1
SECOND AMENDED AND RESTATED
GLOBAL CREDIT AGREEMENT
Dated as of November 20, 1998
among
OCEAN ENERGY, INC.,
a Delaware corporation,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent,
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
as Syndication Agent,
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
as Documentation Agent,
BARCLAYS BANK PLC,
as Managing Agent,
PARIBAS
SOCIETE GENERALE, SOUTHWEST AGENCY,
AND
CREDIT SUISSE FIRST BOSTON
as Co-Agents,
and
THE LENDERS NOW OR HEREAFTER PARTIES HERETO
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION
CO-ARRANGERS
2
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Terms Defined in Recitals..............................................................1
Section 1.02 Certain Defined Terms..................................................................1
Section 1.03 Accounting Terms and Determinations...................................................17
ARTICLE II
Commitments
Section 2.01 Loans and Letters of Credit...........................................................18
Section 2.02 Borrowings, Continuations and Conversions; Issuance of Letters of
Credit................................................................................19
Section 2.03 Extensions and Changes of Commitments.................................................20
Section 2.04 Facility Fee and Other Fees...........................................................21
Section 2.05 Lending Offices.......................................................................22
Section 2.06 Several Obligations...................................................................22
Section 2.07 Notes.................................................................................22
Section 2.08 Prepayments...........................................................................23
Section 2.09 Borrowing Base........................................................................24
ARTICLE III
Payments of Principal and Interest
Section 3.01 Repayment of Loans....................................................................26
Section 3.02 Interest..............................................................................26
ARTICLE IV
Payments; Pro Rata Treatment; Computations; Etc.
Section 4.01 Payments..............................................................................27
Section 4.02 Pro Rata Treatment....................................................................27
Section 4.03 Computations..........................................................................28
Section 4.04 Non-receipt of Funds by the Administrative Agent......................................28
Section 4.05 Sharing of Payments, Etc..............................................................28
Section 4.06 Assumption of Risks...................................................................29
Section 4.07 Obligation to Reimburse and to Prepay.................................................30
Section 4.08 Obligations for Letters of Credit.....................................................31
ARTICLE V
Yield Protection and Illegality
Section 5.01 Additional Costs......................................................................31
Section 5.02 Limitation on Eurodollar Loans........................................................32
i
3
Section 5.03 Illegality............................................................................33
Section 5.04 Base Rate Loans pursuant to Sections 5.01, 5.02 and 5.03..............................33
Section 5.05 Compensation..........................................................................33
Section 5.06 Additional Cost in Respect of Tax.....................................................34
Section 5.07 Avoidance of Taxes and Additional Costs...............................................34
Section 5.08 Lender Tax Representation.............................................................35
Section 5.09 Limitation on Right to Compensation...................................................35
Section 5.10 Compensation Procedure................................................................35
ARTICLE VI
Conditions Precedent
Section 6.01 Effectiveness.........................................................................36
Section 6.02 All Loans and Letters of Credit.......................................................37
Section 6.03 Conditions Relating to Letters of Credit..............................................38
ARTICLE VII
Representations and Warranties
Section 7.01 Corporate Existence...................................................................38
Section 7.02 Financial Condition...................................................................39
Section 7.03 Litigation............................................................................39
Section 7.04 No Breach.............................................................................39
Section 7.05 Corporate Action; Binding Obligation..................................................39
Section 7.06 Approvals.............................................................................39
Section 7.07 Use of Loans and Letters of Credit....................................................40
Section 7.08 ERISA.................................................................................40
Section 7.09 Taxes.................................................................................40
Section 7.10 Insurance.............................................................................40
Section 7.11 Titles, etc...........................................................................40
Section 7.12 No Material Misstatements.............................................................41
Section 7.13 Investment Company Act................................................................41
Section 7.14 Public Utility Holding Company Act....................................................41
Section 7.15 Subsidiaries and Partnerships.........................................................41
Section 7.16 Location of Business and Offices......................................................41
Section 7.17 Rate Filings..........................................................................41
Section 7.18 Environmental Matters.................................................................42
Section 7.19 Defaults..............................................................................43
Section 7.20 Compliance with the Law...............................................................43
Section 7.21 Risk Management Agreements............................................................43
Section 7.22 Gas Imbalances........................................................................43
Section 7.23 Solvency..............................................................................43
Section 7.24 Year 2000 Compliance..................................................................43
ARTICLE VIII
Affirmative Covenants
Section 8.01 Financial Statements..................................................................44
ii
4
Section 8.02 Litigation............................................................................46
Section 8.03 Corporate Existence, Etc..............................................................46
Section 8.04 Environmental Matters.................................................................48
Section 8.05 Engineering Reports...................................................................48
Section 8.06 Stock of Restricted Subsidiaries......................................................49
Section 8.07 Further Assurances....................................................................49
Section 8.08 Performance of Obligations............................................................49
ARTICLE IX
Negative Covenants
Section 9.01 Debt..................................................................................49
Section 9.02 Liens.................................................................................51
Section 9.03 Investments, Loans and Advances.......................................................52
Section 9.04 Dividends, Distributions and Redemptions..............................................54
Section 9.05 Financial Covenants...................................................................55
Section 9.06 Nature of Business....................................................................55
Section 9.07 Limitation on Operating Leases and Sale-Leaseback Transactions........................55
Section 9.08 Mergers, Etc..........................................................................55
Section 9.09 Proceeds of Notes.....................................................................56
Section 9.10 ERISA Compliance......................................................................56
Section 9.11 Sale or Discount of Receivables.......................................................56
Section 9.12 Risk Management Agreements............................................................56
Section 9.13 Transactions with Affiliates..........................................................56
Section 9.14 Negative Pledge Agreements............................................................56
Section 9.15 Subsidiaries and Partnerships.........................................................57
Section 9.16 Sale of Oil and Gas Properties........................................................57
Section 9.17 Environmental Matters.................................................................57
Section 9.18 Payment Restrictions..................................................................57
Section 9.19 Subordinated and Pari Passu Debt......................................................58
Section 9.20 Maintenance of Deposits...............................................................58
Section 9.21 Unrestricted Subsidiaries.............................................................58
Section 9.22 Gas Imbalances, Take-or-Pay or Other Prepayments......................................59
ARTICLE X
Events of Default
Section 10.01 Events of Default.....................................................................59
Section 10.02 Remedies; Application of Proceeds.....................................................62
ARTICLE XI
The Agents
Section 11.01 Appointment, Powers and Immunities....................................................62
Section 11.02 Reliance by Agents....................................................................63
Section 11.03 Defaults..............................................................................63
Section 11.04 Rights as a Lender....................................................................63
Section 11.05 Indemnification.......................................................................63
iii
5
Section 11.06 Non-Reliance on Agents and other Lenders..............................................64
Section 11.07 Action by Agents......................................................................64
Section 11.08 Resignation or Removal of Agents......................................................64
ARTICLE XII
Miscellaneous
Section 12.01 Waiver................................................................................65
Section 12.02 Notices...............................................................................65
Section 12.03 Payment of Expenses, Indemnities, etc.................................................65
Section 12.04 Amendments, Etc.......................................................................67
Section 12.05 Successors and Assigns................................................................67
Section 12.06 Assignments and Participations........................................................67
Section 12.07 Invalidity............................................................................69
Section 12.08 Entire Agreement......................................................................69
Section 12.09 References............................................................................69
Section 12.10 Survival..............................................................................69
Section 12.11 Captions..............................................................................69
Section 12.12 Counterparts..........................................................................69
Section 12.13 GOVERNING LAW.........................................................................69
Section 12.14 Confidentiality.......................................................................70
Section 12.15 Interest..............................................................................71
Section 12.16 Effectiveness.........................................................................72
Section 12.17 Survival of Obligations...............................................................72
Section 12.18 Debt Characterization for Indenture Purposes; Specified or Designated
Senior Indebtedness...................................................................72
Section 12.19 EXCULPATION PROVISIONS................................................................73
Section 12.20 Intercreditor Agreement...............................................................73
iv
6
ANNEX, EXHIBITS AND SCHEDULES
Annex I - List of Commitments and Commitment Percentages
Exhibit A - Form of Note
Exhibit B-1 - Form of Opinion of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
Exhibit B-2 - Form of Opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Torian, Diaz, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Exhibit C - Form of Borrowing Request
Exhibit D - Restricted and Unrestricted Subsidiaries
Exhibit E - Name of Partnerships
Exhibit F - List of Loan Documents
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Master Release
Schedule 2.01 - Assumed Letters of Credit
Schedule 7.03 - Litigation
Schedule 7.18 - Environmental Matters
Schedule 7.21 - Risk Management Agreements
Schedule 7.22 - Gas Imbalances
v
7
This Second Amended and Restated Global Credit Agreement dated as of
November 20, 1998 is among: OCEAN ENERGY, INC., a corporation duly organized and
validly existing under the laws of the state of Delaware (the "Company"); each
of the financial institutions that is now or hereafter a signatory hereto
(individually, a "Lender" and, collectively, the "Lenders"); CHASE BANK OF
TEXAS, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT for the Lenders (in such
capacity, the "Administrative Agent"), ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW
YORK, AS SYNDICATION AGENT for the Lenders (in such capacity, the "Syndication
Agent"), BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION, AS DOCUMENTATION
AGENT for the Lenders (in such capacity, the "Documentation Agent"), BARCLAYS
BANK PLC, as Managing Agent (in such capacity, the "Managing Agent"), and
PARIBAS, SOCIETE GENERALE, SOUTHWEST AGENCY and CREDIT SUISSE FIRST BOSTON AS
CO-AGENTS for the Lenders (in such capacity, the "Co-Agents").
RECITALS
A. The Company, and certain of the Agents and the Lenders entered into
that certain Amended and Restated Global Credit Agreement dated as of July 8,
1998 (such credit agreement, the "Prior Credit Agreement").
B. The Company has requested that the Agents and the Lenders amend,
restate and restructure the Prior Credit Agreement and make credit available on
the terms and conditions stated herein.
C. The Agents and the Lenders, subject to the terms and conditions
stated herein, are willing to amend, restate and restructure the Prior Credit
Agreement and to make such credit facilities available.
D. NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED IN RECITALS. As used in this Agreement, the
terms defined in the Recitals shall have the meanings indicated in the Recitals.
SECTION 1.02 CERTAIN DEFINED TERMS. As used herein, including the
Recitals, the following terms shall have the following meanings:
"Additional Costs" shall have the meaning assigned to that term in
Section 5.01(a).
"Affected Loans" shall have the meaning assigned to that term in
Section 5.04.
"Affiliate" of any Person shall mean (a) any Person directly or
indirectly controlled by, controlling or under common control with such first
Person and (b) any director or executive officer of such first Person.
1
8
"Agent" shall mean any one or more of the Administrative Agent, the
Syndication Agent, the Documentation Agent, the Managing Agent, the Technical
Agents and/or the Co-Agents, or if the context so indicates, all of the
foregoing collectively. References to any Agent shall include its successors.
"Aggregate Commitments" at any time shall equal the sum of the
Commitments of all of the Lenders.
"Agreement" shall mean this Second Amended and Restated Global Credit
Agreement, as amended, supplemented or modified from time to time.
"Applicable Lending Office" shall mean, for each Lender and for each
Type of Loan, the lending office of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
office of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Administrative Agent and the Company as the
office at which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean the following rate per annum as is
applicable based upon the Percentage Usage as of the date of determination:
-----------------------------------------------------------------------------------------------------------------
Percentage Usage Eurodollar Applicable Margin Base Rate Applicable Margin
-----------------------------------------------------------------------------------------------------------------
Less than or equal to 40% 0.750% 0.000%
-----------------------------------------------------------------------------------------------------------------
Greater than 40%, but 1.000% 0.000%
less than or equal to 60%
-----------------------------------------------------------------------------------------------------------------
Greater than 60%, but 1.200% 0.250%
less than or equal to 75%
-----------------------------------------------------------------------------------------------------------------
Greater than 75%, but 1.400% 0.500%
less than or equal to 90%
-----------------------------------------------------------------------------------------------------------------
Greater than 90%, but 1.600% 0.750%
less than or equal to 100%
-----------------------------------------------------------------------------------------------------------------
Greater than 100%, but 1.750% 1.000%
less than or equal to 115%
-----------------------------------------------------------------------------------------------------------------
Greater than 115% 2.000% 1.250%
-----------------------------------------------------------------------------------------------------------------
"Assignment and Acceptance" shall have the meaning assigned such term
in Section 12.06(b).
"Available Commitment" shall mean the obligation of the Lenders to make
Loans to the Company and to participate in Letters of Credit issued by the
Administrative Agent for the account of the Company and its Subsidiaries in an
aggregate amount not to exceed the lesser of either (a) the Aggregate
Commitments, as then in effect, or (b) the then applicable Borrowing Base.
2
9
"Base Rate" shall mean, with respect to any Base Rate Loan, for any
day, the higher of (a) the Federal Funds Rate for any such day plus 1/2 of 1% or
(b) the Prime Rate for such day. Each change in any interest rate provided for
herein based upon the Base Rate resulting from a change in the Base Rate shall
take effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans which bear interest at rates based
upon the Base Rate.
"Borrowing Base" shall mean at any time an amount equal to the amount
determined in accordance with Section 2.09.
"Borrowing Base Deficiency" shall have the meaning assigned to that
term in Section 2.08(c).
"Business Day" shall mean any day on which commercial banks are not
authorized or required to close in Houston, Texas; and where such term is used
in the definition of "Quarterly Date" in this Section 1.02 or if such day
relates to a borrowing of, a payment or prepayment of principal of or interest
on, a continuation of, or a conversion of or into, or the Interest Period for, a
Eurodollar Loan or a notice by the Company with respect to any such borrowing,
payment, prepayment, continuation, conversion or Interest Period, any day which
is also a day on which dealings in Dollar deposits are carried out in the London
interbank market.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commitment" shall mean, as to each Lender, the obligation of such
Lender to make Loans to the Company and to participate in the Letters of Credit
issued by the Administrative Agent for the account of the Company or any of its
Subsidiaries, in an aggregate amount at any one time outstanding equal to the
amount set forth opposite such Lender's name on Annex I under the caption
"Commitment," as the same may be reduced pursuant to Section 2.03 or may be
modified pursuant to Assignment and Acceptances pursuant to Section 12.06(b).
"Commitment Percentage" shall mean, as of any date of determination, as
to any Lender, the percentage of the Commitments to be provided by a Lender
under this Agreement as indicated on Annex I under the caption "Commitment
Percentage," as modified from time to time to reflect any assignments permitted
by Section 12.06(b).
"Consolidated Net Income" shall mean, for any period, the consolidated
net income (or loss) of the Company and its Consolidated Restricted Subsidiaries
for such period as determined in accordance with GAAP, adjusted by excluding,
without duplication, (a) any extraordinary or non-recurring net gains or losses
together with any related provision for taxes on such gain or loss, realized in
connection with any extraordinary or nonrecurring gains or losses, (b) any
expenses associated with the Merger to the extent such expenses occur prior to
December 31, 1998 and are not in excess of $40,000,000 in the aggregate, (c) the
amount of noncash write downs of long-lived assets in compliance with GAAP or
SEC guidelines, and (d) foreign currency translation adjustments.
"Consolidated Restricted Subsidiary" shall mean a Consolidated
Subsidiary that is a Restricted Subsidiary.
3
10
"Consolidated Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person (whether now existing or hereafter acquired) whose
financial statements should be (or should have been) consolidated with the
financial statements of such Person in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, with respect to the
Company and its Consolidated Subsidiaries, the sum of preferred stock (if any),
par value of common stock, capital in excess of par value of common stock and
retained earnings, less treasury stock (if any), goodwill, cost in excess of
fair value of net assets acquired and all other assets that are properly
classified as intangible assets, but plus any expenses associated with the
Merger occurring prior to December 31, 1998 and not in excess of $40,000,000 in
the aggregate, the amount of noncash write downs of long-lived assets in
compliance with GAAP or SEC guidelines, and excluding any extraordinary or
non-recurring net gains or losses together with any related provision for taxes
on such gain or loss, realized in connection with any extraordinary or
nonrecurring gains or losses, and plus or minus, as appropriate, foreign
currency translation adjustments, all as determined on a consolidated basis.
Notwithstanding the foregoing, "Consolidated Tangible Net Worth" shall not be
reduced to reflect redemptions or repurchases of equity securities permitted by
the terms of Section 9.04.
"Debt" shall mean, for any Person the sum of the following (without
duplication): (a) all obligations of such Person for borrowed money or evidenced
by bonds, debentures, notes or other similar instruments; (b) all obligations of
such Person (whether contingent or otherwise) in respect of letters of credit,
bankers' acceptances, surety or other bonds and similar instruments; (c) all
obligations of such Person to pay the deferred purchase price of Property or
services, except trade accounts payable (other than for borrowed money) arising
in the ordinary course of business of such Person; (d) all obligations under
leases which shall have been, or should have been, in accordance with GAAP,
recorded as capital leases in respect of which such Person is liable,
contingently or otherwise, as obligor, guarantor or otherwise; (e) all Debt of
others secured by a Lien on any asset of such Person, whether or not such Debt
is assumed by such Person, provided that if such Debt is Non-recourse except
with respect to the asset subject to such Lien, then only that portion of such
Debt equal to the lesser of the amount of such Debt and the fair market value of
such asset; (f) all Debt of others guaranteed by such Person or upon which such
Person is otherwise liable as a partner or otherwise to the extent of the lesser
of the amount of such Debt and the maximum stated amount of such guarantee or
other liability; (g) the undischarged balance of any production payment created
by such Person or for the creation of which such Person directly or indirectly
received payment; and (h) obligations to deliver goods or services including
Hydrocarbons in consideration of advance payments other than (1) obligations to
sell or purchase Hydrocarbons, (2) obligations with pipelines for firm
transportation of natural gas of such Person, and (3) oil and gas balancing
agreements, take or pay agreements or other prepayment obligations in respect of
Hydrocarbons, in each case, incurred in the ordinary course of business and
which are customary in the oil and gas industry.
"Debt Coverage Ratio" shall mean the ratio, calculated as of any date
of determination, of (a) Total Debt as of such date of determination to (b)
EBITDA of the Company and its Consolidated Restricted Subsidiaries for the
immediately preceding four (4) fiscal quarters of the Company and its
Consolidated Restricted Subsidiaries ending on the date of determination, after
giving effect to the pooling of interests treatment of the Merger.
"Default" shall mean an event which with notice or lapse of time or
both would become an Event of Default.
4
11
"Dollars" and "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean, with respect to the Company and its Consolidated
Restricted Subsidiaries, net earnings (excluding, without duplication, gains and
losses resulting from the sale or retirement of assets, non-cash write downs,
charges resulting from accounting convention changes and any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with any extraordinary or nonrecurring gains or losses, any expenses
associated with the Merger occurring prior to December 31, 1998 and not in
excess of $40,000,000 in the aggregate, and foreign currency translation
adjustments) before deduction for taxes, interest expenses, exploration
expenses, depreciation, and depletion and amortization expenses, all determined
on a consolidated basis in accordance with GAAP; provided that if the Company or
any Restricted Subsidiary shall acquire any Person or sell any Subsidiary or
acquire or dispose of any Properties outside the ordinary course of business or
engage in any other material transaction, EBITDA for the preceding four fiscal
quarter period prior to such transaction may be determined on a pro forma basis
using or excluding, as applicable, the revenue attributable to such Properties
or Person's Properties, as appropriate, net of operating expenses, severance and
ad valorem taxes incurred with respect to such Properties during the relevant
period, as appropriate, and otherwise as if such transaction had occurred at the
start of such four fiscal quarter period.
"Effective Date" shall have the meaning assigned such term in Section
12.16.
"Engineering Reports" shall have the meaning assigned to that term in
Section 2.09(c).
"Environmental Laws" shall mean any and all laws, statutes, ordinances,
rules, regulations, orders, or determinations of any Governmental Authority
pertaining to health or the environment in effect in any and all jurisdictions
in which the Company or any of its Subsidiaries are conducting or at any time
have conducted business, or where any Property of the Company or any of its
Subsidiaries is located, or where any hazardous substances generated by or
disposed of by the Company or any of its Subsidiaries are located, including
without limitation, the Oil Pollution Act of 1990 ("OPA"), the Clean Air Act, as
amended, the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution Control Act, as
amended, the Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,
the Superfund Amendments and Reauthorization Act of 1986, as amended. For
purposes of this definition, the term "oil" shall have the meaning specified in
OPA; the terms "hazardous substance," "release" and "threatened release" have
the meanings specified in CERCLA, and the terms "solid waste" and "disposal" (or
"disposed") have the meanings specified in RCRA; provided that, in the event
either OPA, CERCLA or RCRA is amended so as to broaden the meaning of any term
defined thereby, such broader meaning shall apply subsequent to the effective
date of such amendment with respect to all provisions of this Agreement other
than Article VII hereof, and provided further that, to the extent the laws of
the state in which any Property of the Company or its Subsidiaries is located
establish a meaning for "oil," "hazardous substance," "release," "solid waste"
or "disposal" which is broader than that specified in either OPA, CERCLA or
RCRA, such broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
5
12
"ERISA Affiliate" shall mean any corporation or trade or business which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Company or is under common control (within
the meaning of Section 414(c) of the Code) with the Company.
"Eurodollar Loans" shall mean Loans the interest rates on which are
determined on the basis of rates referred to in the definition of "Eurodollar
Rate" in this Section 1.02.
"Eurodollar Rate" shall mean, with respect to a Eurodollar Loan, the
rate per annum (rounded upwards, if necessary to the nearest 1/100 of 1%) quoted
by the Administrative Agent at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) two (2) Business Days prior to the first day of the
Interest Period for such Loan for the offering by the Administrative Agent to
leading banks in the London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to the principal
amount of the Eurodollar Loan to be made by the Lenders for such Interest
Period.
"Event of Default" shall have the meaning assigned to that term in
Section 10.01.
"Excepted Liens" shall mean: (i) Liens for taxes, assessments or other
governmental charges or levies not yet delinquent or which are being contested
in good faith by appropriate action; (ii) Liens in connection with workmen's
compensation, unemployment insurance or other social security, old age pension
or public liability obligations not yet due or which are being contested in good
faith by appropriate action; (iii) (A) vendors', carriers', operators',
warehousemen's, repairmen's, mechanics', workmen's, materialmen's, construction,
maritime, landlords' and other like Liens arising by operation of law and (B)
Liens arising by agreement (provided that no such Liens secure any obligations
constituting Debt for borrowed money or contingent obligations relating to
borrowed money), in each case, in the ordinary course of business or incident to
the exploration, development, operation and maintenance of Oil and Gas
Properties (including without limitation, Liens created in the ordinary course
of business under oil and gas leases, farm-out agreements, divisions orders,
partnership agreements, production sharing contracts or other petroleum
concessions, licenses or similar agreements, royalty agreements, contracts for
the sale or transportation of Hydrocarbons, operating agreements, development
agreements or compulsory pooling or unitization orders, declarations and
agreements and contractual landlord's liens), in any such case, in respect of
obligations which have not been outstanding more than 90 days or which are being
contested in good faith by appropriate proceedings; (iv) Liens securing the
performance of bids, tenders, contracts (other than for the repayment of
borrowed money or for the deferred purchase price of Property or services),
leases (other than leases which constitute Debt) and government contracts,
statutory or regulatory obligations, surety and appeal bonds, and other Liens of
like nature, in each case made in the ordinary course of business; (v) any Liens
securing Debt, neither assumed nor guaranteed by the Company or any of its
Subsidiaries nor on which any one of them pays interest, existing upon real
estate or rights in or relating to real estate acquired by the Company or any
Subsidiary for substation, metering station, pump station, storage, gathering
line, transmission line, transportation line, distribution line or right of way
purposes, and any Liens reserved in leases for rent and for compliance with the
terms of the leases in the case of leasehold estates, to the extent that any
such Lien referred to in this clause (v) does not materially impair the use of
the Property covered by such Lien for the purposes for which such Property is
held by the Company or such Subsidiary; (vi) encumbrances (other than to secure
the payment of borrowed money or the deferred purchase price of Property or
services), easements, restrictions, servitudes, permits, conditions, covenants,
exceptions or reservations in any rights of way or other Property of
6
13
the Company or any of its Subsidiaries for the purpose of roads, pipelines,
transmission lines, transportation lines, distribution lines for the removal of
gas, oil, coal or other minerals or timber, and other like purposes, or for the
joint or common use of real estate, rights of way, facilities and equipment, and
defects, irregularities and deficiencies in title of any rights of way or other
Property which in the aggregate do not materially impair the use of such rights
of way or other Property for the purposes of which such rights of way and other
Property are held by the Company or any of its Subsidiaries; (vii) inchoate
Liens on pipelines or pipeline facilities that arise by operation of law which
have not attached to the Property subject of such Lien, (viii) rights of
collecting banks having rights of setoff, revocation, refund or chargeback with
respect to money or instruments of the Company or any of its Subsidiaries or on
deposit with or in the possession of such banks, and (ix) judgment and
attachment Liens not giving rise to an Event of Default or Liens created by or
existing from any litigation or legal proceedings that are currently being
contested in good faith by appropriate proceedings, promptly instituted and
diligently conducted, and for which adequate reserves have been made to the
extent required by GAAP.
"Excluded Taxes" shall have the meaning assigned such term in Section
5.01(a).
"Facility Fee Rate" shall mean the following rate per annum as is
applicable based upon the Percentage Usage as of the date of determination:
------------------------------------------------------------------------------------
Percentage Usage Facility Fee Rate
------------------------------------------------------------------------------------
Less than or equal to 60% 0.250%
------------------------------------------------------------------------------------
Greater than 60%,but less than 0.300%
or equal to 75%
------------------------------------------------------------------------------------
Greater than 75%,but less than 0.350%
or equal to 90%
------------------------------------------------------------------------------------
Greater than 90%,but less than 0.400%
or equal to 100%
------------------------------------------------------------------------------------
Greater than 100% 0.500%
------------------------------------------------------------------------------------
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (i) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions for the next preceding day as so published on the
next succeeding Business Day, and (ii) if such rate is not so published for any
Business Day, the Federal Funds Rate for such day shall be the average rate
charged to the Administrative Agent on such day on such similar transactions as
determined by the Administrative Agent.
7
14
"Fee Letters" shall mean (i) that certain letter agreement dated
November 20, 1998 among, inter alia, the Company, the Administrative Agent and
an Affiliate of the Administrative Agent; and (ii) that certain letter agreement
dated November 20, 1998 among the Company and the Administrative Agent.
"Financial Statements" shall mean the annual consolidated financial
statements of the Company and its Consolidated Subsidiaries described or
referred to in Section 7.02(a).
"GAAP" shall mean generally accepted accounting principles as in effect
on the Effective Date.
"Governmental Authority" shall mean (a) any governmental authority
wherever located, including the federal governments of the United States, Canada
and any other foreign country or nation, and any state, county, parish,
province, municipal and political subdivisions in which any Property of the
Company or any of its Subsidiaries is located or which exercises jurisdiction
over any such Property; and (b) any court, agency, department, commission,
board, bureau or instrumentality of any of them which exercises jurisdiction
over any such Person or Property.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other direction or requirement
(including, without limitation, Environmental Laws, energy regulations and
occupational, safety and health standards or controls) of any Governmental
Authority.
"Guaranty Agreement" shall mean the guaranty agreement executed by
OEI-Louisiana in form and substance satisfactory to the Administrative Agent and
the Documentation Agent guarantying payment of the Indebtedness.
"Havre" shall mean Havre Pipeline Company, LLC, a limited liability
company established under the laws of the State of Texas of which the Company or
a Subsidiary of the Company is the manager and a majority member.
"Havre Credit Facility" shall mean any credit agreement by and between
Havre and the lender or lenders party thereto, the promissory notes described
therein, the Pledge and Estoppel Agreement executed by OEI-Louisiana (as
successor by merger to UMC), as assumed by OERI, in connection therewith, all
guarantees of any of the foregoing by the Company or any of its Subsidiaries and
all amendments, restatements, refinancings (whether with the same lender or
other lenders) and other modifications (including increases so long as the
aggregate principal amount owing in connection therewith is less than
$20,000,000) to the foregoing from time to time.
"Highest Lawful Rate" shall mean, with respect to each Lender, the
maximum nonusurious interest rate, if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received on the Notes or on
other Indebtedness under laws applicable to such Lender which are presently in
effect or, to the extent allowed by law, under such applicable laws which may
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws now allow.
"Hydrocarbon Interests" shall mean all rights, titles, interests and
estates in and to oil and gas leases; oil, gas and mineral leases; other liquid
or gaseous hydrocarbon leases; production sharing contracts or other petroleum
concessions, licenses or similar agreements made by or on behalf of a
8
15
sovereign; mineral fee interests; overriding royalty and royalty interests; net
profit interests and production payment interests in Hydrocarbons, including any
reserve or residual interest of whatever nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all products refined therefrom and all other minerals.
"Indebtedness" shall mean any and all amounts owing or to be owing by
the Company or OEI-Louisiana to any Agent and/or the Lenders in connection with
the Notes or any Loan Document, including this Agreement and the Letter of
Credit Agreements, and all renewals, extensions and/or rearrangements thereof.
"Indemnity Matters" shall mean actions, suits, proceedings (including
any investigations, litigation or inquiries), claims, demands, causes of action,
costs, losses, liabilities, damages or expenses of any kind or nature
whatsoever.
"Indentures" shall mean any or all of the following, as the context
requires: (a) the 95 Indenture, (b) the 96 Indenture, (c) the 97 Indenture and
(d) the 98 Indentures.
"Initial Reserve Reports" shall mean: the reports of (a) ▇▇▇▇▇ ▇▇▇▇▇
Company Petroleum Engineers and ▇▇▇▇▇▇▇▇ & Associates Consultants Ltd. with
respect to Oil and Gas Properties formerly owned by UMC evaluating such
Properties as of January 1, 1998; (b) ▇▇▇▇▇▇▇▇ & Associates Consultants Ltd.
with respect to the Oil and Gas Properties of Ocean Canada evaluating such
Properties as of January 1, 1998; (c) Netherland, ▇▇▇▇▇▇ & Associates, Inc. with
respect to the Oil and Gas Properties of certain Subsidiaries of the Company
named therein conducting operations in Africa evaluating such Properties as of
January 1, 1998; (d) Netherland, ▇▇▇▇▇▇ & Associates with respect to the Oil and
Gas Properties of the Company evaluating such Properties as of December 31,
1997; and (e) the chief petroleum engineer of the Company with respect to its
Oil and Gas Properties evaluating such Properties as of December 31, 1997.
"Intercreditor Agreement" shall mean that certain Amended and Restated
Intercreditor Agreement dated as of July 8, 1998, among the Agents, the Lenders,
the Canadian Agent, the Canadian Lenders, the Company, OEI-Louisiana and Ocean
Canada, as amended from time to time.
"Interest Coverage Ratio" shall mean the ratio, calculated as of the
last day of any fiscal quarter of the Company, of (a) EBITDA for the immediately
preceding four (4) fiscal quarters of the Company and its Consolidated
Restricted Subsidiaries ending on the date of determination to (b) interest
expenses (including capitalized interest expenses and excluding to the extent
included in the calculation of interest expenses, amortization of capitalized
debt issuance costs of the Company and its Consolidated Restricted Subsidiaries)
on all Debt of the Company and its Consolidated Restricted Subsidiaries for the
immediately preceding four (4) fiscal quarters of the Company and its
Consolidated Restricted Subsidiaries ending on the date of determination, after
giving effect to the pooling of interests treatment of the Merger; provided that
if the Company or any Restricted Subsidiary shall acquire any Person or dispose
of any Subsidiary or acquire or dispose of any Properties outside the ordinary
course of business or engage in any other material transaction, interest expense
for the preceding four fiscal quarter period prior to such transaction may be
determined on a pro forma basis as if such transaction had occurred at the start
of such four fiscal quarter period.
9
16
"Interest Period" shall mean, with respect to any Eurodollar Loan, the
period commencing on the date such Eurodollar Loan is made or converted from a
Base Rate Loan or the last day of the next preceding Interest Period with
respect to such Loan and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as the Company may
select as provided in Section 2.02 (or, in the case of a Loan that is a
Eurodollar Loan, such longer period as may be requested by the Company and
agreed to by all of the Lenders, except that each Interest Period which
commences on the last Business Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent calendar
month.
Notwithstanding the foregoing (unless agreed to by the Company and all
of the Lenders): (i) no Interest Period for a Loan may end after the Termination
Date; (ii) each Interest Period which would otherwise end on a day which is not
a Business Day shall end on the next succeeding Business Day unless the next
succeeding Business Day falls in the next succeeding calendar month, then on the
next preceding Business Day; and (iii) notwithstanding clause (i) above, no
Interest Period for any Eurodollar Loans shall have a duration of less than one
month and, if the Interest Period for any Eurodollar Loans would otherwise be a
shorter period, such Loans shall not be available hereunder.
"LC Exposure" shall mean at any time the aggregate undrawn face amount
of all outstanding Letters of Credit and the aggregate of all amounts drawn
under Letters of Credit and not yet reimbursed or funded as a Loan pursuant to
Section 4.07(b), minus the aggregate face amount of all letters of credit issued
for the benefit of the Company or the Administrative Agent, which in each
instance has been specifically accepted by the Administrative Agent as
acceptable collateral supporting the Letters of Credit.
"LC Fee Rate" shall mean, as of any date of determination, the
Applicable Margin for Eurodollar Loans as of such date.
"Letter of Credit Agreements" shall mean the written agreements between
the Company and the Administrative Agent or one of its Affiliates executed or
hereafter executed in connection with the issuance by the Administrative Agent
or its Affiliate of the Letters of Credit, such agreements to be on the
Administrative Agent's or such Affiliate's customary form for letters of credit
of comparable amount and purpose, as from time to time in effect or as otherwise
agreed to by the Company and the Administrative Agent or its Affiliate.
"Letters of Credit" shall mean: (a) the letters of credit hereafter
issued by the Administrative Agent or one of its Affiliates on behalf of the
Lenders pursuant to Section 2.01(b), (b) all letters of credit heretofore issued
by the Administrative Agent, as agent, or one of its Affiliates under the Prior
Credit Agreement, which are outstanding on the Effective Date, and (c) all
reimbursement obligations pertaining to any such letters of credit; and "Letter
of Credit" shall mean any one of the Letters of Credit and the reimbursement
obligation pertaining thereto.
"Liens" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge (including, without limitation, production payments and the like
payable out of Oil and Gas Properties), security interest or encumbrance of any
kind in respect of such asset. For the purposes of this Agreement, the Company
and its Subsidiaries shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
10
17
"Lion" shall mean Lion GPL, S.A.
"Loan Documents" shall mean this Agreement, the Notes, the Letter of
Credit Agreements, the Guaranty Agreement, the Fee Letters, the agreements or
instruments described or referred to in Exhibit F, and any and all other
agreements or instruments now or hereafter executed and delivered by the Company
or any other Person (other than participation or similar agreements between any
Lender and any other lender or creditor with respect to any Indebtedness) in
connection with, or as security for the payment or performance of, the Notes,
the Letter of Credit Agreements or this Agreement, as such agreements may be
amended or supplemented from time to time.
"Loans" shall mean the loans provided for by Section 2.01.
"Majority Lenders" shall mean: (a) if no Event of Default has occurred
and is continuing, Lenders (who are not in default of their obligations under
this Agreement ) having, without duplication, greater than fifty percent (50%)
of the Aggregate Commitments; and (b) if an Event of Default has occurred and is
continuing, Lenders (who are not in default of their obligations under this
Agreement ) holding (or, as to Letters of Credit, participating in) greater than
fifty percent (50%) of the outstanding aggregate principal amount of the Loans
and Letters of Credit (without regard to any sale by a Lender of a participation
in any Loan or Letter of Credit).
"Material Adverse Effect" shall mean any material and adverse effect
on: (a) the business, condition (financial or otherwise), results of operations,
assets, liabilities or prospects of the Company and its Restricted Subsidiaries
on a consolidated basis, (b) the ability of the Company and its Restricted
Subsidiaries to perform their obligations under the Loan Documents to which they
are party, taken as a whole, or (c) the rights and remedies of the Agents and
the Lenders under the Loan Documents, taken as a whole.
"Merger" shall mean the merger pursuant to the Merger Agreement of
United Meridian into the Company, with the Company being the surviving Person.
"Merger Agreement" shall mean that certain Agreement and Plan of Merger
dated as of December 22, 1997 between the Company and United Meridian, as
amended by amendments thereto dated as of January 7, 1998 and February 20, 1998.
"Multiemployer Plan" shall mean a Plan defined as such in Section 3(37)
of ERISA to which contributions have been made by the Company or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"95 Indenture" shall mean that certain Indenture among the Company (as
successor by merger to United Meridian), as issuer, OEI-Louisiana (as successor
by merger to UMC), as initial subsidiary guarantor, and U.S. Bank Trust National
Association (formerly known as First Bank of New York, National Association), as
trustee, dated as of October 30, 1995, providing for the issuance of the
Company's $150,000,000 10-3/8% Senior Subordinated Notes due 2005, as amended by
the First Supplemental Indenture thereto dated as of November 4, 1997 and the
Second Supplemental Indenture thereto dated as of March 27, 1998, and all notes
or securities issued under any of the foregoing, any subsidiary guarantees
issued pursuant to the terms of any of the foregoing, and all amendments and
supplements to the foregoing permitted under Section 9.19(b) or a consent
thereunder.
11
18
"96 Indenture" shall mean that certain Indenture dated as of September
26, 1996 among the Company (formerly known as ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.), as issuer,
the subsidiary guarantor named therein, and State Street Bank and Trust Company,
as trustee, providing for the issuance of the Company's $160,000,000 9-3/4%
Senior Subordinated Notes due 2006, as amended by the First Supplemental
Indenture thereto dated as of March 27, 1998, and all notes or securities issued
under any of the foregoing, any subsidiary guarantees issued pursuant to the
terms of any of the foregoing, and all amendments and supplements to the
foregoing permitted under Section 9.19(b) or a consent thereunder.
"97 Indenture" shall mean that certain Indenture dated as of July 2,
1997 among the Company, as issuer, the subsidiary guarantor named therein, and
State Street Bank and Trust Company, as trustee, providing for the issuance of
the Company's $200,000,000 8-7/8% Senior Subordinated Notes due 2007, as amended
by the First Supplemental Indenture thereto dated as of March 27, 1998, and all
notes or securities issued under any of the foregoing, any subsidiary guarantees
issued pursuant to the terms of any of the foregoing, and all amendments and
supplements to the foregoing permitted under Section 9.19(b) or a consent
thereunder.
"98 Indentures" shall mean the 98 Senior (7-year) Indenture, 98 Senior
(20-year) Indenture and the 98 Senior Subordinated Indenture.
"98 Senior (7-year) Indenture" shall mean shall mean that certain
Indenture dated as of July 8, 1998 among the Company, as issuer, the subsidiary
guarantor named therein, and Norwest Bank Minnesota, National Association, as
trustee, providing for the issuance of the Company's $125,000,000 7-5/8% Senior
Notes due 2005 and all notes or securities issued under any of the foregoing,
any subsidiary guarantees issued pursuant to the terms of any of the foregoing,
and all amendments and supplements to the foregoing permitted under Section
9.19(b) or a consent thereunder.
"98 Senior (20-year) Indenture" shall mean shall mean that certain
Indenture dated as of July 8, 1998 among the Company, as issuer, the subsidiary
guarantor named therein, and Norwest Bank Minnesota, National Association, as
trustee, providing for the issuance of the Company's $125,000,000 8-1/4% Senior
Notes due 2018 and all notes or securities issued under any of the foregoing,
any subsidiary guarantees issued pursuant to the terms of any of the foregoing,
and all amendments and supplements to the foregoing permitted under Section
9.19(b) or a consent thereunder.
"98 Senior Subordinated Indenture" shall mean that certain Indenture
dated as of July 8, 1998 among the Company, as issuer, the subsidiary guarantor
named therein, U.S. Bank Trust National Association, as trustee, providing for
the issuance of the Company's $250,000,000 8-3/8% Senior Subordinated Notes due
2008 and all notes or securities issued under any of the foregoing, any
subsidiary guarantees issued pursuant to the terms of any of the foregoing, and
all amendments and supplements to the foregoing permitted under Section 9.19(b)
or a consent thereunder.
"Non-recourse" with respect to an obligation and a Person shall mean
that such Person has no liability to the holder of such obligation for the
payment or repayment of such obligation, except that such Person may have
liability to the holder of such obligation for damages with respect to such
obligation arising out of fraudulent acts or omissions, willful
misrepresentations, willful misconduct and similar acts or omissions by such
Person.
12
19
"Non-Recourse Debt" shall mean Debt as to which neither the Company nor
any of its Restricted Subsidiaries (a) provides any guarantee or credit support
of any kind (including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Debt), or (b) is directly or indirectly liable
(as guarantor or otherwise), in each case, other than Debt permitted by Section
9.01(m).
"Note" shall mean a promissory note, described in Section 2.07(a) and
being substantially in the form of Exhibit A, issued by the Company to the order
of any Lender evidencing the Loans made to the Company by such Lender, together
with any and all renewals, extensions for any period, increases, rearrangements
or replacements thereof.
"Ocean Canada" shall mean Ocean Energy Resources Canada, Ltd., a
company amalgamated under the laws of the Province of British Columbia.
"OEI-Louisiana" shall mean Ocean Energy, Inc., a corporation duly
formed and existing under the laws of the state of Louisiana, which is a
wholly-owned Subsidiary of the Company.
"OERI" shall mean Ocean Energy Resources, Inc., a Delaware corporation,
formerly known as Norfolk Holdings Inc., which is the parent of Ocean Canada and
a Subsidiary of OEI-Louisiana.
"Oil and Gas Properties" shall mean Hydrocarbon Interests; the
Properties now or hereafter pooled or unitized with Hydrocarbon Interests; all
presently existing or future unitization or pooling agreements and declarations
of pooled units and the units created thereby (including without limitation all
units created under orders, regulations and rules of any Governmental Authority
having jurisdiction) which may affect all or any portion of the Hydrocarbon
Interests; all operating agreements, contracts and other agreements which relate
to any of the Hydrocarbon Interests or the production, sale, purchase, exchange
or processing of Hydrocarbons from or attributable to such Hydrocarbon
Interests; all Hydrocarbons in and under and which may be produced and saved or
attributable to the Hydrocarbon Interests, the lands covered thereby and all oil
in tanks and all rents, issues, profits, proceeds, products, revenues and other
incomes from or attributable to the Hydrocarbon Interests; all tenements,
hereditaments, appurtenances and Properties in any way appertaining, belonging,
affixed or incidental to the Hydrocarbon Interests, Properties, rights, titles,
interests and estates described or referred to above, including any and all
Property, real or personal, now owned or hereinafter acquired and situated upon,
used, held for use or useful in connection with the operating, working or
development of any of such Hydrocarbon Interests or Property (excluding drilling
rigs, automotive equipment or other personal property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil ▇▇▇▇▇, gas ▇▇▇▇▇, injection ▇▇▇▇▇ or other ▇▇▇▇▇,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.
"Pari Passu Debt" shall mean, as of any date of determination, any Debt
of the Company or OEI-Louisiana that is pari passu in right of payment to the
Indebtedness other than Debt outstanding under Section 9.01(j), (k), (l) and (n)
(as long as any Debt incurred under clause (n) is contingent, for example, the
undrawn amount of outstanding letters of credit).
13
20
"Partnerships" shall mean the general and limited partnerships listed
on Exhibit E.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Percentage Usage" shall mean as of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the sum of Loans,
the LC Exposure outstanding as of such date of determination and all Pari Passu
Debt outstanding as of such date of determination and the denominator of which
is the Threshold Amount in effect as of such date of determination.
"Person" shall mean any individual, corporation, limited liability
company, voluntary association, partnership, joint venture, trust,
unincorporated organization or government or any agency, instrumentality or
political subdivision thereof, or any other form of entity.
"Plan" shall mean an employee pension benefit or other plan established
or maintained by the Company or any ERISA Affiliate and which is covered by
Title IV of ERISA, other than a Multiemployer Plan.
"Pledge of Production and Trust Agreements" shall mean collectively,
(i) that certain Pledge of Production Proceeds and Trust Agreements dated as of
May 12, 1993 among Shell Offshore Inc., OEI-Louisiana and First National Bank of
Commerce, New Orleans, Louisiana, as Trustee, as the same may from time to time
be amended, and (ii) that certain Pledge of Production Proceeds and Trust
Agreements dated as of May 12, 1992 among Shell Offshore Inc., OEI-Louisiana and
First National Bank of Commerce, New Orleans, Louisiana, as Trustee, as amended,
and as the same may be further amended from time to time.
"Post-Default Rate" shall mean, in respect of any principal of any Loan
or any other amount payable by the Company or OEI-Louisiana under this
Agreement, any Note or any Loan Document which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period commencing on the due date until such amount is paid in full or the
default is cured or waived equal to 2% per annum above the Base Rate as in
effect from time to time plus the Applicable Margin (if any), but in no event to
exceed the Highest Lawful Rate; provided that, if such amount in default is
principal of a Eurodollar Loan and the due date is a day other than the last day
of the Interest Period therefor, the "Post-Default Rate" for such principal
shall be, for the period commencing on the due date and ending on the last day
of the Interest Period therefor, 2% per annum above the interest rate for such
Loan as provided in Section 3.02(a), but in no event to exceed the Highest
Lawful Rate, and thereafter, the rate provided for above in this definition.
"Prime Rate" shall mean the rate of interest from time to time
announced by the Administrative Agent at the Principal Office as its prime
commercial lending rate. Such rate is set by the Administrative Agent as a
general reference rate of interest, taking into account such factors as it may
deem appropriate, it being understood that many of the Administrative Agent's
commercial or other loans are priced in relation to such rate, that it is not
necessarily the lowest or best rate actually charged to any customer and that
the Administrative Agent may make various commercial or other loans at rates of
interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the
Administrative Agent, presently located at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
14
21
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last day of each March, June,
September and December in each year, commencing December 31, 1998; provided that
if any such day is not a Business Day, then such Quarterly Date shall be the
next succeeding Business Day.
"Redetermination Date" shall mean the annual, semi-annual or other date
that the redetermined Borrowing Base becomes effective.
"Redetermination Period" shall mean the period between any two
consecutive Redetermination Dates, regardless of the length of such period.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"Regulations T, U and X" shall mean Regulations T, U and X of the Board
of Governors of the Federal Reserve System (or any successor), as the same may
be amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Lender, any change
after the date of this Agreement in United States Federal, state or foreign law
or regulations (including Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a class of
lenders or insurance companies, including such Lender or its Applicable Lending
Office, of or under any United States Federal, state or foreign law or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Required Lenders" shall mean: (a) if no Event of Default has occurred
and is continuing, Lenders (who are not in default of their obligations under
this Agreement ) having, without duplication, greater than sixty-six and
two-thirds percent (66-2/3%) of the Aggregate Commitments; and (b) if an Event
of Default has occurred and is continuing, Lenders (who are not in default of
their obligations under this Agreement ) holding (or, as to Letters of Credit,
participating in) greater than sixty-six and two-thirds percent (66-2/3%) of the
outstanding aggregate principal amount of the Loans and Letters of Credit
(without regard to any sale by a Lender of a participation in any Loan or Letter
of Credit).
"Required Payment" shall have the meaning assigned to that term in
Section 4.04.
"Reserve Report" shall mean a report, in form and substance reasonably
satisfactory to the Technical Agents, setting forth, as of each January 1 and
July 1 (or such other date in the event of an unscheduled redetermination): (i)
the oil and gas reserves attributable to Oil and Gas Properties of the Company
and its Restricted Subsidiaries which the Company desires to include in the
Borrowing Base, together with a projection of the rate of production and future
net income, taxes, operating expenses and capital expenditures with respect
thereto as of such date, based upon the pricing assumptions consistent with SEC
reporting requirements at the time; and (ii) such other information as the
Technical Agents may reasonably request. The term "Reserve Report" shall also
include the information to be provided by the Company pursuant to Section
8.05(c).
15
22
"Restricted Subsidiary" shall at all times mean OEI-Louisiana, OERI,
Ocean Canada and any other Subsidiary of the Company, whether existing on or
after the Effective Date, unless such Subsidiary is (i) an Unrestricted
Subsidiary as of the Effective Date or is thereafter designated as an
Unrestricted Subsidiary in accordance with Section 9.21 or (ii) a Subsidiary of
an Unrestricted Subsidiary.
"Risk Management Agreements" shall mean any commodity, interest rate or
currency swap, rate cap, rate floor, rate collar, forward agreement or other
exchange, price or rate protection or risk management agreements or any option
with respect to any such transaction.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency thereto.
"SEC Value" shall mean the future net revenues before income taxes from
proved reserves, estimated assuming that oil and natural gas prices and
production costs remain constant, then discounted at the rate of 10% per year to
obtain the present value.
"Subordinated Debt" shall mean: (a) the Debt of the Company and
OEI-Louisiana under the 95 Indenture, the 96 Indenture, the 97 Indenture, the 98
Senior Subordinated Indenture and other Debt permitted under Section 9.01(e)(i);
(b) the obligations under or in connection with the Pledge of Production and
Trust Agreements; and (c) any Debt of the Company or OEI-Louisiana incurred in
accordance with the terms of Section 9.01(e)(iii).
"Subsidiary" shall mean, with respect to any Person, any corporation or
limited liability company of which at least a majority of the outstanding shares
of stock or interests having by the terms thereof ordinary voting power to elect
a majority of the board of directors of such corporation or a manager of such
limited liability company (irrespective of whether or not at the time stock or
interests of any other class or classes shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more of its Subsidiaries
or by such Person and one or more of the Subsidiaries.
"Tax" shall mean any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and additions
thereto) that is imposed by any government or other taxing authority in respect
of any payment under this Agreement other than a stamp, registration,
documentation or similar tax.
"Tax Partnerships" shall mean partnerships or joint ventures arising
out of routine joint operating agreements or farmout agreements entered into
with the Company or any of its Restricted Subsidiaries with respect to Oil and
Gas Properties.
"Technical Agents" shall mean Chase Bank of Texas, National
Association, ▇▇▇▇▇▇ Guaranty Trust Company of New York, Bank of America National
Trust & Savings Association, Barclays Bank PLC, Paribas, Societe Generale,
Southwest Agency and Credit Suisse First Boston.
"Termination Date" shall mean March 31, 2003, unless the Commitments
are sooner terminated pursuant to Section 2.03(b) or Section 10.01, or extended
pursuant to Section 2.03(a).
"Threshold Amount" shall mean (i) during the period from and including
the Effective Date to and including the date of the redetermination of the
Borrowing Base scheduled to occur March 31,
16
23
1999, the amount determined as such by the Technical Agents and approved by the
requisite Lenders pursuant to Section 2.09(a), and (ii) thereafter, the amount
equal to the Borrowing Base.
"Total Debt" shall mean as of any date of determination, all Debt of
the Company and its Consolidated Restricted Subsidiaries of the types described
in clauses (a), (b) (but only letters of credit and bankers' acceptances), (c),
(d), (e) and (f) of the definition of "Debt", determined on a consolidated basis
in accordance with GAAP.
"Type" shall mean, with respect to any Loan, a Eurodollar Loan or a
Base Rate Loan, each being a "Type" of Loan.
"UMC" shall mean UMC Petroleum Corporation, a Delaware corporation
which merged into OEI-Louisiana in connection with the Merger Agreement.
"United Meridian" shall mean United Meridian Corporation, a Delaware
corporation which merged into the Company pursuant to the Merger Agreement.
"Unrestricted Subsidiary" shall mean, as of the Effective Date, each
Subsidiary of the Company specified as such on Exhibit D, and any other
Subsidiary of the Company which (i) the Board of Directors of the Company has
determined will be designated an Unrestricted Subsidiary as provided in Section
9.21 and (ii) is a Subsidiary of an Unrestricted Subsidiary.
"Voting Stock" shall mean, with respect to any Person, any class or
classes of capital stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of any Person (irrespective of whether
or not, 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).
"Wholly Owned Restricted Subsidiary" shall mean any Restricted
Subsidiary to the extent (i) all of the capital stock or other ownership
interests in such Restricted Subsidiary, other than any directors' qualifying
shares mandated by applicable law, is owned directly or indirectly by the
Company or (ii) such Restricted Subsidiary is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
foreign jurisdiction to be partially owned by the government of such foreign
jurisdiction or individuals or corporate citizens of such foreign jurisdiction
in order for such Restricted Subsidiary to transact business in such foreign
jurisdiction, provided that the Company, directly or indirectly, owns the
remaining capital stock or ownership interest in such Restricted Subsidiary and,
by contract or otherwise, controls the management and business of such
Restricted Subsidiary to substantially the same extent as if such Restricted
Subsidiary were a wholly owned Subsidiary.
SECTION 1.03 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to any Agent or the Lenders hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent with the
Financial Statements. Unless otherwise specified, all amounts referred to herein
and in the other Loan Documents are in Dollars.
17
24
ARTICLE II
COMMITMENTS
SECTION 2.01 LOANS AND LETTERS OF CREDIT.
(a) LOANS.
(i) Each Lender severally agrees, on the terms and conditions of this
Agreement, to make revolving credit loans (each a "Loan") to the
Company during the period from and including the Effective Date to and
including the Termination Date, in an aggregate principal amount at any
one time outstanding up to but not exceeding such Lender's Commitment
as then in effect minus such Lender's Commitment Percentage of the LC
Exposure; provided that the aggregate principal amount of all Loans
made by all of the Lenders hereunder at any one time outstanding shall
not exceed the Available Commitment as then in effect minus the LC
Exposure then outstanding; and provided further that the aggregate
principal amount of all Loans made by all of the Lenders hereunder at
any one time outstanding shall not exceed an amount equal to the excess
of the Borrowing Base over the sum of the LC Exposure and the amount of
Pari Passu Debt then outstanding. Subject to the terms of this
Agreement, during the period from the Effective Date to and including
the Termination Date, the Company may borrow, repay and reborrow the
amount of the Available Commitment as then in effect. Loans may be Base
Rate Loans or Eurodollar Loans.
(ii) Unless consented to in writing by the Administrative Agent, no
more than seven (7) Eurodollar Loans may be outstanding from each
Lender at any time. For purposes of this Section 2.01(a)(ii),
Eurodollar Loans having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate
Loans.
(b) LETTERS OF CREDIT.
(i) During the period from and including the Effective Date to and
including the Termination Date, the Administrative Agent agrees, on
behalf of the Lenders, to extend credit to the Company by issuing,
renewing, extending or reissuing Letters of Credit for the account of
the Company or any of its Subsidiaries; provided that the aggregate LC
Exposure at any one time outstanding shall not exceed the lesser of (A)
the Available Commitment as then in effect minus the aggregate amount
of all Loans then outstanding or (B) $50,000,000; and provided further
that the aggregate principal amount of the LC Exposure hereunder at any
one time shall not exceed an amount equal to the excess of the
Borrowing Base over the sum of the Loans and the amount of Pari Passu
Debt then outstanding.
(ii) Each of the Letters of Credit shall (A) be issued by the
Administrative Agent or The Chase Manhattan Bank, an Affiliate of the
Administrative Agent, (B) contain such terms and provisions as are
reasonably required by the Administrative Agent in accordance with its
customary procedures, (C) be for the account of the Company or one of
its Subsidiaries, and (D) expire not later than the earlier of three
(3) years after the issue date of such Letter of Credit or five (5)
days before the Termination Date.
(iii) In conjunction with the issuance of a Letter of Credit, the
Company shall execute a Letter of Credit Agreement. In the event of any
conflict between any provision of a Letter of
18
25
Credit Agreement and this Agreement, the Company, the Agents and the
Lenders hereby agree that the provisions of this Agreement shall
govern. Such conflicts include, without limitation, provisions in a
Letter of Credit Agreement providing for an interest rate different
from the interest rate provided in this Agreement and provisions in a
Letter of Credit Agreement requiring or relating to collateral to
secure the obligations thereunder.
(c) LOANS UNDER PRIOR CREDIT AGREEMENT. On the Effective Date:
(i) the Company shall pay all accrued and unpaid fees outstanding under
the Prior Credit Agreement for the account of each "Lender" under the
Prior Credit Agreement;
(ii) to the extent outstanding on the Effective Date, each "Base Rate
Loan" and "Eurodollar Loan" under the Prior Credit Agreement shall be
repaid and the Company shall pay to the lenders thereunder any amounts
due under Section 5.05 of the Prior Credit Agreement;
(iii) all letters of credit issued under the Prior Credit Agreement
(which are scheduled on Schedule 2.01) shall be deemed to be issued
under Section 2.02(d) hereof as of the Effective Date; and
(iv) the Prior Credit Agreement and the commitments thereunder shall be
superseded by this Agreement and such commitments shall be amended and
restated as set forth herein.
SECTION 2.02 BORROWINGS, CONTINUATIONS AND CONVERSIONS; ISSUANCE OF
LETTERS OF CREDIT.
(a) BORROWINGS. The Company shall give the Administrative Agent (which
shall promptly notify the Lenders) advance notice as hereinafter provided of
each borrowing, continuation, and conversion hereunder of a Loan, which shall
specify the aggregate amount of such borrowing, continuation or conversion, the
Type and date (which shall be a Business Day) of the Loans to be borrowed,
continued or converted, and (in the case of Eurodollar Loans) the duration of
the Interest Period therefor.
(b) MINIMUM AMOUNTS. All Base Rate Loans (as part of the same
borrowing) shall be in aggregate amounts among all Lenders of at least
$1,000,000 (or whole multiples thereof) or the remaining unused portion of the
Commitments. All Eurodollar Loans (as part of the same borrowing) shall be in
aggregate amounts among all Lenders of at least $3,000,000 (or a whole multiple
of $1,000,000 in excess thereof).
(c) NOTICES, ETC. FOR LOANS. All borrowings, continuations and
conversions relating to Loans shall require advance written notice from the
Company to the Administrative Agent, in the form of Exhibit C, or such other
form as may be accepted by the Administrative Agent from time to time, which in
each case shall be irrevocable and effective only upon receipt by the
Administrative Agent not later than (i) in the case of a Base Rate Loan, 11:00
a.m. Houston time on the date of such borrowing, continuation or conversion; and
(ii) in the case of a Eurodollar Loan, 12:00 noon Houston time on a day which is
not less than three (3) Business Days prior to the date of such borrowing,
continuation or conversion. Not later than 12:00 noon Houston time on the date
specified for each borrowing hereunder of a Loan, each Lender shall make
available the amount of the Loan to be made by such Lender on such date to the
Administrative Agent, at an account maintained by the Administrative Agent at
the Principal Office, in immediately available funds for the account of the
19
26
Company. The amounts so received by the Administrative Agent shall, subject to
the terms and conditions of this Agreement, be made available to the Company by
depositing the same, in immediately available funds, in an account of the
Company designated by the Company and maintained with the Administrative Agent
at the Principal Office.
(d) LETTERS OF CREDIT. The Company shall give the Administrative Agent
(which shall promptly notify the Lenders) advance notice as provided in Section
2.02(c) not less than one (1) Business Day prior thereto of each request for the
issuance, renewal, or extension of a Letter of Credit hereunder which request
shall specify the amount of such Letter of Credit, the date (which shall be a
Business Day) such Letter of Credit is to be issued, renewed or extended, the
duration thereof, the beneficiary thereof, and such other terms as the
Administrative Agent may reasonably request, all of which shall be reasonably
satisfactory to the Administrative Agent. Subject to the terms and conditions of
this Agreement, on the date specified for the issuance, renewal or extension of
a Letter of Credit, the Administrative Agent shall issue such Letter of Credit
to the beneficiary thereof.
(e) CONTINUATION OPTIONS. Subject to the terms of this Agreement, the
Company may elect to continue all or any part of any Eurodollar Loan beyond the
expiration of the then current Interest Period relating thereto by giving
advance notice to the Administrative Agent of such election, specifying the
amount of such Eurodollar Loan to be continued and the Interest Period therefor.
In the absence of such a timely and proper election, the Company shall be deemed
to have elected to convert such Eurodollar Loan to a Base Rate Loan. All or any
part of any Eurodollar Loan may be continued as provided herein, provided that
(i) the principal amount of all or any part of a Loan so continued shall be not
less than $3,000,000 in the aggregate for all Lenders and (ii) no Default shall
have occurred and be continuing. If a Default shall have occurred and be
continuing, each Eurodollar Loan shall be converted to a Base Rate Loan on the
last day of the Interest Period applicable thereto.
(f) CONVERSION OPTIONS. The Company may elect to convert any Eurodollar
Loan on the last day of the then current Interest Period relating thereto to a
Base Rate Loan by giving advance notice to the Administrative Agent of such
election. Subject to the terms of this Agreement, the Company may elect to
convert all or any part of a Base Rate Loan at any time and from time to time to
a Eurodollar Loan by giving advance notice to the Administrative Agent of such
election. All or any part of any outstanding Loan may be converted as provided
herein, provided that any conversion of any Base Rate Loan into a Eurodollar
Loan shall be (as to each such Loan into which there is a conversion for an
applicable Interest Period) in the principal amount not less than $3,000,000 in
the aggregate for all Lenders. If no Default shall have occurred and be
continuing, each Loan may be converted as provided in this Section. If a Default
shall have occurred and be continuing, no Loan may be converted into a
Eurodollar Loan.
SECTION 2.03 EXTENSIONS AND CHANGES OF COMMITMENTS.
(a) EXTENSION OF TERMINATION DATE.
(i) At any time during the 60-day period beginning February
1st of a year and ending on April 1st of such year, the Company may request in
writing that, in connection with the forthcoming redetermination of the
Borrowing Base, the Lenders extend the Termination Date for a period of one (1)
additional year; provided, that any such extension shall require the consent of
all of the Lenders, which consent may be withheld in each such Person's sole
discretion; and provided, further, that if any
20
27
Lender has not responded to such request in writing within 45 days after receipt
of the written request of the Company by the Administrative Agent, such failure
shall be deemed a denial of said request.
(ii) Notwithstanding the foregoing clause (i), if the Required
Lenders (but not all Lenders) have agreed to extend the then applicable
Termination Date as provided in Section 2.03(a)(i), then the Company may
terminate, in whole but not in part, the Commitment of any Lender which has
refused to grant such extension (a "Terminated Lender") upon five (5) Business
Days' notice, during the period commencing on the expiration of the 45-day
notice period referred to above (or, if earlier, the date of receipt by the
Company of notice of such Terminated Lender's refusal) and ending on the date
thirty (30) days after the end of such 45-day period, by giving written notice
to the Terminated Lender and the Administrative Agent (such notice referred to
herein as a "Notice of Termination"). In order to effect the termination of the
Commitment of the Terminated Lender, the Company shall: (1) obtain an agreement
with one or more Lenders to increase its respective Commitment and/or (2)
request any one or more other financial institutions to become parties to this
Agreement in place of such Terminated Lender; provided, that any such financial
institution is reasonably acceptable to the Administrative Agent and becomes
party to this Agreement by executing an Assignment and Acceptance (the Lender or
other financial institutions that agree to accept in whole or in part the
Commitment of the Terminated Lender being referred to herein as the "Replacement
Lender") and to assume the Commitment and Loans of the Terminated Lender, such
that the aggregate increased and/or accepted Commitments of the Replacement
Lender(s) under clauses (1) and (2) equal the Commitment of the Terminated
Lender. If the Company is unable to obtain one or more Replacement Lenders to
accept the Commitment and to assume the Loans of the Terminated Lender, then, if
no Default or Event of Default has occurred at the time of such proposed
extension, the Company shall either elect by written notice to the
Administrative Agent to forego the requested extension or reduce the Aggregate
Commitments by an amount equal to the Commitment of the Terminated Lender. (The
failure to give such notice will be deemed an election by the Company to forego
the requested extension.) If a Default or Event of Default has occurred and is
continuing, no extension will be permitted without the consent of all Lenders.
Any assignment to a Replacement Lender shall be effected pursuant to Section
12.06(b).
(b) OPTIONAL REDUCTION. The Company shall have the right to terminate
or to reduce the Aggregate Commitments at any time or from time to time upon not
less than one (1) Business Day's prior written notice to the Administrative
Agent (which shall promptly notify the Lenders) of each such termination or
reduction, which notice shall specify the effective date thereof and the amount
of any such reduction (which shall not be less than $5,000,000, or any whole
multiple of $1,000,000 in excess thereof). Such notice shall be irrevocable and
effective only upon receipt by the Administrative Agent.
(c) REINSTATEMENT. The Aggregate Commitments once terminated or reduced
may not be reinstated. The amount of the Available Commitment may increase or
decrease from time to time in accordance with the terms hereof, including, but
not limited to Section 2.09.
SECTION 2.04 FACILITY FEE AND OTHER FEES.
(a) FACILITY FEE. The Company shall pay to the Administrative Agent for
the account of the Lenders a facility fee (the "Facility Fee") in an aggregate
amount equal to the Facility Fee Rate times an amount equal to the average daily
Available Commitment. The Facility Fee will accrue for the period from and
including the Effective Date to and including the Termination Date, without
regard
21
28
to the outstanding principal amount of Loans outstanding. Accrued Facility Fees
shall be payable in arrears on each Quarterly Date and on the Termination Date.
(b) LETTER OF CREDIT FEE. The Company agrees to pay to the
Administrative Agent for the account of the Lenders a quarterly fee for issuing
the Letters of Credit, calculated separately for each Letter of Credit, in an
aggregate amount for each Letter of Credit equal to 1/4 of the product of (i)
the LC Fee Rate, as then in effect, and (ii) the daily average balance during
such quarter of the amount of the Letter of Credit upon which drafts may be
drawn from time to time commencing on the date of issuance of such Letter of
Credit (or on the Effective Date for Letters of Credit issued under the Prior
Credit Agreement and outstanding on the Effective Date); provided that each
respective Letter of Credit shall bear an aggregate minimum quarterly fee equal
to $350, or such other fee as may be specifically agreed by the Company and the
Administrative Agent in each respective Letter of Credit Agreement. All fees for
all Letters of Credit (including all fees incurred for any amendments to Letters
of Credit) shall be payable in arrears on each Quarterly Date.
(c) ISSUING FEE. In addition to the fees described in Section 2.04(b),
the Company shall pay to the Administrative Agent for its own account a
quarterly fee for issuing each Letter of Credit, calculated separately for each
Letter of Credit, in an aggregate amount for each Letter of Credit equal to 1/4
of the product of (i) .125% per annum and (ii) the daily average balance during
such quarter of the amount of the Letter of Credit upon which drafts may be
drawn from time to time commencing on the date of issuance of such Letter of
Credit (or on the Effective Date for Letters of Credit issued under the Prior
Credit Agreement and outstanding on the Effective Date). All fees for all
Letters of Credit (including all fees incurred for any amendments to Letters of
Credit) shall be payable in arrears on each Quarterly Date.
(d) FEE LETTERS. The Company shall pay to the Administrative Agent and
its Affiliates and the Lenders such other amounts as are set forth in the Fee
Letters on the dates set forth therein.
SECTION 2.05 LENDING OFFICES. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.
SECTION 2.06 SEVERAL OBLIGATIONS. The failure of any Lender to make any
Loan to be made by such Lender or to provide funds for disbursements under
Letters of Credit on the date specified therefor shall not relieve any other
Lender of its obligation to make its Loan or provide such funds on such date,
but no Lender shall be responsible for the failure of any other Lender to make a
Loan to be made by such other Lender or to provide funds to be provided by such
other Lender.
SECTION 2.07 NOTES.
(a) NOTES. The Loans made by each Lender shall be evidenced by a single
promissory note of the Company in substantially the form of Exhibit A, dated as
of the Effective Date or such later date that a Lender becomes a party hereto,
payable to the order of such Lender in a principal amount equal to the maximum
amount of its Commitment as originally in effect and otherwise duly completed.
The date, amount, Type and interest rate of each Loan made by each Lender, and
all payments made on account of the principal thereof, shall be recorded by such
Lender on its books and, prior to any transfer of the Note held by it, endorsed
by such Lender on the schedule attached to such Note or any continuation
thereof; provided that the failure of a Lender to make any notation shall not
affect the Company's obligations in respect of such Loan.
22
29
(b) NO RIGHT TO SUBDIVIDE. No Lender shall be entitled to have its
Notes subdivided, by exchange for promissory notes of lesser denominations or
otherwise, except in connection with a permitted assignment of all or any
portion of such Lender's Commitment, Loans and Notes pursuant to Section
12.06(b).
SECTION 2.08 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Company may prepay Loans on any Business
Day upon notice to the Administrative Agent (which shall promptly notify the
Lenders), which notice (i) shall be given by the Company not later than 12:00
noon Houston time on such Business Day, (ii) shall specify the amount of the
prepayment (which shall be not less than $1,000,000 or the remaining balance of
Base Rate Loans outstanding, if less) and (iii) shall be irrevocable and
effective only upon receipt by the Administrative Agent. Interest on the
principal prepaid, accrued to the prepayment date, shall be paid on the
prepayment date. Any prepayment of any Eurodollar Loans shall be subject to the
provisions of Section 5.05.
(b) MANDATORY PREPAYMENT UPON REDUCTION OF COMMITMENT. If, after giving
effect to any termination or reduction of the Aggregate Commitments pursuant to
Section 2.03, the sum of the outstanding aggregate principal amount of the Loans
and the LC Exposure exceeds the Aggregate Commitments, then the Company shall on
the date of such termination or reduction pay or prepay the amount of such
excess for application first, towards reduction of all amounts previously drawn
under Letters of Credit, but not yet funded as a Loan pursuant to Section
4.07(b) or reimbursed, second, if necessary, towards reduction of the
outstanding principal balance of the Notes by prepaying Base Rate Loans, if any,
then outstanding, third, if necessary, toward a reduction of the outstanding
principal balance of the Notes by prepaying Eurodollar Loans, if any, then
outstanding, and fourth, if necessary, paying such amount to the Administrative
Agent as cash collateral for outstanding Letters of Credit, which amount shall
be held by the Administrative Agent as cash collateral to secure the Company's
obligation to reimburse the Administrative Agent and the Lenders for drawings
under the Letters of Credit. The Company shall on the date of such termination
or reduction also pay any amounts payable pursuant to Section 5.05 in connection
therewith.
(c) MANDATORY PREPAYMENT UPON REDETERMINATION. Upon any adjustment or
redetermination of the amount of the Borrowing Base in accordance with (1)
Section 2.09, (2) Section 8.05(d), (3) Section 9.01(e), (4) Section 9.01(o), (5)
Section 9.16(b) or (6) Section 9.21 or otherwise, if the adjusted or
redetermined Borrowing Base is less than the sum of the aggregate outstanding
principal amount of the Loans, the LC Exposure and all Pari Passu Debt then
outstanding (a "Borrowing Base Deficiency"), then the Company shall within 90
days of receipt of written notice thereof either (i) take such steps as may be
approved by the Administrative Agent to increase the Borrowing Base by an amount
equal to or greater than the amount of such Borrowing Base Deficiency or (ii)
prepay the amount of such Borrowing Base Deficiency for application first,
towards reduction of all amounts previously drawn under Letters of Credit, but
not yet funded as a Loan pursuant to Section 4.07(b) or reimbursed, second, if
necessary, towards reduction of the outstanding principal balance of the Notes
by prepaying Base Rate Loans, if any, then outstanding, third, if necessary,
towards a reduction of the outstanding principal balance of the Notes by
prepayment of Eurodollar Loans, if any, then outstanding, and fourth, if
necessary, towards payment of such amount to the Administrative Agent as cash
collateral for outstanding Letters of Credit, which amount shall be held by the
Administrative Agent as cash collateral to secure the Company's obligation to
reimburse the Administrative Agent and the Lenders for drawings under the
Letters of Credit; provided however that
23
30
if a Borrowing Base Deficiency occurs during the period from and after the
Effective Date up to and including the redetermination to occur as of March 31,
1999, such Borrowing Base Deficiency must be repaid within 30 days. The Company
shall also pay any amounts payable pursuant to Section 5.05 in connection
therewith.
(d) MANDATORY PAYMENTS UPON ISSUANCE OF EQUITY. If the Company shall
issue any shares of capital stock, on or prior to March 31, 1999, then on the
date not less than 30 days after such issuance, the Company shall make a payment
on the Loans and/or post cash collateral for Letters of Credit by an amount
equal to the lesser of (i) the net cash proceeds of such issuance or (ii) the
excess of the sum of the Loans then outstanding, the LC Exposure and the Pari
Passu Debt over the Threshold Amount; provided that the foregoing requirement
will be waived following a written certification from the Company setting forth
that such net cash proceeds have been or are being contemporaneously utilized by
it or one of its Restricted Subsidiaries to purchase Oil and Gas Properties
which are substantially all proved producing.
(e) NO PENALTY OR PREMIUMS. Subject to compensation requirements of
Section 5.05, all prepayments shall be without premium or penalty.
SECTION 2.09 BORROWING BASE.
(a) (i) The initial Borrowing Base shall be $650,000,000 and the
initial Threshold Amount shall be $550,000,000. From and after the
redetermination of the Borrowing Base scheduled to occur on March 31,
1999, the Borrowing Base, as redetermined, shall be equal to the
Threshold Amount and thereafter, the rights and obligations of the
parties hereunder shall be determined with reference to the Borrowing
Base only.
(ii) Subject to the terms of Section 2.09(a)(i), the Borrowing Base
shall be determined in accordance with Sections 2.09(b), (c) and (d) by
the Technical Agents with the approval or deemed approval of the
Required Lenders (provided that any increase in the Borrowing Base
shall require the approval or deemed approval of all the Lenders).
Subject to the rights of the parties under Section 2.09(e), the
Borrowing Base will initially be redetermined as of March 31, 1999 in
accordance with Section 2.09(b), and thereafter, the Borrowing Base
will be redetermined semi-annually on May 1st and November 1st of each
year in accordance with Section 2.09(b), commencing November 1, 1999.
Upon any redetermination of the Borrowing Base, such redetermination
shall remain in effect until the next successive Redetermination Date.
(iii) Notwithstanding the fact that the Borrowing Base exceeds or may
from time to time exceed the Aggregate Commitments, the obligations of
the Lenders hereunder is limited as contemplated in the definition of
"Available Commitment."
(b) REDETERMINATION. On or before March 15, 1999, and thereafter, on or
before April 1st and October 1st of each year, commencing October 1, 1999, the
Technical Agents shall propose in writing to the Company and the Lenders a new
Borrowing Base in accordance with Section 2.09(c) (assuming receipt by the
Technical Agents of the Engineering Reports in a timely and complete manner).
After having received notice of such proposal by the Technical Agents, each
Lender shall have ten (10) days to agree with such proposal or disagree by
proposing an alternate Borrowing Base. If at the end of ten (10) days, any
Lender has not communicated its approval or disapproval, such
24
31
silence shall be deemed to be an approval. If, however, at the end of such
10-day period, all of the Lenders in the case of the redetermination scheduled
for March 31, 1999, and thereafter, the Required Lenders, have not approved or
deemed to have approved, as aforesaid, the proposed Borrowing Base, then the
Borrowing Base shall be determined in accordance with Section 2.09(d). After
such redetermined Borrowing Base is approved by the requisite Lenders or is
otherwise determined as provided in Section 2.09(d), it shall become effective
and applicable to the Company, the Agents, the Lenders as of March 31, 1999 (in
the case of the March 1999 redetermination only) or the next succeeding May 1st
or November 1st, as applicable.
(c) ENGINEERING REPORTS. Upon receipt of the Reserve Reports and such
other reports, data, and supplemental information as may, from time to time, be
reasonably requested by the Required Lenders (the "Engineering Reports"),
together with a certificate from the President or chief financial officer of the
Company that, to the best of his knowledge and in all material respects, (i) the
information contained in the Engineering Reports is true and correct, (ii) the
certificate identifies the Properties covered by the Engineering Reports that
have not been previously included in any prior Engineering Reports, and (iii) no
other Oil and Gas Properties have been sold since the date of the last Borrowing
Base determination except as set forth on an exhibit to the certificate, which
certificate shall list all Oil and Gas Properties sold or disposed of in
compliance with Section 9.16 (or pursuant to a waiver thereof) and in such
detail as reasonably required by the Technical Agents, the Technical Agents will
evaluate such information. The Technical Agents, with the approval or deemed
approval of the requisite Lenders as set forth in Section 2.09(b), but subject
to the terms of Section 2.09(d), shall redetermine the Borrowing Base based upon
such information and such other information (including, without limitation, the
Indebtedness) as the Technical Agents deem appropriate and consistent with their
normal oil and gas lending criteria as it exists at the particular time
(including, without limitation, the status of title information with respect to
Properties in the Engineering Reports and the existence of any other Debt). Such
redetermination shall be accomplished not later than and effective as of March
31, 1999, in the case of the initial redetermination, and thereafter as of the
first (1st) day of each May and November of each calendar year, assuming that
the Company shall have furnished the Engineering Reports in a timely and
complete manner.
(d) CONSENSUS AND FAILURE OF CONSENSUS. Except as otherwise provided in
this Section 2.09, the decision of the Required Lenders with respect to any
Borrowing Base determination shall control; however, if the Required Lenders
have not approved or are not deemed to have approved the Borrowing Base as of
the date such a determination is called for in Section 2.09(b), the Technical
Agents shall poll the Lenders to ascertain the highest Borrowing Base then
acceptable to a number of Lenders sufficient to constitute the Required Lenders
for purposes of this Section 2.09 and such amounts shall then become the
Borrowing Base for the next Redetermination Period. Notwithstanding the
foregoing, however, (i) approval of the Borrowing Base determined any time after
the Effective Date to and including the Borrowing Base determined as of March
31, 1999, and (ii) thereafter any increase in the Borrowing Base, shall require
the consent of all the Lenders.
(e) INTERIM REDETERMINATIONS. The Company may, at its option one time
during a 12 month period, initiate an interim redetermination of the Borrowing
Base and the Threshold Amount. The Administrative Agent (at the direction of the
Required Lenders, in their option) may, one time during any 12 month period,
initiate an interim redetermination of the Borrowing Base; provided however that
the Agents and the Lenders hereby waive their right to do so prior to the
redetermination under Section 2.09(b) occurring on or before March 31, 1999.
25
32
(f) OTHER ADJUSTMENTS. The Borrowing Base is also subject to adjustment
as set forth in Sections 8.05(d), 9.01(e)(iii), 9.01(o), 9.16(b) and 9.21. If
during any Redetermination Period prior to and including the date of the
redetermination of the Borrowing Base scheduled to occur March 31, 1999, the
Borrowing Base is adjusted pursuant to any of the foregoing sections, then the
Threshold Amount shall also automatically reduce by an amount equal to the
Threshold Amount prior to such adjustment times a fraction the numerator of
which is the amount of the Borrowing Base outstanding after giving effect to
such adjustment and the denominator of which is the Borrowing Base outstanding
prior to giving effect to such adjustment.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
SECTION 3.01 REPAYMENT OF LOANS. The Company will pay on the
Termination Date to the Administrative Agent for the account of each Lender the
then-outstanding principal amount of each Loan made by such Lender.
SECTION 3.02 INTEREST.
(a) The Company will pay to the Administrative Agent for the account of
each Lender interest on the unpaid principal amount of each Loan made by such
Lender for the period commencing on the date of such Loan to but excluding the
date such Loan shall be paid in full, at the following rates per annum:
(i) if such Loan is a Base Rate Loan, the Base Rate (as in effect from
time to time) plus the Applicable Margin for Base Rate Loans, but in no
event to exceed the Highest Lawful Rate; and
(ii) if such Loan is a Eurodollar Loan, for each Interest Period
relating thereto, the Eurodollar Rate for such Loan plus the Applicable
Margin for Eurodollar Loans, but in no event to exceed the Highest
Lawful Rate.
Notwithstanding the foregoing, the Company will pay to the
Administrative Agent for the account of each Lender interest at the applicable
Post-Default Rate on any principal of any Loan made by such Lender, and, to the
fullest extent permitted by law, on any other amount payable by the Company or
OEI-Louisiana hereunder or under any Loan Document, that shall not be paid in
full when due (whether at stated maturity, by acceleration or otherwise), for
the period commencing on the due date thereof until the same is paid in full,
but in no event to exceed the Highest Lawful Rate.
(b) Accrued interest on each Base Rate Loan shall be payable quarterly
on each Quarterly Date. Accrued interest on each Eurodollar Loan shall be
payable on the last day of the Interest Period therefor and, if such Interest
Period is longer than three months or ninety (90) days, at three-month or ninety
(90) day intervals, as appropriate, following the first day of such Interest
Period. In any event, interest payable at the Post-Default Rate shall be payable
from time to time on demand and interest on any Eurodollar Loan that is
converted into a Base Rate Loan pursuant to Section 5.04 shall be payable on the
date of conversion (but only to the extent so converted).
(c) Promptly after the determination of any interest rate provided for
herein or any change therein, the Administrative Agent shall notify the Company
and the Lenders to which such interest is
26
33
payable thereof. Upon notice to the Administrative Agent of the incurrence of
Debt pursuant to Section 8.01(g), the incurrence of any Pari Passu Debt or
Subordinated Debt and/or any change in the amount of the Indebtedness (including
the LC Exposure) outstanding hereunder, the Administrative Agent shall promptly
determine the Percentage Usage and, in the event such circumstances result in a
change in the Applicable Margin, the Facility Fee Rate and the LC Fee Rate, the
Administrative Agent shall notify the Lenders and the Company. Such new
Applicable Margin, the Facility Fee Rate and the LC Fee Rate will be applicable
until the next day on which events described in this Section 3.02(c) result in a
change and notice thereof is given by the Administrative Agent.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
SECTION 4.01 PAYMENTS. Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made by the Company
under this Agreement, the Notes and other Loan Documents shall be made in
Dollars, in immediately available funds, to the Administrative Agent at an
account maintained by the Administrative Agent at the Principal Office, not
later than 1:00 p.m. Houston time on the date on which such payments shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day). The Company shall,
subject to Section 4.02, at the time of making each payment under this
Agreement, any Note or any other Loan Document, specify to the Administrative
Agent the Loans, Letters of Credit or other amounts payable by the Company
hereunder to which such payment is to be applied (and in the event that it fails
to so specify, and such day is not a Quarterly Date or other day on which a
payment of either interest or principal is due, then such payments shall be
applied in the following order: first, to interest accrued on Loans maintained
as Base Rate Loans, second, any excess to reduce the aggregate principal amount
then outstanding on Loans maintained as Base Rate Loans, third, any excess to
interest accrued on Loans maintained as Eurodollar Loans, and fourth any excess
to reduce the aggregate principal amount then outstanding on Loans maintained as
Eurodollar Loans; provided that if an Event of Default has occurred and is
continuing, the Administrative Agent may distribute such payment to the Lenders
in such manner as it or the Majority Lenders may determine to be appropriate,
subject to Section 4.02). Each payment received by the Administrative Agent
under this Agreement, any Note or any other Loan Document for the account of a
Lender shall be paid promptly to such Lender, in immediately available funds,
for account of such Lender's Applicable Lending Office for the Loan, Letter of
Credit or other amount in respect of which such payment is made. Except as
provided in clause (ii) of the provisions of the definition of Interest Period,
if the due date of any payment under this Agreement, any Note or any other Loan
Document would otherwise fall on a day which is not a Business Day such date
shall be extended to the next succeeding Business Day and interest shall be
payable for any principal so extended for the period of such extension.
SECTION 4.02 PRO RATA TREATMENT. Except as set forth in Sections
2.03(a)(ii) or Section 5.07(b) or to the extent otherwise provided herein: (a)
(i) each borrowing from the Lenders under Section 2.01 shall be made from the
Lenders in such amounts as may be necessary so that, after giving effect to such
borrowing, the outstanding Loans shall have been made pro rata by the Lenders
based on their respective Commitment Percentages as then in effect, (ii) each
payment of Facility Fee or other fees under Sections 2.04(a) and (b) shall be
made for the account of the Lenders pro rata according to their respective
Commitment Percentages, and (iii) each termination or reduction of the amount of
the Commitments under Section 2.03 shall be applied to the Commitments of the
Lenders pro rata according to their respective Commitment Percentage; (b) each
payment of principal of Loans by the Company shall be made for the account of
the Lenders pro rata in accordance with the
27
34
respective unpaid principal amount of the Loans held by the Lenders; (c) each
payment of interest on Loans by the Company shall be made for the account of the
Lenders pro rata in accordance with the amounts of interest due and payable on
such Loans to the respective Lenders; and (d) each reimbursement by the Company
of disbursements under Letters of Credit shall be made for the account of the
Lenders pro rata in accordance with the amounts of reimbursement obligations due
and payable on such Letters of Credit to the respective Lenders.
SECTION 4.03 COMPUTATIONS. Interest on Eurodollar Loans shall be
computed on the basis of a year of 360 days and actual days elapsed (including
the first day but excluding the last day) occurring in the period for which such
interest is payable (unless such calculation would result in a rate of interest
that would exceed the Highest Lawful Rate for any Lender in which event such
calculation for such Lender shall be computed on the basis of a year of 365 or
366 days, as the case may be). Interest on Base Rate Loans and fees shall be
computed on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable.
SECTION 4.04 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless
the Administrative Agent shall have been notified by a Lender or the Company
prior to the date on which a payment is scheduled to be made to the
Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be
made by it hereunder or under a Letter of Credit or (in the case of the Company)
a payment to the Administrative Agent for account of one or more of the Lenders
hereunder (such payment being herein called a "Required Payment"), which notice
shall be effective upon receipt, that it does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date. If such Lender or the Company (as the case
may be) has not in fact made the Required Payment to the Administrative Agent,
the recipient(s) of such payment shall, on demand, repay to the Administrative
Agent the amount so made available together with interest thereon in respect of
each day during the period commencing on the date such amount was so made
available by the Administrative Agent until the date the Administrative Agent
recovers such amount at a rate per annum equal to the Base Rate for such day,
but in no event to exceed the Highest Lawful Rate.
SECTION 4.05 SHARING OF PAYMENTS, ETC.
(a) The Company agrees that, in addition to (and without limitation of)
any right of set-off, bankers' lien or counterclaim a Lender may otherwise have,
each Lender shall be entitled (after consultation with the Administrative
Agent), at its option, during the existence of an Event of Default, to offset
balances held by it for account of the Company at any of its offices, in Dollars
or in any other currency, against any principal of or interest on any of such
Lender's Loans or any other amount payable to such Lender hereunder or under any
other Loan Document which is not paid when due (regardless of whether such
balances are then due to the Company), in which case such Lender shall promptly
notify the Company and the Administrative Agent thereof, provided that such
Lender's failure to give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain payment of any principal of or interest
on any Loan made by it to the Company under this Agreement or payment of any
reimbursement obligation under a Letter of Credit Agreement through the exercise
of any right of set-off, banker's lien or counterclaim or similar right or
otherwise, and, as a result of such payment, such Lender shall have received a
greater
28
35
percentage of the principal or interest or reimbursement obligation then due
hereunder or under the respective Letter of Credit Agreement, as the case may
be, by the Company to such Lender than the percentage received by any other
Lenders, such Lender shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans made by such other Lenders (or in interest due thereon,
as the case may be) or reimbursement obligations under the Letter of Credit
Agreements in such amounts, and make such other adjustments from time to time as
shall be equitable, to the end that all the Lenders shall share the benefit of
such excess payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal and/or interest on the Loans held by each of the Lenders or pro
rata in accordance with the unpaid reimbursement obligation owed to each of the
Lenders. To such end, all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored. The Company agrees that any Lender
so purchasing a participation (or direct interest) in the Loans made by other
Lenders (or in interest due thereon, as the case may be) or in the reimbursement
obligations owed to the other Lenders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans or reimbursement
obligations, as the case may be, in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of the Company. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a set-off to which this
Section 4.05 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section 4.05 to share the benefits of any
recovery on such secured claim.
SECTION 4.06 ASSUMPTION OF RISKS. The Company assumes all risks of the
acts or omissions of beneficiaries of any of the Letters of Credit with respect
to its use of the Letters of Credit. Except in the case of gross negligence or
willful misconduct on the part of such Person or any of its employees, neither
the Administrative Agent, the Administrative Agent's correspondents, any other
Agent, nor any Lender shall be responsible: (a) for the validity or genuineness
of certificates or other documents, even if such certificates or other documents
should in fact prove to be invalid, fraudulent or forged; (b) for errors,
omissions, interruptions or delays in transmissions or delivery of any messages
by mail, telex, or otherwise, whether or not they be in code; (c) for errors in
translation or for errors in interpretation of technical terms; or (d) for any
other consequences arising from causes beyond the Administrative Agent's
control. In addition, neither the Administrative Agent, any other Agent nor any
Lender shall be responsible for any error, neglect, or default of any of the
Administrative Agent's correspondents which were chosen in good faith; and none
of the above shall affect, impair or prevent the vesting of any of the
Administrative Agent's rights or any Lender's rights or powers hereunder or
under the Letter of Credit Agreements, all of which rights shall be cumulative.
The Administrative Agent and the Administrative Agent's correspondents may
accept certificates or other documents that appear on their face to be in order,
without responsibility for further investigation. In furtherance and not in
limitation of the foregoing provisions, the Company agrees that any action,
inaction or omission taken or not taken by the Administrative Agent or any
correspondent in the absence of gross negligence or willful misconduct by the
Administrative Agent or any correspondent in connection with any Letter of
Credit, or any related drafts, certificates, documents or instruments, shall be
binding on the Company and shall not put the Administrative Agent or its
correspondents or any Lender under any resulting liability to the Company.
29
36
SECTION 4.07 OBLIGATION TO REIMBURSE AND TO PREPAY.
(a) If any draft or claim shall be presented for payment under a Letter
of Credit, after confirming that such draft or claim complies with all
requirements of the relevant Letter of Credit, the Administrative Agent shall
promptly notify the Company and each Lender orally (confirming such notice
promptly in writing) of the date and the amount of the draft or claim presented
for payment, the Business Day on which such draft or claim is to be honored and,
in the case of each Lender, the ratable share of such draft or claim
attributable to such Lender on the basis of its Commitment Percentage then in
effect.
(b) If a disbursement by the Administrative Agent is made under any
Letter of Credit and no Default under this Agreement shall have occurred and be
continuing, the Company may elect, and if no election is made, the Company shall
be deemed to have elected, to have the amount of such disbursement treated as a
Loan to the Company as provided, and subject to the limitations, in Section
2.01(a), subject to the terms and conditions set forth in this Agreement. With
respect to any disbursement under a Letter of Credit after and during the
continuance of a Default, the amount of such disbursement shall be due and
payable immediately and the Company shall pay to the Administrative Agent,
promptly after notice of such disbursement is received by the Company, in
federal or other immediately available funds, the amount of such disbursement,
together with interest on the amount disbursed from and including the date of
disbursement until payment in full of such disbursed amount at a varying rate
per annum equal to (i) the Base Rate (as in effect from time to time) plus the
Applicable Margin for Base Rate Loans (but in no event to exceed the Highest
Lawful Rate) for the first Business Day following the date of such disbursement
and (ii) the Post-Default Rate for Base Rate Loans for the period from and
including the second Business Day following the date of such disbursement to and
including the date of repayment in full of such disbursed amount.
(c) The Company's obligation to make each such payment shall be
absolute and unconditional and shall not be subject to any defense or be
affected by any right of setoff, counterclaim or recoupment which the Company
may now or hereafter have against any beneficiary of any Letter of Credit, the
Administrative Agent, any other Agent, any Lender or any other Person for any
reason whatsoever (but, without prejudice to any other provisions hereof, any
such payment shall not waive, impair or otherwise adversely affect any claim, if
any, that the Company may have against any beneficiary of a Letter of Credit,
the Administrative Agent, any other Agent, any Lender or any other Person).
(d) If an Event of Default shall have occurred and be continuing, the
Company shall, upon request of the Majority Lenders, pay to the Administrative
Agent as cash collateral an amount equal to the LC Exposure. The Company's
obligation to provide such cash collateral shall be absolute and unconditional
without regard to whether any beneficiary of any such Letter of Credit has
attempted to draw down all or a portion of such amount under the terms of a
Letter of Credit. In addition, the Company's obligation shall not be subject to
any defense or be affected by a right of setoff, counterclaim or recoupment
which the Company may now or hereafter have against any such beneficiary, any
Agent, any Lender or any other Person for any reason whatsoever (but, without
prejudice to any other provisions hereof, any such payment shall not waive,
impair or otherwise adversely affect any claim, if any, that the Company may
have against any beneficiary of a Letter of Credit, the Administrative Agent,
any other Agent, any Lender or any other Person). The Company hereby grants to
the Administrative Agent, for the benefit of the Agents and the Lenders, a
security interest in all such cash to secure the LC Exposure and any and all
other Indebtedness now or hereafter
30
37
owing hereunder. If the Company shall provide cash collateral under this Section
4.07 or shall prepay any Letter of Credit pursuant to Section 2.08 and
thereafter either (i) drafts or other demands for payment complying with the
terms of such Letters of Credit are not made prior to the respective expiration
dates thereof, or (ii) such Event of Default shall have been waived or cured,
then the Agents and the Lenders agree that the Administrative Agent is hereby
authorized, without further action by any other Agent or Lender, to release the
Lien in such cash and will direct the Administrative Agent to remit to the
Company amounts for which the contingent obligations evidenced by such Letters
of Credit have ceased.
SECTION 4.08 OBLIGATIONS FOR LETTERS OF CREDIT.
(a) Immediately, (i) upon issuance of any Letter of Credit by the
Administrative Agent and (ii) effective on the Effective Date with respect to
Letters of Credit outstanding under the Prior Credit Agreement on the Effective
Date, each Lender shall be deemed to be a participant through the Administrative
Agent in the obligation of the Administrative Agent under such Letter of Credit.
Upon the delivery by such Lender to the Administrative Agent of funds requested
for a disbursement pursuant to Section 4.08(c), such Lender shall be deemed as
having purchased a participating interest in the Company's reimbursement
obligations with respect to such Letter of Credit in an amount equal to such
funds delivered to the Administrative Agent.
(b) Each Lender severally agrees with the Administrative Agent and the
Company that it shall be unconditionally liable to the Administrative Agent,
without regard to the occurrence of any Default or Event of Default, for its pro
rata share, based upon its Commitment Percentage, of disbursements under any
Letter of Credit, and agrees to reimburse on demand the Administrative Agent for
its pro rata share of each such disbursement.
(c) The Administrative Agent shall promptly request from each Lender
its ratable share of any disbursement under any Letter of Credit that the
Company has not elected hereunder to treat as a Loan pursuant to Section 4.07,
which amount shall be made available by each Lender to the Administrative Agent
at the Principal Office in immediately available funds no later than 2:00 p.m.
Houston time on the date requested. If such amount due to the Administrative
Agent is made available later than 2:00 p.m. Houston time on the date requested,
then such Lender shall pay to the Administrative Agent such amount with interest
thereon in respect of each day during the period commencing on the date such
amount was requested until the date the Administrative Agent receives such
amount at a rate per annum equal to the Base Rate (but not to exceed the Highest
Lawful Rate).
ARTICLE V
YIELD PROTECTION AND ILLEGALITY
SECTION 5.01 ADDITIONAL COSTS.
(a) EURODOLLAR REGULATIONS. The Company shall pay directly to each
Lender such amounts as such Lender may determine to be necessary to compensate
it for any increased costs incurred by the Lender which such Lender determines
are attributable to its making or maintaining any Eurodollar Loans or its
obligation to make any Eurodollar Loans hereunder, or any reduction in any
amount receivable by such Lender hereunder in respect of any of such Loans or
such obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any Regulatory Change
which: (i) changes the basis of taxation of any amounts payable
31
38
to such Lender under this Agreement or its Notes in respect of any of such Loans
(other than franchise taxes, taxes on capital and/or gross receipts or taxes
imposed on the overall net income of such Lender or of its Applicable Lending
Office for any of such Loans by the jurisdiction in which such Lender has its
principal office or such Applicable Lending Office ("Excluded Taxes")); or (ii)
imposes or modifies any reserve, special deposit, minimum capital, capital ratio
or similar requirements relating to any extensions of credit or other assets of,
or any deposits with or other liabilities of, such Lender (including any of such
Loans or any deposits referred to in the definition of "Eurodollar Rate" in
Section 1.02 hereof), or any Commitment of such Lender; or (iii) imposes any
other condition affecting this Agreement or its Notes (or any of such extensions
of credit or liabilities) or Commitment.
(b) SUSPENSION OF EURODOLLAR LOANS. If any Lender requests
compensation from the Company under Section 5.01(a), the Company may, by notice
to such Lender (with a copy to the Administrative Agent), suspend the obligation
of such Lender to make additional Loans of the Type with respect to which such
compensation is requested until the Regulatory Change giving rise to such
request ceases to be in effect (in which case the provisions of Section 5.04
shall be applicable). Without limiting the effect of the foregoing provisions of
this Section 5.01(b), in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender which includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, such Lender may elect
by notice to the Company (with a copy to the Administrative Agent), to suspend
its obligation to make additional Eurodollar Loans until such Regulatory Change
ceases to be in effect (in which case the provisions of Section 5.04 shall be
applicable).
(c) CAPITAL ADEQUACY. Without limiting the effect of Section 5.01(a)
and (b), but without duplication, after any Regulatory Change, the Company shall
pay directly to each Lender such amounts as such Lender may reasonably determine
to be necessary as a result of such Regulatory Change to compensate such Lender
(or its parent or holding company) for any costs which it determines are
attributable to the maintenance by such Lender (or its parent or holding company
or its Applicable Lending Office) of its capital in respect of its Commitment,
its Note, any Loans and/or any interest held by it in any Letter of Credit. Such
compensation shall include, without limitation, an amount equal to any reduction
of the rate of return on assets or equity of such Lender (or any Applicable
Lending Office) to a level below that which such Lender (or any Applicable
Lending Office) could have achieved but for such law, regulation,
interpretation, directive or request.
SECTION 5.02 LIMITATION ON EURODOLLAR LOANS. Notwithstanding any other
provision of this Agreement, if, on or prior to the determination of any
Eurodollar Rate for any Interest Period:
(a) the Administrative Agent determines (which determination shall be
conclusive, absent manifest error) that quotations of interest rates for the
relevant deposits referred to in the definition of "Eurodollar Rate" in Section
1.02 are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for Eurodollar Loans as
provided herein; or
(b) the Administrative Agent shall determine (which determination shall
be conclusive, absent manifest error) that the relevant rates of interest
referred to in the definition of "Eurodollar Rate" in Section 1.02 upon the
basis of which the rate of interest for Eurodollar Loans for such Interest
32
39
Period is to be determined are not sufficient to adequately cover the cost to
the Lenders of making or maintaining Eurodollar Loans;
then the Administrative Agent shall give the Company and each Lender prompt
notice thereof and so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Eurodollar Loans (in which case
the provisions of Section 5.04 shall be applicable).
SECTION 5.03 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Loans hereunder, then such Lender shall promptly notify the Company thereof
(with a copy to the Administrative Agent) and such Lender's obligation to make
Eurodollar Loans shall be suspended until such time as such Lender may again
make and maintain Eurodollar Loans (in which case the provisions of Section 5.04
shall be applicable).
SECTION 5.04 BASE RATE LOANS PURSUANT TO SECTIONS 5.01, 5.02 AND 5.03.
If the obligation of any Lender to make Eurodollar Loans shall be suspended
pursuant to Section 5.01, 5.02 or 5.03 ("Affected Loans"), all Affected Loans
which would otherwise be made by such Lender shall be made instead as Base Rate
Loans (and, if an event referred to in Section 5.03 has occurred and such Lender
so requests by notice to the Company with a copy to the Administrative Agent,
all Affected Loans of such Lender then outstanding shall be automatically
converted into Base Rate Loans on the date specified by such Lender in such
notice). To the extent that Affected Loans are so made as (or converted into)
Base Rate Loans, all payments of principal which would otherwise be applied to
such Lender's Affected Loans shall be applied instead to the Loans so converted.
SECTION 5.05 COMPENSATION. The Company shall pay to the Administrative
Agent for account of each Lender, upon the request of such Lender through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense which such Lender determines are attributable to:
(a) any payment, prepayment or conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the Loans pursuant to
Section 10.01) on a date other than the last day of the Interest Period for such
Loan; or
(b) any failure by the Company for any reason (including but not
limited to, the failure of any of the conditions precedent specified in Article
VI to be satisfied, but excluding failures arising out of the negligence, gross
negligence or wilful misconduct of a Lender or Agent) to borrow, continue or
convert a Eurodollar Loan from such Lender on the date for such borrowing,
continuation or conversion specified in the relevant notice of borrowing given
pursuant to Section 2.02.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (x) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
converted for the period from the date of such payment, prepayment or conversion
to the last day of the then current Interest Period for such Loan (or, in the
case of a failure to borrow, convert or continue, the Interest Period for such
Loan which would have commenced on the date specified for such borrowing,
conversion or continuation) at the applicable rate of interest for such Loan
provided for herein over (y) the interest component of the amount such Lender
would have bid in the London interbank market for Dollar deposits of leading
banks in amounts comparable to such
33
40
principal amount and with maturities comparable to such period (as reasonably
determined by such Lender).
SECTION 5.06 ADDITIONAL COST IN RESPECT OF TAX.
(a) PAYMENTS FREE AND CLEAR. Each payment to be made by the Company
hereunder or in connection herewith to any Agent or Lender or any other Person
shall be made free and clear of and without deduction for or on account of any
Tax unless the Company is required to make such payment subject to the deduction
or withholding of Tax, in which case (except for Excluded Taxes) the sum payable
by the Company in respect of which such deduction or withholding is required to
be made shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, such Person receives and retains (free
from any liability in respect of any such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had not such
deduction or withholding been made or required to be made.
(b) OBLIGATION TO INDEMNIFY. If (i) any Agent or Lender is required by
law to make any payment on account of any Tax (except for Excluded Taxes) on or
in relation to any sum received or receivable hereunder by such Agent or Lender
or (ii) any liability in respect of any such payment is asserted, imposed,
levied or assessed against such Agent or Lender, then the Company shall promptly
pay to such Agent or Lender, as the case may be, any additional amounts
necessary to compensate it for such payment together with any interest,
penalties and expenses payable or incurred in connection therewith. If an Agent
or a Lender has paid over on account of Tax (other than Excluded Taxes) an
amount paid to it by the Company pursuant to the foregoing indemnification and
the amount so paid over is subsequently refunded to the recipient Agent or
Lender, in whole or in part, then the recipient Agent or Lender shall promptly
remit such amount refunded to the Company.
(c) NOTICE OF CHANGES; PROOF OF PAYMENT. If at any time the Company is
required by law to make any deduction or withholding from any sum payable by it
hereunder or in connection herewith (or if thereafter there is any change in the
rates at which or the manner in which such deductions or withholdings are
calculated), the Company shall promptly notify the Administrative Agent thereof.
If the Company makes any payment hereunder or in connection herewith for which
it is required by law to make any deduction or withholding, it shall pay the
full amount to be deducted or withheld to the relevant taxation or other
authority within the time allowed for such payment under applicable law and
shall deliver to the Administrative Agent within thirty (30) days after it has
made such payment to the applicable authority (i) a receipt issued by such
authority or (ii) other evidence reasonably satisfactory to the Administrative
Agent evidencing the payment to such authority of all amounts so required to be
deducted or withheld from such payment.
SECTION 5.07 AVOIDANCE OF TAXES AND ADDITIONAL COSTS.
(a) CHANGE APPLICABLE FUNDING OFFICE. If a Lender makes any claim under
Section 5.01 or Section 5.06 in respect of Additional Costs or Taxes, such
Lender shall be obligated to use reasonable efforts to designate a different
Applicable Lending Office for the Commitment or the Loans of such Lender
affected by such event if such designation will avoid the need for, or reduce
the amount of, such compensation or the imposition of any Taxes and will not, in
the sole opinion of such Lender, be disadvantageous to such Lender; provided
that such Lender shall have no obligation to so designate an Applicable Lending
Office located in the United States.
34
41
(b) REPLACEMENT. If any Lender claims (i) payment of Additional Costs,
(ii) the inability to make or maintain the Eurodollar Rate for its Loans
pursuant to Section 5.01 or 5.03 (when such inability is not then being claimed
by substantially all of the Lenders) or (iii) payment of any Taxes pursuant to
Section 5.06, then the Company shall have the right, upon payment of such
requested Additional Costs or Taxes, if applicable, to (i) prepay the Loans made
by such Lender and terminate the Commitment of such Lender on a non pro rata
basis or (ii) subject to the approval of the Administrative Agent (such approval
not to be unreasonably withheld or delayed), find one or more Persons willing to
assume the Loans, Commitment and other obligations of such Lender and replace
such Lender pursuant to an Assignment and Acceptance. Any such assumption shall
be effected pursuant to Section 12.06(b). The Company shall not, however, be
entitled to replace any Lender if an event which with notice or lapse of time,
or both, would constitute a Default or an Event of Default exists at the time.
SECTION 5.08 LENDER TAX REPRESENTATION. Each Lender represents that it
is either (a) a corporation organized under the laws of the United States of
America or any state thereof or (b) entitled to complete exemption from United
States withholding tax imposed on or with respect to any payments, including
fees, to be made to it pursuant to this Agreement, the Notes and the other Loan
Documents (i) under an applicable provision of a tax convention to which the
United States of America is a party or (ii) because it is acting through a
branch, agency or office in the United States of America and any payment to be
received by it hereunder is effectively connected with a trade or business in
the United States of America. Each Lender that is not a corporation organized
under the laws of the United States of America or any state thereof agrees to
provide to the Company and the Administrative Agent on the Effective Date, or on
the date of its delivery of the Assignment and Acceptance pursuant to which it
becomes a Lender, and at such other times as required by United States law, two
accurate and complete original signed copies of either Internal Revenue Service
Form 4224 (or successor form) certifying that all payments to be made to it
hereunder will be effectively connected to a United States trade or business or
Internal Revenue Service Form 1001 (or successor form) certifying that it is
entitled to the benefit of a tax convention to which the United States of
America is a party which completely exempts from United States withholding tax
all payments to be made to it hereunder. If a Lender determines, as a result of
any Regulatory Change or other change in its circumstances, that it is unable to
submit any form or certificate that it is obligated to submit pursuant to this
Section 5.08, or that it is required to withdraw or cancel any such form or
certificate previously submitted, it shall promptly notify the Company and the
Administrative Agent of such fact.
SECTION 5.09 LIMITATION ON RIGHT TO COMPENSATION. Any demand for
compensation pursuant to Article V (other than Section 5.06) must be made on or
before six (6) months after the Lender incurs the expense, cost or economic loss
referred to or such Lender shall be deemed to have waived the right to such
compensation. Any demand for compensation pursuant to Section 5.06 must be made
on or before twelve (12) months after the Lender incurs the expense, cost or
economic loss referred to or such Lender shall be deemed to have waived the
right to such compensation.
SECTION 5.10 COMPENSATION PROCEDURE. Each Lender will notify the
Administrative Agent and the Company of any event occurring after the date of
this Agreement which will entitle such Lender to compensation or indemnification
pursuant to this Article V as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. Each Lender will furnish
the Administrative Agent and the Company with a certificate setting forth the
basis and amount of each request by such Lender for compensation or
indemnification and specify the Section pursuant to which it is claiming
compensation or indemnification. Such certificate shall also include (i)
calculations in
35
42
reasonable detail computing such claim, and (ii) a statement from such Lender
that it is asserting its right for indemnity or compensation not solely with
respect to the Indebtedness outstanding under this Agreement, but is generally
making such claims with respect to similar borrowers in connection with
transactions similar to the one contemplated in this Agreement. Determinations
and allocations by any Lender for purposes of this Article V of the effect of
any Regulatory Change pursuant to Sections 5.01(a) or (b), or of the effect of
capital maintained pursuant to Section 5.01(c), on its costs or rate of return
of maintaining Loans or issuing or participating in Letters of Credit or its
obligation to make Loans or issue or participate in Letters of Credit, or on
amounts receivable by it in respect of Loans or such obligations, and of the
additional amounts required to compensate such Lender under Section 5.01, 5.05
or 5.06, shall be conclusive, provided that such determinations and allocations
are made on a reasonable basis.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01 EFFECTIVENESS. The effectiveness of this amendment and
restatement of the Prior Credit Agreement is subject to the receipt by the
Administrative Agent of the following documents and satisfaction of the other
conditions provided in this Section 6.01, each of which shall be satisfactory to
the Administrative Agent in form and substance unless otherwise indicated:
(a) a certificate of the Secretary or Assistant Secretary of the
Company setting forth (i) that the resolutions of its board of directors
attached to such certificate are in full force and effect with respect to the
authorization of the execution, delivery and performance of the obligations
contained in the Notes, this Agreement and the other Loan Documents to which it
is a party, (ii) that the officers of the Company specified in such Secretary's
Certificate are authorized to sign this Agreement, the Notes, and the other Loan
Documents to which it is a party and who, until replaced by another officer or
officers duly authorized for that purpose, will act as the Company's
representative(s) for the purposes of signing documents and giving notices and
other communications in connection with this Agreement, the other Loan Documents
to which it is a party and the transactions contemplated hereby and thereby,
(iii) specimen signatures of the officers so authorized, and (iv) that no
amendments or modifications have been made to the certificate of incorporation
and the bylaws of the Company since July 8, 1998. The Agents and the Lenders may
conclusively rely on such certificate until the Administrative Agent receives
notice in writing from the Company to the contrary.
(b) a certificate of the Secretary or Assistant Secretary of
OEI-Louisiana setting forth (i) that the resolutions of its board of directors
attached to such certificate are in full force and effect with respect to the
authorization of the execution, delivery and performance of the obligations
contained in the Loan Documents to which it is a party, (ii) that the officers
specified in such Secretary's Certificate are authorized to sign the Loan
Documents to which it is a party and who, until replaced by another officer or
officers duly authorized for that purpose, will act as its representative(s) for
the purposes of signing documents and giving notices and other communications in
connection with such Loan Documents and the transactions contemplated thereby,
(iii) specimen signatures of the officers so authorized, and (iv) that no
amendments or modifications have been made to the articles or certificate of
incorporation and the bylaws of OEI-Louisiana since July 8, 1998. The Agents and
the Lenders may conclusively rely on such certificate until the Administrative
Agent receives notice in writing from the Company to the contrary.
36
43
(c) certificates of the appropriate state agencies with respect to the
existence, qualification and good standing of the Company, OEI-Louisiana and
certain material Restricted Subsidiaries in certain specified jurisdictions.
(d) the Notes, the Guaranty Agreement and the other Loan Documents
listed on Exhibit F, each duly completed and executed.
(e) the following opinions:
(i) an opinion of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel to
the Company, substantially in the form of Exhibit B-1.
(ii) an opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Torian, Diaz, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
special Louisiana counsel to OEI-Louisiana, substantially in the form
of Exhibit B-2.
(f) appropriate UCC search certificates of the Company and its
Restricted Subsidiaries reflecting no Liens on any of their Properties except
for such Liens permitted by Section 9.02.
(g) the Agents and the Lenders shall have received all fees due and
payable pursuant to Section 2.04 on or prior to the Effective Date.
(h) the Master Release, substantially in the form of Exhibit H, duly
executed and delivered, terminating the existing credit facilities maintained by
Ocean Canada.
(i) Such other documents as the Administrative Agent or Technical
Agents or special counsel to the Administrative Agent may reasonably request.
SECTION 6.02 ALL LOANS AND LETTERS OF CREDIT.
(a) GENERALLY. The obligation of the Lenders to make Loans to the
Company upon the occasion of each borrowing hereunder (other than Base Rate
Loans which are made pursuant to the terms hereof solely to replace existing
Eurodollar Loans which have matured in the normal course on the last day of an
Interest Period therefor or pursuant to Section 5.03) or of the Administrative
Agent to issue Letters of Credit is subject to the further conditions precedent
that, as of the date of such Loans and after giving effect thereto: (i) no
Default or Event of Default shall have occurred and be continuing; (ii) no event
or circumstance having a Material Adverse Effect shall have occurred since the
date of the Financial Statements, and (iii) the representations and warranties
made by the Company and OEI-Louisiana in Article VII and the Loan Documents
shall be true in all material respects on and as of the date of the making of
such Loans or the issuance of such Letter of Credit with the same force and
effect as if made on and as of such date and following such new borrowing or
issuance, except as such representations and warranties are modified to give
effect to transactions expressly permitted hereby or to the extent expressly
limited to an earlier date.
(b) CERTIFICATION AS TO REPRESENTATIONS. Each notice of borrowing,
conversion or continuation and selection of an Interest Period (other than Base
Rate Loans which are made pursuant to the terms hereof solely to replace
existing Eurodollar Loans which have matured in the normal course on the last
day of an Interest Period therefor or pursuant to Section 5.03) or request for
the issuance, renewal, extension or reissuance of a Letter of Credit by the
Company hereunder shall
37
44
constitute a certification by the Company to the effect set forth in Section
6.02(a) (both as of the date of such notice and, unless the Company otherwise
notifies the Administrative Agent prior to the date of or immediately following
such borrowing or such issuance, as of the date of such borrowing or issuance,
as the case may be).
(c) CERTIFICATE REGARDING INCURRENCE OF DEBT UNDER INDENTURES. The
obligation of the Lenders to make Loans to the Company or of the Administrative
Agent to issue Letters of Credit, if, after giving effect thereto, the aggregate
principal amount of all the Loans then outstanding and the LC Exposure would be
in excess of $100,000,000, is subject to the further condition precedent that
the Company deliver a certificate from an authorized officer, in form and
substance reasonably satisfactory to the Administrative Agent, certifying that,
as of the date of incurrence, the Company is permitted to incur such
Indebtedness under the Indentures and setting forth in reasonable detail
calculations to support the certification.
(d) CERTIFICATE REGARDING INCURRENCE FOLLOWING SALE OF EQUITY. If the
Company shall have issued any shares of capital stock, and there has been a
payment pursuant to Section 2.08(d) then the obligation of the Lenders to make
any Loans or of the Administrative Agent to issue any Letter of Credit to the
extent the sum of all Loans then outstanding and the LC Exposure would exceed
the Threshold Amount shall be subject to the further condition precedent that:
the Company shall provide the Administrative Agent with written certification
that it or one or more of its Restricted Subsidiaries will use the cash proceeds
of such Loans above the Threshold Amount to acquire Oil and Gas Properties which
are substantially all proved producing.
SECTION 6.03 CONDITIONS RELATING TO LETTERS OF CREDIT. In addition to
the satisfaction of all other conditions precedent set forth in this Article VI,
the issuance, renewal, extension or reissuance of the Letters of Credit referred
to in Section 2.01(b) is subject to the following conditions precedent:
(a) At least one (1) Business Day prior to the date of the issuance,
renewal, extension or reissuance of each Letter of Credit, the Administrative
Agent shall have received a written request for a Letter of Credit as described
in Section 2.02.
(b) The Company shall have duly and validly executed and delivered to
the Administrative Agent a Letter of Credit Agreement pertaining to the Letter
of Credit.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agents and the Lenders as
follows:
SECTION 7.01 CORPORATE EXISTENCE. The Company, OEI-Louisiana, Ocean
Canada and each Restricted Subsidiary: (a) is duly organized and validly
existing under the laws of the jurisdiction of its formation (or, if
appropriate, the laws of the jurisdiction under which it is continued); (b) has
all requisite power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its business as
now being conducted; and (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify would have a Material Adverse Effect.
38
45
SECTION 7.02 FINANCIAL CONDITION.
(a) The unaudited combined balance sheet of the Company and its
Consolidated Subsidiaries as at September 30, 1998, as included in the Company's
quarterly report on Form 10-Q for the quarter ended September 30, 1998 and the
related consolidated statement of income of the Company and its Consolidated
Subsidiaries for the fiscal period ended on said date, heretofore furnished to
each of the Lenders, fairly present in all material respects the consolidated
financial condition of the Company and its Consolidated Subsidiaries and the
consolidated results of their operations as at said date and for the period
stated.
(b) The Company and its Consolidated Subsidiaries, as of September 30,
1998, had no material events of loss or casualties, material contingent
liabilities, liabilities for taxes, Liens, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the Financial
Statements or otherwise contemplated by this Agreement. Since September 30,
1998, there has been no change or event which has had or could reasonably be
expected to have a Material Adverse Effect.
SECTION 7.03 LITIGATION. Except as disclosed on Schedule 7.03, there
are no legal or arbitral proceedings or any proceedings by or before any
Governmental Authority, now pending or (to the knowledge of the Company)
threatened against the Company or any of its Restricted Subsidiaries or against
any of their respective Property which could reasonably be expected to have a
Material Adverse Effect.
SECTION 7.04 NO BREACH. The execution and delivery by the Company and
its Restricted Subsidiaries of this Agreement, the Notes, the other Loan
Documents, the consummation of the transactions herein or therein contemplated
and the compliance with the terms and provisions hereof will not (a) conflict
with or result in a breach of, or require any consent under (i) the respective
charter or by-laws of such Person, or (ii) any applicable law or regulation, or
any order, writ, injunction or decree of any court or other Governmental
Authority, or any agreement or instrument to which any such Person is a party or
by which it is bound or to which it is subject, in each case in such manner as
could reasonably be expected to have a Material Adverse Effect; or (b)
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or Property of such
Person, in each case in such manner as could reasonably be expected to have a
Material Adverse Effect.
SECTION 7.05 CORPORATE ACTION; BINDING OBLIGATION. Each of the Company
and OEI-Louisiana has all necessary corporate power and authority to execute,
deliver and perform its respective obligations under this Agreement, the Notes
and the Loan Documents to which it is a party; and the execution, delivery and
performance by each of the Company and OEI-Louisiana of this Agreement, the
Notes and the Loan Documents to which it is party have been duly authorized by
all necessary corporate action on its part. This Agreement, the Notes and the
Loan Documents to which it is a party constitute the legal, valid and binding
obligation of each of such Person, enforceable against it in accordance with
their terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights and general
principles of equity.
SECTION 7.06 APPROVALS. Other than (i) Approvals heretofore obtained,
(ii) the Approvals described in the last sentence of this Section 7.06 and (iii)
Approvals the absence of which could not
39
46
reasonably be expected to have a Material Adverse Effect, no authorizations,
approvals or consents of, and no filings or registrations with, any Governmental
Authority ("Approvals") are necessary for the execution, delivery or performance
by the Company or OEI-Louisiana of this Agreement, the Notes, the Loan Documents
to which it is a party or for the validity or enforceability thereof. It is
understood that continued performance by the Company and its Subsidiaries of
this Agreement and the other Loan Documents to which such Persons are a party
will require various Approvals, such as filings related to environmental
matters, ERISA matters, Taxes and intellectual property, filings required to
maintain corporate and similar standing and existence, filings pursuant to the
Uniform Commercial Code and other security filings and recordings, filings
required by the SEC, routine filings in the ordinary course of business, and
filings required in connection with the exercise by the Lenders and the Agents
of remedies in connection with the Loan Documents.
SECTION 7.07 USE OF LOANS AND LETTERS OF CREDIT. The proceeds of the
Loans and the Letters of Credit shall be used by the Company for general
corporate purposes of the Company and its Subsidiaries, including without
limitation, (i) the acquisition of Oil and Gas Properties and related Property
and Persons owning Oil and Gas Properties and related Property; (ii) the
financing of the Company's and its Subsidiaries' share of North American and
international oil and gas exploration, development and production costs; (iii)
the financing of ongoing working capital requirements of the Company and its
Subsidiaries; and (iv) the making of other payments as otherwise permitted under
this Agreement. Neither the Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying margin stock within the meaning of Regulation T, U or X and no part of
the proceeds of any Loan hereunder will be used to buy or carry any margin
stock.
SECTION 7.08 ERISA. Each of the Company and the ERISA Affiliates (a)
have fulfilled its respective obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan, (b) are in compliance, with
respect to each Plan, in all material respects with the presently applicable
provisions of ERISA and the Code, and (c) have not incurred any liability to the
PBGC or any Plan or Multiemployer Plan. The Company and its Subsidiaries have no
ERISA Affiliates.
SECTION 7.09 TAXES. Each of the Company and its Subsidiaries has filed
all United States Federal income tax returns and all other material tax returns
which are required to be filed by it and has paid all taxes due pursuant to such
returns or pursuant to any assessment received by it, except for such taxes as
are being contested in good faith by appropriate proceedings and for which
adequate reserves are being maintained. The charges, accruals and reserves on
the books of the Company and its Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of the Company, adequate.
SECTION 7.10 INSURANCE. The Company has, and has caused all its
Restricted Subsidiaries to, have (a) all insurance policies sufficient for the
compliance by each of them with all material Governmental Requirements, and (b)
insurance coverage in at least such amounts and against such risks (including
public liability) that are usually insured against by companies similarly
situated engaged in the same or a similar business for the assets and operations
of the Company and its Restricted Subsidiaries.
SECTION 7.11 TITLES, ETC. The Company and its Restricted Subsidiaries
own the material Oil and Gas Properties included in the Borrowing Base, free and
clear of all Liens except Liens permitted under Section 9.02. Other than Liens
permitted under Section 9.02, the Company (directly or
40
47
indirectly through its Restricted Subsidiaries) will own in the aggregate, in
all material respects, the net interests in production attributable to the ▇▇▇▇▇
and units evaluated in the Initial Reserve Reports. The ownership of such
Properties shall not in the aggregate in any material respect obligate the
Company and its Restricted Subsidiaries to bear the costs and expenses relating
to the maintenance, development and operations of such Properties in an amount
materially in excess of the working interest of such Properties set forth in the
Initial Reserve Reports. The Company has, or has caused its Restricted
Subsidiaries to, pay all royalties payable under the Hydrocarbon Interests to
which it is operator, except as permitted under Section 8.03(c). Upon delivery
of each Reserve Report furnished to the Lenders pursuant to Sections 8.05(a) or
(b), the statements made in the preceding sentences of this Section 7.11 shall
be true with respect to such Reserve Reports. All information contained in the
Initial Reserve Reports was true and correct in all material respects as of the
date thereof.
SECTION 7.12 NO MATERIAL MISSTATEMENTS. At the time delivery is made,
no information, exhibit or report furnished to any Agent or Lender by the
Company or any of its Restricted Subsidiaries in connection with the negotiation
of this Agreement or any Loan Document contained any material misstatement of
fact or omitted to state a material fact or any fact necessary to make the
statement contained therein not materially misleading. Notwithstanding the
foregoing, the financial statements described in Section 7.02 and Section 8.01
shall be subject to the standards set forth in Section 7.02.
SECTION 7.13 INVESTMENT COMPANY ACT. Neither the Company nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 7.14 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Company
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 7.15 SUBSIDIARIES AND PARTNERSHIPS. Except as shown in Exhibit
D, (a) the Company has no Subsidiaries, (b) the Company owns 100% of all of the
issued and outstanding shares of each class of stock issued by each of its
Subsidiaries, and (c) all Subsidiaries of the Company are Restricted
Subsidiaries. The Company and its Subsidiaries have no interest in any
partnerships other than Tax Partnerships and the partnerships identified in
Exhibit E.
SECTION 7.16 LOCATION OF BUSINESS AND OFFICES. The principal place of
business and chief executive offices of the Company and each its Subsidiaries
are located at either the address stated on the signature page of this Agreement
or on Exhibit D.
SECTION 7.17 RATE FILINGS. To the best of the Company's knowledge, (a)
neither the Company nor any of its Restricted Subsidiaries have violated any
provisions of The Natural Gas Act or any other Federal or State law or any of
the regulations thereunder, including those of any Governmental Authority having
jurisdiction over the Oil and Gas Properties of the Company or such Restricted
Subsidiary, which violation could reasonably be expected to have a Material
Adverse Effect; and (b) the Company and its Restricted Subsidiaries have made
all necessary rate filings, certificate applications, well category filings,
interim collection filings and notices, and any other filings or certifications,
and have received all necessary regulatory authorizations (including without
limitation necessary authorizations, if any, with respect to any processing
arrangements conducted by any one
41
48
of them or others respecting said Oil and Gas Properties or production
therefrom) required under said laws and regulations with respect to all of the
Oil and Gas Properties or production therefrom so as not to have a Material
Adverse Effect. To the best of the Company's knowledge, said material rate
filings, certificate applications, well category filings, interim collection
filings and notices, and other filings and certifications contain no untrue
statements of material facts nor do they omit any statements of material facts
necessary in said filings.
SECTION 7.18 ENVIRONMENTAL MATTERS. Except as provided in Schedule 7.18
or as would not have a Material Adverse Effect (or with respect to (c), (d), and
(e) below, where the failure to take such actions would not have such a Material
Adverse Effect):
(a) Neither any Property of the Company and its Subsidiaries nor the
operations conducted thereon violate any Environmental Laws or order of any
court or Governmental Authority with respect to Environmental Laws;
(b) Without limitation of Section 7.18(a), no Property of the Company
and its Subsidiaries nor the operations conducted thereon (including operations
by any prior owner or operator of such Property), are in violation of or subject
to any existing, pending or (to the knowledge of the Company) threatened action,
suit, investigation, inquiry or proceeding by or before any court or
Governmental Authority with respect to Environmental Laws or to any remedial
obligations under Environmental Laws;
(c) All notices, permits, licenses or similar authorizations, if any,
required to be obtained or filed in connection with the operation or use of any
and all Property of the Company and its Subsidiaries, including without
limitation past or present treatment, storage, disposal or release of a
hazardous substance or solid waste into the environment, have been duly obtained
or filed;
(d) All hazardous substances generated at any and all Property of the
Company and its Subsidiaries have in the past been transported, treated and
disposed of only by carriers maintaining valid permits under RCRA and any other
Environmental Law and only at treatment, storage and disposal facilities
maintaining valid permits under RCRA and any other Environmental Law, which
carriers and facilities (to the best knowledge of the Company) have been and are
operating in compliance with such permits;
(e) The Company and its Subsidiaries have taken all steps necessary to
determine and have determined that no hazardous substances or solid waste have
been disposed of or otherwise released and there has been no threatened release
of any hazardous substances on or to any Property of the Company and its
Subsidiaries except in compliance with Environmental Laws; and
(f) The Company and its Subsidiaries have no material liability in
connection with any release or threatened release of any hazardous substance or
solid waste into the environment.
(g) To the extent applicable, the Company and its Subsidiaries have
complied with all financial responsibility, spill prevention facility design,
operation and equipment requirements imposed by OPA or will comply with such
requirements scheduled to be imposed by OPA in the future during the term of
this Agreement; and the Company has no reason to believe that either it or its
Subsidiaries will not be able to maintain compliance with all applicable OPA
requirements during the term of this Agreement.
42
49
SECTION 7.19 DEFAULTS. The Company and its Restricted Subsidiaries are
not in default and no event or circumstance has occurred which, but for the
passage of time or the giving of notice, or both, would constitute a default
under any agreement or other instrument to which either the Company or any of
its Restricted Subsidiaries is a party or by which it is bound in any manner
that could reasonably be expected to have a Material Adverse Effect. No Default
or Event of Default hereunder has occurred and is continuing.
SECTION 7.20 COMPLIANCE WITH THE LAW. The Company and its Restricted
Subsidiaries have not violated any Governmental Requirement or failed to obtain
any license, permit, franchise or other governmental authorization necessary for
the ownership of any of their respective Properties or the conduct of their
respective business which violation or failure could reasonably be expected to
have a Material Adverse Effect.
SECTION 7.21 RISK MANAGEMENT AGREEMENTS. Schedule 7.21 sets forth, as
of the Effective Date, a true and complete list of all Risk Management
Agreements (including commodity price swap agreements, forward agreements or
contracts of sale which provide for prepayment for deferred shipment or delivery
of oil, gas or other commodities) of the Company and its Restricted
Subsidiaries, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net ▇▇▇▇ to market
value thereof, all credit support agreements relating thereto (including any
margin required or supplied), and the counterparty to each such agreement.
SECTION 7.22 GAS IMBALANCES. As of the Effective Date, except as set
forth on Schedule 7.22 or on the most recent certificate delivered pursuant to
Section 8.05(c), on a net basis there are no gas imbalances, take or pay or
other prepayments with respect to the Company and its Restricted Subsidiaries'
Oil and Gas Properties which would require the Company or such Subsidiary to
deliver Hydrocarbons produced from the Oil and Gas Properties at some future
time without then or thereafter receiving substantially full payment therefor
exceeding 10,000,000 mcf of gas in the aggregate.
SECTION 7.23 SOLVENCY. The Company (a) is not insolvent and will not be
rendered insolvent as a result of the execution, delivery and performance of the
Notes and this Agreement or the making of the Loans or issuance of Letters of
Credit hereunder, (b) is not engaged in business or a transaction, or about to
engage in a business or a transaction, for which it has unreasonably small
capital, and (c) does not intend to incur, or believe it will incur, debts that
will be beyond its ability to pay as such debts mature.
SECTION 7.24 YEAR 2000 COMPLIANCE. Except where failure to do so would
not have a Material Adverse Effect, any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the computer systems
of the Company and its Subsidiaries and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
systems of the Company and its Subsidiaries interface) and the testing of all
such systems and equipment, as so reprogrammed, will be completed by August 1,
1999. The cost to the Company and its Subsidiaries of such reprogramming and
testing and of the reasonably foreseeable consequences of year 2000 to the
Company and its Subsidiaries (including, without limitation, reprogramming
errors and the failure of others' systems or equipment) will not result in a
Default or Event of Default or otherwise have a Material Adverse Effect. Except
for such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the Company and
its Subsidiaries are and, with ordinary course upgrading and maintenance,
43
50
will continue for the term of this Agreement to be, sufficient to permit the
Company and its Subsidiaries to conduct their business without Material Adverse
Effect.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Company agrees that, so long as any of the Commitments are in
effect and until payment in full of all Loans hereunder, all interest thereon
and all other amounts payable by the Company or OEI-Louisiana hereunder or any
Loan Document:
SECTION 8.01 FINANCIAL STATEMENTS. The Company shall deliver to each of
the Lenders:
(a) As soon as available and in any event within 60 days after the end
of each of the first three fiscal quarterly periods of each fiscal year of the
Company, consolidated statements of income (including cost summaries of general
and administrative expenses in detail satisfactory to the Administrative Agent),
changes in stockholders' equity and cash flows of the Company and its
Consolidated Subsidiaries for such period and for the period from the beginning
of the respective fiscal year to the end of such period, and the related
consolidated balance sheets as at the end of such period, and commencing March
31, 1999, setting forth in each case in comparative form the corresponding
figures for the corresponding period in the preceding fiscal year, accompanied
by the certificate of the senior financial officer of the Company, which
certificate shall state that said financial statements fairly present, in all
material respects, the consolidated financial conditions and results of
operations of the Company and its Consolidated Subsidiaries in accordance with
generally accepted accounting principles, consistently applied, as at the end
of, and for, such period (subject to the absence of footnotes and normal
year-end audit adjustments).
(b) As soon as available and in any event within 120 days after the end
of each fiscal year of the Company, consolidated statements of income, changes
in stockholders' equity and cash flows of the Company and its Consolidated
Subsidiaries for such year and the related consolidated balance sheets as at the
end of such year, and commencing December 31, 1999, setting forth in each case
in comparative form the corresponding figures for the preceding fiscal year, and
accompanied by the opinion thereon of independent certified public accountants
of recognized national standing, which opinion shall state that said financial
statements fairly present, in all material respects, the consolidated financial
condition and results of operations of the Company and its Consolidated
Subsidiaries as at the end of, and for, such fiscal year.
(c) Promptly upon their becoming available, copies of all registration
statements and regular periodic reports, if any, which the Company or any of its
Subsidiaries shall have filed with the SEC or any national securities exchange.
(d) As soon as possible, and in any event within ten (10) days after
the Company knows that any of the events or conditions specified below with
respect to any Plan or Multiemployer Plan have occurred or exist, a statement
signed by a senior financial officer of the Company setting forth details
respecting such event or condition and the action, if any, which the Company or
its ERISA Affiliate proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC by the Company or an
ERISA Affiliate with respect to such event or condition):
44
51
(i) any reportable event, as defined in Section 4043(b) of ERISA and
the regulations issued thereunder, with respect to a Plan, as to which
PBGC has not by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such
event (provided that a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA shall be a reportable
event regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal by the Company or any ERISA
Affiliate under Section 4201 or 4204 of ERISA from a Multiemployer
Plan, or the receipt by the Company or any ERISA Affiliate of notice
from a Multiemployer Plan that is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA; and
(v) the institution of a proceeding by a fiduciary of any Multiemployer
Plan against the Company or any ERISA Affiliate to enforce Section 515
of ERISA, which proceeding is not dismissed within 30 days.
(e) As soon as available and in any event within 60 days after the end
of each fiscal quarterly period of each fiscal year of the Company, for such
quarterly period, the detailed monthly financial reports of the Company and its
Consolidated Subsidiaries, containing production, revenue and cost information
reports for such quarterly period with respect to the Oil and Gas Properties
owned by the Company and its Consolidated Subsidiaries, which report shall be in
such form as may be accepted by the Administrative Agent and the Technical
Agents from time to time.
(f) Promptly after the Company knows that a Default or Event of Default
has occurred and is continuing, a notice of such Default or Event of Default
describing the same in reasonable detail and what action, if any, the Company
intends to take in response thereto.
(g) Prior to the issuance of any Pari Passu Debt under Section 9.01(h),
written notice of such event describing the amount of Debt to be incurred and
the maturity of such Pari Passu Debt, and such other information as the
Administrative Agent may reasonably request. In connection with the foregoing,
the Company shall also deliver a copy of the instruments and agreements
evidencing or governing such Pari Passu Debt, certified as true and complete by
the Company, promptly after the applicable closing.
(h) Promptly after the Company or any of its Restricted Subsidiaries is
aware of any event of force majeure or other event, circumstance or condition
materially and adversely affecting the Oil and Gas Properties of any Restricted
Subsidiary of the Company, notice of such event, circumstance or condition.
45
52
(i) Promptly after the Company or any of its Restricted Subsidiaries is
aware that any Loan Document, after delivery thereof, has for any reason, except
to the extent permitted by the terms of this Agreement or thereof, ceased to be
in full force and effect and valid, binding and enforceable in accordance with
its terms (subject to customary exceptions therefrom), notice of such event or
condition.
(j) At the time the Company furnishes a Reserve Report under Section
8.05(a), a report, in form and substance satisfactory to the Administrative
Agent, setting forth as of the day of such Reserve Report, a true and complete
list of all Risk Management Agreements (including commodity price swap
agreements, forward agreements or contracts of sale which provide for prepayment
for deferred shipment or delivery of oil, gas or other commodities) of the
Company and each of its Restricted Subsidiaries, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net ▇▇▇▇ to market value therefor, any new credit support
agreements relating thereto not listed on Schedule 7.21, any margin required or
supplied under any credit support document, and the counterparty to each such
agreement.
(k) At the time the Company furnishes each set of financial statements
pursuant to Section 8.01(a) or (b), a report, in form and substance satisfactory
to the Administrative Agent, setting forth as of the last day of such fiscal
quarter or year, the amount of investments, loans and advances made to its
Unrestricted Subsidiaries pursuant to Section 9.03(p).
(l) From time to time such other information regarding the business,
affairs or financial condition of the Company and its Restricted Subsidiaries as
any Lender or the Administrative Agent may reasonably request.
The Company shall furnish to each Lender, at the time it furnishes each set of
financial statements pursuant to Section 8.01(a) or (b), a certificate of a
senior financial officer of the Company: (i) to the effect that no Default or
Event of Default has occurred and is continuing (or, if any Default or Event of
Default has occurred and is continuing, describing the same in reasonable detail
and what action, if any, the Company intends to take in response thereto); and
(ii) setting forth in reasonable detail the computations necessary to determine
whether the Company is in compliance with Sections 9.03(c), 9.03(p), 9.04, 9.05,
9.12 and 9.16(b) as of the end of the respective fiscal quarter or fiscal year.
SECTION 8.02 LITIGATION. The Company shall promptly give to the
Administrative Agent notice of all legal or arbitral proceedings, and of all
proceedings before any Governmental Authority, affecting the Company or any of
its Restricted Subsidiaries except proceedings which could not reasonably be
expected to have a Material Adverse Effect.
SECTION 8.03 CORPORATE EXISTENCE, ETC.
(a) Except as permitted by Section 9.08, the Company shall, and shall
cause each of its Restricted Subsidiaries to: (i) preserve and maintain its
corporate existence and all of its material rights, privileges and franchises;
(ii) comply with the requirements of all applicable laws, rules, regulations and
orders of Governmental Authorities if failure to comply with such requirements
could reasonably be expected to have a Material Adverse Effect; (iii) pay and
discharge all taxes, assessments and governmental charges or levies imposed on
it or on its income or profits or on any of its Property prior to the date on
which penalties attach thereto, except for any such tax, assessment, charge or
levy the payment of which is being contested in good faith and by proper
proceedings and against which
46
53
adequate reserves are being maintained; (iv) permit representatives of any
Lender or the Administrative Agent, during normal business hours, to examine,
copy and make extracts from its books and records, inspect its Properties, and
discuss its business and affairs with its officers, all to the extent reasonably
requested by such Lender or the Administrative Agent (as the case may be); and
(v) keep insured by financially sound and reputable insurers all Property of a
character usually insured by corporations engaged in the same or similar
business similarly situated against loss or damage of the kinds and in the
amounts customarily insured against by such corporations and carry such other
insurance as is usually carried by such corporations.
(b) The Company shall, and shall cause each of its Restricted
Subsidiaries to: (i) do or cause to be done all things reasonably necessary to
preserve and keep in good repair, working order and efficiency (ordinary wear
and tear excepted) all of the Oil and Gas Properties owned by the Company or any
Restricted Subsidiary of the Company including, without limitation, all
equipment, machinery and facilities, and (ii) make all the reasonably necessary
repairs, renewals and replacements so that at all times the state and condition
of the Oil and Gas Properties owned by the Company and its Restricted
Subsidiaries will be fully preserved and maintained, except to the extent a
portion of such Oil and Gas Properties is no longer capable of producing
Hydrocarbons in economically reasonable amounts, as determined by the Company in
its sole judgment.
(c) The Company and its Restricted Subsidiaries will promptly pay and
discharge or cause to be paid and discharged all delay rentals, royalties,
expenses and indebtedness accruing under, and perform or cause to be performed
each and every act, matter or thing required by, each and all of the
assignments, deeds, leases, sub-leases, contracts and agreements affecting their
interests in their Oil and Gas Properties and will do all other things necessary
to keep unimpaired the Company's or any Restricted Subsidiary's rights with
respect thereto and prevent any forfeiture thereof or a default thereunder,
except (i) to the extent a portion of such Oil and Gas Properties is no longer
capable of producing Hydrocarbons in economically reasonable amounts as
determined by the Company in its sole judgment, (ii) for sales or other
dispositions of Oil and Gas Properties permitted by Section 9.16, (iii) if such
failure to comply could not reasonably be expected to have a Material Adverse
Effect, or (iv) those contested in accordance with the terms of the applicable
joint operating agreement or otherwise contested in good faith by appropriate
proceedings.
(d) The Company and its Restricted Subsidiaries will operate their Oil
and Gas Properties or cause or use commercially reasonably efforts to cause such
Oil and Gas Properties to be operated in a careful and efficient manner in
accordance with the practices of the industry and in compliance with all
applicable contracts and agreements and in compliance in all material respects
with all Governmental Requirements, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(e) The Company will, and will cause its Subsidiaries to, maintain
accounting procedures, books and records to permit the preparation of financial
statements of the Company and its Subsidiaries in accordance with GAAP.
(f) The Company or any of its Restricted Subsidiaries may upon thirty
(30) days' notice thereafter to the Administrative Agent change its principal
place of business and chief executive offices from that listed on Exhibit D.
47
54
SECTION 8.04 ENVIRONMENTAL MATTERS. The Company shall, and shall cause
each of its Subsidiaries to, promptly notify the Administrative Agent and the
Lenders in writing of any existing, pending or threatened action, investigation
or inquiry by any Governmental Authority (of which the Company or any of its
Subsidiaries has actual knowledge) in connection with any Environmental Laws,
excluding routine testing and corrective action, which would involve a violation
of any Environmental Law or remedial obligation (individually or in the
aggregate) sufficient to have a Material Adverse Effect.
SECTION 8.05 ENGINEERING REPORTS.
(a) On or before February 28, 1999, and thereafter, March 15 of each
year commencing March 15, 2000, the Company shall furnish to the Technical
Agents and the Lenders a Reserve Report as of the preceding January 1st in form
and substance reasonably satisfactory to the Technical Agents. The January 1
Reserve Report of each year shall be comprised of two reports; one being
prepared by or under the supervision of certified independent petroleum
engineers or other independent petroleum consultant(s) reasonably acceptable to
the Technical Agents and evaluating Oil and Gas Properties comprising not less
than eighty percent (80%) of the SEC Value of the Oil and Gas Properties of the
Company and its Restricted Subsidiaries which Properties the Company desires to
have included in the Borrowing Base, and the other being prepared by or under
the supervision of the chief petroleum engineer of the Company (utilizing
substantially similar procedures to those used by its independent petroleum
engineers) and evaluating the Oil and Gas Properties comprising the remaining
SEC Value of the Oil and Gas Properties of the Company and its Restricted
Subsidiaries which Properties the Company desires to have included in the
Borrowing Base. Notwithstanding the foregoing, the January 1 Reserve Report
relating to any Oil and Gas Properties not located in the geographical
boundaries of the United States of America and Canada and surrounding waters
shall be prepared by certified independent petroleum engineers or other
independent petroleum consultant(s) reasonably acceptable to the Technical
Agents.
(b) On or before September 15 of each year commencing September 15,
1999, the Company shall furnish to the Technical Agents and the Lenders a
Reserve Report prepared as of the immediately preceding July 1 by the chief
engineer of the Company (who shall certify such report to have been prepared in
accordance with the procedures used in the immediately preceding January 1
Reserve Report), which shall further evaluate the Oil and Gas Properties
evaluated in the immediately preceding Reserve Report. For any unscheduled
redetermination pursuant to Section 2.09(d), the Company shall provide such
Reserve Report (which shall be prepared by its chief engineer) with an "as of"
date as specified by the Required Lenders, as soon as possible, but in any event
no later than 75 days following the receipt of the request by the Administrative
Agent.
(c) With the delivery of each Reserve Report required in Section
8.05(a) and (b), the Company shall provide to the Lenders a statement reflecting
(i) any material changes in the net revenue interest of each well or lease as
reflected in the Reserve Report delivered for the prior period, after giving
effect to all encumbrances listed therein from the net revenue interests as
reflected in such report, along with an explanation as to any material
discrepancies between the two net revenue interest disclosures, and (ii) that,
except as set forth on an exhibit thereto, on a net basis there are no gas
imbalances, take or pay or other prepayments with respect to their Oil and Gas
Properties evaluated in such Reserve Report which would require the Company or
any of its Restricted Subsidiaries to deliver Hydrocarbons produced from such
Oil and Gas Properties at some future time without then or thereafter receiving
full payment therefor.
48
55
(d) If the Technical Agents desire to exclude an Oil and Gas Property
included in the Borrowing Base on the basis that title to such Oil and Gas
Property is unsatisfactory, the Administrative Agent shall give the Company
written notice thereof and the Company shall have 90 days to cure such defect.
If the Company is unable to cure any such title defect requested to be cured
within the 90-day period, such default shall not be a Default or an Event of
Default, but instead, if the aggregate value of all such Oil and Gas Properties
which have unsatisfactory title defects (and which have not previously resulted
in the invocation of the remedy set forth in this Section) constitutes 5% or
more of the then current amount of the Borrowing Base, the Technical Agents
shall have the right, by sending written notice to the Company, to reduce the
then outstanding Borrowing Base by an amount as reasonably determined by the
Technical Agents to reflect the impairment to the Borrowing Base caused by such
title defect. This adjustment to the Borrowing Base shall become effective
immediately after receipt of such notice.
SECTION 8.06 STOCK OF RESTRICTED SUBSIDIARIES. Except as provided in
Section 9.08 and Exhibit D, the Company will at all times legally and
beneficially own all issued and outstanding shares of all classes of stock of
its Restricted Subsidiaries as listed on Exhibit D.
SECTION 8.07 FURTHER ASSURANCES. The Company shall, and shall cause its
Restricted Subsidiaries to, cure promptly any defects in the creation and
issuance of the Notes and the execution and delivery of the Loan Documents,
including this Agreement. The Company and its Restricted Subsidiaries will at
their expense promptly execute and deliver to the Administrative Agent upon
request all such other and further documents, agreements and instruments (a) in
compliance with or accomplishment of the covenants and agreements of the Company
and OEI-Louisiana in the Loan Documents, including this Agreement, (b) to
further evidence and more fully describe the collateral, if any, intended as
security for the Notes, (c) to correct any omissions in the Loan Documents, or
more fully state the security obligations set out herein or in any of the Loan
Documents, (d) to perfect, protect or preserve any Liens created pursuant to any
of the Loan Documents, or (e) to make any recordings, to file any notices, or
obtain any consents, all as may be necessary or appropriate in connection
therewith.
SECTION 8.08 PERFORMANCE OF OBLIGATIONS. The Company will pay the Notes
according to the reading, tenor and effect thereof; and the Company will and
will cause each Subsidiary to do and perform every act and discharge all of the
obligations to be performed and discharged by them under this Agreement and the
other Loan Documents, at the time or times and in the manner specified.
ARTICLE IX
NEGATIVE COVENANTS
The Company agrees that, so long as any of the Commitments are in
effect and until payment in full of all Loans hereunder, all interest thereon
and all other amounts payable by the Company or OEI-Louisiana hereunder or any
Loan Document:
SECTION 9.01 DEBT. The Company will not, and will not permit any of its
Subsidiaries to, incur, create, assume or suffer to exist any Debt, except the
following (each of which exceptions is in addition to, and not in limitation of,
the other; and the Company may elect to classify any item of Debt under any
applicable exception, and such classification shall not be deemed to be a
utilization of any other potentially applicable exception):
49
56
(a) the Indebtedness and any guarantees thereof;
(b) Debt of the Company and its Subsidiaries existing on the date of
this Agreement which is reflected in the Financial Statements and any renewals,
refinancings and extensions thereof;
(c) Debt created under leases which, in accordance with GAAP are or
should be recorded as capital leases, in an aggregate amount not to exceed
$10,000,000 at any one time outstanding;
(d) Debt of any Unrestricted Subsidiary that is Non-Recourse Debt, on
terms approved by the Administrative Agent, the Syndication Agent and the
Documentation Agent (which approval shall not be unreasonably withheld),
provided that the Property of such Unrestricted Subsidiary is not included in
the most recent calculation of the Borrowing Base;
(e) (i) Subordinated Debt incurred pursuant to the 95 Indenture, the 96
Indenture, the 97 Indenture and the 98 Senior Subordinated Indenture and any
refinancings permitted by Section 9.19(a) of this Agreement or a consent
thereunder; provided that in no event may the aggregate principal amount of all
Subordinated Debt under such Indentures exceed $760,000,000 at any one time
outstanding without the consent of the Required Lenders, (ii) obligations under
or in connection with the Pledge of Production and Trust Agreements, and (iii)
other Subordinated Debt that is issued on terms reasonably satisfactory to each
of the Administrative Agent, the Syndication Agent and the Documentation Agent
with respect to maturity, interest rate, covenants and subordination language
and any refinancings thereof permitted by Section 9.19(a) of this Agreement or a
consent thereunder, provided that in connection with the issuance of any such
Subordinated Debt under this clause (iii), the Borrowing Base is redetermined;
(f) Debt (i) of the Company created, incurred or assumed after the date
hereof; provided that the aggregate outstanding principal amount of such Debt
shall not exceed $10,000,000 minus the amount of Debt outstanding under clause
(ii) at any one time outstanding and (ii) Debt of any Restricted Subsidiary
created, incurred or assumed after the date hereof; provided that the aggregate
outstanding principal amount of such Debt shall not exceed $1,000,000 at any one
time outstanding;
(g) Debt owed by the Company or any of its Restricted Subsidiaries to
the Company or any of its Restricted Subsidiaries; provided such Debt is on
terms (including, without limitation, subordination provisions) reasonably
satisfactory to the Administrative Agent (which approval shall not be
unreasonably withheld);
(h) (i) the $125,000,000 7-5/8% Senior Notes due 2005 issued pursuant
to the 98 Senior (7-year) Indenture; (ii) the $125,000,000 8-1/4% Senior Notes
due 2018 issued pursuant to the 98 Senior (20-year) Indenture; and (iii) other
Pari Passu Debt that is issued on terms reasonably satisfactory to each of the
Administrative Agent, the Syndication Agent and the Documentation Agent with
respect to maturity, interest rate and covenants and any refinancings thereof
permitted by Section 9.19(a) of this Agreement or a consent thereunder, provided
that in connection with the issuance of any other Pari Passu Debt under this
clause (iii), the Company provides the Administrative Agent notice thereof as
required by Section 8.01(g);
(i) Debt, on terms approved by the Administrative Agent, the
Syndication Agent and the Documentation Agent (which approval shall not be
unreasonably withheld), incurred by partnerships, of which the Company or any
Subsidiary is a general partner and which Debt is Non-recourse to the
50
57
Company or such Subsidiary for the payment thereof (including no recourse to the
Company's or such Subsidiary's interest in such partnership);
(j) Debt under the Havre Credit Facility;
(k) Debt not to exceed $10,000,000 in the aggregate at any one time
outstanding under guarantees or other similar surety obligations by the Company
or any of its Subsidiaries with respect to Debt owed by the Government of
Equatorial Guinea or any Person exercising rights of a sovereign on its behalf;
(l) Debt of Lion not to exceed $12,000,000 in the aggregate at any one
time outstanding incurred with respect to the Abidjan LPG plant and all
guarantees or other surety obligations by the Company or any of its Subsidiaries
with respect to such Debt;
(m) With respect to Debt described in Section 9.01(d) and Debt of
Persons who are not Subsidiaries of the Company ("Primary Obligations"), (i)
Debt of the Company not to exceed $10,000,000 in the aggregate at any one time
outstanding under guarantees of (or other surety obligations with respect to)
Primary Obligations, and (ii) Debt arising out of the grant of Liens on stock
(or other equity interests) issued by obligors of Primary Obligations;
(n) Debt associated with letters of credit, bank guarantees, bonds,
surety or similar obligations required or requested by Governmental Authorities
in connection with the usual and customary operation of and the obtaining of Oil
and Gas Properties; provided that the aggregate amount of all such Debt under
this Section 9.01(n) shall not exceed $50,000,000 in the aggregate at any one
time outstanding;
(o) Debt in an aggregate amount at any one time outstanding not to
exceed $250,000,000 of a Restricted Subsidiary engaged in the oil and gas
business exclusively outside of North America (i) that is Non-recourse to the
Company and any other Restricted Subsidiary of the Company and their respective
Property (other than those guarantees or other surety obligations by the Company
relating to such Debt to which the Technical Agents and the Required Lenders
consent in writing), and (ii) that is on terms approved by the Technical Agents
and the Required Lenders, provided that in connection with the issuance of any
such Debt under this Section 9.01(o), (A) the Borrowing Base is redetermined and
(B) no further investments, loans and advances under Section 9.03 shall be made
in or to such obligor without the prior consent of the Required Lenders; and
(p) Endorsements of checks and other instruments in the ordinary course
of business for purposes of collection.
SECTION 9.02 LIENS. The Company will not and will not permit any of its
Subsidiaries to create, incur, assume or permit to exist any Lien on any of its
Properties (now owned or hereafter acquired), except:
(a) Liens securing the payment of any Indebtedness and any guarantees
thereof;
(b) Excepted Liens;
51
58
(c) Liens existing on the date of this Agreement which have been
disclosed to the Lenders in the Financial Statements and any renewals and
extensions thereof;
(d) Liens securing Debt permitted by Section 9.01(c), provided that
such Liens attach only to the Property subject to such lease;
(e) Liens securing Debt permitted by Section 9.01(d) and Section
9.01(e)(ii);
(f) Liens securing Debt permitted by Section 9.01(i), provided that
such Liens attach only to Property of the partnership incurring such Debt;
(g) Liens to secure the Debt permitted by Section 9.01(j) on any
Property owned by Havre and on the ownership interest in Havre held by the
Company and its Subsidiaries, and encumbrances under gas gathering agreements
caused by the dedication by the Company or any Subsidiary to Havre of such
Person's Oil and Gas Properties located adjacent to the gas gathering system
owned by Havre; and
(h) Liens securing Debt permitted by Sections 9.01(l), (m), (n) (other
than letters of credit and bank guarantees) and (o).
SECTION 9.03 INVESTMENTS, LOANS AND ADVANCES. The Company will not, and
will not permit any of its Restricted Subsidiaries to, make or permit to remain
outstanding any loans or advances to or investments in any Person, except that
the foregoing restriction shall not apply to:
(a) investments, loans or advances reflected in the Financial
Statements;
(b) investments, loans or advances by the Company or by any of its
Restricted Subsidiaries to or in the Company or any of its Restricted
Subsidiaries, including, without limitation, purchases of outstanding equity
interests in Restricted Subsidiaries held by Persons that are not Restricted
Subsidiaries;
(c) (i) investments by the Company or any of its Restricted
Subsidiaries in additional Oil and Gas Properties and facilities related
thereto, including gas gathering systems, and other investments, loans and
advances made in the ordinary course of, and which are or become customary in,
the oil and gas business as a means of actively exploiting, exploring for,
acquiring, developing, processing, gathering, storing, marketing or transporting
oil and gas; (ii) investments, loans or advances in or to any Restricted
Subsidiary of the Company for the investment by such Persons in Properties of
the types described in clause (c)(i) above (whether now owned or hereafter
acquired or developed) located in jurisdictions (A) in North America and (B)
outside of North America; provided that such investments, loans or advances
under this clause (c)(ii)(B) shall not exceed $150,000,000 annually, net of cash
received during such period as a return of capital or return on investment from
any such investment, loan or advance previously made, in the aggregate for each
nation; and (iii) investments in unrelated development activities or businesses
in countries in which any of its Restricted Subsidiaries has Oil and Gas
Properties; provided that the aggregate amount of such investments under this
clause (iii) do not exceed $10,000,000, net of cash received during such period
as a return of capital or return on investment from any such investment, loan or
advance previously made, in the aggregate during any twelve month period;
52
59
(d) routine advances by the Company or any of its Restricted
Subsidiaries to or on behalf of the Company or any of its Restricted
Subsidiaries in the ordinary course of business for general and administrative
expenses;
(e) routine operating expenses advanced by the Company or any of its
Restricted Subsidiaries as operator in the ordinary course of business for other
working interest owners under operating agreements, which do not exceed
$10,000,000 in the aggregate outstanding at any one time to all Persons
combined;
(f) investments required to satisfy obligations under any Plans;
(g) accounts receivable of the Company or any of its Restricted
Subsidiaries arising out of the sale of Hydrocarbons and other assets or
services in the ordinary course of business;
(h) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within one year from the date of purchase thereof; and repurchase
agreements of any Lender or any commercial bank in the United States, if the
commercial paper of such bank or of the bank holding company of which such bank
is a wholly owned subsidiary is rated in one of the two highest rating
categories of Standard & Poors Ratings Service, ▇▇▇▇▇'▇ Investors Service, Inc.
or any other rating agency satisfactory to the Majority Lenders, that are fully
secured by securities described in this Section 9.03(h);
(i) commercial paper rated in one of the two highest grades by Standard
& Poors Rating Service or ▇▇▇▇▇'▇ Investors Service, Inc.;
(j) demand deposits and certificates of deposit maturing within one
year from the date of acquisition thereof with any Lender or any office located
in the United States of any bank or trust company which is organized under the
laws of the United States or any state thereof and which has capital, surplus
and undivided profits aggregating at least $500,000,000 (as of the date of such
bank or trust company's most recent financial reports);
(k) routine advances or loans to employees of the Company or any of its
Subsidiaries not to exceed $200,000 in the aggregate at any one time;
(l) deposit accounts maintained in the ordinary course of business by
the Company or any of its Subsidiaries maturing within one year from the date of
creation thereof or available upon demand with any bank or trust company
organized in a country in which a Restricted Subsidiary is then doing business
or in which it owns Property;
(m) investments, loans or advances in an aggregate amount not to exceed
$10,000,000, net of cash received during such period as a return of capital or
return on investment from any such investment, loan or advance previously made,
to or for the benefit of the Government of Equatorial Guinea or any Governmental
Authority thereof;
(n) (i) investments, loans or advances (including any guarantee or
other surety obligation constituting Debt under Section 9.01(m)(i) and the
amount of any Letters of Credit issued on account of Lion, but excluding
obligations under Section 9.01(m)(ii)) in the Abidjan LPG plant or in Lion or in
any Person that directly or indirectly controls such plant in an aggregate
amount not to exceed
53
60
$25,000,000, net of cash received during such period as a return of capital or
return on investment, loan or advance from any such investment, loan or advance
previously made, and (ii) investments, loans or advances in Havre (including any
guarantee or other surety obligation constituting Debt under Section 9.01(j) or
(m)(i) and the amount of any Letters of Credit issued on account of Havre, but
excluding obligations under Section 9.01(m)(ii)) in an aggregate amount not to
exceed $21,000,000, net of cash received during such period as a return of
capital or return on investment, loan or advance from any such investment, loan
or advance previously made;
(o) investments by the Company or any of its Restricted Subsidiaries
under Risk Management Agreements entered into in the ordinary course of their
business for the purposes of protecting against fluctuations in interest rates,
oil and gas prices or foreign currency exchange rates;
(p) investments, loans and advances in or to Unrestricted Subsidiaries
of the Company other than Havre and Lion; provided that the aggregate amount of
investments, loans and advances (including (i) guarantee or other surety
obligations by the Company or any Restricted Subsidiary constituting Debt under
Section 9.01(m)(i), but excluding obligations under Section 9.01(m)(ii), (ii)
Letters of Credit issued on account of obligations of such Unrestricted
Subsidiary and (iii) if Ocean Equatorial Guinea Corporation, a Delaware
corporation, or its successor, is designated as an Unrestricted Subsidiary, the
aggregate amount of investments, loans or advances made under Section 9.03(m))
in and to all Unrestricted Subsidiaries (other than Havre and Lion) by the
Company and its Restricted Subsidiaries hereunder, net of cash received as a
return of capital or return on any investment, loan or advance previously made,
does not exceed $20,000,000;
(q) deposits in money market funds investing exclusively in investments
described in Section 9.03(h), 9.03(i) or 9.03(j); and
(r) other investments, loans or advances not to exceed $1,000,000 in
the aggregate at any time.
SECTION 9.04 DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS. Except with
prior approval of the Required Lenders, the Company will not declare or pay any
dividend, purchase, redeem or otherwise acquire for value any of its stock now
or hereafter outstanding, return any capital to its stockholders, or make any
distribution of its assets to its stockholders as such, or permit any of its
Restricted Subsidiaries to purchase or otherwise acquire for value any stock of
the Company, except the Company may, so long as no Default or Event of Default
has occurred and is continuing: (i) declare and deliver stock dividends; (ii)
redeem or repurchase stock with the proceeds received from the issuance of new
shares of any class of stock within the 12 month period prior to such redemption
or repurchase; provided that the aggregate amount redeemed or repurchased under
this clause (ii) during such 12 month period does not exceed $100,000,000; (iii)
(A) declare and pay cash dividends, (B) if, but only if, the 12 month
redemption/repurchase period allowed in Section 9.04(ii) is not applicable,
redeem or repurchase stock, in either case in an aggregate amount not to exceed
$25,000,000 plus 50% of the Consolidated Net Income generated after March 31,
1998; and (C) make required payments due on the Company's $50,000,000 6-1/2%
cumulative preferred stock to be issued to ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance
Company and ▇▇▇▇▇▇▇ Mezzanine Partners L.P.; provided that (x) no Borrowing Base
Deficiency exists either immediately before declaration of such dividend, after
payment of such dividend or immediately after any such stock redemption,
repurchase or payment under this clause (iii) and (y) the aggregate amount of
Loans and LC Exposure immediately before or after declaration and such payment
are less than or equal to the Threshold Amount.
54
61
SECTION 9.05 FINANCIAL COVENANTS.
(a) INTEREST COVERAGE RATIO. The Company will not permit its Interest
Coverage Ratio, as of the end of any fiscal quarter of the Company, to be less
than 3.0 to 1.0.
(b) DEBT COVERAGE RATIO. The Company will not permit its Debt Coverage
Ratio, at any time to be greater than 3.5 to 1.0.
(c) TANGIBLE NET WORTH. On and after the Effective Date, the Company
will not permit its Consolidated Tangible Net Worth to be less than $580,000,000
plus the amount equal to seventy-five percent (75%) of the net cash proceeds of
any sale or other issuance of any equity security by the Company at any time
after the Effective Date, plus the amount equal to 50% of its positive
Consolidated Net Income for the period from March 31, 1998 to the date of such
determination, taken as a single accounting period.
SECTION 9.06 NATURE OF BUSINESS. The Company will not, and will not
permit any of its Restricted Subsidiaries to, make any material change in the
character of its business as carried on at the date hereof.
SECTION 9.07 LIMITATION ON OPERATING LEASES AND SALE-LEASEBACK
TRANSACTIONS. The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any obligation for the
payment of rent or hire of Property of any kind whatsoever (real or personal),
under leases or lease agreements (other than (a) leases or lease agreements
which constitute Debt, (b) leases of Hydrocarbon Interests, and (c) leases
directly related to oil and gas field operations, including without limitation,
leases for drilling, workover or other rig related activities) which would cause
the aggregate amount of all payments made by the Company and its Restricted
Subsidiaries pursuant to such leases or lease agreements to exceed $17,000,000
in any period of twelve consecutive calendar months. Neither the Company nor any
of its Restricted Subsidiaries will enter into any arrangement, directly or
indirectly, with any Person whereby the Company or any of its Restricted
Subsidiaries shall sell or transfer any of their Property, whether now owned or
hereafter acquired, and whereby the Company or any of its Restricted
Subsidiaries shall then or thereafter rent or lease as lessee such Property or
any part thereof or other Property which the Company or any of its Restricted
Subsidiaries intends to use for substantially the same purpose or purposes as
the Property sold or transferred.
SECTION 9.08 MERGERS, ETC. The Company will not, and will not permit
any of its Restricted Subsidiaries, to (a) merge into or with or consolidate
with, any other Person, (b) sell, lease or otherwise dispose of (whether in one
transaction or in a series of transactions), all or any substantial part of its
Property or assets to any other Person, or (c) dissolve or take other similar
actions; provided that if the Company gives prior written notice to the
Administrative Agent, and no Default or Event of Default has occurred and is
continuing or will result from the action proposed to be taken, then: any
Restricted Subsidiary of the Company may (i) merge or consolidate with the
Company or with any other Subsidiary of the Company, including an Unrestricted
Subsidiary so long as the requirements of Sections 9.16 and 9.21 are met, (ii)
sell, lease or otherwise dispose of (at fair market value) all or any
substantial part of its Property or assets to the Company or to any other
Subsidiary of the Company, including an Unrestricted Subsidiary so long as the
requirements of Sections 9.16 and 9.21 are met, or (iii) dissolve or take other
similar actions.
55
62
SECTION 9.09 PROCEEDS OF NOTES. The Company will not permit the
proceeds of the Notes to be used for any purpose other than those permitted by
Section 7.07.
SECTION 9.10 ERISA COMPLIANCE. The Company will not at any time permit
any Plan maintained by it or any of its Subsidiaries to:
(a) engage in any "prohibited transaction" as such term is defined in
Section 4975 of the Code;
(b) incur any "accumulated funding deficiency" as such term is defined
in Section 302 of ERISA; or
(c) terminate any such Plan in a manner which could result in the
imposition of a Lien on the Property of the Company or any of its Subsidiaries
pursuant to Section 4068 of ERISA.
SECTION 9.11 SALE OR DISCOUNT OF RECEIVABLES. Except for receivables
obtained by the Company out of the ordinary course of its business, the Company
and its Restricted Subsidiaries will not discount or sell (with or without
recourse) any of its notes receivable or accounts receivable except for
settlement of joint interest billing accounts (other than with respect to
Restricted Subsidiaries) in the normal course of business.
SECTION 9.12 RISK MANAGEMENT AGREEMENTS. The Company will not, and will
not permit any of its Restricted Subsidiaries to, incur any obligations under
Risk Management Agreements, except that the Company may incur such obligations
either with investment grade counterparties or as disclosed in Schedule 7.21;
provided Risk Management Agreements relating to commodity prices shall not cover
more than (i) 80% of the Company's and its Restricted Subsidiaries' applicable
production estimates from their Oil and Gas Properties for the 24 month period
measured as of the end of each fiscal quarter of the Company and its
Consolidated Subsidiaries, (ii) 65% of the Company's and its Restricted
Subsidiaries' applicable production estimates from their Oil and Gas Properties
for the period commencing at the end of such 24-month period and ending on the
date which is 36 months after the date of determination, and (iii) 50% of the
Company's and its Restricted Subsidiaries' applicable production estimates from
their Oil and Gas Properties for the period thereafter.
SECTION 9.13 TRANSACTIONS WITH AFFILIATES. The Company and its
Restricted Subsidiaries shall not enter into any transaction, including without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Affiliate (other than the Company, OEI-Louisiana, Ocean
Canada or any other Restricted Subsidiary of the Company) unless such
transactions are in the ordinary course of the Company's or its Restricted
Subsidiary's business and are upon fair and reasonable terms no less favorable
to the Company or such Restricted Subsidiary than could be obtained in a
comparable arm's length transaction with a Person not an Affiliate.
SECTION 9.14 NEGATIVE PLEDGE AGREEMENTS. Except for (a) any of the Loan
Documents; (b) the Indentures and any agreement evidencing other Pari Passu Debt
or Subordinated Debt; (c) agreements permitted by Sections 9.02(c), (d), (e),
(f), (g) or (h) but only with respect to the Property subject of the Lien
permitted thereby; (d) customary provisions in leases, licenses, asset sale
agreements and other customary agreements not related to the borrowing of money
and entered into in the ordinary course of business, (e) Liens or restrictions
imposed on investments (or Property related thereto) of the type described in
Section 9.03(c)(iii), but only on such investments or Property; and
56
63
(f) restrictions imposed by agreements governing Excepted Liens, the Company and
its Restricted Subsidiaries will not create, incur, assume or suffer to exist
any contract, agreement or understanding which in any way prohibits or restricts
the granting, conveying, creation or imposition of any Lien on any Property of
the Company or any of its Restricted Subsidiaries or which requires the consent
of or notice to other Persons in connection therewith.
SECTION 9.15 SUBSIDIARIES AND PARTNERSHIPS. The Company and any of its
Restricted Subsidiaries may create additional Subsidiaries or partnerships,
provided that the Company shall give the Administrative Agent prompt notice
thereof.
SECTION 9.16 SALE OF OIL AND GAS PROPERTIES. Except for Hydrocarbons
sold in the ordinary course of business as and when produced or after the
production thereof, the Company will not sell, assign, transfer or convey, or
permit any of its Restricted Subsidiaries to sell, assign, transfer or convey,
any interest in any of the Oil and Gas Properties that constitute part of the
Borrowing Base. This provision shall not apply to:
(a) Routine farm-outs and dispositions of non-proven acreage; and
(b) Sales or other dispositions of Properties, provided that if the
aggregate fair market value of such Properties sold or otherwise disposed of
during any Redetermination Period exceeds five percent (5%) of the then current
SEC Value of the Oil and Gas Properties included in the Borrowing Base (as in
effect immediately prior to such sale), then simultaneously with any such
disposition the Borrowing Base is reduced by an amount reasonably determined at
the time by the Technical Agents to reflect the contribution to the Borrowing
Base of the Properties so disposed of.
SECTION 9.17 ENVIRONMENTAL MATTERS. The Company will not cause or
permit, or permit any of its Subsidiaries, to cause or permit, any of its
Property to be in violation of, or do anything or permit anything to be done
which will subject any such Property to any remedial obligations under any
Environmental Laws if the effect of such violation could reasonably be expected
to have a Material Adverse Effect. The Company and its Subsidiaries will
establish and implement such procedures as may be necessary to promptly and
properly respond in the event that: (i) solid wastes are disposed of on any of
its respective Property in quantities or locations that would require remedial
action under any Environmental Laws; (ii) hazardous substances are released on
or to any such Property in a quantity equal to or exceeding that quantity which
requires reporting pursuant to Section 103 of CERCLA; (iii) hazardous substances
are released on or to any such Property so as to pose an imminent and
substantial endangerment to public health or welfare or the environment; or (iv)
oil is released or threatened to be released in violation of OPA.
SECTION 9.18 PAYMENT RESTRICTIONS. Except for (a) any of the Loan
Documents, (b) the Indentures or agreements evidencing any other Pari Passu Debt
or Subordinated Debt, (c) the agreements relating to Non-recourse Debt permitted
by Section 9.01, but only with respect to the Restricted Subsidiary that is
liable for such Non-recourse Debt, and (d) restrictions imposed relating to
investments (or Property related thereto) of the type described in Section
9.03(c)(iii), but only with respect to such investments or Property, the Company
and its Restricted Subsidiaries will not enter into any agreements which would
restrict payments from any Restricted Subsidiary of the Company to the Company
or any other Restricted Subsidiary.
57
64
SECTION 9.19 SUBORDINATED AND PARI PASSU DEBT. Neither the Company nor
any of its Restricted Subsidiaries shall, without the prior written consent of
the Majority Lenders:
(a) defease, redeem, offer to purchase or purchase any of the
Subordinated Debt or the Pari Passu Debt, unless the Indebtedness shall have
been paid in full and the Commitments of each Lender terminated; provided that
the Company may optionally defease, redeem, offer to purchase and purchase all
or any part of the Subordinated Debt or any Pari Passu Debt (i) with the
proceeds of the issuance of any equity securities or (ii) with the proceeds of
any other Debt (which, in the case of Subordinated Debt, is subordinated on
terms substantially identical to the Subordinated Debt or on terms more
advantageous to the Lenders and) which has an average life and final maturity
later than the average life and final maturity date, respectively, of the
Subordinated Debt or Pari Passu Debt being refinanced; provided further that the
Company and OEI-Louisiana may (1) make the payments required under the Pledge of
Production Trust Agreements in accordance with the terms thereof and (2) make
mandatory repayments and repurchases of Pari Passu Debt to the extent required
under the instruments governing such Debt; or
(b) amend, supplement or modify the provisions of the Indentures or any
instrument evidencing or guaranteeing the Debt incurred pursuant to the terms
thereof; provided that the foregoing shall not apply to the following: (i) any
amendment, supplement or modification, that, subject to the concurrence of the
Administrative Agent, the Syndication Agent and the Documentation Agent, causes
such Debt to have terms generally less restrictive than its terms immediately
prior thereto, (ii) any amendment or supplement to the 95 Indenture, the 96
Indenture or the 97 Indenture to conform the provisions thereof to the
corresponding provisions of the 98 Senior Subordinated Indenture; and (iii) the
Company and OEI-Louisiana (and the trustee, if applicable) may enter into
supplemental indentures to the instruments governing such Debt of the type
described in Section 9.1 of each of the Indentures.
SECTION 9.20 MAINTENANCE OF DEPOSITS. The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, maintain deposits of funds in
any bank or financial institution outside of the United States, Canada and
nations that are members of the European Union, except for operating accounts in
jurisdictions where the Company or any of its Restricted Subsidiaries is doing
business or owns Property, which operating accounts shall contain only such
minimum amounts as may be necessary for the conduct of business or the
maintenance and exploitation of such Property.
SECTION 9.21 UNRESTRICTED SUBSIDIARIES.
(a) The Company will not, and will not permit any Restricted Subsidiary
to, create or otherwise designate any Subsidiary as an Unrestricted Subsidiary
if (i) a Borrowing Base Deficiency exists, (ii) a Default or Event of Default
exists or would result from such creation or designation, including under
Section 9.03(p), (iii) such Subsidiary owes or incurs Debt other than
Non-Recourse Debt, Debt under Section 9.01(j), and Debt owed to the Company and
any of its Restricted Subsidiaries in connection with investments, loans or
advances (including, without limitation, contingent obligations) made in
compliance with Section 9.03(n) or (p), or (iv) such creation or designation
shall result in the creation or imposition of any claim or Lien on any assets of
the Company or any Restricted Subsidiary. Notwithstanding the foregoing, in no
event may the Board of Directors of the Company designate OEI-Louisiana, OERI or
Ocean Canada as an Unrestricted Subsidiary.
58
65
(b) Without limitation of Section 9.21(a), the Company will not, and
will not permit any Restricted Subsidiaries to, without the prior written
consent of the Majority Lenders, change the characterization of a Subsidiary
from a Restricted Subsidiary to an Unrestricted Subsidiary or an Unrestricted
Subsidiary to a Restricted Subsidiary; provided, however, the prior written
consent of the Majority Lenders shall not be required to (i) change the
characterization of an Unrestricted Subsidiary to a Restricted Subsidiary if (A)
no Default or Event of Default shall have occurred and be continuing at such
time or would result therefrom, (B) after giving effect to such
re-characterization, each of the representations and warranties made by the
Company and OEI-Louisiana in the Loan Documents to which each is a party shall
be true and correct in all material respects, and (C) the Company provides the
Administrative Agent five (5) days advance written notice of its intent to
re-characterize such Subsidiary or (ii) change the characterization of a
Restricted Subsidiary to an Unrestricted Subsidiary if (A) no Default or Event
of Default shall have occurred and be continuing or would result therefrom
(including a violation of Section 9.03(p)), and on the date of such
recharacterization, all investments made by the Company or any other Restricted
Subsidiary in such Restricted Subsidiary prior to the date of such
re-characterization shall be investments in an Unrestricted Subsidiary subject
to Section 9.03(p), (B) if the Restricted Subsidiary owns any Oil and Gas
Properties which are included in the Borrowing Base, the Aggregate Commitments
and the Borrowing Base shall be reduced by an amount reasonably determined at
the time by the Technical Agents to reflect the contribution to the Borrowing
Base of the Properties so owned, and (C) the Company provides the Administrative
Agent five (5) days advance written notice of its intent to re-characterize such
Subsidiary.
SECTION 9.22 GAS IMBALANCES, TAKE-OR-PAY OR OTHER PREPAYMENTS. The
Company and its Restricted Subsidiaries will not enter into any contracts or
agreements which warrant production of Hydrocarbons and will not hereafter allow
gas imbalances, take-or-pay or other prepayments with respect to the Oil and Gas
Properties of the Company and its Restricted Subsidiaries which would require
the Company or such Restricted Subsidiaries to deliver Hydrocarbons produced on
Oil and Gas Properties at some future time without then or thereafter receiving
full payment therefor to exceed 10,000,000 mcf of gas in the aggregate on a net
basis.
ARTICLE X
EVENTS OF DEFAULT
SECTION 10.01 EVENTS OF DEFAULT. If one or more of the following events
(herein called "Events of Default") shall occur and be continuing:
(a) The Company shall default in the payment or mandatory prepayment
when due of any principal of any Loan or of any reimbursement obligation for
disbursement made under any Letter of Credit; or the Company shall default in
the payment when due of any interest on any Loan, any fees payable hereunder or
under any other Loan Document or other amount payable by it hereunder or
thereunder and such default shall continue for a period of five (5) Business
Days; or
(b) The Company or any of its Restricted Subsidiaries shall default in
the payment when due (after expiration of all applicable grace periods, if any)
of any principal of or interest on any of its other Debt, or default in the
payment of any termination or settlement payments under any futures contracts,
or similar Risk Management Agreement, in any case, in an amount in excess of
$15,000,000; or any event specified in any note, agreement, indenture or other
document evidencing or relating to any Debt of the Company or any of its
Restricted Subsidiaries in an amount in excess of $15,000,000 shall occur
(including the giving of all required notices and the expiration of all
applicable
59
66
grace periods, if any) and be continuing if the effect of such event is to
cause, or to permit the holder or holders of such Debt (or a trustee or agent on
behalf of such holder or holders) to cause, such Debt in excess of $15,000,000
to become due prior to its stated maturity; or the Company shall under any
circumstances become obligated to redeem, defease or offer to buy all or any of
the subordinated notes issued under the 95 Indenture, the 96 Indenture, the 97
Indenture or the 98 Senior Subordinated Indenture; or
(c) Any representation, warranty or certification made or deemed made
herein or in any other Loan Document by the Company or any of its Restricted
Subsidiaries or in any certificate furnished to any Lender or any Agent pursuant
to the provisions hereof or any other Loan Document, shall prove to have been
false or misleading as of the time made or furnished in any material respect; or
(d) The Company shall default in the performance of any of its
obligations under Article IX; or the Company or any of its Restricted
Subsidiaries shall default in the performance of any of their respective other
obligations in this Agreement or under any other Loan Document to which it is
party and such default shall continue unremedied for a period of 30 days after
notice thereof to the Company by the Administrative Agent or any Lender; or
(e) The Company or any Restricted Subsidiary shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become due;
or
(f) The Company or any Restricted Subsidiary shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part of
its property, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the Bankruptcy Code (as now or hereafter
in effect), (iv) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code, or (vi) take any corporate action
for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application or
consent of the Company or any Restricted Subsidiary in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like for such
Person or of all or any substantial part of its assets, or (iii) similar relief
in respect of any such Person under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 days; or an order for relief against
such Person shall be entered in an involuntary case under the Bankruptcy Code;
or
(h) A final judgment or judgments for the payment of money in excess of
$15,000,000 in the aggregate in excess of insurance coverage shall be rendered
by a court or courts against the Company or any of its Restricted Subsidiaries
and either the same shall not be discharged or provision shall not be made for
such discharge, or a stay of execution thereof shall not be procured, in either
case, within 30 days from the date of entry thereof and the judgment debtor
shall not, within said
60
67
period of 30 days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal; or
(i) An event or condition specified in Section 9.10 shall occur or
exist with respect to any Plan or Multiemployer Plan and, as a result of such
event or condition, together with all other such events or conditions, the
Company or any ERISA Affiliate shall incur or in the opinion of the Required
Lenders shall be reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or PBGC (or any combination of the foregoing) which is in
excess of $15,000,000; or
(j) The Guaranty Agreement or other material Loan Document, after
delivery thereof, shall for any reason, except to the extent permitted by the
terms of this Agreement or thereof, cease to be in full force and effect and
valid, binding and enforceable in accordance with its terms (subject to
customary exceptions therefrom); or
(k) Any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended), excluding
underwriters in the course of their distribution of Voting Stock in an
underwritten public offering, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 of the SEC under the Securities Exchange Act of 1934), directly or
indirectly, of more than 50% of the total Voting Stock of the Company; or during
any consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; or
(l) The Company shall cease to directly or indirectly own 100% of each
class of stock of OEI-Louisiana, OERI, Ocean Canada or any Restricted Subsidiary
(except for (i) directors' qualifying shares and (ii) shares of Wholly Owned
Restricted Subsidiaries of the type described in clause (ii) of the definition
of Wholly Owned Restricted Subsidiaries).
THEREUPON: (i) in the case of an Event of Default other than one referred to in
clause (e), (f) or (g) of this Section 10.01 with respect to the Company or
OEI-Louisiana, the Administrative Agent may and, upon request of the Majority
Lenders, shall, by notice to the Company, cancel the Commitments and/or declare
the principal amount of the Loans, together with accrued interest, and all other
amounts payable by the Company hereunder and under the Notes to be forthwith due
and payable, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other formalities of any kind, all of which are hereby expressly
waived by the Company and OEI-Louisiana; and (ii) in the case of the occurrence
of an Event of Default referred to in clause (e), (f) or (g) of this Section
10.01 with respect to the Company or OEI-Louisiana, the Commitments shall be
automatically canceled and the principal amount of the Loans, together with
accrued interest, and all other amounts payable by the Company hereunder and
under the Notes shall become automatically immediately due and payable without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other formalities of any kind, all of which are hereby expressly
waived by the Company on its behalf and on behalf of OEI-Louisiana.
61
68
SECTION 10.02 REMEDIES; APPLICATION OF PROCEEDS. If an Event of Default
exists, the Administrative Agent may, or upon the request of the Majority
Lenders, shall, proceed to enforce remedies under the Loan Documents. Upon
realization of any cash proceeds, all such cash proceeds shall be applied as
follows:
(a) First, to the pro rata reimbursement of fees (including fees due
under Section 2.04), expenses and indemnities provided for in this Agreement or
any other Loan Document of the Agents and the Lenders;
(b) Second, to accrued and unpaid interest on the Notes;
(c) Third, pro rata to principal outstanding on the Notes;
(d) Fourth, to serve as cash collateral to be held by the
Administrative Agent to secure the LC Exposure;
(e) Fifth, to repay any other amounts then due and unpaid; and
(f) Sixth, any excess shall be paid to the Company or as otherwise
required by any Governmental Requirement.
ARTICLE XI
THE AGENTS
SECTION 11.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent, the Syndication
Agent, the Documentation Agent, the Technical Agents and each Co-Agent to act as
its agent hereunder with such powers as are specifically delegated to it by the
terms of this Agreement or any Loan Document, together with such other powers as
are reasonably incidental thereto. (As of the Effective Date, the Co-Agents have
been delegated no specific powers or responsibilities under this Agreement,
except in their capacities as Lenders.) Each Agent (which term as used in this
sentence and in Section 11.05 and the first sentence of Section 11.06 shall
include reference to its Affiliates and its own and its Affiliates' officers,
directors, employees and agents): (a) shall have no duties or responsibilities
except those expressly set forth in this Agreement and the other Loan Documents
and shall not by reason of this Agreement or any other Loan Document be a
trustee for any other Agent or Lender; (b) shall not be responsible to any other
Agent or the Lenders (i) for the accuracy of any recitals, statements,
representations or warranties contained in this Agreement or any Loan Document
or in any certificate or other document referred to or provided for in, or
received by any of them under, this Agreement; (ii) for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, any
Note or any Loan Document or any other document referred to or provided for
herein; or (iii) for any failure by the Company, OEI-Louisiana or any other
Person to perform any of its obligations hereunder or thereunder; (c) shall not
be required to initiate or conduct any litigation or collection proceedings
hereunder except as may be expressly required under this Agreement or any other
Loan Document; and (d) shall not be responsible for any action taken or omitted
to be taken by it hereunder or under any other Loan Document, except for its own
gross negligence or willful misconduct. The Agents may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it in good faith. Each Agent
may deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until a written notice of the
62
69
assignment or transfer thereof shall have been filed with the Administrative
Agent, together with the written consent of the Company to such assignment or
transfer.
SECTION 11.02 RELIANCE BY AGENTS. Each Agent shall be entitled to rely:
(a) upon any certification, notice or other communication (including any thereof
by telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons;
and (b) upon advice and statements of legal counsel, independent accountants and
other experts selected by any Agent in good faith. As to any matters not
expressly provided for by this Agreement or any Loan Document, each Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Majority Lenders; and
such instructions of the Majority Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.
SECTION 11.03 DEFAULTS. No Agent shall be deemed to have knowledge of
the occurrence of a Default (other than, in the case of the Administrative
Agent, the non-payment of principal of or interest on Loans or of fees or the
non-payment of reimbursement obligations of the Company in connection with
Letters of Credit) unless it has received notice from either a Lender or the
Company specifying such Default and stating that such notice is a "Notice of
Default". In the event that any Agent receives such a notice of the occurrence
of a Default, it shall promptly give notice to the Administrative Agent who
shall thereafter give prompt notice thereof to the Lenders.
SECTION 11.04 RIGHTS AS A LENDER. With respect to its Commitment and
the Loans made by it and the Letters of Credit issued by it or in which it is
participating, each Agent (and any successor acting as an Agent) in its capacity
as a Lender hereunder shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not acting as an Agent,
and the term "Lender" or "Lenders" shall include each Agent in its individual
capacity. Each Agent (and any successor acting as an Agent) and its Affiliates
may (without having to account therefor to any other Agent or Lender) accept
deposits from, lend money to and generally engage in any kind of banking, trust
or other business with the Company and its Subsidiaries or any of the Company's
Affiliates as if it were not acting as an Agent. Each Agent and its Affiliates
may accept fees and other consideration from the Company or any of its
Affiliates for services in connection with this Agreement, any Loan Document or
otherwise without having to account for the same to any other Agent or the
Lenders.
SECTION 11.05 INDEMNIFICATION. The Lenders agree to indemnify each
Agent (to the extent not reimbursed under Section 12.03, but without limiting
the obligations of the Company under Section 12.03), ratably in accordance with
the aggregate principal amount of the Loans made by the Lenders (or, if no Loans
are at the time outstanding, ratably in accordance with their respective
Commitments), for any and all Indemnity Matters of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against such Agent
in any way relating to or arising out of: (a) this Agreement or any other Loan
Document or the transactions contemplated hereby and thereby (including, without
limitation, the costs and expenses which the Company is obligated to pay under
Section 12.03 but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder); or (b) the enforcement of any of the terms hereof or
of any other Loan Document; provided that no Lender shall be liable for any
Indemnity Matter to the extent it arises from the gross negligence or willful
misconduct of the Person to be indemnified; and provided further that no Lender
shall be liable for any Indemnity Matters arising solely by reason of claims
among the Agents and their shareholders. THE FOREGOING
63
70
INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES NOTWITHSTANDING THE SOLE OR
CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR
PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT
LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT
(SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY REASON OF
STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED
PARTIES. TO THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND BY A FINAL,
NON-APPEALABLE JUDGMENT OF A COURT OR BY AGREEMENT TO HAVE COMMITTED AN ACT OF
GROSS NEGLIGENCE OR WILFUL MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF
INDEMNIFICATION SHALL CONTINUE BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM
THAT IS DEEMED TO HAVE OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS
NEGLIGENCE OR WILFUL MISCONDUCT OF THE PARTY SEEKING INDEMNIFICATION. IN
ADDITION, THE FOREGOING INDEMNITIES EXCLUDE ALL INDEMNITY MATTERS ARISING SOLELY
BY REASON OF CLAIMS AMONG INDEMNIFIED PARTIES AND THEIR SHAREHOLDERS.
SECTION 11.06 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender
agrees: (a) that it has, independently and without reliance on any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and its Subsidiaries
and decision to enter into this Agreement; and (b) that it will, independently
and without reliance upon any Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this
Agreement or any other Loan Document. No Agent shall be required to keep itself
informed as to the performance or observance by the Company, OEI-Louisiana or
any other Person of its obligations under this Agreement or any other Loan
Document or document referred to or provided for herein or to inspect the
Properties or books of the Company and its Subsidiaries. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by an Agent hereunder or under a Loan Document, no Agent shall
have any duty or responsibility to provide any other Agent or Lender with any
credit or other information concerning the affairs, financial condition or
business of the Company and its Subsidiaries (or any of their Affiliates) which
may come into the possession of such Agent or any of their Affiliates.
SECTION 11.07 ACTION BY AGENTS. Except for action or other matters
expressly required of an Agent hereunder, such Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall (i) receive
written instructions from the Majority Lenders specifying the action to be
taken, and (ii) be indemnified to its satisfaction by the Lenders against any
and all liability and expenses which may be incurred by it by reason of taking
or continuing to take any such action, and such instructions of the Majority
Lenders and any action taken or failure to act pursuant thereto shall be binding
on all of the Lenders. If a Default has occurred and is continuing, the
Administrative Agent shall take such action with respect to such Default as
shall be directed by the Majority Lenders in the written instructions (with
indemnities) described in this Section 11.07, provided that, unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interests of the Lenders. In no event, however, shall the
Administrative Agent be required to take any action which exposes it to personal
liability or which is contrary to this Agreement and the Loan Documents or
applicable law.
SECTION 11.08 RESIGNATION OR REMOVAL OF AGENTS. Subject to the
appointment and acceptance of a successor Agent as provided in this Section
11.08, any Agent may resign at any time by giving notice thereof to the Lenders
and the Company, and any Agent may be removed at any time, for cause,
64
71
by the Required Lenders. Upon any such resignation or removal, the Required
Lenders, with the consent of the Company (which consent shall not be
unreasonably withheld or delayed), shall have the right to appoint a successor
Agent. If no successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after either the retiring
Agent's giving of notice of resignation or the Required Lenders' removal of the
retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint
its successor. Upon the acceptance of any appointment as an Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder, the provisions of this
Article XI shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as an Agent.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 WAIVER. No failure on the part of any Agent or any Lender
to exercise, no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement or any Loan Document shall
operate as a waiver thereof; and no single or partial exercise of any right,
power or privilege under this Agreement or any Loan Document shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
SECTION 12.02 NOTICES. All notices and other communications provided
for herein and in the other Loan Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the other Loan
Documents) shall be given or made by telecopy, telegraph, cable or in writing
and telecopied, telegraphed, cabled, mailed or delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof; or, as to any party, at such other address as shall be designated
by such party in a notice to each other party. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly given
when transmitted by telecopier, delivered to the telegraph or cable office or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.
SECTION 12.03 PAYMENT OF EXPENSES, INDEMNITIES, ETC. The Company agrees
to:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable expenses of the Administrative Agent in the
administration (both before and after the execution hereof and including advice
of counsel as to the rights and duties of the Agents and the Lenders with
respect thereto) of, and in connection with the negotiation, investigation,
preparation, execution and delivery of, recording or filing of, preservation of
rights under, enforcement of, and refinancing, renegotiation or restructuring
of, this Agreement, the Notes and the other Loan Documents and any amendment,
waiver or consent relating thereto (including, without limitation, the
reasonable fees and disbursements of counsel for the Administrative Agent and in
the case of enforcement for any of the Lenders); and promptly reimburse each
Agent or Lender for all amounts expended, advanced or incurred by such Agent or
Lender to satisfy any obligation of the Company or OEI-Louisiana under this
Agreement or any Loan Document; and
(b) pay and hold each of the Agents and the Lenders harmless from and
against any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save each
65
72
Agent and Lender harmless from and against any and all liabilities with respect
to or resulting from any delay or omission to pay such taxes; and
(c) INDEMNIFY THE AGENTS AND EACH LENDER, THEIR OFFICERS, DIRECTORS,
EMPLOYEES, REPRESENTATIVES, AGENTS AND AFFILIATES (COLLECTIVELY, THE
"INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM HARMLESS AGAINST, PROMPTLY UPON
DEMAND PAY OR REIMBURSE EACH OF THEM FOR, AND REFRAIN FROM CREATING OR ASSERTING
AGAINST ANY OF THEM, ANY AND ALL INDEMNITY MATTERS OF ANY KIND OR NATURE
WHATSOEVER WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM
(WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF,
ARISING OUT OF OR IN ANY WAY RELATED TO (I) OFFSETS, REDUCTIONS, REBATEMENTS OR
OTHER CLAIMS, COUNTERCLAIMS OR DEFENSES OF ANY NATURE WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, CLAIMS OF USURY) OF THE COMPANY, ANY OF ITS SUBSIDIARIES OR
ANY OTHER PERSON, WHETHER IN TORT OR IN CONTRACT, FIXED OR CONTINGENT, IN LAW OR
IN EQUITY, KNOWN OR UNKNOWN, WHETHER NOW EXISTING OR HEREAFTER ARISING, IN
CONNECTION WITH OTHER LENDERS WHOSE DEBT MAY BE REFINANCED WITH ANY PROCEEDS OF
THE LOANS (IN THEIR CAPACITY AS LENDERS OR AS AGENT FOR THE LENDERS IN
CONNECTION WITH THE LOAN DOCUMENTS EXECUTED IN CONNECTION WITH SUCH REFINANCED
DEBT AND NOT OTHERWISE), THE LOAN DOCUMENTS EXECUTED IN CONNECTION WITH SUCH
REFINANCED DEBT OR ANY ACTIONS OR RELATIONSHIPS RELATING TO ANY OF THE
FOREGOING, (II) ANY ACTUAL OR PROPOSED USE BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES OF THE PROCEEDS OF ANY OF THE LOANS OR LETTERS OF CREDIT OR (III)
ANY OTHER ASPECT OF THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL
AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR
PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY
INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM, BUT EXCLUDING HEREFROM ALL
INDEMNITY MATTERS ARISING SOLELY BY REASON OF CLAIMS AMONG INDEMNIFIED PARTIES
AND THEIR SHAREHOLDERS.
(d) INDEMNIFY AND HOLD EACH AGENT AND LENDER, ITS OFFICERS, DIRECTORS,
EMPLOYEES, REPRESENTATIVES, AGENTS AND AFFILIATES HARMLESS AGAINST, AND PROMPTLY
TO PAY ON DEMAND OR REIMBURSE EACH OF THEM WITH RESPECT TO, ANY AND ALL
INDEMNITY MATTERS OF ANY AND EVERY KIND OR NATURE WHATSOEVER ASSERTED AGAINST OR
INCURRED BY ANY OF THEM BY REASON OF OR ARISING OUT OF OR IN ANY WAY RELATED TO
(I) THE BREACH OF ANY REPRESENTATION OR WARRANTY AS SET FORTH HEREIN REGARDING
ENVIRONMENTAL LAWS, OR (II) THE FAILURE OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES TO PERFORM ANY OBLIGATION HEREIN REQUIRED TO BE PERFORMED PURSUANT
TO ENVIRONMENTAL LAWS.
(e) In the case of any indemnification hereunder, the Agent or Lender
seeking indemnification, as appropriate shall give notice to the Company of any
such claim or demand being made against the Indemnified Party; and the Company
shall have the non-exclusive right to join in the defense against any such claim
or demand.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER
WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN
OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT
IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE
INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON
ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED
PARTY IS FOUND BY A FINAL, NON-APPEALABLE JUDGMENT
66
73
OF A COURT OR BY AGREEMENT TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR
WILFUL MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE
BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE
OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILFUL
MISCONDUCT OF THE PARTY SEEKING INDEMNIFICATION. IN ADDITION, THE FOREGOING
INDEMNITIES EXCLUDE ALL INDEMNITY MATTERS ARISING SOLELY BY REASON OF CLAIMS
AMONG INDEMNIFIED PARTIES AND THEIR SHAREHOLDERS.
(g) The Company's obligations under this Section 12.03 shall survive
any termination of this Agreement and the payment of the Notes and shall
continue thereafter in full force and effect.
(h) The Company shall pay any amounts due under this Section 12.03
within thirty (30) days of the receipt by the Company of notice of the amount
due.
SECTION 12.04 AMENDMENTS, ETC. Any provision of this Agreement or any
other Loan Documents may be amended, modified or waived with the Majority
Lenders' consent; provided that (a) the Commitment of a Lender may not be
increased without the express written consent of such Lender; (b) no amendment,
modification or waiver which amends, modifies or waives the definition of
"Majority Lender" or "Required Lenders" or any provision of Sections 2.03, 2.09
or 12.04 shall be effective without the express written consent of all Lenders;
(c) no amendment, modification or waiver which amends or modifies the definition
of "Applicable Margin" or reduces the interest rate (other than as a result of
waiving the applicability of any post-Default increases in such rates), modifies
the amount of principal due on any payment date or modifies the payment dates
for payments of either principal or interest on any Loan, modifies any fees
payable under any of the Loan Documents, increases the Borrowing Base or
releases or modifies the obligations of OEI-Louisiana under the Guaranty
Agreement shall be effective without consent of all Lenders; and (d) no
amendment, modification or waiver which modifies the rights, duties or
obligations or fees of any Agent shall be effective without the consent of such
Agent.
SECTION 12.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
SECTION 12.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) The Company may not assign its rights or obligations hereunder,
under the Notes or under any Letter of Credit Agreement without the prior
consent of all of the Lenders and the Administrative Agent.
(b) Each Lender may, upon the written consent of the Company and the
Administrative Agent which consent shall not be unreasonably withheld or delayed
(provided that if an Event of Default has occurred and is continuing,
assignments may be made hereunder without the Company's consent), assign to one
or more assignees all or a portion of its rights and obligations under this
Agreement pursuant to an Assignment and Acceptance Agreement substantially in
the form of Exhibit G (an "Assignment and Acceptance"); provided that (i) any
such assignment shall be in the aggregate amount of at least $5,000,000, the
entire amount of a Lender's Commitment, if less, or such other lesser amount to
which the Company has consented, and (ii) the assignee shall pay to the
Administrative Agent a processing and recordation fee of $3,500; provided that
such fee shall not be payable in conjunction with any assignments occurring
within 30 days of the Effective Date. Any such assignment will become effective
upon the issuance by the Administrative Agent of a letter of
67
74
acknowledgment reflecting such assignment and the resultant effects thereof on
the Commitments of the assignor and assignee, and the principal amount
outstanding of the Loans owed to the assignor and assignee, the Administrative
Agent hereby agreeing to effect such issuance no later than five (5) Business
Days after its receipt of an Assignment and Acceptance executed by all parties
thereto. Promptly after receipt of an Assignment and Acceptance executed by all
parties thereto, the Administrative Agent shall send to the Company a copy of
such executed Assignment and Acceptance. Upon receipt of such executed
Assignment and Acceptance, the Company, will, at its own expense, execute and
deliver new Notes to the assignor and/or assignee, as appropriate, in accordance
with their respective interests as they appear on the Administrative Agent's
letter of acknowledgment. Upon the effectiveness of any assignment pursuant to
this Section, the assignee will become a "Lender," if not already a "Lender,"
for all purposes of this Agreement and the other Loan Documents. Subject to the
terms of Section 12.10 of this Agreement and the Sections referred to therein,
the assignor shall be relieved of its obligations hereunder to the extent of
such assignment (and if the assigning Lender no longer holds any rights or
obligations under this Agreement, such assigning Lender shall cease to be a
"Lender" hereunder). The Administrative Agent will prepare on the last Business
Day of each month during which an assignment has become effective pursuant to
this Section 12.06(b), a new Annex I giving effect to all such assignments
effected during such month, and will promptly provide the same to the Company
and each of the Lenders.
(c) Each Lender may transfer, grant or assign participations in all or
any part of such Lender's interests hereunder pursuant to this subsection to any
Person, provided that: (i) such Lender shall remain a "Lender" for all purposes
of this Agreement and the transferee of such participation shall not constitute
a "Lender" hereunder; and (ii) no participant under any such participation shall
have rights to approve any amendment to or waiver of this Agreement, the Notes
or any Loan Document except to the extent such amendment or waiver would (x)
extend the Termination Date, (y) reduce the principal amount of any Loan
outstanding , the interest rate (other than as a result of waiving the
applicability of any post-default increases in interest rates) or fees
applicable to any of the Commitments or Loans in which such participant is
participating, or postpone the payment of any thereof, or (z) release
OEI-Louisiana from its obligations under the Guaranty Agreement. In the case of
any such participation, the participant shall not have any rights under this
Agreement or any of the Loan Documents (the participant's rights against the
granting Lender in respect of such participation to be those set forth in the
agreement with such Lender creating such participation), and all amounts payable
by the Company hereunder shall be determined as if such Lender had not sold such
participation, provided that if such participant has made and complied with the
representations contained in Section 5.08, such participant shall be entitled to
receive additional amounts under Article V on the same basis as if it were a
Lender other than amounts paid by reason of such participant's noncompliance
with Section 5.08. In addition, each agreement creating any participation must
include agreements by the participant to be bound by the provisions of Section
12.14 if such participant is to receive any confidential information.
(d) Notwithstanding any other provisions of this Section 12.06, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Company to file a registration statement
with the SEC or to qualify the Loans or any interest therein under the "Blue
Sky" laws of any state.
(e) The Lenders may furnish any information concerning the Company in
the possession of the Lenders from time to time to assignees and participants
(including prospective assignees and
68
75
participants); provided that, such Persons agree in writing to be bound by the
provisions of Section 12.14 hereof.
(f) Notwithstanding anything in this Section 12.06 to the contrary, any
Lender may assign and pledge all or any of its Notes to any Federal Reserve Bank
or the United States Treasury as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve System and/or such Federal Reserve Bank. No such
assignment and/or pledge shall release the assigning and/or pledging Lender from
its obligations hereunder.
SECTION 12.07 INVALIDITY. In the event that any one or more of the
provisions contained in the Notes, this Agreement or in any other Loan Document
shall for any reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of such Note, this Agreement or any other Loan Document.
SECTION 12.08 ENTIRE AGREEMENT. The Notes, this Agreement, the Guaranty
Agreement and the other Loan Documents embody the entire agreement and
understanding between the Lenders, the Agents, the Company and its Subsidiaries
party thereto and supersede all prior agreements and understandings between such
parties relating to the subject matter hereof and thereof. There are no
unwritten oral agreements between the parties.
SECTION 12.09 REFERENCES. The words "herein," "hereof," "hereunder" and
other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Section shall be deemed to refer to the applicable
Section of this Agreement unless otherwise stated herein. Any reference herein
to an exhibit or schedule shall be deemed to refer to the applicable exhibit or
schedule attached hereto unless otherwise stated herein.
SECTION 12.10 SURVIVAL. The obligations of the Company, each Agent and
the Lenders under Sections 5.01, 5.05, 5.06, 12.03 and 12.14 shall survive the
repayment of the Loans, the expiration of the Letters of Credit and the
termination of the Commitments and any assignment by a Lender of all its Loans
or Commitments pursuant to Section 12.06(b).
SECTION 12.11 CAPTIONS. Captions and section headings appearing herein
or any Loan Document are included solely for convenience of reference and are
not intended to affect the interpretation of any provision of this Agreement or
such Loan Document.
SECTION 12.12 COUNTERPARTS. This Agreement and each Loan Document
(other than the Notes) may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement or any such Loan Document by signing
any such counterpart.
SECTION 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES (INCLUDING, BUT NOT LIMITED TO, THE
VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
69
76
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR THE OTHER LOAN DOCUMENTS TO WHICH THE COMPANY IS A PARTY MAY BE BROUGHT
IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
THE COMPANY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS
SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE THE
ADMINISTRATIVE AGENT OR ANY LENDER FROM OBTAINING JURISDICTION OVER THE COMPANY
IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) The Company irrevocably consents to the service of process of any
of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to it, as the
case may be, at its said address, such service to become effective 30 days after
such mailing.
(d) Nothing herein shall affect the right of any Agent or any Lender or
any holder of a Note to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Company in any other
jurisdiction.
(e) THE COMPANY, EACH AGENT AND EACH LENDER HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT
NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN
DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.13.
SECTION 12.14 CONFIDENTIALITY. Each Lender and each Agent agree that
they will use their best efforts not to disclose without the prior written
consent of the Company (other than to their employees, auditors or counsel or to
another Lender if the Lender or such Lender's holding or parent company or the
Administrative Agent in its sole discretion determines that any such party
should have access to such information) any information with respect to the
Company or any of its Subsidiaries which is furnished pursuant to this Agreement
and which is designated by the Company to the Lenders and the Administrative
Agent in writing as confidential, provided that any Lender and the
Administrative Agent may disclose any such information (a) as has become
generally available to the public, (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Lender or the
Administrative
70
77
Agent or to the Federal Reserve Board, the Federal Deposit Insurance Company,
National Association of Insurance Commissioners or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation, (d) in order to comply with any law, order, regulation or
ruling applicable to such Lender or the Administrative Agent, and (e) to the
prospective transferee in connection with any contemplated transfer of any of
the Notes or any interest therein by such Lender or to any Affiliate of a
Lender, provided that such prospective transferee, participant or Affiliate
executes an agreement with the Company containing provisions substantially
identical to those contained in this Section.
SECTION 12.15 INTEREST. It is the intention of the parties hereto that
each Agent and Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Agent or Lender under laws applicable to it (including the laws of the United
States of America and the State of Texas or any other jurisdiction whose laws
may be mandatorily applicable to such Agent or Lender notwithstanding the other
provisions of this Agreement), then, in that event, notwithstanding anything to
the contrary in the Notes, this Agreement or any other Loan Document, it is
agreed as follows: (a) the aggregate of all consideration which constitutes
interest under law applicable to any Agent or Lender that is contracted for,
taken, reserved, charged or received by such Agent or Lender under the Notes,
this Agreement or under any of the other aforesaid Loan Documents or agreements
or otherwise in connection with the Notes shall under no circumstances exceed
the maximum amount allowed by such applicable law, and any excess shall be
canceled automatically and if theretofore paid shall be credited by such Agent
or Lender on the principal amount of the Indebtedness (or, to the extent that
the principal amount of the Indebtedness shall have been or would thereby be
paid in full, refunded by such Agent or Lender to the Company); and (b) in the
event that the maturity of the Notes is accelerated by reason of an election of
the holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to any Agent or
Lender may never include more than the maximum amount allowed by such applicable
law, and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically by such Agent or Lender as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by such
Agent or Lender on the principal amount of the Indebtedness (or, to the extent
that the principal amount of the Indebtedness shall have been or would thereby
be paid in full, refunded by such Agent or Lender to the Company). All sums paid
or agreed to be paid to any Agent or Lender for the use, forbearance or
detention of sums due hereunder shall, to the extent permitted by law applicable
to such Agent or Lender, be amortized, prorated, allocated and spread throughout
the term of the Loans evidenced by the Notes until payment in full so that the
rate or amount of interest on account of any Loans or other amounts hereunder
does not exceed the maximum amount allowed by such applicable law. If at any
time and from time to time (i) the amount of interest payable to any Agent or
Lender on any date shall be computed at the Highest Lawful Rate applicable to
such Agent or Lender pursuant to this Section 12.15 and (ii) in respect of any
subsequent interest computation period the amount of interest otherwise payable
to such Agent or Lender would be less than the amount of interest payable to
such Agent or Lender computed at the Highest Lawful Rate applicable to such
Agent or Lender, then the amount of interest payable to such Agent or Lender in
respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate applicable to such Agent or Lender until the
total amount of interest payable to such Agent or Lender shall equal the total
amount of interest which would have been payable to such Agent or Lender if the
total amount of interest had been computed without giving effect to this Section
12.15.
71
78
To the extent that the Texas Credit Title is relevant to any Agent or
Lender for the purpose of determining the Highest Lawful Rate, each such Agent
and Lender hereby elects to determine the applicable rate ceiling under the
Texas Credit Title by the weekly rate ceiling from time to time in effect.
SECTION 12.16 EFFECTIVENESS. This Agreement and the Loan Documents
shall not be effective until the date (the "Effective Date") that (a) each of
them is delivered to the Administrative Agent in the State of Texas, (b) each of
them is accepted by the Administrative Agent in such State, and (c) the
conditions set forth in Section 6.01 have been satisfied or waived.
SECTION 12.17 SURVIVAL OF OBLIGATIONS. To the extent that any payments
on the Indebtedness or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Indebtedness so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Administrative Agent's (held for the benefit of the Agents
and the Lenders) Liens (if any), rights, powers and remedies under this
Agreement and each Loan Document shall continue in full force and effect. In
such event, each Loan Document shall be automatically reinstated and the Company
shall, and shall cause each of its Restricted Subsidiaries to, take such action
as may be reasonably requested by the Administrative Agent and the Lenders to
effect such reinstatement.
SECTION 12.18 DEBT CHARACTERIZATION FOR INDENTURE PURPOSES; SPECIFIED
OR DESIGNATED SENIOR INDEBTEDNESS.
(a) If so designated by the Company in its internal records (which
designation may be made in its sole and absolute discretion), any Debt incurred
hereunder and all guarantees thereof shall constitute "Indebtedness" other than
"Permitted Indebtedness" or "Permitted Subsidiary Indebtedness" (as such terms
are defined in the 95 Indenture, the 96 Indenture, the 97 Indenture and the 98
Senior Subordinated Indenture) for purposes of any Indenture.
(b) The Company hereby represents and warrants that:
(i) this Agreement, the Notes, the Loan Documents and the obligations
of the Company and OEI-Louisiana hereunder and thereunder are "Senior
Indebtedness" and "Specified Senior Indebtedness" and "Guarantor Senior
Indebtedness" and "Specified Guarantor Senior Indebtedness",
respectively, under and for purposes of the 95 Indenture; and
(ii) this Agreement, the Notes, the Loan Documents and the obligations
of the Company and OEI-Louisiana hereunder and thereunder are "Senior
Indebtedness" and "Designated Senior Indebtedness" and "Guarantor
Senior Indebtedness" and "Designated Guarantor Senior Indebtedness",
respectively, under and for purposes of the 96 Indenture, the 97
Indenture and the 98 Senior Subordinated Indenture;
and that as such, the Agents and the Lenders are entitled to the rights
and privileges afforded holders of Senior Indebtedness, Specified
Senior Indebtedness or Designated Senior Indebtedness, Senior Guarantor
Indebtedness, Specified Guarantor Senior Indebtedness or Designated
Guarantor Senior Indebtedness under each of said Indentures.
72
79
(c) To the extent permitted and required by the terms of any Indenture
or any other instrument evidencing Subordinated Debt which the Company may
hereafter incur, the Company covenants and agrees to give (and maintain without
revocation) any notices or designations to the trustee, agent or other
representative thereunder designating (A) the Indebtedness as "senior
indebtedness", "specified senior indebtedness", "designated senior indebtedness"
or any other similar designation, and (B) the Guaranty Agreement as "guarantor
senior indebtedness", "specified guarantor senior indebtedness", "designated
guarantor senior indebtedness" or any other similar designation.
SECTION 12.19 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY
INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED
THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT
IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS
RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT
IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD
NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
SECTION 12.20 INTERCREDITOR AGREEMENT. Each Agent and Lender hereby
authorizes the Administrative Agent to execute and deliver on its behalf a
Master Release acknowledging the termination of the Intercreditor Agreement and
the obligations of the parties thereunder, other than those obligations which by
their terms expressly survive such termination.
73
80
The parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
OCEAN ENERGY, INC., a Delaware corporation
By:
--------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President
Chief Financial Officer
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[Signature Page 1]
81
AGENTS: CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent
By:
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President
Address for Notices to Chase as Administrative Agent:
Chase Bank of Texas, National Association
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Loan Syndication Services
with copy to:
Chase Securities Inc.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
[Signature Page 2]
82
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW
YORK, as Syndication Agent
By:
--------------------------------------------------
Name:
Title:
Address for Notices for ▇▇▇▇▇▇ as Syndication Agent:
▇▇▇▇▇▇ Guaranty Trust Company
of New York
C/O ▇.▇. ▇▇▇▇▇▇ Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[Signature Page 3]
83
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,
as Documentation Agent
By:
--------------------------------------------------
Name:
Title:
Address for Notices for Bank of America as
Documentation Agent:
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
[Signature Page 4]
84
BARCLAYS BANK PLC, as Managing Agent
By:
--------------------------------------------------
Name:
Title:
Address for Notices to Barclays as Managing Agent:
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
[Signature Page 5]
85
PARIBAS, as Co-Agent
By:
--------------------------------------------------
Name:
Title:
By:
--------------------------------------------------
Name:
Title:
Address for Notices for Paribas as Co-Agent:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Paribas
Houston Agency
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
[Signature Page 6]
86
SOCIETE GENERALE, SOUTHWEST AGENCY, as Co-Agent
By:
--------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Address for Notices for Societe Generale as Co-Agent:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Societe Generale
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
[Signature Page 7]
87
CREDIT SUISSE FIRST BOSTON, as Co-Agent
By:
--------------------------------------------------
Name:
Title:
By:
--------------------------------------------------
Name:
Title:
Address for Notices for Credit Suisse First Boston as
Co-Agent:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
with copy to:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
[Signature Page 7B]
88
LENDER: CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By:
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Managing Director
Lending Office for all Loans:
Chase Bank of Texas, National Association
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Loan Syndication Services
with copy to:
Chase Securities Inc.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
[Signature Page 8]
89
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
By:
--------------------------------------------------
Name:
Title:
Lending Office for all Loans:
▇▇▇▇▇▇ Guaranty Trust Company
of New York
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇▇▇▇ Guaranty Trust Company
of New York
C/O ▇.▇. ▇▇▇▇▇▇ Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Guaranty Trust Company
of New York
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telex No.: 177615MGTUT
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
[Signature Page 9]
90
BARCLAYS BANK PLC
By:
--------------------------------------------------
Name:
Title:
Lending Office for all Loans:
Barclays Bank PLC - New York Branch
ABA # 020-002574
CLAD Control Account # 050-019104
Credit: Ocean Energy
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
[Signature Page 10]
91
ABN AMRO BANK, N.V.
By:
--------------------------------------------------
▇▇▇▇▇ ▇▇▇▇
---------------------
By:
--------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President
Lending Office for all Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Credit Administration
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Credit Administration
with copy to:
ABN AMRO North America, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
[Signature Page 11]
92
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By:
--------------------------------------------------
Name:
Title:
Lending Office for all Loans:
Bank of America NT & SA
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Assignee's Eurodollar Lending Office:
Bank of America NT & SA
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notice:
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
with copy to:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[Signature Page 12]
93
PARIBAS
By:
--------------------------------------------------
Name:
Title:
By:
--------------------------------------------------
Name:
Title:
Lending Office for all Loans:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notice:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Paribas
Houston Agency
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
[Signature Page 13]
94
SOCIETE GENERALE, SOUTHWEST AGENCY
By:
--------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Lending Office for all Loans:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notice:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Loan Administration
with copy to:
Societe Generale
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
[Signature Page 14]
95
▇▇▇▇▇ FARGO BANK (TEXAS), N.A.
By:
--------------------------------------------------
J. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
Lending Office for all Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notice:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with copy to:
▇▇▇▇▇ Fargo Bank (Texas), ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
[Signature Page 15]
96
[THIS PAGE WAS INTENTIONALLY LEFT BLANK]
[Signature Page 16]
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇▇) INC.
By:
--------------------------------------------------
Name:
Title:
Lending Office for all Loans:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
[Signature Page 17]
98
U.S. BANK NATIONAL ASSOCIATION
By:
--------------------------------------------------
Name:
Title:
Lending Office for all Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notice:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[Signature Page 18]
99
BANK ONE, TEXAS, N.A.
By:
--------------------------------------------------
Name:
Title:
Lending Office for all Loans:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Bank One, Texas, N.A.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[Signature Page 19]
100
CREDIT SUISSE FIRST BOSTON
By:
--------------------------------------------------
Name:
Title:
By:
--------------------------------------------------
Name:
Title:
Lending Office for all Loans:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
with copy to:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
[Signature Page 20]
101
[THIS PAGE WAS INTENTIONALLY LEFT BLANK]
[Signature Page 21]
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇, N.A.
By:
--------------------------------------------------
A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President/Manager Energy Lending
Lending Office for all Loans:
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇
Attention: A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
[Signature Page 22]