Exhibit 10.3
AMENDED AND RESTATED
GLOBAL CREDIT AGREEMENT
Dated as of July 8, 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,
Barclays Bank PLC,
as Documentation Agent,
ABN Amro Bank, N.V.,
Bank Of America National Trust &
Savings Association,
Paribas,
Nationsbank, N.A.,
Societe Generale, Southwest Agency,
and
▇▇▇▇▇ Fargo Bank (Texas), N.A.,
as Co-Agents,
and
The Lenders Now or Hereafter Parties Hereto
Chase Bank Of Texas, National Association ▇▇▇▇▇▇ Guaranty Trust Company Of
New York
Barclays Bank PLC Nationsbank, N.A.
Co-Arrangers
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Accounting Matters.............................. 1
Section 1.01 Terms Defined in Recitals.................................. 1
Section 1.02 Certain Defined Terms...................................... 1
Section 1.03 Accounting Terms and Determinations........................ 21
ARTICLE II Commitments.................................................... 21
Section 2.01 Loans and Letters of Credit................................ 21
Section 2.02 Borrowings, Continuations and Conversions; Issuance of
Letters of Credit.......................................... 23
Section 2.03 Extensions and Changes of Commitments...................... 27
Section 2.04 Facility Fee and Other Fees................................ 29
Section 2.05 Lending Offices............................................ 30
Section 2.06 Several Obligations........................................ 30
Section 2.07 Notes...................................................... 30
Section 2.08 Prepayments................................................ 30
Section 2.09 Borrowing Base............................................. 32
ARTICLE III Payments of Principal and Interest............................ 35
Section 3.01 Repayment of Loans......................................... 35
Section 3.02 Interest................................................... 35
ARTICLE IV Payments; Pro Rata Treatment; Computations; Etc................ 36
Section 4.01 Payments................................................... 36
Section 4.02 Pro Rata Treatment......................................... 37
Section 4.03 Computations............................................... 37
Section 4.04 Non-receipt of Funds by the Administrative Agent........... 38
Section 4.05 Sharing of Payments, Etc................................... 38
Section 4.06 Assumption of Risks........................................ 39
Section 4.07 Obligation to Reimburse and to Prepay...................... 40
Section 4.08 Obligations for Letters of Credit.......................... 41
ARTICLE V Yield Protection and Illegality................................. 42
Section 5.01 Additional Costs........................................... 42
Section 5.02 Limitation on Eurodollar Loans............................. 43
Section 5.03 Illegality................................................. 43
Section 5.04 Base Rate Loans pursuant to Sections 5.01, 5.02 and 5.03... 43
Section 5.05 Compensation............................................... 43
Section 5.06 Additional Cost in Respect of Tax.......................... 44
Section 5.07 Avoidance of Taxes and Additional Costs.................... 45
Section 5.08 Lender Tax Representation.................................. 45
Section 5.09 Limitation on Right to Compensation........................ 46
Section 5.10 Compensation Procedure..................................... 46
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ARTICLE VI Conditions Precedent........................................... 47
Section 6.01 Effectiveness.............................................. 47
Section 6.02 All Loans and Letters of Credit............................ 48
Section 6.03 Conditions Relating to Letters of Credit................... 49
ARTICLE VII Representations and Warranties................................ 49
Section 7.01 Corporate Existence........................................ 49
Section 7.02 Financial Condition........................................ 49
Section 7.03 Litigation................................................. 50
Section 7.04 No Breach.................................................. 50
Section 7.05 Corporate Action; Binding Obligation....................... 50
Section 7.06 Approvals.................................................. 50
Section 7.07 Use of Loans and Letters of Credit......................... 51
Section 7.08 ERISA...................................................... 51
Section 7.09 Taxes...................................................... 51
Section 7.10 Insurance.................................................. 51
Section 7.11 Titles, etc................................................ 51
Section 7.12 No Material Misstatements.................................. 52
Section 7.13 Investment Company Act..................................... 52
Section 7.14 Public Utility Holding Company Act......................... 52
Section 7.15 Subsidiaries and Partnerships.............................. 52
Section 7.16 Location of Business and Offices........................... 52
Section 7.17 Rate Filings............................................... 52
Section 7.18 Environmental Matters...................................... 53
Section 7.19 Defaults................................................... 54
Section 7.20 Compliance with the Law.................................... 54
Section 7.21 Risk Management Agreements................................. 54
Section 7.22 Gas Imbalances............................................. 54
Section 7.23 Solvency................................................... 54
Section 7.24 Year 2000 Compliance....................................... 54
ARTICLE VIII Affirmative Covenants........................................ 55
Section 8.01 Financial Statements....................................... 55
Section 8.02 Litigation................................................. 58
Section 8.03 Corporate Existence, Etc................................... 58
Section 8.04 Environmental Matters...................................... 59
Section 8.05 Engineering Reports........................................ 59
Section 8.06 Stock of Restricted Subsidiaries........................... 60
Section 8.07 Further Assurances......................................... 60
Section 8.08 Performance of Obligations................................. 61
ARTICLE IX Negative Covenants............................................. 61
Section 9.01 Debt....................................................... 61
Section 9.02 Liens...................................................... 63
Section 9.03 Investments, Loans and Advances............................ 64
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Section 9.04 Dividends, Distributions and Redemptions.................. 66
Section 9.05 Financial Covenants....................................... 66
Section 9.06 Nature of Business........................................ 67
Section 9.07 Limitation on Operating Leases and Sale-Leaseback
Transactions.............................................. 67
Section 9.08 Mergers, Etc.............................................. 67
Section 9.09 Proceeds of Notes......................................... 68
Section 9.10 ERISA Compliance.......................................... 68
Section 9.11 Sale or Discount of Receivables........................... 68
Section 9.12 Risk Management Agreements................................ 68
Section 9.13 Transactions with Affiliates.............................. 68
Section 9.14 Negative Pledge Agreements................................ 68
Section 9.15 Subsidiaries and Partnerships............................. 69
Section 9.16 Sale of Oil and Gas Properties............................ 69
Section 9.17 Environmental Matters..................................... 69
Section 9.18 Payment Restrictions...................................... 69
Section 9.19 Subordinated and Long-Term Pari Passu Debt................ 70
Section 9.20 Maintenance of Deposits................................... 70
Section 9.21 Unrestricted Subsidiaries................................. 71
Section 9.22 Gas Imbalances, Take-or-Pay or Other Prepayments.......... 71
ARTICLE X Events of Default............................................... 72
Section 10.01 Events of Default......................................... 72
Section 10.02 Cash Collateral for Letters of Credit..................... 74
ARTICLE XI The Agents..................................................... 74
Section 11.01 Appointment, Powers and Immunities........................ 74
Section 11.02 Reliance by Agents........................................ 75
Section 11.03 Defaults.................................................. 75
Section 11.04 Rights as a Lender........................................ 75
Section 11.05 Indemnification........................................... 76
Section 11.06 Non-Reliance on Agents and other Lenders.................. 76
Section 11.07 Action by Agents.......................................... 77
Section 11.08 Resignation or Removal of Agents.......................... 77
ARTICLE XII Miscellaneous................................................. 78
Section 12.01 Waiver.................................................... 78
Section 12.02 Notices................................................... 78
Section 12.03 Payment of Expenses, Indemnities, etc..................... 78
Section 12.04 Amendments, Etc........................................... 80
Section 12.05 Successors and Assigns.................................... 80
Section 12.06 Assignments and Participations............................ 80
Section 12.07 Invalidity................................................ 82
Section 12.08 Entire Agreement.......................................... 82
Section 12.09 References................................................ 82
Section 12.10 Survival.................................................. 82
Section 12.11 Captions.................................................. 82
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Section 12.12 Counterparts.............................................. 83
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION................. 83
Section 12.14 Confidentiality........................................... 84
Section 12.15 Interest.................................................. 84
Section 12.16 Effectiveness............................................. 85
Section 12.17 Survival of Obligations................................... 85
Section 12.18 Debt Characterization for Indenture Purposes; Specified or
Designated Senior Indebtedness............................ 86
Section 12.19 EXCULPATION PROVISIONS.................................... 86
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ANNEX, EXHIBITS AND SCHEDULES
Annex I -- List of U.S. Commitments and Canadian Subcommitment; Global
Commitment Percentages
Exhibit A-1 -- Form of Conventional Loan Note
Exhibit A-2 -- Form of Bid Rate Loan Note
Exhibit B-1 -- Form of Opinion of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
Exhibit B-2 -- Form of Opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Torian, Diaz, McNamera &
▇▇▇▇▇
Exhibit C-1 -- Form of Borrowing Request
Exhibit C-2 -- Form of Competitive Bid Request
Exhibit C-3 -- Form of Bid Loan Quote/Response to Competitive Bid Request
Exhibit D -- Restricted and Unrestricted Subsidiaries
Exhibit E -- Partnerships
Exhibit F -- Loan Documents
Exhibit G -- Form of Assignment and Acceptance
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
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This Amended And Restated Global Credit Agreement dated as of July 8, 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"),
Barclays Bank PLC, as Documentation Agent for the Lenders (in such capacity, the
"Documentation Agent"), and ABN Amro Bank, N.V., Bank of America National Trust
& Savings Association, Paribas, Nationsbank, N.A., Societe Generale, Southwest
Agency and ▇▇▇▇▇ Fargo Bank (Texas), N.A., as Co-Agents for the Lenders (in such
capacity, the "Co-Agents").
Recitals
A. The Company, as guarantor, Ocean Energy, Inc., a Louisiana corporation
("OEI-Louisiana"), as borrower, and certain of the Agents and the Lenders
entered into that certain Global Credit Agreement dated as of March 27, 1998
(such credit agreement, the "Prior Credit Agreement").
B. For their own corporate purposes and not at the request of the
Lenders or the Agents, the Company and OEI-Louisiana have requested that the
Agents and the Lenders (i) amend, restate and restructure the Prior Credit
Agreement such that, under the credit facilities evidenced by this Agreement,
the Company will assume all of the obligations and liabilities as borrower under
the Prior Credit Agreement and OEI-Louisiana will cease to be liable as the
borrower and become liable as a guarantor and (ii) 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:
"Absolute Rate" shall mean, with respect to any Bid Rate Loan, such rate of
interest as a Lender may offer the Company for any given Interest Period
therefor, which rate shall be fixed for the duration of such Interest Period.
"Absolute Rate Loans" shall mean Bid Rate Loans which bear interest at the
Absolute Rate.
"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.
"Affiliated Canadian Lender" shall mean, with regard to any Lender, the
Canadian Lender designated as such on Annex I, if any.
"Agent" shall mean any one or more of the Administrative Agent, the Paying
Agent, the Syndication Agent, the Documentation Agent, the Technical Agents, the
Competitive Bid Auction Agent 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 Amended and Restated Global Credit Agreement,
as amended, supplemented or modified from time to time.
"Allocated Canadian Borrowing Base" shall mean, as of any date, an amount
in U.S. Dollars designated as such by the Company pursuant to Section
2.09(a)(iii). A Canadian Lender's Share of the Allocated Canadian Borrowing
Base shall equal such Canadian Lender's Canadian Commitment Percentage of the
Allocated Canadian Borrowing Base.
"Allocated U.S. Borrowing Base" shall mean an amount equal to the Borrowing
Base then in effect minus the Allocated Canadian Borrowing Base. A Lender's
Share of the Allocated U.S. Borrowing Base shall equal such Lender's Commitment
Percentage of the Allocated U.S. Borrowing Base.
"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, with respect to Conventional Loans, as of
any date of determination, the following rate per annum as is applicable based
upon the Percentage Usage as of such date of determination:
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Percentage Usage Eurodollar Applicable Margin Base Rate Applicable Margin
---------------------------------------------------------------------------------------------------
Less than or equal to 50% 0.700% 0.000%
---------------------------------------------------------------------------------------------------
Greater than 50%, but Less
than or equal to 60% 0.850% 0.000%
---------------------------------------------------------------------------------------------------
Greater than 60%, but Less
than or equal to 75% 0.950% 0.000%
---------------------------------------------------------------------------------------------------
Greater than 75% 1.275% 0.000%
---------------------------------------------------------------------------------------------------
"Assignment and Acceptance" shall have the meaning assigned such term in
Section 12.06(b).
"Available Canadian Subcommitment" shall mean, as of any date of
determination, the lesser of (a) the Canadian dollar amount of the Allocated
Canadian Borrowing Base (converted from U.S. Dollars to Canadian dollars by
multiplying the exchange ratio of Canadian dollars to U.S. Dollars in effect on
such date of determination, as determined in good faith by the Administrative
Agent on such date pursuant to the following sentence, and the Allocated
Canadian Borrowing Base); or (b) the aggregate Canadian Subcommitments as then
in effect. The exchange ratio shall be calculated (i) on the date a
reallocation pursuant to Section 2.09(a) between the Available Canadian
Borrowing Base and Available U.S. Borrowing Base occurs, (ii) on each
Redetermination Date, or (iii) in any event, at ninety (90) day intervals
following the most recent Redetermination Date.
"Available U.S. 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 Allocated U.S.
Borrowing Base.
"Bankers Acceptances" shall mean any banker's acceptance issued to any of
the Canadian Lenders pursuant to the Canadian Credit Agreement.
"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.
"Bid Loan Quote" shall mean an offer by any Lender to make Bid Rate Loans
pursuant to Section 2.01(c), such offer being substantially in the form of
Exhibit C-3.
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"Bid Rate" shall mean, with respect to any Bid Rate Loan, the rate per
annum offered by any Lender in its sole discretion to the Company pursuant to
Section 2.01(c) for any Bid Rate Loan, which rate shall be either (a) determined
on the basis of the rates referred to in the definition of "Eurodollar Rate" in
this Section 1.02 or (b) an Absolute Rate.
"Bid Rate Loan" shall mean any loan made pursuant to Section 2.01(c) under
the procedures set forth in Section 2.02(g).
"Bid Rate Note" shall mean a promissory note, described in Section 2.07(b)
and being substantially in the form of Exhibit A-2, issued by the Company to the
order of a Lender evidencing Bid Rate Loans made to the Company by such Lender.
"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.
"Canadian Agent" shall mean The Chase Manhattan Bank of Canada, as
administrative agent for the Canadian Lenders, together with its successors in
such capacity.
"Canadian Commitment Percentage" shall mean a Canadian Lender's share,
expressed as a percentage, of the Canadian Subcommitments as set forth under the
caption "Canadian Subcommitment Percentage" in Annex I, as modified from time to
time to reflect any assignments permitted by Section 12.03(b) of the Canadian
Credit Agreement.
"Canadian Credit Agreement" shall mean that certain Amended and Restated
Credit Agreement dated as of even date herewith among Ocean Canada, the Canadian
Agent and the Canadian Lenders, as the same may be amended, restated,
supplemented or modified from time to time.
"Canadian Indebtedness" shall mean an amount, converted into U.S. Dollars
using the exchange ratio specified in the definition of "Available Canadian
Subcommitment", of the loans made and Bankers Acceptances issued and accepted to
or for Ocean Canada pursuant to the Canadian Credit Agreement.
"Canadian Lenders" shall mean the lenders now or hereafter parties to the
Canadian Credit Agreement.
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"Canadian Subcommitments" shall mean the "Commitments" of the Canadian
Lenders (in Canadian dollars) under the Canadian Credit Agreement.
"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 Conventional 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
"U.S. 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 "U.S. Commitment
Percentage", as modified from time to time to reflect any assignments permitted
by Section 12.06(b).
"Competitive Bid Auction Agent" shall mean The Chase Manhattan Bank in its
capacity as bid administrator under Section 2.02(g).
"Competitive Bid Request" shall have the meaning assigned such term in
Section 2.02(g)(i).
"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.
"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
5
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.
"Conventional Loan Note" shall mean a promissory note, described in Section
2.07(a) and being substantially in the form of Exhibit A-1, issued by the
Company to the order of any Lender evidencing the Conventional Loans made to the
Company by such Lender.
"Conventional Loans" shall mean the loans made pursuant to Section 2.01(a).
"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.
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"Dollars", "U.S. 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.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"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
8
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 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, as of any date of determination, the
following rate per annum as is applicable based upon the Percentage Usage as of
such date of determination:
Percentage Usage Facility Fee Rate
-----------------------------------------------------------
Less than or equal to 50% 0.200%
-----------------------------------------------------------
Greater than 50%, but less
than or equal to 60% 0.250%
-----------------------------------------------------------
Greater than 60%, but less
than or equal to 75% 0.300%
-----------------------------------------------------------
Greater than 75% 0.375%
-----------------------------------------------------------
"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
9
(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.
"Fee Letters" shall mean (i) that certain letter agreement dated March 3,
1998 among, inter alia, the Company, the Administrative Agent and an Affiliate
of the Administrative Agent; and (ii) that certain letter agreement dated March
27, 1998 among, inter alia, the Company and ▇▇▇▇▇▇ Guaranty Trust Company of New
York.
"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.
"Global Commitment Percentage" shall mean, as to any Lender, the percentage
of the Indebtedness (plus, without duplication, if such Lender is also a
Canadian Lender or has an Affiliated Canadian Lender, the Dollar amount of
Canadian Indebtedness) to be provided by such Lender under this Agreement (and,
as applicable, by such Lender or its Affiliated Canadian Lender under the
Canadian Credit Agreement) as indicated on Annex I, as modified from time to
time to reflect any assignments permitted by Section 12.06(b) and Section
12.03(b) of the Canadian Credit Agreement and any decreases pursuant to Section
2.03 or Section 2.03 of the Canadian Credit Agreement.
"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 that certain Credit Agreement, dated as
of September 29, 1995, by and between Union Bank and Havre, the promissory notes
described therein, the Pledge and Estoppel Agreement executed by OEI-Louisiana
(as successor by merger
10
to UMC), as assumed by OERI, in connection therewith, all guarantees of any of
the foregoing 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 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, but
excluding the Canadian Indebtedness.
"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 Funding" shall mean the funding of the initial Loans pursuant to
Section 6.01.
"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.
11
"Intercreditor Agreement" shall mean that certain Amended and Restated
Intercreditor Agreement of even date herewith 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.
"Interest Period" shall mean:
(a) 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 Conventional Loan that is a Eurodollar Loan, such longer period as
may be requested by the Company and agreed to by all of the Lenders, and, in the
case of a Bid Rate Loan that is a Eurodollar Loan, nine or twelve months as may
be requested by the Company and agreed to by the Lender making such Loan),
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; and
(b) with respect to any Absolute Rate Loan, the period commencing on the
date such Loan is made and ending on such day thereafter, of not less than seven
(7) days and not more than 360 days, as the Company may select as provided in
Section 2.02(g).
Notwithstanding the foregoing (unless, in the case of a Conventional Loan
that is a Eurodollar Loan, agreed to by the Company and all of the Lenders, or,
in the case of a Bid Rate Loan, the Company and the Lender making such Loan):
(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.
12
"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.
"Lender Group" shall mean collectively the Agents, the Lenders, the
Canadian Agent and the Canadian Lenders.
"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 date of the Initial Funding, 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.
"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 or
Canadian 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.
13
"Loans" shall mean the Conventional Loans and Bid Rate Loans provided for
by Section 2.01.
"Long-Term Pari Passu Debt" shall mean, as of any date of determination,
any Pari Passu Debt that has no amortization of principal prior to maturity and
an initial final maturity of twenty (20) years or more as of the date such Debt
is issued, including, without limitation, the 8-1/4% $125,000,000 Senior Notes
due 2018 issued by the Company pursuant to the 98 Senior (20-year) Indenture.
"Majority Lenders" shall mean: (a) if no Event of Default has occurred and
is continuing, Lenders and Canadian Lenders (who are not in default of their
obligations under this Agreement or the Canadian Credit Agreement ) having,
without duplication, greater than fifty percent (50%) of the sum of the
Aggregate Commitments and the Canadian Subcommitments; and (b) if an Event of
Default has occurred and is continuing, Lenders and Canadian Lenders holding
(or, as to Letters of Credit, participating in) greater than fifty percent (50%)
of the outstanding aggregate principal amount of the Conventional Loans,
Canadian Indebtedness and Letters of Credit (without regard to any sale by a
Lender or a Canadian Lender of a participation in any Loan, Canadian
Indebtedness or Letter of Credit). For purposes of this determination, Canadian
dollar amounts shall be converted to Dollars at an exchange ratio specified in
the definition of "Available Canadian Subcommitment".
"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
14
of the foregoing, and all amendments and supplements to the foregoing permitted
under Section 9.19(b) or a consent thereunder.
"96 Indenture" shall mean that certain Indenture dated as of September 26,
1996 among the Company (formerly known as ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.), as issuer, the
subsidiaries guarantors 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 guarantors 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 guarantors
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
guarantors 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 guarantors 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.
15
"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.
"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).
"Notes" shall mean the Conventional Loan Notes and Bid Rate Notes, 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 anywise 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
16
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.
"Partnerships" shall mean the general and limited partnerships listed on
Exhibit E.
"Paying Agent" shall mean Chase Bank of Texas, National Association, in its
capacity as the Paying Agent under the Intercreditor Agreement.
"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 and the Canadian Indebtedness outstanding as of such date of
determination and the denominator of which is the Borrowing Base 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 or Absolute Rate 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.
17
"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 ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"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 September 30, 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 and Canadian Lenders (who are not in default of their
obligations under this Agreement or the Canadian Credit Agreement ) having,
without duplication, greater than sixty-six and two-thirds percent (66-2/3%) of
the sum of the Aggregate Commitments and the Canadian Subcommitments; and (b) if
an Event of Default has occurred and is continuing, Lenders and Canadian Lenders
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 Conventional Loans, Canadian Indebtedness and Letters of Credit (without
regard to any sale by a Lender or a
18
Canadian Lender of a participation in any Loan, Canadian Indebtedness or Letter
of Credit). For purposes of this determination, Canadian dollar amounts shall be
converted to Dollars at an exchange ratio specified in the definition of
"Available Canadian Subcommitment".
"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).
"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.
"Share" of the Allocated Canadian Borrowing Base or the Allocated U.S.
Borrowing Base shall have the meaning set forth within such terms.
"Short-Term Pari Passu Debt" shall mean, as of any date of determination,
any Pari Passu Debt that is not Long Term Pari Passu Debt (including, without
limitation, 7-5/8% $125,000,000 Senior Notes due 2005 issued by the Company
pursuant to the 98 Senior (7-year) Indenture).
"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).
19
"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 (or, if applicable in the context, the
Canadian Credit 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 the Administrative Agent, the Syndication
Agent and the Documentation Agent.
"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).
"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, an Absolute Rate 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
20
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 (other than the Canadian Credit Agreement and
any guaranty executed in connection with the Canadian Credit Agreement) are in
Dollars.
ARTICLE II
COMMITMENTS
SECTION 2.01 LOANS AND LETTERS OF CREDIT.
(A) CONVENTIONAL LOANS.
(i) Each Lender severally agrees, on the terms and conditions of this
Agreement, to make revolving credit loans (each a "Conventional 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 the lesser of (1) such Lender's
Commitment and (2) the amount of such Lender's Share of the Allocated U.S.
Borrowing Base as then in effect; provided that the aggregate principal
amount of all Conventional Loans and all Bid Rate Loans made by all of the
Lenders hereunder at any one time outstanding shall not exceed the
Available U.S. Commitment, as then in effect, minus the LC Exposure 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 U.S. Commitment as
then in effect. Conventional 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 that are Conventional Loans may be
outstanding from each
21
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 U.S.
Commitment as then in effect minus the aggregate amount of all Conventional
Loans and Bid Rate Loans then outstanding or (B) $50,000,000.
(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 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) BID RATE LOANS.
(i) Each Lender severally agrees that the Company from time to time
may request one or more of the Lenders to make loans to the Company on a
non-pro rata basis (each a "Bid Rate Loan") in the manner set forth in
Section 2.02(g) during the period from and including the Effective Date to
and including the Termination Date; provided that (A) no Lender shall be
obligated to make Bid Rate Loans to the Company unless such Lender has
irrevocably offered to make a Bid Rate Loan pursuant to Section
2.02(g)(iii); and (B) following the making of any Bid Rate Loan by any
Lender, the aggregate principal amount of all Conventional Loans and all
Bid Rate Loans made by all of the Lenders hereunder at any one time
outstanding shall not exceed the Available U.S. Commitment, as then in
effect, minus the LC Exposure then outstanding. Bid Rate Loans may be
Eurodollar Loans or Absolute Rate Loans. For purposes of this Section
2.01(c)(i) and Section 2.02(g), Bid Rate Loans having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Loans.
22
(ii) The making of any Bid Rate Loan to the Company by any Lender
shall not be deemed to be a utilization of such Lender's Commitment
(although it shall be deemed to be a utilization of the Available U.S.
Commitment to effect the above stated limitation and for all other purposes
of this Agreement).
(D) 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 Conventional 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
Conventional 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). All Bid Rate Loan borrowings under Section 2.02(g) shall be in
amounts of at least $5,000,000.
(C) NOTICES, ETC. FOR CONVENTIONAL LOANS. All borrowings, continuations and
conversions relating to Conventional Loans shall require advance written notice
from the Company to the Administrative Agent, in the form of Exhibit C-1, 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
23
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 Conventional Loan, each Lender shall
make available the amount of the Conventional 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 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 that is a
Conventional 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.
The Company may not continue Bid Rate Loans.
(F) CONVERSION OPTIONS. The Company may elect to convert any Eurodollar
Loan that is a Conventional 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 that is a
Conventional 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
24
continuing, no Loan may be converted into a Eurodollar Loan. The Company may not
convert Bid Rate Loans.
(G) BID RATE LOANS. The procedure for making Bid Rate Loans shall be as
follows:
(i) The Company may request Bid Rate Loans pursuant to this Section
2.02(g) from time to time from the Lenders by giving to the Competitive Bid
Auction Agent a notice of a proposed bid rate borrowing in substantially
the form of Exhibit C-2 hereto (a "Competitive Bid Request"), which notice
shall be given not later than 10:00 a.m., Houston time, on a Business Day
not less than four (4) Business Days prior to the proposed date the Bid
Rate Loans are to be borrowed if such Bid Rate Loans are Eurodollar Loans
and not less than one (1) Business Day prior to the proposed date the Bid
Rate Loans are to be borrowed if such Bid Rate Loans are Absolute Rate
Loans. The Competitive Bid Request shall specify the proposed date of the
Bid Rate Loans to be borrowed (which shall be a Business Day), the
aggregate amount of the proposed Bid Rate Loans to be made, which shall be
not less than $5,000,000, the duration therefor, the Type, the interest
payment date or dates relating thereto, and any other terms to be
applicable to such Bid Rate Loan. The Company may request offers to make
Bid Rate Loans for up to three (3) different Interest Periods in a single
Competitive Bid Request. The terms of a Competitive Bid Request may not
waive or modify any of the conditions precedent set forth herein. The
Competitive Bid Auction Agent, as bid administrator, shall promptly notify
the Administrative Agent and each Lender of the Company's request for Bid
Rate Loans by sending each Lender a copy of the Competitive Bid Request.
(ii) Each Competitive Bid Request must be in writing and may be
delivered (whether by the Company or the Competitive Bid Auction Agent as
bid administrator) by telegraph, telex, telecopy, other facsimile
transmission or other suitable means. All responses to any Competitive Bid
Request shall be in writing and may be delivered to the Competitive Bid
Auction Agent by telegraph, telex, telecopy, other facsimile transmission
or other suitable means.
(iii) Upon receipt of such Competitive Bid Request, each Lender may,
if, in its sole discretion, it elects to do so, irrevocably offer to make
one or more Bid Rate Loans to the Company at a rate or rates of interest
specified by such Lender in its sole discretion by notifying the
Competitive Bid Auction Agent, as bid administrator (which shall promptly
convey such response to the Company), in writing by supplying a Bid Rate
Quote in substantially the form of Exhibit C-3 hereto of its decision not
later than 2:00 p.m., Houston time, on the Business Day not less than four
(4) Business Days prior to the proposed date the Bid Rate Loans are to be
borrowed if such Bid Rate Loans are Eurodollar Loans and before 10:00 a.m.
Houston time on the same Business Day as the Bid Rate Loans are to be
borrowed if such Bid Rate Loans are Absolute Rate Loans (provided that if
the Administrative Agent, in its capacity as a Lender, desires to submit a
Bid Rate Quote, it shall on the relevant date submit its quote not later
than 1:45 p.m. and 9:45 a.m., respectively), of the minimum amount and
maximum amount of each Bid Rate Loan such Lender would be willing to make
as part of such proposed Bid Rate Loan (which shall be not less than
$5,000,000), the rate or rates of interest therefor, the
25
Applicable Lending Office therefor, if different, and the period of time
during which such Lender's offer with respect to such rate or rates of
interest shall remain open. Such rate or rates of interest may be either an
Absolute Rate or based on the definition of "Eurodollar Rate," adding or
subtracting any margin which such Lender deems appropriate. Unless
otherwise agreed by the Competitive Bid Auction Agent and the Company, no
Bid Rate Quote shall contain qualifying, conditional or similar language,
propose terms other than or in addition to those set forth in the relevant
Competitive Bid Request, or be conditioned upon acceptance by the Company
of all of the Bid Rate Loans for which such offer is being made. Bid Rate
Quotes not in compliance with this clause (iii) may be disregarded by the
Company in its sole discretion.
(iv) The Company shall, in turn, not later than the expiration of the
period of time specified by such Lender during which its offer would remain
open (but in no event later than 10:30 a.m. Houston time on the Business
Day that is three (3) Business Days prior to the proposed borrowing date if
such Bid Rate Loans are Eurodollar Loans and not later than 11:00 a.m.
Houston time on the proposed borrowing date if such Bid Rate Loans are
Absolute Rate Loans), in its sole discretion, either (A) cancel its request
by giving the Competitive Bid Auction Agent, as bid administrator, notice
to that effect, or (B) accept one or more offers made by Lenders to make
one or more Bid Rate Loans, in its sole discretion, by giving notice to the
Competitive Bid Auction Agent, as bid administrator, of the amount of each
Bid Rate Loan to be made by such Lender (which amount shall be equal to or
greater than the minimum amount and less than or equal to the maximum
amount, that such Lender specified to the Company for such Bid Rate Loan
pursuant to clause (iii) above, but in no event shall such amount be less
than $5,000,000). In the event the Company fails to cancel its request or
to accept the offer of a Lender to make one or more Bid Rate Loans within
the time periods specified in this clause (iv), the Company shall be deemed
to have canceled its request for such Bid Rate Loan. Upon notice that a
Competitive Bid Request has been canceled, the Competitive Bid Auction
Agent, as bid administrator, shall give prompt notice thereof to the
Administrative Agent and the Lenders.
(v) The Company shall have no obligation to accept any offers, but if
the Company accepts offers, it shall do so on the basis of the lowest Bid
Rate offered; and in the event bids are equal, the Company may accept any
such offers in its sole discretion. If the Company accepts one or more of
the offers made by the Lenders, the Competitive Bid Auction Agent, as bid
administrator, shall promptly notify the Administrative Agent and each
Lender whose offer was accepted of the date and aggregate amount of such
Bid Rate Loan and shall promptly notify all other Lenders whose offers were
not accepted of such fact. The benefit of any notice or time periods
specified above in this Section 2.02(g) relating to Bid Rate Loans from any
Lender may be waived by the Company or such Lender, as the case may be,
without the consent or approval of the Competitive Bid Auction Agent or any
other Lender.
(vi) Not later than 1:00 p.m., Houston time, on the date specified for
each borrowing hereunder of a Bid Rate Loan, each Lender that has had its
bids accepted shall make available the amount of such Bid Rate Loan to be
made by it on such date to the Administrative Agent, at an account
maintained by the Administrative Agent at the
26
Principal Office, in immediately available funds, for the account of the
Company. The amounts so received by the Administrative Agent shall, subject
to the terms and conditions of this Agreement, including without limitation
the satisfaction of all conditions precedent specified in Section 6.02, be
made available to the Company by depositing the same, in immediately
available funds, in an account of the Company, designated by the Company,
maintained with the Administrative Agent at the Principal Office.
(vii) If any Lender makes a new Bid Rate Loan hereunder on a day on
which the Company is to repay all or any part of any outstanding Bid Rate
Loan from such Lender, such Lender shall apply the proceeds of its new Bid
Rate Loan to make such repayment and only an amount equal to the difference
(if any) between such amount being borrowed and such amount being repaid
shall be made available by such Lender to the Company or remitted by the
Company to such Lender, as the case may be.
(viii) The indebtedness of the Company resulting from each Bid Rate
Loan made to the Company shall be evidenced by the records of each Lender
making a Bid Rate Loan and by the Bid Rate Note therefor. Such records
shall be presumed correct; provided that the failure of any Lender to make
any such notation on its Bid Rate Note shall not affect the Company's
obligations in respect of its Bid Rate Loan from such Lender.
(ix) All notices to any Lender required by this Section 2.02(g) shall
be made in accordance with Section 12.02 and the Competitive Bid
Administrative Questionnaire most recently placed on file by each Lender
with the Competitive Bid Auction Agent or the Administrative Agent.
(x) The Chase Manhattan Bank, an Affiliate of the Administrative
Agent, hereby agrees to be a party to this Agreement for the sole purpose
of acting as Competitive Bid Auction Agent and performing all duties
assigned to the Competitive Bid Auction Agent as the bid administrator
hereunder.
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 and the Canadian 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 and the Canadian
Lenders, which consent may be withheld in each such Person's sole
discretion; and provided, further, that if any Lender or Canadian 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 and Canadian Lenders) have agreed to extend the then
applicable Termination Date as provided in Section 2.03(a)(i), then the
Company (or Ocean Canada) may
27
terminate, in whole but not in part, the Commitment of any Lender or the
Canadian Subcommitment of any Canadian 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 (or the Canadian Agent)
(such notice referred to herein as a "Notice of Termination"). In order to
effect the termination of the Commitment (or Canadian Subcommitment) of the
Terminated Lender, the Company (or Ocean Canada) shall: (1) obtain an
agreement with one or more Lenders (or Canadian Lenders) to increase its
respective Commitment (or Canadian Subcommitment) and/or (2) request any
one or more other financial institutions to become parties to this
Agreement (or the Canadian Credit Agreement) in place of such Terminated
Lender; provided, that any such financial institution is reasonably
acceptable to the Administrative Agent (or the Canadian Agent) and becomes
party to this Agreement (or the Canadian Credit Agreement) by executing an
Assignment and Acceptance (or its equivalent under the Canadian Credit
Agreement) (the Lender or other financial institutions that agree to accept
in whole or in part the Commitment (or Canadian Subcommitment) of the
Terminated Lender being referred to herein as the "Replacement Lender") and
to assume the Loans of the Terminated Lender, such that the aggregate
increased and/or accepted Commitments (or Canadian Subcommitments) of the
Replacement Lender(s) under clauses (1) and (2) equal the Commitment (or
Canadian Subcommitment) of the Terminated Lender. If the Company (or Ocean
Canada) is unable to obtain one or more Replacement Lenders to accept the
Commitment (or Canadian Subcommitment) 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 (or, if applicable, the
aggregate Canadian Subcommitments) by an amount equal to the Commitment (or
Canadian Subcommitment) 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 and the Canadian Lenders. Any assignment to a Replacement Lender
shall be effected pursuant to Section 12.06(b) or Section 12.03(b) of the
Canadian Credit Agreement, as applicable.
(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 U.S. Commitment may increase or
decrease from time to time in accordance with the terms hereof, including, but
not limited to Section 2.09.
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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 U.S. Commitment. The Facility Fee will accrue for the period from and
including the Effective Date to and including the Termination Date, without
regard 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 date of
Initial Funding for Letters of Credit issued under the Prior Credit Agreement
and outstanding on the date of Initial Funding); 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 date of Initial Funding for Letters of Credit issued under the Prior
Credit Agreement and outstanding on the date of Initial Funding). 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) COMPETITIVE BID ADMINISTRATION FEE. Upon delivery of each Competitive
Bid Request to the Administrative Agent, the Company shall pay to the
Competitive Bid Auction Agent, as bid administrator, for its own account, a bid
administration fee of $1,000, which fee shall be due and payable regardless of
whether or not the Company cancels its request or accepts any offers from any
Lender.
(E) BORROWING BASE INCREASES. Upon any increase in the Borrowing Base to an
amount greater than $300,000,000 and on the occasion of each increase in the
amount of the Borrowing Base thereafter, the Company shall pay to the
Administrative Agent for the account of the Lenders a one-time aggregate
additional non-refundable facility fee of 0.15% of such increase on each
Redetermination Date on which the Borrowing Base shall increase above the
highest Borrowing Base outstanding under this Agreement prior to such date.
29
(F) FEE LETTERS. The Company shall pay to the Administrative Agent and its
Affiliates and the Syndication Agent 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) CONVENTIONAL NOTES. The Conventional Loans made by each Lender shall be
evidenced by a single promissory note of the Company in substantially the form
of Exhibit A-1, 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
Conventional 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 Conventional Loan 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.
(B) BID RATE NOTES. The Bid Rate Loans made by each Lender shall be
evidenced by a single promissory note of the Company in substantially the form
of Exhibit A-2, dated as of the Effective Date or such later date that a Lender
becomes a party hereto, payable to such Lender and otherwise duly completed. The
date, amount, Type, interest rate and maturity date of each Bid Rate 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 Bid
Rate 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.
(C) 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 Conventional 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
30
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. The Company
may not prepay Bid Rate Loans; provided that the foregoing shall not prevent an
acceleration of the maturity of a Bid Rate Loan upon the occurrence and
continuance of an Event of Default.
(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 Conventional Loan pursuant to
Section 4.07(b) or reimbursed, second, if necessary, towards reduction of the
outstanding principal balance of the Conventional Loan Notes by prepaying Base
Rate Loans, if any, then outstanding, third, if necessary, toward a reduction of
the outstanding principal balance of the Conventional Loan Notes by prepaying
Eurodollar Loans, if any, then outstanding, 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 and fifth, if
necessary, paying such amount to the Administrative Agent as cash collateral for
outstanding Bid Rate Loans, which amount shall be held by the Administrative
Agent as cash collateral to secure the Company's obligation under such Loans.
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 (i)
Section 2.09, (ii) 8.05(d), (iii) 9.01(e), (iv) 9.01(h)(ii), (v) Section
9.01(o), (vi) Section 9.16(b) or (vii) 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 the Canadian
Indebtedness (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 Conventional Loan pursuant to Section 4.07(b) or reimbursed,
second, if necessary, towards reduction of the outstanding principal balance of
the Conventional Loan Notes and Canadian Indebtedness by prepaying Base Rate
Loans, as defined herein and as defined in the Canadian Credit Agreement, if
any, then outstanding, third, if necessary, towards prepayment of Bankers'
Acceptances issued and outstanding under the Canadian Credit Agreement, fourth,
if necessary, towards a reduction of the outstanding principal balance of the
Conventional Loan Notes by prepayment of Eurodollar Loans, if any, then
outstanding, fifth, 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
31
Lenders for drawings under the Letters of Credit and sixth, if necessary,
towards payment of such amount to the Administrative Agent as cash collateral
for outstanding Bid Rate Loans, which amount shall be held by the Administrative
Agent as cash collateral to secure the Company's obligation under such Loans.
The Company shall also pay any amounts payable pursuant to Section 5.05 in
connection therewith.
(D) PREPAYMENT FOLLOWING REALLOCATION. Upon any reallocation of the
Borrowing Base in accordance with Section 2.09, if either (i) the Available U.S.
Commitment is less than the sum of the aggregate outstanding principal amount of
the Loans and the LC Exposure or (ii) the Available Canadian Subcommitment is
less than the Canadian Indebtedness, then in either case, the Company shall
within 90 days of receipt of written notice thereof, prepay the amount of such
excess in a manner consistent with the application order specified in Section
2.08(c).
(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) ALLOCATION. (i) For the period from and including the Effective Date to
but not including the first Redetermination Date, the amount of the Borrowing
Base shall be $300,000,000. The Borrowing Base may not exceed the Aggregate
Commitments.
(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 and the Canadian Lenders).
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
May 1, 1999. Upon any redetermination of the Borrowing Base, such
redetermination shall remain in effect until the next successive
Redetermination Date.
(iii) The Borrowing Base may be allocated between the Company under
this Agreement and Ocean Canada under the Canadian Credit Agreement.
Subject to the other terms of this Agreement, the Allocated U.S. Borrowing
Base in effect from time to time shall represent the maximum amount of
credit in the form of Loans and Letters of Credit (subject to the Aggregate
Commitments and the other provisions of this Agreement) that the Lenders
will extend to the Company at any one time prior to the Termination Date.
On the Effective Date, the Allocated Canadian Borrowing Base shall be
$7,000,000 resulting in an initial Allocated U.S. Borrowing Base of
$293,000,000.
(iv) The Company at any time shall have the right to request in
writing to the Administrative Agent, Canadian Agent and the Canadian
Lenders that the Canadian Lenders, in their sole discretion, increase the
Allocated Canadian Borrowing Base; provided that any such increase shall
require the approval of all of the Canadian Lenders; and provided further
that the Company may not make such request more than three (3) times during
any twelve month period. Within ten (10) Business Days of the receipt by
32
the Canadian Lenders of such request, the Canadian Lenders shall give
written notice to the Company and the Administrative Agent of their
approval or disapproval of such increase. If such increase is approved,
each Lender which is also a Canadian Lender (or who has an Affiliated
Canadian Lender) shall have its pro rata share of the Allocated U.S.
Borrowing Base reduced by an amount equal to its corresponding increase in
the Allocated Canadian Borrowing Base. The revised Allocated U.S. Borrowing
Base and Allocated Canadian Borrowing Base (and, if applicable, Commitment
Percentages) shall become effective upon the distribution by the
Administrative Agent to the Company, all Lenders and all Canadian Lenders
of written notice thereof which shall occur not later than three (3)
Business Days after its receipt of the notice of increase.
(v) The Company at any time shall have the right to request in writing
to the Administrative Agent, the Canadian Agent and the Lenders who are
also Canadian Lenders (or who have Affiliated Canadian Lenders) that such
Lenders who are also Canadian Lenders (or who have Affiliated Canadian
Lenders), in their sole discretion, permit the Company to decrease the
Allocated Canadian Borrowing Base; provided that any such change shall
require the approval of all of such Lenders; and provided further that the
Company may not make such request more than three (3) times during any
twelve month period. Within ten (10) Business Days of the receipt by such
Lenders of such request, such Lenders shall give written notice to the
Company and the Administrative Agent of their approval or disapproval of
such change. If such decrease is approved, each such Lender shall have its
pro rata share of the Allocated U.S. Borrowing Base increased by an amount
equal to its corresponding decrease in the Allocated Canadian Borrowing
Base. The revised Allocated U.S. Borrowing Base and Allocated Canadian
Borrowing Base (and, if applicable, Commitment Percentages) shall become
effective upon the distribution by the Administrative Agent to the Company,
all Lenders and all Canadian Lenders of written notice thereof which shall
occur not later than three (3) Business Days after its receipt of the
notice of increase.
(vi) Reallocations of the Allocated U.S. Borrowing Base and Allocated
Canadian Borrowing Base may affect the Commitment Percentage set forth on
Annex I, but shall not, without the prior agreement of all the Lenders and
the Company, affect the Global Commitment Percentage.
(B) REDETERMINATION. On or before April 1st and October 1st of each year,
commencing April 1, 1999, the Technical Agents shall propose in writing to the
Company, the Lenders and the Canadian 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 and each Canadian
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 or Canadian Lender has not communicated its approval or disapproval, such
silence shall be deemed to be an approval. If, however, at the end of such 10-
day period, 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 Required Lenders or is otherwise determined as provided
in Section 2.09(d), it shall become effective and applicable to the Company, the
Agents, the
33
Lenders and the Canadian Lenders as of 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 Required 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
including, without limitation, the Debt of Ocean Canada under the Canadian
Credit Agreement). Such redetermination shall be accomplished not later than and
effective 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 hereinafter provided, 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 and the Canadian Lenders to ascertain the highest Borrowing Base
then acceptable to a number of Lenders and Canadian 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, any increase in the Borrowing
Base shall require the consent of all the Lenders and the Canadian 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. 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.
(F) SHORT-TERM PARI PASSU DEBT; OTHER ADJUSTMENTS.
(i) The Technical Agents shall calculate the Borrowing Base for any
Redetermination Period by reducing the amount which would have been the
Borrowing Base in the absence of any Short-Term Pari Passu Debt by an
amount equal to the amount
34
of Short-Term Pari Passu Debt outstanding as of the Redetermination Date
for such Redetermination Period. In addition, if during any Redetermination
Period, any Short-Term Pari Passu Debt is incurred or assumed, the amount
of the then effective Borrowing Base shall automatically reduce for the
remainder of such Redetermination Period by an amount equal to the amount
of Short-Term Pari Passu Debt so incurred or assumed.
(ii) The Borrowing Base is also subject to adjustment as set forth in
Sections 8.05(d), 9.01(e)(iii), 9.01(h)(ii), 9.01(o), 9.16(b) and 9.21.
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 Conventional Loan made by such Lender.
Notwithstanding the foregoing sentence, each Bid Rate Loan will mature and be
payable in full on the last day of the Interest Period therefor and the Company
agrees to pay to the Administrative Agent for the account of the Lender making
such Bid Rate Loan the amount of such Bid Rate Loan in full on such day.
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;
(ii) if such Loan is a Eurodollar Loan that is a Conventional Loan,
for each Interest Period relating thereto, the Eurodollar Rate for such
Loan plus the Applicable Margin for Eurodollar Loans that are Conventional
Loans, but in no event to exceed the Highest Lawful Rate;
(iii) if such Loan is a Eurodollar Loan that is a Bid Rate Loan, for
each Interest Period relating thereto, the Eurodollar Rate for Eurodollar
Loans plus or minus any margin as may be agreed between the Company and the
Lender making such Bid Rate Loan, but in no event to exceed the Highest
Lawful Rate; and
(iv) if such Loan is an Absolute Rate Loan, for each Interest Period
relating thereto, such rate per annum as may be agreed between the Company
and the Lender making such Bid Rate Loan, 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
35
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 and Absolute Rate
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 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 or
the amount of the Canadian Indebtedness under the Canadian Credit Agreement, 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 Conventional Loans
maintained as Base Rate Loans, second, any excess to reduce the aggregate
principal amount then outstanding on Conventional Loans maintained as Base Rate
Loans, third, any excess to interest accrued on Conventional Loans maintained as
Eurodollar Loans, and fourth any excess to reduce the aggregate principal amount
then outstanding on Conventional 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
36
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 with respect to Bid Rate Loans made
by any Lender, 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 Conventional
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 Global Commitment Percentages (or, if there is a
contemporaneous and corresponding termination or reduction of the amount of the
Canadian Subcommitments, such amounts as may be necessary so that, after giving
effect to such reduction, the Global Commitment Percentages shall have been
reduced pro rata); (b) each payment of principal of Conventional Loans by the
Company shall be made for the account of the Lenders pro rata in accordance with
the respective unpaid principal amount of the Conventional Loans held by the
Lenders; (c) each payment of interest on Conventional 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 Conventional 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. If, on any day on which payments on
account of one or more Bid Rate Loans are due, payments on account of
Conventional Loans or on account of other items otherwise under this Agreement
are also due and the Administrative Agent has received insufficient funds to pay
all amounts due and owing on such date, then the Administrative Agent shall
distribute all funds so received first pro rata among the Lenders in accordance
with the unpaid amounts due on such day, and thereafter to the payment of such
Bid Rate Loans, pro rata.
SECTION 4.03 COMPUTATIONS. Interest on Eurodollar Loans and Absolute Rate
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.
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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 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
38
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.
(c) Without limitation of the last sentence of Section 4.02, if an Event of
Default has occurred and is continuing and the Notes have been declared to be
immediately due and payable, the Administrative Agent shall distribute funds
received pro rata among the Lenders in accordance with the respective unpaid
principal amounts of the Loans (whether Conventional Loans or Bid Rate Loans)
held by the Lenders.
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.
39
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 up to the
amount of the Available U.S. Commitment then available treated as a Conventional
Loan to the Company as provided 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 Paying 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
40
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
Paying 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 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 Paying Agent is hereby
authorized, without further action by any other Agent or Lender, to release the
Lien in such cash and will direct the Paying 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 date of the Initial Funding with
respect to Letters of Credit outstanding under the Prior Credit Agreement on the
date of Initial Funding, 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 Conventional 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).
41
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 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
42
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 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
43
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 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
44
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 of 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.
(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
45
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.
46
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 indemnitication. Such certificate shall also include (i)
calculations in 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.
47
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 March 27, 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 March 27, 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.
(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:
48
(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, McNamera & ▇▇▇▇▇,
special Louisiana counsel to OEI-Louisiana, substantially in the form of
Exhibit B-2.
(f) All conditions to closing the Canadian Credit Agreement shall have been
satisfied or waived contemporaneously with the Initial Funding.
(g) 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.
(h) The Lender Group shall have received all fees due and payable pursuant
to Section 2.04 on or prior to the Effective Date.
(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 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
49
Credit, if, after giving effect thereto, the aggregate principal amount of all
the Loans then outstanding, the LC Exposure and the Canadian Indebtedness 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 or Canadian Indebtedness under the Indentures and setting forth in
reasonable detail calculations to support the certification.
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.
SECTION 7.02 FINANCIAL CONDITION.
(a) The unaudited pro forma combined balance sheet of the Company and its
Consolidated Subsidiaries as at December 31, 1997, consolidated for the
preceding fiscal year of the Company and United Meridian, which is presented to
give effect to the Merger under the pooling of interests method of accounting,
as reflected in ▇▇▇ ▇▇▇▇ ▇-▇, 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 (subject to the absence of a statement of
changes in stockholders' equity and cash flows). The Company believes that its
assumptions contained in the foregoing unaudited pro forma financial statements
are reasonable for presenting the significant financial and accounting effects
attributable to the Merger in accordance with SEC rules for such pro forma
financial statements.
50
(b) The Company and its Consolidated Subsidiaries, as of December 31, 1997,
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 December 31, 1997, 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 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
51
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 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
52
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 those contested in
accordance with the terms of the applicable joint operating agreement or
otherwise contested in good faith by appropriate proceedings. 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 is 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
53
(including without limitation necessary authorizations, if any, with respect to
any processing arrangements conducted by any one 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
54
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.
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
55
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, 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, and shall
cause Ocean Canada to cause to be delivered 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 each of
the Company and Ocean Canada, 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 and Ocean Canada 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
certificates of the respective senior financial officers of the Company and
Ocean Canada, which certificates shall respectively state that said financial
statements fairly present, in all material respects, the respective consolidated
financial conditions and results of operations of the Company and Ocean Canada
and their respective 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 and Ocean Canada, consolidated statements of
income, changes in stockholders' equity and cash flows of the Company and its
Consolidated Subsidiaries and Ocean Canada 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 respective consolidated
financial condition and results of operations of the
56
Company and Ocean Canada and their respective 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):
(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.
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(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.
(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.
(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
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(ii) setting forth in reasonable detail the computations necessary to determine
whether the Company is in compliance with Sections 9.01(h), 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, and shall cause Ocean Canada
to, 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 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
59
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, and (iii) if such failure to comply could
not reasonably be expected to have a Material Adverse Effect.
(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' prior notice to the Administrative Agent change its principal place of
business and chief executive offices from that listed on Exhibit D.
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 March 15 of each year commencing March 15, 1999, 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
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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, 1998,
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) 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.
(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 own all issued and
outstanding shares of all classes of stock of its Restricted Subsidiaries as
listed on Exhibit D and the Company will at all times own all issued and
outstanding shares of all classes of stock of its Restricted Subsidiaries 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
61
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):
(a) the Indebtedness and the Canadian 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; provided that Ocean Canada may not incur, create,
assume or suffer to exist any Debt under this Section 9.01(c) in an aggregate
amount in excess of $2,000,000 at any one time outstanding;
(d) Debt (i) 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, or (ii) of Persons who are
not Subsidiaries of the Company which is Non-recourse to the Company and its
Restricted Subsidiaries and any of their Property except for recourse
constituting Debt permitted under Section 9.01(m);
62
(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 of any Restricted Subsidiary;
(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) other Short-Term Pari Passu Debt,
provided that prior to the issuance or incurrence of such Debt, the Company
provides the Administrative Agent notice thereof as required by Section 8.01(g);
(iii) the $125,000,000 8-1/4% Senior Notes due 2018 issued pursuant to the 98
Senior (20-year) Indenture; and (iv) other Long-Term 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 Long-Term Pari Passu Debt under this clause (iv), the
Borrowing Base is redetermined;
(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 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 with respect to
Debt owed by the Government of Equatorial Guinea or any Person exercising rights
of a sovereign on its behalf;
63
(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 with respect to such Debt;
(m) With respect to Debt described in Section 9.01(d) (the "Primary
Obligation"), (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) such Primary Obligation, and (ii) Debt arising out of the grant
of Liens on stock (or other equity interests) issued by the obligor on such
Primary Obligation;
(n) Debt associated with letters of credit, bank guarantees, bonds or
surety obligations required by Governmental Requirements in connection with the
usual and customary operation of the Oil and Gas Properties;
(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 or the Canadian
Indebtedness and any guarantees thereof;
(b) Excepted Liens;
(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;
64
(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(k), (l), (m), (n) 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;
(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;
65
(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 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
$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;
66
(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 UMC 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);
(r) other investments, loans or advances not to exceed $1,000,000 in the
aggregate at any time; and
(s) advances to operators under operating agreements entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business.
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; and
(iii) (A) declare and pay cash dividends, and (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; provided that no Borrowing Base Deficiency exists either immediately
before declaration of such dividend and after payment of such dividend or
immediately after any such stock redemption or repurchase.
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.
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(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 Initial Funding, 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
(i) the aggregate amount of all payments made by the Company and its Restricted
Subsidiaries, other than Ocean Canada and its Restricted Subsidiaries (in each
case, determined on a consolidated basis), pursuant to such leases or lease
agreements to exceed $15,000,000 in any period of twelve consecutive calendar
months or (ii) the aggregate amount of all payments made by Ocean Canada and its
Restricted Subsidiaries (determined on a consolidated basis) pursuant to such
leases or lease agreements to exceed $2,000,000 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 (other than Ocean Canada) 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.
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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 Agreement 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 or any other agreement evidencing the 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
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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
(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 other 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 other agreements evidencing any of the
Subordinated Debt, (c) the agreements relating to Non-recourse Debt permitted by
Section 9.01, but only with respect to the Restricted
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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.
SECTION 9.19 SUBORDINATED AND LONG-TERM 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 Long-Term Pari Passu Debt, unless the Indebtedness shall have been
paid in full and the Commitments of each Lender and Canadian Lender terminated;
provided that the Company may optionally defease, redeem, offer to purchase and
purchase all or any part of the Subordinated Debt and the Long-Term 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 the Canadian 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 Long-Term 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 prepayments and
repurchases of the Long-Term 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.
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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.
(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 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.
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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 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) Ocean Canada shall default in the payment or mandatory prepayment when
due of any principal of or interest on any Loan (as defined in the Canadian
Credit Agreement) or of any Bankers Acceptance; or Ocean Canada shall default in
the payment when due any fees or other amount payable by it under the Canadian
Credit Agreement and such default shall continue for a period of five (5)
Business Days; or
(d) 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
(e) The Company shall default in the performance of any of its obligations
under Article IX; Ocean Canada shall default in the performance of any of its
obligations under Article IX of the Canadian Credit Agreement; 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
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(f) 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
(g) 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
(h) 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
(i) 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 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
(j) 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
(k) 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
(l) 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
74
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
(m) 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 (f), (g) or (h) of this Section 10.01 with respect to the Company, OEI-
Louisiana or Ocean Canada, 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 (ii) in the case of the occurrence of an
Event of Default referred to in clause (f), (g) or (h) of this Section 10.01
with respect to the Company, OEI-Louisiana or Ocean Canada, 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 and Ocean
Canada.
SECTION 10.02 CASH COLLATERAL FOR LETTERS OF CREDIT. If an Event of Default
exists, the Administrative Agent and the Paying Agent may, or upon the request
of the Majority Lenders, shall, proceed to enforce remedies under the Loan
Documents. Upon realization of any of the collateral consisting of cash, or of
any cash proceeds from any disposition of the collateral, all such cash and cash
proceeds shall be applied as set forth in the Intercreditor Agreement.
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, the Competitive Bid
Auction Agent 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
75
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 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
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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 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
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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, 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.
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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 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
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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 or 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 OF A COURT OR BY AGREEMENT TO
HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILFUL MISCONDUCT,
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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. Subject to the terms of the Intercreditor
Agreement, 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 and the Canadian 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 hereunder, increases the Borrowing Base or releases or modifies the
obligations of OEI-Louisiana under the Guaranty Agreement or of the Company or
OEI-Louisiana under the Intercreditor Agreement shall be effective without
consent of all Lenders and Canadian 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
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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 acknowledgment
reflecting such assignment and the resultant effects thereof on the Commitments
of the assignor and assignee, and the principal amount outstanding of the
Conventional 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 Conventional Loan 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. If an assignment is made to a
Person which had not previously been a Lender, the Company will promptly execute
and deliver to such Lender a Bid Rate Note as described in Section 2.07(b).
(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
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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 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.
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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.
(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
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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 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
85
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.
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 Paying 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.
86
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 under the Canadian Credit Agreement 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 acknowledges and declares 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 Lender Group is 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.
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."
87
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]
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.
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
[Signature Page 2]
▇▇▇▇▇▇ 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.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[Signature Page 3]
BARCLAYS BANK PLC, as Documentation Agent
By: _________________________________________________
Name: _________________________________________________
Title:_________________________________________________
Address for Notices to Barclays as Documentation Agent:
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
[Signature Page 4]
ABN AMRO BANK, N.V., as Co-Agent
By:____________________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
By:____________________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President
Address for Notices for ABN AMRO as Co-Agent:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
with copy to:
Credit Administration
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page 5]
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Co-Agent
By: _________________________________________________
Name: _________________________________________________
Title:_________________________________________________
Address for Notices for Bank of America as Co-Agent:
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
[Signature Page 6]
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: ▇▇▇▇ ▇▇▇▇▇▇▇
[Signature Page 7]
NATIONSBANK, N.A., as Co-Agent
By:____________________________________________________
▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
Address for Notices for NationsBank as Co-Agent:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
[Signature Page 8]
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
▇▇▇▇▇ FARGO BANK (TEXAS), N.A., as Co-Agent
By:____________________________________________________
J. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
Address for Notices for ▇▇▇▇▇ Fargo Bank as Co-Agent:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with copy to:
▇▇▇▇▇ Fargo Bank (Texas), ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
[Signature Page 10]
LENDER: CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By:____________________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
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 11]
▇▇▇▇▇▇ 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 12]
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 13]
ABN AMRO BANK, N.V.
By:____________________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
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 14]
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: _________________________________________________
Name: _________________________________________________
Title:_________________________________________________
Lending Office for all Loans:
Bank of America NT & SA
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notice:
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
with copy to:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[Signature Page 15]
PARIBAS
By:____________________________________________________
▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
By:____________________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Director
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 16]
NATIONSBANK, N.A.
By:____________________________________________________
▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
Lending Office for all Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notice:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
NationsBank, N.A.
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
[Signature Page 17]
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 18]
▇▇▇▇▇ FARGO BANK (TEXAS), N.A.
By:__________________________________________________
J. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
Lending Office for all Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notice:
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▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with copy to:
▇▇▇▇▇ Fargo Bank (Texas), ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
[Signature Page 19]
HIBERNIA NATIONAL BANK
By:___________________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Lending Office for all Loans:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Energy/Maritime Department
[Signature Page 20]
TORONTO DOMINION (TEXAS) INC.
By: _________________________________________
Name:________________________________________
Title:_______________________________________
Lending Office for all Loans:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
[Signature Page 21]
U.S. BANK NATIONAL ASSOCIATION
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Lending Office for all Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notice:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[Signature Page 22]
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 23]
CREDIT SUISSE FIRST BOSTON
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
Lending Office for all Loans:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices:
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
with copy to:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
[Signature Page 24]
FIRST NATIONAL BANK OF COMMERCE
By:________________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President
Lending Office for all Loans:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
First National Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
with copy to:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President
[Signature Page 25]
BANK OF NEW YORK
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
Lending Office for all Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
[Signature Page 26]
SOUTHWEST BANK OF TEXAS, 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 27]
AGENT: THE CHASE MANHATTAN BANK, as Competitive Bid Auction
Agent
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________
Address for Notices to Chase as Competitive Bid
Auction Agent:
The Chase Manhattan Bank
Loan and Agency Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
[Signature Page 28]
ANNEX I
LIST OF COMMITMENTS AND CANADIAN COMMITMENTS
--------------------------------------------
as of July 8, 1998
U.S. Lenders and U.S. Commitments
Canadian Lenders and Canadian Subcommitments
U.S. Commitment Global
Name of Lender Percentage Commitment Commitment Percentage
--------------------------------- ---------------- ----------- ----------------------
Chase Bank of Texas, 7.76451% $35,000,000 8.75000%
National Association
▇▇▇▇▇▇ Guaranty Trust Company 8.19112% $32,000,000 8.00000%
of New York
Barclays Bank PLC 8.19112% $32,000,000 8.00000%
NationsBank, N.A. 8.19112% $32,000,000 8.00000%
ABN Amro Bank, N.V. 7.67918% $30,000,000 7.50000%
Bank of America NT & SA 7.67918% $30,000,000 7.50000%
Bank One, Texas, N.A. 7.67918% $30,000,000 7.50000%
Paribas 7.67918% $30,000,000 7.50000%
Societe Generale, Southwest 7.67918% $30,000,000 7.50000%
Agency
▇▇▇▇▇ Fargo Bank (Texas), N.A. 7.67918% $30,000,000 7.50000%
Hibernia National Bank 4.60751% $18,000,000 4.50000%
Toronto Dominion (Texas) Inc. 3.41297% $18,000,000 4.50000%
U.S. Bank National Association 4.60751% $18,000,000 4.50000%
Credit Suisse First Boston 3.83960% $15,000,000 3.75000%
Bank of New York 2.55973% $10,000,000 2.50000%
Southwest Bank of Texas, N.A. 2.55973% $10,000,000 2.50000%
Annex-I-1
Canadian Lenders and Canadian Subcommitments
Name of Lender Subcommitment Percentage Commitment
------------------------------------- ------------------------- ---------------
The Chase Manhattan Bank of Canada 50% CDN $12,500,000
Toronto Dominion Bank 50% CDN $12,500,000
Affiliated Canadian Lenders
Lender Canadian Affiliate
------ ------------------
Chase Bank of Texas, The Chase Manhattan Bank of Canada
National Association
Toronto Dominion (Texas) Inc. Toronto Dominion Bank
Annex-I-2
EXHIBIT A-1
[FORM OF]
PROMISSORY NOTE
(CONVENTIONAL LOANS)
$______________ _______________, 199_/200_
FOR VALUE RECEIVED, Ocean Energy, Inc., a Delaware corporation (the
"Company"), hereby promises to pay to the order of _____________________ (the
"Lender"), for the account of its respective Applicable Lending Offices provided
for by the Credit Agreement as hereinafter defined, at the principal office of
Chase Bank of Texas, National Association, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, the
principal sum of _____________ Dollars (or such lesser amount as shall equal the
aggregate unpaid principal amount of the Conventional Loans made by the Lender
to the Company under the Credit Agreement), in lawful money of the United States
of America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Loan, at such office, in like money and funds, for
the period commencing on the date of such Loan until such Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and maturity date of each Loan made
by the Lender to the Company, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior to any transfer
of this Note, endorsed by the Lender on the schedule attached hereto or any
continuation thereof.
This Note is one of the Conventional Loan Notes referred to in the Amended
and Restated Global Credit Agreement (such Global Credit Agreement together with
all amendments and supplements thereto being the "Credit Agreement") dated as of
July 8, 1998 among the Company, the Lenders named therein (including the
Lender), Chase Bank of Texas, National Association, as Administrative Agent,
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Syndication Agent, Barclays Bank
PLC, as Documentation Agent, and ABN Amro Bank, N.V., Bank of America National
Trust & Savings Association, Paribas, NationsBank, N.A., Societe Generale,
Southwest Agency and ▇▇▇▇▇ Fargo Bank (Texas), N.A., as Co-Agents, and evidences
the Conventional Loans made by the Lender thereunder. Capitalized terms used in
this Note have the respective meanings assigned to them in the Credit Agreement.
This Note is issued pursuant to the Credit Agreement and is entitled to the
benefits provided for in the Credit Agreement and the Loan Documents. The
Credit Agreement provides for the acceleration of the maturity of this Note upon
the occurrence of certain events and for prepayments of Conventional Loans upon
the terms and conditions specified therein and other pertinent terms.
A-I-1
THIS NOTE (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY
HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF TEXAS.
This Note is "Senior Indebtedness" and "Specified Senior Indebtedness"
under and for purposes of the 95 Indenture; and "Senior Indebtedness" and
"Designated Senior Indebtedness" under and for purposes of the 96 Indenture, the
97 Indenture and the 98 Senior Subordinated Indenture.
It is the intent of the Company and the Lender to conform strictly to the
usury laws applicable to the Lender. Accordingly, reference is made to Section
12.15 of the Credit Agreement which is incorporated herein by reference for all
purposes.
OCEAN ENERGY, INC., a Delaware corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF]
PROMISSORY NOTE
(BID RATE LOANS)
__________, 199_/200_
FOR VALUE RECEIVED, Ocean Energy, Inc., a Delaware corporation (the
"Company"), hereby promises to pay to the order of _________________ (the
"Lender"), for the account of its respective Applicable Lending Offices provided
for by the Credit Agreement as hereinafter defined, at the principal office of
Chase Bank of Texas, National Association, at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
the aggregate unpaid principal amount of the Bid Rate Loans made by the Lender
to the Company under the Credit Agreement, in lawful money of the United States
of America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Bid Rate Loan, at such office, in like money and
funds, for the period commencing on the date of each such Bid Rate Loan until
such Bid Rate Loan shall be paid in full, at the rates per annum and on the
dates provided in the Bid Loan Quote provided by such Lender in connection with
such Loan and accepted by the Company.
The date, amount, Type, interest rate and maturity date of each Bid Rate
Loan made by the Lender to the Company, and each payment made on account of the
principal thereof, shall be recorded by the Lender on its books and, prior to
any transfer of this Note, endorsed by the Lender on the schedule attached
hereto or any continuation thereof.
This Note is one of the Bid Rate Notes referred to in the Amended and
Restated Global Credit Agreement (such Global Credit Agreement together with all
amendments and supplements thereto being the "Credit Agreement") dated as of
July 8, 1998 among the Company, the Lenders named therein (including the
Lender), Chase Bank of Texas, National Association, as Administrative Agent,
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Syndication Agent, Barclays Bank
PLC, as Documentation Agent, and ABN Amro Bank, N.V., Bank of America National
Trust & Savings Association, Paribas, NationsBank, N.A., Societe Generale,
Southwest Agency and ▇▇▇▇▇ Fargo Bank (Texas), N.A., as Co-Agents, and evidences
Bid Rate Loans made by the Lender thereunder. Capitalized terms used in this
Note have the respective meanings assigned to them in the Credit Agreement.
This Note is issued pursuant to the Credit Agreement and is entitled to the
benefits provided for in the Credit Agreement and the Loan Documents. The
Credit Agreement provides for the acceleration of the maturity of this Note upon
the occurrence of certain events.
A-2-1
THIS NOTE (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY
HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF TEXAS.
This Note is "Senior Indebtedness" and "Specified Senior Indebtedness"
under and for purposes of the 95 Indenture; and "Senior Indebtedness" and
"Designated Senior Indebtedness" under and for purposes of the 96 Indenture, the
97 Indenture and the 98 Senior Subordinated Indenture.
It is the intent of the Company and the Lender to conform strictly to the
usury laws applicable to the Lender. Accordingly, reference is made to Section
12.15 of the Credit Agreement which is incorporated herein by reference for all
purposes.
OCEAN ENERGY, INC., a Delaware corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF LEGAL OPINION]
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF LOUISIANA LEGAL OPINION]
B-2-1
EXHIBIT C-1
[FORM OF]
BORROWING, CONTINUATION AND CONVERSION REQUEST
----------------------------------------------
_______________, 199__/200_
Ocean Energy, Inc., a Delaware corporation (the "Company"), pursuant to
that certain Amended and Restated Global Credit Agreement dated as of July 8,
1998 among the Company, Chase Bank of Texas, National Association, as
Administrative Agent, ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Syndication
Agent, Barclays Bank PLC, as Documentation Agent, and ABN Amro Bank, N.V., Bank
of America National Trust & Savings Association, Paribas, NationsBank, N.A.,
Societe Generale, Southwest Agency and ▇▇▇▇▇ Fargo Bank (Texas), N.A., as Co-
Agents, and the lenders parties thereto (such Global Credit Agreement together
with all amendments and supplements thereto being the "Credit Agreement"),
hereby makes the requests indicated below (unless otherwise defined herein,
capitalized terms are defined in the Credit Agreement):
1. Conventional Loans:
(a) Aggregate amount of new Conventional Loans to be $________________;
(b) Requested funding date is _________________, 199__/200_;
(c) $_____________________ of such borrowings are to be Eurodollar Loans;
$_____________________ of such borrowings are to be Base Rate Loans; and
(d) Length of Interest Period for Eurodollar Loans is: ____________________.
2. Eurodollar Loan Continuation for Eurodollar Loans maturing
on _____________:
(a) Aggregate amount to be continued as Eurodollar Loans is $_______________;
(b) Aggregate amount to be converted to Base Rate Loans is $_______________;
(c) Length of Interest Period for continued Eurodollar Loans
is _________________.
3. Conversion of Outstanding Base Rate Loans to Eurodollar Loans:
Convert $__________________ of the outstanding Base Rate Loans to
Eurodollar Loans on _________________________ with an Interest Period
of ______________________.
C-1-1
4. Letter of Credit
(a) Account Party: _________________________
(b) Issuance Date: _________________________
(c) Beneficiary:_________________________
(d) Expiration Date: _________________________
(e) Delivery Instructions:____________________
___________________________________________
The undersigned certifies that he[she] is the _____________________ of the
Company, and that as such he[she] is authorized to execute this certificate on
behalf of the Company. The undersigned further certifies, represents and
warrants on behalf of the Company that the Company is entitled to receive the
requested borrowing, continuation or conversion under the terms and conditions
of the Credit Agreement, including the condition set forth in Section 6.02(c).
In connection with the foregoing, attached hereto are (with calculations
demonstrating such ratio) [(i)] the Percentage Usage for the Company, after
giving effect to the requested borrowing or issuance [to the extent necessary]
[and (ii) the Fixed Charge Coverage Ratio (as defined in the Indentures) for the
Company after giving effect to the requested borrowing or issuance].
OCEAN ENERGY, INC., a Delaware corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
C-1-2
EXHIBIT C-2
[Form of Competitive Bid Request]
[Date]
TO: The Chase Manhattan Bank,
As Competitive Bid Auction Administrator
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
FROM: Ocean Energy, Inc., a Louisiana corporation
RE: Competitive Bid Request
Pursuant to Section 2.02(g) of that certain Amended and Restated Global
Credit Agreement (as the same may be amended, modified or supplemented from time
to time, the "Credit Agreement") dated as of July 8, 1998 among Ocean Energy,
Inc., a Delaware corporation (the "Company"), the Lenders parties thereto, Chase
Bank of Texas, National Association, as Administrative Agent, ▇▇▇▇▇▇ Guaranty
Trust Company of New York, as Syndication Agent, Barclays Bank PLC, as
Documentation Agent, and ABN Amro Bank, N.V., Bank of America National Trust &
Savings Association, Paribas, NationsBank, N.A., Societe Generale, Southwest
Agency and ▇▇▇▇▇ Fargo Bank (Texas), N.A., as Co-Agents, we hereby give notice
that we request quotes for the following proposed Bid Rate Loan(s):
Borrowing Quotation Interest
Date Date/1/ Amount/2/ Type Duration/3/ Payment Dates
-------------- ------------ --------- ---- ----------- -------------
Terms used herein have the meanings assigned to them in the Credit
Agreement.
[insert other terms, if any]
OCEAN ENERGY, INC., a Delaware corporation
By:_______________________________________
Title:____________________________________
-------------------
/1/ For use if an Absolute Rate is requested to be submitted before the
borrowing date.
/2/ Each amount must be at least $5,000,000.
/3/ 1, 2, 3 or 6 months, or 9 or 12 months, if available, in the case of a
Eurodollar Loan or, in the case of an Absolute Rate Loan, a period of not
less than 7 days and not more than 360 days after the making of such
Absolute Rate Loan and ending on a Business Day.
C-2-1
EXHIBIT C-3
[Form of Bid Loan Quote]
The Chase Manhattan Bank,
as Competitive Bid Auction Administrator
Attention:
Re: Bid Rate Loan Quote to
Ocean Energy, Inc., a Delaware corporation (the "Company")
This Bid Rate Loan quote is given in accordance with Section 2.02(g) of
that certain Amended and Restated Global Credit Agreement (as the same may be
amended, modified or supplemented from time to time, the "Credit Agreement")
dated as of July 8, 1998 among the Company, the Lenders parties thereto
(including the Lender), Chase Bank of Texas, National Association, as
Administrative Agent, ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Syndication
Agent, Barclays Bank PLC, as Documentation Agent, and ABN Amro Bank, N.V., Bank
of America National Trust & Savings Association, Paribas, NationsBank, N.A.,
Societe Generale, Southwest Agency and ▇▇▇▇▇ Fargo Bank (Texas), N.A., as Co-
Agents. Terms defined in the Credit Agreement are used herein as defined
therein.
In response to the Company's invitation dated _______________, 19___/200_,
we hereby make the following Bid Loan Quote(s) on the following terms:
1. Quoting Lender:
2. Person to contact at Quoting Lender:
3. We hereby offer to make Bid Rate Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Borrowing Quotation Interest
Date Date Amount(s)/s/ Type Duration/5/ Payment Dates Rate/6/
--------- --------- ------------ ---- ----------- ------------- --------
-----------------
/4/ The principal amount bid for each Interest Period may not exceed the
principal amount requested. Bids must be made for at least $5,000,000.
/5/ 1, 2, 3 or 6 months, or 9 or 12 months, if available, in the case of a
Eurodollar Loan or, in the case of an Absolute Rate Loan, a period of up to
360 days after the making of such Absolute Rate Loan and ending on a
Business Day, as specified in the related Competitive Bid Request.
/6/ For a Eurodollar Loan, specify margin over or under the Eurodollar Rate
determined for the applicable Interest Period. Specify percentage (rounded
to the nearest 1/100 of 1%) and specify whether "PLUS" or "MINUS". For an
Absolute Rate Loan, specify rate of interest per annum (rounded to the
nearest 1/100 of 1%).
C-3-1
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Credit Agreement,
irrevocably obligate(s) us to make the Bid Rate Loan(s) for which any offer(s)
[is] [are] accepted, in whole or in part.
This offer expires ___________ [a.m.] [p.m.] Houston time on
___________________, 199___/200_.
Very truly yours,
[Name of Lender]
Dated: By:_________________________________
Authorized Officer
C-3-2
EXHIBIT D
SUBSIDIARIES
Unless otherwise indicated in this Exhibit D, 100% of the capital stock of
each of the Subsidiaries listed below is legally and beneficially owned by OEI-
Louisiana.
Unless otherwise indicated in this Exhibit D, the principal place of
business and chief executive office of each of the Subsidiaries listed below is
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
Unless otherwise indicated in this Exhibit D, each of the Subsidiaries
listed below is a Delaware corporation.
Unless otherwise indicated in this Exhibit D, each of the Subsidiaries
listed below is a Restricted Subsidiary for purposes of the Global Credit
Agreement.
UMC Pipeline Corporation
United Meridian International Corporation
UMIC Cote d'Ivoire Corporation
UMC Cayman Islands Corporation (a Cayman Islands corporation)
Ocean Energy Resources, Inc.
Ocean Energy Resources Canada, Ltd. (a British Columbia company).
100% of the capital stock of this corporation is legally and
beneficially owned by Ocean Energy Resources, Inc. The principal
place of business and chief executive office of Ocean Energy Resources
Canada, Ltd. is located at First Canada Centre, Suite 1000, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇.
UMC Equatorial Guinea Corporation
Silver Eagle Resources (an Alberta company)
UMC Bangladesh (________________)
Havre Pipeline Company, LLC (Unrestricted Subsidiary)
Lion GPL, S.A. (Unrestricted Subsidiary)
F&R International (________________)
D-1
EXHIBIT E
PARTNERSHIPS
------------
[List Partnerships]
E-1
EXHIBIT F
LIST OF LOAN DOCUMENTS
----------------------
1. The Notes
2. Guaranty Agreement.
3. Canadian Credit Agreement.
4. Promissory Notes issued by Ocean Canada under the Canadian Credit Agreement.
5. Ocean Canada Guaranty Agreement executed by OEI-Louisiana.
6. Ocean Canada Guaranty Agreement executed by the Company.
7. Fee Letter.
8. Intercreditor Agreement.
F-1
EXHIBIT G
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated: __________, 199__/200_
Reference is made to that certain Amended and Restated Global Credit
Agreement dated as of July 8, 1998 among Ocean Energy, Inc., a Delaware
corporation (the "Company"), Chase Bank of Texas, National Association, as
Administrative Agent, ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Syndication
Agent, Barclays Bank PLC, as Documentation Agent, and ABN Amro Bank, N.V., Bank
of America National Trust & Savings Association, Paribas, NationsBank, N.A.,
Societe Generale, Southwest Agency and ▇▇▇▇▇ Fargo Bank (Texas), N.A., as Co-
Agents, and the lenders parties thereto (such Credit Agreement together with all
amendments and supplements thereto being the "Credit Agreement"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Credit Agreement. This Assignment and Acceptance, between the
Assignor (as defined and set forth on Schedule I hereto and made a part hereof)
and the Assignee (as defined and set forth on Schedule I hereto and made a part
hereof) is dated as of the Effective Date (as set forth on Schedule I hereto and
made a part hereof).
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date, an undivided interest (the "Assigned Interest") in and to all
the Assignor's rights and obligations under the Credit Agreement respecting
those, and only those, Commitments and Loans contained in the Credit Agreement
as are set forth on Schedule I, in a principal amount as set forth on
Schedule I.
2. The Assignor (i) represents and warrants that it owns the Assigned
Interest free and clear from any Lien or adverse claim; (ii) other than the
representation and warranty set forth in clause (i) above, makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other instrument, document or agreement delivered in
connection therewith, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, or any other
instrument or document furnished pursuant thereto, other than that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or any of its Subsidiaries or the performance
or observance by the Company and its Subsidiaries of any of their respective
obligations under the Credit Agreement or any Loan Document to which it is a
party; and (iv) attaches the Notes held by it evidencing the Assigned Interest
and requests that the Company exchange such Notes for new Notes payable to the
Assignor (if the Assignor has retained any interest in the Assigned Interest)
and new Notes payable to the Assignee in the respective
G-1
amounts which reflect the assignment being made hereby (and after giving effect
to any other assignments which have become effective on or before the Effective
Date).
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Credit Agreement, together with copies of the Financial
Statements, or if later, the most recent financial statements delivered pursuant
to Section 8.01 thereof, and such other documents and information as it has
deemed appropriate to make its own credit analysis; (iii) agrees that it will,
independently and without reliance upon either the Administrative Agent, any
other Agent, any other Lender or the Assignor and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement; (iv)
agrees that it will be bound by the provisions of the Credit Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it; and (v) if the Assignee
is organized under the laws of a jurisdiction outside the United States,
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such tax at a rate reduced by an applicable tax treaty.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Company effective as of the Effective Date (which Effective
Date shall, unless otherwise agreed, be at least five (5) Business Days after
the execution of this Assignment and Acceptance).
5. Upon receipt by the Company, all payments under the Credit Agreement in
respect of the Assigned Interest (including without limitation, all payments of
principal, interest and fees with respect thereto) for the period up to, but not
including, the Effective Date, shall be made to the Assignor, and for the period
from and after the Effective Date shall be made to the Assignee. Assignor and
Assignee hereby agree that if Assignor receives any of the payments referred to
in the preceding sentence which should have been made to Assignee, or if
Assignee receives any of the payments referred to in the previous sentence which
should have been made to Assignor, such payments shall promptly be paid by
Assignor to Assignee, or by Assignee to Assignor, as the case may be, in full.
6. From and after the Effective Date, (i) the Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment and
Acceptance and Section 12.06 of the Credit Agreement, shall have the rights and
obligations thereunder, including without limitation, rights under the
Intercreditor Agreement, to which Assignee hereby agrees to be bound, and (ii)
the Assignor shall, to the extent provided in this Assignment and Acceptance and
Section 12.06 of the Credit Agreement, relinquish its rights and be released
from its obligations under the Credit Agreement.
7. THIS ASSIGNMENT AND ACCEPTANCE (INCLUDING, BUT NOT LIMITED TO, THE
VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
G-2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto.
---------------------------------------------
as Assignor
By:__________________________________________
Name:________________________________________
Title:_______________________________________
---------------------------------------------
as Assignor
By:__________________________________________
Name:________________________________________
Title:_______________________________________
G-3
APPROVED:
Ocean Energy, Inc., a Delaware corporation
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Chase Bank of Texas, National Association, as
Administrative Agent
By:__________________________________________
Name:________________________________________
Title:_______________________________________
G-4
SCHEDULE I TO ASSIGNMENT AND ACCEPTANCE
Assignor: _____________________
Commitment of Assignor Prior to Effective Date: $______________
Commitment of Assignor After Effective Date: $______________
Assignee: _____________________
Commitment of Assignee Prior to Effective Date: $______________
Commitment of Assignee After Effective Date: $______________
Effective Date of Assignment: _____________, 199__/200_
Amount of Commitment Hereby Assigned: $___________
Outstanding
Commitment Principal Amount
Assigned Assigned
-------------- ----------------
$______________ $______________
SCHEDULE 1-1
Assignee's Base Rate
Lending Office:
_____________________________
_____________________________
_____________________________
Assignee's Eurodollar
Lending Office:
_______________________________
_______________________________
_______________________________
Address for Notice:
____________________________
____________________________
____________________________
Attn:_______________________
Telex No:___________________
Telecopy No:__________________
Telephone No:_________________
SCHEDULE 1-2