (other than as to such
holder's full right, title and interest to such Notes free of any adverse claim
thereto), at a price, payable in immediately available funds by wire transfer to
the account specified pursuant to Paragraph 11A hereof or to such other account
as may be specified in such notice, equal to the Agreed Put Consideration;
provided, that if more than one holder shall give a Notice of Sale in compliance
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with the foregoing provisions of this Paragraph 4E(ii), the Company shall
purchase the Notes held by all such holders on the same day, which shall be the
latest day specified in all such Notices of Sale but in no event more than 180
days after the date of the Company's sending of notice of the occurrence of
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the Designated Event giving rise thereto, and shall advise the holder of each
Note of such date and the aggregate principal amount of Notes to be purchased by
the Company. Each Significant Holder or holder, as the case may be, shall have
the respective rights specified in this Paragraph 4E with respect to each
Designated Event that shall occur, regardless of any act or omission to act with
respect to any previous Designated Event.
4F. Retirement of Notes. The Company shall not, and shall not permit
any Subsidiary or Affiliate to, prepay or otherwise retire in whole or in part
prior to their stated final maturity (other than by prepayment pursuant to
Paragraphs 4A and 4B or upon acceleration of such final maturity pursuant to
Paragraph 7A), or purchase or otherwise acquire (other than by purchase pursuant
to Paragraph 4E), directly or indirectly, Notes held by any holder unless the
Company or such Subsidiary or Affiliate shall have offered to prepay or
otherwise retire or purchase or otherwise acquire, as the case may be, the same
proportion of the aggregate principal amount of Notes held by each other holder
of Notes at the time outstanding upon the same terms and conditions. Any Notes
prepaid or otherwise retired, purchased (whether pursuant to Paragraph 4E or
otherwise) or otherwise acquired by the Company or any Subsidiary or Affiliate
shall not be deemed to be outstanding for any purpose under this Agreement,
except as provided in Paragraph 4D.
PARAGRAPH 5. AFFIRMATIVE COVENANTS.
5. Affirmative Covenants. So long as any Note shall remain unpaid,
the Company covenants that:
5A. Financial Statements. The Company will deliver in duplicate:
(i) to each holder, as soon as practicable and in any event
within 60 days after the end of each quarterly period (other than the
last quarterly period) in each fiscal year, consolidated statements of
operations and cash flows of the Company and the Subsidiaries for such
quarterly period and for the period from the beginning of the current
fiscal year to the end of such quarterly period, and a consolidated
balance sheet of the Company and the Subsidiaries as at the end of
such quarterly period, setting forth in each case in comparative form
figures for the corresponding period in the preceding fiscal year, all
in reasonable detail and certified by the Chief Financial Officer, the
Treasurer or the Chief Accounting Officer of the Company, subject to
changes resulting from year-end adjustments; provided, however, that
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delivery pursuant to clause (iii) below, within the period specified
above, of copies of the Quarterly Report on Form 10-Q of the Company
for such quarterly period filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this clause
(i); and provided, further, that at any time that the Company has any
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Subsidiaries that are not Restricted Subsidiaries, the Company will
also deliver unaudited consolidating
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statements of operations and cash flows and an unaudited consolidating
balance sheet for the Company and the Subsidiaries for the respective
periods indicated above, all in reasonable detail and certified as
aforesaid;
(ii) to each holder, as soon as practicable and in any event
within 120 days after the end of each fiscal year, consolidated
statements of operations, cash flows and stockholders' equity of the
Company and the Subsidiaries for such year, and a consolidated balance
sheet of the Company and the Subsidiaries as at the end of such year,
setting forth in each case in comparative form corresponding
consolidated figures from the preceding annual audit, all in
reasonable detail and reasonably satisfactory in scope to the Required
Holder(s) and certified to the Company by KPMG Peat Marwick or other
independent public accountants of recognized national standing
selected by the Company whose certificate shall be in scope and
substance satisfactory to the Required Holder(s); provided, however,
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that delivery pursuant to clause (iii) below, within the period
specified above, of copies of the Annual Report on Form 10-K of the
Company for such fiscal year filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this clause
(ii); and provided, further, that at any time that the Company has any
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Subsidiaries that are not Restricted Subsidiaries, the Company will
also deliver unaudited consolidating statements of operations and cash
flows and an unaudited consolidating balance sheet for the Company and
the Subsidiaries for such fiscal year, all in reasonable detail and
certified by the Chief Financial Officer, the Treasurer or the Chief
Accounting Officer of the Company;
(iii)(a) to each holder, within five days after the transmission
thereof, copies of all such financial statements, proxy statements,
notices and reports that it sends to its public stockholders and
copies of all registration statements (without exhibits) and all
reports that it files with the Securities and Exchange Commission (or
any governmental body or agency succeeding to the functions of the
Securities and Exchange Commission), and (b) to each Significant
Holder, within five days after transmission thereof, copies of all
press releases that it or any Subsidiary makes;
(iv) to each holder, promptly upon receipt thereof, a copy of
each annual, interim or special audit made by independent public
accountants of the books of the Company or any Subsidiary;
(v) to each holder, as soon as practicable and in any event
within five days after the Chairman, the President, the Chief
Financial Officer, the Chief Accounting Officer, the Secretary or the
Treasurer of the Company obtains knowledge (a) of any condition or
event that, in the sole opinion of the executive officers of the
Company, would have a material adverse effect
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on the business, condition (financial or other), assets, properties,
operations or prospects of the Company and the Restricted
Subsidiaries, taken as a whole, (b) that any Person has given any
notice to the Company or any of the Subsidiaries or taken any other
action with respect to a claimed default or event or condition of the
type referred to in Paragraph 7A(iii), (c) of the institution of any
litigation involving claims against the Company or any of the
Subsidiaries equal to or greater than $5,000,000 with respect to any
single cause of action or of any adverse determination in any court
proceeding in any litigation involving a potential liability to the
Company or any of the Subsidiaries equal to or greater than $5,000,000
with respect to any single cause of action that makes the likelihood
of an adverse determination in such litigation against the Company or
such Subsidiary substantially more probable, (d) of any regulatory
proceeding by or against the Company or any Subsidiary that would have
a material adverse effect on the business, financial condition,
assets, properties or operations of the Company and the Restricted
Subsidiaries, taken as a whole, or (e) of any material disputes
between the Company and any of the Subsidiaries, an Officer's
Certificate of the Company specifying the nature and period of
existence of any such condition or event, or specifying the notice
given or action taken by such Person and the nature of any such
claimed Default, Event of Default, event or condition, or specifying
the details of such proceeding, litigation or dispute and what action
the Company or any of the Subsidiaries has taken, is taking or
proposes to take with respect thereto;
(vi) to each holder, promptly after the filing or receiving
thereof, copies of all material reports and notices with respect to a
Plan or a Multiemployer Plan that the Company or any Subsidiary files
under ERISA with the Internal Revenue Service, the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor or that the
Company or any Subsidiary receives from any such governmental agency;
and
(vii) with reasonable promptness, such other information
respecting the business, financial condition, assets, properties or
operations of the Company or any of the Subsidiaries as any
Significant Holder may reasonably request.
Together with each delivery of financial statements required by
clauses (i) and (ii) above, the Company will deliver to each holder an
Officer's Certificate, substantially in the form of Schedule II hereto,
demonstrating compliance by the Company and the Restricted Subsidiaries
with the provisions of Paragraph 6A, Paragraph 6B, the proviso following
clause (vi) of Paragraph 6C(1) and the last proviso following clause (vi)
of Paragraph 6C(2), the first proviso following clause (vi) of Paragraph
6C(2), Paragraph 6C(3)(i)(b), Paragraph 6C(3)(vi), Paragraph 6C(4),
Paragraph 6C(5)(v), Paragraph 6C(6) and Paragraph 6C(8) and stating that
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there exists no Event of Default or Default, or, if any Event of Default or
Default exists, specifying the nature and period of existence thereof and
what action the Company proposes to take with respect thereto. Together
with each delivery of financial statements required by clause (ii) above,
the Company will deliver to each holder a certificate of such accountants
stating that, in making the audit necessary to the certification of such
financial statements, they have obtained no knowledge of any Event of
Default or Default, or, if they have obtained knowledge of any Event of
Default or Default, specifying the nature and period of existence thereof.
Such accountants, however, shall not be liable to anyone by reason of their
failure to obtain knowledge of any Event of Default or Default that would
not be disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards. The Company also covenants that
forthwith upon the Chairman, the President, the Chief Financial Officer,
the Chief Accounting Officer, the Secretary or the Treasurer of the Company
obtaining knowledge of an Event of Default or Default, it will deliver to
each holder an Officer's Certificate specifying the nature and period of
existence thereof and what action the Company proposes to take with respect
thereto.
5B. Inspection of Property. The Company will permit any Person
designated by any Significant Holder in writing, at such Significant Holder's
expense so long as no Default or Event of Default exists and otherwise at the
reasonable expense of the Company, (i) upon not less than two Business Days'
prior notice and while accompanied by personnel of the Company or a Subsidiary,
to visit and inspect any of the properties of the Company and the Subsidiaries
and to examine the corporate books and financial records of the Company and the
Subsidiaries and make copies thereof or extracts therefrom, and (ii) to discuss
the affairs, finances and accounts of any of such corporations with the
principal officers of the Company and its independent public accountants, all at
such reasonable times and as often as such Significant Holder may reasonably
request; provided, that each person so designated by any Significant Holder to
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visit and inspect any properties shall, by virtue of such designation, be deemed
to have agreed to comply with the Company's on-site safety procedures that are
applicable to such properties and of which the Company shall have informed him.
5C. Compliance with Environmental Laws. The Company will, and will
cause each of the Subsidiaries and each of the Affiliates that are controlled by
the Company or any Subsidiary to, comply in a timely fashion with, or operate
pursuant to valid waivers of the provisions of, all applicable federal, state
and local environmental or pollution-control laws, regulations, orders and
decrees governing, without limitation, the emission of wastewater effluent,
solid and hazardous waste and air pollution, and laying down general
environmental conditions together with any other applicable requirements for
conducting, on a timely basis, periodic tests and monitoring for contamination
of ground water, surface water, air and land and for biological toxicity of the
aforesaid, and diligently comply with the applicable regulations (except to the
extent such regulations are waived by appropriate governmental authorities) of
the Environmental Protection Agency or other relevant federal,
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state or local governmental authority except where noncompliance would not
materially adversely affect the business, financial condition, assets,
properties or operations of the Company and the Restricted Subsidiaries, taken
as a whole. To the fullest extent permitted by applicable law, the Company
agrees to indemnify and hold you, your officers, agents and employees harmless
from any loss, liability, claim or expenses (without limitation at any time that
the Notes are secured by any Lien, and otherwise up to the aggregate principal
amount of Notes originally held by you) that you may incur or suffer as a result
of a breach by the Company, any Subsidiary or any Affiliate, as the case may be,
of this covenant. The Company shall not be deemed to have breached or violated
this Paragraph 5C if the Company, any Subsidiary or any Affiliate is challenging
in good faith by appropriate proceedings diligently pursued the application or
enforcement of any such governmental requirements for which adequate reserves
have been established in accordance with generally accepted accounting
principles.
5D. Maintenance of Insurance. The Company will carry and maintain,
and cause each Subsidiary to carry and maintain, insurance (subject to customary
deductibles and retentions) in at least such amounts and against such
liabilities and hazards and by such methods as are customarily maintained by
other companies operating similar businesses.
5E. Covenant to Secure Notes Equally. If the Company or any
Restricted Subsidiary shall create or assume any Lien upon any of its property
or assets, whether now owned or hereafter acquired, other than Liens permitted
by Paragraph 6C(1) (unless prior written consent to the creation or assumption
thereof shall have been obtained pursuant to Paragraph 11C), it will make or
cause to be made effective provision whereby the Notes will be secured by such
Lien equally and ratably with any and all other Debt thereby secured so long as
any such other Debt shall be so secured; provided that compliance with this
--------
Paragraph 5E shall not cause to be cured or waived any Default or Event of
Default resulting from the creation or assumption of such Lien (except by prior
written consent as set forth above).
5F. Compliance with Laws, Etc. The Company will comply, and cause
each Subsidiary to comply, in all material respects with all applicable laws,
rules, regulations and orders the noncompliance with which could reasonably be
expected to result in a material adverse effect upon the business, financial
condition, assets, properties or operations of the Company and the Restricted
Subsidiaries, taken as a whole, such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon the Company or such Subsidiary, as the case may be, or upon
their respective properties except to the extent contested in good faith by
appropriate proceedings diligently pursued and for which adequate reserves have
been established in accordance with generally accepted accounting principles.
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<PAGE>
5G. Corporate Existence, Licenses and Permits; Maintenance of
Properties. The Company will at all times do or cause to be done all things
necessary to maintain, preserve and renew its existence as a corporation
organized under the laws of a state of the United States of America, will
preserve and keep in force and effect, and cause each Subsidiary to preserve and
keep in force and effect, all licenses and permits necessary to the conduct of
its and their respective businesses and will maintain and keep, and will cause
each Subsidiary to maintain and keep, its and their respective properties in
good repair, working order and condition, and from time to time make all
necessary and proper repairs, renewals and replacements, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times in the normal course of business as conducted prior to the date of
repair; provided, however, that nothing contained in this Paragraph 5G shall
-------- -------
prevent the Company or any Subsidiary from ceasing or omitting to exercise any
right, license or permit or to make any repair, renewal or replacement that in
the judgment of the Company or such Subsidiary is no longer in the best
interests of the Company or such Subsidiary.
5H. Information Regarding Significant Holders. The Company will,
within 10 Business Days after the occurrence of any Designated Event, provide to
each Significant Holder the identity and address of each other Significant
Holder, as reflected in the records of the Company.
PARAGRAPH 6. NEGATIVE COVENANTS.
6. Negative Covenants. So long as any Note shall remain unpaid, the
Company covenants that:
6A. Consolidated Tangible Net Worth. The Company will not permit
Consolidated Tangible Net Worth at any time to be less than $150,000,000.
6B. Dividend Limitation. The Company covenants that it will not make
any Restricted Payment at any time after March 31, 1991, except out of
Consolidated Net Earnings Available for Restricted Payments and except if no
Default or Event of Default shall have occurred and be continuing at the time
such Restricted Payment is made and if no Default or Event of Default would
result therefrom.
6C. Lien, Debt, and Other Restrictions. The Company will not and will
not permit any Restricted Subsidiary to:
6C(1). Liens. Create, assume or suffer to exist any Lien upon any of
its properties or assets, whether now owned or hereafter acquired (whether or
not provision is made for the equal and ratable securing of the Notes in
accordance with the provisions of Paragraph 5E), except
------
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(i) Liens for taxes not yet due or that are being actively
contested in good faith by appropriate proceedings in accordance with
Paragraph 5F,
(ii) other Liens incidental to the conduct of its business or
the ownership of its property and assets (including landlord liens)
that are not incurred in connection with the borrowing of money or
the obtaining of advances or credit or the guaranteeing of the
obligations of another Person, and that do not in the aggregate
materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its business,
(iii) Liens on property or assets of a Restricted Subsidiary to
secure obligations of such Restricted Subsidiary to the Company or to
another Restricted Subsidiary,
(iv) Liens on property of the Company or a Restricted
Subsidiary that are described in Exhibit D attached hereto and
---------
that secure Debt permitted by clause (ii) of Paragraph 6C(2),
(v) in the case of transactions that occur after the Date of
Closing, Liens existing on any property of any corporation at the time
it becomes a Restricted Subsidiary, or existing prior to the time of
acquisition upon any property acquired by the Company or any
Restricted Subsidiary through purchase, merger or consolidation or
otherwise, whether or not the obligation secured thereby is assumed by
the Company or such Restricted Subsidiary, or placed on property at
the time of acquisition by the Company or any Restricted Subsidiary to
secure all or a portion of (or to secure Debt incurred to pay all or a
portion of) the purchase price thereof, provided that (a) all of such
--------
property is not or shall not thereby become encumbered in any amount
in excess of the lesser of the cost thereof or fair value thereof, (b)
such Lien shall not encumber any other property of the Company or such
Restricted Subsidiary, and (c) such Lien shall not have been created
in contemplation of such corporation's becoming a Restricted
Subsidiary or such property's being acquired by the Company or any
Restricted Subsidiary, and
(vi) other Liens on the property of the Company that secure
Debt of the Company permitted under Paragraph 6C(2) and that are
created after the Date of Closing,
provided that the aggregate amount of Debt or other obligations
--------
secured by Liens permitted by clauses (iv) and (vi) together with the
amount of Debt of the Restricted Subsidiaries permitted by clauses
(ii) and (vi) of Paragraph 6C(2) does not exceed at any time an amount
in excess of 10% of Consolidated Tangible Net Worth.
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6C(2). Debt. Create, incur, assume or suffer to exist any Debt,
except
- - ------
(i) Funded Debt of the Company represented by the Notes,
(ii) Funded Debt of the Company or a Restricted Subsidiary
described in Exhibit D attached hereto which, unless permitted by
---------
another clause of this Paragraph 6C(2), shall not be renewed, extended
or permitted to remain outstanding after the respective maturities
thereof set forth on Exhibit D attached hereto or increased in amount
---------
beyond the respective amounts set forth on Exhibit D attached hereto
---------
(after giving effect to any actual or scheduled reductions),
(iii) Debt of any Restricted Subsidiary to the Company or any
other Restricted Subsidiary, provided, that such Debt shall not be
--------
subordinated to any other obligation of such Restricted Subsidiary,
(iv) Current Debt of the Company to any Restricted Subsidiary,
(v) other Debt of the Company that is created, incurred or
assumed after the Date of Closing, and
(vi) Debt of a corporation outstanding at the time, subsequent
to the Date of Closing, such corporation becomes a Restricted
Subsidiary, provided, that such Debt (a) shall not have been
--------
created, incurred or assumed in contemplation of such corporation's
becoming a Restricted Subsidiary and (b) shall not be renewed,
extended or permitted to remain outstanding after the stated
maturities thereof,
provided, however, that at no time shall the Company permit
-------- -------
Consolidated Debt to exceed 60% of Consolidated Net Tangible Assets at
any time through April 30, 1995, or 55% of Consolidated Net Tangible
Assets at any time thereafter; and provided, further, that all Debt of
-------- -------
the Company owing to any Subsidiary shall be subordinated and subject
in right to the prior payment in full of the obligations of the
Company in respect of the Notes; and provided further that the
-------- -------
aggregate amount of Debt of the Restricted Subsidiaries permitted by
clauses (ii) and (vi) of this Paragraph 6C(2), together with the
aggregate amount of Debt or other obligations secured by Liens
permitted by clauses (iv) and (vi) of Paragraph 6C(1) does not exceed
at any time an amount in excess of 10% of Consolidated Tangible Net
Worth.
6C(3). Loans, Advances and Investments. Commit to make, make or
permit to remain outstanding any loan or advance to, or own, purchase or acquire
any stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any Person, except that
------
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<PAGE>
(i) the Company or any Restricted Subsidiary may make or
permit to remain outstanding loans or advances to any Restricted
Subsidiary or to the Company (provided, however, that in the case
--------- -------
of loans or advances to the Company, (a) all such loans and
advances shall be subordinated and subject in right to the prior
payment in full of the obligations of the Company in respect of the
Notes, and (b) the aggregate amount of all of such loans and
advances from all Restricted Subsidiaries to the Company at any
time outstanding shall not exceed $2,000,000, such amount to take
into account the netting out of loans and advances from the Company
to a Restricted Subsidiary with the loans and advances from such
Restricted Subsidiary to the Company, such netting out to be done on a
Restricted Subsidiary by Restricted Subsidiary basis and not on an
aggregated Restricted Subsidiaries basis, and provided, further,
-------- -------
that in the case of loans or advances to a Restricted Subsidiary, no
such loan or advance shall be subordinated to any other obligation
of such Restricted Subsidiary),
(ii) the Company or any Restricted Subsidiary may own,
purchase or acquire stock, obligations or securities of a Restricted
Subsidiary or of a corporation that immediately after such purchase or
acquisition will be a Restricted Subsidiary,
(iii) the Company or any Restricted Subsidiary may acquire an
own stock, obligations or securities received in settlement of debts
(created in the ordinary course of business) owing to the Company or
any Restricted Subsidiary,
(iv) the Company may own, purchase or acquire (a) commercial
paper rated A-1 by Standard & Poor's Corporation or P-1 by Moody's
Investors Service, Inc., (b) certificates of deposit in domestic
banks or in domestic branches of foreign banks (in either case
having capital resources, net of loan loss reserves, in excess of
$250,000,000 and having a senior unsecured debt rating of A- or
better from Standard & Poor's Corporation or A-3 or better from
Moody's Investors Service, Inc.), (c) obligations of the United
States Government or any agency thereof, (d) shares in money market
mutual funds rated A-1 by Standard & Poor's Corporation or P-1 by
Moody's Investors Service, Inc., and (e) Eurodollar time deposits in
foreign banks having capital resources, net of loan loss reserves,
in excess of $250,000,000 and having a senior unsecured debt rating
of A- or better from Standard & Poor's Corporation or A-3 or better
from Moody's Investors Service, Inc., in each case maturing (or, in
the case of investments described in clause (d), investing
exclusively in obligations maturing) within one year from the date
of purchase,
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<PAGE>
(v) the Company or any Restricted Subsidiary may make or
permit to remain outstanding travel and other like advances to
officers and employees in the ordinary course of business, and
(vi) the Company or any Restricted Subsidiary may (a) own,
purchase or acquire stock, obligations or securities of, or any other
form of ownership interest in, any other Person engaged in the
business of gathering, transmitting, distributing or processing
natural gas, natural gas liquids or crude oil (but not the refining of
crude oil) in the United States of America or Canada or (b) commit to
make, make or permit to remain outstanding loans or advances to any
other Person engaged in the business of exploring for, developing,
producing, processing, fractionating or refining hydrocarbons in the
United States of America or Canada; provided, that (1) the aggregate
--------
amount of the investment (at original cost) in such stock,
obligations, securities or other forms of ownership interest, together
with the aggregate principal amount of such loans and advances and
commitments therefor, shall at no time exceed an amount equal to 10%
of Consolidated Net Tangible Assets, (2) the aggregate principal
amount of such loans and advances and commitments therefor shall at no
time exceed 4% of Consolidated Net Tangible Assets, and (3) no
Subsidiary shall own or acquire any stock or securities of the
Company.
6C(4). Sale of Stock and Debt of Restricted Subsidiaries. Sell or
otherwise dispose of, or part with control of, any shares of stock or Debt of
any Restricted Subsidiary, or permit any Restricted Subsidiary to issue any
shares of its stock, except to the Company or another Restricted Subsidiary or
except for directors' qualifying shares, and except that all shares of stock and
Debt of any Restricted Subsidiary at the time owned by or owed to the Company
and all Restricted Subsidiaries may be sold as an entirety for a cash
consideration that represents the fair value (as determined in good faith by the
Board of Directors of the Company) at the time of sale of the shares of stock
and Debt so sold, provided that (i) the assets of such Restricted Subsidiary
--------
together with (ii) the assets of all other Restricted Subsidiaries the stock or
Debt of which was sold or otherwise disposed of in the preceding 12-month period
and (iii) the assets of the Company and the Restricted Subsidiaries sold,
leased, transferred or otherwise disposed of pursuant to clause (v) of Paragraph
6C(5) in the preceding 12-month period (in each transaction measured by the
greater of book value or Fair Market Value), do not represent more than 10% of
Consolidated Net Tangible Assets as reflected on the most recent annual or
quarterly consolidated balance sheet, and provided further that, at the time of
-------- -------
such sale, such Restricted Subsidiary shall not own, directly or indirectly, any
shares of stock or Debt of any other Restricted Subsidiary (unless all of the
shares of stock and Debt of such other Restricted Subsidiary owned, directly or
indirectly, by the Company and all Restricted Subsidiaries are simultaneously
being sold as permitted by this Paragraph 6C(4)), or any shares of stock or Debt
of the Company.
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<PAGE>
6C(5). Merger and Sale of Assets. Merge or consolidate with or into
any other Person or sell, convey, lease, transfer or otherwise dispose of all or
any part of its assets, except that:
------
(i) any Restricted Subsidiary may merge with the Company
(provided, that the Company shall be the continuing or surviving
---------
corporation) or with any one or more other Restricted Subsidiaries,
(ii) any Restricted Subsidiary may sell, lease, transfer or
otherwise dispose of any of its assets to the Company or to another
Restricted Subsidiary,
(iii) the Company may merge with any other corporation, provided
--------
that (a) the Company shall be the continuing or surviving corporation,
and (b) immediately after giving effect to such merger no Event of
Default or Default shall exist,
(iv) any Restricted Subsidiary may merge or consolidate with
any other corporation, provided, that immediately after giving
--------
effect to such merger or consolidation (a) the continuing or
surviving corporation of such merger or consolidation shall
constitute a Restricted Subsidiary, and (b) no Event of Default or
Default shall exist,
(v) the Company or any Restricted Subsidiary may sell, lease,
transfer or otherwise dispose of any of its assets to any Person,
provided, that (a) such assets together with (b) all other assets of
--------
the Company and the Restricted Subsidiaries sold, leased, transferred
or otherwise disposed of during the preceding 12-month period, and (c)
the assets of all Restricted Subsidiaries the stock or Debt of which
has been sold or otherwise disposed of during the preceding 12-month
period pursuant to the first proviso of Paragraph 6C(4) (in each
transaction measured by the greater of book value or Fair Market
Value), do not represent more than 10% of Consolidated Net Tangible
Assets as reflected on the most recent annual or quarterly
consolidated balance sheet,
(vi) the Company may merge into or consolidate with any solvent
corporation organized under the laws of any State of the United States
of America that shall expressly assume in writing all of the
obligations of the Company under this Agreement and the Notes,
including all covenants herein and therein contained, and such
successor or acquiring corporation shall succeed to and be substituted
for the Company with the same effect as if it had been named herein as
a party hereto (it being agreed that such assumption shall, upon the
request of the holder of any outstanding Note and at the expense of
such successor corporation, be evidenced by the exchange
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of such Note for another Note executed by such successor corporation,
with such changes in phraseology and form as may be appropriate but in
substance of like terms as the Note surrendered for such exchange and
of like unpaid principal amount, and that each Note executed pursuant
to Paragraph 11D after such assumption shall be executed by and in the
name of such successor corporation); provided, that after such merger
--------
or consolidation no Event of Default or Default shall exist, and
(vii) the Company and any Restricted Subsidiary may sell or
otherwise dispose of property (including inventory) in the ordinary
course of business.
6C(6). Lease Rentals. Except for oil, gas and mineral leases or
permits or similar agreements entered into in the ordinary course of business,
and except for leases for transportation equipment, including over-the-road
trucks and tankers, data processing and other office equipment used in the
ordinary course of business, enter into or permit to remain in effect any
agreements to rent or lease (as lessee) any real or personal property for terms
(including options to renew or extend any term, whether or not exercised) of
more than three years if after giving effect thereto the aggregate amount of all
sums payable in any fiscal year by the Company and all Restricted Subsidiaries
under all such leases would exceed one percent of Consolidated Net Tangible
Assets.
6C(7). Sale and Lease-Back. Enter into any arrangement with any
lender or investor or to which such lender or investor is a party providing for
the leasing by the Company or any Restricted Subsidiary of real or personal
property that has been or is to be sold or transferred by the Company or any
Restricted Subsidiary (or the leasing of other real or personal property that
the Company or any Restricted Subsidiary intends to use for substantially the
same purposes as the property so sold or transferred) to such lender or investor
or to any Person to whom funds have been or are to be advanced by such lender or
investor on the security of any such property or any rental obligations of the
Company or any Restricted Subsidiary.
6C(8). Sale or Discount of Receivables. In any fiscal year sell with
recourse, or discount (other than to the extent of finance and interest charges
included therein) or otherwise sell for less than face value thereof, any of its
notes or accounts receivable if the aggregate original amount of all such notes
and accounts receivable exceeds $100,000.
6C(9). Guaranties. Enter into or be party to:
(i) any contract for the purchase of materials, supplies or other
property or services if such contract (or any related document)
requires that payment for such materials, supplies or other property
or services shall be made regardless of whether or not delivery of
such materials, supplies or
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<PAGE>
other property or services is ever made or tendered; provided,
--------
however, that the foregoing provisions shall not be construed so as to
-------
prevent the Company or any Restricted Subsidiary from entering into an
earnest money contract providing for the payment of no more than 20%
of the purchase price, or
(ii) any contract to rent or lease (as lessee) any real or
personal property if such contract (or any related document) provides
that the obligation to make payments thereunder is absolute and
unconditional under conditions not customarily found in commercial
leases then in general use or requires that the lessee purchase or
otherwise acquire securities or obligations of the lessor, or
(iii) any contract for the sale or use of materials, supplies or
other property, or the rendering of services, if such contract (or any
related document) requires that payment of such materials, supplies or
other property, or the use thereof, or payment for such services,
shall be subordinated to any indebtedness (of the purchaser or user of
such materials, supplies or other property or the Person entitled to
the benefit of such services) owed or to be owed to any Person, or
(iv) any other contract that is a guaranty, an endorsement or
another form of contingent liability in respect of the obligations,
stock or dividends of any Person or that, in economic effect, is
substantially equivalent to a guarantee; provided, that the foregoing
--------
provisions shall not apply to (a) guaranties of, or contingent
reimbursement obligations to issuers of letters of credit issued in
support of, obligations of the Company or a Restricted Subsidiary
representing advances or credit on open account, includable in current
liabilities, for goods and services obtained in the ordinary course of
business under usual trade terms, (b) guaranties of rental
obligations, which do not constitute Capitalized Lease Obligations, of
Restricted Subsidiaries under leases for office space and for
transportation equipment, including over-the-road trucks and tankers,
data processing and other office equipment and (c) endorsements of
negotiable instruments for collection in the ordinary course of
business;
provided, that, notwithstanding the foregoing, any contract of the type
- - --------
specified in any of the provisions of this Paragraph 6C(9) shall be permitted if
the obligations of the Company thereunder constitute Debt of the type described
in clause (iv) of the definition thereof and such Debt could be incurred by the
Company (and thereafter permitted to remain outstanding) in compliance with the
first proviso following clause (vi) of Paragraph 6C(2).
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<PAGE>
6C(10). Transactions With Affiliates. Directly or indirectly,
purchase, acquire or lease any property from, or sell, transfer or lease any
property to, or otherwise deal with (i) any Affiliate, (ii) any Person owning
beneficially or of record, directly or indirectly, either individually or
together with all other Persons to whom such Person is related by blood,
adoption or marriage, 5% or more of the Voting Stock of the Company or (iii) any
Person related by blood, adoption or marriage to any Person described or coming
within the provisions of clause (i) or (ii) of this Paragraph 6C(10), except
that the Company may sell to, or purchase (within the limitations of Paragraph
6B) from, any such Person shares of the Company's stock and except for
transactions that are otherwise permitted by this Agreement and that are in the
ordinary course of the Company's or a Restricted Subsidiary's business, and are
also upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
PARAGRAPH 7. EVENTS OF DEFAULT.
7. Events of Default.
7A. Acceleration. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) (a) the Company defaults in the payment of any principal of
or premium on any Note when the same shall become due, either by the
terms thereof or otherwise as herein provided, or (b) the Company
defaults in the payment of the Agreed Put Consideration in respect of
any Note when the same shall become payable under Paragraph 4E(ii); or
(ii) the Company defaults in the payment of any interest on any
Note for more than five days after the date due; or
(iii) (a) the Company or any Restricted Subsidiary defaults in
any payment of principal of or interest on any other obligation for
money borrowed (or any Capitalized Lease Obligation, any obligation
under a conditional sale or other title retention agreement, any
obligation issued or assumed as full or partial payment for property
whether or not secured by a purchase money mortgage, any obligation
under notes payable or drafts accepted representing extensions of
credit) beyond any period of grace provided with respect thereto, or
the Company or any Restricted Subsidiary fails to perform or observe
any other agreement, term or condition contained in any agreement
under which any such obligation is created (or if any other event
thereunder or under any such agreement shall occur and be continuing)
and the effect of such failure or other event is to cause, or to
permit the
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<PAGE>
holder or holders of such obligation (or a trustee on behalf of such
holder or holders) to cause, such obligation to become due, purchased,
redeemed or defeased prior to any stated maturity, or the Company or
any Restricted Subsidiary fails to pay in accordance with its terms
any obligation that constitutes Debt of the type described in clause
(iv) of the definition thereof, provided that the amount of such
--------
obligation as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration, purchase, redemption or defeasance shall occur and be
continuing exceeds $1,000,000 in each case or $2,000,000 in the
aggregate; or (b) the holder of any Note accelerates the maturity
thereof pursuant to clause (b) following the enumeration of Events of
Default set forth in this Paragraph 7A; or
(iv) any representation or warranty made by the Company
herein or by the Company or any of its officers in any writing
furnished in connection with or pursuant to this Agreement shall be
false in any material respect on the date as of which made; or
(v) the Company fails to perform or observe any term,
covenant or agreement contained in Paragraph 6 or in clause (v) of
Paragraph 5A; or
(vi) the Company fails to perform or observe any other
agreement, covenant, term or condition contained herein and such
failure shall not be remedied within 30 days after the President,
the Chief Financial Officer, the Chief Accounting Officer, the
Secretary or the Treasurer of the Company obtains knowledge thereof;
or
(vii) the Company or any Restricted Subsidiary (a) makes an
assignment for the benefit of creditors or (b) is generally not paying
its debts as such debts become due; or
(viii) any decree or order for relief in respect of the Company
or any Restricted Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (herein called the "Bankruptcy Law"), of any
jurisdiction; or
(ix) the Company or any Restricted Subsidiary petitions or
applies to any tribunal for, or consents to, the appointment of, or
taking possession by, a trustee, receiver, custodian, liquidator or
similar official of the Company or any Restricted Subsidiary, or of
any substantial part of the assets of the Company or any Restricted
Subsidiary, or commences a voluntary case under the Bankruptcy Law of
the United States or any proceedings (other than proceedings for the
voluntary liquidation and dissolution of a Restricted
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Subsidiary) relating to the Company or any Restricted Subsidiary under
the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Restricted
Subsidiary and the Company or such Restricted Subsidiary by any act
indicates its approval thereof, consent thereto or acquiescence
therein, or an order, judgment or decree is entered appointing any
such trustee, receiver, custodian, liquidator or similar official, or
approving the petition in any such proceedings, and such order,
judgment or decree remains unstayed and in effect for more than 30
days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company or any Restricted Subsidiary
decreeing the dissolution of the Company or such Restricted
Subsidiary and such order, judgment or decree remains unstayed and
in effect for more than 30 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-
up of the Company or such Subsidiary that requires the divestiture
of assets representing 10% or more, or the divestiture of the stock
of a Subsidiary the assets of which represent 10% or more, of the
consolidated assets of the Company and the Subsidiaries (determined
in accordance with generally accepted accounting principles) or that
requires the divestiture of assets, or stock of a Subsidiary, that
shall have contributed 10% or more of Consolidated Net Earnings for
any of the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for more
than 60 days; or
(xiii) any judgment or order, or series of judgments or orders,
for the payment of money in an amount in excess of $2,000,000 is
rendered against the Company or any Restricted Subsidiary and either
(i) enforcement proceedings have been commenced by any creditor upon
such judgment or order or (ii) within 30 days after entry thereof,
such judgment is not discharged or execution thereof stayed pending
appeal, or within 30 days after the expiration of any such stay, such
judgment is not discharged; or
(xiv) any Termination Event with respect to a Plan shall have
occurred, and, within 30 days after the occurrence thereof, (i) such
Termination Event (if correctable) shall not have been corrected and
(ii) the then present value of such Plan's vested benefits exceeds the
then current value of assets accumulated in such Plan by more than the
amount of $5,000,000 (or in the case of a Termination Event involving
the withdrawal of a "substantial employer" (as defined in Section
4001(a) (2) of ERISA), the
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<PAGE>
withdrawing employer's proportionate share of such excess shall exceed
such amount); or
(xv) the Company or any ERISA Affiliates as employer under a
Multiemployer Plan shall have made a complete or partial withdrawal
from such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that
such employer has incurred a withdrawal liability in an annual amount
exceeding $1,000,000;
then (a) if such event is an Event of Default specified in clause (vii)(a),
(viii), (ix) or (x) of this Paragraph 7A with respect to the Company, all of the
Notes at the time outstanding shall automatically become immediately due and
payable at par together with interest accrued thereon, without presentment,
demand, protest or notice of any kind (including, without limitation, notice of
intent to accelerate and notice of acceleration of maturity), all of which are
hereby waived by the Company; (b) if such event is an Event of Default specified
in clause (i) or (ii) of this Paragraph 7A, any Significant Holder that holds a
Note as to which such an Event of Default shall have occurred may at its option,
by notice in writing to the Company, declare such Note to be, and such Note
shall thereupon be and become, immediately due and payable together with
interest accrued thereon and (to the extent permitted by law) the Yield-
Maintenance Premium, if any, with respect to such Note, without presentment,
demand, protest or other notice of any kind (including, without limitation,
notice of intent to accelerate), all of which are hereby waived by the Company;
and (c) if such event is any Event of Default (other than an Event of Default
referred to in clause (a) above), the Required Holder(s) may at its or their
option, by notice in writing to the Company, declare all of the Notes to be, and
all of the Notes shall thereupon be and become, immediately due and payable
together with interest accrued thereon and (to the extent permitted by law) the
Yield-Maintenance Premium, if any, with respect to each Note, without
presentment, demand, protest or other notice of any kind (including, without
limitation, notice of intent to accelerate), all of which are hereby waived by
the Company, provided that the Yield-Maintenance Premium, if any, with respect
--------
to each Note shall be due and payable upon such declaration only if (x) such
event is an Event of Default specified in any of clauses (i) to (vi), inclusive,
and (xiii) to (xv), inclusive, of this Paragraph 7A and (y) one or more of the
Events of Default so identified shall be continuing at the time of such
declaration. At any time after the principal of, and interest on, any Note or
all of the Notes are declared due and payable pursuant to clause (b) or clause
(c), as the case may be, of this Paragraph 7A, the Required Holders may, by
written notice to the Company, rescind and annul any such declaration and its
consequences if (1) the Company has paid all interest in arrears on such Note or
Notes, the principal and premium, if any, on any such Note or Notes that have
become due otherwise than by reason of such declaration, and interest on such
overdue principal and premium and (to the extent permitted by law) overdue
interest at a rate specified in the Notes, (2) in the case that all Notes are
declared due and payable pursuant to clause (c) of this Paragraph 7A, all Events
of Default, other than nonpayment of amounts that have become due solely by
reason of such declaration, and all conditions and events that constitute a
Default or an Event of
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Default have been cured or waived, and (3) no judgment or decree has been
entered for the payment of any monies due on the Notes or pursuant to this
Agreement; but no such rescission and annulment shall extend to or affect any
subsequent Default or Event of Default or impair any right consequent thereon.
7B. Other Remedies. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
7C. Notice by the Company of Acceleration. If the Required Holders
shall give notice of acceleration of the maturity of all the Notes pursuant to
clause (c) of Paragraph 7A or if any Significant Holder shall give notice of
acceleration of the maturity of the Note or Notes held by it pursuant to clause
(b) of Paragraph 7A, the Company will forthwith give written notice thereof to
the holders of all outstanding Notes, describing the nature and status of the
Event of Default giving rise to such notice of acceleration and what action the
Company proposes to take with respect thereto, unless such a notice has
previously been given by the Company pursuant to Paragraph 5A.
PARAGRAPH 8. REPRESENTATIONS, COVENANTS AND WARRANTIES.
8. Representations, Covenants and Warranties. The Company
represents, covenants and warrants that:
8A. Organization; Qualification; Corporate Authority. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated. The Company has and each Subsidiary has the corporate power to
own its respective property and to carry on its respective business as now being
conducted. The execution, delivery and performance by the Company of this
Agreement and the Notes are within the Company's corporate powers and have been
duly authorized by all necessary corporate action. The Company and the
Restricted Subsidiaries are duly qualified as foreign corporations to do
business and are in good standing in every jurisdiction in which the nature of
the properties owned or the businesses conducted by them makes such
qualification necessary, except for such jurisdictions in which the failure to
be so qualified or in good standing would not individually or in the aggregate
have a material adverse effect on the business, financial
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condition, assets, properties or operations of the Company and the Restricted
Subsidiaries, taken as a whole. The only Subsidiaries are those identified on
Exhibit E attached hereto, and the percentages of stock of such Subsidiaries
- - ---------
owned, directly or indirectly, by the Company and the states or countries of
incorporation of such Subsidiaries are as stated in Exhibit E attached hereto.
---------
All of the outstanding shares of each of the Subsidiaries have been validly
issued, are fully paid and nonassessable, and except as set forth on Exhibit E
---------
attached hereto, are free of any adverse claim or other Lien. No Subsidiary
owns any share of stock or other security of the Company.
8B. Financial Statements. The Company has furnished you with the
following financial statements, identified by a principal financial officer of
the Company: (i) a consolidated balance sheet of the Company and the
Subsidiaries as at September 30 in each of the years 1990 to 1993, inclusive,
and consolidated statements of operations, cash flows and stockholders' equity
of the Company and the Subsidiaries for each such year, certified by KPMG Peat
Marwick; and (ii) a consolidated balance sheet of the Company and the
Subsidiaries as at December 31 in each of the years 1990 to 1993, inclusive, and
consolidated statements of operations and cash flows for the three-month period
ended on each such date, prepared by the Company. Such financial statements
(including any related schedules and/or notes) are true and correct in all
material respects (subject, as to interim statements, to changes resulting from
audits and year-end adjustments), have been prepared in accordance with
generally accepted accounting principles consistently followed throughout the
periods involved and show all liabilities, direct and contingent, of the Company
and the Subsidiaries required to be shown in accordance with such principles.
The balance sheets fairly present the financial condition of the Company and the
Subsidiaries as at the dates thereof, and the statements of operations and cash
flows fairly present the results of the operations of the Company and the
Subsidiaries for the periods indicated. There has been no material adverse
change in the business, financial condition, assets, properties or operations of
the Company and the Restricted Subsidiaries, taken as a whole, since September
30, 1993.
8C. Conflicting Agreements and Other Matters. Neither the Company nor
any of the Subsidiaries is a party to any contract or agreement or subject to
any charter or other corporate restriction that materially and adversely affects
its business, financial condition, assets, properties or operations. Neither
the execution nor delivery of this Agreement or the Notes, nor the offering,
issuance and sale of the Notes, nor fulfillment of nor compliance with the terms
and provisions hereof and of the Notes will conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary pursuant to, the
charter or by-laws of the Company or any Subsidiary, any award of any arbitrator
or any agreement (including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the Company or any
Subsidiary is subject. Neither the Company nor any Subsidiary is a party to, or
otherwise subject to any provision contained in, any instrument evidencing
indebtedness of the Company or such Subsidiary, any agreement
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relating thereto or any other contract or agreement (including its charter) that
limits the amount of, or otherwise imposes restrictions on the incurring of,
Debt of the Company of the type to be evidenced by the Notes except as set forth
in the agreements listed in Exhibit F attached hereto.
---------
8D. Governmental Consent. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
other action by or notice to or filing with any court or administrative or
governmental or regulatory body (other than routine filings after the Date of
Closing with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or of the Notes.
8E. Enforceability. This Agreement is, and the Notes when delivered
hereunder will be, legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally.
8F. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary, or any properties or rights of the Company or any
Subsidiary, by or before any court, arbitrator or administrative or governmental
body that might result in any material adverse change in the business, financial
condition, assets, properties or operations of the Company and the Restricted
Subsidiaries, taken as a whole. There is no action, suit, investigation or
proceeding pending or threatened against the Company or any Subsidiary that
purports to affect the validity or enforceability of this Agreement or any Note.
8G. Outstanding Debt and Liens. Neither the Company nor any
Subsidiary has outstanding any Debt, except as permitted by Paragraph 6C(2), or
has any property that is subject to a Lien that secures any Debt or any other
obligation, except as permitted by Paragraph 6C(1). There exists no default (or
any waiver thereof that is conditional or is limited in duration) under the
provisions of any instrument evidencing any Debt or any such obligation or of
any agreement relating thereto.
8H. Title to Properties. The Company has and each Subsidiary has (i)
good and marketable title to those of its respective properties held in fee
simple and for which a title insurance policy has been issued, and (ii)
defensible title to all of its other respective material properties and assets,
including the properties and assets, all as reflected in the balance sheet as at
September 30, 1993 referred to in Paragraph 8B (other than (x) properties and
assets disposed of in the ordinary course of business and (y) properties
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and assets that can be replaced, or purchased from an adverse claimant, for
aggregate expenditures not to exceed $5,000,000), subject to no Lien of any kind
except Liens permitted by Paragraph 6C(1). For purposes of this Paragraph 8H,
the term "defensible title" shall mean such title as a reasonably prudent
purchaser of like properties would accept, subject only to such encumbrances and
title defects as would not, individually or in the aggregate, materially and
adversely affect the use, enjoyment or operation of the properties in question.
All leases necessary in any material respect for the conduct of the respective
business(es) of the Company and the Subsidiaries are valid and subsisting and
are in full force and effect.
8I. Taxes. The Company has and each Subsidiary has filed all federal,
state and other income tax returns that, to the best knowledge of the officers
of the Company, are required to be filed, and each has paid all taxes as shown
on such returns and on all assessments received by it to the extent that such
taxes have become due, except such taxes as are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with generally accepted accounting principles.
8J. Offering of Notes. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes or
any similar security of the Company from, or otherwise approached or negotiated
with respect thereto with, any Person other than institutional investors, and
neither the Company nor any agent acting on its behalf has taken or will take
any action that would subject the issuance or sale of the Notes to the
provisions of section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.
8K. Regulation G, etc. Neither the Company nor any Subsidiary owns or
has any present intention of acquiring any "margin stock" as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal Reserve
System (herein called "margin stock"). The proceeds of sale of the Notes will
be used to reduce the Debt of the Company outstanding under the Revolving Credit
Agreement and for general corporate purposes. None of such proceeds will be
used, directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any margin stock or for the purpose of
maintaining, reducing or retiring any indebtedness that was originally incurred
to purchase or carry any stock that is currently a margin stock or for any other
purpose that might constitute this transaction a "purpose credit" within the
meaning of such Regulation G. Neither the Company nor any agent acting on its
behalf has taken or will take any action that might cause this Agreement or the
Notes to violate Regulation G, Regulation T, Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act, in each case as in effect now or as the same may hereafter be
in effect.
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<PAGE>
8L. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan. No liability to the Pension Benefit Guaranty Corporation
has been or is expected by the Company to be incurred with respect to any Plan
or any Multiemployer Plan by the Company or any ERISA Affiliates that is or
would be materially adverse to the business, financial condition, assets,
properties or operations of the Company and the Subsidiaries, taken as a whole.
Neither the Company nor any ERISA Affiliates has incurred or presently expects
to incur any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan that is or would be materially adverse to the business,
financial condition, assets, properties or operations of the Company and the
Subsidiaries, taken as a whole. The execution and delivery of this Agreement
and the issuance and sale of the Notes will not involve any transaction that is
subject to the prohibitions of section 406 of ERISA or in connection with which
a tax could be imposed pursuant to section 4975 of the Code. The representation
by the Company in the next preceding sentence is made in reliance upon and
subject to the accuracy of your representation in Paragraph 9 as to the source
of the funds to be used to pay the purchase price of the Notes to be purchased
by you.
8M. Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished, or to be furnished, to you by or on behalf
of the Company in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading. There is no fact (other
than matters of a general economic nature) that materially adversely affects or
in the future may reasonably be expected to (so far as the Company can now
foresee) materially adversely affect the business, financial condition, assets,
properties or operations of the Company or any of the Subsidiaries and that has
not been set forth in this Agreement or in the other documents, certificates and
statements furnished to you by or on behalf of the Company prior to the date
hereof in connection with the transactions contemplated hereby.
8N. Pollution and Other Regulations. (a) Each of the Company and the
Subsidiaries is in compliance with all applicable laws and regulations in effect
on the Date of Closing, including, without limitation, those relating to equal
employment opportunity and employee safety in all jurisdictions in which it is
presently doing business except where the failure to do so would not materially
adversely affect the business, financial condition, assets, properties or
operations of the Company and the Restricted Subsidiaries, taken as a whole.
(b) The Company and the Subsidiaries, and the plants and sites of
each, have complied with all applicable federal, state, local and regional
statutes, ordinances, orders, judgments, rulings and regulations in effect on
the Date of Closing relating to any matters of pollution or of environmental
regulation or control except, in any such case, where such failure to comply
would not result in a material adverse effect on the business, financial
condition, assets, properties or operations of the Company and the Restricted
Subsidiaries, taken as a whole. Without limiting the generality of the
preceding sentence,
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<PAGE>
neither the Company nor any Subsidiary has received notice of or has actual
knowledge of any actual or claimed or asserted failure so to comply that alone
or together with any other such failure is material and would result in a
material adverse effect on the business, financial condition, assets, properties
or operations of the Company and the Restricted Subsidiaries, taken as a whole.
Neither the Company nor any Subsidiary nor their plants or other sites manage,
generate or dispose of, or during their respective periods of use, ownership,
occupancy or operation by the Company or the Subsidiaries have managed,
generated, released or disposed of, any hazardous wastes, hazardous substances,
hazardous materials, toxic substances or toxic pollutants, as those terms are
used or defined in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act and the
Clean Water Act, in material violation of, or in a manner that would result in
liability under, such statutes or any regulations promulgated pursuant thereto
or any other applicable law, except where such noncompliance or liability would
not result in a material adverse effect on the business, financial condition,
assets, properties or operations of the Company and the Restricted Subsidiaries,
taken as a whole.
8O. Brokerage. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Company without the
intervention of any Person that might give rise to a valid claim against you for
a brokerage commission or other like payment; and the Company agrees to
indemnify and hold you harmless from and against any such claims.
8P. Possession of Permits, Licenses, Etc. The Company and the
Subsidiaries possess all certificates, licenses, permits and other
authorizations from governmental political subdivisions or regulatory
authorities, and all patents, trademarks, service marks, trade names,
copyrights, licenses, and all other rights, that are necessary in any material
respect for the ownership, maintenance and operation of their respective
properties and assets; and neither the Company nor any Subsidiary is in
violation of any thereof in any material respect.
8Q. Public Utility Holding Company Act; Federal Power Act; Investment
Company Act. Neither the Company nor any Subsidiary is a "holding company" or a
"subsidiary company" of a "holding company" or a "public utility company" as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended, or a "public utility" as such term is defined in the Federal Power Act,
as amended. The Company is not, and is not directly or indirectly controlled by
or acting on behalf of any Person that is, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
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8R. Certain Investments and Guaranties. Neither the Company nor any
Restricted Subsidiary has any loan or advance of the type described in clause
(vi) of Paragraph 6C(3), except as set forth on Exhibit G attached hereto, or
---------
any stock, obligation, security or other form of ownership interest, of the type
described in clause (vi) of Paragraph 6C(3), except as set forth on Exhibit H
---------
attached hereto. Neither the Company nor any Restricted Subsidiary has any
obligation of the type described in Paragraph 6C(9), except as set forth on
Exhibit I attached hereto, and there exists no default (and no waiver of any
- - ---------
default that is conditional or is limited in duration) under the provisions of
any instrument relating thereto.
PARAGRAPH 9. REPRESENTATIONS OF EACH PURCHASER. Each of you
severally represents, and in making this sale to you it is specifically
understood and agreed, that you are not acquiring the Notes to be purchased by
you hereunder with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act, provided that the disposition
--------
of your property shall at all times be and remain within your control. Each of
you also severally represents that no part of the funds being used by you to pay
the purchase price of the Notes being purchased by you hereunder constitutes
assets allocated to any separate account maintained by you in which any employee
benefit plan, other than employee benefit plans identified on a list that has
been furnished by you to the Company, participates to the extent of 10% or more.
For the purpose of this Paragraph 9, the terms "separate account" and "employee
benefit plan" shall have the respective meanings specified in section 3 of
ERISA.
PARAGRAPH 10. DEFINITIONS AND ACCOUNTING TERMS.
10A. Certain Defined Terms. As used in this Agreement the following
terms shall have the meanings specified with respect thereto below (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the
Company, except the Company or a Restricted Subsidiary. A Person shall be
deemed to control a corporation if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management
and policies of such corporation, whether through the ownership of Voting
Stock, by contract or otherwise.
"Agreed Put Consideration" shall mean, as of the date of purchase by
the Company of the Notes held by a Significant Holder or by the holder of
any Note, as the case may be, upon the exercise by such holder of its Right
to Put, the sum of (i) the outstanding aggregate principal amount of Notes
held by such Significant Holder or such holder on such date, plus (ii) all
accrued and unpaid interest to such date on such Notes, plus (iii) the
Yield-Maintenance Premium, if any, as of such date with respect to each
such Note.
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"Bankruptcy Law" shall have the meaning specified in clause (viii) of
Paragraph 7A.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City are required or authorized
to be closed.
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Paragraph 4B (any partial
prepayment being applied in satisfaction of required payments of principal
in inverse order of their scheduled due dates), or is declared to be
immediately due and payable pursuant to Paragraph 7A, or is purchased
pursuant to Paragraph 4E, as the context requires.
"Capitalized Lease Obligation" shall mean any rental obligation that,
under generally accepted accounting principles, is or will be required to
be capitalized on the books of the Company or any Restricted Subsidiary,
taken at the amount thereof accounted for as indebtedness (net of interest
expense) in accordance with such principles.
"Closing" or "Date of Closing" shall have the meaning specified in
Paragraph 2.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean the corporation that originally executed this
Agreement as issuer of the Notes until a corporation becomes a successor in
a transaction permitted by Paragraph 6C(5)(vi), and thereafter shall mean
any such successor corporation.
"Consolidated Current Liabilities" shall mean the consolidated current
liabilities of the Company and the Restricted Subsidiaries, as determined
in accordance with generally accepted accounting principles, but excluding
all required payments of principal on Funded Debt due within one year from
the date of determination.
"Consolidated Debt" shall mean the consolidated Funded Debt and
Current Debt of the Company and the Restricted Subsidiaries, determined in
accordance with generally accepted accounting principles.
"Consolidated Net Earnings" shall mean consolidated gross revenues of
the Company and the Restricted Subsidiaries including any gains (net of
expenses and taxes applicable thereto) resulting from the sale, conversion
or other disposition of capital assets (i.e., assets other than current
assets), less all operating and non-operating expenses of the Company and
the Restricted Subsidiaries including all losses resulting from the sale,
conversion or other disposition of capital assets (i.e.,
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assets other than current assets) and all charges of a proper character
(including current and deferred taxes on income, provision for taxes on
unremitted foreign earnings that are included in gross revenues, and
current additions to reserves), but not including in gross revenues any
gains resulting from the write-up of assets, any equity of the Company or
any Restricted Subsidiary in the unremitted earnings of any Person that is
not a Restricted Subsidiary, any earnings of any Person acquired by the
Company or any Restricted Subsidiary through purchase, merger or
consolidation or otherwise for any period prior to the time of acquisition,
or any deferred credit representing the excess of equity in any Restricted
Subsidiary at the date of acquisition over the cost of the investment in
such Restricted Subsidiary, all determined in accordance with generally
accepted accounting principles.
"Consolidated Net Earnings Available For Restricted Payments" shall
mean an amount equal to (1) the sum of $10,000,000 plus (2) 50% (or minus
----
100% in case of a deficit) of Consolidated Net Earnings for the period
(taken as one accounting period) commencing on April 1, 1991 and
terminating at the end of the last fiscal quarter preceding the date of any
proposed Restricted Payment, less (3) the sum of all Restricted Payments
----
made or declared after March 31, 1991, plus (4) the aggregate amount
----
received by the Company after March 31, 1991, as the net cash proceeds of
the sale of any shares of its stock. There shall not be included in
Restricted Payments or in any computation of Consolidated Net Earnings
Available for Restricted Payments (x) dividends paid, or distributions
made, in stock of the Company; or (y) exchanges of stock of one or more
classes of the Company, except to the extent that cash or other value is
involved in such exchange. The term "stock" as used in this definition and
in the definition of "Restricted Payments" shall include warrants or
options to purchase stock.
"Consolidated Net Tangible Assets" shall mean the consolidated assets
of the Company and the Restricted Subsidiaries, less, without duplication,
(i) Consolidated Current Liabilities, (ii) assets, liability, contingency
and other reserves of the Company and the Restricted Subsidiaries,
including reserves for depreciation and for deferred income taxes, (iii)
all other liabilities of the Company and the Restricted Subsidiaries,
except liabilities for Funded Debt of the types described in clauses (i),
(ii) and (iii) of the definition of Debt, and (iv) treasury stock,
unamortized debt discount and expense, goodwill (other than goodwill
associated with the acquisition by the Company of MEGA), trademarks, brand
names, patents, organizational expenses and any other intangible assets of
the Company and the Restricted Subsidiaries, and any write-up of the value
of any assets after December 31, 1990, all as determined in accordance with
generally accepted accounting principles.
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"Consolidated Tangible Net Worth" shall mean consolidated
stockholders' equity of the Company and the Restricted Subsidiaries, less
goodwill (including, without limitation, goodwill associated with the
acquisition by the Company of MEGA), trademarks, brand names, patents,
organizational expenses and any other intangible assets of the Company and
the Restricted Subsidiaries, all as determined in accordance with generally
accepted accounting principles.
"Current Debt" shall mean any Debt payable on demand or within a
period of one year from the date of the creation thereof; provided, that
--------
any obligation shall be treated as Funded Debt, regardless of its term, if
such obligation is renewable pursuant to the terms thereof or of a
revolving credit or similar agreement effective for more than one year
after the date of the creation of such obligation, or may be payable out of
the proceeds of a similar obligation pursuant to the terms of such
obligation or of any such agreement.
"Debt" shall mean:
(i) any obligation that, under generally accepted accounting
principles, is shown on the balance sheet as a liability (including,
without limitation, any obligation for borrowed money, any notes
payable and drafts accepted representing extensions of credit, whether
or not representing obligations for borrowed money, and Capitalized
Lease Obligations but excluding accounts payable, reserves for
deferred income taxes and other reserves to the extent that such
reserves do not constitute an obligation),
(ii) any obligation secured by a Lien on, or payable out of the
proceeds of production from, property, whether or not the obligation
secured thereby shall have been assumed by the owner of such property,
(iii) liabilities in respect of unfunded vested benefits under
Plans and liabilities in respect of post-retirement or post-employment
benefits that, under generally accepted accounting principles in
effect at the time in question, are shown on the balance sheet as a
liability, and
(iv) any obligation described in Paragraph 6C(9) for which a
maximum amount is quantifiable.
"Designated Event" shall mean the occurrence of any one or more of the
following after the Date of Closing:
(i) the direct or indirect acquisition by any person (as such
term is used in Section 13(d) and Section 14(d)(2) of the Exchange
Act), or related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act), of (a) beneficial ownership of
issued and outstanding shares
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of Voting Stock of the Company the result of which acquisition is that
such person or such group possesses in excess of 50% of the combined
voting power of all then issued and outstanding Voting Stock of the
Company or (b) within any period of 365 consecutive days, all or
substantially all of the assets of the Company; or
(ii) following the election or removal of directors, a majority
of the Company's Board of Directors consists of individuals who were
not members of the Company's Board of Directors two years before such
election or removal, unless the election of each director who was not
a director at the beginning of such two-year period has been approved
in advance by directors representing at least a majority of the
directors then in office who were directors at the beginning of the
two-year period; or
(iii) the consolidation with, or merger into, any Person by the
Company in a transaction in which more than 30% by number of votes of
the Voting Stock of the Company is exchanged (the calculation of which
shall be made by dividing the number of votes attributable to the
Voting Stock so exchanged by the aggregate number of votes
attributable to the Voting Stock immediately prior to such
transaction); or
(iv) any transaction or series of transactions (whether related
or unrelated) in which the Company repurchases or otherwise retires in
the aggregate, within any period of 365 consecutive days, 30% or more
(by number) of the Company's outstanding common stock (the calculation
of which shall be made by dividing the number of shares outstanding
immediately after giving effect to each such repurchase or retirement,
by the highest number of shares outstanding at any time during the
period of 365 consecutive days ending on (and including) the date of
such repurchase or retirement (adjusting in each case for stock
splits, stock dividends and other similar transactions, excluding in
each case shares held in treasury, and assuming in each case that all
securities then convertible into, or representing then effective
rights to purchase, common stock have been exercised at such time); or
(v) any Restricted Payment the Fair Market Value of which,
together with the aggregate Fair Market Value of all other Restricted
Payments during the period of 365 consecutive days ending on (and
including) the date of such Restricted Payment (each Restricted
Payment being valued on the date it is made), equals or exceeds 30% of
the Fair Market Value of the Company's outstanding common stock
(determined at the commencement of such period);
-34-
<PAGE>
in each case if as a result of such event or events Consolidated Debt
shall, at any time during the period beginning on the date of such
transaction (or the date of the completion of such series of transactions,
as the case may be) and ending 365 days thereafter, equal or exceed 75% of
the sum of Consolidated Debt plus Consolidated Tangible Net Worth at such
time.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to the Reinvestment Yield with
respect to such Called Principal.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the Company is a member
and that is under common control within the meaning of the regulations
under Section 414 of the Code.
"Event of Default" shall mean any of the events specified in Paragraph
7A, provided that there has been satisfied any requirement in connection
with such event for the giving of notice, or the lapse of time, or the
happening of any further condition, event or act, and "Default" shall mean
any of such events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, at any time with respect to any
property of any kind or character, the sale value of such property that
would be realized in an arm's-length sale at such time between an informed
and willing buyer and an informed and willing seller, under no compulsion
to buy or sell, respectively.
"Funded Debt" shall mean any Debt payable more than one year from the
date of creation thereof, including without limitation any current portion
of such Debt.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of, or agreement
to give, any financing statement under the Uniform Commercial Code of any
jurisdiction) or any other type of preferential arrangement.
-35-
<PAGE>
"MEGA" shall mean Mega Natural Gas Company, an Oklahoma corporation.
"Multiemployer Plan" shall mean any plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Notes" shall have the meaning specified in Paragraph 1.
"Notice of Sale" shall have the meaning specified in Paragraph 4E(ii).
"Officer's Certificate" shall mean a certificate signed in the name of
the Company by its President, one of its Vice Presidents or its Treasurer.
"Paragraph" shall mean a paragraph of this Agreement unless otherwise
specified.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Plan" shall mean an "employee pension benefit plan" (as defined in
section 3 of ERISA) that is or has been established or maintained, or to
which contributions are or have been made, by the Company or by any trade
or business, whether or not incorporated, that, together with the Company,
is under common control, as described in section 414(b) or (c) of the Code.
"Purchasers" shall mean the purchasers of the Notes identified on the
signature pages hereof.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, 0.50% plus the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Service (or such other
display as may replace Page 678 on the Telerate Service) for actively
traded U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or if
such yields shall not be reported as of such time or the yields reported as
of such time shall not be ascertainable, (ii) the Treasury Constant
Maturity Series yields reported, for the latest day for which such yields
shall have been so reported as of the Business Day next preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if necessary, by
(a)
-36-
<PAGE>
converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between reported yields.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest one-
twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled
Payment of such Called Principal (but not of interest thereon) by (b) the
number of years (calculated to the nearest one-twelfth year) that will
elapse between the Settlement Date with respect to such Called Principal
and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to
such Called Principal if no payment of such Called Principal were made
prior to its scheduled due date.
"Required Holder(s)" shall mean the holder or holders of at least 66-
2/3% of the aggregate principal amount of the Notes from time to time
outstanding.
"Restricted Payment" shall mean (a) any dividend paid or declared by
the Company or any Subsidiary on any class of the Company's stock (other
than a dividend payable solely in shares of stock of the Company), or any
other distribution made by the Company or any Subsidiary on account of any
class of the Company's stock, or (b) any cash or other consideration
applied, directly or indirectly, by the Company or any Subsidiary to the
redemption, purchase or other acquisition of any shares of the Company's
stock.
"Restricted Subsidiary" shall mean any Subsidiary organized under the
laws of any State of the United States, Canada or any Province of Canada
that conducts substantially all of its business in the United States or
Canada and all of the stock of every class of which, except directors'
qualifying shares, shall, at the time as of which any determination is
being made, be owned by the Company either directly or through one or more
Restricted Subsdiaries.
"Revolving Credit Agreement" shall mean the Revolving Credit
Agreement, dated as of June 1, 1992, between the Company, certain
commercial lending institutions parties thereto and Continental Bank N.A.,
as agent for such institutions, as amended, restated, supplemented or
otherwise modified from time to time.
"Right to Put" shall have the meaning specified in Paragraph 4E(i).
"Securities Act" shall mean the Securities Act of 1933, as amended.
-37-
<PAGE>
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant
to Paragraph 4B, or is declared to be immediately due and payable pursuant
to Paragraph 7A, or is to be purchased pursuant to Paragraph 4E, as the
context requires.
"Significant Holder" shall mean (i) each Purchaser, so long as such
Purchaser shall hold any Note, (ii) any holder of any Note which had at
least $5,000,000 in principal amount outstanding at the time of acquisition
thereof by such holder, or (iii) any other holder of a Note that represents
100% of the remaining unpaid principal amount of any Note that was
originally issued to a Purchaser.
"Subsidiary" shall mean any corporation the majority of the total
combined voting power of all classes of Voting Stock of which shall, at the
time as of which any determination is being made, be owned by the Company
either directly or through Subsidiaries.
"Termination Event" shall mean (i) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation under such regulations), or (ii) the
withdrawal of the Company or any ERISA Affiliates from a Plan during a plan
year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to terminate
a Plan or the treatment of a Plan amendment as a termination under Section
4041 of ERISA, or (iv) the institution of proceedings to terminate a Plan
by the Pension Benefit Guaranty Corporation, or (v) any other event or
condition that might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.
"Transferee" shall mean any direct or indirect transferee of all or
any part of any Note purchased by you under this Agreement.
"Voting Stock" shall mean, with respect to any corporation, any shares
of stock of such corporation the holders of which are entitled under
ordinary circumstances to vote for the election of directors of such
corporation (irrespective of whether at the time stock of any other class
or classes shall have or might have voting power by reason of the happening
of any contingency).
"Yield-Maintenance Premium" shall mean, with respect to any Note, a
premium equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement
Date with respect to such Called Principal. The Yield-Maintenance Premium
shall in no event be less than zero.
-38-
<PAGE>
10B. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the financial
statements referred to in Paragraph 8B.
PARAGRAPH 11. MISCELLANEOUS.
11. Miscellaneous.
11A. Note Payments. So long as you shall hold any Note, the Company
will make payments of principal thereof and premium, if any, and interest
thereon, which comply with the terms of this Agreement, not later than 12:00
noon (New York City time) on the day when due by wire transfer of immediately
available funds for credit to your account or accounts as specified in Schedule
I hereto, or such other account or accounts in the United States as you may
designate in writing, notwithstanding any contrary provision herein or in any
Note with respect to the place of payment. You severally agree that, before
disposing of any Note, you will make a notation thereon (or on a schedule
attached thereto) of all principal payments previously made thereon and of the
date to which interest thereon has been paid. The Company agrees to afford the
benefits of this Paragraph 11A to any Transferee that shall have made the same
agreement as you have made in this Paragraph 11A.
11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save you and any
Transferee harmless against liability for the payment of, all out-of-pocket
expenses arising in connection with such transactions, including (i) all costs
and expenses of obtaining all necessary private placement numbers, (ii) all
document production and duplication charges and the fees and expenses of any
special counsel engaged by you or any Transferee (otherwise than in connection
with the transfer of any Note) in connection with this Agreement, the
transactions contemplated hereby and any subsequent proposed modification of, or
proposed consent under, this Agreement, whether or not such proposed
modification shall be effected or proposed consent granted, and (iii) the costs
and expenses, including attorneys' fees, incurred by you or any Transferee in
administering this Agreement and enforcing any rights under this Agreement or
the Notes or in responding to any subpoena or other legal process issued in
connection with this Agreement or the transactions contemplated hereby or by
reason of your or any Transferee's having acquired any Note, including without
limitation costs and expenses incurred in any bankruptcy case or in connection
with any actual or proposed work-out or restructuring of the transactions
contemplated hereby and by the Notes. The obligations of the Company under this
Paragraph 11B shall survive the transfer of any Note or portion thereof or
interest therein by you or any Transferee and the payment of any Note.
-39-
<PAGE>
11C. Consent to Amendments. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) except
that, without the written consent of the holder or holders of all Notes at the
time outstanding, no amendment to this Agreement shall change the maturity of
any Note, or change the principal of, or the rate or time of payment of interest
or any premium payable with respect to any Note, or affect the time, amount or
allocation of any required prepayments, or reduce the proportion of the
principal amount of the Notes required with respect to any consent, or amend the
provisions of Paragraph 4E or, for purposes of such Paragraph, the defined terms
used therein. Each holder of any Note at the time or thereafter outstanding
shall be bound by any consent authorized by this Paragraph 11C, whether or not
such Note shall have been marked to indicate such consent, but any Notes issued
thereafter may bear a notation referring to any such consent. No course of
dealing between the Company and the holder of any Note nor any delay in
exercising any rights hereunder or under any Note shall operate as a waiver of
any rights of any holder of such Note. As used herein and in the Notes, the
term "this Agreement" and references thereto shall mean this Agreement as it may
from time to time be amended, restated, supplemented or otherwise modified.
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes.
The Notes are issuable as registered notes without coupons in denominations of
at least $100,000, except as may be necessary to reflect any principal amount
not evenly divisible by $100,000. The Company shall keep at its principal
office a register in which the Company shall provide for the registration of
Notes and of transfers of Notes. Upon surrender for registration of transfer of
any Note at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Notes of like tenor and of a like
aggregate principal amount, registered in the name of such transferee or
transferees. At the option of the holder of any Note, such Note may be
exchanged for other Notes of like tenor and of any authorized denominations, of
a like aggregate principal amount, upon surrender of the Note to be exchanged at
the principal office of the Company. Whenever any Notes are so surrendered for
exchange, the Company shall, at its expense, execute and deliver the Notes that
the holder making the exchange is entitled to receive. Every Note surrendered
for registration of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the holder of
such Note or such holder's attorney duly authorized in writing. Any Note or
Notes issued in exchange for any Note or upon transfer thereof shall carry the
rights to unpaid interest and interest to accrue that were carried by the Note
so exchanged or transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange. Upon receipt of written notice from
the holder of any Note of the loss, theft, destruction or mutilation of such
Note and, in the case of any such loss, theft or destruction, upon receipt of
such holder's unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Note.
-40-
<PAGE>
11E. Persons Deemed Owners; Participations. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and premium, if any, and interest on such Note
and for all other purposes whatsoever, whether or not such Note shall be
overdue, and the Company shall not be affected by notice to the contrary.
Subject to the preceding sentence, the holder of any Note may from time to time
grant participations in all or any part of such Note to any Person on such terms
and conditions as may be determined by such holder in its sole and absolute
discretion.
11F. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by you of any Note or
portion thereof or interest therein and the payment of any Note, and may be
relied upon by any Transferee, regardless of any investigation made at any time
by or on behalf of you or any Transferee. Subject to the preceding sentence,
this Agreement and the Notes embody the entire agreement and understanding
between you and the Company supersede all prior agreements and understandings
relating to the subject matter hereof.
11G. Successors and Assigns. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee), whether so expressed or
not.
11H. Disclosure to Other Persons. The Company acknowledges that the
holder of any Note may deliver copies of any financial statements and other
documents delivered to such holder, and disclose any other information disclosed
to such holder, by or on behalf of the Company or any Subsidiary in connection
with or pursuant to this Agreement, to (i) such holder's directors, officers,
employees, agents and professional consultants, (ii) any other holder of any
Note, (iii) any Person to which such holder offers to sell such Note or any part
thereof, (iv) any Person to which such holder sells or offers to sell a
participation in all or any part of such Note, (v) any federal or state
regulatory authority having jurisdiction over such holder, (vi) the National
Association of Insurance Commissioners or any similar organization or (vii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (a) in compliance with any law, rule, regulation or order applicable
to such holder, (b) in response to any subpoena or other legal process, (c) in
connection with any litigation to which such holder is a party or (d) in order
to protect such holder's investment in such Note.
The Company agrees that it will furnish to any holder of any Note or
to a prospective purchaser of any Note designated by such holder, upon the
request of such holder or such prospective purchaser, on or prior to the date
such Note is to be sold to such prospective purchaser, all information required
by section (d)(4) of Rule 144A promulgated
-41-
<PAGE>
by the Securities and Exchange Commission under the Securities Act, or any
successor rule or regulation, including without limitaiton, if and for so long
as the Company is not subject to section 13 or 15(d) of the Exchange Act, the
following information (which shall be reasonably current in relation to the date
of such sale under this Paragraph 11H): a very brief statement of the nature of
the business of the Company and the products and services it offers; and the
Company's most recent audited balance sheet and profit and loss and retained
earnings statements, and similar audited financial statements for the two
preceding fiscal years.
11I. Notices. All notices or other communications provided for
hereunder (except for any telephonic or facsimile notice contemplated by
Schedule I) shall be in writing and sent by first class mail or nationwide
overnight delivery service (with charges prepaid) and, (i) if to you, addressed
to you at the address specified for such communications in Schedule I hereto, or
at such other address as you shall have specified to the Company in writing,
(ii) if to any other holder of any Note, addressed to such other holder at such
address as such other holder shall have specified to the Company in writing or,
if any such other holder shall not have so specified an address to the Company,
then addressed to such other holder in care of the last holder of such Note that
shall have so specified an address to the Company, and (iii) if to the Company,
addressed to it at 370 17th Street, Suite 900, Denver, Colorado 80202,
Attention: Chief Financial Officer, or at such other address as the Company
shall have specified to the holder of each Note in writing; provided, however,
-------- -------
that any such communication to the Company may also, at the option of the holder
of any Note, be delivered by any other means either to the Company at its
address specified above or to any officer of the Company.
11J. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11K. Satisfaction Requirement. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to you or to the Required Holder(s), the
determination of such satisfaction shall be made by you or the Required
Holder(s), as the case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.
11L. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE GOVERNED BY,
THE LAWS OF SAID STATE. This Agreement may not be changed orally, but (subject
to the provisions of Paragraph 11C) only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought.
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<PAGE>
11M. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to the
Company, whereupon this letter shall become a binding agreement between you and
the Company.
Very truly yours,
ASSOCIATED NATURAL GAS
CORPORATION
By: /s/ Harold R. Logan, Jr.
---------------------------------
Name: Harold R. Logan, Jr.
-------------------------------
Title: Senior Vice President/Finance
------------------------------
The foregoing Agreement is
hereby accepted as of the
date first above written.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc.
By: /s/ Stephen L. Roberts
---------------------------
Name: Stephen L. Roberts
---------------------
Title: Vice President
--------------------
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<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
on behalf of one or more separate accounts
By: CIGNA Investments, Inc.
By: /s/ Stephen L. Roberts
---------------------------
Name: STEPHEN L. ROBERTS
--------------------
Title: VICE PRESIDENT
-------------------
INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA Investments, Inc.
By: /s/ Stephen L. Roberts
----------------------------
Name: STEPHEN L. ROBERTS
---------------------
Title: VICE PRESIDENT
--------------------
-44-
<PAGE>
SCHEDULE I
----------
SCHEDULE OF PURCHASERS
<TABLE>
<CAPTION>
AGGREGATE
PRINCIPAL
AMOUNT OF
NOTES TO BE NOTE
PURCHASER PURCHASED DENOMINATIONS
- - --------- --------- -------------
<S> <C> <C>
Connecticut General $21,000,000 $12,000,000
Life Insurance Company $ 6,000,000
$ 3,000,000
(1) All payments on account of
Notes held by such purchaser shall
be made by wire transfer of
immediately available funds for
credit to:
FED ABA #021000021 Chase
NYC/CTR/BNF = CIGNA
Private Placement/AC =
9009001802
OBI = [Issue Name, Private
Placement Number, Description of
Security with Rate and Maturity,
the Amount of Interest and/or
Principal, the Amount of any
Prepayment, the Payable Date, the
Originator's Contact Name and
Telephone Number]
Together with a Notice of Each
Payment to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, NY 10081
Attn: CIGNA Private Placements
Fax: 212-552-3107/1005
</TABLE>
I-1
<PAGE>
<TABLE>
<S> <C> <C>
(2) Address for all notices relating
to payments:
CIG & CO./Connecticut General
Life Insurance Company
c/o CIGNA Investments, Inc.
Hartford, CT 06152*
Attn: Securities Accounting
Department (S-206)
with a copy to:
CIG & CO./Connecticut General
Life Insurance Company
c/o CIGNA Investments, Inc.
Hartford, CT 06152
Attn: Private Securities Division
(S-307)
(3) Address for all other
communications and notices:
CIG & CO./Connecticut General
Life Insurance Company
c/o CIGNA Investments, Inc.
Hartford, CT 06152*
Attn: Private Securities Division
(S-307)
(4) Tax Identification No.: 13-
3574027
(5) Method of Notice for purposes
of Paragraph 4C and Paragraph 4E
shall be by written notice in the
manner specified in (3) above and
by telephone notice to
Mr. James W. Spann
(203)726-8632.
*/For Notices sent by overnight
courier, express mail or messenger,
substitute "900 Cottage Grove
Road, Bloomfield, CT 06002" in
place of "Hartford, CT 06152"
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
AGGREGATE
PRINCIPAL
AMOUNT OF
NOTES TO BE NOTE
PURCHASER PURCHASED DENOMINATIONS
- - --------- --------- -------------
<S> <C> <C>
Connecticut General Life $4,000,000 $3,000,000
Insurance Company, on behalf of $1,000,000
one or more separate accounts
(1) All payments on account of
Notes held by such purchaser shall
be made by wire transfer of
immediately available funds for
credit to:
FED ABA #021000021 Chase
NYC/CTR/BNF = CIGNA
Private Placement/AC =
9009001802
OBI = [Issue name, Private
Placement Number, Description of
Security with Rate and Maturity,
the Amount of Interest and/or
Principal, the Amount of any
Prepayment, the Payable Date, the
Originator's Contact Name and
Telephone Number]
Together with a Notice of Each
Payment to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, NY 10081
Attn: CIGNA Private Placements
Fax: 212-552-3107/1005
</TABLE>
I-3
<PAGE>
<TABLE>
<S> <C> <C>
(2) Address for all notices relating
to payments:
CIG & CO,/Connecticut General
Life Insurance Company, on behalf
of one or more separate accounts
c/o CIGNA Investments, Inc.
Hartford, CT 06152*
Attn: Securities Accounting
Department (S-206)
with a copy to:
CIG & CO./Connecticut General
Life Insurance Company, on behalf
of one or more separate accounts
c/o CIGNA Investments, Inc.
Hartford, CT 06152*
Attn: Private Securities Division
(S-307)
(3) Address for all other
communications and notices:
CIG & CO./Connecticut General
Life Insurance Company, on behalf
of one or more separate accounts
c/o CIGNA Investments, Inc.
Hartford, CT 06152*
Attn: Private Securities Division
(S-307)
(4) Tax Identification No.:
13-3574027
(5) Method of Notice for purposes
of Paragraph 4C and Paragraph 4E
shall be written notice in the
manner specified in (3) above and
by telephonic notice to
Mr. James W. Spann
(203) 726-8632.
</TABLE>
I-4
<PAGE>
*/For Notices sent by overnight
courier, express mail or messenger,
substitute "900 Cottage Grove
Road, Bloomfield, CT 06002" in
place of "Hartford, CT 06152"
I-5
<PAGE>
<TABLE>
<CAPTION>
AGGREGATE
PRINCIPAL
AMOUNT OF NOTE NOTE
PURCHASER TO BE PURCHASED DENOMINATION
- - --------- --------------- ------------
<S> <C> <C>
Insurance Company of North $15,000,000 $15,000,000
America
(1) All payments on account of
Notes held by such purchaser shall
be made by wire transfer of
immediately available funds for
credit to:
Morgan Guaranty Trust Company
of New York
ABA #0210-0023-8
BTR/BNF = CUSTZ/AC-
99999024/Z
Attn: Cust. Svc. Insurance
Company of North America
a/c 35000
Providing sufficient information to
identify the source of the transfer
and the amount of interest and/or
principal.
(2) Address for all notices relating
to payments:
ZANDE & CO./Insurance
Company of North America
c/o CIGNA Investments, Inc.
Hartford, CT 06152*
Attn: Securities Accounting
Department (S-206)
with a copy to:
ZANDE & CO./Insurance
Company of North America
c/o CIGNA Investments, Inc.
Hartford, CT 06152*
Attn: Private Securities Division
(S-307)
</TABLE>
I-6
<PAGE>
<TABLE>
<S> <C> <C>
(3) Address for all other
communications and notices:
ZANDE & CO./Insurance
Company of North America
c/o CIGNA Investments, Inc.
Hartford, CT 06152*
Attn: Private Securities Division
(S-307)
(4) Tax Identification No.:
13-6020804
(5) Method of Notice for purposes
of Paragraph 4C and Paragraph 4E
shall be written notice in the
manner specified in (3) above and
by telephonic notice to
Mr. James W. Spann
(203) 726-8632.
*/For Notices sent by overnight
courier, express mail or messenger,
substitute "900 Cottage Grove
Road, Bloomfield, CT 06002" in
place of "Hartford, CT 06152"
</TABLE>
I-7
<PAGE>
SCHEDULE II
-----------
OFFICER'S CERTIFICATE
FOR THE PERIOD ENDED __________, ____
I, the undersigned Officer of Associated Natural Gas Corporation, a
Delaware corporation (the "Company"), do hereby certify that, to the best of my
knowledge and after due inquiry, the Company is in compliance with the
following provisions of the Note Agreement, dated as of April 5, 1994, between
the Company and each of Connecticut General Life Insurance Company,
Connecticut General Life Insurance Company, on behalf of one or more separate
accounts, and Insurance Company of North America ($ in thousands):
<TABLE>
<CAPTION>
PARAGRAPH 6A - CONSOLIDATED TANGIBLE NET WORTH
- - ----------------------------------------------
Stockholders' Equity
<S> <C> <C>
less: all goodwill
less: other intangible assets
-------
Consolidated Tangible Net Worth
=======
Must be greater than $150,000.
<CAPTION>
PARAGRAPH 6B - DIVIDEND LIMITATION
- - ----------------------------------
<S> <C> <C>
plus: $10,000
plus: Consolidated Net Earnings
commencing April 1, 1991; multiply
by 50% (100% if a loss):
-------
less: Restricted Payments commencing
April 1, 1991
(1) dividends and distributions, and
(2) redemptions or purchase of Company
stock
plus: net cash proceeds from stock sales
-------
Consolidated Net Earnings Available for Restricted Payments
=======
Must be greater than zero.
</TABLE>
II-1
<PAGE>
PROVISO FOLLOWING CLAUSE (vi) OF PARAGRAPH 6C(1) AND LAST PROVISO FOLLOWING
- - ---------------------------------------------------------------------------
CLAUSE (vi) OF PARAGRAPH 6C(2) - SECURED DEBT AND RESTRICTED SUBSIDIARY DEBT
- - ----------------------------------------------------------------------------
plus: Debt secured by Liens permitted by 6C(1)(iv)
plus: Debt secured by Liens permitted by 6C(1)(vi)
plus: Debt of the Restricted Subsidiaries permitted
by 6C(2)(ii)
plus: Debt of the Restricted Subsidiaries
permitted by 6C(2)(vi)
---------
divided by: Consolidated Tangible Net Worth (from below)
---------
Must be less than 10% %
=========
FIRST PROVISO FOLLOWING CLAUSE (vi) OF PARAGRAPH 6C(2) - CONSOLIDATED DEBT
- - --------------------------------------------------------------------------
Numerator
- - ---------
plus: Current Debt, including amount included
under paragraph 6C(9)
plus: Funded Debt, including amount included under
paragraph 6C(9)
=========
Denominator
- - -----------
plus: consolidated total assets
less: Consolidated Current Liabilities
less: reserves including deferred taxes
less: other liabilities other than Funded Debt of the
types described in clauses (i) - (iii) of the term
"Debt"
less: treasury stock
less: goodwill (other than from Mega transaction)
less: other intangible assets
---------
Consolidated Net Tangible Assets
=========
Must not be greater than 60% through April 30, 1995
and not greater than 55% thereafter. %
=========
II-2
<PAGE>
PARAGRAPH 6C(3)(i)(b) - INTERCOMPANY LOANS
- - ------------------------------------------
Aggregate amount of loans and advances from all
Restricted Subsidiaries to the Company, taking into
account the netting of loans and advances between the
Company and each Restricted Subsidiary ==========
Must be less than $2,000.
PARAGRAPH 6C(3)(vi) - INVESTMENTS, LOANS AND ADVANCES
- - -----------------------------------------------------
Consolidated Tangible Net Worth
Multiply by: 15% ----------
less: subject investments
less: subject loans and advances ----------
Must be greater than zero. ==========
No Subsidiary owns any stock or securities of the Company.
PARAGRAPH 6C(3)(vi) - LOANS AND ADVANCES
- - ----------------------------------------
Consolidated Tangible Net Worth
Multiply by: 10% ----------
less: subject loans and advances ----------
Must be greater than zero. ==========
PARAGRAPHS 6C(4) AND 6C(5) - SALE OF STOCK AND DEBT OF SUBSIDIARIES:
- - --------------------------------------------------------------------
SALES OF ASSETS
- - ---------------
Consolidated Net Tangible Assets
Multiply by: 10% ----------
less: Debt and stock of Restricted
Subsidiaries sold in preceding 12 months
less: assets of the Company and Restricted
Subsidiaries sold during
preceding 12 months ----------
II-3
<PAGE>
Must be greater than zero. ==========
PARAGRAPH 6C(6) - LEASE RENTALS
- - -------------------------------
Consolidated Tangible Net Assets
Multiply by: 1% ----------
less: subject lease rentals paid during
the current fiscal year ----------
Must be greater than zero. ==========
PARAGRAPH 6C(8) - DISCOUNTED RECEIVABLES
- - ----------------------------------------
Receivables sold or discounted
in current fiscal year ----------
Must be less than $100. ==========
I do hereby certify and warrant that, to the best of my knowledge, after due
inquiry, no Event of Default or Default under the Note Agreement has occurred.
WITNESS MY HAND on this day of , .
----- --------------------- -----
------------------------------------
Name:
------------------------------
Title:
------------------------------
II-4
<PAGE>
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
EXCEPT PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT
EXHIBIT A
---------
[FORM OF NOTE]
ASSOCIATED NATURAL GAS CORPORATION
----------------------------------
6.30% SENIOR NOTE DUE APRIL 15, 2003
PPN
--------------------
No. R-
-------------------- [Date of Issuance]
$
----------------------
FOR VALUE RECEIVED, the undersigned, ASSOCIATED NATURAL GAS CORPORATION
(the "Company"), a corporation organized and existing under the laws of the
State of Delaware, hereby promises to pay to _________________________, or
registered assigns, the principal sum of ____________________________________
DOLLARS on April 15, 2003, with interest (computed on the basis of a 360-day
year -- 30-day month) (a) on the unpaid balance thereof at the rate of 6.30%
per annum from the date hereof, payable semi-annually on October 15 and April
15 in each year, commencing with October 15, 1994, until the principal hereof
shall have become due and payable, and (b) on any overdue payment (including
any overdue prepayment) of principal, any overdue payment of premium and, to
the extent permitted by applicable law, any overdue payment of interest,
payable semi-annually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 8.30% or (ii) 2% above the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York from time to time in New York City
as its Prime Rate, effective as of the effective date of the change of such
Prime Rate, in either case calculated from the date each overdue payment was
due until paid in full.
Payments of principal, premium, if any, and interest are to be made at
the main office of Morgan Guaranty Trust Company of New York in New York City
or at such other place as the holder hereof shall designate to the Company in
writing, in lawful money of the United States of America.
A-1
<PAGE>
This Note is one of the Senior Notes (the "Notes") issued pursuant to a
Note Agreement, dated as of April 5, 1994 (the "Agreement"), between the
Company and Connecticut General Life Insurance Company, Connecticut General
Life Insurance Company, on behalf of one or more separate accounts, and
Insurance Company of North America and is entitled to the benefits thereof. As
provided in the Agreement, this Note is subject to the prepayment, in whole or
from time to time in part in certain cases without premium and in other cases
with a premium as specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note of the same series and for a like principal amount will be issued
to, and registered in the name of, the transferee. Prior to due presentment
for registration of transfer, the Company may treat the person in whose name
this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company shall not be affected by
any notice to the contrary.
The Company agrees to make prepayments of principal on the dates and in
the amounts specified in the Agreement.
If an Event of Default, as defined in the Agreement, shall occur and be
continuing, the principal of this Note may be declared or otherwise become due
and payable in the manner and with the effect provided in the Agreement.
The Company and any and all endorsers, guarantors and sureties severally
waive grace, demand, presentment for payment, notice of dishonor or default,
notice of intent to accelerate, notice of acceleration (to the extent waived
in the Agreement), protest and diligence in collecting.
Should any indebtedness represented by this Note be collected at law or
in equity, or in bankruptcy or other proceedings, or should this Note be
placed in the hands of attorneys for collection, the Company agrees to pay, in
addition to the principal, premium, if any, and interest due and payable
hereon, all costs of collecting or attempting to collect this Note, including
reasonable attorneys' fees and expenses (including those incurred in
connection with any appeal).
A-2
<PAGE>
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS
OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED
BY, THE LAWS OF SAID STATE.
ASSOCIATED NATURAL GAS
CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
A-3
<PAGE>
Exhibit B
---------
Please see Tab 8, this Index
B-1
<PAGE>
EXHIBIT C
---------
FORM OF NOTICE OF SALE
Associated Natural Gas Corporation
370 17th Street
Suite 900
Denver, Colorado 80202
Attention: Chief Financial Officer
Gentlemen:
Reference is made to Note Agreement, dated as of April 5, 1994 (the
"Note Agreement", the capitalized terms herein being used herein as therein
defined), between Associated Natural Gas Corporation (the "Company") and each
of Connecticut General Life Insurance Company, Connecticut General Life
Insurance Company, on behalf of one or more separate accounts and Insurance
Company of North America, that provides, among other things, for the issuance
and sale by the Company of its 6.30% Senior Notes due April 15, 2003, in the
aggregate principal amount of $40,000,000. In accordance with paragraph 4E of
the Note Agreement, the undersigned hereby exercises its Right to Put with
respect to all Notes held by it.
Please transfer, in immediately available funds, on
-------------
[not less than 30 days after delivery of this Notice of Sale], the Agreed Put
Consideration with respect to the foregoing exercise of the undersigned's Right
to Put.
Date:
----------------
[NAME OF [SIGNIFICANT] HOLDER OF
NOTES]
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
C-1
<PAGE>
EXHIBIT D
---------
EXISTING LIENS AND DEBT
EXISTING DEBT
-------------
<TABLE>
<CAPTION>
Borrower Lender Outstanding Maturity
- - -------- ------ ----------- --------
Principal as of
---------------
March 31, 1994
--------------
<S> <C> <C> <C>
ANGC The Prudential $8,000,000.00 12/31/95
Insurance Company
of America
ANGC Revolving Credit $105,000,000.00 5/31/99
Facility
Continental Bank
N.A. (Revolving)
Canadian Imperial
Bank of Commerce
First National Bank
of Boston
ANGC Series A Notes $55,000,000.00 4/30/99
ANGC Series B Notes $45,000,000.00 4/30/03
ANGC Promissory Note -0- 12/31/94
Continental Bank,
N.A.
</TABLE>
EXISTING LIENS
--------------
NONE
<PAGE>
EXHIBIT E
---------
ASSOCIATED NATURAL GAS CORPORATION
----------------------------------
SUBSIDIARIES
------------
<TABLE>
<CAPTION>
% of
Jurisdiction Stock
Name of Company of Organization Restricted Owned*
- - --------------- --------------- ---------- -----
<S> <C> <C> <C>
Associated Natural Gas, Inc. (ANGI) Colorado Yes 100%
Associated Transport and Trading Company (ATTCO) Colorado Yes 100%
Associated Intrastate Pipeline Company (AIP) Delaware Yes 100%
Associated Interstate Pipe Line Company (AIPLC) Delaware Yes 100%
Associated Louisiana Intrastate Pipe Line Company (ALIPLC) Delaware Yes 100%
ATTCO LA Company (ATTCO LA) Louisiana Yes 100%
ATTCO Pipeline Company (ATTCO P/L) Delaware Yes 100%
ATTCO NGL Pipeline Company (ATTCO NGL) Delaware Yes 100%
Associated Holding Company (AHC) Colorado Yes 100%
NGA Corporation (NGA) Colorado Yes 100%
Lubrication Services, Inc. (LSI) Colorado Yes 100%
Front Range Propane, Inc. Colorado Yes 100%
Associated Natural Gas (U.K.) Ltd. Delaware Yes 100%
ANGI Limited England Yes 75%
AIM Pipeline Company Colorado Yes 100%
</TABLE>
- - ----------------------------------------------
* Associated Natural Gas Corporation owns 100% of the Capital Stock of each
of its subsidiaries, except ANGI Limited is 75% owned by Associated
Natural Gas Corporation, and 25% by Evergreen Resources, Inc.
<PAGE>
EXHIBIT "F"
-----------
List of Agreements Restricting Debt
(Paragraph 8C)
1. Revolving Credit Agreement dated as of June 1, 1992 between the Company
and Continental Bank N.A., CIBC Inc., and The First National Bank of
Boston.
2. Note Agreement dated as of April 30, 1991 between the Company and each
of The Prudential Insurance Company of America, The Variable Annuity
Life Insurance Company, Massachusetts Mutual Life Insurance Company and
The Mutual Life Insurance Company of New York.
3. Amendment and Restatement of Note Agreement dated June 1, 1992 between
the Company and The Prudential Life Insurance Company of America.
<PAGE>
EXHIBIT G
---------
EXISTING LOANS AND ADVANCES
<TABLE>
<CAPTION>
Current Amount
Outstanding as
Instrument of 3/31/94
- - ---------- --------------
<S> <C>
Richardson $ 255,030.74
Production Prepayment Agreement, dated as
of March 22, 1993, between Richardson
Production Company and Richardson Operating
Company and Associated Natural Gas, Inc.
Freedom $1,462,381.45
Secured term loan agreement, dated as of
September 20, 1993, between Freedom Energy,
Inc. and Associated Natural Gas, Inc.
Kauffman $ 67,362.44
Production Prepayment Agreement, dated as
of December 22, 1993, between Gusoil-1981
and Associated Natural Gas, Inc.
Gerrity $1,500,000.00
Production Prepayment Agreement, dated as
of July 21, 1992, between Gerrity Oil and
Gas Corporation and Associated Natural Gas,
Inc.
Kauffman $ 138,316.15
Production Prepayment Agreement, dated as
of December 22, 1993, between Gusoil-1982
and Associated Natural Gas, Inc.
</TABLE>
[NOTE - None of the foregoing agreements provides for future advances.]
<PAGE>
EXHIBIT H
---------
EXISTING INVESTMENTS
Hydro Gathering System Joint Venture*
Laubhan-Friesen Gas Gathering System*
Moody Gas Gathering System*
Stanton Gathering System Joint Venture
Wausau Gas System
West Caddo Gas Gathering System*
* May be sold
<PAGE>
EXHIBIT I
---------
EXISTING OBLIGATIONS PERMITTED BY PARAGRAPH 6C(9)
NONE
