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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
Securities Exchange Act of 1934
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Date of Earliest Event Reported: March 27, 1998
OCEAN ENERGY, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-25058 72-1277752
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
</TABLE>
1201 Louisiana, Suite 1400
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 654-9110
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Item 2. Acquisition or Disposition of Assets
MERGER WITH UNITED MERIDIAN CORPORATION
Effective on March 27, 1998, United Meridian Corporation, a Delaware
corporation ("UMC"), merged with and into Ocean Energy, Inc., a Delaware
corporation (the "Company"), pursuant to an Agreement and Plan of Merger, dated
as of December 22, 1997, as amended by an Amendment No. 1, dated as of January
7, 1998, and an Amendment No. 2, dated as of February 20, 1998 (as amended the
"Merger Agreement"), among the Company, UMC and the OEI Holding Corporation, a
Delaware corporation (the "Merger"). The closing of the transactions
contemplated by the Merger Agreement took place on March 27, 1998. Pursuant to
the Merger Agreement, the Company's stockholders are entitled to receive 2.34
shares of common stock, par value $0.01 per share, of the Company (the "OEI
Common Stock") for each of the approximately 22.9 million existing shares of
common stock outstanding (the "Old OEI Common Stock"), and UMC stockholders are
entitled to receive 1.30 shares of OEI Common Stock for each of the
approximately 35.8 million existing shares of UMC common stock, par value $0.01
per share ("UMC Common Stock) outstanding. This results in approximately 100.1
million shares of OEI Common Stock outstanding immediately following the Merger.
UMC Common Stock and Old OEI Common Stock are no longer transferable and
certificates evidencing shares of UMC Common Stock and Old OEI Common Stock
represent only the right to receive, without interest, shares of OEI Common
Stock, in accordance with the provisions of the Merger Agreement. Cash will be
paid in lieu of fractional shares of OEI Common Stock. The stockholders of the
Company and UMC approved the Merger at an Annual Stockholders' Meeting and a
Special Stockholders' Meeting, respectively, held on March 27, 1998.
The consideration of the Merger was determined through negotiations
between the managements of the Company and UMC and was approved by their
respective board of directors. In North America, the UMC production is
concentrated in the Gulf Coast, Permian Basin, Midcontinent and Rocky Mountain
regions and in Western Canada. Internationally, UMC operations include the West
African oil and gas producing regions of Cote d'Ivoire and Equatorial Guinea,
production sharing contracts or petroleum concession agreements on five blocks
in Pakistan and on one block in Bangladesh, and participation in a block in
offshore Angola. Additionally, there are two applications pending for production
sharing contracts in an additional West African nation.
Under the Merger Agreement, each unexpired and unexercised outstanding
Company stock option to purchase or acquire a share of Old OEI Common Stock
under the Company's Option Plans (as defined below) was automatically converted
into an option to purchase the number of shares of OEI Common Stock equal to
2.34 times the number of shares of Old OEI Common Stock which could have been
obtained prior to the Merger, at an exercise price per share equal to the
exercise price for each such share of Old OEI Common Stock subject to such
option divided by 2.34. The other terms of each such option, and the plans under
which they were issued, continue to apply in accordance with their terms,
including any provisions providing for transfer and acceleration.
In addition, each outstanding UMC stock option to purchase or acquire a
share of UMC Common Stock under the UMC Option Plans (as defined below) was
converted into an option to purchase the number of shares of OEI Common Stock
equal to 1.30 times the number of shares of UMC Common Stock which could have
been obtained prior to the Merger, at an exercise price per share equal to the
exercise price for each such share of UMC Common Stock subject to such option
under the UMC Option Plans divided by 1.30. The Company also assumed the
obligations of UMC under the UMC Option Plans. The other terms of each such
option, and the UMC Option Plans under which they were issued, continue to apply
in accordance with their terms, including any provisions providing for transfer
and acceleration.
ITEM 5. OTHER EVENTS
At the Company's 1998 Annual Meeting of Stockholders (the "Annual
Meeting"), the stockholders of the Company also approved the Ocean Energy, Inc.
1998 Long-Term Incentive Plan (the "1998 LTIP"). As used herein, the term
"Company Option Plans" shall mean, collectively, the Ocean Energy, Inc. 1994
Long-Term Incentive Plan ("1994 LTIP"), the Ocean Energy, Inc. 1996 Long-Term
Incentive Plan ("1996 LTIP"), the Ocean Energy, Inc. Long-Term Incentive Plan
for Nonexecutive Employees ("Nonexecutive LTIP") and the 1998 LTIP. As used
herein, the term "UMC Option Plans" shall mean, collectively, the United
Meridian Corporation 1987 Nonqualified Stock
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Option Plan ("UMC 1987 NQO Plan"), the United Meridian Corporation 1994 Employee
Nonqualified Stock Option Plan ("UMC 1994 NQO Plan") and the United Meridian
Corporation 1994 Outside Directors' Nonqualified Stock Option Plan ("UMC Outside
Director Plan"). Although the outstanding options under each of the Company
Option Plans and UMC Option Plans (collectively, the "Plans") will remain
outstanding (adjusted as described above), no further grants will be made under
any of such plans other than the 1998 LTIP and the Nonexecutive LTIP.
Substantially all outstanding options granted under the Plans became fully
exercisable as a result of the Merger.
At the Annual Meeting, the Company's stockholders also elected Mr.
Flores and Thomas D. Clark, Jr. to serve additional three-year terms as Class
III Directors. The Board of Directors of the Company following the effective
time of the Merger is composed of the following individuals: Robert L. Belk,
John B. Brock, Thomas D. Clark, Jr., Lodwrick M. Cook, James L. Dunlap, James C.
Flores, Robert L. Howard, Elvis L. Mason, Charles F. Mitchell, James L. Murdy,
David K. Newbigging, William W. Rucks, IV, Matthew R. Simmons and Milton J.
Womack. In addition, stockholders ratified the appointment of Arthur Andersen
LLP as the Company's independent auditors for the 1998 fiscal year.
In connection with the Merger, on March 27, 1998, the Company entered
into employment agreements, copies of which are attached hereto as exhibits,
with John B. Brock and James C. Flores which extend for an initial period of
three years, subject to extension. Mr. Brock and Mr. Flores will receive a base
salary per year of $475,000 and $600,000, respectively, and a maximum
discretionary annual bonus of 200% of such executive's base salary in effect
during such year. Additionally, the Certificate of Incorporation of the Company
was amended to increase the number of authorized shares of Common Stock to 250
million shares.
Also in connection with the Merger, on March 27, 1998, the Company,
restructured its bank debt by entering into a $750,000,000 (subject to borrowing
base limitations) Revolving Credit Facility among the Company, Ocean Energy,
Inc., a Louisiana corporation and indirect wholly owned subsidiary of the
Company ("OEI Louisiana"), and a consortium of banks, including Chase Bank of
Texas, National Association, as Administrative Agent, and Morgan Guaranty Trust
Company of New York, as Syndication Agent (the "Revolving Credit Facility"). The
Revolving Credit Facility provides for an initial borrowing base of $600,000,000
and for the guaranty by the Company of OEI Louisiana's obligations under the
Revolving Credit Facility. The Company and OEI Louisiana plan to use the funds
available under the Revolving Credit Facility in order to finance, among other
things, (i) the repayment of existing senior credit facilities of the Company
and UMC Petroleum Corporation, predecessor by merger to OEI Louisiana, (ii)
future exploration, development and production costs, and (iii) other working
capital needs.
Additionally, on March 27, 1998, UMC Resources Canada, Ltd., a British
Columbia corporation and wholly-owned, indirect subsidiary of the Company ("UMC
Canada"), entered into a subfacility with certain lenders for borrowings in
Canadian Dollars up to CDN $25,000,000 (subject to borrowing base limitations)
(the "Canadian Subfacility"). The Canadian Subfacility provides for the guaranty
by the Company of UMC Canada's obligations under the Canadian Subfacility.
The Company executed a Third Supplemental Indenture, dated as of March
27, 1998, by and among the Company, OEI Louisiana and State Street Bank and
Trust Company, as successor in interest to Fleet National Bank, as trustee (the
"Trustee"), relating to the 13 1/2% Senior Notes due 2004 (the "1994
Supplemental Indenture"). The 1994 Supplemental Indenture amends the original
indenture, dated as of December 1, 1994, by and among the Company, OEI Louisiana
and the Trustee, as supplemented by the First Supplemental Indenture thereto,
dated as of September 19, 1996, and the Second Supplemental Indenture thereto,
dated as of July 14, 1997 (the "1994 Indenture").
The Company also executed on March 27, 1998, a First Supplemental
Indenture, by and among the Company, OEI Louisiana and the Trustee, relating to
the 9 3/4% Senior Subordinated Notes due 2006 (the "1996 Supplemental
Indenture"), which amends the original indenture, dated as of September 26,
1996, by and among the Company, OEI Louisiana and the Trustee (the "1996
Indenture").
Additionally, on March 27, 1998, the Company executed a First
Supplemental Indenture, by and among the Company, OEI Louisiana and the Trustee,
with respect to the 87/8% Senior Subordinated Notes due 2007 (the "1997
Supplemental Indenture"), amending the original indenture, dated as of July 2,
1997, among the Company, OEI Louisiana and the Trustee (the "1997 Indenture").
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The 1994 Supplemental Indenture, the 1996 Supplemental Indenture and
the 1997 Supplemental Indenture amend their respective original indentures by
providing that (i) OEI Louisiana will confirm its subsidiary guarantees under
such indentures and (ii) with respect to the 1996 Indenture and the 1997
Indenture, the Company will evidence its designation of Havre Pipeline Company
LLC, and Lion GPL, S.A. to be "Unrestricted Subsidiaries" for purposes of such
Indentures.
Also on March 27, 1998, the Company executed a Second Supplemental
Indenture by and among the Company, OEI Louisiana and U.S. Bank Trust National
Association, with respect to the 103/8% Senior Subordinated Notes due 2005 (the
"1995 Supplemental Indenture"). The 1995 Supplemental Indenture amends the
original indenture, dated as of October 30, 1995, by and among UMC, UMC
Petroleum Corporation and First Trust of New York, National Association, as
trustee, as supplemented by the First Supplemental Indenture, thereto, dated as
of November 4, 1997 (the "1995 Indenture"), by providing that (i) the Company,
as successor by merger to UMC, will assume the obligations of UMC under the 1995
Indenture, (ii) OEI Louisiana, as successor by merger to UMC Petroleum
Corporation, will assume UMC Petroleum Corporation's subsidiary guarantee of the
1995 Indenture and become a subsidiary guarantor under the 1995 Indenture, and
(iii) the Company will evidence its designation of Havre Pipeline Company, LLC
and Lion GPL, S.A. to be "Unrestricted Subsidiaries" for purposes of the 1995
Indenture.
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Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
Previously reported.
(b) Pro Forma Financial Information
Previously reported.
(c) Exhibits
The following exhibits are filed as part of this report:
2.1 Agreement and Plan of Merger, dated as of December 22, 1997,
by and among the Company, United Meridian Corporation, a
Delaware Corporation, and OEI Holding Corporation, a Delaware
corporation (incorporated by reference to Exhibit 2.1 to
United Meridian Corporation's Current Report on Form 8-K filed
on December 23, 1997).
2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of
January 7, 1997, among the Company, OEI Holding Corporation, a
Delaware corporation and United Meridian Corporation, a
Delaware corporation (incorporated by reference to Exhibit 2.2
to the Company's Registration Statement on Form S-4
(Registration No. 333-43933)).
2.3 Amendment No. 2. to Agreement and Plan of Merger, dated as of
February 20, 1998, among the Company, OEI Holding Corporation,
a Delaware corporation and United Meridian Corporation, a
Delaware corporation (incorporated by reference to Exhibit 2.3
to the Company's Registration Statement on Form S-4
(Registration No. 333-43933)).
*+10.1 Employment Agreement, dated as of March 27, 1998, among the
Company and John B. Brock.
*+10.2 Employment Agreement, dated as of March 27, 1998, among the
Company and James C. Flores.
*10.3 Global Credit Agreement, dated as of March 27, 1998, by and
among the Company, OEI Louisiana, Chase Bank of Texas,
National Association ("Chase Texas") as Administrative Agent,
Morgan Guaranty Trust of New York ("Morgan Guaranty") as
Syndication Agent, Barclay Bank PLC as Documentation Agent,
and the other Lenders named therein.
*10.4 Guaranty Agreement, dated as of March 27, 1998, by and among
the Company, Chase Texas as Administrative Agent, Morgan
Guaranty as Syndication Agent, Barclays Bank PLC as
Documentation Agent, and the other Lenders named therein.
*10.5 Intercreditor Agreement, dated as of March 27, 1998, by and
among the Company, OEI Louisiana, UMC 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 Credit Agreement, dated as of March 27, 1998, by and among UMC
Canada, the Chase Manhattan Bank of Canada ("Chase Canada") as
Agent, and the other Lenders named therein.
*10.7 Guaranty Agreement, dated as of March 27, 1998, by and among
the Company, Chase Canada as Administrative Agent, and the
other Lenders named therein.
*10.8 Guaranty Agreement, dated as of March 27, 1998, by and among
OEI Louisiana, Chase Canada as Administrative Agent and the
other Lenders named therein.
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*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.
*10.10 First Supple mental 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.
*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 87/8% Senior Subordinated
Notes due 2007.
*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 103/8% Senior Subordinated Notes due 2005.
*+10.13 Ocean Energy, Inc. 1998 Long Term Incentive Plan (included as
Appendix E to the Joint Proxy Statement and Prospectus
contained in the Company's Registration Statement on Form S-4
(No. 333-43933) and incorporated herein by reference).
*99.1 Certificate of Incorporation of the Company, as amended.
*99.2 Amended and Restated Bylaws of the Company.
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* Filed herewith.
+ Management contract or compensatory plan.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OCEAN ENERGY, INC.
By: /s/ ROBERT K. REEVES
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Robert K. Reeves
Executive Vice President,
General Counsel and Secretary
Date: March 31, 1998
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EXHIBIT INDEX
2.1 Agreement and Plan of Merger, dated as of December 22, 1997,
by and among the Company, United Meridian Corporation, a
Delaware Corporation, and OEI Holding Corporation, a Delaware
corporation (incorporated by reference to Exhibit 2.1 to
United Meridian Corporation's Current Report on Form 8-K filed
on December 23, 1997).
2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of
January 7, 1997, among the Company, OEI Holding Corporation, a
Delaware corporation and United Meridian Corporation, a
Delaware corporation (incorporated by reference to Exhibit 2.2
to the Company's Registration Statement on Form S-4
(Registration No. 333-43933)).
2.3 Amendment No. 2. to Agreement and Plan of Merger, dated as of
February 20, 1998, among the Company, OEI Holding Corporation,
a Delaware corporation and United Meridian Corporation, a
Delaware corporation (incorporated by reference to Exhibit 2.3
to the Company's Registration Statement on Form S-4
(Registration No. 333-43933)).
*+10.1 Employment Agreement, dated as of March 27, 1998, among the
Company and John B. Brock.
*+10.2 Employment Agreement, dated as of March 27, 1998, among the
Company and James C. Flores.
*10.3 Global Credit Agreement, dated as of March 27, 1998, by and
among the Company, OEI Louisiana, Chase Bank of Texas,
National Association ("Chase Texas") as Administrative Agent,
Morgan Guaranty Trust of New York ("Morgan Guaranty") as
Syndication Agent, Barclay Bank PLC as Documentation Agent,
and the other Lenders named therein.
*10.4 Guaranty Agreement, dated as of March 27, 1998, by and among
the Company, Chase Texas as Administrative Agent, Morgan
Guaranty as Syndication Agent, Barclays Bank PLC as
Documentation Agent, and the other Lenders named therein.
*10.5 Intercreditor Agreement, dated as of March 27, 1998, by and
among the Company, OEI Louisiana, UMC 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 Credit Agreement, dated as of March 27, 1998, by and among UMC
Canada, the Chase Manhattan Bank of Canada ("Chase Canada") as
Agent, and the other Lenders named therein.
*10.7 Guaranty Agreement, dated as of March 27, 1998, by and among
the Company, Chase Canada as Administrative Agent, and the
other Lenders named therein.
*10.8 Guaranty Agreement, dated as of March 27, 1998, by and among
OEI Louisiana, Chase Canada as Administrative 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.
*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.
*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 87/8% Senior Subordinated
Notes due 2007.
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*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 103/8% Senior Subordinated Notes due 2005.
*+10.13 Ocean Energy, Inc. 1998 Long Term Incentive Plan (included as
Appendix E to the Joint Proxy Statement and Prospectus
contained in the Company's Registration Statement on Form S-4
(No. 333-43933) and incorporated herein by reference).
*99.1 Certificate of Incorporation of the Company, as amended.
*99.2 Amended and Restated Bylaws of the Company.
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* Filed herewith.
+ Management contract or compensatory plan.
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Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into effective as of
March 27, 1998 (the "Effective Date") by and between Ocean Energy, Inc., a
Delaware corporation ("Company"), and John B. Brock ("Employee").
WHEREAS, the Company employs Employee and desires to continue such
employment relationship and Employee desires to continue such employment;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties, and agreements contained herein, and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby
accepts employment by the Company, on the terms and conditions set forth in this
Agreement.
2. Term of Employment. Subject to the provisions for earlier
termination provided in the Agreement, the term of this Agreement (the "Term")
shall commence on the Effective Date and shall terminate on the third
anniversary of the Effective Date; provided, however, commencing on the
Effective Date and on each day thereafter, the Term shall automatically be
extended one additional day unless the Board of Directors of the Company (the
"Board") shall give written notice to Employee that the Term shall cease to be
so extended as of a specified future date, in which event the Agreement shall
terminate on the third anniversary of the specified future date. Notwithstanding
any provision of this Agreement to the contrary, termination of this Agreement
shall not alter or impair any rights or benefits of Employee (or Employee's
estate or beneficiaries) that have arisen under this Agreement on or prior to
such termination.
3. Employee's Duties. During the Term, Employee shall assume and
discharge the responsibilities of the Chairman of the Board, as well as such
other responsibilities as may be assigned to him by the Board; provided that
such duties are at all times consistent with the duties of such positions.
Employee agrees to devote his full attention and time during normal
business hours to the business and affairs of the Company and to use reasonable
best efforts to perform faithfully and efficiently such duties and
responsibilities. Notwithstanding the foregoing, during the Term, Employee may
engage in the following activities so long as they do not interfere in any
material respect with the performance of Employee's duties and responsibilities
hereunder: (i) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures, fulfill speaking engagements or teach on a part-time
basis at educational institutions, and (iii) manage his personal investments;
provided, however, in no event shall the conduct of any of such activities by
Employee be deemed to materially interfere with Employee's duties hereunder
until Employee has been notified in writing thereof by the Board and given a
reasonable period in which to cure such interference.
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The Company agrees to use its reasonable best efforts to cause
Employee to be elected or appointed, or re-elected or re-appointed, as a
director of the Company at all times during the Term.
4. Base Compensation. For services rendered by Employee under this
Agreement the Company shall pay to Employee a base salary ("Base Compensation")
of $475,000 per annum payable in accordance with the Company's customary payroll
practice for its senior executive officers. The amount of Base Compensation
shall be reviewed periodically by the Board and may be increased from time to
time as the Board may deem appropriate. Base Compensation, as in effect at any
time, may not be decreased.
5. Annual Bonus. In addition to his Base Compensation, Employee shall
be eligible to receive each year during the Term, a cash incentive payment in an
amount equal to 200% of Employee's Base Compensation (the "Target Bonus"). The
amount of the Target Bonus earned for any year shall be determined by the
Compensation Committee of the Board based on Employee's individual performance
and the performance by the Company.
6. Other Benefits. Employee shall be entitled to participate in all
incentive compensation plans and to receive all fringe benefits and perquisites
offered by the Company to any of its senior executive officers, including,
without limitation, participation in the various employee benefit plans or
programs provided to the employees of the Company in general, subject to the
regular eligibility requirements with respect to each of such benefit plans or
programs, and such other benefits or prerequisites as may be approved by the
Board during the Term, all on a basis at least as favorable to Employee as may
be provided or offered to any other senior executive officer of the Company.
7. Termination. This Agreement may be terminated prior to the end of
its Term as set
forth below.
(a) Resignation. Employee may resign his position at any time.
In the event of such resignation, except in the case of resignation for
Good Reason (as defined below), Employee shall not be entitled to
further compensation pursuant to this Agreement.
(b) Death. If Employee's employment is terminated due to his
death, this Agreement shall terminate and the Company shall have no
obligations to his legal representatives with respect to this Agreement
other than the payment of any compensation which had accrued hereunder
at the date of Employee's death.
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(c) Discharge.
(i) The Company may terminate this Agreement and
Employee's employment for any reason deemed sufficient by the
Company upon notice as provided in Section 10. However, in the
event that Employee's employment is terminated during the Term
by the Company for any reason other than his Misconduct or
Disability (as such terms are defined below), then, subject to
Section 7(h) below: (A) within five business days of the Date
of Termination, the Company shall pay to Employee a lump sum
amount in cash equal to three times the sum of (1) Employee's
Base Compensation and (2) Employee's Target Bonus; (B) for the
36- month period after such Date of Termination the Company,
at its sole expense, shall continue to provide or arrange to
provide Employee (and Employee's dependents) with health
insurance benefits no less favorable than the health plan
benefits provided by the Company (or any successor) during
such 36-month period to any senior executive officer of the
Company; provided, further, to the extent the coverage or
benefits received are taxable to Employee, the Company shall
make Employee "whole" on a net after tax basis; and (C) on the
Date of Termination all then outstanding Company stock-based
awards of Employee, whether under this Agreement, a Company
stock plan or otherwise, shall become immediately exercisable
and payable in full, as the case may be, with any performance
goals associated therewith being deemed to have been achieved
at the maximum levels. Notwithstanding anything in this
Agreement to the contrary, if any payment to Employee in
respect of a Company stock-based award would give rise to a
short-swing profit liability to Employee under Section 16(b)
of the Securities Exchange Act of 1934, then both the payment
and the entitlement to payment thereof shall automatically be
deferred until the earliest date at which the payment of such
benefit would not result in a short-swing profit liability to
Employee.
(ii) Notwithstanding the foregoing provisions of this
Section 7, in the event Employee is terminated because of
Misconduct, the Company shall have no obligations pursuant to
this Agreement after the Date of Termination. As used herein,
"Misconduct" means (a) the willful and continued failure by
Employee to substantially perform his duties with the Company
(other than any such failure resulting from Employee's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a Notice
of Termination by Employee for Good Reason), after a written
demand for substantial performance is delivered to Employee by
the Board, which demand specifically identifies the manner in
which the Board believes that Employee has not substantially
performed his duties, or (b) the willful engaging by Employee
in conduct which is demonstrably and materially injurious to
the Company, monetarily or otherwise. For purposes hereof, no
act, or failure to act, on Employee's part shall be deemed
"willful" unless done, or omitted to be done, by Employee not
in good faith and without reasonable belief that Employee's
action or omission was in the best interest of the Company.
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Notwithstanding the foregoing, Employee shall not be deemed to
have been terminated for Misconduct unless and until there
shall have been delivered to Employee a copy of a resolution
duly adopted by the affirmative vote of not less than
two-thirds of the entire membership of the Board at a meeting
of the Board called and held for such purpose, finding that in
the good faith opinion of the Board Employee was guilty of
conduct set forth above and specifying the particulars thereof
in detail.
(d) Disability.
(i) If Employee shall have been absent from the
full-time performance of Employee's duties with the Company
for six consecutive months as a result of Employee's
incapacity due to physical or mental illness, as determined by
Employee's physician, and within 30 days after written Notice
of Termination is given by the Company Employee shall not have
returned to the full-time performance of Employee's duties,
Employee's employment may be terminated by the Company for
"Disability", provided Employee is entitled to and receiving
benefits under an insured long term disability plan of the
Company. Thereafter, Employee shall not be entitled to further
compensation pursuant to this Agreement.
(ii) If Employee fails during any period during the
Term to perform Employee's full-time duties with the Company
as a result of incapacity due to physical or mental illness,
as determined by Employee's physician, Employee shall continue
to receive his Base Compensation, less any amount payable to
Employee under a Company disability plan, and all other
compensation and benefits during such period until this
Agreement is terminated.
(e) Resignation for Good Reason. Employee shall be entitled to
terminate his employment for Good Reason as defined herein. If Employee
terminates his employment for Good Reason, Employee shall be entitled
to the compensation and benefits provided in Paragraph 7(c)(i) hereof.
"Good Reason" shall mean (1) the breach of any of the Company's
obligations under this Agreement without Employee's express written
consent or (2) the occurrence of any of the following circumstances, as
the case may be, without Employee's express written consent unless such
breach or circumstances are fully corrected prior to the Date of
Termination specified in the Notice of Termination pursuant to
Subsection 7(f) given in respect thereof:
(i) the assignment by the Board to Employee of any
duties that, in the good faith opinion of Employee, are
inconsistent with Employee's positions with the Company, or an
adverse alteration (as determined in good faith by Employee)
in the nature or status of Employee's office, title,
responsibilities, including reporting responsibilities, or the
conditions of Employee's employment from those in effect
immediately prior to such alteration;
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(ii) the failure by the Company to continue in effect
any compensation plan in which Employee participates that is
material to Employee's total compensation unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or the failure
by the Company to continue Employee's participation therein
(or in such substitute or alternative plan) on a basis not
materially less favorable to Employee, both in terms of the
amount of benefits provided and the level of Employee's
participation relative to other participants;
(iii) the taking of any action by the Company which
would directly or indirectly materially reduce or deprive
Employee of any material fringe benefit then enjoyed by
Employee;
(iv) the failure of the Company to obtain a
satisfactory agreement from any successor to assume and agree
to perform this Agreement, as contemplated in Section 12
hereof;
(v) the relocation of the Company's principal
executive offices outside the greater Houston, Texas
metropolitan area, or the Company's requiring Employee to
relocate anywhere other than the location of the Company's
principal executive offices, except for required travel on the
Company's business to an extent substantially consistent with
Employee's past business travel obligations; or
(vi) any purported termination of Employee's
employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection (f)
hereof, which purported termination shall not be effective for
purposes of this Agreement.
Employee's right to terminate employment pursuant to this
subsection shall not be affected by Employee's incapacity due to
physical or mental illness. In addition, Employee's continued
employment following any event, act or omission, regardless of the
length of such continued employment, shall not constitute Employee's
consent to, or a waiver of Employee's rights with respect to, such
event, act or omission constituting a Good Reason circumstance
hereunder.
(f) Notice of Termination. Any purported termination of
Employee's employment by the Company or by Employee shall be
communicated by written Notice of Termination to the other party hereto
in accordance with Section 10 hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall set forth in
reasonable detail the reason for termination of Employee's employment,
or in the case of resignation for Good Reason, said notice must specify
in reasonable detail the basis for such resignation. No purported
termination which is not effected pursuant to this Section 7(f) shall
be effective.
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(g) Date of Termination, Etc. "Date of Termination" shall mean
the date specified in the Notice of Termination. Either party may,
within 15 days after any Notice of Termination is given, provide notice
to the other party pursuant to Section 10 hereof that a dispute exists
concerning the termination. Notwithstanding the pendency of any such
dispute, the Company will continue to pay Employee his full Base
Compensation in effect when the notice giving rise to the dispute was
given (including, but not limited to, Base Compensation) and continue
Employee as a participant in all compensation, benefit and insurance
plans in which Employee was participating when the notice giving rise
to the dispute was given, until the dispute is finally resolved in
accordance with Section 16 hereof, but in no event past the expiration
date of this Agreement. Any payments and benefits provided during such
period of dispute shall not reduce any other payments or benefits due
Employee under this Agreement nor shall Employee be liable to repay the
Company for such payments and benefits if it is finally determined the
Employee is not entitled to payments under the other provisions of this
Agreement following Employee's termination of employment.
(h) Mitigation. Employee shall not be required to mitigate the
amount of any payment or benefit provided for in this Section 7 by
seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for in this Agreement be reduced by any
compensation or benefit earned by Employee as a result of employment by
another employer, self-employment earnings, by retirement benefits, by
offset against any amount claimed to be owing by Employee to the
Company, or otherwise, except that any cash severance amount payable to
Employee pursuant to a Company maintained severance plan or policy for
employees in general shall reduce the amount otherwise payable to
Employee pursuant to Section 7(c)(i)(A).
(i) Gross-Up of Parachute Payments. If, during the Term, any
payment, including without limitation any imputed income, made or
benefit provided to or on behalf of Employee, including any accelerated
vesting or any deferred compensation or other award, in connection with
a "change in control" of the Company, whether or not made or provided
pursuant to this Agreement, results in Employee being subject to the
excise tax imposed by section 4999 of the Internal Revenue Code of
1986, as amended (or any successor or similar provision), the Company
shall pay Employee an additional amount of cash (the "Additional
Amount") such that the net amount of all payments and benefits received
by Employee after paying all applicable taxes thereon, including on
such Additional Amount, shall be equal to the net after-tax amount of
payments and benefits that Employee would have received if section 4999
were not applicable.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Employee's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
affiliated companies and for which Employee may qualify, nor shall anything
herein limit or otherwise adversely affect such rights as Employee may
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have under any stock option or other agreements with the Company or any of its
affiliated companies.
9. Assignability. The obligations of Employee hereunder are personal
and may not be assigned or delegated by him or transferred in any manner
whatsoever, nor are such obligations subject to involuntary alienation,
assignment or transfer. The Company shall have the right to assign this
Agreement and to delegate all rights, duties and obligations hereunder, either
in whole or in part, to any parent, affiliate, successor or subsidiary
organization or company of the Company, provided that no such assignment or
delegation shall relieve the Company of its duties and obligations hereunder nor
affect the rights of Employee hereunder.
10. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by overnight
courier or by facsimile with confirmation of receipt or on the third business
day after being mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to the Company at its principal office
address and facsimile number, directed to the attention of the Board with a copy
to the Secretary of the Company, and to Employee at Employee's residence address
and facsimile number on the records of the Company or to such other address as
either party may have furnished to the other in writing in accordance herewith
except that notice of change of address shall be effective only upon receipt.
11. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
12. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and assets of the Company ("Successor") or any corporation which
becomes the ultimate parent corporation of the Company or any such Successor
("Ultimate Parent") to expressly assume and agree in writing satisfactory to the
Employee to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such written agreement prior to the
effectiveness of any such succession or creation of the parent corporation
relationship shall be a breach of this Agreement and shall entitle Employee to
compensation and benefits from the Company in the same amount and on the same
terms as he would be entitled to hereunder if he terminated his employment for
Good Reason, except that for purposes of implementing the foregoing, the date on
which any such succession (or creation of the parent corporation relationship)
becomes effective shall be deemed the Date of Termination. As used in this
Agreement, including, without limitation, in Section 3, the term "Company" shall
include any Successor and Ultimate Parent which executes and delivers the
Agreement as provided for in this Section 12 or which otherwise becomes bound by
all terms and provisions of this Agreement by operation of law.
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<PAGE>
(b) This Agreement and all rights of Employee hereunder shall inure to
the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
13. Indemnification. During the Term and for a period of six years
thereafter, the Company shall cause Employee to be covered by and named as an
insured under any policy or contract of insurance obtained by it to insure its
directors and officers against personal liability for acts or omissions in
connection with service as an officer or director of the Company or service in
other capacities at the request of the Company. The coverage provided to
Employee pursuant to this Section 8 shall be of a scope and on terms and
conditions at least as favorable as the most favorable coverage provided to any
other officer or director of the Company (or any successor).
In addition, to the maximum extent permitted under applicable
law, during the Term and for a period of six years thereafter, the Company shall
indemnify Employee against and hold Employee harmless from any costs,
liabilities, losses and exposures for Employee's services as an employee,
officer and director of the Company (or any successor).
14. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by Employee and such officer as may be specifically
authorized by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or in compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. This Agreement is an integration of the parties
agreement; no agreement or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Texas.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
16. Arbitration. Employee shall be permitted (but not required) to
elect that any dispute or controversy arising under or in connection with this
Agreement be settled by arbitration in the city in which Employee resides at
such time in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. All legal fees and costs incurred by Employee in connection
with the resolution of any dispute or controversy under or in connection with
this Agreement shall be paid by the Company as bills for such services are
presented by Employee to the Company.
17. Prior Employment Agreement. This Agreement supersedes and replaces
in full any existing employment agreement (written or oral) between the parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement on March
27, 1998, effective for all purposes as provided above.
OCEAN ENERGY, INC.
By: /s/ Robert K. Reeves
Robert K. Reeves
Executive Vice President,
General Counsel
and Secretary
EMPLOYEE
/s/ John B. Brock
John B. Brock
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Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into effective as of
March 27, 1998 (the "Effective Date") by and between Ocean Energy, Inc., a
Delaware corporation ("Company"), and James C. Flores ("Employee").
WHEREAS, the Company employs Employee and desires to continue such
employment relationship and Employee desires to continue such employment;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties, and agreements contained herein, and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby
accepts employment by the Company, on the terms and conditions set forth in this
Agreement.
2. Term of Employment. Subject to the provisions for earlier
termination provided in the Agreement, the term of this Agreement (the "Term")
shall commence on the Effective Date and shall terminate on the third
anniversary of the Effective Date; provided, however, commencing on the
Effective Date and on each day thereafter, the Term shall automatically be
extended one additional day unless the Board of Directors of the Company (the
"Board") shall give written notice to Employee that the Term shall cease to be
so extended as of a specified future date, in which event the Agreement shall
terminate on the third anniversary of the specified future date. Notwithstanding
any provision of this Agreement to the contrary, termination of this Agreement
shall not alter or impair any rights or benefits of Employee (or Employee's
estate or beneficiaries) that have arisen under this Agreement on or prior to
such termination.
3. Employee's Duties. During the Term, Employee shall serve as the
Chief Executive Officer and President of the Company, with such customary duties
and responsibilities as may from time to time be assigned to him by the Board,
provided that such duties are at all times consistent with the duties of such
positions. Employee shall report directly to the Board. All other employees of
the Company shall report to Employee.
Employee agrees to devote his full attention and time during normal
business hours to the business and affairs of the Company and to use reasonable
best efforts to perform faithfully and efficiently such duties and
responsibilities. Notwithstanding the foregoing, during the Term Employee may
engage in the following activities so long as they do not interfere in any
material respect with the performance of Employee's duties and responsibilities
hereunder: (i) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures, fulfill speaking engagements or teach on a part-time
basis at educational institutions, and (iii) manage his personal investments;
provided, however, in no event shall the conduct of any of such activities by
Employee be deemed to materially interfere with Employee's duties hereunder
until Employee has been notified in writing thereof by the Board and given a
reasonable period in which to cure such interference.
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The Company agrees to use its reasonable best efforts to cause
Employee to be elected or appointed, or re-elected or re-appointed, as a
director of the Company at all times during the Term.
4. Base Compensation. For services rendered by Employee under this
Agreement the Company shall pay to Employee a base salary ("Base Compensation")
of $600,000 per annum payable in accordance with the Company's customary payroll
practice for its senior executive officers. The amount of Base Compensation
shall be reviewed periodically by the Board and may be increased from time to
time as the Board may deem appropriate. Base Compensation, as in effect at any
time, may not be decreased.
5. Annual Bonus. In addition to his Base Compensation, Employee shall
be eligible to receive each year during the Term, a cash incentive payment in an
amount equal to 200% of Employee's Base Compensation (the "Target Bonus"). The
amount of the Target Bonus earned for any year shall be determined by the
Compensation Committee of the Board based on Employee's individual performance
and the performance by the Company.
6. Other Benefits. Employee shall be entitled to participate in all
incentive compensation plans and to receive all fringe benefits and perquisites
offered by the Company to any of its senior executive officers, including,
without limitation, participation in the various employee benefit plans or
programs provided to the employees of the Company in general, subject to the
regular eligibility requirements with respect to each of such benefit plans or
programs, and such other benefits or prerequisites as may be approved by the
Board during the Term, all on a basis at least as favorable to Employee as may
be provided or offered to any other senior executive officer of the Company.
In addition, and not in limitation of the foregoing, Employee
shall be entitled to the following:
(a) Business Expenses. The Company shall reimburse Employee
for all business expenses reasonably incurred by Employee in the
performance of his duties. It is understood that Employee is authorized
to incur reasonable business expenses for promoting the business of the
Company, including reasonable expenditures for travel, lodging, meals
and client or business associate entertainment. Request for
reimbursement for such expenses must be accompanied by appropriate
documentation.
(b) Automobile. The Company shall either provide Employee with
an automobile of a make and model selected by Employee or promptly
reimburse Employee in full for his cost of leasing or purchasing an
automobile. In addition, the Company shall pay or reimburse Employee
for all reasonable costs and expenses associated with the use,
maintenance, insurance and repair of such automobile.
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(c) Clubs. The Company shall reimburse Employee for the cost
and expenses (including initiation fees, assessments and annual dues)
of such social clubs and business clubs as Employee determines, in his
good faith opinion, to be helpful or appropriate to the performance of
his duties.
(d) Relocation Expenses. In conjunction with Employee's
relocation of his principal residence to the greater Houston, Texas
metropolitan area, the Company shall reimburse Employee for all
out-of-pocket expenses involved in such move, including, without
limitation, packing and transport of personal, family, and household
goods and vehicles by suitable service providers, for any brokerage
fees for the sale or purchase of any residences, of any loss of
economic value occasioned by the timing of the sale or by Employee's
inability to recover monies invested in any personal residence sold,
temporary housing costs in suitable alternative housing, all utility
severance and hook-up costs, and any other relocation expenses, all
such sums to be grossed-up for the impact of any federal, state or
local taxes levied against Employee for such portions of such
reimbursement as shall be taxable and non-deductible to Employee.
7. Termination. This Agreement may be terminated prior to the end of
its Term as set forth below. (a) Resignation. Employee may resign his position
at any time.
In the event of such resignation, except in the case of resignation for
Good Reason (as defined below), Employee shall not be entitled to
further compensation pursuant to this Agreement.
(b) Death. If Employee's employment is terminated due to his
death, this Agreement shall terminate and the Company shall have no
obligations to his legal representatives with respect to this Agreement
other than the payment of any compensation which had accrued hereunder
at the date of Employee's death.
(c) Discharge.
(i) The Company may terminate this Agreement and
Employee's employment for any reason deemed sufficient by the
Company upon notice as provided in Section 10. However, in the
event that Employee's employment is terminated during the Term
by the Company for any reason other than his Misconduct or
Disability (as such terms are defined below), then, subject to
Section 7(h) below: (A) within five business days of the Date
of Termination, the Company shall pay to Employee a lump sum
amount in cash equal to three times the sum of (1) Employee's
Base Compensation and (2) Employee's Target Bonus; (B) for the
36- month period after such Date of Termination the Company,
at its sole expense, shall continue to provide or arrange to
provide Employee (and Employee's dependents) with health
insurance benefits no less favorable than the health plan
benefits provided by the Company (or any successor) during
such 36-month period to any senior
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executive officer of the Company; provided, further, to the
extent the coverage or benefits received are taxable to
Employee, the Company shall make Employee "whole" on a net
after tax basis; and (C) on the Date of Termination all then
outstanding Company stock-based awards of Employee, whether
under this Agreement, a Company stock plan or otherwise, shall
become immediately exercisable and payable in full, as the
case may be, with any performance goals associated therewith
being deemed to have been achieved at the maximum levels.
Notwithstanding anything in this Agreement to the contrary, if
any payment to Employee in respect of a Company stock-based
award would give rise to a short-swing profit liability to
Employee under Section 16(b) of the Securities Exchange Act of
1934, then both the payment and the entitlement to payment
thereof shall automatically be deferred until the earliest
date at which the payment of such benefit would not result in
a short-swing profit liability to Employee.
(ii) Notwithstanding the foregoing provisions of this
Section 7, in the event Employee is terminated because of
Misconduct, the Company shall have no obligations pursuant to
this Agreement after the Date of Termination. As used herein,
"Misconduct" means (a) the willful and continued failure by
Employee to substantially perform his duties with the Company
(other than any such failure resulting from Employee's
incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a Notice
of Termination by Employee for Good Reason), after a written
demand for substantial performance is delivered to Employee by
the Board, which demand specifically identifies the manner in
which the Board believes that Employee has not substantially
performed his duties, or (b) the willful engaging by Employee
in conduct which is demonstrably and materially injurious to
the Company, monetarily or otherwise. For purposes hereof, no
act, or failure to act, on Employee's part shall be deemed
"willful" unless done, or omitted to be done, by Employee not
in good faith and without reasonable belief that Employee's
action or omission was in the best interest of the Company.
Notwithstanding the foregoing, Employee shall not be deemed to
have been terminated for Misconduct unless and until there
shall have been delivered to Employee a copy of a resolution
duly adopted by the affirmative vote of not less than
two-thirds of the entire membership of the Board at a meeting
of the Board called and held for such purpose, finding that in
the good faith opinion of the Board Employee was guilty of
conduct set forth above and specifying the particulars thereof
in detail.
(d) Disability.
(i) If Employee shall have been absent from the
full-time performance of Employee's duties with the Company
for six consecutive months as a result of Employee's
incapacity due to physical or mental illness, as determined by
Employee's physician, and within 30 days after written Notice
of Termination is
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given by the Company Employee shall not have returned to the
full-time performance of Employee's duties, Employee's
employment may be terminated by the Company for "Disability",
provided Employee is entitled to and receiving benefits under
an insured long term disability plan of the Company.
Thereafter, Employee shall not be entitled to further
compensation pursuant to this Agreement.
(ii) If Employee fails during any period during the
Term to perform Employee's full-time duties with the Company
as a result of incapacity due to physical or mental illness,
as determined by Employee's physician, Employee shall continue
to receive his Base Compensation, less any amount payable to
Employee under a Company disability plan, and all other
compensation and benefits during such period until this
Agreement is terminated.
(e) Resignation for Good Reason. Employee shall be entitled to
terminate his employment for Good Reason as defined herein. If Employee
terminates his employment for Good Reason, Employee shall be entitled
to the compensation and benefits provided in Paragraph 7(c)(i) hereof.
"Good Reason" shall mean (1) the breach of any of the Company's
obligations under this Agreement without Employee's express written
consent or (2) the occurrence of any of the following circumstances, as
the case may be, without Employee's express written consent unless such
breach or circumstances are fully corrected prior to the Date of
Termination specified in the Notice of Termination pursuant to
Subsection 7(f) given in respect thereof:
(i) the assignment by the Board to Employee of any
duties that, in the good faith opinion of Employee, are
inconsistent with Employee's positions with the Company, or an
adverse alteration (as determined in good faith by Employee)
in the nature or status of Employee's office, title,
responsibilities, including reporting responsibilities, or the
conditions of Employee's employment from those in effect
immediately prior to such alteration;
(ii) the failure by the Company to continue in effect
any compensation plan in which Employee participates that is
material to Employee's total compensation unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or the failure
by the Company to continue Employee's participation therein
(or in such substitute or alternative plan) on a basis not
materially less favorable to Employee, both in terms of the
amount of benefits provided and the level of Employee's
participation relative to other participants;
(iii) the taking of any action by the Company which
would directly or indirectly materially reduce or deprive
Employee of any material fringe benefit then enjoyed by
Employee;
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(iv) the failure of the Company to obtain a
satisfactory agreement from any successor to assume and agree
to perform this Agreement, as contemplated in Section 12
hereof;
(v) the relocation of the Company's principal
executive offices outside the greater Houston, Texas
metropolitan area, or the Company's requiring Employee to
relocate anywhere other than the location of the Company's
principal executive offices, except for required travel on the
Company's business to an extent substantially consistent with
Employee's past business travel obligations; or
(vi) any purported termination of Employee's
employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection (f)
hereof, which purported termination shall not be effective for
purposes of this Agreement.
Employee's right to terminate employment pursuant to this
subsection shall not be affected by Employee's incapacity due to
physical or mental illness. In addition, Employee's continued
employment following any event, act or omission, regardless of the
length of such continued employment, shall not constitute Employee's
consent to, or a waiver of Employee's rights with respect to, such
event, act or omission constituting a Good Reason circumstance
hereunder.
(f) Notice of Termination. Any purported termination of
Employee's employment by the Company or by Employee shall be
communicated by written Notice of Termination to the other party hereto
in accordance with Section 10 hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall set forth in
reasonable detail the reason for termination of Employee's employment,
or in the case of resignation for Good Reason, said notice must specify
in reasonable detail the basis for such resignation. No purported
termination which is not effected pursuant to this Section 7(f) shall
be effective.
(g) Date of Termination, Etc. "Date of Termination" shall mean
the date specified in the Notice of Termination. Either party may,
within 15 days after any Notice of Termination is given, provide notice
to the other party pursuant to Section 10 hereof that a dispute exists
concerning the termination. Notwithstanding the pendency of any such
dispute, the Company will continue to pay Employee his full Base
Compensation in effect when the notice giving rise to the dispute was
given (including, but not limited to, Base Compensation) and continue
Employee as a participant in all compensation, benefit and insurance
plans in which Employee was participating when the notice giving rise
to the dispute was given, until the dispute is finally resolved in
accordance with Section 16 hereof, but in no event past the expiration
date of this Agreement. Any payments and benefits provided during such
period of dispute shall not reduce any other payments or benefits due
Employee under this Agreement nor shall Employee be liable to repay the
Company for such
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payments and benefits if it is finally determined the Employee is not
entitled to payments under the other provisions of this Agreement
following Employee's termination of employment.
(h) Mitigation. Employee shall not be required to mitigate the
amount of any payment or benefit provided for in this Section 7 by
seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for in this Agreement be reduced by any
compensation or benefit earned by Employee as a result of employment by
another employer, self-employment earnings, by retirement benefits, by
offset against any amount claimed to be owing by Employee to the
Company, or otherwise, except that any cash severance amount payable to
Employee pursuant to a Company maintained severance plan or policy for
employees in general shall reduce the amount otherwise payable to
Employee pursuant to Section 7(c)(i)(A).
(i) Gross-Up of Parachute Payments. If, during the Term, any
payment, including without limitation any imputed income, made or
benefit provided to or on behalf of Employee, including any accelerated
vesting or any deferred compensation or other award, in connection with
a "change in control" of the Company, whether or not made or provided
pursuant to this Agreement, results in Employee being subject to the
excise tax imposed by section 4999 of the Internal Revenue Code of
1986, as amended (or any successor or similar provision), the Company
shall pay Employee an additional amount of cash (the "Additional
Amount") such that the net amount of all payments and benefits received
by Employee after paying all applicable taxes thereon, including on
such Additional Amount, shall be equal to the net after-tax amount of
payments and benefits that Employee would have received if section 4999
were not applicable.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Employee's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
affiliated companies and for which Employee may qualify, nor shall anything
herein limit or otherwise adversely affect such rights as Employee may have
under any stock option or other agreements with the Company or any of its
affiliated companies.
9. Assignability. The obligations of Employee hereunder are personal
and may not be assigned or delegated by him or transferred in any manner
whatsoever, nor are such obligations subject to involuntary alienation,
assignment or transfer. The Company shall have the right to assign this
Agreement and to delegate all rights, duties and obligations hereunder, either
in whole or in part, to any parent, affiliate, successor or subsidiary
organization or company of the Company, provided that no such assignment or
delegation shall relieve the Company of its duties and obligations hereunder nor
affect the rights of Employee hereunder.
10. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when
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personally delivered, sent by overnight courier or by facsimile with
confirmation of receipt or on the third business day after being mailed by
United States registered mail, return receipt requested, postage prepaid,
addressed to the Company at its principal office address and facsimile number,
directed to the attention of the Board with a copy to the Secretary of the
Company, and to Employee at Employee's residence address and facsimile number on
the records of the Company or to such other address as either party may have
furnished to the other in writing in accordance herewith except that notice of
change of address shall be effective only upon receipt.
11. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
12. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and assets of the Company ("Successor") or any corporation which
becomes the ultimate parent corporation of the Company or any such Successor
("Ultimate Parent") to expressly assume and agree in writing satisfactory to the
Employee to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such written agreement prior to the
effectiveness of any such succession or creation of the parent corporation
relationship shall be a breach of this Agreement and shall entitle Employee to
compensation and benefits from the Company in the same amount and on the same
terms as he would be entitled to hereunder if he terminated his employment for
Good Reason, except that for purposes of implementing the foregoing, the date on
which any such succession (or creation of the parent corporation relationship)
becomes effective shall be deemed the Date of Termination. As used in this
Agreement, including, without limitation, in Section 3, the term "Company" shall
include any Successor and Ultimate Parent which executes and delivers the
Agreement as provided for in this Section 12 or which otherwise becomes bound by
all terms and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of Employee hereunder shall inure to
the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
13. Indemnification. During the Term and for a period of six years
thereafter, the Company shall cause Employee to be covered by and named as an
insured under any policy or contract of insurance obtained by it to insure its
directors and officers against personal liability for acts or omissions in
connection with service as an officer or director of the Company or service in
other capacities at the request of the Company. The coverage provided to
Employee pursuant to this Section 8 shall be of a scope and on terms and
conditions at least as favorable as the most favorable coverage provided to any
other officer or director of the Company (or any successor).
-8-
<PAGE>
In addition, to the maximum extent permitted under applicable
law, during the Term and for a period of six years thereafter, the Company shall
indemnify Employee against and hold Employee harmless from any costs,
liabilities, losses and exposures for Employee's services as an employee,
officer and director of the Company (or any successor).
14. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by Employee and such officer as may be specifically
authorized by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or in compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. This Agreement is an integration of the parties
agreement; no agreement or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Texas.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
16. Arbitration. Employee shall be permitted (but not required) to
elect that any dispute or controversy arising under or in connection with this
Agreement be settled by arbitration in the city in which Employee resides at
such time in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. All legal fees and costs incurred by Employee in connection
with the resolution of any dispute or controversy under or in connection with
this Agreement shall be paid by the Company as bills for such services are
presented by Employee to the Company.
17. Prior Employment Agreement. This Agreement supersedes and replaces
in full any existing employment agreement (written or oral) between the parties.
-9-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on March
27, 1998, effective for all purposes as provided above.
OCEAN ENERGY, INC.
By: /s/ Robert K. Reeves
Robert K. Reeves
Executive Vice President,
General Counsel
and Secretary
EMPLOYEE
/s/ James C. Flores
James C. Flores
-10-
Exhibit 10.3
GLOBAL CREDIT AGREEMENT
Dated as of March 27, 1998
among
OCEAN ENERGY, INC.,
a Delaware corporation,
OCEAN ENERGY, INC.,
a Louisiana 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,
BANQUE PARIBAS,
NATIONSBANK OF TEXAS, N.A.,
SOCIETE GENERALE, SOUTHWEST AGENCY,
AND
WELLS FARGO BANK (TEXAS), N.A.,
as Co-Agents,
and
THE LENDERS NOW OR HEREAFTER PARTIES HERETO
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C> <C> <C>
Page
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Terms Defined in Recitals..............................................................2
-------------------------
Section 1.02 Certain Defined Terms..................................................................2
---------------------
Section 1.03 Accounting Terms and Determinations...................................................20
-----------------------------------
ARTICLE II
Commitments
Section 2.01 Loans and Letters of Credit...........................................................21
---------------------------
Section 2.02 Borrowings, Continuations and Conversions; Issuance of Letters of
-----------------------------------------------------------------
Credit................................................................................22
------
Section 2.03 Extensions and Changes of Commitments.................................................26
-------------------------------------
Section 2.04 Facility Fee and Other Fees...........................................................28
---------------------------
Section 2.05 Lending Offices.......................................................................28
---------------
Section 2.06 Several Obligations...................................................................28
-------------------
Section 2.07 Notes.................................................................................29
-----
Section 2.08 Prepayments...........................................................................29
-----------
Section 2.09 Borrowing Base........................................................................31
--------------
ARTICLE III
Payments of Principal and Interest
Section 3.01 Repayment of Loans....................................................................34
------------------
Section 3.02 Interest..............................................................................34
--------
ARTICLE IV
Payments; Pro Rata Treatment; Computations; Etc.
Section 4.01 Payments..............................................................................35
--------
Section 4.02 Pro Rata Treatment....................................................................36
------------------
Section 4.03 Computations..........................................................................36
------------
Section 4.04 Non-receipt of Funds by the Administrative Agent......................................36
------------------------------------------------
Section 4.05 Sharing of Payments, Etc..............................................................37
-------------------------
Section 4.06 Assumption of Risks...................................................................38
-------------------
Section 4.07 Obligation to Reimburse and to Prepay.................................................38
-------------------------------------
Section 4.08 Obligations for Letters of Credit.....................................................39
---------------------------------
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
ARTICLE V
Yield Protection and Illegality
Section 5.01 Additional Costs......................................................................40
----------------
Section 5.02 Limitation on Eurodollar Loans........................................................41
------------------------------
Section 5.03 Illegality............................................................................41
----------
Section 5.04 Base Rate Loans pursuant to Sections 5.01, 5.02 and 5.03..............................42
--------------------------------------------------------
Section 5.05 Compensation..........................................................................42
------------
Section 5.06 Additional Cost in Respect of Tax.....................................................42
---------------------------------
Section 5.07 Avoidance of Taxes and Additional Costs...............................................43
---------------------------------------
Section 5.08 Lender Tax Representation.............................................................44
-------------------------
Section 5.09 Limitation on Right to Compensation...................................................44
-----------------------------------
Section 5.10 Compensation Procedure................................................................44
----------------------
ARTICLE VI
Conditions Precedent
Section 6.01 Initial Funding.......................................................................45
---------------
Section 6.02 Subsequent Loans and Letters of Credit................................................46
--------------------------------------
Section 6.03 Conditions Relating to Letters of Credit..............................................47
----------------------------------------
ARTICLE VII
Representations and Warranties
Section 7.01 Corporate Existence...................................................................47
-------------------
Section 7.02 Financial Condition...................................................................48
-------------------
Section 7.03 Litigation............................................................................48
----------
Section 7.04 No Breach.............................................................................48
---------
Section 7.05 Corporate Action; Binding Obligation..................................................48
------------------------------------
Section 7.06 Approvals.............................................................................49
---------
Section 7.07 Use of Loans and Letters of Credit....................................................49
----------------------------------
Section 7.08 ERISA.................................................................................49
-----
Section 7.09 Taxes.................................................................................50
-----
Section 7.10 Insurance.............................................................................50
---------
Section 7.11 Titles, etc...........................................................................50
-----------
Section 7.12 No Material Misstatements.............................................................50
-------------------------
Section 7.13 Investment Company Act................................................................50
----------------------
Section 7.14 Public Utility Holding Company Act....................................................51
----------------------------------
Section 7.15 Subsidiaries and Partnerships.........................................................51
-----------------------------
Section 7.16 Location of Business and Offices......................................................51
--------------------------------
Section 7.17 Rate Filings..........................................................................51
------------
Section 7.18 Environmental Matters.................................................................51
---------------------
Section 7.19 Defaults..............................................................................52
--------
Section 7.20 Compliance with the Law...............................................................52
-----------------------
Section 7.21 Risk Management Agreements............................................................53
--------------------------
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Section 7.22 Gas Imbalances........................................................................53
--------------
Section 7.23 Solvency..............................................................................53
--------
ARTICLE VIII
Affirmative Covenants
Section 8.01 Financial Statements..................................................................53
--------------------
Section 8.02 Litigation............................................................................56
----------
Section 8.03 Corporate Existence, Etc..............................................................56
-------------------------
Section 8.04 Environmental Matters.................................................................57
---------------------
Section 8.05 Engineering Reports...................................................................57
-------------------
Section 8.06 Stock of Restricted Subsidiaries......................................................58
--------------------------------
Section 8.07 Further Assurances....................................................................58
------------------
Section 8.08 Performance of Obligations............................................................59
--------------------------
ARTICLE IX
Negative Covenants
Section 9.01 Debt..................................................................................59
----
Section 9.02 Liens.................................................................................61
-----
Section 9.03 Investments, Loans and Advances.......................................................62
-------------------------------
Section 9.04 Dividends, Distributions and Redemptions..............................................64
----------------------------------------
Section 9.05 Financial Covenants...................................................................64
-------------------
Section 9.06 Nature of Business....................................................................65
------------------
Section 9.07 Limitation on Operating Leases and Sale-Leaseback Transactions........................65
--------------------------------------------------------------
Section 9.08 Mergers, Etc..........................................................................65
-------------
Section 9.09 Proceeds of Notes.....................................................................65
-----------------
Section 9.10 ERISA Compliance......................................................................65
----------------
Section 9.11 Sale or Discount of Receivables.......................................................66
-------------------------------
Section 9.12 Risk Management Agreements............................................................66
--------------------------
Section 9.13 Transactions with Affiliates..........................................................66
----------------------------
Section 9.14 Negative Pledge Agreements............................................................66
--------------------------
Section 9.15 Subsidiaries and Partnerships.........................................................66
-----------------------------
Section 9.16 Sale of Oil and Gas Properties........................................................67
------------------------------
Section 9.17 Environmental Matters.................................................................67
---------------------
Section 9.18 Payment Restrictions..................................................................67
--------------------
Section 9.19 Subordinated and Long-Term Pari Passu Debt............................................67
------------------------------------------
Section 9.20 Maintenance of Deposits...............................................................68
-----------------------
Section 9.21 Unrestricted Subsidiaries.............................................................68
-------------------------
Section 9.22 Gas Imbalances, Take-or-Pay or Other Prepayments......................................69
------------------------------------------------
ARTICLE X
Events of Default
Section 10.01 Events of Default.....................................................................69
-----------------
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Section 10.02 Cash Collateral for Letters of Credit.................................................72
-------------------------------------
ARTICLE XI
The Agents
Section 11.01 Appointment, Powers and Immunities....................................................72
----------------------------------
Section 11.02 Reliance by Agents....................................................................72
------------------
Section 11.03 Defaults..............................................................................73
--------
Section 11.04 Rights as a Lender....................................................................73
------------------
Section 11.05 Indemnification.......................................................................73
---------------
Section 11.06 Non-Reliance on Agents and other Lenders..............................................74
----------------------------------------
Section 11.07 Action by Agents......................................................................74
----------------
Section 11.08 Resignation or Removal of Agents......................................................74
--------------------------------
ARTICLE XII
Miscellaneous
Section 12.01 Waiver................................................................................75
------
Section 12.02 Notices...............................................................................75
-------
Section 12.03 Payment of Expenses, Indemnities, etc.................................................75
--------------------------------------
Section 12.04 Amendments, Etc.......................................................................77
----------------
Section 12.05 Successors and Assigns................................................................77
----------------------
Section 12.06 Assignments and Participations........................................................77
------------------------------
Section 12.07 Invalidity............................................................................79
----------
Section 12.08 Entire Agreement......................................................................79
----------------
Section 12.09 References............................................................................79
----------
Section 12.10 Survival..............................................................................79
--------
Section 12.11 Captions..............................................................................79
--------
Section 12.12 Counterparts..........................................................................79
------------
Section 12.13 GOVERNING LAW.........................................................................80
-------------
Section 12.14 Confidentiality.......................................................................80
---------------
Section 12.15 Interest..............................................................................81
--------
Section 12.16 Effectiveness.........................................................................82
-------------
Section 12.17 Release of Liens and Guaranties Securing Prior Credit Agreements......................82
----------------------------------------------------------------
Section 12.18 Survival of Obligations...............................................................82
-----------------------
Section 12.19 Debt Characterization for Indenture Purposes; Specified or Designated
---------------------------------------------------------------------
Senior Indebtedness...................................................................82
-------------------
Section 12.20 EXCULPATION PROVISIONS................................................................83
----------------------
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
ANNEX, EXHIBITS AND SCHEDULES
<S> <C>
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
Exhibit H - Form of Master Release
Schedule 2.01 - Assumed Letters of Credit
Schedule 7.03 - Litigation
Schedule 7.08 - ERISA Obligations and ERISA Affiliates
Schedule 7.18 - Environmental Matters
Schedule 7.21 - Risk Management Agreements
Schedule 7.22 - Gas Imbalances
Schedule 9.01 - Debt not reflected in Financial Statements
Schedule 9.02 - Liens
Schedule 9.03 - Investments, loans or advances not reflected in
Financial Statements
Schedule 9.10 - Accumulated Funding Deficiencies
Schedule 9.16 - Sale Properties
</TABLE>
-v-
<PAGE>
THIS GLOBAL CREDIT AGREEMENT dated as of March 27, 1998 is
among: OCEAN ENERGY, INC., a corporation duly organized and validly existing
under the laws of the state of Delaware ("OEI"); OCEAN ENERGY, INC., a
corporation duly organized and validly existing under the laws of the state of
Louisiana (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, BANQUE
PARIBAS, NATIONSBANK OF TEXAS, 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, The Chase Manhattan Bank, as administrative agent, and
the financial institutions signatory thereto entered into that certain Second
Amended and Restated Credit Agreement dated as of October 15, 1997, as amended
by that certain First Amendment to Second Amended and Restated Credit Agreement
dated as of January 27, 1998 (such credit agreement, as amended, the "Prior
OEI-Louisiana Credit Agreement").
B. United Meridian Corporation, a Delaware corporation ("United
Meridian"), as guarantor, UMC Petroleum Corporation, a Delaware corporation
("UMC"), as borrower, certain of the Agents and the financial institutions
signatory thereto entered into that certain Global Credit Agreement dated as of
March 18, 1997, as amended by that certain First Joint Amendment to Global
Credit Agreement and To Credit Agreement (Canada) dated as of December 3, 1997
(such credit agreement, as amended, the "Prior UMC Credit Agreement").
C. OEI and United Meridian have merged pursuant to that certain
Agreement and Plan of Merger dated as of December 22, 1997 (as amended by
amendments thereto dated as of January 7, 1998 and February 20, 1998, the
"Merger Agreement") with OEI being the surviving Person; and UMC has merged into
the Company, with the Company being the surviving Person.
D. OEI and the Company have requested that the Agents and the Lenders
refinance the Prior OEI-Louisiana Credit Agreement and the Prior UMC Credit
Agreement (collectively, the "Prior Credit Agreements") and make credit
available on the terms and conditions stated herein.
E. The Agents and the Lenders, subject to the terms and conditions
stated herein, are willing to refinance the Prior Credit Agreements and to make
such credit facilities available.
F. NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:
-1-
<PAGE>
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Terms Defined in Recitals. As used in this Agreement, the
terms defined in the Recitals shall have the meanings indicated in the Recitals.
Section 1.02 Certain Defined Terms. As used herein, including the
Recitals, the following terms shall have the following meanings:
"Absolute Rate" shall mean, with respect to any Bid Rate Loan, such
rate of interest as a Lender may offer the Company for any given Interest Period
therefor, which rate shall be fixed for the duration of such Interest Period.
"Absolute Rate Loans" shall mean Bid Rate Loans which bear interest at
the Absolute Rate.
"Additional Costs" shall have the meaning assigned to that term in
Section 5.01(a).
"Affected Loans" shall have the meaning assigned to that term in
Section 5.04.
"Affiliate" of any Person shall mean (a) any Person directly or
indirectly controlled by, controlling or under common control with such first
Person and (b) any director or executive officer of such first Person.
"Affiliated Canadian Lender" shall mean, with regard to any Lender, the
Canadian Lender designated as such on Annex I, if any.
"Agent" shall mean any one or more of the Administrative Agent, the
Paying Agent, the Syndication Agent, the Documentation Agent, the Technical
Agents, the Competitive Bid Auction Agent and/or the Co-Agents, or if the
context so indicates, all of the foregoing collectively. References to any Agent
shall include its successors.
"Aggregate Commitments" at any time shall equal the sum of the
Commitments of all of the Lenders.
"Agreement" shall mean this 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.
-2-
<PAGE>
"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, the
following rate per annum as is applicable:
(a) subject to clause (b) of this definition, from and after the
Effective Date, as of any date of determination, the Applicable Margin shall be
the following rate per annum as is applicable based upon the Debt Coverage Ratio
as of such date of determination:
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Debt Coverage Ratio Eurodollar Applicable Margin Base Rate Applicable Margin
- ------------------------------------------------------------------------------------------------------------------------------
Less than 1.50 0.3750% 0.000%
- ------------------------------------------------------------------------------------------------------------------------------
Greater than or equal to 0.4500% 0.000%
1.50, but less than 1.75
- ------------------------------------------------------------------------------------------------------------------------------
Greater than or equal to 0.5125% 0.000%
1.75, but less than 2.50
- ------------------------------------------------------------------------------------------------------------------------------
Greater than or equal to 0.5750% 0.000%
2.50, but less than 3.25
- ------------------------------------------------------------------------------------------------------------------------------
Greater than or equal to 3.25 0.7500% 0.000%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
and
(b) notwithstanding clause (a) of this definition, if at any time the
sum of the aggregate outstanding principal amount of the Loans, the LC Exposure
and the Canadian Indebtedness is greater than the Threshold Amount, the
Applicable Margin for Eurodollar Loans shall be 1.075%, and the Applicable
Margin for Base Rate Loans shall be 0.000%.
"Assignment and Acceptance" shall have the meaning assigned such term
in Section 12.06(b).
"Available Canadian Subcommitment" shall mean, as of any date of
determination, the lesser of (a) the Canadian dollar amount of the Allocated
Canadian Borrowing Base (converted from U.S. Dollars to Canadian dollars by
multiplying the exchange ratio of Canadian dollars to U.S. Dollars in effect on
such date of determination, as determined in good faith by the Administrative
Agent on such date pursuant to the following sentence, and the Allocated
Canadian Borrowing Base); or (b) the aggregate Canadian Subcommitments as then
in effect. The exchange ratio shall be calculated (i) on the date a reallocation
pursuant to Section 2.09(a) between the Available Canadian Borrowing Base and
Available U.S. Borrowing Base occurs, (ii) on each Redetermination Date, or
(iii) in any event, at ninety (90) day intervals following the most recent
Redetermination Date.
-3-
<PAGE>
"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.
"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
agent for the Canadian Lenders, together with its successors in such capacity.
-4-
<PAGE>
"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 Credit Agreement
dated of even date herewith among UMC 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 UMC Canada pursuant to the Canadian Credit Agreement.
"Canadian Lenders" shall mean the lenders now or hereafter parties to
the Canadian Credit Agreement.
"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 OEI 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,
-5-
<PAGE>
(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 OEI and
its Consolidated Subsidiaries, the sum of preferred stock (if any), par value of
common stock, capital in excess of par value of common stock and retained
earnings, less treasury stock (if any), goodwill, cost in excess of fair value
of net assets acquired and all other assets that are properly classified as
intangible assets, but plus any expenses associated with the Merger occurring
prior to December 31, 1998 and not in excess of $40,000,000 in the aggregate,
the amount of noncash write downs of long-lived assets in compliance with GAAP
or SEC guidelines, and excluding any extraordinary or non-recurring net gains or
losses together with any related provision for taxes on such gain or loss,
realized in connection with any extraordinary or nonrecurring gains or losses,
and plus or minus, as appropriate, foreign currency translation adjustments, all
as determined on a consolidated basis. Notwithstanding the foregoing,
"Consolidated Tangible Net Worth" shall not be reduced to reflect redemptions or
repurchases of equity securities permitted by the terms of Section 9.04.
"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 obliga tions 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
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<PAGE>
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 OEI and its Consolidated Restricted Subsidiaries for the immediately
preceding four (4) fiscal quarters of OEI 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.
"Dollars", "U.S. Dollars" and "$" shall mean lawful money of the United
States of America.
"EBITDA" shall mean, with respect to OEI 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 OEI or any
Restricted Subsidiary shall acquire any Person 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 OEI or any of its Subsidiaries are conducting or at any time have
conducted business, or where any Property of OEI or any of its Subsidiaries is
located, or where any hazardous substances generated by or disposed of by OEI 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
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<PAGE>
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 OEI or its Subsidiaries is located establish a
meaning for "oil," "hazardous substance," "release," "solid waste" or "disposal"
which is broader than that specified in either OPA, CERCLA or RCRA, such broader
meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"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 OEI or is under common control (within the
meaning of Section 414(c) of the Code) with OEI.
"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
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<PAGE>
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 OEI 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 OEI or any Subsidiary for substation, metering station, pump
station, storage, gathering line, transmission line, transportation line,
distribution line or right of way purposes, and any Liens reserved in leases for
rent and for compliance with the terms of the leases in the case of leasehold
estates, to the extent that any such Lien referred to in this clause (v) does
not materially impair the use of the Property covered by such Lien for the
purposes for which such Property is held by OEI 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 OEI 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 OEI 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 OEI or any of its Subsidiaries or on
deposit with or in the possession of such banks, and (ix) judgment and
attachment Liens not giving rise to an Event of Default or Liens created by or
existing from any litigation or legal proceedings that are currently being
contested in good faith by appropriate proceedings, promptly instituted and
diligently conducted, and for which adequate reserves have been made to the
extent required by GAAP.
"Excluded Taxes" shall have the meaning assigned such term in Section
5.01(a).
"Facility Fee Rate" shall mean the following rate per annum as is
applicable:
(a) subject to clause (b) of this definition, from and after the
Effective Date, as of any date of determination, the Facility Fee Rate shall be
the following rate per annum as is applicable based upon the Debt Coverage Ratio
as of such date of determination:
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- --------------------------------------------------------------------------------
Debt Coverage Ratio Facility Fee Rate
- --------------------------------------------------------------------------------
Less than 1.50 0.1250%
- --------------------------------------------------------------------------------
Greater than or equal to 0.1500%
1.50, but less than 1.75
- --------------------------------------------------------------------------------
Greater than or equal to 0.1875%
1.75, but less than 2.50
- --------------------------------------------------------------------------------
Greater than or equal to 0.2250%
2.50, but less than 3.25
- --------------------------------------------------------------------------------
Greater than or equal to 0.2500%
3.25
- --------------------------------------------------------------------------------
and
(b) notwithstanding clause (a) of this definition, if at any time the
sum of the aggregate outstanding principal amount of the Loans, the LC Exposure
and the Canadian Indebtedness is greater than the Threshold Amount, the Facility
Fee Rate shall be 0.3000%.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (i) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions for the next preceding day as so published on the
next succeeding Business Day, and (ii) if such rate is not so published for any
Business Day, the Federal Funds Rate for such day shall be the average rate
charged to the Administrative Agent on such day on such similar transactions as
determined by the Administrative Agent.
"Fee Letters" shall mean (i) that certain letter agreement dated March
3, 1998 among, inter alia, OEI, the Administrative Agent and an Affiliate of the
Administrative Agent; and (ii) that certain letter agreement dated March 27,
1998 among, inter alia, OEI and Morgan Guaranty Trust Company of New York.
"Financial Statements" shall mean the annual consolidated financial
statements of OEI 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)
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<PAGE>
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 OEI 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
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
(as successor by merger to UMC) 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 the
Company (as successor by merger to UMC) 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 $14,000,000) 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.
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<PAGE>
"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
OEI or the Company 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, and (c) the 97 Indenture.
"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 UMC 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 OEI 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.
"Intercreditor Agreement" shall mean that certain Intercreditor
Agreement of even date herewith among the Agents, the Lenders, the Canadian
Agent, the Canadian Lenders, OEI, the Company and UMC 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 OEI, of (a) EBITDA for the immediately
preceding four (4) fiscal quarters of OEI 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 OEI and its Consolidated Restricted Subsidiaries) on all Debt of OEI
and its Consolidated Restricted Subsidiaries for the immediately preceding four
(4) fiscal quarters of OEI 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 OEI or any Restricted Subsidiary shall
acquire any Person 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.
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<PAGE>
"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.
"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.
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<PAGE>
"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 Agreements, 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, OEI 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 OEI, 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.
"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.
"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 OEI and its Restricted Subsidiaries on a
consolidated basis, (b) the ability of OEI and its Restricted Subsidiaries,
including the Company, to perform their obligations under the Loan Documents to
which they are party,
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<PAGE>
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 OEI, with OEI being the surviving Person.
"Multiemployer Plan" shall mean a Plan defined as such in Section 3(37)
of ERISA to which contributions have been made by OEI or any ERISA Affiliate and
which is covered by Title IV of ERISA.
"95 Indenture" shall mean that certain Indenture among OEI (as
successor by merger to United Meridian), as issuer, the Company (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 OEI'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 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.
"96 Indenture" shall mean that certain Indenture dated as of September
26, 1996 among OEI (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 OEI's $160,000,000 9-3/4% Senior
Subordinated Notes due 2006 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 OEI, as issuer, the subsidiary guarantors named therein, and State
Street Bank and Trust Company, as Trustee, providing for the issuance of OEI's
$200,000,000 8-7/8% Senior Subordinated Notes due 2007 and all notes or
securities issued under any of the foregoing, any subsidiary guarantees issued
pursuant to the terms of any of the foregoing, and all amendments and
supplements to the foregoing permitted under Section 9.19(b) or a consent
thereunder.
"Non-recourse" with respect to an obligation and a Person shall mean
that such Person has no liability to the holder of such obligation for the
payment or repayment of such obligation, except that such Person may have
liability to the holder of such obligation for damages with respect to such
obligation arising out of fraudulent acts or omissions, willful
misrepresentations, willful misconduct and similar acts or omissions by such
Person.
"Non-Recourse Debt" shall mean Debt as to which neither OEI 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).
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"Norfolk" shall mean Norfolk Holdings Inc., a corporation duly formed
and existing under the laws of the state of Delaware, which is the parent of UMC
Canada and a direct Subsidiary of the Company.
"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.
"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 leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.
"Operating Merger" shall mean the merger of UMC into the Company, with
the Company being the surviving Person.
"Pari Passu Debt" shall mean, as of any date of determination, any Debt
of OEI or the Company 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.
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"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 OEI 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., the Company 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., the Company 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 OEI or the Company 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.
"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 June 30, 1998; provided that if
any such day is not a Business Day, then such Quarterly Date shall be the next
succeeding Business Day.
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"Redetermination Date" shall mean the 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 G, T, U and X" shall mean Regulations G, 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 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 OEI and its
Restricted Subsidiaries which OEI 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 the Company, Norfolk,
UMC Canada and any other Subsidiary of OEI, whether existing on or after the
Effective Date, unless such Subsidiary is (i) an
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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.
"Subordinated Debt" shall mean: (a) the Debt of OEI and the Company
under the Indentures 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 OEI or the Company incurred in accordance with
the terms of Section 9.01(e)(iii).
"Subsidiary" shall mean, with respect to any Person, any corporation or
limited liability company of which at least a majority of the outstanding shares
of stock or interests having by the terms thereof ordinary voting power to elect
a majority of the board of directors of such corporation or a manager of such
limited liability company (irrespective of whether or not at the time stock or
interests of any other class or classes shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more of its Subsidiaries
or by such Person and one or more of the Subsidiaries.
"Tax" shall mean any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and additions
thereto) that is imposed by any government or other taxing authority in respect
of any payment under this Agreement (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 OEI 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.
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"Termination Date" shall mean March 31, 2003, unless the Commitments
are sooner terminated pursuant to Section 2.03(b) or Section 10.01, or extended
pursuant to Section 2.03(a).
"Threshold Amount" shall mean the amount determined as such by the
Technical Agents pursuant to Section 2.09.
"Total Debt" shall mean as of any date of determination, all Debt of
OEI 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 Canada" shall mean UMC Resources Canada Ltd., a company
amalgamated under the laws of the Province of British Columbia.
"Unrestricted Subsidiary" shall mean, as of the Effective Date, each
Subsidiary of OEI specified as such on Exhibit D, and any other Subsidiary of
OEI which (i) the Board of Directors of OEI has determined will be designated an
Unrestricted Subsidiary as provided in Section 9.21 and (ii) is a Subsidiary of
an Unrestricted Subsidiary.
"Voting Stock" shall mean, with respect to any Person, any class or
classes of capital stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of any Person (irrespective of whether
or not, at the time, stock of any other class or classes shall have, or might
have, voting power by reason of the happening of any contingency).
"Wholly Owned Restricted Subsidiary" shall mean any Restricted
Subsidiary to the extent (i) all of the capital stock or other ownership
interests in such Restricted Subsidiary, other than any directors' qualifying
shares mandated by applicable law, is owned directly or indirectly by either OEI
or 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
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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 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.
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(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, OEI, 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.
(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 Agreements. On the Effective Date:
(i) the Company shall pay all accrued and unpaid fees outstanding under
the Prior Credit Agreements for the account of each "Lender" under the
Prior Credit Agreements;
(ii) each "Base Rate Loan" and "Eurodollar Loan" under each Prior
Credit Agreement shall be deemed to be repaid with the proceeds of new
Loans under this Agreement;
(iii) all letters of credit issued under the Prior Credit Agreements
(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 Agreements and the commitments thereunder shall
be superseded by this Agreement and such commitments shall terminate.
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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 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.
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(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 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.
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(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 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.
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(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 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.
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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 UMC Canada) may 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 UMC 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 UMC 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.
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(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.
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 Agreements 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 Agreements 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
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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) 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).
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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 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
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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 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 $600,000,000 and the Threshold
Amount shall be $525,000,000. The Borrowing Base may not exceed the
Aggregate Commitments.
(ii) Subject to the terms of Section 2.09(a)(i), the Borrowing Base and
the Threshold Amount 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 and the
Threshold Amount will be redetermined annually in accordance with
Section 2.09(b), commencing May 1, 1999. Upon any redetermination of
the Borrowing Base and the Threshold Amount, 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 UMC 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 $593,000,000.
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(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 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 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 and Threshold Amount 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 and Threshold Amount. 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
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period, the Required Lenders have not approved or deemed to have approved, as
aforesaid, the proposed Borrowing Base and Threshold Amount, then the Borrowing
Base and Threshold Amount shall be determined in accordance with Section
2.09(d). After such redetermined Borrowing Base and Threshold Amount 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 Lenders and the Canadian Lenders as of the next succeeding May 1st.
(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 and Threshold
Amount 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 UMC
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
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 and
Threshold Amount determination shall control; however, if the Required Lenders
have not approved or are not deemed to have approved the Borrowing Base and the
Threshold Amount 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 and Threshold Amount 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 and the Threshold Amount for the next Redetermination Period.
Notwithstanding the foregoing, however, any increase in the Borrowing Base and
the Threshold Amount 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 and the Threshold Amount. The Administrative Agent (at the direction of the
Required Lenders, in their option) may, one time during any 12 month period,
initiate an interim redetermination of the Borrowing Base and the Threshold
Amount.
(f) Short-Term Pari Passu Debt; Other Adjustments.
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(i) The Technical Agents shall calculate the Borrowing Base and the
Threshold Amount for any Redetermination Period by (A) 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 of Short-
Term Pari Passu Debt outstanding as of the Redetermination Date for
such Redetermination Period and (B) reducing the Threshold Amount by an
amount equal to the product of the amount of Short- Term Pari Passu
Debt outstanding as of the Redetermination Date for such
Redetermination Period and a fraction the numerator of which is the
amount which would have been the Threshold Amount but for the effect of
this clause (i) and denominator of which is the amount which would have
been the Borrowing Base but for the effect of this clause (i). 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 and the Threshold Amount shall
likewise reduce in a pro rata fashion.
(ii) The Borrowing Base and the Threshold Amount are 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
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(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 OEI or the
Company hereunder or under any Loan Document, that shall not be paid in full
when due (whether at stated maturity, by acceleration or otherwise), for the
period commencing on the due date thereof until the same is paid in full, but in
no event to exceed the Highest Lawful Rate.
(b) Accrued interest on each Base Rate Loan shall be payable quarterly
on each Quarterly Date. Accrued interest on each Eurodollar Loan 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 Debt Coverage Ratio 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
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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 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
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calculation for such Lender shall be computed on the basis of a year of 365 or
366 days, as the case may be). Interest on Base Rate Loans and fees shall be
computed on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable.
Section 4.04 Non-receipt of Funds by the Administrative Agent. Unless
the Administrative Agent shall have been notified by a Lender or the Company
prior to the date on which a payment is scheduled to be made to the
Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be
made by it hereunder or under a Letter of Credit or (in the case of the Company)
a payment to the Administrative Agent for account of one or more of the Lenders
hereunder (such payment being herein called a "Required Payment"), which notice
shall be effective upon receipt, that it does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date. If such Lender or the Company (as the case
may be) has not in fact made the Required Payment to the Administrative Agent,
the recipient(s) of such payment shall, on demand, repay to the Administrative
Agent the amount so made available together with interest thereon in respect of
each day during the period commencing on the date such amount was so made
available by the Administrative Agent until the date the Administrative Agent
recovers such amount at a rate per annum equal to the Base Rate for such day,
but in no event to exceed the Highest Lawful Rate.
Section 4.05 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and without limitation of)
any right of set-off, bankers' lien or counterclaim a Lender may otherwise have,
each Lender shall be entitled (after consultation with the Administrative
Agent), at its option, during the existence of an Event of Default, to offset
balances held by it for account of the Company at any of its offices, in Dollars
or in any other currency, against any principal of or interest on any of such
Lender's Loans or any other amount payable to such Lender hereunder or under any
other Loan Document which is not paid when due (regardless of whether such
balances are then due to the Company), in which case such Lender shall promptly
notify the Company and the Administrative Agent thereof, provided that such
Lender's failure to give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain payment of any principal of or interest
on any Loan made by it to the Company under this Agreement or payment of any
reimbursement obligation under a Letter of Credit Agreement through the exercise
of any right of set-off, banker's lien or counterclaim or similar right or
otherwise, and, as a result of such payment, such Lender shall have received a
greater 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
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with the unpaid principal and/or interest on the Loans held by each of the
Lenders or pro rata in accordance with the unpaid reimbursement obligation owed
to each of the Lenders. To such end, all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. The Company agrees
that any Lender so purchasing a participation (or direct interest) in the Loans
made by other Lenders (or in interest due thereon, as the case may be) or in the
reimbursement obligations owed to the other Lenders may exercise all rights of
set-off, bankers' lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans or
reimbursement obligations, as the case may be, in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Company. If under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section 4.05 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section 4.05 to share the benefits
of any recovery on such secured claim.
(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 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
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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 Agreements 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).
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
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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 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
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(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 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
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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 Fee and Clear. Each payment to be made by the Company
hereunder or in connection herewith to any Agent or Lender or any other Person
shall be made free and clear of and without deduction for or on account of any
Tax unless the Company is required to make such payment subject to the deduction
or withholding of Tax, in which case (except for Excluded Taxes) the sum payable
by the Company in respect of which such deduction or withholding is required to
be made shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, such Person receives and retains (free
from any liability in respect of any such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had not such
deduction or withholding been made or required to be made.
(b) Obligation to Indemnify. If (i) any Agent or Lender is required by
law to make any payment on account of any Tax (except for Excluded Taxes) on or
in relation to any sum received or receivable hereunder by such Agent or Lender
or (ii) any liability in respect of any such payment is asserted, imposed,
levied or assessed against such Agent or Lender, then the Company shall promptly
pay to such Agent or Lender, as the case may be, any additional amounts
necessary to compensate it for such payment together with any interest,
penalties and expenses payable or incurred in connection therewith. If an Agent
or a Lender has paid over on account of Tax (other than Excluded Taxes) an
amount paid to it by the Company pursuant to the foregoing indemnification and
the amount so paid over is subsequently refunded to the recipient Agent or
Lender, in whole or in part, then the recipient Agent or Lender shall promptly
remit such amount refunded to the Company.
(c) Notice of Changes; Proof of Payment. If at any time the Company is
required by law to make any deduction or withholding from any sum payable by it
hereunder or in connection herewith (or if thereafter there is any change in the
rates at which or the manner in which such deductions or withholdings are
calculated), the Company shall promptly notify the Administrative Agent thereof.
If the Company makes any payment hereunder or in connection herewith for which
it is required by law to make any deduction or withholding, it shall pay the
full amount to be deducted or withheld to the relevant taxation or other
authority within the time allowed for such payment under applicable law and
shall deliver to the Administrative Agent within thirty (30) days after it has
made such payment to the applicable authority (i) a receipt issued by such
authority or (ii) other evidence reasonably satisfactory to the Administrative
Agent evidencing the payment to such authority of all amounts so required to be
deducted or withheld from such payment.
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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 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.
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Section 5.09 Limitation on Right to Compensation. Any demand for
compensation pursuant to Article V (other than Section 5.06) must be made on or
before six (6) months after the Lender incurs the expense, cost or economic loss
referred to or such Lender shall be deemed to have waived the right to such
compensation. Any demand for compensation pursuant to Section 5.06 must be made
on or before twelve (12) months after the Lender incurs the expense, cost or
economic loss referred to or such Lender shall be deemed to have waived the
right to such compensation.
Section 5.10 Compensation Procedure. Each Lender will notify the
Administrative Agent and the Company of any event occurring after the date of
this Agreement which will entitle such Lender to compensation or indemnification
pursuant to this Article V as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. Each Lender will furnish
the Administrative Agent and the Company with a certificate setting forth the
basis and amount of each request by such Lender for compensation or
indemnification and specify the Section pursuant to which it is claiming
compensation or indemnification. Such certificate shall also include (i)
calculations in reasonable detail computing such claim, and (ii) a statement
from such Lender that it is asserting its right for indemnity or compensation
not solely with respect to the Indebtedness outstanding under this Agreement,
but is generally making such claims with respect to similar borrowers in
connection with transactions similar to the one contemplated in this Agreement.
Determinations and allocations by any Lender for purposes of this Article V of
the effect of any Regulatory Change pursuant to Sections 5.01(a) or (b), or of
the effect of capital maintained pursuant to Section 5.01(c), on its costs or
rate of return of maintaining Loans or issuing or participating in Letters of
Credit or its obligation to make Loans or issue or participate in Letters of
Credit, or on amounts receivable by it in respect of Loans or such obligations,
and of the additional amounts required to compensate such Lender under Section
5.01, 5.05 or 5.06, shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.
ARTICLE VI
Conditions Precedent
Section 6.01 Initial Funding. The obligation of the Lenders to make the
Initial Funding hereunder (which Initial Funding will include the refinancing of
the Debt outstanding under the Prior Credit Agreements and the assumption of the
obligations under all Letters of Credit outstanding under the Prior Credit
Agreements) 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 attached
to such certificate are true and
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complete copies of the articles of incorporation and the bylaws of the Company.
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
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 attached to such
certificate are true and complete copies of the articles or certificate of
incorporation and the bylaws of OEI. The Agents and the Lenders may conclusively
rely on such certificate until the Administrative Agent receives notice in
writing from OEI to the contrary.
(c) Certificates of the appropriate state agencies with respect to the
existence, qualification and good standing of OEI, the Company and certain
material Restricted Subsidiaries in certain specified jurisdictions.
(d) The Notes, the Guaranty Agreement and the other Loan Documents
listed on Exhibit F, each duly completed and executed.
(e) The following opinions:
(i) an opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel to
OEI and the Company, substantially in the form of Exhibit B-1.
(ii) an opinion of Onebane, Bernard, Torian, Diaz, McNamera & Abell,
special Louisiana counsel to the Company, substantially in the form of
Exhibit B-2.
(f) the Initial Reserve Reports.
(g) The Administrative Agent shall have received one or more
certificates or policies of insurance reflecting that OEI and its Restricted
Subsidiaries, including the Company, are carrying insurance consistent with the
requirements of this Agreement as to amounts, coverages and provisions.
(h) All conditions to closing the Canadian Credit Agreement shall have
been satisfied or waived contemporaneously with the Initial Funding.
(i) Evidence of termination of the Prior Credit Agreements and the
commitments thereunder.
(j) Appropriate UCC search certificates of OEI and its Restricted
Subsidiaries reflecting no Liens on any of their Properties except for such
Liens permitted by Section 9.02.
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(k) Satisfactory evidence that the Merger and the Operating Merger have
been consummated and that all Governmental Requirements reasonably necessary in
connection therewith have been obtained.
(l) The Lender Group shall have received all fees due and payable
pursuant to Section 2.04 on or prior to the Effective Date.
(m) Such other documents as the Administrative Agent or Technical
Agents or special counsel to the Administrative Agent may reasonably request.
Section 6.02 Subsequent 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 OEI and the Company 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 OEI and the Company to the
effect set forth in Section 6.02(a) (both as of the date of such notice and,
unless OEI or the Company otherwise notifies the Administrative Agent prior to
the date of or immediately following such borrowing or such issuance, as of the
date of such borrowing or issuance, as the case may be).
(c) Certificate Regarding Incurrence of Debt under Indentures. The
obligation of the Lenders to make Loans to the Company or of the Administrative
Agent to issue Letters of Credit, if, after giving effect thereto, the aggregate
principal amount of all the Loans then outstanding, the LC Exposure and the
Canadian Indebtedness would be in excess of $100,000,000, is subject to the
further condition precedent that OEI 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, OEI is permitted to incur
such Indebtedness or Canadian Indebtedness under the Indentures and setting
forth in reasonable detail calculations to support the certification.
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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
OEI and the Company represent and warrant to the Agents and the Lenders
as follows:
Section 7.01 Corporate Existence. OEI, the Company, UMC 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 OEI and its
Consolidated Subsidiaries as at December 31, 1997, consolidated for the
preceding fiscal year of OEI 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
OEI 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 OEI 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). OEI 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.
(b) OEI 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.
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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 and OEI)
threatened against OEI or any of its Restricted Subsidiaries, including the
Company, or against any of their respective Property which could reasonably be
expected to have a Material Adverse Effect or which would seek to enjoin or
prevent consummation of the Merger or the Operating Merger.
Section 7.04 No Breach. The execution and delivery by OEI and its
Restricted Subsidiaries, including the Company, of this Agreement, the Notes,
the other Loan Documents, the consummation of the transactions herein or therein
contemplated, including the Merger and the Operating Merger, 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 OEI and the
Company 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 OEI and the Company 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. Each of OEI and
United Meridian had all necessary corporate power and authority to execute,
deliver and perform its respective obligations under the Merger Agreement; and
the execution, delivery and performance by each such Person of its obligations
under the Merger Agreement were duly authorized by all necessary corporate
action on its part. Each of the Company and UMC had all necessary corporate
power and authority to perform the transactions contemplated by it under the
Merger Agreement; and performance by each such Person of the transactions
contemplated by it under the Merger Agreement were duly authorized by all
necessary corporate action on its part. On or prior to the Effective Date, the
Merger and the Operating Merger have been consummated.
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 OEI or the Company of
this Agreement, the Notes, the Loan Documents to which it is a party, the Merger
and the Operating Merger or for the validity or enforceability thereof. It is
understood that continued performance by OEI and its Subsidiaries, including the
Company, of this Agreement and the other Loan Documents to which such Persons
are a party will require various Approvals, such as filings related to
environmental matters, ERISA matters, Taxes and intellectual
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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
refinancing of the Debt outstanding under the Prior Credit Agreements; (iii) the
financing of OEI's and its Subsidiaries' share of North American and
international oil and gas exploration, development and production costs; (iv)
the financing of purchases of Subordinated Debt issued under the 95 Indenture
which is tendered to OEI pursuant to a Change of Control Offer under the 95
Indenture; (v) the financing of ongoing working capital requirements of OEI and
its Subsidiaries; and (vi) the making of other payments as otherwise permitted
under this Agreement. Neither OEI nor any of its Subsidiaries, including the
Company, 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 G,
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. Except as set out in Schedule 7.08, each of OEI 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. Except as set out
in Schedule 7.08, OEI and its Subsidiaries, including the Company, have no ERISA
Affiliates.
Section 7.09 Taxes. Each of OEI and its Subsidiaries, including the
Company, 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 OEI and its Subsidiaries, including the
Company, in respect of taxes and other governmental charges are, in the opinion
of OEI, adequate.
Section 7.10 Insurance. OEI 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 OEI
and its Restricted Subsidiaries, including the Company.
Section 7.11 Titles, etc. OEI and its Restricted Subsidiaries,
including the Company, 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, OEI (directly or indirectly
through the Company and its other Restricted Subsidiaries) will own in the
aggregate, in all material
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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 material respect obligate OEI 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. OEI 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 OEI 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 OEI nor any of its
Subsidiaries, including the Company, 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 OEI nor any of
its Subsidiaries, including the Company, 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) OEI has no Subsidiaries, (b) OEI 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 OEI are Restricted Subsidiaries. OEI 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 OEI and each its Subsidiaries, including
the Company, 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
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necessary regulatory authorizations (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 OEI and its Subsidiaries, including the
Company, 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 OEI and its
Subsidiaries, including the Company, 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 either
OEI or 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 OEI 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 OEI
and its Subsidiaries, including the Company, 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 OEI and the Company)
have been and are operating in compliance with such permits;
(e) OEI and its Subsidiaries, including the Company, 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 OEI and
its Subsidiaries, including the Company, except in compliance with Environmental
Laws; and
(f) OEI and its Subsidiaries, including the Company, have no material
liability in connection with any release or threatened release of any hazardous
substance or solid waste into the environment.
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(g) To the extent applicable, OEI and its Subsidiaries, including the
Company, have complied with all financial responsibility, spill prevention
facility design, operation and equipment requirements imposed by OPA or will
comply with such requirements scheduled to be imposed by OPA in the future
during the term of this Agreement; and OEI 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. OEI and its Restricted Subsidiaries, including
the Company, 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 OEI or any of
its Restricted Subsidiaries, including the Company, 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. OEI and its Restricted
Subsidiaries, including the Company, 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 OEI 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 OEI and its Restricted Subsidiaries' Oil and
Gas Properties which would require OEI 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. OEI (a) is not insolvent as of the date hereof
and will not be rendered insolvent as a result of the Merger, the execution,
delivery and performance of the Guaranty 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.
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ARTICLE VIII
Affirmative Covenants
OEI and the Company agree 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 OEI or the Company hereunder or any Loan
Document:
Section 8.01 Financial Statements. The Company shall deliver, and shall
cause UMC 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 OEI and UMC 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 OEI and
its Consolidated Subsidiaries and UMC 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 OEI and UMC 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 OEI and UMC 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 OEI and UMC Canada, consolidated statements of income,
changes in stockholders' equity and cash flows of OEI and its Consolidated
Subsidiaries and UMC 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 OEI and UMC 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 OEI 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
OEI 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 OEI setting forth details respecting such event or
condition and the action, if any, which OEI 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 OEI or an ERISA Affiliate with respect to such
event or condition):
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(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 OEI 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 OEI or any ERISA Affiliate
under Section 4201 or 4204 of ERISA from a Multiemployer Plan, or the
receipt by OEI 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 OEI 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 OEI, for such quarterly
period, the detailed monthly financial reports of OEI and its Consolidated
Subsidiaries, containing production, revenue and cost information reports for
such quarterly period with respect to the Oil and Gas Properties owned by the
Company and its Consolidated Subsidiaries, which report shall be in such form as
may be accepted by the Administrative Agent and the Technical Agents from time
to time.
(f) Promptly after OEI or 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, either
OEI or 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,
OEI shall also deliver a copy of the instruments and agreements evidencing or
governing such Pari Passu Debt, certified as true and complete by OEI.
(h) Promptly after OEI 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 OEI, notice of such event, circumstance or condition.
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(i) Promptly after OEI 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 OEI 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 OEI 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 OEI 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 OEI and its Restricted Subsidiaries, including
the Company, as any Lender or the Administrative Agent may reasonably request.
OEI and 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 OEI: (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, OEI and/or the Company intends to take in response
thereto); and (ii) setting forth in reasonable detail the computations necessary
to determine whether OEI 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 UMC Canada
to, promptly give to the Administrative Agent notice of all legal or arbitral
proceedings, and of all proceedings before any Governmental Authority, affecting
OEI or any of its Restricted Subsidiaries, including the Company, 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 and OEI 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
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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 and OEI 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 OEI and its Restricted Subsidiaries,
including the Company, 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 OEI
in its sole judgment.
(c) OEI and its Restricted Subsidiaries, including the Company, 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 OEI's or any Restricted Subsidiary's rights with respect
thereto and prevent any forfeiture thereof or a default thereunder, except (i)
to the extent a portion of such Oil and Gas Properties is no longer capable of
producing Hydrocarbons in economically reasonable amounts as determined by OEI
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) OEI and its Restricted Subsidiaries, including the Company, 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) OEI will, and will cause its Subsidiaries, including the Company,
to, maintain accounting procedures, books and records to permit the preparation
of financial statements of OEI and its Subsidiaries in accordance with GAAP.
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(f) OEI or any of its Restricted Subsidiaries, including the Company,
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. OEI shall, and shall cause each of
its Subsidiaries, including the Company, 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 OEI 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 OEI and its Restricted Subsidiaries which
Properties OEI desires to have included in the Borrowing Base, and the other
being prepared by or under the supervision of the chief petroleum engineer of
OEI (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 OEI and its Restricted
Subsidiaries which Properties OEI desires to have included in the Borrowing
Base. Notwithstanding the foregoing, the January 1 Reserve Report relating to
any Oil and Gas Properties not located in the geographical boundaries of the
United States of America and Canada and surrounding waters shall be prepared by
certified independent petroleum engineers or other independent petroleum
consultant(s) reasonably acceptable to the Technical Agents.
(b) On or before September 15 of each year commencing September 15,
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
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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 OEI written
notice thereof and OEI shall have 90 days to cure such defect. If OEI 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 OEI, 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, OEI 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. OEI 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. OEI and its Restricted Subsidiaries, including the
Company, 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 OEI and the Company 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 OEI 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
OEI and the Company agree 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 OEI or the Company hereunder or any Loan
Document:
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Section 9.01 Debt. OEI will not and will not permit any of its
Subsidiaries, including the Company, 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 OEI 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 OEI and its Subsidiaries, including the Company, existing
on the date of this Agreement which is reflected in the Financial Statements or
is disclosed in Schedule 9.01, 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 UMC 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 OEI which is Non-recourse to OEI and its Restricted
Subsidiaries and any of their Property except for recourse constituting Debt
permitted under Section 9.01(m);
(e) (i) Subordinated Debt incurred pursuant to the Indentures 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 the Indentures exceed $510,000,000 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 and the Threshold
Amount are redetermined;
(f) Debt of OEI or any of its Restricted Subsidiaries, including 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
at any one time outstanding;
(g) Debt owed by OEI or any of its Restricted Subsidiaries to OEI 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) 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); and
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(ii) 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 such Debt under this clause
(ii), the Borrowing Base and the Threshold Amount are 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;
(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 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 OEI
and any other Restricted Subsidiary of OEI and their respective Property (other
than those guarantees or other surety obligations 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 and the Threshold Amount are 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.
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Section 9.02 Liens. OEI will not and will not permit any of its
Subsidiaries, including the Company 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 or in Schedule 9.02, and
any renewals and extensions thereof;
(d) Liens securing Debt permitted by Section 9.01(c), provided that
such Liens attach only to the Property subject to such lease;
(e) Liens securing Debt permitted by Section 9.01(d) and Section
9.01(e)(ii);
(f) Liens securing Debt permitted by Section 9.01(i), provided that
such Liens attach only to Property of the partnership incurring such Debt;
(g) Liens to secure the Debt permitted by Section 9.01(j) on any
Property owned by Havre and on the Company's ownership interest in Havre, and
encumbrances under gas gathering agreements caused by the dedication by the
Company to Havre of the Company'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. OEI will not and will not
permit any of its Restricted Subsidiaries, including the Company, 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 or which are disclosed to the Lenders in Schedule 9.03;
(b) investments, loans or advances by OEI or by any of its Restricted
Subsidiaries to or in OEI 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 OEI 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
OEI 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
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(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 OEI or any of its Restricted Subsidiaries to or
on behalf of OEI or any of its Restricted Subsidiaries in the ordinary course of
business for general and administrative expenses;
(e) routine operating expenses advanced by OEI or any of its Restricted
Subsidiaries as operator in the ordinary course of business for other working
interest owners under operating agreements, which do not exceed $10,000,000 in
the aggregate outstanding at any one time to all Persons combined;
(f) investments required to satisfy obligations under any Plans;
(g) accounts receivable of OEI or any of its Restricted Subsidiaries,
including the Company, 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 commercial banks 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 OEI or any of its
Subsidiaries, including the Company, not to exceed $200,000 in the aggregate at
any one time;
(l) deposit accounts maintained in the ordinary course of business by
OEI 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;
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(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;
(o) investments by OEI 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 OEI other than Havre and Lion; provided that the aggregate amount of
investments, loans and advances (including (i) guarantee or other surety
obligations by OEI 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 OEI 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
OEI 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, OEI 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
OEI, except OEI may, so long as no Default or Event of
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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. OEI will not permit its Interest Coverage
Ratio, as of the end of any fiscal quarter of OEI, to be less than 3.0 to 1.0.
(b) Debt Coverage Ratio. OEI 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, OEI 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 OEI 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. OEI 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. OEI will not, and will not permit any of its Restricted
Subsidiaries, including the Company 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
OEI and its Restricted Subsidiaries, other than UMC 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
UMC 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 OEI nor any of its Restricted
Subsidiaries will enter into any arrangement, directly or indirectly, with any
Person whereby OEI or any of its Restricted Subsidiaries shall sell or transfer
any of their Property, whether now owned or hereafter acquired, and whereby OEI
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 OEI or any of
its Restricted Subsidiaries intends to use for substantially the same purpose or
purposes as the Property sold or transferred.
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Section 9.08 Mergers, Etc. OEI will not, and will not permit any of its
Restricted Subsidiaries, including the Company and UMC Canada, 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 OEI or 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 OEI (other than UMC
Canada) may (i) merge or consolidate with OEI or with any other Subsidiary of
OEI, 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 OEI
or to any other Subsidiary of OEI, 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.
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. OEI 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) except as provided in Schedule 9.10, 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 OEI or any of its Subsidiaries,
including the Company, 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, OEI and its
Restricted Subsidiaries, including the Company, 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. OEI will not, and will not
permit any of its Restricted Subsidiaries to, incur any obligations under Risk
Management Agreements, except for 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
OEI'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 OEI and its Consolidated Subsidiaries, (ii) 65% of OEI'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 OEI's and its Restricted Subsidiaries' applicable production
estimates from their Oil and Gas Properties for the period thereafter.
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Section 9.13 Transactions with Affiliates. OEI and its Restricted
Subsidiaries, including the Company, 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 OEI, the
Company, UMC Canada or any other Restricted Subsidiary of OEI) unless such
transactions are in the ordinary course of OEI's or its Restricted Subsidiary's
business and are upon fair and reasonable terms no less favorable to OEI 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 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, OEI and its Restricted
Subsidiaries, including the Company, 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 OEI or any of its Restricted Subsidiaries, including the Company, or
which requires the consent of or notice to other Persons in connection
therewith.
Section 9.15 Subsidiaries and Partnerships. OEI 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;
(b) Sales or other dispositions of Properties, provided that if the
aggregate fair market value of such Properties (other than Properties listed on
Schedule 9.16) 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; and
(c) Sale of the Properties listed on Schedule 9.16.
Section 9.17 Environmental Matters. OEI will not cause or permit, or
permit any of its Subsidiaries, including the Company, to cause or permit, any
of its Property to be in violation of, or do
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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. OEI
and its Subsidiaries, including the Company, 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 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, OEI and its Restricted
Subsidiaries, including the Company, will not enter into any agreements which
would restrict payments from the Restricted Subsidiaries of the Company to the
Company or Restricted Subsidiaries of OEI to OEI.
Section 9.19 Subordinated and Long-Term Pari Passu Debt. Neither OEI
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 OEI 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 OEI and the Company may (1) make
the payments required under the Pledge of Production Trust Agreements in
accordance with the terms thereof, (2) make the change in control offer required
under the 95 Indenture, and (3) make mandatory prepayments 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 Subordinated Debt or the Long-Term
Pari Passu Debt; 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 Subordinated Debt or Long-Term Pari Passu Debt to have terms
generally less restrictive than its terms immediately prior thereto, (ii) any
amendment or supplement to the 96 Indenture or the 97 Indenture to conform the
provisions thereof to the corresponding provisions of the 95 Indenture; and
(iii) OEI and the Company (and the trustee, if applicable) may enter into
supplemental indentures to the instruments
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governing such Subordinated Debt or Long-Term Pari Passu Debt of the type
described in Section 9.1 of each of the Indentures.
Section 9.20 Maintenance of Deposits. OEI and the Company shall not,
and shall not permit any of their 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 OEI or any of its Restricted Subsidiaries is
doing business or owns Property, which operating accounts shall contain only
such minimum amounts as may be necessary for the conduct of business or the
maintenance and exploitation of such Property.
Section 9.21 Unrestricted Subsidiaries.
(a) OEI 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 OEI 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 OEI or any
Restricted Subsidiary. Notwithstanding the foregoing, in no event may the Board
of Directors of OEI designate the Company, Norfolk or UMC Canada as an
Unrestricted Subsidiary.
(b) Without limitation of Section 9.21(a), OEI 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 OEI and the Company in the Loan Documents
to which each is a party shall be true and correct in all material respects, and
(C) OEI 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 OEI 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) OEI 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. OEI and
its Restricted Subsidiaries will not enter into any contracts or agreements
which warrant production of Hydrocarbons
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and will not hereafter allow gas imbalances, take-or-pay or other prepayments
with respect to the Oil and Gas Properties of OEI and its Restricted
Subsidiaries which would require OEI or such Restricted Subsidiaries to deliver
Hydrocarbons produced on Oil and Gas Properties at some future time without then
or thereafter receiving full payment therefor to exceed 10,000,000 mcf of gas in
the aggregate on a net basis.
ARTICLE X
Events of Default
Section 10.01 Events of Default. If one or more of the following events
(herein called "Events of Default") shall occur and be continuing:
(a) The Company shall default in the payment or mandatory prepayment
when due of any principal of any Loan or of any reimbursement obligation for
disbursement made under any Letter of Credit; or the Company shall default in
the payment when due of any interest on any Loan, any fees payable hereunder or
under any other Loan Document or other amount payable by it hereunder or
thereunder and such default shall continue for a period of five (5) Business
Days; or
(b) OEI or any of its Restricted Subsidiaries, including the Company,
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 OEI 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 OEI shall under any
circumstances become obligated to redeem, defease or offer to buy all or any of
the subordinated notes issued under the Indentures (other than in connection
with the "Change of Control Offer" required under the terms of the 95
Indenture); or
(c) UMC 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 UMC 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 OEI or any of its Restricted
Subsidiaries, including the Company, 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) OEI or the Company shall default in the performance of any of their
respective obligations under Article IX; UMC Canada shall default in the
performance of any of its obligations under Article IX
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of the Canadian Credit Agreement; or OEI or any of its Restricted Subsidiaries,
including the Company, 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 OEI by the Administrative Agent or any Lender;
or
(f) OEI, the Company, UMC Canada 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) OEI, the Company, UMC Canada 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 OEI, the Company, UMC Canada 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 OEI 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, OEI 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
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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 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 OEI; or during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of OEI (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
stockholders of OEI 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 OEI then in
office; or
(m) OEI shall cease to directly or indirectly own 100% of each class of
stock of the Company, UMC 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 OEI, the Company or
UMC 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 OEI, the Company or UMC 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.
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
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powers as are specifically delegated to it by the terms of this Agreement or any
Loan Document, together with such other powers as are reasonably incidental
thereto. (As of the Effective Date, the Co-Agents have been delegated no
specific powers or responsibilities under this Agreement.) 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 OEI, the Company 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 acting as an Agent,
and the term "Lender"
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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 OEI
and its Subsidiaries, including the Company, or any of OEI's Affiliates as if it
were not acting as an Agent. Each Agent and its Affiliates may accept fees and
other consideration from OEI or any of its Affiliates, including the Company,
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 OEI and its Subsidiaries, including
the Company, and decision to enter into this Agreement; and (b) that it will,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement or any other Loan Document. No Agent shall be required to
keep itself informed as to the performance or observance by OEI, the Company 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 OEI and its Subsidiaries, including the Company. Except
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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 OEI and its Subsidiaries, including the Company, (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.
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.
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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 OEI or the Company 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 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 OEI OR ANY OF ITS SUBSIDIARIES,
INCLUDING THE COMPANY, 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
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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 OEI OR ANY OF ITS SUBSIDIARIES,
INCLUDING THE COMPANY, 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, 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
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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 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 OEI's
obligations under the Guaranty Agreement or 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
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
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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 from
its obligations under the Guaranty Agreement. In the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the Loan Documents (the participant's rights against the granting Lender
in respect of such participation to be those set forth in the agreement with
such Lender creating such participation), and all amounts payable by the Company
hereunder shall be determined as if such Lender had not sold such participation,
provided that if such participant has made and complied with the representations
contained in Section 5.08, such participant shall be entitled to receive
additional amounts under Article V on the same basis as if it were a Lender
other than amounts paid by reason of such participant's noncompliance with
Section 5.08. In addition, each agreement creating any participation must
include agreements by the participant to be bound by the provisions of Section
12.14 if such participant is to receive any confidential information.
(d) Notwithstanding any other provisions of this Section 12.06, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Company to file a registration statement
with the SEC or to qualify the Loans or any interest therein under the "Blue
Sky" laws of any state.
(e) The Lenders may furnish any information concerning the Company in
the possession of the Lenders from time to time to assignees and participants
(including prospective assignees and 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
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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, OEI and the Company and supersede
all prior agreements and understandings between such parties relating to the
subject matter hereof and thereof. There are no unwritten oral agreements
between the parties.
Section 12.09 References. The words "herein," "hereof," "hereunder" and
other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Section shall be deemed to refer to the applicable
Section of this Agreement unless otherwise stated herein. Any reference herein
to an exhibit or schedule shall be deemed to refer to the applicable exhibit or
schedule attached hereto unless otherwise stated herein.
Section 12.10 Survival. The obligations of the Company, each Agent and
the Lenders under Sections 5.01, 5.05, 5.06, 12.03 and 12.14 shall survive the
repayment of the Loans, the expiration of the Letters of Credit and the
termination of the Commitments and any assignment by a Lender of all its Loans
or Commitments pursuant to Section 12.06(b).
Section 12.11 Captions. Captions and section headings appearing herein
or any Loan Document are included solely for convenience of reference and are
not intended to affect the interpretation of any provision of this Agreement or
such Loan Document.
Section 12.12 Counterparts. This Agreement and each Loan Document
(other than the Notes) may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement or any such Loan Document by signing
any such counterpart.
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES (INCLUDING, BUT NOT LIMITED TO, THE
VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR THE OTHER LOAN DOCUMENTS TO WHICH EITHER OEI OR 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, OEI AND THE COMPANY EACH 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. OEI AND THE COMPANY
HEREBY IRREVOCABLY WAIVE 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
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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 OEI OR THE COMPANY IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) OEI and the Company irrevocably consent 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 OEI or the Company in
any other jurisdiction.
(e) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES OR ANY OTHER
LOAN DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT AND AGREES THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
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 OEI or
any of its Subsidiaries, including the Company, 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.
-81-
<PAGE>
Section 12.15 Interest. It is the intention of the parties hereto that
each Agent and Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Agent or Lender under laws applicable to it (including the laws of the United
States of America and the State of Texas or any other jurisdiction whose laws
may be mandatorily applicable to such Agent or Lender notwithstanding the other
provisions of this Agreement), then, in that event, notwithstanding anything to
the contrary in the Notes, this Agreement or any other Loan Document, it is
agreed as follows: (a) the aggregate of all consideration which constitutes
interest under law applicable to any Agent or Lender that is contracted for,
taken, reserved, charged or received by such Agent or Lender under the Notes,
this Agreement or under any of the other aforesaid Loan Documents or agreements
or otherwise in connection with the Notes shall under no circumstances exceed
the maximum amount allowed by such applicable law, and any excess shall be
canceled automatically and if theretofore paid shall be credited by such Agent
or Lender on the principal amount of the Indebtedness (or, to the extent that
the principal amount of the Indebtedness shall have been or would thereby be
paid in full, refunded by such Agent or Lender to the Company); and (b) in the
event that the maturity of the Notes is accelerated by reason of an election of
the holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to any Agent or
Lender may never include more than the maximum amount allowed by such applicable
law, and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically by such Agent or Lender as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by such
Agent or Lender on the principal amount of the Indebtedness (or, to the extent
that the principal amount of the Indebtedness shall have been or would thereby
be paid in full, refunded by such Agent or Lender to the Company). All sums paid
or agreed to be paid to any Agent or Lender for the use, forbearance or
detention of sums due hereunder shall, to the extent permitted by law applicable
to such Agent or Lender, be amortized, prorated, allocated and spread throughout
the term of the Loans evidenced by the Notes until payment in full so that the
rate or amount of interest on account of any Loans or other amounts hereunder
does not exceed the maximum amount allowed by such applicable law. If at any
time and from time to time (i) the amount of interest payable to any Agent or
Lender on any date shall be computed at the Highest Lawful Rate applicable to
such Agent or Lender pursuant to this Section 12.15 and (ii) in respect of any
subsequent interest computation period the amount of interest otherwise payable
to such Agent or Lender would be less than the amount of interest payable to
such Agent or Lender computed at the Highest Lawful Rate applicable to such
Agent or Lender, then the amount of interest payable to such Agent or Lender in
respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate applicable to such Agent or Lender until the
total amount of interest payable to such Agent or Lender shall equal the total
amount of interest which would have been payable to such Agent 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 each of them
is delivered to the Administrative Agent in the State of Texas, and accepted by
the Administrative Agent in such State.
-82-
<PAGE>
Section 12.17 Release of Liens and Guaranties Securing Prior Credit
Agreements. Each Agent and Lender hereby authorizes the Administrative Agent or
its Affiliate, The Chase Manhattan Bank, in its capacity as administrative agent
under the Prior Credit Agreements, on behalf of each such Agent or Lender, to:
(a) execute the Master Release, in substantially the form of Exhibit H hereto,
together with any and all releases of Liens, termination statements and other
instruments required or requested thereunder; (b) indorse in blank, without
recourse or warranty, any instruments previously endorsed to the order the
Administrative Agent or its Affiliate and delivered to it as collateral for the
obligations under either Prior Credit Agreement; (c) return any instrument,
including stock certificates, previously delivered to the Administrative Agent
or its Affiliates as collateral for the obligations under either Prior Credit
Agreement; and (d) take any other actions reasonably requested by OEI or the
Company pursuant to the terms of the Master Release which is not inconsistent
with the terms thereof. Subject to the terms of the Master Release, in
substantially the form attached hereto as Exhibit H, each Agent and Lender
hereby releases, terminates and discharges the Liens, guarantees and other
obligations described in the Master Release as being released, terminated or
discharged thereby and acknowledges that such release, termination and discharge
shall be and is evidenced by its execution of this Agreement and the execution
by the Administrative Agent or its Affiliate of the Master Release.
Section 12.18 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 OEI shall, and shall cause
the Company and each of its Restricted Subsidiaries to, take such action as may
be reasonably requested by the Administrative Agent and the Lenders to effect
such reinstatement.
Section 12.19 Debt Characterization for Indenture Purposes; Specified
or Designated Senior Indebtedness.
(a) If so designated by OEI 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 Indentures) for
purposes of any Indenture.
(b) OEI and the Company hereby acknowledges and declares that:
(i) this Agreement and the Notes and the obligations of OEI
and the Company 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;
(ii) this Agreement and the Notes and the obligations of OEI
and the Company hereunder and thereunder are "Senior Indebtedness" and
"Designated Senior Indebtedness" and "Guarantor Senior
-83-
<PAGE>
Indebtedness" and "Designated Guarantor Senior Indebtedness",
respectively, under and for purposes of the 96 Indenture; and
(iii) this Agreement and the Notes and the obligations of OEI and the
Company 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 97 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 the Indentures.
Section 12.20 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."
-84-
<PAGE>
The parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
[SIGNATURES BEGIN ON THE NEXT PAGE]
-85-
<PAGE>
OCEAN ENERGY, INC., a Louisiana corporation
By: /s/ Jonathan M. Clarkson
---------------------------------
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) 653-5024
Telephone No.: (713) 654-9110
Attention: Robert K. Reeves
[Signature Page 1]
<PAGE>
OCEAN ENERGY, INC., a Delaware corporation
By: /s/ Jonathan M. Clarkson
-------------------------------
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) 653-5024
Telephone No.: (713) 654-9110
Attention: Robert K. Reeves
[Signature Page 2]
<PAGE>
AGENTS: CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent
By: /s/ Russell Johnson
--------------------------------
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.: (703) 750-3810
Telephone No.: (703) 750-2784
Attention: Loan Syndication Services
with a 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 3]
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Syndication Agent
By: /s/ John Kowalczuk
---------------------------------
John Kowalczuk
Vice President
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 4]
<PAGE>
BARCLAYS BANK PLC, as Documentation Agent
By: Illegible Signature
-------------------------------
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 5]
<PAGE>
ABN AMRO BANK, N.V., as Co-Agent
By: /s/ Charles W. Randall
-----------------------------
Charles W. Randall
Senior Vice President
By: /s/ Cheryl Lipshutz
-----------------------------
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 6]
-6-
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION , as Co-Agent
By: Illegible Signature
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 7]
<PAGE>
BANQUE PARIBAS, as Co-Agent
By: Illegible Signature
-----------------------------
Name:
Title:
By: Illegible Signature
------------------------------
Name:
Title:
Address for Notices for Banque 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:
Banque 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 8]
<PAGE>
NATIONSBANK OF TEXAS, N.A., as Co-Agent
By: /s/ Paul Squires
---------------------------
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 of Texas, 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 9]
<PAGE>
SOCIETE GENERALE, SOUTHWEST AGENCY , as Co-
Agent
By: /s/ Richard Erbert
-------------------------
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
[Signature Page 10]
<PAGE>
WELLS FARGO BANK (TEXAS), N.A., as Co-Agent
By: /s/ J. Alan Alexander
------------------------------
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 11]
<PAGE>
LENDER: CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By: /s/ Russell Johnson
---------------------------
Russell Johnson
Vice President
Lending Office for ABR Loans and
Eurodollar 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 12]
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK
By: /s/ John Kowalczuk
--------------------------
John Kowalczuk
Vice President
Lending Office for Base Rate Loans
and Eurodollar 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 13]
<PAGE>
BARCLAYS BANK PLC
By: Illegible Signature
Name:
Title:
Lending Office for ABR Loans and
Eurodollar 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 14]
<PAGE>
ABN AMRO BANK, N.V.
By: /s/ Charles W. Randall
-------------------------
Charles W. Randall
Senior Vice President
By: /s/ Cheryl Lipshutz
-------------------------
Cheryl Lipshutz
Senior Vice President
Lending Office for ABR Loans and
Eurodollar 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 15]
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: Illegible Signature
Name:
Title:
Lending Office for ABR Loans and
Eurodollar Loans:
Bank of America NT & SA
231 S. LaSalle Street
Chicago, IL 60697
Assignee's Eurodollar Lending Office:
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 16]
<PAGE>
BANQUE PARIBAS
By: /s/ Doug Liftman
-----------------------
Doug Liftman
Vice President
By: /s/ Barton D. Schouest
------------------------
Barton D. Schouest
Managing Director
Base Rate and Eurodollar Lending Office:
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:
Banque 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 17]
<PAGE>
NATIONSBANK OF TEXAS, N.A.
By: /s/ Paul Squires
------------------------
Paul Squires
Senior Vice Presiden
Base Rate and Eurodollar Lending Office:
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 of Texas, 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 18]
<PAGE>
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Richard Erbert
-----------------------------
Richard Erbert
Vice President
Base Rate and Eurodollar Lending Office:
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 19]
<PAGE>
WELLS FARGO BANK (TEXAS), N.A.
By: /s/ J. Alan Alexander
---------------------------
J. Alan Alexander
Vice President
Base Rate and Eurodollar Lending Office:
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 20]
<PAGE>
HIBERNIA NATIONAL BANK
By: /s/ Colleen McEvoy
--------------------------------
Colleen McEvoy
Vice President
Lending Office for ABR Loans and
Eurodollar 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 21]
<PAGE>
TORONTO DOMINION (TEXAS) INC.
By: Illegible Signature
Name:
Title:
Lending Office for ABR Loans and
Eurodollar 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 22]
<PAGE>
U.S. BANK NATIONAL ASSOCIATION
By: Illegible Signature
Name:
Title:
Base Rate and Eurodollar Lending Office:
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 23]
<PAGE>
BANK ONE, TEXAS, N.A.
By: Illegible Signature
Name:
Title:
Lending Office for ABR Loans and
Eurodollar 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 24]
<PAGE>
CREDIT SUISSE FIRST BOSTON
By: Illegible Signature
Name:
Title:
By: Illegible Signature
Name:
Title:
Lending Office for ABR Loans and
Eurodollar 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 25]
<PAGE>
FIRST NATIONAL BANK OF COMMERCE
By: /s/ David R. Reid
--------------------------
David R. Reid
Senior Vice President
Lending Office for ABR Loans and Eurodollar 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 26]
<PAGE>
BANK OF NEW YORK
By: Illegible Signature
Name:
Title:
Lending Office for ABR Loans and
Eurodollar 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 27]
<PAGE>
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ A. Stephen Kennedy
-------------------------
A. Stephen Kennedy
Vice President/Manager Energy Lending
Lending Office for ABR Loans and
Eurodollar 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]
-27-
<PAGE>
AGENT: THE CHASE MANHATTAN BANK, as Competitive Bid
Auction Agent
By: Illegible Signature
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 29]
Exhibit 10.4
GUARANTY AGREEMENT
Dated as of March 27, 1998
by
OCEAN ENERGY, INC.,
a Delaware 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,
BANQUE PARIBAS,
NATIONSBANK OF TEXAS, 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
Page
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Terms Defined in Recitals..............................2
-------------------------
Section 1.02 Certain Definitions....................................2
-------------------
Section 1.03 Credit Agreement Definitions...........................3
----------------------------
ARTICLE II
The Guaranty
Section 2.01 Obligations Guaranteed.................................3
----------------------
Section 2.02 Nature of Guaranty.....................................3
------------------
Section 2.03 Lenders' Rights........................................3
---------------
Section 2.04 Guarantor's Waivers....................................3
-------------------
Section 2.05 Maturity of Obligations; Payment.......................4
--------------------------------
Section 2.06 Lenders' Expenses......................................4
-----------------
Section 2.07 Obligation.............................................4
----------
Section 2.08 Events and Circumstances Not Reducing or
Discharging the Guarantor's Obligations................4
---------------------------------------
Section 2.09 Subrogation............................................6
ARTICLE III
Representations and Warranties
Section 3.01 By the Guarantor.......................................6
ARTICLE IV
Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims..................6
-------------------------------------
Section 4.02 Claims in Bankruptcy...................................7
--------------------
Section 4.03 Payments Held in Trust.................................7
----------------------
Section 4.04 Liens Subordinate......................................7
-----------------
Section 4.05 Notation of Records....................................7
-------------------
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...........................................8
------------
Section 5.05 Survival of Obligations................................8
-----------------------
Section 5.06 Subject to the Intercreditor Agreement.................8
--------------------------------------
Section 5.07 Status as Specified or Designated Senior
Indebtedness.. ........................................8
------------
Section 5.08 Interest...............................................9
--------
i
<PAGE>
GUARANTY AGREEMENT
This GUARANTY AGREEMENT dated as of March 27, 1997 is by OCEAN
ENERGY, INC., a corporation duly organized and validly existing under the laws
of the state of Delaware (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, BANQUE PARIBAS, NATIONSBANK OF TEXAS, 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 Guarantor, Ocean Energy, Inc., a Louisiana 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 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
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 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 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 all promissory notes given in substitution for such
Notes or in modification, renewal,
2
<PAGE>
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 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
3
<PAGE>
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;
(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
4
<PAGE>
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;
(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
5
<PAGE>
(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 Agents and/or the Lenders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 By the Guarantor. 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 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 Letters of Credit 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 constitutes 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 Agents 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
6
<PAGE>
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.
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.
7
<PAGE>
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. 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.
Section 5.05 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 Agents' 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 5.06 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 "Senior Indebtedness" and "Specified Senior Indebtedness" under
and for purposes of the 95 Indenture;
8
<PAGE>
(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; and
(c) this Guaranty Agreement and the obligations of the Guarantor
hereunder are "Senior Indebtedness" and "Designated Senior Indebtedness" under
and for purposes of the 97 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 the 95 Indenture,
the 96 Indenture and the 97 Indenture.
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.
9
<PAGE>
WITNESS THE EXECUTION HEREOF, effective as of the date first written
above.
OCEAN ENERGY, INC., a Delaware
corporation
By: /s/ Jonathan M.Clarkson
----------------------------
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
10
Exhibit 10.5
INTERCREDITOR AGREEMENT
among
OCEAN ENERGY, INC.,
a Delaware corporation,
OCEAN ENERGY, INC.,
a Louisiana corporation,
UMC 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,
BANQUE PARIBAS,
NATIONSBANK OF TEXAS, 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
March 27, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.................................................2
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Section 1.02 Incorporation of U.S. Credit Agreement Definitions..........3
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ARTICLE II
APPLICATION OF PROCEEDS
Section 2.01 Election to Pursue Remedies.................................3
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Section 2.02 Duty of the Paying Agent....................................4
------------------------
Section 2.03 Application of Proceeds.....................................4
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Section 2.04 Payments by Paying Agent....................................5
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Section 2.05 Notices under Related Documents.............................5
-------------------------------
Section 2.06 Amendments..................................................5
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Section 2.07 Pro Rata Treatment..........................................5
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Section 2.08 Voting Procedure............................................6
----------------
Section 2.09 Triggering Event............................................6
----------------
Section 2.10 Bankruptcy Preferences......................................6
----------------------
Section 2.11 Property of Obligors........................................6
--------------------
Section 2.12 Marshalling.................................................6
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Section 2.13 Lender Dealings; Good Faith.................................7
---------------------------
ARTICLE III
CALCULATION OF INDEBTEDNESS
Section 3.01 Notice of Amount of Indebtedness............................7
--------------------------------
Section 3.02 Escrow Account..............................................7
--------------
Section 3.03 Handling of Escrow Account..................................7
--------------------------
Section 3.04 Currency Conversion.........................................8
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ARTICLE IV
THE PAYING AGENT
Section 4.01 Appointment of Paying Agent.................................8
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Section 4.02 Nature of Duties of Paying Agent............................8
--------------------------------
Section 4.03 Lack of Reliance on the Paying Agent........................9
------------------------------------
Section 4.04 Certain Rights of the Paying Agent..........................9
----------------------------------
Section 4.05 Reliance by Paying Agent...................................10
------------------------
Section 4.06 Paying Agent's Reimbursements and Indemnification..........10
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Section 4.07 The Paying Agent in its Individual Capacity................10
-------------------------------------------
Section 4.08 Creditors as Owners........................................10
-------------------
Section 4.09 Successor Paying Agent.....................................10
----------------------
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Section 4.10 Employment of Paying Agent and Counsel......................11
--------------------------------------
Section 4.11 Independent Action..........................................11
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ARTICLE V
MISCELLANEOUS
Section 5.01 Authority...................................................11
---------
Section 5.02 Termination.................................................11
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Section 5.03 Notices, etc................................................11
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Section 5.04 Payment of Expenses, Indemnities, etc.......................12
-------------------------------------
Section 5.05 Applicable Law..............................................12
--------------
Section 5.06 Entire Agreement............................................12
----------------
Section 5.07 Execution in Counterparts...................................12
-------------------------
Section 5.08 Amendment of Defined Instruments............................12
--------------------------------
Section 5.09 References and Titles.......................................12
---------------------
Section 5.10 Severability................................................12
------------
Section 5.11 Conflict with Loan Documents................................13
----------------------------
Section 5.12 Limitation by Law...........................................13
-----------------
Section 5.13 Benefit of Agreement; Limitation on Assignment..............13
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INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT dated as of March 27, 1998 (this
"Agreement"), is among: OCEAN ENERGY, INC., a corporation duly organized and
validly existing under the laws of the state of Delaware ("OEI"); OCEAN ENERGY,
INC., a corporation duly organized and validly existing under the laws of the
state of Louisiana (the "Company"); UMC RESOURCES CANADA LTD., a company
continued under the laws of the Province of British Columbia ("UMC 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 U.S. Lenders (in such capacity, the
"Documentation Agent"), and ABN AMRO BANK, N.V., BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION, BANQUE PARIBAS, NATIONSBANK OF TEXAS, N.A., SOCIETE
GENERALE, SOUTHWEST AGENCY AND WELLS FARGO BANK (TEXAS), N.A., AS CO-AGENTS for
the U.S. Lenders (in such capacity, the "Co-Agents"), THE CHASE MANHATTAN BANK
OF CANADA ("Chase Canada"), as 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, OEI, as guarantor, 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 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, UMC Canada, the
Canadian Agent, and the Canadian Lenders are entering into that certain Credit
Agreement (as the same is from time to time supplemented, amended, restated,
extended, or increased herein called the "Canadian Credit Agreement").
C. To secure, inter alia, the U.S. Indebtedness of the Company under
the U.S. Credit Agreement and the Canadian Indebtedness of UMC 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 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.
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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 UMC 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,
Toronto or Calgary, Alberta.
"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.
"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.
2
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"Notes" shall mean the U.S. Lender Notes and the Canadian Lender Notes.
"Obligors" shall mean OEI, the Company and UMC 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 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
3
<PAGE>
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 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.
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(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. 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).
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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
OEI, the Company or UMC Canada, 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.
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.
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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.
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).
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(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 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 OEI'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 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.
9
<PAGE>
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 UMC 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 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 UMC 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
10
<PAGE>
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.
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
11
<PAGE>
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 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.
12
<PAGE>
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
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.
13
<PAGE>
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:/s/ Russell Johnson
---------------------------------
Russell Johnson
Vice President
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: ---------------------------------
ABN AMRO BANK, N.V., individually and as Co-Agent
By: /s/ Charles W. Randall
--------------------------------
Charles W. Randall
Senior Vice President
By: /s/ Cheryl Lipshutz
---------------------------------
Cheryl Lipshutz
Senior Vice President
14
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, individually and as Co-Agent
By: Illegible Signature
Name:
Title:
BANQUE PARIBAS, individually and as Co-Agent
By: Illegible Signature
Doug Liftman
Vice President
By: Illegible Signature
Barton D. Schouest
Managing Director
NATIONSBANK OF TEXAS, N.A., individually and as
Co-Agent
By: /s/ Paul Squires
---------------------------
Paul Squires
Senior Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY,
individually and as Co-Agent
By: /s/ Richard Erbert
---------------------------
Richard Erbert
Vice President
WELLS FARGO BANK (TEXAS), N.A., individually and
as Co-Agent
By: /s/ J. Alan Alexander
---------------------------
J. Alan Alexander
Vice President
15
<PAGE>
THE CHASE MANHATTAN BANK OF CANADA,
individually and as Canadian Agent
By: /s/ Christine Chan
----------------------------
Christine Chan
Vice President
TORONTO DOMINION BANK
By: Illegible Signature
----------------------------
Name:
----------------------------
Title:
----------------------------
By: Illegible Signature
----------------------------
Name:
----------------------------
Title:
----------------------------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Paying Agent
By: /s/ Russell Johnson
---------------------------
Russell Johnson
Vice President
HIBERNIA NATIONAL BANK
By: /s/ Colleen McEvoy
----------------------------
Colleen McEvoy
Vice President
TORONTO DOMINION (TEXAS) INC.
By: Illegible Signature
----------------------------
Name:
----------------------------
Title:
----------------------------
U.S. BANK NATIONAL ASSOCIATION
By: Illegible Signature
----------------------------
Name:
----------------------------
Title:
----------------------------
16
<PAGE>
BANK ONE, TEXAS, N A.
By: Illegible Signature
----------------------------
Name:
----------------------------
Title:
----------------------------
CREDIT SUISSE FIRST BOSTON
By: Illegible Signature
----------------------------
Name:
----------------------------
Title:
----------------------------
FIRST NATIONAL BANK OF COMMERCE
By: /s/ David R. Reid
----------------------------
David R. Reid
Senior Vice President
BANK OF NEW YORK
By: Illegible Signature
----------------------------
Name:
----------------------------
Title:
----------------------------
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ A. Stephen Kennedy
----------------------------
A. Stephen Kennedy
Vice President/Manager Energy Lending
17
<PAGE>
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: /s/ Jonathan M. Clarkson
--------------------------------
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
18
<PAGE>
UMC RESOURCES CANADA LTD.
By: /s/ Jonthan M. Clarkson
-------------------------------
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
OCEAN ENERGY, INC., a Louisiana corporation
By: /s/ Jonthan M. Clarkson
-------------------------------
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
18
Exhibit 10.6
CREDIT AGREEMENT
Dated as of March 27, 1998
Among
UMC RESOURCES CANADA LTD.,
as the Company,
THE CHASE MANHATTAN BANK OF CANADA,
as Agent,
and
THE LENDERS PARTIES HERETO
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Article I: Definitions and Accounting Matters
<S> <C> <C> <C>
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
-----------------------------------
</TABLE>
<TABLE>
<CAPTION>
Article II: Commitments
<S> <C> <C> <C>
Section 2.01 Loans and Bankers' Acceptances.............................................................5
------------------------------
Section 2.02 Borrowings, Renewals, Conversions, and Issuances...........................................6
------------------------------------------------
Section 2.03 Changes of Commitments.....................................................................8
----------------------
Section 2.04 Commitment Fee and Other Fees..............................................................8
-----------------------------
Section 2.05 Lending Offices............................................................................8
---------------
Section 2.06 Several Obligations........................................................................8
-------------------
Section 2.07 Notes......................................................................................8
-----
Section 2.08 Prepayments................................................................................9
-----------
Section 2.09 Available Canadian Subcommitment..........................................................10
--------------------------------
Section 2.10 Acceptance Date Procedure.................................................................10
-------------------------
Section 2.11 Purchase of Bankers' Acceptances..........................................................10
--------------------------------
Section 2.12 Payment of Bankers' Acceptances...........................................................11
-------------------------------
</TABLE>
<TABLE>
<CAPTION>
Article III: Payments of Principal and Interest
<S> <C> <C> <C>
Section 3.01 Repayment of Loans........................................................................11
Section 3.02 Interest..................................................................................11
Article IV: Payments; Pro Rata Treatment; Computations; Etc.
Section 4.01 Payments..................................................................................12
--------
Section 4.02 Pro Rata Treatment........................................................................12
------------------
Section 4.03 Computations..............................................................................12
------------
Section 4.04 Non-receipt of Funds by the Administrative Agent..........................................13
------------------------------------------------
Section 4.05 Sharing of Payments, Etc..................................................................13
-------------------------
</TABLE>
<TABLE>
<CAPTION>
Article V: Yield Protection and Illegality
<S> <C> <C> <C>
Section 5.01 Additional Costs..........................................................................14
----------------
Section 5.02 Illegality................................................................................15
----------
Section 5.03 Additional Cost in Respect of Tax.........................................................15
---------------------------------
Section 5.04 Base Rate Loans pursuant to Sections 5.01 and 5.02........................................16
--------------------------------------------------
Section 5.05 Compensation..............................................................................16
------------
Section 5.06 Avoidance of Taxes and Additional Costs...................................................16
---------------------------------------
Section 5.07 Limitation on Right to Compensation.......................................................17
-----------------------------------
Section 5.08 Compensation Procedure................................................................17
----------------------
</TABLE>
<TABLE>
<CAPTION>
Article VI: Conditions Precedent
<S> <C> <C> <C>
Section 6.01 Initial Loan or Bankers' Acceptance.......................................................17
-----------------------------------
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
Section 6.02 Subsequent Borrowings.....................................................................18
</TABLE>
<TABLE>
<CAPTION>
Article VII: Representations and Warranties
<S> <C> <C> <C>
Section 7.01 Incorporation By Reference................................................................19
</TABLE>
<TABLE>
<CAPTION>
Article VIII: Affirmative Covenants
<S> <C> <C> <C>
Section 8.01 Incorporation By Reference................................................................19
</TABLE>
<TABLE>
<CAPTION>
Article IX: Negative Covenants
<S> <C> <C> <C>
Section 9.01 Affirmation of Certain Covenants in Article IX of the U. S. Credit Agreement..............20
</TABLE>
<TABLE>
<CAPTION>
Article X: Events of Default
<S> <C> <C> <C>
Section 10.01 Events of Default........................................................................20
</TABLE>
<TABLE>
<CAPTION>
ARTICLE XI: The Administrative Agent
<S> <C> <C> <C>
Section 11.01 Incorporation by Reference...............................................................20
</TABLE>
<TABLE>
<CAPTION>
Article XII: Miscellaneous
<S> <C> <C> <C>
Section 12.01 Incorporation by Reference...............................................................21
--------------------------
Section 12.02 Amendments, Etc..........................................................................21
---------------
Section 12.03 Assignments and Participations...........................................................21
------------------------------
Section 12.04 Survival.................................................................................22
--------
Section 12.05 GOVERNING LAW; SUBMISSION TO JURISDICTION................................................23
------------- --------------------------
Section 12.06 Effectiveness............................................................................23
-------------
Section 12.07 Interpretation of Loan Documents.........................................................23
--------------------------------
</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
ii
<PAGE>
This CREDIT AGREEMENT dated as of March 27, 1998 is among: UMC
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 March 18, 1997, as
amended by that certain First Joint Amendment to Global Credit Agreement and
Credit Agreement (Canada) dated December 3, 1997, (such credit agreement, as
amended, the "Prior Credit Agreement").
B. The Company has requested that the Administrative Agent and the
Lenders refinance the obligations outstanding under 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.
"Aggregate Commitments" at any time shall equal the sum of the
Commitments of all of the Lenders.
1
<PAGE>
"Affected Loans" shall have the meaning assigned to that term in
Section 5.04.
"Agreement" shall mean this Credit Agreement, as amended, supplemented
or modified from time to time.
"Allocated Canadian Borrowing Base" shall mean the amount designated as
such by OEI- Louisiana 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.
"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.
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"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.
"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.
"Initial Funding" shall mean the funding of the initial Borrowing
pursuant to Section 6.01.
"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
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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 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.
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"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 Global Credit Agreement
of even date herewith among OEI-Delaware, as guarantor, OEI-Louisiana, 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, Banque Paribas, NationsBank of Texas, 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 accor dance 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 principal amount at any one time outstanding 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.
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(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
(iii) the Prior Credit Agreement and the commitments
thereunder shall be superseded by this Agreement and such commitments
shall terminate.
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
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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' 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
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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.
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
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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 the outstanding 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.
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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- Louisiana 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 Canadian Borrowing Base shall not, without the prior written
agreement of all the U.S. Lenders, the Lenders and OEI-Louisiana, 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
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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' 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.
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(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, 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
F:\RR0929\OCEAN98\CANADA\CA.007
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days. Any rates of interest not expressed in this Credit 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 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 otherwise) if such payment is rescinded
or must otherwise be restored. The Company agrees that any Lender so purchasing
a participation (or
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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, counterclaim 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 Lenders entitled under this Section 4.05 to share the benefits of any
recovery on such secured claim.
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).
(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.
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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
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
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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 wilful misconduct of a Lender or the 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
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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 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 Initial Loan or Bankers' Acceptance. The obligation of the
Lenders to make the initial Borrowing hereunder 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.
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(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 attached to such certificate are true and complete copies of the
certificate or articles of incorporation and the bylaws of such Guarantor. 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:
(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 to the Initial Funding 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.
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(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 therefor 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).
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 UMC 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.
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,
20
<PAGE>
(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, 12.19 and
12.20 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 effec tive 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, 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
21
<PAGE>
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 determined 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.
(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 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.
22
<PAGE>
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) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES OR ANY OTHER
LOAN DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT AND AGREES THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
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]
23
<PAGE>
The parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
COMPANY:
UMC RESOURCES CANADA LTD.
By: /s/ Jonathan M. Clarkson
----------------------------
Jonathan M. Clarkson
Executive 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: /s/ Christine Chan
------------------------------
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, N.A.
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: /s/ Christine Chan
------------------------------
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
<PAGE>
EXHIBIT A
FORM OF NOTE
$________________ ______________, 199__
FOR VALUE RECEIVED, UMC RESOURCES CANADA LTD., a company continued
under the laws of the Province of British Columbia (the "Company"), hereby
promises to pay to the order of ___________________ (the "Lender"), for the
account of its Applicable Lending Office as provided for by the Credit Agreement
(as hereinafter defined), at the Principal Office of The Chase Manhattan Bank of
Canada, as Administrative Agent, the principal sum of
_____________________________ ____________________ ($__________) (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 Credit Agreement dated
as of March 27, 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.
S-4
<PAGE>
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE PROVINCE OF ALBERTA, CANADA.
UMC RESOURCES CANADA LTD.
By:
---------------------
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
S-5
<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 Credit Agreement dated as of March
27, 1998 among UMC 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 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).
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
C-1
<PAGE>
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.
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:
-------------------------------------
C-2
<PAGE>
APPROVED:
UMC 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>
Assignor:
<S> <C> <C>
Total Commitment of Assignor Prior to Effective Date: $______________
Total Commitment of Assignor After Effective Date: $______________
</TABLE>
<TABLE>
<CAPTION>
Assignee:
<S> <C> <C>
Total Commitment of Assignee Prior to Effective Date: $______________
Total Commitment of Assignee After Effective Date: $______________
</TABLE>
Effective Date of Assignment: , 199
Amount of Total Commitment Assigned: $
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:________________
SI-1
<PAGE>
EXHIBIT D
[FORM OF]
BORROWING, RENEWAL AND CONVERSION REQUEST
_____________________, 199__
UMC Resources Canada Ltd., a company continued under the laws of the
Province of British Columbia (the "Company"), pursuant to the Credit Agreement
dated as of March 27, 1998 among the Company, The Chase Manhattan Bank of
Canada, as Administrative Agent, and the lenders parties thereto (such 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 ______________________.
D-1
<PAGE>
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 Company is entitled to receive the requested
Borrowing, continuation or conversion under the terms and conditions of the
Credit Agreement.
UMC RESOURCES CANADA, LTD.
By:
------------------------
Name:
------------------------
Title:
------------------------
D-2
Exhibit 10.7
GUARANTY AGREEMENT
Dated as of March 27, 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 Survival of Obligations.....................................8
-----------------------
Section 5.06 Subject to the Intercreditor Agreement......................8
--------------------------------------
Section 5.07 Status as Specified or Designated Senior Indebtedness.......8
-----------------------------------------------------
i
<PAGE>
GUARANTY AGREEMENT
This GUARANTY AGREEMENT dated as of March 27, 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. UMC 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 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 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
Global Credit Agreement dated of even date herewith among Guarantor, Ocean
Energy, Inc., a Louisiana corporation, 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,
BANQUE PARIBAS, NATIONSBANK OF TEXAS, 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 Commit ments 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
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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 assur ance 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
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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 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 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 5.06 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 U.S. 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 "Senior Indebtedness" and "Specified Senior Indebtedness" under
and for purposes of the 95 Indenture;
(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; and
(c) this Guaranty Agreement and the obligations of the Guarantor
hereunder are "Senior Indebtedness" and "Designated Senior Indebtedness" under
and for purposes of the 97 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 the 95 Indenture,
the 96 Indenture and the 97 Indenture.
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WITNESS THE EXECUTION HEREOF, effective as of the date first written
above.
OCEAN ENERGY, INC., a Delaware corporation
By: /s/ Jonathan M. Clarkson
-----------------------------
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
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Exhibit 10.8
GUARANTY AGREEMENT
Dated as of March 27, 1998
by
OCEAN ENERGY, INC.,
a Louisiana 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 the 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................................................6
-----------------
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.....................................................7
------------
Section 5.05 Survival of Obligations..........................................7
-----------------------
Section 5.06 Subject to the Intercreditor Agreement...........................8
--------------------------------------
Section 5.07 Status as Specified Guarantor Senior Indebtedness
-------------------------------------------------
or Designated Guarantor Senior Indebtedness......................8
-------------------------------------------
i
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GUARANTY AGREEMENT
This GUARANTY AGREEMENT dated as of March 27, 1998 is by OCEAN
ENERGY, INC., a corporation duly organized and validly existing under the laws
of the state of Louisiana ("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. UMC Resources Canada Ltd., a company amalgamated under the laws of
the Province of British Columbia (the "Company"), the Administrative Agent and
the Lenders have executed that certain 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 the 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 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
1
<PAGE>
payable to or incurred by 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
Global Credit Agreement dated of even date herewith among Guarantor, Ocean
Energy, Inc., a Delaware corporation, 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, BANQUE
PARIBAS, NATIONSBANK OF TEXAS, 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 Commit ments 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
2
<PAGE>
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
3
<PAGE>
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 assur ance 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;
4
<PAGE>
(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
5
<PAGE>
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 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
6
<PAGE>
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.
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 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
7
<PAGE>
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 5.06 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 U.S. 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 Guarantor Senior Indebtedness or
Designated Guarantor 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;
(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; and
(c) 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 97 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 the 95 Indenture, the 96 Indenture and the 97 Indenture.
8
<PAGE>
WITNESS THE EXECUTION HEREOF, effective as of the date first written
above.
OCEAN ENERGY, INC., a Louisiana corporation
By: /s/ Jonathan M. Clarkson
------------------------------
Jonathan M. Clarkson
Executive Vice President
Chief Financial Officer
Exhibit 10.9
================================================================================
OCEAN ENERGY, INC.,
a Delaware corporation,
as Issuer,
OCEAN ENERGY, INC.,
a Louisiana corporation,
as Subsidiary Guarantor,
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
--------------------
THIRD SUPPLEMENTAL INDENTURE
Dated as of March 27, 1998
to
INDENTURE
Dated as of December 1, 1994
--------------------
13 1/2% Senior Notes due 2004
================================================================================
<PAGE>
THIRD SUPPLEMENTAL INDENTURE
THIRD SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of March 27, 1998, by and among Ocean Energy, Inc., a Delaware corporation (the
"Company"), Ocean Energy, Inc., a Louisiana corporation and wholly owned
subsidiary of the Company ("OEI Sub"), and State Street Bank and Trust Company,
as trustee (the "Trustee").
RECITALS
WHEREAS, the Company, as issuer, and OEI Sub, as subsidiary guarantor,
have heretofore executed and delivered to the Trustee an Indenture, dated as of
December 1, 1994, as supplemented by the First Supplemental Indenture, dated as
of September 19, 1996, among the Company, OEI Sub and Fleet National Bank
(formerly known as Shawmut Bank Connecticut, National Association) and the
Second Supplemental Indenture, dated as of July 14, 1997, among the Company, OEI
Sub and the Trustee, as successor in interest to Fleet National Bank (the
"Indenture"), providing for the issuance of an aggregate principal amount of
$125,000,000 of 13 1/2% Senior Notes due 2004 (the "Notes"); and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger, dated as of December 22, 1997, as amended by Amendment No. 1 thereto,
dated as of January 7, 1998, and Amendment No. 2 thereto, dated as of February
20, 1998 (as amended, the "Merger Agreement"), among OEI Holding Corporation, a
Delaware corporation, United Meridian Corporation, a Delaware corporation
("UMC"), and the Company, UMC has merged (the "Merger") with and into the
Company, with the Company as the surviving entity; and
WHEREAS, pursuant to Section 8.1(e) of the Indenture, OEI Sub is, upon
the occurrence of the Merger, required to execute a supplemental indenture
confirming that its Subsidiary Guarantee shall apply to the obligations of the
Company under the Indenture and the Securities; and
WHEREAS, pursuant to Section 9.1(e) of the Indenture, the Company, the
Subsidiary Guarantors and the Trustee may enter into one or more supplemental
indentures without the consent of any Holders to make any provisions with
respect to matters or questions arising under the Indenture; provided that such
action shall not adversely affect the interests of the Holders in any material
respect.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, OEI Sub and the Trustee mutually covenant and agree for the equal and
ratable benefit of the Holders as follows:
1. Definitions. Capitalized terms used herein without definition shall
have the meanings assigned to them in the Indenture. For all purposes of this
Supplemental Indenture, except as otherwise herein expressly provided or unless
the context otherwise requires, the words "herein," "hereof" and "hereby" and
other words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.
<PAGE>
2. Confirmation of Guarantee by OEI Sub. OEI Sub hereby expressly
confirms that, after the consummation of the Merger, its Subsidiary Guarantee
set forth in Article XIII of the Indenture and in a notation to the Securities
shall apply to the obligations of the Company set forth in the Indenture and the
Securities. Such Subsidiary Guarantee includes, without limitation, (i) the full
and prompt performance of the Company's obligations under the Indenture, and
(ii) the prompt payment in full of principal of (premium, if any, on) and
interest on the Securities when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
upon the Securities, if any, to the extent lawful, and all other obligations of
the Company to the Holders or the Trustee under the Indenture or under the
Securities, all in accordance with the terms of the Indenture and the
Securities.
3. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder heretofore or hereafter
authenticated and delivered shall be bound hereby.
4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
5. Trustee Makes No Representation. The Trustee makes no representation
as to the validity or sufficiency of this Supplemental Indenture.
6. 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.
7. Effect of Headings. The Section headings herein are for convenience
only and shall not effect the construction thereof.
[signature page follows]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
OCEAN ENERGY, INC., a Delaware corporation
By: /s/ Robert L. Belk
------------------------------
Name: Robert L. Belk
Title: Executive Vice President
- Administration
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ E.C. Hammer
-------------------------------
Name: ELIZABETH C. HAMMER
-------------------------------
Title: VICE PRESIDENT
-------------------------------
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By: /s/ Robert L. Belk
-------------------------------
Name: Robert L. Belk
Title: Executive Vice President
- Administration
Exhibit 10.10
================================================================================
OCEAN ENERGY, INC.,
a Delaware corporation,
as Issuer,
OCEAN ENERGY, INC.,
a Louisiana corporation,
as Subsidiary Guarantor,
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
--------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of March 27, 1998
to
INDENTURE
Dated as of September 26, 1996
--------------------
9 3/4% Senior Subordinated Notes due 2006
================================================================================
<PAGE>
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of March 27, 1998, by and among Ocean Energy, Inc., a Delaware corporation (the
"Company"), Ocean Energy, Inc., a Louisiana corporation and wholly owned
subsidiary of the Company ("OEI Sub"), and State Street Bank and Trust Company,
as successor trustee to Fleet National Bank (the "Trustee").
RECITALS
WHEREAS, the Company, as issuer, and OEI Sub, as subsidiary guarantor,
have heretofore executed and delivered to the Trustee an Indenture, dated as of
September 26, 1996 (the "Indenture"), providing for the issuance of an aggregate
principal amount of $160,000,000 of 9- 3/4% Senior Subordinated Notes due 2006
(the "Notes"); and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger, dated as of December 22, 1997, as amended by Amendment No. 1 thereto,
dated as of January 7, 1998, and Amendment No. 2 thereto, dated as of February
20, 1998 (as amended, the "Merger Agreement"), among OEI Holding Corporation, a
Delaware corporation, United Meridian Corporation, a Delaware corporation
("UMC"), and the Company, UMC has merged (the "Merger") with and into the
Company, with the Company as the surviving entity; and
WHEREAS, pursuant to Section 8.1(e) of the Indenture, OEI Sub is, upon
the occurrence of the Merger, required to execute a supplemental indenture
confirming that its Subsidiary Guarantee shall apply to the obligations of the
Company under the Indenture and the Securities; and
WHEREAS, pursuant to Section 9.1(e) of the Indenture, the Company, the
Subsidiary Guarantors and the Trustee may enter into one or more supplemental
indentures without the consent of any Holders to make any provisions with
respect to matters or questions arising under the Indenture; provided that such
action shall not adversely affect the interests of the Holders in any material
respect.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, OEI Sub and the Trustee mutually covenant and agree for the equal and
ratable benefit of the Holders as follows:
1. Definitions. Capitalized terms used herein without definition shall
have the meanings assigned to them in the Indenture. For all purposes of this
Supplemental Indenture, except as otherwise herein expressly provided or unless
the context otherwise requires, the words "herein," "hereof" and "hereby" and
other words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.
<PAGE>
2. Confirmation of Guarantee by OEI Sub. OEI Sub hereby expressly
confirms that, after the consummation of the Merger, its Subsidiary Guarantee
set forth in Article XIII of the Indenture and in a notation to the Securities
shall apply to the obligations of the Company set forth in the Indenture and the
Securities. Such Subsidiary Guarantee includes, without limitation, (i) the full
and prompt performance of the Company's obligations under the Indenture, and
(ii) the prompt payment in full of principal of (premium, if any, on) and
interest on the Securities when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
upon the Securities, if any, to the extent lawful, and all other obligations of
the Company to the Holders or the Trustee under the Indenture or under the
Securities, all in accordance with the terms of the Indenture and the
Securities.
3. Designation of Unrestricted Subsidiaries. The Company's Board of
Directors has designated Havre Pipeline Company, LLC, an indirect Subsidiary of
the Company, and Lion GPL, S.A., an indirect Subsidiary of the Company, to be
"Unrestricted Subsidiaries" under the Indenture. The Company hereby files with
the Trustee the Board Resolution giving effect to such designations, which is
attached hereto as Exhibit A.
4. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder heretofore or hereafter
authenticated and delivered shall be bound hereby.
5. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
6. Trustee Makes No Representation. The Trustee makes no representation
as to the validity or sufficiency of this Supplemental Indenture.
7. 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.
8. Effect of Headings. The Section headings herein are for convenience
only and shall not effect the construction thereof.
[signature page follows]
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
OCEAN ENERGY, INC., a Delaware corporation
By: /s/ Robert L. Belk
-------------------------------------
Name: Robert L. Belk
Title: Executive Vice President - Administration
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ E.C. Hammer
--------------------------------------
Name: Elizabeth C. Hammer
Title Vice President
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By: /s/ Robert L. Belk
--------------------------------------
Name: Robert L. Belk
Title: Executive Vice President - Administration
-3-
<PAGE>
EXHIBIT A
Board Resolution
-4-
Exhibit 10.11
================================================================================
OCEAN ENERGY, INC.,
a Delaware corporation,
as Issuer,
OCEAN ENERGY, INC.,
a Louisiana corporation,
as Subsidiary Guarantor,
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
--------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of March 27, 1998
to
INDENTURE
Dated as of July 2, 1997
--------------------
8 7/8% Senior Subordinated Notes due 2007
================================================================================
<PAGE>
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of March 27, 1998, by and among Ocean Energy, Inc., a Delaware corporation (the
"Company"), Ocean Energy, Inc., a Louisiana corporation and wholly owned
subsidiary of the Company ("OEI Sub"), and State Street Bank and Trust Company,
as trustee (the "Trustee").
RECITALS
WHEREAS, the Company, as issuer, and OEI Sub, as subsidiary guarantor,
have heretofore executed and delivered to the Trustee an Indenture, dated as of
July 2, 1997 (the "Indenture"), providing for the issuance of an aggregate
principal amount of $200,000,000 of 8 7/8% Senior Subordinated Notes due 2007
(the "Notes"); and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger, dated as of December 22, 1997, as amended by Amendment No. 1 thereto,
dated as of January 7, 1998, and Amendment No. 2 thereto, dated as of February
20, 1998 (as amended, the "Merger Agreement"), among OEI Holding Corporation, a
Delaware corporation, United Meridian Corporation, a Delaware corporation
("UMC"), and the Company, UMC has merged (the "Merger") with and into the
Company, with the Company as the surviving entity; and
WHEREAS, pursuant to Section 8.1(e) of the Indenture, OEI Sub is, upon
the occurrence of the Merger, required to execute a supplemental indenture
confirming that its Subsidiary Guarantee shall apply to the obligations of the
Company under the Indenture and the Securities; and
WHEREAS, pursuant to Section 9.1(e) of the Indenture, the Company, the
Subsidiary Guarantors and the Trustee may enter into one or more supplemental
indentures without the consent of any Holders to make any provisions with
respect to matters or questions arising under the Indenture; provided that such
action shall not adversely affect the interests of the Holders in any material
respect.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, OEI Sub and the Trustee mutually covenant and agree for the equal and
ratable benefit of the Holders as follows:
1. Definitions. Capitalized terms used herein without definition shall
have the meanings assigned to them in the Indenture. For all purposes of this
Supplemental Indenture, except as otherwise herein expressly provided or unless
the context otherwise requires, the words "herein," "hereof" and "hereby" and
other words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.
2. Confirmation of Guarantee by OEI Sub. OEI Sub hereby expressly
confirms that, after the consummation of the Merger, its Subsidiary Guarantee
set forth in Article XIII of the
<PAGE>
Indenture and in a notation to the Securities shall apply to the obligations of
the Company set forth in the Indenture and the Securities. Such Subsidiary
Guarantee includes, without limitation, (i) the full and prompt performance of
the Company's obligations under the Indenture, and (ii) the prompt payment in
full of principal of (premium, if any, on) and interest on the Securities when
due, whether at maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest upon the Securities, if any, to the
extent lawful, and all other obligations of the Company to the Holders or the
Trustee under the Indenture or under the Securities, all in accordance with the
terms of the Indenture and the Securities.
3. Designation of Unrestricted Subsidiaries. The Company's Board of
Directors has designated Havre Pipeline Company, LLC, an indirect Subsidiary of
the Company, and Lion GPL, S.A., an indirect Subsidiary of the Company, to be
"Unrestricted Subsidiaries" under the Indenture. The Company hereby files with
the Trustee the Board Resolution giving effect to such designations, which is
attached hereto as Exhibit A.
4. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder heretofore or hereafter
authenticated and delivered shall be bound hereby.
5. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
6. Trustee Makes No Representation. The Trustee makes no representation
as to the validity or sufficiency of this Supplemental Indenture.
7. 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.
8. Effect of Headings. The Section headings herein are for convenience
only and shall not effect the construction thereof.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
OCEAN ENERGY, INC., a Delaware corporation
By: /s/ Robert L. Belk
-------------------------------------
Name: Robert L. Belk
Title: Executive Vice President - Administration
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ E. C. Hammer
--------------------------------------
Name: Elizabeth C. Hammer
Title: Vice President
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By: /s/ Robert L. Belk
--------------------------------------
Name: Robert L. Belk
Title: Executive Vice President - Administration
-3-
Exhibit 10.12
================================================================================
OCEAN ENERGY, INC.,
a Delaware corporation,
successor by merger to
UNITED MERIDIAN CORPORATION,
as Issuer,
OCEAN ENERGY, INC.,
a Louisiana corporation,
successor by merger to
UMC PETROLEUM CORPORATION,
a Delaware corporation,
as Subsidiary Guarantor,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
--------------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of March 27, 1998
to
INDENTURE
Dated as of October 30, 1995
--------------------
10.375% Senior Subordinated Notes due 2005
================================================================================
<PAGE>
SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of March 27, 1998, by and among Ocean Energy, Inc., a Delaware corporation (the
"Company"), as successor by merger to United Meridian Corporation, a Delaware
corporation ("UMC"), Ocean Energy, Inc., a Louisiana corporation and wholly
owned subsidiary of the Company ("OEI Sub"), as successor by merger to UMC
Petroleum Corporation, a Delaware corporation ("UMC Sub"), and U.S. Bank Trust
National Association, formerly known as First Trust of New York, National
Association, as trustee (the "Trustee").
RECITALS
WHEREAS, UMC, as issuer, and UMC Sub, as subsidiary guarantor, have
heretofore executed and delivered to the Trustee an Indenture, dated as of
October 30, 1995, as supplemented by the First Supplemental Indenture, among
UMC, UMC Sub and First Trust of New York, National Association, successor to
Bank of Montreal Trust Company, as Trustee, dated as of November 4, 1997 (the
"Indenture"), providing for the issuance of an aggregate principal amount of
$150,000,000 of 10.375% Senior Subordinated Notes due 2005 (the "Notes"); and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger, dated as of December 22, 1997, as amended by Amendment No. 1 thereto,
dated as of January 7, 1998, and Amendment No. 2 thereto, dated as of February
20, 1998 (as amended, the "Merger Agreement"), among OEI Holding Corporation, a
Delaware corporation, UMC, and the Company, UMC has merged (the "Merger") with
and into the Company, with the Company as the surviving entity; and
WHEREAS, in connection with the Merger, UMC Sub has merged with and
into OEI Sub, with OEI Sub as the surviving corporation (the "Sub Merger" and,
together with the Merger, the "Mergers"); and
WHEREAS, pursuant to the Section 6.18 of the Merger Agreement, the
Company has assumed all of the obligations of UMC under the Indenture, as
permitted under Section 8.1 thereof; and
WHEREAS, pursuant to the Sub Merger, OEI Sub has assumed UMC Sub's
obligations under the Indenture, as permitted by Section 13.2(b) thereof; and
WHEREAS, pursuant to Section 9.1(a) and 9.1(g) of the Indenture, the
Company, the Subsidiary Guarantors and the Trustee may enter into one or more
supplemental indentures without the consent of any holders of the Notes (the
"Holders") to evidence succession of another Person to the Company or any
Subsidiary Guarantor and the assumption by any such successor of, respectively,
the covenants of the Company contained in the Indenture and in the Securities or
of the covenants and agreements of such Subsidiary Guarantor contained in the
Indenture, the Securities and the Subsidiary Guarantee of such Subsidiary
Guarantor.
-1-
<PAGE>
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, OEI Sub and the Trustee mutually covenant and agree for the equal and
ratable benefit of the Holders as follows:
1. Definitions. Capitalized terms used herein without definition shall have
the meanings assigned to them in the Indenture. For all purposes of this
Supplemental Indenture, except as otherwise herein expressly provided or unless
the context otherwise requires, the words "herein," "hereof" and "hereby" and
other words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.
2. Assumption by the Company. The Company hereby (i) expressly assumes
all of the covenants and other obligations of UMC under the Securities and the
Indenture, and (ii) succeeds to, and becomes substituted for, and may exercise
every right and power of, UMC under the Indenture with the same effect as if the
Company had originally been named as the issuer of the Securities under the
Indenture.
3. Assumption by OEI Sub. OEI Sub hereby expressly assumes (i) UMC Sub's
Subsidiary Guarantee set forth in Article XIII of the Indenture and in a
notation to the Securities, (ii) the due and punctual performance and observance
of all of the covenants and conditions of the Indenture to be performed by UMC
Sub, and (iii) all covenants and agreements of UMC Sub contained in the
Indenture, in the Securities and in the Subsidiary Guarantee of UMC Sub.
4. Change of Corporate Name. Any and all references in the Indenture to
UNITED MERIDIAN CORPORATION or the "Company," shall be deemed henceforth to
refer to OCEAN ENERGY, INC., a Delaware corporation, and any and all references
in the Indenture to UMC PETROLEUM CORPORATION shall be deemed henceforth to
refer to OCEAN ENERGY, INC., a Louisiana corporation.
5. Designation of Unrestricted Subsidiaries. The Company's Board of
Directors has designated Havre Pipeline Company, LLC, an indirect Subsidiary of
the Company, and Lion GPL, S.A., an indirect Subsidiary of the Company, to be
"Unrestricted Subsidiaries" under the Indenture. The Company hereby files with
the Trustee the Board Resolution giving effect to such designations, which is
attached hereto as Exhibit A.
6. Ratification of Indenture; Supplemental Indentures Part of Indenture.
Except as expressly amended hereby, the Indenture is in all respects ratified
and confirmed and all the terms, conditions and provisions thereof shall remain
in full force and effect. This Supplemental Indenture shall form a part of the
Indenture for all purposes, and every Holder heretofore or hereafter
authenticated and delivered shall be bound hereby.
7. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
-2-
<PAGE>
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
8. Trustee Makes No Representation. The Trustee makes no representation as
to the validity or sufficiency of this Supplemental Indenture.
9. 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.
10. Effect of Headings. The Section headings herein are for convenience
only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
OCEAN ENERGY, INC., a Delaware corporation
By: /s/ Robert L. Belk
------------------------------
Name: Robert L. Belk
Title: Executive Vice President - Administration
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
By: /s/ Gretchen L Middents
--------------------------------
Name: GRETCHEN L MIDDENTS
--------------------------------
Title ASSISTANT VICE PRESIDENT
--------------------------------
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By: /s/ Robert L. Belk
--------------------------------
Name: Robert L. Belk
Title: Executive Vice President - Administration
-3-
Exhibit 99.1
CERTIFICATE OF INCORPORATION
of
FLORES & RUCKS, INC.
The undersigned person, acting as sole incorporator of the
Corporation pursuant to the General Corporation Law of the State of Delaware,
does hereby make this Certificate of Incorporation for such Corporation,
declaring and certifying that this is my act and deed and that the facts herein
stated are true:
1. The name of the Corporation is Flores & Rucks, Inc.
2. The address of its registered office in the State of Delaware is
1209 Orange Street, Wilmington, County of New Castle, Delaware 19801. The name
of its registered agent at such address is The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Laws of the State of Delaware.
4. The total number of shares of stock which the Corporation shall have
authority to issue is one hundred ten million (110,000,000), consisting of ten
million (10,000,000) shares of preferred stock, par value $.01 per share
(hereinafter called "Preferred Stock"), and one hundred million (100,000,000)
shares of common stock, par value $.01 per share (hereinafter called "Common
Stock").
(a) The Preferred Stock may be issued from time to time in one
or more series and in such amounts as may be determined by the Board of
Directors. The voting powers, designations, preferences and relative,
participating, optional or other special rights, if any, and the
qualifications, limitations or restrictions thereof, if any, of the
Preferred Stock of each series shall be such as are fixed by the Board
of Directors, authority so to do being hereby expressly granted, and as
are stated and expressed in a resolution or resolutions adopted by the
Board of Directors providing for the issue of such series of Preferred
Stock (herein called the "Directors' Resolution"). The Directors'
Resolution as to any series shall (1) designate the series, (2) fix the
dividend rate, if any, of such series, establish whether dividends
shall be cumulative or non-cumulative, fix the payment dates for
dividends on shares of such series and the date or dates, or the method
of determining the date or dates, if any, from which dividends on
shares of such series shall be cumulative, (3) fix the amount or
amounts payable on shares of such series upon voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, and (4) state the price or prices or rate or rates, and
adjustments, if any, at which, the time or times and the terms and
conditions upon which, the shares of such series may be redeemed at the
option of the
-1-
<PAGE>
Corporation or at the option of the holder or holders of shares of such
series or upon the occurrence of a specified event, and state whether
such shares may be redeemed for cash, property or rights, including
securities of the Corporation or another entity; and such Directors'
Resolutions may (i) limit the number of shares of such series that may
be issued, (ii) provide for a sinking fund for the purchase or
redemption of shares of such series and specify the terms and
conditions governing the operations of any such fund, (iii) grant
voting rights to the holders of shares of such series, (iv) impose
conditions or restrictions upon the creation of indebtedness of the
Corporation or upon the issuance of additional Preferred Stock or other
capital stock ranking on a parity therewith, or prior thereto, with
respect to dividends or distributions of assets upon liquidation, (v)
impose conditions or restrictions upon the payment of dividends upon,
or the making of other distributions to, or the acquisition of, shares
ranking junior to the Preferred Stock or to any series thereof with
respect to dividends or distributions of assets upon liquidation, (vi)
state the time or times, the price or prices or the rate or rates of
exchange and other terms, conditions and adjustments upon which shares
of any such series may be made convertible into, or exchangeable for,
at the option of the holder or the Corporation or upon the occurrence
of a specified event, shares of any other class or classes or of any
other series of Preferred Stock or any other class or classes of stock
or other securities of the Corporation, and (vii) grant such other
special rights and impose such qualifications, limitations or
restrictions thereon as shall be fixed by the Board of Directors, to
the extent not inconsistent with this Section 4 and to the full extent
now or hereafter permitted by the laws of the State of Delaware.
Except as by law expressly provided, or except as may
be provided in any Directors' Resolution, the Preferred Stock shall
have no right or power to vote on any question or in any proceeding or
to be represented at, or to receive notice of, any meeting of
stockholders of the Corporation.
Preferred Stock that is redeemed, purchased or
retired by the Corporation shall assume the status of authorized but
unissued Preferred Stock and may thereafter, subject to the provisions
of any Directors' Resolution providing for the issue of any particular
series of Preferred Stock, be reissued in the same manner as authorized
but unissued Preferred Stock.
(b) All shares of Common Stock shall be identical and except
as otherwise required by law or as otherwise provided in the resolution
or resolutions, if any, adopted by the Board of Directors with respect
to any series of Preferred Stock, the holders of the Common Stock shall
exclusively possess all voting power, and each share of Common Stock
shall have one vote.
(c) The Corporation shall be entitled to treat the person in
whose name any share of its stock is registered as the owner thereof
for all purposes and shall not be bound to recognize any equitable or
other claim to, or interest in, such share on the part of any other
-2-
<PAGE>
person, whether or not the Corporation shall have notice thereof,
except as expressly provided by applicable laws.
5. The Board of Directors is hereby authorized to create and issue,
whether or not in connection with the issuance and sale of any of its stock or
other securities, rights (the "Rights") entitling the holders thereof to
purchase from the Corporation shares of capital stock or other securities. The
times at which and the terms upon which the Rights are to be issued will be
determined by the Board of Directors and set forth in the contracts or
instruments that evidence the Rights. The authority of the Board of Directors
with respect to the Rights shall include, but not be limited to, determination
of the following:
(a) The initial purchase price per share of the capital stock
or other securities of the Corporation to be purchased upon exercise of
the Rights;
(b) Provisions relating to the times at which and the
circumstances under which the Rights may be exercised or sold or
otherwise transferred, either together with or separately from, any
other securities of the Corporation;
(c) Provisions that adjust the number or exercise price of the
Rights or amount or nature of the securities or other property
receivable upon exercise of the Rights in the event of a combination,
split or recapitalization of any capital stock of the Corporation, a
change in ownership of the Corporation's securities or a
reorganization, merger, consolidation, sale of assets or other
occurrence relating to the Corporation or any capital stock of the
Corporation, and provisions restricting the ability of the Corporation
to enter into any such transaction absent an assumption by the other
party or parties thereto of the obligations of the Corporation under
such Rights;
(d) Provisions that deny the holder of a specified percentage
of the outstanding securities of the Corporation the right to exercise
the Rights and/or cause the Rights held by such holder to become void;
(e) Provisions that permit the Corporation to redeem the
Rights; and
(f) The appointment of a Rights Agent with respect to the
Rights;
and such other provisions relating to the Rights as may be
determined by the Board of Directors.
6. No holder of stock of the Corporation shall be entitled as a right
to purchase or subscribe for any part of any unissued stock of the Corporation
or any additional stock to be issued by reason of any increase of the authorized
capital stock of the Corporation, or any bonds, certificates of indebtedness,
debentures or other securities convertible into stock or such additional
authorized issue of new stock, but rather such stock, bonds, certificates of
indebtedness, debentures
-3-
<PAGE>
and other securities may be issued and disposed of pursuant to resolution of the
Board of Directors to such persons, firms, corporations or associations, and
upon such terms as may be deemed advisable by the Board of Directors in the
exercise of their discretion.
7. The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and for
creating, defining, limiting and regulating the powers of the Corporation, the
directors and the stockholders.
(a) Subject to any limitation contained in the bylaws, the
Board of Directors may make bylaws, and from time to time may alter,
amend or repeal any bylaws, but any bylaws made by the Board of
Directors may be altered, amended or repealed by the stockholders at
any meeting of stockholders by the affirmative vote of the holders of
at least 66 2/3% of the outstanding shares entitled to vote thereon,
provided notice that an amendment is to be considered and acted upon is
inserted in the notice or waiver of notice of such meeting.
(b) Any vote or votes authorizing liquidation of the
Corporation or proceedings for its dissolution may provide, subject to
(i) any agreements among and between stockholders, (ii) the rights of
creditors and (iii) rights expressly provided for particular classes or
series of stocks, for the distribution pro rata among the stockholders
of the Corporation of assets of the Corporation, wholly or in part in
kind, whether such assets be in cash or other property, and may
authorize the Board of Directors of the Corporation to determine the
value of the different assets of the Corporation for the purpose of
such liquidation and may divide, or authorize the Board of Directors of
the Corporation to divide, such assets or any part thereof among the
stockholders of the Corporation in such manner that every stockholder
will receive a proportionate amount in value (determined as aforesaid)
of cash or property of the Corporation upon such liquidation or
dissolution even though each stockholder may not receive a strictly
proportionate part of each such asset.
(c) The Corporation shall, to the maximum extent permitted
from time to time under the General Corporation Law of the State of
Delaware, indemnify and upon request shall advance expenses to any
person who is or was a party or is threatened to be made a party to any
threatened, pending or completed action, suit, proceeding or claim,
whether civil, criminal, administrative or investigative, by reason of
the fact that he is or was or has agreed to be a director or officer of
the Corporation, or while a director or officer is or was serving at
the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit
plans, against expenses (including attorneys' fees and expenses),
judgments, fines, penalties and amounts paid in settlement or incurred
in connection with the investigation, preparation to defend or defense
of such action, suit, proceeding, claim or counterclaim initiated by or
on behalf of such person. Such indemnification shall not be exclusive
of other indemnification rights arising under any bylaw, agreement,
vote of directors or stockholders or otherwise and shall inure to the
benefit of the heirs and legal representatives of such person. Any
repeal or modification of the foregoing provisions of
-4-
<PAGE>
this Section 7(c) shall not adversely affect any right or protection of
a director or officer of the Corporation existing at the time of such
repeal or modification.
(d) A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived
an improper personal benefit. If the General Corporation Law of the
State of Delaware is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the General Corporation Law
of the State of Delaware, as so amended. Any repeal or modification of
this Section by the stockholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the
time of such repeal or modification.
8. Subject to the rights of the holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation to
elect additional directors under specific circumstances:
(a) any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called
annual or special meeting of stockholders of the Corporation and may
not be effected by any consent in writing of such stockholders;
(b) special meetings of the stockholders of the Corporation
may be called only by the Chairman of the Board of Directors and shall
be called within ten (10) days after receipt of the written request of
the Board of Directors, pursuant to a resolution approved by a majority
of the whole Board of Directors; and
(c) the business permitted to be conducted at any special
meeting of the stockholders is limited to the business brought before
the meeting by the Chairman or by the Secretary at the request of a
majority of the Board of Directors.
9. The number of directors which shall constitute the whole board shall
be such as from time to time shall be fixed by, or in the manner provided in,
the bylaws, but in no case shall the number be less than two nor more than 15.
The names and the addresses of the persons who are to serve as the initial
directors of the Corporation until the first annual meeting of stockholders or
until their successors are elected or qualified are:
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James C. Flores 8440 Jefferson Highway, Suite 420
Baton Rouge, LA 70809
William W. Rucks, IV 500 Dover Boulevard, Suite 300
Lafayette, LA 70503
The directors shall be classified with respect to the time for
which they shall severally hold office by dividing them into three classes,
which classes shall consist of an equal, or as near to equal as possible, number
of directors. At the 1995 annual meeting of stockholders, the director or
directors of the first class shall be elected for a term expiring at the next
annual meeting of stockholders to be held in 1996; the director or directors of
the second class for a term expiring at the annual meeting to be held in 1997;
and the director or directors of the third class for a term expiring at the
annual meeting to be held in 1998. At each annual meeting, commencing with the
annual meeting in 1996, the successor or successors to the class of directors
whose term shall expire in that year shall be elected to hold office for the
term of three years, so that the term of office of one class of directors shall
expire in each year. Any increase or decrease in the number of directors
constituting the Board shall be apportioned among the classes so as to maintain
the number of directors in each class as near as possible to one-third the whole
number of directors as so adjusted. Any director elected or appointed to fill a
vacancy shall hold office for the remaining term of the class to which such
directorship is assigned. No decrease in the number of directors constituting
the Corporation's Board of Directors shall shorten the term of any incumbent
director. Any vacancy in the Board of Directors, whether arising through death,
resignation or removal of a director, or through an increase in the number of
directors of any class, shall be filled by the majority vote of the remaining
directors. The bylaws may contain any provision regarding classification of the
Corporation's directors not inconsistent with the terms hereof. The right to
cumulate votes in the election of directors is expressly prohibited.
A director of the Corporation may be removed only for cause
and only upon the affirmative vote of the holders of a majority of the
outstanding capital stock of the Corporation entitled to vote at an election of
directors, subject to further restrictions on removal, not inconsistent with
this Section 9, as may be contained in the bylaws.
Notwithstanding the foregoing, whenever the holders of any one
or more classes or series of Preferred Stock issued by the Corporation shall
have the right, voting separately by class or series, to elect directors at an
annual or special meeting of stockholders, the election, term of office, filling
of vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporation applicable thereto, and such
directors so elected shall not be divided into classes pursuant to this Section
9 unless expressly provided by such terms.
10. Election of directors need not be by written ballot unless the
bylaws of the Corporation shall so provide. Meetings of stockholders may be held
within or without the State of Delaware, as the bylaws may provide. The books of
the Corporation may be (subject to any provisions contained in the statutes of
the State of Delaware) outside the State of Delaware at such
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<PAGE>
place or places as may be designated from time to time by the Board of Directors
or the bylaws of the Corporation.
11. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in the
manner set forth below, and all rights conferred upon the directors or
stockholders of the Corporation herein or in any amendment hereof are granted
subject to this reservation.
The affirmative vote of the holders of at least 75% of the
then outstanding shares entitled to vote thereon and the affirmative vote of the
holders of at least 75% of the then outstanding shares of each class of stock of
the Corporation voting separately as a class, shall be required to adopt any
amendment to Sections 5, 7, 8, 9 and 11 of the Certificate of Incorporation of
the Corporation.
The affirmative vote of the holders of at least a majority of
the then outstanding shares entitled to vote thereon and the affirmative vote of
the holders of at least a majority of the then outstanding shares of each class
of stock of the Corporation voting separately as a class, shall be required to
adopt any amendment to Sections 1, 2, 3, 4, 6 and 10 of the Certificate of
Incorporation of the Corporation.
12. The name and mailing address of the incorporator is:
James A. Knight 4200 Texas Commerce Tower
Houston, Texas 77002
I, THE UNDERSIGNED, hereunto set my hand this 21st day of
September, 1994.
/s/ JAMES A. KNIGHT
----------------------------
James A. Knight
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<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
FLORES & RUCKS, INC.
Flores & Rucks, Inc. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "DGCL"), does hereby certify:
FIRST: That the name of the Corporation is Flores & Rucks, Inc. The
original Certificate of Incorporation of the Corporation was filed with the
Delaware Secretary of State's Office on September 21, 1994.
SECOND: That in lieu of a meeting and vote of directors, the Board of
Directors of the Corporation, by unanimous written consent filed with the
minutes of proceedings of the Board of Directors of the Corporation in
accordance with the provisions of Section 141(f) of the DGCL, adopted
resolutions approving and declaring advisable the following amendment to the
Certificate of Incorporation of the Corporation:
RESOLVED, that Article 1 of the Certificate of Incorporation of the
Corporation be amended to read in its entirety as follows:
"1. The name of the Corporation is Ocean Energy, Inc."
THIRD: That said amendment was duly adopted by the stockholders of the
Corporation in accordance with the applicable provisions of Section 242 of the
DGCL.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Robert K. Reeves, its Senior Vice President this 17th day of June,
1997.
FLORES & RUCKS, INC.
By : /s/ ROBERT K. REEVES
-------------------------
Name: Robert K. Reeves
Title: Senior Vice President
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<PAGE>
CERTIFICATE OF MERGER
Merger of OEI Holding Corporation, a Delaware corporation
With and Into
Ocean Energy, Inc., a Delaware corporation
Pursuant to the provisions of Section 251 of the Delaware
General Corporation Law, the undersigned certifies as follows concerning the
merger (the "Merger") of OEI Holding Corporation, a Delaware corporation, with
and into Ocean Energy, Inc., a Delaware corporation, with Ocean Energy, Inc. as
the surviving corporation (the "Surviving Corporation").
1. The Agreement and Plan of Merger, dated December 22, 1997,
as modified by Amendment No. 1 to Agreement and Plan of Merger, dated as of
January 7, 1998, and by Amendment No. 2 to Agreement and Plan of Merger, dated
as of February 20, 1998, (the Agreement and Plan of Merger, together with
Amendment No. 1 and Amendment No. 2, being hereinafter referred to as the
"Merger Agreement") has been approved, adopted, certified, executed and
acknowledged in accordance with Section 251 of the Delaware General Corporation
Law.
2. The Merger contemplated in the Merger Agreement and this
Certificate of Merger will be effective at 3:00 p.m., Central Standard Time, on
March 27, 1998.
3. The name of the Surviving Corporation shall be Ocean Energy,
Inc.
4. The Certificate of Incorporation of the Surviving
Corporation shall be amended upon the effectiveness of the Merger as set forth
in Annex A attached hereto and incorporated herein by reference.
5. The executed Merger Agreement is on file at the principal
place of business of the Surviving Corporation, 1201 Louisiana, Suite 1400,
Houston, Texas 77002.
6. A copy of the Merger Agreement will be furnished by the
Surviving Corporation, on request and without cost, to any stockholder of OEI
Holding Corporation or Ocean Energy, Inc.
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<PAGE>
Dated this 27th day of March, 1998.
OCEAN ENERGY, INC.
By: /s/ ROBERT K. REEVES
------------------------------
Name: Robert K. Reeves
Title: Executive Vice President,
General Counsel and Secretary
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<PAGE>
ANNEX A
The introductory paragraph to Article 4 of the Certificate of
Incorporation of the Surviving Corporation shall be amended and restated as
follows:
"4. The total number of shares of stock which the Corporation
shall have the authority to issue is two hundred sixty million (260,000,000),
consisting of ten million (10,000,000) shares of preferred stock, par value $.01
per share (hereinafter called "Preferred Stock"), and two hundred fifty million
(250,000,000) shares of common stock, par value $.01 per share (hereinafter
called "Common Stock")."
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<PAGE>
CERTIFICATE OF MERGER
Merger of United Meridian Corporation, a Delaware corporation
With and Into
Ocean Energy, Inc., a Delaware corporation
Pursuant to the provisions of Section 251 of the Delaware
General Corporation Law, the undersigned certifies as follows concerning the
merger (the "Merger") of United Meridian Corporation, a Delaware corporation,
with and into Ocean Energy, Inc., a Delaware corporation, with Ocean Energy,
Inc. as the surviving corporation (the "Surviving Corporation").
1. The Agreement and Plan of Merger, dated December 22, 1997,
as modified by Amendment No. 1 to Agreement and Plan of Merger, dated as of
January 7, 1998, and by Amendment No. 2 to Agreement and Plan of Merger, dated
as of February 20, 1998 (the Agreement and Plan of Merger, together with
Amendment No. 1 and Amendment No. 2, being hereinafter referred to as the
"Merger Agreement") has been approved, adopted, certified, executed and
acknowledged in accordance with Section 251 of the Delaware General Corporation
Law.
2. The Merger contemplated in the Merger Agreement and this
Certificate of Merger will be effective at 3:01 p.m., Central Standard Time, on
March 27, 1998.
3. The name of the Surviving Corporation shall be Ocean Energy,
Inc.
4. The Certificate of Incorporation of Ocean Energy, Inc. as in
effect at the effective time of the Merger shall be the certificate of
incorporation of the Surviving Corporation.
5. The executed Merger Agreement is on file at the principal
place of business of the Surviving Corporation, 1201 Louisiana, Suite 1400,
Houston, Texas 77002.
6. A copy of the Merger Agreement will be furnished by the
Surviving Corporation, on request and without cost, to any stockholder of United
Meridian Corporation or Ocean Energy, Inc.
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<PAGE>
Dated this 27th day of March, 1998.
OCEAN ENERGY, INC.
By: /s/ ROBERT K. REEVES
----------------------------
Name: Robert K. Reeves
Title: Executive Vice President,
General Counsel and Secretary
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<PAGE>
CERTIFICATE OF DESIGNATIONS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF
OCEAN ENERGY, INC.
(Pursuant to Section 151 of the General
Corporation Law of the State of Delaware)
------------------------------------
Ocean Energy, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Company"), hereby certifies that the following resolutions were duly adopted by
the Board of Directors of the Company as required by Section 151 of the General
Corporation Law of the State of Delaware at a meeting duly called and held on
December 22, 1997:
WHEREAS, pursuant to the Company's Certificate of Incorporation, as
amended to date (hereinafter called the "Certificate of Incorporation"), the
Company is authorized to issue up to 10,000,000 shares of preferred stock, par
value $0.01 per share (the "Preferred Stock") from time to time, none of which
are currently outstanding; and
WHEREAS, pursuant to the authority vested in the Board of Directors of
the Company in accordance with the General Corporation Law of the State of
Delaware and the Company's Certificate of Incorporation, the Board of Directors
is authorized by resolution duly adopted, to designate shares of Preferred Stock
to be issued, in one or more series, to provide for the designation thereof of
the powers, designations, preferences and relative, participating, optional or
other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof;
RESOLVED, that the form of Certificate of Designation of Series A
Junior Participating Preferred Stock (the "Certificate of Designation"), dated
December 22, 1997, which was previously furnished to the members of this Board
for their review, is hereby approved in all respects; and
RESOLVED FURTHER, that the President or any Vice President and the
Secretary or any Assistant Secretary of the Company be, and each hereby is,
authorized and empowered, for and on behalf of the Company and in its name, to
execute and deliver the Certificate of Designation, in the form presented to
this Board, together with such changes as the officers executing the Certificate
of Designation determine to be appropriate, such determination to be
conclusively evidenced by their execution thereof; and
RESOLVED FURTHER, that the President or any Vice President and the
Secretary or any Assistant Secretary Vice of the Company is authorized and
empowered, in the name and on behalf
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<PAGE>
of the Company, to file the Certificate of Designation with the Secretary of
State of the State of Delaware and such other offices of the State of Delaware
as may be necessary or appropriate; and
RESOLVED FURTHER, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the Delaware
General Corporation Law and the Certificate of Incorporation, a Series A Junior
Participating Preferred Stock of the Corporation is hereby created, and
2,000,0000 shares of preferred stock shall be reserved for issuance as Series A
Junior Participating Preferred Stock in accordance with the Certificate of
Designation with the designations thereof and the powers, designations,
preferences and relative, participating, optional or other special rights of the
shares of such series, and the qualifications, limitations or restrictions
thereof as set forth below:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 2,000,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Company convertible
into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock of the Company (the "Preferred Stock") (or any similar stock)
ranking prior and superior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock, par value $0.01 per share, of the Company (the
"Common Stock") and of any other stock of the Company ranking junior to the
Series A Preferred Stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available therefor, quarterly
dividends payable in cash on the last day of January, April, July, and October
in each year (each such date being referred to herein as a "Dividend Payment
Date"), commencing on the first Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 and (b)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock, declared
on the Common Stock since the immediately preceding Dividend Payment Date or,
with respect to the first Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event that the
Company shall at any time after January 9, 1998 declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case
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<PAGE>
the amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Dividend Payment Date and the next subsequent Dividend
Payment Date, a dividend of $1.00 per share on the Series A Preferred Stock
shall nevertheless be payable, when, as and if declared, on such subsequent
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative, whether or not
earned or declared, on outstanding shares of Series A Preferred Stock from the
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and before such Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth and
except as otherwise provided in the Certificate of Incorporation or required by
law, each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters upon which the holders of the Common Stock of the
Company are entitled to vote. In the event the Company shall at any time after
January 9, 1998 declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction, the
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<PAGE>
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock, and except as otherwise required by law,
the holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Company having general voting
rights shall vote together as one class on all matters submitted to a vote of
stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by law or the
Certificate of Incorporation, holders of Series A Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not earned or declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Company shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (as to dividends) to the Series A
Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (as to
dividends) with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred Stock, provided that the Company may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Company ranking junior (as to
dividends and upon dissolution, liquidation or winding up) to the
Series A Preferred Stock or rights, warrants or options to acquire such
junior stock;
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors,
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<PAGE>
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their retirement become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to any
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (A) to the holders of the Common Stock or of shares of any other stock of
the Company ranking junior, upon liquidation, dissolution or winding up, to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividend distributions thereon, whether or not earned or
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of shares
of Common Stock, or (B) to the holders of shares of stock ranking on a parity
upon liquidation, dissolution or winding up with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Series A Preferred Stock liquidation preference and the
liquidation preferences of all other classes and series of stock of the Company,
if any, that rank on a parity with the Series A Preferred Stock in respect
thereof, then the assets available for such distribution shall be distributed
ratably to the holders of the Series A Preferred Stock and the holders of such
parity shares in the proportion to their respective liquidation preferences. In
the event the Company shall at any time after January 9, 1998 declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (A) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such
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<PAGE>
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In the case the Company shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are converted into, exchanged for or changed into
other stock or securities, cash and/or any property, then in any such case each
share of Series A Preferred Stock shall at the same time be similarly converted
into, exchanged for or changed into an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
converted, exchanged or converted. In the event the Company shall at any time
after January 9, 1998 declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the conversion, exchange or change of
shares of Series A Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable from any holder.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up of the Company, junior to all other series of
Preferred Stock and senior to the Common Stock.
Section 10. Amendment. If any proposed amendment to the Certificate of
Incorporation (including this Certificate of Designations) would alter, change
or repeal any of the preferences, powers or special rights given to the Series A
Preferred Stock so as to affect the Series A Preferred Stock adversely, then the
holders of the Series A Preferred Stock shall be entitled to vote separately as
a class upon such amendment, and the affirmative vote of two-thirds of the
outstanding shares of the Series A Preferred Stock, voting separately as a
class, shall be necessary for the adoption thereof, in addition to such other
vote as may be required by the General Corporation Law of the State of Delaware.
Section 11. Fractional Shares. Series A Preferred Stock may be issued
in fractions of a share that shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
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<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Company by its Chairman, President and Chief Executive Officer and
attested by its Secretary this 22nd day of December, 1997.
/s/ JAMES C. FLORES
----------------------------------
James C. Flores
Chairman, President and
Chief Executive Officer
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Exhibit 99.2
AMENDED AND RESTATED
BYLAWS
OF
OCEAN ENERGY, INC.
As of March 27, 1998
<PAGE>
ARTICLE I
OFFICES
Section 1. The registered office of Ocean Energy, Inc. (the
"Corporation") shall be in the City of Wilmington, County of New Castle, State
of Delaware.
Section 2. The Corporation may also have offices at such other
places both within and without the state of Delaware as the Board of Directors
may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election
of Directors shall be held at such place as may be fixed from time to time by
the Board of Directors and stated in the notice of the meeting. Meetings of
stockholders for any other purpose may be held at such time and place, within or
without the State of Delaware, as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of stockholders shall be held on
such date and at such time as shall be designated from time to time by the Board
of Directors and stated in the notice of the meeting. At the annual meeting, the
stockholders shall elect by a plurality vote the Directors pursuant to Article
III of these Bylaws, and transact such other business as may properly be brought
before the meeting.
Section 3. Written notice of the annual meeting stating the
place, date and hour of the meeting shall be given to each stockholder entitled
to a vote at such meeting not less than ten (10) nor more than sixty (60) days
before the date of the meeting.
At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be (i) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, (ii) otherwise properly brought before the meeting by or
at the direction of the Board of Directors, or (iii) otherwise properly brought
before the meeting by a stockholder. For business to be properly brought before
an annual meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the secretary of the Corporation. To be timely, a
stockholder's notice must be delivered to or mailed to and received at the
principal executive offices of the Corporation not less than 80 days prior to
the meeting; provided, however, that in the event that less than 90 days' notice
or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the tenth day following the date on which
such notice of the date of the annual meeting was mailed or such public
disclosure made.
A stockholder's notice to the secretary shall set forth as to
each matter the stockholder proposes to bring before the annual meeting (a) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (b)
the name and address, as they appear on the Corporation's books, of the
stockholder proposing such business, (c) the class and number of shares of the
Corporation which are beneficially owned by the stockholder, and (d) any
material interest of the stockholder in such business. Notwithstanding anything
in the Bylaws to the contrary, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in this Section 3.
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The presiding officer of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting in accordance with this Section 3, and if the
presiding officer should so determine, the presiding officer shall so declare to
the meeting and any such business not properly brought before the meeting shall
not be transacted.
Section 4. The officer who has charge of the stock ledger of
the Corporation shall prepare and make, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders for any
purpose may be called only by the Chairman of the Board of Directors and shall
be called within 10 days after receipt of the written request of the Board of
Directors, pursuant to a resolution approved by a majority of the entire Board
of Directors. The business permitted to be conducted at any special meeting of
the stockholders is limited to the business brought before the meeting by the
Chairman or by the Secretary at the request of a majority of the entire Board of
Directors.
Section 6. Written notice of a special meeting stating the
place, date and hour of the meeting, and the purpose or purposes for which the
meeting is called, shall be given not less than ten (10) nor more than sixty
(60) days before the date of the meeting, to each stockholder entitled to vote
at such meeting.
Section 7. The holders of a majority of the stock issued,
outstanding and entitled to vote, present in person or represented by proxy,
shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented.
Section 8. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting, except as otherwise
required by this Section 8, if the time and place thereof are announced at the
meeting at which the adjournment is taken. At such adjourned meeting the
Corporation may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote
of the holders of a majority of the stock having voting power present in person
or represented by proxy shall decide any question brought before such meeting,
except as provided to the contrary by statute, the Company's certificate of
incorporation or these Bylaws.
Section 10. Each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock having voting power held by such stockholder, but no proxy shall
be voted on after three years from its date, unless the proxy provides for a
longer period.
Section 11. Any action required or permitted to be taken by
the stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing of such stockholders.
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Section 12. At each meeting of stockholders, the Chairman of
the Board of Directors shall preside, and the secretary shall keep records, and
in the absence of either such officer their duties shall be performed by the
person appointed as provided in Article V.
ARTICLE III
DIRECTORS
Number, Nomination, Removal
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Section 1. The number of Directors shall be fixed from time to
time by the Board of Directors, but shall not be less than 2 nor more than 15
persons. The Directors shall be elected at the annual meeting of the
stockholders in accordance with the provisions of Section 2 of this Article, and
each Director elected shall hold office until his successor is elected and
qualified. Directors need not be stockholders.
Section 2. Subject to the rights of holders of any class or
series of stock having a preference over the Common Stock as to dividends or
upon liquidation, nominations for the election of Directors may be made by the
Board of Directors or a committee appointed by the Board of Directors or by any
stockholder entitled to vote in the election of Directors generally. Any
stockholder entitled to vote in the election of Directors generally may nominate
one or more persons for election as Directors at a meeting only if written
notice of such stockholder's intent to make such nomination or nominations has
been given, either by personal delivery or by United States mail, postage
prepaid, to the secretary of the Corporation not later than 80 days prior to the
date of any annual or special meeting. In the event that the date of such annual
or special meeting was not publicly announced by the Corporation by mail, press
release or otherwise more than 90 days prior to the meeting, notice by the
stockholder to be timely must be delivered to the secretary of the Corporation
not later than the close of business on the tenth day following the day on which
such announcement of the date of the meeting was communicated to the
stockholders.
Each such notice shall set forth: (a) the name and address of
the stockholder who intends to make the nomination and of the person or persons
to be nominated; (b) a representation that the stockholder is a holder of record
of stock of the Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or understandings
between the stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or nominations are to
be made by the stockholder; (d) such other information regarding each nominee
proposed by such stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated, by the
Board of Directors; and (e) the consent of each nominee to serve as a Director
of the Corporation if so elected.
If the presiding officer of the meeting for the election of
Directors determines that a nomination of any candidate for election as a
Director at such meeting was not made in accordance with the applicable
provisions of these Bylaws, such nomination shall be void.
Section 3. Subject to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation to elect additional Directors under specified circumstances,
newly created directorships resulting from any increase in the number of
Directors and any vacancy on the Board of Directors resulting from death,
resignation, disqualification, removal or other cause shall be filled solely by
the affirmative vote of a majority of the remaining Directors then in office,
even though less than a quorum of the Board of Directors, or by a sole remaining
Director. Any Director elected or chosen as provided herein shall hold office
until the sooner of the following events: (i) the expiration of the term of the
directorship to which he is appointed, (ii) such time as his successor is
elected and qualified or (iii) his resignation or removal. No decrease in the
number of Directors constituting the Board of Directors shall shorten the term
of an incumbent Director.
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Section 4. Subject to the rights of the holders of any class
or series of stock having preference over the Common Stock as to dividends or
upon liquidation to elect additional Directors under specified circumstances,
any Director may be removed from office only for cause by the stockholders in
the manner provided in this Section 4. At any annual meeting of the stockholders
of the Corporation or at any special meeting of the stockholders of the
Corporation, the notice of which shall state that the removal of a Director or
Directors is among the purposes of the meeting, the affirmative vote of the
holders of at least 662/3 percent of the combined voting power of the
outstanding shares of Voting Stock (as defined below), voting together as a
single class, may remove such Director or Directors for cause.
For the purpose of this Section 4, "Voting Stock" shall mean
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of Directors. In any vote required by or provided for
in this Section 4, each share of Voting Stock shall have the number of votes
granted to it generally in the election of Directors.
Section 5. The business of the Corporation shall be managed by
its Board of Directors, which may exercise all such powers of the Corporation
and do all such lawful acts and things as are not by statute or by the
certificate of incorporation or by these Bylaws directed or required to be
exercised or done by the stockholders.
Meetings of the Board of Directors
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Section 6. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 7. Meetings of the Board of Directors may be held at
such time and place as shall be specified in a notice given in the manner
hereinafter provided, or as shall be specified in a written waiver signed by all
of the Directors.
Section 8. Regular meetings of the Board of Directors may be
held without notice at such time and at such place as shall from time to time be
determined by the Board of Directors.
Section 9. Special meetings of the Board of Directors may be
called by the Chairman of the Board on 24 hours notice to each Director, either
personally or by mail, telecopy, or telegram; special meetings shall be called
by the president, chief executive officer or secretary in like manner and on
like notice on the written request of three Directors.
Section 10. Except as provided in these Bylaws to the
contrary, at all meetings of the board a majority of the total number of
Directors shall constitute a quorum for the transaction of business and the vote
of a majority of the Directors entitled to vote and present at a meeting at
which a quorum is present shall be the act of the Board of Directors, unless the
certificate of incorporation shall require a vote of a greater number. If a
quorum shall not be present at any meeting of the Board of Directors, the
Directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 11. Unless otherwise restricted by the certificate of
incorporation or these Bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee.
Section 12. At all meetings of the Board of Directors,
business shall be transacted in such order as from time to time the Board of
Directors may determine.
At all meetings of the Board of Directors, the Chairman of the
Board of Directors shall preside, and in the absence of the Chairman his duties
shall be performed by the person appointed as provided in Article V.
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The secretary of the Corporation (or an assistant secretary in
the absence of the secretary) shall act as secretary of the meeting of the Board
of Directors, but in the absence of the secretary and an assistant secretary,
the presiding officer may appoint any person to act as secretary of the meeting.
Committees of Directors
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Section 13.
(a) In addition to the committees set forth in Section 14(a)
of this Article III, the Board of Directors may, by resolution passed by a
two-thirds vote of the entire Board of Directors, designate one or more
additional committees, with each such committee consisting of one or more
directors of the Corporation and having such powers and authority as the Board
of Directors shall designate by such resolutions. Any such committee, to the
extent provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority in reference to amending the
certificate of incorporation (except pursuant to a resolution relating to the
issuance of capital stock pursuant to Section 151 of Title 8 of the Delaware
General Corporation Law); adopting an agreement of merger or consolidation;
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets; recommending to the
stockholders the dissolution of the Corporation or a revocation of a
dissolution; or amending the bylaws of the Corporation and, unless the
resolution, certificate of incorporation expressly so provides, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. Such committee or committees shall have such
members as may be determined from time to time by resolution adopted by the
Board of Directors.
(b) Any modification to the powers and authority of any
committee shall require the adopting of a resolution by a two-thirds vote of the
entire Board of Directors.
(c) All acts done by any committee within the scope of its
powers and authority pursuant to these Bylaws and the resolutions adopted by the
Board of Directors in accordance with the terms hereof shall be deemed to be,
and may be certified as being, done or conferred under authority of the Board of
Directors. The Secretary or any Assistant Secretary is empowered to certify that
any resolutions duly adopted by any such committee is binding upon the
Corporation and to execute and deliver such certifications from time to time as
may be necessary or proper to conduct of the business of the Corporation.
(d) Regular meetings of committees shall be held at such times
as may be determined by resolution of the Board of Directors or the committee in
question and no notice shall be required for any regular meeting other than such
resolution. A special meeting of any committee shall be called by resolution of
the Board of Directors, or by the Secretary or an Assistant Secretary upon the
request of the chairman or a majority of the members of any committee. Notice of
special meetings shall be given to each member of the committee in the same
manner as that provided for in Article IV, Section 1 of these Bylaws.
(e) Each committee shall keep regular minutes of its meeting
and report the same to the Board of Directors.
Section 14.
(a) The Corporation shall have four standing committees: the
finance committee, the nominating committee, the audit committee and the
compensation committee.
(1) The finance committee shall have those powers and
authority as are delegated to it from time to time pursuant to a
resolution passed by a two-thirds vote of the total number of directors
fixed
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by the Board of Directors pursuant to Article III, Section 1 of these
Bylaws which the Corporation would have if there were not vacancies
(the "entire Board of Directors").
(2) The nominating committee shall have the following
exclusive powers and authority: (i) evaluating and recommending
director candidates to the Board of Directors, (ii) recommending
director compensation and benefits philosophy for the Corporation,
(iii) reviewing individual director performance as issues arise and
(iv) periodically reviewing the Corporation's corporate governance
profile.
(3) The audit committee shall have the following
powers and authority: (i) employing independent public accountants to
audit the books of account, accounting procedures and financial
statements of the Corporation and to perform such other duties from
time to time as the audit committee may prescribe, (ii) receiving the
reports and comments of the Corporation's internal auditors and of the
independent public accountants employed by the committee and to take
such action with respect thereto as may seem appropriate, (iii)
requesting the Corporation's consolidated subsidiaries and affiliated
companies to employ independent public accountants to audit their
respective books of account, accounting procedures and financial
statements, (iv) requesting the independent public accountants to
furnish to the compensation committee the certifications required under
any present or future stock option, incentive compensation or employee
benefit plan of the Corporation, (v) reviewing the adequacy of internal
financial controls, (vi) approving the accounting principles employed
in financial reporting, (vii) approving the appointment or removal of
the Corporation's general auditor, and (viii) reviewing the accounting
principles employed in financial reporting. None of the members of the
audit committee shall be an officer or full-time employee of the
Corporation or of any subsidiary or affiliate of the Corporation.
(4) The compensation committee shall have the
following powers and authority: (i) determining and fixing the
compensation for all senior officers of the Corporation and those of
its subsidiaries that the compensation committee shall from time to
time consider appropriate, as well as all employees of the Corporation
and its subsidiaries compensated at a rate in excess of such amount per
annum as may be fixed or determined from time to time by the Board of
Directors, (ii) performing the duties of the committees of the Board of
Directors provided for in any present or future stock option, incentive
compensation or employee benefit plan of the Corporation or, if the
compensation committee shall so determine, any such plan of any
subsidiary and (iii) reviewing the operations of and policies
pertaining to any present or future stock option, incentive
compensation or employee benefit plan of the Corporation or any
subsidiary that the compensation committee shall from time to time
consider appropriate.
(b) The Board of Directors may elect a secretary of any such
committee. If the Board of Directors does not elect such a secretary, the
committee shall do so. The secretary of any committee need not be a member of
the committee, but shall be selected from a member of the staff of the office of
the Secretary of the Corporation, unless otherwise provided by the Board of
Directors or the committee, as applicable.
(c) Each member of any committee of the Board of Directors
shall hold office until such member's successor is elected and has qualified,
unless such member sooner dies, resigns or is removed. The number of directors
which shall constitute any committee shall be determined by resolution adopted
by the Board of Directors.
(d) The Board of Directors may remove a director from a
committee or change the chairmanship of a committee by resolution adopted by the
Board of Directors, provided that a resolution to remove John Brock or James C.
Flores from a committee or the chairmanship of a committee shall require a
two-thirds vote of the entire Board of Directors.
(e) The Board of Directors may designate one or more directors
as alternate members of any committee to fill any vacancy on a committee and to
fill a vacant chairmanship of a committee, occurring as a result of a member or
chairman leaving the committee, whether through death, resignation, removal or
otherwise.
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Section 14. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Directors.
Compensation of Directors
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Section 15. The Directors may be paid their expenses, if any,
of attendance at each meeting of the Board of Directors and may be paid a fixed
sum for attendance at each meeting of the Board of Directors or a stated salary
or retainer as Director. No such payment shall preclude any Director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings.
ARTICLE IV
NOTICES
Section 1. Whenever notice is required to be given to any
Director or stockholder pursuant to a statutory provision or the certificate of
incorporation or these bylaws, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
Director or stockholder, at his address as it appears on the records of the
Corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to Directors may also be given by telegram or telecopy.
Section 2. Whenever notice is required to be given pursuant to
a statutory provision or the certificate of incorporation or bylaws, a waiver
thereof in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto.
ARTICLE V
OFFICERS
General
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Section 1. The officers of the Corporation shall be elected by
the Board of Directors and shall consist of a Chairman of the Board; a President
and Chief Executive Officer (which shall be the same person holding both such
offices); and may also consist of a Chief Operating Officer; a Chief Financial
Officer; one or more vice presidents; a secretary; one or more assistant
secretaries; a treasurer; one or more assistant treasurers; a controller; and
such other officers as in the judgment of the Board of Directors may be
necessary or desirable.
Section 2. All officers chosen by the Board of Directors shall
have such powers and duties as generally pertain to their respective offices,
subject to the specific provisions of this Article V. Such officers shall also
have powers and duties as from time to time may be conferred by the Board of
Directors or any committee thereof.
Section 3. Any number of officers may be held by the same
person, unless otherwise prohibited by law, the certificate of incorporation or
these Bylaws. The officers of the Corporation need not be stockholders or
directors of the Corporation.
Section 4. The salaries of all officers and agents of the
Corporation shall be fixed from time to time by the Board of Directors.
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Election and Term of Office
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Section 5. Subject to Section 15 of this Article V, the
elected officers of the Corporation shall be elected annually by the Board of
Directors at the regular meeting of the Board of Directors held after each
annual meeting of the stockholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
convenient. Subject to Section 15 of this Article V, each officer shall hold
office until his successor shall have been duly elected and shall have qualified
or until his death or until he shall resign or be removed.
Chairman of the Board
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Section 6. The Chairman of the Board shall be a member of the
Board of Directors and shall be an officer of the Corporation. The Chairman of
the Board, if present, shall preside at all meetings of the Board of Directors.
Vice Chairman of the Board
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Section 7. The Vice Chairman of the Board shall be a member of
the Board of Directors and shall be an officer of the Corporation. The Vice
Chairman of the Board shall have such duties and powers as shall be assigned to
him from time to time by the President and Chief Executive Officer of the
Corporation.
President and Chief Executive Officer
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Section 8. Subject to the penultimate sentence of this
Section, the offices of President and Chief Executive Officer shall be held by a
single individual who is a member of the Board of Directors and such person
shall be an officer of the Corporation. The President and Chief Executive
Officer shall supervise, coordinate and manage the Corporation's business and
activities and supervise, coordinate and manage its operating expenses and
capital allocation, shall make recommendations as to compensation and benefits
to the Compensation Committee of the Board of Directors with respect to the
employees of the Corporation and its subsidiaries, shall have general authority
to exercise all the powers necessary for the President and Chief Executive
Officer of the Corporation and shall perform such other duties and have such
other powers as may be prescribed by the Board of Directors or these Bylaws, all
in accordance with basic policies as established by and subject to the oversight
of the Board of Directors. In the absence or disability of the Chairman of the
Board, the duties of the Chairman of the Board shall be performed and the
Chairman of the Board's authority may be exercised by the President and Chief
Executive Officer, and in the event the President and Chief Executive Officer is
absent or disabled, such duties shall be performed and such authority may be
exercised by a director designated for this purpose by the Board of Directors.
Notwithstanding the foregoing, the Board of Directors may designate the Chief
Operating Officer, if one is so designated by the Board of Directors, as
President of the Corporation provided that the duties and authority of the Chief
Executive Officer are not materially diminished. The Vice Chairman and all
executive vice presidents shall report directly to the Chief Executive Officer
or such other officer of the Corporation that the President and Chief Executive
Officer may designate.
Chief Financial Officer
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Section 9. The Chief Financial Officer shall have
responsibility for the financial affairs of the Corporation and shall exercise
supervisory responsibility for the performance of the duties of the Treasurer
and the Controller. The Chief Financial Officer shall perform such other duties
and have such other powers as may be prescribed by the Board of Directors or
these Bylaws, all in accordance with basic policies as established by and
subject to the oversight of the Board of the Directors, the Chairman and Chief
Executive Officer and the President and Chief Operating Officer.
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The Executive Vice Presidents, Senior Vice Presidents and Vice Presidents
- -------------------------------------------------------------------------
Section 10. In the absence of the president or in the event of
his inability or refusal to act, an executive vice president or, in the absence
of an executive vice president, a senior vice president or a vice president (in
either case in the order determined by the Board of Directors, or, if there be
no such determination, then in the order of their election), shall perform the
duties of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions imposed upon the president. The executive vice
presidents, senior vice presidents and vice presidents shall perform such other
duties and have such other powers as the president or Board of Directors may
from time to time prescribe.
The Secretary and the Assistant Secretary
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Section 11. The secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record all the
proceedings of the meetings to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or cause to be
given, notice of all meetings of the stockholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or president, under whose supervision he shall be. He
shall have custody of the corporate seal of the Corporation, if any such seal be
adopted by resolution of the Board of Directors, and he, or an assistant
secretary, shall have authority to affix the same to any instrument requiring it
and when so affixed, it may be attested by his signature or by the signature of
such assistant secretary. The Board of Directors may give general authority to
any other officer to affix the seal of the Corporation and to attest the
affixing thereof by his signature.
Section 12. The assistant secretary (or if there be more than
one, the assistant secretaries in the order determined by the Board of
Directors, or, if there be no such determination, then in the order of their
election) shall, in the absence of the secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
The Treasurer and Assistant Treasurer
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Section 13. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the president and the Board of Directors, at its regular meetings, or
when the Board of Directors so requires, an account of all his transactions as
treasurer and of the financial condition of the Corporation.
Section 14. The assistant treasurer (or, if there shall be
more than one, the assistant treasurers in the order determined by the Board of
Directors, or, if there be no such determination, then in the order of their
election) shall, in the absence of the treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Certain Actions
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Section 15. Notwithstanding anything to the contrary contained
in these Bylaws, the removal of the current Chairman of the Board and President
and Chief Executive Officer as of March 27, 1998, or any material modification
to either of their respective roles, duties or authority shall require a
two-thirds vote of the entire Board of Directors.
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ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the Corporation shall be
entitled to a certificate, signed by, or in the name of the Corporation by, the
president or a vice president and the secretary or an assistant secretary of the
Corporation, certifying the number of shares owned by him in the Corporation. If
the Corporation shall be authorized to issue more than one class of stock or
more than one series of any class, the designations, preferences and relative
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarized on the face or back of
the certificate which the Corporation shall issue to represent such class or
series of stock, provided that, except as otherwise provided in Section 202 of
the General Corporation Law of Delaware, in lieu of the foregoing requirements,
there may be set forth on the face or back of the certificate which the
Corporation shall issue to represent such class or series of stock, a statement
that the Corporation will furnish without charge to each stockholder who so
requests the designations, preferences and relative, participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
Section 2. Where a certificate is countersigned (1) by a
transfer agent other than the Corporation or its employee or, (2) by a registrar
other than the Corporation or its employee, any signature on the certificate may
be a facsimile. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the Corporation with the same effect as if he
were such officer, transfer agent or registrar at the date of issue.
Lost Certificates
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Section 3. The Board of Directors may direct a new certificate
or certificates to be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
Transfers of Stock
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Section 4. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by a proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Fixing Record Date
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Section 5. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
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Registered Stock Holders
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Section 6. The Corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote at such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
Dividends
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Section 1. Dividends upon the capital stock of the
Corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the Board of Directors at any regular or special
meetings, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Section 2. Before payment of any dividend, there may be set aside
out of any funds of the Corporation available for dividends such sum or sums as
the Directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purpose as the Directors shall think conducive to the interest of the
Corporation, and the Directors may modify or abolish any such reserve in the
manner in which it was created.
Annual Statement
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Section 3. The Board of Directors shall present at each annual
meeting, and at any special meeting of the stockholders when called for by vote
of the stockholders, a full and clear statement of the business and condition of
the Corporation.
Checks
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Section 4. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Fiscal Year
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Section 5. The fiscal year of the Corporation shall begin on
the first day of January of each year and end on the last day of December of
each year, unless otherwise determined by the Board of Directors.
Seal
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Section 6. The corporate seal, if any such seal be adopted by
resolution of the Board of Directors in such form as the Board of Directors may
prescribe. The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise placed thereon.
Interested Directors and Officers
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Section 7.
(a) No contract or transaction between the Corporation and one
or more of its Directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in which
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one or more of its Directors or officers are Directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the Director or officer is present at or participates in the meeting of
the board or committee thereof which authorizes the contract or transaction, or
solely because his or their votes are counted for such purposes, if;
(1) The material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are
known to the Board of Directors or the committee, and the board or
committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested Directors, even
though the disinterested Directors be less than a quorum; or
(2) The material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are
known to the shareholders entitled to vote thereon, and the contract
for transaction is specifically approved in good faith by vote of the
shareholders; or
(3) The contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or ratified, by
the Board of Directors, a committee thereof, or the shareholder.
(b) Common or interested Directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
ARTICLE VIII
AMENDMENTS
Section 1. These Bylaws may be altered, amended or repealed,
or new bylaws may be adopted by the affirmative vote of a majority of the entire
Board of Directors at any meeting and without the consent or vote of the
stockholders; provided, however, that the affirmative vote of no less than
two-thirds of the entire Board of Directors is required to alter, amend or
repeal the bylaws set forth in Article III, Sections 13 and 14, Article V,
Section 15 and this proviso. These Bylaws may be altered, amended or repealed,
or new bylaws may be adopted by the stockholders at any regular meeting of the
stockholders or at any special meeting of the stockholders, if notice of such
alteration, amendment, repeal or adoption of new bylaws is contained in the
notice of such meeting, by the holders of at least 66- 2/3% of the total voting
power of all shares of stock of the Corporation entitled to vote in the election
of directors, considered for purposes of this Article VIII as one class.
ARTICLE IX
INDEMNIFICATION AND INSURANCE
Section 1. The Corporation shall, to the full extent permitted
by Section 145 of Title 8 of the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify all officers and directors of
the Corporation whom it may indemnify pursuant thereto. The provisions of this
Article IX shall apply to acts or omissions occurring before or after the
adoption hereof. The right of indemnification herein provided for shall not be
exclusive of any other right to which any Director or officer may now or
hereafter be entitled under any statute, bylaw, agreement, vote of stockholders
or disinterested Directors or otherwise, shall continue as to a person who has
ceased to be such Director or officer entitled to indemnification pursuant to
this Article IX and shall inure to the benefit of the heirs, executors and
administrators of such Director or officer.
Section 2. The Corporation may purchase and maintain insurance
on behalf of any person who is or was a Director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
Director, officer, employee or agent of another Corporation, partnership, joint
venture, trust or other enterprise against
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any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the provisions of this
Article IX or of Section 145 of the General Corporation Law of the State of
Delaware.
Section 3. The indemnification provided by this Article IX
shall be subject to all valid and applicable laws, and, in the event this
Article IX or any of the provisions hereof or the indemnification contemplated
hereby are found to be inconsistent with or contrary to any such valid laws, the
latter shall be deemed to control, and this Article IX shall be regarded as
modified accordingly and, as so modified, shall continue in full force and
effect.
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