CONSENT AND AGREEMENT
CONSENT AND AGREEMENT, dated as of April 15, 1991, between the lender
whose name appears on the signature page hereof (the "Lender") and ALASKA
PIPELINE COMPANY, an Alaska corporation (the "Company").
WHEREAS, the Company has outstanding on the date hereof, (i) $144,000
aggregate principal amount of its 8 3/8% Series A Notes due January 1, 1993 (the
"Series A Notes"), (ii) $460,000 aggregate principal amount of its 10 1/4%
Series B Notes due January 1, 1995 (the "Series B Notes"), (iii) $2,100,000
aggregate principal amount of its 9.95% Series D Notes due April 1, 1997 (the
"Series D Notes"), (iv) $14,500,000 aggregate principal amount of its 12.70%
Series F Notes due July 1, 1995 (the "Series F Notes"), (v) $3,000,000 aggregate
principal amount of its 12.80% Series G Notes due July 1, 2000 (the "Series G
Notes"), and (vi) $8,000,000 aggregate principal amount of its 12.75% Series H
Notes due July 1, 2000 (the "Series H Notes" and, together with the Series A
Notes, the Series B Notes, the Series D Notes, the Series F Notes and the Series
G Notes, the "Notes");
WHEREAS, the Series A Notes and the Series B Notes were originally
issued pursuant to a Note Agreement dated as of August 15, 1972 (as heretofore
amended, the "1972 Note Agreement");
WHEREAS, the Series D Notes were originally issued pursuant to a Note
Agreement dated as of March 15, 1977 (as heretofore amended, the "1977 Note
Agreement");
WHEREAS, the Series F Notes, the Series G Notes and the Series H Notes
were originally issued pursuant to separate Note Agreements dated as of June 17,
1985 (as heretofore amended, the "1985 Agreement" and, together with the 1972
Note Agreement, the 1975 Note Agreement and the 1977 Note Agreement, the "Note
Agreements");
WHEREAS, the Lender is the owner and holder of certain of the Notes
(the "Lender Notes");
WHEREAS, the Company and the Lender desire to amend in certain respects
the Note Agreements pursuant to which the Lender Notes were originally issued
(the "Lender Notes");
WHEREAS, as of the date hereof, Seagull Energy Corporation ("Seagull")
has outstanding $66,951,512 aggregate principal amount of Intercompany Notes (as
defined in the Lender Note Agreements), such Intercompany Notes (the "Existing
Intercompany Notes") being more particularly described in Exhibit A attached
hereto;
WHEREAS, the Company and Seagull have requested the consent of the
Lender to the execution and delivery by Seagull of new Intercompany Notes, in
exchange for and in replacement of the Existing Intercompany Notes, such new
Intercompany Notes (the "Replacement Intercompany Notes") to be identical in
form and substance to the respective Existing Intercompany Notes being replaced
thereby except that each Replacement Intercompany Note shall include the
additional provision set forth in Exhibit B attached hereto; and
WHEREAS, the Company and Seagull have requested the consent of the
Lender to the execution and delivery by the Company and Seagull of a Ninth
Supplemental Mortgage in the form of Exhibit C attached hereto (the "Ninth
Supplemental Mortgage") for the purpose of supplementing and amending the
Intercompany Mortgage (as defined in the Lender Note Agreements) so as to (i)
permit the inclusion of the provision set forth in Exhibit B attached hereto in
all Intercompany Notes issued after the date hereof and (ii) cause Section 3.02
of the Intercompany Mortgage to be consistent with the provision set forth in
Exhibit B attached hereto;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Lender and the Company hereby consent and agree as follows:
1. The Company and the Lender hereby agree that clause (a) of the
definition of "Consolidated Adjusted Net Earnings" contained in Section 14 of
each Lender Note Agreement is amended to read in its entirely as follows:
"(a) there shall be deducted an amount equal to the excess, if any, of (i)
the sum of (x) the aggregate amount applied by the Company during such period to
the payment, redemption, retirement and purchase of Funded Debt of the Company
(other than any amount payable at the scheduled maturity of any such Funded Debt
or on account of any mandatory or required sinking, purchase or other analogous
fund with respect to any such Funded Debt) and (y) the aggregate amount applied
by the Company during such period to the repayment during such period of
advances to the Company by Seagull over (ii) the sum of (x) the aggregate amount
of depreciation and amortization deducted during such period in determining
Consolidated Net Income as Reported, (y) the aggregate principal amount of
Funded Debt incurred by the Company during such period for the purpose of
renewing, extending, refinancing, refunding, rearranging or replacing any Funded
Debt taken into account under subclause (i) (x) above and (z) the sinking fund
payments made by Seagull to the Company during such period in accordance with
indebtedness of the Division to the Company evidenced by the Intercompany
Notes;".
2. The Company and the Lender hereby agree that, except as hereinabove
amended and modified, each Lender Note Agreement shall continue in full force
and effect.
3. The Lender hereby consents to (a) the execution and delivery by
Seagull of the Replacement Intercompany Notes in exchange for and in replacement
of the Existing Intercompany Notes and (b) the execution and delivery by the
Company and Seagull of the Ninth Supplemental Mortgage.
IN WITNESS WHEREOF, the Company and the Lender have caused this Consent
and Agreement to be executed as of the date first above written.
ALASKA PIPELINE COMPANY
By:____________________________________
THE TRAVELERS INSURANCE COMPANY
By:____________________________________
Intercompany Notes Outstanding
as of April 15, 1991
Original Outstanding
Principal Principal
Date Amount Amount
----------------- ---------------------- -----------------------
01/01/85 $ 245,000 $ 35,000
01/01/85 320,000 80,000
12/31/84 900,000 300,000
01/01/85 760,000 304,000
01/01/85 165,000 66,000
01/01/85 1,620,000 810,000
04/01/85 300,000 150,000
04/01/85 660,000 330,000
06/01/85 2,332,650 2,332,650
01/01/85 2,150,000 2,150,000
07/01/85 24,300,000 18,900,000
12/31/85 3,000,000 2,350,000
12/31/86 10,650,000 8,290,000
12/31/88 8,000,000 6,220,000
12/31/89 8,300,000 7,263,000
12/31/90 12,300,000 12,300,000
12/31/84 5,070,862 5,070,862
====================== =======================
$ 81,073,512 $ 66,951,512
====================== =======================
Anything in this Note, the Mortgage or elsewhere to the contrary
notwithstanding, Seagull shall not be personally liable for the payment of the
principal of, premium (if any) or interest on this Note, it being expressly
understood and agreed that the sole recourse of the holder of this Note for the
payment hereof shall be against the Mortgaged Property and that no recourse
(whether under rule of law, statute or constitution or by the enforcement of any
assessment or penalty or otherwise) shall be had against Seagull or any other
Person for the payment of the principal of, premium (if any) or interest on this
Note or for any claim based hereon or otherwise in respect hereof; provided,
however, that nothing in this paragraph shall (i) affect the validity of the
indebtedness evidenced by this Note or the rights of any holder of this Note to
proceed against the Mortgaged Property in accordance with the Mortgage, (ii)
constitute a waiver of any indebtedness or obligation evidenced by this Note
(but the same shall continue until paid or discharged), (iii) limit or otherwise
prejudice in any way the right of any holder of this Note to name Seagull or any
owner, holder or transferee of any interest in the Mortgaged Property as a party
defendant in any action or suit for judicial foreclosure of, or in the exercise
of any other remedy available to such holder with respect to, the Mortgaged
Property so long as no judgment in the nature of a deficiency or seeking
personally liability shall be asked of or (if obtained) enforced against
Seagull.
================================================================================
SEAGULL ENERGY CORPORATION
As Mortgagor
TO
ALASKA PIPELINE COMPANY
As Mortgagee
------------
NINTH SUPPLEMENTAL MORTGAGE
Dated as of ________________, 1991
------------
Further Supplementing and Amending the First Mortgage and Deed of Trust, dated
as of August 1, 1960, as heretofore supplemented, amended and restated by a
Supplemental Mortgage dated as of September 9, 1960, a Second Supplemental
Mortgage dated as of May 1, 1961, a Third Supplemental Mortgage dated as of
December 15, 1969, a Fifth Supplemental Mortgage dated as of November 15, 1975,
a Sixth Supplemental Mortgage dated as of December 30, 1977, a Seventh
Supplemental Mortgage dated as of January 1, 1984 and an Eight Supplemental
Mortgage dated as of June 17, 1985.
================================================================================
NINTH SUPPLEMENTAL MORTGAGE, dated as of __________________, 1991, between
SEAGULL ENERGY CORPORATION (the "Company"), a Texas corporation, party of the
first part, and ALASKA PIPELINE COMPANY ("Alaska"), an Alaska corporation, party
of the second part.
RECITALS
WHEREAS, Alaska Public Service Corporation (formerly named Anchorage
Natural Gas Corporation and herein called "Service"), in order to secure loans
made to it form time to time by Alaska, executed and delivered to Alaska, as
Mortgagee, a First Mortgage and Deed of Trust dated as of August 1, 1960 (the
"Original Mortgage"), and three mortgages supplemental thereto consisting of a
Supplemental Mortgage dated as September 9, 1960 (the "First Supplemental
Mortgage"), a Second Supplemental Mortgage dated as of May 1, 1961 (the "Second
Supplemental Mortgage") and a Third Supplemental Mortgage dated as of December
15, 1969 (the "Third Supplemental Mortgage");
WHEREAS, effective February 18, 1972, Alaska Interstate Company, an
Alaska corporation ("Interstate"), acquired all of the assets and business as a
going concern of Service and in connection therewith entered into a Fourth
Supplemental Mortgage dated as of February 18, 1972 ( the "Fourth Supplemental
Mortgage") which, among other things, (a) provided for the assumption by
Interstate of all obligations, warranties and agreements of Service under the
Secured Notes and the Original Mortgage as supplemented and amended thereby and
by the First Supplemental Mortgage, the Second Supplemental Mortgage and the
Third Supplemental Mortgage, and (b) restated the terms and provisions of the
Original Mortgage, as supplemented and amended thereby and by the First
Supplemental Mortgage, the Second Supplemental Mortgage and the Third
Supplemental Mortgage;
WHEREAS, effective June 4, 1982, Interstate merged into ENSTAR
Corporation ("ENSTAR"), and ENSTAR, as the surviving corporation, succeeded to
all of Interstate's right, title and interest to the assets and business of
Service as a going concern, and assumed all of Interstate's obligations under
(a) the Original Mortgage as theretofore supplemented, amended and restated by
the First Supplemental Mortgage, the Second Supplemental Mortgage, the Third
Supplemental Mortgage, the Fourth Supplemental Mortgage, a Fifth Supplemental
Mortgage dated as of November 15, 1975, a Sixth Supplemental Mortgage dated as
of December 30, 1977 and a Seventh Supplemental Mortgage dated as of January 1,
1984 (the Original Mortgage, as so supplemented, amended and restated by such
seven supplemental mortgages, being herein called the "Amended Mortgage") and
(b) the notes of Interstate secured by the Amended Mortgage;
WHEREAS, following such merger, the name of Service was changed to
ENSTAR Natural Gas Company and its operations were thereafter conducted as a
division (the "Division") of ENSTAR;
WHEREAS, effective June 17, 1985, the Company purchased from ENSTAR all
of the outstanding common stock of Alaska and all of the assets and business as
a going concern of the Division pursuant to an Agreement of Purchase and Sale
dated as of October 30, 1984, as amended by a Supplemental Agreement dated may
3, 1985;
WHEREAS, in connection with such purchase, the Company, and Alaska
entered into an Eighth Supplemental Mortgage, dated as of June 17, 1985 (the
"Eighth Supplemental Mortgage"), providing, among other things, for (i) the
amendment and restatement of the Amended Mortgage and (ii) the assumption by the
Company all the obligations, warranties and agreements of ENSTAR and the
Division under the Amended Mortgage;
WHEREAS, pursuant to the Amended Mortgage, as amended and restated by the
Eighth Supplemental Mortgage (the "Mortgage"), the Company issued to Alaska
certain promissory notes of the Company (the "Replacement Notes") in exchange
for and in cancellation and replacement of all promissory notes of ENSTAR
secured by the Mortgage (the "ENSTAR Notes");
WHEREAS, the Replacement Notes were issued in renewal, extension and
refunding of the ENSTAR Notes and the lien created by the Mortgage was carried
forward and continued in force and effect for the purpose of securing, among
other indebtedness, the indebtedness evidenced by the Replacement Notes;
WHEREAS, the Company and Alaska desire to amend certain terms and
conditions contained in the Mortgage, and the Company desires to convey and
mortgage, and confirm the conveyancing and mortgaging under the Mortgage and
hereunder, of certain properties heretofore acquired by the Company with respect
to the operations of the Division and not specifically described in the
Mortgage, and, to that end, the Company desires to make, execute and deliver to
Alaska a Ninth Supplemental Mortgage, supplemental to the Mortgage, in the form
hereof and for the purposes herein provided, which will secure all the Notes (as
defined in Section 1.01 of the Mortgage);
WHEREAS, all conditions and requirements necessary to authorize the
execution, acknowledgment and delivery of this Ninth Supplemental Mortgage and
duly and legally to effect the modifications of the Mortgage provided for in
this Ninth Supplemental Mortgage and to make the Mortgage, as supplemented and
amended hereby, a valid, binding and legal instrument for the security of the
Notes ( as defined in Section 1.01 of the Mortgage), have been compiled with or
have been done and performed;
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Alaska hereby act and agree as follows:
ARTICLE I
Confirmation of Mortgage, etc.
In order further to secure (and the Company hereby acknowledges and
agrees that the lien of the Mortgage is hereby carried forward and continued in
force and effect for the purpose of securing) the payment of the principal of
and the premium, if any, and interest on all Notes at any time issued and
outstanding under the Amended Mortgage, as supplemented and amended by this
Ninth Supplemental Mortgage and as further supplemented and amended, from time
to time, in accordance with their terms, and the performance and observance by
the
Company of all of the obligations and agreements of the Company herein and
therein contained and the payment of all amounts payable and to become payable
by the Company under the Gas Sale Contract (as defined in Section 1.01 of the
Mortgage), the Company (i) has executed and delivered this Ninth Supplemental
Mortgage, (ii) does hereby ratify and confirm its mortgage and pledge to Alaska
of its property (other than Excepted Property, as defined in the Excepted
Property Clause of the Mortgage, and any property heretofore released from the
lien of the Mortgage pursuant thereto and other than easements, rights-of-way,
permits, leaseholds, contracts and agreements which have either expired or been
completed in accordance with their terms) described in the Mortgage as being
subjected to the lien of the Mortgage and has granted, bargained, sold,
released, conveyed, assigned, transferred, mortgaged, pledged, set over and
confirmed, and (iii) does hereby grant, bargain, sell, release, convey, assign,
transfer, mortgage, pledge, set over and confirm unto Alaska, as Mortgagee under
the Mortgage, and to its successors and assigns forever the real property and
interests in real property described in Schedule I attached hereto and made a
part hereof for all purposes.
ARTICLE II
Modifications of the Mortgage
SECTION 2.1. Section 2.02 Amended. Section 2.02 of the Mortgage is
hereby amended by adding the following new paragraph to the Form of Note
contained in such Section:
"Anything in this Note, the Mortgage or elsewhere to the contrary
notwithstanding, Seagull shall not be personally liable for the payment of the
principal of, premium (if any) or interest on this Note, it being expressly
understood and agreed that the sole recourse of the holder of this Note for the
payment hereof shall be against the Mortgaged Property and that no recourse
(whether under rule of law, statute or constitution or by the enforcement of any
assessment or penalty or otherwise) shall be had against Seagull or any other
Person for the payment of the principal of, premium (if any) or interest on this
Note or for any claim based hereon or otherwise in respect hereof; provided,
however, that nothing in this paragraph shall (i) affect the validity of the
indebtedness evidenced by this Note or the rights of any holder of this Note to
proceed against the Mortgaged Property in accordance with the Mortgage, (ii)
constitute a waiver of any indebtedness or obligation evidenced by this Note
(but the same shall continue until paid or discharged), (iii) limit or otherwise
prejudice in any way the right of any holder of this Note to name Seagull or any
owner, holder or transferee of any interest in the Mortgaged Property as a party
defendant in any action or suit for judicial foreclosure of, or in the exercise
of any other remedy available to such holder with respect to, the Mortgaged
Property so long as no judgment in the nature of a deficiency or seeking
personally liability shall be asked of or (if obtained) enforced against
Seagull."
SECTION 2.2. Section 3.02 Amended. Section 3.02 of the Mortgage is
hereby amended by replacing the second paragraph thereof with the following
paragraph:
"Anything in this Mortgage, the Notes or elsewhere to the contrary
notwithstanding, the Company shall not be personally liable for the payment of
the principal of, premium (if any) or interest on the Notes (whether Replacement
Notes or otherwise), it being expressly understood and agreed that the sole
recourse of the holders of the Notes for the
payment thereof shall be against the Mortgaged Property and that no recourse
(whether under rule of law, statute or constitution or by the enforcement of any
assessment or penalty or otherwise) shall be had against the Company or any
other Person for the payment of the principal of, premium (if any) or interest
on the Notes or for any claim based hereon or otherwise in respect thereof;
provided, however, that nothing in this paragraph shall (i) affect the validity
of the indebtedness evidenced by the Notes or the rights of any holder of a Note
to proceed against the Mortgaged Property in accordance with this Mortgage, (ii)
constitute a waiver of any indebtedness or obligation evidenced by the Notes
(but the same shall continue until paid or discharged), (iii) limit or otherwise
prejudice in any way the right of any holder of a Note to name the Company or
any owner, holder or transferee of any interest in the Mortgaged Property as a
party defendant in any action or suit for judicial foreclosure of, or in the
exercise of any other remedy available to such holder with respect to, the
Mortgaged Property so long as no judgment in the nature of a deficiency or
seeking personally liability shall be asked of or (if obtained) enforced against
the Company."
ARTICLE III
Miscellaneous Provisions
SECTION 3.1. Titles, Headings, Etc. The titles and headings of the
Articles, Sections and subdivisions of this Ninth Supplemental Mortgage have
been inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 3.2. Counterparts. This Ninth Supplemental Mortgage may be
executed in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Ninth Supplemental
Mortgage to be executed by their respective officers thereunto duly authorized,
all as of the day and year first above written.
SEAGULL ENERGY CORPORATION
By:_____________________________
[Corporate Seal] Title:__________________________
Attest:
By:___________________________
Secretary
ALASKA PIPELINE COMPANY
By:__________________________
[Corporate Seal]
Title:_______________________
Attest:
By:___________________________
Secretary
STATE OF TEXAS
COUNTY OF XXXXXX
BEFORE ME, the undersigned authority, on this day personally appeared
___________________________, known to me to be the person whose name is
subscribed to the foregoing instrument, and known to me to be the
___________________________________ of SEAGULL ENERGY CORPORATION, a Texas
corporation, and acknowledged to me that he executed said instrument for the
purposes and consideration therein expressed, and in the capacity therein
stated, as the free and voluntary act and deed of the said corporation for the
uses and purposes therein mentioned.
Given under my hand and seal of office this _____ day of ____________,
1991.
-----------------------------------
Notary Public in and for
the State of Texas
[Notarial Seal]
My Commission Expires:_______________
STATE OF TEXAS
COUNTY OF XXXXXX
BEFORE ME, the undersigned authority, on this day personally appeared
______________________________, known to me to be the person whose name is
subscribed to the foregoing instrument, and known to me to be the
________________________________ of ALASKA PIPELINE COMPANY, a Texas
corporation, and acknowledge to me that the executed said instrument for the
purposes and consideration therein expressed, and in the capacity therein
stated, as the free and voluntary act and deed of the said corporation for the
uses and purposes therein mentioned.
Given under my hand and seal of office this ______ day of ____________,
1991.
-----------------------------------
Notary Public in and for
the State of Texas
[Notarial Seal]
My Commission Expires:_______________
SCHEDULE I
A. The right, title and interest of the Company in the following easements,
rights-of-way, permits, licenses, servitudes, leases, grants and rights (all
references hereafter made to books and pages being to the Conveyance and Deed
Records of the respective Recording Districts of the State of Alaska), to wit:
[ To Come]
B. The right, title and interest of the Company in the following
permits, licenses, franchises and grants over, in, on and across the lands
described and for the purposed stated therein:
[To Come]
C. The right, title and interest of the Company in the following real
property:
[To Come]
