<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-25058
OCEAN ENERGY, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 72-1277752
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1201 LOUISIANA, SUITE 1400
HOUSTON, TEXAS 77002
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (713) 654-9110
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of shares outstanding of the registrant's common stock, all of which
comprise a single class with a $0.01 par value, as of August 10, 1998, the
latest practicable date, was 100,907,108.
<PAGE>
OCEAN ENERGY, INC.
FORM 10-Q
JUNE 30, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Statement of Income for the Three Months and
Six Months Ended June 30, 1998 and 1997................... 1
Consolidated Balance Sheet at June 30, 1998 and
December 31, 1997......................................... 2
Consolidated Statement of Changes in Stockholders' Equity
for the Year Ended December 31, 1997 and for the Six
Months Ended June 30, 1998................................ 4
Consolidated Statement of Cash Flows for the Six Months
Ended June 30, 1998 and 1997.............................. 5
Notes to Consolidated Financial Statements................. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 18
PART II OTHER INFORMATION
Item 1. Legal Proceedings.......................................... 19
Item 2. Changes in Securities...................................... 19
Item 3. Defaults Upon Senior Securities............................ 19
Item 4. Submission of Matters to a Vote of Security
Holders................................................... 19
Item 5. Other Information.......................................... 19
Item 6. Exhibits and Reports on Form 8-K........................... 20
SIGNATURES ........................................................... 20
EXHIBITS
Index to Exhibits.................................................... 21
</TABLE>
<PAGE>
OCEAN ENERGY, INC.
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- -------------------------
1998 1997 1998 1997
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Operating revenues:
Gas sales.................................... $ 58,330 $ 42,974 $ 115,934 $ 95,777
Oil sales.................................... 74,626 75,622 158,031 150,776
Contract settlements and other............... 251 1,120 1,125 1,818
--------- -------- --------- --------
133,207 119,716 275,090 248,371
--------- -------- --------- --------
Costs and expenses:
Production costs............................. 36,923 29,763 74,230 58,297
General and administrative................... 10,559 7,169 20,200 13,553
Depreciation, depletion and amortization..... 74,727 57,762 147,498 105,810
Write-down of oil and gas properties......... 218,392 -- 218,392 --
--------- -------- --------- --------
340,601 94,694 460,320 177,660
--------- -------- --------- --------
Income (loss) from operations................. (207,394) 25,022 (185,230) 70,711
Other income, expenses and deductions:
Interest and debt expense.................... 9,437 11,593 21,941 22,741
Merger costs................................. -- -- 39,000 --
Interest and other expense (income).......... (24) (632) 317 (2,112)
--------- -------- --------- --------
Income (loss) before income taxes............. (216,807) 14,061 (246,488) 50,082
Income tax provision (benefit):
Current...................................... 648 1,392 2,591 2,674
Deferred..................................... (82,609) 3,070 (86,100) 16,423
--------- -------- --------- --------
Net income (loss)............................. $(134,846) $ 9,599 $(162,979) $ 30,985
========= ======== ========= ========
Basic earnings (loss) per share............... $ (1.34) $ 0.10 $ (1.62) $ 0.34
========= ======== ========= ========
Weighted average number of common
shares outstanding........................... 100,569 92,279 100,351 92,083
========= ======== ========= ========
Diluted earnings (loss) per share............. $ (1.34) $ 0.10 $ (1.62) $ 0.32
========= ======== ========= ========
Weighted average number of common shares
and common share equivalents
outstanding................................. 100,569 96,703 100,351 96,587
========= ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
1
<PAGE>
OCEAN ENERGY, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
ASSETS 1998 1997
------------ ------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents.............................. $ 14,348 $ 11,689
Accounts receivable
Oil and gas sales................................... 58,433 75,642
Joint interest and other............................ 59,270 49,289
Deferred income taxes.................................. 24 1,547
Inventory.............................................. 17,901 11,097
Prepaid expenses and other............................. 13,352 10,630
----------- ----------
163,328 159,894
----------- ----------
Property and equipment, at cost:
Oil and gas (full cost method)
Evaluated properties................................ 2,374,886 2,043,700
Unevaluated properties excluded from amortization... 310,093 232,726
Other.................................................. 34,486 28,182
----------- ----------
2,719,465 2,304,608
Accumulated depreciation, depletion and amortization... (1,245,462) (880,771)
----------- ----------
1,474,003 1,423,837
----------- ----------
Other assets:
Gas imbalances receivable.............................. 5,856 6,227
Deferred income taxes.................................. 97,509 130
Deferred financing costs............................... 14,994 19,661
Restricted deposits and other.......................... 20,440 33,246
----------- ----------
138,799 59,264
----------- ----------
TOTAL ASSETS........................................ $ 1,776,130 $1,642,995
=========== ==========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
2
<PAGE>
OCEAN ENERGY, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1997
----------- ------------
(UNAUDITED)
<S> <C> <C>
Current liabilities:
Accounts payable......................................... $ 135,068 $ 188,429
Advances from joint owners............................... 13,807 8,491
Interest payable......................................... 20,090 16,476
Accrued liabilities...................................... 10,277 6,572
Current maturities of long-term debt..................... 951 911
---------- ----------
180,193 220,879
---------- ----------
Long-term debt............................................. 987,277 672,298
---------- ----------
Deferred credits and other liabilities:
Deferred income taxes.................................... 17,254 11,159
Gas imbalances payable................................... 4,777 5,861
Other.................................................... 16,257 7,461
---------- ----------
38,288 24,481
---------- ----------
Commitments and contingencies
Stockholders' equity:
Common stock............................................. 1,007 1,001
Additional paid-in capital............................... 832,548 823,956
Accumulated other comprehensive income (loss) foreign
currency translation adjustment....................... (7,423) (6,839)
Retained earnings (deficit).............................. (255,760) (92,781)
---------- ----------
570,372 725,337
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............... $1,776,130 $1,642,995
========== ==========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE>
OCEAN ENERGY, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands, except share amounts)
For the year ended December 31, 1997 and six months ended June 30, 1998
<TABLE>
<CAPTION>
Common Stock Additional Accumulated Other Retained Total
----------------------- Paid-In Comprehensive Earnings Stockholders'
Shares Amount Capital Income (Deficit) Equity
----------- -------- ---------- ----------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996............ 91,741,503 $ 918 $632,111 $(4,257) $(135,700) $ 493,072
OEI common stock offering........... 7,254,000 73 177,674 -- -- 177,747
Common shares issued in exchange for
shares tendered from a prior
acquisition....................... 3,461 -- -- -- -- --
Exercise of common stock options.... 1,110,277 10 14,171 -- -- 14,181
Comprehensive income:
Net income........................ -- -- -- -- 42,919 42,919
Other comprehensive income (loss):
Foreign currency translation
adjustment....................... -- -- -- (2,582) -- (2,582)
----------- ------ -------- ------- --------- ---------
Balance, December 31, 1997............ 100,109,241 $1,001 $823,956 $(6,839) $ (92,781) $ 725,337
Exercise of common stock options.... 631,071 6 8,592 -- -- 8,598
Comprehensive income:
Net loss.......................... -- -- -- -- (162,979) (162,979)
Other comprehensive income:
Foreign currency translation
adjustment....................... -- -- -- (584) -- (584)
----------- ------ -------- ------- --------- ---------
Balance, June 30, 1998 (Unaudited).... 100,740,312 $1,007 $832,548 $(7,423) $(255,760) $ 570,372
=========== ====== ======== ======= ========= =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
OCEAN ENERGY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1998 1997
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)................................................. $(162,979) $ 30,985
Adjustments to reconcile net income (loss) to
cash provided by operating activities:
Depreciation, depletion and amortization........................ 147,498 105,810
Write-down of oil and gas properties............................ 218,392 --
Amortization of debt issue cost................................. 6,308 1,411
Deferred income tax provision (benefit)......................... (86,100) 15,731
Deferred hedge revenue.......................................... (98) (75)
--------- ---------
123,021 153,862
Changes in assets and liabilities:
Decrease in receivables......................................... 10,644 18,907
Increase (decrease) in payables and other current liabilities... (24,259) 16,733
Increase (decrease) in net gas imbalances....................... (713) 85
Other........................................................... 3,122 (977)
--------- ---------
Net cash provided by operating activities...................... 111,815 188,610
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties.............................. (421,988) (350,700)
Additions to other property and equipment........................ (5,633) (3,559)
Net proceeds from sale of assets................................. 739 47,053
Increase in restricted deposits.................................. (1,085) (1,068)
--------- ---------
Net cash used in investing activities.......................... (427,967) (308,274)
--------- ---------
Cash flows from financing activities:
Repayment of long-term debt...................................... (364,480) (65,984)
Additions to total debt.......................................... 679,438 139,236
Deferred financing costs......................................... (1,590) (2,802)
Proceeds from common stock options exercised..................... 5,443 4,897
--------- ---------
Net cash provided by financing activities...................... 318,811 75,347
--------- ---------
Net increase (decrease) in cash and cash equivalents............... 2,659 (44,317)
Cash and cash equivalents, beginning of the period................. 11,689 60,701
--------- ---------
Cash and cash equivalents, end of the period....................... $ 14,348 $ 16,384
========= =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE>
OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 BASIS OF FINANCIAL STATEMENTS
The accompanying consolidated financial statements of Ocean Energy, Inc. (OEI
or the Company), a Delaware corporation, included herein have been prepared,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC). Although certain information normally included in
financial statements prepared in accordance with generally accepted accounting
principles has been condensed or omitted, OEI believes that the disclosures are
adequate to make the information presented not misleading.
Effective March 27, 1998, pursuant to the Agreement and Plan of Merger dated
December 22, 1997, United Meridian Corporation (UMC) was merged into the Company
(the Merger). As a result of the Merger, each outstanding share of UMC common
stock was converted into 1.3 shares of OEI common stock with approximately 46
million shares issued to the shareholders of UMC representing approximately 46%
of all of the issued and outstanding shares of OEI. The Company's shareholders
received 2.34 shares of OEI shares for each share outstanding immediately
preceding the Merger representing approximately 54% of all of the issued and
outstanding shares of OEI. The Merger was accounted for as a pooling of
interests. Accordingly, the consolidated financial statements for periods prior
to the Merger have been restated to conform accounting policies and combine the
historical results of OEI and UMC and have been included in the Form 8-K filed
May 6, 1998.
The accompanying consolidated financial statements of OEI should be read in
conjunction with the supplemental consolidated financial statements and notes
thereto for the year ended December 31, 1997 included in the Form 8-K filed May
6, 1998.
The financial statements reflect all normal recurring adjustments that, in the
opinion of management, are necessary for a fair presentation.
NOTE 2 INVESTMENT IN OIL AND GAS PROPERTIES
As part of its on-going operations, the Company continually acquires and sells
producing and undeveloped reserves and related assets. Certain transactions
occurring in the periods presented are discussed below.
On January 3, 1997, the Company completed the sale of its interest in the
South Marsh Island 269 field, realizing proceeds of $37.2 million from the sale.
No gain or loss was recognized on the sale. During the six months ended June 30,
1997, the Company sold various non-strategic North American properties for total
proceeds of $13.6 million.
On March 7, 1997, the Company completed the acquisition of certain interests
in various state leases in the Main Pass Block 69 field for a net purchase price
of $55.9 million. Through July 1997, the Company acquired additional interests
in various properties from several of its institutional partners. In conjunction
with one of these acquisitions, the Company sold a portion of the acquired
interests. The net cost of the additional interests was approximately $25.9
million.
As required under the full cost method of accounting, capitalized costs are
limited to the sum of the present value of future net revenues using current
unescalated pricing discounted at 10% related to estimated production of proved
reserves and the lower of cost or estimated fair value of unevaluated
properties, all net of expected income tax effects. At June 30, 1998, the
Company recognized a non-cash impairment of oil and gas properties in the amount
of $218.4 million pre-tax ($135.4 million after-tax) pursuant to this ceiling
limitation required by the full cost method of accounting for oil and gas
properties, using certain improvements in pricing experienced after period end.
The write-down is primarily a result of the precipitous decline in world crude
oil prices experienced during the second quarter 1998.
6
<PAGE>
Note 3 Financial Instruments
The Company hedges certain of its production through master swap agreements
(Swap Agreements) which provide for separate contracts tied to the NYMEX light
sweet crude oil and natural gas futures contracts. In addition, the Company has
combined contracts which have agreed upon price floors and ceilings (Costless
Collars). As of June 30, 1998, the fair market value of all hedging contracts
was approximately $10.1 million.
Oil revenues have been increased by $6.3 million and $11.1 million for the
three and six months ended June 30, 1998 as a result of the hedge contracts in
place for each period. As of June 30, 1998, the Company's open forward position
on its outstanding crude oil Swaps was 2,100 MBbls at an average price of $19.87
per Bbl for the year ended December 31, 1998. The Company currently has no
outstanding natural gas swaps.
As of June 30, 1998, the Company's open forward position on its outstanding
natural gas Costless Collars was as follows:
Effective Contracted Contracted Contracted
-------------- Volumes Floor Ceiling
Year From Through (MMBTU/day) Price Price
---- ---- ------- ----------- ---------- ----------
1998 July August 40,000 $2.00 $2.54
1998 July July 20,000 $2.00 $2.50
1998 July August 10,000 $2.00 $2.50
The Company currently has certain agreements in place to reduce interest rate
fluctuation risk on a portion of its debt, resulting in an increase in interest
and debt expense of $0.2 million during the six months ended June 30, 1998.
NOTE 4 SUBSEQUENT EVENT
On July 8, 1998, the Company closed an offering of $500.0 million Senior and
Senior Subordinated Notes receiving net proceeds of approximately $487.8
million, after deducting underwriting discounts and expenses. The offering, made
pursuant to Rule 144A, comprised three separate indentures including $125.0
million of 7 5/8% Senior Notes due July 1, 2005, $125.0 million of 8 1/4% Senior
Notes due July 1, 2018, and $250.0 million of 8 3/8% Senior Subordinated Notes
due July 1, 2008. The proceeds from the offering were used to pay off amounts
then outstanding under the OEI Credit Facility. The excess net proceeds of the
offering over the amounts outstanding under the OEI Credit Facility have since
been used for capital expenditures and general corporate purposes.
In addition, the Company announced the simultaneous amendment and restatement
of the OEI Credit Facility. Concurrent with the closing of the Merger on March
27, 1998, the Company had entered into a $750.0 million five-year unsecured
revolving credit facility (OEI Credit Facility) with an initial borrowing base
of $600.0 million. As of June 30, 1998, total borrowings outstanding against
the facility were approximately $472.1 million, leaving approximately $127.9
million of available credit. In connection with the $500.0 million notes
offering made by the Company in July 1998, the OEI Credit Facility was restated
and amended to a $400.0 million, five-year revolving credit facility, with an
initial borrowing base of $300.0 million. No amounts were outstanding under the
OEI Credit Facility immediately following the $500.0 million notes offering.
NOTE 5 IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARD
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities, which establishes a new model for accounting
for derivatives and hedging activities. SFAS 133, which will be effective for
the Company's fiscal year 2000, requires that all derivatives be recognized in
the balance sheet as either assets or liabilities and measured at fair value.
The statement also requires that changes in fair value be reported in earnings
unless specific hedge accounting criteria are met. The Company is currently
evaluating the effect of the adoption of the Statement on its consolidated
financial position and results of operations.
7
<PAGE>
NOTE 6 SUPPLEMENTAL GUARANTOR INFORMATION
Ocean Energy, Inc., a Louisiana corporation (Ocean Louisiana), the Company's
only direct subsidiary, has unconditionally guaranteed the full and prompt
performance of the Company's obligations under certain of the notes and related
indentures, including the payment of principal, premium (if any) and interest.
None of the referenced indentures place significant restrictions on a wholly-
owned subsidiary's ability to make distributions to the parent. Other than
intercompany arrangements and transactions, the consolidated financial
statements of Ocean Louisiana are equivalent in all material respects to those
of the Company and therefore the separate consolidated financial statements of
Ocean Louisiana are not material to investors and have not been included herein.
However, in an effort to provide meaningful financial data relating to the
guarantor (i.e., Ocean Louisiana on an unconsolidated basis), the following
condensed consolidating financial information has been provided following the
policies set forth below:
(1) Investments in subsidiaries are accounted for by the Company on the cost
basis. Earnings of subsidiaries are therefore not reflected in the related
investment accounts.
(2) Certain reclassifications were made to conform all of the financial
information to the financial presentation on a consolidated basis. The
principal eliminating entries eliminate investments in subsidiaries and
intercompany balances.
Certain intercompany notes and the related accrued interest were transferred
from the Company to a newly formed non-guarantor subsidiary effective as of
January 1, 1997.
8
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
For the three months ended June 30, 1998 and 1997
(In thousands)
<TABLE>
<CAPTION>
Unconsolidated
-----------------------------------------------------------
Guarantor Non-Guarantor Consolidated
OEI Subsidiary Subsidiaries OEI
-------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
1998
- ----
Revenues..................................... $ -- $ 106,325 $26,882 $ 133,207
------- --------- ------- ---------
Costs and expenses:
Production costs........................... -- 30,470 6,453 36,923
General and administrative................. 60 9,997 502 10,559
Depreciation, depletion and amortization... -- 62,436 12,291 74,727
Write-down of oil and gas properties....... -- 218,392 218,392
------- --------- ------- ---------
Income (loss) from operations................ (60) (214,970) 7,636 (207,394)
Interest expense (income), net............. 4,028 9,789 (4,380) 9,437
Other expense (credits), net............... -- 106 (130) (24)
------- --------- ------- ---------
Income (loss) before income taxes............ (4,088) (224,865) 12,146 (216,807)
Income tax benefit........................... (78) (80,176) (1,707) (81,961)
------- --------- ------- ---------
Net income (loss)............................ $(4,010) $(144,689) $13,853 $(134,846)
======= ========= ======= =========
1997
- ----
Revenues..................................... $ -- $ 90,932 $28,784 $ 119,716
------- --------- ------- ---------
Costs and expenses:
Production costs........................... -- 25,186 4,577 29,763
General and administrative................. 60 6,707 402 7,169
Depreciation, depletion and amortization... -- 41,409 16,353 57,762
------- --------- ------- ---------
Income (loss) from operations................ (60) 17,630 7,452 25,022
Interest expense (income), net............. (4,879) 13,691 2,781 11,593
Other credits, net......................... -- (502) (130) (632)
------- --------- ------- ---------
Income before income taxes................... 4,819 4,441 4,801 14,061
Income tax provision......................... 2,181 1,184 1,097 4,462
------- --------- ------- ---------
Net income................................... $ 2,638 $ 3,257 $ 3,704 $ 9,599
======= ========= ======= =========
</TABLE>
9
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
For the six months ended June 30, 1998 and 1997
(In thousands)
<TABLE>
<CAPTION>
Unconsolidated
--------------------------------------------
Guarantor Non-Guarantor Consolidated
OEI Subsidiary Subsidiaries OEI
--------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
1998
- ----
Revenues..................................... $ -- $ 216,733 $58,357 $ 275,090
-------- --------- ------- ---------
Costs and expenses:
Production costs........................... -- 62,888 11,342 74,230
General and administrative................. 60 19,139 1,001 20,200
Depreciation, depletion and amortization... -- 116,197 31,301 147,498
Write-down of oil and gas properties....... -- 218,392 -- 218,392
-------- --------- ------- ---------
Income (loss) from operations............... (60) (199,883) 14,713 (185,230)
Interest expense (income), net............. 8,057 20,338 (6,454) 21,941
Merger costs............................... -- 39,000 -- 39,000
Other expense, net......................... -- 222 95 317
-------- --------- ------- ---------
Income (loss) before income taxes............ (8,117) (259,443) 21,072 (246,488)
Income tax benefit........................... (21,900) (60,444) (1,165) (83,509)
-------- --------- ------- ---------
Net income (loss)............................ $ 13,783 $(198,999) $22,237 $(162,979)
======== ========= ======= =========
1997
- ----
Revenues..................................... $ -- $ 193,378 $54,993 $ 248,371
-------- --------- ------- ---------
Costs and expenses:
Production costs........................... -- 50,068 8,229 58,297
General and administrative................. 90 12,591 872 13,553
Depreciation, depletion and amortization... -- 76,619 29,191 105,810
-------- --------- ------- ---------
Income (loss) from operations................ (90) 54,100 16,701 70,711
Interest expense (income), net............. (9,640) 25,306 7,075 22,741
Other credits, net......................... -- (2,006) (106) (2,112)
-------- --------- ------- ---------
Income before income taxes................... 9,550 30,800 9,732 50,082
Income tax provision......................... 3,904 11,334 3,859 19,097
-------- --------- ------- ---------
Net income................................... $ 5,646 $ 19,466 $ 5,873 $ 30,985
======== ========= ======= =========
</TABLE>
10
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
At June 30, 1998 and December 31, 1997
(In thousands)
<TABLE>
<CAPTION>
Unconsolidated
---------------------------------------------
Guarantor Non-Guarantor Eliminating Consolidated
OEI Subsidiary Subsidiaries Entries OEI
---------- --------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
JUNE 30, 1998
- -------------
ASSETS
Current assets............................. $ 2 $ 95,205 $ 68,121 $ -- $ 163,328
Intercompany investments................... 1,338,677 (206,451) 287,437 (1,419,663) --
Property and equipment, net................ -- 1,052,463 421,540 -- 1,474,003
Other assets............................... 17,964 106,047 14,788 -- 138,799
---------- ---------- -------- ----------- ----------
Total assets............................. $1,356,643 $1,047,264 $791,886 $(1,419,663) $1,776,130
========== ========== ======== =========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities........................ $ 16,107 $ 137,050 $ 27,036 $ -- $ 180,193
Long-term debt............................. 509,213 460,300 17,764 -- 987,277
Deferred credits and other liabilities..... -- 22,246 16,042 -- 38,288
Stockholders' equity....................... 831,323 427,668 731,044 (1,419,663) 570,372
---------- ---------- -------- ----------- ----------
Total liabilities & stockholders' equity... $1,356,643 $1,047,264 $791,886 $(1,419,663) $1,776,130
========== ========== ======== =========== ==========
DECEMBER 31, 1997
- -----------------
ASSETS
Current assets............................. $ 11,480 $ 103,243 $ 56,649 $ (11,478) $ 159,894
Intercompany investments................... 1,094,737 (19,479) 335,024 (1,410,282) --
Property and equipment, net................ -- 1,033,193 390,644 -- 1,423,837
Other assets............................... 5,395 89,189 (35,320) -- 59,264
---------- ---------- -------- ----------- ----------
Total assets............................. $1,111,612 $1,206,146 $746,997 $(1,421,760) $1,642,995
========== ========== ======== =========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities........................ $ 14,804 $ 180,345 $ 37,208 $ (11,478) $ 220,879
Long-term debt............................. 509,152 147,800 15,346 -- 672,298
Deferred credits and other liabilities..... -- 27,936 (3,455) -- 24,481
Stockholders' equity....................... 587,656 850,065 697,898 (1,410,282) 725,337
---------- ---------- -------- ----------- ----------
Total liabilities & stockholders' equity... $1,111,612 $1,206,146 $746,997 $(1,421,760) $1,642,995
========== ========== ======== =========== ==========
</TABLE>
11
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the six months ended June 30, 1998 and 1997
(In thousands)
<TABLE>
<CAPTION>
Unconsolidated
--------------------------------------------
Guarantor Non-Guarantor Consolidated
OEI Subsidiary Subsidiaries OEI
--------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
1998
- ----
Cash flows from operating activities:
Net income (loss)..................................... $ 13,783 $(198,999) $ 22,237 $(162,979)
Adjustments to reconcile net income (loss) to
cash from operating activities..................... (21,091) 279,409 27,682 286,000
Changes in assets and liabilities..................... 1,865 (92,600) 79,529 (11,206)
-------- --------- --------- ---------
Net cash provided by (used in)
operating activities.............................. (5,443) (12,190) 129,448 111,815
Cash flows used in investing activities................. -- (299,138) (128,829) (427,967)
Cash flows provided by financing activities............. 5,443 310,910 2,458 318,811
-------- --------- --------- ---------
Net increase (decrease) in cash and cash equivalents.... -- (418) 3,077 2,659
Cash and cash equivalents at beginning of period........ 2 2,653 9,034 11,689
-------- --------- --------- ---------
Cash and cash equivalents at end of period.............. $ 2 $ 2,235 $ 12,111 $ 14,348
======== ========= ========= =========
1997
- ----
Cash flows from operating activities:
Net income............................................ $ 5,646 $ 19,466 $ 5,873 $ 30,985
Adjustments to reconcile net income to
cash from operating activities..................... 4,180 88,050 30,647 122,877
Changes in assets and liabilities..................... 2 36,781 (2,035) 34,748
-------- --------- --------- ---------
Net cash provided by operating activities.......... 9,828 144,297 34,485 188,610
Cash flows used in investing activities................. -- (208,832) (99,442) (308,274)
Cash flows provided by (used in) financing activities... (9,829) 20,737 64,439 75,347
-------- --------- --------- ---------
Net decrease in cash and cash equivalents............... (1) (43,798) (518) (44,317)
Cash and cash equivalents at beginning of period........ 3 47,518 13,180 60,701
-------- --------- --------- ---------
Cash and cash equivalents at end of period.............. $ 2 $ 3,720 $ 12,662 $ 16,384
======== ========= ========= =========
</TABLE>
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
On December 23, 1997, the Company announced that it entered into a Merger
Agreement with UMC that provided in part for a stock-for-stock merger of UMC
with and into the Company. Pursuant to the Merger Agreement, at the effective
time of the Merger, the Company's stockholders received 2.34 shares of the
combined company's common stock for each share of the Company's common stock
then owned and UMC stockholders received 1.30 shares of the combined company's
common stock for each share of UMC stock then owned. The Merger, effective
March 27, 1998, was treated as a pooling of interests for accounting purposes.
This financial review summarizes the combined financial condition and results
of operations giving retroactive effect to the Merger and should be read in
conjunction with the Company's supplemental consolidated financial statements
and the notes thereto included in the Form 8-K filed May 6, 1998. The
consolidated financial statements previously filed in the Company's Form 10-K
for the year ended December 31, 1997, have been restated therein to reflect the
combination of the historical results of OEI and UMC and conforming of
accounting policies in accordance with the pooling of interests method of
accounting.
RESULTS OF OPERATIONS
The following table sets forth certain operating information of the Company for
the periods shown:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- ------------------------
1998 1997 1998 1997
------------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
Production:
Oil (MBO)
U.S............................................. 3,819 2,776 7,635 5,320
Canada.......................................... 111 110 218 212
Cote d'Ivoire................................... 184 274 393 568
Equatorial Guinea............................... 1,494 929 2,888 1,679
------- ------- ------- -------
Total......................................... 5,608 4,089 11,134 7,779
======= ======= ======= =======
Natural gas (MMCF)
U.S............................................. 25,356 19,829 49,886 37,172
Canada.......................................... 2,471 1,834 4,729 3,470
Cote d'Ivoire................................... 1,771 1,209 3,615 2,160
------- ------- ------- -------
Total......................................... 29,598 22,872 58,230 42,802
======= ======= ======= =======
AVERAGE WELLHEAD SALES PRICE, INCLUDING HEDGING:
Oil ($ per bbl)
U.S............................................. $ 14.19 $ 18.55 $ 14.76 $ 19.89
Canada.......................................... $ 11.23 $ 16.59 $ 12.04 $ 18.88
Cote d'Ivoire................................... $ 13.83 $ 17.22 $ 14.81 $ 18.61
Equatorial Guinea............................... $ 11.14 $ 18.91 $ 12.77 $ 18.10
Average....................................... $ 13.31 $ 18.49 $ 14.19 $ 19.38
Natural Gas ($ per MCF)
U.S............................................. $ 2.06 $ 1.95 $ 2.08 $ 2.33
Canada.......................................... $ 1.28 $ 1.13 $ 1.30 $ 1.49
Cote d'Ivoire................................... $ 1.65 $ 1.79 $ 1.68 $ 1.82
Average....................................... $ 1.97 $ 1.88 $ 1.99 $ 2.24
ADDITIONAL DATA ($ PER BOE):
Production and operating costs (1)............... $ 3.01 $ 3.16 $ 3.04 $ 3.20
General and administrative expense............... $ 1.00 $ 0.91 $ 0.97 $ 0.91
Oil and natural gas depletion and depreciation... $ 6.99 $ 7.19 $ 6.98 $ 6.97
</TABLE>
- ----------
(1) Costs incurred to operate and maintain wells and related equipment,
excluding ad valorem and production taxes of $0.49 and $0.61 per BOE for
the three months ended June 30, 1998 and 1997, and $0.52 and $0.71 per BOE
for the six months ended June 30, 1998 and 1997, respectively.
13
<PAGE>
SIX MONTHS ENDED JUNE 30, 1998 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1997
Operating revenues. The Company's total operating revenues increased
approximately $26.7 million, or 11%, to $275.1 million for the six months ended
June 30, 1998, from $248.4 million for the comparable period in 1997.
Production levels for the six months ended June 30, 1998, increased 40% to
20,839 MBOE from 14,913 MBOE for the comparable period in 1997. The increase in
oil and gas revenues is due to increased oil volumes in the Gulf of Mexico and
Equatorial Guinea and overall higher U.S. gas volumes.
Oil revenues increased $7.2 million, or 5%, to $158.0 million for the six
months ended June 30, 1998, from $150.8 million for the six months ended June
30, 1997, the result of significantly increased worldwide production volumes
offset by a decline in the average realized price received. Oil production
increased 43% to 11,134 MBO for the first six months of 1998 as compared to the
same period in 1997 due primarily to increased oil production in the Gulf of
Mexico and Equatorial Guinea. The average sales price before hedging for oil
decreased 32% to $13.20 in the first six months of 1998 compared to $19.43 in
the same period in 1997.
Natural gas revenues increased $20.1 million, or 21%, to $115.9 million for
the six months ended June 30, 1998, from $95.8 million for the six months ended
June 30, 1997, the result of increased worldwide production which more than
offset the decline in prices received for gas. Natural gas production for the
six months of 1998 was 58,230 MMCF, an increase of 36% over 1997 volumes due
primarily to increased production in the Gulf of Mexico, Cote d'Ivoire and
Canada and the impact of acquisitions, offset by property sales and natural
production declines in North America. The average sales price before hedging for
natural gas decreased 11% to $1.99 per MCF in the first six months of 1998 as
compared to $2.24 in the first six months of 1997.
For the six months ended June 30, 1998, the Company's total revenues were
further affected by a $6.3 million increase in hedging revenues. In order to
manage its exposure to price risks in the sale of its crude oil and natural gas,
the Company from time to time enters into price hedging arrangements. The
Company's average sales prices including hedging for oil and natural gas for the
six months ended June 30, 1998 were $14.19 per Bbl and $1.99 per Mcf compared to
$19.38 per Bbl and $2.24 per Mcf in the comparable 1997 period.
Production costs. Total production costs increased $15.9 million, or 27%, to
$74.2 million for the six months ended June 30, 1998 from $58.3 million for the
comparable 1997 period. This increase primarily results from fluctuations in
normal operating expenses, including operating expenses associated with
increased production from new facilities. Production and operating costs (costs
incurred to operate and maintain wells and related equipment, excluding ad
valorem and production taxes) decreased $0.16 per BOE, or 5%, to $3.04 per BOE
for the six months ended June 30, 1998, from $3.20 per BOE in the comparable
1997 period. This decrease is primarily the result of increased production in
the Company's offshore Gulf of Mexico and Equatorial Guinea fields and resulting
higher utilization of existing facilities.
General and administrative expenses. General and administrative expenses
increased $6.6 million, or 49%, to $20.2 million for the six months ended June
30, 1998, from $13.6 million in the comparable 1997 period. This increase is
primarily due to costs of increased corporate staffing associated with both an
increase in drilling activities and the Company's property acquisitions in 1997.
In addition, costs related to a new systems implementation partially offset by
an increase in the capitalization of a portion of the salaries paid to employees
directly engaged in the acquisition, exploration and development of oil and gas
properties in accordance with the full cost method of accounting contributed to
the increase. As a result of these factors, general and administrative expenses
per BOE increased slightly by $0.06 per BOE, or 7%, to $0.97 per BOE for the six
months ended June 30, 1998, from $0.91 per BOE for the comparable 1997 period.
Depreciation, depletion and amortization expense. Depreciation, depletion and
amortization (DD&A) expense increased $41.7 million, or 39%, to $147.5 million
for the six months ended June 30, 1998, from $105.8 million for the comparable
1997 period. This variance is primarily attributable to the Company's increased
production and related current and future capital costs from the 1997 and 1998
Gulf of Mexico and international drilling programs and acquisitions, partially
offset by the effect of an increase in proved reserves resulting from such
programs and acquisitions. Oil and gas DD&A increased $0.01 per BOE, or less
than 1%, to $6.98 per BOE for the six months ended June 30, 1998, from $6.97 per
BOE for the comparable 1997 period. The non-cash write-down of oil and gas
properties recognized in the second quarter of 1998 should lower oil and gas
DD&A per BOE in future periods.
Write-down of oil and gas properties. As required under the full cost method
of accounting, capitalized costs are limited to the sum of the present value of
future net revenues using current unescalated pricing discounted at 10% related
to estimated production of proved reserves and the lower of cost or estimated
fair value of unevaluated properties, all net of expected income
14
<PAGE>
tax effects. At June 30, 1998, the Company recognized a non-cash impairment of
oil and gas properties in the amount of $218.4 million pre-tax ($135.4 million
after-tax) pursuant to this ceiling limitation required by the full cost method
of accounting for oil and gas properties, using certain improvements in pricing
experienced after period end. The write-down is primarily a result of the
precipitous decline in world crude oil prices experienced during the second
quarter 1998.
Interest and debt expense. Reported interest and debt expense decreased $0.8
million, or 4%, to $21.9 million for the six months ended June 30, 1998, from
$22.7 million in the comparable 1997 period. This decrease is primarily the
result of an increase in capitalized interest for the period. Average total debt
outstanding for the six months ended June 30, 1998, was $830.7 million as
compared to $478.6 million for the same period in 1997.
Merger Costs. Merger costs of $39.0 million were recorded in the first quarter
of 1998. These costs consist primarily of investment banking and other
transaction fees, employee severance and relocation costs as well as the write-
off of deferred financing costs related to the former credit facilities replaced
by the OEI Credit Facility in March 1998.
Income tax provision (benefit). An income tax benefit of $83.5 million (of
which $2.6 million is a current provision and $86.1 million is a deferred
benefit) was recognized for 1998, compared to a provision of $19.1 million (of
which $2.7 million was a current provision and $16.4 million was a deferred
provision) for 1997. A significant portion of current taxes is a non-cash
provision representing current taxes incurred in Cote d'Ivoire which, under the
terms of the production sharing contract, will be paid by the Ivorian government
from their production proceeds. The deferred tax benefit for the six months
ended June 30, 1998 is further impacted by the non-cash write-down of oil and
gas properties and the tax treatment of certain Merger costs, a portion of which
is not deductible for tax purposes. Consistent with Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, the deferred
income tax provision or benefit was derived primarily from changes in deferred
income tax assets and liabilities recorded on the balance sheet.
Net income (loss). Due to the factors described above, the net loss for the
six months ended June 30, 1998, was $(163.0) million, a decrease of $194.0
million from net income of $31.0 million for the comparable 1997 period.
THREE MONTHS ENDED JUNE 30, 1998 COMPARED WITH THE THREE MONTHS ENDED JUNE 30,
1997.
Material changes in the results of operations between the three months ended
June 30, 1998 and 1997, primarily reflect the significant increases in oil and
natural gas production volumes offset by decreases in prices received and other
activities as previously discussed.
LIQUIDITY AND CAPITAL RESOURCES
The following summary table reflects comparative cash flows for the Company
for the six months ended June 30, 1998 and 1997 (in thousands):
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------
1998 1997
------------ ------------
<S> <C> <C>
Net cash provided by operating activities $ 111,815 $ 188,610
Net cash used in investing activities (427,967) (308,274)
Net cash provided by financing activities 318,811 75,347
</TABLE>
15
<PAGE>
Capital requirements. The Company's capital investments to date have focused
primarily on exploration, acquisitions and development of proved properties. The
Company's expenditures for property acquisition, exploration and development for
the six months ended June 30, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1998 1997
----------- -----------
(in thousands)
<S> <C> <C>
Property acquisition costs:
Proved......................................... $ 6,879 $ 92,980
Unproved....................................... 16,916 30,280
Exploration costs................................ 140,914 99,827
Development costs................................ 216,160 151,562
Capitalized interest on unevaluated properties... 15,049 5,001
Capitalized general and administrative costs..... 11,469 6,589
-------- --------
Total costs incurred............................. $407,387 $386,239
======== ========
</TABLE>
The Company makes, and will continue to make, substantial capital expenditures
for the acquisition, exploration, development, production and abandonment of its
oil and natural gas reserves. The Company has historically funded its
operations, acquisitions, exploration and development expenditures from cash
flows from operating activities, bank borrowings, sales of equity and debt
securities, sales of non-strategic oil and natural gas properties, sales of
partial interests in exploration concessions and project finance borrowings.
The Company intends to finance remaining 1998 capital expenditures related to
this strategy primarily with funds provided by operations, borrowings or other
capital market activities.
The Company's capital expenditure budget for 1998 is expected to be
approximately $650 million focused on the Company's three operating regions. In
addition, the Company will evaluate its level of capital spending throughout the
year based upon drilling results, commodity prices, cash flows from operations
and property acquisitions. Actual capital spending may vary from the capital
expenditure budget.
The Company's debt to total capitalization ratio has increased to 63.4% at
June 30, 1998, from 48.1% at December 31, 1997. The Company's interest coverage
ratio (calculated as the ratio of income from operations plus DD&A and
impairment of proved oil and gas properties to reported interest expense plus
capitalized interest less non-cash amortization of debt issue costs) was 5.1 to
1 for the first six months of 1998 compared with 6.7 to 1 for the first six
months of 1997.
The Company currently has certain agreements in place to reduce interest rate
fluctuation risk on a portion of its debt, resulting in an increase in interest
and debt expense of $0.2 million during the six months ended June 30, 1998.
Concurrent with the closing of the Merger on March 27, 1998, the Company
entered into a $750.0 million five-year unsecured revolving credit facility (OEI
Credit Facility) which combined and replaced the Revolving Credit Facility and
the Global Credit Facility. The OEI Credit Facility, which is with a group of
commercial banks, provides for various borrowing options under either a base
rate or Eurodollar margin rates. As of June 30, 1998, the OEI Credit Facility
provided a $600.0 million initial borrowing base. As of June 30, 1998, total
borrowings outstanding against the facility were approximately $472.1 million,
leaving approximately $127.9 million of available credit. These borrowings were
repaid in July 1998 with the proceeds from a $500.0 million Notes Offering made
by the Company pursuant to Rule 144A. At that time, the credit facility was
amended and restated to a $400.0 million, five-year revolving credit facility
with an initial borrowing base of $300.0 million.
Liquidity. The ability of the Company to satisfy its obligations and fund
planned capital expenditures will be dependent upon its future performance,
which will be subject to prevailing economic conditions, including oil and gas
prices, and subject to financial and business conditions and other factors, many
of which are beyond its control, supplemented if necessary with existing cash
balances and borrowings under the OEI Credit Facility. The Company currently
expects that its cash flow from operations and availability under the OEI Credit
Facility will be adequate to execute its 1998 business plan. However, no
assurance can be given that the Company will not experience liquidity problems
from time to time in the future or on a long-term basis. If the Company's cash
flow from operations and availability under the OEI Credit Facility are not
sufficient to satisfy its cash requirements, there can be no assurance that
additional debt or equity financing will be available to meet its requirements.
16
<PAGE>
Effects of Leverage. The Company has outstanding long-term indebtedness of
approximately $987.3 million as of June 30, 1998. The Company's level of
indebtedness has several important effects on its future operations, including
(i) a substantial portion of the Company's cash flow from operations must be
dedicated to the payment of interest on its indebtedness and will not be
available for other purposes, (ii) the covenants contained in the various
indentures require the Company to meet certain financial tests, and contain
other restrictions which limit the Company's ability to borrow additional funds
or to dispose of assets and may affect the Company's flexibility in planning
for, and reacting to, changes in its business, including possible acquisition
activities and (iii) the Company's ability to obtain additional financing in the
future for working capital, expenditures, acquisitions, general corporate
purposes or other purposes may be impaired. None of the indentures place
significant restrictions on a wholly-owned subsidiary's ability to make
distributions to the parent company.
The Company believes it is currently in compliance with all covenants
contained in the respective indentures.
The Company's ability to meet its debt service obligations and to reduce its
total indebtedness will be dependent upon the Company's future performance,
which will be subject to oil and gas prices, general economic conditions and to
financial, business and other factors affecting the operations of the Company,
many of which are beyond its control. There can be no assurance that the
Company's future performance will not be adversely affected by such economic
conditions and financial, business and other factors.
OTHER MATTERS
Energy swap agreements. The Company hedges certain of its production through
master swap agreements (Swap Agreements) which provide for separate contracts
tied to the NYMEX light sweet crude oil and natural gas futures contracts. In
addition, the Company has combined contracts which have agreed upon price floors
and ceilings (Costless Collars). As of June 30, 1998, the fair market value of
all hedging contracts was approximately $10.1 million.
Oil revenues have been increased by $6.3 million and $11.1 million for the
three and six months ended June 30, 1998 as a result of the hedge contracts in
place for each period. As of June 30, 1998, the Company's open forward position
on its outstanding crude oil Swaps was 2,100 MBbls at an average price of $19.87
per Bbl for the year ended December 31, 1998. The Company currently has no
outstanding natural gas swaps.
It is the Company's current intention to commit no more than 50% of its
production on a BOE basis to such arrangements at any point in time. As the
current Swap Agreements expire, the portion of the Company's oil and natural gas
production which is subject to price fluctuations will increase substantially
unless the Company enters into additional hedging transactions.
Price fluctuations and volatile nature of markets. Despite the measures taken
by the Company to attempt to control price risk, the Company remains subject to
price fluctuations for natural gas and oil sold on the spot market. Prices
received for natural gas sold on the spot market are volatile due primarily to
seasonality of demand and other factors beyond the Company's control. Domestic
oil prices generally follow worldwide oil prices which are subject to price
fluctuations resulting from changes in world supply and demand. Any significant
decline in prices for oil and gas could have a material adverse effect on the
Company's financial position, results of operations and quantities of reserves
recoverable on an economic basis.
Environmental. The Company's business is subject to certain federal, state,
and local laws and regulations relating to the exploration for, and the
development, production and transportation of, oil and natural gas, as well as
environmental and safety matters. Many of these laws and regulations have
become more stringent in recent years, often imposing greater liability on a
larger number of potentially responsible parties. Although the Company believes
it is in substantial compliance with all applicable laws and regulations, the
requirements imposed by such laws and regulations are frequently changed and
subject to interpretation, and the Company is unable to predict the ultimate
cost of compliance with these requirements or their effect on its operations.
Under certain circumstances, the MMS may require any Company operations on
federal leases to be suspended or terminated. Any such suspensions, terminations
or inability to meet applicable bonding requirements could materially and
adversely affect the Company's financial condition and operations. Although
significant expenditures may be required to comply with governmental laws and
regulations applicable to the Company, to date such compliance has not had a
material adverse effect on the earnings or competitive position of the Company.
It is possible that such regulations in the future may add to the cost of
operating offshore drilling equipment or may significantly limit drilling
activity. The Company has included approximately $10.0 million in its 1998
exploration and development capital budget
17
<PAGE>
to reformat operations for alternative disposal of water produced from its
offshore wells in accordance with an approved zero discharge plan.
The Oil Pollution Act of 1990 (OPA) imposes ongoing requirements on a
responsible party including proof of financial responsibility to cover at least
some costs in a potential spill. For tank vessels, including mobile offshore
drilling rigs, the OPA imposes on owners, operators and charterers of the
vessels, an obligation to maintain evidence of financial responsibility of up to
$10.0 million depending on gross tonnage. With respect to offshore facilities,
proof of greater levels of financial responsibility may be applicable. This
amount is subject to upward regulatory adjustment up to $150.0 million.
Year 2000 compliance. The Company is currently in the process of evaluating
its information technology infrastructure for the year 2000 (Year 2000)
compliance. The Company's primary information systems are in the process of
being replaced with fully compliant new systems as part of a regularly scheduled
upgrade to meet the Company's growing capacity and performance requirements.
These replacements are expected to be completed by early 1999.
The Company does not expect that the cost to modify and replace its
information technology infrastructure to be Year 2000 compliant will be material
to its financial condition or results of operations. The Company does not
anticipate any material disruption in its operations as a result of any failure
by the Company to be in compliance. The costs of these projects and the date on
which the Company plans to complete modifications and replacements are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events including the continued availability of certain resources,
third party modification plans and other factors. However, there can be no
guarantee that these estimates will be achieved and actual results could differ
materially from those plans.
The Company does not currently have any information concerning the Year 2000
compliance status of its suppliers and customers. In the event that any of the
Company's significant suppliers or customers do not successfully and timely
achieve Year 2000 compliance, the Company's business or operations could be
adversely affected.
The Company has not incurred significant costs related to Year 2000 compliance
prior to December 31, 1997, other than internal costs to evaluate the extent of
compliance.
Forward-looking statements. Certain statements in this report, including
statements of the Company's and management's expectation, intentions, plans and
beliefs, including those contained in or implied by "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the Notes to
Consolidated Financial Statements, are "forward-looking statements", within the
meaning of Section 21E of the Securities Exchange Act of 1934, that are subject
to certain events, risk and uncertainties that may be outside the Company's
control. These forward-looking statements include statements of management's
plans and objectives for the Company's future operations and statements of
future economic performance; information regarding drilling schedules, expected
or planned production or transportation capacity, future production levels of
international and domestic fields, the Company's capital budget and future
capital requirements, the Company's meeting its future capital needs, the
Company's realization of its deferred tax assets, the level of future
expenditures for environmental costs and the outcome of regulatory and
litigation matters; and the assumptions described in this report underlying such
forward-looking statements. Actual results and developments could differ
materially from those expressed in or implied by such statements due to a number
of factors, including, without limitation, those described in the context of
such forward-looking statements, fluctuations in the price of crude oil and
natural gas, the success rate of exploration efforts, timeliness of development
activities, risk incident to the drilling and completion for oil and gas wells,
future production and development costs, the political and economic climate in
which the Company conducts operations and the risk factors described from time
to time in the Company's other documents and reports filed with the Securities
and Exchange Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
18
<PAGE>
OCEAN ENERGY, INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On December 29, 1997, a class action complaint (Newman v. Carson, et al.,
Civil Action No. 16109-NC) was filed in the Court of Chancery of the State of
Delaware, by a person claiming to represent the stockholders of UMC against UMC
and each of its directors. On January 9, 1998, a similar class action complaint
(Ross v. Brock. et al., Civil Action No. 98-00845) was filed in the District
Court of Harris County, Texas, 164th Judicial District by another person
claiming to represent the stockholders of UMC against UMC and each of its
directors. Preliminary settlements have been reached in each of these
complaints, the effects of which are not material to the consolidated financial
statements.
The U.S. Environmental Protection Agency has indicated that the Company may
be potentially responsible for costs and liabilities associated with alleged
releases of hazardous substances at two sites in Louisiana under the
Comprehensive Environmental Response, Compensation and Liability Act. Given the
extremely large number of companies that have been identified as potentially
responsible for releases of hazardous substances at the sites and the small
volume of hazardous substances allegedly disposed of by the companies whose
properties the Company acquired, management believes that the Company's
potential liability arising from these sites, if any, will not have a material
adverse impact on the Company.
In February 1998, the Tulane Environmental Law Clinic (Clinic), claiming to
represent several southeastern Louisiana environmental groups, gave notice that
it intends to file a Clean Water Act citizens' suit against the Company after a
sixty-day waiting period expires in connection with the discharge of produced
water in East Bay. The Clinic claims that the Company is violating the Clean
Water Act by discharging produced water from its East Bay Central Facilities
into Southwest Pass, and has stated that it will seek an injunction to require
the Company to cease its discharge of produced water, and will seek civil
penalties and attorney's fees. If the Clinic were to successfully obtain an
injunction, certain production operations at the Company's East Bay Facilities
could be interrupted until favorable resolution of the issue in court or
accelerated completion of the Company's plan to reformat operations to provide
for alternative produced water disposal. The Company believes that its zero
discharge compliance plan, which permits the temporary continued discharge of
produced water into Southwest Pass through July 1, 1999, is completely lawful as
authorized by a Compliance Order issued by the Louisiana Department of
Environmental Quality, and intends to vigorously defend any such citizens' suit,
if filed. The Clinic has delivered similar notices to other Louisiana coastal
producers.
The Company is a named defendant in lawsuits and is a party in governmental
proceedings from time to time arising in the ordinary course of business. While
the outcome of such lawsuits or other proceedings against the Company cannot be
predicted with certainty, management does not expect these matters to have a
material adverse effect on the financial position or results of operations of
the Company.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
19
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
[A] Exhibits: See Index to Exhibits on page 21.
[B] Reports on Form 8-K
A Form 8-K dated May 6, 1998 was filed containing the Company's
Supplemental Consolidated Financial Statements and Related Management's
Discussion and Analysis of Financial Condition and Results of Operations
giving retroactive effect of the merger between United Meridian Corporation
and Ocean Energy, Inc.
A Form 8-K dated May 29, 1998 was filed announcing 30 days of combined
operating results of the Company to satisfy the requirements of Accounting
Series Release 135 issued by the SEC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Signature Title Date
--------- ----- ----
/s/ JONATHAN M. CLARKSON Executive Vice President and August 12, 1998
- ------------------------- Chief Financial Officer
Jonathan M. Clarkson
/s/ CHRISTOPHER E. CRAGG Vice President and Controller August 12, 1998
- ------------------------ (Chief Accounting Officer)
Christopher E. Cragg
20
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ----------- ------------------------------------------------------------------------------------------------------
<C> <S>
3.1 Certificate of Incorporation of the Company, as amended, incorporated by reference to Exhibit 99.1
to the Company's Form 8-K filed with the Securities and Exchange Commission on March 31, 1998.
3.2 Amended and Restated Bylaws of the Company, incorporated by reference to Exhibit 99.2 to the
Company's Form 8-K filed with the Securities and Exchange Commission on March 31, 1998.
10.1 Employment Agreement, dated as of March 27, 1998, among the Company and John B. Brock,
incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed with the Securities and
Exchange Commission on March 31, 1998.
10.2 Employment Agreement, dated as of March 27, 1998, among the Company and James C. Flores,
incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed with the Securities and
Exchange Commission on March 31, 1998.
10.3* Amended and Restated Global Credit Agreement, dated as of July 8, 1998, by and among the Company,
Chase Bank of Texas, National Association ("Chase Texas") as Administrative Agent, Morgan Guaranty
Trust Company of New York ("Morgan Guaranty") as Syndication Agent, Barclays Bank PLC as
Documentation Agent, and the other Lenders named therein.
10.4* Amended and Restated Guaranty Agreement, dated as of July 8, 1998, by and among the Company, Chase
Manhattan Bank of Canada as Administrative Agent, Morgan Guaranty as Syndication Agent, Barclays
Bank PLC as Documentation Agent, and the other Lenders named therein.
10.5* Amended and Restated Intercreditor Agreement, dated as of July 8, 1998, by and among the Company,
OEI Louisiana, Ocean Energy Resources Canada, Ltd., (Resources Canada), Chase Texas as
Administrative Agent and Paying Agent, Morgan Guaranty as Syndication Agent, Barclays Bank PLC as
Documentation Agent, and the other Lenders named therein.
10.6* Amended and Restated Credit Agreement, dated as of July 8, 1998, by and among Resources Canada,
the Chase Manhattan Bank of Canada ("Chase Canada") as Administrative Agent, and the other Lenders
named therein.
10.7* Amended and Restated Guaranty Agreement, dated as of July 8, 1998, by and among the Company, Chase
Canada as Administrative Agent, and the other Lenders named therein.
10.8* Guaranty Agreement, dated as of July 8, 1998, by and among OEI Louisiana, Chase Texas as
Administrative Agent, Morgan Guaranty as Syndication Agent, Barclays Bank PLC as Documentation
Agent, and the other Lenders named therein.
10.9 Third Supplemental Indenture, dated as of March 27, 1998, among Ocean Energy, Inc., a Delaware
corporation, Ocean Energy, Inc., a Louisiana corporation, and State Street Bank and Trust Company,
relating to the 13 1/2% Senior Notes due 2004, incorporated by reference to Exhibit 10.9 to the
Company's Form 8-K filed with the Securities and Exchange Commission on March 31, 1998.
10.10 First Supplemental Indenture, dated as of March 27, 1998, among Ocean Energy, Inc. a Delaware
corporation, Ocean Energy, Inc., a Louisiana corporation, and State Street Bank and Trust Company,
relating to the 9 3/4% Senior Subordinated Notes due 2006, incorporated by reference to Exhibit
10.10 to the Company's Form 8-K filed with the Securities and Exchange Commission on March 31,
1998.
10.11 First Supplemental Indenture, dated as of March 27, 1998, among Ocean Energy, Inc., a Delaware
corporation, Ocean Energy, Inc., a Louisiana corporation, and State Street Bank and Trust Company,
relating to the 8 7/8% Senior Subordinated Notes due 2007, incorporated by reference to Exhibit 10.11
to the Company's Form 8-K filed with the Securities and Exchange Commission on March 31, 1998.
</TABLE>
21
<PAGE>
<TABLE>
<C> <S>
10.12 Second Supplemental Indenture, dated as of March 27, 1998, among Ocean Energy, Inc. a Delaware
corporation (successor by merger to United Meridian Corporation), Ocean Energy, Inc., a Louisiana
corporation, (successor by merger to UMC Petroleum Corporation), and U.S. Bank Trust National
Association, relating to the 10 3/8% Senior Subordinated Notes due 2005, incorporated by reference to
Exhibit 10.12 to the Company's Form 8-K filed with the Securities and Exchange Commission on March
31, 1998.
10.13 Ocean Energy, Inc. 1998 Long Term Incentive Plan, incorporated by reference to Exhibit 10.13 to
the Company's Form 8-K filed with the Securities and Exchange Commission on March 31, 1998.
10.14 Petroleum Production Sharing Contract on Block CI-11 dated June 27, 1992 among the Republic of
Cote d'Ivoire, UMIC Cote d'Ivoire Corporation and Societe Nationale d'Operations Petrolieres de la
Cote d'Ivoire (including English translation), incorporated herein by reference to Exhibit 10.5 to
Amendment No. 3 to United Meridian Corporation's Form S-1 (No. 33-63532) filed with the Securities
and Exchange Commission on July 20, 1993.
10.15 Production Sharing Contract dated August 18, 1992 between the Republic of Equatorial Guinea and
United Meridian International Corporation (Area A - Offshore NE Bioco), incorporated herein by
reference to Exhibit 10.6 to Amendment No. 1 to United Meridian Corporation's Form S-1 (No.
33-63532) filed with the Securities and Exchange Commission on June 18, 1993.
10.16 Production Sharing Contract dated June 29, 1992 between the Republic of Equatorial Guinea and
United Meridian International Corporation (Area B - Offshore NW Bioco), incorporated herein by
reference to Exhibit 10.7 to Amendment No. 1 to United Meridian Corporation's Form S-1 (No.
33-63532) filed with the Securities and Exchange Commission on June 18, 1993.
10.17 Production Sharing Contract dated June 29, 1994 between the Republic of Equatorial Guinea and
United Meridian International Corporation (Area C - Offshore Bioco), incorporated herein by
reference to Exhibit 10.15 to United Meridian Corporation's 1994 Form 10-K filed with the
Securities and Exchange Commission on March 10, 1995.
10.18 Production Sharing Contract on Block CI-01 dated December 5, 1994 among The Republic of Cote
d'Ivoire, UMIC Cote d'Ivoire Corporation and Societe Nationale d'Operations Petrolieres de la Cote
d'Ivoire (English translation), incorporated by reference to Exhibit 10.16 to United Meridian
Corporation's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995.
10.19 Production Sharing Contract on Block CI-02 dated December 5, 1994 among The Republic of Cote
d'Ivoire, UMIC Cote d'Ivoire Corporation and Societe Nationale d'Operations Petrolieres de la Cote
d'Ivoire (English translation), incorporated by reference to Exhibit 10.17 to United Meridian
Corporation's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995.
10.20 Production Sharing Contract of Block CI-12 dated April 27 1995 among The Republic of Cote
d'Ivoire, UMIC Cote d'Ivoire Corporation and others (English translation), incorporated by
reference to Exhibit 10.18 to United Meridian Corporation's 1995 Form 10-K filed with the
Securities and Exchange Commission on March 7, 1996.
10.21 Production Sharing Contract dated April 5, 1995 between The Republic of Equatorial Guinea and UMIC
Equatorial Guinea Corporation (Area D - Offshore Bioco), incorporated by reference to Exhibit 10.20
to United Meridian Corporation's Form 10-Q for the period ended September 30, 1995 filed with the
Securities and Exchange Commission on August 10, 1995.
10.22* Indenture, dated as of July 8, 1998, among the Company, its Subsidiary Guarantors, and U.S. Bank
Trust National Association, relating to the 8 3/8% Series A Senior Subordinated Notes due 2008 and
the 8 3/8% Series B Senior Subordinated Notes due 2008.
</TABLE>
22
<PAGE>
<TABLE>
<C> <S>
10.23* Indenture, dated as of July 8, 1998, among the Company, its Subsidiary Guarantors, and Norwest
Bank Minnesota, National Association (Norwest Bank) as Trustee, relating to the 7 5/8% Senior Notes
due 2005.
10.24* Indenture, dated as of July 8, 1998, among the Company, its Subsidiary Guarantors, and Norwest
Bank as Trustee, relating to the 8 1/4% Senior Notes due 2018.
10.25* Registration Rights Agreement, dated as of July 8, 1998, among the Company as Issuer, OEI
Louisiana as Subsidiary Guarantor and Merrill Lynch & Co., Chase Securities, Inc., Lehman
Brothers, Inc., and Salomon Brothers, Inc.
27.1* Financial Data Schedule, included solely in the Form 10-Q filed electronically with the Securities
and Exchange Commission.
</TABLE>
___________________________________________
* Filed herewith
23
<PAGE>
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,
Morgan 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
Wells Fargo Bank (Texas), N.A.,
as Co-Agents,
and
The Lenders Now or Hereafter Parties Hereto
Chase Bank Of Texas, National Association Morgan Guaranty Trust Company Of
New York
Barclays Bank PLC Nationsbank, N.A.
Co-Arrangers
<PAGE>
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
i
<PAGE>
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
ii
<PAGE>
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
iii
<PAGE>
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
iv
<PAGE>
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, Hauer & Feld, L.L.P.
Exhibit B-2 -- Form of Opinion of Onebane, Bernard, Torian, Diaz, McNamera &
Abell
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
v
<PAGE>
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"), Morgan 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 Wells 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.
<PAGE>
"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:
2
<PAGE>
<TABLE>
<CAPTION>
Percentage Usage Eurodollar Applicable Margin Base Rate Applicable Margin
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
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%
- ---------------------------------------------------------------------------------------------------
</TABLE>
"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.
3
<PAGE>
"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.
4
<PAGE>
"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
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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
<PAGE>
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
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<PAGE>
(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 Morgan 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
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<PAGE>
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) Ryder Scott
Company Petroleum Engineers and McDaniel & Associates Consultants Ltd. with
respect to Oil and Gas Properties formerly owned by UMC evaluating such
Properties as of January 1, 1998; (b) McDaniel & Associates Consultants Ltd.
with respect to the Oil and Gas Properties of Ocean Canada evaluating such
Properties as of January 1, 1998; (c) Netherland, Sewell & 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, Sewell & 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.
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<PAGE>
"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.
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<PAGE>
"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.
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<PAGE>
"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
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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 Flores & Rucks, 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.
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"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 wells, gas wells, injection wells or other wells,
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
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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.
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"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 707 Travis, Houston, Texas 77002.
"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
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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).
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"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
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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
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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.
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(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
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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
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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
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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
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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
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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.
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(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
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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).
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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
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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
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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
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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
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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.
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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.
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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:
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(i) an opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel
to the Company, substantially in the form of Exhibit B-1.
(ii) an opinion of Onebane, Bernard, Torian, Diaz, McNamera & Abell,
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
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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 SEC Form S-4, 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.
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(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
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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 wells and units evaluated in
the Initial Reserve Reports. The ownership of such Properties shall not in the
aggregate in any
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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
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(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
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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 mark 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
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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
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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 mark 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
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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
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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);
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(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;
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(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;
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(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;
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(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, Moody's 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 Moody's 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;
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(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
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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
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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
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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.
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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."
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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: ___________________________________________________
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
1201 Louisiana, Suite 1400
Houston, Texas 77002
Telecopier No.: (713) 654-5124
Telephone No.: (713) 654-9110
Attention: Frank Willoughby
with copy to:
1201 Louisiana, Suite 1400
Houston, Texas 77002
Telecopier No.: (713) 653-1920
Telephone No.: (713) 654-9110
Attention: Robert K. Reeves
[Signature Page 1]
<PAGE>
AGENTS: CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent
By:____________________________________________________
Russell Johnson
Vice President
Address for Notices to Chase as Administrative Agent:
Chase Bank of Texas, National Association
1111 Fannin
Houston, Texas 77002
Telecopier No.: (713) 750-3810
Telephone No.: (713) 750-2784
Attention: Loan Syndication Services
with copy to:
Chase Securities Inc.
600 Travis, 20th Floor
Houston, Texas 77002
Telecopier No.: (713) 216-4295
Telephone No.: (713) 216-4147
Attention: Robert Mertensotto
[Signature Page 2]
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Syndication Agent
By: _________________________________________________
Name: _________________________________________________
Title:_________________________________________________
Address for Notices for Morgan as Syndication Agent:
Morgan Guaranty Trust Company
of New York
C/O J.P. Morgan Services, Inc.
500 Stanton Christiana Road
Newark, Delaware 19713-2107
Telecopier No.: (302) 634-1094
Telephone No.: (302) 634-4671
Attention: Allison Hollis
[Signature Page 3]
<PAGE>
BARCLAYS BANK PLC, as Documentation Agent
By: _________________________________________________
Name: _________________________________________________
Title:_________________________________________________
Address for Notices to Barclays as Documentation Agent:
222 Broadway
New York, New York 10038
Telecopier No.: (212) 412-7585
Telephone No.: (212) 412-1306
Attention: Darryl Neider
[Signature Page 4]
<PAGE>
ABN AMRO BANK, N.V., as Co-Agent
By:____________________________________________________
Charles W. Randall
Senior Vice President
By:____________________________________________________
Cheryl Lipshutz
Senior Vice President
Address for Notices for ABN AMRO as Co-Agent:
Three Riverway, Suite 1700
Houston, Texas 77056
Telecopier No.: (713) 621-5801
Telephone No.: (713) 964-3348
Attention: Chuck Randall
with copy to:
Credit Administration
135 South LaSalle Street, Suite 2805
Chicago, Illinois 60603
Telecopier No.: (312) 904-8840
Telephone No.: (312) 904-1133
[Signature Page 5]
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Co-Agent
By: _________________________________________________
Name: _________________________________________________
Title:_________________________________________________
Address for Notices for Bank of America as Co-Agent:
231 S. LaSalle Street
Chicago, Illinois 60697
Telecopy No: (312) 974-9626
Telephone No: (312) 828-5239
Attn: Ida Rubens
[Signature Page 6]
<PAGE>
PARIBAS, as Co-Agent
By: _________________________________________________
Name: _________________________________________________
Title:_________________________________________________
By: _________________________________________________
Name: _________________________________________________
Title:_________________________________________________
Address for Notices for Paribas as Co-Agent:
1200 Smith Street, Suite 3100
Houston, Texas 77002
Attn: Leah Evans Hughes or Kimberly Miller
Telecopy No: (713) 659-5305
Telephone No: (713) 659-4811
with copy to:
Paribas
Houston Agency
1200 Smith Street, Suite 3100
Houston, Texas 77002
Telecopy: (713) 659-6915
Telephone: (713) 659-4811
Attn: Doug Liftman
[Signature Page 7]
<PAGE>
NATIONSBANK, N.A., as Co-Agent
By:____________________________________________________
Paul Squires
Senior Vice President
Address for Notices for NationsBank as Co-Agent:
901 Main Street
Dallas, Texas 75201
Attn: Karen Dumond
Telecopy No: (214) 508-1285
Telephone No: (214) 508-2513
with copy to:
NationsBank, N.A.
700 Louisiana, 8th Floor
Houston, Texas 77002
Telecopy: (713) 247-6568
Telephone: (713) 247-6952
Attn: Paul Squires
Senior Vice President
[Signature Page 8]
<PAGE>
SOCIETE GENERALE, SOUTHWEST AGENCY, as Co-Agent
By:____________________________________________________
Richard Erbert
Vice President
Address for Notices for Societe Generale as Co-Agent:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Attention: Loan Administration
Telecopy No: (214) 754-0171
Telephone No: (214) 979-2792
with copy to:
Societe Generale
1111 Bagby, Suite 2020
Houston, Texas 77002
Telecopy: (713) 650-0824
Telephone: (713) 759-6318
Attention: Richard Erbert
Vice President
<PAGE>
WELLS FARGO BANK (TEXAS), N.A., as Co-Agent
By:____________________________________________________
J. Alan Alexander
Vice President
Address for Notices for Wells Fargo Bank as Co-Agent:
201 Third Street, 8th Floor
San Francisco, California 94103
Telecopy: (415) 979-0675
Telephone: (415) 477-5425
Attention: Oscar Enriquez
with copy to:
Wells Fargo Bank (Texas), NA
Energy Department
1000 Louisiana, Third Floor
Telecopy No: (713) 250-7912
Telephone No: (713) 250-1651
Attention: J. Alan Alexander
[Signature Page 10]
<PAGE>
LENDER: CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By:____________________________________________________
Russell Johnson
Vice President
Lending Office for all Loans:
Chase Bank of Texas, National Association
1111 Fannin
Houston, Texas 77002
Telecopier No.: (713) 750-3810
Telephone No.: (713) 750-2784
Attention: Loan Syndication Services
with copy to:
Chase Securities Inc.
600 Travis, 20th Floor
Houston, Texas 77002
Telecopier No.: (713) 216-4295
Telephone No.: (713) 216-4147
Attention: Robert Mertensotto
[Signature Page 11]
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: _________________________________________________
Name: _________________________________________________
Title:_________________________________________________
Lending Office for all Loans:
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260
Address for Notices:
Morgan Guaranty Trust Company
of New York
C/O J.P. Morgan Services, Inc.
500 Stanton Christiana Road
Newark, Delaware 19713-2107
Telecopier No.: (302) 634-1094
Telephone No.: (302) 634-4671
Attention: Allison Hollis
with a copy to:
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260
Telex No.: 177615MGTUT
Telecopier No.: (212) 648-5348
Telephone No.: (212) 648-7612
Attention: John Kowalczuk
[Signature Page 12]
<PAGE>
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:
222 Broadway
New York, New York 10038
Telecopier No.: (212) 412-7585
Telephone No.: (212) 412-1306
Attention: Darryl Neider
[Signature Page 13]
<PAGE>
ABN AMRO BANK, N.V.
By:____________________________________________________
Charles W. Randall
Senior Vice President
By:____________________________________________________
Cheryl Lipshutz
Senior Vice President
Lending Office for all Loans:
135 South LaSalle Street, Suite 2805
Chicago, Illinois 60603
Attention: Credit Administration
Address for Notices:
135 South LaSalle Street, Suite 2805
Chicago, Illinois 60603
Telecopier No.: (312) 904-8840
Telephone No.: (312) 904-1133
Attention: Credit Administration
with copy to:
ABN AMRO North America, Inc.
Three Riverway, Suite 1700
Houston, Texas 77056
Telecopier No.: (713) 621-5801
Telephone No.: (713) 964-3348
Attention: Chuck Randall
[Signature Page 14]
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: _________________________________________________
Name: _________________________________________________
Title:_________________________________________________
Lending Office for all Loans:
Bank of America NT & SA
231 S. LaSalle Street
Chicago, IL 60697
Address for Notice:
231 S. LaSalle Street
Chicago, Illinois 60697
Telecopy No: (312) 974-9626
Telephone No: (312) 828-5239
Attention: Ida Rubens
with copy to:
333 Clay Street, Suite 4550
Houston, Texas 77002
Telecopy No: (713) 651-4841
Telephone No: (713) 651-4881
Attention: Ronald E. McKaig
[Signature Page 15]
<PAGE>
PARIBAS
By:____________________________________________________
Doug Liftman
Vice President
By:____________________________________________________
Barton D. Schouest
Managing Director
Lending Office for all Loans:
1200 Smith Street, Suite 3100
Houston, Texas 77002
Address for Notice:
1200 Smith Street, Suite 3100
Houston, Texas 77002
Attn: Leah Evans-Hughes or Kimberly Miller
Telecopy No: (713) 659-5305
Telephone No: (713) 659-4811
with copy to:
Paribas
Houston Agency
1200 Smith Street, Suite 3100
Houston, Texas 77002
Telecopy: (713) 659-6915
Telephone: (713) 659-4811
Attn: Doug Liftman
Vice President
[Signature Page 16]
<PAGE>
NATIONSBANK, N.A.
By:____________________________________________________
Paul Squires
Senior Vice President
Lending Office for all Loans:
901 Main Street
Dallas, Texas 75201
Address for Notice:
901 Main Street
Dallas, Texas 75201
Attn: Karen Dumond
Telecopy No: (214) 508-1285
Telephone No: (214) 508-2513
with copy to:
NationsBank, N.A.
700 Louisiana, 8th Floor
Houston, Texas 77002
Telecopy: (713) 247-6568
Telephone: (713) 247-6952
Attn: Paul Squires
Senior Vice President
[Signature Page 17]
<PAGE>
SOCIETE GENERALE, SOUTHWEST AGENCY
By:____________________________________________________
Richard Erbert
Vice President
Lending Office for all Loans:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Address for Notice:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Telecopy No: (214) 754-0171
Telephone No: (214) 979-2792
Attention: Loan Administration
with copy to:
Societe Generale
1111 Bagby, Suite 2020
Houston, Texas 77002
Telecopy: (713) 650-0824
Telephone: (713) 759-6318
Attention: Richard Erbert
Vice President
[Signature Page 18]
<PAGE>
WELLS FARGO BANK (TEXAS), N.A.
By:__________________________________________________
J. Alan Alexander
Vice President
Lending Office for all Loans:
201 Third Street, 8th Floor
San Francisco, California 94103
Address for Notice:
201 Third Street, 8th Floor
San Francisco, California 94103
Telecopy: (415) 979-0675
Telephone: (415) 477-5425
Attention: Oscar Enriquez
with copy to:
Wells Fargo Bank (Texas), NA
Energy Department
1000 Louisiana, Third Floor
Telecopy No: (713) 250-7912
Telephone No: (713) 250-1651
Attention: J. Alan Alexander
[Signature Page 19]
<PAGE>
HIBERNIA NATIONAL BANK
By:___________________________________________________
Colleen McEvoy
Vice President
Lending Office for all Loans:
313 Carondelet Street
New Orleans, LA 70130
Address for Notices:
313 Carondelet Street, Suite 1300
New Orleans, LA 70130
Telecopier No.: (504) 533-5434
Telephone No.: (504) 533-5395
Attention: Energy/Maritime Department
[Signature Page 20]
<PAGE>
TORONTO DOMINION (TEXAS) INC.
By: _________________________________________
Name:________________________________________
Title:_______________________________________
Lending Office for all Loans:
909 Fannin, Suite 1700
Houston, Texas 77002
Address for Notices:
909 Fannin, Suite 1700
Houston, Texas 77002
Telecopier No.: (713) 652-2647
Telephone No.: (713) 653-8201
Attention: Mark Green
[Signature Page 21]
<PAGE>
U.S. BANK NATIONAL ASSOCIATION
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Lending Office for all Loans:
918 17th Street, Suite 300
Denver, Colorado 80202
Address for Notice:
918 17th Street, Suite 300
Denver, Colorado 80202
Telecopy No: (303) 585-4362
Telephone No: (303) 585-4209
Attention: Charles S. Searle
[Signature Page 22]
<PAGE>
BANK ONE, TEXAS, N.A.
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
Lending Office for all Loans:
910 Travis, 6th Floor
Houston, Texas 77002
Address for Notices:
Bank One, Texas, N.A.
910 Travis, 6th Floor
Houston, Texas 77002
Telecopier No.: (713) 751-3544
Telephone No.: (713) 751-3564
Attention: John Lane
[Signature Page 23]
<PAGE>
CREDIT SUISSE FIRST BOSTON
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
Lending Office for all Loans:
11 Madison Avenue, 20th Floor
New York, New York 10010
Address for Notices:
11 Madison Avenue, 20th Floor
New York, New York 10010
Telecopier No.: (212) 325-8314
Telephone No.: (212) 325-9069
Attention: Charlie Thompson
James Moran
with copy to:
600 Travis, 30th Floor
Houston, Texas 77002
Telecopier No.: (713) 237-0325
Telephone No.: (713) 220-6774
Attention: Scott Brown
[Signature Page 24]
<PAGE>
FIRST NATIONAL BANK OF COMMERCE
By:________________________________________________
David R. Reid
Senior Vice President
Lending Office for all Loans:
210 Baronne Street
New Orleans, Louisiana 70112
Address for Notices:
First National Bank of Commerce
210 Baronne Street
New Orleans, Louisiana
Telecopier No.: (504) 561-1316
Telephone No.: (504) 561-2085
Attention: Shelia Mason
with copy to:
600 Jefferson Street, 3rd Floor
Lafayette, Louisiana 70501
Telecopier No: (318) 265-3228
Telephone No: (318) 265-3455
Attention: David R. Reid
Senior Vice President
[Signature Page 25]
<PAGE>
BANK OF NEW YORK
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
Lending Office for all Loans:
One Wall Street, 19th Floor
New York, New York 10286
Address for Notices:
One Wall Street, 19th Floor
New York, New York 10286
Telecopier No.: (212) 635-7923
Telephone No.: (212) 635-7861
Attention: Felicia La Forgia
[Signature Page 26]
<PAGE>
SOUTHWEST BANK OF TEXAS, N.A.
By:______________________________________________
A. Stephen Kennedy
Vice President/Manager Energy Lending
Lending Office for all Loans:
5 Post Oak Park
4400 Post Oak Parkway
Houston, Texas 77027
Address for Notices:
5 Post Oak Park
4400 Post Oak Parkway
Houston, Texas 77027
Telecopier No.: (713) 621-2031
Telephone No.: (713) 235-8881 x1707
Attention: A. Stephen Kennedy
[Signature Page 27]
<PAGE>
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
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Telecopier No.: (212) 552-5627
Telephone No.: (212) 552-7259
Attention: Chris Consomer
[Signature Page 28]
<PAGE>
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
<TABLE>
<CAPTION>
U.S. Commitment Global
Name of Lender Percentage Commitment Commitment Percentage
- --------------------------------- ---------------- ----------- ----------------------
<S> <C> <C> <C>
Chase Bank of Texas, 7.76451% $35,000,000 8.75000%
National Association
Morgan 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
Wells 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%
</TABLE>
Annex-I-1
<PAGE>
Canadian Lenders and Canadian Subcommitments
<TABLE>
<CAPTION>
Name of Lender Subcommitment Percentage Commitment
- ------------------------------------- ------------------------- ---------------
<S> <C> <C>
The Chase Manhattan Bank of Canada 50% CDN $12,500,000
Toronto Dominion Bank 50% CDN $12,500,000
</TABLE>
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
<PAGE>
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, 707 Travis, Houston, Texas 77002, 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,
Morgan 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 Wells 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
<PAGE>
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:____________________________________
A-I-2
<PAGE>
EXHIBIT A-2
[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 707 Travis, Houston, Texas 77002,
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,
Morgan 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 Wells 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
<PAGE>
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:____________________________________
A-2-2
<PAGE>
EXHIBIT B-1
[FORM OF LEGAL OPINION]
B-1-1
<PAGE>
EXHIBIT B-2
[FORM OF LOUISIANA LEGAL OPINION]
B-2-1
<PAGE>
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, Morgan 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 Wells 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
<PAGE>
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
<PAGE>
EXHIBIT C-2
[Form of Competitive Bid Request]
[Date]
TO: The Chase Manhattan Bank,
As Competitive Bid Auction Administrator
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
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, Morgan 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 Wells 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
<PAGE>
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, Morgan 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 Wells 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
<PAGE>
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
<PAGE>
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 1201 Louisiana, Suite 1400, Houston, Texas 77002.
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, 350 Fifth
Avenue S.W., Calgary, Alberta T2P 3N9.
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
<PAGE>
EXHIBIT E
PARTNERSHIPS
------------
[List Partnerships]
E-1
<PAGE>
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
<PAGE>
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, Morgan 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 Wells 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
<PAGE>
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
<PAGE>
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
<PAGE>
APPROVED:
Ocean Energy, Inc., a Delaware corporation
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Chase Bank of Texas, National Association, as
Administrative Agent
By:__________________________________________
Name:________________________________________
Title:_______________________________________
G-4
<PAGE>
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
<PAGE>
Assignee's Base Rate
Lending Office:
_____________________________
_____________________________
_____________________________
Assignee's Eurodollar
Lending Office:
_______________________________
_______________________________
_______________________________
Address for Notice:
____________________________
____________________________
____________________________
Attn:_______________________
Telex No:___________________
Telecopy No:__________________
Telephone No:_________________
SCHEDULE 1-2
<PAGE>
Exhibit 10.4
AMENDED AND RESTATED
GUARANTY AGREEMENT
Dated as of July 8, 1998
by
Ocean Energy, Inc.,
a Delaware corporation,
in favor of
The Chase Manhattan Bank of Canada,
as Administrative Agent,
and
The Lenders Now or Hereafter Parties To The Credit Agreement
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Page
----
Article I Definitions and Accounting Matters
Section 1.01 Terms Defined In Recitals.............................................. 1
Section 1.02 Certain Definitions.................................................... 1
Section 1.03 Credit Agreement Definitions........................................... 2
Article II The Guaranty
Section 2.01 Obligations Guaranteed................................................. 2
Section 2.02 Nature of Guaranty..................................................... 2
Section 2.03 Lenders' Rights........................................................ 2
Section 2.04 Guarantor's Waivers.................................................... 3
Section 2.05 Maturity of Obligations; Payment....................................... 3
Section 2.06 Lenders' Expenses...................................................... 3
Section 2.07 Obligation............................................................. 3
Section 2.08 Events and Circumstances Not Reducing or Discharging the Guarantor's
Obligations.......................................................... 3
Section 2.09 Subrogation............................................................ 5
Article III Representations and Warranties
Section 3.01 By the Guarantor....................................................... 5
Article IV Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims.................................. 6
Section 4.02 Claims in Bankruptcy................................................... 6
Section 4.03 Payments Held in Trust................................................. 6
Section 4.04 Liens Subordinate...................................................... 7
Section 4.05 Notation of Records.................................................... 7
Article V Miscellaneous
Section 5.01 Successors and Assigns................................................. 7
Section 5.02 Notices................................................................ 7
Section 5.03 Authority of Administrative Agent...................................... 7
Section 5.04 CONSTRUCTION........................................................... 8
Section 5.05 Waivers................................................................ 8
Section 5.06 Judgment Currency...................................................... 8
Section 5.07 Amendment and Restatement.............................................. 9
Section 5.08 Survival of Obligations................................................ 9
Section 5.09 Subject to the Intercreditor Agreement................................. 9
Section 5.10 Status as Specified or Designated Senior Indebtedness.................. 9
</TABLE>
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AMENDED AND RESTATED
GUARANTY AGREEMENT
This Amended and Restated Guaranty Agreement dated as of July 8, 1998,
is by Ocean Energy, Inc., a corporation duly organized and validly existing
under the laws of the state of Delaware ("Guarantor"), in favor of each of the
following: each of the financial institutions that is now or hereafter a party
to the Credit Agreement (as defined below) (individually, a "Lender" and,
collectively, the "Lenders"); and The Chase Manhattan Bank of Canada, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
Recitals
A. Ocean Energy Resources Canada, Ltd., a company continued under the laws
of the Province of British Columbia (the "Company"), the Administrative Agent
and the Lenders have executed that certain Amended and Restated Credit Agreement
of even date herewith (such credit agreement, as amended, the "Credit
Agreement").
B. One of the terms and conditions stated in the Credit Agreement for the
making of the loans and extensions of credit described in the Credit Agreement
is the execution and delivery to the Administrative Agent and the Lenders of
this Guaranty Agreement.
C. NOW, THEREFORE, (i) in order to comply with the terms and conditions of
the Credit Agreement, (ii) to induce the Lenders to enter into the Credit
Agreement, and (iii) for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Guarantor hereby agrees as
follows:
Article I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED IN RECITALS. As used in this Guaranty
Agreement, the terms defined in the Recitals shall have the meanings indicated
in the Recitals.
SECTION 1.02 CERTAIN DEFINITIONS. As used in this Guaranty Agreement,
including the Recitals, the following terms shall have the following meanings,
unless the context otherwise requires:
"Guarantor Claims" shall have the meaning indicated in Section 4.01.
"Guaranty Agreement" shall mean this Amended and Restated Guaranty
Agreement, as the same may from time to time be amended or supplemented.
"Obligations" shall mean (a) the payment and performance of all present and
future indebtedness, obligations and liabilities of the Company and/or the
Guarantor to the Administrative Agent and the Lenders under the Credit
Agreement, including but not limited to, (i) the full and punctual payment of
the Notes issued thereunder, and any and all promissory notes given in
substitution for such Notes or in modification, renewal, extension or
rearrangement thereof in whole or in part, and (ii) the Acceptance Exposure
under all Bankers Acceptances now outstanding or hereafter issued under the
Credit Agreement; (b) all obligations of the Guarantor under this Guaranty
Agreement; and (c) all
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interest (whether pre- or post petition), charges, expenses, reasonable
attorneys' or other fees and any other sums payable to the Administrative Agent
and the Lenders in connection with the execution, administration or enforcement
of any of their rights and remedies hereunder or any other Loan Document.
SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are not defined herein
shall have the meaning ascribed such terms in the Credit Agreement and in the
Amended and Restated Global Credit Agreement dated of even date herewith among
Guarantor, each of the financial institutions that is now or hereafter a party
thereto (collectively, the "U.S. Lenders"); Chase Bank of Texas, National
Association, as administrative agent for the U.S. Lenders, Morgan Guaranty Trust
Company of New York, as syndication agent for the U.S. Lenders, Barclays Bank
PLC, as documentation agent for the U.S. Lenders, and ABN Amro Bank, N.V., Bank
of America National Trust & Savings Association, Paribas, NationsBank, N.A.,
Societe Generale, Southwest Agency and Wells Fargo Bank (Texas), N.A., , as co-
agents for the U.S. Lenders.
ARTICLE II
THE GUARANTY
SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment at maturity of the Obligations.
SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute,
irrevocable, completed and continuing guaranty of payment and not a guaranty of
collection, and no notice of the Obligations or any extension of credit already
or hereafter contracted by or extended to the Company need be given to the
Guarantor. The guaranty evidenced hereby is joint and several with all other
guarantees of the Obligations. This guaranty may not be revoked by the
Guarantor and shall continue to be effective with respect to debt under the
Obligations arising or created after any attempted revocation by the Guarantor
and shall remain in full force and effect until the Obligations are paid in full
and the Aggregate Commitments are terminated, notwithstanding that from time to
time prior thereto no Obligations may be outstanding. The Company, the
Administrative Agent and the Lenders may modify, alter, rearrange, extend for
any period and/or renew from time to time, the Obligations and the
Administrative Agent and the Lenders may waive any Defaults or Events of Default
without notice to the Guarantor and in such event the Guarantor will remain
fully bound hereunder on the Obligations. Subject to the terms of the Credit
Agreement, this Guaranty Agreement may be enforced by the Administrative Agent
and/or the Lenders and any subsequent holder of the Obligations and shall not be
discharged by the assignment or negotiation of all or part of the Obligations.
The Guarantor hereby expressly waives presentment, demand, notice of non-
payment, protest and notice of protest and dishonor, notice of Event of Default,
notice of intent to accelerate the maturity and notice of acceleration of the
maturity and any other notice in connection with the Obligations, and also
notice of acceptance of this Guaranty Agreement, acceptance on the part of the
Administrative Agent and the Lenders being conclusively presumed by their
request for this Guaranty Agreement and delivery of the same to the
Administrative Agent.
SECTION 2.03 LENDERS' RIGHTS. Subject to the terms of the Credit
Agreement, the Guarantor authorizes the Lenders (or the Administrative Agent on
behalf of the Lenders), without notice or demand and without affecting the
Guarantor's obligation hereunder, to take and hold agreed-upon security for the
payment of the Obligations, and exchange, enforce, waive and release any such
security; and to
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apply such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their discretion may determine; and to
obtain a guaranty of the Obligations from any one or more Persons and at any
time or times to enforce, waive, rearrange, modify, limit or release any of such
other Persons from their obligations under such guaranties.
SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to
require the Administrative Agent and the Lenders to (a) proceed against the
Company or any other Person liable on the Obligations, (b) enforce their rights
against any other guarantor of the Obligations, (c) proceed or enforce their
rights against or exhaust any security given to secure the Obligations, (d) have
the Company joined with the Guarantor in any suit arising out of this Guaranty
Agreement and/or the Obligations, or (e) pursue any other remedy whatsoever.
Neither the Administrative Agent nor the Lenders shall be required to mitigate
damages or take any action to reduce, collect or enforce the Obligations. The
Guarantor waives any defense arising by reason of any disability, lack of
corporate authority or power, or other defense of the Company or any other
guarantor of the Obligations, and shall remain liable hereon regardless of
whether the Company or any other guarantor be found not liable thereon for any
reason.
SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees that
if the maturity of the Obligations is accelerated by bankruptcy or otherwise,
such maturity shall also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to the Guarantor. The Guarantor will,
forthwith upon notice from the Administrative Agent of the Company's failure to
pay the Obligations at maturity, pay to the Administrative Agent for the benefit
of the Administrative Agent and the Lenders at the Administrative Agent's
Principal Office, the amount due and unpaid by the Company and guaranteed
hereby. The failure of the Administrative Agent to give this notice shall not
in any way release the Guarantor hereunder.
SECTION 2.06 LENDERS' EXPENSES. If the Guarantor fails to pay the
Obligations after notice from the Administrative Agent of the Company's failure
to pay any Obligations at maturity (whether by acceleration or otherwise), and
if the Administrative Agent or the Lenders obtain the services of an attorney
for collection of amounts owing by the Guarantor hereunder, or obtain advice of
counsel in respect of any of their rights under this Guaranty Agreement, or if
suit is filed to enforce this Guaranty Agreement, or if proceedings are had in
any bankruptcy, receivership or other judicial proceedings for the establishment
or collection of any amount owing by the Guarantor hereunder, or if any amount
owing by the Guarantor hereunder is collected through such proceedings, the
Guarantor agrees to pay to the Administrative Agent at its Principal Office the
reasonable attorneys' fees of the Administrative Agent and the Lenders.
SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of
the Guarantor for the payment of the Obligations guaranteed hereby shall be
primary and not secondary.
SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of
the following to the fullest extent permitted by law, agrees that its
obligations under this Guaranty Agreement shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any
rights (including without limitation rights to notice) which it might otherwise
have as a result of or in connection with any of the following:
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(a) Modifications, etc. Any renewal, extension, modification, or increase
in the amount of the Aggregate Commitments as in effect on the Effective Date,
decrease, alteration or rearrangement of all or any part of the Obligations, any
Loan Document or any instrument executed in connection therewith, or any
contract or understanding between the Company, any Agent and/or the Lenders, or
any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Administrative Agent or the Lenders to the
Company or the Guarantor or any Person liable on the Obligations;
(c) Condition of the Company or the Guarantor. The insolvency, bankruptcy,
arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Company or the Guarantor or any other Person
at any time liable for the payment of all or part of the Obligations; or any
sale, lease or transfer of any or all of the assets of the Company or the
Guarantor, or any changes in the shareholders of the Company or the Guarantor;
(d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Loan Document,
including the Notes, for any reason whatsoever, including without limitation the
fact that the Obligations, or any part thereof, exceed the amount permitted by
law, the act of creating the Obligations or any part thereof is ultra vires, the
officers or representatives executing any Loan Document or otherwise creating
the Obligations acted in excess of their authority, the Obligations violate
applicable usury laws, the Company has valid defenses, claims or offsets
(whether at law, in equity or by agreement) which render the Obligations wholly
or partially uncollectible from the Company, the creation, performance or
repayment of the Obligations (or the execution, delivery and performance of any
Loan Document) is illegal, uncollectible, legally impossible or unenforceable,
or the Credit Agreement, the Notes or other Loan Documents have been forged or
otherwise are irregular or not genuine or authentic;
(e) Release of Obligors. Any full or partial release of the obligation of
the Company on the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Company will be liable to perform the Obligations, or
that the Administrative Agent and the Lenders will look to other parties to
perform the Obligations;
(f) Security. The taking or accepting of any security, collateral or
guaranty, or other assurance of payment, for all or any part of the Obligations;
(g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, Property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
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(h) Care and Diligence. The failure of any Agent or any Lender or any
other Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of such collateral, Property or security;
(i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;
(j) Payments Rescinded. Any payment by the Company to any Agent or Lender
is held to constitute a preference under the bankruptcy laws, or for any reason
an Agent or Lender is required to refund such payment or pay such amount to the
Company or someone else; or
(k) Other Actions Taken or Omitted. Any other action taken or omitted to
be taken with respect to the Credit Agreement or the other Loan Documents, the
Obligations, or the security and collateral therefor, whether or not such action
or omission prejudices the Guarantor or increases the likelihood that the
Guarantor will be required to pay the Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay the Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, except for the full and final payment and satisfaction of the
Obligations.
SECTION 2.09 SUBROGATION. Until the Obligations have been paid in full
and the Aggregate Commitments terminated, the Guarantor hereby waives any claim,
right or remedy which the Guarantor may now have or hereafter acquire against
the Company which arises out of this Guaranty Agreement or from the performance
by the Guarantor hereunder, including without limitation, any claim, remedy or
right of subrogation, reimbursement, exoneration, indemnification, or
participation in any such claim, right or remedy of any other Person against the
Company. The Guarantor further waives any benefit of any right to participate
in any security now or hereafter held by the Administrative Agent and/or the
Lenders.
Article III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 BY THE GUARANTOR. In order to induce the Administrative
Agent and the Lenders to accept this Guaranty Agreement, the Guarantor
represents and warrants to the Lender Group (which representations and
warranties will survive the creation of the Obligations and any extension of
credit thereunder) that:
(a) Benefit to the Guarantor. The Company is a wholly-owned Subsidiary of
the Guarantor; and the Guarantor's guaranty pursuant to this Guaranty Agreement
reasonably may be expected to benefit, directly or indirectly, the Guarantor;
and the Guarantor has determined that this Guaranty Agreement is necessary and
convenient to the conduct, promotion and attainment of the business of the
Guarantor and the Company.
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(b) Solvency. It (i) is not insolvent as of the date hereof and will not
be rendered insolvent as a result of this Guaranty Agreement or the transactions
contemplated by the Credit Agreement or the making of the Loans or issuance of
Bankers Acceptances thereunder, (ii) is not engaged in a business or a
transaction, or about to engage in a business or a transaction, for which any
Property or assets remaining with the Guarantor constitute unreasonably small
capital, and (iii) does not intend to incur, or believe it will incur, debts
that will be beyond its ability to pay as such debts mature.
(c) No Representation by Administrative Agent or Lenders. Neither any
Agent, Lender nor any other Person has made any representation, warranty or
statement to the Guarantor in order to induce the Guarantor to execute this
Guaranty Agreement.
Article IV
SUBORDINATION OF INDEBTEDNESS
SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Company to
the Guarantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation be direct, contingent, primary,
secondary, several, joint and several, or otherwise, and irrespective of whether
such debts or obligations be evidenced by note, contract, open account, or
otherwise, and irrespective of the Person or Persons in whose favor such debts
or obligations may, at their inception, have been, or may hereafter be created,
or the manner in which they have been or may hereafter be acquired by the
Guarantor. Except for payments permitted by the Credit Agreement, until the
Obligations shall be paid and satisfied in full, the Aggregate Commitments are
terminated and the Guarantor shall have performed all of its obligations
hereunder and the Loan Documents to which it is a party, the Guarantor shall not
receive or collect, directly or indirectly, from the Company any amount upon the
Guarantor Claims.
SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Company, the Administrative Agent on behalf of the
Administrative Agent and the Lenders shall have the right to prove their claim
in any proceeding, so as to establish their rights hereunder and receive
directly from the receiver, trustee or other court custodian, dividends and
payments which would otherwise be payable upon Guarantor Claims. The Guarantor
hereby assigns such dividends and payments to the Administrative Agent for the
benefit of the Administrative Agent and the Lenders. Should any Agent or Lender
receive, for application upon the Obligations, any such dividend or payment
which is otherwise payable to the Guarantor, and which, as between the Company
and the Guarantor, shall constitute a credit upon the Guarantor Claims, then
upon payment in full of the Obligations, the Guarantor shall become subrogated
to the rights of the Administrative Agent and the Lenders to the extent that
such payments to the Administrative Agent and the Lenders on the Guarantor
Claims have contributed toward the liquidation of the Obligations, and such
subrogation shall be with respect to that proportion of the Obligations which
would have been unpaid if the Administrative Agent and the Lenders had not
received dividends or payments upon the Guarantor Claims.
SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, the Guarantor agrees (a)
to hold in trust for the Administrative Agent and the Lenders an amount equal to
the amount of all funds, payments, claims or distributions so received, and (b)
that it shall have absolutely no dominion over the amount of such funds,
payments, claims or distributions
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except to pay them promptly to the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders; and the Guarantor covenants promptly to
pay the same to the Administrative Agent.
SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
upon the Company's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens upon the Company's assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
the Guarantor, any Agent or Lender presently exist or are hereafter created or
attach. Without the prior written consent of the Administrative Agent, the
Guarantor, during the period in which any of the Obligations are outstanding or
the Aggregate Commitments are in effect, shall not (a) exercise or enforce any
creditor's right it may have against the Company, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Lien, mortgages, deeds of trust, security
interest, collateral rights, judgments or other encumbrances on assets of the
Company held by the Guarantor.
SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of the Administrative Agent, all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by the Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.
Article V
MISCELLANEOUS
SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and shall
be in every particular available to the successors and assigns of the
Administrative Agent and the Lenders and is and shall always be fully binding
upon the legal representatives, successors and assigns of the Guarantor,
notwithstanding that some or all of the monies, the repayment of which this
Guaranty Agreement applies, may be actually advanced after any bankruptcy,
receivership, reorganization or other event affecting either the Company or the
Guarantor.
SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in the manner and to the
address of the Guarantor as provided for in the Credit Agreement.
SECTION 5.03 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Guaranty Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guaranty Agreement shall, as between
the Administrative Agent and the Lenders, be governed by the Credit Agreement
and by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Guarantor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting; and
the Guarantor shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
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SECTION 5.04 CONSTRUCTION. THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT
LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ALBERTA, CANADA.
SECTION 5.05 WAIVERS. THE GUARANTOR AND EACH LENDER AND THE
ADMINISTRATIVE AGENT BY ITS ACCEPTANCE HEREOF 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 GUARANTY AGREEMENT OR ANY LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY AGREEMENT, THE
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
5.05.
SECTION 5.06 JUDGMENT CURRENCY. This is an international loan
transaction in which the specification of Canadian Dollars or U.S. Dollars is of
the essence, and the stipulated currency shall in each instance be the Currency
of account and payment in all instances. A payment obligation in one Currency
hereunder (the "Original Currency") shall not be discharged by an amount paid in
another currency (the "Other Currency"), whether pursuant to any judgment
expressed in or converted into any Other Currency or in another place except to
the extent that such tender or recovery results in the effective receipt by the
payee of the full amount of the Original Currency payable to it under this
Guaranty Agreement. If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in the Original Currency into the Other
Currency, the rate of exchange that shall be applied shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase Original Currency at the Principal Office with the Other Currency on
the Business Day next preceding the day on which such judgment is rendered. The
obligation of the Guarantor in respect of any such sum due from it to the
Administrative Agent or any Lender hereunder or under any other Loan Document
(in this Section 5.06 called an "Entitled Person") shall, notwithstanding the
rate of exchange actually applied in rendering such judgment, be discharged only
to the extent that on the Business Day following receipt by such Entitled Person
of any sum adjudged to be due hereunder in the Other Currency such Entitled
Person may in accordance with normal banking procedures purchase and transfer
the Original Currency to Toronto with the amount of the judgment currency so
adjudged to be due; and the Guarantor hereby, as a separate obligation and
notwithstanding any such judgment, agrees jointly and severally to indemnify
such Entitled Person against, and to pay such Entitled Person on demand, in the
Original Currency, the amount (if any) by which the sum originally due to such
Entitled Person in the Original Currency hereunder exceeds the amount of the
Original Currency so purchased and transferred.
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SECTION 5.07 AMENDMENT AND RESTATEMENT. This Amended and Restated
Guaranty Agreement amends, restates, supersedes and replaces that certain
Guaranty Agreement dated as of March 27, 1998, by and among the parties hereto,
and such Guaranty Agreement shall be void and have no further effect.
SECTION 5.08 SURVIVAL OF OBLIGATIONS. To the extent that any payments on
the Obligations 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 Obligations so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Administrative Agent's and the Lenders' Liens, rights,
powers and remedies under this Guaranty Agreement and each Loan Document shall
continue in full force and effect. In such event, each Loan Document shall be
automatically reinstated and the Guarantor shall take such action as may be
reasonably requested by the Administrative Agent and the Lenders to effect such
reinstatement.
SECTION 5.09 SUBJECT TO THE INTERCREDITOR AGREEMENT. This Guaranty
Agreement is subject to the terms of the Intercreditor Agreement which (a)
subjects the ability of the Lender Group to pursue remedies hereunder to the
prior consent of the U.S. Lenders and (b) sets forth a priority for the
application of proceeds upon any disposition of amounts received hereunder.
SECTION 5.10 STATUS AS SPECIFIED OR DESIGNATED SENIOR INDEBTEDNESS. The
Guarantor hereby acknowledges and confirms that:
(a) this Guaranty Agreement and the obligations of the Guarantor hereunder
are "Senior Indebtedness" and "Specified Senior Indebtedness" under and for
purposes of the 95 Indenture; and
(b) this Guaranty Agreement and the obligations of the Guarantor hereunder
are "Senior Indebtedness" and "Designated Senior Indebtedness" 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, as applicable, under each of such Indentures.
WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
OCEAN ENERGY, INC., a Delaware corporation
By:
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
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Exhibit 10.5
AMENDED AND RESTATED
INTERCREDITOR AGREEMENT
among
Ocean Energy, Inc.,
a Delaware corporation,
Ocean Energy, Inc.,
a Louisiana corporation,
Ocean Energy Resources Canada, Ltd.,
Chase Bank of Texas, National Association,
as Administrative Agent and Paying Agent,
Morgan 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
Wells Fargo Bank (Texas), N.A.,
as Co-Agents,
The Chase Manhattan Bank Of Canada,
as Canadian Agent,
and
The Lenders Now Or Hereafter Parties Hereto
July 8, 1998
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................. 2
Section 1.01 Definitions........................................ 2
Section 1.02 Incorporation of U.S. Credit Agreement Definitions. 3
ARTICLE II APPLICATION OF PROCEEDS................................. 3
Section 2.01 Election to Pursue Remedies........................ 3
Section 2.02 Duty of the Paying Agent........................... 4
Section 2.03 Application of Proceeds............................ 5
Section 2.04 Payments by Paying Agent........................... 5
Section 2.05 Notices under Related Documents.................... 5
Section 2.06 Amendments......................................... 6
Section 2.07 Pro Rata Treatment................................. 6
Section 2.08 Voting Procedure................................... 6
Section 2.09 Triggering Event................................... 6
Section 2.10 Bankruptcy Preferences............................. 7
Section 2.11 Property of Obligors............................... 7
Section 2.12 Marshalling........................................ 7
Section 2.13 Lender Dealings; Good Faith........................ 7
ARTICLE III CALCULATION OF INDEBTEDNESS............................ 8
Section 3.01 Notice of Amount of Indebtedness................... 8
Section 3.02 Escrow Account..................................... 8
Section 3.03 Handling of Escrow Account......................... 8
Section 3.04 Currency Conversion................................ 9
ARTICLE IV THE PAYING AGENT........................................ 9
Section 4.01 Appointment of Paying Agent........................ 9
Section 4.02 Nature of Duties of Paying Agent................... 9
Section 4.03 Lack of Reliance on the Paying Agent............... 10
Section 4.04 Certain Rights of the Paying Agent................. 10
Section 4.05 Reliance by Paying Agent........................... 11
Section 4.06 PAYING AGENT'S REIMBURSEMENTS AND INDEMNIFICATION.. 11
Section 4.07 The Paying Agent in its Individual Capacity........ 11
Section 4.08 Creditors as Owners................................ 11
Section 4.09 Successor Paying Agent............................. 12
Section 4.10 Employment of Paying Agent and Counsel............. 12
Section 4.11 Independent Action................................. 12
ARTICLE V MISCELLANEOUS............................................ 13
Section 5.01 Authority.......................................... 13
Section 5.02 Termination........................................ 13
Section 5.03 Notices, etc....................................... 13
Section 5.04 PAYMENT OF EXPENSES, INDEMNITIES, ETC.............. 13
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Section 5.05 Applicable Law..................................... 13
Section 5.06 Entire Agreement................................... 13
Section 5.07 Execution in Counterparts.......................... 14
Section 5.08 Amendment of Defined Instruments................... 14
Section 5.09 References and Titles.............................. 14
Section 5.10 Severability....................................... 14
Section 5.11 Conflict with Loan Documents....................... 14
Section 5.12 Limitation by Law.................................. 14
Section 5.13 Benefit of Agreement; Limitation on Assignment..... 14
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AMENDED AND RESTATED
INTERCREDITOR AGREEMENT
THIS AMENDED AND RESTATED INTERCREDITOR AGREEMENT dated as of July 8, 1998
(this "Intercreditor Agreement"), is among: OCEAN ENERGY, INC., a corporation
duly organized and validly existing under the laws of the state of Delaware (the
"Company"); OCEAN ENERGY, INC., a corporation duly organized and validly
existing under the laws of the state of Louisiana ("OEI-Louisiana"); OCEAN
ENERGY RESOURCES CANADA, LTD., a company continued under the laws of the
Province of British Columbia ("Ocean Canada"); each of the other Persons now or
hereafter parties hereto as an Obligor; each of the financial institutions that
is now or hereafter a party hereto (individually, a "U.S. Lender" and,
collectively, the "U.S. Lenders"); CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, AS
ADMINISTRATIVE AGENT for the U.S. Lenders (in such capacity, the "Administrative
Agent") and as Paying Agent for the Lender Group, MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, AS SYNDICATION AGENT for the U.S. 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 WELLS FARGO BANK (TEXAS), N.A., AS CO-
AGENTS for the Lenders (in such capacity, the "Co-Agents"), THE CHASE MANHATTAN
BANK OF CANADA ("Chase Canada"), as administrative agent for the Canadian
Lenders (in such capacity, the "Canadian Agent"), each of the lenders now or
hereafter parties to the Canadian Credit Agreement (collectively, the "Canadian
Lenders").
Recitals
A. On the date of this Intercreditor Agreement, the Company, the
Administrative Agent, the Syndication Agent, the Documentation Agent, the Co-
Agents (the Administrative Agent, the Documentation Agent and the Co-Agents
collectively being the "U.S. Agents"), and the U.S. Lenders are entering into
that certain Amended and Restated Global Credit Agreement (as the same is from
time to time supplemented, amended, restated, extended, or increased herein
called the "U.S. Credit Agreement").
B. On the date of this Intercreditor Agreement, Ocean Canada, the Canadian
Agent, and the Canadian Lenders are entering into that certain Amended and
Restated Credit Agreement (as the same is from time to time supplemented,
amended, restated, extended, or increased herein called the "Canadian Credit
Agreement").
C. To support, inter alia, the U.S. Indebtedness of the Company under the
U.S. Credit Agreement and the Canadian Indebtedness of Ocean Canada under the
Canadian Credit Agreement (collectively, the "Credit Agreements") and the other
obligations of the Obligors under the Loan Documents, the Obligors will execute
and deliver the Loan Documents.
D. The U.S. Lenders and the Canadian Lenders (collectively, the "Lenders")
and the U.S. Agents and the Canadian Agent (collectively, the "Agents"; and the
Paying Agent, the
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Lenders and the Agents collectively being the "Lender Group") are entering into
this Intercreditor Agreement to establish their relative rights with respect to
payment of their respective Indebtedness owed by the Obligors, to agree as to
the exercise of certain remedies and to appoint Chase Bank of Texas, National
Association as Paying Agent for the purposes of dealing with the Loan Documents
and apportioning payments among the Lenders and for other purposes as set forth
herein.
E. The execution and delivery of this Intercreditor Agreement is a
condition to the performance by each Lender of its obligations under the Credit
Agreement to which it is a party.
F. NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and to induce the U.S. Agents and
the U.S. Lenders to enter into the U.S. Credit Agreement and the Canadian Agent
and the Canadian Lenders to enter into the Canadian Credit Agreement, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The terms defined in the recitals shall have the
meanings assigned to those terms in such recitals, and the following terms shall
have the meanings assigned as follows:
"Acceptance Exposure" means, at any time, the aggregate face amount of all
Bankers Acceptances outstanding at such time for which Ocean Canada has not yet
reimbursed the Canadian Lenders which have accepted such Bankers Acceptance
pursuant to the terms of the Canadian Credit Agreement.
"Balance" shall have the meaning assigned such term in Section 3.03.
"Business Day" shall mean any day excluding Saturday, Sunday and any other
day on which banks are required or authorized to close in Houston, Texas or
Toronto.
"Canadian Indebtedness" shall mean the Indebtedness (as defined in the
Canadian Credit Agreement) and shall include the aggregate Acceptance Exposure.
"Canadian Lender Notes" shall mean the Notes issued to the Canadian Lenders
under the Canadian Credit Agreement.
"Commitments" shall mean the sum of the Aggregate Commitments of the U.S.
Lenders under the U.S. Credit Agreement and the Aggregate Commitments of the
Canadian Lenders under the Canadian Credit Agreement.
"Contingent Indebtedness" shall have the meaning assigned such term in
Section 3.03.
"Conversion Ratio" shall have the meaning assigned such term in Section
3.04.
"Escrow Account" shall have the meaning assigned such term in Section 3.02.
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"Group" shall mean the U.S. Lenders, as a group of Lenders, or the Canadian
Lenders, as a group of Lenders, as the case may be.
"Indebtedness" shall mean all U.S. Indebtedness and Canadian Indebtedness,
including, but not limited to, all other sums of money which may be hereafter
paid or advanced by the Agents or the Lenders under the terms and provisions of
this Intercreditor Agreement or the other Loan Documents as such sums of money
relate either to the administration, protection and exercise of remedies in
connection with this Intercreditor Agreement or the Loan Documents, or to any
reimbursement and indemnity provisions contained in this Intercreditor Agreement
and the Loan Documents.
"Issuing Bank" shall mean, for each of the Letters of Credit, the issuer of
such Letter of Credit.
"Notes" shall mean the U.S. Lender Notes and the Canadian Lender Notes.
"Obligors" shall mean the Company, OEI-Louisiana and Ocean Canada.
"Paying Agent" shall mean Chase Bank of Texas, National Association in such
capacity, together with all successors in such capacity under the terms of this
Intercreditor Agreement.
"Pro Rata Share" shall mean as to each holder of any of the Indebtedness
the percentage that the Indebtedness held by such holder represents of all
Indebtedness.
"Proceeds" shall mean all cash proceeds and other Property received by the
Paying Agent or any of the Lenders from or for the account of any Obligor, from
whatever source.
"Triggering Event" shall have the meaning assigned such term in Section
2.09.
"U.S. $ Amount" shall have the meaning assigned such term in Section 3.04.
"U.S. Indebtedness" shall mean the Indebtedness, including but not limited
to, the amount of the LC Exposure which is not at such time a part of the fixed
Indebtedness.
"U.S. Lender Notes" shall mean the Notes issued to the U.S. Lenders under
the U.S. Credit Agreement.
Section 1.02 Incorporation of U.S. Credit Agreement Definitions.
Capitalized terms not defined herein shall have the meaning assigned such terms
in the U.S. Credit Agreement.
ARTICLE II
APPLICATION OF PROCEEDS
Section 2.01 Election to Pursue Remedies.
(a) Upon the occurrence and during the continuance of any Triggering Event,
the Paying Agent shall, subject to Section 2.02 and Article IV, take or, as
appropriate, direct the appropriate trustee or agent to take any and all actions
provided for in the Loan Documents
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relating to the pursuit of remedies, including the foreclosure or disposition of
collateral, if any, only if such actions are authorized as provided in this
Section 2.01.
(b) Upon the occurrence and during the continuance of any Triggering Event,
the Lenders shall vote on whether or not to pursue any remedy or remedies
available to them at law or otherwise, including whether or not to foreclose on
or dispose of collateral, if any. If the Required Lenders at such time vote to
pursue any particular remedy or remedies, including foreclosure or disposition
of collateral, instructions specifying the particular action to be taken from
the Required Lenders shall be delivered to the Paying Agent. Upon receipt by the
Paying Agent of such instructions from the Required Lenders, with indemnities
appropriate for such instructions as provided in Section 4.04, the Paying Agent
shall immediately commence to take or direct the instructed actions (and
continue to take such actions) relating such remedies.
(c) Without regard to the occurrence of a Triggering Event, upon the
written instruction of the Required Lenders, with indemnities appropriate for
such instructions as provided in Section 4.04, the Paying Agent shall (i) take
or direct any action provided for in the Loan Documents (other than foreclosure
or disposition of the collateral) or proceed to enforce, or direct the
enforcement of, consistent with the Loan Documents and applicable law (other
than foreclosure or disposition of the collateral), the rights or powers
provided in the Loan Documents and under applicable law for the benefit of the
Lender Group and shall give such notice or direction or shall take such action
or exercise such right or power hereunder or under any of the Loan Documents
incidental thereto as shall be reasonably specified in such instructions and
consistent with the terms of the Loan Documents and this Intercreditor
Agreement; and/or (ii) execute such instruments or agreements or take such other
action in connection with the Loan Documents as may be deemed reasonably
necessary or appropriate by the Required Lenders and consistent with the terms
of the Loan Documents and this Intercreditor Agreement. Such action may include,
but is not limited to (x) the giving of any notice, approval, consent or waiver
which may be called for under the Loan Documents, (y) the requiring of the
execution and delivery of additional Loan Documents, or (z) employing agents or
directing trustees in order to accomplish the actions requested.
(d) Nothing in this Section 2.01 shall impair the right of a Lender to
exercise its rights of set-off existing at law or under the Credit Agreements,
but in any event, subject to the terms thereof.
Section 2.02 Duty of the Paying Agent.
(a) The Paying Agent shall not be obligated to follow any instructions of
any one or more of the Lenders if: (i) such instructions conflict with the
provisions of this Intercreditor Agreement or any other Loan Document or any
applicable law or (ii) the Paying Agent has not been adequately indemnified to
its satisfaction. Nothing in this Article II shall impair the right of the
Paying Agent in its discretion to take any action, to the extent that the
consent of any of the Lenders is not required or to the extent such action is
not prohibited by the terms hereof, which it deems proper and consistent with
the instructions given by the Lenders as provided for herein. In the absence of
written instructions, containing the appropriate indemnities, from the Lenders
or Required Lenders as appropriate for any particular matter, the Paying Agent
shall have no
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duty to take or refrain from taking any action unless such action or inaction is
explicitly required by the terms of this Intercreditor Agreement.
(b) Beyond its duties expressly provided herein or in any Loan Document and
its duties to account to the Lender Group and/or the Obligors for monies and
other Property received by it hereunder or under any Loan Document, the Paying
Agent shall not have any implied duty to the Lender Group or any Obligor as to
any Property belonging to an Obligor (whether or not the same constitutes
collateral) in its possession or control or in the possession or control of any
of its agents or nominees, or any income thereon or as to the preservation of
rights against prior parties or any other rights pertaining thereto.
Section 2.03 Application of Proceeds.
(a) Upon the occurrence and during the continuance of a Triggering Event,
all Proceeds shall be applied as follows and in accordance with Section 3.03:
(i) First, to the pro rata payment of costs and expenses reasonably
incurred by the Paying Agent, the Agents or any other Lender in connection
with any action taken or proceeding brought, including reasonable legal
expenses and attorneys' fees, and of all Taxes (other than Excluded Taxes)
or assessments.
(ii) Second, any Balance remaining shall be applied to repay the
Indebtedness or held in escrow as specified in Section 3.03.
(iii) Finally, the payment of surplus proceeds, if any, to any Person
that may be lawfully entitled to receive the same, including without
limitation, an Obligor, and in the order of priority specified for by any
Governmental Requirement.
(b) At any time other than after the occurrence and during continuance of a
Triggering Event, payments made to the Lenders may be applied as provided in the
Credit Agreements.
Section 2.04 Payments by Paying Agent. All payments by the Paying Agent
hereunder shall be delivered to the administrative agents under the Credit
Agreements for distribution in the manner set forth therein.
Section 2.05 Notices under Related Documents. The Paying Agent shall
deliver to each Lender promptly upon receipt thereof, duplicates or copies of
all material notices, requests and other instruments received by the Paying
Agent under or pursuant to this Intercreditor Agreement or any Loan Document, to
the extent that the same shall not have been previously furnished to such Lender
pursuant hereto or thereto. Promptly upon obtaining such knowledge, each Lender
agrees: (a) to deliver to the Paying Agent, at the same time it makes delivery
to the Obligors, a copy of any notice of default, notice of intent to accelerate
or notice of acceleration with respect to the Indebtedness subject to this
Intercreditor Agreement; (b) to deliver to the Paying Agent, at the same time it
makes delivery to any other Person, a copy of any notice of the commencement of
any judicial proceeding and a copy of any other notice with respect to the
exercise of remedies with respect to the Indebtedness subject to this
Intercreditor Agreement.
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The Paying Agent agrees to deliver to each Lender any notice or other
communication received by it from any Lender pursuant to clause (a) or (b) of
this Section 2.05.
Section 2.06 Amendments. Amendments, modifications, supplements, waivers,
consents and approvals of or in connection with this Intercreditor Agreement or
any other Loan Document (other than the Credit Agreements) may be effectuated
only upon the written consent of the Required Lenders (and, if the rights or
duties of the Paying Agent and the Agents or any Obligors are affected thereby,
by the Paying Agent and the Agents or the applicable Obligor, as the case may
be). Amendments, modifications, supplements, waivers, consents and approvals of
or in connection with the Credit Agreements shall be effectuated only in
accordance with the terms contained therein.
Section 2.07 Pro Rata Treatment. The Lenders hereby agree among themselves
that (a) prior to the occurrence and continuance of a Triggering Event, each
Lender shall be entitled to receive and retain for its own account scheduled
payments or voluntary prepayments of principal, interest, fees and premium, if
any, all in compliance with the Credit Agreements, and (b) after the occurrence
and during the continuance of a Triggering Event, all Proceeds shall be applied
by the Paying Agent and shared by Lenders in accordance with the respective Pro
Rata Share held by each of them and in accordance with Section 2.03(a). In the
event that any Lender shall obtain payment after the occurrence and during the
continuance of a Triggering Event, whether in whole or in part, from any source
in respect of its portion of the Indebtedness, including without limitation
payments by reason of the exercise of its right of offset, banker's lien,
general lien or counterclaim, such Lender shall promptly pay to the Paying Agent
such amount for application in accordance with Section 2.03(a).
Section 2.08 Voting Procedure. Notwithstanding anything to the contrary
herein, in the Credit Agreements or in any other Loan Document, the Lenders
agree that for purposes of any provision hereof or thereof that requires a vote
of the Required Lenders, each Lender shall have the right to vote independently
of the other Lenders in its Group. When this Intercreditor Agreement requires a
vote of the Required Lenders, the Paying Agent shall poll the Lenders in order
to determine the vote of the Required Lenders (and such vote shall be binding
upon the Lenders who are not among the Required Lenders). The Obligors and the
Lender Group may rely on the Paying Agent with regard to any such vote without
any duty of further inquiry.
Section 2.09 Triggering Event. The occurrence of any of the following shall
constitute a "Triggering Event":
(a) The occurrence and continuance of an Event of Default specified in
Sections 10.01(f), (g), and (h) of the U.S. Credit Agreement as it relates to
the Company or any Restricted Subsidiary, or
(b) The Paying Agent shall have received from either the Administrative
Agent, the Canadian Agent or the Required Lenders, as appropriate, written
advice, which advice shall reference this Section 2.09, (i) that an Event of
Default has occurred and is continuing and (ii) that the unpaid principal amount
of the Notes and all interest accrued and unpaid thereon have been declared to
be then due and payable.
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Section 2.10 Bankruptcy Preferences. If any payment actually received by
any member of the Lender Group is subsequently invalidated, declared to be
fraudulent or preferential or set aside and is required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state, provincial
or Federal law, common law, or equitable cause, then the Paying Agent shall
distribute to such Person from the Balance, exclusive of any amount in the
Escrow Account in accordance with Section 3.03, an amount equal to such payment.
If, due to previous disbursements to the Lender Group pursuant to Section
2.03(a), the Balance then held by the Paying Agent is insufficient for such
purpose, then each other member of the Lender Group shall pay to such Person
upon demand an amount equal to a ratable portion of such payment according to
the aggregate amounts distributed to each member of the Lender Group by the
Paying Agent.
Section 2.11 Property of Obligors. The Lenders agree that all the
provisions of this Intercreditor Agreement shall apply to any and all Properties
and rights of the Obligors or any other Obligor in which the Paying Agent (in
its capacity as such), any Agent or any Lender at anytime acquires a right of
set-off or Lien, whether pursuant to the Loan Documents, the Credit Agreements
or a judgment, including, without limitation, real property or rights in, on or
over real property, notwithstanding any provision to the contrary in any
mortgage, leasehold mortgage or other document purporting to grant or perfect
any Lien in favor of any Lender, any Agent, or the Paying Agent.
Section 2.12 Marshalling. The Paying Agent shall not be required to marshal
any present or future security for (including without limitation any collateral
described in any of the Loan Documents), or guaranties of the Indebtedness or
any part or portion thereof, or to resort to such security or guaranties in any
particular order; and all rights in respect of such securities and guaranties
shall be cumulative and in addition to all other rights, however existing or
arising. To the extent that they lawfully may, each Obligor, Agent and Lender
hereby agrees that it will not invoke any law relating to the marshaling of
collateral which might cause delay or impede the enforcement of the Lender
Group's rights under the Loan Documents or under any other instrument evidencing
any of the Indebtedness or under which any of the Indebtedness is outstanding or
by which any of the Indebtedness is secured or guaranteed.
Section 2.13 Lender Dealings; Good Faith. Nothing contained in this
Intercreditor Agreement shall prevent either Group of Lenders from dealing
directly or negotiating with the other Group for any purpose, including, but not
limited to, the purpose of attempting to reach agreement as to any vote or
proposed vote relating to the Paying Agent's actions hereunder, whether or not
any Triggering Event or other Default or Event of Default has occurred. Each
U.S. Agent and U.S. Lender covenants and agrees with and for the benefit of the
Canadian Agent and each Canadian Lender, and the Canadian Agent and each
Canadian Lender covenants and agrees with and for the benefit of each U.S. Agent
and U.S. Lender, that it will, in taking any action under this Intercreditor
Agreement or directing the Paying Agent to exercise any remedy hereunder or
under any other Loan Document, take such action or make such direction in good
faith and in a commercially reasonable manner and not for the purpose of
hindering, delaying, obstructing or preventing the exercise by the other of its
rights under the Loan Documents.
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ARTICLE III
CALCULATION OF INDEBTEDNESS
Section 3.01 Notice of Amount of Indebtedness. Upon receipt of any Proceeds
to be distributed pursuant to Section 2.03(a)(ii), the Paying Agent shall give
the Lenders notice thereof, and each Lender shall within five (5) Business Days
notify the Paying Agent of the amount of Indebtedness owing to such Lender. Such
notification shall state the amount of its Indebtedness, how much is then due
and owing, and how much is Contingent Indebtedness. Each Lender with Contingent
Indebtedness shall describe the status of such Indebtedness. If requested by the
Paying Agent, each Lender shall demonstrate that the amounts set forth in its
notice are actually owing to such Lender to the satisfaction of the Paying
Agent.
Section 3.02 Escrow Account. Prior to taking any action to enforce any Lien
or remedy under any Loan Document, or requesting cash collateral for the Letters
of Credit or Bankers Acceptances, the Paying Agent shall open an escrow account
(the "Escrow Account") at its banking quarters in Houston, Texas (or such other
city where any successor may maintain banking quarters) designated the "OEI
Collateral Account."
Section 3.03 Handling of Escrow Account. Upon each receipt by the Paying
Agent of Proceeds and after payment therefrom of all items referred to in
Section 2.03(a)(i), remaining Proceeds ("Balance") shall be applied as provided
in this Section 3.03. If at such time, there exists any Indebtedness which is
contingent in amount, including, without limitation, contingent amounts of LC
Exposure, but not including the Acceptance Exposure (such Indebtedness being
"Contingent Indebtedness"), the Paying Agent shall (with the information
provided under Section 3.01) determine the amount of all Indebtedness then
outstanding, including, without limitation, Contingent Indebtedness. The
Balance shall be applied as follows:
(a) If no Contingent Indebtedness is outstanding, then all such Balance
shall be applied to repay or prepay the amount of the Indebtedness then
outstanding until the Indebtedness shall have been paid in full.
(b) If there exists Contingent Indebtedness, the Paying Agent shall (i)
deposit in the Escrow Account a portion of such Balance equal to the Contingent
Indebtedness divided by total Indebtedness (until such time as the amount on
deposit in the Escrow Account equals the maximum amount of the Contingent
Indebtedness), and (ii) apply the remaining Balance to repay or prepay the
amount of the Indebtedness then outstanding until the Indebtedness shall have
been paid in full. Thereafter, any further remaining Balance shall be returned
or applied as provided in Section 2.03(a)(iii).
(c) If at any time Contingent Indebtedness or any part thereof becomes
Indebtedness which is no longer contingent, any funds held in the Escrow Account
up to the amount (or pro rata amount based upon the total amount of remaining
Contingent Indebtedness if the Escrow Amount is less than the amount of the
remaining Contingent Indebtedness) of such Indebtedness which has become fixed
(or pro rata amount based upon the total amount of remaining Contingent
Indebtedness) shall be distributed pro rata to the holders of such previously
Contingent Indebtedness. If all of the fixed Indebtedness has been paid in full
and the Paying Agent determines that the amount of monies held in the Escrow
Account exceeds the sum of the
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Contingent Indebtedness outstanding at such time, such excess shall be returned
or applied as provided in Section 2.03(a)(iii).
Section 3.04 Currency Conversion. To the extent that calculations under
this Intercreditor Agreement involve U.S. and Canadian currency (or any other
currency), the Paying Agent shall, at the time of such calculation, determine
all amounts based on U.S. dollars, using a conversion ratio (the "Conversion
Ratio") determined by it in good faith (the "U.S. $ Amount"). The amount of
distributions of a Lender's Pro Rata Share shall be based upon the U.S. $
Amount, but in the case of a Canadian Lender shall be distributed in and
converted to a Canadian dollar amount calculated by using the Conversion Ratio.
ARTICLE IV
THE PAYING AGENT
Section 4.01 Appointment of Paying Agent. Each Lender hereby designates
Chase Bank of Texas, National Association to act as the Paying Agent for the
Lenders with respect to any collateral pledge under any of the Loan Documents,
the enforcement of any Liens granted thereunder and the collection of Proceeds
following the disposition of any such collateral. Each Lender hereby authorizes
the Paying Agent to designate The Chase Manhattan Bank of Canada to act as the
agent for the Paying Agent on behalf of the Lenders with respect to the Canadian
assets under the Loan Documents. Each Lender hereby authorizes the Paying Agent
to take such action on its behalf under the provisions of this Intercreditor
Agreement and the Loan Documents and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to either Chase
Bank of Texas, National Association, as Administrative Agent, or The Chase
Manhattan Bank of Canada, as Canadian Agent, or required of the Paying Agent by
the terms hereof and such other powers as are reasonably incidental thereto. The
Paying Agent may perform any of its duties hereunder by or through its agents or
employees. The Paying Agent agrees to act as Paying Agent upon the express terms
and conditions contained in this Article IV.
Section 4.02 Nature of Duties of Paying Agent. The Paying Agent shall have
no duties or responsibilities, except those expressly set forth in this
Intercreditor Agreement or any Loan Document. The Paying Agent shall have and
may exercise such powers hereunder and under the Loan Documents as are
specifically delegated to the Paying Agent by the terms hereof or to either
Chase Bank of Texas, National Association, as Administrative Agent, or The Chase
Manhattan Bank of Canada, as Canadian Agent thereunder, together with such
powers as are reasonably incidental thereto. Neither the Paying Agent nor any of
its directors, officers, employees or agents shall be liable to the Lenders for
any action taken or omitted by it as such hereunder or under the Loan Documents,
unless caused solely by its or their gross negligence or willful misconduct. The
duties of the Paying Agent shall be mechanical and administrative in nature; and
the Paying Agent shall not have by reason of this Intercreditor Agreement a
fiduciary relationship in respect of any Lender. Nothing in this Intercreditor
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Paying Agent any Indebtedness in respect of this Intercreditor
Agreement and the other Loan Documents except as expressly set forth herein.
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Section 4.03 Lack of Reliance on the Paying Agent.
(a) Independently and without reliance upon the Paying Agent or any other
Lender, each Lender, to the extent it deems appropriate, has made (i) its own
independent investigation of the financial condition and affairs of the Obligors
based on such documents and information as it has deemed appropriate in
connection with the taking or not taking of any action in connection herewith,
and (ii) its own appraisal of the credit worthiness of the Obligors. Each Lender
also acknowledges that it will, independently and without reliance upon the
Paying Agent or any other Person 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 this Intercreditor Agreement, the
Indebtedness or the Loan Documents. Except as expressly provided in this
Intercreditor Agreement and the other Loan Documents, the Paying Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Obligors or any of the Company's
Subsidiaries which may come into the possession of the Paying Agent or any of
its Affiliates whether now in its possession or in its possession at any time or
times hereafter; and the Paying Agent shall not be required to keep itself
informed as to the performance or observance by any Obligor of this
Intercreditor Agreement, any Loan Document or any other document referred to or
provided for herein or to inspect the Properties or books of any Obligor.
(b) The Paying Agent shall not (i) be responsible to any Lender for any
recitals, statements, information, representations or warranties herein, in any
Loan Document, or in any document, certificate or other writing delivered in
connection herewith or therewith or for the execution, effectiveness,
genuineness, validity, enforceability, collectability, priority or sufficiency
of this Intercreditor Agreement, the Indebtedness or the Loan Documents or the
financial condition of the Obligors; or (ii) be required to make any inquiry
concerning the performance or observance of any of the terms, provisions or
conditions of this Intercreditor Agreement, the Indebtedness or the Loan
Documents, the financial condition of the Obligors, or the existence or possible
existence of any Default or Event of Default.
Section 4.04 Certain Rights of the Paying Agent. If the Paying Agent shall
request instructions from the Lenders with respect to any act or action
(including the failure to act) in connection with this Intercreditor Agreement,
the Indebtedness and the Loan Documents, the Paying Agent shall be entitled to
refrain from such act or taking such action unless and until the Paying Agent
shall have received instructions from the Required Lenders pursuant to the terms
hereof; and the Paying Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Lender shall have any right
of action whatsoever against the Paying Agent as a result of the Paying Agent
acting or refraining from acting under this Intercreditor Agreement or the Loan
Documents in accordance with the written instructions given in accordance with
this Intercreditor Agreement and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all the Lenders. Except for
action expressly required of the Paying Agent pursuant to the terms hereof, the
Paying Agent shall be fully justified in failing or refusing to take any action
hereunder or under the Loan Documents unless it shall first be indemnified to
its satisfaction by the Obligors or the Lenders against any and all liability
and expense which may be incurred by the Paying Agent by reason of taking or
continuing to take any such action. Notwithstanding any other provision of this
Article IV or
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any indemnity or instructions provided by any or all of the Lenders, the Paying
Agent shall not be required to take any action which exposes the Paying Agent to
personal liability or which is contrary to this Intercreditor Agreement, the
Loan Documents or applicable law.
Section 4.05 Reliance by Paying Agent. The Paying Agent shall be entitled
to rely, and shall be fully protected in relying, upon any Note or other
instrument evidencing the Indebtedness, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other documentary, teletransmission or telephone message believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person.
The Paying Agent may consult with independent legal counsel (which shall not be
counsel for the Obligors), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 4.06 PAYING AGENT'S REIMBURSEMENTS AND INDEMNIFICATION. TO THE
EXTENT THE PAYING AGENT IS NOT REIMBURSED BY THE COMPANY OR OCEAN CANADA, EACH
LENDER WILL (WITHOUT DUPLICATION IN THE CASE OF A U.S. LENDER AND ITS AFFILIATED
CANADIAN LENDER) REIMBURSE AND INDEMNIFY THE PAYING AGENT, IN PROPORTION TO ITS
GLOBAL COMMITMENT PERCENTAGE, FOR AND AGAINST ANY AND ALL INDEMNITY MATTERS
WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE PAYING AGENT IN
PERFORMING ITS DUTIES HEREUNDER OR UNDER ANY LOAN DOCUMENT OR OTHERWISE IN
CONNECTION HEREWITH OR THEREWITH, INCLUDING LOSSES OCCURRING FROM THE ORDINARY
AND/OR COMPARATIVE NEGLIGENCE OF THE PAYING AGENT, IN ANY WAY RELATING TO OR
ARISING OUT OF THIS INTERCREDITOR AGREEMENT; PROVIDED THAT NO LENDER SHALL BE
LIABLE FOR ANY PORTION OF SUCH LIABILITIES, INDEBTEDNESS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING
SOLELY FROM THE PAYING AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Section 4.07 The Paying Agent in its Individual Capacity. With respect to
its Indebtedness under the Credit Agreements and its Indebtedness, the Paying
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties specified
herein; and the terms "Lenders", "Required Lenders", or any similar terms shall,
unless the context clearly otherwise indicates, include Chase Bank of Texas,
National Association (or any successor Paying Agent), in its individual capacity
as and to the extent it is a holder of any Note or is an Issuing Bank and not in
its capacity as an Agent or as the Paying Agent. The Paying Agent may accept
deposits from, lend money to, and generally engage in any kind of banking,
trust, financial advisory or other business with the Obligors or any Affiliate
of the Obligors as if it were not performing the duties specified herein, and
may accept fees and other consideration from the Obligors for services in
connection with this Intercreditor Agreement and otherwise without having to
account for the same to the Lenders.
Section 4.08 Creditors as Owners. The Paying Agent may deem and treat each
Lender as the owner of such Lender's Indebtedness for all purposes hereof unless
and until the Paying
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Agent is notified of a change in Lenders pursuant to the terms of Section 12.06
of the U.S. Credit Agreement or Section 12.03 of the Canadian Credit Agreement,
as applicable.
Section 4.09 Successor Paying Agent.
(a) The Paying Agent may resign at any time by giving sixty (60) days prior
written notice thereof to the Lender Group, the Company and Ocean Canada and may
be removed at any time with cause by the Required Lenders, which resignation or
removal shall be effective upon the appointment of a successor to the Paying
Agent. Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Paying Agent. If within thirty (30) days after the
retiring Paying Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Paying Agent, no successor Paying Agent shall have been
so appointed by the Required Lenders and accepted such appointment, then, the
retiring Paying Agent may, on behalf of the Lenders, appoint a successor Paying
Agent, which shall be a bank which maintains an office in the United States of
America, or a commercial bank organized under the laws of the United States of
America or of any State thereof, or any Affiliate of such bank, having a
combined capital and surplus of at least $200,000,000 as of the date of its most
recent financial statements.
(b) Upon the acceptance of any appointment as Paying Agent hereunder by a
successor Paying Agent, such successor Paying Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Paying Agent, and the retiring Paying Agent shall be discharged from
its duties and Indebtedness under this Intercreditor Agreement. After any
retiring Paying Agent's resignation or removal hereunder as Paying Agent, the
provisions of this Intercreditor Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Paying Agent under this
Intercreditor Agreement.
Section 4.10 Employment of Paying Agent and Counsel. The Paying Agent may
execute any of its duties as Paying Agent hereunder or under the Loan Documents
by or through employees, agents, and attorneys-in-fact and shall not be
answerable to the Lenders for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care, provided that the Paying
Agent shall always be obligated to account for moneys or securities received by
it or its authorized agents. The Paying Agent shall be entitled to advice of
independent counsel concerning all matters pertaining to the agency hereby
created and its duties hereunder or under the Loan Documents.
Section 4.11 Independent Action. Each Lender agrees that no Lender or Agent
other than the Paying Agent shall have any right individually to realize upon
any Liens granted by the Loan Documents or to otherwise enforce or exercise any
remedy in respect of the Loan Documents (other than the right of set-off at law
or specified in the Credit Agreements, but in any event, subject to the terms
thereof), it being understood and agreed that such remedies may be exercised
only by the Paying Agent for the ratable benefit of the Lender Group. Each Agent
and Lender further agrees that it shall not individually institute any judicial
action pertaining to the Loan Documents or exercise any other remedy (other than
the right of set-off at law or specified in the Credit Agreements, but in any
event, subject to the terms thereof), pertaining to the Loan Documents, except
with the consent of the Required Lenders.
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ARTICLE V
MISCELLANEOUS
Section 5.01 Authority. The parties hereto represent and warrant that they
have all requisite power to, and have been duly authorized to, enter into this
Intercreditor Agreement.
Section 5.02 Termination. This Intercreditor Agreement shall terminate upon
receipt by the Paying Agent of evidence satisfactory to it of (a) the payment
(or prepayment) in full of the principal of and the premium, if any, and
interest on all Indebtedness, (b) the termination of the Commitments in the
Credit Agreements, and (c) the termination of the Loan Documents pursuant to the
terms of the Credit Agreements.
Section 5.03 Notices, etc. All notices and other communications hereunder
shall be given in writing and shall be given to such Person at its address or
telecopy number as set forth on the signature pages of the Credit Agreements or
such other address or telecopy number such Person may hereafter specify by
notice to the Paying Agent (who shall promptly notify the Obligors and the other
Lenders). Each notice or other communication shall be effective (a) if given by
mail, upon receipt, (b) if given by telecopier during regular business hours,
once such telecopy is transmitted to the telecopy number provided in writing to
the Paying Agent by each Lender and by each Obligor, respectively, or (c) if
given by any other means, upon receipt; provided that notices to the Paying
Agent are not effective until received.
Section 5.04 PAYMENT OF EXPENSES, INDEMNITIES, ETC. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE OBLIGORS SHALL INDEMNIFY THE AGENTS AND THE
LENDERS IN ACCORDANCE WITH THE TERMS OF THE CREDIT AGREEMENTS AND THE OBLIGORS
HEREBY AGREE THAT ALL INDEMNITIES SET FORTH IN THE CREDIT AGREEMENTS SHALL ALSO
RUN IN FAVOR OF THE PAYING AGENT. IF AND TO THE EXTENT THAT THE INDEBTEDNESS OF
THE OBLIGORS UNDER THIS SECTION 5.04 OR UNDER THE RESPECTIVE INDEMNITY
PROVISIONS OF THE CREDIT AGREEMENTS ARE UNENFORCEABLE FOR ANY REASON, THE
OBLIGORS HEREBY AGREE TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND
SATISFACTION OF SUCH INDEBTEDNESS WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. THE
OBLIGORS' INDEBTEDNESS UNDER THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS
INTERCREDITOR AGREEMENT AND THE PAYMENT OF THE INDEBTEDNESS, BUT SHALL TERMINATE
UPON THE TERMINATION OF THE INDEMNITIES CONTAINED IN THE CREDIT AGREEMENTS.
Section 5.05 Applicable Law. THIS INTERCREDITOR AGREEMENT (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.
Section 5.06 Entire Agreement. The Notes, this Intercreditor Agreement and
the other Loan Documents embody the entire agreement and understanding between
the Lenders, the Agents and the Obligors and supersede all prior agreements and
understandings between such
13
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parties relating to the subject matter hereof and thereof. There are no
unwritten oral agreements between the parties.
Section 5.07 Execution in Counterparts. This Intercreditor Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Any signature page of a counterpart may be detached
therefrom without impairing the legal effect of the signatures thereon and
attached to another counterpart identical in form thereto but having attached to
it one or more additional signature pages signed by other parties.
Section 5.08 Amendment of Defined Instruments. Unless the context otherwise
requires or unless otherwise provided herein, the terms defined in this
Intercreditor Agreement which refer to a particular agreement, instrument or
document also refer to and include all renewals, extensions, increases,
modifications, supplements, amendments, and restatements of such agreement,
instrument or document; provided that nothing contained in this section shall be
construed to authorize any such renewal, extension, increases, modification,
supplement, amendment or restatement.
Section 5.09 References and Titles. All references in this Intercreditor
Agreement to Schedules, articles, sections, subsections and other subdivisions
refer to the Schedules, articles, sections, subsections and other subdivisions
of this Intercreditor Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions.
Section 5.10 Severability. If any term or provision of this Intercreditor
Agreement shall be determined to be illegal or unenforceable, all other terms
and provisions of this Intercreditor Agreement shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by applicable
law.
Section 5.11 Conflict with Loan Documents. If there is a conflict between
the terms and provisions contained in the Credit Agreements, the Notes, any
instrument evidencing the Indebtedness or any Loan Document with the terms and
provisions contained herein, the terms and provisions contained in this
Intercreditor Agreement shall control.
Section 5.12 Limitation by Law. All rights, remedies and powers provided
herein may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law; and all the provisions hereof are
intended (a) to be subject to all applicable mandatory provisions of law which
may be controlling and (b) to be limited to the extent necessary so that they
will not render this Intercreditor Agreement or any Loan Document invalid under
the provisions of any applicable law.
Section 5.13 Benefit of Agreement; Limitation on Assignment. The terms and
provisions of this Intercreditor Agreement shall be binding upon and inure to
the benefit of the Agents and each Lender and their respective successors and
assigns. Except as stated in the last sentence of Section 2.08 hereof, the terms
and provisions of this Intercreditor Agreement shall not inure to the benefit
of, nor be relied upon by, the Obligors or their successors or assigns. No
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Lender shall assign, transfer or sell any part of its portion of the
Indebtedness, unless in connection with such assignment, transfer or sale, such
assignee, transferee or purchaser shall first become a party to this
Intercreditor Agreement.
15
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IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Intercreditor Agreement as of the date first
above written.
LENDERS AND AGENTS:
Chase Bank of Texas, National Association, individually
and as Administrative Agent
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
Morgan Guaranty Trust Company of New York, individually
and as Syndication Agent
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
Barclays Bank PLC, individually and as Documentation
Agent
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
16
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ABN AMRO BANK, N.V., individually and as Co-Agent
By:____________________________________________________
Charles W. Randall
Senior Vice President
By:____________________________________________________
Cheryl Lipshutz
Senior Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
individually and as Co-Agent
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
Paribas, individually and as Co-Agent
By:____________________________________________________
Doug Liftman
Vice President
By:____________________________________________________
Barton D. Schouest
Managing Director
NATIONSBANK, N.A., individually and as Co-Agent
By:____________________________________________________
Paul Squires
Senior Vice President
17
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SOCIETE GENERALE, SOUTHWEST AGENCY, individually and as
Co-Agent
By:____________________________________________________
Richard Erbert
Vice President
WELLS FARGO BANK (TEXAS), N.A., individually and as Co-
Agent
By:____________________________________________________
Alan Alexander
Vice President - Energy Department
THE CHASE MANHATTAN BANK OF CANADA, individually and as
Canadian Agent
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
Toronto Dominion Bank
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
18
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Chase Bank of Texas, National Association, as Paying
Agent
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
Hibernia National Bank
By:____________________________________________________
Colleen McEvoy
Vice President
TORONTO DOMINION (TEXAS) INC.
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
U.S. Bank National Association
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
Bank One, Texas, N.A.
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
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<PAGE>
Credit Suisse First Boston
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
First National Bank of Commerce
By:____________________________________________________
David R. Reid
Senior Vice President
BANK OF NEW YORK
By:____________________________________________________
Name:__________________________________________________
Title:_________________________________________________
Southwest Bank of Texas, N.A.
By:____________________________________________________
A. Stephen Kennedy
Vice President/Manager Energy Lending
20
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The Obligors hereby execute this Intercreditor Agreement to evidence their
agreement that:
1. The Obligors shall be bound by all of the terms and provisions of this
Intercreditor Agreement.
2. The Obligors acknowledge and agree that the terms of this Intercreditor
Agreement shall control over the terms of the Credit Agreements, the Notes, the
instruments evidencing the Indebtedness and the Loan Documents to the extent of
any conflict relating to the relative rights of the Agents and the Lenders.
3. THE INDEMNITY AND REIMBURSEMENT PROVISIONS CONTAINED IN SECTION 5.04
SHALL APPLY TO ALL MATTERS UNDER THIS INTERCREDITOR AGREEMENT AND THE OBLIGORS
AGREE TO INDEMNIFY AND REIMBURSE THE PAYING AGENT IN ACCORDANCE WITH THE TERMS
THEREOF.
4. Except as stated in the last sentence of Section 2.08 hereof, the terms
and provisions of this Intercreditor Agreement shall inure solely to the benefit
of the Agents, each Lender and their respective successors and assigns and the
terms and provisions of this Intercreditor Agreement shall not inure to the
benefit of nor be enforceable by the Obligors or their successors or assigns.
This Intercreditor Agreement may be amended as provided herein without the
necessity of the Obligors joining in any such amendment, provided, that the
Obligors shall not be bound by any amendment which would have the effect of
increasing their Indebtedness and indemnities hereunder or materially affecting
their rights or duties under the Loan Documents unless they shall have consented
to such amendment.
5. Each Obligor at its expense will execute, acknowledge and deliver all
such agreements and instruments and take all such action as the Paying Agent or
the Required Lenders from time to time may reasonably request in order further
to effectuate the purposes of this Intercreditor Agreement and to carry out the
terms hereof.
OBLIGORS: OCEAN ENERGY, INC., a Delaware corporation
By:____________________________________________________
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
21
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OCEAN ENERGY RESOURCES CANADA, LTD.
By:____________________________________________________
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
OCEAN ENERGY, INC., a Louisiana corporation
By:____________________________________________________
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
22
<PAGE>
EXHIBIT 10.6
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of July 8, 1998
Among
OCEAN ENERGY RESOURCES CANADA, LTD.,
as the Company,
THE CHASE MANHATTAN BANK OF CANADA,
as Administrative Agent,
and
THE LENDERS PARTIES HERETO
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Article I: Definitions and Accounting Matters................................................ 1
Section 1.01 Terms Defined Recitals....................................................... 1
Section 1.02 Certain Defined Terms........................................................ 1
Section 1.03 Other Defined Terms.......................................................... 5
Section 1.04 Accounting Terms and Determinations.......................................... 5
Article II: Commitments...................................................................... 5
Section 2.01 Loans and Bankers' Acceptances............................................... 5
Section 2.02 Borrowings, Renewals, Conversions, and Issuances............................. 7
Section 2.03 Changes of Commitments....................................................... 8
Section 2.04 Commitment Fee and Other Fees................................................ 9
Section 2.05 Lending Offices.............................................................. 9
Section 2.06 Several Obligations.......................................................... 9
Section 2.07 Notes........................................................................ 9
Section 2.08 Prepayments.................................................................. 9
Section 2.09 Available Canadian Subcommitment............................................. 10
Section 2.10 Acceptance Date Procedure.................................................... 11
Section 2.11 Purchase of Bankers' Acceptances............................................. 11
Section 2.12 Payment of Bankers' Acceptances.............................................. 11
Article III: Payments of Principal and Interest.............................................. 12
Section 3.01 Repayment of Loans........................................................... 12
Section 3.02 Interest..................................................................... 12
Article IV: Payments; Pro Rata Treatment; Computations; Etc.................................. 12
Section 4.01 Payments..................................................................... 12
Section 4.02 Pro Rata Treatment........................................................... 13
Section 4.03 Computations................................................................. 13
Section 4.04 Non-receipt of Funds by the Administrative Agent............................. 13
Section 4.05 Sharing of Payments, Etc..................................................... 14
Section 4.06 Interest Act (Canada)........................................................ 15
Article V: Yield Protection and Illegality................................................... 15
Section 5.01 Additional Costs............................................................. 15
Section 5.02 Illegality................................................................... 16
Section 5.03 Additional Cost in Respect of Tax............................................ 16
Section 5.04 Base Rate Loans pursuant to Sections 5.01 and 5.02........................... 17
Section 5.05 Compensation................................................................. 17
Section 5.06 Avoidance of Taxes and Additional Costs...................................... 18
Section 5.07 Limitation on Right to Compensation.......................................... 18
Section 5.08 Compensation Procedure....................................................... 18
</TABLE>
i
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<TABLE>
<CAPTION>
Page
<S> <C>
Article VI: Conditions Precedent............................................................. 19
Section 6.01 Effectiveness................................................................ 19
Section 6.02 Subsequent Borrowings........................................................ 20
Article VII: Representations and Warranties.................................................. 21
Section 7.01 Incorporation By Reference................................................... 21
Article VIII: Affirmative Covenants.......................................................... 21
Section 8.01 Incorporation By Reference................................................... 21
Article IX: Negative Covenants............................................................... 22
Section 9.01 Affirmation of Certain Covenants in Article IX of the U. S. Credit Agreement. 22
Article X: Events of Default................................................................. 22
Section 10.01 Events of Default............................................................ 22
Article XI: The Administrative Agent......................................................... 23
Section 11.01 Incorporation by Reference................................................... 23
Article XII: Miscellaneous................................................................... 23
Section 12.01 Incorporation by Reference................................................... 23
Section 12.02 Amendments, Etc.............................................................. 23
Section 12.03 Assignments and Participations............................................... 23
Section 12.04 Survival..................................................................... 25
Section 12.05 GOVERNING LAW; SUBMISSION TO JURISDICTION.................................... 25
Section 12.06 Effectiveness................................................................ 26
Section 12.07 Interpretation of Loan Documents............................................. 26
</TABLE>
Exhibit A - Form of Note
Exhibit B - Form of Bankers' Acceptances
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Borrowing Request
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This AMENDED AND RESTATED CREDIT AGREEMENT dated as of July 8, 1998 is
among: OCEAN ENERGY RESOURCES CANADA, LTD., a company continued under the laws
of the Province of British Columbia (the "Company"); each of the lenders that is
a party hereto (individually, a "Lender" and, collectively, the "Lenders"); and
THE CHASE MANHATTAN BANK OF CANADA, as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the
"Administrative Agent").
RECITALS
A. The Company, the Administrative Agent and the lenders parties thereto
entered into that certain Credit Agreement dated as of March 27, 1998 (such
credit agreement, as amended, the "Prior Credit Agreement").
B. The Company has requested that the Administrative Agent and the Lenders
amend and restate the Prior Credit Agreement and make credit available to and on
behalf of the Company on the terms and conditions stated herein.
C. The Administrative Agent and the Lenders, subject to the terms and
conditions stated herein, are willing to make such credit facilities available.
D. Subject to the terms and conditions set forth herein, the Administrative
Agent and the Lenders have agreed to make certain credit available to the
Company; and accordingly, the parties hereto agree as follows:
ARTICLE I: DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED 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 (all terms defined in this
Article I or in other provisions of this Agreement in the singular to have the
same meanings when used in the plural and vice versa):
"Acceptance Date" shall mean any Business Day on which a Bankers'
Acceptance is issued and accepted by the Accepting Lender.
"Acceptance Exposure" means, at any time, the aggregate face amount of all
Bankers' Acceptances outstanding at such time for which the Company has not yet
reimbursed the Accepting Lenders.
"Accepting Lender" shall mean, as to any Bankers' Acceptance, the
Administrative Agent or any other Lender which has accepted such Bankers'
Acceptance pursuant to the terms of this Agreement.
"Additional Costs" shall have the meaning assigned to that term in
Section 5.01.
<PAGE>
"Aggregate Commitments" at any time shall equal the sum of the Commitments
of all of the Lenders.
"Affected Loans" shall have the meaning assigned to that term in
Section 5.04.
"Agreement" shall mean this Amended and Restated Credit Agreement, as
amended, supplemented or modified from time to time.
"Allocated Canadian Borrowing Base" shall mean the amount designated as
such by OEI-Delaware under Section 2.09 of the U. S. Credit Agreement.
"Applicable Lending Office" shall mean, for each Lender, the lending office
of such Lender (or an Affiliate of such Lender) located in Canada designated on
the signature pages hereof or such other offices of such Lender (or of an
Affiliate of such Lender) located in Canada as such Lender may from time to time
specify to the Administrative Agent and the Company as the office at which its
Loans are to be made and maintained and Bankers' Acceptances are to be accepted.
"Applicable Margin" shall mean:
(a) with respect to Base Rate Loans: the Applicable Margin for Base Rate
Loans that are Conventional Loans under the U. S. Credit Agreement plus the then
applicable Facility Fee Rate; provided, that if at any time, the Applicable
Margin for Base Rate Loans plus the Base Rate is less than the Applicable Margin
for Bankers' Acceptances plus the Discount Rate for Bankers' Acceptances having
an Interest Period of 30 days, the Applicable Margin for Base Rate Loans shall
be increased so that the Applicable Margin for Base Rate Loans plus the Base
Rate will be not less than the Applicable Margin for Bankers' Acceptances plus
the Discount Rate for Bankers' Acceptances having an Interest Period of 30 days;
and
(b) with respect to Bankers' Acceptances: the Applicable Margin for
Eurodollar Loans that are Conventional Loans under the U. S. Credit Agreement
plus the then applicable Facility Fee Rate.
"Assignment and Acceptance" shall have the meaning assigned such term in
Section 12.03(b).
"Available Proceeds" shall mean the face amount of the Bankers' Acceptance
less the applicable Discount Amount and the Stamping Fee.
"Bankers' Acceptance" shall mean a bill of exchange drawn by the Company in
Canadian Dollars, duly completed and accepted by a Lender, in a form customarily
used by the Administrative Agent in creating bankers' acceptances and which
otherwise meets any requirements of the Administrative Agent.
"Base Rate" shall mean, with respect to any Base Rate Loan, for any day,
the rate equal to 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.
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<PAGE>
"Base Rate Loans" shall mean loans which bear interest at the Base Rate.
"Borrowing" shall mean a utilization of the Commitments by way of Loans or
by the issuance, acceptance and purchase of Bankers' Acceptances.
"Business Day" shall mean any day on which commercial banks are not
authorized or required to close in Toronto, Canada or Calgary, Canada.
"Chase" shall mean The Chase Manhattan Bank of Canada.
"Commitment" shall mean, as to each Lender, the obligation of such Lender
to make Loans to the Company or accept Bankers' Acceptances from the Company in
an aggregate amount at any one time outstanding equal to the amount set forth
opposite such Lender's name on Annex I to the U. S. Credit Agreement under the
caption "Canadian Subcommitment" (as the same may be reduced from time to time
pursuant to Section 2.03 or modified pursuant to Assignment and Acceptances
pursuant to Section 12.03(b)).
"Commitment Percentage" shall mean, as to any Lender, the percentage of the
Commitments to be provided by such Lender under this Agreement as indicated on
Annex I to the U. S. Credit Agreement as the Canadian Commitment Percentage, as
modified from time to time to reflect any assignments permitted by
Section 12.03(b), such percentage being the quotient of such Lender's
Commitment divided by the aggregate Commitments for all Lenders.
"Discount Amount" shall mean, with respect to any Bankers' Acceptance, an
amount equal to the face amount thereof multiplied by the Discount Rate.
"Discount Rate" shall mean at any time, with respect to any Bankers'
Acceptance, the then current bid rate in effect quoted by the Administrative
Agent on such day, which shall be a Business Day, for purchase by the
Administrative Agent of bankers' acceptances of the same face amount and having
maturities on the same date as the maturity date of such Bankers' Acceptance.
"Dollars" and "$" shall mean Canadian Dollars.
"Effective Date" shall have the meaning assigned such term in
Section 12.06.
"Guarantors" shall mean OEI-Delaware and OEI-Louisiana.
"Guaranty Agreements" shall mean an agreement executed by each of the
Guarantors in form and substance satisfactory to the Administrative Agent
guarantying payment of the Indebtedness.
"Indebtedness" shall mean any and all amounts owing or to be owing by the
Company or the Guarantors to the Administrative Agent, and/or the Lenders in
connection with the Notes, any Bankers' Acceptance or any other Loan Document,
including this Agreement and all renewals, extensions and/or rearrangements
thereof.
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"Insolvency Event" shall mean any of the Events of Default described in
Section 10.01(f), (g) or (h) of the U. S. Credit Agreement.
"Interest Period" shall mean, with respect to any Bankers' Acceptances, the
period (which shall be 30 days, 60 days, 90 days, and subject to availability,
180 days, or such other period longer than 90 days requested by the Company and
agreed to by all the Lenders) commencing on the date such Bankers' Acceptance is
issued, accepted and purchased.
Notwithstanding the foregoing (unless otherwise agreed to by the Company and all
of the Lenders) each Interest Period which would otherwise end on a day which is
not a Business Day shall end on the next succeeding Business Day.
"Loan Documents" shall mean this Agreement, the Notes, the Bankers'
Acceptances, the Guaranty Agreements, and all instruments, documents and
agreements which are "Loan Documents" under the U. S. Credit Agreement, and any
and all other agreements or instruments now or hereafter executed and delivered
by OEI-Delaware or any of its Subsidiaries, including 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 pursuant to this
Agreement) in connection with, or as security for the payment or performance of,
the Notes or this Agreement, as such agreements may be amended or supplemented
from time to time.
"Loans" shall have the meaning assigned to that term in Section 2.01.
"Note" shall mean a promissory note issued by the Company described in
Section 2.07(a) payable to the order of any Lender and being substantially in
the form of Exhibit A evidencing the aggregate Loans to the Company by such
Lender.
"OEI-Delaware" shall mean Ocean Energy, Inc., a Delaware corporation, as
successor by merger to United Meridian Corporation.
"OEI-Louisiana" shall mean Ocean Energy, Inc., a Louisiana corporation, as
successor by merger to UMC Petroleum Corporation.
"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 for loans in Canadian Dollars made in Canada. Such rate is set by the
Administrative Agent as a general reference rate of interest, taking into
account such factors as the Administrative Agent 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 and Chase in Canada, presently located in Toronto, Ontario, Canada.
"Regulatory Change" shall mean, with respect to any Lender, any change
after the date of this Agreement in United States Federal, Canadian, state,
provincial, or foreign law or regulations or the adoption or making after such
date of any interpretations, directives or requests
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applying to a class of lenders or insurance companies (including such Lender or
its Applicable Lending Office) of or under any United States Federal, Canadian,
state, provincial 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 Payment" shall have the meaning assigned to that term in
Section 4.04.
"Stamping Fee" shall mean, with respect to any Bankers' Acceptance, an
amount equal to the face amount thereof multiplied by the Applicable Margin for
Bankers' Acceptances.
"U.S. Administrative Agent" shall mean Chase Bank of Texas, National
Association as Administrative Agent for the U.S. Lenders, together with its
successors in such capacity.
"U.S. Commitments" shall mean the "Commitments" as defined in the U. S.
Credit Agreement.
"U.S. Indebtedness" shall mean all Indebtedness as defined in the U. S.
Credit Agreement.
"U.S. Lenders" shall mean the "Lenders" as defined in the U. S. Credit
Agreement.
"U.S. Credit Agreement" shall mean that certain Amended and Restated Global
Credit Agreement of even date herewith, among OEI-Delaware, as borrower, Chase
Bank of Texas, National Association, as Administrative Agent, Morgan 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 Wells Fargo Bank (Texas), N.A., as Co-Agents, and the lenders parties
thereto, as amended, restated, supplemented or modified from time to time.
SECTION 1.03 OTHER DEFINED TERMS. All other capitalized terms not defined
herein shall have the meanings assigned such terms in the U. S. Credit
Agreement.
SECTION 1.04 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 the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with Canadian generally accepted accounting
principles as in effect, applied on a basis consistent with the audited
consolidated financial statements of the Company and the consolidated
Subsidiaries referred to in Section 7.02 (except for changes concurred with by
the Company's independent public accountants).
ARTICLE II: COMMITMENTS
SECTION 2.01 LOANS AND BANKERS' ACCEPTANCES.
(a) LOANS. Each Lender severally agrees, on the terms and conditions of
this Agreement, to make to the Company during the period from and including the
Effective Date to and including the Termination Date, revolving credit loans
(the "Loans") in an aggregate
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principal amount at any one time out-standing up to, but not exceeding, the
amount of such Lender's Commitment as then in effect; provided, that the
aggregate principal amount of (i) all Loans made by each Lender shall not exceed
(1) such Lender's Commitment Percentage of the Available Canadian Subcommitment
minus (2) such Lender's Acceptance Exposure and (ii) all Loans made by all
Lenders hereunder at any one time outstanding shall not exceed the Available
Canadian Subcommitment, as then in effect, minus the aggregate amount of
Acceptance Exposure for all Lenders. 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 Commitments, as
then in effect.
(b) BANKERS' ACCEPTANCES. Each Lender severally agrees, on the terms and
conditions of this Agreement, to accept and, immediately thereafter, purchase
Bankers' Acceptances from the Company from and after the Effective Date with a
maturity or Interest Period not beyond the Termination Date in an aggregate
amount at any one time outstanding up to, but not exceeding, the amount of such
Lenders' Commitment as then in effect; provided, that the Acceptance Exposure at
any one time (i) for each Lender shall not exceed (1) such Lender's Commitment
Percentage of the Available Canadian Subcommitment minus (2) such Lender's
outstanding Loans and (ii) for all Lenders shall not exceed the Available
Canadian Subcommitment, as then in effect, minus the aggregate amount of all
outstanding Loans.
(c) DELIVERY OF BANKERS' ACCEPTANCES. Upon execution of this Agreement, the
Company shall deliver to each Lender bills of exchange, in the form for Bankers'
Acceptances of such Lender, executed in blank in sufficient quantity and
thereafter shall, from time to time upon request of the Administrative Agent,
deliver to the Lenders further quantities of such bills of exchange (on the
Administrative Agent's forms) so executed, and the Lenders shall hold such bills
of exchange in safekeeping. The present form of Bankers' Acceptances of each
Lender is set out in Exhibit B.
(d) SAFEKEEPING OF BANKERS' ACCEPTANCES. The bills of exchange so executed
in blank and delivered to each Lender shall be held in safekeeping in the vault
of one of each such Lender's branches. The standard of care that each Lender
shall maintain in its safekeeping of such bills of exchange shall be at least as
high as that maintained by such Lender in the safekeeping of its own securities.
Each Lender shall indemnify and hold and save harmless the Company from loss or
damage resulting from the failure of such Lender to maintain such standard of
care.
(e) LOANS UNDER PRIOR CREDIT AGREEMENT. On the Effective Date:
(i) the Company shall pay all accrued and unpaid commitment fees
outstanding under the Prior Credit Agreement for the account of each
"Lender" under the Prior Credit Agreement;
(ii) each "Base Rate Loan" and each "Bankers' Acceptance" under the
Prior Credit Agreement shall be deemed to be repaid with the proceeds of a
new Base Rate Loan under this Agreement; and
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(iii) the Prior Credit Agreement and the commitments thereunder shall
be superseded by this Agreement and shall be amended and restated as set
forth herein.
SECTION 2.02 BORROWINGS, RENEWALS, CONVERSIONS, AND ISSUANCES.
(a) BORROWINGS. The Company shall give the Administrative Agent (which
shall promptly notify the Lenders) advance notice as hereinafter provided of
each Borrowing, renewal, and conversion, which shall specify the aggregate
amount of such Borrowing, and the date (which shall be a Business Day) of the
Borrowing to be borrowed, renewed or converted, all of which must be reasonably
acceptable to the Administrative Agent, and in the case of Bankers' Acceptances,
all details of the proposed issue, specifying the aggregate amount of Bankers'
Acceptances to be accepted and purchased by the Lenders and the duration of the
Interest Period therefor. Promptly following such notice the Administrative
Agent will notify the Company and the Lenders of the Discount Rate for the
specified Acceptance Date.
(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
Bankers' Acceptances (as part of the same Borrowing) shall be in aggregate
amounts among all Lenders of not less than $1,000,000 and in whole multiples of
$100,000.
(c) NOTICES, ETC. FOR LOANS. All Borrowings, renewals and conversions shall
require advance written notice from the Company to the Administrative Agent, in
the form of Exhibit D, 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 and shall be
received by the Administrative Agent not later than (i) in the case of a Base
Rate Loan, 11:00 a.m. Toronto time on the date of such Borrowing, renewal or
conversion; and (ii) in the case of Bankers' Acceptances, 12:00 noon Toronto
time on a day that is not less than one (1) Business Day prior to the date of
such Borrowing, renewal or conversion. Not later than 12:00 noon Toronto time on
the date specified for each Borrowing hereunder or each request for the
acceptance and purchase of a Bankers' Acceptance, each Lender shall make
available the amount of the Loan or the Available Proceeds of the Bankers'
Acceptance to be made by such Lender on such date to the Administrative Agent,
at account number 219274 maintained by the Administrative Agent at The Royal
Bank of Canada, Correspondent Banking Division, Toronto, Canada, 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.
(d) REPLACEMENT/RENEWAL ACCEPTANCES. Subject to the terms of this
Agreement, the Company may elect to cause a new replacement Bankers' Acceptance
to be issued, accepted and purchased to replace all or any part of any Bankers'
Acceptance at the maturity thereof by giving one (1) Business Day's advance
notice to the Administrative Agent of such election, specifying the amount of
such new Bankers' Acceptance 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 Bankers' Acceptance to a Base Rate Loan as provided in
Section 2.12(b). All or any part of any Bankers' Acceptance may be renewed as
provided herein, provided that (i) any renewal Bankers'
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Acceptance shall meet all requirements for Bankers' Acceptances hereunder, (ii)
no Default shall have occurred and be continuing and (iii) the Company shall
have paid to the Administrative Agent for the account of Lenders an amount equal
to the difference between the amount due on the maturing Bankers' Acceptance and
the Available Proceeds of the new Bankers' Acceptance. If a Default shall have
occurred and be continuing, each Bankers' Acceptance shall be converted to a
Base Rate Loan on the last day of the Interest Period applicable thereto unless
the Termination Date has occurred in which event all sums due thereon shall be
immediately due and payable.
(e) CONVERSION OPTIONS. The Company may elect to convert any Bankers'
Acceptance 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. If no Default shall have occurred and be continuing, subject to the
terms of this Agreement, the Company may elect to convert all or any part of a
Base Rate Loan at any time and from time to time to a Bankers' Acceptance by
giving one (1) Business Day's advance notice to the Administrative Agent of such
election; provided that any conversion of any Base Rate Loan into a Bankers'
Acceptance shall be in an amount not less than $1,000,000 in the aggregate for
all Lenders and in whole multiples of $100,000.
(f) PRO RATA TREATMENT. Unless otherwise agreed among the Lenders, all
Loans shall be made by all Lenders pro rata relative to their respective
Commitment Percentage and the aggregate amount of all Bankers' Acceptances
issued hereunder shall be issued pro rata by all Lenders relative to their
respective Commitment Percentage, rounded, upwards or downwards, as the case may
be, to the nearest $100,000.
SECTION 2.03 CHANGES OF COMMITMENTS.
(a) EXTENSION OF TERMINATION DATE. All of the Lenders and the U.S. Lenders
may extend the Termination Date as set forth in Section 2.03(a) of the U.S.
Credit Agreement, which section is hereby incorporated by reference into this
Agreement and made a part of this Agreement to the same extent as if set forth
in full herein, except that for purposes hereof, references therein to "Lenders"
and "Canadian Lenders" shall be deemed to be references to "U.S. Lenders" and
"Lenders," respectively, and, as appropriate in the context, other corresponding
changes shall be made, mutatis mutandis.
(b) OPTIONAL REDUCTION. The Company shall have the right to terminate or to
reduce the amount of the Commitments at any time or from time to time upon not
less than one (1) Business Day's prior 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), and shall be irrevocable and effective only upon
receipt by the Administrative Agent.
(c) REINSTATEMENT. Other than increases pursuant to Section 2.09, the
Commitments once terminated or reduced may not be reinstated. The amount of the
Available Canadian Subcommitment may increase or decrease from time to time in
accordance with the terms of this Agreement, including but not limited to,
Section 2.09.
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SECTION 2.04 COMMITMENT FEE AND OTHER FEES. The Company shall pay to the
Administrative Agent for the account of the Lenders an aggregate commitment fee
on the daily average unused amount of such Lender's Available Canadian
Subcommitment for the period from and including the Effective Date of this
Agreement to and including the Termination Date, at a rate per annum equal to
the Facility Fee Rate. The commitment fee shall be payable in arrears on each
Quarterly Date and on the Termination Date.
SECTION 2.05 LENDING OFFICES. The Loans made and Bankers' Acceptances
accepted and purchased by each Lender shall be made and maintained at such
Lender's Applicable Lending Office, which shall be located in Canada.
SECTION 2.06 SEVERAL OBLIGATIONS. The failure of any Lender to make any
funds available in connection with any Borrowing to be funded by such Lender on
the date specified therefor shall not relieve any other Lender of its obligation
to provide such funds on such date, but neither the Administrative Agent nor any
Lender shall be responsible for the failure of any other Lender to provide funds
to be provided by such other Lender.
SECTION 2.07 NOTES.
(a) SINGLE PROMISSORY NOTE. The Loans made by each Lender shall be
evidenced by a single promissory note of the Company in substantially the form
of Exhibit A hereto, dated as of the Effective Date or such later date upon a
permitted assignment of all or any portion of such Note, 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, interest
rate and maturity date of each Loan made by each Lender, and all payments made
on account of the principal thereof, shall be recorded by such Lender on its
books and, prior to any transfer of the Note held by it, endorsed by such Lender
on the schedule attached to such Note or any continuation thereof.
(b) NO RIGHT TO SUBDIVIDE. No Lender shall be entitled to have its Note
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 Note pursuant to
Section 12.03(b).
SECTION 2.08 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Company may prepay any Loans or cash
collateralize Bankers' Acceptances on any Business Day upon notice to the
Administrative Agent (which shall promptly notify the Lenders), which notice
shall be given by the Company not later than 12:00 noon Toronto time on such
Business Day, shall specify the amount of the prepayment (which shall be not
less than $1,000,000 or the remaining balance of Base Rate Loans outstanding, if
less) and shall be irrevocable and effective only upon receipt by the
Administrative Agent, provided that interest on the principal prepaid on any
Loan, accrued to the prepayment date, shall be paid on the prepayment date. Any
prepayment of any Bankers' Acceptances shall be subject to the provisions of
Sections 2.08(d), 2.08(e) and 5.05.
(b) MANDATORY PREPAYMENT UPON REDUCTION OF COMMITMENT. If, after giving
effect to any termination or reduction of the Commitments pursuant to
Section 2.03, the sum of
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the out-standing aggregate principal amount of the Loans and the Acceptance
Exposure exceeds the aggregate amount of the Commitments, then the Company shall
on the date of such termination or reduction pay or prepay the amount of such
excess amount for application first, towards reduction of the outstanding
principal balance of the Notes and then, if necessary, by cash collateralizing
(or prepaying if acceptable to the holder thereof) Bankers' Acceptances, if any,
then outstanding subject to the provisions of Section 2.08(d). 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) NO PENALTY OR PREMIUMS. Subject to compensation requirements of
Section 5.05 hereof, all prepayments shall be without premium or penalty.
(d) PRO RATA TREATMENT. Without duplication of Section 5.05, but subject to
Section 2.08(e), any prepayment of Bankers' Acceptances shall be in an amount
equal to the full face amount of any Bankers' Acceptance so prepaid (less any
unearned Discount Amount and Stamping Fee), and be pro rata among all Lenders
relative to their respective Commitments.
(e) BANKERS' ACCEPTANCES. A Bankers' Acceptance may only be repaid on the
last day of its Interest Period unless consented to by the holder thereof. In
lieu of prepayment of a Bankers' Acceptance, the Company may cash collateralize
a Bankers' Acceptance by delivery to the Administrative Agent for distribution
to each Lender such discounted amount in respect of such Bankers' Acceptance as
the Administrative Agent, acting reasonably, advises the Lender will enable the
Lender, based upon the rate of return the Lender will be able to earn on the
funds so received, to pay the full face amount of such Bankers' Acceptance on
the last day of such Interest Period.
SECTION 2.09 AVAILABLE CANADIAN SUBCOMMITMENT.
(a) ALLOCATED CANADIAN BORROWING BASE. The Allocated Canadian Borrowing
Base in effect from time to time shall represent the maximum amount of Loans and
Bankers' Acceptances that the Lenders will loan or accept to or for the Company
at any one time prior to the Termination Date. On the Effective Date, the
Allocated Canadian Borrowing Base shall be U.S. $7,000,000.
(b) REALLOCATION. The Company, the Administrative Agent and the Lenders
agree that OEI-Delaware shall have the right to request that the Allocated
Canadian Borrowing Base be increased or decreased, and the Allocated U.S.
Borrowing Base be decreased or increased, respectively, in a corresponding
amount, all as more particularly set forth in Section 2.09(a) of the U.S. Credit
Agreement, which provisions are hereby incorporated by reference into this
Agreement and made a part of this Agreement to the same extent as if set forth
in full herein, except that for purposes hereof, references therein to "Lenders"
and "Canadian Lenders" shall be deemed to be references to "U.S. Lenders" and
"Lenders," respectively, and, as appropriate in the context, other corresponding
changes shall be made, mutatis mutandis.
(c) NO CHANGE TO GLOBAL COMMITMENT. The Company, the Administrative Agent
and the Lenders agree that reallocations of the Allocated U. S. Borrowing Base
and Allocated
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Canadian Borrowing Base shall not, without the prior written agreement of all
the U.S. Lenders, the Lenders and OEI-Delaware, affect the Global Commitment
Percentage.
SECTION 2.10 ACCEPTANCE DATE PROCEDURE. On the Acceptance Date, the
following provisions shall apply:
(a) On or before 10:30 a.m. Toronto time on the Acceptance Date, the
Administrative Agent shall promptly determine the Discount Rate and notify each
Lender as to:
(i) the Discount Rate;
(ii) the face amount of the Bankers' Acceptances to be purchased by
such Lender on such Acceptance Date;
(iii) the amount of the Stamping Fee applicable to those Bankers'
Acceptances to be accepted and purchased by such Lender on such Acceptance
Date, such Lender being authorized by the Company to collect the Discount
Amount and the Stamping Fee out of the proceeds of the Bankers' Acceptances
upon the Lender's acceptance and purchase thereof;
(iv) the Available Proceeds by subtracting the Discount Amount and the
Stamping Fee mentioned in subsection (iii) from the face amount mentioned
in subsection (ii).
(b) As provided in Section 2.02(c), not later than 2:00 p.m. Toronto time
that same day, each Lender shall make available to the Administrative Agent its
Available Proceeds and the Administrative Agent shall make the Available
Proceeds available to the Company.
SECTION 2.11 PURCHASE OF BANKERS' ACCEPTANCES. The Lenders shall, on the
Acceptance Date, accept the Bankers' Acceptances, by inserting the appropriate
face amount, Acceptance Date and maturity date thereof in accordance with the
Company's notice relating thereto and affixing their acceptance stamps thereto,
and shall purchase same as provided in Section 2.10.
SECTION 2.12 PAYMENT OF BANKERS' ACCEPTANCES. The Bankers' Acceptances
shall be payable in accordance with the following provisions:
(a) If such Bankers' Acceptances are held by or presented to the Accepting
Lender or the Administrative Agent, the Company shall pay to the Administrative
Agent for the account of each Lender an amount equal to the face amount of the
Bankers' Acceptances of such Lender on their respective maturity dates. In the
event that any Bankers' Acceptance is presented to the Company, rather than the
Accepting Lender thereof, for payment on its respective maturity date and the
Company shall have made payments to the holders thereof, then the Company shall
give notice to the Administrative Agent to such effect together with the
original canceled Bankers' Acceptance and the Administrative Agent shall
promptly notify the Lenders.
(b) In the event the Company fails to notify the Administrative Agent in
writing, not later than 12:00 Noon, one (1) Business Day prior to any maturity
date of a Bankers'
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Acceptance, that the Company intends to pay with its own funds the amount of the
Bankers' Acceptances due on such maturity date, the Company shall be deemed, for
all purposes, to have given the Administrative Agent notice to convert the
amount of such Bankers' Acceptances into a Base Rate Loan and the provisions of
Section 2.02(f) shall apply, except save that:
(i) such maturity date shall be considered to be the borrowing date
of such Base Rate Loan;
(ii) the proceeds of such Base Rate Loan shall be used to pay the
amount of the Bankers' Acceptance due on such maturity date; and
(iii) on such maturity date, each Lender, instead of making its funds
available to the Administrative Agent to fund such Base Rate Loan, shall
first directly apply its pro rata share of such Loan in payment of its pro
rata share in the amount of its Bankers' Acceptances due on such date.
ARTICLE III: PAYMENTS OF PRINCIPAL AND INTEREST
SECTION 3.01 REPAYMENT OF LOANS. The Company will pay on the Termination
Date to the Administrative Agent for the account of each Lender the then-
outstanding principal amount of each Loan made by such Lender and the amount of
the Acceptance Exposure.
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 Base Rate (as in effect from time
to time) plus the Applicable Margin for such Loan, but in no event to exceed the
Highest Lawful Rate.
(b) Accrued interest on each Loan shall be payable quarterly on each
Quarterly Date, except that interest payable after maturity shall be payable
from time to time on demand.
(c) Promptly after the determination of any interest rate provided for
herein or any change therein, the Administrative Agent shall notify the Lenders
to which such interest is payable and the Company.
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 the Bankers' Acceptances shall be made in
Dollars, in immediately available funds, to the Administrative Agent at transit
#09591, account number 219-2474-4 maintained by the Administrative Agent at
Royal Bank of Canada, Correspondent Banking Division, Toronto Canada, not later
than 12:00 noon Toronto 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 or any
Note or Bankers' Acceptance,
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specify to the Administrative Agent the Loans, Bankers' Acceptances or other
amounts payable by the Company hereunder to which such payment is to be applied
(and in the event that it fails to so specify, and such day is not a Quarterly
Date or other day on which a payment of either interest or principal is due,
then such payments shall be applied in the following order: first, to interest
accrued on Loans, second, any excess to reduce the aggregate principal amount
then outstanding on the Loans and, third, any excess to Bankers' Acceptances;
provided, however, that if an Event of Default has occurred and is continuing,
the Administrative Agent may distribute such payment to the Lenders in such
manner as it or the Required Lenders may determine to be appropriate, subject to
Section 4.02). Each payment received by the Administrative Agent under this
Agreement or any Note or Bankers' Acceptance 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 or Bankers' Acceptances in
respect of which such payment is made. If the due date of any payment under this
Agreement or any 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 amount so extended for the period of such
extension.
SECTION 4.02 PRO RATA TREATMENT. Except to the extent agreed among the
Lenders or otherwise provided herein: (a) each Borrowing from the Lenders under
Section 2.01 shall be made from the Lenders, each payment of commitment fee or
other fees under Section 2.04 shall be made for account of the Lenders, and each
termination or reduction of the amount of the Commitments under Section 2.03
shall be applied to the Commitments of the Lenders, pro rata according to their
respective Commitment Percentages, (b) each payment of Bankers' Acceptances or
principal of Loans by the Company shall be made for account of the Lenders pro
rata in accordance with the aggregate unpaid principal amount of Loans and face
amount of Bankers' Acceptances held or purchased by the Lenders, and (c) each
payment of interest on Loans by the Company shall be made for account of the
Lenders pro rata in accordance with the amounts of interest due and payable on
such Loans to the respective Lenders.
SECTION 4.03 COMPUTATIONS. Interest on 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. The Applicable Margin for determining the Stamping Fee
for Bankers' Acceptances shall be computed on the basis of a year of 365 days.
Any rates of interest not expressed in this Agreement on the basis of a 365 day
or 366 day year are the equivalent, expressed on a calendar year basis, of the
same rate of interest multiplied by a fraction, the numerator of which is the
actual number of days in the applicable calendar year and the denominator of
which is the number of days on which interest is expressed to be based.
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 Borrowing to be made by it
hereunder 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
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reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient(s) on such date and, 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 Bankers' Acceptances, or any other amount payable to such
Lender hereunder 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 or reimbursement on any Bankers' Acceptance made available to the
Company under this 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 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 or
Bankers' Acceptances made by such other Lenders (or in interest due thereon, as
the case may be), 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
aggregate unpaid principal and interest on the Loans and reimbursement
obligations on the Bankers' Acceptances held or accepted by each of the Lenders.
To such end, all the Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or other-wise) if such payment is
rescinded or must otherwise be restored. The Company agrees that any Lender so
purchasing a participation (or direct interest) in the Loans or Bankers'
Acceptances made by other Lenders (or in interest due thereon, as the case may
be) may exercise all rights of set-off, bankers' lien, counter-claim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Loans or acceptor of Bankers' Acceptances, 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
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Lenders entitled under this Section 4.05 to share the benefits of any recovery
on such secured claim.
SECTION 4.06 INTEREST ACT (CANADA).
(a) For purposes of the Interest Act (Canada), (i) whenever any interest or
fee under this Agreement is calculated using a rate based on a year of 360 days
or 365 days, such rate determined pursuant to such calculation, when expressed
as an annual rate, is equivalent to (x) the applicable rate based on a year of
360 days or 365 days, as the case may be, (y) multiplied by the actual number of
days in the calendar year in which the period for which such interest or fee is
payable (or compounded) ends, and (z) divided by 360 or 365 as the case may be.
(b) The principle of deemed reinvestment of interest shall not apply to any
interest calculation under this Agreement, and the rates of interest stipulated
in this Agreement are intended to be nominal rates and not effective rates or
yields.
(c) To the extent permitted by law, section 6 of the Judgment Interest Act
(Alberta) shall not apply to this Agreement and is hereby expressly waived by
the Company.
ARTICLE V: YIELD PROTECTION AND ILLEGALITY
SECTION 5.01 ADDITIONAL COSTS.
(a) REGULATORY CHANGE. The Company shall pay directly to each Lender from
time to time 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 Loans or Bankers'
Acceptances or its obligation to make any Loans or Bankers' Acceptances
hereunder, or any reduction in any amount receivable by such Lender hereunder in
respect of any of such Loans or Bankers' Acceptances (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 in respect of any of
such Loans or Bankers' Acceptances (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 or Bankers'
Acceptances 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, or any Commitment of such
Lender; or (iii) imposes any other condition affecting this Agreement or its
Loans or Bankers' Acceptances (or any of such extensions of credit or
liabilities) or Commitment. If any Lender requests compensation from the Company
under this Section 5.01, 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 or accept and purchase additional Bankers' Acceptances 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).
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(b) CAPITAL ADEQUACY. Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the Company shall pay
directly to each Lender from time to time on request such amounts as such Lender
may determine to be necessary to compensate such Lender for any costs which it
determines are attributable to the maintenance by such Lender (or any Applicable
Lending Office), pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law) of any court or
governmental or monetary authority following any Regulatory Change, of capital
in respect of its Commitment, such compensation to 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 ILLEGALITY. If the introduction of or any change in,
applicable law, regulation, treaty or official directive, or regulatory
requirement or the interpretation or application thereof by any court or by any
governmental authority charged with the administration thereof, makes it
unlawful, or prohibited for any Lender (in its sole opinion) to accept,
purchase, trade or hold Bankers' Acceptances, such Lender may, by written notice
to the Administrative Agent, which notice shall be promptly communicated by the
Administrative Agent to the Company, terminate its obligations to accept,
purchase, trade or hold Bankers' Acceptances and the Company shall repay or cash
collateralize, as the case may be, such Bankers' Acceptances then outstanding
forthwith together with any payments required under Section 5.05, or at the end
of such period as such Lender in its discretion agrees, (it being understood and
agreed that the Lender shall use its best efforts to permit such prepayment to
occur on the maturity date of Bankers' Acceptances, if this is legally
permissible) together with all additional amounts as may be applicable to the
date of payment and may reborrow, subject to the terms hereof, any amount which
has been prepaid pursuant to this Section 5.02, by way of one of the remaining
legal basis of Borrowings available under this Agreement, as provided in
Section 5.04.
SECTION 5.03 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 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 other 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 Lender or the Administrative Agent,
on behalf of such Lender or on its own behalf, 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 Lender or the Administrative
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Agent, or (ii) any liability in respect of any such payment is asserted,
imposed, levied or assessed against such Lender or the Administrative Agent (as
the case may be) against such payment or liability, the Company shall promptly
pay to the Administrative Agent or such Lender, as the case may be, any
additional amounts necessary to compensate the Administrative Agent or such
Lender for such payment together with any interest, penalties and expenses
payable or incurred in connection therewith. If the Administrative Agent or a
Lender has paid over on account of Tax (other than Excluded Taxes) an amount
paid to the Administrative Agent or such Lender by the Company pursuant to the
foregoing indemnification and the amount so paid over is subsequently refunded
to the Administrative Agent or such Lender, in whole or in part, the
Administrative Agent or such Lender, as appropriate, 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 in respect
of 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 5.04 BASE RATE LOANS PURSUANT TO SECTIONS 5.01 AND 5.02. If the
obligation of any Lender to accept and purchase Bankers' Acceptances shall be
suspended pursuant to Section 5.01 or 5.02 ("Affected Loans"), all Affected
Loans which would otherwise be made available by such Lender shall be made
instead as Base Rate Loans (and, if an event referred to in Section 5.01(a) or
Section 5.02 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, subject to
Section 5.05, on the date specified by such Lender in such notice) and, to the
extent that Affected Loans are so made as (or converted into) Base Rate Loans,
all payments which would otherwise be applied to such Lender's Affected Loans
shall be applied instead to its Base Rate Loans.
SECTION 5.05 COMPENSATION. The Company shall pay to the Administrative
Agent for account of each Lender, upon the request of such Lender through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense which such Lender determines are attributable to:
(a) any payment or conversion of a Bankers' Acceptance 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
Bankers' Acceptance; 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 willful misconduct of a Lender or the
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Administrative Agent) to issue a Bankers' Acceptance to such Lender on the date
for such issuance specified in the relevant notice of Borrowing given pursuant
to Section 2.02.
SECTION 5.06 AVOIDANCE OF TAXES AND ADDITIONAL COSTS.
(a) CHANGE APPLICABLE FUNDING OFFICE. If a Lender makes any claim under
Section 5.01 or Section 5.03 in respect of Additional Costs or Taxes, such
Lender shall be obligated to use reasonable efforts to designate a different
Applicable Lending Office for the Commitment or the Loans or the Bankers
Acceptances 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 Canada.
(b) REPLACEMENT. If any Lender claims (i) payment of Additional Costs, (ii)
the inability to make or maintain the Bankers Acceptances pursuant to
Section 5.01 or 5.02 (when such inability is not then being claimed by
substantially all of the Lenders) or (iii) payment of any Taxes pursuant to
Section 5.03, then the Company shall have the right, upon payment of such
requested Additional Costs or Taxes to (i) prepay the Loans made by such Lender,
cash collateralize the Bankers Acceptances then outstanding which have been
discounted 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 12.03(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 5.07 LIMITATION ON RIGHT TO COMPENSATION. Any demand for
compensation pursuant to Article V (other than Section 5.03) 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 5.03 must be made
on or before twelve (12) months after the Lender incurs the expense, cost or
economic loss referred to or such Lender shall be deemed to have waived the
right to such compensation.
SECTION 5.08 COMPENSATION PROCEDURE. Each Lender will notify the Company
of any event occurring after the date of this Agreement which will entitle such
Lender to compensation pursuant to this Article V as promptly as practicable
after it obtains knowledge thereof and determines to request such compensation,
and will furnish the Company with a certificate setting forth the basis and
amount of each request by such Lender for compensation under this Article V.
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 Section 5.01(a), or
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of the effect of capital maintained pursuant to Section 5.01(b), on its costs or
rate of return of accepting and purchasing Bankers' Acceptances or maintaining
Loans or its obligation to make Loans or accept and purchase Bankers'
Acceptances, or on amounts receivable by it in respect of Loans or Bankers'
Acceptances, and of the additional amounts required to compensate such Lender
under this Article V, shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.
ARTICLE VI: CONDITIONS PRECEDENT
SECTION 6.01 EFFECTIVENESS. The effectiveness of this amendment and
restatement 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:
(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 respective representative
for the purposes of signing documents and giving notices and other
communications in connection with this Agreement and 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 attached to
such certificate are true and complete copies of the articles and memorandum of
the Company. The Administrative Agent 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 each Guarantor
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 of such Guarantor
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 certificate or articles of
incorporation and the bylaws of such Guarantor since March 27, 1998. The
Administrative Agent and the Lenders may conclusively rely on such certificate
until the Administrative Agent receives notice in writing from such Guarantor to
the contrary.
(c) The following legal opinions:
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(i) An opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel
to the Company, addressing such matters as may be reasonably requested by
the Administrative Agent.
(ii) An opinion of Bennett Jones Verchere, special Canadian counsel to
the Company, addressing such matters as may be reasonably requested by the
Administrative Agent.
(iii) An opinion of Ladner Downs, special British Columbia counsel to
the Company, addressing such matters as may be reasonably requested by the
Administrative Agent.
(iv) An opinion of Onebane, Bernard, Torian, Diaz, McNamera & Abell,
addressing such matters as may be reasonably requested by the
Administrative Agent.
(d) The Notes and bills of exchange referred to in Section 2.01, duly
completed and executed.
(e) The Guaranty Agreements, duly completed and executed.
(f) All conditions precedent under the U. S. Credit Agreement shall have
been satisfied or waived to the satisfaction of the Administrative Agent.
SECTION 6.02 SUBSEQUENT BORROWINGS.
(a) The obligation of the Lenders to provide funds (other than with respect
to Base Rate Loans which are made pursuant to the terms hereof solely to replace
existing Bankers' Acceptances which have matured in the normal course on the
last day of an Interest Period therefor or pursuant to Section 5.02) to the
Company upon the occasion of each Borrowing or to accept and purchase a Bankers'
Acceptance hereunder is subject to the further conditions precedent that, as of
the date of such Loans or acceptance and purchase 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 December 31, 1997, and (iii) the representations and
warranties made by the Company in Article VII and the other Loan Documents shall
be true in all material respects on and as of the date of such Borrowing with
the same force and effect as if made on and as of such date and following such
new Borrowing, 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) Each notice of Borrowing, conversion or renewal (other than Base Rate
Loans which are made pursuant to the terms hereof solely to replace existing
Bankers' Acceptances which have matured in the normal course on the last day of
an Interest Period there-for or pursuant to Section 5.02) and election for
acceptance or renewal of a Bankers' Acceptance by the Company hereunder shall
constitute a certification by the Company to the effect set forth in the
preceding sentence (both as of the date of such notice and, unless the Company
otherwise notifies the Administrative Agent, immediately following such
Borrowing).
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ARTICLE VII: REPRESENTATIONS AND WARRANTIES
SECTION 7.01 INCORPORATION BY REFERENCE. Except as expressly stated in
this Agreement, each of the representations and warranties contained in
Article VII of the U. S. Credit Agreement (together with the relevant provisions
of any other Section or Sections to which they refer, including definitions) is
hereby incorporated by reference into this Agreement and made a part of this
Agreement to the same extent as if those terms were set forth in full herein,
provided that, as and when appropriate, in the context: (a) any reference to
"Company" shall be deemed a reference to Ocean Energy Resources Canada, Ltd.;
(b) any reference to the "Guarantors" shall be deemed a reference to OEI-
Delaware and OEI-Louisiana; (c) any references to U.S. Governmental Requirements
shall, when appropriate in the context, be deemed to be references to
corresponding Canadian Governmental Requirements governing such subject matter,
if such exist; and (d) any other use of any capitalized term defined in both
this Agreement and the U. S. Credit Agreement shall be deemed to refer to such
term as defined in this Agreement, where appropriate in the context. As so
incorporated, the Company hereby makes and affirms each such representation and
warranty. All amendments, modifications, approvals, consents and waivers under
the U. S. Credit Agreement entered into by the parties to the U. S. Credit
Agreement with respect to Article VII thereof shall be binding upon the
Administrative Agent, the Lenders and the Company and shall constitute
corresponding amendments, modifications, approvals, consents and waivers hereto.
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 and Bankers' Acceptances hereunder, all
interest thereon and all other amounts payable by the Company hereunder:
SECTION 8.01 INCORPORATION BY REFERENCE. The Company will not, and will
not permit any of its Subsidiaries to, enter into, make, take, cause or suffer
to exist any transaction, action, omission or condition, if such transaction,
action, omission or condition constitutes a breach of any covenant set forth in
Sections 8.01, 8.02, 8.03, 8.04, 8.07 and 8.08 of the U.S. Credit Agreement,
which Sections (together with the relevant provisions of any other Section or
Sections of the U.S. Credit Agreement to which they refer, including
definitions) are hereby incorporated by reference into this Agreement and made a
part of this Agreement to the same extent as if those provisions were set forth
in full herein, provided that, for purposes of this Section, all defined terms
used in such provisions shall have the meanings set forth in the U.S. Credit
Agreement. As so incorporated, the Company hereby repeats and affirms each such
covenant and further covenants and agrees to strictly comply with each such
covenant. All amendments, modifications, approvals, consents and waivers under
the U. S. Credit Agreement entered into by the parties to the U. S. Credit
Agreement with respect to Article VIII thereof shall be binding upon the
Administrative Agent, the Lenders and the Company and shall constitute
corresponding amendments, modifications, approvals, consents and waivers hereto.
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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 and Bankers' Acceptances hereunder, all
interest thereon and all other amounts payable by the Company hereunder:
SECTION 9.01 AFFIRMATION OF CERTAIN COVENANTS IN ARTICLE IX OF THE U. S.
CREDIT AGREEMENT. The Company will not, and will not permit any of its
Subsidiaries to, enter into, make, take, cause or suffer to exist any
transaction, action, omission or condition, if such transaction, action,
omission or condition constitutes a breach of any covenant set forth in Sections
9.01, 9.02, 9.03, 9.06, 9.07, 9.08, 9.09, 9.10, 9.11, 9.12, 9.13, 9.14, 9.15,
9.16, 9.17, 9.18, 9.19, 9.20, 9.21 and 9.22 of the U.S. Credit Agreement, which
Sections (together with the relevant provisions of any other Section or Sections
of the U.S. Credit Agreement to which they refer, including definitions) are
hereby incorporated by reference into this Agreement and made a part of this
Agreement to the same extent as if those provisions were set forth in full
herein, provided that, for purposes of this Section, all defined terms used in
such provisions shall have the meanings set forth in the U.S. Credit Agreement.
As so incorporated, the Company hereby repeats and affirms each such covenant
and further covenants and agrees to strictly comply with each such covenant. All
amendments, modifications, approvals, consents and waivers under the U. S.
Credit Agreement, entered into by the parties to the U. S. Credit Agreement with
respect to Article IX thereof, shall be binding upon the Administrative Agent,
the Lenders and the Company and shall constitute corresponding amendments,
modifications, approvals, consents and waivers hereto.
ARTICLE X: EVENTS OF DEFAULT
SECTION 10.01 EVENTS OF DEFAULT. If one or more Events of Default shall
occur and be continuing, then (a) in the case of an Event of Default other than
an Insolvency Event with respect to the Company and either Guarantor, the
Administrative Agent may and, upon request of the Required Lenders, shall, by
notice to the Company, cancel the Commitments and/or declare the principal
amount then outstanding of and the accrued interest on the Loans and all other
amounts payable by the Company hereunder and under the Notes and the Bankers'
Acceptances 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 (b) in the case of
the occurrence of an Insolvency Event with respect to the Company and either
Guarantor, 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 and the Bankers'
Acceptances 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 and, in either case, the Administrative Agent and the
Lenders may pursue all rights and remedies of the Lenders and the Administrative
Agent under the other Loan Documents.
22
<PAGE>
ARTICLE XI: THE ADMINISTRATIVE AGENT
SECTION 11.01 INCORPORATION BY REFERENCE. Sections 11.01 through 11.08 of
the U.S. Credit Agreement (together with the relevant provisions of any other
Section or Sections of the U.S. Credit Agreement to which they refer, including
definitions) are hereby incorporated by reference into this Agreement and made a
part of this Agreement to the same extent as if those provisions were set forth
in full herein, provided that, for purposes of such incorporated Sections, as
appropriate in the context, (i) references therein to "Administrative Agent,"
"Agreement," "Company" and "Lenders" shall mean such terms as defined in this
Agreement; (ii) references therein to "Loans" shall mean "Loans" and "Bankers
Acceptances" as such terms are defined in this Agreement; (iii) references
therein to "Notes" shall mean "Notes" and "Bankers Acceptances" as such terms
are defined in this Agreement; and (iv) as appropriate in the context, other
corresponding changes shall be made, mutatis mutandis.
ARTICLE XII: MISCELLANEOUS
SECTION 12.01 INCORPORATION BY REFERENCE. Sections 12.01, 12.02, 12.03,
12.05, 12.07, 12.08, 12.09, 12.11, 12.12, 12.14, 12.15, 12.17, 12.18 and 12.19
of the U.S. Credit Agreement (together with the relevant provisions of any other
Section or Sections of the U.S. Credit Agreement to which they refer, including
definitions) are hereby incorporated by reference into this Agreement and made a
part of this Agreement to the same extent as if those provisions were set forth
in full herein, provided that, for purposes of such incorporated Sections, as
appropriate in the context, (i) references therein to "Administrative Agent,"
"Agreement," "Company" and "Lenders" shall mean such terms as defined in this
Agreement; (ii) references therein to "Loans" shall mean "Loans" and "Bankers
Acceptances" as such terms are defined in this Agreement; (iii) references
therein to "Notes" shall mean "Notes" and "Bankers Acceptances" as such terms
are defined in this Agreement; and (iv) as appropriate in the context, other
corresponding changes shall be made, mutatis mutandis.
SECTION 12.02 AMENDMENTS, ETC. Subject to the terms of the Intercreditor
Agreement, any provision of this Agreement or any other Loan Document may be
amended, modified or waived as provided in the U. S. Credit Agreement; provided
that no amendment, modification or waiver which extends the maturity of the
Loans or any Bankers' Acceptances, increases the Available Canadian
Subcommitment, or reduces the interest rate applicable to the Loans or the
Stamping Fee shall be effective without consent of all Lenders.
SECTION 12.03 ASSIGNMENTS AND PARTICIPATIONS.
(a) The Company may not assign its rights or obligations hereunder 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, 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 C (an "Assignment and
Acceptance") provided, however, that (i) any such assignment shall be in the
aggregate amount of at least $5,000,000, the entire amount of the Lender's
Commitment, if less,
23
<PAGE>
or such lesser amount to which the Company has consented, (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, and (iii) the
assignee is a resident of Canada for purposes of the Income Tax Act (Canada).
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 Loans owed to the assignor
and assignee, the Administrative Agent hereby agreeing to effect such issuance
no later than five (5) Business Days after its receipt of an Assignment and
Acceptance executed by all parties thereto. Promptly after receipt of an
Assignment and Acceptance executed by all parties thereto, the Administrative
Agent shall send to the Company a copy of such executed Assignment and
Acceptance. Upon receipt of such executed Assignment and Acceptance, the
Company, will, at its own expense, execute and deliver new Notes to the assignor
and/or assignee, as appropriate, in accordance with their respective interests
as they appear on the Administrative Agent's letter of acknowledgment. Upon the
effectiveness of any assignment pursuant to this Section, the assignee will
become a "Lender," if not already a "Lender," for all purposes of this Agreement
and the other Loan Documents. 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 except for the purposes of
Section 12.04 hereof and the Sections referred to therein). The Administrative
Agent will prepare on the last Business Day of each month during which an
assignment has become effective pursuant to this Section a revised Annex I to
the U. S. Credit Agreement giving effect to all such assignments effected during
such month, and will promptly provide the same to the Company and each of the
Lenders.
(c) Each Lender may transfer, grant or assign participations in all or any
part of such Lender's interests hereunder pursuant to this subsection to any
Person, provided that: (i) such Lender shall remain a "Lender" for all purposes
of this Agreement and the transferee of such participation shall not constitute
a "Lender" hereunder; and (ii) no participant under any such participation shall
have rights to approve any amendment to or waiver of this Agreement, the Notes
or any Loan Document except to the extent such amendment or waiver would (x)
extend the Termination Date, (y) reduce the 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 all or substantially all of the collateral (except as expressly provided
in the Loan Documents) supporting any of the Commitments or Loans in which such
participant is participating. 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 deter-mined as if such Lender had not sold such participation, provided
that if the participant is a resident of Canada for purposes of the Income Tax
Act (Canada) and has its principal office in Canada, such participant shall be
entitled to receive additional amounts under Article V on the same basis as if
it were a Lender. In addition, each agreement creating any participation must
include agreements by the participant to be bound by the provisions of
Section 12.14 of the U.S. Credit Agreement as incorporated herein and forbidding
the transfer, assignment or sub-participation of such participation.
24
<PAGE>
(d) 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 of the U.S.
Credit Agreement as incorporated herein by Section 12.01.
SECTION 12.04 SURVIVAL. The obligations of the Company, the Administrative
Agent and the Lenders under Sections 5.01, 5.03 and 5.05 hereof, and
Sections 12.03 and 12.14 of the U.S. Credit Agreement as incorporated herein by
Section 12.01 shall survive the repayment of the Loans and the termination of
the Commitments.
SECTION 12.05 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ALBERTA, CANADA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES, ANY BANKERS' ACCEPTANCE, OR THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN
THE COURTS OF TORONTO, ONTARIO, 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) Nothing herein shall affect the right of the Administrative Agent or
any Lender to serve process in any manner permitted by law or to commence legal
proceedings or otherwise proceed against the Company in any other jurisdiction.
(d) THE COMPANY, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY (i)
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW,
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVE, TO
THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFY
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY
25
<PAGE>
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 12.05.
SECTION 12.06 EFFECTIVENESS. This Agreement shall not be effective until
the date (the "Effective Date") that it is delivered to the Lenders in Toronto,
Ontario, Canada, accepted by the Lenders in such place, and executed by the
Lenders in such place.
SECTION 12.07 INTERPRETATION OF LOAN DOCUMENTS. If in the event of any
conflict between the terms of Articles VII, VIII, IX and X of this Agreement and
the representations, warranties, covenants or events of default contained in any
of the Loan Documents (other than the U. S. Credit Agreement), the terms of
Articles VII, VIII, IX and X of this Agreement, as appropriate, shall govern.
[SIGNATURES BEGIN NEXT PAGE]
26
<PAGE>
The parties hereto have caused this Agreement to be duly executed as of the
day and year first above written.
COMPANY:
OCEAN ENERGY RESOURCES CANADA, LTD.
By:
------------------------------------------
Jonathan M. Clarkson
Senior Vice President
Chief Financial Officer
10th Floor, First Canadian Centre
Suite 1000
350-7th Avenue S.W.
Calgary, Alberta T2P 3N9
Telecopier No: (403) 298-8984
Telephone No.: (403) 264-3333
with a copy to:
1201 Louisiana, Suite 1400
Houston, Texas 77002
Telecopier No.: (713) 653-5024
Telephone No.: (713) 654-9110
Attention: Frank D. Willoughby
and Robert K. Reeves
S-1
<PAGE>
THE CHASE MANHATTAN BANK OF CANADA
By:
------------------------------------------
Christine Chan
Vice President
Lending Office for Base Rate Loans:
The Chase Manhattan Bank of Canada
1 First Canadian Place
100 King Street West
Suite 6900, P.O. Box 106
Toronto, Ontario M5X 1A4
Address for Notices:
The Chase Manhattan Bank of Canada
1 First Canadian Place
100 King Street West
Suite 6900, P.O. Box 106
Toronto, Ontario M5X 1A4
Attn: Christine Chan
with a copy to:
Chase Bank of Texas, National Association
600 Travis
Houston, Texas 77002
Telecopier No.: (713) 216-4117
Telephone No.: (713) 216-8869
Attention: Peter Licalzi
S-2
<PAGE>
TORONTO DOMINION BANK
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
Lending Office for Base Rate Loans:
8th Floor
Home Oil Tower
324 8th Ave. S.W.
Calgary, Alberta T2P 2Z2
Address for Notices:
Toronto Dominion Bank
Corporate Investment Banking Group
8th Floor
Home Oil Tower
324 8th Ave. S.W.
Calgary, Alberta T2P 2Z2
Telecopier No.: (403) 292-2772
Telephone No.: (403) 299-7918
Attention: Phil Ghali
S-3
<PAGE>
THE CHASE MANHATTAN BANK OF CANADA, as
Administrative Agent
By:
------------------------------------------
Christine Chan
Vice President
Address for Notices to Chase Administrative
Agent:
The Chase Manhattan Bank of Canada
1 First Canadian Place
100 King Street West
Suite 6900, P.O. Box 106
Toronto, Ontario M5X 1A4
Attn: Christine Chan
Telecopier No.: (416) 216-4161
Telephone No.: (416) 216-4133
S-4
<PAGE>
EXHIBIT A
FORM OF NOTE
$________________ ______________, 199__
FOR VALUE RECEIVED, Ocean Energy Resources Canada, Ltd., a company
continued under the laws of the Province of British Columbia (the "Company"),
hereby promises to pay to the order of ___________________ (the "Lender"), for
the account of its Applicable Lending Office as provided for by the Credit
Agreement (as hereinafter defined), at the Principal Office of The Chase
Manhattan Bank of Canada, as Administrative Agent, the principal sum of
_________________________________________________ ($__________) (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Loans made by
the Lender to the Company under the Credit Agreement) in lawful money of Canada
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 Principal 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, interest rate and maturity 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 schedules attached hereto or any
continuation thereof.
This Note is a Note referred to in that certain Amended and Restated Credit
Agreement dated as of July 8, 1998 between the Company, each of the lenders that
is a party thereto and The Chase Manhattan Bank of Canada, as the administrative
agent (as such may be amended from time to time, the "Credit Agreement"), and
evidences the 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 Loans upon the terms and
conditions specified therein and other pertinent terms.
A-1
<PAGE>
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE PROVINCE OF ALBERTA, CANADA.
Ocean Energy Resources Canada, Ltd.
By:
------------------------------------------
Jonathan M. Clarkson
Senior Vice President
Chief Financial Officer
A-2
<PAGE>
SCHEDULE
OF
LOAN AND PAYMENTS OF PRINCIPAL AND INTEREST
<TABLE>
<CAPTION>
Amount of Unpaid
Principal Amount of Principal
Amount of Paid or Interest Balance Notation
Date Loan Prepaid Paid of Loan Made by
<S> <C> <C> <C> <C> <C>
- ----- ----------- ----------- ----------- ----------- -----------
- ----- ----------- ----------- ----------- ----------- -----------
- ----- ----------- ----------- ----------- ----------- -----------
- ----- ----------- ----------- ----------- ----------- -----------
- ----- ----------- ----------- ----------- ----------- -----------
- ----- ----------- ----------- ----------- ----------- -----------
- ----- ----------- ----------- ----------- ----------- -----------
</TABLE>
S-1
<PAGE>
EXHIBIT B
FORM OF BANKER'S ACCEPTANCE
B-1
<PAGE>
EXHIBIT C
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Dated: _____________, 199__
Reference is made to that certain Amended and Restated Credit Agreement
dated as of July 8, 1998 among Ocean Energy Resources Canada, Ltd., a company
continued under the laws of the Province of British Columbia (the "Company"),
The Chase Manhattan Bank of Canada, as Administrative Agent, and the lenders
parties thereto (such Amended and Restated 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, Loans and Bankers' Acceptances 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 either OEI-Delaware or the Company or the performance or
observance by OEI-Delaware or any of its Subsidiaries, including the Company, or
of any of their respective obligations under the Credit Agreement, or any other
instrument or document furnished pursuant thereto; 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 amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date).
C-1
<PAGE>
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
referred to in Section 7.02 of the U.S. Credit Agreement, 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 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) represents and warrants that it is a resident of Canada
for purposes of the Income Tax Act (Canada) and has its principal office in
Canada.
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 delivery to 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 12.03 of the Credit Agreement, have the rights and
obligations thereunder, and (ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance and Section 12.03 of the Credit Agreement,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ALBERTA, CANADA.
C-2
<PAGE>
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 Assignee
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
APPROVED:
Ocean Energy Resources Canada, Ltd.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
THE CHASE MANHATTAN BANK OF
CANADA, as Administrative Agent
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
C-3
<PAGE>
SCHEDULE I TO ASSIGNMENT AND ACCEPTANCE
<TABLE>
<CAPTION>
<S> <C>
Assignor:
-------------------------------------------------------
Total Commitment of Assignor Prior to Effective Date: $
------------------------
Total Commitment of Assignor After Effective Date: $
------------------------
Assignee:
-------------------------------------------------------
Total Commitment of Assignee Prior to Effective Date: $
------------------------
Total Commitment of Assignee After Effective Date: $
------------------------
Effective Date of Assignment: , 199
Amount of Total Commitment Assigned: $
------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Principal Amount Percentage Assigned
(or amount of Commitment) (Shown as a percentage of
Assigned aggregate Commitments)
- ----------------------------------------------- --------------------------------------------------
$ %
------------------------- ------------
Assignee's
Address for Notice:
---------------------------------------------
---------------------------------------------
Lending Office:
---------------------------------------------
---------------------------------------------
Attn:
----------------------------------------
Telex No.:
-----------------------------------
Telecopy No.:
--------------------------------
Telephone No.:
-------------------------------
</TABLE>
SI-1
<PAGE>
EXHIBIT D
[FORM OF]
BORROWING, RENEWAL AND CONVERSION REQUEST
_____________________, 199__
Ocean Energy Resources Canada, Ltd., a company continued under the laws of
the Province of British Columbia (the "Company"), pursuant to the Amended and
Restated Credit Agreement dated as of July 8, 1998 among the Company, The Chase
Manhattan Bank of Canada, as Administrative Agent, and the lenders parties
thereto (such Amended and Restated 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. Borrowings:
(a) Aggregate amount of new Borrowings to be $________________;
(b) Requested funding date is _________________, 199__;
(c) $_____________________ of such Borrowings are to be Bankers'
Acceptances;
$_____________________ of such Borrowings are to be Base Rate Loans;
and
(d) Length of Interest Period for Bankers' Acceptances is:
_________________________.
2. Bankers' Acceptance Renewals for Bankers' Acceptances maturing on
______________:
(a) Aggregate amount to be renewed as Bankers' Acceptances is
$_______________;
(b) Aggregate amount to be converted to Base Rate Loans is
$_______________;
(c) Length of Interest Period for renewed (or reissued) Bankers'
Acceptances is ________________________.
3. Conversion of Outstanding Base Rate Loans by issuance of Bankers'
Acceptances:
Convert $__________________ of the outstanding Base Rate Loans by issuance
of Bankers' Acceptances on ____________________ with an Interest Period of
______________________.
The undersigned certifies that he is the _____________________ of the
Company, and that as such he 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
D-1
<PAGE>
Company is entitled to receive the requested Borrowing, continuation or
conversion under the terms and conditions of the Credit Agreement.
Ocean Energy Resources Canada, Ltd.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
D-2
<PAGE>
EXHIBIT 10.7
AMENDED AND RESTATED
GUARANTY AGREEMENT
Dated as of July 8, 1998
by
OCEAN ENERGY, INC.,
a Delaware corporation,
in favor of
THE CHASE MANHATTAN BANK OF CANADA,
as Administrative Agent,
and
THE LENDERS NOW OR HEREAFTER PARTIES TO THE
CREDIT AGREEMENT
<PAGE>
TABLE OF CONTENTS
Page
Article I Definitions and Accounting Matters
Section 1.01 Terms Defined In Recitals............................ 1
Section 1.02 Certain Definitions.................................. 1
Section 1.03 Credit Agreement Definitions......................... 2
Article II The Guaranty
Section 2.01 Obligations Guaranteed............................... 2
Section 2.02 Nature of Guaranty................................... 2
Section 2.03 Lenders' Rights...................................... 2
Section 2.04 Guarantor's Waivers.................................. 3
Section 2.05 Maturity of Obligations; Payment..................... 3
Section 2.06 Lenders' Expenses.................................... 3
Section 2.07 Obligation........................................... 3
Section 2.08 Events and Circumstances Not Reducing or Discharging
the Guarantor's Obligations.......................... 3
Section 2.09 Subrogation.......................................... 5
Article III Representations and Warranties
Section 3.01 By the Guarantor..................................... 5
Article IV Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims................ 6
Section 4.02 Claims in Bankruptcy................................. 6
Section 4.03 Payments Held in Trust............................... 6
Section 4.04 Liens Subordinate.................................... 7
Section 4.05 Notation of Records.................................. 7
Article V Miscellaneous
Section 5.01 Successors and Assigns............................... 7
Section 5.02 Notices.............................................. 7
Section 5.03 Authority of Administrative Agent.................... 7
Section 5.04 CONSTRUCTION......................................... 8
Section 5.05 Waivers.............................................. 8
Section 5.06 Judgment Currency.................................... 8
Section 5.07 Amendment and Restatement............................ 9
Section 5.08 Survival of Obligations.............................. 9
Section 5.09 Subject to the Intercreditor Agreement............... 9
Section 5.10 Status as Specified or Designated Senior Indebtedness 9
i
<PAGE>
AMENDED AND RESTATED
GUARANTY AGREEMENT
This Amended and Restated Guaranty Agreement dated as of July 8, 1998,
is by Ocean Energy, Inc., a corporation duly organized and validly existing
under the laws of the state of Delaware ("Guarantor"), in favor of each of the
following: each of the financial institutions that is now or hereafter a party
to the Credit Agreement (as defined below) (individually, a "Lender" and,
collectively, the "Lenders"); and The Chase Manhattan Bank of Canada, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
Recitals
A. Ocean Energy Resources Canada, Ltd., a company continued under the laws
of the Province of British Columbia (the "Company"), the Administrative Agent
and the Lenders have executed that certain Amended and Restated Credit Agreement
of even date herewith (such credit agreement, as amended, the "Credit
Agreement").
B. One of the terms and conditions stated in the Credit Agreement for the
making of the loans and extensions of credit described in the Credit Agreement
is the execution and delivery to the Administrative Agent and the Lenders of
this Guaranty Agreement.
C. NOW, THEREFORE, (i) in order to comply with the terms and conditions of
the Credit Agreement, (ii) to induce the Lenders to enter into the Credit
Agreement, and (iii) for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED IN RECITALS. As used in this Guaranty Agreement,
the terms defined in the Recitals shall have the meanings indicated in the
Recitals.
SECTION 1.02 CERTAIN DEFINITIONS. As used in this Guaranty Agreement,
including the Recitals, the following terms shall have the following meanings,
unless the context otherwise requires:
"Guarantor Claims" shall have the meaning indicated in Section 4.01.
"Guaranty Agreement" shall mean this Amended and Restated Guaranty
Agreement, as the same may from time to time be amended or supplemented.
"Obligations" shall mean (a) the payment and performance of all present and
future indebtedness, obligations and liabilities of the Company and/or the
Guarantor to the Administrative Agent and the Lenders under the Credit
Agreement, including but not limited to, (i) the full and punctual payment of
the Notes issued thereunder, and any and all promissory notes given in
substitution for such Notes or in modification, renewal, extension or
rearrangement thereof in whole or in part, and (ii) the Acceptance Exposure
under all Bankers Acceptances now outstanding or hereafter issued under the
Credit Agreement; (b) all obligations of the Guarantor under this Guaranty
Agreement; and (c) all interest (whether pre- or post petition), charges,
expenses, reasonable attorneys' or other fees and any other sums
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payable to the Administrative Agent and the Lenders in connection with the
execution, administration or enforcement of any of their rights and remedies
hereunder or any other Loan Document.
SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined herein,
all terms beginning with a capital letter which are not defined herein shall
have the meaning ascribed such terms in the Credit Agreement and in the Amended
and Restated Global Credit Agreement dated of even date herewith among
Guarantor, each of the financial institutions that is now or hereafter a party
thereto (collectively, the "U.S. Lenders"); Chase Bank of Texas, National
Association, as administrative agent for the U.S. Lenders, Morgan Guaranty Trust
Company of New York, as syndication agent for the U.S. Lenders, Barclays Bank
PLC, as documentation agent for the U.S. Lenders, and ABN Amro Bank, N.V., Bank
of America National Trust & Savings Association, Paribas, NationsBank, N.A.,
Societe Generale, Southwest Agency and Wells Fargo Bank (Texas), N.A., , as co-
agents for the U.S. Lenders.
ARTICLE II
THE GUARANTY
SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment at maturity of the Obligations.
SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute, irrevocable,
completed and continuing guaranty of payment and not a guaranty of collection,
and no notice of the Obligations or any extension of credit already or hereafter
contracted by or extended to the Company need be given to the Guarantor. The
guaranty evidenced hereby is joint and several with all other guarantees of the
Obligations. This guaranty may not be revoked by the Guarantor and shall
continue to be effective with respect to debt under the Obligations arising or
created after any attempted revocation by the Guarantor and shall remain in full
force and effect until the Obligations are paid in full and the Aggregate
Commitments are terminated, notwithstanding that from time to time prior thereto
no Obligations may be outstanding. The Company, the Administrative Agent and the
Lenders may modify, alter, rearrange, extend for any period and/or renew from
time to time, the Obligations and the Administrative Agent and the Lenders may
waive any Defaults or Events of Default without notice to the Guarantor and in
such event the Guarantor will remain fully bound hereunder on the Obligations.
Subject to the terms of the Credit Agreement, this Guaranty Agreement may be
enforced by the Administrative Agent and/or the Lenders and any subsequent
holder of the Obligations and shall not be discharged by the assignment or
negotiation of all or part of the Obligations. The Guarantor hereby expressly
waives presentment, demand, notice of non-payment, protest and notice of protest
and dishonor, notice of Event of Default, notice of intent to accelerate the
maturity and notice of acceleration of the maturity and any other notice in
connection with the Obligations, and also notice of acceptance of this Guaranty
Agreement, acceptance on the part of the Administrative Agent and the Lenders
being conclusively presumed by their request for this Guaranty Agreement and
delivery of the same to the Administrative Agent.
SECTION 2.03 LENDERS' RIGHTS. Subject to the terms of the Credit Agreement,
the Guarantor authorizes the Lenders (or the Administrative Agent on behalf of
the Lenders), without notice or demand and without affecting the Guarantor's
obligation hereunder, to take and hold agreed-upon security for the payment of
the Obligations, and exchange, enforce, waive and release any such security; and
to apply such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their discretion may determine; and to
obtain a guaranty of the Obligations from any one or more
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Persons and at any time or times to enforce, waive, rearrange, modify, limit or
release any of such other Persons from their obligations under such guaranties.
SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to require
the Administrative Agent and the Lenders to (a) proceed against the Company or
any other Person liable on the Obligations, (b) enforce their rights against any
other guarantor of the Obligations, (c) proceed or enforce their rights against
or exhaust any security given to secure the Obligations, (d) have the Company
joined with the Guarantor in any suit arising out of this Guaranty Agreement
and/or the Obligations, or (e) pursue any other remedy whatsoever. Neither the
Administrative Agent nor the Lenders shall be required to mitigate damages or
take any action to reduce, collect or enforce the Obligations. The Guarantor
waives any defense arising by reason of any disability, lack of corporate
authority or power, or other defense of the Company or any other guarantor of
the Obligations, and shall remain liable hereon regardless of whether the
Company or any other guarantor be found not liable thereon for any reason.
SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees that if
the maturity of the Obligations is accelerated by bankruptcy or otherwise, such
maturity shall also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to the Guarantor. The Guarantor will,
forthwith upon notice from the Administrative Agent of the Company's failure to
pay the Obligations at maturity, pay to the Administrative Agent for the benefit
of the Administrative Agent and the Lenders at the Administrative Agent's
Principal Office, the amount due and unpaid by the Company and guaranteed
hereby. The failure of the Administrative Agent to give this notice shall not in
any way release the Guarantor hereunder.
SECTION 2.06 LENDERS' EXPENSES. If the Guarantor fails to pay the
Obligations after notice from the Administrative Agent of the Company's failure
to pay any Obligations at maturity (whether by acceleration or otherwise), and
if the Administrative Agent or the Lenders obtain the services of an attorney
for collection of amounts owing by the Guarantor hereunder, or obtain advice of
counsel in respect of any of their rights under this Guaranty Agreement, or if
suit is filed to enforce this Guaranty Agreement, or if proceedings are had in
any bankruptcy, receivership or other judicial proceedings for the establishment
or collection of any amount owing by the Guarantor hereunder, or if any amount
owing by the Guarantor hereunder is collected through such proceedings, the
Guarantor agrees to pay to the Administrative Agent at its Principal Office the
reasonable attorneys' fees of the Administrative Agent and the Lenders.
SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of the
Guarantor for the payment of the Obligations guaranteed hereby shall be primary
and not secondary.
SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of the
following to the fullest extent permitted by law, agrees that its obligations
under this Guaranty Agreement shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and waives any rights
(including without limitation rights to notice) which it might otherwise have as
a result of or in connection with any of the following:
(a) Modifications, etc. Any renewal, extension, modification, or increase
in the amount of the Aggregate Commitments as in effect on the Effective Date,
decrease, alteration or rearrangement of all or any part of the Obligations, any
Loan Document or any instrument executed in connection
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therewith, or any contract or understanding between the Company, any Agent
and/or the Lenders, or any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Administrative Agent or the Lenders to the
Company or the Guarantor or any Person liable on the Obligations;
(c) Condition of the Company or the Guarantor. The insolvency, bankruptcy,
arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Company or the Guarantor or any other Person
at any time liable for the payment of all or part of the Obligations; or any
sale, lease or transfer of any or all of the assets of the Company or the
Guarantor, or any changes in the shareholders of the Company or the Guarantor;
(d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Loan Document,
including the Notes, for any reason whatsoever, including without limitation the
fact that the Obligations, or any part thereof, exceed the amount permitted by
law, the act of creating the Obligations or any part thereof is ultra vires, the
officers or representatives executing any Loan Document or otherwise creating
the Obligations acted in excess of their authority, the Obligations violate
applicable usury laws, the Company has valid defenses, claims or offsets
(whether at law, in equity or by agreement) which render the Obligations wholly
or partially uncollectible from the Company, the creation, performance or
repayment of the Obligations (or the execution, delivery and performance of any
Loan Document) is illegal, uncollectible, legally impossible or unenforceable,
or the Credit Agreement, the Notes or other Loan Documents have been forged or
otherwise are irregular or not genuine or authentic;
(e) Release of Obligors. Any full or partial release of the obligation of
the Company on the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Company will be liable to perform the Obligations, or
that the Administrative Agent and the Lenders will look to other parties to
perform the Obligations;
(f) Security. The taking or accepting of any security, collateral or
guaranty, or other assurance of payment, for all or any part of the Obligations;
(g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, Property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
(h) Care and Diligence. The failure of any Agent or any Lender or any
other Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of such collateral, Property or security;
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(i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;
(j) Payments Rescinded. Any payment by the Company to any Agent or Lender
is held to constitute a preference under the bankruptcy laws, or for any reason
an Agent or Lender is required to refund such payment or pay such amount to the
Company or someone else; or
(k) Other Actions Taken or Omitted. Any other action taken or omitted to
be taken with respect to the Credit Agreement or the other Loan Documents, the
Obligations, or the security and collateral therefor, whether or not such action
or omission prejudices the Guarantor or increases the likelihood that the
Guarantor will be required to pay the Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay the Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, except for the full and final payment and satisfaction of the
Obligations.
SECTION 2.09 SUBROGATION. Until the Obligations have been paid in full and
the Aggregate Commitments terminated, the Guarantor hereby waives any claim,
right or remedy which the Guarantor may now have or hereafter acquire against
the Company which arises out of this Guaranty Agreement or from the performance
by the Guarantor hereunder, including without limitation, any claim, remedy or
right of subrogation, reimbursement, exoneration, indemnification, or
participation in any such claim, right or remedy of any other Person against the
Company. The Guarantor further waives any benefit of any right to participate in
any security now or hereafter held by the Administrative Agent and/or the
Lenders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 BY THE GUARANTOR. In order to induce the Administrative Agent
and the Lenders to accept this Guaranty Agreement, the Guarantor represents and
warrants to the Lender Group (which representations and warranties will survive
the creation of the Obligations and any extension of credit thereunder) that:
(a) Benefit to the Guarantor. The Company is a wholly-owned Subsidiary of
the Guarantor; and the Guarantor's guaranty pursuant to this Guaranty Agreement
reasonably may be expected to benefit, directly or indirectly, the Guarantor;
and the Guarantor has determined that this Guaranty Agreement is necessary and
convenient to the conduct, promotion and attainment of the business of the
Guarantor and the Company.
(b) Solvency. It (i) is not insolvent as of the date hereof and will not
be rendered insolvent as a result of this Guaranty Agreement or the transactions
contemplated by the Credit Agreement or the making of the Loans or issuance of
Bankers Acceptances thereunder, (ii) is not engaged in a business or a
transaction, or about to engage in a business or a transaction, for which any
Property or assets remaining with the Guarantor constitute unreasonably small
capital, and (iii) does not intend to incur, or believe it will incur, debts
that will be beyond its ability to pay as such debts mature.
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(c) No Representation by Administrative Agent or Lenders. Neither any
Agent, Lender nor any other Person has made any representation, warranty or
statement to the Guarantor in order to induce the Guarantor to execute this
Guaranty Agreement.
ARTICLE IV
SUBORDINATION OF INDEBTEDNESS
SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Company to
the Guarantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation be direct, contingent, primary,
secondary, several, joint and several, or otherwise, and irrespective of whether
such debts or obligations be evidenced by note, contract, open account, or
otherwise, and irrespective of the Person or Persons in whose favor such debts
or obligations may, at their inception, have been, or may hereafter be created,
or the manner in which they have been or may hereafter be acquired by the
Guarantor. Except for payments permitted by the Credit Agreement, until the
Obligations shall be paid and satisfied in full, the Aggregate Commitments are
terminated and the Guarantor shall have performed all of its obligations
hereunder and the Loan Documents to which it is a party, the Guarantor shall not
receive or collect, directly or indirectly, from the Company any amount upon the
Guarantor Claims.
SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Company, the Administrative Agent on behalf of the
Administrative Agent and the Lenders shall have the right to prove their claim
in any proceeding, so as to establish their rights hereunder and receive
directly from the receiver, trustee or other court custodian, dividends and
payments which would otherwise be payable upon Guarantor Claims. The Guarantor
hereby assigns such dividends and payments to the Administrative Agent for the
benefit of the Administrative Agent and the Lenders. Should any Agent or Lender
receive, for application upon the Obligations, any such dividend or payment
which is otherwise payable to the Guarantor, and which, as between the Company
and the Guarantor, shall constitute a credit upon the Guarantor Claims, then
upon payment in full of the Obligations, the Guarantor shall become subrogated
to the rights of the Administrative Agent and the Lenders to the extent that
such payments to the Administrative Agent and the Lenders on the Guarantor
Claims have contributed toward the liquidation of the Obligations, and such
subrogation shall be with respect to that proportion of the Obligations which
would have been unpaid if the Administrative Agent and the Lenders had not
received dividends or payments upon the Guarantor Claims.
SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, the Guarantor agrees (a)
to hold in trust for the Administrative Agent and the Lenders an amount equal to
the amount of all funds, payments, claims or distributions so received, and (b)
that it shall have absolutely no dominion over the amount of such funds,
payments, claims or distributions except to pay them promptly to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders; and the Guarantor covenants promptly to pay the same to the
Administrative Agent.
SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
upon the Company's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens upon the Company's assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
the
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Guarantor, any Agent or Lender presently exist or are hereafter created or
attach. Without the prior written consent of the Administrative Agent, the
Guarantor, during the period in which any of the Obligations are outstanding or
the Aggregate Commitments are in effect, shall not (a) exercise or enforce any
creditor's right it may have against the Company, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Lien, mortgages, deeds of trust, security
interest, collateral rights, judgments or other encumbrances on assets of the
Company held by the Guarantor.
SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of the Administrative Agent, all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by the Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and shall
be in every particular available to the successors and assigns of the
Administrative Agent and the Lenders and is and shall always be fully binding
upon the legal representatives, successors and assigns of the Guarantor,
notwithstanding that some or all of the monies, the repayment of which this
Guaranty Agreement applies, may be actually advanced after any bankruptcy,
receivership, reorganization or other event affecting either the Company or the
Guarantor.
SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in the manner and to the
address of the Guarantor as provided for in the Credit Agreement.
SECTION 5.03 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guaranty Agreement with respect to any action taken by the Administrative Agent
or the exercise or non-exercise by the Administrative Agent of any option,
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Guaranty Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Guarantor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting; and
the Guarantor shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
SECTION 5.04 CONSTRUCTION. THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT
LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ALBERTA, CANADA.
SECTION 5.05 WAIVERS. THE GUARANTOR AND EACH LENDER AND THE ADMINISTRATIVE
AGENT BY ITS ACCEPTANCE HEREOF 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 GUARANTY AGREEMENT OR ANY LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM
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THEREIN; (ii) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFY THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGE THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY AGREEMENT, THE LOAN DOCUMENTS AND
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 5.05.
SECTION 5.06 JUDGMENT CURRENCY . This is an international loan transaction
in which the specification of Canadian Dollars or U.S. Dollars is of the
essence, and the stipulated currency shall in each instance be the Currency of
account and payment in all instances. A payment obligation in one Currency
hereunder (the "Original Currency") shall not be discharged by an amount paid in
another currency (the "Other Currency"), whether pursuant to any judgment
expressed in or converted into any Other Currency or in another place except to
the extent that such tender or recovery results in the effective receipt by the
payee of the full amount of the Original Currency payable to it under this
Guaranty Agreement. If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in the Original Currency into the Other
Currency, the rate of exchange that shall be applied shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase Original Currency at the Principal Office with the Other Currency on
the Business Day next preceding the day on which such judgment is rendered. The
obligation of the Guarantor in respect of any such sum due from it to the
Administrative Agent or any Lender hereunder or under any other Loan Document
(in this Section 5.06 called an "Entitled Person") shall, notwithstanding the
rate of exchange actually applied in rendering such judgment, be discharged only
to the extent that on the Business Day following receipt by such Entitled Person
of any sum adjudged to be due hereunder in the Other Currency such Entitled
Person may in accordance with normal banking procedures purchase and transfer
the Original Currency to Toronto with the amount of the judgment currency so
adjudged to be due; and the Guarantor hereby, as a separate obligation and
notwithstanding any such judgment, agrees jointly and severally to indemnify
such Entitled Person against, and to pay such Entitled Person on demand, in the
Original Currency, the amount (if any) by which the sum originally due to such
Entitled Person in the Original Currency hereunder exceeds the amount of the
Original Currency so purchased and transferred.
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SECTION 5.07 AMENDMENT AND RESTATEMENT. This Amended and Restated Guaranty
Agreement amends, restates, supersedes and replaces that certain Guaranty
Agreement dated as of March 27, 1998, by and among the parties hereto, and such
Guaranty Agreement shall be void and have no further effect.
SECTION 5.08 SURVIVAL OF OBLIGATIONS. To the extent that any payments on
the Obligations 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 Obligations so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Administrative Agent's and the Lenders' Liens, rights,
powers and remedies under this Guaranty Agreement and each Loan Document shall
continue in full force and effect. In such event, each Loan Document shall be
automatically reinstated and the Guarantor shall take such action as may be
reasonably requested by the Administrative Agent and the Lenders to effect such
reinstatement.
SECTION 5.09 SUBJECT TO THE INTERCREDITOR AGREEMENT. This Guaranty
Agreement is subject to the terms of the Intercreditor Agreement which (a)
subjects the ability of the Lender Group to pursue remedies hereunder to the
prior consent of the U.S. Lenders and (b) sets forth a priority for the
application of proceeds upon any disposition of amounts received hereunder.
SECTION 5.10 STATUS AS SPECIFIED OR DESIGNATED SENIOR INDEBTEDNESS. The
Guarantor hereby acknowledges and confirms that:
(a) this Guaranty Agreement and the obligations of the Guarantor hereunder
are "Senior Indebtedness" and "Specified Senior Indebtedness" under and for
purposes of the 95 Indenture; and
(b) this Guaranty Agreement and the obligations of the Guarantor hereunder
are "Senior Indebtedness" and "Designated Senior Indebtedness" 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, as applicable, under each of such Indentures.
WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
OCEAN ENERGY, INC., a Delaware corporation
By:
-----------------------------------------
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
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EXHIBIT 10.8
GUARANTY AGREEMENT
Dated as of July 8, 1998
by
OCEAN ENERGY, INC.,
a Louisiana corporation
in favor of
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent,
MORGAN 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
WELLS FARGO BANK (TEXAS), N.A.,
as Co-Agents,
and
THE LENDERS NOW OR HEREAFTER PARTIES TO THE CREDIT AGREEMENT
<PAGE>
TABLE OF CONTENTS
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Article I Definitions and Accounting Matters
Section 1.01 Terms Defined in Recitals.............................................. 1
Section 1.02 Certain Definitions.................................................... 1
Section 1.03 Credit Agreement Definitions........................................... 2
Article II The Guaranty
Section 2.01 Obligations Guaranteed................................................. 2
Section 2.02 Nature of Guaranty..................................................... 2
Section 2.03 Lenders' Rights........................................................ 2
Section 2.04 Guarantor's Waivers.................................................... 3
Section 2.05 Maturity of Obligations; Payment....................................... 3
Section 2.06 Lenders' Expenses...................................................... 3
Section 2.07 Obligation............................................................. 3
Section 2.08 Events and Circumstances Not Reducing or Discharging the Guarantor's
Obligations.......................................................... 3
Section 2.09 Limitations on Obligation of the Guarantor Hereunder................... 5
Section 2.10 Subrogation............................................................ 5
Article III Representations, Warranties and Covenants
Section 3.01 Representations and Warranties......................................... 5
Section 3.02 Covenants.............................................................. 7
Article IV Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims.................................. 7
Section 4.02 Claims in Bankruptcy................................................... 7
Section 4.03 Payments Held in Trust................................................. 7
Section 4.04 Liens Subordinate...................................................... 8
Section 4.05 Notation of Records.................................................... 8
Article V Miscellaneous
Section 5.01 Successors and Assigns................................................ 8
Section 5.02 Notices............................................................... 8
Section 5.03 Authority of Administrative Agent..................................... 8
Section 5.04 CONSTRUCTION.......................................................... 9
Section 5.05 Survival of Obligations............................................... 10
Section 5.06 Subject to the Intercreditor Agreement................................ 10
Section 5.07 Status as Specified or Designated Senior Indebtedness................. 10
Section 5.08 Interest.............................................................. 10
</TABLE>
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GUARANTY AGREEMENT
This Guaranty Agreement dated as of July 8, 1998 is by Ocean Energy,
Inc., a corporation duly organized and validly existing under the laws of the
state of Louisiana (the "Guarantor"), in favor of each of the following: each of
the financial institutions that is now or hereafter a party to the Credit
Agreement (as defined below) as a lender (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"), Morgan 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
Wells Fargo Bank (Texas), N.A., as co-agents for the Lenders (in such capacity,
the "Co-Agents").
RECITALS
A. Ocean Energy, Inc., a Delaware corporation (the "Company"), the
Administrative Agent, the Syndication Agent, the Documentation Agent, the Co-
Agents (collectively the "Agents") and the Lenders have executed that certain
Amended and Restated Global Credit Agreement of even date herewith (such credit
agreement, as amended, the "Credit Agreement").
B. One of the terms and conditions stated in the Credit Agreement for the
making of the loans and extensions of credit described in the Credit Agreement
is the execution and delivery to the Agents and the Lenders of this Guaranty
Agreement.
C. NOW, THEREFORE, (i) in order to comply with the terms and conditions of
the Credit Agreement, (ii) to induce the Lenders to enter into the Credit
Agreement, and (iii) for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED IN RECITALS. As used in this Guaranty Agreement,
the terms defined in the Recitals shall have the meanings indicated in the
Recitals.
SECTION 1.02 CERTAIN DEFINITION. As used in this Guaranty Agreement,
including the Recitals, the following terms shall have the following meanings,
unless the context otherwise requires:
"Guarantor Claims" shall have the meaning indicated in Section 4.01.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the same may
from time to time be amended or supplemented.
"Obligations" shall mean (a) the payment and performance of all present and
future indebtedness, obligations and liabilities of the Company to the Agents
and the Lenders under the Credit Agreement, including but not limited to, (i)
the full and punctual payment of the Notes issued thereunder, and any and
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all promissory notes given in substitution for such Notes or in modification,
renewal, extension or rearrangement thereof in whole or in part, and (ii) the
reimbursement and other obligations of the Company under and with respect to
Letters of Credit and Letter of Credit Agreements now outstanding or hereafter
issued under the Credit Agreement; (b) all obligations of the Guarantor under
this Guaranty Agreement; and (c) all interest (whether pre- or post petition),
charges, expenses, reasonable attorneys' or other fees and any other sums
payable to the Agents and the Lenders in connection with the execution,
administration or enforcement of any of their rights and remedies hereunder or
any other Loan Document.
SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined herein,
all terms beginning with a capital letter which are defined in the Credit
Agreement shall have the same meanings herein as therein.
ARTICLE II
THE GUARANTY
SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment at maturity of the Obligations.
SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute, irrevocable,
completed and continuing guaranty of payment and not a guaranty of collection,
and no notice of the Obligations or any extension of credit already or hereafter
contracted by or extended to the Company need be given to the Guarantor. This
guaranty may not be revoked by the Guarantor and shall continue to be effective
with respect to debt under the Obligations arising or created after any
attempted revocation by the Guarantor and shall remain in full force and effect
until the Obligations are paid in full and the Aggregate Commitments are
terminated, notwithstanding that from time to time prior thereto no Obligations
may be outstanding. The Company, the Agents and the Lenders may modify, alter,
rearrange, extend for any period and/or renew from time to time, the Obligations
and the Agents and the Lenders may waive any Defaults or Events of Default
without notice to the Guarantor and in such event the Guarantor will remain
fully bound hereunder on the Obligations. Subject to the terms of the Credit
Agreement, this Guaranty Agreement may be enforced by the Agents and/or the
Lenders and any subsequent holder of the Obligations and shall not be discharged
by the assignment or negotiation of all or part of the Obligations. The
Guarantor hereby expressly waives presentment, demand, notice of non-payment,
protest and notice of protest and dishonor, notice of Event of Default, notice
of intent to accelerate the maturity and notice of acceleration of the maturity
and any other notice in connection with the Obligations, and also notice of
acceptance of this Guaranty Agreement, acceptance on the part of the Agents and
the Lenders being conclusively presumed by their request for this Guaranty
Agreement and delivery of the same to the Administrative Agent.
SECTION 2.03 LENDERS' RIGHTS. Subject to the terms of the Credit Agreement,
the Guarantor authorizes the Lenders (or the Administrative Agent on behalf of
the Lenders), without notice or demand and without affecting the Guarantor's
obligation hereunder, to take and hold agreed-upon security for the payment of
the Obligations, and exchange, enforce, waive and release any such security; and
to apply such security and direct the order or manner of sale thereof as the
Agents and the Lenders in their discretion may determine; and to obtain a
guaranty of the Obligations from any one or more Persons and at any time or
times to enforce, waive, rearrange, modify, limit or release any of such other
Persons from their obligations under such guaranties.
SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to require
the Agents and the Lenders to (a) proceed against the Company or any other
Person liable on the Obligations, (b) enforce their
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rights against any other guarantor of the Obligations, (c) proceed or enforce
their rights against or exhaust any security given to secure the Obligations,
(d) have the Company joined with the Guarantor in any suit arising out of this
Guaranty Agreement and/or the Obligations, or (e) pursue any other remedy
whatsoever. Neither the Agents nor the Lenders shall be required to mitigate
damages or take any action to reduce, collect or enforce the Obligations. The
Guarantor waives any defense arising by reason of any disability, lack of
corporate authority or power, or other defense of the Company or any other
guarantor of the Obligations, and shall remain liable hereon regardless of
whether the Company or any other guarantor be found not liable thereon for any
reason.
SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees that if
the maturity of the Obligations is accelerated by bankruptcy or otherwise, such
maturity shall also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to the Guarantor. The Guarantor will,
forthwith upon notice from the Administrative Agent of the Company's failure to
pay the Obligations at maturity, pay to the Administrative Agent for the benefit
of the Agents and the Lenders at the Administrative Agent's Principal Office,
the amount due and unpaid by the Company and guaranteed hereby. The failure of
the Administrative Agent to give this notice shall not in any way release the
Guarantor hereunder.
SECTION 2.06 LENDERS' EXPENSES. If the Guarantor fails to pay the
Obligations after notice from the Administrative Agent of the Company's failure
to pay any Obligations at maturity (whether by acceleration or otherwise), and
if the Agents or the Lenders obtain the services of an attorney for collection
of amounts owing by the Guarantor hereunder, or obtain advice of counsel in
respect of any of their rights under this Guaranty Agreement, or if suit is
filed to enforce this Guaranty Agreement, or if proceedings are had in any
bankruptcy, receivership or other judicial proceedings for the establishment or
collection of any amount owing by the Guarantor hereunder, or if any amount
owing by the Guarantor hereunder is collected through such proceedings, the
Guarantor agrees to pay to the Administrative Agent at its Principal Office the
reasonable attorneys' fees of the Agents and the Lenders.
SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of the
Guarantor for the payment of the Obligations guaranteed hereby shall be primary
and not secondary.
SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of the
following to the fullest extent permitted by law, agrees that its obligations
under this Guaranty Agreement shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and waives any rights
(including without limitation rights to notice) which it might otherwise have as
a result of or in connection with any of the following:
(a) Modifications, etc. Any renewal, extension, modification, or increase
in the amount of the Aggregate Commitments as in effect on the Effective Date,
decrease, alteration or rearrangement of all or any part of the Obligations, any
Loan Document or any instrument executed in connection therewith, or any
contract or understanding between the Company, any Agent and/or the Lenders, or
any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Agents or the Lenders to the Company, the
Guarantor or any Person liable on the Obligations;
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(c) Condition of the Company or the Guarantor. The insolvency, bankruptcy,
arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Company or the Guarantor or any other Person
at any time liable for the payment of all or part of the Obligations; or any
sale, lease or transfer of any or all of the assets of the Company or the
Guarantor, or any changes in the shareholders of the Company or the Guarantor;
(d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Loan Document,
including the Notes, for any reason whatsoever, including without limitation the
fact that the Obligations, or any part thereof, exceed the amount permitted by
law, the act of creating the Obligations or any part thereof is ultra vires, the
officers or representatives executing any Loan Document or otherwise creating
the Obligations acted in excess of their authority, the Obligations violate
applicable usury laws, the Company has valid defenses, claims or offsets
(whether at law, in equity or by agreement) which render the Obligations wholly
or partially uncollectible from the Company, the creation, performance or
repayment of the Obligations (or the execution, delivery and performance of any
Loan Document) is illegal, uncollectible, legally impossible or unenforceable,
or the Credit Agreement, the Notes or other Loan Documents have been forged or
otherwise are irregular or not genuine or authentic;
(e) Release of Obligors. Any full or partial release of the obligation of
the Company on the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Company will be liable to perform the Obligations, or
that the Agents and the Lenders will look to other parties to perform the
Obligations;
(f) Security. The taking or accepting of any security, collateral or
guaranty, or other assurance of payment, for all or any part of the Obligations;
(g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, Property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
(h) Care and Diligence. The failure of any Agent or any Lender or any
other Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of such collateral, Property or security;
(i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;
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(j) Payments Rescinded. Any payment by the Company to any Agent or Lender
is held to constitute a preference under the bankruptcy laws, or for any reason
an Agent or Lender is required to refund such payment or pay such amount to the
Company or someone else; or
(k) Other Actions Taken or Omitted. Any other action taken or omitted to
be taken with respect to the Credit Agreement or the other Loan Documents, the
Obligations, or the security and collateral therefor, whether or not such action
or omission prejudices the Guarantor or increases the likelihood that the
Guarantor will be required to pay the Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay the Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, except for the full and final payment and satisfaction of the
Obligations.
SECTION 2.09 LIMITATIONS ON OBLIGATION OF THE GUARANTOR HEREUNDER. The
parties hereto (i) intend that the obligation of the Guarantor hereunder be
limited to the maximum amount that would not result in the obligation created
hereby being avoidable under Section 548 of the Federal Bankruptcy Code (11
U.S.C. (S) 548; hereinafter "Section 548") or other applicable state fraudulent
conveyance or transfer law and (ii) agree that this Guaranty Agreement shall be
so construed. Accordingly, the obligation of the Guarantor hereunder is limited
to an amount that is the greater of (x) the "reasonably equivalent value" or
"fair consideration" received by the Guarantor in exchange for the obligation
incurred hereunder, within the meaning of Section 548, as amended, or any
applicable state fraudulent conveyance or transfer law, as amended; or (y) the
lesser of (1) the maximum amount that will not render the Guarantor insolvent or
(2) the maximum amount that will not leave the Guarantor with any Property
deemed an unreasonably small capital. Clauses (1) and (2) are and shall be
determined pursuant to Section 548, as amended, or other applicable state
fraudulent conveyance or transfer law, as amended.
SECTION 2.10 SUBROGATION. The Guarantor shall not exercise any rights which
it may acquire by way of subrogation, reimbursement, exoneration,
indemnification or participation, by any payment made under this Guaranty
Agreement, under any other Loan Document or otherwise until the Obligations have
been paid in full and the Aggregate Commitments are terminated; provided that,
notwithstanding the foregoing, the Guarantor reserves its rights of contribution
and reimbursement, if any, from its co-guarantors and other Persons liable on
the Obligations or otherwise. Except as described in this Section 2.10, the
Guarantor further waives any benefit of any right to participate in any security
now or hereafter held by the Agents and/or the Lenders.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01 REPRESENTATIONS AND WARRANTIES. In order to induce the Agents
and the Lenders to accept this Guaranty Agreement, the Guarantor represents and
warrants to the Lender Group (which representations and warranties will survive
the creation of the Obligations and any extension of credit thereunder) that:
(a) Benefit to the Guarantor. The Guarantor is a wholly-owned Subsidiary
of the Company and the Guarantor's guaranty pursuant to this Guaranty Agreement
reasonably may be expected to benefit, directly or indirectly, the Guarantor;
and the Guarantor has determined that this Guaranty Agreement is necessary and
convenient to the conduct, promotion and attainment of the business of the
Guarantor and the Company.
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(b) Corporate Existence. The Guarantor: (i) is duly organized and validly
existing under the laws of the jurisdiction of its formation; (ii) 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 (iii) 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.
(c) No Breach. The execution and delivery by the Guarantor of this
Guaranty Agreement and the other Loan Documents to which it is a party, the
consummation of the transactions herein or therein contemplated, and the
compliance with the terms and provisions hereof will not (i) conflict with or
result in a breach of, or require any consent under (A) the charter or by-laws
of the Guarantor, or (B) any applicable law or regulation, or any order, writ,
injunction or decree of any court or other Governmental Authority, or any
material agreement or instrument to which the Guarantor 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 (ii) 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 the Guarantor in
each case in such manner as could reasonably be expected to have a Material
Adverse Effect.
(d) Corporate Action. The Guarantor has all necessary corporate power and
authority to execute, deliver and perform its obligations under this Guaranty
Agreement and the Loan Documents to which it is a party; and the execution,
delivery and performance by the Guarantor of this Guaranty Agreement and the
other Loan Documents to which such Person is a party have been duly authorized
by all necessary corporate action on its part. This Guaranty Agreement and the
Loan Documents to which the Guarantor is a party constitute the legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with their terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors' rights and
general principals of equity.
(e) Approvals. Other than consents heretofore obtained or described in the
Credit Agreement, no authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Authority are necessary for the execution,
delivery or performance by the Guarantor of this Guaranty Agreement or the Loan
Documents to which it is a party or for the validity or enforceability thereof.
It is understood that continued performance by the Guarantor of this Guaranty
Agreement and the other Loan Documents to which it is a party will require
various filings, such as filings related to environmental matters, ERISA
matters, Taxes and intellectual property, filings required to maintain corporate
and similar standing and existence, filings pursuant to the Uniform Commercial
Code and other security filings and recordings and 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.
(f) Solvency. The Guarantor (i) is not insolvent and will not be rendered
insolvent as a result of this Guaranty Agreement, (ii) is not engaged in a
business or a transaction, or about to engage in a business or a transaction,
for which any Property or assets remaining with the Guarantor are unreasonably
small capital, and (iii) does not intend to incur, or believe it will incur,
debts that will be beyond its ability to pay as such debts mature.
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(g) No Representation by Agents or Lenders. Neither any Agent, any Lender
nor any other Person has made any representation, warranty or statement to the
Guarantor in order to induce the Guarantor to execute this Guaranty Agreement.
SECTION 3.02 COVENANTS. The Guarantor acknowledges that it is has read the
Credit Agreement and hereby covenants and agrees to comply with covenants and
agreements set forth therein which restrict Restricted Subsidiaries of the
Company in so far as such covenants and agreements apply to it.
ARTICLE IV
SUBORDINATION OF INDEBTEDNESS
SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Company to
the Guarantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation be direct, contingent, primary,
secondary, several, joint and several, or otherwise, and irrespective of whether
such debts or obligations be evidenced by note, contract, open account, or
otherwise, and irrespective of the Person or Persons in whose favor such debts
or obligations may, at their inception, have been, or may hereafter be created,
or the manner in which they have been or may hereafter be acquired by the
Guarantor. Except for payments permitted by the Credit Agreement, until the
Obligations shall be paid and satisfied in full, the Aggregate Commitments are
terminated and the Guarantor shall have performed all of its obligations
hereunder and the Loan Documents to which it is a party, the Guarantor shall not
receive or collect, directly or indirectly, from the Company any amount upon the
Guarantor Claims.
SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Company, the Administrative Agent on behalf of the
Agents and the Lenders shall have the right to prove their claim in any
proceeding, so as to establish their rights hereunder and receive directly from
the receiver, trustee or other court custodian, dividends and payments which
would otherwise be payable upon Guarantor Claims. The Guarantor hereby assigns
such dividends and payments to the Administrative Agent for the benefit of the
Agents and the Lenders. Should any Agent or Lender receive, for application upon
the Obligations, any such dividend or payment which is otherwise payable to the
Guarantor, and which, as between the Company and the Guarantor, shall constitute
a credit upon the Guarantor Claims, then upon payment in full of the
Obligations, the Guarantor shall become subrogated to the rights of the Agents
and the Lenders to the extent that such payments to the Agents and the Lenders
on the Guarantor Claims have contributed toward the liquidation of the
Obligations, and such subrogation shall be with respect to that proportion of
the Obligations which would have been unpaid if the Agents and the Lenders had
not received dividends or payments upon the Guarantor Claims.
SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, the Guarantor agrees (a)
to hold in trust for the Agents and the Lenders an amount equal to the amount of
all funds, payments, claims or distributions so received, and (b) that it shall
have absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Administrative Agent, for the
benefit of the Agents and the Lenders; and the Guarantor covenants promptly to
pay the same to the Administrative Agent.
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SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
upon the Company's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens upon the Company's assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
the Guarantor, any Agent or Lender presently exist or are hereafter created or
attach. Without the prior written consent of the Administrative Agent, the
Guarantor, during the period in which any of the Obligations are outstanding or
the Aggregate Commitments are in effect, shall not (a) exercise or enforce any
creditor's right it may have against the Company, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Lien, mortgages, deeds of trust, security
interest, collateral rights, judgments or other encumbrances on assets of the
Company held by the Guarantor.
SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of the Administrative Agent, all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by the Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and shall
be in every particular available to the successors and assigns of the Agents and
the Lenders and is and shall always be fully binding upon the legal
representatives, successors and assigns of the Guarantor, notwithstanding that
some or all of the monies, the repayment of which this Guaranty Agreement
applies, may be actually advanced after any bankruptcy, receivership,
reorganization or other event affecting either the Company or the Guarantor.
SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in the manner and to the
address of the Guarantor as provided for in Section 12.02 of the Credit
Agreement.
SECTION 5.03 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guaranty Agreement with respect to any action taken by the Administrative Agent
or the exercise or non-exercise by the Administrative Agent of any option,
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Guaranty Agreement shall, as between the Agents
and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Guarantor, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting; and the Guarantor shall
not be under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 5.04 CONSTRUCTION.
(a) THIS GUARANTY AGREEMENT (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.
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(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY AGREEMENT
OR THE OTHER LOAN DOCUMENTS TO WHICH THE GUARANTOR 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 GUARANTY
AGREEMENT, THE GUARANTOR 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 GUARANTOR 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 GUARANTOR IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) The Guarantor 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 Guarantor in any
other jurisdiction.
(e) THE GUARANTOR AND, BY ITS ACCEPTANCE HEREOF, 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 GUARANTY AGREEMENT OR ANY LOAN DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY
COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY AGREEMENT, THE
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
5.04.
SECTION 5.05 SURVIVAL OF OBLIGATIONSSECTION 5.05. To the extent that any
payments on the Obligations 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
Obligations so satisfied shall be revived and continue as if such payment or
proceeds had not been received and the Agents' and the Lenders' Liens, rights,
powers and remedies under this Guaranty Agreement and each Loan Document shall
continue in full force and effect.
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In such event, each Loan Document shall be automatically reinstated and the
Guarantor shall take such action as may be reasonably requested by the
Administrative Agent and the Lenders to effect such reinstatement.
SECTION 5.06 SUBJECT TO THE INTERCREDITOR AGREEMENT. This Guaranty
Agreement is subject to the terms of the Intercreditor Agreement which (a)
subjects the ability of the Lender Group to pursue remedies hereunder to the
prior consent of the Canadian Lenders and (b) sets forth a priority for the
application of proceeds upon any disposition of amounts received hereunder.
SECTION 5.07 STATUS AS SPECIFIED OR DESIGNATED SENIOR INDEBTEDNESS. The
Guarantor hereby acknowledges and confirms that:
(a) this Guaranty Agreement and the obligations of the Guarantor hereunder
are "Guarantor Senior Indebtedness" and "Specified Guarantor Senior
Indebtedness" under and for purposes of the 95 Indenture; and
(b) this Guaranty Agreement and the obligations of the Guarantor hereunder
are "Guarantor Senior Indebtedness" and "Designated Guarantor Senior
Indebtedness" 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 Guarantor Senior Indebtedness, Specified Guarantor Senior
Indebtedness or Designated Guarantor Senior Indebtedness, as applicable, under
each of such Indentures.
SECTION 5.08 INTEREST. It is in the interest of the Guarantor and the
Lender Group to conform strictly to the usury laws applicable to each member of
the Lender Group. Accordingly, reference is made to Section 12.15 of the Credit
Agreement which is incorporated herein by reference for all purposes.
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WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
OCEAN ENERGY, INC., a Louisiana corporation
By:
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
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Exhibit 10.22
- --------------------------------------------------------------------------------
OCEAN ENERGY, INC.
SUBSIDIARY GUARANTORS
parties hereto
AND
U.S. BANK TRUST NATIONAL ASSOCIATION
Trustee
-------------------------
Indenture
Dated as of July 8, 1998
-------------------------
$250,000,000
8 3/8% Series A Senior Subordinated Notes due 2008
8 3/8% Series B Senior Subordinated Notes due 2008
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.............2
Section 1.1 Definitions.....................................................2
Section 1.2 Other Definitions..............................................34
Section 1.3 Incorporation by Reference of Trust Indenture Act..............35
Section 1.4 Rules of Construction..........................................35
ARTICLE II SECURITY FORMS....................................................36
Section 2.1 Forms Generally................................................36
Section 2.2 Form of Face of Security.......................................36
Section 2.3 Form of Reverse of Security....................................40
Section 2.4 Form of Notation Relating to Subsidiary Guarantees.............48
Section 2.5 Form of Trustee's Certificate of Authentication................49
ARTICLE III THE SECURITIES...................................................50
Section 3.1 Title and Terms................................................50
Section 3.2 Denominations..................................................50
Section 3.3 Execution, Authentication, Delivery and Dating.................50
Section 3.4 Temporary Securities...........................................52
Section 3.5 Registration, Registration of Transfer and Exchange............52
Section 3.6 Transfer and Exchange..........................................52
Section 3.7 Additional Provisions for Global Security......................60
Section 3.8 Mutilated, Destroyed, Lost and Stolen Securities...............61
Section 3.9 Payment of Interest; Interest Rights Preserved.................61
Section 3.10 Persons Deemed Owners..........................................62
Section 3.11 Cancellation...................................................63
Section 3.12 Computation of Interest........................................63
Section 3.13 CUSIP Numbers..................................................63
ARTICLE IV SATISFACTION AND DISCHARGE........................................63
Section 4.1 Satisfaction and Discharge of Indenture........................63
Section 4.2 Application of Trust Money.....................................64
ARTICLE V REMEDIES...........................................................65
Section 5.1 Events of Default..............................................65
Section 5.2 Acceleration of Maturity; Rescission and Annulment.............67
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee........................................................68
Section 5.4 Trustee May File Proofs of Claim...............................69
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Section 5.5 Trustee May Enforce Claims Without Possession of Securities....69
Section 5.6 Application of Money Collected.................................70
Section 5.7 Limitation on Suits............................................70
Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest...........................................71
Section 5.9 Restoration of Rights and Remedies.............................71
Section 5.10 Rights and Remedies Cumulative.................................71
Section 5.11 Delay or Omission Not Waiver...................................71
Section 5.12 Control by Holders.............................................71
Section 5.13 Waiver of Past Defaults........................................72
Section 5.14 Waiver of Stay, Extension or Usury Laws........................72
ARTICLE VI THE TRUSTEE.......................................................72
Section 6.1 Notice of Defaults.............................................72
Section 6.2 Certain Rights and Duties of Trustee...........................73
Section 6.3 Trustee Not Responsible for Recitals or Issuance of
Securities.....................................................75
Section 6.4 May Hold Securities............................................75
Section 6.5 Money Held in Trust............................................75
Section 6.6 Compensation and Reimbursement.................................75
Section 6.7 Corporate Trustee Required; Eligibility........................76
Section 6.8 Conflicting Interests..........................................76
Section 6.9 Resignation and Removal; Appointment of Successor..............77
Section 6.10 Acceptance of Appointment by Successor.........................78
Section 6.11 Merger, Conversion, Consolidation or Succession to Business....78
Section 6.12 Preferential Collection of Claims Against Company..............79
ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE............................79
Section 7.1 Disclosure of Names and Addresses of Holders...................79
Section 7.2 Reports By Trustee.............................................79
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE..............................................79
Section 8.1 Company May Consolidate, etc., Only on Certain Terms...........79
Section 8.2 Successor Substituted..........................................81
ARTICLE IX SUPPLEMENTAL INDENTURES...........................................81
Section 9.1 Supplemental Indentures Without Consent of Holders.............81
Section 9.2 Supplemental Indenture with Consent of Holders.................82
Section 9.3 Execution of Supplemental Indentures...........................83
Section 9.4 Effect of Supplemental Indentures..............................83
Section 9.5 Conformity With Trust Indenture Act............................83
Section 9.6 Reference in Securities to Supplemental Indentures.............83
Section 9.7 Notice of Supplemental Indentures..............................84
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ARTICLE X COVENANTS..........................................................84
Section 10.1 Payment of Principal, Premium, if any, and Interest............84
Section 10.2 Maintenance of Office or Agency................................84
Section 10.3 Money for Security Payments to Be Held in Trust................85
Section 10.4 Corporate Existence............................................86
Section 10.5 Payment of Taxes and Other Claims..............................86
Section 10.6 Maintenance of Properties......................................86
Section 10.7 Insurance......................................................87
Section 10.8 Statement by Officers as to Default............................87
Section 10.9 Provision of Financial Information.............................87
Section 10.10 Limitation on Other Senior Subordinated Indebtedness...........88
Section 10.11 Limitation on Restricted Payments..............................88
Section 10.12 Limitation on Indebtedness.....................................92
Section 10.13 Limitation on Guarantees of Indebtedness by Subsidiaries;
Additional Subsidiary Guarantors..............................92
Section 10.14 Limitation on Issuances and Sale of Capital Stock by
Restricted Subsidiaries.......................................93
Section 10.15 Limitation on Liens............................................94
Section 10.16 Purchase of Securities Upon Change of Control..................94
Section 10.17 Disposition of Proceeds of Asset Sales.........................96
Section 10.18 Limitation on Transactions with Affiliates.....................98
Section 10.19 Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.............................99
Section 10.20 Limitation on Restrictive Covenants...........................100
Section 10.21 Waiver of Certain Covenants...................................100
Section 10.22 Suspension of Certain Covenants...............................100
ARTICLE XI REDEMPTION OF SECURITIES.........................................101
Section 11.1 Right of Redemption...........................................101
Section 11.2 Applicability of Article......................................101
Section 11.3 Election to Redeem; Notice to Trustee.........................101
Section 11.4 Selection by Trustee of Securities to Be Redeemed.............102
Section 11.5 Notice of Redemption..........................................102
Section 11.6 Deposit of Redemption Price...................................102
Section 11.7 Securities Payable on Redemption Date.........................103
Section 11.8 Securities Redeemed in Part...................................103
ARTICLE XII DEFEASANCE AND COVENANT DEFEASANCE..............................103
Section 12.1 Company's Option to Effect Defeasance or Covenant
Defeasance...................................................103
Section 12.2 Defeasance and Discharge......................................103
Section 12.3 Covenant Defeasance...........................................104
Section 12.4 Conditions to Defeasance or Covenant Defeasance...............104
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Section 12.5 Deposited Money and U.S. Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions.....................106
Section 12.6 Reinstatement.................................................107
ARTICLE XIII GUARANTEES.....................................................107
Section 13.1 Unconditional Guarantee.......................................107
Section 13.2 Subsidiary Guarantors May Consolidate, etc., on Certain
Terms........................................................108
Section 13.3 Release of a Subsidiary Guarantor.............................109
Section 13.4 Limitation of Subsidiary Guarantor's Liability................110
Section 13.5 Contribution..................................................110
Section 13.6 Execution and Delivery of Notation of Subsidiary Guarantee....110
Section 13.7 Severability..................................................111
Section 13.8 Subsidiary Guarantees Subordinated to Guarantor
Senior Indebtedness..........................................111
Section 13.9 Subsidiary Guarantors Not to Make Payments with Respect to
Subsidiary Guarantees in Certain Circumstances...............111
Section 13.10 Subsidiary Guarantees Subordinated to Prior Payment of All
Guarantor Senior Indebtedness upon Dissolution, etc..........113
Section 13.11 Holders to be Subrogated to Rights of Holders of Guarantor
Senior Indebtedness..........................................114
Section 13.12 Obligations of the Subsidiary Guarantors Unconditional........114
Section 13.13 Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice............................................115
Section 13.14 Application by Trustee of Money Deposited with it.............115
Section 13.15 Subordination Rights Not Impaired by Acts of Omissions
of Subsidiary Guarantors or Holders of Guarantor
Senior Indebtedness..........................................116
Section 13.16 Holders Authorize Trustee to Effectuate Subordination of
Subsidiary Guarantees........................................116
Section 13.17 Right of Trustee to Hold Guarantor Senior Indebtedness........116
Section 13.18 Article XIII Not to Prevent Events of Default.................117
Section 13.19 Payment.......................................................117
ARTICLE XIV SUBORDINATION OF SECURITIES.....................................117
Section 14.1 Securities Subordinate to Senior Indebtedness.................117
Section 14.2 Payment Over of Proceeds upon Dissolution, etc................117
Section 14.3 Suspension of Payment When Senior Indebtedness in Default.....118
Section 14.4 Trustee's Relation to Senior Indebtedness.....................120
Section 14.5 Subrogation to Rights of Holders of Senior Indebtedness.......120
Section 14.6 Provisions Solely To Define Relative Rights...................120
Section 14.7 Trustee To Effectuate Subordination...........................121
Section 14.8 Waiver of Subordination Provision.............................121
Section 14.9 Notice to Trustee.............................................122
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Section 14.10 Reliance on Judicial Order or Certificate of Liquidating
Agent........................................................123
Section 14.11 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.............................123
Section 14.12 Article Applicable to Paying Agents...........................123
Section 14.13 No Suspension of Remedies.....................................123
ARTICLE XV MISCELLANEOUS....................................................124
Section 15.1 Compliance Certificates and Opinions..........................124
Section 15.2 Form of Documents Delivered to Trustee........................124
Section 15.3 Acts of Holders...............................................125
Section 15.4 Notices, etc. to Trustee, Company and Subsidiary Guarantors...126
Section 15.5 Notice to Holders; Waiver.....................................126
Section 15.6 Effect of Headings and Table of Contents......................127
Section 15.7 Successors and Assigns........................................127
Section 15.8 Separability Clause...........................................127
Section 15.9 Benefits of Indenture.........................................127
Section 15.10 Governing Law; Trust Indenture Act Controls...................127
Section 15.11 Legal Holidays................................................128
Section 15.12 No Recourse Against Others....................................128
Section 15.13 Duplicate Originals...........................................128
Section 15.14 No Adverse Interpretation of Other Agreements.................128
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INDENTURE, dated as of July 8, 1998 between OCEAN ENERGY, INC., a Delaware
corporation (hereinafter called the "Company"), the SUBSIDIARY GUARANTORS (as
defined hereinafter) and U.S. BANK TRUST NATIONAL ASSOCIATION, as trustee
(hereinafter called the "Trustee").
RECITALS OF THE COMPANY
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's 8 3/8% Series A Senior
Subordinated Notes due 2008 (the "Series A Securities") and the Company's 8 3/8%
Series B Senior Subordinated Notes due 2008 (the "Series B Securities" and,
collectively with the Series A Securities, the "Securities" or each, a
"Security").
The Company owns beneficially and of record all of the equity ownership of
the outstanding Voting Stock of the initial Subsidiary Guarantor, and the
initial Subsidiary Guarantor is a member of the Company's consolidated group of
companies that are engaged in related businesses. The initial Subsidiary
Guarantor will derive direct and indirect benefit from the issuance of the
Securities; accordingly, the initial Subsidiary Guarantor has authorized its
guarantee of the Company's obligations under this Indenture and the Securities,
and to provide therefor the initial Subsidiary Guarantor has duly authorized the
execution and delivery of this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, that are required to be part of this Indenture and shall, to
the extent applicable, be governed by such provisions.
All things necessary have been done to make the Securities, when executed
by the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, to make the Subsidiary Guarantee
contained in this Indenture, when executed by the Subsidiary Guarantor, the
valid obligation of the Subsidiary Guarantor and to make this Indenture a valid
agreement of the Company, the Subsidiary Guarantor and the Trustee, in
accordance with their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
(together with the related Subsidiary Guarantee) by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities (together with the related Subsidiary Guarantee), as
follows:
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
-------------------------------------------------------
Section 1.1 Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (a) assumed in
connection with an Asset Acquisition from such Person, (b) outstanding at the
time such Person becomes a Subsidiary of any other Person (other than any
Indebtedness incurred in connection with, or in contemplation of, such Asset
Acquisition or such Person becoming such a Subsidiary) or (c) any renewals,
extensions, substitutions, refinancings or replacements (each, for purposes of
this clause, a "refinancing") by the Company of any Indebtedness described in
clause (a) or (b) of this definition, including any successive refinancings, so
long as (i) any such new Indebtedness shall be a principal amount that does not
exceed the principal amount (or, if such Indebtedness being refinanced provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof, such lesser amount as of the date of
determination) so refinanced plus the amount of any premium required to be paid
in connection with such refinancing pursuant to the terms of the Indebtedness
refinanced or the amount of any premium reasonably determined by the Company as
necessary to accomplish such refinancing, plus the amount of expenses of the
Company incurred in connection with such refinancing, and (ii) in the case of
any refinancing of Subordinated Indebtedness, such new Indebtedness is made
subordinate to the Securities at least to the same extent as the Indebtedness
being refinanced and (iii) such new Indebtedness has an Average Life longer than
the Average Life of the Securities and a final Stated Maturity later than the
final Stated Maturity of the Securities.
"Act," when used with respect to any Holder, has the meaning specified in
Section 15.3.
"Adjusted Consolidated Net Tangible Assets" means (without duplication), as
of the date of determination, (a) the sum of (i) discounted future net revenues
from proved oil and gas reserves of the Company and its Restricted Subsidiaries
calculated in accordance with SEC guidelines before any state or federal income
taxes, with no less than 70% of such discounted future net revenues estimated or
audited by one or more nationally recognized firms of independent petroleum
engineers in a reserve report prepared as of the end of the Company's most
recently completed fiscal year, as increased by, as of the date of
determination, the estimated discounted future net revenues from (A) estimated
proved oil and gas reserves acquired since the date of such year-end reserve
report, and (B) estimated oil and gas reserves attributable to upward revisions
of estimates of proved oil and gas reserves since the date of such year-end
reserve report due to exploration, development or exploitation activities, in
each case calculated in accordance with SEC guidelines (utilizing the prices
utilized in such year-end reserve report), and decreased by, as of the date of
determination, the estimated discounted future net revenues from (C) estimated
proved oil and gas reserves produced or disposed of since the date of such year-
end reserve report and (D) estimated oil and gas reserves attributable to
downward revisions of estimates of proved oil and gas reserves since the date of
such year-end reserve report due to changes in geological conditions or other
factors which would, in
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accordance with standard industry practice, cause such revisions, in each case
calculated in accordance with SEC guidelines (utilizing the prices utilized in
such year-end reserve report); provided that, in the case of each of the
determinations made pursuant to clauses (A) through (D), such increases and
decreases shall be as estimated by the Company's petroleum engineers, unless in
the event that there is a Material Change as a result of such acquisitions,
dispositions or revisions, then the discounted future net revenues utilized for
purposes of this clause (a)(i) shall be confirmed in writing by estimate or
audit of one or more nationally recognized firms of independent petroleum
engineers as to at least 70% of such discounted future net revenues, (ii) the
capitalized costs that are attributable to oil and gas properties of the Company
and its Restricted Subsidiaries to which no proved oil and gas reserves are
attributable, based on the Company's books and records as of a date no earlier
than the date of the Company's latest annual or quarterly financial statements,
(iii) the Net Working Capital on a date no earlier than the date of the
Company's latest annual or quarterly financial statements and (iv) the greater
of (A) the net book value on a date no earlier than the date of the Company's
latest annual or quarterly financial statements or (B) the appraised value, as
estimated by independent appraisers, of other tangible assets (including,
without duplication, Investments in unconsolidated Restricted Subsidiaries) of
the Company and its Restricted Subsidiaries, as of the date no earlier than the
date of the Company's latest audited financial statements, minus (b) the sum of
(i) minority interests, (ii) any gas balancing liabilities of the Company and
its Restricted Subsidiaries reflected in the Company's latest audited financial
statements, (iii) to the extent included in (a) (i) above, the discounted future
net revenues, calculated in accordance with SEC guidelines (utilizing the prices
utilized in the Company's year-end reserve report), attributable to reserves
which are required to be delivered to third parties to fully satisfy the
obligations of the Company and its Restricted Subsidiaries with respect to
Volumetric Production Payments on the schedules specified with respect thereto
and (iv) the discounted future net revenues, calculated in accordance with SEC
guidelines, attributable to reserves subject to Dollar-Denominated Production
Payments which, based on the estimates of production and price assumptions
included in determining the discounted future net revenues specified in (a)(i)
above, would be necessary to fully satisfy the payment obligations of the
Company and its Restricted Subsidiaries with respect to Dollar-Denominated
Production Payments on the schedules specified with respect thereto. If the
Company changes its method of accounting from the full cost method to the
successful efforts method or a similar method of accounting, "Adjusted
Consolidated Net Tangible Assets" will continue to be calculated as if the
Company was still using the full cost method of accounting.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
amount by which the fair value of the properties and assets of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such
date.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether
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through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
For purposes of this definition, beneficial ownership of 10% or more of the
voting common equity (on a fully diluted basis) or options or warrants to
purchase such equity (but only if exercisable at the date of determination or
within 60 days thereof) of a Person shall be deemed to constitute control of
such Person.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or any Restricted Subsidiary shall be merged with
or into the Company or any other Restricted Subsidiary or (b) the acquisition by
the Company or any Restricted Subsidiary of the assets of any Person which
constitute all or substantially all of the assets of such Person or any division
or line of business of such Person.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition to any Person other than the Company or any of its Restricted
Subsidiaries (including, without limitation, by means of a Sale/ Leaseback
Transaction or by way of merger or consolidation) (collectively, for purposes of
this definition, a "transfer"), directly or indirectly, in one or a series of
related transactions, of (a) any Capital Stock of any Restricted Subsidiary (or
North American Unrestricted Subsidiary) held by the Company or any Restricted
Subsidiary (or North American Unrestricted Subsidiary); (b) all or substantially
all of the properties and assets of any division or line of business of the
Company or any of its Restricted Subsidiaries (or North American Unrestricted
Subsidiaries); or (c) any other properties or assets of the Company or any of
its Restricted Subsidiaries (or North American Unrestricted Subsidiaries) other
than (A) a transfer of hydrocarbons or other mineral products, cash or Cash
Equivalents in the ordinary course of business or (B) any lease, abandonment,
disposition, relinquishment or farm-out of any oil and gas Property in the
ordinary course of business. For the purposes of this definition, the term
"Asset Sale" shall not include (i) any transfer of properties or assets that is
governed by, and made in accordance with, the provisions described in
Section 8.1 hereof; (ii) any transfer of properties or assets to an Unrestricted
Subsidiary, if permitted under Section 10.11 hereof; (iii) any trade or exchange
by the Company or any Restricted Subsidiary (or North American Unrestricted
Subsidiary) of oil and gas properties for other oil and gas properties owned or
held by another Person which the Board of Directors of the Company determines in
good faith to be of approximately equivalent value; (iv) any transfer of
Properties having a fair market value of less than $5,000,000; or (v) any
transfer that is a Permitted Investment, a Restricted Payment not prohibited by
Section 10.11 hereof or an investment specifically excluded from the definition
of the term "Investment."
"Attributable Indebtedness" means, with respect to any particular lease
under which any Person is at the time liable and at any date as of which the
amount thereof is to be determined, the present value of the total net amount of
rent required to be paid by such Person under the lease during the primary term
thereof, without giving effect to any renewals at the option of the lessee,
discounted from the respective due dates thereof to such date of determination
at the rate of interest per annum implicit in the terms of the lease. As used in
the preceding sentence, the "net amount of rent" under any lease for any such
period shall mean the sum of rental and other payments required
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to be paid with respect to such period by the lessee thereunder, excluding any
amounts required to be paid by such lessee on account of maintenance and
repairs, insurance, taxes, assessments, water rates or similar charges. In the
case of any lease which is terminable by the lessee upon payment of a penalty,
such net amount of rent shall also include the amount of such penalty, but no
rent shall be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated.
"Average Life" means, with respect to any Indebtedness, at any date of
determination, the quotient obtained by dividing (a) the sum of the products of
(i) the number of years (and any portion thereof) from the date of determination
to the date or dates of each successive scheduled principal payment (including,
without limitation, any sinking fund or mandatory redemption payment
requirements) of such Indebtedness multiplied by (ii) the amount of each such
principal payment by (b) the sum of all such principal payments.
"Bank Agent" means Chase Bank of Texas, National Association or any
successor or replacement agent under the Credit Agreement.
"Board of Directors" means, with respect to the Company, either the board
of directors of the Company or any duly authorized committee of such board of
directors, and, with respect to any Restricted Subsidiary, either the board of
directors of such Restricted Subsidiary or any duly authorized committee of that
board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by its Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee, and with respect to a Restricted
Subsidiary, a copy of a resolution certified by the Secretary or an Assistant
Secretary of such Restricted Subsidiary to have been duly adopted by its Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the Borough of Manhattan,
The City of New York, New York or the city in which the Trustee's Corporate
Trust Office is located, are authorized or obligated by law or executive order
to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents in the equity
interests (however designated) in such Person, and any rights (other than debt
securities convertible into an equity interest), warrants or options exercisable
for, exchangeable for or convertible into such an equity interest in such
Person.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) any
Property (whether real, personal or mixed) that is required to be classified and
accounted for as a capital lease obligation under GAAP,
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and, for the purpose of this Indenture, the amount of such obligation at any
date shall be the capitalized amount thereof at such date, determined in
accordance with GAAP.
"Cash Equivalents" means (i) any evidence of Indebtedness with a maturity
of 365 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof); (ii) demand and time deposits and certificates of deposit or
acceptances with a maturity of 365 days or less of any financial institution
organized in the United States that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$500,000,000 or any commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development ("OECD") and has total assets in excess of $500,000,000; (iii)
direct obligations issued by any state of the United States of America or Canada
or any political subdivision of any such state or Canada or any public
instrumentality of any such state or Canada maturing within 90 days after the
date of acquisition thereof and, at the time of acquisition, having one of the
two highest ratings obtainable from either S&P or Moody's (or, if at any time
neither S&P nor Moody's shall be rating such obligations, then from such other
rating service as may be acceptable to the Trustee); (iv) commercial paper
issued by a corporation that is not an Affiliate of the Company and is organized
under the laws of any state of the United States or the District of Columbia and
rated at least A- 1 by S&P or at least P- 1 by Moody's; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any commercial bank
meeting the specifications of clause (ii) above; (vi) overnight bank deposits
and bankers' acceptances at any commercial bank meeting the qualifications
specified in clause (ii) above; (vii) deposits available for withdrawal on
demand with any commercial bank not meeting the qualifications specified in
clause (ii) above but which is organized under the laws of (a) any country that
is a member of the OECD and has total assets in excess of $50,000,000 or (b) any
other country in which the Company or any Restricted Subsidiary maintains an
office or is engaged in the Oil and Gas Business, provided that, in either case
(A) all such deposits are required to be made in such accounts in the ordinary
course of business, (B) such deposits do not at any one time exceed $5,000,000
in the aggregate and (C) no funds so deposited remain on deposit in such bank
for more than 30 days; (viii) deposits available for withdrawal on demand with
any commercial bank not meeting the qualifications specified in clause (ii)
above but which is a lending bank under any of the Company's or any Restricted
Subsidiary's credit facilities, provided all such deposits do not exceed
$5,000,000 in the aggregate at any one time; (ix) deposits at any one time not
in excess of $200,000 in the aggregate, available for withdrawal on demand, with
any commercial bank organized in the United States, and not meeting the
qualifications specified in clause (ii) above; and (x) investments in money
market funds substantially all of whose assets comprise securities of the types
described in clauses (i) through (vi).
"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the
total Voting Stock of the Company; (b) the Company is merged with or into
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or consolidated with another Person and, immediately after giving effect to the
merger or consolidation, (A) less than 50% of the total voting power of the
outstanding Voting Stock of the surviving or resulting Person is then
"beneficially owned" (within the meaning of Rule 13d-3 under the Exchange Act)
in the aggregate by (x) the stockholders of the Company immediately prior to
such merger or consolidation, or (y) if a record date has been set to determine
the stockholders of the Company entitled to vote with respect to such merger or
consolidation, the stockholders of the Company as of such record date and (B)
any "person" or "group" (as defined in Section 13(d)(3) or 14(d)(2) of the
Exchange Act, has become the direct or indirect "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act) of more than 50% of the total voting power
of the Voting Stock of the surviving or resulting Person; (c) the Company,
either individually or in conjunction with one or more Restricted Subsidiaries,
sells, conveys, transfers or leases, or the Restricted Subsidiaries sell,
convey, transfer or lease, all or substantially all of the assets of the Company
and the Restricted Subsidiaries, taken as a whole (either in one transaction or
a series of related transactions), including Capital Stock of the Restricted
Subsidiaries, to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary) (but in no event shall the sale, conveyance, transfer or lease of
the assets of, or the Capital Stock of, a North American Restricted Subsidiary,
in the absence of other factors, result in a Change of Control); (d) 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 (e) the liquidation or dissolution
of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder issued by the Internal Revenue Service.
"Commission" or "SEC" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
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"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Consolidated Exploration Expenses" means, for any period, exploration
expenses of the Company and its Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the ratio
of (a) the sum of Consolidated Net Income, Consolidated Interest Expense,
Consolidated Exploration Expenses, Consolidated Income Tax Expense and
Consolidated Non-cash Charges deducted in computing Consolidated Net Income, in
each case, for such period, of the Company and its Restricted Subsidiaries on a
consolidated basis, all determined in accordance with GAAP, decreased (to the
extent included in determining Consolidated Net Income) by the sum of (x) the
amount of deferred revenues that are amortized during such period and are
attributable to reserves that are subject to Volumetric Production Payments and
(y) amounts recorded in accordance with GAAP as repayments of principal and
interest pursuant to Dollar-Denominated Production Payments, to (b) the sum of
such Consolidated Interest Expense for such period; provided that (i) in making
such computation, the Consolidated Interest Expense attributable to interest on
any Indebtedness required to be computed on a pro forma basis in accordance with
clause (x) of Section 10.12 hereof and bearing a floating interest rate shall be
computed as if the rate in effect on the date of computation had been the
applicable rate for the entire period, (ii) in making such computation, the
Consolidated Interest Expense attributable to interest on any Indebtedness under
a revolving credit facility required to be computed on a pro forma basis in
accordance with clause (x) of Section 10.12 hereof shall be computed based upon
the average daily balance of such Indebtedness during the applicable period,
provided that such average daily balance shall be reduced by the amount of any
repayment of Indebtedness under a revolving credit facility during the
applicable period, which repayment permanently reduced the commitments or
amounts available to be reborrowed under such facility, (iii) notwithstanding
clauses (i) and (ii) of this proviso, interest on Indebtedness determined on a
fluctuating basis, to the extent such interest is covered by agreements relating
to Interest Rate Protection Obligations, shall be deemed to have accrued at the
rate per annum resulting after giving effect to the operation of such agreements
and (iv) in making such calculation, Consolidated Interest Expense shall exclude
interest attributable to Dollar-Denominated Production Payments.
"Consolidated Income Tax Expense" means, for any period, the provision for
federal, state, local and foreign income taxes of the Company and its Restricted
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, for any period, without duplication,
the sum of (i) the interest expense of the Company and its Restricted
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP, including, without limitation, (a) any amortization of debt discount,
(b) the net cost under Interest Rate Protection Obligations (including any
amortization of discounts), (c) the interest portion of any deferred payment
obligation, (d) all
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commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and (e) all accrued interest, in
each case to the extent attributable to such period, (ii) to the extent any
Indebtedness of any Person (other than the Company or a Restricted Subsidiary)
is guaranteed by the Company or any Restricted Subsidiary, the aggregate amount
of interest paid or accrued by such other Person during such period attributable
to any such Indebtedness, in each case to the extent attributable to that
period, (iii) the aggregate amount of the interest component of Capitalized
Lease Obligations paid, accrued and/or scheduled to be paid or accrued by the
Company and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP and (iv) the aggregate amount of
dividends paid or accrued on Redeemable Capital Stock or Preferred Stock of the
Company and its Restricted Subsidiaries, to the extent such Redeemable Capital
Stock or Preferred Stock is owned by Persons other than Restricted Subsidiaries,
less (v) to the extent included in clauses (i), (ii) or (iii), writeoff of
capitalized debt issuance costs of the Company and its Restricted Subsidiaries
during such period.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such period
as determined in accordance with GAAP, adjusted by excluding (a) net after-tax
extraordinary gains or losses (less all fees and expenses relating thereto), (b)
net after-tax gains or losses (less all fees and expenses relating thereto)
attributable to Asset Sales, (c) the net income (or net loss) of any Person
(other than the Company or any of its Restricted Subsidiaries), in which the
Company or any of its Restricted Subsidiaries has an ownership interest, except
to the extent of the amount of dividends or other distributions or interest on
indebtedness actually paid to the Company or its Restricted Subsidiaries in cash
by such other Person during such period (regardless of whether such cash
dividends, distributions or interest on indebtedness is attributable to net
income (or net loss) of such Person during such period or during any prior
period), (d) net income (or net loss) of any Person combined with the Company or
any of its Restricted Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (e) the net income
of any Restricted Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary is not at the
date of determination permitted, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, provided, however, that the net income of a
Foreign Subsidiary subject to restrictions on the payment of dividends or
similar distributions related to project financing Indebtedness incurred in
compliance with Section 10.12 hereof shall not be excluded to the extent of the
sum of, without duplication, (i) the aggregate amount of all principal and
interest on such project financing Indebtedness, plus (ii) capital expenditures;
provided further, however, that the net income of a Foreign Subsidiary subject
to restrictions on the payment of dividends or similar distributions shall not
be excluded to the extent that such restrictions relate to completion of the
project being financed by such project financing Indebtedness and such
restriction is in effect for a period of no more than 18 months from the time of
incurrence of such project financing Indebtedness, (f) any writedowns of non-
current assets, provided, however, that any ceiling limitation writedowns under
SEC guidelines shall be treated as capitalized costs, as if such writedowns had
not occurred, and (g) any expenses associated with the merger between the
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Company and United Meridian Corporation occurring prior to December 31, 1998 and
not in excess of $40 million in the aggregate.
"Consolidated Net Worth" means, at any date, the consolidated stockholders'
equity of the Company less the amount of such stockholders' equity attributable
to Redeemable Capital Stock or treasury stock of the Company and its Restricted
Subsidiaries, as determined in accordance with GAAP.
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, depletion, amortization and other non-cash expenses of the Company
and its Restricted Subsidiaries reducing Consolidated Net Income for such
period, determined on a consolidated basis in accordance with GAAP (excluding
any such non-cash charge which requires an accrual of or reserve for cash
charges for any future period).
"Corporate Trust Office" means the corporate trust office of the Trustee,
at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Indenture is located
at 950 17th Street, Suite 650, Denver, Colorado 80202, Attention: Corporate
Trust Department, except that with respect to presentation of Securities for
payment or for registration of transfer or exchange, such term shall mean the
office or agency of the Trustee at which, at any particular time, its corporate
agency business shall be conducted.
"Credit Agreement" means the Amended and Restated Credit Agreement dated as
of July 8, 1998 among the Company, as borrower, OEI Louisiana, as guarantor, and
Chase Bank of Texas, National Association, as agent, the other agents parties
thereto, and the lenders parties thereto, as such agreement may be amended,
modified, supplemented, extended, restated, replaced (including replacement
after the termination of such agreement), restructured, increased, renewed or
refinanced from time to time in one or more credit agreements, loan agreements,
instruments or similar agreements, with the same or different agents or lenders,
as such may be further amended, modified, supplemented, extended, restated,
replaced (including replacement after the termination of such agreement),
restructured, increased, renewed or refinanced from time to time, in each case
in accordance with and as permitted by this Indenture.
"Credit Agreement Obligations" means all monetary obligations of every
nature of the Company or a Restricted Subsidiary, including without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities, from time to time owed to the
lenders or any agent under or in respect of the Credit Agreement.
"Default" means any event, act or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.9 hereof.
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"Definitive Securities" means Securities that are in the form set forth in
Section 2.2 hereto (but without including the paragraph referred to in the
footnote in Section 2.2 hereof).
"Depositary" means with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 3.5 hereof as
the Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Designated Guarantor Senior Indebtedness" means, with respect to a
Subsidiary Guarantor, (i) all Guarantor Senior Indebtedness of such Subsidiary
Guarantor under the Credit Agreement Obligations, (ii) all Guarantor Senior
Indebtedness of such Subsidiary Guarantor under the Senior Note Obligations and
(iii) any other Guarantor Senior Indebtedness which (a) at the time of
incurrence equals or exceeds $10,000,000 in aggregate principal amount and (b)
is specifically designated by such Subsidiary Guarantor in the instrument
evidencing such Guarantor Senior Indebtedness as "Designated Guarantor Senior
Indebtedness" for purposes of this Indenture.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness under
the Credit Agreement Obligations, (ii) all Senior Indebtedness under the Senior
Note Obligations and (iii) any other Senior Indebtedness which (a) at the time
of incurrence equals or exceeds $10,000,000 in aggregate principal amount and
(b) is specifically designated by the Company in the instrument evidencing such
Senior Indebtedness as "Designated Senior Indebtedness" for purposes of this
Indenture.
"Disinterested Director" means, with respect to any transaction or series
of transactions in respect of which the Board of Directors of the Company is
required to deliver a Board Resolution hereunder, a member of the Board of
Directors of the Company who does not have any material direct or indirect
financial interest (other than an interest arising solely from the beneficial
ownership of Capital Stock of the Company) in or with respect to such
transaction or series of transactions.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Event of Default" has the meaning specified in Section 5.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor act thereto.
"Exchange Offer" means the offer by the Company to the Holders of all
outstanding Transfer Restricted Securities to exchange all such outstanding
Transfer Restricted Securities held by such Holders for Series B Securities, in
an aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.
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"Existing Indentures" means, collectively, the indenture related to the
Company's 10 3/8% Senior Subordinated Notes due 2005, the indenture related to
the Company's 9 3/4% Senior Subordinated Notes due 2006 and the indenture
related to the Company's 8 7/8% Senior Subordinated Notes due 2007, in each case
as amended and supplemented to the date hereof and as such may be further
amended and supplemented from time to time.
"Existing Notes" means (i) the 10 3/8% Senior Subordinated Notes due 2005
of the Company issued pursuant to the Indenture, dated as of October 30, 1995,
between the Company, as successor by merger to United Meridian Corporation, as
issuer, OEI Louisiana, as successor by merger to UMC Petroleum Corporation, as
subsidiary guarantor, and U.S. Bank Trust National Association, as trustee, as
amended and supplemented by the First and Second Supplemental Indentures
thereto, (ii) the 9 3/4% Senior Subordinated Notes due 2006 of the Company
issued pursuant to the Indenture, dated as of September 26, 1996, between the
Company, as issuer, OEI Louisiana, as subsidiary guarantor, and State Street
Bank and Trust Company, as trustee, as amended and supplemented by the First
Supplemental Indenture thereto, and (iii) the 8 7/8% Senior Subordinated Notes
due 2007 of the Company issued pursuant to the Indenture, dated as of July 2,
1997, between the Company, as issuer, OEI Louisiana, as subsidiary guarantor,
and State Street Bank and Trust Company, as trustee, as amended and supplemented
by the First Supplemental Indenture thereto, in each case as such notes and
indentures may be further amended and supplemented from time to time.
"Existing Senior Notes" means the 13 1/2% Senior Notes due 2004 of the
Company issued pursuant to the Indenture, dated as of December 1, 1994, between
the Company, as issuer, OEI Louisiana, as subsidiary guarantor, and State Street
Bank and Trust Company, as trustee, as amended and supplemented by the First,
Second and Third Supplemental Indentures thereto, and as further amended and
supplemented from time to time.
"Fair Market Value" means the fair market value of a Property (including
shares of Capital Stock) or Redeemable Capital Stock as determined by a Board
Resolution of the Company adopted in good faith, which determination shall be
conclusive for purposes of this Indenture; provided however, that unless
otherwise specified herein, the Board of Directors shall be under no obligation
to obtain any valuation or assessment from any investment banker, appraiser or
other third party.
"Federal Bankruptcy Code" means the United States Bankruptcy Code of
Title 11 of the United States Code, as amended from time to time.
"Foreign Subsidiary" means (i) any Restricted Subsidiary engaged in the Oil
and Gas Business exclusively outside the United States of America, irrespective
of its jurisdiction of incorporation, and (ii) any other Restricted Subsidiary
whose assets (excluding any cash and Cash Equivalents) consist exclusively of
Capital Stock or Indebtedness of one or more Restricted Subsidiaries described
in clause (i) of this definition.
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"GAAP" means generally accepted accounting principles in the United States
as in effect on the Issue Date.
"Guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. When used as a verb,
"guarantee" shall have a corresponding meaning.
"Guarantor" means any Restricted Subsidiary that incurs a Subsidiary
Guarantee.
"Guarantor Senior Indebtedness" means all Indebtedness of a Subsidiary
Guarantor (present and future) created, incurred, assumed or guaranteed by such
Subsidiary Guarantor (and all renewals, substitutions, refinancings or
replacements thereof) (including the principal of, interest on and fees,
premiums, expenses (including costs of collection), indemnities and other
amounts payable in connection with such Indebtedness) (and including, in the
case of the Credit Agreement and any guarantees related to the Senior Notes and
the Existing Senior Notes, interest accruing after the filing of a petition by
or against such Subsidiary Guarantor under any bankruptcy law, in accordance
with and at the rate, including any default rate, specified with respect to such
indebtedness, whether or not a claim for such interest is allowed as a claim
after such filing in any proceeding under such bankruptcy law), unless the
instrument governing such Indebtedness expressly provides that such Indebtedness
is not senior in right of payment to its Subsidiary Guarantee. Notwithstanding
the foregoing, Guarantor Senior Indebtedness of a Subsidiary Guarantor will not
include (i) Indebtedness of such Subsidiary Guarantor evidenced by its
Subsidiary Guarantee, (ii) Indebtedness of such Subsidiary Guarantor that is
expressly subordinate or junior in right of payment to any Guarantor Senior
Indebtedness of such Subsidiary Guarantor or its Subsidiary Guarantee, (iii)
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11 United States Code, is by its terms without recourse
to such Subsidiary Guarantor, (iv) any repurchase, redemption or other
obligation in respect of Redeemable Capital Stock of such Subsidiary Guarantor,
(v) to the extent it might constitute Indebtedness, any liability for federal,
state, local or other taxes owed or owing by such Subsidiary Guarantor, (vi)
Indebtedness of such Subsidiary Guarantor to the Company or any of the Company's
other Subsidiaries or any other Affiliate of the Company or any of such
Affiliate's Subsidiaries, and (vii) that portion of any Indebtedness of such
Subsidiary Guarantor which at the time of issuance is issued in violation of
this Indenture (but, as to any such Indebtedness, no such violation shall be
deemed to exist for purposes of this clause (vii) if the holder(s) of such
Indebtedness or their representative or such Subsidiary Guarantor shall have
furnished to the Trustee an opinion of counsel unqualified in all material
respects of independent legal counsel, addressed to the Trustee (which legal
counsel may, as to matters of fact, rely upon a certificate of such Subsidiary
Guarantor) to the effect that the incurrence of such Indebtedness does not
violate the provisions of this Indenture); provided that the foregoing
exclusions shall not affect the priorities of any Indebtedness arising solely by
operation of law in any case or proceeding or
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similar event described in clause (a), (b) or (c) of the definition of
"Insolvency or Liquidation Proceeding" included herein.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all liabilities of such Person for borrowed money or for the deferred purchase
price of Property or services, excluding any trade accounts payable and other
accrued current liabilities incurred in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit, bankers' acceptance or other
similar credit transaction and in connection with any agreement to purchase,
redeem, exchange, convert or otherwise acquire for value any Capital Stock of
such Person, or any warrants, rights or options to acquire such Capital Stock,
now or hereafter outstanding, if, and to the extent, any of the foregoing would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, (b) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments, if, and to the extent, any of the
foregoing would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, (c) all Indebtedness of such Person created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even if the rights and remedies of
the seller or lender under such agreement in the event of default are limited to
repossession or sale of such Property), but excluding trade accounts payable
arising in the ordinary course of business, (d) all Capitalized Lease
Obligations of such Person, (e) the Attributable Indebtedness (in excess of any
related Capitalized Lease Obligations) related to any Sale/Leaseback Transaction
of such Person, (f) all Indebtedness referred to in the preceding clauses of
other Persons and all dividends of other Persons, the payment of which is
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon Property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness (the amount of such obligation being deemed to be the lesser of the
value of such Property or asset or the amount of the obligation so secured), (g)
all guarantees by such Person of Indebtedness referred to in this definition
(including, with respect to any Production Payment, any warranties or guaranties
of production or payment by such Person with respect to such Production Payment
but excluding other contractual obligations of such Person with respect to such
Production Payment), (h) all Redeemable Capital Stock of such Person valued at
the greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued dividends, (i) all obligations of such Person under or in respect of
currency exchange contracts and Interest Rate Protection Obligations and (j) any
amendment, supplement, modification, deferral, renewal, extension or refunding
of any liability of such Person of the types referred to in clauses (a) through
(i) above. For purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such Redeemable Capital
Stock, such Fair Market Value shall be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock,
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provided, however, that if such Redeemable Capital Stock is not at the date of
determination permitted or required to be repurchased, the "maximum fixed
repurchase price" shall be the book value of such Redeemable Capital Stock.
Subject to clause (g) of the first sentence of this definition, neither Dollar-
Denominated Production Payments nor Volumetric Production Payments shall be
deemed to be Indebtedness.
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Initial Purchasers" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Chase Securities Inc., J.P. Morgan Securities Inc., Lehman
Brothers Inc. and Salomon Brothers Inc as initial purchasers in the Offering.
"Insolvency or Liquidation Proceeding" means, with respect to any Person,
(a) an insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding, relative to
such Person or to its creditors, as such, or its assets, or (b) any liquidation,
dissolution or other winding-up of such Person, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any general
assignment for the benefit of creditors or any other marshaling of assets and
liabilities of such Person.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Protection Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements or arrangements designed to protect
against or manage such Person's and any of its Subsidiaries' exposure to
fluctuations in interest rates.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee of Indebtedness or other extension of credit or capital
contribution to (by means of any transfer of cash or other Property or assets to
others or any payment for Property, assets or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities (including derivatives) or
evidences of Indebtedness issued by, any other Person. In addition, the Fair
Market Value of the net assets of any Restricted Subsidiary at the time that
such Restricted Subsidiary is designated an Unrestricted Subsidiary shall be
deemed to be an "Investment" made by the Company in such Unrestricted Subsidiary
at such time. "Investments" shall exclude (a) extensions of trade credit on
commercially reasonable terms in accordance with normal trade practices, (b)
Interest Rate Protection Obligations entered into in
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the ordinary course of business or as required by any Permitted Indebtedness or
any Indebtedness incurred in compliance with Section 10.12 hereof, but only to
the extent that the notional principal amount of such Interest Rate Protection
Obligations does not exceed 105% of the principal amount of such Indebtedness to
which such Interest Rate Protection Obligations relate and (c) Capital Stock,
bonds, notes, debentures or other securities received as a result of Asset Sales
permitted under Section 10.17 hereof.
"Issue Date" means the closing date for the sale and original issuance of
the Securities to the Initial Purchasers.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or preference
or priority or other encumbrance or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or grant a Lien or any lease, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing) upon or with respect to any Property of any kind. A Person shall be
deemed to own subject to a Lien any Property which such Person 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.
"Make-Whole Premium" means, in connection with any optional redemption of
any Security prior to the Five-Year Date, the excess, if any, of (i) the
aggregate present value as of the date of such redemption of each dollar of
principal of such Security being redeemed and the amount of interest (exclusive
of interest accrued to the date of redemption) and premium that would have been
payable in respect of such dollar if such redemption had been made on the Five-
Year Date, determined by discounting, on a semiannual basis, such principal,
interest and premium at a rate equal to the sum of the Treasury Yield
(determined on the business day immediately preceding the date of such
redemption) plus 0.45% per annum, from the respective dates on which such
principal, interest and premium would have been payable if such redemption had
been made on the Five-Year Date, over (ii) the aggregate principal amount of
such Securities being redeemed.
"Material Change" means an increase or decrease (excluding changes that
result solely from changes in prices) of more than 50% during a fiscal quarter
in the estimated discounted future net cash flows from proved oil and gas
reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (a) (i) of the definition of Adjusted Consolidated Net
Tangible Assets; provided, however, that the following will be excluded from the
calculation of Material Change: (i) any acquisitions during the quarter of oil
and gas reserves that have been estimated by a nationally recognized firm of
independent petroleum engineers and on which a report or reports exist and (ii)
any disposition of Properties existing at the beginning of such quarter that
have been disposed of as provided in Section 10.17 hereof.
"Maturity" means, with respect to any Security, the date on which any
principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity with
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respect to such principal or by declaration of acceleration, call for redemption
or purchase or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (except to the extent that such obligations are financed or sold
with recourse to the Company or any Restricted Subsidiary), net of (i) brokerage
commissions and other fees and expenses (including fees and expenses of legal
counsel and investment banks) related to such Asset Sale, (ii) provisions for
all taxes payable as a result of such Asset Sale, (iii) amounts required to be
paid to any Person (other than the Company or any Restricted Subsidiary) owning
a beneficial interest in the assets subject to the Asset Sale and (iv)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP consistently
applied against any liabilities associated with such Asset Sale and retained by
the Company or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Trustee; provided,
however, that any amounts remaining after adjustments, revaluations or
liquidations of such reserves shall constitute Net Cash Proceeds.
"Net Working Capital" means (i) all current assets of the Company and its
Restricted Subsidiaries, minus (ii) all current liabilities of the Company and
its Restricted Subsidiaries, except current liabilities included in
Indebtedness, in each case as set forth in financial statements of the Company
prepared in accordance with GAAP.
"Non-payment Default" means, for purposes of Article XIV hereof, any event
(other than a Payment Default) the occurrence of which entitles one or more
Persons to act to accelerate the maturity of any Designated Senior Indebtedness.
"Non-recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of the Company incurred in connection with the acquisition by the
Company of any Property or assets and as to which (a) the holders of such
Indebtedness agree that they will look solely to the Property or assets so
acquired and securing such Indebtedness for payment on or in respect of such
Indebtedness and (b) no default with respect to such Indebtedness would permit
(after notice or passage of time or both), according to the terms thereof, any
holder of any Indebtedness of the Company or a Restricted Subsidiary to declare
a default on such Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
"North American Restricted Subsidiary" means any Restricted Subsidiary at
least 90% of the Adjusted Consolidated Net Tangible Assets of which are located
onshore (or in water not deeper than 15 feet) in the United States or Canada (as
evaluated immediately prior to the designation of
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such Subsidiary to be an Unrestricted Subsidiary); and "North American
Unrestricted Subsidiary" means such Subsidiary after such designation.
"Obligations" means any principal of, premium, if any, and interest on, and
any other amounts (including, without limitation, any payment obligations with
respect to the Securities as a result of any Asset Sale, Change of Control or
redemption) owing in respect of, the Securities payable pursuant to the terms of
the Securities or this Indenture or upon acceleration of the Securities.
"OEI Louisiana" means Ocean Energy, Inc., a Louisiana corporation and
wholly-owned subsidiary of the Company.
"Offering" means the Offering of the Series A Securities pursuant to the
Offering Memorandum.
"Offering Memorandum" means the Offering Memorandum of the Company, dated
July 1, 1998, relating to the Offering.
"Officer" means, with respect to any Person, the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of such Person.
"Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Oil and Gas Business" means (i) the acquisition, exploration, development,
operation and disposition of interests in oil, gas and other hydrocarbon
Properties, (ii) the gathering, marketing, treating, processing, storage,
refining, selling and transporting of any production from such interests or
Properties, (iii) any business relating to or arising from exploration for or
development, production, treatment, processing, storage, refining,
transportation or marketing of oil, gas and other minerals and products produced
in association therewith, (iv) any power generation and electrical transmission
business in a jurisdiction outside of North America where fuel required by such
business is supplied, directly or indirectly, from production reserves
substantially from blocks in which the Company or its Restricted Subsidiaries
participate and (v) any activity necessary, appropriate or incidental to the
activities described in the foregoing clauses (i) through (iv) of this
definition.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company (or any Subsidiary Guarantor, if applicable), including an
employee of the Company (or any Subsidiary Guarantor, if applicable), and who
shall be reasonably acceptable to the Trustee.
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"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 12.2 and
12.3 hereof, with respect to which the Company has effected legal
defeasance and/or covenant defeasance as provided in Article XII hereof;
and
(iv) Securities which have been paid pursuant to Section 3.8 hereof
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands the Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the Company, any Subsidiary Guarantor, or any other obligor upon the
Securities or any Affiliate of the Company, any Subsidiary Guarantor, or such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, consent, notice or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company, any Subsidiary
Guarantor, or any other obligor upon the Securities or any Affiliate of the
Company, any Subsidiary Guarantor, or such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company that is
pari passu in right of payment to the Securities.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (and premium, if any,
on) or interest on any Securities on behalf of the Company.
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"Payment Default" means any default in the payment when due (whether at
Stated Maturity, upon scheduled repayment, upon acceleration or otherwise) of
principal of or premium, if any, or interest on, or of unreimbursed amounts
under drawn letters of credit or fees relating to letters of credit
constituting, any Designated Senior Indebtedness.
"Permitted Guarantor Junior Securities" means with respect to any
Subsidiary Guarantor, so long as the effect of any exclusion employing this
definition is not to cause such Subsidiary Guarantee to be treated in any case
or proceeding or similar event described in clause (a), (b) or (c) of the
definition of Insolvency or Liquidation Proceeding as part of the same class of
claims as Guarantor Senior Indebtedness of such Subsidiary Guarantor or any
class of claims pari passu with, or senior to, Guarantor Senior Indebtedness of
such Subsidiary Guarantor, for any payment or distribution, debt or equity
securities of such Subsidiary Guarantor or any successor Person provided for or
by a plan of reorganization or readjustment that are subordinated at least to
the same extent that such Subsidiary Guarantee is subordinated to the payment of
all Guarantor Senior Indebtedness of such Subsidiary Guarantor when outstanding;
provided that (i) if a new Person results from such reorganization or
readjustment, such Person assumes any Guarantor Senior Indebtedness of such
Subsidiary Guarantor not paid in full in cash or Cash Equivalents in connection
with such reorganization or readjustment and (ii) the rights of the holders of
such Guarantor Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment.
"Permitted Indebtedness" means any of the following:
(i) Indebtedness of the Company under one or more bank credit or
revolving credit facilities in an aggregate principal amount at any one
time outstanding not to exceed the greater of (A) $500 million and (B) an
amount equal to the sum of (x) $350 million and (y) 25% of Adjusted
Consolidated Net Tangible Assets determined as of the date of the
incurrence of such Indebtedness (such greater amount being referred to as
the "Adjusted Maximum Credit Amount") (plus interest and fees under such
facilities), less any amounts derived from Asset Sales and applied to the
required permanent reduction of Senior Indebtedness (and a permanent
reduction of the related commitment to lend or amount available to be
reborrowed in the case of a revolving credit facility) under such credit
facilities as contemplated by Section 10.17(b) hereof (the "Maximum Credit
Amount") (with the Maximum Credit Amount to be an aggregate maximum amount
for the Company and all Restricted Subsidiaries, pursuant to clause (i) of
the definition of "Permitted Subsidiary Indebtedness"), and any renewals,
amendments, extensions, supplements, modifications, deferrals, refinancings
or replacements (each, for purposes of this clause, a "refinancing")
thereof by the Company, including any successive refinancings thereof by
the Company, so long as the aggregate principal amount of any such new
Indebtedness, together with the aggregate principal amount of all other
Indebtedness outstanding pursuant to this clause (i) (and clause (i) of the
definition of "Permitted Subsidiary Indebtedness"), shall not at any one
time exceed the Maximum Credit Amount;
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(ii) Indebtedness of the Company under the Senior Notes and the
Securities;
(iii) Indebtedness of the Company outstanding on the Issue Date;
(iv) obligations of the Company pursuant to Interest Rate Protection
Obligations, but only to the extent such obligations do not exceed 105% of
the aggregate principal amount of the Indebtedness covered by such Interest
Rate Protection Obligations; obligations under currency exchange contracts
entered into in the ordinary course of business; and hedging arrangements
that the Company enters into in the ordinary course of business for the
purpose of protecting the production of the Company and its Restricted
Subsidiaries against fluctuations in oil or natural gas prices;
(v) Indebtedness of the Company to any Restricted Subsidiaries;
(vi) in-kind obligations relating to net gas balancing positions
arising in the ordinary course of business and consistent with past
practice;
(vii) Indebtedness in respect of bid, performance or surety bonds
issued for the account of the Company or any Restricted Subsidiary in the
ordinary course of business (including obligations of the type described in
clause (g) of the definition of the term "Permitted Liens"), including
guarantees and letters of credit supporting such bid, performance, surety
or other obligations (in each case other than for an obligation for money
borrowed);
(viii) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") by the
Company of any Indebtedness of the Company other than Indebtedness incurred
pursuant to clauses (iv), (v), (vi) and (vii) of this definition, including
any successive refinancings by the Company, so long as (A) any such new
Indebtedness shall be in a principal amount that does not exceed the
principal amount (or, if such Indebtedness being refinanced provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount as of the date of
determination) so refinanced plus the amount of any premium required to be
paid in connection with such refinancing pursuant to the terms of the
Indebtedness refinanced or the amount of any premium reasonably determined
by the Company as necessary to accomplish such refinancing, plus the amount
of expenses of the Company incurred in connection with such refinancing,
(B) in the case of any refinancing of Subordinated Indebtedness, such new
Indebtedness is made subordinate to the Securities at least to the same
extent as the Indebtedness being refinanced and (C) such new Indebtedness
has an Average Life equal to or longer than the Average Life of the
Indebtedness being refinanced and a final Stated Maturity equal to or later
than the final Stated Maturity of the Indebtedness being refinanced;
(ix) Non-recourse Indebtedness;
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(x) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or a Subsidiary,
other than guarantees of Indebtedness incurred by any Person acquiring all
or any portion of such business, assets or a Subsidiary for the purpose of
financing such acquisition;
(xi) Indebtedness of the Company to an Unrestricted Subsidiary for
money borrowed, provided that such Indebtedness is subordinated in right of
payment to the Securities and the Stated Maturity of such Indebtedness is
later than the final Stated Maturity of the Securities;
(xii) any guarantee of Guarantor Senior Indebtedness or Indebtedness
of a Foreign Subsidiary incurred in compliance with Section 10.12 hereof;
and
(xiii) other Indebtedness of the Company and the Restricted
Subsidiaries that are Subsidiary Guarantors in an aggregate principal
amount not in excess of $50,000,000 at any one time outstanding.
"Permitted Investments" means any of the following: (i) Investments in Cash
Equivalents; (ii) Investments in the Company or any of its Restricted
Subsidiaries; (iii) Investments in an amount not to exceed 5% of Adjusted
Consolidated Net Tangible Assets at any one time outstanding; (iv) Investments
by the Company or any of its Restricted Subsidiaries in another Person, if as a
result of such Investment (A) such other Person becomes a Restricted Subsidiary
of the Company; or (B) such other Person is merged or consolidated with or into,
or transfers or conveys all or substantially all of its assets to, the Company
or a Restricted Subsidiary; (v) entry into operating agreements, joint ventures,
partnership agreements (whether general or limited), limited liability company
agreements, subscription agreements, stock purchase agreements, stockholder
agreements, working interests, royalty interests, mineral leases, processing
agreements, farm-out agreements, contracts for the sale, transportation or
exchange of oil and natural gas, unitization agreements, pooling arrangements,
area of mutual interest agreements, production sharing agreements and other
similar or customary agreements, transactions, properties, interests or
arrangements, and Investments and expenditures in connection therewith or
pursuant thereto, in each case made or entered into in the ordinary course of
the Oil and Gas Business; (vi) shares of Capital Stock or other securities
received in settlement of debts owed to the Company or any of its Restricted
Subsidiaries as a result of foreclosure, perfection or enforcement of any Lien
or indebtedness or in connection with any good faith settlement or a bankruptcy
proceeding; (vii) entry into any hedging arrangements in the ordinary course of
business for the purpose of protecting the Company's or any Restricted
Subsidiary's production against fluctuations in oil or natural gas prices;
(viii) entry into any currency exchange contract in the ordinary course of
business; (ix) Investments in any Person engaged in the power generation and
electrical transmission business where fuel required by such business is
supplied, directly or indirectly, from production reserves substantially from
blocks in which the Company or its Restricted Subsidiaries participate, provided
that the aggregate amount of
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Investments outstanding at any one time in such Person shall be no more than
$15,000,000; (x) Investments in any Person that is the purchaser of a portion of
the interests of a Foreign Subsidiary, provided that such Investments are in the
nature of a note or other deferred payment obligation to the Company or such
Foreign Subsidiary and are in an amount of no more than $35,000,000 at any one
time outstanding; (xi) workers' compensation, utility, lease and similar
deposits and prepaid expenses in the ordinary course of business; (xii)
endorsements of negotiable instruments and documents in the ordinary course of
business; or (xiii) designation of a North American Restricted Subsidiary to be
an Unrestricted Subsidiary if the credit ratings assigned to the Securities by
each of S&P and Moody's, respectively, immediately after giving effect to such
designation (the "post-designation credit ratings") are or will be greater than
or equal to the greater of (A) the credit rating assigned to the Securities by
such Rating Agency immediately prior to giving effect to such designation and
(B) such credit rating as of the Issue Date. For purposes of determining
compliance with clause (xiii) of the preceding sentence, (1) subsequent changes
in such credit rating unrelated to such designation shall not cause such
designation to fail to constitute a "Permitted Investment," and (2) without
limitation of other forms of proof of the post-designation credit rating
assigned to the Securities, any press release issued by such Rating Agency or
any written notification from such Rating Agency to the Company addressing the
impact of such designation on the credit rating assigned to the Securities
(whether such press release or written notification is issued before,
contemporaneously with or after such designation) shall constitute conclusive
evidence of the post-designation credit rating.
"Permitted Junior Securities" means, so long as the effect of any exclusion
employing this definition is not to cause the Securities to be treated in any
case or proceeding or similar event described in clause (a), (b) or (c) of the
definition of Insolvency or Liquidation Proceeding as part of the same class of
claims as Senior Indebtedness or any class of claims pari passu with, or senior
to, Senior Indebtedness, for any payment or distribution, debt or equity
securities of the Company or any successor Person provided for or by a plan of
reorganization or readjustment that are subordinated at least to the same extent
that the Securities are subordinated to the payment of all Senior Indebtedness
when outstanding; provided that (i) if a new Person results from such
reorganization or readjustment, such Person assumes any Senior Indebtedness not
paid in full in cash or Cash Equivalents in connection with such reorganization
or readjustment and (ii) the rights of the holders of such Senior Indebtedness
are not, without the consent of such holders, altered by such reorganization or
readjustment.
"Permitted Liens" means the following types of Liens:
(a) Liens existing as of the Issue Date;
(b) Liens securing the Securities;
(c) Liens in favor of the Company or a Restricted Subsidiary that is
a Subsidiary Guarantor;
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(d) Liens securing Senior Indebtedness, Guarantor Senior Indebtedness
or Indebtedness of a Restricted Subsidiary incurred in compliance with
Section 10.12 hereof;
(e) Liens for taxes, assessments and governmental charges or claims
either (i) not delinquent or (ii) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(f) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not delinquent or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in
respect thereof;
(g) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the payment or performance
of tenders, statutory or regulatory obligations, surety and appeal bonds,
bids, leases, government contracts and leases, performance and return of
money bonds and other similar obligations, including letters of credit and
bank guarantees required or requested by the United States, any State
thereof or any foreign government or any subdivision, department, agency,
organization or instrumentality of any of the foregoing in connection with
any contract or statute (exclusive of obligations for the payment of
borrowed money but including lessee or operator obligations under statutes,
governmental regulations, contracts or instruments related to the
ownership, exploration and production of oil, gas and minerals on state,
Federal or foreign lands or waters);
(h) judgment Liens not giving rise to an Event of Default so long as
any appropriate legal proceedings which may have been duly initiated for
the review of such judgment shall not have been finally terminated or the
period within which such proceeding may be initiated shall not have
expired;
(i) easements, rights-of-way, restrictions and other similar charges
or encumbrances not interfering in any material respect with the ordinary
conduct of the business of the Company or any of its Restricted
Subsidiaries;
(j) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease;
(k) Liens resulting from the deposit of funds or evidences of
Indebtedness in trust for the purpose of defeasing Indebtedness of the
Company or any of the Subsidiaries;
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(l) Liens securing obligations under hedging agreements that the
Company or any Restricted Subsidiary enters into in the ordinary course of
business for the purpose of protecting their production against
fluctuations in oil or natural gas prices, and Liens securing obligations
under any foreign currency exchange agreement, option or futures contract
or other similar agreement or arrangement entered into in the ordinary
course of business and designed to protect against or manage the Company's
or any of its Restricted Subsidiaries' exposure to fluctuation in foreign
currency rates;
(m) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(n) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other Property
relating to such letters of credit and products and proceeds thereof;
(o) Liens encumbering Property or assets under construction arising
from progress or partial payments by a customer of the Company or its
Restricted Subsidiaries relating to such Property or assets;
(p) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and set-
off;
(q) Liens securing Interest Rate Protection Obligations which Interest
Rate Protection Obligations relate to Indebtedness that is secured by Liens
otherwise permitted under this Indenture;
(r) Liens on, or related to, Properties or assets to secure all or
part of the costs incurred in the ordinary course of business for the
exploration, drilling, development or operation thereof;
(s) Liens on pipeline or pipeline facilities which arise out of
operation of law;
(t) Liens arising under operating agreements, joint venture
agreements, partnership agreements, oil and gas leases, farm-out
agreements, division orders, contracts for the sale, transportation or
exchange of oil and natural gas, unitization and pooling declarations and
agreements, area of mutual interest agreements and other agreements which
are customary in the Oil and Gas Business;
(u) Liens reserved in oil and gas mineral leases for bonus or rental
payments and for compliance with the terms of such leases;
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(v) Liens constituting survey exceptions, encumbrances, easements, or
reservations of, or rights to others for, rights-of-way, zoning or other
restrictions as to the use of real properties, and minor defects of title
which, in the case of any of the foregoing, were not incurred or created to
secure the payment of borrowed money or the deferred purchase price of
Property or services, and in the aggregate do not materially adversely
affect the value of Property of the Company and the Restricted
Subsidiaries, taken as a whole, or materially impair the use of such
Properties for the purposes for which such Properties are held by the
Company or any Restricted Subsidiaries;
(w) Liens securing Non-recourse Indebtedness; provided, however, that
the related Non-recourse Indebtedness shall not be secured by any Property
or assets of the Company or any Restricted Subsidiary other than the
Property and assets acquired by the Company with the proceeds of such Non-
recourse Indebtedness, all improvements, additions and accessions thereto
and all proceeds thereof;
(x) purchase money Liens; provided, however, that (i) the related
purchase money Indebtedness shall not be secured by any Property of the
Company or any Restricted Subsidiary other than the Property so acquired,
all improvements, additions and accessions thereto and all proceeds thereof
and (ii) the Lien securing such Indebtedness shall be created within 90
days of such acquisition; and
(y) Liens securing Acquired Indebtedness, provided that any such Lien
extends only to the Properties that were subject to such Lien prior to the
related acquisition by the Company or such Restricted Subsidiary, all
improvements, additions and accessions thereto and all proceeds thereof,
and was not created, incurred or assumed in contemplation of such
transaction;
Notwithstanding anything in clauses (a) through (y) of this definition, the term
"Permitted Liens" does not include any Liens resulting from the creation,
incurrence, issuance, assumption or guarantee of any Production Payments other
than Production Payments that are created, incurred, issued, assumed or
guaranteed in connection with the financing of, and within 30 days after, the
acquisition of the Properties or assets that are subject thereto.
"Permitted Subsidiary Indebtedness" means any of the following:
(i) Indebtedness of any Restricted Subsidiary under one or more
bank credit or revolving credit facilities (and "refinancings" thereof) in
an amount at any one time outstanding not to exceed the Maximum Credit
Amount (in the aggregate for all Restricted Subsidiaries and the Company,
pursuant to clause (i) of the definition of "Permitted Indebtedness");
(ii) Indebtedness of any Restricted Subsidiary outstanding on the
Issue Date;
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(iii) obligations of any Restricted Subsidiary pursuant to Interest
Rate Protection Obligations, but only to the extent such obligations do not
exceed 105% of the aggregate principal amount of the Indebtedness covered
by such Interest Rate Protection Obligations; obligations under currency
exchange contracts entered into in the ordinary course of business; and
hedging arrangements that any Restricted Subsidiary enters into in the
ordinary course of business for the purpose of protecting the production of
the Company and its Restricted Subsidiaries against fluctuations in oil or
natural gas prices;
(iv) the Subsidiary Guarantees, the Senior Guarantees and the
Guarantees of the Existing Senior Notes and the Existing Notes (and any
assumption of the obligations guaranteed thereby);
(v) Indebtedness of any Restricted Subsidiary relating to
guarantees by such Restricted Subsidiary of Permitted Indebtedness pursuant
to clause (i) of the definition of "Permitted Indebtedness";
(vi) in-kind obligations relating to net gas balancing positions
arising in the ordinary course of business and consistent with past
practice;
(vii) Indebtedness in respect of bid, performance or surety bonds
issued for the account of any Restricted Subsidiary in the ordinary course
of business (including obligations of the type described in clause (g) of
the definition of the term "Permitted Liens"), including guarantees and
letters of credit supporting such bid, performance, surety or other
obligations (in each case other than for an obligation for money borrowed);
(viii) Indebtedness of any Restricted Subsidiary to any other
Restricted Subsidiary or to the Company;
(ix) Indebtedness relating to guarantees by any Restricted
Subsidiary permitted to be incurred pursuant to Section 10.13 hereof;
(x) any guarantee of Guarantor Senior Indebtedness or Indebtedness
of a Foreign Subsidiary incurred in compliance with Section 10.12 hereof;
(xi) Indebtedness of any Restricted Subsidiary permitted under
clauses (vi), (vii), (x) or (xiii) of the definition of "Permitted
Indebtedness"; and
(xii) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") by any
Restricted Subsidiary of any Indebtedness of such Restricted Subsidiary,
including any successive refinancings by such Restricted Subsidiary, so
long as (x) any such new Indebtedness shall be in a principal amount that
does not exceed the principal amount (or, if such Indebtedness being
refinanced provides for an amount less than the principal amount thereof to
be due and payable upon
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a declaration of acceleration thereof, such lesser amount as of the date of
determination) so refinanced plus the amount of any premium required to be
paid in connection with such refinancing pursuant to the terms of the
Indebtedness refinanced or the amount of any premium reasonably determined
by such Restricted Subsidiary as necessary to accomplish such refinancing,
plus the amount of expenses of such Subsidiary incurred in connection with
such refinancing and (y) such new Indebtedness has an Average Life equal to
or longer than the Average Life of the Indebtedness being refinanced and a
final Stated Maturity equal to or later than the final Stated Maturity of
the Indebtedness being refinanced.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.8 hereof in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred or preference stock, whether outstanding on or issued after
the Issue Date, including, without limitation, all classes and series of
preferred or preference stock of such Person.
"Production Payments" means, collectively, Dollar-Denominated Production
Payments and Volumetric Production Payments.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including, without limitation, Capital Stock in any other Person.
"Public Equity Offering" means an underwritten public offering for cash by
the Company of its Qualified Capital Stock pursuant to a registration statement
that has been declared effective by the Commission (other than a registration
statement on Form S-8 or any successor form or otherwise relating to equity
securities issuable under any employee benefit plan of the Company).
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any class or series of Capital Stock that,
either by its terms, by the terms of any security into which it is convertible
or exchangeable or by contract or otherwise, is, or upon the happening of an
event or passage of time would be, required to be redeemed prior to the final
Stated Maturity of the Securities or is redeemable at the option of the
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holder thereof at any time prior to such final Stated Maturity, or is
convertible into or exchangeable for debt securities at any time prior to such
final Stated Maturity.
"Redemption Date," when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registrable Securities" shall have the meaning assigned to such term in
the Registration Rights Agreement.
"Registration Rights Agreement" means that certain Registration Rights
Agreement dated as of July 8, 1998, among the Company and the Initial
Purchasers.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the December 15 or June 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Responsible Officer," when used with respect to the Trustee, means any
officer in the Corporate Trust Administration Department of the Trustee, and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the Issue Date, unless such Subsidiary of the Company is an
Unrestricted Subsidiary or is designated as an Unrestricted Subsidiary pursuant
to the terms of this Indenture.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard and Poor's Ratings Group and its successors.
"Sale/Leaseback Transaction" means, with respect to any Person, any direct
or indirect arrangement pursuant to which Properties or assets are sold or
transferred by such Person or a Subsidiary of such Person and are thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Subsidiaries.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities of 1933, as amended, or any successor
statute.
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"Security Custodian" means the Trustee, as custodian with respect to the
Global Securities, or any successor entity thereto.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5 hereof.
"Senior Guarantees" means any guarantee of the Senior Notes by any
Restricted Subsidiary.
"Senior Indebtedness" means the principal of, premium, if any, and interest
on any Indebtedness of the Company (including, in the case of the Credit
Agreement, the Senior Notes and the Existing Senior Notes, interest accruing
after the filing of a petition by or against the Company under any bankruptcy
law, in accordance with and at the rate, including any default rate, specified
with respect to such indebtedness, whether or not a claim for such interest is
allowed as a claim after such filing in any proceeding under such bankruptcy
law), whether outstanding on the Issue Date or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Securities. Without limiting the generality of the foregoing,
"Senior Indebtedness" shall also include the Senior Note Obligations.
Notwithstanding the foregoing, "Senior Indebtedness" shall not include (a)
Indebtedness evidenced by the Securities, (b) Indebtedness that is expressly
subordinate or junior in right of payment to any Senior Indebtedness of the
Company, (c) Indebtedness which, when incurred and without respect to any
election under Section 1111 (b) of Title 11 United States Code, is by its terms
without recourse to the Company, (d) any repurchase, redemption or other
obligation in respect of Redeemable Capital Stock of the Company, (e) to the
extent it might constitute Indebtedness, any liability for federal, state, local
or other taxes owed or owing by the Company, (f) Indebtedness of the Company to
a Subsidiary of the Company or any other Affiliate of the Company or any of such
Affiliate's Subsidiaries, and (g) that portion of any Indebtedness of the
Company which at the time of issuance is issued in violation of this Indenture
(but, as to any such Indebtedness, no such violation shall be deemed to exist
for purposes of this clause (g) if the holder(s) of such Indebtedness or their
representative or the Company shall have furnished to the Trustee an opinion of
counsel unqualified in all material respects of independent legal counsel,
addressed to the Trustee (which legal counsel may, as to matters of fact, rely
upon a certificate of the Company) to the effect that the incurrence of such
Indebtedness does not violate the provisions of this Indenture); provided that
the foregoing exclusions shall not affect the priorities of any Indebtedness
arising solely by operation of law in any case or proceeding or similar event
described in clause (a), (b) or (c) of the definition of Insolvency or
Liquidation Proceeding included herein.
"Senior Notes" means (i) the 7 5/8% Senior Notes due 2005 of the Company
issued pursuant to the Indenture, dated as of July 8, 1998, between the Company,
as issuer, OEI Louisiana, as subsidiary guarantor, and Norwest Bank Minnesota,
National Association, as trustee, as amended and supplemented from time to time,
and (ii) the 8 1/4% Senior Notes due 2018 of the Company issued pursuant to the
Indenture, dated as of July 8, 1998, between the Company, as issuer, OEI
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Louisiana, as subsidiary guarantor, and Norwest Bank Minnesota, National
Association, as trustee, as amended and supplemented from time to time.
"Senior Note Obligations" means all monetary obligations of every nature of
the Company or a Restricted Subsidiary, including without limitation,
obligations to pay principal and interest, fees, expenses and indemnities, from
time to time owed to the holders or the trustee in respect of the Senior Notes
and the Existing Senior Notes.
"Senior Representative" means the Bank Agent or any other representatives
designated in writing to the Trustee of the holders of any class or issue of
Designated Senior Indebtedness; provided that, in the absence of a
representative of the type described above, any holder or holders of a majority
of the principal amount outstanding of any class or issue of Designated Senior
Indebtedness may collectively act as Senior Representative for such class or
issue, subject to the provisions of any agreements relating to such Designated
Senior Indebtedness.
"Series A Securities" means the Company's 8 3/8% Series A Senior Notes due
2008 to be issued pursuant to this Indenture.
"Series B Securities" means the Company's 8 3/8% Series B Senior Notes due
2008 to be issued pursuant to this Indenture in the Exchange Offer.
"Significant Subsidiary" means any Restricted Subsidiary the consolidated
assets of which comprise in excess of 5% of Adjusted Consolidated Net Tangible
Assets (as shown in the most recent audited consolidated balance sheet of the
Company and its Subsidiaries).
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.9 hereof.
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable, and, when used with respect to any other
Indebtedness or any installment of interest thereon, means the date specified in
the instrument evidencing or governing such Indebtedness as the fixed date on
which the principal of such Indebtedness or such installment of interest is due
and payable.
"Subordinated Indebtedness" means Indebtedness of the Company which is
expressly subordinated in right of payment to the Securities.
"Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation), including, without limitation, a joint venture, in which such
Person, one or more Subsidiaries thereof or such Person and one or more
Subsidiaries thereof, directly or indirectly, at
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the date of determination thereof, has at least majority ownership interest
entitled to vote in the election of directors, managers or trustees thereof (or
other Persons performing similar functions).
"Subsidiary Guarantee" has the meaning specified in Section 13.1 hereof.
"Subsidiary Guarantor" means (i) OEI Louisiana, (ii) each of the Company's
Restricted Subsidiaries that becomes a guarantor of the Securities in compliance
with the provisions of Section 10.13 or Article XIII hereof and (iii) each of
the Company's Subsidiaries executing a supplemental indenture in which such
Subsidiary agrees to be bound by the terms of this Indenture and to guarantee on
an unsubordinated basis the payment of the Securities pursuant to the provisions
of Article XIII hereof.
"Transfer Restricted Securities" means the Registrable Securities under the
Registration Rights Agreement.
"Treasury Yield" means, in connection with the calculation of any Make-
Whole Premium on any Security, the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled by
and published in the most recent Federal Reserve Statistical Release H.15 (519)
that has become publicly available at least two business days prior to the date
fixed for redemption (or, if such Statistical Release is no longer published,
any publicly available source of similar data)) equal to the then remaining
period of time until the Five-Year Date; provided that if no United States
Treasury security is available with such a constant maturity and for which a
closing yield is given, the Treasury Yield shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the closing
yields of United States Treasury securities for which such yields are given,
except that if the remaining period of time until the Five-Year Date is less
than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and in force at the Issue Date, except as provided in Section 9.5
hereof.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Subsidiary" means (i) Havre Pipeline Company, LLC and Lion
GPL, S.A., (ii) any Subsidiary of the Company that at the time of determination
will be designated an Unrestricted Subsidiary by the Board of Directors of the
Company as provided below and (iii) any Subsidiary of an Unrestricted
Subsidiary, in each case until such time as such Subsidiary is designated as a
Restricted Subsidiary for purposes of this Indenture. The Board of Directors of
the Company may designate any Subsidiary of the Company as an Unrestricted
Subsidiary so long as (a) neither the Company nor any Restricted Subsidiary is
directly or indirectly liable pursuant to the terms of any Indebtedness of such
Subsidiary; (b) no default with respect to any Indebtedness of
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such Subsidiary would permit (upon notice, lapse of time or otherwise) any
holder of any other Indebtedness of the Company or any Restricted Subsidiary to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; (c) neither the Company nor
any Restricted Subsidiary has made an Investment in such Subsidiary unless such
Investment was made pursuant to, and in accordance with Section 10.11 hereof,
(including as a Permitted Investment thereunder); and (d) such designation shall
not result in the creation or imposition of any Lien on any of the Properties of
the Company or any Restricted Subsidiary (other than any Permitted Lien or any
Lien the creation or imposition of which shall have been in compliance with
Section 10.15 hereof); provided, however, that with respect to clause (a), the
Company or a Restricted Subsidiary may be liable for Indebtedness of an
Unrestricted Subsidiary if (x) such liability constituted a Permitted Investment
or a Restricted Payment permitted by Section 10.11 hereof, in each case at the
time of incurrence, or (y) the liability would be a Permitted Investment at the
time of designation of such Subsidiary as an Unrestricted Subsidiary. Any such
designation by the Board of Directors of the Company shall be evidenced to the
Trustee by filing a Board Resolution with the Trustee giving effect to such
designation. Any such designation shall be deemed to be an Investment, as more
particularly described in the definition of such term, above. The Board of
Directors of the Company may designate any Unrestricted Subsidiary as a
Restricted Subsidiary if, immediately after giving effect to such designation,
(i) no Default or Event of Default shall have occurred and be continuing, (ii)
the Company could incur $1.00 of additional Indebtedness (not including the
incurrence of Permitted Indebtedness) under Section 10.12 hereof, and (iii) if
any of the Properties of the Company or any of its Restricted Subsidiaries would
upon such designation become subject to any Lien (other than a Permitted Lien),
the creation or imposition of such Lien shall have been in compliance with
Section 10.15 hereof.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
"Wholly Owned Restricted Subsidiary" means 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
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government of such foreign jurisdiction or individual 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 and derives the economic benefits of
ownership of such Restricted Subsidiary to substantially the same extent as if
such Restricted Subsidiary were a wholly owned Subsidiary.
Section 1.2 Other Definitions.
Defined
Term in Section
---- ----------
"Agent Members"........................... 3.7
"Change of Control Notice"................ 10.16(c)
"Change of Control Offer"................. 10.16(a)
"Change of Control Purchase Date"......... 10.16(a)
"Change of Control Purchase Price"........ 10.16(a)
"Defaulted Interest"...................... 3.9
"Five-Year Date".......................... 11.1
"Global Security"......................... 2.1
"Funding Guarantor"....................... 13.5
"Excess Proceeds"......................... 10.17(b)
"Investment Grade Ratings"................ 10.22
"Net Proceeds Deficiency"................. 10.17(c)
"Net Proceeds Offer"...................... 10.17(c)
"Net Proceeds Payment Date"............... 10.17(c)
"Offered Price"........................... 10.17(c)
"Pari Passu Indebtedness Amount".......... 10.17(c)
"Pari Passu Offer"........................ 10.17(c)
"Payment Amount".......................... 10.17(c)
"Payment Blockage Notice"................. 14.3(b)
"Payment Blockage Period"................. 14.3(b)
"Physical Securities"..................... 2.1
"Purchase Notice"......................... 10.17
"Rating Agencies"......................... 10.22
"Restricted Payment"...................... 10.11(a)
"SEC"..................................... 1.1 ("Commission")
"Subsidiary Guarantor Non-payment Default" 13.9(b)
"Subsidiary Guarantor Payment Default".... 13.9(a)
"Subsidiary Guarantor Payment Notice"..... 13.9(b)
"Surviving Entity"........................ 8.1
"Suspended Covenants"..................... 10.22
"Trigger Date"............................ 10.17
"U.S. Government Obligations"............. 12.4(a)
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Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities,
"indenture security holder" means a Holder,
"indenture to be qualified" means this Indenture,
"indenture trustee" or "institutional trustee" means the Trustee, and
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
and not otherwise defined herein have the meanings assigned to them therein.
Section 1.4 Rules of Construction. For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(a) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(d) unless the context otherwise requires, the word "or" is not
exclusive;
(e) provisions apply to successive events and transactions; and
(f) references to agreements and other instruments include subsequent
amendments and waivers but only to the extent not prohibited by this Indenture.
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ARTICLE II
SECURITY FORMS
--------------
Section 2.1 Forms Generally. The Definitive Securities shall be
printed, lithographed or engraved on steel-engraved borders or may be produced
in any other manner, all as determined by the officers executing such Securities
or notations of Subsidiary Guarantees, as the case may be, as evidenced by their
execution of such Securities or notations of Subsidiary Guarantees, as the case
may be.
Securities (including the notations thereon relating to the Subsidiary
Guarantees and the Trustee's certificate of authentication) bought and sold in
reliance on Rule 144A shall be issued initially in the form of one or more
permanent global Securities substantially in the form set forth in Sections 2.2
through 2.5 hereof (the "Global Security") deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. Subject to the limitation set forth in
Section 3.1, the principal amount of the Global Securities may be increased or
decreased from time to time by adjustments made on the records of the Trustee as
custodian for the Depositary, as hereinafter provided.
Securities (including the notations thereon relating to the Subsidiary
Guarantees and the Trustee's certificate of authentication) offered and sold
other than as described in the preceding paragraph shall be issued in the form
of permanent certificated Securities in registered form in substantially the
form set forth in Sections 2.2 through 2.5 hereto ("Physical Securities").
The Securities, the notations thereon relating to the Subsidiary
Guarantees and the Trustee's certificate of authentication shall be in
substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
or notations of Subsidiary Guarantees, as the case may be, as evidenced by their
execution of the Securities or notations of Subsidiary Guarantees, as the case
may be. Any portion of the text of any Security may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Security. In
addition to the requirements of Section 2.3, the Securities may also have set
forth on the reverse side thereof a form of assignment and forms to elect
purchase by the Company pursuant to Sections 10.16 and 10.17 hereof.
Section 2.2 Form of Face of Security.
OCEAN ENERGY, INC.
8 3/8% Series [A/B] Senior Subordinated Note due 2008
No. $_________
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CUSIP No. [Series A: ________]
[Series B: ________]
Ocean Energy, Inc., a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
____________________ or registered assigns the principal sum of ______ Dollars
on July 1, 2008, at the office or agency of the Company referred to below, and
to pay interest thereon, commencing on January 1, 1999 and continuing
semiannually thereafter, on January 1 and July 1 in each year, from July 8,
1998, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, at the rate of 8 3/8% per annum, until the principal
hereof is paid or duly provided for, and (to the extent lawful) to pay on demand
interest on any overdue interest at the rate borne by the Securities from the
date on which such overdue interest becomes payable to the date payment of such
interest has been made or duly provided for. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the December 15 or
June 15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date, or, in the case of interest payable at the Maturity of
the principal of the Securities, to the Person to whom principal is paid. Any
such interest not so punctually paid or duly provided for shall forthwith cease
to be payable to the Holder on such Regular Record Date, and such defaulted
interest, and (to the extent lawful) interest on such defaulted interest at the
rate borne by the Securities, may be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.
Payment of the principal of (and premium, if any, on) and interest on
this Security will be made at the office or agency of the Company maintained for
that purpose in The City of New York, or at such other office or agency of the
Company as may be maintained for such purpose, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided however, that payment of principal,
premium, if any, and interest may be made at the option of the Company (i) by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Security Register or (ii) with respect to Securities held in book-
entry form, by wire transfer to an account maintained by the Holder located in
the United States, as specified in a written notice to the Trustee by any such
Holder requesting payment by wire transfer and specifying the account to which
transfer is requested.
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the
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Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. The Depository Trust Company shall act as the Depositary
until a successor shall be appointed by the Company and the Registrar. Unless
this certificate is presented by an authorized representative of The Depository
Trust Company (55 Water Street, New York, New York) ("DTC"), to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein./1/
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED ( THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
HEREOF AGREES (1) NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO (X) THE DATE THAT IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS
SECURITY) AND THE LAST DAY ON WHICH OCEAN ENERGY, INC. (THE "COMPANY") OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE
LAWS (THE "RESALE RESTRICTION TERMINATION DATE"), EXCEPT (A) TO THE COMPANY, (B)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT IS ACQUIRING SUCH
SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (2) THAT IT WILL GIVE TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
- ---------------
/1/ This paragraph should be included only if the Security is issued in global
form.
38
<PAGE>
THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE, THE TRANSFER
AGENT AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER HEREOF, BY
PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT
IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2)
A NON-U.S. PERSON AND IS ACQUIRING THE NOTE IN AN "OFFSHORE TRANSACTION"
PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
39
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
OCEAN ENERGY, INC.,
a Delaware corporation
By:
-----------------------------------
Chairman of the Board
Attest:
- --------------------------------
Secretary
Section 2.3 Form of Reverse of Security. This Security is one of a
duly authorized issue of securities of the Company designated as its 8 3/8%
Series [A/B] Senior Subordinated Notes due 2008 (herein called the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to $250,000,000, which may be issued
under an indenture (as amended and supplemented from time to time, the
"Indenture") dated as of July 8, 1998, between the Company, the Subsidiary
Guarantors and U.S. Bank Trust National Association, as trustee (herein called
the "Trustee," which term includes any successor trustee under the Indenture),
to which Indenture reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, the Subsidiary Guarantors, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Indebtedness evidenced by the Securities is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness (as defined in
the Indenture) and this Security is issued subject to such provisions. Each
Holder of this Security, by accepting the same, (i) agrees to and shall be bound
by such provisions, (ii) authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (iii) appoints the Trustee as his
attorney-in-fact for such purpose.
Prior to July 1, 2003, the Securities will be redeemable, in whole but
not in part, at a redemption price equal to the sum of (a) an amount equal to
100% of the principal amount thereof and (b) the Make-Whole Premium, together
with accrued and unpaid interest to the date fixed for redemption. In no event
will such redemption price ever be less than 100% of the principal amount of the
Securities plus accrued interest to the date of redemption. On or after July 1,
2003, the Securities will be redeemable, in whole or in part, at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest, if any, to the redemption date
40
<PAGE>
(subject to the right of Holders of record on the relevant record date to
receive interest due on an interest payment date that is on or prior to the
redemption date), if redeemed during the 12-month period beginning on July 1 of
the years indicated below:
Year Price
2003 104.188%
2004 102.792%
2005 101.396%
2006 and thereafter 100.000%
In addition, at any time and from time to time prior to July 1, 2001,
the Company may, at its option, redeem in the aggregate up to 33 1/3% of the
aggregate principal amount of the Securities originally issued under the
Indenture with the proceeds of one or more Public Equity Offerings by the
Company at a redemption price (expressed as a percentage of principal amount) of
108.375%, plus accrued and unpaid interest, if any, to the date of redemption
(subject to the right of Holders on the relevant record date to receive interest
due on the relevant interest payment date); provided, however, that at least 66
2/3% aggregate principal amount of the Securities must remain outstanding after
each such redemption. In order to effect the foregoing redemption, the Company
must mail notice of redemption no later than 60 days after the related Public
Equity Offering and must consummate such redemption within 90 days of the
closing of the Public Equity Offering.
In the event that less than all of the Securities are to be redeemed
at any time, selection of such Securities (or any portion thereof that is an
integral multiple of $1,000) for redemption will be made by the Trustee from the
outstanding Securities not previously called for redemption (or otherwise
purchased by the Company) on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate; provided, however, that no Security
with a principal amount of $1,000 or less shall be redeemed in part.
Notice of redemption shall be mailed by first-class mail at least 30
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at its registered address. If any Security is to be
redeemed in part only, the notice of redemption that relates to such Security
shall state the portion of the principal amount thereof to be redeemed. A new
Security in a principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original
Security. On and after the redemption date, interest will cease to accrue on
Securities or portions thereof called for redemption and accepted for payment.
The Securities do not have the benefit of any sinking fund
obligations.
In the event of a Change of Control of the Company, and subject to
certain conditions and limitations provided in the Indenture, the Company will
be obligated to make an offer to purchase, on a Business Day not more than 70 or
less than 30 days following the occurrence of a Change of Control of the
Company, all of the then outstanding Securities at a purchase price equal to
101% of
41
<PAGE>
the principal amount thereof, together with accrued and unpaid interest
to the Change of Control Purchase Date, all as provided in the Indenture.
In the event of Asset Sales, under certain circumstances, the Company
will be obligated to make a Net Proceeds Offer to purchase all or a specified
portion of each Holder's Securities at a purchase price equal to 100% of the
principal amount of the Securities, together with accrued and unpaid interest to
the Net Proceeds Payment Date.
As set forth in the Indenture, an Event of Default is generally (i)
failure to pay principal of or premium, if any, on any of the Securities upon
maturity, redemption, acceleration or otherwise (including pursuant to a Change
of Control Offer or a Net Proceeds Offer); (ii) default for 30 days in payment
of interest on any of the Securities; (iii) default in the performance of
certain provisions of the Indenture relating to mergers, consolidations and
sales of all or substantially all assets or the failure to make or consummate a
Change of Control Offer or a Net Proceeds Offer; (iv) failure for 30 days after
notice to comply with any other covenants in the Indenture or the Securities;
(v) certain payment defaults under, the acceleration prior to the maturity of,
and the exercise of certain enforcement rights with respect to, certain
Indebtedness of the Company or any Restricted Subsidiary in an aggregate
principal amount in excess of the greater of $20,000,000 and 5% of Adjusted
Consolidated Net Tangible Assets; (vi) the failure of any Subsidiary Guarantee
to be in full force and effect or otherwise to be enforceable (except as
permitted by the Indenture); (vii) certain final judgments against the Company
or any Restricted Subsidiary in an aggregate amount that is more than the
greater of $20,000,000 and 5% of Adjusted Consolidated Net Tangible Assets which
remain unsatisfied and either become subject to commencement of enforcement
proceedings or remain unstayed for a period of 60 days; and (viii) certain
events of bankruptcy, insolvency or reorganization of the Company, any
Subsidiary Guarantor or any Significant Subsidiary. If any Event of Default
occurs and is continuing, the Trustee or the holders of at least 25% in
aggregate principal amount of the Outstanding Securities may declare the
principal amount of all the Securities to be due and payable immediately, except
that (i) in the case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization, the principal amount of the Securities
will become due and payable immediately without further action or notice, and
(ii) in the case of an Event of Default which relates to certain payment
defaults, acceleration or the exercise of certain enforcement rights with
respect to certain Indebtedness, any acceleration of the Securities will be
automatically rescinded if any such Indebtedness is repaid or if the default
relating to such Indebtedness is cured or waived and if the holders thereof have
accelerated such Indebtedness then such holders have rescinded their declaration
of acceleration or if in certain circumstances the proceedings or enforcement
action with respect to the Indebtedness that is the subject of such Event of
Default is terminated or rescinded. No Holder may pursue any remedy under the
Indenture unless the Trustee shall have failed to act after notice of an Event
of Default and written request by Holders of at least 25% in principal amount of
the Outstanding Securities, and the offer to the Trustee of indemnity reasonably
satisfactory to it; however, such provision does not affect the right to sue for
enforcement of any overdue payment on a Security by the Holder thereof. Subject
to certain limitations, Holders of a majority in principal amount of the
Outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders notice of any
42
<PAGE>
continuing default (except default in payment of principal, premium or interest)
if it determines in good faith that withholding the notice is in the interest of
the Holders. The Company is required to file quarterly reports with the Trustee
as to the absence or existence of defaults.
The Indenture contains provisions for defeasance at any time of (i)
the entire indebtedness of the Company on this Security and (ii) certain
restrictive covenants and the related Defaults and Events of Default, upon
compliance by the Company with certain conditions set forth therein, which
provisions apply to this Security.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the Subsidiary Guarantors and the rights of the Holders under the
Indenture at any time by the Company, the Subsidiary Guarantors and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by or on behalf of the Holder of this Security shall
be conclusive and binding upon such Holder and upon future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Security. Without the consent of any Holder, the
Company, the Subsidiary Guarantors and the Trustee may amend or supplement the
Indenture or the Securities to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Securities in addition to or in place of certificated
Securities and to make certain other specified changes and other changes that do
not adversely affect the rights of any Holder in any material respect.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any, on)
and interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained for such purpose in
The City of New York, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain
43
<PAGE>
limitations therein set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
A director, officer, incorporator, employee, Affiliate or stockholder
of the Company or any Subsidiary Guarantor, as such, shall not have any personal
liability under this Security or the Indenture by reason of his or its status as
such director, officer, incorporator or stockholder. Each Holder, by accepting
this Security with the notation of Subsidiary Guarantee endorsed hereon, waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of this Security with the notation of Subsidiary
Guarantee endorsed hereon.
Prior to the time of due presentment of this Security for registration
of transfer, the Company, the Subsidiary Guarantors, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name this Security
is registered as the owner hereof for all purposes, whether or not this Security
is overdue, and neither the Company, the Subsidiary Guarantors, the Trustee nor
any agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture. The Company will
furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to the Company at 1201 Louisiana, Suite 1400,
Houston, Texas 77002.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders thereof. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identifying information
printed hereon.
This Security shall be governed by and construed in accordance with
the laws of the State of New York, without regard to conflicts of law
principles.
44
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
------------------------------------------------------
(Insert assignee's social security or tax I.D. number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-----------------------------------------------------
as agent to transfer this Security on the books of the Company. The agent
may substitute another to act for him.
Date: Your Signature:
------------ ----------------------------
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:
------------------------------------------------------
(Participant in a Recognized Signature
Guaranty Medallion Program)
45
<PAGE>
FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 10.16 or Section 10.17 of the Indenture, check the
appropriate box:
Section 10.16 [_] Section 10.17 [_]
If you want to have only part of this Security purchased by the
Company pursuant to Section 10.16 or Section 10.17 of the Indenture, state the
amount in integral multiples of $1,000:
Date: Signature:
------------------- ---------------------------------
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee:
------------------------------------------------------
(Participant in a Recognized Signature
Guaranty Medallion Program)
46
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITY*
The following exchanges of a part of this Global Security for Definitive
Securities have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of Amount of of this Global Signature of
decrease in increase in Security following authorized signatory
Date of Principal Amount Principal Amount such decrease of Trustee or
Exchange of this Global Security of this Global Security (or increase) Security Custodian
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
- ---------------
* This should be included only if the Security is issued in global form.
47
<PAGE>
Section 2.4 Form of Notation Relating to Subsidiary Guarantees. The
form of notation to be set forth on each Security relating to the Subsidiary
Guarantees shall be in substantially the following form:
SUBSIDIARY GUARANTEE
Subject to the limitations set forth in the Indenture, the Subsidiary
Guarantors (as defined in the Indenture referred to in the Security upon which
this notation is endorsed and each hereinafter referred to as a "Subsidiary
Guarantor," which term includes any successor or additional Subsidiary Guarantor
under the Indenture) have, jointly and severally, unconditionally guaranteed (a)
the due and punctual payment of the principal (and premium, if any) of and
interest on the Securities, whether at maturity, acceleration, redemption or
otherwise, (b) the due and punctual payment of interest on the overdue principal
of and interest on the Securities, if any, to the extent lawful, (c) the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee, all in accordance with the terms set forth in the Indenture, and
(d) in case of any extension of time of payment or renewal of any Securities or
any of such other obligations, the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at Stated Maturity, by acceleration or otherwise. Capitalized terms used herein
shall have the meanings assigned to them in the Indenture unless otherwise
indicated.
The obligations of each Subsidiary Guarantor are limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities and after giving effect to any collections from or payments made by
or on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to
its contribution obligations under the Indenture, result in the obligations of
such Subsidiary Guarantor under the Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law. Each
Subsidiary Guarantor that makes a payment or distribution under a Subsidiary
Guarantee shall be entitled to a contribution from each other Subsidiary
Guarantor in a pro rata amount based on the Adjusted Net Assets of each
Subsidiary Guarantor.
The obligations of the Subsidiary Guarantors to the Holders or the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly subordinate
to all Guarantor Senior Indebtedness to the extent set forth in Article XIII of
the Indenture and reference is made to such Indenture for the precise terms of
such subordination.
No stockholder, officer, director or incorporator, as such, past, present
or future, of the Subsidiary Guarantors shall have any personal liability under
the Subsidiary Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
Any Subsidiary Guarantor may be released from its Subsidiary Guarantee upon
the terms and subject to the conditions provided in the Indenture.
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<PAGE>
All terms used in this notation of Subsidiary Guarantee which are defined
in the Indenture referred to in this Security upon which this notation of
Subsidiary Guarantee is endorsed shall have the meanings assigned to them in
such Indenture.
The Subsidiary Guarantee shall be binding upon each Subsidiary Guarantor
and its successors and assigns and shall inure to the benefit of the Trustee and
the Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof and in the Indenture.
The Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Security upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
OCEAN ENERGY, INC.,
a Louisiana corporation
Attest: By:
------------------- ----------------------------
Secretary President
Section 2.5 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 8 3/8% Series [A/B] Senior Subordinated Notes due
2008 referred to in the within-mentioned Indenture.
Authenticated:
Dated:
------------------
U.S. Bank Trust National Association
Trustee
By:
---------------------------------------------
Authorized Officer
49
<PAGE>
ARTICLE III
THE SECURITIES
--------------
Section 3.1 Title and Terms. The aggregate principal amount of
Securities which may be authenticated and delivered under this Indenture is
limited to $250,000,000 except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 3.4, 3.5, 3.6, 3.8, 9.6, 10.16, 10.17 or 11.8 hereof.
The Securities shall be known and designated as the "8 3/8% Series A
Senior Subordinated Notes Due 2008" and the "8 3/8% Series B Senior Subordinated
Notes due 2008"of the Company. Their Stated Maturity shall be July 1, 2008, and
they shall bear interest at the rate of 8 3/8% per annum from July 8, 1998, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, payable semiannually on January 1 and July 1 in each year,
commencing January 1, 1999, and at said Stated Maturity, until the principal
thereof is paid or duly provided for.
The principal of (and premium, if any, on) and interest on the
Securities shall be payable at the office or agency of the Company maintained
for such purpose in The City of New York, or at such other office or agency of
the Company as may be maintained for such purpose pursuant to Section 10.2
hereof; provided, however, that, at the option of the Company, principal,
premium, if any, and interest may be paid (i) by check mailed to addresses of
the Persons entitled thereto as such addresses shall appear on the Security
Register, or (ii) with respect to Securities held in book-entry form, by wire
transfer to an account maintained by the Holder located in the United States, as
specified in a written notice to the Trustee by any such Holder requesting
payment by wire transfer and specifying the account to which transfer is
requested.
The Securities shall be redeemable as provided in Article XI hereof.
The Securities shall be subject to defeasance at the option of the
Company as provided in Article XII hereof.
The Securities shall be guaranteed by the Subsidiary Guarantors as
provided in Article XIII hereof.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XIV hereof.
Section 3.2 Denominations. The Securities shall be issuable only in
registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof.
Section 3.3 Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman, its
President or a Vice President of the Company, under its corporate seal
reproduced thereon and attested by its Secretary or an Assistant
50
<PAGE>
Secretary or a Vice President of the Company. The signature of any of these
officers on the Securities may be manual or facsimile signatures of the present
or any future such authorized officer and may be imprinted or otherwise
reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company and
having the notation of Subsidiary Guarantees executed by the Subsidiary
Guarantors to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee in
accordance with such Company Order shall authenticate and deliver such
Securities with the notation of Subsidiary Guarantees thereon as provided in
this Indenture.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.
In case the Company, pursuant to and in compliance with Article VIII
hereof, shall be consolidated or merged with or into any other Person or shall
convey, transfer, lease or otherwise dispose of its Properties substantially as
an entirety to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company shall have
been merged, or the Person which shall have received a conveyance, transfer,
lease or other disposition as aforesaid, shall have executed an indenture
supplemental hereto with the Trustee pursuant to Article VIII hereof, any of the
Securities authenticated or delivered prior to such consolidation, merger,
conveyance, transfer, lease or other disposition may, from time to time, at the
request of the successor Person, be exchanged for other Securities executed in
the name of the successor Person with such changes in phraseology and form as
may be appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Request of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of a
successor Person pursuant to this Section in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person, at the
option of the Holders but without expense to them, shall provide for the
exchange of all Securities at the time Outstanding for Securities authenticated
and delivered in such new name.
51
<PAGE>
Section 3.4 Temporary Securities. Pending the preparation of
Definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the Definitive Securities in lieu of
which they are issued and having the notations of Subsidiary Guarantees thereon
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities and notations of Subsidiary
Guarantees may determine, as conclusively evidenced by their execution of such
Securities and notations of Subsidiary Guarantees.
If temporary Securities are issued, the Company will cause Definitive
Securities to be prepared without unreasonable delay. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 10.2
hereof, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
Definitive Securities of authorized denominations having notations of Subsidiary
Guarantees thereon. Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Securities.
Section 3.5 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office a register (the
register maintained in such office and in any other office or agency designated
pursuant to Section 10.2 hereof being herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. At all reasonable times and during normal business hours, the Security
Register shall be open to inspection by the Trustee. The Trustee is hereby
initially appointed as security registrar (the "Security Registrar") for the
purpose of registering Securities and transfers of Securities as herein
provided.
The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global Security.
Section 3.6 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When Definitive
Securities are presented to the Securities Registrar with the request:
(x) to register the transfer of the Definitive Securities, or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
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the Securities Registrar shall register the transfer or make the exchange as
requested if its requirement for such transactions are met; provided, however,
that the Definitive Securities presented or surrendered for registration of
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument
of transfer in form satisfactory to the Securities Registrar duly executed
by the Holder thereof or by his attorney, duly authorized in writing; and
(ii in the case of Transfer Restricted Securities that are
Definitive Securities, shall be accompanied by the following additional
information and documents, as applicable, upon which the Securities
Registrar may conclusively rely:
(A) if such Transfer Restricted Securities are being
delivered to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such Holder to
that effect (in substantially the form of Exhibit A hereto); or
(B) if such Transfer Restricted Securities are being
transferred (1) to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance with Rule 144A under
the Securities Act or (2) pursuant to an exemption from registration
in accordance with Rule 144 under the Securities Act (and based upon
an opinion of counsel if the Company or the Trustee so requests) or
(3) pursuant to an effective registration statement under the
Securities Act, a certification to that effect from such Holder (in
substantially the form of Exhibit A hereto); or
(C) if such Transfer Restricted Securities are being
transferred to an institutional "accredited investor," within the
meaning of Rule 501 (a)(1), (2), (3) or (7) under the Securities Act
pursuant to a private placement exemption from the registration
requirements of the Securities Act, a certification to that effect
from such Holder (in substantially the form of Exhibit A hereto) and a
certification from the applicable transferee (in substantially the
form of Exhibit B hereto) and an opinion of counsel to that effect if
the Company or the Trustee so requests;
(D) if such Transfer Restricted Securities are being
transferred pursuant to an exemption from registration in accordance
with Rule 904 under the Securities Act, certifications to that effect
from such Holder (in substantially the form of Exhibits A and C
hereto) and an opinion of counsel to that effect if the Company or the
Trustee so requests; or
(E) if such Transfer Restricted Securities are being
transferred in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that effect
from such Holder (in substantially the form of Exhibit A
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hereto) and an opinion of counsel to that effect if the Company or
the Trustee so requests.
(b) Restriction on Transfer of a Definitive Security for a Beneficial
Interest in a Global Security. A Definitive Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with the following additional
information and documents, as applicable, upon which the Trustee may
conclusively rely:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form of Exhibit A hereto that
such Definitive Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act; or
(ii) if such Definitive Security is a Transfer Restricted
Security and is being transferred pursuant to an exemption from
registration in accordance with Rule 904 under the Securities Act,
certifications to that effect from such Holder (in substantially the form
of Exhibits A and C hereto) and an opinion of counsel to that effect if the
Company or Trustee so requests; and
(iii) whether or not such Definitive Security is a Transfer
Restricted Security written instructions directing the Trustee to make, or
direct the Security Custodian to make, an endorsement on the Global
Security to reflect an increase in the aggregate principal amount of the
Securities represented by the Global Security;
then the Trustee shall cancel such Definitive Security in accordance with
Section 3.11 hereof and cause, or direct the Security Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Security Custodian, the aggregate principal amount of
Securities represented by the Global Security to be increased accordingly. If
no Global Securities are then outstanding, the Company shall issue and the
Trustee shall authenticate a new Global Security in the appropriate principal
amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor, which shall include restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Security for a
Definitive Security.
(i) Any Person having a beneficial interest in a Global Security
may upon request exchange such beneficial interest for a Definitive
Security. Upon receipt by the Trustee of
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written instructions or such other form of instructions as is customary for
the Depositary, from the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Global Security, and in the case of a
Transfer Restricted Security, the following additional information and
documents (all of which may be submitted by facsimile), upon which the
Trustee may conclusively rely:
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification from such Person to that effect (in substantially the
form of Exhibit A hereto); or
(B) if such beneficial interest is being transferred (1) to
a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act
or (2) pursuant to an exemption from registration in accordance with
Rule 144 under the Securities Act (and based upon an opinion of
counsel to that effect if the Company or the Trustee so requests) or
(3) pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the transferor (in
substantially the form of Exhibit A hereto); or
(C) if such beneficial interest is being transferred to an
institutional "accredited investor," within the meaning of Rule 501
(a)(1), (2), (3) or (7) under the Securities Act pursuant to a private
placement exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel to that effect if
the Company or the Trustee so requests), a certification to that
effect from such transferor (in substantially the form of Exhibit A
hereto) and a certification from the applicable transferee (in
substantially the form of Exhibit B hereto); or
(D) if such beneficial interest is being transferred
pursuant to an exemption from registration in accordance with Rule 904
under the Securities Act (and based upon an opinion to that effect of
counsel if the Company or the Trustee so requests), certifications to
that effect from such transferor (in substantially the form of
Exhibits A and C hereto); or
(E) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act (and based upon an opinion of counsel to that
effect if the Company or the Trustee so requests), a certification to
that effect from such transferor (in substantially the form of Exhibit
A hereto);
the Trustee or the Security Custodian, at the direction of the Trustee, shall,
in accordance with the standing instructions and procedures existing between the
Depositary and the Security Custodian, cause the aggregate principal amount of
Global Securities to be reduced accordingly and, following such reduction, the
Company shall execute and the Trustee shall authenticate and deliver to the
transferee a Definitive Security in the appropriate principal amount.
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(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 3.6(d) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Definitive Securities to the Persons in whose names such
Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 3.6), a Global Security
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Securities in Absence of Depositary.
If at any time:
(i) the Depositary for the Securities notifies the Company that
the Depositary is unwilling or unable to continue as Depositary for the
Global Securities and a successor Depositary for the Global Securities is
not appointed by the Company within 90 days after delivery of such notice;
(ii) an Event of Default has occurred and is continuing and the
Security Registrar has received a request from the Depositary to issue
Definitive Securities in lieu of all or a portion of the Global Security
(in which case the Company shall deliver Definitive Securities within 30
days of such request); or
(iii) the Company, at its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Securities
under this Indenture,
then the Company will execute, and the Trustee will authenticate and deliver
Definitive Securities, in an aggregate principal amount equal to the principal
amount of the Global Securities, in exchange for such Global Securities and
registered in such names as the Depositary shall instruct the Trustee or the
Company in writing.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii) and
(iii) immediately below, each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or substitution thereof) shall bear a legend in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED ( THE "SECURITIES ACT"), OR ANY STATE
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SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES (1) NOT
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO (X) THE DATE
THAT IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF
THIS SECURITY) AND THE LAST DAY ON WHICH OCEAN ENERGY, INC. (THE "COMPANY")
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION DATE"),
EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT IS ACQUIRING SUCH SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, AND (2) THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE, THE TRANSFER
AGENT AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (i) PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR THE
BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A OR (2) A NON-U.S. PERSON AND IS ACQUIRING
THE NOTE IN AN "OFFSHORE
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TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Security certificate evidencing the Global Securities also shall bear the
paragraph referred to in the first footnote of the form of Security in Section
2.2 hereof.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act or an effective
registration statement under the Securities Act, which shall be certified
to the Trustee and Security Registrar upon which each may conclusively
rely:
(A) in the case of any Transfer Restricted Security that is
a Definitive Security, the Security Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a Definitive
Security that does not bear the legend set forth in (i) above and
rescind any restriction on the transfer of such Transfer Restricted
Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Security, such Transfer Restricted Security
shall not be required to bear the legend set forth in (i) above if all
other interests in such Global Security have been or are concurrently
being sold or transferred pursuant to Rule 144 under the Securities
Act or pursuant to an effective registration statement under the
Securities Act, but such Transfer Restricted Security shall continue
to be subject to the provisions of Section 3.6(c) hereof; provided,
however, that with respect to any request for an exchange of a
Transfer Restricted Security that is represented by a Global Security
for a Definitive Security that does not bear a legend set forth in (i)
above, which request is made in reliance upon Rule 144 under the
Securities Act, the Holder thereof shall certify in writing to the
Security Registrar that such request is being made pursuant to Rule
144 under the Securities Act (such certification to be substantially
in the form of Exhibit A hereto and upon which the Security Registrar
may conclusively rely).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 3.3 hereof, the Trustee
shall authenticate Series B Securities in exchange for Series A Securities
accepted for exchange in the Exchange Offer, which Series B Securities
shall not bear the legend set forth in (i) above, and the Security
Registrar shall rescind any restriction on the transfer of such Securities,
in each case unless the Holder of such Series A Securities is either (A) a
broker-dealer, (B) a Person participating in the distribution of the Series
A Securities or (C) a Person who is an affiliate (as defined in Rule 144
under the
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Securities Act) of the Company. The Company shall identify to the Trustee
such Holders of the Securities in a written certification signed by an
Officer of the Company and, absent certification from the Company to such
effect, the Trustee shall assume that there are no such Holders.
(h) Cancellation and/or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, repurchased or canceled, such Global Security
shall be returned to or retained and canceled by the Trustee. At any time prior
to such cancellation, if any beneficial interest in a Global Security is
exchanged for Definitive Securities, redeemed, repurchased or canceled, the
principal amount of Securities represented by such Global Security shall be
reduced and an endorsement shall be made on such Global Security, by the Trustee
or the Security Custodian, at the direction of the Trustee to reflect such
reduction.
(i) General Provisions with respect to Transfer and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Security Registrar's request.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange or redemption of Securities (except as otherwise
permitted herein), but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in
connection therewith (other than such transfer tax or similar governmental
charge payable upon exchanges pursuant to the last paragraph of Section 3.3
or Sections 3.4, 9.6 or 11.8 hereof).
(iii) The Trustee shall authenticate Definitive Securities and Global
Securities in accordance with the provisions of Section 3.3 hereof.
(iv) Notwithstanding any other provisions of this Indenture to the
contrary, the Company shall not be required to register the transfer or
exchange of a Security between a Regular Record Date and the next
succeeding Interest Payment Date.
(v) Neither the Company nor the Trustee will have any responsibility
or liability for any aspect of the records relating to, or payments made on
account of, Securities by the Depositary, or for maintaining, supervising
or reviewing any records of the Depositary relating to such Securities.
Neither the Company nor the Trustee shall be liable for any delay by the
related Global Security Holder or the Depositary in identifying the
beneficial owners of the related Securities and each such Person may
conclusively rely on, and shall be protected in relying on, instructions
from such Global Security Holder or the Depositary for all purposes
(including with respect to the registration and delivery, and the
respective principal amounts, of the Securities to be issued).
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(vi) Neither the Trustee, the Security Registrar nor the Company shall
be required (A) to issue, register the transfer of or exchange any Security
during a period beginning at the opening of business 15 days before the
mailing of a notice of redemption of Securities selected for redemption
under Section 11.4 hereof and ending at the close of business on the day of
such mailing of the relevant notice of redemption, or (B) to register the
transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in
part.
(vii) All Securities and the Subsidiaries Guarantees, if any, noted
thereon issued upon any registration of transfer or exchange of Securities
shall be the valid obligations of the Company and the respective Subsidiary
Guarantors, if any, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
(viii) Each Holder of a Security agrees to indemnify the Company and
the Trustee against any liability that may result from the transfer,
exchange or assignment of such Holder's Security in violation of any
provision of this Indenture and/or applicable federal or state securities
law.
(ix) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security other than to require delivery of
such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by the terms of,
this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
Section 3.7 Additional Provisions for Global Security.
(a) The Global Security initially shall be registered in the name of
the Depositary for such Global Security or the nominee of such Depositary and be
delivered to the Trustee as custodian for, such Depositary.
Members of or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or shall impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Security.
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(b) The registered Holder of the Global Security may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
Section 3.8 Mutilated, Destroyed, Lost and Stolen Securities. If (i) any
mutilated Security is surrendered to the Trustee or (ii) the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Security, and there is delivered to the Company, the Subsidiary
Guarantors and the Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Company or
the Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute, the Subsidiary Guarantors shall execute the notations of
Subsidiary Guarantees, and upon Company Order the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, having the notations of Subsidiary Guarantees thereon bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company and the respective Subsidiary
Guarantors, whether or not the mutilated, destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be entitled to all
benefits of this Indenture equally and proportionately with any and all other
Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.9 Payment of Interest; Interest Rights Preserved. Interest on any
Security which is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name such Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, or, in the case of interest
payable at the Maturity of the principal of the Securities, to the Person to
whom principal is paid, in each case at the office or agency of the Company
maintained for such purpose pursuant to Section 10.2 hereof.
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Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date shall forthwith cease to
be payable to the Holder on the Regular Record Date by virtue of having been
such Holder, and such defaulted interest and (to the extent lawful) interest on
such defaulted interest at the rate borne by the Securities (such defaulted
interest and interest thereon herein collectively called "Defaulted Interest")
may be paid by the Company, at its election in each case, as provided in clause
(a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered, at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited shall be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days prior to
the date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date, and in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given in the
manner provided for in Section 15.5 hereof, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so given, such Defaulted
Interest shall be paid to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 3.10 Persons Deemed Owners. Prior to the due presentment of a
Security for registration of transfer, the Company, the Subsidiary Guarantors,
the Security Registrar, the Trustee and any agent of the Company, the Subsidiary
Guarantors or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving
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payment of principal of (and premium, if any, on) and (subject to Section 3.9
hereof) interest on such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and none of the Company, the Subsidiary
Guarantors, the Security Registrar, the Trustee or any agent of the Company, the
Subsidiary Guarantors or the Trustee shall be affected by notice to the
contrary.
Section 3.11 Cancellation. All Securities surrendered for payment,
redemption, registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be destroyed and a certificate of their
destruction delivered to the Company unless by a Company Order the Company shall
direct that canceled Securities be returned to it.
Section 3.12 Computation of Interest. Interest on the Securities shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
Section 3.13 CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
--------------------------
Section 4.1 Satisfaction and Discharge of Indenture. This Indenture shall
upon Company Request be discharged and cease to be of further effect (except as
to surviving rights of registration of transfer or exchange of Securities, as
expressly provided for in this Indenture) as to all outstanding Securities, and
the Trustee, at the expense of the Company, shall, upon payment of all amounts
due the Trustee under Section 6.6 hereof, execute proper instruments
acknowledging satisfaction and discharge of this Indenture when
(a) either
(i) all Securities theretofore authenticated and delivered (other
than (1) Securities which have been mutilated, destroyed, lost or stolen
and which have been replaced or paid
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as provided in Section 3.8 hereof and (2) Securities for whose payment
money or United States governmental obligations of the type described in
clause (i) of the definition of Cash Equivalents has theretofore been
deposited in trust with the Trustee or any Paying Agent or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3 hereof) have been
delivered to the Trustee for cancellation, or
(i) all such Securities not theretofore delivered to the Trustee
for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity
within one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (ii)(A), (ii)(B) or (ii)(C) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium,
if any) and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be, together with
instructions from the Company irrevocably directing the Trustee to
apply such funds to the payment thereof at maturity or redemption, as
the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each satisfactory in form to the Trustee, which, taken
together, state that all conditions precedent herein relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.6 hereof and, if money
shall have been deposited with the Trustee pursuant to this Section, the
obligations of the Trustee under Section 4.2 hereof and the last paragraph of
Section 10.3 hereof shall survive.
Section 4.2 Application of Trust Money. Subject to the provisions of the
last paragraph of Section 10.3 hereof, all money deposited with the Trustee
pursuant to Section 4.1 hereof shall be
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held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee.
ARTICLE V
REMEDIES
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Section 5.1 Events of Default. "Events of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of the principal of or premium, if any, on
any of the Securities, whether such payment is due at maturity, upon redemption,
upon repurchase pursuant to a Change of Control Offer or a Net Proceeds Offer,
upon acceleration or otherwise; or
(b) default in the payment of any installment of interest on any of
the Securities, when it becomes due and payable, and the continuance of such
default for a period of 30 days; or
(c) default in the performance or breach of the provisions of Article
VIII hereof, the failure to make or consummate a Change of Control Offer in
accordance with the provisions of Section 10.16 or the failure to make or
consummate a Net Proceeds Offer in accordance with the provisions of Section
10.17; or
(d) the Company or any Subsidiary Guarantor shall fail to perform or
observe any other term, covenant or agreement contained in the Securities, any
Subsidiary Guarantee or this Indenture (other than a default specified in (a),
(b) or (c) above) for a period of 30 days after written notice of such failure
stating that it is a "notice of default" hereunder and requiring the Company or
such Subsidiary Guarantor to remedy the same shall have been given (i) to the
Company by the Trustee or (ii) to the Company and the Trustee by the holders of
at least 25% in aggregate principal amount of the Securities then Outstanding;
or
(e) the occurrence and continuation beyond any applicable grace period
of any default in the payment of the principal of (or premium, if any, on) or
interest on any Indebtedness of the Company (other than the Securities) or any
Subsidiary Guarantor or any other Restricted Subsidiary for money borrowed when
due, or any other default causing acceleration of any Indebtedness of the
Company or any Subsidiary Guarantor or any other Restricted Subsidiary for money
borrowed, provided that the aggregate principal amount of such Indebtedness
shall exceed the greater of (i) $20 million and (ii) 5% of Adjusted Consolidated
Net Tangible Assets; provided further that if any such default is cured or
waived or any such acceleration rescinded, or such debt
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is repaid, within a period of 10 days from the continuation of such default
beyond the applicable grace period or the occurrence of such acceleration, as
the case may be, such Event of Default under this Indenture and any
consequential acceleration of the Securities shall be automatically rescinded,
so long as such rescission does not conflict with any judgment or decree; or
(f) the commencement of proceedings, or the taking of any enforcement
action (including by way of set-off), by any holder of at least the greater of
(i) $20 million and (ii) 5% of Adjusted Consolidated Net Tangible Assets in
aggregate principal amount of Indebtedness of the Company or any Subsidiary
Guarantor or any other Restricted Subsidiary, after a default under such
Indebtedness, to retain in satisfaction of such Indebtedness or to collect or
seize, dispose of or apply in satisfaction of such Indebtedness, Property or
assets of the Company or any Subsidiary Guarantor or any other Restricted
Subsidiary having a Fair Market Value (as determined by the Board of Directors
of the Company and evidenced by a Board Resolution) in excess of the greater of
(i) $20 million and (ii) 5% of Adjusted Consolidated Net Tangible Assets
individually or in the aggregate, provided that if any such proceedings or
actions are terminated or rescinded, or such Indebtedness is repaid, such Event
of Default under this Indenture and any consequential acceleration of the
Securities shall be automatically rescinded, so long as (x) such rescission does
not conflict with any judgment or decree and (y) the holder of such Indebtedness
shall not have applied any such property or assets in satisfaction of such
Indebtedness; or
(g) any Subsidiary Guarantee shall for any reason cease to be, or be
asserted by the Company or any Subsidiary Guarantor, as applicable, not to be,
in full force and effect, enforceable in accordance with its terms (except
pursuant to the release of any such Subsidiary Guarantee in accordance with this
Indenture); or
(h) final judgments or orders rendered against the Company or any
Subsidiary Guarantor or any other Restricted Subsidiary that are unsatisfied and
that require the payment in money, either individually or in an aggregate
amount, that is more than the greater of (i) $20 million and (ii) 5% of Adjusted
Consolidated Net Tangible Assets over the coverage under applicable insurance
policies and either (x) commencement by any creditor of an enforcement
proceeding upon such judgment (other than a judgment that is stayed by reason of
pending appeal or otherwise) or (y) the occurrence of a 60-day period during
which a stay of such judgment or order, by reason of pending appeal or
otherwise, was not in effect; or
(i) the entry of a decree or order by a court having jurisdiction in
the premises (i) for relief in respect of the Company, any Subsidiary Guarantor
or any Significant Subsidiary in an involuntary case or proceeding under the
Federal Bankruptcy Code or any other applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (ii) adjudging the Company,
any Subsidiary Guarantor or any Significant Subsidiary bankrupt or insolvent, or
approving a petition seeking reorganization, arrangement, adjustment or
composition of the Company, any Subsidiary Guarantor or any Significant
Subsidiary under the Federal Bankruptcy Code or any other applicable federal or
state law, or appointing under any such law a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company, any
Subsidiary Guarantor
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or any Significant Subsidiary or of a substantial part of their consolidated
assets, or ordering the winding up or liquidation of their affairs, and the
continuance of any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 60 consecutive days; or
(j) the commencement by the Company, any Subsidiary Guarantor or any
Significant Subsidiary of a voluntary case or proceeding under the Federal
Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by the Company, any
Subsidiary Guarantor or any Significant Subsidiary to the entry of a decree or
order for relief in respect thereof in an involuntary case or proceeding under
the Federal Bankruptcy Code or any other applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by the
Company, any Subsidiary Guarantor or any Significant Subsidiary of a petition or
consent seeking reorganization or relief under any applicable federal or state
law, or the consent by it under any such law to the filing of any such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or other similar official) of any
of the Company, any Subsidiary Guarantor or any Significant Subsidiary or of any
substantial part of their consolidated assets, or the making by it of an
assignment for the benefit of creditors under any such law, or the admission by
it in writing of its inability to pay its debts generally as they become due or
taking of corporate action by the Company, any Subsidiary Guarantor or any
Significant Subsidiary in furtherance of any such action.
Section 5.2 Acceleration of Maturity; Rescission and Annulment. If an Event
of Default (other than an Event of Default specified in clause (i) or (j) of
Section 5.1 hereof) shall occur and be continuing, the Trustee, by written
notice to the Company, or the holders of at least 25% in aggregate principal
amount of the Securities then Outstanding, by notice to the Trustee and the
Company, may declare the principal of, premium, if any, and accrued interest on
all of the Outstanding Securities due and payable immediately, upon which
declaration all amounts payable in respect of the Securities shall be
immediately due and payable. If an Event of Default specified in Section 5.1(i)
or (j) hereof occurs and is continuing, then the principal of, premium, if any,
and accrued interest on all of the Outstanding Securities shall ipso facto
become and be immediately due and payable without any declaration, notice or
other act on the part of the Trustee or any Holder of Securities.
After a declaration of acceleration has been made and before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in aggregate principal amount of the
Securities Outstanding, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if (a) the Company or
any Subsidiary Guarantor has paid or deposited with the Trustee a sum sufficient
to pay (i) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, (ii) all overdue interest on all Securities, (iii) the principal of
and premium, if any, on any Securities which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate borne by the
Securities, and (iv) to the
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extent that payment of such interest is lawful, interest upon overdue interest
and overdue principal at the rate borne by the Securities which has become due
otherwise than by such declaration of acceleration; (b) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction; and
(c) all Events of Default, other than the nonpayment of principal of, premium,
if any, and interest on the Securities that has become due solely by such
declaration of acceleration, have been cured or waived.
The Holders of not less than a majority in aggregate principal amount
of the outstanding Securities may on behalf of the holders of all the Securities
waive any past defaults under this Indenture, except (i) a default in the
payment of the principal of, premium, if any, or interest on any Security, (ii)
a default in respect of a covenant or provision which under this Indenture
cannot be modified or amended without the consent of the Holder of each Security
Outstanding, and (iii) as limited by Section 10.21 hereof.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if
(a) default is made in the payment of any installment of interest on
any Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof or with respect to any Security
required to have been purchased by the Company on the Change of Control Purchase
Date or the Net Proceeds Payment Date pursuant to a Change of Control Offer or a
Net Proceeds Offer, as applicable,
the Company will, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by the Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the Property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether
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for the specific enforcement of any covenant or agreement in this Indenture or
in aid of the exercise of any power granted herein, or to enforce any other
proper remedy.
Section 5.4 Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company, the Subsidiary Guarantors or any other obligor upon the Securities
or the Property of the Company, the Subsidiary Guarantors or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company, the Subsidiary Guarantors or such other obligor for
the payment of overdue principal, premium, if any, or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities and
to file such other papers or documents and take any other actions including
participation as a full member of any creditor or other committee as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other Property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.6 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the Subsidiary Guarantees or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 5.5 Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities or the Subsidiary Guarantees may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name and as trustee of an express
trust, and any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses,
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disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 5.6 Application of Money Collected. Any money collected by
the Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in the case of the distribution of
such money on account of principal (or premium, if any) or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.6 hereof,
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any, on,) and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if
any) and interest, respectively; and
THIRD: The balance, if any, to the Company.
Section 5.7 Limitation on Suits. No Holder of any Securities shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority or more in
aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other
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Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all the Holders.
Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest. Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment, as provided herein (including, if applicable,
Article XII hereof) and in such Security of the principal of (and premium, if
any, on) and (subject to Section 3.9 hereof) interest on, such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
Section 5.9 Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Subsidiary Guarantors, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereunder
and all rights and remedies of the Trustee and the Holders shall continue as
though no such proceeding had been instituted.
Section 5.10 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.8 hereof, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
Section 5.12 Control by Holders. The Holders of not less than a
majority in principal amount of the Outstanding Securities shall have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
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(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders not joining therein.
Section 5.13 Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities may on behalf of the
Holders of all the Securities waive any existing Default or Event of Default
hereunder and its consequences, except a Default or Event of Default
(a) in respect of the payment of the principal of (or premium, if
any, on) or interest on any Security, or
(b) in respect of a covenant or provision hereof which under Article
IX hereof cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such Default or Event of Default shall cease to
exist for every purpose under this Indenture, but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
Section 5.14 Waiver of Stay, Extension or Usury Laws. Each of the
Company and the Subsidiary Guarantors covenants (to the extent that each may
lawfully do so) that it will not at any time insist upon, plead or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension, or
usury law or other law, which would prohibit or forgive the Company or any
Subsidiary Guarantor from paying all or any portion of the principal of
(premium, if any, on) and/or interest on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each of the Company and the Subsidiary Guarantors hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
-----------
Section 6.1 Notice of Defaults. Within 60 days after the occurrence of any
Default hereunder, the Trustee shall transmit in the manner and to the extent
provided in TIA Section 313(c), notice of such Default hereunder known to the
Trustee, unless such Default shall have been cured or waived; provided, however,
that, except in the case of a Default in the payment of the principal
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of (or premium, if any, on) or interest on any Security, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders; and provided, further, that in the
case of any Default of the character specified in Section 5.1(e) hereof, no such
notice to Holders shall be given until at least 60 days after the occurrence
thereof.
Section 6.2 Certain Rights and Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent Person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and the TIA and no others, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee. To the extent of any conflict between the duties of the
Trustee hereunder and under the TIA, the TIA shall control.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture (but need
not confirm or investigate the accuracy of mathematical calculations or
other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.12 hereof.
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(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(f) Subject to the provisions of TIA Sections 315(a) through 315(d):
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(ii) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(iii) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(iv) the Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(v) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(vi) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
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(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(viii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
(g) The Trustee shall not be required to advance, expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
Section 6.3 Trustee Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities and the notations of
Subsidiary Guarantees thereon, except for the Trustee's certificates of
authentication, shall be taken as the statements of the Company or the
Subsidiary Guarantors, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities, except
that the Trustee represents that it is duly authorized to execute and deliver
this Indenture, authenticate the Securities and perform its obligations
hereunder, and that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1 supplied to the Company are true and accurate, subject
to the qualifications set forth herein. The Trustee shall not be accountable
for the use or application by the Company of Securities or the proceeds thereof.
Section 6.4 May Hold Securities. The Trustee, any Paying Agent, any
Security Register or any other agent of the Company, any Subsidiary Guarantor or
of the Trustee, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to TIA Sections 310(b) and 311, may otherwise
deal with the Company and the Subsidiary Guarantors with the same rights it
would have if it were not the Trustee, Paying Agent, Security Registrar or such
other agent.
Section 6.5 Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company or any
Subsidiary Guarantor.
Section 6.6 Compensation and Reimbursement. The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
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(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel, except any such expense, disbursement
or advance as may be attributable to the Trustee's negligence or bad faith); and
(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder or in connection with enforcing this indemnification
provision.
The obligations of the Company under this Section 6.6 to compensate
the Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or any other termination under any Insolvency or
Liquidation Proceeding. As security for the performance of such obligations of
the Company, the Trustee shall have a claim and lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for payment of principal of (and premium, if any, on) or
interest on particular Securities. Such lien shall survive the satisfaction and
discharge of this Indenture or any other termination under any Insolvency or
Liquidation Proceeding.
When the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in paragraphs (i) or (j) of Section
5.1 of this Indenture, such expenses and the compensation for such services are
intended to constitute expenses of administration under any Insolvency or
Liquidation Proceeding.
Section 6.7 Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be eligible to act as Trustee under TIA
Section 310(a)(1) and shall have a combined capital and surplus of at least
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section 6.7, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 6.8 Conflicting Interests. The Trustee shall comply with the
provisions of Section 310(b) of the Trust Indenture Act.
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Section 6.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10 hereof.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.10 hereof shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
not less than a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(ii) the Trustee shall cease to be eligible under Section 6.7
hereof and shall fail to resign after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security for
at least six months, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by
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the Company. If no successor Trustee shall have been so appointed by the Company
or the Holders and accepted appointment in the manner hereinafter provided, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee. The
evidence of such successorship may, but need not be, evidenced by a supplemental
indenture.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to the Holders of
Securities in the manner provided for in Section 15.5 hereof. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
Section 6.10 Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee, but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of all amounts due it under
Section 6.6 hereof, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 6.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities; and in
case at that time any of the Securities shall not have been authenticated, any
successor Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Securities in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
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Section 6.12 Preferential Collection of Claims Against Company. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor under the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
or any such other obligor.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE
-------------------------------------
Section 7.1 Disclosure of Names and Addresses of Holders. Every Holder of
Securities, by receiving and holding the same, agrees with the Company, the
Subsidiary Guarantors, the Security Registrar and the Trustee that none of the
Company, the Subsidiary Guarantors, the Security Registrar or the Trustee, or
any agent of any of them, shall be held accountable by reason of the disclosure
of any such information as to the names and addresses of the Holders in
accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA Section
312(b).
Section 7.2 Reports By Trustee. Within 60 days after May 15 of each year
commencing with May 15, 1999, the Trustee shall transmit by mail to the Holders,
as their names and addresses appear in the Security Register, a brief report
dated as of such May 15 in accordance with and to the extent required under TIA
Section 313(a). The Trustee shall also comply with TIA Sections 313(b) and
313(c).
The Company shall promptly notify the Trustee in writing if the Securities
become listed on any stock exchange or automatic quotation system.
A copy of each Trustee's report, at the time of its mailing to Holders of
Securities, shall be mailed to the Company and filed with the Commission and
each stock exchange, if any, on which the Securities are listed.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
----------------------------------------------------
Section 8.1 Company May Consolidate, etc., Only on Certain Terms. The
Company (A) will not, in any single transaction or series of related
transactions, merge or consolidate with or into any other Person, or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of its Properties and assets to any Person or group of Affiliated Persons, and
(B) shall not permit any of its Restricted Subsidiaries to enter into any such
transaction or series of transactions if such transaction or series of
transactions by Restricted Subsidiaries, in the aggregate, would result in a
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sale, assignment, conveyance, transfer, lease or other disposition of all or
substantially all of the Properties and assets of the Company and its Restricted
Subsidiaries on a consolidated basis to any other Person or group of Affiliated
Persons, unless at the time and after giving effect thereto (i) either (a) if
the transaction or transactions is a merger or consolidation, the Company or a
Restricted Subsidiary, as the case may be, shall be the surviving Person of such
merger or consolidation, or (b) the Person (if other than the Company or a
Restricted Subsidiary, as the case may be) formed by such consolidation or into
which the Company or such Restricted Subsidiary is merged or to which the
Properties and assets of the Company or such Restricted Subsidiary, as the case
may be, are sold, assigned, conveyed, transferred, leased or otherwise disposed
of (any such surviving Person or transferee Person being the "Surviving Entity")
shall be a corporation organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia and shall, in
either case, expressly assume by a supplemental indenture to this Indenture
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company for the due and punctual payment of the principal
of (and premium, if any, on) and interest on all the Securities and the
performance and observance of every covenant of this Indenture on the part of
the Company, to be performed or observed, and this Indenture shall remain in
full force and effect; (ii) immediately before and immediately after giving
effect to such transaction or series of transactions on a pro forma basis (and
treating any Indebtedness not previously an obligation of the Company or any of
its Restricted Subsidiaries which becomes the obligation of the Company or any
of its Restricted Subsidiaries in connection with or as a result of such
transaction or transactions as having been incurred at the time of such
transaction or transactions), no Default or Event of Default shall have occurred
and be continuing; (iii) except in the case of the consolidation or merger of
any Restricted Subsidiary with or into the Company, immediately after giving
effect to such transaction or transactions on a pro forma basis, the
Consolidated Net Worth of the Company (or the Surviving Entity if the Company is
not the continuing obligor under this Indenture) is at least equal to the
Consolidated Net Worth of the Company immediately before such transaction or
transactions; (iv) except in the case of the consolidation or merger of any
Restricted Subsidiary with or into the Company or any Wholly Owned Restricted
Subsidiary, immediately before and immediately after giving effect to such
transaction or transactions on a pro forma basis (on the assumption that the
transaction or transactions occurred on the first day of the period of four full
fiscal quarters ending immediately prior to the consummation of such transaction
or transactions, with the appropriate adjustments with respect to the
transaction or transactions being included in such pro forma calculation), the
Company (or the Surviving Entity if the Company is not the continuing obligor
under this Indenture) could incur $1.00 of additional Indebtedness (excluding
Permitted Indebtedness) pursuant to Section 10.12 hereof; (v) if the Company is
not the Surviving Entity, each Subsidiary Guarantor, unless it is the other
party to the transactions described above, shall have by supplemental indenture
to this Indenture confirmed that its Subsidiary Guarantee shall apply to such
Person's obligations under this Indenture and the Securities; and (vi) if any of
the Properties or assets of the Company or any of its Restricted Subsidiaries
would upon such transaction or series of related transactions become subject to
any Lien (other than a Permitted Lien), the creation and imposition of such Lien
shall have been in compliance with Section 10.15 hereof.
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In connection with any consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition contemplated hereby, the
Company shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate
stating that such consolidation, merger, sale, assignment, conveyance, transfer,
lease or other disposition and any supplemental indenture in respect thereto
comply with the requirements under this Indenture and an Opinion of Counsel
stating that the requirements of clause (i) of the preceding paragraph have been
complied with.
Section 8.2 Successor Substituted. Upon any consolidation of the Company
with or merger of the Company with or into any other Person or any sale,
assignment, conveyance, transfer, lease or other disposition of all or
substantially all of the Properties of the Company to any Person in accordance
with Section 8.1 hereof, the successor Person formed by such consolidation or
into which the Company is merged or to which such sale, assignment, conveyance.
transfer or other disposition (other than by lease) is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and in the event of any such sale, assignment,
lease, conveyance, transfer or other disposition, the Company (which term shall
for this purpose mean the Person named as the "Company" in the first paragraph
of this Indenture or any successor Person which shall theretofore become such in
the manner described in Section 8.1 hereof), except in the case of a lease,
shall be discharged of all obligations and covenants under this Indenture and
the Securities and the Company may be dissolved and liquidated and such
dissolution and liquidation shall not cause a Change of Control under clause (e)
of the definition thereof to occur unless the merger, or the sale, assignment,
lease, conveyance, transfer or other disposition of all or substantially all of
the Properties of the Company to any Person otherwise results in a Change of
Control.
ARTICLE IX
SUPPLEMENTAL INDENTURES
-----------------------
Section 9.1 Supplemental Indentures Without Consent of Holders. Without the
consent of any Holders, the Company, the Subsidiary Guarantors and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company contained
herein and in the Securities; or
(b) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default; or
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(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of Sections 6.9
and 6.10 hereof; or
(e) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein;
or
(f) to secure the Securities pursuant to the requirements of Section
10.15 hereof or otherwise; or
(g) to add any Person as a Subsidiary Guarantor as provided in
Sections 10.13 and 13.1 hereof or as contemplated by the definition of
"Permitted Subsidiary Indebtedness" or to evidence the succession of another
Person to any Guarantor and the assumption by any such successor of the
covenants and agreements of such Subsidiary Guarantor contained herein, in the
Securities and in the Subsidiary Guarantee; or
(h) to release a Subsidiary Guarantor from its Guarantee pursuant to
Sections 10.13 and 13.3 hereof; or
(i) to provide for uncertificated Securities in addition to or in
place of certificated Securities; or
(j) to make any other provisions with respect to matters or questions
arising under this Indenture; provided that such action shall not adversely
affect the interests of the Holders in any material respect.
Section 9.2 Supplemental Indenture with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, the Subsidiary
Guarantors, when authorized by a Board Resolution, and the Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights of the Holders under
this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
change the place, coin or currency in which any Security or any premium or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date); or
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(b) reduce the percentage of aggregate principal amount of the
Outstanding Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture; or
(c) modify any of the provisions of this Section or Sections 5.13 and
10.21 hereof, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby; or
(d) modify Section 10.13(a) hereof or any provisions of this Indenture
relating to the Subsidiary Guarantees in a manner adverse to the Holders
thereof; or
(e) amend, change or modify the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control, or to
make and consummate a Net Proceeds Offer with respect to any Asset Sale or
modify any of the provisions or definitions with respect thereto.
It shall not be necessary for any Act of the Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 9.3 Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Section 9.4 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes, and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
Section 9.5 Conformity With Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
Section 9.6 Reference in Securities to Supplemental Indentures. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
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modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company, with
the notations of Subsidiary Guarantees thereon executed by the Subsidiary
Guarantors, and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
Section 9.7 Notice of Supplemental Indentures. Promptly after the execution
by the Company and the Trustee of any supplemental indenture pursuant to the
provisions of Section 9.2 hereof, the Company shall give notice thereof to the
Holders of each Outstanding Security affected, in the manner provided for in
Section 15.5 hereof, setting forth in general terms the substance of such
supplemental indenture.
ARTICLE X
COVENANTS
---------
Section 10.1 Payment of Principal, Premium, if any, and Interest. The
Company covenants and agrees for the benefit of the Holders that it will duly
and punctually pay the principal of (and premium, if any, on) and interest on
the Securities in accordance with the terms of the Securities and this
Indenture.
Section 10.2 Maintenance of Office or Agency. The Company shall maintain in
the Borough of Manhattan, The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities, the Subsidiary
Guarantees and this Indenture may be served. The office of U.S. Bank Trust
National Association located at 100 Wall Street, Suite 1600, New York, NY 10005,
Attn: Corporate Trust Department, shall be such office or agency of the Company,
unless the Company shall designate and maintain some other office or agency for
one or more of such purposes. The Company will give prompt written notice to the
Trustee of any change in the location of any such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the aforementioned
office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes and may from time to time
rescind any such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in the Borough of Manhattan, The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such other
office or agency.
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Section 10.3 Money for Security Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent, it shall, on or before
each due date of the principal of (and premium, if any, on) or interest on any
of the Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it will, on or before 12:00 noon on each due date of the principal
of (and premium, if any, on), or interest on, any Securities, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company shall promptly notify the Trustee of such
action or any failure so to act.
The Company shall cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of (and
premium, if any, on) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of principal
(and premium, if any) or interest; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Subject to applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any, on) or interest
on any Security and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
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cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 10.4 Corporate Existence. Except as expressly permitted by Article
VIII hereof, Section 10.16 hereof or other provisions of this Indenture, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect the corporate existence, rights (charter and statutory)
and franchises of the Company and each Restricted Subsidiary; provided, however,
that the Company shall not be required to preserve any such existence of its
Restricted Subsidiaries, rights or franchises, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Restricted Subsidiaries, taken as a whole
and that the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 10.5 Payment of Taxes and Other Claims. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Restricted Subsidiary or upon the income,
profits or Property of the Company or any Restricted Subsidiary and (b) all
lawful claims for labor, materials and supplies, which, if unpaid, might by law
become a Lien upon the Property of the Company or any Restricted Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate provision has been made in
accordance with GAAP.
Section 10.6 Maintenance of Properties. The Company shall cause all
material Properties owned by the Company or any Restricted Subsidiary and used
or held for use in the conduct of its business or the business of any Restricted
Subsidiary to be maintained and kept in good condition, repair and working order
(ordinary wear and tear excepted), all as in the judgment of the Company may be
necessary so that its business may be properly and advantageously conducted at
all times; provided, however, that nothing in this Section shall prevent the
Company from discontinuing the maintenance of any of such Properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of the Company and its Restricted Subsidiaries
taken as a whole and not disadvantageous in any material respect to the Holders.
Notwithstanding the foregoing, nothing contained in this Section 10.6 shall
limit or impair in any way the right of the Company and its Restricted
Subsidiaries to sell, divest and otherwise to engage in transactions that are
otherwise permitted by this Indenture.
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Section 10.7 Insurance. The Company shall at all times keep all of its and
its Restricted Subsidiaries' Properties which are of an insurable nature insured
with insurers, believed by the Company to be responsible, against loss or damage
to the extent that property of similar character is usually so insured by
corporations similarly situated and owning like properties.
The Company may adopt such other plan or method of protection, in lieu of
or supplemental to insurance with insurers, whether by the establishment of an
insurance fund or reserve to be held and applied to make good losses from
casualties, or otherwise, conforming to the systems of self-insurance maintained
by corporations similarly situated and owning like properties, as may be
determined by the Board of Directors.
Section 10.8 Statement by Officers as to Default.
(a) The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year of the Company and within 45 days of the end of each of
the first, second and third quarters of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding fiscal quarter or fiscal year, as
applicable, has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of such Officer's
knowledge the Company has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred and be continuing, describing
all such Defaults or Events of Default of which such Officer may have knowledge
and what action the Company is taking or proposes to take with respect thereto).
Such Officers' Certificate shall comply with TIA Section 314(a)(4). For purposes
of this Section 10.8(a), such compliance shall be determined without regard to
any period of grace or requirement of notice under this Indenture.
(b) The Company and the Subsidiary Guarantors shall, so long as any of
the Securities are outstanding, deliver to the Trustee forthwith upon any
Officer becoming aware of any Default or Event of Default or default in the
performance of any covenant, agreement or condition contained in this Indenture,
an Officers' Certificate specifying such Default or Event of Default and what
action the Company or any Subsidiary Guarantor proposes to take with respect
thereto within 10 days of its occurrence.
Section 10.9 Provision of Financial Information. The Company and the
Subsidiary Guarantors shall file with the Trustee (with exhibits) and deliver to
each Holder (without exhibits), without cost to such Holder, within 15 days
after it files them with the Commission (or would have been required to file
them with the Commission if such filing were required), copies of the annual and
quarterly reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may by rules and
regulations prescribe) which each of the Company and the Subsidiary Guarantors
is required to file with the Commission pursuant to
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Section 13 or 15(d) of the Exchange Act. If the Company is not subject to the
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
nonetheless file with the Commission (to the extent such filings are accepted by
the Commission) and the Trustee, and deliver to each Holder (without exhibits),
without cost to such Holder, copies of such annual reports and such information,
documents and other reports as it would file if it were subject to the
requirements of Section 13 or 15(d) of the Exchange Act. If filing such reports
and documents with the Commission is not accepted by the Commission or is
prohibited under the Exchange Act, the Company shall supply at the Company's
cost copies of such reports and documents to any Holder of Securities promptly
upon written request. The Company is obligated to make available, upon request,
to any Holder of Securities the information required by Rule 144A(d)(4) under
the Securities Act, during any period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act. So long as any Transfer Restricted
Securities remain outstanding during any period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, the Company shall furnish to
all Holders and prospective purchasers of the Securities designated by the
Holders of Transfer Restricted Securities, promptly upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) of the
Securities Act. The Company and each Subsidiary Guarantor also shall comply with
the other provisions of TIA Section 314(a).
Section 10.10 Limitation on Other Senior Subordinated Indebtedness. The
Company will not incur, directly or indirectly, any Indebtedness which is
expressly subordinate or junior in right of payment in any respect to Senior
Indebtedness unless such Indebtedness (i) ranks pari passu in right of payment
with the Securities pursuant to subordination provisions substantially similar
to those contained in Article XIV hereof, or (ii) is expressly subordinated in
right of payment to the Securities.
Section 10.11 Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, take the following actions:
(i) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Company's Capital Stock (other than dividends
or distributions payable solely in shares of Qualified Capital Stock of the
Company or in options, warrants or other rights to purchase Qualified
Capital Stock of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any Affiliate thereof (other than any
Wholly Owned Restricted Subsidiary of the Company) or any options, warrants
or other rights to acquire such Capital Stock (other than with respect to
any such Capital Stock or other interests held by the Company or any Wholly
Owned Restricted Subsidiary of the Company);
(iii) make any principal payment on or repurchase, redeem, defease
or otherwise acquire or retire for value, prior to any scheduled principal
payment, scheduled sinking fund
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payment or maturity, any Subordinated Indebtedness, except in any case out
of a Net Proceeds Deficiency pursuant to the terms of this Indenture and
except upon the occurrence of a Change of Control to the extent (and only
to the extent) required by the indenture or other agreement or instrument
pursuant to which such Subordinated Indebtedness was issued, provided that
the Company is then in compliance with its obligations under Section 10.16
hereof;
(iv) declare or pay any dividend on, or make any distribution to
the holders of, any shares of Capital Stock of any Restricted Subsidiary of
the Company (other than to the Company or any of its Wholly Owned
Restricted Subsidiaries) or purchase, redeem or otherwise acquire or retire
for value any Capital Stock of any Restricted Subsidiary or any options,
warrants or other rights to acquire any such Capital Stock (other than with
respect to any such Capital Stock or other interests held by the Company or
any Wholly Owned Restricted Subsidiary of the Company); or
(v) make any Investment (other than any Permitted Investment);
(such payments or other actions described in (but not excluded from) clauses (i)
through (v) are collectively referred to as "Restricted Payments") , unless at
the time of and after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, shall be the amount
determined by the Board of Directors of the Company, whose determination shall
be conclusive and evidenced by a Board Resolution), (A) no Default or Event of
Default shall have occurred and be continuing, (B) the Company could incur $1.00
of additional Indebtedness (excluding Permitted Indebtedness) in accordance with
Section 10.12 hereof, and (C) the aggregate amount of all Restricted Payments
declared or made after the Issue Date shall not exceed the sum (without
duplication) of the following:
(1) 50% of the aggregate cumulative Consolidated Net Income of the
Company (including, without limitation, notwithstanding clause (d) of the
definition of "Consolidated Net Income," the Consolidated Net Income of
each of Ocean Energy, Inc. and United Meridian Corporation prior to their
merger) accrued on a cumulative basis during the period beginning June 1,
1997 and ending on the last day of the Company's last fiscal quarter ending
prior to the date of such proposed Restricted Payment (or, if such
aggregate cumulative Consolidated Net Income shall be a loss, minus 100% of
such loss), plus
(2) the aggregate net cash proceeds received after June 1, 1997 by
the Company as capital contributions to the Company (other than from any
Restricted Subsidiary), plus
(3) the aggregate net cash proceeds received after June 1, 1997,
by the Company from the issuance or sale (other than to any of its
Restricted Subsidiaries) of shares of Qualified Capital Stock of the
Company or any options, warrants or rights to purchase such shares of
Qualified Capital Stock of the Company, plus
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(4) the aggregate net cash proceeds received after June 1, 1997 by
the Company (other than from any of its Restricted Subsidiaries) upon the
exercise of any options, warrants or rights to purchase shares of Qualified
Capital Stock of the Company, plus
(5) the aggregate net cash proceeds received after June 1, 1997 by
the Company from the issuance or sale (other than to any of its Restricted
Subsidiaries) of debt securities or shares of Redeemable Capital Stock that
have been converted into or exchanged for Qualified Capital Stock of the
Company to the extent such debt securities were originally sold for cash,
together with the aggregate cash received by the Company at the time of
such conversion or exchange, plus
(6) the aggregate net cash proceeds received after June 1, 1997 by
the Company or its Restricted Subsidiaries, computed on a consolidated
basis, constituting a return of capital on an Investment (other than a
Permitted Investment) made by the Company or any Restricted Subsidiary
after June 1, 1997, including, without limitation, from the redesignation
of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each
case as provided in the definition of Investment), not to exceed in the
case of any Unrestricted Subsidiary the total amount of Investments (other
than Permitted Investments) in such Unrestricted Subsidiary made by the
Company and its Restricted Subsidiaries in such Unrestricted Subsidiary
after June 1, 1997, plus
(7) $50,000,000.
(b) Notwithstanding paragraph (a) above, the Company and its
Restricted Subsidiaries may take the following actions so long as (in the case
of clauses (ii), (iii) and (iv) below) no Default or Event of Default shall have
occurred and be continuing:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such declaration complied
with the provisions of paragraph (a) above (and such payment shall be
deemed to have been paid on such date of declaration for purposes of any
calculation required by the provisions of paragraph (a) above);
(ii) the repurchase, redemption or other acquisition or retirement
of any shares of any class of Capital Stock of the Company or any
Restricted Subsidiary, in exchange for, or out of the aggregate net cash
proceeds of, a substantially concurrent issue and sale (other than to a
Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(iii) the purchase, redemption, repayment, defeasance or other
acquisition or retirement for value of any Subordinated Indebtedness (other
than Redeemable Capital Stock) in exchange for or out of the aggregate net
cash proceeds of a substantially concurrent issue and sale (other than to a
Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
and
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(iv) the purchase, redemption, repayment, defeasance or other
acquisition or retirement for value of Subordinated Indebtedness (other
than Redeemable Capital Stock) in exchange for, or out of the aggregate net
cash proceeds of a substantially concurrent incurrence (other than to a
Restricted Subsidiary) of, Subordinated Indebtedness of the Company so long
as (A) the principal amount of such new Indebtedness does not exceed the
principal amount (or, if such Subordinated Indebtedness being refinanced
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration thereof, such lesser amount as
of the date of determination) of the Subordinated Indebtedness being so
purchased, redeemed, repaid, defeased, acquired or retired, plus the amount
of any premium required to be paid in connection with such refinancing
pursuant to the terms of the Subordinated Indebtedness refinanced or the
amount of any premium reasonably determined by the Company as necessary to
accomplish such refinancing, plus the amount of expenses of the Company
incurred in connection with such refinancing, (B) such new Subordinated
Indebtedness is subordinated to the Securities at least to the same extent
as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased,
acquired or retired, and (C) such new Subordinated Indebtedness has an
Average Life to Stated Maturity that is longer than the Average Life to
Stated Maturity of the Securities and such new Subordinated Indebtedness
has a Stated Maturity for its final scheduled principal payment that is at
least 91 days later than the Stated Maturity for the final scheduled
principal payment of the Securities.
The actions described in clauses (i), (ii) and (iii) of this paragraph (b) shall
be Restricted Payments that shall be permitted to be taken in accordance with
this paragraph (b) but shall reduce the amount that would otherwise be available
for Restricted Payments under clause (C) of paragraph (a) (provided that any
dividend paid pursuant to clause (i) of this paragraph (b) shall reduce the
amount that would otherwise be available under clause (C) of paragraph (a) when
declared, but not also when subsequently paid pursuant to such clause (i)), and
the actions described in clause (iv) of this paragraph (b) shall be Restricted
Payments that shall be permitted to be taken in accordance with this paragraph
and shall not reduce the amount that would otherwise be available for Restricted
Payments under clause (C) of paragraph (a).
(c) In computing Consolidated Net Income of the Company under
paragraph (a) above, (1) the Company shall use audited financial statements for
the portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (2) the Company shall be permitted to
rely in good faith on the financial statements and other financial data derived
from the books and records of the Company that are available on the date of
determination. If the Company makes a Restricted Payment which, at the time of
the making of such Restricted Payment would in the good faith determination of
the Company be permitted under the requirements of this Indenture, such
Restricted Payment shall be deemed to have been made in compliance with this
Indenture notwithstanding any subsequent adjustments made in good faith to the
Company's financial statements affecting Consolidated Net Income of the Company
for any period.
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Section 10.12 Limitation on Indebtedness. The Company shall not, and
shall not permit any Restricted Subsidiary to create, incur, issue, assume,
guarantee or in any manner become directly or indirectly liable for the payment
of (collectively "incur") any Indebtedness (including any Acquired
Indebtedness), other than Permitted Indebtedness and Permitted Subsidiary
Indebtedness, as the case may be; provided, however, that the Company and its
Restricted Subsidiaries that are either Subsidiary Guarantors or Foreign
Subsidiaries may incur Indebtedness (and Restricted Subsidiaries that are not
Subsidiary Guarantors or Foreign Subsidiaries may incur Acquired Indebtedness)
if (x) the Company's Consolidated Fixed Charge Coverage Ratio for the four full
fiscal quarters immediately preceding the incurrence of such Indebtedness (and
for which financial statements are available), taken as one period (at the time
of such incurrence, after giving pro forma effect to: (i) the incurrence of
such Indebtedness and (if applicable) the application of the net proceeds
therefrom, including to refinance other Indebtedness, as if such Indebtedness
was incurred and the application of such proceeds occurred at the beginning of
such four-quarter period; (ii) the incurrence, repayment or retirement of any
other Indebtedness (including Permitted Indebtedness) by the Company or its
Restricted Subsidiaries since the first day of such four-quarter period
(including any other Indebtedness to be incurred concurrent with the incurrence
of such Indebtedness) as if such Indebtedness was incurred, repaid or retired at
the beginning of such four-quarter period; and (iii) notwithstanding clause (d)
of the definition of Consolidated Net Income, the acquisition (whether by
purchase, merger or otherwise) or disposition (whether by sale, merger or
otherwise) of any Person (or any properties outside of the ordinary course of
business) acquired or disposed of by the Company or its Restricted Subsidiaries,
as the case may be, since the first day of such four-quarter period, as if such
acquisition or disposition occurred at the beginning of such four-quarter
period), would have been equal to at least 2.5 to 1.0. The incurrence of
certain guarantees by certain Restricted Subsidiaries is further limited by
Section 10.13 hereof.
Section 10.13 Limitation on Guarantees of Indebtedness by Subsidiaries;
Additional Subsidiary Guarantors.
(a) The Company shall not permit any Restricted Subsidiary that is not
a Subsidiary Guarantor to guarantee the payment of any Indebtedness of the
Company unless (i) (A) such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to this Indenture providing for a Subsidiary
Guarantee of the Securities by such Restricted Subsidiary which Subsidiary
Guarantee will be subordinated to Guarantor Senior Indebtedness (but no other
Indebtedness) to the same extent that the Securities are subordinated to Senior
Indebtedness and (B) with respect to any guarantee of Subordinated Indebtedness
by a Restricted Subsidiary, any such guarantee shall be subordinated to such
Restricted Subsidiary's Subsidiary Guarantee at least to the same extent as such
Subordinated Indebtedness is subordinated to the Securities; (ii) except to the
extent contemplated by Section 13.5 hereof, such Restricted Subsidiary waives
and will not in any manner whatsoever claim or take the benefit or advantage of,
any rights of reimbursement, indemnity or subrogation or any other rights
against the Company or any other Restricted Subsidiary as a result of any
payment by such Restricted Subsidiary under its Subsidiary Guarantee until such
time as the obligations guaranteed thereby are paid in full; and (iii) such
Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the
effect that such Subsidiary Guarantee has been
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duly executed and authorized and constitutes a valid, binding and enforceable
obligation of such Restricted Subsidiary, except insofar as enforcement thereof
may be limited by bankruptcy, insolvency or similar laws (including, without
limitation, all laws relating to fraudulent transfers) and except insofar as
enforcement thereof is subject to general principles of equity; provided that
this paragraph (a) shall not be applicable to any guarantee of any Restricted
Subsidiary that (x) existed at the time such Person became a Restricted
Subsidiary of the Company and (y) was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary of the Company.
(b) The Company may from time to time, at its option, nominate any
Restricted Subsidiary as an additional Subsidiary Guarantor. Any such
Restricted Subsidiary shall execute and deliver a supplemental indenture to this
Indenture agreeing to guarantee the Securities. At the election of the Company,
such Subsidiary Guarantee may contain such release provisions as the Company may
deem appropriate (including, without limitation, release provisions of the type
in paragraph (c) below).
(c) Notwithstanding the foregoing paragraph (a) and the other
provisions of this Indenture, any Subsidiary Guarantee incurred by a Restricted
Subsidiary pursuant to this Section 10.13 may, at the election of the Company,
provide by its terms that it shall be automatically and unconditionally released
and discharged upon (i) any sale, exchange or transfer, to any Person that is
not an Affiliate of the Company, of all of the Company's Capital Stock in, or
all or substantially all the Property of, such Restricted Subsidiary (which
sale, exchange or transfer is not prohibited by this Indenture), (ii) the merger
of such Restricted Subsidiary into the Company or any other Restricted
Subsidiary (provided the surviving Restricted Subsidiary assumes the Subsidiary
Guarantee) or the liquidation and dissolution of such Restricted Subsidiary (in
each case to the extent not prohibited by this Indenture), or (iii) the release
or discharge of the guarantee which resulted in the creation of such Subsidiary
Guarantee, except a discharge or release by or as a result of payment under such
guarantee.
(d) Unless specified to the contrary in a supplemental indenture
hereto, any Subsidiary Guarantee incurred by a Restricted Subsidiary pursuant to
this Section 10.13 shall be deemed to provide for the release and discharge
thereof as contemplated by Sections 10.13(c) and 13.3 hereof.
Section 10.14 Limitation on Issuances and Sale of Capital Stock by
Restricted Subsidiaries. The Company (a) shall not permit any Restricted
Subsidiary to issue any Capital Stock (other than to the Company or a Wholly
Owned Restricted Subsidiary) and (b) shall not permit any Person (other than the
Company or a Wholly Owned Restricted Subsidiary) to own any Capital Stock of any
Restricted Subsidiary, except, in each case, for (i) directors' qualifying
shares, (ii) Capital Stock of a Restricted Subsidiary organized in a foreign
jurisdiction required to be issued to, or owned by, the government of such
foreign jurisdiction or individual or corporate citizens of such foreign
jurisdiction in order for such Restricted Subsidiary to transact business in
such foreign jurisdiction, (iii) a sale of all or substantially all the Capital
Stock of a Restricted Subsidiary effected in
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accordance with Section 10.17 hereof, (iv) the Capital Stock of a Restricted
Subsidiary owned by a Person at the time such Restricted Subsidiary became a
Restricted Subsidiary or acquired by such Person in connection with the
formation of the Restricted Subsidiary and (v) Capital Stock of Havre Pipeline
Company, LLC and Capital Stock of Big Sky Gas Marketing L.L.C.; provided,
however, that any Capital Stock retained by the Company or a Restricted
Subsidiary shall be treated as an Investment for purposes of Section 10.11
hereof if the amount of such Capital Stock represents less than a majority of
the Voting Stock of such Restricted Subsidiary.
Section 10.15 Limitation on Liens. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, affirm or suffer to exist or become effective any Lien of any kind
except for Permitted Liens, on or with respect to any of its Property or assets
(including any intercompany notes), whether owned at the Issue Date or
thereafter acquired, or any income, profits or proceeds therefrom, or assign or
otherwise convey any right to receive income thereon, unless (x) in the case of
any Lien securing Subordinated Indebtedness, the Securities are secured by a
Lien on such Property, assets or proceeds that is senior in priority to such
Lien and (y) in the case of any other Lien, the Securities are directly secured
equally and ratably with the obligation or liability secured by such Lien.
Section 10.16 Purchase of Securities Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase all of the then outstanding Securities (a
"Change of Control Offer"), and shall purchase, on a business day (the "Change
of Control Purchase Date") not more than 70 nor less than 30 days following the
Change of Control, all of the then outstanding Securities validly tendered
pursuant to such Change of Control Offer, at a purchase price (the "Change of
Control Purchase Price") equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the Change of Control Purchase Date.
(b) The Change of Control Offer is required to remain open for at
least 20 Business Days and until the close of business on the Change of Control
Purchase Date. The Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer at the same purchase price, at the same times and otherwise in substantial
compliance with the requirements applicable to a Change of Control Offer made by
the Company and purchases all Securities validly tendered and not withdrawn
under such Change of Control Offer.
(c) Not later than the 30th day following any Change of Control, the
Company shall give to the Trustee in the manner provided in Section 15.4 and
each Holder of the Securities in the manner provided in Section 15.5, a notice
(the "Change of Control Notice") stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to repurchase such Holder's Securities, or
portion thereof, at the Change of Control Purchase Price;
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(2) any information regarding such Change of Control required to
be furnished pursuant to Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder;
(3) the Change of Control Purchase Date which shall be on a
Business Day and no earlier than 30 days nor later than 70 days from the
date the Change of Control occurred;
(4) that any Security, or portion thereof, not tendered or
accepted for payment will continue to accrue interest;
(5) that unless the Company defaults in depositing money with the
Paying Agent in accordance with the last paragraph of clause (d) of this
Section 10.16, or payment is otherwise prevented, any Security, or portion
thereof, accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Purchase Date; and
(6) the instructions a Holder must follow in order to have its
Securities repurchased in accordance with paragraph (d) of this Section.
(d) Holders electing to have Securities purchased will be required to
surrender such Securities to the Company at the address specified in the Change
of Control Notice at least five Business Days prior to the Change of Control
Purchase Date. Holders will be entitled to withdraw their election if the
Company receives, not later than three Business Days prior to the Change of
Control Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the certificate number(s) and principal
amount of the Securities delivered for purchase by the Holder as to which his
election is to be withdrawn and a statement that such Holder is withdrawing his
election to have such Securities purchased. Holders whose Securities are
purchased only in part will be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.
On the Change of Control Purchase Date, the Company shall (i) accept
for payment Securities or portions thereof tendered pursuant to a Change of
Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Securities or portions thereof so tendered, and (iii)
deliver or cause to be delivered to the Trustee the Securities so accepted. The
Paying Agent shall promptly mail or deliver to Holders of the Securities so
tendered payment in an amount equal to the purchase price for the Securities,
and the Company will promptly execute and the Trustee will promptly authenticate
and mail or make available for delivery to such Holders a new Security equal in
principal amount to any unpurchased portion of the Security which any such
Holder did not surrender for purchase. The Company shall announce the results
of a Change of Control Offer on or as soon as practicable after the Change of
Control Purchase Date. For purposes of this Section 10.16, the Trustee will act
as the Paying Agent.
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(e) The Company shall comply with Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable, in the event that a Change of Control occurs and
the Company is required to purchase Securities as described above.
Section 10.17 Disposition of Proceeds of Asset Sales.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, engage in any Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value of the assets and
Properties sold or otherwise disposed of pursuant to the Asset Sale (as
determined by the Board of Directors of the Company, whose determination shall
be conclusive and evidenced by a Board Resolution) and (ii) at least 70% of the
consideration received by the Company or the Restricted Subsidiary, as the case
may be, in respect of such Asset Sale consists of cash, Cash Equivalents or the
assumption by the purchaser of liabilities of the Company (other than
liabilities of the Company that are by their terms subordinated to the
Securities) or any Restricted Subsidiary as a result of which the Company and
its remaining Restricted Subsidiaries are no longer liable.
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale the Company may either (x) apply the Net Cash Proceeds thereof to
permanently reduce Senior Indebtedness or to permanently reduce Guarantor Senior
Indebtedness, or (y) invest all or any part of the Net Cash Proceeds thereof,
within 365 days after such Asset Sale, in Properties and assets which replace
the Properties and assets that were the subject of the Asset Sale or in
Properties and assets that will be used in the business of the Company or its
Restricted Subsidiaries, as the case may be ("Replacement Assets"). The amount
of such Net Cash Proceeds not applied or invested as provided in this paragraph
constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$20,000,000 (the "Trigger Date"), the Company shall make an offer to purchase,
from all Holders of the Securities and holders of any then outstanding Pari
Passu Indebtedness required to be repurchased or repaid on a permanent basis in
connection with an Asset Sale, an aggregate principal amount of Securities and
any such Pari Passu Indebtedness equal to such Excess Proceeds as follows:
(i) (A) not later than the 30th day following the Trigger Date,
the Company shall give to the Trustee in the manner provided in Section
15.4 hereof and each Holder of the Securities in the manner provided in
Section 15.5 hereof, a notice (a "Purchase Notice") offering to purchase (a
"Net Proceeds Offer") from all Holders of the Securities in accordance with
the procedures set forth herein the maximum principal amount (expressed as
a multiple of $1,000) of Securities that may be purchased out of an amount
(the "Payment Amount") equal to the product of such Excess Proceeds
multiplied by a fraction, the numerator of which is the outstanding
principal amount of the Securities and the denominator of which is the sum
of the outstanding principal amount of the Securities and
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such Pari Passu Indebtedness, if any (subject to proration in the event
such amount is less than the aggregate Offered Price (as hereinafter
defined) of all Securities tendered), and (B) to the extent required by
such Pari Passu Indebtedness and provided there is a permanent reduction in
the principal amount of such Pari Passu Indebtedness, the Company shall
make an offer to purchase Pari Passu Indebtedness (a "Pari Passu Offer") in
an amount (the "Pari Passu Indebtedness Amount") equal to the excess of the
Excess Proceeds over the Payment Amount.
(ii) The offer price for the Securities shall be payable in cash
in an amount equal to 100% of the principal amount of the Securities
tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid
interest, if any, to the date such Net Proceeds Offer is consummated (the
"Offered Price"), in accordance with the procedures set forth herein. To
the extent that the aggregate Offered Price of the Securities tendered
pursuant to a Net Proceeds Offer is less than the Payment Amount relating
thereto or the aggregate amount of the Pari Passu Indebtedness that is
purchased or repaid pursuant to the Pari Passu Offer is less than the Pari
Passu Indebtedness Amount (such shortfall constituting a "Net Proceeds
Deficiency"), the Company may use such Net Proceeds Deficiency, or a
portion thereof, for general corporate purposes, subject to the limitations
of Section 10.11 hereof.
(iii) If the aggregate Offered Price of Securities validly
tendered and not withdrawn by Holders thereof exceeds the Payment Amount,
Securities to be purchased will be selected on a pro rata basis by the
Trustee based on the principal amount of Securities so tendered. Upon
completion of such Net Proceeds Offer and Pari Passu Offer, the amount of
Excess Proceeds shall be reset to zero.
(iv) The Purchase Notice shall set forth a purchase date (the "Net
Proceeds Payment Date"), which shall be on a Business Day no earlier than
30 days nor later than 70 days from the Trigger Date. The Purchase Notice
shall also state (i) that a Trigger Date with respect to one or more Asset
Sales has occurred and that such Holder has the right to require the
Company to repurchase such Holders, Securities at the Offered Price,
subject to the limitations described in this Section, (ii) any information
regarding such Net Proceeds Offer required to be furnished pursuant to Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder, (iii) that any Security, or portion thereof, not tendered or
accepted for payment will continue to accrue interest, (iv) that, unless
the Company defaults in depositing money with the Paying Agent in
accordance with the last paragraph of clause (d) of this Section 10.17, or
payment is otherwise prevented, any Security, or portion thereof, accepted
for payment pursuant to the Net Proceeds Offer shall cease to accrue
interest after the Net Proceeds Payment Date, and (v) the instructions a
Holder must follow in order to have its Securities repurchased in
accordance with paragraph (d) of this Section.
(d) Holders electing to have Securities purchased will be required to
surrender such Securities to the Company at the address specified in the
Purchase Notice at least five Business
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Days prior to the Net Proceeds Payment Date. Holders will be entitled to
withdraw their election if the Company receives, not later than three Business
Days prior to the Net Proceeds Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the certificate
number(s) and principal amount of the Securities delivered for purchase by the
Holder as to which his election is to be withdrawn and a statement that such
Holder is withdrawing his election to have such Securities purchased. Holders
whose Securities are purchased only in part will be issued new Securities equal
in principal amount to the unpurchased portion of the Securities surrendered.
On the Net Proceeds Payment Date, the Company shall (i) accept for
payment Securities or portions thereof tendered pursuant to a Net Proceeds Offer
in an aggregate principal amount equal to the Payment Amount or such lesser
amount of Securities as has been tendered, (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Securities or portions thereof
so tendered in an aggregate principal amount equal to the Payment Amount or such
lesser amount and (iii) deliver or cause to be delivered to the Trustee the
Securities so accepted. The Paying Agent shall promptly mail or deliver to
Holders of the Securities so accepted payment in an amount equal to the purchase
price, and the Company shall execute and the Trustee will promptly authenticate
and mail or make available for delivery to such Holders a new Security equal in
principal amount to any unpurchased portion of the Security which any such
Holder did not surrender for purchase. Any Securities not so accepted will be
promptly mailed or delivered to the Holder thereof. The Company shall announce
the results of a Net Proceeds Offer on or as soon as practicable after the Net
Proceeds Payment Date. For purposes of this Section 10.17, the Trustee will act
as the Paying Agent.
The Company shall not permit any Subsidiary (except a Foreign Subsidiary)
to enter into or suffer to exist any agreement that would place any restriction
of any kind (other than pursuant to law or regulation) on the ability of the
Company to make a Net Proceeds Offer following any Asset Sale. The Company
intends to comply with Rule l4e-1 under the Exchange Act, and any other
securities laws and regulations thereunder, if applicable, in the event that an
Asset Sale occurs and the Company is required to purchase Securities as
described above.
Section 10.18 Limitation on Transactions with Affiliates. The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
enter into or suffer to exist any transaction or series of related transactions
(including, without limitation, the sale, purchase, exchange or lease of assets,
Property or the rendering of any services) with, or for the benefit of, any
Affiliate of the Company, unless (i) such transaction or series of transactions
are on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that would be available in a
comparable arm's length transaction with unrelated third parties who are not
Affiliates, (ii) with respect to any one transaction or series of transactions
involving aggregate payments in excess of $10,000,000, the Company delivers an
Officers' Certificate to the Trustee certifying that such transaction or series
of transactions complies with clause (i) above and such transaction or series of
transactions have been approved by a Board Resolution of the Board of Directors
of the Company, and (iii) with respect to any one transaction or series of
transactions involving aggregate payments in excess of $20,000,000, the
Officers' Certificate referred to in
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clause (ii) above also certifies that such transaction or series of transactions
have been approved by a majority of the Disinterested Directors (or, in the
event there are no such Disinterested Directors, that the Company has obtained a
written opinion from an independent nationally recognized investment banking
firm or appraisal firm, in either case specializing or having a specialty in the
type and subject matter of the transaction or series of transactions at issue,
which opinion shall be to the effect set forth in clause (i) above or shall
state that such transaction or series of transactions are fair from a financial
point of view to the Company or such Restricted Subsidiary); provided, however,
that this Section 10.18 shall not apply to (1) the payment of reasonable and
customary regular compensation and fees to directors of the Company who are not
employees of the Company or any Restricted Subsidiary, (2) the payment of
dividends on, or making distributions with respect to, shares of Capital Stock
of the Company on a pro rata basis to the extent permitted by Section 10.11
hereof, (3) transactions between or among the Company and/or any of its Wholly
Owned Restricted Subsidiaries, (4) Restricted Payments permitted by the
provisions of Section 10.11 hereof, (5) loans or advances to officers, directors
and employees of the Company or any Restricted Subsidiary made in the ordinary
course of business and consistent with past practices of the Company and its
Restricted Subsidiaries in an aggregate amount not to exceed $1,000,000
outstanding at any one time, (6) any transaction or series of related
transactions entered into prior to the Issue Date or (7) the Company's employee
compensation and other benefit arrangements.
Section 10.19 Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any Restricted Subsidiary (except a Foreign
Subsidiary) to (a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock to the Company or any other
Restricted Subsidiary, (b) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (c) make an Investment in the Company or any other
Restricted Subsidiary or (d) transfer any of its Properties or assets to the
Company or any other Restricted Subsidiary, except for such encumbrances or
restrictions (i) pursuant to this Indenture, the Existing Indentures, the Credit
Agreement or any agreement in effect or entered into on the Issue Date, (ii) any
agreement or other instrument of a Person acquired by the Company or any
Restricted Subsidiary in existence at the time of such acquisition (but not
created in contemplation thereof), which encumbrance or restriction is not
applicable to any other Person, or the Properties or assets of any other Person,
other than the Person, or the Property or assets of the Person, so acquired,
(iii) that constitute customary restrictions in leases and licenses relating to
the Property covered thereby and entered into in the ordinary course of
business, (iv) contained in agreements governing Indebtedness permitted to be
incurred in accordance with this Indenture provided that the restrictions are
not materially more restrictive in the aggregate than the restrictions contained
in this Indenture, or (v) existing under any agreement that extends, renews,
refinances or replaces (in whole or in part, and whether or not such prior
agreements remain outstanding) the agreements containing the restrictions in the
foregoing clauses (i), (ii), (iii) and (iv) provided that the terms and
conditions of any such restrictions are not materially less favorable to the
Holders of the Securities than those under or pursuant to the agreement
evidencing the Indebtedness so extended, renewed, refinanced or replaced.
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Section 10.20 Limitation on Restrictive Covenants. Notwithstanding any
other provision of this Indenture, the restrictive covenants set forth in this
Indenture, including, without limitation, those set forth in Sections 8.1, 10.11
and 10.18, shall be and shall be deemed limited to the extent necessary so that
the creation, existence and effectiveness of such restrictive covenants shall
not result in a breach of the covenant of any of the Existing Indentures
entitled "Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries."
Section 10.21 Waiver of Certain Covenants. Subject to Section 5.2 hereof,
the Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 10.04 through 10.12 and Sections
10.14, 10.15, 10.18 and 10.19 hereof if, before or after the time for such
compliance, the Holders of at least a majority in principal amount of the
Outstanding Securities and the Subsidiary Guarantors, by Act of such Holders and
written agreement of the Subsidiary Guarantors, waive such compliance in such
instance with such term, provision or condition, but no such waiver shall extend
to or affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
Section 10.22 Suspension of Certain Covenants. The covenants set forth in
this Indenture will be applicable to the Company, except that during any period
of time that (i) the ratings assigned to the Securities by both S&P and
Moody's (collectively, the "Rating Agencies") are equal to or higher than BBB-
and Baa3, or the equivalents thereof, respectively (the "Investment Grade
Ratings"), except subsequent to a Change of Control of the Company, and (ii) no
Default or Event of Default shall have occurred and be continuing, the Company
and its Subsidiaries shall not be subject to the provisions of Sections 10.10,
10.11, 10.12, 10.14, 10.17, 10.18 and 10.19 hereof and clauses (iii) and (iv) of
Section 8.1 hereof (collectively, the "Suspended Covenants"). In the event that
the Company is not subject to the Suspended Covenants for any period of time as
a result of the preceding sentence (a "Suspension Period") and, subsequently,
one or both Rating Agencies withdraws its ratings or downgrades the ratings
assigned to the Securities below the required Investment Grade Ratings, then,
from and after the date of such withdrawal or downgrade, the Company and its
Subsidiaries will again be subject to the Suspended Covenants and compliance
with the Suspended Covenants with respect to Restricted Payments made after the
time of such withdrawal or downgrade will be calculated in accordance with the
terms of Section 10.11 hereof as if such covenant had been in effect during the
entire period of time from the Issue Date. Notwithstanding any other provision
of this Indenture, the continued existence, after the date of such withdrawal or
downgrade, of facts and circumstances that were incurred or otherwise, came into
being during a Suspension Period shall not constitute a breach of any covenant
set forth in this Indenture or a Default or Event of Default hereunder.
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ARTICLE XI
REDEMPTION OF SECURITIES
-------------------------
Section 11.1 Right of Redemption. Prior to July 1, 2003 (the "Five-Year
Date"), the Securities will be redeemable, in whole but not in part, at a
Redemption Price equal to the sum of (a) an amount equal to 100% of the
principal amount thereof and (b) the Make-Whole Premium, together with accrued
and unpaid interest to the Redemption Date. In no event will such redemption
price ever be less than 100% of the principal amount of the Securities plus
accrued interest to the Redemption Date. On or after July 1, 2003, the
Securities will be redeemable, in whole or in part, at the Redemption Prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on the relevant record date to receive interest due on an Interest
Payment Date that is on or prior to the redemption date), if redeemed during the
12-month period beginning on July 1 of the years indicated below:
Year Price
2003 104.188%
2004 102.792%
2005 101.396%
2006 and thereafter 100.000%
In addition, at any time and from time to time prior to July 1, 2001, the
Company may, at its option, redeem in the aggregate up to 33 1/3% of the
aggregate principal amount of the Securities originally issued under this
Indenture with the proceeds of one or more Public Equity Offerings by the
Company at a redemption price (expressed as a percentage of principal amount) of
108.375%, plus accrued and unpaid interest, if any, to the date of redemption
(subject to the right of Holders on the relevant record date to receive interest
due on the relevant Interest Payment Date); provided, however, that at least
66-2/3% aggregate principal amount of the Securities originally issued under
this Indenture must remain outstanding after each such redemption. In order to
effect the foregoing redemption, the Company must mail notice of redemption no
later than 60 days after the related Public Equity Offering and must consummate
such redemption within 90 days of the closing of the Public Equity Offering.
Section 11.2 Applicability of Article. Redemption of Securities at the
election of the Company or otherwise, as permitted or required by any provision
of this Indenture, shall be made in accordance with such provision and this
Article.
Section 11.3 Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Securities pursuant to Section 11.1 hereof shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal amount
of Securities to
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be redeemed and shall deliver to the Trustee such documentation and records as
shall enable the Trustee to select the Securities to be redeemed pursuant to
Section 11.4 hereof. Any election to redeem Securities shall be revocable until
the Company gives a notice of redemption pursuant to Section 11.5 hereof to the
Holders of Securities to be redeemed.
Section 11.4 Selection by Trustee of Securities to Be Redeemed. In the
event that less than all of the Securities are to be redeemed at any time,
selection of such Securities (or any portion thereof that is an integral
multiple of $1,000) for redemption will be made by the Trustee from the
Outstanding Securities not previously called for redemption (or otherwise
purchased by the Company) on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate; provided, however, that no Security
with a principal amount of $1,000 or less shall be redeemed in part.
Section 11.5 Notice of Redemption. Notice of redemption shall be given in
the manner provided for in Section 15.5 hereof not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification (and in the case of a partial redemption, the principal amounts)
of the particular Securities to be redeemed;
(d) that on the Redemption Date the Redemption Price (together with
accrued interest, if any, to the Redemption Date payable as provided in Section
11.7 hereof) will become due and payable upon each such Security, or the portion
thereof, to be redeemed, and that, unless the Company shall default in the
payment of the Redemption Price and any applicable accrued interest, interest
thereon will cease to accrue on and after said date; and
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. Failure to give such
notice by mailing to any Holder of Securities or any defect therein shall not
affect the validity of any proceedings for the redemption of other Securities.
Section 11.6 Deposit of Redemption Price. On or before 12:00 noon on any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is
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acting as its own Paying Agent, segregate and hold in trust as provided in
Section 10.3 hereof) an amount of money sufficient to pay the Redemption Price
of, and accrued and unpaid interest on, all the Securities which are to be
redeemed on such Redemption Date.
Section 11.7 Securities Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified (together with accrued and unpaid interest, if any, to the Redemption
Date), and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued and unpaid interest) such Securities
shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued and unpaid interest, if
any, to the Redemption Date; provided, however, that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 3.9 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Securities.
Section 11.8 Securities Redeemed in Part. Any Security which is to be
redeemed only in part shall be surrendered at the office or agency of the
Company maintained for such purpose pursuant to Section 10.2 hereof (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal amount of the Security so surrendered.
ARTICLE XII
DEFEASANCE AND COVENANT DEFEASANCE
----------------------------------
Section 12.1 Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may, at its option by Board Resolution, at any time, with respect to
the Securities, elect to have either Section 12.2 or Section 12.3 hereof be
applied to all Outstanding Securities upon compliance with the conditions set
forth below in this Article XII.
Section 12.2 Defeasance and Discharge. Upon the Company's exercise under
Section 12.1 hereof of the option applicable to this Section 12.2, the Company
and the Subsidiary Guarantors shall be deemed to have been discharged from their
obligations with respect to all Outstanding
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Securities on the date the conditions set forth in Section 12.4 hereof are
satisfied (hereinafter, "legal defeasance"). For this purpose, such legal
defeasance means that the Company and the Subsidiary Guarantors shall be deemed
(i) to have paid and discharged their respective obligations under the
Outstanding Securities; provided, however that the Securities shall continue to
be deemed to be "Outstanding" for purposes of Section 12.6 hereof and the other
Sections of this Indenture referred to in clauses (A) and (B) below, and (ii) to
have satisfied all their other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (A) the rights of Holders of Outstanding Securities to
receive, solely from the trust fund described in Section 12.4 hereof and as more
fully set forth in such Section, payments in respect of the principal of (and
premium, if any, on) and interest on such Securities when such payments are due
(or at such time as the Securities would be subject to redemption at the option
of the Company in accordance with this Indenture), (B) the obligations of the
Company under Sections 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 5.8, 5.14, 6.6, 6.9, 6.10
and 10.2 hereof, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, and (D) the obligations of the Company under this Article
XII. Subject to compliance with this Article XII, the Company may exercise its
option under this Section 12.2 notwithstanding the prior exercise of its option
under Section 12.3 hereof with respect to the Securities.
Section 12.3 Covenant Defeasance. Upon the Company's exercise under Section
12.1 hereof of the option applicable to this Section 12.3, the Company and the
Subsidiary Guarantors shall be released from their obligations under any
covenant contained in Articles VIII and XIII and in Sections 10.5 through 10.19
hereof and the Defaults and Events of Default contained in Sections 5.1(e), (f),
(g) and (h) hereof with respect to the Outstanding Securities on and after the
date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Securities shall thereafter be deemed not to be
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with such
covenants, Defaults and Events of Default, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Outstanding Securities, the Company
and the Subsidiary Guarantors may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, Default or Event of Default, whether directly or indirectly, by reason
of any reference elsewhere herein to any such provision or by reason of any
reference in any such provision to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Sections 5.1 (c), (d), (e), (f), (g) and (h) hereof, but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby.
Section 12.4 Conditions to Legal Defeasance or Covenant Defeasance. The
following shall be the conditions to application of either Section 12.2 or
Section 12.3 hereof to the Outstanding Securities:
(a) The Company or any Subsidiary Guarantor shall irrevocably have
deposited or caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section
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6.7 hereof who shall agree to comply with the provisions of this Article XII
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (A) cash in U.S. Dollars in
an amount, or (B) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, the principal of (and premium, if any, on) and interest on the
Outstanding Securities on the Stated Maturity (or Redemption Date, if
applicable) of such principal (and premium, if any) or installment of interest;
provided that the Trustee shall have been irrevocably instructed in writing by
the Company to apply such money or the proceeds of such U.S. Government
Obligations to said payments with respect to the Securities. Before such a
deposit, the Company may give to the Trustee, in accordance with Section 11.3
hereof, a notice of its election to redeem all of the Outstanding Securities at
a future date in accordance with Article XI hereof, which notice shall be
irrevocable. Such irrevocable redemption notice, if given, shall be given
effect in applying the foregoing. For this purpose, "U.S. Government
Obligations" means securities that are (x) direct obligations of the United
States of America for the timely payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the timely payment
of which is unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act of 1933, as amended), as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
(b) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit.
(c) Such legal defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest under this Indenture or the Trust
Indenture Act with respect to any securities of the Company or any Subsidiary
Guarantor.
(d) Such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under any other material
agreement or instrument to which the Company or any Subsidiary Guarantor is a
party or by which it is bound, as evidenced to the Trustee in an Officers'
Certificate delivered to the Trustee concurrently with such deposit.
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(e) In the case of an election under Section 12.2 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the Issue Date there has been a change in the
applicable Federal income tax laws; in either case providing that the Holders of
the Outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such legal defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such legal defeasance had not occurred (it being
understood that (x) such Opinion of Counsel shall also state that such ruling or
applicable law is consistent with the conclusions reached in such Opinion of
Counsel and (y) the Trustee shall be under no obligation to investigate the
basis of correctness of such ruling).
(f) In the case of an election under Section 12.3 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities will not recognize income, gain or loss
for Federal income tax purposes as a result of such covenant defeasance and will
be subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance had not
occurred.
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, which, taken together, state that all
conditions precedent provided for relating to either the legal defeasance under
Section 12.2 hereof or the covenant defeasance under Section 12.3 (as the case
may be) have been complied with and that no violations under agreements
governing any other outstanding Indebtedness would result therefrom.
Section 12.5 Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 10.3 hereof, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee--collectively for purposes of this Section 12.5, the "Trustee") pursuant
to Section 12.4 hereof in respect of the Outstanding Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal (and premium, if any) and interest,
but such money need not be segregated from other funds except to the extent
required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 12.4 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities.
Anything in this Article XII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government
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Obligations held by it as provided in Section 12.4 hereof which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent legal defeasance or covenant defeasance, as applicable, in accordance
with this Article.
Section 12.6 Reinstatement. If the Trustee or any Paying Agent is unable to
apply any money in accordance with Section 12.5 hereof by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's and the Subsidiary
Guarantors' obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 12.2 or
12.3 hereof, as the case may be, until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 12.5 hereof;
provided, however, that if the Company or any Subsidiary Guarantor makes any
payment of principal of (or premium, if any, on) or interest on any Security
following the reinstatement of its obligations, the Company or such Subsidiary
Guarantor shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE XIII
GUARANTEES
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Section 13.1 Unconditional Guarantee. Each Subsidiary Guarantor hereby
unconditionally, jointly and severally, guarantees (each such guarantee to be
referred to herein as a "Subsidiary Guarantee," with all such guarantees being
referred to herein as the "Subsidiary Guarantees") to each Holder of Securities
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, the full and prompt performance of the Company's obligations under
this Indenture and the Securities and that:
(a) the principal of (premium, if any, on) and interest on the
Securities will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of
and interest on the Securities, if any, to the extent lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any
Securities or of any such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise;
subject, however, in the case of clauses (a) and (b) above, to the limitations
set forth in Section 13.4 hereof.
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Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately. Each Subsidiary Guarantor
hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. Each Subsidiary Guarantor hereby
waives diligence, presentment, demand of payment, notice of acceleration, notice
of intent to accelerate, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that its Subsidiary Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture and
in this Subsidiary Guarantee. If any Holder or the Trustee is required by any
court or otherwise to return to the Company, any Subsidiary Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
the Company or any Subsidiary Guarantor, any amount paid by the Company or any
Subsidiary Guarantor to the Trustee or such Holder, this Subsidiary Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect. Each Subsidiary Guarantor agrees it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Subsidiary Guarantor further agrees that, as between each Subsidiary
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article V hereof for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article V hereof,
such obligations (whether or not due and payable) shall forthwith become due and
payable by each Subsidiary Guarantor for the purpose of this Subsidiary
Guarantee.
Section 13.2 Subsidiary Guarantors May Consolidate, etc., on Certain Terms.
(a) Except as set forth in Articles VIII and X hereof, nothing
contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into the Company or
another Subsidiary Guarantor or shall prevent any sale or conveyance of the
assets of a Subsidiary Guarantor as an entirety or substantially as an entirety,
to the Company or another Subsidiary Guarantor.
(b) Except as set forth in Articles VIII and X hereof, nothing
contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into a Person other
than the Company or a Subsidiary Guarantor (whether or not affiliated with the
Subsidiary Guarantor), or successive consolidations or mergers in which a
Subsidiary Guarantor or its successor or successors shall be a party or parties,
or shall prevent any sale or conveyance of the Properties of a Subsidiary
Guarantor as an entirety or substantially as an
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entirety, to a Person other than the Company or another Subsidiary Guarantor
(whether or not Affiliated with the Subsidiary Guarantor) authorized to acquire
and operate the same; provided, however, that, subject to Sections 13.2(a) and
13.3 hereof, (i) immediately after such transaction, and giving effect thereto,
no Default or Event of Default shall have occurred as a result of such
transaction and be continuing, (ii) such transaction shall not violate any of
the covenants in Sections 10.10 through 10.19 hereof, and (iii) each Subsidiary
Guarantor hereby covenants and agrees that, upon any such consolidation, merger,
sale or conveyance, such Subsidiary Guarantor's Subsidiary Guarantee set forth
in this Article XIII and in a notation to the Securities, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by such Subsidiary Guarantor, shall be expressly
assumed (in the event that the Subsidiary Guarantor is not the surviving
corporation in the merger), by supplemental indenture satisfactory in form to
the Trustee, executed and delivered to the Trustee, by such Person formed by
such consolidation, or into which the Subsidiary Guarantor shall have merged, or
by the Person that shall have acquired such Property (except to the extent the
following Section 13.3 would result in the release of such Subsidiary Guarantee
in which case such surviving Person does not have to execute any such
supplemental indenture). In the case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by supplemental
indenture executed and delivered to the Trustee and satisfactory in form to the
Trustee of the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Subsidiary Guarantor, such
successor Person shall succeed to and be substituted for the Subsidiary
Guarantor with the same effect as if it had been named herein as a Subsidiary
Guarantor.
Section 13.3 Release of a Subsidiary Guarantor. The Subsidiary Guarantee of
a Subsidiary Guarantor shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person that is not an
Affiliate of the Company, of all of the Company's Capital Stock in, or all or
substantially all the assets of such Subsidiary Guarantor (which sale, exchange
or transfer is not prohibited by this Indenture), (ii) the merger of such
Subsidiary Guarantor into the Company or any other Restricted Subsidiary
(provided the surviving Restricted Subsidiary assumes the Subsidiary Guarantee)
or the liquidation and dissolution of such Subsidiary Guarantor (in each case to
the extent not prohibited by this Indenture), or (iii) if applicable, the
release or discharge of the guarantee which resulted in the creation of such
Subsidiary Guarantee under Section 10.13 hereof, except a discharge or release
by or as a result of payment under such guarantee. If, at any time while any of
the Securities remain outstanding, none of the Company's then outstanding
Indebtedness (other than the Securities) is guaranteed by a Subsidiary
Guarantor, such Subsidiary Guarantor shall be automatically and unconditionally
released, discharged and relieved of any obligations under its Subsidiary
Guarantee (which shall be terminated and cease to have any force and effect).
Each Subsidiary Guarantor that is designated as an Unrestricted Subsidiary in
accordance with the provisions of this Indenture shall be released from its
Subsidiary Guarantee and related obligations set forth in this Indenture for so
long as it remains an Unrestricted Subsidiary. The Trustee shall deliver an
appropriate instrument evidencing such release upon receipt of a Company Request
accompanied by an Officers' Certificate and an Opinion of Counsel certifying
that such sale or other disposition was made by the Company in accordance with
the provisions of this Indenture. Any Subsidiary Guarantor not so released
remains liable for the full
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amount of principal of (and premium, if any, on) and interest on the Securities
as provided in this Article XIII.
Section 13.4 Limitation of Subsidiary Guarantor's Liability. Each
Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby confirms
that it is the intention of all such parties that the Guarantee by such
Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or fraudulent conveyance for purposes of any federal, state
or foreign law. To effectuate the foregoing intention, the Holders and each
Subsidiary Guarantor hereby irrevocably agree that the obligations of each
Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities (including, but not limited to, Guarantor Senior Indebtedness) of
such Subsidiary Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under its Subsidiary
Guarantee or pursuant to Section 13.5 hereof, result in the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal, state or foreign
law. This Section 13.4 is for the benefit of the creditors of each Subsidiary
Guarantor.
Section 13.5 Contribution. In order to provide for just and equitable
contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree,
inter se, that in the event any payment or distribution is made by any
Subsidiary Guarantor (a "Funding Guarantor") under its Subsidiary Guarantee,
such Funding Guarantor shall be entitled to a contribution from each other
Subsidiary Guarantor (if any) in a pro rata amount based on the Adjusted Net
Assets of each Subsidiary Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in discharging
the Company's obligations with respect to the Securities or any other Subsidiary
Guarantor's obligations with respect to its Subsidiary Guarantee.
Section 13.6 Execution and Delivery of Notation of Subsidiary Guarantee. To
evidence its Subsidiary Guarantee set forth in Section 13.1 hereof, each
Subsidiary Guarantor hereby agrees to execute the notation of Subsidiary
Guarantee in substantially the form set forth in Section 2.4 hereof to be
endorsed on each Security ordered to be authenticated and delivered by the
Trustee, and each Subsidiary Guarantor agrees that this Indenture shall be
executed on behalf of each Subsidiary Guarantor by its President or one of its
Vice Presidents and attested to by one of its Secretaries or Assistant
Secretaries. Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 13.1 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of such
Subsidiary Guarantee. Each such notation of Subsidiary Guarantee shall be signed
on behalf of each Subsidiary Guarantor by two Officers, or an Officer and an
Assistant Secretary or one Officer shall sign and one Officer or an Assistant
Secretary (each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to such notation of Subsidiary
Guarantee prior to the authentication of the Security on which it is endorsed,
and the delivery of such Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the notation of Subsidiary
Guarantee set forth in this Indenture on behalf of the Subsidiary Guarantors.
Such signatures upon the notation of Subsidiary Guarantee may
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be by manual or facsimile signature of such officers and may be imprinted or
otherwise reproduced on the Subsidiary Guarantee, and in case any such officer
who shall have signed the notation of Subsidiary Guarantee shall cease to be
such officer before the Security on which such notation of Subsidiary Guarantee
is endorsed shall have been authenticated and delivered by the Trustee or
disposed of by the Company, such Security nevertheless may be authenticated and
delivered or disposed of as though the person who signed the notation of
Subsidiary Guarantee had not ceased to be such officer of the Subsidiary
Guarantor.
Section 13.7 Severability. In case any provision of this Subsidiary
Guarantee shall be invalid, illegal or unenforceable, that portion of such
provision that is not invalid, illegal or unenforceable shall remain in effect,
and the validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
Section 13.8 Subsidiary Guarantees Subordinated to Guarantor Senior
Indebtedness. Each Subsidiary Guarantor covenants and agrees, and each Holder
of a Security, by his acceptance of the Subsidiary Guarantees, likewise
covenants and agrees, for the benefit of the holders, from time to time, of
Guarantor Senior Indebtedness, that the payments by such Subsidiary Guarantor in
respect of its Subsidiary Guarantee are subordinated and subject in right of
payment, to the extent and in the manner provided in this Article XIII, to the
prior payment in full of all Guarantor Senior Indebtedness of such Subsidiary
Guarantor, whether outstanding on the Issue Date or thereafter created,
incurred, assumed or guaranteed; provided, however, that the Subsidiary
Guarantee of such Subsidiary Guarantor, the Indebtedness represented thereby and
the payment of the principal of (and premium, if any, on) and the interest on
the Securities pursuant to such Subsidiary Guarantee in all respects shall rank
pari passu with, or prior to, all existing and future unsecured indebtedness
(including, without limitation, Indebtedness) of such Subsidiary Guarantor that
is subordinated to its Guarantor Senior Indebtedness.
This Article XIII shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold,
Guarantor Senior Indebtedness, and such provisions are made for the benefit of
the holders of Guarantor Senior Indebtedness, and such holders are made obligees
hereunder and any of them may enforce such provisions.
Section 13.9 Subsidiary Guarantors Not to Make Payments with Respect to
Subsidiary Guarantees in Certain Circumstances.
(a) No payment or distribution of any Property of any Subsidiary
Guarantor of any kind or character (other than Permitted Guarantor Junior
Securities) may be made by such Subsidiary Guarantor in respect of its
Subsidiary Guarantee upon the happening of any default in respect of the payment
or required prepayment of any of its Guarantor Senior Indebtedness when the same
becomes due and payable (a "Subsidiary Guarantor Payment Default"), unless and
until such Subsidiary Guarantor Payment Default shall have been cured or waived
in writing or shall have ceased to exist or such Guarantor Senior Indebtedness
shall have been paid in full or otherwise
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discharged, after which such Subsidiary Guarantor shall resume making any and
all required payments in respect of its Subsidiary Guarantee, including any
missed payments.
(b) Upon the happening of any event (other than a Subsidiary Guarantor
Payment Default) the occurrence of which entitles one or more Persons to
accelerate the maturity of any Designated Guarantor Senior Indebtedness (a
"Subsidiary Guarantor Non-payment Default"), and receipt by the applicable
Subsidiary Guarantor and a Responsible Officer of the Trustee, on behalf of the
Trustee, of written notice thereof from one or more of the holders of such
Designated Guarantor Senior Indebtedness or their representative (a "Subsidiary
Guarantor Payment Notice"), then, unless and until such Subsidiary Guarantor
Non-payment Default shall have been cured or waived in writing or shall have
ceased to exist or such Designated Guarantor Senior Indebtedness is paid in full
or otherwise discharged or the holders (or a representative of the holders) of
such Designated Guarantor Senior Indebtedness give their written approval, no
payment or distribution shall be made by such Subsidiary Guarantor in respect of
its Subsidiary Guarantee (other than Permitted Guarantor Junior Securities);
provided, however, that these provisions will not prevent the making of any
payment for more than 179 days after a Subsidiary Guarantor Payment Notice shall
have been given after which, subject to Section 13.9(a), such Subsidiary
Guarantor will resume making any and all required payments in respect of its
Subsidiary Guarantee, including any missed payments. Notwithstanding any other
provision of this Indenture, only one Subsidiary Guarantor Payment Notice shall
be given with respect to any Subsidiary Guarantee within any 360 consecutive day
period. No Subsidiary Guarantor Non-payment Default with respect to Designated
Guarantor Senior Indebtedness that existed or was continuing on the date of any
Subsidiary Guarantor Payment Notice with respect to the Designated Guarantor
Senior Indebtedness initiating such Subsidiary Guarantor Payment Notice shall
be, or can be, made the basis for the commencement of a subsequent Subsidiary
Guarantor Payment Notice with respect to such Subsidiary Guarantee, whether or
not within a period of 360 consecutive days, unless such default shall have been
cured or waived for a period of not less than 90 consecutive days (it being
acknowledged that any subsequent action, or any breach of any financial covenant
for a period commencing after the date of commencement of such Subsidiary
Guarantor Payment Notice, that, in either case, would give rise to a Subsidiary
Guarantor Non-payment Default pursuant to any provision under which a Subsidiary
Guarantor Non-payment Default previously existed or was continuing shall
constitute a new Subsidiary Guarantor Non-payment Default for this purpose;
provided that, in the case of a breach of a particular financial covenant, such
Subsidiary Guarantor shall have been in compliance for at least one full 90
consecutive day period commencing after the date of commencement of such
Subsidiary Guarantor Payment Notice). In no event shall a Subsidiary Guarantor
Payment Notice extend beyond 179 days from the date of its receipt and there
must be a 181 consecutive day period in any 360 consecutive day period during
which no Subsidiary Guarantor Payment Notice is in effect with respect to such
Subsidiary Guarantee.
(c) In the event that, notwithstanding the foregoing, a Subsidiary
Guarantor shall make any payment in respect of its Subsidiary Guarantee to the
Trustee or the Holder of any Security prohibited by the foregoing provisions of
this Section 13.9, then and in such event such payment shall be paid over and
delivered forthwith to the Company. In the event that a Subsidiary Guarantor
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shall make any payment in respect of its Subsidiary Guarantee to the Trustee and
a Responsible Officer of the Trustee, on behalf of the Trustee, shall receive
written notice of a Subsidiary Guarantor Payment Default or a Subsidiary
Guarantor Non-payment Default from one or more of the holders of Guarantor
Senior Indebtedness (or their representative) prior to making any payment to
Holders in respect of the Subsidiary Guarantee and prior to 11:00 a.m. Eastern
Time on the date which is two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose, such payments shall
be paid over by the Trustee and delivered forthwith to the Company. Each
Subsidiary Guarantor shall give prompt written notice to the Trustee of any
default under any of its Guarantor Senior Indebtedness or under any agreement
pursuant to which its Guarantor Senior Indebtedness may have been issued.
Section 13.10 Subsidiary Guarantees Subordinated to Prior Payment of All
Guarantor Senior Indebtedness upon Dissolution, etc. Upon any distribution of
Properties of any Subsidiary Guarantor or payment on behalf of a Subsidiary
Guarantor in the event of any Insolvency or Liquidation Proceeding with respect
to such Subsidiary Guarantor:
(a) the holders of such Subsidiary Guarantor's Guarantor Senior
Indebtedness shall be entitled to receive payment in full of such Guarantor
Senior Indebtedness, or provision must be made for such payment, before the
Holders are entitled to receive any direct or indirect payment or distribution
of any kind or character, whether in cash, property or securities (other than
Permitted Guarantor Junior Securities), on account of any payment in respect of
such Subsidiary Guarantor's Subsidiary Guarantee;
(b) any direct or indirect payment or distribution of Properties of
such Subsidiary Guarantor of any kind or character, whether in cash, property or
securities (other than a payment or distribution in the form of Permitted
Guarantor Junior Securities), by set-off or otherwise, to which the Holders or
the Trustee, on behalf of the Holders, would be entitled except for the
provisions of this Article XIII, shall be paid by the Subsidiary Guarantor or by
any liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of such Guarantor Senior Indebtedness or
their representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Guarantor Senior
Indebtedness may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of such Guarantor Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full of all such
Guarantor Senior Indebtedness, after giving effect to any concurrent payment or
distribution to the holders of such Guarantor Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of
this Section 13.10, any direct or indirect payment or distribution of Properties
of such Subsidiary Guarantor of any kind or character, whether in cash, property
or securities (other than a payment or distribution in the form of Permitted
Guarantor Junior Securities), shall be received by the Trustee or the Holders
before all such Guarantor Senior Indebtedness is paid in full or otherwise
discharged, such Properties shall be received and held in trust for and shall be
paid over to the holders of such
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Guarantor Senior Indebtedness remaining unpaid or their representatives, for
application to the payment of such Guarantor Senior Indebtedness until all such
Guarantor Senior Indebtedness shall have been paid or provided for in full,
after giving effect to any concurrent payment or distribution to the holders of
such Guarantor Senior Indebtedness.
The Company or a Subsidiary Guarantor shall give prompt written notice to a
Responsible Officer of the Trustee, on behalf of the Trustee, of the occurrence
of any Insolvency or Liquidation Proceeding with respect to such Subsidiary
Guarantor.
Section 13.11 Holders to be Subrogated to Rights of Holders of Guarantor
Senior Indebtedness. After the payment in full of all Guarantor Senior
Indebtedness of a Subsidiary Guarantor, the Holders shall be subrogated (equally
and ratably with the holders of all other Indebtedness of such Subsidiary
Guarantor which by its express terms is subordinated to such Guarantor Senior
Indebtedness to substantially the same extent as such Subsidiary Guarantee is so
subordinated and which is entitled to like rights of subrogation as a result of
payments made to the holders of such Guarantor Senior Indebtedness) to the
rights of the holders of such Guarantor Senior Indebtedness to receive payments
or distributions of cash, property and securities of such Subsidiary Guarantor
applicable to such Guarantor Senior Indebtedness until all amounts owing on the
Securities shall be paid in full, and for the purpose of such subrogation no
payments or distributions to the holders of such Guarantor Senior Indebtedness
by or on behalf of such Subsidiary Guarantor or by or on behalf of the Holders
by virtue of this Article XIII which otherwise would have been made to the
Holders shall, as between such Subsidiary Guarantor, its creditors other than
the holders of Guarantor Senior Indebtedness, and the Holders of the Securities,
be deemed to be a payment or distribution by such Subsidiary Guarantor to or on
account of such Guarantor Senior Indebtedness, it being understood that the
subordination provisions of this Article XIII are, and are intended solely for
the purpose of defining the relative rights of the Holders, on the one hand, and
the holders of Guarantor Senior Indebtedness, on the other hand.
Section 13.12 Obligations of the Subsidiary Guarantors Unconditional.
Nothing contained in this Article XIII or elsewhere in this Indenture or in any
Security is intended to or shall impair, as between Subsidiary Guarantors and
the Holders, the obligation of the Subsidiary Guarantors under the Subsidiary
Guarantees, or is intended to or shall affect the relative rights of the Holders
and creditors of the Subsidiary Guarantors other than the holders of Guarantor
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or
any Holder from exercising all remedies otherwise permitted by applicable law
upon Default under this Indenture subject to the rights, if any, under this
Article XIII of the holders of Guarantor Senior Indebtedness in respect of cash,
property or securities of any Subsidiary Guarantor received upon the exercise of
any such remedy. Upon any distribution of Properties of a Subsidiary Guarantor
referred to in this Article XIII, the Trustee, subject to the provisions of
Section 6.2 hereof, and the Holders of the Securities shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of a trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, or agent or other
Person making any distribution to the Trustee or to the Holders of the
Securities, for the
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purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the related Guarantor Senior Indebtedness and other
indebtedness of such Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XIII.
Section 13.13 Trustee Entitled to Assume Payments Not Prohibited in Absence
of Notice. The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee, unless a Responsible Officer of the Trustee, on behalf of the
Trustee, shall have received at the Corporate Trust Office written notice
thereof from a Subsidiary Guarantor or from one or more holders of Guarantor
Senior Indebtedness or Designated Guarantor Senior Indebtedness, in the case of
a Subsidiary Guarantor Non-payment Default, or from any representative thereof;
and, prior to the receipt of any such written notice, the Trustee, subject to
TIA Sections 315(a) through 315(d), shall be entitled to assume conclusively
that no such facts exist. The Trustee shall be entitled to rely on the delivery
to it of a written notice by a Person representing himself to be a holder of
Guarantor Senior Indebtedness or Designated Guarantor Senior Indebtedness, in
the case of a Subsidiary Guarantor Non-payment Default (or a representative on
behalf of such holder), to establish that such notice has been given by a holder
of Guarantor Senior Indebtedness or Designated Guarantor Senior Indebtedness, in
the case of a Subsidiary Guarantor Non-payment Default, or a representative on
behalf of any such holder or holders.
Section 13.14 Application by Trustee of Money Deposited with it. Except as
provided in Article XIV, any deposit of money by a Subsidiary Guarantor with the
Trustee or any Paying Agent (whether or not in trust) for any payment in respect
of the related Subsidiary Guarantee shall be subject to the provisions of
Sections 13.8, 13.9, 13.10 and 13.11 hereof except that, if prior to 11:00 a.m.
Eastern time on the date which is two Business Days prior to the date on which
by the terms of this Indenture any such money may become payable for any
purpose, the Trustee or, in the case of any such deposit of money with a Paying
Agent, the Paying Agent shall not have received with respect to such money the
notice provided for in Section 13.13 hereof, then the Trustee or such Paying
Agent, as the case may be, shall have full power and authority to receive such
money and to apply the same to the purpose for which it was received, and shall
not be affected by any notice to the contrary which may be received by it on or
after 11:00 a.m., Eastern time, two Business Days prior to such payment date.
In the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Guarantor Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XIII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Guarantor Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XIII, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
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The Trustee, however, shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness but shall have only such obligations to
such holders as are expressly set forth in this Article XIII.
Section 13.15 Subordination Rights Not Impaired by Acts of Omissions of
Subsidiary Guarantors or Holders of Guarantor Senior Indebtedness. No right of
any present or future holders of any Guarantor Senior Indebtedness of a
Subsidiary Guarantor to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of such Subsidiary Guarantor or by any act or failure to act by any such
holder, or by any noncompliance by such Subsidiary Guarantor with the terms of
this Indenture, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with.
Without in any way limiting the generality of the preceding paragraph of
this Section, the holders of Guarantor Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Trustee or the
Holders of the Securities, without incurring responsibility to the Holders of
the Securities and without impairing or releasing the subordination or other
benefits provided in this Article, or the obligations hereunder of the Holders
of the Securities to the holders of Guarantor Senior Indebtedness, do any one or
more of the following: (1) change the manner, place or terms of payment or
extend the time of payment of, or renew, exchange, amend, increase or alter,
Guarantor Senior Indebtedness or the term of any instrument evidencing the same
or any agreement under which Guarantor Senior Indebtedness is outstanding or any
liability of any obligor thereon (unless such change, extension or alteration
results in such Indebtedness no longer being Guarantor Senior Indebtedness as
defined in this Indenture); (2) sell, exchange, release or otherwise deal with
any Property pledged, mortgaged or otherwise securing Guarantor Senior
Indebtedness; (3) settle or compromise any Guarantor Senior Indebtedness or any
liability of any obligor thereon or release any Person liable in any manner for
the collection of Guarantor Senior Indebtedness; and (4) exercise or refrain
from exercising any rights against the Company and any other Person.
Section 13.16 Holders Authorize Trustee to Effectuate Subordination of
Subsidiary Guarantees. Each Holder, by his acceptance thereof, authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XIII and appoints the Trustee as his attorney-in-fact for such purpose,
including, in the event of any Insolvency or Liquidation Proceeding with respect
to any Subsidiary Guarantor, the immediate filing of a claim for the unpaid
balance of his Securities pursuant to the related Subsidiary Guarantee in the
form required in said proceedings and the causing of said claim to be approved.
Section 13.17 Right of Trustee to Hold Guarantor Senior Indebtedness. The
Trustee shall be entitled to all of the rights set forth in this Article XIII in
respect of any Guarantor Senior Indebtedness at any time held by it to the same
extent as any other holder of Guarantor Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
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Section 13.18 Article XIII Not to Prevent Events of Default. The failure
to make a payment on account of the Subsidiary Guarantees by reason of any
provision in this Article XIII shall not be construed as preventing the
occurrence of an Event of Default under this Indenture.
Section 13.19 Payment. For purposes of this Article XIII, a payment with
respect to any Subsidiary Guarantee or with respect to principal of or interest
on any Security or any Subsidiary Guarantee shall include, without limitation,
payment of principal of and interest on any Security, any depositing of funds
under Article IV hereof, any payment on account of any repurchase or redemption
of any Security and any payment or recovery on any claim (whether for rescission
or damages and whether based on contract, tort, duty imposed by law, or any
other theory of liability) relating to or arising out of the offer, sale or
purchase of any Security.
ARTICLE XIV
SUBORDINATION OF SECURITIES
---------------------------
Section 14.1 Securities Subordinate to Senior Indebtedness. The Company
covenants and agrees, and each Holder of a Security, by his acceptance thereof,
likewise covenants and agrees for the benefit of the holders, from time to time,
of Senior Indebtedness, that, to the extent and in the manner hereinafter set
forth in this Article XIV, the Indebtedness represented by the Securities and
the payment of and distributions of or with respect to the Obligations are
hereby expressly made subordinate and subject in right of payment as provided in
this Article to the prior payment in full in cash or cash equivalents of all
amounts payable under all existing and future Senior Indebtedness.
This Article XIV shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold Senior
Indebtedness; and such provisions are made for the benefit of the holders of
Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 14.2 Payment Over of Proceeds upon Dissolution, etc. In the event
of an Insolvency or Liquidation Proceeding with respect to the Company:
(1) the holders of all Senior Indebtedness shall be entitled to
receive payment in full in cash or cash equivalents of all Senior
Indebtedness before the Holders of the Securities are entitled to receive
any direct or indirect payment or distribution of any kind or character
(excluding Permitted Junior Securities of the Company) on account of
Obligations; and
(2) any direct or indirect payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities
(excluding Permitted Junior Securities of the Company), by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Article shall be paid by the liquidating trustee or
agent or other Person making such payment or distribution, whether a
trustee in
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bankruptcy, a receiver or liquidating trustee or otherwise, directly to the
holders of Senior Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under which any
instruments evidencing any of such Senior Indebtedness may have been
issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash or cash equivalents of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 14.2, the Trustee or the Holder of any Security shall have
received any payment or distribution of properties or assets of the Company
of any kind or character, whether in cash, property or securities, by set
off or otherwise, in respect of any Obligations before all Senior
Indebtedness is paid or provided for in full, then and in such event such
payment or distribution (excluding Permitted Junior Securities of the
Company) shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or
other Person making payment or distribution of assets of the Company for
application to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all Senior Indebtedness in full, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company with or
into, another Person or the liquidation or dissolution of the Company following
the conveyance, transfer or lease of its properties and assets substantially as
an entirety to another Person upon the terms and conditions set forth in Article
VIII hereof shall not be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of the Company for the purposes of this Article if the Person
formed by such consolidation or the surviving entity of such merger or the
Person which acquires by conveyance, transfer or lease such properties and
assets substantially as an entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance, transfer or lease, comply with the
conditions set forth in such Article VIII hereof to the extent applicable.
Section 14.3 Suspension of Payment When Senior Indebtedness in Default.
(a) Unless Section 14.2 hereof shall be applicable, upon the
occurrence of a Payment Default, no direct or indirect payment or distribution
of any assets of the Company of any kind or character shall be made by or on
behalf of the Company on account of the Obligations or on account of the
purchase or redemption or other acquisition of any Obligations unless and until
such Payment Default shall have been cured or waived or shall have ceased to
exist or such Designated Senior Indebtedness shall have been discharged or paid
in full in cash or Cash Equivalents, after which, subject to Section 14.2 hereof
(if applicable), the Company shall resume making any and all required payments
in respect of the Securities, and the other Obligations, including any missed
payments.
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(b) Unless Section 14.2 hereof shall be applicable, upon (1) the
occurrence of a Non-payment Default and (2) receipt by the Trustee from a Senior
Representative of written notice (a "Payment Blockage Notice") of such
occurrence stating that such notice is a Payment Blockage Notice pursuant to
this Section 14.3(b) of this Indenture, no payment or distribution of any assets
of the Company of any kind or character shall be made by or on behalf of the
Company on account of any Obligations or on account of the purchase or
redemption or other acquisition of Obligations for a period ("Payment Blockage
Period") commencing on the date of receipt by the Trustee of such notice unless
and until the earlier to occur of the following events (subject to any blockage
of payments that may then be in effect under Section 14.2 hereof or subsection
(a) of this Section 14.3 hereof): (w) 179 days shall have elapsed since receipt
of such written notice by the Trustee, (x) the date, as set forth in a written
notice to the Company or the Trustee from the Senior Representative initiating
such Payment Blockage Period, on which such Non-payment Default shall have been
cured or waived or shall have ceased to exist (provided that no other Payment
Default or Non-payment Default has occurred and is then continuing after giving
effect to such cure or waiver), (y) such Designated Senior Indebtedness shall
have been discharged or paid in full in cash or cash equivalents or (z) such
Payment Blockage Period shall have been terminated by written notice to the
Company or the Trustee from the Senior Representative initiating such Payment
Blockage Period, after which, subject to Sections 14.2 and 14.3(a) hereof (if
applicable), the Company shall promptly resume making any and all required
payments in respect of the Obligations, including any missed payments.
Notwithstanding any other provision of this Indenture, only one Payment Blockage
Period may be commenced within any 360 consecutive day period. No Non-payment
Default with respect to Designated Senior Indebtedness that existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness initiating such Payment Blockage
Period shall be, or can be, made the basis for the commencement of a second
Payment Blockage Period, whether or not within a period of 360 consecutive days,
unless such default shall have been cured or waived for a period of not less
than 90 consecutive days (it being acknowledged that any subsequent action, or
any breach of any financial covenant for a period commencing after the date of
commencement of such Payment Blockage Period, that, in either case, would give
rise to a Non-payment Default pursuant to any provision under which a Non-
payment Default previously existed or was continuing shall constitute a new Non-
payment Default for this purpose; provided that, in the case of a breach of a
particular financial covenant, the Company shall have been in compliance for at
least one full 90 consecutive day period commencing after the date of
commencement of such Payment Blockage Period). In no event shall a Payment
Blockage Period extend beyond 179 days from the date of the receipt of the
notice referred to in clause (2) hereof and there must be a 181 consecutive day
period in any 360 consecutive day period during which no Payment Blockage Period
is in effect pursuant to this Section 14.3(b).
(c) In the event that, notwithstanding the foregoing, the Trustee or
the Holder of any Security shall have received any payment or distribution
prohibited by the foregoing provisions of this Section 14.3, then and in such
event such payment or distribution shall be paid over and delivered forthwith to
the Senior Representatives or as a court of competent jurisdiction shall direct
for application to the payment of any due and unpaid Senior Indebtedness, to the
extent necessary
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to pay all such due and unpaid Senior Indebtedness in cash or cash equivalents,
after giving effect to any concurrent payment to or for the holders of Senior
Indebtedness.
Section 14.4 Trustee's Relation to Senior Indebtedness. With respect to the
holders of Senior Indebtedness, notwithstanding any other provisions of this
Indenture, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article XIV, and
no implied covenants or obligations with respect to the holders of Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall mistakenly pay over or deliver to Holders, the Company
or any other Person moneys or assets to which any holder of Senior Indebtedness
shall be entitled by virtue of this Article XIV or otherwise.
Section 14.5 Subrogation to Rights of Holders of Senior Indebtedness. Upon
the payment in full in cash or Cash Equivalents of all Senior Indebtedness, the
Holders of the Securities shall be subrogated (equally and ratably with the
holders of all Indebtedness of the Company which by its express terms is
subordinated to Senior Indebtedness to substantially the same extent as the
Securities are so subordinated and which is entitled to like rights of
subrogation as a result of the payments made to the holders of Senior
Indebtedness) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to the Senior Indebtedness until the principal of, premium, if any, and interest
on the Securities shall be paid in full in cash or cash equivalents. For
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled except for the provisions of
this Article XIV, and no payments over pursuant to the provisions of this
Article XIV to the holders of Senior Indebtedness by Holders of the Securities
or the Trustee shall, as among the Company, its creditors other than holders of
Senior Indebtedness, and the Holders of the Securities, be deemed to be payment
or distribution by the Company to or on account of the Senior Indebtedness.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article XIV shall have been
applied, pursuant to the provisions of this Article XIV, to the payment of all
amounts payable under the Senior Indebtedness of the Company and such payments
or distributions received by such holders of such Senior Indebtedness shall be
in excess of the amount sufficient to pay all amounts payable under or in
respect of such Senior Indebtedness in full in cash or cash equivalents, then
and in such case the Holders shall be entitled to receive the amount of such
excess from the Company upon and to the extent of any return of such excess by
the holders of such Senior Indebtedness.
Section 14.6 Provisions Solely To Define Relative Rights. The provisions of
this Article XIV are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities on the one hand and the holders
of Senior Indebtedness on the other hand. Nothing contained in this Article XIV
or elsewhere in this Indenture or in the Securities is intended to or shall (a)
impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the
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Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of,
premium, if any, and interest on the Securities as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of the Securities and
creditors of the Company other than the holders of the Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon a Default or an Event of
Default under this Indenture, subject to the rights, if any, under this Article
XIV of the holders of Senior Indebtedness.
The failure to make a payment on account of any Obligations by reason of
any provision of this Article XIV shall not be construed as preventing the
occurrence of a Default or an Event of Default hereunder.
Section 14.7 Trustee To Effectuate Subordination. Each Holder of a Security
by his acceptance thereof authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XIV and appoints the Trustee his
attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of the Company whether in
bankruptcy, insolvency, receivership proceedings, or otherwise, the timely
filing of a claim for the unpaid balance of the Indebtedness of the Company
owing to such Holder in the form required in such proceedings and the causing of
such claim to be approved. If the Trustee does not file such a claim prior to 30
days before the expiration of the time to file such a claim, the holders of
Senior Indebtedness, or any Senior Representative, may file such a claim on
behalf of Holders of the Securities.
Section 14.8 Waiver of Subordination Provision.
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this Section
14.8, the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
XIV or the obligations hereunder of the Holders of the Securities to the holders
of Senior Indebtedness, do any one or more of the following: (1) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding or any liability of any
obligor thereon (unless such change, extension or alteration results in such
Indebtedness no longer being
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Senior Indebtedness as defined in this Indenture); (2) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (3) settle or compromise any Senior Indebtedness or any
liability of any obligor thereon or release any Person liable in any manner for
the collection or payment of Senior Indebtedness; and (4) exercise or refrain
from exercising any rights against the Company and any other Person; provided,
however, that in no event shall any such actions limit the right of the Holders
of the Securities to take any action to accelerate the maturity of the
Securities pursuant to Article V hereof or to pursue any rights or remedies
hereunder or under applicable laws if the taking of such action does not
otherwise violate the terms of this Indenture.
Section 14.9 Notice to Trustee.
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article XIV or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until a Responsible Officer of the Trustee, on behalf of the Trustee, shall
have received written notice thereof from the Company or a holder of Senior
Indebtedness or from any trustee, fiduciary or agent therefor; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
this Section 14.9, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall not have received the
notice provided for in this Section 14.9 at least two Business Days prior to the
date upon which by the terms hereof any money may become payable for any purpose
under this Indenture (including, without limitation, the payment of the
principal of, premium, if any, or interest on any Security), then, anything
herein contained to the contrary notwithstanding but without limiting the rights
and remedies of the holders of Senior Indebtedness or any trustee, fiduciary or
agent thereof, the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
within two Business Days prior to such date; nor shall the Trustee be charged
with knowledge of the curing of any such default or the elimination of the act
or condition preventing any such payment unless and until the Trustee shall have
received an Officers' Certificate to such effect.
(b) Subject to TIA Sections 315(a) through 315(d), the Trustee shall
be entitled to rely on the delivery to it of a written notice to a Responsible
Officer of the Trustee, on behalf of the Trustee, by a Person representing
himself to be a holder of Senior Indebtedness (or a trustee, fiduciary or agent
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee, fiduciary or agent therefor). In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Article XIV, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such
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Person under this Article XIV, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 14.10 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article XIV, the Trustee, subject to TIA Sections 315(a) through 315(d),
and the Holders, shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding-up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XIV.
Section 14.11 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article XIV with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
XIV shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 6.6 hereof.
Section 14.12 Article Applicable to Paying Agents. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article XIV shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article XIV in addition
to or in place of the Trustee; provided, however, that Section 14.11 hereof
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as Paying Agent.
Section 14.13 No Suspension of Remedies. Nothing contained in this Article
XIV shall limit the right of the Trustee or the Holders of Securities to take
any action to accelerate the maturity of the Securities pursuant to Article V
hereof or to pursue any rights or remedies hereunder or under applicable law,
subject to the rights, if any, under this Article XIV of the holders, from time
to time, of Senior Indebtedness.
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ARTICLE XV
MISCELLANEOUS
-------------
Section 15.1 Compliance Certificates and Opinions. Upon any application or
request by the Company and/or any Subsidiary Guarantor to the Trustee to take
any action under any provision of this Indenture, the Company and/or such
Subsidiary Guarantor, as the case may be, shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act or
this Indenture. Each such certificate and each such opinion shall be in the
form of an Officers' Certificate or an Opinion of Counsel, as applicable, and
shall comply with the requirements of this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
The certificates and opinions provided pursuant to this Section 15.1 and the
statements required by this Section 15.1 shall comply in all respects with TIA
Sections 314(c) and (e).
Section 15.2 Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an Officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
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erroneous. Any such Opinion of Counsel may be based, insofar as it relates to
factual matters, upon an Officers' Certificate of an Officer or Officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate with respect to such matters
is erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 15.3 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership, principal amount and serial numbers of Securities
held by any Person, and the date of holding the same, shall be proved by the
Security Register.
(d) If the Company shall solicit from the Holders of Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such solicitation is completed. If such a record date
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is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall be deemed
to be Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, wavier or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
Section 15.4 Notices, etc. to Trustee, Company and Subsidiary Guarantors.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or any Subsidiary
Guarantor shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing and delivered in person or mailed by
certified or registered mail (return receipt requested) to the Trustee at
its Corporate Trust Office; or
(2) the Company or any Subsidiary Guarantor by the Trustee or by
any Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and delivered in person
or mailed by certified or registered mail (return receipt requested) to the
Company addressed to it or a Subsidiary Guarantor, as applicable, at the
Company's principal office located at 1201 Louisiana, Suite 1400, Houston,
Texas 77002, or at any other address otherwise furnished in writing to the
Trustee by the Company.
Section 15.5 Notice to Holders; Waiver. Where this Indenture provides for
notice of any event to Holders by the Company or the Trustee, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Holder affected by such event,
at his address as it appears in the Security Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice. Where this Indenture provides
for notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and
126
<PAGE>
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
Section 15.6 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 15.7 Successors and Assigns. All covenants and agreements in this
Indenture by the Company and the Subsidiary Guarantors shall bind their
respective successors and assigns, whether so expressed or not. All agreements
of the Trustee in this Indenture shall bind its successor.
Section 15.8 Separability Clause. In case any provision in this Indenture
or in the Securities or the Subsidiary Guarantees shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby, and a Holder
shall have no claim therefore against any party hereto.
Section 15.9 Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person (other than the parties
hereto, any Paying Agent, any Securities Registrar and their successors
hereunder, the Holders, the holders of Senior Indebtedness, the holders of
Guarantor Senior Indebtedness and, to the extent set forth in Section 13.4
hereof, creditors of Subsidiary Guarantors) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 15.10 Governing Law; Trust Indenture Act Controls.
(a) THIS INDENTURE, INCLUDING THE SUBSIDIARY GUARANTEES CONTAINED HEREIN,
AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
THE COMPANY AND EACH SUBSIDIARY GUARANTOR IRREVOCABLY SUBMITS TO THE NON-
EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES, AND
THE COMPANY AND EACH SUBSIDIARY GUARANTOR IRREVOCABLY AGREE THAT ALL CLAIMS IN
RESPECT OF SUCH
127
<PAGE>
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED BY ANY SUCH COURT.
(b) This Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, that are required to be part of this Indenture and shall,
to the extent applicable, be governed by such provisions. If and to the extent
that any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by Sections 310 and 318, inclusive, of the Trust Indenture Act,
or conflicts with any provision (an "incorporated provision") required by or
deemed to be included in this Indenture by operation of such Trust Indenture Act
sections, such imposed duties or incorporated provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or excluded, as the case may
be.
Section 15.11 Legal Holidays. In any case where any Interest Payment Date,
Redemption Date, or Stated Maturity or Maturity of any Security shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or of
the Securities) payment of interest or principal (and premium, if any) need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date, Redemption
Date or at the Stated Maturity or Maturity; provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption
Date, Stated Maturity or Maturity, as the case may be.
Section 15.12 No Recourse Against Others. A director, officer,
incorporator, employee, Affiliate or stockholder of the Company or any
Subsidiary Guarantor, as such, shall not have any personal liability under the
Securities or this Indenture by reason of his or its status as such director,
officer, incorporator or stockholder. Each Holder, by accepting a Security with
the notation of Subsidiary Guarantee endorsed thereon, waives and releases all
such liability. Such waiver and release are part of the consideration for the
issuance of the Securities with the notation of Subsidiary Guarantee endorsed
thereon.
Section 15.13 Duplicate Originals. The parties may sign any number of
copies or counterparts of this Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
Section 15.14 No Adverse Interpretation of Other Agreements. This Indenture
may not be used to interpret another indenture, loan or debt agreement of the
Company or any of its Subsidiaries. Any such indenture, loan or debt agreement
may not be used to interpret this Indenture.
* * *
(Signature Page Follows)
128
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed as of the day and year first above written.
ISSUER:
OCEAN ENERGY, INC.,
a Delaware corporation
By:______________________________________
Name:_________________________________
Title:________________________________
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC.,
a Louisiana corporation
By:______________________________________
Name:_________________________________
Title:________________________________
TRUSTEE:
U.S. BANK TRUST,
NATIONAL ASSOCIATION, as Trustee
By:______________________________________
Name:_________________________________
Title:________________________________
<PAGE>
EXHIBIT A
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 8-3/8% Series [A/B] Senior Subordinated Notes due 2008 of Ocean Energy, Inc.
(the "Company")
This Certificate relates to $____________ principal amount of
Securities held in *__________ book-entry or *_______________ definitive form by
________________________________________ (the "Transferor").
The Transferor*:
[ ] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Securities held by the Depositary, a
Security or Securities in definitive registered form equal to its beneficial
interest in such Global Securities (or the portion thereof indicated above); or
[ ] has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with such request and in respect of each such Security,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture relative to the above captioned Securities and that the transfer of
this Security does not require registration under the Securities Act (as defined
below) because:*
[ ] Such Security is being acquired for the Transferor's own account
without transfer.
[ ] Such Security is being transferred (i) to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")), in reliance on Rule 144A under the Securities Act or
(ii) pursuant to an exemption from registration in accordance with Rule 904
under the Securities Act (and in the case of clause (ii), based on an opinion of
counsel if the Company so requests and together with a certification in
substantially the form of Exhibit C to the Indenture).
[ ] Such Security is being transferred (i) in accordance with Rule 144
under the Securities Act (and based on an opinion of counsel if the Company so
requests) or (ii) pursuant to an effective registration statement under the
Securities Act.
__________________
* Check appropriate box.
A-1
<PAGE>
[ ] Such Security is being transferred to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act pursuant to a private placement exemption from the registration
requirements of the Securities Act (and based on an opinion of counsel if the
Company so requests) together with a certification in substantially the form of
Exhibit B to the Indenture and, to the knowledge of the Transferor, such
institutional accredited investor to whom such Security is to be transferred is
not an "affiliate" (as defined in Rule 144 under the Securities Act) of the
Company.
[ ] Such Security is being transferred in reliance on and in compliance
with another exemption from the registration requirements of the Securities Act
(and based on an opinion of counsel if the Company so requests).
------------------------------------
[INSERT NAME OF TRANSFEROR]
By:__________________________________
Name:____________________________
Title:___________________________
Address:_________________________
Date:_____________________
A-2
<PAGE>
EXHIBIT B
TRANSFEREE LETTER OF REPRESENTATIONS
Ocean Energy Inc.
1201 Louisiana
Suite 1400
Houston, Texas 77002
Dear Sirs and Madams:
In connection with our proposed purchase of $
million aggregate principal amount of 8-3/8% Senior Subordinated Notes due 2008
(the "Securities") of Ocean Energy, Inc., a Delaware corporation (the
"Company"):
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or under any
other applicable securities laws, and may not be sold except as permitted
in the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing the Securities to offer, sell
or otherwise transfer such Securities prior to the date which is two years
after the later of the date of original issue and the last date on which
the Company or any affiliate of the Company was the owner of such
Securities, or any predecessor, thereto (the "Resale Restriction
Termination Date") only (a) to the Company, (b) pursuant to a registration
statement that has been declared effective by the Securities and Exchange
Commission (the "SEC"), (c) for so long as the Securities are eligible for
resale pursuant to Rule 144A under the Securities Act, to a person we
reasonably believe is a qualified institutional buyer under Rule 144A (a
"QIB") that purchases for its own account or for the account of a QIB to
whom notice is given that the transfer is being made in reliance on Rule
144A, (d) pursuant to offers and sales to non-U.S. persons that occur
outside the United States pursuant to Regulation S under the Securities
Act, (e) to an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act
(an "Institutional Accredited Investor") that is acquiring the Securities
for its own account or for the account of another Institutional Accredited
Investor for investment purposes and not with a view to, or for offer or
sale in connection with, any distribution thereof in violation of the
regulations of the Securities Act and any other applicable securities laws
or (f) pursuant to any other available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing cases
to any requirement of law that the disposition of our property and the
property of such investor account or accounts be at all times within our or
their control. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause
(e) above prior to the Resale Restriction Termination Date, the transferor
shall deliver a letter from the transferee substantially in the
B-1
<PAGE>
form of this letter to the Trustee, which shall provide, among other
things, that the transferee is an Institutional Accredited Investor and
that it is acquiring such Securities for investment purposes and not for
distribution in violation of the Securities Act. We acknowledge that the
Company and the Trustee reserve the right prior to any offer, sale or other
transfer pursuant to clauses (e) or (f) prior to the Resale Restriction
Termination Date of the Securities to require the delivery of an opinion of
counsel, certifications and/or other information satisfactory to the
Company and the Trustee.
2. We are an Institutional Accredited Investor purchasing for our own
account or for the account of another Institutional Accredited Investor.
3. We are acquiring the Securities purchased by us for our own
account, or for one or more accounts as to each of which we exercise sole
investment discretion, for investment purposes and not with a view to, or
for offer or sale in connection with any distribution in violation of, the
Securities Act. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
investment in the Securities, we invest in securities similar to the
Securities in the normal course of our business and we, and all accounts
for which we are acting, are able to bear the economic risk of investment
in the Securities.
4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party
in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
By:___________________________________
(Name of Purchaser)
Upon transfer, the Securities should be registered in the name of the new
beneficial owner as follows:
Name:_______________________________
Address:____________________________
____________________________
____________________________
____________________________
Taxpayer ID Number:_________________
B-2
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
______________
U.S. Bank Trust National Association
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed sale of certain 8-3/8% Series [A/B] Senior
Subordinated Notes due 2008 (the "Securities") of Ocean Energy, Inc., a Delaware
corporation (the "Company"), we represent that:
(i) the offer of the Securities was not made to a person in the United
States;
(ii) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(iii) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S under the U.S. Securities Act of 1933, as applicable; and
(iv) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S under the U.S. Securities Act of 1933.
Very truly yours,
_____________________________________
[Name]
By:__________________________________
Name:__________________________
Title:_________________________
Address:_______________________
C-1
<PAGE>
Exhibit 10.23
================================================================================
OCEAN ENERGY, INC.
And
SUBSIDIARY GUARANTORS
Parties Hereto
7 5/8% SENIOR NOTES DUE 2005
INDENTURE
Dated as of July 8, 1998
Norwest Bank Minnesota, National Association
Trustee
================================================================================
<PAGE>
CROSS-REFERENCE TABLE/1/
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310 (a)(1)..................................................................7.10
(a)(2)..................................................................7.10
(a)(3)..................................................................N.A.
(a)(4)..................................................................N.A.
(a)(5)..................................................................7.10
(b).....................................................................7.10
(c).....................................................................N.A.
311 (a).....................................................................7.11
(b).....................................................................7.11
(c).....................................................................N.A.
312 (a).....................................................................2.05
(b)....................................................................11.03
(c)....................................................................11.03
313 (a).....................................................................7.06
(b)(2)............................................................7.06, 7.07
(c)..............................................................7.06, 11.02
(d).....................................................................7.06
314 (a).....................................................................4.03
(a)(4).................................................................11.04
(c)(1)..................................................................N.A.
(c)(2)..................................................................N.A.
(c)(3)..................................................................N.A.
(e)....................................................................11.05
(f).....................................................................N.A.
315 (a).....................................................................7.01
(b).....................................................................7.05
(c).....................................................................7.01
(d).....................................................................7.01
(e).....................................................................6.11
316 (a)(last sentence)......................................................2.09
(a)(1)(A)...............................................................6.05
(a)(1)(B)...............................................................6.04
(a)(2)..................................................................N.A.
(b).....................................................................6.07
(c).....................................................................2.12
317 (a)(1)..................................................................6.09
(a)(2)..................................................................6.09
(b).....................................................................2.04
318 (a)....................................................................11.01
(b)....................................................................11.01
(c)....................................................................11.01
N.A. means not applicable.
- -----------------
/1/ This Cross-Reference Table is not part of this Indenture.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions..................................................... 1
Section 1.02 Other Definitions...............................................12
Section 1.03 Incorporation by Reference of Trust Indenture Act...............12
Section 1.04 Rules of Construction...........................................12
ARTICLE II
THE NOTES
Section 2.01 Form and Dating.................................................13
Section 2.02 Execution and Authentication....................................14
Section 2.03 Registrar and Paying Agent......................................15
Section 2.04 Paying Agent to Hold Money in Trust.............................15
Section 2.05 Holder Lists....................................................15
Section 2.06 Transfer and Exchange...........................................16
Section 2.07 Replacement Notes...............................................29
Section 2.08 Outstanding Notes...............................................29
Section 2.09 Treasury Notes..................................................30
Section 2.10 Temporary Notes.................................................30
Section 2.11 Cancellation....................................................30
Section 2.12 Defaulted Interest..............................................30
Section 2.13 CUSIP Numbers...................................................31
ARTICLE III
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee..............................................31
Section 3.02 Notice of Redemption............................................31
Section 3.03 Effect of Notice of Redemption..................................32
Section 3.04 Deposit of Redemption Price.....................................32
Section 3.05 Optional Redemption.............................................32
i
<PAGE>
ARTICLE IV
COVENANTS
Section 4.01 Payment of Principal, Premium, if any, and Interest.............33
Section 4.02 Maintenance of Office or Agency.................................33
Section 4.03 Compliance Certificate..........................................34
Section 4.04 Liens...........................................................34
Section 4.05 Sale/Leaseback Transactions.....................................36
Section 4.06 Purchase of Notes Upon Change of Control........................37
Section 4.07 Additional Subsidiary Guarantors................................39
ARTICLE V
SUCCESSORS
Section 5.01 Consolidation, Merger and Sale of Assets........................40
Section 5.02 Successor Substituted...........................................40
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default...............................................40
Section 6.02 Acceleration; Rescission........................................42
Section 6.03 Other Remedies..................................................43
Section 6.04 Waiver of Past Defaults.........................................43
Section 6.05 Control by Majority.............................................43
Section 6.06 Limitation on Suits.............................................44
Section 6.07 Rights of Holders of Notes to Receive Payment...................45
Section 6.08 Collection Suit by Trustee......................................45
Section 6.09 Trustee May File Proofs of Claim................................45
Section 6.10 Priorities......................................................46
Section 6.11 Undertaking for Costs...........................................46
ARTICLE VII
TRUSTEE
Section 7.01 Duties of Trustee...............................................46
Section 7.02 Rights of Trustee...............................................48
Section 7.03 Individual Rights of Trustee....................................48
Section 7.04 Trustee's Disclaimer............................................48
ii
<PAGE>
Section 7.05 Notice of Defaults..............................................49
Section 7.06 Reports by Trustee to Holders of the Notes......................49
Section 7.07 Compensation and Indemnity......................................49
Section 7.08 Replacement of Trustee..........................................50
Section 7.09 Successor Trustee by Merger, Etc................................51
Section 7.10 Eligibility; Disqualification...................................51
Section 7.11 Preferential Collection of Claims Against Company...............51
ARTICLE VIII
DEFEASANCE AND DISCHARGE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance........52
Section 8.02 Legal Defeasance and Discharge..................................52
Section 8.03 Covenant Defeasance.............................................52
Section 8.04 Conditions to Legal or Covenant Defeasance......................53
Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions...........................54
Section 8.06 Repayment to Company............................................55
Section 8.07 Reinstatement...................................................55
Section 8.08 Discharge.......................................................56
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.............................56
Section 9.02 With Consent of Holders of Notes................................57
Section 9.03 Compliance with Trust Indenture Act.............................58
Section 9.04 Revocation and Effect of Consents...............................58
Section 9.05 Notation on or Exchange of Notes................................58
Section 9.06 Trustee to Sign Amendments, Etc.................................58
ARTICLE X
GUARANTEES
Section 10.01 Subsidiary Guarantees...........................................59
Section 10.02 Execution and Delivery of Subsidiary Guarantee..................60
Section 10.03 Subsidiary Guarantors May Consolidate, Etc., on
Certain Terms...................................................60
Section 10.04 Releases of Subsidiary Guarantees...............................61
Section 10.05 Limitation on Subsidiary Guarantor Liability; Contribution......61
iii
<PAGE>
Section 10.06 Trustee to Include Paying Agent 62
ARTICLE XI
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls....................................62
Section 11.02 Notices.........................................................62
Section 11.03 Communication by Holders of Notes with Other Holders
of Notes........................................................63
Section 11.04 Certificate and Opinion as to Conditions Precedent..............64
Section 11.05 Statements Required in Certificate or Opinion...................64
Section 11.06 Rules by Trustee and Agents.....................................64
Section 11.07 No Personal Liability of Directors, Officers, Employees and
Stockholders....................................................65
Section 11.08 Governing Law...................................................65
Section 11.09 No Adverse Interpretation of Other Agreements...................65
Section 11.10 Successors......................................................65
Section 11.11 Severability....................................................65
Section 11.12 Counterpart Originals...........................................65
Section 11.13 Table of Contents, Headings, Etc................................66
EXHIBITS
EXHIBIT A Form of Note...................................................A-1
EXHIBIT B Form of Certificate of Transfer................................B-1
EXHIBIT C Form of Certificate of Exchange................................C-1
EXHIBIT D Form of Supplemental Indenture.................................D-1
iv
<PAGE>
INDENTURE dated as of July 8, 1998 among Ocean Energy, Inc., a Delaware
corporation (the "Company"), the Subsidiary Guarantors (as defined herein) and
Norwest Bank Minnesota, National Association, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the 7 5/8 % Senior Notes
due 2005, Series A (the "Initial Notes"), and the 7 5/8 % Senior Notes due 2005,
Series B, issued in the Exchange Offer (the "Exchange Notes" and, together with
the Initial Notes, the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
amount by which the fair value of the properties and assets of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such
date.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of this definition, beneficial ownership of 10% or more of the voting
common equity (on a fully diluted basis) or options or warrants to purchase such
equity (but only if exercisable at the date of determination or within 60 days
thereof) of a Person shall be deemed to constitute control of such Person.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and CEDEL that apply to such transfer or exchange.
"Attributable Indebtedness," when used with respect to any Sale/Leaseback
Transaction, means, as at the time of determination, the present value
(discounted at a rate equivalent to the Company's current weighted average cost
of funds for borrowed money as at the time of determination, compounded on a
semiannual basis) of the total obligations of the lessee for rental
<PAGE>
payments during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended).
"Bankruptcy Code" means Title 11, U.S. Code, as amended, or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of such Board, and, with respect to any Restricted
Subsidiary, the Board of Directors of such Restricted Subsidiary or any
authorized committee of such Board.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" of any Person means and includes any and all shares,
interests, rights to purchase, warrants or options (whether or not currently
exercisable), participations or other equivalents of or interests (however
designated) in the equity (which includes, but is not limited to, common stock,
preferred stock and partnership and joint venture interests) of such Person
(excluding any debt securities that are convertible into, or exchangeable for
such equity).
"Capitalized Lease Obligation" of any Person means any obligation of such
Person to pay rent or other amounts under a lease of property, real or personal,
that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"CEDEL" means Cedel Bank, societe anonyme.
"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the
total Voting Stock of the Company; (b) the Company is merged with or into or
consolidated with another Person and, immediately after giving effect to the
merger or consolidation, (A) less than 50% of the total voting power of the
outstanding Voting Stock of the surviving or resulting Person is then
"beneficially owned" (within the meaning of Rule 13d-3 under the Exchange Act)
in the aggregate by (x) the stockholders of the Company immediately prior to
such merger or consolidation, or (y) if a record date has been set to determine
the stockholders of the Company entitled to vote with respect to such merger or
consolidation, the stockholders of the Company as of such record date and (B)
any "person" or "group" (as defined in Section 13(d)(3) or 14(d)(2) of the
Exchange Act, has become the direct or indirect "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act) of more than 50% of the total voting power
of the Voting Stock of the surviving or resulting Person; (c) 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
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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 (d) the
liquidation or dissolution of the Company.
"Common Equity" of any Person means and includes all Capital Stock of such
Person that is generally entitled to (i) if such Person is a corporation, vote
in the election of directors of such Person or (ii) if such Person is not a
corporation, vote or otherwise participate in the selection of the governing
body, partners, managers or others that will control the management and policies
of such Person.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Consolidated Net Tangible Assets" means, as of the date of determination,
Consolidated Total Assets after deducting therefrom, to the extent included
therein (with respect to clauses (i) and (ii), in each case determined on a
consolidated basis in accordance with GAAP (without duplication)): (i)
unamortized debt discount and expenses; and (ii) goodwill, patents, trademarks,
service marks, trade names, copyrights and other items properly classified as
intangible assets in accordance with GAAP; and (iii) all liabilities properly
classified as current liabilities in accordance with GAAP (except liabilities
that, by their terms, are extendible or renewable at the option of the obligor
to a date that is 12 months or more after the date on which such current
liabilities are determined).
"Consolidated Total Assets" means, as of any date, the total assets of the
Company and its Restricted Subsidiaries that would be shown as assets on a
consolidated balance sheet of the Company and its Restricted Subsidiaries as of
such date prepared in accordance with GAAP (without giving effect to any ceiling
limitation writedowns after the Issue Date).
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time that were incurred pursuant to any
foreign currency exchange agreement, option or futures contract or other similar
agreement or arrangement designed to protect against or manage such Person's or
any of its Subsidiaries' exposure to fluctuations in foreign currency exchange
rates.
"Custodian" means any receiver, trustee, assignee, liquidator, sequester or
similar official under the Bankruptcy Code.
"Default" means any event, act or condition that is, or after notice or
passage of time or both would be, an Event of Default.
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"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, in the form of
Exhibit A hereto except that such Note shall not bear the Global Note Legend and
shall not have the "Schedule of Exchanges of Interests in the Global Note"
attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"DTC" means The Depository Trust Company.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means Notes registered under the Securities Act that are
issued under Section 2.06 hereof in exchange for the Initial Notes pursuant to
the Exchange Offer.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"GAAP" means generally accepted accounting principles in the United States
as in effect on the Issue Date.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, in the form of Exhibit A hereto
issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(iv) or 2.06(f)
hereof.
"Guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of all or any
part of such obligation, including, without limiting the foregoing, the payment
of amounts drawn down by letters of credit. When used as a verb, "guarantee"
shall have a corresponding meaning.
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"Holder" means a Person in whose name a Note is registered.
"Indebtedness" of any Person at any date means, without duplication (a) all
indebtedness or obligations of such Person for borrowed money (whether or not
the recourse of the lender is to the whole of the assets of such Person or only
to a portion thereof), (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person in respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto), other than standby letters of
credit and bid or performance bonds issued by such Person in the ordinary course
of business, to the extent not drawn or, to the extent drawn, if such drawing is
reimbursed not later than thirty business days following demand for
reimbursement, (d) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, except trade payables and accrued
expenses incurred in the ordinary course of business, (e) all Capitalized Lease
Obligations of such Person, (f) all Indebtedness of others secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person, (g) all Indebtedness of others guaranteed by such Person to the extent
of such guarantee and (h) all obligations of such Person in respect of Currency
Hedge Obligations, Interest Rate Hedging Agreements and Oil and Gas Hedging
Contracts. Notwithstanding anything in this definition to the contrary,
production payment liabilities (whether recorded as liabilities or as deferred
revenue) shall not constitute Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the $125,000,000 in aggregate principal amount of the
Notes initially authenticated and delivered under this Indenture on the Issue
Date.
"Interest Rate Heading Agreements" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person or any of its
Subsidiaries against fluctuations in interest rates.
"Issue Date" means the date on which the Initial Notes are first issued
under this Indenture.
"Legal Holiday" means, a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
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"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
property or asset, whether or not filed, recorded or otherwise perfected under
applicable law, but excluding agreements to refrain from granting Liens. For
the purposes of this Indenture, a Person shall be deemed to own subject to a
Lien any property or asset that it has acquired or holds subject to the interest
of a vendor or lessor under any conditional sale agreement, Capitalized Lease
Obligation or other title retention agreement relating to such asset; provided,
however, that "Lien" shall not include a trust or similar arrangement
established for the purpose of defeasing any Indebtedness pursuant to the terms
of the instrument evidencing or providing for the issuance of such Indebtedness.
"Make-Whole Premium" means, in connection with any optional redemption of
any Note, the excess, if any, of (i) the aggregate present value as of the date
of such redemption of each dollar of principal of such Note being redeemed and
the amount of interest (exclusive of interest accrued to the date of redemption)
that would have been payable in respect of such dollar if such redemption had
not been made, determined by discounting, on a semiannual basis, such principal
and interest at a rate equal to the sum of the Treasury Yield (determined on the
Business Day immediately preceding the date of such redemption) plus 0.20% per
annum, from the respective dates on which such principal and interest would have
been payable if such redemption had not been made, over (ii) the aggregate
principal amount of such Note being redeemed.
"Non-U.S. Person" means a person who is not a U.S. Person.
"Note Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
"Obligations" means any principal, premium (if any), interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or its Restricted Subsidiaries whether or
not a claim for post-filing interest is allowed in such proceeding), penalties,
fees, charges, expenses, indemnifications, reimbursement obligations, damages,
guarantees (including the Subsidiary Guarantees) and other liabilities or
amounts payable under the documentation governing any Indebtedness or in respect
thereof.
"Ocean Louisiana" means Ocean Energy, Inc., a Louisiana corporation.
"Offering" means the offering of the Initial Notes by the Company.
"Offering Memorandum" means the Offering Memorandum of the Company dated
July 1, 1998 with respect to the Offering.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any
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Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or
any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 11.05
hereof.
"Oil and Gas Hedging Contracts" means any oil and gas purchase or hedging
agreement, and other agreement or arrangement, in each case, that is designed to
provide protection against oil and gas price fluctuations.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company or
any Subsidiary Guarantor.
"Pari Passu Indebtedness" means any Indebtedness of the Company, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall be subordinated in right of payment to the
Notes.
"Pari Passu Indebtedness of a Subsidiary Guarantor" means any Indebtedness
of such Subsidiary Guarantor, whether outstanding on the Issue Date or
thereafter created, incurred, or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall be
subordinated in right of payment to the Subsidiary Guarantees.
"Participant" means, with respect to DTC, Euroclear or CEDEL, a Person who
has an account with DTC, Euroclear or CEDEL, respectively (and, with respect to
DTC, shall include Euroclear and CEDEL).
"Participating Broker-Dealer" has the meaning set forth in the Registration
Rights Agreement.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint stock
company, trust, unincorporated organization or government or other agency or
political subdivision thereof or other entity of any kind.
"Principal Property" means (i) any property owned or leased by the Company
or any Restricted Subsidiary and located within the United States of America,
any State thereof (including property located off the coast of the United States
of America held pursuant to lease from any United
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States Federal, State or other governmental body) or Canada that is considered
by the Company to be capable of producing oil, gas or other minerals in
commercial quantities, (ii) any refinery, smelter or processing or manufacturing
plant owned or leased by the Company or any Restricted Subsidiary and located
within the United States of America, any State thereof, or Canada, except (A)
facilities related thereto employed in transportation, distribution or
marketing, and (B) any refinery, smelter or processing or manufacturing plant,
or portion thereof, that the Board of Directors determines is not material to
the business of the Company and its Restricted Subsidiaries taken as a whole,
and (iii) any Capital Stock or Indebtedness issued by a Restricted Subsidiary
that owns or leases property of the types described in clauses (i) and (ii) of
this definition.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
hereof to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Project Finance Debt" means Indebtedness of an Unrestricted Subsidiary (i)
as to which neither the Company nor any Restricted Subsidiary of the Company is
directly or indirectly liable (by virtue of the Company's or such Restricted
Subsidiary's being the primary obligor, or guarantor of (by way of guarantee,
statute, common law or otherwise), or otherwise contractually liable in any
respect on, such Indebtedness) and (ii) that is not secured by any assets of the
Company or of any of its Restricted Subsidiaries.
"Purchase Agreement" means the Purchase Agreement dated July 1, 1998 among
the Company, Ocean Louisiana and the Initial Purchasers (as defined therein.)
"QIB" means a "qualified institution buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of July 8, 1998, by and among the Company, Ocean Louisiana and the
other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time.
"Regulation S " means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a permanent global Note in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee.
"Responsible Officer," when used with respect to the Trustee, means any
officer, including, without limitation, any vice president, assistant vice
president, assistant treasurer or secretary within the Corporate Trust
Administration of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to particular corporate trust matter, any
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other officer or employee to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Period" means the 40-day distribution compliance period as set
forth in Regulation S.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the Issue Date, other than an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means the Global Note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Notes sold in reliance on Rule 144A.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Sale/Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Company or any of its Restricted Subsidiaries
for a period of more than three years of any Principal Property, which property
has been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person in contemplation of such leasing.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary the consolidated
assets of which comprise in excess of 5% of Consolidated Net Tangible Assets (as
shown in the most recent audited consolidated balance sheet of the Company and
its Subsidiaries).
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"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and, when used with respect to any other Indebtedness or any
installment of interest thereon, means the date specified in the instrument
evidencing or governing such Indebtedness as the fixed date on which the
principal of such Indebtedness or such installment of interest is due and
payable.
"Subordinated Indebtedness of a Subsidiary Guarantor" means any
Indebtedness of such Subsidiary Guarantor, whether outstanding on the Issue Date
or thereafter created, incurred, or assumed, if the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall be subordinated in right of payment to the
Subsidiary Guarantees.
"Subsidiary" means, as to any Person, any corporation, association or other
business entity, in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries own more than 50% of the total
combined voting power of all Common Equity, and any partnership or joint venture
if more than a 50% interest in the profits or capital thereof is owned by such
Person or one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Restricted Subsidiaries).
"Subsidiary Guarantee" means any Guarantee of the Notes by any Subsidiary
Guarantor pursuant to Article 10 hereof or pursuant to the execution and
delivery of a supplemental indenture substantially in the form of Exhibit D
hereto.
"Subsidiary Guarantor" means (i) Ocean Louisiana and (ii) each of the
Company's Restricted Subsidiaries that becomes a guarantor of the Notes pursuant
to Article 10.01 hereof and executes a supplemental indenture in which such
Restricted Subsidiary agrees to be bound by the terms of this Indenture, in each
case until such time as the Subsidiary Guarantee of such Person is released in
accordance with the provisions of Article 10 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Treasury Yield" means, in connection with the calculation of any Make-
Whole Premium on any Note, the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled by and
published in the most recent Federal Reserve Statistical Release H.15 (519) that
has become publicly available at least two business days prior to the date fixed
for redemption (or, if such Statistical Release is no longer published, any
publicly available source of similar data)) equal to the then remaining maturity
of such Note; provided that if no United States Treasury security is available
with such a constant maturity and for which a closing yield is given, the
Treasury Yield shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the closing yields of United States Treasury
securities for which such yields
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are given, except that if the remaining maturity of such Note is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note in the form of
Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing Notes that do not bear the Private Placement Legend.
"Unrestricted Subsidiary" means (i) Havre Pipeline Company, LLC and Lion
GPL, S.A., (ii) any Subsidiary acquired or organized after the Issue Date that
is designated as an Unrestricted Subsidiary for purposes of this Indenture by a
resolution of the Board of Directors of the Company in accordance with the
requirements of this paragraph, and (iii) any Subsidiary of an Unrestricted
Subsidiary, in each case until such time as such Subsidiary is designated as a
Restricted Subsidiary for purposes of this Indenture by a resolution of the
Board of Directors of the Company in accordance with the requirements of this
paragraph. The Company may designate any Subsidiary that satisfies the
requirements of this paragraph to be an Unrestricted Subsidiary by a resolution
of the Board of Directors of the Company if after giving effect to such
designation (a) such Subsidiary does not own or hold any Capital Stock of, or
any Lien on any property of, the Company or any Restricted Subsidiary and (b)
such Subsidiary is not liable, directly or indirectly, with respect to any
Indebtedness other than Project Finance Debt. The Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary by a resolution of the
Board of Directors of the Company if immediately after giving effect to such
designation, no Default or Event of Default has occurred and is continuing.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
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SECTION 1.02 Other Definitions.
DEFINED
TERM IN
SECTION
"Change of Control Notice"................. 4.06
"Change of Control Offer".................. 4.06
"Change of Control Purchase Date".......... 4.06
"Change of Control Purchase Price"......... 4.06
"Covenant Defeasance"...................... 8.03
"Event of Default"......................... 6.01
"Funding Guarantor"........................ 10.05
"Legal Defeasance"......................... 8.02
"Paying Agent"............................. 2.03
"Registrar"................................ 2.03
"U.S. Government Obligations".............. 8.04
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Company and any successor obligor upon the
Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time.
ARTICLE II
THE NOTES
SECTION 2.01 Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof. The Notes may bear
notations of Subsidiary Guarantees.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
Notes issued in global form shall be substantially in the form of Exhibit A
attached hereto, including the Global Note Legend and the "Schedule of Exchanges
in the Global Note" attached thereto. Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto, but without the Global
Note Legend and without the "Schedule of Exchanges of Interests in the Global
Note" attached thereto. Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee, the Depositary or the Note Custodian, at the
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direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
Notes offered and sold in reliance on Regulation S will initially be
represented by one or more Regulation S Global Notes which will be registered in
the name of Cede & Co., as nominee of DTC, and deposited on behalf of the
purchasers of the Notes represented thereby with a custodian for DTC for credit
to the respective accounts of the purchasers (or to such other accounts as they
may direct) at Euroclear or CEDEL Bank. Prior to the 40th day after the later
of the commencement of the Offering and the Issue Date, interests in Regulation
S Global Notes may only be held through Euroclear or CEDEL. The aggregate
principal amount of the Regulation S Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of CEDEL shall be applicable
to transfers of beneficial interests in the Regulation S Global Notes that are
held by members of, or Participants, in DTC through Euroclear or CEDEL.
SECTION 2.02 Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Notes for original issue on the Issue Date up to
$125,000,000 aggregate principal amount of the Notes. The aggregate principal
amount of Notes outstanding at any time may not exceed $125,000,000 except as
provided in Section 2.07 hereof. Each Note shall be dated the date of its
authentication.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with Holders or an Affiliate of the Company.
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SECTION 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency within the City and State of
New York where Notes may be presented for registration of transfer or for
exchange ("Registrar") and an office or agency where Notes may be presented for
payment ("Paying Agent"). The Registrar shall keep a register of the Notes and
of their transfer and exchange. The Company may appoint one or more co-
registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall promptly notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may act as Paying Agent or Registrar.
The Company initially appoints DTC to act as Depositary with respect to the
Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal
or premium, if any, or interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) shall have no further liability for
the money. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
SECTION 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall provide to a Responsible Officer of the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Company shall otherwise comply with TIA
(S) 312(a).
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SECTION 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary for the Global Notes or that it is no
longer a clearing agency registered under the Exchange Act and, in either case,
a successor Depositary is not appointed by the Company within 90 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion notifies the Trustee in writing that it elects to cause issuance of
the Notes in certificated form; provided that in no event shall the Regulation S
Global Note be exchanged by the Company for Definitive Notes prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the Securities Act. Upon the
occurrence of either of the preceding events in (i) or (ii) above, Definitive
Notes shall be issued in such names as the Depositary shall instruct the
Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.07 and 2.11 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to Section 2.07 or 2.11 hereof, shall be authenticated and delivered in
the form of, and shall be, a Global Note. A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs as applicable:
(i) Transfer of Beneficial Interests in the Same Global
Note. Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial interest
in the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period transfers of
beneficial interests in a Regulation S Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Beneficial interests in any Unrestricted Global Note
may be transferred only to Persons who take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note. No written orders or
instructions
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shall be required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and exchanges
of beneficial interests (other than a transfer of a beneficial interest in
a Global Note to a Person who takes delivery thereof in the form of a
beneficial interest in the same Global Note), the transferor of such
beneficial interest must deliver to the Registrar (A) (1) a written order
from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant
or an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above; provided that in no event shall Definitive Notes
be issued upon the transfer or exchange of beneficial interests in a
Regulation S Global Note prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903 under the Securities Act. Upon an Exchange Offer by
the Company in accordance with Section 2.06(f) hereof, the requirements of
this Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes contained in
this Indenture, the Notes and otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of clause (ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of
a beneficial interest in the Rule 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in Item (1) thereof; or
(B) if the transferee will take delivery in the form of
the Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in Item (2) thereof.
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(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted Global
Note. A beneficial interest in any Restricted Global Note may be exchanged
by any Holder thereof for a beneficial interest in an Unrestricted Global
Note or transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of clause (ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder of the beneficial interest to be transferred,
in the case of an exchange, or the transferee, in the case of a
transfer, is not (1) a broker-dealer, (2) a Person participating in
the distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a beneficial interest in an Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in Item (1)(a) thereof;
(2) if the Holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit B hereto, including the
certifications in Item (4) thereof; and
(3) in each such case set forth in this subparagraph
(D), an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are not
required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or
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more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraph
(B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in Item (2)(a) thereof;
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in Item (1) thereof;
(C) if such beneficial interest is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in Item
(2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in Item (3)(a) thereof;
(E) if such beneficial interest is being transferred
pursuant to any other exemption from the registration requirements of
the Securities Act, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by Item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in Item
(3)(b) thereof; or
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(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in Item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)
shall be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall make available for delivery such
Definitive Notes to the Persons in whose names such Notes are so registered.
Any Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein.
(ii) Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Global Note may not be (A)
exchanged for a Definitive Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(c)(3)(B) under the Securities Act or (B)
transferred to a Person who takes delivery thereof in the form of a
Definitive Note prior to the conditions set forth in clause (A) above or
unless the transfer is pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Notwithstanding 2.06(c)(i) hereof, a holder of a
beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer
such beneficial interest to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the case of
an exchange, or the transferee, in the case of a transfer, is not (1)
a broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
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(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit C hereto,
including the certifications in Item (1)(b) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in Item (4) thereof; and
(3) in each such case set forth in this subparagraph
(D), an Opinion of Counsel in form reasonably acceptable to the
Company, to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are not required
in order to maintain compliance with the Securities Act.
(iv) If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for
a Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the
Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and make available
for delivery to the Person designated in the instructions a Definitive Note
in the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall make available for delivery such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iv) shall not bear the Private
Placement Legend. A beneficial interest in an Unrestricted Global Note
cannot be exchanged for a Definitive Note bearing the Private Placement
Legend or transferred to a Person who takes delivery thereof in the form of
a Definitive Note bearing the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) If any Holder of a Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global Note
or to transfer such Definitive
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Notes to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the Registrar
of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in Item (2)(b) thereof;
(B) if such Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in Item (1) thereof;
(C) if such Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in Item (2)
thereof;
(D) if such Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in Item (3)(a) thereof;
(E) if such Definitive Note is being transferred to the
Company or any of its subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in Item (3)(b)
thereof; or
(F) if such Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in Item (3)(c) thereof,
the Trustee shall cancel the Definitive Note, increase or cause to be increased
the aggregate principal amount of, in the case of subparagraph (A) above, the
appropriate Restricted Global Note and, in the case of subparagraph (B) above,
the 144A Global Note, and, in the case of subparagraph (C) above, the Regulation
S Global Note.
(ii) A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, is not (1) a broker-
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dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes
to exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in Item (1)(c) thereof;
(2) if the Holder of such Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery thereof in
the form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in Item (4) thereof; and
(3) in each such case set forth in this subparagraph
(D), an Opinion of Counsel in form reasonably acceptable to the
Company to the effect that such exchange or transfer is in compliance
with the Securities Act, that the restrictions on transfer contained
herein and in the Private Placement Legend are not required in order
to maintain compliance with the Securities Act, and such Definitive
Notes are being exchanged or transferred in compliance with any
applicable blue sky securities laws of any State of the United States.
Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause
to be increased the aggregate principal amount of the Unrestricted Global Note.
(iii) A Holder of an Unrestricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
(iv) If any such exchange or transfer from a Definitive Note
to a beneficial interest is effected pursuant to subparagraphs (ii)(B),
(ii)(D) or (iii) above at a time when an
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Unrestricted Global Note has not yet been issued, the Company shall issue
and, upon receipt of an authentication order in accordance with Section
2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global
Notes in an aggregate principal amount equal to the principal amount of
beneficial interests transferred pursuant to subparagraphs (ii)(B), (ii)(D)
or (iii) above.
(e) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Definitive Notes may be transferred to and
registered in the name of Persons who take delivery thereof if the
Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in Item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904 of the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in Item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications, certificates and Opinion of
Counsel required by Item (3) thereof, if applicable.
(ii) Any Restricted Definitive Note may be exchanged by the
Holder thereof for an Unrestricted Definitive Note or transferred to a
Person or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, is not (1) a broker-dealer, (2)
a Person participating in the distribution of the Exchange Notes or
(3) a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
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(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in Item (1)(b) thereof;
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in Item (4) thereof; and
(3) in each such case set forth in this subparagraph
(D), an Opinion of Counsel in form reasonably acceptable to the
Company to the effect that such exchange or transfer is in compliance
with the Securities Act, that the restrictions on transfer contained
herein and in the Private Placement Legend are not required in order
to maintain compliance with the Securities Act, and such Restricted
Definitive Note is being exchanged or transferred in compliance with
any applicable blue sky securities laws of any State of the United
States.
(iii) A Holder of Unrestricted Definitive Notes may transfer
such Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request for such a
transfer, the Registrar shall register the Unrestricted Definitive Notes
pursuant to the instructions from the Holder thereof. Unrestricted
Definitive Notes cannot be exchanged for or transferred to Persons who take
delivery thereof in the form of a Restricted Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of (A) an authentication order in accordance with Section 2.02
hereof and (B) an Opinion of Counsel opining as to the enforceability of the
Exchange Notes and the Guarantees thereof, the Trustee shall authenticate (i)
one or more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by persons that are not (x) broker-dealers, (y) Persons
participating in the distribution of the Exchange Notes or (z) Persons who are
affiliates (as defined in Rule 144) of the Company and accepted for exchange in
the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer. Concurrent with the issuance of such Notes, the
Trustee shall cause the aggregate principal amount of the applicable Restricted
Global Notes to be reduced accordingly, and
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the Company shall execute and the Trustee shall authenticate and make available
for delivery to the Persons designated by the Holders of Definitive Notes so
accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
HEREOF AGREES (1) NOT TO OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO (X) THE DATE THAT IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS
SECURITY) AND THE LAST DAY ON WHICH OCEAN ENERGY, INC. (THE "COMPANY") OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE
LAWS (THE "RESALE RESTRICTION TERMINATION DATE"), EXCEPT (A) TO THE COMPANY, (B)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT IS ACQUIRING SUCH SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (2) THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE, THE TRANSFER
AGENT AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY
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SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFER TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR THE
BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A OR (2) A NON-U.S. PERSON AND IS ACQUIRING THE NOTE IN AN
"OFFSHORE TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraph (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section
2.06 (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO ARTICLE 2 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III)
THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on
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such Global Note, by the Trustee, the Note Custodian or the Depositary at the
direction of the Trustee, to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note, by the Trustee, the Note Custodian or by the
Depositary at the direction of the Trustee, to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note
for any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer or exchange of any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global Notes
or Definitive Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange Notes during a period beginning at
the opening of business 15 days before the day of any selection of Notes
for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part or (C) to
register the transfer of or to exchange a Note between a record date and
the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and
treat the Person in whose name any Note is registered as the absolute owner
of such Note for the purpose of receiving payment of principal of and
interest on such Notes and for all other purposes, and none of the Trustee,
any Agent or the Company shall be affected by notice to the contrary.
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(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this Section
2.06 to effect a transfer or exchange may be submitted by facsimile.
SECTION 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon the written order of
the Company signed by two Officers of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
SECTION 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated and
delivered by the Trustee except for those canceled by it, those delivered to it
for cancellation, those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
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SECTION 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee actually knows are so owned
shall be so disregarded.
SECTION 2.10 Temporary Notes.
Until Definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate Definitive Notes in exchange for
temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
SECTION 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall return such
canceled Notes to the Company. The Company may not issue new Notes to replace
Notes that it has paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall promptly notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
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SECTION 2.13 CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if then generally
in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE III
REDEMPTION AND PREPAYMENT
SECTION 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.05 hereof, it shall furnish to the Trustee, at least 30
days but not more than 60 days before such redemption date, an Officers'
Certificate setting forth the matters described in Section 3.02 hereof.
SECTION 3.02 Notice of Redemption.
Not less than 30 and not more than 60 days before such redemption date, the
Company shall mail or cause to be mailed, by first class mail, postage prepaid,
a notice of redemption to each Holder whose Notes are to be redeemed at its
registered address.
The notice shall identify the Notes (including CUSIP numbers) to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(e) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
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(f) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(g) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the name and at the expense of the Company; provided, however, that the
Company shall have delivered to the Trustee, at least 40 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.03 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.02 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price.
SECTION 3.04 Deposit of Redemption Price.
No later than 10:00 a.m. New York City time on the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption price of and accrued interest on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes
called for redemption. If a Note is redeemed on or after an interest record
date but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Note was
registered at the close of business on such record date. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
SECTION 3.05 Optional Redemption.
(a) The Notes will be subject to redemption at any time at the
option of the Company, in whole but not in part, at a redemption price equal to
the sum of (a) an amount equal to 100% of the principal amount thereof and (b)
the Make-Whole Premium, together with accrued
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and unpaid interest to the date fixed for redemption. In no event will such
redemption price ever be less than 100% of the principal amount of the Notes
plus accrued interest to the date of redemption.
(b) Any redemption pursuant to this Section 3.05 shall be made
pursuant to the provisions of Sections 3.01 through 3.04 hereof.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders of Notes
that it will duly and punctually pay the principal of (and premium, if any, on)
and interest on the Notes in accordance with the terms of the Notes and this
Indenture.
SECTION 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the Notes,
the Subsidiary Guarantees and this Indenture may be served. The office of the
Trustee, maintained on behalf of the Trustee by DTC and located at 55 Water
Street, New York, NY 10041, shall be such office or agency of the Company,
unless the Company shall designate and maintain some other office or agency for
one or more of such purposes. The Company will give prompt written notice to
the Trustee of any change in the location of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
aforementioned office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind any such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in the Borough of Manhattan, The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or recission and any change in the location of any such other office
or agency.
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SECTION 4.0 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company and within 45 days after the end of
each of the first, second and third quarters of each fiscal year of the Company,
an Officers' Certificate stating that a review of the activities of the Company
and its Restricted Subsidiaries during the preceding fiscal quarter or fiscal
year, as applicable, has been made under the supervision of the signing Officers
with a view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of such Officer's
knowledge the Company has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which such Officer may have knowledge and what action the
Company is taking or proposes to take with respect thereto). Such Officers'
Certificate shall comply with TIA Section 314(a)(4). For purposes of this
Section 4.03(a), such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
(b) The Company and the Subsidiary Guarantors shall, so long as
any of the Notes are outstanding, deliver to the Trustee, within 10 days of any
Default or Event of Default or default in the performance of any covenant,
agreement or condition contained in this Indenture, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
SECTION 4.0 Liens.
(a) The Company will not, and will not permit any Restricted
Subsidiary of the Company to, issue, assume or guarantee any Indebtedness for
borrowed money secured by any Lien on any Principal Property now owned or
hereafter acquired by the Company or such Restricted Subsidiary without making
effective provision whereby any and all Notes then or thereafter outstanding
will be secured by a Lien equally and ratably with any and all other obligations
thereby secured for so long as any such obligations shall be so secured. The
foregoing restriction will not, however, apply to the Company and its Restricted
Subsidiaries with respect to:
(i) Liens existing on the Issue Date or provided for
pursuant to agreements (and terms thereof) existing on the Issue Date
securing Indebtedness (A) existing on the Issue Date or (B) to be incurred
under agreements existing on the Issue Date;
(ii) Liens on property (and all improvements, additions and
accessions thereto and all proceeds thereof) securing (A) all or any
portion of the cost of exploration, drilling, development, operation or
maintenance of such property or the cost of acquiring, constructing,
altering, improving or repairing such property or improvements used or to
be used in connection with such property (including the cost of financing
such actions) or
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(B) Indebtedness incurred by the Company or any Restricted Subsidiary to
provide funds for the activities set forth in clause (A) above;
(iii) Liens securing Indebtedness owed by a Restricted
Subsidiary to the Company or to any other Restricted Subsidiary or by the
Company to any Restricted Subsidiary that is a Subsidiary Guarantor;
(iv) Liens on the property of any Person existing at the
time such Person becomes a Restricted Subsidiary and not incurred as a
result of (or in connection with or in anticipation of) such Person
becoming a Restricted Subsidiary, provided that such Liens do not extend to
or cover any property of the Company or any of its Restricted Subsidiaries
other than the property encumbered at the time such Person becomes a
Restricted Subsidiary, all improvements, additions and accessions thereto
and all proceeds thereof;
(v) Liens affecting property existing at the time it
becomes property of the Company or a Restricted Subsidiary, all
improvements, additions and accessions thereto and all proceeds thereof;
(vi) Liens on any property securing (A) Indebtedness
incurred in connection with the construction, installation or financing of
pollution control or abatement facilities or other forms of industrial
revenue bond financing or (B) Indebtedness issued or guaranteed by the
United States or any State thereof or any department, agency or
instrumentality of either;
(vii) Any Lien extending, renewing or replacing (or
successive extensions, renewals or replacements of) any Lien of any type
permitted under clauses (i) through (vi) above, provided that such Lien
extends to or covers only the property that is subject to the Lien being
extended, renewed or replaced and that the principal amount of Indebtedness
secured thereby shall not exceed the sum of (A) the principal amount of
Indebtedness so secured at the time of such extension, renewal or
replacement, (B) any additional Indebtedness incurred to pay the cost of
altering, improving or repairing such property and (C) any expenses of the
Company and its Restricted Subsidiaries (including any premium) incurred in
connection with any such extension, renewal or replacement; and
(viii) Other Liens (exclusive of any Lien of any type
otherwise permitted under clauses (i) through (vii) above or paragraph (b)
below) securing Indebtedness for borrowed money of the Company or any of
its Restricted Subsidiaries in an aggregate principal amount that, together
with the aggregate amount of Attributable Indebtedness deemed to be
outstanding in respect of all Sale/Leaseback Transactions entered into
pursuant to Section 4.05(a) hereof (exclusive of any such Sale/Leaseback
Transactions otherwise permitted under clauses (i) through (vii) above of
this Section 4.04(a) or Section 4.04 (b) below), does not at the time such
Indebtedness is incurred exceed 15% of Consolidated Net
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Tangible Assets (as shown in the most recent audited consolidated balance
sheet of the Company and its Restricted Subsidiaries).
(b) The following types of transactions will not be prohibited or
otherwise limited by the foregoing covenant: (i) the sale, granting of Liens
with respect to, or other transfer of, oil, gas or other minerals in place for a
period of time until, or in an amount such that, the transferee will realize
therefrom a specified amount (however determined) of money or of such oil, gas
or other minerals; (ii) the sale or other transfer of any other interest in
property of the character commonly referred to as a production payment,
overriding royalty, forward sale or similar interest; (iii) the entering into of
Currency Hedge Obligations, Interest Rate Hedging Agreements or Oil and Gas
Hedging Contracts but Liens securing any Indebtedness for borrowed money that is
related to any Interest Rate Hedging Agreement shall not be permitted hereby
unless otherwise permitted under this Section 4.04; and (iv) the granting of
Liens in favor of the United States, any State thereof or any foreign government
or any subdivision, department, agency, organization or instrumentality of any
of the foregoing to secure partial, progress, advance or other payments or other
obligations pursuant to the provisions of any contract or statute, or in favor
of any other Person to secure obligations in connection with any letters of
credit, bank guarantees, bonds or surety obligations required or requested by
any such governmental authority in connection with any contract or statute.
SECTION 4.0 Sale/Leaseback Transactions.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any Sale/Leaseback Transaction with any Person (other than the
Company or a Restricted Subsidiary) unless either:
(a) the Company or such Restricted Subsidiary would be entitled to
incur Indebtedness, in a principal amount equal to the Attributable Indebtedness
with respect to such Sale/Leaseback Transaction, secured by a Lien on the
property subject to such Sale/Leaseback Transaction pursuant to Section 4.04
hereof without equally and ratably securing the Notes pursuant to such Section
4.04; or
(b) such Sale/Leaseback Transaction occurs within 180 days from
the date of acquisition of such Principal Property or the date of the completion
of construction or commencement of full operations of such Principal Property,
whichever is later; or
(c) after the Issue Date and within a period commencing six months
prior to the consummation of such Sale/Leaseback Transaction and ending six
months after the consummation thereof, the Company or a Restricted Subsidiary
shall have expended for property used or to be used in the business of the
Company and its Restricted Subsidiaries an amount equal to all or a portion of
the net proceeds from such Sale/Leaseback Transaction and the Company shall have
elected to designate such amount as a credit against such Sale/Leaseback
Transaction (with any such amount not being so expended and so designated to be
applied as set forth in Section 4.05(d) below); or
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(d) the Company or a Restricted Subsidiary, during the 12-month
period after the effective date of such Sale/Leaseback Transaction, shall have
applied to the voluntary repayment, repurchase, redemption, defeasance or other
acquisition or retirement ("retirement") of Notes, any Pari Passu Indebtedness,
any Pari Passu Indebtedness of a Subsidiary Guarantor or any Indebtedness of a
Restricted Subsidiary that is not a Subsidiary Guarantor ("Retired
Indebtedness") an amount equal to the greater of (i) the net proceeds of the
sale or transfer of the property leased in such Sale/Leaseback Transaction and
(ii) the fair value, as determined by the Board of Directors of the Company, of
such property at the time of entering into such Sale/Leaseback Transaction (in
either case reduced to reflect the remaining term of the lease and any amount
expended by the Company or a Restricted Subsidiary as set forth in Section
4.05(c) above), less an amount equal to the principal amount of such Retired
Indebtedness voluntarily retired within such 12-month period and not designated
as a credit against any other Sale/Leaseback Transaction entered into by the
Company or any Restricted Subsidiary during such period.
SECTION 4.06 Purchase of Notes Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall
be obligated to make an offer to purchase all of the then outstanding Notes (a
"Change of Control Offer"), and shall purchase, on a business day (the "Change
of Control Purchase Date") not more than 70 nor less than 30 days following the
Change of Control, all of the then outstanding Notes validly tendered pursuant
to such Change of Control Offer, at a purchase price (the "Change of Control
Purchase Price") equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the Change of Control Purchase Date.
(b) The Change of Control Offer is required to remain open for at
least 20 Business Days and until the close of business on the Change of Control
Purchase Date. The Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer at the same purchase price, at the same times and otherwise in substantial
compliance with the requirements applicable to a Change of Control Offer made by
the Company and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer.
(c) Not later than the 30th day following any Change of Control,
the Company shall give to the Trustee and each Holder of the Notes, in the
manner provided in Section 11.02, a notice (the "Change of Control Notice")
stating:
(1) that a Change in Control has occurred and that
such Holder has the right to require the Company to repurchase such
Holder's Notes, or portion thereof, at the Change of Control Purchase
Price;
(2) any information regarding such Change of Control
required to be furnished pursuant to Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder;
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(3) the Change of Control Purchase Date which shall
be on a Business Day and no earlier than 30 days nor later than 70
days from the date the Change of Control occurred;
(4) that any Note, or portion thereof, not tendered
or accepted for payment will continue to accrue interest;
(5) that unless the Company defaults in depositing
money with the Paying Agent in accordance with the last paragraph of
clause (d) of this Section 4.06, or payment is otherwise prevented,
any Note, or portion thereof, accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the
Change of Control Purchase Date; and
(6) the instructions a Holder must follow in order
to have its Notes repurchased in accordance with paragraph (d) of this
Section.
(d) Holders electing to have Notes purchased will be required to
surrender such Notes to the Company at the address specified in the Change of
Control Notice at least five Business Days prior to the Change of Control
Purchase Date. Holders will be entitled to withdraw their election if the
Company receives, not later than three Business Days prior to the Change of
Control Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the certificate number(s) and principal
amount of the Notes delivered for purchase by the Holder as to which his
election is to be withdrawn and a statement that such Holder is withdrawing his
election to have such Notes purchased. Holders whose Notes are purchased only in
part will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
On the Change of Control Purchase Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to a Change of
Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so tendered, and (iii) deliver
or cause to be delivered to the Trustee the Notes so accepted. The Paying Agent
shall promptly mail or deliver to Holders of the Notes so tendered payment in an
amount equal to the purchase price for the Notes, and the Company will promptly
execute and the Trustee will promptly authenticate and mail or make available
for delivery to such Holders a new Note equal in principal amount to any
unpurchased portion of the Note which any such Holder did not surrender for
purchase. The Company shall announce the results of a Change of Control Offer on
or as soon as practicable after the Change of Control Purchase Date. For
purposes of this Section 4.06, the Trustee will act as the Paying Agent.
(e) The Company shall comply with Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable, in the event that a Change of Control
occurs and the Company is required to purchase Notes as described above.
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SECTION 4.07 Additional Subsidiary Guarantors.
(a) The Company shall not permit any Restricted Subsidiary that is
not a Subsidiary Guarantor to guarantee the payment of any Indebtedness of the
Company unless (i) (A) such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to this Indenture substantially in the form of
Exhibit D hereto, providing for a Subsidiary Guarantee of the Notes by such
Restricted Subsidiary and (B) with respect to any guarantee of subordinated
indebtedness by a Restricted Subsidiary, any such guarantee shall be
subordinated to such Restricted Subsidiary's Subsidiary Guarantee; (ii except to
the extent contemplated by Section 10.05 hereof, such Restricted Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Restricted Subsidiary as a result of any
payment by such Restricted Subsidiary under its Subsidiary Guarantee until such
time as the obligations guaranteed thereby are paid in full; and (ii such
Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the
effect that such Subsidiary Guarantee has been duly executed and authorized and
constitutes a valid, binding and enforceable obligation of such Restricted
Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy,
insolvency or similar laws (including, without limitation, all laws relating to
fraudulent transfers) and except insofar as enforcement thereof is subject to
general principles of equity; provided that this paragraph (a) shall not be
applicable to any guarantee of any Restricted Subsidiary that (x) existed at the
time such Person became a Restricted Subsidiary of the Company and (y) was not
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary of the Company.
(b) The Company may from time to time, at its option, nominate any
Restricted Subsidiary as an additional Subsidiary Guarantor. Any such Restricted
Subsidiary shall execute and deliver a supplemental indenture to this Indenture
agreeing to guarantee the Notes. At the election of the Company, such Subsidiary
Guarantee may contain such release provisions as the Company may deem
appropriate (including, without limitation, release provisions of the type in
paragraph (c) below).
(c) Notwithstanding the foregoing paragraph (a) and the other
provisions of this Indenture, any Subsidiary Guarantee incurred by a Restricted
Subsidiary pursuant to this Section 4.07 may, at the election of the Company,
provide by its terms that it shall be automatically and unconditionally released
and discharged upon (i) any sale or other disposition of all of the Company's
Capital Stock in, or all or substantially all the assets of, such Restricted
Subsidiary (ii the merger of such Restricted Subsidiary into the Company or any
other Restricted Subsidiary (provided the surviving Restricted Subsidiary
assumes the Subsidiary Guarantee) or the liquidation and dissolution of such
Restricted Subsidiary; or (ii the release or discharge of the guarantee which
resulted in the creation of such Subsidiary Guarantee, except a discharge or
release by or as a result of payment under such guarantee.
(d) Unless specified to the contrary in a supplemental indenture
hereto, any Subsidiary Guarantee incurred by a Restricted Subsidiary pursuant to
this Section 4.07 shall be
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deemed to provide for the release and discharge thereof as contemplated by
Sections 4.07(c) and 10.04 hereof.
ARTICLE V
SUCCESSORS
SECTION 5.01 Consolidation, Merger and Sale of Assets.
The Company will not (A) consolidate with or merge with any Person, or (B)
sell, lease, convey, transfer or otherwise dispose of all or substantially all
of its assets (each an "asset disposition") to any Person, unless: (i) either
(a) in the case of any such consolidation or merger, the Company is the
continuing Person or (b) the Person formed by or surviving such consolidation or
merger (if other than the Company), or to which such asset disposition shall be
made (collectively, the "Successor"), is organized and existing under the laws
of the United States, any political subdivision thereof or any State thereof or
the District of Columbia, and assumes by supplemental indenture all the
obligations of the Company under this Indenture and the Notes; and (ii)
immediately after giving effect to such transaction, no Default or Event of
Default has occurred and is continuing.
SECTION 5.02 Successor Substituted.
Upon any consolidation, merger or the Company asset disposition in
accordance with Section 5.01 hereof, the Successor shall be substituted for the
Company (so that from and after the date of such consolidation, merger or asset
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the Successor and not to the Company), and may exercise every
right and power of the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and, in the case of
an asset disposition, the Company will thereafter be relieved of all obligations
and covenants under this Indenture and the Notes.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
An "Event of Default" occurs if:
(a) default in the payment of the principal of or premium, if any,
on any of the Notes, whether such payment is due at maturity, upon redemption,
upon repurchase pursuant to a Change of Control Offer, upon acceleration or
otherwise; or
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(b) default in the payment of any installment of interest on any
of the Notes, when it becomes due and payable, and the continuance of such
default for a period of 30 days; or
(c) the failure to make or consummate a Change of Control Offer in
accordance with the provisions of Section 4.06 hereof; or
(d) the Company or any Subsidiary Guarantor shall fail to perform
or observe any other term, covenant or agreement contained in the Notes, any
Subsidiary Guarantee or this Indenture (other than a default specified in (a),
(b) or (c) above) for a period of 60 days after written notice of such failure
requiring the Company to remedy the same shall have been given (i) to the
Company by the Trustee or (ii) to the Company and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Notes then outstanding; or
(e) the occurrence and continuation beyond any applicable grace
period of any default in the payment of the principal of (or premium, if any,
on) or interest on any Indebtedness of the Company or any Restricted Subsidiary
for money borrowed (other than the Notes and the Subsidiary Guarantees) when
due, or any other default causing acceleration of any Indebtedness of the
Company or any Restricted Subsidiary for money borrowed, provided that the
aggregate principal amount of such Indebtedness shall exceed the greater of (i)
$20 million and (ii) 5% of Consolidated Net Tangible Assets (as shown in the
most recent audited balance sheet of the Company and its Subsidiaries); provided
further that any such default is not cured or waived or any such acceleration is
not rescinded, or such debt is not repaid, within a period of 20 days after a
written notice thereof to the Company as provided in Section 11.02 of this
Indenture; or
(f) any Subsidiary Guarantee shall for any reason cease to be, or
be asserted by the Company or any Subsidiary Guarantor, as applicable, not to
be, in full force and effect, enforceable in accordance with its terms (except
pursuant to the release of any such Subsidiary Guarantee in accordance with this
Indenture); or
(g) final judgments or orders rendered against the Company or any
Restricted Subsidiary that are unsatisfied and that require the payment in
money, either individually or in an aggregate amount, that exceed the coverage
under applicable insurance policies by the greater of (i) $20 million and (ii)
5% of Consolidated Net Tangible Assets (as shown in the most recent audited
balance sheet of the Company and its Subsidiaries), and either (x) commencement
by any creditor of an enforcement proceeding upon such judgment (other than a
judgment that is stayed by reason of pending appeal or otherwise) or (y) the
occurrence of a 60-day period during which a stay of such judgment or order, by
reason of pending appeal or otherwise, was not in effect; or
(h) the entry of a decree or order by a court having jurisdiction
in the premises (i) for relief in respect of the Company, any Subsidiary
Guarantor or any Significant Subsidiary in an involuntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or (ii) adjudging the Company, any Subsidiary Guarantor or any
Significant Subsidiary bankrupt or insolvent, or approving a petition seeking
reorganization,
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arrangement, adjustment or composition of the Company, any Subsidiary Guarantor
or any Significant Subsidiary under any applicable federal or state law, or
appointing under any such law a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company, any Subsidiary
Guarantor or any Significant Subsidiary or of a substantial part of their
consolidated assets, or ordering the winding up or liquidation of their affairs,
and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive days; or
(i) the commencement by the Company, any Subsidiary Guarantor or
any Significant Subsidiary of a voluntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or any other case or proceeding to be adjudicated bankrupt or
insolvent, or the consent by the Company, any Subsidiary Guarantor or any
Significant Subsidiary to the entry of a decree or order for relief in respect
thereof in an involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or
the filing by the Company, any Subsidiary Guarantor or any Significant
Subsidiary of a petition or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by it under any such law to the
filing of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or other
similar official) of any of the Company, any Subsidiary Guarantor or any
Significant Subsidiary or of any substantial part of their consolidated assets,
or the making by it of an assignment for the benefit of creditors under any such
law, or the admission by it in writing of its inability to pay its debts
generally as they become due or taking of corporate action by the Company, any
Subsidiary Guarantor or any Significant Subsidiary in furtherance of any such
action.
SECTION 6.02 Acceleration; Rescission.
If any Event of Default (other than as specified in clause (h) or (i) of
Section 6.01 above) occurs and is continuing, the Trustee, by written notice to
the Company, or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes, by written notice to the Trustee and the Company may
declare the principal of, premium, if any, and accrued interest on all the then
outstanding Notes due and payable immediately. Upon any such declaration, the
Notes shall become due and payable immediately. Notwithstanding the foregoing,
if an Event of Default specified in clause (h) or (i) of Section 6.01 hereof
occurs, the principal of, premium, if any, and accrued interest on all the then
outstanding Notes shall ipso facto become and be immediately due and payable
without any declaration, notice or other act on the part of the Trustee or any
Holder.
After a declaration of acceleration has been made, but before a judgment or
decree for payment of the money due has been obtained by the Trustee, the
Holders of a majority in aggregate principal amount of the then outstanding
Notes, by written notice to the Company and the Trustee, may rescind and annul
such declaration and its consequences if (a) the Company or any Restricted
Subsidiary has paid or deposited with the Trustee a sum sufficient to pay (i)
all sums paid or advanced by the Trustee under this Indenture and the reasonable
compensation, expenses,
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disbursements and advances of the Trustee, its agents and counsel, (ii) all
overdue interest on all Notes, (iii) the principal of and premium, if any, on
any Notes which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Notes, and (iv) to
the extent that payment of such interest is lawful, interest upon overdue
interest and overdue principal at the rate borne by the Notes which has become
due otherwise than by such declaration of acceleration; (b) the rescission would
not conflict with any judgment or decree of a court of competent jurisdiction;
and (c) all Events of Default, other than the nonpayment of principal of,
premium, if any, and interest on the Notes that has become due solely by such
declaration of acceleration, have been cured or waived.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal and interest on the Notes
or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes may on behalf of the Holders of all the Notes waive
any existing Default or Event of Default hereunder and its consequences, except
a Default or Event of Default
(a) in respect of the payment of the principal of, or premium, if
any, or interest on any Note, or
(b) in respect of a covenant or provision hereof which under
Article IX hereof cannot be modified or amended without the consent of the
Holder of each outstanding Note affected.
Upon any such waiver, such Default or Event of Default shall cease to exist
for every purpose under this Indenture, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
SECTION 6.05 Control by Majority.
Subject to the provisions of Section 7.02 hereof, the Holders of a majority
in aggregate principal amount of the then outstanding Notes have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or
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power conferred on the Trustee under this Indenture. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or that
the Trustee determines may be unduly prejudicial to the rights of other Holders
of Notes or that may involve the Trustee in personal liability. Subject to the
provisions of Section 7.01 hereof, in case an Event of Default shall occur and
be continuing, the Trustee is not under any obligation to exercise any of its
rights or powers hereunder at the request or direction of any of the Holders
unless such Holders shall have offered to the Trustee reasonable security or
indemnity.
If a Default or an Event of Default occurs and is continuing and is known
to the Trustee, the Trustee shall mail to each Holder notice of the Default or
Event of Default within 60 days after the occurrence thereof. Except in the
case of a Default or an Event of Default in payment of principal of, premium, if
any, or interest on the Notes, the Trustee may withhold the notice to the
Holders of such Notes if a committee of its trust officers in good faith
determines that withholding the notice is in the best interests of the Holders.
SECTION 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) such Holder has previously given to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of
the then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense to be incurred in compliance with such request;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in
aggregate principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all of such Holders.
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SECTION 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on the Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) hereof occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense, and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, premium, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the cost of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
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(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and the TIA and no others, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee. To the extent of any conflict between the duties of the
Trustee hereunder and under the TIA, the TIA shall control.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture (but need
not confirm or investigate the accuracy of mathematical calculations or
other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or expense
that might be incurred by it in compliance with such request.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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SECTION 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document (whether
in its original or facsimile form) believed by it to be genuine and to have been
signed or presented by the proper Person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
SECTION 7.03 Individual Rights of Trustee.
The Trustee, any Paying Agent, any authenticating agent or registrar in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that
the Trustee acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue as trustee or
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
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SECTION 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and is known to a
Responsible Officer of the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 60 days after the occurrence
thereof. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on the Notes, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the best interests of
the Holders of the Notes.
SECTION 7.06 Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA (S)313(a) (but if no event described in TIA
(S)313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA
(S)313(b)(2). The Trustee shall also transmit by mail all reports as required
by TIA (S)313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA (S)313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange or
delisted therefrom.
SECTION 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation
for its acceptance of this Indenture and services hereunder as the parties shall
agree from time to time. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor Trustee
against any and all losses, liabilities, claims, damages or expenses (including
taxes other than taxes based upon the income or gross receipts of the Trustee)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company or
any Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability, claim, damage or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its
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obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of
this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01 (h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under the
Bankruptcy Code.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to the
extent applicable.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof,
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under the Bankruptcy Code;
(c) a custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
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If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may, at the expense of the Company, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10
hereof, such Holder of a Note may, at the expense of the Company, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S)310(a)(1), (2) and (5). The Trustee is subject to TIA (S)310(b).
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA (S)311(a), excluding any creditor
relationship listed in TIA (S)311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S)311(a) to the extent indicated therein.
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ARTICLE VII
DEFEASANCE AND DISCHARGE
SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article VIII.
SECTION 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and the Subsidiary Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from their obligations with respect to
all outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that the Company and the Subsidiary Guarantors shall be deemed (i) to have paid
and discharged the entire Indebtedness represented by the outstanding Notes,
which shall thereafter be deemed to be "outstanding" only for the purposes of
Section 8.07 hereof and the other Sections of this Indenture referred to in (a)
and (b) below, and (ii) to have satisfied all their respective other obligations
under such Notes and this Indenture (and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.04 hereof,
and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on such Notes when such payments are
due, (b) the obligations of the Company with respect to Notes under Article 2
and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the respective obligations of the Company in
connection therewith and (d) this Article VIII. Subject to compliance with this
Article VIII, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
SECTION 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Subsidiary Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from their obligations under the covenants contained in
Sections 4.03 - 4.07 hereof and Articles V and X hereof and the Defaults and
Events of Default contained in Sections 6.01(c), (e), (f) and (g) hereof with
respect to the outstanding Notes on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not to be "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof)
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in connection with such provisions but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company and
the Subsidiary Guarantors may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such provision,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such provision or by reason of any reference in any such provision to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01 hereof,
but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby.
SECTION 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company or any Subsidiary Guarantor shall irrevocably have
deposited or caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 7.10 hereof who shall agree to comply
with the provisions of this Article VIII applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of such
Securities, (A) cash in U.S. Dollars in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (C) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, the principal
of, and premium, if any, and interest on the outstanding Notes on the Stated
Maturity (or redemption date, if applicable) of such principal, premium, if any,
or installment of interest; provided that the Trustee shall have been
irrevocably instructed in writing by the Company to apply such money or the
proceeds of such U.S. Government Obligations to said payments with respect to
such Notes. Before such a deposit, the Company may give to the Trustee, in
accordance with Section 3.02 hereof, a notice of its election to redeem all of
the outstanding Notes at a future date in accordance with Article III hereof,
which notice shall be irrevocable. Such irrevocable redemption notice, if given,
shall be given effect in applying the foregoing. For this purpose, "U.S.
Government Obligations" means securities that are (x) direct obligations of the
United States of America for the timely payment of which its full faith and
credit is pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt, provided that (except as required
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by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the Issue Date, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);
(e) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or any
Subsidiary Guarantor is a party or by which it is bound, as evidenced to the
Trustee in an Officers' Certificate delivered to the Trustee concurrently with
such deposit; and
(f) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, which taken together, state that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant
to Section 8.04 or 8.08 hereof shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the
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payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
all sums due and to become due thereon in respect of principal, premium, if any,
and interest but such money need not be segregated from other funds except to
the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 8.04 or 8.08 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or U.S. Government Obligations held by it as provided in
Section 8.04 or 8.08 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance, Covenant
Defeasance or discharge.
SECTION 8.06 Repayment to Company.
Subject to applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or interest on any
Note and remaining unclaimed for two years after such principal, and premium, if
any, or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. dollars or U.S.
Government Obligations in accordance with Section 8.02 or 8.03 hereof, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's and the Subsidiary Guarantors' obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.02 or
8.03 hereof, as the case may be;
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provided, however, that, if the Company or any Subsidiary Guarantor makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company or such Subsidiary Guarantor shall
be subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
SECTION 8.08 Discharge.
This Indenture will cease to be of further effect (except for (1) the
rights of Holders to receive the trust funds described in clause (i)(B) of this
Section, and (2) the provisions described in Section 8.02, clauses (b), (c) and
(d)) when (i) either (A) all outstanding Notes theretofore authenticated and
issued (other than destroyed, lost or stolen Notes that have been replaced or
paid) have been delivered to the Trustee for cancellation; or (B) all
outstanding Notes not theretofore delivered to the Trustee for cancellation (x)
have become due and payable, (y) will become due and payable at their Stated
Maturity within one year or (z) are to be called for redemption within one year,
and the Company has irrevocably deposited or caused to be deposited with the
Trustee as funds (immediately available to Holders in the case of clause (x)) in
trust for such purpose cash or U.S. Government Obligations, maturing as to
principal and interest at such times and in such amounts as will ensure the
availability of cash, or a combination thereof that will be sufficient to pay
and discharge the entire indebtedness on the Notes for principal and any
interest to the date of such deposit (in the case of Notes which have become due
and payable), or for principal, premium, if any, and interest to the Stated
Maturity or the Redemption Date, as the case may be; or (C) the Company has
fulfilled such other means of discharge; (ii) the Company has paid all other
sums payable by it; and (iii) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel relating to such matters.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 hereof, the Company and the Trustee may amend
or supplement this Indenture or the Notes without the consent of any Holder of a
Note: (a) to cure any ambiguity, omission, defect or inconsistency, (b) to
provide for the assumption of the obligations of the Company or any Subsidiary
Guarantor under this Indenture by a Successor upon the merger, consolidation or
sale or other disposition of all or substantially all of the assets of the
Company or such Subsidiary Guarantor, (c) to provide for uncertificated Notes in
addition to or in place of certificated Notes, (d) to provide any security for
Notes, (e) to reflect the release of any Subsidiary Guarantor from its
Subsidiary Guarantee, or the addition of any Subsidiary of the Company as a
Subsidiary Guarantor, in the manner provided in this Indenture, (f) to comply
with any requirement to effect or maintain the qualification of this Indenture
under the TIA, (g) to add covenants or Events of Default, (h) to establish the
form or terms of Notes or (i) to make any change that does not adversely affect
the interests of any Holder of Notes in any material respect.
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Upon the request of the Company relating to the execution of any such
amended or supplemental Indenture, and upon receipt by the Trustee of the
documents described in Section 7.02 hereof, the Trustee shall join with the
Company in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture that
affects its own rights, duties, liabilities or immunities under this Indenture
or otherwise.
SECTION 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company, the Subsidiary
Guarantors and the Trustee may amend or supplement this Indenture with the
consent of the Holders of a majority in principal amount of the outstanding
Notes affected thereby; provided, however, that no such amendment or supplement
may, without the consent of the Holder of each outstanding Note affected
thereby, (i) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver, (ii) reduce the rate of or change the time for
payment of interest, including default interest, on any Note; (iii) reduce the
principal of or premium on or change the stated maturity of, any Note; (iv)
reduce the premium, if any, payable upon redemption of any Note; (v) change the
currency or currency unit of payment of principal of, premium (if any) or any
interest on any Note; (vi) impair the right to institute suit for the
enforcement of any payment of principal of, premium (if any) or any interest on,
any Note; (vii) waive a continuing Default or Event of Default in payment of
principal of, premium (if any) or any interest on, any Note; or (viii) amend,
change or modify the obligation of the Company to make and consummate a Change
of Control Offer in the event of a Change of Control or modify any provisions or
definitions with respect thereto.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
a Responsible Officer of the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture affects
the Trustee's own rights, duties, liabilities or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or
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supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of Notes then outstanding
may waive compliance in a particular instance by the Company with any provision
of this Indenture with respect to the Notes, except a continuing Default or
Event of Default in the payment of the principal of, premium (if any) or
interest on, any Note or in respect of a provision that under this Indenture
cannot be modified or amended without the consent of the Holder of each
outstanding Note.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company, in
exchange for all Notes, may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06 Trustee to Sign Amendments, Etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article IX if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive and (subject to
Section 7.01 hereof) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Indenture.
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ARTICLE X
GUARANTEES
SECTION 10.01 Subsidiary Guarantees.
Subject to Section 10.05 hereof, any Restricted Subsidiary that is or
becomes a Subsidiary Guarantor shall, jointly and severally, unconditionally
guarantee to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, the Notes and the Obligations
of the Company hereunder and thereunder, that:
(a) the principal of, premium, if any, and interest on the Notes
will be promptly paid in full when due, subject to any applicable grace period,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal, premium, if any (to the extent permitted by law), and
interest on any interest, if any, on the Notes, and all other payment
Obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full and performed, all in accordance with the terms
hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise.
Failing payment when so due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately. An Event of Default under this
Indenture or the Notes shall constitute an event of default under the Subsidiary
Guarantees, and shall entitle the Holders to accelerate the Obligations of the
Subsidiary Guarantors hereunder in the same manner and to the same extent as the
Obligations of the Company. The Subsidiary Guarantors shall agree that their
Obligations hereunder shall be unconditional, irrespective of the validity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.
Each Subsidiary Guarantor shall waive diligence, presentment, demand of payment,
notice of acceleration, notice of intent to accelerate, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and shall covenant that its Subsidiary Guarantee will not be
discharged except by complete performance of the Obligations contained in the
Notes and this Indenture. If any Holder or the Trustee is required by any court
or otherwise to return to the Company, the Subsidiary Guarantors, or any Note
Custodian, Trustee, liquidator or other similar official acting in relation to
either the Company or the Subsidiary Guarantors, any amount paid by the Company
or any Subsidiary Guarantor to the Trustee or such Holder, the Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated
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in full force and effect. Each Subsidiary Guarantor shall agree that it shall
not be entitled to, and shall waive, any right to exercise any right of
subrogation in relation to the Holders in respect of any Obligations guaranteed
by the Subsidiary Guarantee, except as provided under Section 10.05 hereof. Each
Subsidiary Guarantor shall further agree that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations guaranteed by the Subsidiary Guarantee may
be accelerated as provided in Article 6 hereof for the purposes of its
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed thereby,
and (y) in the event of any declaration of acceleration of such Obligations as
provided in Article 6 hereof, such Obligations (whether or not due and payable)
shall forthwith become due and payable by each Subsidiary Guarantor for the
purpose of its Subsidiary Guarantee. The Subsidiary Guarantors shall have the
right to seek contribution from any non-paying Subsidiary Guarantor pursuant to
Section 10.05 after the Notes and the Obligations hereunder shall have been paid
in full to the Holders under the Subsidiary Guarantees.
Pursuant to Section 4.07 hereof, the Company may, and in certain
circumstances shall be obligated to, cause Restricted Subsidiaries that are not
Subsidiary Guarantors to become Subsidiary Guarantors.
SECTION 10.02 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 10.01 hereof,
each Subsidiary Guarantor shall execute and deliver this Indenture or a
supplemental indenture substantially in the form of Exhibit D hereto, which
supplemental indenture shall be executed on behalf of such Subsidiary Guarantor,
by manual or facsimile signature, by an Officer of such Subsidiary Guarantor.
Each Subsidiary Guarantor shall agree that its Subsidiary Guarantee set
forth in Section 10.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
If an officer who shall have signed this Indenture or a supplemental
indenture no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the notation of Subsidiary Guarantee
set forth in this Indenture on behalf of the Subsidiary Guarantors.
SECTION 10.04 Subsidiary Guarantors May Consolidate, Etc., on Certain Terms.
(a) Except as set forth in Articles IV and V hereof, nothing
contained in this Indenture shall prohibit a merger between a Subsidiary
Guarantor and another Subsidiary Guarantor or a merger between a Subsidiary
Guarantor and the Company.
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(b) Subject to Section 10.04 hereof, no Subsidiary Guarantor may
consolidate or merge with or into (whether or not such Subsidiary Guarantor is
the surviving Person) another Person unless (i) the Person formed by or
surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) assumes all the obligations of such Subsidiary Guarantor pursuant to
a supplemental indenture, in a form reasonably satisfactory to the Trustee,
under the Notes and this Indenture, and (ii) immediately after such transaction,
no Default or Event of Default exists.
(c) In the case of any such consolidation or merger and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and substantially in the form of Exhibit D hereto, of
the Subsidiary Guarantee, such successor Person shall succeed to and be
substituted for the Subsidiary Guarantor with the same effect as if it had been
named herein as a Subsidiary Guarantor.
SECTION 10.04 Releases of Subsidiary Guarantees.
In the event of a sale or other disposition of all or substantially all of
the assets of any Subsidiary Guarantor, or a sale or other disposition of all of
the Capital Stock or other ownership interests of any Subsidiary Guarantor, in
each case by way of merger, consolidation or otherwise, then such Subsidiary (in
the event of such a sale or other disposition of all the Capital Stock or other
ownership interests of such Subsidiary) or such Subsidiary and the Person
acquiring the property (in the event of such a sale or other disposition of all
or substantially all of the assets of such Subsidiary) will be released and
relieved of any obligations under its Subsidiary Guarantee. If, at any time
while any of the Notes remain outstanding, none of the Company's then
outstanding Indebtedness (other than Notes) is guaranteed by a Subsidiary
Guarantor, such Subsidiary Guarantor shall be automatically and unconditionally
released, discharged and relieved of any obligations under its Subsidiary
Guarantee (which shall be terminated and cease to have any force and effect).
In addition, pursuant to Section 4.07 hereof, any Subsidiary Guarantee incurred
after the Issue Date may contain such release provisions as may be set forth in
the supplemental indenture evidencing the assumption by such Subsidiary
Guarantor of the Subsidiary Guarantee obligations under this Indenture.
SECTION 10.05 Limitation on Subsidiary Guarantor Liability; Contribution.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee by such
Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or fraudulent conveyance for purposes of any federal, state
or foreign law. To effectuate the foregoing intention, the Holders and each
Subsidiary Guarantor hereby irrevocably agree that the obligations of each
Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities (including, but not limited to, Guarantor Senior Indebtedness) of
such Subsidiary Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under its Subsidiary
Guarantee or pursuant to this Section 10.05,
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result in the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
federal, state or foreign law. This Section 10.05 is for the benefit of the
creditors of each Subsidiary Guarantor.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under its Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from each other Subsidiary Guarantor (if
any) in a pro rata amount based on the Adjusted Net Assets of each Subsidiary
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Subsidiary Guarantor's
obligations with respect to its Subsidiary Guarantee.
SECTION 10.06 Trustee to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 10 shall in each case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully and for all intents and purposes as if such Paying Agent were
named in this Article 10 in place of the Trustee.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S)318(c), the imposed duties shall control.
SECTION 11.02 Notices.
Any notice or communication by the Company, and Subsidiary Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
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If to the Company or any Subsidiary Guarantor:
Ocean Energy, Inc.
1201 Louisiana, Suite 1400
Houston, Texas 77002-5603
Telecopy: (713) 653-5024
If to the Trustee:
Norwest Bank Minnesota, National Association
Sixth and Marquette
Minneapolis, Minnesota 55479-0069
Attention: Corporate Trust Operations
Telecopy: (612) 667-9825
The Company, any Subsidiary Guarantor or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
SECTION 11.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA
(S) 312(c).
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SECTION 11.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 11.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA (S)
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 11.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
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SECTION 11.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator,
partner, member or stockholder of the Company or any Subsidiary Guarantor, or of
any member, partner or stockholder of any such entity, as such, shall have any
liability for any obligations of the Company under the Notes, this Indenture or
the Subsidiary Guarantees or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
SECTION 11.08 Governing Law.
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF, SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE,
THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 11.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10 Successors.
All agreements of the Company and the Subsidiary Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successors.
SECTION 11.11 Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
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SECTION 11.13 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures Page(s) Follow]
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SIGNATURES
Dated as of July 8, 1998
ISSUER:
Ocean Energy, Inc.,
a Delaware corporation
By:
---------------------------
Name:
Title:
SUBSIDIARY GUARANTOR:
Ocean Energy, Inc.,
a Louisiana corporation
By:
---------------------------
Name:
Title:
TRUSTEE:
Norwest Bank Of Minnesota, National
Association
By:
---------------------------
Name:
Title:
<PAGE>
EXHIBIT A
(FACE OF NOTE)
CUSIP No. 674812 AG7
7 5/8% Series [A/B] Senior Notes due 2005
No. _____ $__________
OCEAN ENERGY, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on July 1, 2005.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Ocean Energy, Inc.
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Trustee
By: Dated:
--------------------------------- -----------------------------
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<PAGE>
(Back of Note)
7 5/8 % Senior Notes due 2005
[Insert the Global Note Legend, if applicable, pursuant to the provisions
of the Indenture]
[Insert the Private Placement Legend, if applicable, pursuant to the
provisions of the Indenture]
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Ocean Energy, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 7 5/8% per
annum, from July 8, 1998 until maturity. The Company will pay interest semi-
annually in arrears on January 1 and July 1 of each year, or if any such day is
not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be January 1, 1999. The Company shall pay
interest on overdue principal and premium, if any, from time to time on demand
at the rate borne on the Notes; it shall pay interest on overdue installments of
interest (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the December 15 or June 15 next preceding the Interest
Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the
Indenture with respect to defaulted interest, and except that, in the case of
interest payable at the maturity of the principal hereof, interest shall be paid
to the Person to whom principal is paid. The Notes will be payable as to
principal, premium, if any, and interest at the office or agency of the Company
maintained for such purpose within the City and State of New York, or, at the
option of the Company, payment of principal, premium, if any, and interest may
be made by check mailed to the Holders at their addresses set forth in the
register of Holders or by wire transfer in the case of Notes held in book-entry
form. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
3. Paying Agent and Registrar. Initially, Norwest Bank of Minnesota,
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any
such capacity.
A-2
<PAGE>
4. Indenture. The Company issued the Notes under an Indenture dated as
of July 8, 1998 (as amended and supplemented from time to time, the "Indenture")
between the Company, the Subsidiary Guarantors parties thereto and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code (S)(S) 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $125,000,000
in aggregate principal amount.
5. Optional Redemption.
(a) The Notes will be subject to redemption at any time at the option
of the Company, in whole but not in part, at a redemption price equal to the sum
of (a) an amount equal to 100% of the principal amount thereof and (b) the Make-
Whole Premium, together with accrued and unpaid interest to the date fixed for
redemption. In no event will such redemption price ever be less than 100% of the
principal amount of the Notes plus accrued interest to the date of redemption.
(b) Any redemption pursuant to this paragraph 5 shall be made pursuant
to the provisions of Article III of the Indenture. Notice of redemption will be
mailed at least 30 days but not more than 60 days before a redemption date to
each Holder whose Notes are to be redeemed at its registered address. On and
after the redemption date, interest will cease to accrue on Notes or portions
thereof called for redemption.
6. Mandatory Redemption. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
7. Purchase of Notes upon Change of Control. Upon the occurrence of a
Change of Control, the Company shall be obligated to make an offer to purchase
all of the then outstanding Notes (a "Change of Control Offer"), and shall
purchase, on a business day (the "Change of Control Purchase Date") not more
than 70 nor less than 30 days following the Change of Control, all of the then
outstanding Notes validly tendered pursuant to such Change of Control Offer, at
a purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the Change of Control Purchase Date.
8. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of
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<PAGE>
any Note or portion of a Note selected for redemption. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
9. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
10. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to (a) to cure any ambiguity, omission, defect or inconsistency,
(b) to provide for the assumption of the obligations of the Company or any
Subsidiary Guarantor under the Indenture by a Successor upon the merger,
consolidation or sale or other disposition of all or substantially all of the
assets of the Company or such Subsidiary Guarantor, (c) to provide for
uncertificated Notes in addition to or in place of certificated Notes, (d) to
provide any security for Notes, (e) to reflect the release of any Subsidiary
Guarantor from its Subsidiary Guarantee, or the addition of any Subsidiary of
the Company as a Subsidiary Guarantor, in the manner provided in the Indenture,
(f) to comply with any requirement to effect or maintain the qualification of
the Indenture under the TIA, (g) to add covenants or Events of Default, (h) to
establish the form or terms of Notes or (i) to make any change that does not
adversely affect the interests of any Holder of Notes in any material respect.
11. Defaults and Remedies. Events of Default include:
(a) default in the payment when due of principal of or premium, if
any, on the Notes when the same becomes due and payable at maturity, upon
redemption, upon repurchase pursuant to a Change of Control Offer, upon
acceleration or otherwise;
(b) default in the payment when due of interest on the Notes and such
default continues for a period of 30 days;
(c) failure by the Company to make or consummate a Change of Control
Offer in accordance with the provisions of the Indenture;
(d) failure by the Company or any Subsidiary Guarantor to observe or
perform any other term, covenant, or agreement in the Indenture, the Notes or
any Subsidiary Guarantee (other than a default specified in paragraphs (a), (b)
and (c) above) for 60 days after notice to (i) the Company by the Trustee or
(ii) the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding;
(e) default beyond any applicable grace period with respect to the
principal of, premium, if any or interest on any Indebtedness of the Company or
any Restricted Subsidiary for
A-4
<PAGE>
money borrowed (other than the Notes or the Subsidiary Guarantees) when due, or
any other default causing acceleration of any Indebtedness of the Company or any
Restricted Subsidiary for money borrowed, provided that the aggregate principal
amount of such Indebtedness shall exceed the greater of (i) $20 million and (ii)
5% of Consolidated Net Tangible Assets; provided further that any such default
is not cured or waived or any such acceleration is not rescinded, or such debt
is not repaid, within a period of 20 days after a written notice thereof to the
Company as provided in the Indenture;
(f) any Subsidiary Guarantee ceases to be, or is asserted by the
Company or any Subsidiary Guarantor not to be, in effect (except in accordance
with the Indenture);
(g) final judgments or orders rendered against the Company or any
Restricted Subsidiary that are unsatisfied and that require the payment in
money, either individually or in an aggregate amount, that exceed the coverage
under applicable insurance policies by the greater of (i) $20 million and (ii)
5% of Consolidated Net Tangible Assets (as shown in the most recent audited
balance sheet of the Company and its Subsidiaries), and either (x) commencement
by any creditor of an enforcement proceeding upon such judgment (other than a
judgment that is stayed by reason of pending appeal or otherwise) or (y) the
occurrence of a 60-day period during which a stay of such judgment or order, by
reason of pending appeal or otherwise, was not in effect;
(h) the entry of a decree or order by a court having jurisdiction in
the premises (i) for relief in respect of the Company, any Subsidiary Guarantor
or any Significant Subsidiary in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or (ii) adjudging the Company, any Subsidiary Guarantor or any
Significant Subsidiary bankrupt or insolvent, or approving a petition seeking
reorganization, arrangement, adjustment or composition of the Company, any
Subsidiary Guarantor or any Significant Subsidiary under any applicable federal
or state law, or appointing under any such law a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company, any Subsidiary Guarantor or any Significant Subsidiary or of a
substantial part of their consolidated assets, or ordering the winding up or
liquidation of their affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period
of 60 consecutive days; or
(i) the commencement by the Company, any Subsidiary Guarantor or any
Significant Subsidiary of a voluntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law or
any other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company, any Subsidiary Guarantor or any Significant Subsidiary
to the entry of a decree or order for relief in respect thereof in an
involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by the
Company, any Subsidiary Guarantor or any Significant Subsidiary of a petition or
consent seeking reorganization or relief under any applicable federal or state
law, or the consent by it under any such law to the filing of any such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or
A-5
<PAGE>
sequestrator (or other similar official) of any of the Company, any Subsidiary
Guarantor or any Significant Subsidiary or of any substantial part of their
consolidated assets, or the making by it of an assignment for the benefit of
creditors under any such law, or the admission by it in writing of its inability
to pay its debts generally as they become due or taking of corporate action by
the Company, any Subsidiary Guarantor or any Significant Subsidiary in
furtherance of any such action.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal and interest on the Notes
or to enforce the performance of any provision of the Notes or the Indenture.
12. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
13. No Recourse Against Others. A director, officer, employee,
incorporator, partner, member or stockholder, of the Company or any Subsidiary
of the Company or any Subsidiary Guarantor, as such, shall not have any
liability for any obligations of the Company under the Notes, the Subsidiary
Guarantees or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
14. Authentication. This Note shall not be valid until authenticated by
the manual signature of a Responsible Officer of the Trustee or an
authenticating agent.
15. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
16. Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of June 8, 1998, between the Company and the parties named on the
signature pages thereof, as amended from time to time (the "Registration Rights
Agreement").
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
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<PAGE>
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Ocean Energy, Inc.
1201 Louisiana, Suite 1400
Houston, Texas 77002-5603
Telecopy: (713) 653-5024
A-7
<PAGE>
IF THE NOTES ARE GUARANTEED BY ONE OR MORE SUBSIDIARY GUARANTORS, THE FOLLOWING
MAY BE INSERTED IN THE NOTES:
NOTATION OF SUBSIDIARY GUARANTEE
Subject to the limitations set forth in the Indenture, the Subsidiary
Guarantors (as defined in the Indenture) have, jointly and severally,
unconditionally guaranteed the Notes to the extent set forth in the Indenture.
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture unless otherwise indicated.
The obligations of each Subsidiary Guarantor are limited as set forth in
the Indenture.
Any Subsidiary Guarantor may be released from its Subsidiary Guarantee upon
the terms and subject to the conditions provided in the Indenture.
The Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Subsidiary
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
[SUBSIDIARY GUARANTOR]
By:
---------------------------
Name:
-------------------------
Title:
------------------------
A-8
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint______________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
Your Signature:______________________________________________________________
(Sign exactly as your name appears on the face of this Note)
SIGNATURE GUARANTEE
---------------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements
of the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may
be determined by the Registrar in addition to,
or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
A-9
<PAGE>
OPINION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.06 of the Indenture, check the following box: [_]
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.06 of the Indenture, state the amount you elect to have
purchased: $__________
Date:
Your Signature:____________________________________________________________
(Sign exactly as your name appears on the face of the Note)
Tax Identification No.:____________________________________________________
SIGNATURE GUARANTEE
----------------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements
of the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may
be determined by the Registrar in addition to,
or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
A-10
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE/*/
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT SIGNATURE OF
AMOUNT OF AMOUNT OF OF THIS GLOBAL NOTE AUTHORIZED
DECREASE IN INCREASE IN FOLLOWING SUCH SIGNATORY OF
PRINCIPAL AMOUNT PRINCIPAL AMOUNT DECREASE (OR TRUSTEE OR NOTE
DATE OF EXCHANGE OF THIS GLOBAL NOTE OF THIS GLOBAL NOTE INCREASE) CUSTODIAN
---------------- ------------------- ------------------- ------------------- ---------------
<S> <C> <C> <C> <C>
</TABLE>
- -----------------
/*/This should be included only if the Note is issued in global form.
A-11
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Ocean Energy, Inc.
1201 Louisiana, Suite 1400
Houston, Texas 77002-5603
Attention: Robert K. Reeves, Executive Vice President
Norwest Bank Minnesota,
National Association
Sixth and Marquette
Minneapolis, Minnesota 55479-0069
Attention: Corporate Trust Operations
Re: 7 5/8% Senior Notes due 2005
Reference is hereby made to the Indenture, dated as of July 8, 1998 (as
amended and supplemented from time to time, (the "Indenture"), between Ocean
Energy, Inc., as issuer (the "Company"), the Subsidiary Guarantors parties
thereto and Norwest Bank Minnesota, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
____________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such in such Note[s] specified in Annex A hereto, in the
principal amount of $__________ in such Note[s] or interests (the "Transfer"),
to ____________________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement
B-1
<PAGE>
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act and (iii) the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act and (iv) if
the proposed transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note and/or the Definitive Note and in the Indenture and
the Securities Act.
3. [_] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE
144A OR REGULATION S. The Transfer is being effected in compliance with the
transfer restrictions applicable to beneficial interests in Restricted Global
Notes and Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) [_] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) [_] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act.
B-2
<PAGE>
4. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [_] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [_] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [_] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
____________________________________
[Insert Name of Transferor]
By:
---------------------------------
Name:
Title:
Dated:
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (A) OR (B)]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP __________), or
(ii) [_] Regulation S Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP __________), or
(ii) [_] Regulation S Global Note (CUSIP __________), or
(iii) [_] Unrestricted Global Note (CUSIP __________); or
(b) [_] a Restricted Definitive Note.
(c) [_] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Ocean Energy, Inc.
1201 Louisiana, Suite 1400
Houston, Texas 77002-5603
Attention: Robert K. Reeves, Executive Vice President
Norwest Bank of Minnesota,
National Association
Sixth and Marquette
Minneapolis, Minnesota 55479-0069
Attention: Corporate Trust Operations
Re: 7 5/8% Senior Notes due 2005
(CUSIP No. 674812 AG 7)
Reference is hereby made to the Indenture, dated as of July 8, 1998 (the
"Indenture"), between Ocean Energy, Inc., as issuer (the "Company"), the
Subsidiary Guarantors named therein and Norwest Bank Minnesota, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
____________________ (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$__________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an
C-1
<PAGE>
Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficiary interest in
an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the
C-2
<PAGE>
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Note and in the Indenture and the Securities Act.
(b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE]
[_] 144A Global Note [_] Regulation S Global Note
with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Owner]
By:
--------------------------
Name:
Title:
Dated:_______________, _____
C-3
<PAGE>
EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, _____ among Ocean Energy, Inc., a Delaware corporation (the
"Company"), [Existing Subsidiary Guarantors, if any,] [Subsidiary Guarantor]
(the "New Subsidiary Guarantor"), and Norwest Bank Minnesota, National
Association, as trustee under the indenture referred to below (the "Trustee").
Capitalized terms used herein and not defined herein shall have the meaning
ascribed to them in the Indenture (as defined below).
W I T N E S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (as amended and supplemented from time to time, the "Indenture"),
dated as of July 8, 1998, providing for the issuance of an aggregate principal
amount of $125,000,000 of 7 5/8% Senior Notes due 2005 (the "Notes");
WHEREAS, Section 4.07 and Article X of the Indenture provide that under
certain circumstances the Company may or must cause certain of its subsidiaries
to execute and deliver to the Trustee a supplemental indenture pursuant to which
such subsidiaries shall unconditionally guarantee all of the Company's
Obligations under the Notes pursuant to a Subsidiary Guarantee on the terms and
conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, the New Subsidiary Guarantor and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:
1. Agreement to Guarantee. Subject to Section 10.05 of the Indenture,
the New Subsidiary Guarantor hereby, jointly and severally with all other
Subsidiary Guarantors, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, the Notes and the Obligations of the Company under the Notes or
under the Indenture, that: (a) the principal of, premium, if any, and interest
on the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration, redemption or otherwise, and
interest on overdue principal, premium, if any (to the extent permitted by law),
and interest on any interest, if any, on the Notes and all other payment
Obligations of the Company to the Holders or the Trustee under the Indenture or
under the Notes
D-1
<PAGE>
will be promptly paid in full and performed, all in accordance with the terms
thereof; and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when so due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Subsidiary Guarantors will be jointly and severally obligated to pay the same
immediately.
The obligations of the Subsidiary Guarantors to the Holders and to the
Trustee pursuant to this Supplemental Indenture and the Indenture are expressly
set forth in Article X of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee. The terms of
Article X of the Indenture are incorporated herein by reference. This
Subsidiary Guarantee is subject to release as and to the extent provided in
Sections 4.07(c), 4.07(d) and 10.04 of the Indenture.
2. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, partner, member, shareholder or agent of the
New Subsidiary Guarantor, as such, shall have any liability for any obligations
of the Company or any Subsidiary Guarantor under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes.
3. New York Law to Govern. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
4. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
5. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
6. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Subsidiary
Guarantor.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated:
D-2
<PAGE>
OCEAN ENERGY, INC., a Delaware
corporation
By:
------------------------------
Name:
Title:
[NEW SUBSIDIARY GUARANTOR]
By:
------------------------------
Name:
Title:
[EXISTING SUBSIDIARY GUARANTORS,
IF ANY]
By:
------------------------------
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as
Trustee
By:
------------------------------
Name:
Title:
D-3
<PAGE>
Exhibit 10.24
================================================================================
Ocean Energy, Inc.
And
Subsidiary Guarantors
Parties Hereto
8 1/4% SENIOR NOTES DUE 2018
INDENTURE
Dated as of July 8, 1998
Norwest Bank Minnesota, National Association
Trustee
================================================================================
<PAGE>
CROSS-REFERENCE TABLE/1/
Trust Indenture
Act Section Indenture Section
310 (a)(1).......................................................... 7.10
(a)(2).......................................................... 7.10
(a)(3).......................................................... N.A.
(a)(4).......................................................... N.A.
(a)(5).......................................................... 7.10
(b)............................................................. 7.10
(c)............................................................. N.A.
311 (a)............................................................. 7.11
(b)............................................................. 7.11
(c)............................................................. N.A.
312 (a)............................................................. 2.05
(b)............................................................. 11.03
(c)............................................................. 11.03
313 (a)............................................................. 7.06
(b)(2)..................................................... 7.06, 7.07
(c)....................................................... 7.06, 11.02
(d)............................................................. 7.06
314 (a)............................................................. 4.03
(a)(4).......................................................... 11.04
(c)(1).......................................................... N.A.
(c)(2).......................................................... N.A.
(c)(3).......................................................... N.A.
(e)............................................................. 11.05
(f)............................................................. N.A.
315 (a)............................................................. 7.01
(b)............................................................. 7.05
(c)............................................................. 7.01
(d)............................................................. 7.01
(e)............................................................. 6.11
316 (a)(last sentence).............................................. 2.09
(a)(1)(A)....................................................... 6.05
(a)(1)(B)....................................................... 6.04
(a)(2).......................................................... N.A.
(b)............................................................. 6.07
(c)............................................................. 2.12
317 (a)(1).......................................................... 6.09
(a)(2).......................................................... 6.09
(b)............................................................. 2.04
318 (a)............................................................. 11.01
(b)............................................................. 11.01
(c)............................................................. 11.01
N.A. means not applicable.
- -----------------------------
/1/ This Cross-Reference Table is not part of this Indenture.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions................................................. 1
Section 1.02 Other Definitions........................................... 12
Section 1.03 Incorporation by Reference of Trust Indenture Act........... 12
Section 1.04 Rules of Construction....................................... 12
ARTICLE II
THE NOTES
Section 2.01 Form and Dating............................................. 13
Section 2.02 Execution and Authentication................................ 14
Section 2.03 Registrar and Paying Agent.................................. 15
Section 2.04 Paying Agent to Hold Money in Trust......................... 15
Section 2.05 Holder Lists................................................ 15
Section 2.06 Transfer and Exchange....................................... 16
Section 2.07 Replacement Notes........................................... 29
Section 2.08 Outstanding Notes........................................... 29
Section 2.09 Treasury Notes.............................................. 30
Section 2.10 Temporary Notes............................................. 30
Section 2.11 Cancellation................................................ 30
Section 2.12 Defaulted Interest.......................................... 30
Section 2.13 CUSIP Numbers............................................... 31
ARTICLE III
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.......................................... 31
Section 3.02 Notice of Redemption........................................ 31
Section 3.03 Effect of Notice of Redemption.............................. 32
Section 3.04 Deposit of Redemption Price................................. 32
Section 3.05 Optional Redemption......................................... 32
i
<PAGE>
ARTICLE IV
COVENANTS
Section 4.01 Payment of Principal, Premium, if any, and Interest......... 33
Section 4.02 Maintenance of Office or Agency............................. 33
Section 4.03 Compliance Certificate...................................... 34
Section 4.04 Liens....................................................... 34
Section 4.05 Sale/Leaseback Transactions................................. 36
Section 4.06 Purchase of Notes Upon Change of Control.................... 37
Section 4.07 Additional Subsidiary Guarantors............................ 39
ARTICLE V
SUCCESSORS
Section 5.01 Consolidation, Merger and Sale of Assets.................... 40
Section 5.02 Successor Substituted....................................... 40
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default........................................... 40
Section 6.02 Acceleration; Rescission.................................... 42
Section 6.03 Other Remedies.............................................. 43
Section 6.04 Waiver of Past Defaults..................................... 43
Section 6.05 Control by Majority......................................... 43
Section 6.06 Limitation on Suits......................................... 44
Section 6.07 Rights of Holders of Notes to Receive Payment............... 45
Section 6.08 Collection Suit by Trustee.................................. 45
Section 6.09 Trustee May File Proofs of Claim............................ 45
Section 6.10 Priorities.................................................. 46
Section 6.11 Undertaking for Costs....................................... 46
ARTICLE VII
TRUSTEE
Section 7.01 Duties of Trustee........................................... 46
Section 7.02 Rights of Trustee........................................... 48
Section 7.03 Individual Rights of Trustee................................ 48
Section 7.04 Trustee's Disclaimer........................................ 48
ii
<PAGE>
Section 7.05 Notice of Defaults.......................................... 49
Section 7.06 Reports by Trustee to Holders of the Notes.................. 49
Section 7.07 Compensation and Indemnity.................................. 49
Section 7.08 Replacement of Trustee...................................... 50
Section 7.09 Successor Trustee by Merger, Etc............................ 51
Section 7.10 Eligibility; Disqualification............................... 51
Section 7.11 Preferential Collection of Claims Against Company........... 51
ARTICLE VIII
DEFEASANCE AND DISCHARGE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.... 52
Section 8.02 Legal Defeasance and Discharge.............................. 52
Section 8.03 Covenant Defeasance......................................... 52
Section 8.04 Conditions to Legal or Covenant Defeasance.................. 53
Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions....................... 54
Section 8.06 Repayment to Company........................................ 55
Section 8.07 Reinstatement............................................... 55
Section 8.08 Discharge................................................... 56
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes......................... 56
Section 9.02 With Consent of Holders of Notes............................ 57
Section 9.03 Compliance with Trust Indenture Act......................... 58
Section 9.04 Revocation and Effect of Consents........................... 58
Section 9.05 Notation on or Exchange of Notes............................ 58
Section 9.06 Trustee to Sign Amendments, Etc............................. 58
ARTICLE X
GUARANTEES
Section 10.01 Subsidiary Guarantees....................................... 59
Section 10.02 Execution and Delivery of Subsidiary Guarantee.............. 60
Section 10.03 Subsidiary Guarantors May Consolidate, Etc., on Certain
Terms....................................................... 60
Section 10.04 Releases of Subsidiary Guarantees........................... 61
Section 10.05 Limitation on Subsidiary Guarantor Liability; Contribution.. 61
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Section 10.06 Trustee to Include Paying Agent............................. 62
ARTICLE XI
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls................................ 62
Section 11.02 Notices..................................................... 62
Section 11.03 Communication by Holders of Notes with Other Holders of
Notes....................................................... 63
Section 11.04 Certificate and Opinion as to Conditions Precedent.......... 64
Section 11.05 Statements Required in Certificate or Opinion............... 64
Section 11.06 Rules by Trustee and Agents................................. 64
Section 11.07 No Personal Liability of Directors, Officers, Employees
and Stockholders............................................ 65
Section 11.08 Governing Law............................................... 65
Section 11.09 No Adverse Interpretation of Other Agreements............... 65
Section 11.10 Successors.................................................. 65
Section 11.11 Severability................................................ 65
Section 11.12 Counterpart Originals....................................... 65
Section 11.13 Table of Contents, Headings, Etc............................ 66
EXHIBITS
- --------
EXHIBIT A Form of Note................................................ A-1
EXHIBIT B Form of Certificate of Transfer............................. B-1
EXHIBIT C Form of Certificate of Exchange............................. C-1
EXHIBIT D Form of Supplemental Indenture.............................. D-1
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INDENTURE dated as of July 8, 1998 among Ocean Energy, Inc., a Delaware
corporation (the "Company"), the Subsidiary Guarantors (as defined herein) and
Norwest Bank Minnesota, National Association, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the 8 1/4% Senior Notes
due 2018, Series A (the "Initial Notes"), and the 8 1/4% Senior Notes due 2018,
Series B, issued in the Exchange Offer (the "Exchange Notes" and, together with
the Initial Notes, the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
amount by which the fair value of the properties and assets of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such
date.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of this definition, beneficial ownership of 10% or more of the voting
common equity (on a fully diluted basis) or options or warrants to purchase such
equity (but only if exercisable at the date of determination or within 60 days
thereof) of a Person shall be deemed to constitute control of such Person.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and CEDEL that apply to such transfer or exchange.
"Attributable Indebtedness," when used with respect to any Sale/Leaseback
Transaction, means, as at the time of determination, the present value
(discounted at a rate equivalent to the Company's current weighted average cost
of funds for borrowed money as at the time of determination, compounded on a
semiannual basis) of the total obligations of the lessee for rental
<PAGE>
payments during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended).
"Bankruptcy Code" means Title 11, U.S. Code, as amended, or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of such Board, and, with respect to any Restricted
Subsidiary, the Board of Directors of such Restricted Subsidiary or any
authorized committee of such Board.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" of any Person means and includes any and all shares,
interests, rights to purchase, warrants or options (whether or not currently
exercisable), participations or other equivalents of or interests (however
designated) in the equity (which includes, but is not limited to, common stock,
preferred stock and partnership and joint venture interests) of such Person
(excluding any debt securities that are convertible into, or exchangeable for
such equity).
"Capitalized Lease Obligation" of any Person means any obligation of such
Person to pay rent or other amounts under a lease of property, real or personal,
that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"CEDEL" means Cedel Bank, societe anonyme.
"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the
total Voting Stock of the Company; (b) the Company is merged with or into or
consolidated with another Person and, immediately after giving effect to the
merger or consolidation, (A) less than 50% of the total voting power of the
outstanding Voting Stock of the surviving or resulting Person is then
"beneficially owned" (within the meaning of Rule 13d-3 under the Exchange Act)
in the aggregate by (x) the stockholders of the Company immediately prior to
such merger or consolidation, or (y) if a record date has been set to determine
the stockholders of the Company entitled to vote with respect to such merger or
consolidation, the stockholders of the Company as of such record date and (B)
any "person" or "group" (as defined in Section 13(d)(3) or 14(d)(2) of the
Exchange Act, has become the direct or indirect "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act) of more than 50% of the total voting power
of the Voting Stock of the surviving or resulting Person; (c) 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
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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 (d) the
liquidation or dissolution of the Company.
"Common Equity" of any Person means and includes all Capital Stock of such
Person that is generally entitled to (i) if such Person is a corporation, vote
in the election of directors of such Person or (ii) if such Person is not a
corporation, vote or otherwise participate in the selection of the governing
body, partners, managers or others that will control the management and policies
of such Person.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Consolidated Net Tangible Assets" means, as of the date of determination,
Consolidated Total Assets after deducting therefrom, to the extent included
therein (with respect to clauses (i) and (ii), in each case determined on a
consolidated basis in accordance with GAAP (without duplication)): (i)
unamortized debt discount and expenses; and (ii) goodwill, patents, trademarks,
service marks, trade names, copyrights and other items properly classified as
intangible assets in accordance with GAAP; and (iii) all liabilities properly
classified as current liabilities in accordance with GAAP (except liabilities
that, by their terms, are extendible or renewable at the option of the obligor
to a date that is 12 months or more after the date on which such current
liabilities are determined).
"Consolidated Total Assets" means, as of any date, the total assets of the
Company and its Restricted Subsidiaries that would be shown as assets on a
consolidated balance sheet of the Company and its Restricted Subsidiaries as of
such date prepared in accordance with GAAP (without giving effect to any ceiling
limitation writedowns after the Issue Date).
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time that were incurred pursuant to any
foreign currency exchange agreement, option or futures contract or other similar
agreement or arrangement designed to protect against or manage such Person's or
any of its Subsidiaries' exposure to fluctuations in foreign currency exchange
rates.
"Custodian" means any receiver, trustee, assignee, liquidator, sequester or
similar official under the Bankruptcy Code.
"Default" means any event, act or condition that is, or after notice or
passage of time or both would be, an Event of Default.
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"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, in the form of
Exhibit A hereto except that such Note shall not bear the Global Note Legend and
shall not have the "Schedule of Exchanges of Interests in the Global Note"
attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"DTC" means The Depository Trust Company.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means Notes registered under the Securities Act that are
issued under Section 2.06 hereof in exchange for the Initial Notes pursuant to
the Exchange Offer.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"GAAP" means generally accepted accounting principles in the United States
as in effect on the Issue Date.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, in the form of Exhibit A hereto
issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(iv) or 2.06(f)
hereof.
"Guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of all or any
part of such obligation, including, without limiting the foregoing, the payment
of amounts drawn down by letters of credit. When used as a verb, "guarantee"
shall have a corresponding meaning.
4
<PAGE>
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" of any Person at any date means, without duplication (a) all
indebtedness or obligations of such Person for borrowed money (whether or not
the recourse of the lender is to the whole of the assets of such Person or only
to a portion thereof), (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person in respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto), other than standby letters of
credit and bid or performance bonds issued by such Person in the ordinary course
of business, to the extent not drawn or, to the extent drawn, if such drawing is
reimbursed not later than thirty business days following demand for
reimbursement, (d) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, except trade payables and accrued
expenses incurred in the ordinary course of business, (e) all Capitalized Lease
Obligations of such Person, (f) all Indebtedness of others secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person, (g) all Indebtedness of others guaranteed by such Person to the extent
of such guarantee and (h) all obligations of such Person in respect of Currency
Hedge Obligations, Interest Rate Hedging Agreements and Oil and Gas Hedging
Contracts. Notwithstanding anything in this definition to the contrary,
production payment liabilities (whether recorded as liabilities or as deferred
revenue) shall not constitute Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the $125,000,000 in aggregate principal amount of the
Notes initially authenticated and delivered under this Indenture on the Issue
Date.
"Interest Rate Heading Agreements" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person or any of its
Subsidiaries against fluctuations in interest rates.
"Issue Date" means the date on which the Initial Notes are first issued
under this Indenture.
"Legal Holiday" means, a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
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"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
property or asset, whether or not filed, recorded or otherwise perfected under
applicable law, but excluding agreements to refrain from granting Liens. For
the purposes of this Indenture, a Person shall be deemed to own subject to a
Lien any property or asset that it has acquired or holds subject to the interest
of a vendor or lessor under any conditional sale agreement, Capitalized Lease
Obligation or other title retention agreement relating to such asset; provided,
however, that "Lien" shall not include a trust or similar arrangement
established for the purpose of defeasing any Indebtedness pursuant to the terms
of the instrument evidencing or providing for the issuance of such Indebtedness.
"Make-Whole Premium" means, in connection with any optional redemption of
any Note, the excess, if any, of (i) the aggregate present value as of the date
of such redemption of each dollar of principal of such Note being redeemed and
the amount of interest (exclusive of interest accrued to the date of redemption)
that would have been payable in respect of such dollar if such redemption had
not been made, determined by discounting, on a semiannual basis, such principal
and interest at a rate equal to the sum of the Treasury Yield (determined on the
Business Day immediately preceding the date of such redemption) plus 0.20% per
annum, from the respective dates on which such principal and interest would have
been payable if such redemption had not been made, over (ii) the aggregate
principal amount of such Note being redeemed.
"Non-U.S. Person" means a person who is not a U.S. Person.
"Note Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
"Obligations" means any principal, premium (if any), interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or its Restricted Subsidiaries whether or
not a claim for post-filing interest is allowed in such proceeding), penalties,
fees, charges, expenses, indemnifications, reimbursement obligations, damages,
guarantees (including the Subsidiary Guarantees) and other liabilities or
amounts payable under the documentation governing any Indebtedness or in respect
thereof.
"Ocean Louisiana" means Ocean Energy, Inc., a Louisiana corporation.
"Offering" means the offering of the Initial Notes by the Company.
"Offering Memorandum" means the Offering Memorandum of the Company dated
July 1, 1998 with respect to the Offering.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any
6
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Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or
any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 11.05
hereof.
"Oil and Gas Hedging Contracts" means any oil and gas purchase or hedging
agreement, and other agreement or arrangement, in each case, that is designed to
provide protection against oil and gas price fluctuations.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of
Section 11.05 hereof. The counsel may be an employee of or counsel to the
Company or any Subsidiary Guarantor.
"Pari Passu Indebtedness" means any Indebtedness of the Company, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall be subordinated in right of payment to the
Notes.
"Pari Passu Indebtedness of a Subsidiary Guarantor" means any Indebtedness
of such Subsidiary Guarantor, whether outstanding on the Issue Date or
thereafter created, incurred, or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall be
subordinated in right of payment to the Subsidiary Guarantees.
"Participant" means, with respect to DTC, Euroclear or CEDEL, a Person who
has an account with DTC, Euroclear or CEDEL, respectively (and, with respect to
DTC, shall include Euroclear and CEDEL).
"Participating Broker-Dealer" has the meaning set forth in the Registration
Rights Agreement.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint stock
company, trust, unincorporated organization or government or other agency or
political subdivision thereof or other entity of any kind.
"Principal Property" means (i) any property owned or leased by the Company
or any Restricted Subsidiary and located within the United States of America,
any State thereof (including property located off the coast of the United States
of America held pursuant to lease from any United
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States Federal, State or other governmental body) or Canada that is considered
by the Company to be capable of producing oil, gas or other minerals in
commercial quantities, (ii) any refinery, smelter or processing or manufacturing
plant owned or leased by the Company or any Restricted Subsidiary and located
within the United States of America, any State thereof, or Canada, except (A)
facilities related thereto employed in transportation, distribution or
marketing, and (B) any refinery, smelter or processing or manufacturing plant,
or portion thereof, that the Board of Directors determines is not material to
the business of the Company and its Restricted Subsidiaries taken as a whole,
and (iii) any Capital Stock or Indebtedness issued by a Restricted Subsidiary
that owns or leases property of the types described in clauses (i) and (ii) of
this definition.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
hereof to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Project Finance Debt" means Indebtedness of an Unrestricted Subsidiary (i)
as to which neither the Company nor any Restricted Subsidiary of the Company is
directly or indirectly liable (by virtue of the Company's or such Restricted
Subsidiary's being the primary obligor, or guarantor of (by way of guarantee,
statute, common law or otherwise), or otherwise contractually liable in any
respect on, such Indebtedness) and (ii) that is not secured by any assets of the
Company or of any of its Restricted Subsidiaries.
"Purchase Agreement" means the Purchase Agreement dated July 1, 1998 among
the Company, Ocean Louisiana and the Initial Purchasers (as defined therein.)
"QIB" means a "qualified institution buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of July 8, 1998, by and among the Company, Ocean Louisiana and the
other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a permanent global Note in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee.
"Responsible Officer," when used with respect to the Trustee, means any
officer, including, without limitation, any vice president, assistant vice
president, assistant treasurer or secretary within the Corporate Trust
Administration of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to particular corporate trust matter, any
8
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other officer or employee to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Period" means the 40-day distribution compliance period as set
forth in Regulation S.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the Issue Date, other than an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means the Global Note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Notes sold in reliance on Rule 144A.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Sale/Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Company or any of its Restricted Subsidiaries
for a period of more than three years of any Principal Property, which property
has been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person in contemplation of such leasing.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary the consolidated
assets of which comprise in excess of 5% of Consolidated Net Tangible Assets (as
shown in the most recent audited consolidated balance sheet of the Company and
its Subsidiaries).
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"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and, when used with respect to any other Indebtedness or any
installment of interest thereon, means the date specified in the instrument
evidencing or governing such Indebtedness as the fixed date on which the
principal of such Indebtedness or such installment of interest is due and
payable.
"Subordinated Indebtedness of a Subsidiary Guarantor" means any
Indebtedness of such Subsidiary Guarantor, whether outstanding on the Issue Date
or thereafter created, incurred, or assumed, if the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall be subordinated in right of payment to the
Subsidiary Guarantees.
"Subsidiary" means, as to any Person, any corporation, association or other
business entity, in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries own more than 50% of the total
combined voting power of all Common Equity, and any partnership or joint venture
if more than a 50% interest in the profits or capital thereof is owned by such
Person or one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Restricted Subsidiaries).
"Subsidiary Guarantee" means any Guarantee of the Notes by any Subsidiary
Guarantor pursuant to Article 10 hereof or pursuant to the execution and
delivery of a supplemental indenture substantially in the form of Exhibit D
hereto.
"Subsidiary Guarantor" means (i) Ocean Louisiana and (ii) each of the
Company's Restricted Subsidiaries that becomes a guarantor of the Notes pursuant
to Article 10.01 hereof and executes a supplemental indenture in which such
Restricted Subsidiary agrees to be bound by the terms of this Indenture, in each
case until such time as the Subsidiary Guarantee of such Person is released in
accordance with the provisions of Article 10 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Treasury Yield" means, in connection with the calculation of any Make-
Whole Premium on any Note, the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled by and
published in the most recent Federal Reserve Statistical Release H.15 (519) that
has become publicly available at least two business days prior to the date fixed
for redemption (or, if such Statistical Release is no longer published, any
publicly available source of similar data)) equal to the then remaining maturity
of such Note; provided that if no United States Treasury security is available
with such a constant maturity and for which a closing yield is given, the
Treasury Yield shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the closing yields of United States Treasury
securities for which such yields
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are given, except that if the remaining maturity of such Note is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note in the form of
Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing Notes that do not bear the Private Placement Legend.
"Unrestricted Subsidiary" means (i) Havre Pipeline Company, LLC and Lion
GPL, S.A., (ii) any Subsidiary acquired or organized after the Issue Date that
is designated as an Unrestricted Subsidiary for purposes of this Indenture by a
resolution of the Board of Directors of the Company in accordance with the
requirements of this paragraph, and (iii) any Subsidiary of an Unrestricted
Subsidiary, in each case until such time as such Subsidiary is designated as a
Restricted Subsidiary for purposes of this Indenture by a resolution of the
Board of Directors of the Company in accordance with the requirements of this
paragraph. The Company may designate any Subsidiary that satisfies the
requirements of this paragraph to be an Unrestricted Subsidiary by a resolution
of the Board of Directors of the Company if after giving effect to such
designation (a) such Subsidiary does not own or hold any Capital Stock of, or
any Lien on any property of, the Company or any Restricted Subsidiary and (b)
such Subsidiary is not liable, directly or indirectly, with respect to any
Indebtedness other than Project Finance Debt. The Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary by a resolution of the
Board of Directors of the Company if immediately after giving effect to such
designation, no Default or Event of Default has occurred and is continuing.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
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Section 1.02 Other Definitions.
DEFINED
IN
TERM SECTION
- ---------------------------------------------------------- -----------
"Change of Control Notice"................................ 4.06
"Change of Control Offer"................................. 4.06
"Change of Control Purchase Date"......................... 4.06
"Change of Control Purchase Price"........................ 4.06
"Covenant Defeasance"..................................... 8.03
"Event of Default"........................................ 6.01
"Funding Guarantor"....................................... 10.05
"Legal Defeasance"........................................ 8.02
"Paying Agent"............................................ 2.03
"Registrar"............................................... 2.03
"U.S. Government Obligations"............................. 8.04
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Company and any successor obligor upon the
Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include the
singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time.
ARTICLE II
THE NOTES
Section 2.01 Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof. The Notes may bear
notations of Subsidiary Guarantees.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
Notes issued in global form shall be substantially in the form of Exhibit A
attached hereto, including the Global Note Legend and the "Schedule of Exchanges
in the Global Note" attached thereto. Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto, but without the Global
Note Legend and without the "Schedule of Exchanges of Interests in the Global
Note" attached thereto. Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee, the Depositary or the Note Custodian, at the
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direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
Notes offered and sold in reliance on Regulation S will initially be
represented by one or more Regulation S Global Notes which will be registered in
the name of Cede & Co., as nominee of DTC, and deposited on behalf of the
purchasers of the Notes represented thereby with a custodian for DTC for credit
to the respective accounts of the purchasers (or to such other accounts as they
may direct) at Euroclear or CEDEL Bank. Prior to the 40th day after the later
of the commencement of the Offering and the Issue Date, interests in Regulation
S Global Notes may only be held through Euroclear or CEDEL. The aggregate
principal amount of the Regulation S Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of CEDEL shall be applicable
to transfers of beneficial interests in the Regulation S Global Notes that are
held by members of, or Participants, in DTC through Euroclear or CEDEL.
Section 2.02 Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Notes for original issue on the Issue Date up to
$125,000,000 aggregate principal amount of the Notes. The aggregate principal
amount of Notes outstanding at any time may not exceed $125,000,000 except as
provided in Section 2.07 hereof. Each Note shall be dated the date of its
authentication.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with Holders or an Affiliate of the Company.
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Section 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency within the City and State of
New York where Notes may be presented for registration of transfer or for
exchange ("Registrar") and an office or agency where Notes may be presented for
payment ("Paying Agent"). The Registrar shall keep a register of the Notes and
of their transfer and exchange. The Company may appoint one or more co-
registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall promptly notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may act as Paying Agent or Registrar.
The Company initially appoints DTC to act as Depositary with respect to the
Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal
or premium, if any, or interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) shall have no further liability for
the money. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
Section 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall provide to a Responsible Officer of the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Company shall otherwise comply with TIA
(S) 312(a).
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Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary for the Global Notes or that it is no longer a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary is
not appointed by the Company within 90 days after the date of such notice from
the Depositary or (ii) the Company in its sole discretion notifies the Trustee
in writing that it elects to cause issuance of the Notes in certificated form;
provided that in no event shall the Regulation S Global Note be exchanged by the
Company for Definitive Notes prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903 under the Securities Act. Upon the occurrence of either of
the preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.11 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to Section 2.07 or 2.11
hereof, shall be authenticated and delivered in the form of, and shall be, a
Global Note. A Global Note may not be exchanged for another Note other than as
provided in this Section 2.06(a), however, beneficial interests in a Global Note
may be transferred and exchanged as provided in Section 2.06(b), (c) or (f)
hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period transfers of
beneficial interests in a Regulation S Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Beneficial interests in any Unrestricted Global Note
may be transferred only to Persons who take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be
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required to be delivered to the Registrar to effect the transfers described
in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests (other than a transfer of a beneficial interest in a
Global Note to a Person who takes delivery thereof in the form of a
beneficial interest in the same Global Note), the transferor of such
beneficial interest must deliver to the Registrar (A) (1) a written order
from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant
or an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above; provided that in no event shall Definitive Notes
be issued upon the transfer or exchange of beneficial interests in a
Regulation S Global Note prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903 under the Securities Act. Upon an Exchange Offer by
the Company in accordance with Section 2.06(f) hereof, the requirements of
this Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes contained in
this Indenture, the Notes and otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of clause (ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the Rule 144A Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including
the certifications in Item (1) thereof; or
(B) if the transferee will take delivery in the form of
the Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in Item (2) thereof.
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(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted Global
Note. A beneficial interest in any Restricted Global Note may be exchanged
by any Holder thereof for a beneficial interest in an Unrestricted Global
Note or transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of clause (ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer, is
not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a beneficial interest in an Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in Item (1)(a) thereof;
(2) if the Holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit B hereto, including the
certifications in Item (4) thereof; and
(3) in each such case set forth in this subparagraph
(D), an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are not
required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or
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more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraph
(B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Definitive Note or
to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon receipt by the Registrar of
the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in Item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in Item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in Item (2)
thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in Item (3)(a) thereof;
(E) if such beneficial interest is being transferred
pursuant to any other exemption from the registration requirements of
the Securities Act, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by Item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in Item (3)(b)
thereof; or
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(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in Item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)
shall be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall make available for delivery such
Definitive Notes to the Persons in whose names such Notes are so registered.
Any Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein.
(ii) Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Global Note may not be (A)
exchanged for a Definitive Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(c)(3)(B) under the Securities Act or (B)
transferred to a Person who takes delivery thereof in the form of a
Definitive Note prior to the conditions set forth in clause (A) above or
unless the transfer is pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Notwithstanding 2.06(c)(i) hereof, a holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial interest
for an Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
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(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit C hereto,
including the certifications in Item (1)(b) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in Item (4) thereof; and
(3) in each such case set forth in this subparagraph
(D), an Opinion of Counsel in form reasonably acceptable to the
Company, to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are not required
in order to maintain compliance with the Securities Act.
(iv) If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause
the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Company shall
execute and the Trustee shall authenticate and make available for delivery
to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall make available for delivery such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iv) shall not bear the Private
Placement Legend. A beneficial interest in an Unrestricted Global Note
cannot be exchanged for a Definitive Note bearing the Private Placement
Legend or transferred to a Person who takes delivery thereof in the form of
a Definitive Note bearing the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Definitive
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Notes to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the Registrar
of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in Item (2)(b) thereof;
(B) if such Definitive Note is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in Item (1) thereof;
(C) if such Definitive Note is being transferred to a Non-
U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in Item (2)
thereof;
(D) if such Definitive Note is being transferred pursuant
to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in Item (3)(a) thereof;
(E) if such Definitive Note is being transferred to the
Company or any of its subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in Item (3)(b)
thereof; or
(F) if such Definitive Note is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in Item (3)(c) thereof,
the Trustee shall cancel the Definitive Note, increase or cause to be increased
the aggregate principal amount of, in the case of subparagraph (A) above, the
appropriate Restricted Global Note and, in the case of subparagraph (B) above,
the 144A Global Note, and, in the case of subparagraph (C) above, the Regulation
S Global Note.
(ii) A Holder of a Restricted Definitive Note may exchange such
Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, is not (1) a broker-
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dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes
to exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in Item (1)(c) thereof;
(2) if the Holder of such Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery thereof in
the form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in Item (4) thereof; and
(3) in each such case set forth in this subparagraph
(D), an Opinion of Counsel in form reasonably acceptable to the
Company to the effect that such exchange or transfer is in compliance
with the Securities Act, that the restrictions on transfer contained
herein and in the Private Placement Legend are not required in order
to maintain compliance with the Securities Act, and such Definitive
Notes are being exchanged or transferred in compliance with any
applicable blue sky securities laws of any State of the United States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase
or cause to be increased the aggregate principal amount of the Unrestricted
Global Note.
(iii) A Holder of an Unrestricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
(iv) If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
or (iii) above at a time when an
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Unrestricted Global Note has not yet been issued, the Company shall issue
and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to
subparagraphs (ii)(B), (ii)(D) or (iii) above.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Definitive Notes may be transferred to and
registered in the name of Persons who take delivery thereof if the
Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in Item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904 of the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in Item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications, certificates and Opinion of
Counsel required by Item (3) thereof, if applicable.
(ii) Any Restricted Definitive Note may be exchanged by the
Holder thereof for an Unrestricted Definitive Note or transferred to a
Person or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
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(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in Item (1)(b) thereof;
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in Item (4) thereof; and
(3) in each such case set forth in this subparagraph
(D), an Opinion of Counsel in form reasonably acceptable to the
Company to the effect that such exchange or transfer is in compliance
with the Securities Act, that the restrictions on transfer contained
herein and in the Private Placement Legend are not required in order
to maintain compliance with the Securities Act, and such Restricted
Definitive Note is being exchanged or transferred in compliance with
any applicable blue sky securities laws of any State of the United
States.
(iii) A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request for such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof. Unrestricted Definitive Notes cannot
be exchanged for or transferred to Persons who take delivery thereof in the
form of a Restricted Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of (A) an authentication order in accordance with Section 2.02
hereof and (B) an Opinion of Counsel opining as to the enforceability of the
Exchange Notes and the Guarantees thereof, the Trustee shall authenticate (i)
one or more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by persons that are not (x) broker-dealers, (y) Persons
participating in the distribution of the Exchange Notes or (z) Persons who are
affiliates (as defined in Rule 144) of the Company and accepted for exchange in
the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer. Concurrent with the issuance of such Notes, the
Trustee shall cause the aggregate principal amount of the applicable Restricted
Global Notes to be reduced accordingly, and
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the Company shall execute and the Trustee shall authenticate and make available
for delivery to the Persons designated by the Holders of Definitive Notes so
accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
HEREOF AGREES (1) NOT TO OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO (X) THE DATE THAT IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS
SECURITY) AND THE LAST DAY ON WHICH OCEAN ENERGY, INC. (THE "COMPANY") OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE
LAWS (THE "RESALE RESTRICTION TERMINATION DATE"), EXCEPT (A) TO THE COMPANY, (B)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT IS ACQUIRING SUCH SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (2) THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE, THE TRANSFER
AGENT AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY
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SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFER TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR THE
BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A OR (2) A NON-U.S. PERSON AND IS ACQUIRING THE NOTE IN AN
"OFFSHORE TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraph (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this
Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO ARTICLE 2 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III)
THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on
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such Global Note, by the Trustee, the Note Custodian or the Depositary at the
direction of the Trustee, to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note, by the Trustee, the Note Custodian or by the
Depositary at the direction of the Trustee, to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer or exchange of any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global Notes
or Definitive Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required (A) to issue, to register
the transfer of or to exchange Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (C) to register the transfer
of or to exchange a Note between a record date and the next succeeding
Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
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(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a transfer or exchange may be submitted by facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon the written order of
the Company signed by two Officers of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated and
delivered by the Trustee except for those canceled by it, those delivered to it
for cancellation, those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
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Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee actually knows are so owned
shall be so disregarded.
Section 2.10 Temporary Notes.
Until Definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate Definitive Notes in exchange for
temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall return such
canceled Notes to the Company. The Company may not issue new Notes to replace
Notes that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall promptly notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
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Section 2.13 CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if then generally
in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE III
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.05 hereof, it shall furnish to the Trustee, at least 30
days but not more than 60 days before such redemption date, an Officers'
Certificate setting forth the matters described in Section 3.02 hereof.
Section 3.02 Notice of Redemption.
Not less than 30 and not more than 60 days before such redemption
date, the Company shall mail or cause to be mailed, by first class mail, postage
prepaid, a notice of redemption to each Holder whose Notes are to be redeemed at
its registered address.
The notice shall identify the Notes (including CUSIP numbers) to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(e) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
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(f) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(g) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the name and at the expense of the Company; provided, however, that the
Company shall have delivered to the Trustee, at least 40 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.03 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.02 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price.
Section 3.04 Deposit of Redemption Price.
No later than 10:00 a.m. New York City time on the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption price of and accrued interest on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes
called for redemption. If a Note is redeemed on or after an interest record
date but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Note was
registered at the close of business on such record date. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.05 Optional Redemption.
(a) The Notes will be subject to redemption at any time at the option
of the Company, in whole but not in part, at a redemption price equal to the sum
of (a) an amount equal to 100% of the principal amount thereof and (b) the Make-
Whole Premium, together with accrued
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and unpaid interest to the date fixed for redemption. In no event will such
redemption price ever be less than 100% of the principal amount of the Notes
plus accrued interest to the date of redemption.
(b) Any redemption pursuant to this Section 3.05 shall be made
pursuant to the provisions of Sections 3.01 through 3.04 hereof.
ARTICLE IV
COVENANTS
Section 4.01 Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders of Notes
that it will duly and punctually pay the principal of (and premium, if any, on)
and interest on the Notes in accordance with the terms of the Notes and this
Indenture.
Section 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the Notes,
the Subsidiary Guarantees and this Indenture may be served. The office of the
Trustee, maintained on behalf of the Trustee by DTC and located at 55 Water
Street, New York, NY 10041, shall be such office or agency of the Company,
unless the Company shall designate and maintain some other office or agency for
one or more of such purposes. The Company will give prompt written notice to
the Trustee of any change in the location of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
aforementioned office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind any such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in the Borough of Manhattan, The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or recission and any change in the location of any such other office
or agency.
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Section 4.03 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company and within 45 days after the end of
each of the first, second and third quarters of each fiscal year of the Company,
an Officers' Certificate stating that a review of the activities of the Company
and its Restricted Subsidiaries during the preceding fiscal quarter or fiscal
year, as applicable, has been made under the supervision of the signing Officers
with a view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of such Officer's
knowledge the Company has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which such Officer may have knowledge and what action the
Company is taking or proposes to take with respect thereto). Such Officers'
Certificate shall comply with TIA Section 314(a)(4). For purposes of this
Section 4.03(a), such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
(b) The Company and the Subsidiary Guarantors shall, so long as any
of the Notes are outstanding, deliver to the Trustee, within 10 days of any
Default or Event of Default or default in the performance of any covenant,
agreement or condition contained in this Indenture, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
Section 4.04 Liens.
(a) The Company will not, and will not permit any Restricted
Subsidiary of the Company to, issue, assume or guarantee any Indebtedness for
borrowed money secured by any Lien on any Principal Property now owned or
hereafter acquired by the Company or such Restricted Subsidiary without making
effective provision whereby any and all Notes then or thereafter outstanding
will be secured by a Lien equally and ratably with any and all other obligations
thereby secured for so long as any such obligations shall be so secured. The
foregoing restriction will not, however, apply to the Company and its Restricted
Subsidiaries with respect to:
(i) Liens existing on the Issue Date or provided for pursuant
to agreements (and terms thereof) existing on the Issue Date securing
Indebtedness (A) existing on the Issue Date or (B) to be incurred under
agreements existing on the Issue Date;
(ii) Liens on property (and all improvements, additions and
accessions thereto and all proceeds thereof) securing (A) all or any
portion of the cost of exploration, drilling, development, operation or
maintenance of such property or the cost of acquiring, constructing,
altering, improving or repairing such property or improvements used or to
be used in connection with such property (including the cost of financing
such actions) or
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(B) Indebtedness incurred by the Company or any Restricted Subsidiary to
provide funds for the activities set forth in clause (A) above;
(iii) Liens securing Indebtedness owed by a Restricted
Subsidiary to the Company or to any other Restricted Subsidiary or by the
Company to any Restricted Subsidiary that is a Subsidiary Guarantor;
(iv) Liens on the property of any Person existing at the time
such Person becomes a Restricted Subsidiary and not incurred as a result of
(or in connection with or in anticipation of) such Person becoming a
Restricted Subsidiary, provided that such Liens do not extend to or cover
any property of the Company or any of its Restricted Subsidiaries other
than the property encumbered at the time such Person becomes a Restricted
Subsidiary, all improvements, additions and accessions thereto and all
proceeds thereof;
(v) Liens affecting property existing at the time it becomes
property of the Company or a Restricted Subsidiary, all improvements,
additions and accessions thereto and all proceeds thereof;
(vi) Liens on any property securing (A) Indebtedness incurred
in connection with the construction, installation or financing of pollution
control or abatement facilities or other forms of industrial revenue bond
financing or (B) Indebtedness issued or guaranteed by the United States or
any State thereof or any department, agency or instrumentality of either;
(vii) Any Lien extending, renewing or replacing (or successive
extensions, renewals or replacements of) any Lien of any type permitted
under clauses (i) through (vi) above, provided that such Lien extends to or
covers only the property that is subject to the Lien being extended,
renewed or replaced and that the principal amount of Indebtedness secured
thereby shall not exceed the sum of (A) the principal amount of
Indebtedness so secured at the time of such extension, renewal or
replacement, (B) any additional Indebtedness incurred to pay the cost of
altering, improving or repairing such property and (C) any expenses of the
Company and its Restricted Subsidiaries (including any premium) incurred in
connection with any such extension, renewal or replacement; and
(viii) Other Liens (exclusive of any Lien of any type otherwise
permitted under clauses (i) through (vii) above or paragraph (b) below)
securing Indebtedness for borrowed money of the Company or any of its
Restricted Subsidiaries in an aggregate principal amount that, together
with the aggregate amount of Attributable Indebtedness deemed to be
outstanding in respect of all Sale/Leaseback Transactions entered into
pursuant to Section 4.05(a) hereof (exclusive of any such Sale/Leaseback
Transactions otherwise permitted under clauses (i) through (vii) above of
this Section 4.04(a) or Section 4.04 (b) below), does not at the time such
Indebtedness is incurred exceed 15% of Consolidated Net
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Tangible Assets (as shown in the most recent audited consolidated balance
sheet of the Company and its Restricted Subsidiaries).
(b) The following types of transactions will not be prohibited or
otherwise limited by the foregoing covenant: (i) the sale, granting of Liens
with respect to, or other transfer of, oil, gas or other minerals in place for a
period of time until, or in an amount such that, the transferee will realize
therefrom a specified amount (however determined) of money or of such oil, gas
or other minerals; (ii) the sale or other transfer of any other interest in
property of the character commonly referred to as a production payment,
overriding royalty, forward sale or similar interest; (iii) the entering into of
Currency Hedge Obligations, Interest Rate Hedging Agreements or Oil and Gas
Hedging Contracts but Liens securing any Indebtedness for borrowed money that is
related to any Interest Rate Hedging Agreement shall not be permitted hereby
unless otherwise permitted under this Section 4.04; and (iv) the granting of
Liens in favor of the United States, any State thereof or any foreign government
or any subdivision, department, agency, organization or instrumentality of any
of the foregoing to secure partial, progress, advance or other payments or other
obligations pursuant to the provisions of any contract or statute, or in favor
of any other Person to secure obligations in connection with any letters of
credit, bank guarantees, bonds or surety obligations required or requested by
any such governmental authority in connection with any contract or statute.
Section 4.05 Sale/Leaseback Transactions.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any Sale/Leaseback Transaction with any Person (other than the
Company or a Restricted Subsidiary) unless either:
(a) the Company or such Restricted Subsidiary would be entitled to
incur Indebtedness, in a principal amount equal to the Attributable Indebtedness
with respect to such Sale/Leaseback Transaction, secured by a Lien on the
property subject to such Sale/Leaseback Transaction pursuant to Section 4.04
hereof without equally and ratably securing the Notes pursuant to such
Section 4.04; or
(b) such Sale/Leaseback Transaction occurs within 180 days from the
date of acquisition of such Principal Property or the date of the completion of
construction or commencement of full operations of such Principal Property,
whichever is later; or
(c) after the Issue Date and within a period commencing six months
prior to the consummation of such Sale/Leaseback Transaction and ending six
months after the consummation thereof, the Company or a Restricted Subsidiary
shall have expended for property used or to be used in the business of the
Company and its Restricted Subsidiaries an amount equal to all or a portion of
the net proceeds from such Sale/Leaseback Transaction and the Company shall have
elected to designate such amount as a credit against such Sale/Leaseback
Transaction (with any such amount not being so expended and so designated to be
applied as set forth in Section 4.05(d) below); or
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(d) the Company or a Restricted Subsidiary, during the 12-month
period after the effective date of such Sale/Leaseback Transaction, shall have
applied to the voluntary repayment, repurchase, redemption, defeasance or other
acquisition or retirement ("retirement") of Notes, any Pari Passu Indebtedness,
any Pari Passu Indebtedness of a Subsidiary Guarantor or any Indebtedness of a
Restricted Subsidiary that is not a Subsidiary Guarantor ("Retired
Indebtedness") an amount equal to the greater of (i) the net proceeds of the
sale or transfer of the property leased in such Sale/Leaseback Transaction and
(ii) the fair value, as determined by the Board of Directors of the Company, of
such property at the time of entering into such Sale/Leaseback Transaction (in
either case reduced to reflect the remaining term of the lease and any amount
expended by the Company or a Restricted Subsidiary as set forth in Section
4.05(c) above), less an amount equal to the principal amount of such Retired
Indebtedness voluntarily retired within such 12-month period and not designated
as a credit against any other Sale/Leaseback Transaction entered into by the
Company or any Restricted Subsidiary during such period.
Section 4.06 Purchase of Notes Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase all of the then outstanding Notes (a
"Change of Control Offer"), and shall purchase, on a business day (the "Change
of Control Purchase Date") not more than 70 nor less than 30 days following the
Change of Control, all of the then outstanding Notes validly tendered pursuant
to such Change of Control Offer, at a purchase price (the "Change of Control
Purchase Price") equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the Change of Control Purchase Date.
(b) The Change of Control Offer is required to remain open for at
least 20 Business Days and until the close of business on the Change of Control
Purchase Date. The Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer at the same purchase price, at the same times and otherwise in substantial
compliance with the requirements applicable to a Change of Control Offer made by
the Company and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer.
(c) Not later than the 30th day following any Change of Control, the
Company shall give to the Trustee and each Holder of the Notes, in the manner
provided in Section 11.02, a notice (the "Change of Control Notice") stating:
(1) that a Change in Control has occurred and that such
Holder has the right to require the Company to repurchase such
Holder's Notes, or portion thereof, at the Change of Control Purchase
Price;
(2) any information regarding such Change of Control
required to be furnished pursuant to Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder;
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(3) the Change of Control Purchase Date which shall be on
a Business Day and no earlier than 30 days nor later than 70 days from
the date the Change of Control occurred;
(4) that any Note, or portion thereof, not tendered or
accepted for payment will continue to accrue interest;
(5) that unless the Company defaults in depositing money
with the Paying Agent in accordance with the last paragraph of clause
(d) of this Section 4.06, or payment is otherwise prevented, any Note,
or portion thereof, accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Purchase Date; and
(6) the instructions a Holder must follow in order to have
its Notes repurchased in accordance with paragraph (d) of this
Section.
(d) Holders electing to have Notes purchased will be required to
surrender such Notes to the Company at the address specified in the Change of
Control Notice at least five Business Days prior to the Change of Control
Purchase Date. Holders will be entitled to withdraw their election if the
Company receives, not later than three Business Days prior to the Change of
Control Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the certificate number(s) and principal
amount of the Notes delivered for purchase by the Holder as to which his
election is to be withdrawn and a statement that such Holder is withdrawing his
election to have such Notes purchased. Holders whose Notes are purchased only in
part will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
On the Change of Control Purchase Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to a Change of
Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so tendered, and (iii) deliver
or cause to be delivered to the Trustee the Notes so accepted. The Paying Agent
shall promptly mail or deliver to Holders of the Notes so tendered payment in an
amount equal to the purchase price for the Notes, and the Company will promptly
execute and the Trustee will promptly authenticate and mail or make available
for delivery to such Holders a new Note equal in principal amount to any
unpurchased portion of the Note which any such Holder did not surrender for
purchase. The Company shall announce the results of a Change of Control Offer on
or as soon as practicable after the Change of Control Purchase Date. For
purposes of this Section 4.06, the Trustee will act as the Paying Agent.
(e) The Company shall comply with Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable, in the event that a Change of Control occurs and
the Company is required to purchase Notes as described above.
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Section 4.07 Additional Subsidiary Guarantors.
(a) The Company shall not permit any Restricted Subsidiary that is
not a Subsidiary Guarantor to guarantee the payment of any Indebtedness of the
Company unless (i) (A) such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to this Indenture substantially in the form of
Exhibit D hereto, providing for a Subsidiary Guarantee of the Notes by such
Restricted Subsidiary and (B) with respect to any guarantee of subordinated
indebtedness by a Restricted Subsidiary, any such guarantee shall be
subordinated to such Restricted Subsidiary's Subsidiary Guarantee; (ii except to
the extent contemplated by Section 10.05 hereof, such Restricted Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Restricted Subsidiary as a result of any
payment by such Restricted Subsidiary under its Subsidiary Guarantee until such
time as the obligations guaranteed thereby are paid in full; and (ii such
Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the
effect that such Subsidiary Guarantee has been duly executed and authorized and
constitutes a valid, binding and enforceable obligation of such Restricted
Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy,
insolvency or similar laws (including, without limitation, all laws relating to
fraudulent transfers) and except insofar as enforcement thereof is subject to
general principles of equity; provided that this paragraph (a) shall not be
applicable to any guarantee of any Restricted Subsidiary that (x) existed at the
time such Person became a Restricted Subsidiary of the Company and (y) was not
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary of the Company.
(b) The Company may from time to time, at its option, nominate any
Restricted Subsidiary as an additional Subsidiary Guarantor. Any such Restricted
Subsidiary shall execute and deliver a supplemental indenture to this Indenture
agreeing to guarantee the Notes. At the election of the Company, such Subsidiary
Guarantee may contain such release provisions as the Company may deem
appropriate (including, without limitation, release provisions of the type in
paragraph (c) below).
(c) Notwithstanding the foregoing paragraph (a) and the other
provisions of this Indenture, any Subsidiary Guarantee incurred by a Restricted
Subsidiary pursuant to this Section 4.07 may, at the election of the Company,
provide by its terms that it shall be automatically and unconditionally released
and discharged upon (i) any sale or other disposition of all of the Company's
Capital Stock in, or all or substantially all the assets of, such Restricted
Subsidiary (ii the merger of such Restricted Subsidiary into the Company or any
other Restricted Subsidiary (provided the surviving Restricted Subsidiary
assumes the Subsidiary Guarantee) or the liquidation and dissolution of such
Restricted Subsidiary; or (ii the release or discharge of the guarantee which
resulted in the creation of such Subsidiary Guarantee, except a discharge or
release by or as a result of payment under such guarantee.
(d) Unless specified to the contrary in a supplemental indenture
hereto, any Subsidiary Guarantee incurred by a Restricted Subsidiary pursuant to
this Section 4.07 shall be
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deemed to provide for the release and discharge thereof as contemplated by
Sections 4.07(c) and 10.04 hereof.
ARTICLE V
SUCCESSORS
Section 5.01 Consolidation, Merger and Sale of Assets.
The Company will not (A) consolidate with or merge with any Person, or (B)
sell, lease, convey, transfer or otherwise dispose of all or substantially all
of its assets (each an "asset disposition") to any Person, unless: (i) either
(a) in the case of any such consolidation or merger, the Company is the
continuing Person or (b) the Person formed by or surviving such consolidation or
merger (if other than the Company), or to which such asset disposition shall be
made (collectively, the "Successor"), is organized and existing under the laws
of the United States, any political subdivision thereof or any State thereof or
the District of Columbia, and assumes by supplemental indenture all the
obligations of the Company under this Indenture and the Notes; and (ii)
immediately after giving effect to such transaction, no Default or Event of
Default has occurred and is continuing.
Section 5.02 Successor Substituted.
Upon any consolidation, merger or the Company asset disposition in
accordance with Section 5.01 hereof, the Successor shall be substituted for the
Company (so that from and after the date of such consolidation, merger or asset
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the Successor and not to the Company), and may exercise every
right and power of the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and, in the case of
an asset disposition, the Company will thereafter be relieved of all obligations
and covenants under this Indenture and the Notes.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
An "Event of Default" occurs if:
(a) default in the payment of the principal of or premium, if any, on
any of the Notes, whether such payment is due at maturity, upon redemption, upon
repurchase pursuant to a Change of Control Offer, upon acceleration or
otherwise; or
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(b) default in the payment of any installment of interest on any of
the Notes, when it becomes due and payable, and the continuance of such default
for a period of 30 days; or
(c) the failure to make or consummate a Change of Control Offer in
accordance with the provisions of Section 4.06 hereof; or
(d) the Company or any Subsidiary Guarantor shall fail to perform or
observe any other term, covenant or agreement contained in the Notes, any
Subsidiary Guarantee or this Indenture (other than a default specified in (a),
(b) or (c) above) for a period of 60 days after written notice of such failure
requiring the Company to remedy the same shall have been given (i) to the
Company by the Trustee or (ii) to the Company and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Notes then outstanding; or
(e) the occurrence and continuation beyond any applicable grace
period of any default in the payment of the principal of (or premium, if any,
on) or interest on any Indebtedness of the Company or any Restricted Subsidiary
for money borrowed (other than the Notes and the Subsidiary Guarantees) when
due, or any other default causing acceleration of any Indebtedness of the
Company or any Restricted Subsidiary for money borrowed, provided that the
aggregate principal amount of such Indebtedness shall exceed the greater of (i)
$20 million and (ii) 5% of Consolidated Net Tangible Assets (as shown in the
most recent audited balance sheet of the Company and its Subsidiaries); provided
further that any such default is not cured or waived or any such acceleration is
not rescinded, or such debt is not repaid, within a period of 20 days after a
written notice thereof to the Company as provided in Section 11.02 of this
Indenture; or
(f) any Subsidiary Guarantee shall for any reason cease to be, or be
asserted by the Company or any Subsidiary Guarantor, as applicable, not to be,
in full force and effect, enforceable in accordance with its terms (except
pursuant to the release of any such Subsidiary Guarantee in accordance with this
Indenture); or
(g) final judgments or orders rendered against the Company or any
Restricted Subsidiary that are unsatisfied and that require the payment in
money, either individually or in an aggregate amount, that exceed the coverage
under applicable insurance policies by the greater of (i) $20 million and (ii)
5% of Consolidated Net Tangible Assets (as shown in the most recent audited
balance sheet of the Company and its Subsidiaries), and either (x) commencement
by any creditor of an enforcement proceeding upon such judgment (other than a
judgment that is stayed by reason of pending appeal or otherwise) or (y) the
occurrence of a 60-day period during which a stay of such judgment or order, by
reason of pending appeal or otherwise, was not in effect; or
(h) the entry of a decree or order by a court having jurisdiction in
the premises (i) for relief in respect of the Company, any Subsidiary Guarantor
or any Significant Subsidiary in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or (ii) adjudging the Company, any Subsidiary Guarantor or any
Significant Subsidiary bankrupt or insolvent, or approving a petition seeking
reorganization,
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arrangement, adjustment or composition of the Company, any Subsidiary Guarantor
or any Significant Subsidiary under any applicable federal or state law, or
appointing under any such law a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company, any Subsidiary
Guarantor or any Significant Subsidiary or of a substantial part of their
consolidated assets, or ordering the winding up or liquidation of their affairs,
and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive days; or
(i) the commencement by the Company, any Subsidiary Guarantor or any
Significant Subsidiary of a voluntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law or
any other case or proceeding to be adjudicated bankrupt or insolvent, or the
consent by the Company, any Subsidiary Guarantor or any Significant Subsidiary
to the entry of a decree or order for relief in respect thereof in an
involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by the
Company, any Subsidiary Guarantor or any Significant Subsidiary of a petition or
consent seeking reorganization or relief under any applicable federal or state
law, or the consent by it under any such law to the filing of any such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or other similar official) of any
of the Company, any Subsidiary Guarantor or any Significant Subsidiary or of any
substantial part of their consolidated assets, or the making by it of an
assignment for the benefit of creditors under any such law, or the admission by
it in writing of its inability to pay its debts generally as they become due or
taking of corporate action by the Company, any Subsidiary Guarantor or any
Significant Subsidiary in furtherance of any such action.
Section 6.02 Acceleration; Rescission.
If any Event of Default (other than as specified in clause (h) or (i) of
Section 6.01 above) occurs and is continuing, the Trustee, by written notice to
the Company, or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes, by written notice to the Trustee and the Company may
declare the principal of, premium, if any, and accrued interest on all the then
outstanding Notes due and payable immediately. Upon any such declaration, the
Notes shall become due and payable immediately. Notwithstanding the foregoing,
if an Event of Default specified in clause (h) or (i) of Section 6.01 hereof
occurs, the principal of, premium, if any, and accrued interest on all the then
outstanding Notes shall ipso facto become and be immediately due and payable
without any declaration, notice or other act on the part of the Trustee or any
Holder.
After a declaration of acceleration has been made, but before a judgment or
decree for payment of the money due has been obtained by the Trustee, the
Holders of a majority in aggregate principal amount of the then outstanding
Notes, by written notice to the Company and the Trustee, may rescind and annul
such declaration and its consequences if (a) the Company or any Restricted
Subsidiary has paid or deposited with the Trustee a sum sufficient to pay (i)
all sums paid or advanced by the Trustee under this Indenture and the reasonable
compensation, expenses,
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disbursements and advances of the Trustee, its agents and counsel, (ii) all
overdue interest on all Notes, (iii) the principal of and premium, if any, on
any Notes which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Notes, and (iv) to
the extent that payment of such interest is lawful, interest upon overdue
interest and overdue principal at the rate borne by the Notes which has become
due otherwise than by such declaration of acceleration; (b) the rescission would
not conflict with any judgment or decree of a court of competent jurisdiction;
and (c) all Events of Default, other than the nonpayment of principal of,
premium, if any, and interest on the Notes that has become due solely by such
declaration of acceleration, have been cured or waived.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal and interest on the Notes
or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes may on behalf of the Holders of all the Notes waive
any existing Default or Event of Default hereunder and its consequences, except
a Default or Event of Default
(a) in respect of the payment of the principal of, or premium, if
any, or interest on any Note, or
(b) in respect of a covenant or provision hereof which under
Article IX hereof cannot be modified or amended without the consent of the
Holder of each outstanding Note affected.
Upon any such waiver, such Default or Event of Default shall cease to exist
for every purpose under this Indenture, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
Section 6.05 Control by Majority.
Subject to the provisions of Section 7.02 hereof, the Holders of a majority
in aggregate principal amount of the then outstanding Notes have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or
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power conferred on the Trustee under this Indenture. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or that
the Trustee determines may be unduly prejudicial to the rights of other Holders
of Notes or that may involve the Trustee in personal liability. Subject to the
provisions of Section 7.01 hereof, in case an Event of Default shall occur and
be continuing, the Trustee is not under any obligation to exercise any of its
rights or powers hereunder at the request or direction of any of the Holders
unless such Holders shall have offered to the Trustee reasonable security or
indemnity.
If a Default or an Event of Default occurs and is continuing and is known
to the Trustee, the Trustee shall mail to each Holder notice of the Default or
Event of Default within 60 days after the occurrence thereof. Except in the
case of a Default or an Event of Default in payment of principal of, premium, if
any, or interest on the Notes, the Trustee may withhold the notice to the
Holders of such Notes if a committee of its trust officers in good faith
determines that withholding the notice is in the best interests of the Holders.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) such Holder has previously given to the Trustee written notice of
a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense to be incurred in compliance with such request;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in aggregate
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all of such Holders.
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Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on the Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) hereof occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense, and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, premium, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the cost of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE VII
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
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(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and the TIA and no others, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee. To the extent of any conflict between the duties of the
Trustee hereunder and under the TIA, the TIA shall control.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture (but need
not confirm or investigate the accuracy of mathematical calculations or
other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or expense
that might be incurred by it in compliance with such request.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document (whether in
its original or facsimile form) believed by it to be genuine and to have been
signed or presented by the proper Person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
Section 7.03 Individual Rights of Trustee.
The Trustee, any Paying Agent, any authenticating agent or registrar in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that
the Trustee acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue as trustee or
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
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Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and is known to a
Responsible Officer of the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 60 days after the occurrence
thereof. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on the Notes, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the best interests of
the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA (S)313(a) (but if no event described in TIA
(S)313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA
(S)313(b)(2). The Trustee shall also transmit by mail all reports as required
by TIA (S)313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA (S)313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange or
delisted therefrom.
Section 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation
for its acceptance of this Indenture and services hereunder as the parties shall
agree from time to time. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor Trustee
against any and all losses, liabilities, claims, damages or expenses (including
taxes other than taxes based upon the income or gross receipts of the Trustee)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company (including this
Section 7.07) and defending itself against any claim (whether asserted by the
Company or any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability, claim, damage or expense may be attributable to
its negligence or bad faith. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Company shall not relieve the Company of its
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obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of
this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01 (h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under the
Bankruptcy Code.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to the
extent applicable.
Section 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof,
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under the Bankruptcy Code;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
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If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may, at the expense of the Company, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10
hereof, such Holder of a Note may, at the expense of the Company, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S)310(a)(1), (2) and (5). The Trustee is subject to TIA (S)310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA (S)311(a), excluding any creditor
relationship listed in TIA (S)311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S)311(a) to the extent indicated therein.
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ARTICLE VII
DEFEASANCE AND DISCHARGE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article VIII.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and the Subsidiary Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from their obligations with respect to
all outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that the Company and the Subsidiary Guarantors shall be deemed (i) to have paid
and discharged the entire Indebtedness represented by the outstanding Notes,
which shall thereafter be deemed to be "outstanding" only for the purposes of
Section 8.07 hereof and the other Sections of this Indenture referred to in (a)
and (b) below, and (ii) to have satisfied all their respective other obligations
under such Notes and this Indenture (and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.04 hereof,
and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on such Notes when such payments are
due, (b) the obligations of the Company with respect to Notes under Article 2
and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the respective obligations of the Company in
connection therewith and (d) this Article VIII. Subject to compliance with this
Article VIII, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Subsidiary Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from their obligations under the covenants contained in
Sections 4.03 - 4.07 hereof and Articles V and X hereof and the Defaults and
Events of Default contained in Sections 6.01(c), (e), (f) and (g) hereof with
respect to the outstanding Notes on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not to be "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof)
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in connection with such provisions but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company and
the Subsidiary Guarantors may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such provision,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such provision or by reason of any reference in any such provision to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01 hereof,
but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company or any Subsidiary Guarantor shall irrevocably have
deposited or caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 7.10 hereof who shall agree to comply
with the provisions of this Article VIII applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of such
Securities, (A) cash in U.S. Dollars in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (C) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, the principal
of, and premium, if any, and interest on the outstanding Notes on the Stated
Maturity (or redemption date, if applicable) of such principal, premium, if any,
or installment of interest; provided that the Trustee shall have been
irrevocably instructed in writing by the Company to apply such money or the
proceeds of such U.S. Government Obligations to said payments with respect to
such Notes. Before such a deposit, the Company may give to the Trustee, in
accordance with Section 3.02 hereof, a notice of its election to redeem all of
the outstanding Notes at a future date in accordance with Article III hereof,
which notice shall be irrevocable. Such irrevocable redemption notice, if given,
shall be given effect in applying the foregoing. For this purpose, "U.S.
Government Obligations" means securities that are (x) direct obligations of the
United States of America for the timely payment of which its full faith and
credit is pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt, provided that (except as required
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by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the Issue Date, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);
(e) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any Subsidiary
Guarantor is a party or by which it is bound, as evidenced to the Trustee in an
Officers' Certificate delivered to the Trustee concurrently with such deposit;
and
(f) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, which taken together, state that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant
to Section 8.04 or 8.08 hereof shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the
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payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
all sums due and to become due thereon in respect of principal, premium, if any,
and interest but such money need not be segregated from other funds except to
the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 8.04 or 8.08 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or U.S. Government Obligations held by it as provided in
Section 8.04 or 8.08 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance, Covenant
Defeasance or discharge.
Section 8.06 Repayment to Company.
Subject to applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or interest on any
Note and remaining unclaimed for two years after such principal, and premium, if
any, or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. dollars or U.S.
Government Obligations in accordance with Section 8.02 or 8.03 hereof, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's and the Subsidiary Guarantors' obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.02 or
8.03 hereof, as the case may be;
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provided, however, that, if the Company or any Subsidiary Guarantor makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company or such Subsidiary Guarantor shall
be subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
Section 8.08 Discharge.
This Indenture will cease to be of further effect (except for (1) the
rights of Holders to receive the trust funds described in clause (i)(B) of this
Section, and (2) the provisions described in Section 8.02, clauses (b), (c) and
(d)) when (i) either (A) all outstanding Notes theretofore authenticated and
issued (other than destroyed, lost or stolen Notes that have been replaced or
paid) have been delivered to the Trustee for cancellation; or (B) all
outstanding Notes not theretofore delivered to the Trustee for cancellation (x)
have become due and payable, (y) will become due and payable at their Stated
Maturity within one year or (z) are to be called for redemption within one year,
and the Company has irrevocably deposited or caused to be deposited with the
Trustee as funds (immediately available to Holders in the case of clause (x)) in
trust for such purpose cash or U.S. Government Obligations, maturing as to
principal and interest at such times and in such amounts as will ensure the
availability of cash, or a combination thereof that will be sufficient to pay
and discharge the entire indebtedness on the Notes for principal and any
interest to the date of such deposit (in the case of Notes which have become due
and payable), or for principal, premium, if any, and interest to the Stated
Maturity or the Redemption Date, as the case may be; or (C) the Company has
fulfilled such other means of discharge; (ii) the Company has paid all other
sums payable by it; and (iii) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel relating to such matters.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 hereof, the Company and the Trustee may amend
or supplement this Indenture or the Notes without the consent of any Holder of a
Note: (a) to cure any ambiguity, omission, defect or inconsistency, (b) to
provide for the assumption of the obligations of the Company or any Subsidiary
Guarantor under this Indenture by a Successor upon the merger, consolidation or
sale or other disposition of all or substantially all of the assets of the
Company or such Subsidiary Guarantor, (c) to provide for uncertificated Notes in
addition to or in place of certificated Notes, (d) to provide any security for
Notes, (e) to reflect the release of any Subsidiary Guarantor from its
Subsidiary Guarantee, or the addition of any Subsidiary of the Company as a
Subsidiary Guarantor, in the manner provided in this Indenture, (f) to comply
with any requirement to effect or maintain the qualification of this Indenture
under the TIA, (g) to add covenants or Events of Default, (h) to establish the
form or terms of Notes or (i) to make any change that does not adversely affect
the interests of any Holder of Notes in any material respect.
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Upon the request of the Company relating to the execution of any such
amended or supplemental Indenture, and upon receipt by the Trustee of the
documents described in Section 7.02 hereof, the Trustee shall join with the
Company in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture that
affects its own rights, duties, liabilities or immunities under this Indenture
or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company, the Subsidiary
Guarantors and the Trustee may amend or supplement this Indenture with the
consent of the Holders of a majority in principal amount of the outstanding
Notes affected thereby; provided, however, that no such amendment or supplement
may, without the consent of the Holder of each outstanding Note affected
thereby, (i) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver, (ii) reduce the rate of or change the time for
payment of interest, including default interest, on any Note; (iii) reduce the
principal of or premium on or change the stated maturity of, any Note; (iv)
reduce the premium, if any, payable upon redemption of any Note; (v) change the
currency or currency unit of payment of principal of, premium (if any) or any
interest on any Note; (vi) impair the right to institute suit for the
enforcement of any payment of principal of, premium (if any) or any interest on,
any Note; (vii) waive a continuing Default or Event of Default in payment of
principal of, premium (if any) or any interest on, any Note; or (viii) amend,
change or modify the obligation of the Company to make and consummate a Change
of Control Offer in the event of a Change of Control or modify any provisions or
definitions with respect thereto.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
a Responsible Officer of the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture affects
the Trustee's own rights, duties, liabilities or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or
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supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of Notes then outstanding
may waive compliance in a particular instance by the Company with any provision
of this Indenture with respect to the Notes, except a continuing Default or
Event of Default in the payment of the principal of, premium (if any) or
interest on, any Note or in respect of a provision that under this Indenture
cannot be modified or amended without the consent of the Holder of each
outstanding Note.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company, in
exchange for all Notes, may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, Etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article IX if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive and (subject to
Section 7.01 hereof) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Indenture.
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ARTICLE X
GUARANTEES
Section 10.01 Subsidiary Guarantees.
Subject to Section 10.05 hereof, any Restricted Subsidiary that is or
becomes a Subsidiary Guarantor shall, jointly and severally, unconditionally
guarantee to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, the Notes and the Obligations
of the Company hereunder and thereunder, that:
(a) the principal of, premium, if any, and interest on the Notes will
be promptly paid in full when due, subject to any applicable grace period,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal, premium, if any (to the extent permitted by law), and
interest on any interest, if any, on the Notes, and all other payment
Obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full and performed, all in accordance with the terms
hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise.
Failing payment when so due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately. An Event of Default under this
Indenture or the Notes shall constitute an event of default under the Subsidiary
Guarantees, and shall entitle the Holders to accelerate the Obligations of the
Subsidiary Guarantors hereunder in the same manner and to the same extent as the
Obligations of the Company. The Subsidiary Guarantors shall agree that their
Obligations hereunder shall be unconditional, irrespective of the validity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.
Each Subsidiary Guarantor shall waive diligence, presentment, demand of payment,
notice of acceleration, notice of intent to accelerate, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and shall covenant that its Subsidiary Guarantee will not be
discharged except by complete performance of the Obligations contained in the
Notes and this Indenture. If any Holder or the Trustee is required by any court
or otherwise to return to the Company, the Subsidiary Guarantors, or any Note
Custodian, Trustee, liquidator or other similar official acting in relation to
either the Company or the Subsidiary Guarantors, any amount paid by the Company
or any Subsidiary Guarantor to the Trustee or such Holder, the Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated
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in full force and effect. Each Subsidiary Guarantor shall agree that it shall
not be entitled to, and shall waive, any right to exercise any right of
subrogation in relation to the Holders in respect of any Obligations guaranteed
by the Subsidiary Guarantee, except as provided under Section 10.05 hereof. Each
Subsidiary Guarantor shall further agree that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations guaranteed by the Subsidiary Guarantee may
be accelerated as provided in Article 6 hereof for the purposes of its
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed thereby,
and (y) in the event of any declaration of acceleration of such Obligations as
provided in Article 6 hereof, such Obligations (whether or not due and payable)
shall forthwith become due and payable by each Subsidiary Guarantor for the
purpose of its Subsidiary Guarantee. The Subsidiary Guarantors shall have the
right to seek contribution from any non-paying Subsidiary Guarantor pursuant to
Section 10.05 after the Notes and the Obligations hereunder shall have been paid
in full to the Holders under the Subsidiary Guarantees.
Pursuant to Section 4.07 hereof, the Company may, and in certain
circumstances shall be obligated to, cause Restricted Subsidiaries that are not
Subsidiary Guarantors to become Subsidiary Guarantors.
Section 10.02 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 10.01 hereof,
each Subsidiary Guarantor shall execute and deliver this Indenture or a
supplemental indenture substantially in the form of Exhibit D hereto, which
supplemental indenture shall be executed on behalf of such Subsidiary Guarantor,
by manual or facsimile signature, by an Officer of such Subsidiary Guarantor.
Each Subsidiary Guarantor shall agree that its Subsidiary Guarantee set
forth in Section 10.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
If an officer who shall have signed this Indenture or a supplemental
indenture no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the notation of Subsidiary Guarantee
set forth in this Indenture on behalf of the Subsidiary Guarantors.
Section 10.03 Subsidiary Guarantors May Consolidate, Etc., on Certain Terms.
(a) Except as set forth in Articles IV and V hereof, nothing
contained in this Indenture shall prohibit a merger between a Subsidiary
Guarantor and another Subsidiary Guarantor or a merger between a Subsidiary
Guarantor and the Company.
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(b) Subject to Section 10.04 hereof, no Subsidiary Guarantor may
consolidate or merge with or into (whether or not such Subsidiary Guarantor is
the surviving Person) another Person unless (i) the Person formed by or
surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) assumes all the obligations of such Subsidiary Guarantor pursuant to
a supplemental indenture, in a form reasonably satisfactory to the Trustee,
under the Notes and this Indenture, and (ii) immediately after such transaction,
no Default or Event of Default exists.
(c) In the case of any such consolidation or merger and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and substantially in the form of Exhibit D hereto, of
the Subsidiary Guarantee, such successor Person shall succeed to and be
substituted for the Subsidiary Guarantor with the same effect as if it had been
named herein as a Subsidiary Guarantor.
Section 10.04 Releases of Subsidiary Guarantees.
In the event of a sale or other disposition of all or substantially all of
the assets of any Subsidiary Guarantor, or a sale or other disposition of all of
the Capital Stock or other ownership interests of any Subsidiary Guarantor, in
each case by way of merger, consolidation or otherwise, then such Subsidiary (in
the event of such a sale or other disposition of all the Capital Stock or other
ownership interests of such Subsidiary) or such Subsidiary and the Person
acquiring the property (in the event of such a sale or other disposition of all
or substantially all of the assets of such Subsidiary) will be released and
relieved of any obligations under its Subsidiary Guarantee. If, at any time
while any of the Notes remain outstanding, none of the Company's then
outstanding Indebtedness (other than Notes) is guaranteed by a Subsidiary
Guarantor, such Subsidiary Guarantor shall be automatically and unconditionally
released, discharged and relieved of any obligations under its Subsidiary
Guarantee (which shall be terminated and cease to have any force and effect).
In addition, pursuant to Section 4.07 hereof, any Subsidiary Guarantee incurred
after the Issue Date may contain such release provisions as may be set forth in
the supplemental indenture evidencing the assumption by such Subsidiary
Guarantor of the Subsidiary Guarantee obligations under this Indenture.
Section 10.05 Limitation on Subsidiary Guarantor Liability; Contribution.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee by such
Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or fraudulent conveyance for purposes of any federal, state
or foreign law. To effectuate the foregoing intention, the Holders and each
Subsidiary Guarantor hereby irrevocably agree that the obligations of each
Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities (including, but not limited to, Guarantor Senior Indebtedness) of
such Subsidiary Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under its Subsidiary
Guarantee or pursuant to this Section 10.05,
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result in the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
federal, state or foreign law. This Section 10.05 is for the benefit of the
creditors of each Subsidiary Guarantor.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under its Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from each other Subsidiary Guarantor (if
any) in a pro rata amount based on the Adjusted Net Assets of each Subsidiary
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Subsidiary Guarantor's
obligations with respect to its Subsidiary Guarantee.
Section 10.06 Trustee to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 10 shall in each case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully and for all intents and purposes as if such Paying Agent were
named in this Article 10 in place of the Trustee.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S)318(c), the imposed duties shall control.
Section 11.02 Notices.
Any notice or communication by the Company, and Subsidiary Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
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If to the Company or any Subsidiary Guarantor:
Ocean Energy, Inc.
1201 Louisiana, Suite 1400
Houston, Texas 77002-5603
Telecopy: (713) 653-5024
If to the Trustee:
Norwest Bank Minnesota, National Association
Sixth and Marquette
Minneapolis, Minnesota 55479-0069
Attention: Corporate Trust Operations
Telecopy: (612) 667-9825
The Company, any Subsidiary Guarantor or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 11.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA
(S) 312(c).
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Section 11.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 11.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA (S)
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 11.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
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Section 11.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator,
partner, member or stockholder of the Company or any Subsidiary Guarantor, or of
any member, partner or stockholder of any such entity, as such, shall have any
liability for any obligations of the Company under the Notes, this Indenture or
the Subsidiary Guarantees or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 11.08 Governing Law.
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF, SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE,
THE NOTES AND THE SUBSIDIARY GUARANTEES.
Section 11.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 11.10 Successors.
All agreements of the Company and the Subsidiary Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successors.
Section 11.11 Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 11.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
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Section 11.13 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures Page(s) Follow]
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SIGNATURES
Dated as of July 8, 1998
ISSUER:
Ocean Energy, Inc.,
a Delaware corporation
By:
-------------------------------------
Name:
Title:
SUBSIDIARY GUARANTOR:
Ocean Energy, Inc.,
a Louisiana corporation
By:
-------------------------------------
Name:
Title:
TRUSTEE:
Norwest Bank Of Minnesota, National
Association
By:
-------------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
(Face of Note)
CUSIP No. 674812 AJ 1
8 1/4% Series [A/B] Senior Notes due 2018
No. $
-------- -------------
Ocean Energy, Inc.
promises to pay to
or registered assigns,
the principal sum of
Dollars on July 1, 2018.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Ocean Energy, Inc.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Trustee
By: Dated:
------------------------------- ----------------------------------
A-1
<PAGE>
(Back of Note)
8 1/4% Senior Notes due 2018
[Insert the Global Note Legend, if applicable, pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable, pursuant to the provisions
of the Indenture]
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Ocean Energy, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 8 1/4% per
annum, from July 8, 1998 until maturity. The Company will pay interest semi-
annually in arrears on January 1 and July 1 of each year, or if any such day is
not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be January 1, 1999. The Company shall pay
interest on overdue principal and premium, if any, from time to time on demand
at the rate borne on the Notes; it shall pay interest on overdue installments of
interest (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the December 15 or June 15 next preceding the Interest
Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the
Indenture with respect to defaulted interest, and except that, in the case of
interest payable at the maturity of the principal hereof, interest shall be paid
to the Person to whom principal is paid. The Notes will be payable as to
principal, premium, if any, and interest at the office or agency of the Company
maintained for such purpose within the City and State of New York, or, at the
option of the Company, payment of principal, premium, if any, and interest may
be made by check mailed to the Holders at their addresses set forth in the
register of Holders or by wire transfer in the case of Notes held in book-entry
form. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
3. Paying Agent and Registrar. Initially, Norwest Bank of Minnesota,
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any
such capacity.
A-2
<PAGE>
4. Indenture. The Company issued the Notes under an Indenture dated as
of July 8, 1998 (as amended and supplemented from time to time, the "Indenture")
between the Company, the Subsidiary Guarantors parties thereto and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code (S)(S) 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $125,000,000
in aggregate principal amount.
5. Optional Redemption.
(a) The Notes will be subject to redemption at any time at the option
of the Company, in whole but not in part, at a redemption price equal to the sum
of (a) an amount equal to 100% of the principal amount thereof and (b) the Make-
Whole Premium, together with accrued and unpaid interest to the date fixed for
redemption. In no event will such redemption price ever be less than 100% of the
principal amount of the Notes plus accrued interest to the date of redemption.
(b) Any redemption pursuant to this paragraph 5 shall be made
pursuant to the provisions of Article III of the Indenture. Notice of redemption
will be mailed at least 30 days but not more than 60 days before a redemption
date to each Holder whose Notes are to be redeemed at its registered address. On
and after the redemption date, interest will cease to accrue on Notes or
portions thereof called for redemption.
6. Mandatory Redemption. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
7. Purchase of Notes upon Change of Control. Upon the occurrence of a
Change of Control, the Company shall be obligated to make an offer to purchase
all of the then outstanding Notes (a "Change of Control Offer"), and shall
purchase, on a business day (the "Change of Control Purchase Date") not more
than 70 nor less than 30 days following the Change of Control, all of the then
outstanding Notes validly tendered pursuant to such Change of Control Offer, at
a purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the Change of Control Purchase Date.
8. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption. Also, it
need not exchange or register the transfer of
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<PAGE>
any Notes for a period of 15 days before a selection of Notes to be redeemed or
during the period between a record date and the corresponding Interest Payment
Date.
9. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
10. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to (a) to cure any ambiguity, omission, defect or inconsistency,
(b) to provide for the assumption of the obligations of the Company or any
Subsidiary Guarantor under the Indenture by a Successor upon the merger,
consolidation or sale or other disposition of all or substantially all of the
assets of the Company or such Subsidiary Guarantor, (c) to provide for
uncertificated Notes in addition to or in place of certificated Notes, (d) to
provide any security for Notes, (e) to reflect the release of any Subsidiary
Guarantor from its Subsidiary Guarantee, or the addition of any Subsidiary of
the Company as a Subsidiary Guarantor, in the manner provided in the Indenture,
(f) to comply with any requirement to effect or maintain the qualification of
the Indenture under the TIA, (g) to add covenants or Events of Default, (h) to
establish the form or terms of Notes or (i) to make any change that does not
adversely affect the interests of any Holder of Notes in any material respect.
11. Defaults and Remedies. Events of Default include:
(a) default in the payment when due of principal of or premium, if
any, on the Notes when the same becomes due and payable at maturity, upon
redemption, upon repurchase pursuant to a Change of Control Offer, upon
acceleration or otherwise;
(b) default in the payment when due of interest on the Notes and such
default continues for a period of 30 days;
(c) failure by the Company to make or consummate a Change of Control
Offer in accordance with the provisions of the Indenture;
(d) failure by the Company or any Subsidiary Guarantor to observe or
perform any other term, covenant, or agreement in the Indenture, the Notes or
any Subsidiary Guarantee (other than a default specified in paragraphs (a), (b)
and (c) above) for 60 days after notice to (i) the Company by the Trustee or
(ii) the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding;
(e) default beyond any applicable grace period with respect to the
principal of, premium, if any or interest on any Indebtedness of the Company or
any Restricted Subsidiary for
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<PAGE>
money borrowed (other than the Notes or the Subsidiary Guarantees) when due, or
any other default causing acceleration of any Indebtedness of the Company or any
Restricted Subsidiary for money borrowed, provided that the aggregate principal
amount of such Indebtedness shall exceed the greater of (i) $20 million and (ii)
5% of Consolidated Net Tangible Assets; provided further that any such default
is not cured or waived or any such acceleration is not rescinded, or such debt
is not repaid, within a period of 20 days after a written notice thereof to the
Company as provided in the Indenture;
(f) any Subsidiary Guarantee ceases to be, or is asserted by the
Company or any Subsidiary Guarantor not to be, in effect (except in accordance
with the Indenture);
(g) final judgments or orders rendered against the Company or any
Restricted Subsidiary that are unsatisfied and that require the payment in
money, either individually or in an aggregate amount, that exceed the coverage
under applicable insurance policies by the greater of (i) $20 million and (ii)
5% of Consolidated Net Tangible Assets (as shown in the most recent audited
balance sheet of the Company and its Subsidiaries), and either (x) commencement
by any creditor of an enforcement proceeding upon such judgment (other than a
judgment that is stayed by reason of pending appeal or otherwise) or (y) the
occurrence of a 60-day period during which a stay of such judgment or order, by
reason of pending appeal or otherwise, was not in effect;
(h) the entry of a decree or order by a court having jurisdiction in
the premises (i) for relief in respect of the Company, any Subsidiary Guarantor
or any Significant Subsidiary in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or (ii) adjudging the Company, any Subsidiary Guarantor or any
Significant Subsidiary bankrupt or insolvent, or approving a petition seeking
reorganization, arrangement, adjustment or composition of the Company, any
Subsidiary Guarantor or any Significant Subsidiary under any applicable federal
or state law, or appointing under any such law a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company, any Subsidiary Guarantor or any Significant Subsidiary or of a
substantial part of their consolidated assets, or ordering the winding up or
liquidation of their affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period
of 60 consecutive days; or
(i) the commencement by the Company, any Subsidiary Guarantor or any
Significant Subsidiary of a voluntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law or
any other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company, any Subsidiary Guarantor or any Significant Subsidiary
to the entry of a decree or order for relief in respect thereof in an
involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by the
Company, any Subsidiary Guarantor or any Significant Subsidiary of a petition or
consent seeking reorganization or relief under any applicable federal or state
law, or the consent by it under any such law to the filing of any such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or
A-5
<PAGE>
sequestrator (or other similar official) of any of the Company, any Subsidiary
Guarantor or any Significant Subsidiary or of any substantial part of their
consolidated assets, or the making by it of an assignment for the benefit of
creditors under any such law, or the admission by it in writing of its inability
to pay its debts generally as they become due or taking of corporate action by
the Company, any Subsidiary Guarantor or any Significant Subsidiary in
furtherance of any such action.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal and interest on the Notes
or to enforce the performance of any provision of the Notes or the Indenture.
12. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
13. No Recourse Against Others. A director, officer, employee,
incorporator, partner, member or stockholder, of the Company or any Subsidiary
of the Company or any Subsidiary Guarantor, as such, shall not have any
liability for any obligations of the Company under the Notes, the Subsidiary
Guarantees or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
14. Authentication. This Note shall not be valid until authenticated by
the manual signature of a Responsible Officer of the Trustee or an
authenticating agent.
15. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
16. Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of June 8, 1998, between the Company and the parties named on the
signature pages thereof, as amended from time to time (the "Registration Rights
Agreement").
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
A-6
<PAGE>
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Ocean Energy, Inc.
1201 Louisiana, Suite 1400
Houston, Texas 77002-5603
Telecopy: (713) 653-5024
A-7
<PAGE>
IF THE NOTES ARE GUARANTEED BY ONE OR MORE SUBSIDIARY GUARANTORS, THE FOLLOWING
MAY BE INSERTED IN THE NOTES:
NOTATION OF SUBSIDIARY GUARANTEE
Subject to the limitations set forth in the Indenture, the Subsidiary
Guarantors (as defined in the Indenture) have, jointly and severally,
unconditionally guaranteed the Notes to the extent set forth in the Indenture.
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture unless otherwise indicated.
The obligations of each Subsidiary Guarantor are limited as set forth in
the Indenture.
Any Subsidiary Guarantor may be released from its Subsidiary Guarantee upon
the terms and subject to the conditions provided in the Indenture.
The Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Subsidiary
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
[SUBSIDIARY GUARANTOR]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
A-8
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the face of this Note)
SIGNATURE GUARANTEE
----------------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
A-9
<PAGE>
OPINION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.06 of the Indenture, check the following box: [_]
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.06 of the Indenture, state the amount you elect to have
purchased: $
-------------
Date:
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the face of the Note)
Tax Identification No.:
---------------------------------------------------------
SIGNATURE GUARANTEE
----------------------------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
A-10
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE/*/
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT SIGNATURE OF
AMOUNT OF AMOUNT OF OF THIS GLOBAL NOTE AUTHORIZED
DECREASE IN INCREASE IN FOLLOWING SUCH SIGNATORY OF
PRINCIPAL AMOUNT PRINCIPAL AMOUNT DECREASE (OR TRUSTEE OR NOTE
DATE OF EXCHANGE OF THIS GLOBAL NOTE OF THIS GLOBAL NOTE INCREASE) CUSTODIAN
- ------------------ --------------------- --------------------- --------------------- -----------------
<S> <C> <C> <C> <C>
</TABLE>
- -----------------------------
/*/This should be included only if the Note is issued in global form.
A-11
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Ocean Energy, Inc.
1201 Louisiana, Suite 1400
Houston, Texas 77002-5603
Attention: Robert K. Reeves, Executive Vice President
Norwest Bank Minnesota,
National Association
Sixth and Marquette
Minneapolis, Minnesota 55479-0069
Attention: Corporate Trust Operations
Re: 8 1/4% Senior Notes due 2018
Reference is hereby made to the Indenture, dated as of July 8, 1998 (as
amended and supplemented from time to time, (the "Indenture"), between Ocean
Energy, Inc., as issuer (the "Company"), the Subsidiary Guarantors parties
thereto and Norwest Bank Minnesota, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
____________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such in such Note[s] specified in Annex A hereto, in the
principal amount of $__________ in such Note[s] or interests (the "Transfer"),
to ____________________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the
B-1
<PAGE>
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the 144A Global
Note and/or the Definitive Note and in the Indenture and the Securities Act.
2. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S under the Securities Act and (iii) the transaction
is not part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.
3. [_] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE
144A OR REGULATION S. The Transfer is being effected in compliance with the
transfer restrictions applicable to beneficial interests in Restricted Global
Notes and Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) [_] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [_] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act.
B-2
<PAGE>
4. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [_] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer
is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [_] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [_] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
- ----------------------------------
[Insert Name of Transferor]
By:
-------------------------------
Name:
Title:
Dated:
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP __________), or
(ii) [_] Regulation S Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP __________), or
(ii) [_] Regulation S Global Note (CUSIP __________), or
(iii) [_] Unrestricted Global Note (CUSIP __________); or
(b) [_] a Restricted Definitive Note.
(c) [_] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Ocean Energy, Inc.
1201 Louisiana, Suite 1400
Houston, Texas 77002-5603
Attention: Robert K. Reeves, Executive Vice President
Norwest Bank of Minnesota,
National Association
Sixth and Marquette
Minneapolis, Minnesota 55479-0069
Attention: Corporate Trust Operations
Re: 8 1/4% Senior Notes due 2018
(CUSIP No. 674812 AJ 1)
Reference is hereby made to the Indenture, dated as of July 8, 1998 (the
"Indenture"), between Ocean Energy, Inc., as issuer (the "Company"), the
Subsidiary Guarantors named therein and Norwest Bank Minnesota, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
____________________ (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$__________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required
C-1
<PAGE>
in order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(c) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficiary interest in
an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the
C-2
<PAGE>
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Note and in the Indenture and the Securities Act.
(b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE]
[_] 144A Global Note [_] Regulation S Global Note
with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Owner]
By:
--------------------------------------
Name:
Title:
Dated:_______________, _____
C-3
<PAGE>
EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, _____ among Ocean Energy, Inc., a Delaware corporation (the
"Company"), [Existing Subsidiary Guarantors, if any,] [Subsidiary Guarantor]
(the "New Subsidiary Guarantor"), and Norwest Bank Minnesota, National
Association, as trustee under the indenture referred to below (the "Trustee").
Capitalized terms used herein and not defined herein shall have the meaning
ascribed to them in the Indenture (as defined below).
W I T N E S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (as amended and supplemented from time to time, the "Indenture"),
dated as of July 8, 1998, providing for the issuance of an aggregate principal
amount of $125,000,000 of 8 1/4% Senior Notes due 2018 (the "Notes");
WHEREAS, Section 4.07 and Article X of the Indenture provide that under
certain circumstances the Company may or must cause certain of its subsidiaries
to execute and deliver to the Trustee a supplemental indenture pursuant to which
such subsidiaries shall unconditionally guarantee all of the Company's
Obligations under the Notes pursuant to a Subsidiary Guarantee on the terms and
conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, the New Subsidiary Guarantor and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:
1. Agreement to Guarantee. Subject to Section 10.05 of the Indenture,
the New Subsidiary Guarantor hereby, jointly and severally with all other
Subsidiary Guarantors, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, the Notes and the Obligations of the Company under the Notes or
under the Indenture, that: (a) the principal of, premium, if any, and interest
on the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration, redemption or otherwise, and
interest on overdue principal, premium, if any (to the
D-1
<PAGE>
extent permitted by law), and interest on any interest, if any, on the Notes and
all other payment Obligations of the Company to the Holders or the Trustee under
the Indenture or under the Notes will be promptly paid in full and performed,
all in accordance with the terms thereof; and (b) in case of any extension of
time of payment or renewal of any Notes or any of such other Obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration, redemption or otherwise. Failing
payment when so due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Subsidiary Guarantors will be jointly and severally
obligated to pay the same immediately.
The obligations of the Subsidiary Guarantors to the Holders and to the
Trustee pursuant to this Supplemental Indenture and the Indenture are expressly
set forth in Article X of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee. The terms of
Article X of the Indenture are incorporated herein by reference. This
Subsidiary Guarantee is subject to release as and to the extent provided in
Sections 4.07(c), 4.07(d) and 10.04 of the Indenture.
2. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, partner, member, shareholder or agent of the
New Subsidiary Guarantor, as such, shall have any liability for any obligations
of the Company or any Subsidiary Guarantor under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes.
3. New York Law to Govern. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
4. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
5. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
6. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Subsidiary
Guarantor.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
D-2
<PAGE>
Dated:
OCEAN ENERGY, INC., a Delaware
corporation
By:
-------------------------------------
Name:
Title:
[NEW SUBSIDIARY GUARANTOR]
By:
-------------------------------------
Name:
Title:
[EXISTING SUBSIDIARY GUARANTORS,
IF ANY]
By:
-------------------------------------
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as
Trustee
By:
-------------------------------------
Name:
Title:
D-3
<PAGE>
Exhibit 10.25
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JULY 8, 1998
AMONG
OCEAN ENERGY, INC.,
ISSUER,
OCEAN ENERGY, INC., LOUISIANA,
SUBSIDIARY GUARANTOR,
AND
MERRILL LYNCH & CO.,
CHASE SECURITIES INC.,
J.P. MORGAN SECURITIES, INC.,
LEHMAN BROTHERS, INC.,
SALOMON BROTHERS INC
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into this day of July, 1998, among OCEAN ENERGY, INC., a Delaware
corporation (the "Company"), and OCEAN ENERGY, INC., a Louisiana corporation and
a direct wholly-owned subsidiary of the Company (the "Subsidiary Guarantor"),
and MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
("Merrill Lynch"), CHASE SECURITIES INC., J.P. MORGAN SECURITIES, INC., LEHMAN
BROTHERS, INC. and SALOMON BROTHERS INC (collectively, the "Initial
Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated July
1, 1998, among the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of an aggregate of $125,000,000 principal amount of the Company's
7 5/8 % Series A Senior Notes due 2005 (the "2005 Notes"), $125,000,000
principal amount of 8 1/4% Series A Senior Notes due 2018 (the "2018 Notes" and,
together with the 2005 Notes, the "Senior Notes") and $250,000,000 principal
amount of the Company's 8 3/8% Series A Senior Subordinated Notes due 2008 (the
"Senior Subordinated Notes" and, together with the Senior Notes, the
"Securities"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company and the Subsidiary Guarantor have agreed to
provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution of this Agreement
is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Closing Date" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, provided, however, that such
depositary must have an address in the Borough of Manhattan, in the City of
New York.
<PAGE>
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Securities for Registrable Securities pursuant to Section 2.1
hereof.
"Exchange Offer Registration" shall mean a registration under the 1933
Act effected pursuant to Section 2.1 hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, including the Prospectus contained therein, all exhibits thereto
and all documents incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2.1
hereof.
"Exchange Securities" shall mean the 7 5/8% Series B Senior Notes due
2005, the 8 1/4% Series B Senior Notes due 2018 and the 8 3/8% Series B
Senior Subordinated Notes due 2008 issued by the Company under the
Indentures containing terms identical to the 2005 Notes, the 2018 Notes and
the Senior Subordinated Notes, respectively, in all material respects
(except for references to certain interest rate provisions, restrictions on
transfers and restrictive legends) and the related guarantees of the
Securities by the Subsidiary Guarantor, to be offered to Holders of
Securities in exchange for Registrable Securities pursuant to the Exchange
Offer.
"Holder" shall mean an Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indentures.
"Indentures" shall mean, collectively, (i) the Indentures relating to
the Senior Notes, each dated as of July 8, 1998, among the Company, the
Subsidiary Guarantor and NorWest Bank of Minnesota, National Association,
as trustee and (ii) the Indenture relating to the Senior Subordinated
Notes, dated as of July 8, 1998, among the Company, the Subsidiary
Guarantor and U.S. Bank Trust, National Association, as trustee, as the
same may be amended, supplemented, waived or otherwise modified from time
to time in accordance with the terms thereof.
"Initial Purchaser" or "Initial Purchasers" shall have the meaning set
forth in the preamble.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Outstanding (as defined in the Indentures)
Registrable Securities; provided, however, that whenever the consent or
approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company and other
obligors on the Securities or any Affiliate (as defined in the Indentures)
of the
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Company shall be disregarded in determining whether such consent or
approval was given by the Holders of such required percentage amount.
"Participating Broker-Dealer" shall mean any of Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc.,
J.P. Morgan Securities, Inc., Lehman Brothers, Inc. and Salomon Brothers
Inc and any other broker-dealer which makes a market in the Securities and
exchanges Registrable Securities in the Exchange Offer for Exchange
Securities.
"Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble.
"Registrable Securities" shall mean the Securities; provided, however,
that Securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Securities shall have been
declared effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities
have been sold to the public pursuant to Rule 144 (or any similar provision
then in force, but not Rule 144A) under the 1933 Act, (iii) such Securities
shall have ceased to be outstanding or (iv) the Exchange Offer is
consummated (except in the case of Securities purchased from the Company
and continued to be held by the Initial Purchaser).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company and the Subsidiary Guarantor
with this Agreement, including without limitation: (i) all SEC, stock
exchange or National Association of Securities Dealers, Inc. (the "NASD")
registration and filing fees, including, if applicable, the fees and
expenses of any "qualified independent underwriter" (and its counsel) that
is required to be retained by any holder of Registrable Securities in
accordance with the rules and regulations of the NASD, (ii) all fees and
expenses incurred in connection with compliance with state securities or
blue sky laws and compliance with the rules of the NASD (including
reasonable fees and disbursements of one firm of legal counsel for any
underwriters or Holders in connection with blue sky qualification of any of
the Exchange Securities or Registrable Securities and any filings with the
NASD), (iii) all expenses of any Persons in preparing or
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assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or supplements
thereto relating to the performance of and compliance with this Agreement,
(iv) all fees and expenses incurred in connection with the listing, if any,
of any of the Registrable Securities or the Exchange Securities, as the
case may be, on any securities exchange or exchanges, (v) all rating agency
fees, (vi) the fees and disbursements of counsel for the Company and the
Subsidiary Guarantor and of the independent public accountants of the
Company, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, (vii)
the fees and expenses of the Trustee, and any escrow agent or custodian,
(viii) the reasonable fees and out-of-pocket expenses of the Initial
Purchasers in connection with the Exchange Offer, including the reasonable
fees and expenses of counsel to the Initial Purchasers in connection
therewith, (ix) the reasonable fees and disbursements of one firm of legal
counsel selected by the Majority Holders to represent the Holders of
Registrable Securities and (x) any fees and disbursements of the
underwriters customarily required to be paid by issuers or sellers of
securities and the fees and expenses of any special experts retained by the
Company or the Subsidiary Guarantor in connection with any Registration
Statement, but excluding underwriting discounts and commissions; and
transfer taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder.
"Registration Statement" shall mean any registration statement of the
Company and the Subsidiary Guarantor which covers any of the Exchange
Securities or Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated or deemed to be incorporated by reference therein.
"Securities" shall have the meaning set forth in the preamble.
"SEC" shall mean the United States Securities and Exchange Commission
or any successor agency or governmental body performing the functions
currently performed by the United States Securities and Exchange
Commission.
"Senior Notes" shall have the meaning set forth in the preamble.
"Senior Subordinated Notes" shall have the meaning set forth in the
preamble.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2.2 hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company and the Subsidiary Guarantor pursuant to the
provisions of Section 2.2 of this Agreement which covers all of the
Registrable Securities on an appropriate form under Rule 415 under the 1933
Act, or any similar rule that may be adopted by the SEC, and all amendments
and supplements to such registration statement, including post-effective
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<PAGE>
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Subsidiary Guarantor" shall have the meaning set forth in the
preamble and also includes any subsidiary of the Company that becomes a
guarantor of the Securities pursuant to the terms and provisions of the
Indentures.
"Trustees" shall mean the trustees with respect to the Securities
under the Indentures.
2. Registration Under the 1933 Act.
2.1 Exchange Offer. The Company and the Subsidiary Guarantor shall
(A) prepare and, as soon as practicable but not later than 60 days following the
Closing Date, file with the SEC an Exchange Offer Registration Statement on an
appropriate form under the 1933 Act with respect to a proposed Exchange Offer
and the issuance and delivery to the Holders, in exchange for the Registrable
Securities, of a like principal amount of Exchange Securities, (B) use its
reasonable best efforts to cause the Exchange Offer Registration Statement to be
declared effective under the 1933 Act within 120 days of the Closing Date, (C)
use its reasonable best efforts to keep the Exchange Offer Registration
Statement effective until the closing of the Exchange Offer and (D) use its
reasonable best efforts to cause the Exchange Offer to be consummated not later
than 180 days following the Closing Date. The Exchange Securities will be
issued under the Indentures. Upon the effectiveness of the Exchange Offer
Registration Statement, the Company and the Subsidiary Guarantor shall promptly
commence the Exchange Offer, it being the objective of such Exchange Offer to
enable each Holder eligible and electing to exchange Registrable Securities for
Exchange Securities (assuming that such Holder (a) is not an affiliate of the
Company or the Subsidiary Guarantor within the meaning of Rule 405 under the
1933 Act, (b) is not a broker-dealer tendering Registrable Securities acquired
directly from the Company for its own account, (c) acquired the Exchange
Securities in the ordinary course of such Holder's business and (d) has no
arrangements or understandings with any person to participate in the Exchange
Offer for the purpose of distributing the Exchange Securities) to transfer such
Exchange Securities from and after their receipt without any limitations or
restrictions under the registration requirements of the 1933 Act and without
material restrictions under the securities laws of a substantial proportion of
the several states of the United States.
In connection with the Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(b) keep the Exchange Offer open for acceptance for a period of not
less than 30 calendar days after the date notice thereof is mailed to the
Holders (or longer if required by applicable law) (such period referred to
herein as the "Exchange Period");
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<PAGE>
(c) utilize the services of the Depositary for the Exchange Offer;
(d) permit Holders to withdraw tendered Registrable Securities at any
time prior to 5:00 p.m. (Eastern Standard Time), on the last business day
of the Exchange Period, by sending to the institution specified in the
notice, a telegram, telex, facsimile transmission or letter setting forth
the name of such Holder, the principal amount of Registrable Securities
delivered for exchange, and a statement that such Holder is withdrawing his
election to have such Securities exchanged;
(e) notify each Holder that any Registrable Security not tendered will
remain outstanding and continue to accrue interest, but will not retain any
rights under this Agreement (except in the case of certain rights retained
by the Initial Purchasers and Participating Broker-Dealers as provided
herein); and
(f) otherwise comply in all material respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company and the Subsidiary Guarantor shall:
(i) accept for exchange all Registrable Securities duly tendered
and not validly withdrawn pursuant to the Exchange Offer in accordance
with the terms of the Exchange Offer Registration Statement and the
letter of transmittal which shall be an exhibit thereto;
(ii) deliver or cause to be delivered all Registrable Securities
so accepted for exchange to the Trustee for cancellation; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Securities to each Holder of Registrable Securities so
accepted for exchange in a principal amount equal to the principal
amount of the Registrable Securities of such Holder so accepted for
exchange.
Interest on each Exchange Security will accrue from the last date on
which interest was paid on the Registrable Securities surrendered in exchange
therefor or, if no interest has been paid on the Registrable Securities, from
the date of original issuance. The Exchange Offer shall not be subject to any
conditions, other than (i) that the Exchange Offer, or the making of any
exchange by a Holder, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) the due tendering of Registrable
Securities in accordance with the Exchange Offer, (iii) that each Holder of
Registrable Securities exchanged in the Exchange Offer shall have represented
that all Exchange Securities to be received by it shall be acquired in the
ordinary course of its business and that at the time of the consummation of the
Exchange Offer it shall have no arrangement or
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<PAGE>
understanding with any person to participate in the distribution (within the
meaning of the 1933 Act) of the Exchange Securities and shall have made such
other representations as may be reasonably necessary under applicable SEC rules,
regulations or interpretations to render the use of Form S-4 or other
appropriate form under the 1933 Act available, (iv) that no action or proceeding
shall have been instituted or threatened in any court or by or before any
governmental agency with respect to the Exchange Offer, (v) that there shall not
have been adopted or enacted any law, statute, rule or regulation, (vi) that
there shall not have been declared by United States federal or New York state
authorities a banking moratorium, (vii) that trading on the New York Stock
Exchange or generally in the United States over-the-counter market shall not
have been suspended by order of the SEC or any other governmental authority and
(viii) such other conditions as may be reasonably acceptable to Merrill Lynch,
in each of clauses (iv) through (viii), which, in the Company's judgment, would
reasonably be expected to impair the ability of the Company to proceed with the
Exchange Offer. The Company shall inform the Initial Purchasers of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right to contact such Holders and otherwise facilitate
the tender of Registrable Securities in the Exchange Offer.
2.2 Shelf Registration. (i) If, because of any changes in law, SEC
rules or regulations or applicable interpretations thereof by the staff of the
SEC, the Company is not permitted to effect the Exchange Offer as contemplated
by Section 2.1 hereof, (ii) if for any other reason the Exchange Offer
Registration Statement is not declared effective within 120 days following the
Closing Date or the Exchange Offer is not consummated within 180 days after the
Closing Date, (iii) upon the request of Merrill Lynch (but only with respect to
any Registrable Securities which the Initial Purchasers acquired directly from
the Company) or (iv) if a Holder is advised by counsel that it is not permitted
by Federal securities laws or SEC policy to participate in the Exchange Offer or
does not receive fully tradeable Exchange Securities pursuant to the Exchange
Offer, then in case of each of clauses (i) through (iv) the Company and the
Subsidiary Guarantor shall, at their cost:
(a) As promptly as practicable, file with the SEC, and thereafter
shall use its reasonable best efforts to cause to be declared effective as
promptly as practicable but no later than 180 days after the Closing Date,
a Shelf Registration Statement relating to the offer and sale of the
Registrable Securities by the Holders from time to time in accordance with
the methods of distribution elected by the Majority Holders participating
in the Shelf Registration and set forth in such Shelf Registration
Statement.
(b) Use their reasonable best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus forming
part thereof to be usable by Holders for a period of two years from the
date the Shelf Registration Statement is declared effective by the SEC, or
for such shorter period that will terminate when all Registrable Securities
covered by the Shelf Registration Statement (i) have been sold pursuant
thereto, or (ii) are distributed to the public pursuant to Rule 144 of the
Securities Act or are saleable pursuant to Rule 144(k) under the Securities
Act and can be sold pursuant to Rule 144 without any limitations under
clauses (c), (e), (f) and (h) of Rule 144 (or any successor rule
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<PAGE>
thereof); provided, however, that the Company shall not be obligated to
keep the Shelf Registration Statement effective if (A) the Company
determines, in its reasonable judgment, upon advice of counsel, as
authorized by a resolution of its Board of Directors, that the continued
effectiveness and usability of the Shelf Registration Statement would (x)
require the disclosure of material information which the Company has a bona
fide business reason for preserving as confidential, or (y) interfere with
any financing, acquisition, corporate reorganization or other material
transaction involving the Company or any of its subsidiaries, and provided
further, that the failure to keep the Shelf Registration Statement
effective and usable for offers and sales of Registrable Securities for
such reasons shall last no longer than 45 days in any 12-month period
(whereafter a Registration Default, as hereinafter defined, shall occur),
and (B) the Company promptly thereafter complies with the requirements of
Section 3(k) hereof, if applicable. Any such period during which the
Company is excused from keeping the Shelf Registration Statement effective
and usable for offers and sales of Registrable Securities is referred to
herein as a "Suspension Period"; a Suspension Period shall commence on and
include the date that the Company gives notice to the Holders that the
Shelf Registration Statement is no longer effective or the prospectus
included therein is no longer usable for offers and sales of Registrable
Securities as a result of the application of the proviso of the foregoing
sentence and shall end on the earlier to occur of (1) the date on which
each seller of Registrable Securities covered by the Shelf Registration
Statement either receives the copies of the supplemented or amended
prospectus contemplated by Section 3(k) hereof or is advised in writing by
the Company that use of the prospectus may be resumed and (2) the
expiration of 45 days in any 12-month period during which one or more
Suspension Periods has been in effect.
(c) Notwithstanding any other provisions hereof, use their best
efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (ii) any Shelf Registration Statement
and any amendment thereto does not, when it becomes effective, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading and (iii) any Prospectus forming part of any Shelf
Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
The Company and the Subsidiary Guarantor further agree, if necessary,
to supplement or amend the Shelf Registration Statement, as required by Section
3(b) below, and to furnish to the Holders of Registrable Securities copies of
any such supplement or amendment promptly after its being used or filed with the
SEC.
2.3 Expenses. The Company and the Subsidiary Guarantor shall pay all
Registration Expenses in connection with the registration pursuant to Section
2.1 or 2.2. Each
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Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
2.4 Effectiveness. (a) The Company and the Subsidiary Guarantor will
be deemed not to have used their reasonable best efforts to cause the Exchange
Offer Registration Statement or the Shelf Registration Statement, as the case
may be, to become, or to remain, effective during the requisite period if the
Company and the Subsidiary Guarantor voluntarily take any action that would, or
omits to take any action which omission would, result in any such Registration
Statement not being declared effective or in the holders of Registrable
Securities covered thereby not being able to exchange or offer and sell such
Registrable Securities during that period as and to the extent contemplated
hereby, unless such action is required by applicable law.
(b) An Exchange Offer Registration Statement pursuant to Section 2.1
hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not
be deemed to have become effective unless it has been declared effective by the
SEC; provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Registration Statement
will be deemed not to have become effective during the period of such
interference, until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume.
2.5 Interest. The Indentures executed in connection with the
Securities will provide that in the event that either (a) the Exchange Offer
Registration Statement is not filed with the Commission on or prior to the 60th
calendar day following the Closing Date of the Securities, (b) the Exchange
Offer Registration Statement has not been declared effective on or prior to the
120th calendar day following the Closing Date of the Securities, (c) the
Exchange Offer is not consummated or a required Shelf Registration Statement is
not declared effective, in either case, on or prior to the 180th calendar day
following the Closing Date of the Securities or (d) the Exchange Offer
Registration Statement or Shelf Registration Statement is filed and declared
effective but shall thereafter be withdrawn by the Company or becomes subject to
an effective stop order suspending the effectiveness of such registration
statement, except as specifically permitted by Section 2.2(b) hereof, without
being succeeded immediately by an additional registration statement filed and
declared effective (each such event referred to in clauses (a) through (d)
above, a "Registration Default"), the interest rate borne by the Securities
shall be increased by one-fourth of one percent (0.25%) per annum upon the
occurrence of each Registration Default, which rate will increase by an
additional one-fourth of one percent (0.25%) per annum if such Registration
Default has not been cured within 90 days after occurrence thereof and
continuing until all Registration Defaults have been cured, with an aggregate
maximum increase in the interest rate equal to one-half of one percent (0.50%)
per annum; provided, however, that if the Exchange Offer Registration Statement
is not declared effective on or prior to the 120th calendar day following the
Closing Date and the Company and the Subsidiary Guarantor shall request holders
of Securities to provide information for inclusion in the Shelf Registration
Statement, then Securities owned by Holders who do not deliver such
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information to the Company and the Subsidiary Guarantor or who do not provide
comments on the Shelf Registration Statement when requested by the Company and
the Subsidiary Guarantor will not be entitled to any such increase in the
interest rate for any day after the 180th day following the Closing Date.
Following the cure of all Registration Defaults, the accrual of additional
interest will cease and the interest rate will revert to the original rate.
2.6 Specific Enforcement. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company and the Subsidiary Guarantor
acknowledge that any failure by the Company and the Subsidiary Guarantor to
comply with their obligations under Sections 2.1 and 2.2 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may, to the extent permitted by law, obtain
such relief as may be required to specifically enforce the Company's and the
Subsidiary Guarantor's obligations under Sections 2.1 and 2.2 hereof.
3. Registration Procedures. In connection with the obligations of
the Company and the Subsidiary Guarantor with respect to Registration Statements
pursuant to Sections 2.1 and 2.2 hereof, the Company and the Subsidiary
Guarantor shall:
(a) prepare and file with the SEC a Registration Statement, within the
relevant time period specified in Section 2, on the appropriate form under
the 1933 Act, which form (i) shall be selected by the Company, (ii) shall,
in the case of a Shelf Registration, be available for the sale of the
Registrable Securities by the selling Holders thereof, (iii) shall comply
as to form in all material respects with the requirements of the applicable
form and include or incorporate by reference all financial statements
required by the SEC to be filed therewith or incorporated by reference
therein, and (iv) shall comply in all respects with the requirements of
Regulation S-T under the Securities Act, and use their reasonable best
efforts to cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under
applicable law to keep such Registration Statement effective for the
applicable period; and cause each Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the 1933 Act and comply with the provisions of the 1933
Act applicable to them with respect to the disposition of all securities
covered by each Registration Statement during the applicable period in
accordance to the extent allowed by law and reasonably practicable to the
Company with the intended method or methods of distribution by the selling
Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with
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respect to the Registrable Securities is being filed and advising such
Holders that the distribution of Registrable Securities will be made in
accordance with the method selected by the Majority Holders participating
in the Shelf Registration; (ii) furnish to each Holder of Registrable
Securities and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter
may reasonably request, including financial statements and schedules and,
if the Holder so requests, all exhibits in order to facilitate the public
sale or other disposition of the Registrable Securities; and (iii) hereby
consent to the use of the Prospectus or any amendment or supplement thereto
by each of the selling Holders of Registrable Securities in connection with
the offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto;
(d) use its reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue sky"
laws of such jurisdictions as any Holder of Registrable Securities covered
by a Registration Statement and the managing underwriter of an underwritten
offering of Registrable Securities shall reasonably request by the time the
applicable Registration Statement is declared effective by the SEC, and do
any and all other acts and things which may be reasonably necessary or
advisable to enable each such Holder and underwriter to consummate the
disposition in each such jurisdiction of such Registrable Securities owned
by such Holder, provided, however, that the Company and the Subsidiary
Guarantor shall not be required to (i) qualify as a foreign corporation or
as a dealer in securities in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(d), or (ii) take any action
which would subject it to general service of process or taxation in any
such jurisdiction where it is not then so subject;
(e) notify promptly each Holder of Registrable Securities under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Company that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) below and, if requested by such Holder or
Participating Broker-Dealer, confirm such advice in writing promptly (i)
when a Registration Statement has become effective and when any post-
effective amendments and supplements thereto become effective, (ii) of any
request by the SEC or any state securities authority for post-effective
amendments and supplements to a Registration Statement and Prospectus or
for additional information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iv) in
the case of a Shelf Registration, if, between the effective date of a
Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of the
Company contained in any underwriting agreement, securities sales agreement
or other similar agreement, if any, relating to such sale cease to be true
and correct in all material respects, (v) of the happening of any event or
the discovery of any facts during the period a Shelf Registration Statement
is effective which makes any statement made in such Registration
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Statement or the related Prospectus untrue in any material respect or which
requires the making of any changes in such Registration Statement or
Prospectus in order to make the statements therein not misleading and (vi)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities or the
Exchange Securities, as the case may be, for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose;
(f) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution" which section shall be reasonably acceptable to the
Initial Purchasers, and which shall contain a summary statement of the
positions taken or policies made by the staff of the SEC with respect to
the potential "underwriter" status of any broker-dealer that holds
Registrable Securities acquired for its own account as a result of market-
making activities or other trading activities and that will be the
beneficial owner (as defined in Rule l3d-3 under the Exchange Act) of
Exchange Securities to be received by such broker-dealer in the Exchange
Offer, whether such positions or policies have been publicly disseminated
by the staff of the SEC or such positions or policies, in the reasonable
judgment of the Initial Purchasers and its counsel, represent the
prevailing views of the staff of the SEC, including a statement that any
such broker-dealer who receives Exchange Securities for Registrable
Securities pursuant to the Exchange Offer may be deemed a statutory
underwriter and must deliver a prospectus meeting the requirements of the
1933 Act in connection with any resale of such Exchange Securities, (ii)
furnish to each Participating Broker-Dealer who has delivered to the
Company the notice referred to in Section 3(e), without charge, as many
copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary Prospectus, and any amendment or
supplement thereto, as such Participating Broker-Dealer may reasonably
request, (iii) hereby consent to the use of the Prospectus forming part of
the Exchange Offer Registration Statement or any amendment or supplement
thereto, by any person subject to the prospectus delivery requirements of
the SEC, including all Participating Broker-Dealers, in connection with the
sale or transfer of the Exchange Securities covered by the prospectus or
any amendment or supplement thereto, and (iv) include in the transmittal
letter or similar documentation to be executed by an exchange offeree in
order to participate in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale
of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer" and
(y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer
will not be deemed to admit that it is an underwriter within the meaning of
the 1933 Act and
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(B) to the extent any Participating Broker-Dealer participates in
the Exchange Offer, the Company and the Subsidiary Guarantor shall use
their reasonable best efforts to cause to be delivered at the request of an
entity representing the Participating Broker-Dealers (which entity shall be
Merrill Lynch or another Initial Purchaser) (A) a "cold comfort" letter
addressed to the Participating Broker-Dealers from the Company's and the
Subsidiary Guarantor's independent certified public accountants with
respect to the Prospectus in the Exchange Offer Registration Statement in
the form existing on the last date for which exchanges are accepted
pursuant to the Exchange Offer and (B) an opinion of counsel to the Company
and the Subsidiary Guarantor addressed to the Participating Broker-Dealers
in substantially the form attached hereto as Exhibit A relating to the
Exchange Securities; and
(g) (i) in the case of an Exchange Offer, furnish to one firm of legal
counsel for the Initial Purchasers and (ii) in the case of a Shelf
Registration, furnish to one firm of legal counsel for the Holders of
Registrable Securities copies of any comment letters received from the SEC
or any other request by the SEC or any state securities authority for
amendments or supplements to a Registration Statement and Prospectus or for
additional information;
(h) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as soon as
practicable and provide prompt notice to one firm of legal counsel for the
Holders of the withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, and each underwriter, if any, without charge, at
least one conformed copy of each Registration Statement and any post-
effective amendment thereto, including financial statements and schedules
(without documents incorporated therein by reference or any exhibits
thereto, unless requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends; and enable such Registrable Securities
to be in such denominations (consistent with the provisions of the
Indentures) and registered in such names as the selling Holders or the
underwriters, if any, may reasonably request at least three business days
prior to the closing of any sale of Registrable Securities;
(k) in the case of a Shelf Registration, upon the Company or any
Subsidiary Guarantor becoming aware of the occurrence of any event or the
discovery of any facts, each as contemplated by Section 3(e)(v) hereof, use
their reasonable best efforts to prepare a supplement or post-effective
amendment to the Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required
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<PAGE>
document so that, as thereafter delivered to the purchasers of the
Registrable Securities or Participating BrokerDealers, such Prospectus will
not contain at the time of such delivery any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(l) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with a printed certificate
or certificates for the Exchange Securities or the Registrable Securities,
as the case may be, in a form eligible for deposit with the Depositary and
consistent with the procedures to be used by the Depositary;
(m) unless the Indentures, as they relate to the Exchange Securities
or the Registrable Securities, as the case may be, have already been so
qualified, use its best efforts to (i) cause the Indentures to be qualified
under the Trust Indenture Act of 1939 (the "TIA") in connection with the
registration of the Exchange Securities or Registrable Securities, as the
case may be, (ii) cooperate with the Trustees and the Holders to effect
such changes to the Indentures as may be required for the Indentures to be
so qualified in accordance with the terms of the TIA and (iii) execute, and
use its best efforts to cause the Trustees to execute, all documents as may
be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indentures to be so
qualified in a timely manner;
(n) in the case of a Shelf Registration, take all customary and
appropriate actions reasonably required (including those reasonably
requested by the Majority Holders) in order to expedite or facilitate the
disposition of the Registrable Securities registered thereby. If requested
as set forth below, the Company and the Subsidiary Guarantor agree that
they will in good faith negotiate the terms of an underwriting agreement,
which shall be in form and scope as is customary for similar offerings of
debt securities with similar credit ratings (including, without limitation,
representations and warranties to the underwriters) and shall otherwise be
reasonably satisfactory to the Company and the managing underwriters; and:
(i) if requested by the managing underwriters, obtain opinions of
counsel to the Company and the Subsidiary Guarantor (which counsel
shall be reasonably satisfactory to the managing underwriters)
addressed to such underwriters, covering the matters customarily
covered in opinions requested in underwritten sales of securities in
substantially the forms specified in the underwriting agreement;
(ii) if requested by the managing underwriters, obtain a "cold
comfort" letter and an update thereto not later than two weeks after
the date of the original letter (or if not available under applicable
accounting pronouncements or standards, a single "procedures" letter
and a single update thereto) from the Company's independent certified
public accountants addressed to the underwriters named in the
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underwriting agreement and use its best efforts to have such letter
addressed to the selling Holders of Registrable Securities (provided,
however, that such letter need not be addressed to any Holders to
whom, in the reasonable opinion of the Company's independent certified
public accountants, addressing such letter is not permissible under
applicable accounting standards), such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort"
(or "procedures") letters to underwriters in connection with similar
underwritten offerings; and
(iii) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
underwritten offerings.
Notwithstanding anything herein to the contrary, the Company shall
have no obligation to enter into any underwriting agreement or permit an
underwritten offering of Registrable Securities unless a request therefor
shall have been received from the Majority Holders within ten business days
of the date of the notice from the Company as required by Section 3(c). In
the case of such a request for an underwritten offering, the Company shall
provide reasonable advance written notice to the Holders of all Registrable
Securities of such proposed underwritten offering. Such notice shall (A)
offer each such Holder the right to participate in such underwritten
offering (but may indicate that whether or not all Registrable Securities
are included will be at the discretion of the underwriters), (B) specify a
date, which shall be no earlier than ten business days following the date
of such notice, by which such Holder must inform the Company of its intent
to participate in such underwritten offering and (C) include the
instructions such Holder must follow in order to participate in such
underwritten offering;
(o) in the case of a Shelf Registration, and to the extent customary
in connection with a "due diligence" investigation for an offering of debt
securities with a similar credit rating to that of the Registrable
Securities, make available for inspection by representatives appointed by
the Majority Holders and any underwriters participating in any disposition
pursuant to a Shelf Registration Statement and one firm of legal counsel
retained for all Holders participating in such Shelf Registration, and one
firm of legal counsel to the underwriters, if any, all financial and other
records, pertinent corporate documents and properties of the Company
reasonably requested by any such persons, and cause the respective
officers, directors, employees, and any other agents of the Company to
supply all information reasonably requested by any such representative,
underwriter or counsel in connection with a Registration Statement, and
make such representatives of the Company available for discussion of such
documents as shall be reasonably requested by the Initial Purchasers
provided, however, that, if any such records, documents or other
information relates to pending or proposed acquisitions or dispositions, or
otherwise relates to matters reasonably considered by the Company and the
Subsidiary Guarantor to constitute sensitive or proprietary information,
the Company and the Subsidiary Guarantor need not provide such records,
documents or information unless the foregoing parties enter into a
confidentiality agreement in customary form and reasonably acceptable to
such parties and the Company;
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<PAGE>
(p) (i) in the case of an Exchange Offer Registration Statement, a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an
Exchange Offer Registration Statement or amendment or supplement to such
Prospectus, provide copies of such document to Merrill Lynch and make such
changes in any such document prior to the filing thereof as Merrill Lynch
may reasonably request and, except as otherwise required by applicable law,
not file any such document in a form to which Merrill Lynch on behalf of
the Holders of Registrable Securities shall reasonably object, and make the
representatives of the Company and the Subsidiary Guarantor available for
discussion of such documents as shall be reasonably requested by Merrill
Lynch; and
(ii) in the case of a Shelf Registration, a reasonable time prior
to filing any Shelf Registration Statement, any Prospectus forming a
part thereof, any amendment to such Shelf Registration Statement or
amendment or supplement to such Prospectus, provide copies of such
document to Merrill Lynch, one firm of legal counsel appointed by the
Majority Holders to represent the Holders participating in such Shelf
Registration, the managing underwriters of an underwritten offering of
Registrable Securities, if any, and make such changes in any such
document prior to the filing thereof as Merrill Lynch, such one firm
of legal counsel for the Holders, such managing underwriters or their
counsel may reasonably request and not file any such document in a
form to which Merrill Lynch, such one firm of legal counsel for the
Holders, such managing underwriters or their counsel may reasonably
object and make the representatives of the Company and the Subsidiary
Guarantor available for discussion of such document as shall be
reasonably requested by Merrill Lynch, such one firm of legal counsel
for the Holders, such managing underwriters or their counsel.
(q) in the case of a Shelf Registration, use its best efforts to cause
the Registrable Securities to be rated by the appropriate rating agencies,
if so requested by the Majority Holders, or if requested by the managing
underwriters of an underwritten offering of Registrable Securities, if any,
unless the Exchange Securities or the Registrable Securities, as the case
may be, are already so rated or unless the Company has obtained such
ratings for its long-term debt securities generally;
(r) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering at least 12 months which shall satisfy the provisions of Section
11(a) of the 1933 Act and Rule 158 thereunder;
(s) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any
due diligence investigation by any managing underwriter and its counsel
(including any "qualified independent
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<PAGE>
underwriter" that is required to be retained in accordance with the rules
and regulations of the NASD); and
(t) upon consummation of an Exchange Offer, obtain a customary opinion
of counsel to the Company and the Subsidiary Guarantor addressed to the
Trustees for the benefit of all Holders of Registrable Securities
participating in the Exchange Offer, and which includes an opinion that (i)
the Company has duly authorized, executed and delivered the Exchange
Securities and the related Indentures and (ii) the Exchange Securities and
the related Indentures constitute legal, valid and binding obligations of
the Company, enforceable against the Company and the Subsidiary Guarantor
in accordance with their respective terms (with customary exceptions).
(iii) In the case of a Shelf Registration Statement, the Company
and the Subsidiary Guarantor may (as a condition to such Holder's
participation in the Shelf Registration) require each Holder of
Registrable Securities to furnish to the Company and the Subsidiary
Guarantor such information regarding the Holder and the proposed
distribution by such Holder of such Registrable Securities as the
Company and the Subsidiary Guarantor may from time to time reasonably
request in writing.
(iv) In the case of a Shelf Registration Statement, each Holder
agrees and in the case of the Exchange Offer Registration Statement,
each Participating Broker-Dealer agrees that, upon receipt of any
notice from the Company and the Subsidiary Guarantor of (a) the
happening of any event or the discovery of any facts, each of the kind
described in Section 3(e)(v) hereof or (b) the Company's
determination, in its reasonable judgment, upon advice of counsel, as
authorized by a resolution of its Board of Directors, that the
continued effectiveness and usability of the Shelf Registration
Statement would (x) require the disclosure of material information,
which the Company has a bona fide business reason for preserving as
confidential, or (y) interfere with any financing, acquisition,
corporate reorganization or other material transaction involving the
Company or any of its subsidiaries, such Holder or Participating
Broker-Dealer, as the case may be, will forthwith discontinue
disposition of Registrable Securities pursuant to such Registration
Statement until the receipt by such Holder or Participating Broker-
Dealer, as the case may be, of (A) in the case of clause (a) above,
the copies of the supplemented or amended Prospectus contemplated by
Section 3(k) hereof, and, if so directed by the Company and the
Subsidiary Guarantor, such Holder or Participating Broker-Dealers will
deliver to the Company (at its expense) all copies in its possession
of the Prospectus covering such Registrable Securities current at the
time of receipt of such notice, or (B) in the case of clause (b)
above, notice in writing from the Company and the Subsidiary Guarantor
that such Holder or Participating Broker-Dealers may resume
disposition of Registrable Securities pursuant to such Registration
Statement. If the Company and the Subsidiary Guarantor shall give any
such notice described in clause (a) above to suspend the disposition
of Registrable Securities pursuant to a Registration
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<PAGE>
Statement as a result of the happening of any event or the discovery
of any facts, each of the kind described in Section 3(e)(v) hereof,
the Company and the Subsidiary Guarantor shall be deemed to have used
their reasonable best efforts to keep such Registration Statement
effective during such Suspension Period provided that the Company and
the Subsidiary Guarantor shall use their reasonable best efforts to
file and have declared effective (if an amendment) as soon as
practicable an amendment or supplement to such Registration Statement.
The Company shall extend the period during which such Registration
Statement shall be maintained effective pursuant to this Agreement by
the number of days during the period from and including the date of
the giving of the notice described in clauses (a) and (b) above to and
including the date when the Holders or Participating Broker-Dealers
shall have received copies of the supplemented or amended Prospectus
necessary to resume such dispositions.
If any of the Registrable Securities covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the underwriter or
underwriters and manager or managers that will manage such offering will be
selected by the Company and the Subsidiary Guarantor and shall be acceptable to
the Majority Holders. No Holder of Registrable Securities may participate in
any underwritten offering hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
4. Indemnification; Contribution.
(a) The Company and the Subsidiary Guarantor shall jointly and
severally indemnify and hold harmless the Initial Purchasers, each Holder,
each Participating Broker-Dealer, each Person who participates as an
underwriter (any such Person being an "Underwriter") and each Person, if
any, who controls any Holder or Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto)
pursuant to which Exchange Securities or Registrable Securities were
registered under the 1933 Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
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<PAGE>
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 4(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch, or in the event that Merrill Lynch is not an indemnified party,
by a majority of the indemnified parties), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) above; provided, however, that this indemnity
agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the
Initial Purchasers, such Holder or Underwriter expressly for use in a
Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto).
(b) Each Holder severally, but not jointly, agrees to indemnify and
hold harmless the Company, the Subsidiary Guarantor, the Initial
Purchasers, each Underwriter and the other selling Holders, and each of
their respective directors and officers, and each Person, if any, who
controls the Company, the Subsidiary Guarantor, the Initial Purchasers, any
Underwriter or any other selling Holder within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained
in Section 4(a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in
the Shelf Registration Statement (or any amendment thereto) or any
Prospectus included therein (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company expressly for use in the Shelf Registration Statement (or any
amendment thereto) or such Prospectus (or any amendment or supplement
thereto); provided, however, that no such Holder shall be liable for any
claims hereunder in excess of the amount of net proceeds received by such
Holder from the sale of Registrable Securities pursuant to such Shelf
Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder,
but failure so to notify an
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<PAGE>
indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of
such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying party
or parties be liable for the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without
the prior written consent of the indemnified parties, settle or compromise
or consent to the entry of any judgment with respect to any litigation, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) If the indemnification provided for in this Section 4 is for any
reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred
to therein, then each indemnifying party shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred
by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
the Subsidiary Guarantor on the one hand, the Holders on another hand, and
the Initial Purchasers on another hand, from the offering of the
Securities, the Exchange Securities and the Registrable Securities (taken
together) included in such offering or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Subsidiary
Guarantor on the one hand, the Holders on another hand and the Initial
Purchasers on another hand with respect to the statements or omissions
which
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<PAGE>
resulted in such losses, liabilities, claims, damages or expenses, as
well as any other relevant equitable considerations.
The relative benefits received by the Company and the Subsidiary
Guarantor from the offering of the Securities, the Exchange Securities and the
Registrable Securities (taken together) included in such offering shall in each
case be deemed to include the proceeds received by the Company in connection
with the offering of the Securities pursuant to the Purchase Agreement. The
parties hereto agree that any underwriting discount or commission or
reimbursement of fees paid to the Initial Purchasers pursuant to the Purchase
Agreement shall not be deemed to be a benefit received by the Initial Purchasers
in connection with the offering of the Exchange Securities or Registrable
Securities included in such offering.
The relative fault of the Company and the Subsidiary Guarantor on the
one hand, the Holders on another hand, and the Initial Purchasers on another
hand shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Subsidiary Guarantor, the Holders or the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Subsidiary Guarantor, the Holders and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this Section 4. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 4 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 4, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities sold by it were offered exceeds the amount
of any damages which such Initial Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the
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Company, and each person, if any, who controls the Company or the Subsidiary
Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The Initial
Purchasers' respective obligations to contribute pursuant to this Section 4 are
several in proportion to the principal amount of Securities set forth opposite
their respective names in Schedule A to the Purchase Agreement and not joint.
5. Miscellaneous.
5.1 Rule 144 and Rule 144A. For so long as the Company or the
Subsidiary Guarantor is subject to the reporting requirements of Section 13 or
15 of the 1934 Act, the Company and the Subsidiary Guarantor covenant that they
will file the reports required to be filed by them under the 1933 Act and
Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by
the SEC thereunder. If the Company or the Subsidiary Guarantor ceases to be so
required to file such reports, the Company and the Subsidiary Guarantor covenant
that they will upon the request of any Holder of Registrable Securities (a) make
publicly available such information as is necessary to permit sales pursuant to
Rule 144 under the 1933 Act, (b) deliver such information to a prospective
purchaser as is necessary to permit sales pursuant to Rule 144A under the 1933
Act and it will take such further action as any Holder of Registrable Securities
may reasonably request and (c) take such further action that is reasonable in
the circumstances, in each case, to the extent required from time to time to
enable such Holder to sell its Registrable Securities without registration under
the 1933 Act within the limitation of the exemptions provided by (i) Rule 144
under the 1933 Act, as such Rule may be amended from time to time, (ii) Rule
144A under the 1933 Act, as such Rule may be amended from time to time or (iii)
any similar rules or regulations hereafter adopted by the SEC. Upon the request
of any Holder of Registrable Securities, the Company and the Subsidiary
Guarantor will deliver to such Holder a written statement as to whether they
have complied with such requirements.
5.2 No Inconsistent Agreements. Neither the Company nor the
Subsidiary Guarantor has entered into and neither the Company nor the Subsidiary
Guarantor will after the date of this Agreement enter into any agreement which
is inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with the rights
granted to the holders of the Company's nor the Subsidiary Guarantor's other
issued and outstanding securities under any such agreements.
5.3 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company and the Subsidiary Guarantor have obtained
the written consent of Holders of at least a majority in aggregate principal
amount of the outstanding Registrable Securities affected by such amendment,
modification, supplement, waiver or departure. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company and Merrill
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<PAGE>
Lynch to the extent that any such amendment, modification, supplement, waiver or
consent is, in their reasonable judgment, necessary or appropriate to comply
with applicable law (including any interpretation of the staff of the SEC) or
any change therein.
5.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(a) if to a Holder, at the most current address given by such Holder to the
Company or the Subsidiary Guarantor by means of a notice given in accordance
with the provisions of this Section 5.4, which address initially is the address
set forth in the Purchase Agreement with respect to the Initial Purchasers and
(b) if to the Company or the Subsidiary Guarantor, initially at the Company's
address set forth in the Purchase Agreement, and thereafter at such other
address of which notice is given in accordance with the provisions of this
Section 5.4.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; four business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustees under the
Indentures, at the address specified in such Indentures.
5.5 Successor and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement and provided, further, that
Holders of Registrable Securities may not assign their rights under this
Agreement except in connection with the permitted transfer of Registrable
Securities and then only insofar as relates to such Registrable Securities. If
any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such person shall be entitled to
receive the benefits hereof.
5.6 Third Party Beneficiaries. The Initial Purchasers (even if the
Initial Purchasers are not Holders of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder between the Company and the
Subsidiary Guarantor, on the one hand, and the Holders, on the other hand, and
shall have the right to enforce such agreements directly to the extent they deem
such enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the
-23-
<PAGE>
agreements made hereunder between the Company and the Subsidiary Guarantor, on
the one hand, and the Initial Purchasers, on the other hand, and shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights hereunder.
5.7 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and a of which taken together
shall constitute one and the same agreement.
5.8 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
5.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.1 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
-24-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
OCEAN ENERGY, INC.
By:
-----------------------------------------
Name:
Title:
OCEAN ENERGY, INC. (Louisiana)
By:
-----------------------------------------
Name:
Title:
Confirmed and accepted as
of the date first above
written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
LEHMAN BROTHERS, INC.
SALOMON BROTHERS INC
BY: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
--------------------------------
Name:
Title:
-25-
<PAGE>
Exhibit A
FORM OF OPINION OF COUNSEL
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Chase Securities Inc.
J.P. Morgan Securities Inc.
Lehman Brothers, Inc.
Salomon Brothers Inc
and any other Participating Broker-Dealers
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
We have acted as counsel for Ocean Energy, Inc., a Delaware corporation
(the "Company") and Ocean Energy, Inc., a Louisiana corporation (the "Subsidiary
Guarantor"), in connection with the sale by the Company and the Subsidiary
Guarantor to the Initial Purchasers (as defined below) of $125,000,000 aggregate
principal amount of 7 5/8% Senior Notes due 2005 (the "2005 Notes"),
$125,000,000 aggregate principal amount of 8 1/4% Senior Notes due 2018 (the
"2018 Notes") and $250,000,000 aggregate principal amount of 8 3/8 % Senior
Subordinated Notes due 2008 (the "Senior Subordinated Notes," and together with
the 2018 Notes and the 2005 Notes, the "Securities") of the Company pursuant to
the Purchase Agreement dated July 1, 1998 (the "Purchase Agreement") among the
Company, the Subsidiary Guarantor and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Chase Securities Inc., J.P. Morgan
Securities Inc., Lehman Brothers, Inc. and Salomon Brothers Inc (collectively,
the "Initial Purchasers") and the filing by the Company and the Subsidiary
Guarantor of an Exchange Offer Registration Statement (the "Registration
Statement") in connection with an Exchange Offer to be effected pursuant to the
Registration Rights Agreement (the "Registration Rights Agreement"), dated July
8, 1998, among the Company, the Subsidiary Guarantor and the Initial Purchasers.
This opinion is furnished to you pursuant to Section 3(f)(B) of the Registration
Rights Agreement. Unless otherwise defined herein, capitalized terms used in
this opinion that are defined in the Registration Rights Agreement are used
herein as so defined.
A-1
<PAGE>
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion. In rendering this opinion, as to
all matters of fact relevant to this opinion, we have assumed the completeness
and accuracy of, and are relying solely upon, the representations and warranties
of the Company and the Subsidiary Guarantor set forth in the Purchase Agreement
and the statements set forth in certificates of public officials and officers of
the Company and the Subsidiary Guarantor, without making any independent
investigation or inquiry with respect to the completeness or accuracy of such
representations, warranties or statements, other than a review of the
certificate of incorporation, bylaws and relevant minute books of the Company
and the Subsidiary Guarantor.
Based on and subject to the foregoing, we are of the opinion that the
Exchange Offer Registration Statement and the Prospectus included therein (other
than the financial statements, notes or schedules thereto and other financial
and statistical data and supplemental schedules included or incorporated by
reference therein or omitted therefrom, any reserve data included therein and
the Form T-1, as to which we express no opinion), comply as to form in all
material respects with the requirements of the 1933 Act and the applicable rules
and regulations promulgated under the 1933 Act.
In addition, we have participated in the preparation of the Exchange Offer
Registration Statement and the Prospectus included therein and, although we are
not passing upon, and do not assume responsibility for the accuracy,
completeness or fairness of, any portion of the Exchange Offer Registration
Statement and such Prospectus (relying to a large extent as to factual matters
upon certificates of officers and directors of the Company), nothing has come to
our attention that causes us to believe that, at the date it became effective,
the Exchange Offer Registration Statement (other than the financial statements
and schedules and the notes thereto and other financial data included therein,
the reserve data included therein and the Form T-1, as to which we make no
statement) contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that such Prospectus (other than the
financial statements and schedules and the notes thereto and other financial
data included therein and the reserve data included therein, as to which we make
no statement) as of the date hereof includes an untrue statement of a material
fact or omits to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
This opinion is limited in all respects to federal laws, the Delaware
General Corporation Law and New York law. The foregoing opinion is rendered
only with respect to laws, rules, and regulations which are presently in effect
and applicable court rulings and orders which have been published and are
generally available and which are normally applicable to transactions such as
the exchange of the Registrable Securities for the Exchange Securities as
described in the Exchange Offer Registration Statement. We undertake no duty to
advise you as to any changes of law or fact which come to our attention after
the date hereof. This letter is strictly limited to the opinions expressly set
forth herein and is not to be read as applying by implication or otherwise to
any other matter in connection with the Purchase Agreement or the Registration
Rights Agreement other than
A-2
<PAGE>
the sale by Participating Broker-Dealers of the Securities as described in the
Registration Rights Agreement.
This opinion is being furnished to you solely for your benefit in
connection with the transactions contemplated by the Registration Rights
Agreement, and may not be used for any other purpose or relied upon by any
person other than you. Except with our prior written consent, the opinions
herein expressed are not to be used, circulated, quoted or otherwise referred to
in connection with any transactions other than those contemplated by the
Registration Rights Agreement by or to any other person.
Very truly yours,
A-3
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 14,348
<SECURITIES> 0
<RECEIVABLES> 118,893
<ALLOWANCES> 1,190
<INVENTORY> 17,901
<CURRENT-ASSETS> 163,328
<PP&E> 2,719,465
<DEPRECIATION> 1,245,462
<TOTAL-ASSETS> 1,776,130
<CURRENT-LIABILITIES> 180,193
<BONDS> 987,277
0
0
<COMMON> 1,007
<OTHER-SE> 569,365
<TOTAL-LIABILITY-AND-EQUITY> 1,776,130
<SALES> 273,965
<TOTAL-REVENUES> 275,090
<CGS> 0
<TOTAL-COSTS> 74,230
<OTHER-EXPENSES> 365,890
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,941
<INCOME-PRETAX> (246,488)
<INCOME-TAX> (83,509)
<INCOME-CONTINUING> (162,979)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (162,979)
<EPS-PRIMARY> (1.62)
<EPS-DILUTED> (1.62)
</TABLE>
