Securities And Exchange Commission
Washington, D.C. 20549
Form 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 1-8094
Ocean Energy, Inc.
(Exact name of registrant as specified in its charter)
Texas 74-1764876
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1001 Fannin, Suite 1600, Houston, Texas 77002-6714
(Address of principal executive offices) (Zip code)
(713) 265-6000
|
(Registrant's telephone number, including area code)
1001 Fannin, Suite 1700, Houston, Texas 77002-6714
(Former name,former address and former fiscal year,if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No .
As of May 14, 1999, 165,913,600 shares of Common Stock, par value $0.10 per share, were outstanding.
OCEAN ENERGY, INC.
INDEX
Page
Number
Part I. Financial Information
Item 1. Unaudited Consolidated Financial Statements
Consolidated Statements of Operations for the Three Months
Ended March 31, 1999 and 1998...................................................... 1
Consolidated Balance Sheets - March 31, 1999
and December 31, 1998.............................................................. 2
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1999 and 1998...................................................... 3
Consolidated Statements of Comprehensive Income
for the Three Months Ended March 31, 1999 and 1998 ................................ 4
Notes to Consolidated Financial Statements......................................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................................................... 15
Item 3. Quantitative and Qualitative Disclosures about Market Risks............................ 26
Part II. Other Information.......................................................................... 27
Signatures........................................................................................... 32
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On March 30, 1999, Ocean Energy, Inc., a Delaware corporation, merged with and into Seagull Energy Corporation, a Texas corporation, and the resulting company was renamed Ocean Energy, Inc. The merger was treated for accounting purposes as an acquisition of Seagull by Ocean in a purchase business transaction. As such, the financial results presented here are primarily those of Ocean Energy, Inc. on a stand-alone basis for the first quarter of 1999 compared to Ocean's results in the first quarter of 1998 on a stand-alone basis. However, unless the context otherwise requires, the information set forth outside of Part I relates to the surviving Texas corporation, formerly known as Seagull Energy Corporation.
ITEM. 1 UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
OCEAN ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended March 31,
---------------------------------------
1999 1998
----------------- ------------------
Revenues.................................................................. $ 105,694 $ 141,056
Costs of Operations:
Operations and maintenance............................................. 45,160 42,652
Depreciation, depletion and amortization............................... 58,608 72,771
Provision loss on sale of Canadian assets.............................. 28,500 -
General and administrative............................................. 4,576 4,296
----------------- ------------------
136,844 119,719
----------------- ------------------
Operating Profit (Loss)................................................... (31,150) 21,337
Other (Income) Expense:
Merger expense......................................................... 40,652 39,000
Interest expense....................................................... 25,170 12,504
Interest income and other.............................................. (483) (486)
----------------- ------------------
65,339 51,018
----------------- ------------------
Loss Before Income Taxes.................................................. (96,489) (29,681)
Income Tax Benefit........................................................ (15,438) (1,548)
----------------- ------------------
Net Loss.................................................................. (81,051) (28,133)
Preferred Stock Dividend.................................................. 801 -
----------------- ------------------
Net Loss Available to Common Shareholders................................. $ (81,852) $ (28,133)
================= ==================
Loss Per Share:
Basic and Diluted...................................................... $ (0.79) $ (0.28)
================= ==================
Weighted Average Number of Common Shares Outstanding:
Basic and Diluted...................................................... 103,192 100,091
================= ==================
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See accompanying Notes to Consolidated Financial Statements.
OCEAN ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Share Data)
March 31, December 31,
1999 1998
------------------ ------------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents............................................ $ 32,790 $ 10,706
Accounts receivable, net............................................. 183,803 111,829
Inventories.......................................................... 28,943 16,802
Prepaid expenses and other........................................... 20,061 14,444
------------------ ------------------
Total Current Assets............................................... 265,597 153,781
Property, Plant and Equipment, at cost, full cost method for oil and gas:
Evaluated oil and gas properties..................................... 3,699,580 2,759,686
Unevaluated oil and gas properties excluded from amortization........ 546,473 488,689
Other................................................................ 342,208 44,960
------------------ ------------------
4,588,261 3,293,335
Accumulated Depreciation, Depletion and Amortization.................... 1,798,478 1,711,696
------------------ ------------------
2,789,783 1,581,639
Deferred Income Taxes................................................... 204,295 217,824
Other Assets............................................................ 79,355 53,716
------------------ ------------------
Total Assets............................................................ $ 3,339,030 $ 2,006,960
================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITy
Current Liabilities:
Accounts and notes payable........................................... $ 291,894 $ 184,828
Accrued interest payable............................................. 33,396 36,206
Accrued liabilities.................................................. 96,398 15,312
Current maturities of long-term debt................................. 836 836
------------------ ------------------
Total Current Liabilities.......................................... 422,524 237,182
Long-Term Debt.......................................................... 1,944,524 1,371,890
Other Noncurrent Liabilities............................................ 73,878 20,945
Commitments and Contingencies...........................................
Shareholders' Equity:
Preferred stock, $1.00 par value; authorized 50,000,000 shares; issued
50,000 shares...................................................... 1 1
Common stock, $.10 par value; authorized 450,000,000 shares;
issued 166,385,878 and 101,753,646 shares, respectively............ 16,639 1,018
Additional paid-in capital........................................... 1,481,725 892,339
Accumulated deficit.................................................. (581,966) (500,114)
Accumulated other comprehensive loss................................. (9,741) (10,720)
Less - note receivable from employee stock ownership plan............ (2,178) -
Less - notes receivable from employees relating to stock purchases... (2,083) -
Less - treasury stock, at cost; 472,278 shares....................... (4,293) -
Less - deferred compensation......................................... - (5,581)
------------------ ------------------
Total Shareholders' Equity......................................... 898,104 376,943
------------------ ------------------
Total Liabilities and Shareholders' Equity.............................. $ 3,339,030 $ 2,006,960
================== ==================
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See accompanying Notes to Consolidated Financial Statements.
OCEAN ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Three Months Ended March 31,
---------------------------------------
1999 1998
----------------- ------------------
Operating Activities:
Net loss............................................................... $ (81,051) $ (28,133)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation, depletion and amortization............................. 58,608 72,771
Provision for loss on sale of Canadian assets........................ 28,500 -
Merger expenses not paid............................................. 40,652 -
Deferred income taxes................................................ (17,361) (3,491)
Other................................................................ 3,309 5,446
----------------- ------------------
32,657 46,593
Changes in operating assets and liabilities, net of acquisitions:
Decrease in accounts receivable.................................... 8,642 2,429
Decrease in inventories, prepaid expenses and other................ 20,818 -
Increase (decrease) in accounts and notes payable.................. (23,581) 41,167
Increase in accrued expenses and other............................. 37,234 1,041
----------------- ------------------
Net Cash Provided By Operating Activities............................ 75,770 91,230
----------------- ------------------
Investing Activities:
Capital expenditures................................................... (51,726) (204,754)
Acquisition costs, net of cash acquired................................ (1,841) -
Proceeds from sales of property, plant and equipment................... 39,564 1,327
----------------- ------------------
Net Cash Used In Investing Activities................................ (14,003) (203,427)
----------------- ------------------
Financing Activities:
Proceeds from debt..................................................... 542,461 439,892
Principal payments on debt ............................................ (574,983) (326,480)
Proceeds from sales of common stock.................................... - 2,028
Deferred debt issue costs.............................................. (6,370) -
Other.................................................................. (791) (1,532)
----------------- ------------------
Net Cash Provided By (Used In) Financing Activities.................. (39,683) 113,908
----------------- ------------------
Increase In Cash And Cash Equivalents.................................... 22,084 1,711
Cash And Cash Equivalents At Beginning Of Period......................... 10,706 11,689
----------------- ------------------
Cash And Cash Equivalents At End Of Period............................... $ 32,790 $ 13,400
================= ==================
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See accompanying Notes to Consolidated Financial Statements.
OCEAN ENERGY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in Thousands)
(Unaudited)
Three Months Ended March 31,
---------------------------------------
1999 1998
----------------- ------------------
Net loss............................................................... $ (81,051) $ (28,133)
Other comprehensive income, net of tax:
Foreign currency translation adjustment............................. 979 524
----------------- ------------------
Comprehensive loss..................................................... $ (80,072) $ (27,609)
================= ==================
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See accompanying Notes to Consolidated Financial Statements.
OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Presentation of Financial Information
The consolidated financial statements of Ocean Energy, Inc. ("OEI" or "the Company"), a Texas corporation, included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Although certain information normally included in financial statements prepared in accordance with generally accepted accounting principles has been condensed or omitted, management believes that the disclosures are adequate to make the information presented not misleading. The financial statements reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation.
Effective March 30, 1999, pursuant to the Agreement and Plan of Merger (the "Merger") dated November 24, 1998, as amended, Ocean Energy, Inc. ("Old Ocean") was merged with and into Seagull Energy Corporation ("Seagull"). Seagull is an international oil and gas company engaged primarily in exploration and development activities in the United States, Egypt, Cote d'Ivoire, Indonesia and the Russian Republic of Tatarstan. Seagull's other operating segment, referred to as ENSTAR Alaska, operates natural gas transmission and distribution systems which serve the greater Anchorage area. In conjunction with the Merger, Seagull amended its Articles of Incorporation to change its name to Ocean Energy, Inc. As a result of this Merger, each outstanding share of Old Ocean common stock was exchanged for one share of Seagull common stock, and as of March 30, 1999, the stockholders of Old Ocean owned approximately 61.5% of the outstanding common stock of the Company, with the shareholders of Seagull owning the remaining 38.5%. Certain reclassifications have been made to the historical results of the Company to conform the presentation used by the companies.
Effective March 27, 1998, pursuant to the Agreement and Plan of Merger dated December 22, 1997, as amended, United Meridian Corporation ("UMC") was merged into Old Ocean (the "UMC Merger"). As a result of the UMC Merger, each outstanding share of UMC common stock was converted into 1.3 shares of Old Ocean common stock with approximately 46 million shares issued to the shareholders of UMC, representing approximately 46% of all of the issued and outstanding shares of Old Ocean. Old Ocean's shareholders received 2.34 shares of Old Ocean shares for each share outstanding immediately preceding the UMC Merger, representing approximately 54% of all of the then issued and outstanding shares. The UMC Merger was accounted for as a pooling of interests. Accordingly, the consolidated financial statements for periods prior to the UMC Merger were restated to conform accounting policies and combine the historical results of Old Ocean and UMC. Merger costs of $39 million relating to the UMC Merger consisted primarily of investment banking and other transaction fees, employee severance and relocation costs as well as the write-off of deferred financing costs.
The accompanying consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and notes thereto of Old Ocean and Seagull for the year ended December 31, 1998.
Property, Plant and Equipment - The Company capitalizes interest expense
and certain-employee related costs that are directly attributable to oil and gas
operations. For the three
OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
months ended March 31, 1999 and 1998, the Company capitalized interest expense in the amount of $7 million and $5 million, respectively, and certain employee-related costs in the amount of $5 million and $5 million, respectively.
Earnings Per Share - Options to purchase a weighted average of 12,737,000 and 9,601,000 shares of common stock at prices ranging from $2.11 to $36.54 per share were outstanding during 1999 and 1998, respectively, but were not included in the computation of diluted loss per share because such options would have an antidilutive effect on the computation of diluted loss per share. These options expire at various dates from 1999 to 2009.
Treasury Stock - The Company follows the average cost method of accounting for treasury stock transactions.
Regulation - The Company operates in Alaska through a division of the Company and a wholly-owned subsidiary (collectively referred to herein as "ENSTAR Alaska"). ENSTAR Alaska is subject to regulation by the Alaska Public Utilities Commission, which has jurisdiction over, among other things, rates, accounting procedures and standards of service. The Company follows Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 71 for ENSTAR Alaska; however, the provisions of SFAS No. 71 do not materially impact the Company's operating results.
Accounting Pronouncements - In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement establishes standards of accounting for and disclosures of derivative instruments and hedging activities. This statement is effective for fiscal years beginning after June 15, 1999. The Company has not yet determined the impact of this statement on the Company's financial condition or results of operations.
Note 2. Acquisition and Disposition of Assets
Merger - On March 30, 1999, the shareholders approved the Merger. The Merger has been accounted for as a purchase under generally accepted accounting principles. Because Old Ocean stockholders own a majority of the outstanding shares of common stock of the merged company, the accounting treatment of the Merger reflects Old Ocean acquiring Seagull in a "reverse purchase." Under this method of accounting, the merged company's historical results for periods prior to the Merger are the same as Old Ocean's historical results. At the date of the Merger, assets and liabilities of Old Ocean were recorded based upon their historical costs, and the assets and liabilities of Seagull were recorded at their estimated fair market values.
OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following is a calculation of purchase price:
Calculation of purchase price (in thousands, except per share data):
Shares of common stock issued.............................................. 64,630
Average of OEI stock price three days before and after the
merger announcement...................................................... $ 9.09
----------------------
Fair value of stock issued.................................................. $ 587,484
Add: Merger costs........................................................... 64,054
----------------------
Purchase Price.............................................................. $ 651,538
======================
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Capitalized merger costs consisted primarily of severance costs of Seagull ($22 million), value of Seagull stock options maintained by OEI ($17 million), investment banking fees ($10 million), and other transaction fees and professional expenses ($15 million). In addition, merger expenses of $41 million were expensed in the first quarter of 1999 and consisted primarily of Old Ocean's severance costs ($21 million), the write-off of certain costs relating to Old Ocean's information technology system ($14 million) and compensation expense related to the vesting of Old Ocean's restricted stock ($6 million).
The allocation of purchase price to specific assets and liabilities is based on certain estimates of fair values and costs which will be adjusted to actual amounts as determined. Such adjustments are not expected to be material.
The following table presents the unaudited pro forma results (in thousands except per share data) of the Company as though the Merger had occurred on January 1, 1998:
Unaudited Pro Forma Information
Three Months Ended March 31,
--------------------------------------------
1999 1998
----------------------- ------------------
Revenues ......................................................... $ 201,460 $ 260,413
Net loss available to common shareholders......................... $ (46,952) $ (19,797)
Basic and diluted loss per share ................................. $ (0.28) $ (0.12)
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The above pro forma amounts have been determined as follows:
The income statements for 1999 and 1998 are a result of combining the three month income statement of Old Ocean with the three month income statement of Seagull adjusted for 1) certain costs that Seagull had expensed under the successful efforts method of accounting that are capitalized under the full cost method of accounting; 2) depreciation, depletion and amortization expense of Seagull calculated in accordance with the full cost method of accounting applied to the adjusted basis of the properties acquired using the purchase method of accounting; 3) decreased interest expense resulting from the revaluation of Seagull debt under the purchase method of accounting, including the elimination of amortization of historical debt issuance costs; and 4) the related income tax effects of these adjustments based on the applicable statutory tax rate. It should be noted that the pro forma net loss for the three months ended March 31, 1999 and 1998, does not include impairments of oil and gas properties that were recorded by the
OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
companies in the second and fourth quarters of 1998 and does not include expensed merger costs relating to the Merger.
Disposition of Oil and Gas Assets - During March 1999, the Company completed sales of its interests in certain non-core U.S. onshore assets located primarily in the MidContinent, Permian Basin and Rocky Mountain regions and realized proceeds of $40 million from the sale. The proceeds were used to pay down amounts outstanding under the Company's existing credit facilities.
On April 15, 1999, the Company completed a sale of its Canadian oil and gas assets, realizing net proceeds of $63 million which were used to repay existing long-term debt. A loss of $28.5 million on the sale was provided for at March 31, 1999. The Canadian assets disposed of contributed revenue of $6.2 million and $4.3 million for the three months ended March 31, 1999 and 1998, respectively, and had operating profit (loss) of $1.7 million, prior to recording the provision for loss on the sale, and $(0.7) million, respectively. After recording the provision for loss on the sale, the Canadian assets had a net book value of approximately $40.7 million at March 31, 1999.
Note 3. Supplemental Disclosures of Cash Flow Information
Three Months Ended March 31,
-------------------------------
1999 1998
------------ ------------
(amounts in thousands)
Cash paid during the period for:
Interest.................................................. $ 36,254 $ 11,423
Income taxes.............................................. $ 1,131 $ 663
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As discussed in Note 2, the Merger was completed through the issuance of common stock. Therefore, the Merger increased property, plant and equipment by $1.3 billion, working capital by $686 million, debt by $563 million and equity by $595 million through a non-cash transaction that was not reflected in the statement of cash flows. However, $1.8 million of acquisition costs reflected in "investing activities" in the statement of cash flows represents the cash expenses paid in connection with the Merger, less the cash of Seagull on the date of the Merger.
Note 4. Financial Instruments
The Company hedges certain of its production through master swap
agreements ("Swap Agreements") which provide for separate contracts tied to the
NYMEX light sweet crude oil and natural gas futures contracts. In addition, the
Company occasionally engages in combined contracts that have agreed-upon price
floors and ceilings ("Collars"). Natural gas Collars outstanding at December 31,
1998 were cancelled in January 1999, resulting in net proceeds of $6.9 million
which will be recognized in income as the hedged volumes are produced. Oil and
gas revenues have been increased by $2 million and $5 million for the three
months ended March 31, 1999 and 1998, respectively, as a result of the
derivative contracts.
OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Currently, the Company has entered into various derivative financial instruments for gas and oil production throughout the remainder of 1999. In connection with these transactions, the Company recorded a decrease in oil revenues of $7 million during the first quarter of 1999. The derivative financial instruments for gas and oil production discussed in the preceding sentence were cancelled in April 1999 and replaced with Collars. At May 14, 1999, Collars are in place for portions of the Company's oil production for the remainder of 1999 at floors of $12.00 and $15.00 per barrel and ceilings of $15.00, $18.85 and $19.00 per barrel. In addition, Collars are in place for portions of the Company's gas production through October 1999 at a floor of $2.15 per MMBtu and a ceiling of $2.45 per MMBtu. While derivative financial instruments are intended to reduce the Company's exposure to declines in the market price of natural gas and crude oil, these derivative financial instruments will significantly limit the Company's loss/gain from decrease\increases in the market price of natural gas and crude oil below/above the floors/ceilings noted above. As a result, gains and losses on derivative financial instruments are generally offset by similar changes in the realized price of natural gas and crude oil. Gains and losses from these financial instruments are recognized in revenues for the periods to which the derivative financial instruments relate.
Note 5. Debt
March 31, 1999 December 31, 1998
------------------------- -----------------------
Credit Facility (average interest rate of 6.2%), due 2004... $ 585,000 $ -
OEI credit facility (average interest rate of 7.0%)......... - 357,000
13 1/2% senior notes, due 2004.............................. 245 245
8 1/4% senior notes, due 2018............................... 125,000 125,000
7 5/8% senior notes, due 2005............................... 125,000 125,000
10 3/8% senior subordinated notes, due 2005................. 150,000 150,000
9 3/4% senior subordinated notes, due 2006.................. 159,340 159,318
8 7/8% senior subordinated notes, due 2007.................. 199,719 199,711
8 3/8% senior subordinated notes, due 2008.................. 250,000 250,000
7 7/8% senior notes, due 2003............................... 98,250 -
7 1/2% senior notes, due 2027............................... 124,500 -
8 5/8% senior subordinated notes, due 2005.................. 99,500 -
Monetary production payment, due 2000....................... 20,362 -
Other....................................................... 8,444 6,452
------------------------- -----------------------
1,945,360 1,372,726
Less: current maturities................................. (836) (836)
------------------------- -----------------------
$ 1,944,524 $ 1,371,890
========================= =======================
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Concurrently with the closing of the Merger on March 30, 1999, the Company entered into an $800 million credit facility (the "Credit Facility") which combined the existing credit facilities of both Old Ocean and Seagull. The Credit Facility consists of a $500 million five-year revolving facility and a renewable $300 million 364-day facility. The Credit Facility bears interest, at the Company's option, at a competitive bid or LIBOR or prime rates plus applicable margins ranging from zero to 1.7%. Financing fees of approximately $6 million were incurred related to the
OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Credit Facility. As of March 31, 1999, borrowings outstanding against the Credit Facility totaled $585 million, leaving $186 million of available credit.
The Credit Facility contains certain covenants and restrictive provisions including limitations on the incurrence of additional debt and payment of dividends and the maintenance of certain financial ratios. Under the most restrictive of these provisions, approximately $38 million was available for payment of cash dividends on common stock or to repurchase common stock as of March 31, 1999.
As a result of the Merger, the liabilities of both Seagull and Old Ocean became the liabilities of the Company. Accordingly, the financial statements of the Company include an aggregate of approximately $563 million of outstanding Seagull debt as of March 31, 1999. As discussed above, Seagull's existing revolving credit facility was replaced by the Credit Facility. The remaining Seagull debt was recorded at a discount as follows: the 7 1/2% Senior Notes at a discount of $26 million, the 7 7/8% Senior Notes at a discount of $2 million, and the 8 5/8% Senior Subordinated Notes at a discount of $1 million.
Note 6. Segment Information
As a result of the Merger, the Company now has two reportable segments. The reportable segments consist of the Company's oil and gas operations and the Company's Alaska transmission and distribution operations. Information about the Company's operations by business segment for the three months ended March 31, 1999 and 1998 is set forth below (stated in thousands):
Three Months Ended March 31,
-------------------------------------------------
1999 1998
--------------------- -----------------------
Revenues:
Oil and gas operations.......................................... $ 105,694 $ 141,056
===================== =======================
Operating profit (loss):
Oil and gas operations.......................................... $ (25,137) $ 26,678
Corporate....................................................... (6,013) (5,341)
--------------------- -----------------------
$ (31,150) $ 21,337
===================== =======================
March 31, 1999 December 31, 1998
--------------------- -----------------------
Total assets:
Oil and gas operations.......................................... $ 2,902,932 $ 1,982,274
ENSTAR Alaska (1)............................................... 312,143 -
Corporate....................................................... 123,955 24,686
--------------------- -----------------------
$ 3,339,030 $ 2,006,960
===================== =======================
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(1) As discussed in Note 1, the Company's Alaska transmission and distribution operations were acquired as a result of the Merger on March 30, 1999.
OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 7. Supplemental Guarantor Information
Ocean Energy, Inc., a Louisiana corporation and wholly-owned subsidiary of the Company ("Ocean Louisiana"), has unconditionally guaranteed the full and prompt performance of the Company's obligations under certain of the notes and related indentures, including the payment of principal, premium (if any) and interest. None of the referenced indentures place significant restrictions on a wholly-owned subsidiary's ability to make distributions to the parent. In order to provide meaningful financial data relating to the guarantor (i.e., Ocean Louisiana on an unconsolidated basis), the following condensed consolidating financial information has been provided following the policies set forth below:
1) Investments in subsidiaries are accounted for by the Company on the cost basis. Earnings of subsidiaries are therefore not reflected in the related investment accounts.
2) Certain reclassifications were made to conform all of the financial information to the financial presentation on a consolidated basis. The principal eliminating entries eliminate investments in subsidiaries and intercompany balances.
OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Supplemental Condensed Consolidating Statements of Operations For the Three Months Ended March 31, 1999 and 1998
(Amounts in Thousands)
Unconsolidated
--------------------------------------------------------------
Guarantor Non-Guarantor Consolidated
1999 OEI Subsidiary Subsidiaries OEI
------------------ -------------------- ------------------- ------------------
Revenues........................... $ - $ 48,800 $ 56,894 $ 105,694
Costs of Operations:
Operations and maintenance...... - 24,469 20,691 45,160
Depreciation, depletion and
amortization.................. - 30,328 28,280 58,608
Provision for loss on sale of
Canadian assets .............. - - 28,500 28,500
General and administrative...... - 4,330 246 4,576
------------------ -------------------- ------------------- ------------------
Operating Loss..................... - (10,327) (20,823) (31,150)
Merger Expense..................... - 40,652 - 40,652
Interest Expense................... 14,484 12,477 (1,791) 25,170
Interest Income and Other.......... (1) (3,487) 3,005 (483)
------------------ -------------------- ------------------- ------------------
Loss Before Taxes.................. (14,483) (59,969) (22,037) (96,489)
Income Tax Provision (Benefit)..... (27,716) 9,041 3,237 (15,438)
------------------ -------------------- ------------------- ------------------
Net Income (Loss).................. $ 13,233 $ (69,010) $ (25,274) $ (81,051)
================== ==================== =================== ==================
1998
Revenues........................... $ - $ 83,495 $ 57,561 $ 141,056
Costs of Operations:
Operations and maintenance...... - 27,455 15,197 42,652
Depreciation, depletion and
amortization.................. - 36,817 35,954 72,771
General and administrative...... - 4,041 255 4,296
------------------ -------------------- ------------------- ------------------
Operating Profit - 15,182 6,155 21,337
Merger Expense..................... - 39,000 - 39,000
Interest Expense................... 4,029 10,549 (2,074) 12,504
Interest Income and Other.......... - 116 (602) (486)
------------------ -------------------- ------------------- ------------------
Income (Loss) Before Taxes......... (4,029) (34,483) 8,831 (29,681)
Income Tax Provision (Benefit)..... (21,822) 19,768 506 (1,548)
------------------ -------------------- ------------------- ------------------
Net Income (Loss).................. $ 17,793 $ (54,251) $ 8,325 $ (28,133)
================== ==================== =================== ==================
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OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Supplemental Condensed Consolidating Balance Sheets At March 31, 1999 and December 31, 1998
(Amounts in Thousands)
Unconsolidated
--------------------------------------------------
Guarantor Non-Guarantor Eliminating Consolidated
March 31, 1999 OEI Subsidiary Subsidiaries Entries OEI
-------------- --------------- --------------- --------------- ---------------
ASSETS
Current Assets................ $ 535 $ 49,248 $ 215,814 $ - $ 265,597
Intercompany Investments...... 2,746,861 173,435 (1,331,617) (1,588,679) -
Property, Plant and Equipment,
Net........................ 10,148 622,797 2,156,838 - 2,789,783
Other Assets.................. 113,272 196,484 (26,106) - 283,650
-------------- --------------- --------------- --------------- ---------------
Total Assets.................. $ 2,870,816 $ 1,041,964 $ 1,014,929 $(1,588,679) $ 3,339,030
============== =============== =============== =============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities........... $ 114,984 $ 209,874 $ 97,666 $ - $ 422,524
Long-Term Debt................ 1,623,676 313,240 7,608 - 1,944,524
Other Liabilities............. 14,406 14,454 45,018 - 73,878
Shareholders' Equity.......... 1,117,750 504,396 864,637 (1,588,679) 898,104
-------------- --------------- --------------- --------------- ---------------
Total Liabilities and
Shareholders' Equity....... $ 2,870,816 $ 1,041,964 $ 1,014,929 $(1,588,679) $ 3,339,030
============== =============== =============== =============== ===============
December 31, 1998
ASSETS
Current Assets................ $ - $ 49,680 $ 104,101 $ - $ 153,781
Intercompany Investments...... 1,645,933 174,608 (410,255) (1,410,286) -
Property, Plant and Equipment,
Net........................ - 674,598 907,041 - 1,581,639
Other Assets.................. 24,686 214,868 31,986 - 271,540
-------------- --------------- --------------- --------------- ---------------
Total Assets.................. $ 1,670,619 $ 1,113,754 $ 632,873 $(1,410,286) $ 2,006,960
============== =============== =============== =============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities........... $ 31,271 $ 187,878 $ 18,033 $ - $ 237,182
Long-Term Debt................ 1,009,274 357,000 5,616 - 1,371,890
Other Liabilities............. - 981 19,964 - 20,945
Shareholders' Equity.......... 630,074 567,895 589,260 (1,410,286) 376,943
-------------- --------------- --------------- --------------- ---------------
Total Liabilities and
Shareholders' Equity....... $ 1,670,619 $ 1,113,754 $ 632,873 $(1,410,286) $ 2,006,960
============== =============== =============== =============== ===============
|
OCEAN ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Supplemental Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 1999 and 1998
(Amounts in Thousands)
Unconsolidated
----------------------------------------------------------
Guarantor Non-Guarantor Consolidated
1999 OEI Subsidiary Subsidiaries OEI
------------------ ----------------- ----------------- ------------------
Cash Flows from Operating
Activities:
Net Income (Loss)............... $ 13,233 $ (69,010) $ (26,274) $ (81,051)
Adjustments to reconcile net
income (loss) to net cash from
operating activities.......... (27,262) 69,613 71,357 113,708
Changes in assets and liabilities 14,793 34,908 (6,588) 43,113
------------------ ----------------- ----------------- ------------------
Net Cash Provided By
Operating Activities............ 764 35,511 39,495 75,770
Cash Flows Used in Investing
Activities...................... - (9,124) (4,879) (14,003)
Cash Flows Used In
Financing Activities............ (764) (26,387) (12,532) (39,683)
------------------ ----------------- ----------------- ------------------
Net Increase in Cash and
Cash Equivalents................ - - 22,084 22,084
Cash and Cash Equivalents:
Beginning of Period............. - - 10,706 10,706
------------------ ----------------- ----------------- ------------------
End of Period................... $ - $ - $ 32,790 $ 32,790
================== ================= ================= ==================
1998
Cash Flows from Operating
Activities:
Net Income (Loss)............... $ 17,793 $ (54,251) $ 8,325 $ (28,133)
Adjustments to reconcile net income
(loss) to net cash from
operating activities.......... (21,684) 61,830 34,580 74,726
Changes in assets and liabilities 3,863 64,288 (23,514) 44,637
------------------ ----------------- ----------------- ------------------
Net Cash Provided By (Used In)
Operating Activities............ (28) 71,867 19,391 91,230
Cash Flows Used in Investing
Activities...................... - (133,882) (69,545) (203,427)
Cash Flows Provided By Financing
Activities...................... 28 68,702 45,178 113,908
------------------ ----------------- ----------------- ------------------
Net Increase (Decrease) in Cash and
Cash Equivalents................ - 6,687 (4,976) 1,711
Cash and Cash Equivalents:
Beginning of Period............. 2 2,653 9,034 11,689
------------------ ----------------- ----------------- ------------------
End of Period................... $ 2 $ 9,340 $ 4,058 $ 13,400
================== ================= ================= ==================
|
OCEAN ENERGY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is intended to assist in understanding the Company's financial position, results of operations and cash flows for the quarters ended March 31, 1999 and 1998.
As discussed in Note 1, effective March 30, 1999, Ocean Energy, Inc. ("Old Ocean") was merged with and into Seagull Energy Corporation ("Seagull"). In conjunction with the Merger, Seagull amended its Articles of Incorporation to change its name to Ocean Energy, Inc. In addition, effective March 27, 1998, United Meridian Corporation ("UMC") was merged into Old Ocean ("UMC Merger"). The UMC Merger was accounted for as a pooling of interests. Accordingly, the consolidated financial statements for periods prior to the UMC Merger were restated to conform accounting policies and combine the historical results of Old Ocean and UMC.
The Company's accompanying unaudited consolidated financial statements and the notes thereto and the consolidated financial statements and notes thereto included in the Annual Reports on Form 10-K for the year ended December 31, 1998 of Old Ocean and Seagull contain detailed information that should be referred to in conjunction with the following discussion.
Results Of Operations
Consolidated Highlights
(Amounts in Thousands)
Three Months Ended March 31,
---------------------------------------
1999 1998
----------------- ----------------
Revenues:
Oil and gas operations ............................................. $ 105,694 $ 141,056
================= ================
Operating profit (loss):
Oil and gas operations ............................................. (25,137) 26,678
Corporate........................................................... (6,013) (5,341)
----------------- ----------------
$ (31,150) $ 21,337
================= ================
Net loss............................................................... $ (81,051) $ (28,133)
Net cash provided by operating activities before
changes in operating assets and liabilities......................... $ 32,657 $ 46,593
Net cash provided by operating activities.............................. $ 75,770 $ 91,230
|
Revenues decreased $35.4 million and the Company incurred an operating loss of $31.2 million for the first quarter of 1999 compared to operating profit of $21.3 million for the first quarter of 1998 primarily due to lower realized oil and gas prices and the loss on sale of Canadian assets of $28.5 million, partially offset by an increase in production for the quarter. Net loss increased from $28.1 million for the first quarter of 1998 to $81.1 million for the same period in 1999 due to these same factors and an increase in interest expense, partially offset by an increase in income tax benefit.
OCEAN ENERGY, INC.
Oil And Gas Operations
(Amounts in Thousands)
Three Months Ended March 31,
-------------------------------------------
1999 1998
-------------------- ------------------
Revenues:
Natural gas......................................................... $ 47,024 $ 57,651
Oil and NGLs........................................................ 58,670 83,405
-------------------- ------------------
105,694 141,056
-------------------- ------------------
Operations and maintenance............................................ 45,160 42,652
Depreciation, depletion and amortization.............................. 57,171 71,726
Provision for loss on sale of Canadian assets......................... 28,500 -
-------------------- ------------------
Operating profit (loss)............................................. $ (25,137) $ 26,678
==================== ==================
|
Revenues - The Company's total revenues decreased approximately 25%, to
$105.7 million for the three months ended March 31, 1999, from $141.1 million
for the comparable period in 1998. The decrease in oil and gas revenues is
primarily attributable to lower realized oil and gas prices, partially offset by
a 2% increase in production for the first quarter of 1999. Production levels for
the three months ended March 31, 1999, increased to 116.8 MBOE per day from
114.4 MBOE per day for the comparable period in 1998.
Oil revenues decreased $24.7 million, or 30%, to $58.7 million for the three months ended March 31, 1999, from $83.4 million for the three months ended March 31, 1998. This decrease is the result of the precipitous decline in world crude oil prices experienced in 1998, partially offset by a 6% increase in production for the first quarter of 1999. The average realized price for oil decreased 33% to $10.04 in the first quarter of 1999 compared to $15.09 in the same period in 1998. Daily oil production increased to 64,933 Bbl in the first quarter of 1999 as compared to 61,401 Bbl for the same period in 1998. The production increase was due primarily to increased production in Cote d'Ivoire and Equatorial Guinea.
Natural gas revenues decreased $10.7 million, or 18%, to $47.0 million for the three months ended March 31, 1999, from $57.7 million for the three months ended March 31, 1998, primarily due to the decline in gas prices along with a slight reduction in domestic production. The average realized price for natural gas decreased 16% to $1.68 per Mcf in the first quarter of 1999 as compared to $2.01 in the first quarter of 1998. Natural gas production for the first quarter of 1999 was 27,989 MMcf, a decrease of 2% over 1998 volumes due primarily to natural production declines in North America.
For the quarters ended March 31, 1999 and 1998, oil and gas revenues have been increased by $2 million and $5 million, as a result of derivative contracts. In addition, the Company's oil revenues for the first quarter of 1999 were also affected by a $7 million loss in derivative activities.
OCEAN ENERGY, INC.
Exploration And Production Operating Data
Three Months Ended March 31,
--------------------------------------------------------------------------------------
Net Daily Production Unit Price
1999 1998 1999 1998
---------------- ----------------- ----------------- -----------------
Gas Sales (1):
Domestic.............. 251.5 272.6 $ 1.69 $ 2.10
Canada (2)............ 36.0 25.1 $ 1.54 $ 1.31
Cote d'Ivoire......... 23.5 20.4 $ 1.83 $ 1.71
---------------- -----------------
Total................... 311.0 318.1 $ 1.68 $ 2.01
================ =================
Oil and NGL Sales(1):
Domestic.............. 39,811 42,401 $ 9.42 $ 15.34
Canada (2)............ 1,233 1,189 $ 11.10 $ 12.88
Cote d'Ivoire......... 4,489 2,322 $ 9.88 $ 15.67
Equatorial Guinea..... 19,400 15,489 $ 11.28 $ 14.52
---------------- -----------------
Total................... 64,933 61,401 $ 10.04 $ 15.09
================ =================
|
(1) Natural gas is stated in MMcf and $ per Mcf. Oil and NGLs are stated in Bbl
and $ per Bbl.
(2) The Company's Canadian operations were sold April 15, 1999.
Operations and Maintenance Costs - Total operations and maintenance costs increased $2.5 million, or 6%, to $45.2 million for the three months ended March 31, 1999 from $42.7 million for the comparable 1998 period. This increase primarily results from fluctuations in normal operating expenses, including operating expenses associated with increased production from new facilities. Production and operating costs remained relatively flat at $4.30 per BOE for the quarter ended March 31, 1999, compared to $4.14 per BOE in the comparable 1998 period.
Depreciation, Depletion and Amortization Expense - Depreciation, depletion and amortization (DD&A) expense related to oil and gas operations decreased $14.5 million, or 20%, to $57.2 million for the three months ended March 31, 1999, from $71.7 million for the comparable 1998 period. DD&A for Oil and Gas Operations decreased $1.53 per BOE, or 22%, to $5.44 per BOE for the quarter ended March 31, 1999, from $6.97 per BOE for the comparable 1998 period. This variance is primarily attributable to the effect of the non-cash impairments of oil and gas properties recognized by the Company in 1998.
Other
General and Administrative Expenses - General and administrative expenses remained relatively constant at $4.6 million for the three months ended March 31, 1999 versus $4.3 million in the comparable 1998 period.
Interest Expense - Interest and debt expense increased $12.7 million to $25.2 million for the three months ended March 31, 1999 from $12.5 million in the comparable 1998 period. This increase is primarily the result of an increase in debt levels in the first quarter of 1999 resulting from the higher capital spending program throughout 1998. Interest expense for the remainder of 1999 will continue to be higher than 1998 levels due to the inclusion of the outstanding debt of
OCEAN ENERGY, INC.
Seagull of approximately $563 million in the Company's financial statements. However, proceeds from the expected sales of certain non-core oil and gas assets during the remainder of 1999 will be used to repay existing long-term debt.
Merger Expense - Merger expenses of $41 million associated with the Merger between Old Ocean and Seagull have been recorded in the first quarter of 1999. Merger expenses of $39 million associated with the March 1998 merger between Old Ocean and UMC were recorded in the first quarter of 1998.
Income Tax Benefit - An income tax benefit of $15.4 million was recognized for the three months ended March 31, 1999, compared to a benefit of $1.5 million for the three months ended March 31,1998. Consistent with SFAS No. 109, Accounting for Income Taxes, the deferred income tax provision or benefit was derived primarily from changes in deferred income tax assets and liabilities recorded on the balance sheet. The Company currently believes that it is more likely than not that the net deferred tax asset will be realized. This will be evaluated again during integration of the operations of Old Ocean and Seagull and as assets sales take place.
Unaudited Pro Forma Condensed Combined Financial and Operating Data
The following table sets forth summary unaudited pro forma condensed combined financial and operating data which are presented to give effect to the Merger as if it had occurred as of January 1, 1998. The information does not purport to be indicative of actual results, if the Merger had been in effect for the periods indicated, or of future results. The information was prepared based on the following assumptions:
The income statements for 1999 and 1998 are a result of combining the three month income statement of Old Ocean with the three month income statement of Seagull adjusted for 1) certain costs that Seagull had expensed under the successful efforts method of accounting that are capitalized under the full cost method of accounting; 2) depreciation, depletion and amortization expense of Seagull calculated in accordance with the full cost method of accounting applied to the adjusted basis of the properties acquired using the purchase method of accounting; 3) decreased interest expense resulting from the revaluation of Seagull debt under the purchase method of accounting, including the elimination of amortization of historical debt issuance costs; and 4) the related income tax effects of these adjustments based on the applicable statutory tax rate. It should be noted that the pro forma net loss for the three months ended March 31, 1998, does not include the impairments of oil and gas properties that were recorded by the companies in the second and fourth quarters of 1998 and does not include expensed merger costs relating to the Merger. The allocation of purhase price to specific assets and liabilities is based on certain estimates of fair values and costs which will be adjusted to actual amounts as determined. Such adjustments are not expected to be material.
OCEAN ENERGY, INC.
Unaudited Pro Forma Information
(Amounts in Thousands, Except Per Unit Data)
Three Months Ended March 31,
-------------------------------------------
1999 1998
------------------- --- -------------------
Unaudited Pro Forma Condensed Combined Statements of Income:
Revenues:
Oil and gas operations.............................................. $ 162,799 $ 228,537
Alaska transmission and distribution................................ 38,661 31,876
------------------- -------------------
201,460 260,413
------------------- -------------------
Cost of operations:
Operations and maintenance.......................................... 70,978 78,046
ENSTAR Alaska cost of gas sold...................................... 17,852 14,763
Depreciation, depletion and amortization............................ 93,258 114,172
Provision for loss on sale of Canadian assets....................... 28,500 -
General and administrative.......................................... 8,867 7,680
------------------- -------------------
219,455 214,661
------------------- -------------------
Operating profit (loss)................................................ (17,995) 45,752
Other (income) expense:
Merger expenses (1)................................................. - 39,000
Interest expense.................................................... 35,375 20,896
Interest income and other........................................... (5,517) (1,018)
------------------- -------------------
29,858 58,878
------------------- -------------------
Loss before income taxes............................................... (47,853) (13,126)
Income tax expense (benefit)........................................... (1,702) 6,671
------------------- -------------------
Net loss............................................................... (46,151) (19,797)
Preferred stock dividend............................................... 801 -
------------------- -------------------
Net loss available to common shareholders.............................. $ (46,952) $ (19,797)
=================== ===================
Loss per common share:
Basic and Diluted................................................... $ (0.28) $ (0.12)
=================== ===================
Weighted average number of common shares outstanding:
Basic and Diluted................................................... 165,914 163,113
=================== ===================
Capital Expenditures:
Oil and gas operations.............................................. $ 78,341 $ 257,636
ENSTAR Alaska ...................................................... 1,698 1,539
Corporate........................................................... 3,877 3,713
------------------- -------------------
Total (2)........................................................... $ 83,916 $ 262,888
=================== ===================
|
(1) Excludes approximately $41 million of merger expenses recorded in the quarter ended March 31, 1999. During 1998, the Company recorded $39 million in merger expenses related to the UMC Merger, which was accounted for as a pooling transaction.
(2) Includes capitalized interest of $9 million and $7 million and certain employee-related costs of $6 million and $7 million respectively.
OCEAN ENERGY, INC.
Unaudited Pro Forma Information
(Amounts in Thousands, Except Per Unit Data)
Three Months Ended March 31,
-------------------------------------------
1999 1998
------------------- --- -------------------
Operations Data:
Oil and gas operations
Net daily natural gas production (MMcf):
Domestic.......................................................... 510.9 564.3
Canada (1)........................................................ 35.9 25.1
Cote d'Ivoire..................................................... 33.2 30.8
Other international............................................... 8.4 12.3
------------------- -------------------
Total....................................................... 588.4 632.5
=================== ===================
Average natural gas prices ($ per Mcf):
Domestic.......................................................... $ 1.64 $ 2.06
Canada (1)........................................................ $ 1.54 $ 1.31
Cote d'Ivoire..................................................... $ 1.73 $ 1.64
Other international............................................... $ 2.28 $ 2.74
Weighted average.................................................. $ 1.65 $ 2.02
Net daily oil and NGL production (Bbl):
Domestic.......................................................... 43,907 47,454
Canada (1)........................................................ 1,233 1,189
Egypt............................................................. 10,131 10,504
Cote d'Ivoire..................................................... 5,474 3,422
Russia............................................................ 4,190 3,993
Equatoral Guinea.................................................. 19,400 15,489
Other international............................................... 54 286
------------------- -------------------
Total.......................................................... 84,389 82,337
=================== ===================
Net daily production (MBOE):........................................ 182.5 187.8
=================== ===================
Average oil and NGL prices ($ per Bbl):
Domestic.......................................................... $ 9.44 $ 15.15
Canada (1)........................................................ $ 11.10 $ 12.84
Egypt............................................................. $ 10.91 $ 13.16
Cote d'Ivoire..................................................... $ 10.00 $ 13.92
Russia............................................................ $ 6.64 $ 11.62
Equatorial Guinea................................................. $ 11.28 $ 14.52
Other international............................................... $ 14.22 $ 17.61
Total......................................................... $ 9.96 $ 14.53
Average costs ($ per BOE):
Production and operating costs...................................... $ 4.00 $ 4.30
General and administrative expenses................................. 0.54 0.45
Interest expense.................................................... 2.09 1.17
------------------- -------------------
Cash costs 6.63 5.92
Depletion, depreciation and amortizaton............................. 5.55 6.63
------------------- -------------------
All-in costs $ 12.18 $ 12.55
=================== ===================
|
(1) The Company's Canadian operations were sold April 15, 1999.
OCEAN ENERGY, INC.
Unaudited Pro Forma Information
(Amounts in Thousands, Except Per Unit Data)
Three Months Ended March 31,
1999 1998
------------------- --- -------------------
ENSTAR Alaska Operating Data: (1)
Degree days (2)..................................................... 4,516 3,697
Sales and transport volumes (MMcf).................................. 16,417 13,622
Sales and transport margin per MMcf................................. $ 1.27 $ 1.26
|
(1) This segment's business is seasonal with approximately 65% - 70% of its
sales made in the first and fourth quarters of each year.
(2) A measure of weather severity calculated by subtracting the mean
temperature for each day from 65 degrees Fahrenheit. More degree days
equate to colder weather.
Liquidity And Capital Resources
Liquidity - Concurrently with the closing of the Merger on March 30, 1999, the Company entered into an $800 million credit facility (the "Credit Facility") which combined the existing credit facilities of both Old Ocean and Seagull. The Credit Facility consists of a $500 million five-year revolving facility and a renewable $300 million 364-day facility. The Credit Facility bears interest, at the Company's option, at a competitive bid or LIBOR or prime rates plus applicable margins ranging from zero to 1.7%. Financing fees of approximately $6 million were incurred related to the Credit Facility. As of March 31, 1999, borrowings outstanding against the facility totaled $585 million, leaving $186 million of available credit.
The Company's debt to total capitalization ratio has decreased to 68% at March 31, 1999, from 78% at December 31, 1998. The Company plans to pursue additional property sales in 1999, the proceeds from which will be used to pay down amounts outstanding under the Credit Facility.
The ability of the Company to satisfy its obligations and fund planned capital expenditures will be dependent upon its future performance. Such future performance is subject to many conditions that are beyond the Company's control, particularly oil and gas prices, and the Company's ability to obtain additional debt and equity financing, if necessary. The Company currently expects that its cash flow from operations and availability under the Credit Facility will be adequate to execute its 1999 business plan. However, no assurance can be given that the Company will not experience liquidity problems from time to time or on a long-term basis. If the Company's cash flow from operations and availability under the Credit Facility are not sufficient to satisfy its cash requirements, there can be no assurance that additional debt or equity financing will be available to meet its requirements.
Effects of Leverage - The Company has outstanding indebtedness of
approximately $1.9 billion as of March 31, 1999. The Company's level of
indebtedness has several important effects on its future operations, including
(i) a substantial portion of the Company's cash flow from
OCEAN ENERGY, INC.
operations must be dedicated to the payment of interest on its indebtedness and will not be available for other purposes, (ii) the covenants contained in the various indentures require the Company to meet certain financial tests, and contain other restrictions that limit the Company's ability to borrow additional funds or to dispose of assets and may affect the Company's flexibility in planning for, and reacting to, changes in its business, including possible acquisition activities and (iii) the Company's ability to obtain additional financing in the future for working capital, expenditures, acquisitions, general corporate or other purposes may be impaired. None of the indentures place significant restrictions on a wholly-owned subsidiary's ability to make distributions to the parent company.
The Company believes it is currently in compliance with all covenants contained in the respective indentures.
Capital Expenditures
(Amounts in Thousands)
Three Months Ended March 31,
-------------------------------------------
1999 1998
------------------ ------------------
Oil and Gas Operations:
Leasehold acquisitions............................................. $ 3,899 $ 8,807
Exploration costs.................................................. 8,991 86,949
Development costs.................................................. 36,019 107,671
------------------ ------------------
48,909 203,427
Corporate............................................................ 2,817 1,327
------------------ ------------------
$ 51,726 $ 204,754
================== ==================
|
The Company's capital expenditure budget for 1999 is expected to be approximately $350-400 million (excluding proved property acquisitions). Actual capital spending may vary from the capital expenditure budget. The Company will evaluate its level of capital spending throughout the year based upon drilling results, commodity prices, cash flows from operations and property acquisitions.
The Company makes, and will continue to make, substantial capital expenditures for the acquisition, exploration, development, production and abandonment of its oil and natural gas reserves. The Company has historically funded its expenditures from cash flows from operating activities, bank borrowings, sales of equity and debt securities, sales of non-strategic oil and natural gas properties, sales of partial interests in exploration concessions and project finance borrowings. The Company intends to finance 1999 capital expenditures primarily with funds provided by operations.
Accounting Pronouncements
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement establishes standards of accounting for and disclosures of derivative instruments and hedging activities. This statement is effective for fiscal years beginning after June 15, 1999. The Company has not yet determined the impact of this statement on the Company's financial condition or results of operations.
OCEAN ENERGY, INC.
Environmental
Compliance with applicable environmental and safety regulations by the Company has not required any significant capital expenditures or materially affected its business or earnings. The Company believes it is in substantial compliance with environmental and safety regulations and foresees no material expenditures in the future; however, the Company is unable to predict the impact that compliance with future regulations may have on capital expenditures, earnings and competitive position.
Year 2000
Historically, most computer systems (including microprocessors embedded into field equipment and other machinery) utilized software that recognized a calendar year by its last two digits. Beginning in the year 2000, these systems will require modification to distinguish twenty-first century dates from twentieth century dates ("Year 2000 issues").
Accordingly, the Company has initiated a comprehensive plan to address the Year 2000 issues associated with its operations and business (the "Year 2000 plan"). The Company's Board of Directors has been briefed about the Year 2000 problem generally and as it may affect the Company. The Board has created a committee consisting of senior executives and a representative from the Board to oversee the adoption and implementation of the Year 2000 plan covering all of the Company's business units. The plan has been developed with an aim towards taking reasonable steps to prevent the Company's mission-critical functions from being impaired due to the Year 2000 problem.
The plan includes several phases - (i) assessment of all of the Company's
systems and technology; (ii) implementation and testing of modifications to or
replacements of existing systems and technology, both financial and operational;
(iii) communication with key business partners regarding Year 2000 issues; and
(iv) contingency planning.
In planning and developing the project, the Company has considered both its information technology ("IT") and its non-IT systems. The term "computer equipment and software" includes systems that are commonly thought of as IT systems, including accounting, data processing, telephone systems, scanning equipment, and other miscellaneous systems. Non-IT systems include alarm systems, fax machines, monitors for field operations, and other miscellaneous systems. Both IT and non-IT systems may contain embedded technology, which complicates the Company's Year 2000 identification, assessment, remediation, and testing efforts. In those cases where the Company has identified equipment and software that is not Year 2000 ready, the Company is in the process of replacing or upgrading such items so they will calculate dates correctly in the new century. Furthermore, as new equipment and software are purchased in the ordinary course of business, the Company ensures that such purchases are Year 2000 ready.
During 1997, the Company utilized both internal and external resources to test, reprogram or replace many of its IT systems, primarily financial and operational software, for necessary
OCEAN ENERGY, INC.
modifications identified in its assessment of Year 2000 issues. As of the date of this filing, the Company estimates that approximately 90% of its Year 2000 plan related to these IT systems has been implemented and anticipates that the remainder of the plan, including any necessary remedial action, will be completed by June 30, 1999, except for the reserves system which is scheduled for the third quarter of 1999. During September 1998, the Company began utilizing internal and external resources to evaluate its vulnerability to Year 2000 issues related to its non-IT systems, primarily field operational systems and equipment.
The Company has employed outside engineering firms to inventory and evaluate embedded chips in control, metering and monitoring devices on the Company's producing properties. Such devices are extensively used in offshore operations. While some remedial work has been required, it was not extensive and is essentially complete.
The Company has also initiated formal communications with all of its key
business partners to determine the extent to which the Company is vulnerable to
those third parties' potential failure to remediate their own Year 2000 issues.
Key business partners were identified in four categories of companies including:
(a) major vendors and contractors (including banks and other financial service
companies); (b) major customers; (c) utility companies; and (d) third party
operators of major oil and gas properties. Questionnaires were sent to the
Company's key business partners to confirm their Year 2000 activities and
follow-up letters, telephone calls, and meetings are being used, as appropriate,
to obtain additional information.
During the fourth quarter of 1998, the Company began developing contingency plans for its financial and operational systems. The Company's contingency plans are being designed to minimize the disruptions or other adverse effects resulting from Year 2000 incompatibilities regarding these systems, and to facilitate the early identification and remediation of Year 2000 problems that first manifest themselves after January 1, 2000.
The failure to correct a material Year 2000 issue could result in an interruption in, or a failure of, certain normal business activities, resulting in a material, adverse affect on the Company's results of operations, liquidity and financial position. The Company's remediation efforts are expected to reduce significantly the Company's level of uncertainty about Year 2000 compliance and the possibility of interruptions of normal operations. However, there can be no guarantee that other companies' systems, on which the Company's systems rely, will be timely converted, or that a failure to convert by another company, or a conversion that is incompatible with the Company's systems, would not have a material adverse effect on the Company. Disruptions to the oil and gas transportation networks controlled by third-party carriers could result in reduced production volumes delivered to market.
In addition, risks associated with foreign operations may increase with the uncertainty of Year 2000 compliance by foreign governments and their supporting infrastructures. The Company's Year 2000 task force members have been asked to investigate the compliance activities of certain third parties and foreign governments to determine the risks to the Company. This investigation is in progress.
OCEAN ENERGY, INC.
In a recent Securities and Exchange Commission release regarding Year 2000 disclosures, the Securities and Exchange Commission stated that public companies must disclose the most reasonably likely worst case Year 2000 scenario. Analysis of the most reasonably likely worst case Year 2000 scenarios the Company may face leads to contemplation of the following possibilities which, though unlikely in some or many cases, must be included in any consideration of worst cases: widespread failure of electrical, gas, and similar supplies by utilities serving the Company domestically and internationally; widespread disruption of the services of communications common carriers domestically and internationally; similar disruption to means and modes of transportation for the Company and its employees, contractors, suppliers, and customers; significant disruption to the Company's ability to gain access to, and remain working in, office buildings and other facilities; the failure of substantial numbers of the Company's mission-critical information (computer) hardware and software systems, including both internal business systems and systems (such as those with embedded chips) controlling operational facilities such as onshore and offshore oil and gas rigs, oil and gas pipelines and gas plants domestically and internationally, the effects of which would have a cumulative material adverse impact on the Company. Among other things, the Company could face substantial claims by customers or loss of revenues due to service interruptions, inability to fulfill contractual obligations, inability to account for certain revenues or obligations or to bill customers accurately and on a timely basis, and increased expenses associated with litigation, stabilization of operations following mission-critical failures, and the execution of contingency plans. the Company could also experience an inability by customers, traders, and others to pay, on a timely basis or at all, obligations owed to the Company. Under these circumstances, the adverse effect on the Company, and the diminution of the Company's revenues, would be material, although not quantifiable at this time. Further in this scenario, the cumulative effect of these failures could have a substantial adverse effect on the economy, domestically and internationally. The adverse effect on the Company, and the diminution of the Company's revenues, from a domestic or global recession or depression is also likely to be material, although not quantifiable at this time.
The total costs for the Year 2000 compliance review, evaluation, assessment and remediation efforts are not expected to be in excess of $1.0 million. Of this amount, approximately $545,000 had been incurred as of March 31, 1999.
Defined Terms
Natural gas is stated herein in billion cubic feet ("Bcf"), million cubic feet ("MMcf") or thousand cubic feet ("Mcf"). Oil, condensate and natural gas liquids ("NGL") are stated in barrels ("Bbl") or thousand barrels ("MBbl"). MMcfe and Mcfe represent the equivalent of one million and one thousand cubic feet of natural gas, respectively. Oil, condensate and NGL are converted to gas at a ratio of one barrel of liquids per six Mcf of gas, based on relative energy content. MMBOE, MBOE and BOE represent one million barrels, one thousand barrels and one barrel of oil equivalent, respectively, with six Mcf of gas converted to one barrel of liquid. MMbtu means one million British Thermal Units. A British Thermal Unit is the quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit.
OCEAN ENERGY, INC.
Forward-Looking Statements May Prove Inaccurate
This document includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
All statements other than statements of historical fact included in this
document, including, without limitation, statements regarding the financial
position, business strategy, production and reserve growth and other plans and
objectives for the future operations of the Company are forward-looking
statements.
Although the Company believes that such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will in fact occur. Important factors could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements are subject to risks and uncertainties and include information concerning cost savings from the Merger, integration of the businesses of Old Ocean and Seagull, general economic conditions and possible or assumed future results of operations of the Company, estimates of oil and gas production and reserves, drilling plans, future cash flows, anticipated capital expenditures, the Company's realization of its deferred tax assets, the level of future expenditures for environmental costs, and management's strategies, plans and objectives as set forth herein.
When used in this document, the words "believes," "expects," "anticipates," "intends" or similar expressions are intended to identify such forward-looking statements. The following important factors, in addition to those discussed elsewhere in this document could affect the future results of the energy industry in general and could cause those results to differ materially from those expressed in such forward-looking statements:
- Risks incident to the drilling and operation of oil and gas wells;
- Future production and development costs;
- The effect of existing and future laws and regulatory actions;
- The political and economic climate in the foreign jurisdictions in which the Company conducts oil and gas operations;
- The effect of changes in commodity prices, hedging activities and conditions in the capital markets; and
- Competition from others in the energy industry.
Item 3. Quantitative and Qualitative Disclosures About Market Risks.
Currently, the Company has entered into various derivative financial instruments for gas and oil production throughout the remainder of 1999. In connection with these transactions, the Company recorded a decrease in oil revenues of $7 million during the first quarter of 1999. The derivative financial instruments for gas and oil production discussed in the preceding sentence were cancelled in April 1999 and replaced with Collars. At May 14, 1999, Collars are in place for portions of the Company's oil production for the remainder of 1999 at floors of $12.00 and $15.00 per barrel and ceilings of $15.00, $18.85 and $19.00 per barrel. In addition, Collars are in place for portions of the Company's gas production through October 1999 at a floor of $2.15 per
OCEAN ENERGY, INC.
MMBtu and a ceiling of $2.45 per MMBtu. While derivative financial instruments are intended to reduce the Company's exposure to declines in the market price of natural gas and crude oil, these derivative financial instruments will significantly limit the Company's loss/gain from decrease/increases in the market price of natural gas and crude oil below/above the floors/ceilings noted above.. As a result, gains and losses on derivative financial instruments are generally offset by similar changes in the realized price of natural gas and crude oil. Gains and losses from these financial instruments are recognized in revenues for the periods to which the derivative financial instruments relate.
The Company also evaluated the potential effect that reasonably possible near term changes in interest rates may have on the Company's Credit Facility. The Credit Facility represents approximately 30% of the Company's total debt as of March 31, 1999 and is the only floating rate debt. Based upon an analysis, utilizing the actual interest rates in effect and balances outstanding as of March 31, 1999 and assuming a 10% increase in interest rates, the potential increase in annual interest expense is approximately $3.5 million.
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
On March 30, 1999, the shareholders approved a merger of Ocean Energy, Inc. with and into Seagull Energy Corporation and elected certain directors. Votes
were cast as follows:
Broker
For Against Non-Votes Abstained
--------------- -------------- -------------- -------------
Ratification of the Agreement and Plan of
Merger between Seagull and OEI......... 44,408,585 8,815,291 - 193,931
Election as a Director of the Company of:
J. Evans Attwell....................... 49,852,075 - - 3,565,732
John B. Brock.......................... 49,984,447 - - 3,433,360
Milton Carroll......................... 49,981,813 - - 3,435,994
Thomas D. Clark, Jr.................... 49,976,281 - - 3,441,526
James L. Dunlap........................ 49,980,683 - - 3,437,124
James C. Flores........................ 49,970,597 - - 3,447,210
Peter J. Fluor......................... 49,992,945 - - 3,424,862
Barry J. Galt.......................... 49,957,732 - - 3,460,075
James T. Hackett....................... 49,983,771 - - 3,434,036
Robert L. Howard....................... 49,981,097 - - 3,436,710
Elvis L. Mason......................... 49,979,881 - - 3,437,926
Charles F. Mitchell.................... 49,972,865 - - 3,444,942
David K. Newbigging.................... 49,984,669 - - 3,433,138
Dee S. Osborne......................... 49,990,337 - - 3,427,470
R.A. Walker............................ 49,988,939 - - 3,428,868
|
OCEAN ENERGY, INC.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
*4.1 Revolving Credit Agreement, dated as of March 30, 1999, among the Company, Chase Bank of Texas, National Association ("Chase Texas") (Individually and as Administrative Agent), The Chase Manhattan Bank ("Chase Manhattan") (as Auction Administrative Agent), Bank of America National Trust and Savings Association ("Bank of America") (Individually and as Syndication Agent), Bank One Texas, N. A. ("Bank One") (Individually and as Documentation Agent), Societe Generale, Southwest Agency ("Societe Generale") (Individually and as Managing Agent), the Bank of Montreal (Individually and as Managing Agent), and the other Banks signatory thereto.
*4.2 364-Day Credit Agreement, dated as of March 30, 1999, among the Company, Chase Texas (Individually and as Administrative Agent), Chase Manhattan (as Auction Administrative Agent), Bank of America (Individually and as Syndication Agent), Bank One (Individually and as Documentation Agent), Societe Generale (Individually and as Managing Agent), the Bank of Montreal (Individually and as Managing Agent), and the other Banks signatory thereto.
*4.3 Indenture, dated as of July 8, 1998, among Ocean Energy, Inc., its Subsidiary Guarantors, and U.S. Bank Trust National Association, relating to the 8 3/8% Series A Senior Subordinated Notes due 2008 and the 8 3/8% Series B Senior Subordinated Notes due 2008 (the Indenture is incorporated by reference to Exhibit 10.22 to the Form 10-Q for the period ended June 30, 1998 of Ocean Energy, Inc. (Registration No. 0-25058) filed with the Securities and Exchange Commission ("SEC") on August 14, 1998; the First Supplemental Indenture, dated March 30, 1999, is filed herewith).
*4.4 Indenture, dated as of July 8, 1998, among Ocean Energy, Inc., its Subsidiary Guarantors, and Norwest Bank Minnesota, National Association (Norwest Bank) as Trustee, relating to the 7 5/8% Senior Notes due 2005 (the Indenture is incorporated by reference to Exhibit 10.23 to the Form 10-Q for the period ended June 30, 1998 of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on August 14, 1998; the First Supplemental Indenture, dated March 30, 1999, is filed herewith).
*4.5 Indenture, dated as of July 8, 1998, among Ocean Energy, Inc., its Subsidiary Guarantors, and Norwest Bank as Trustee, relating to the 8 1/4% Senior Notes due 2018 (the Indenture is incorporated by reference to Exhibit 10.24 to the Form 10-Q for the period ended June 30, 1998 of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on August 14, 1998; the First Supplemental Indenture, dated March 30, 1999, is filed herewith).
*4.6 Indenture, dated as of July 2, 1997, among Ocean Energy, Inc., the Subsidiary Guarantors Named Therein and State Street Bank and Trust Company, as Trustee, relating to the 8 7/8% Senior Subordinated Notes due 2007 (the Indenture is incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-4 (No. 333-32715) of Ocean Energy, Inc. filed with the SEC on August 1, 1997; the First Supplemental Indenture, dated as of March 27, 1998, is incorporated by reference to Exhibit 10.11 to the Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on March 31, 1998; the Second Supplemental Indenture, dated as of March 30, 1999 is filed herewith).
*4.7 Indenture, dated as of September 26, 1996, among Ocean Energy, Inc. (f/k/a Flores & Rucks, Inc.), the Subsidiary Guarantors Named Therein and Fleet National Bank, as Trustee, relating to the 9 3/4% Senior Subordinated Notes Due 2006 (the Indenture is incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1996 of Ocean Energy, Inc. (Registration No. 0-25058); the First Supplemental Indenture, dated as of March 27, 1998, is incorporated by reference to Exhibit 10.10 to the Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on March 31, 1998; the Second Supplemental Indenture, dated March 30, 1999, is filed herewith).
OCEAN ENERGY, INC.
*4.8 Indenture, dated as of October 30, 1995, 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 Bank of Montreal Trust Company, as Trustee, relating to the 10 3/8% Senior Subordinated Notes Due 2005 (the Indenture is incorporated by reference to Exhibit 4.20 to UMC's Annual Report on Form 10-K for the year ended December 31, 1995; the First Supplemental Indenture, dated as of November 4, 1997, is incorporated by reference to Exhibit 4.11 to the Form 10-Q for the quarter ended September 30, 1998 of Ocean Energy, Inc. (Registration No. 0-25058); the Second Supplemental Indenture, dated as of March 27, 1998, is incorporated by reference to Exhibit 10.12 to the Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on March 31, 1998; the Third Supplemental Indenture, dated March 30, 1999, is filed herewith).
*4.9 Indenture, dated as of December 1, 1994, among Ocean Energy, Inc. (f/k/a Flores & Rucks, Inc.), the Subsidiary Guarantors Named Therein and Shawmut Bank Connecticut, National Association, as Trustee, relating to the 13 1/2% Senior Notes Due 2004, (the Indenture is incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K for the year ended December 31, 1994 of Ocean Energy, Inc. (Registration No. 0-25058); the First Supplemental Indenture, dated as of September 19, 1996, is incorporated by reference to Exhibit 4.1 to the Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on October 10, 1996; the Second Supplemental Indenture, dated as of July 14, 1997, is incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 of Ocean Energy, Inc. (Registration No. 0-25058); the Third Supplemental Indenture, dated as of March 27, 1998, is incorporated by reference to Exhibit 10.9 to the Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on March 31, 1998; the Fourth Supplemental Indenture, dated March 30, 1999, is filed herewith).
*4.10First Supplemental Indenture, date as of March 30, 1999, to the Senior Indenture, dated as of September 1, 1997, relating to the 7 1/2% Senior Notes Due 2027.
*4.11First Supplemental Indenture, date as of March 30, 1999, to the Senior Indenture, dated as of July 15, 1993, relating to the 7 7/8% Senior Notes Due 2003.
*4.12First Supplemental Indenture, date as of March 30, 1999, to the Senior Subordinated Indenture, dated as of July 15, 1993, relating to the 8 5/8% Senior Subordinated Notes Due 2005.
4.13 Amendment No. 2 to Amended and Restated Rights Agreement, dated as of March 10, 1999, by and between the Company and BankBoston, N.A. (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12, 1999).
#10.1 Employment Agreement, dated as of March 27, 1998, among Ocean Energy, Inc. and John B. Brock, as amended (the Agreement is incorporated by reference to Exhibit 10.1 to the Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on March 31, 1998; Amendment No.1, dated as of November 24, 1998, is incorporated by reference to Exhibit 10.33 to the Annual Report on Form 10-K for the year ended December 31, 1998, of Ocean Energy, Inc. (Registration No. 0-25058).
#10.2 Employment Agreement, dated as of March 27, 1998, among Ocean Energy, Inc. and James C. Flores, as amended (the Agreement is incorporated by reference to Exhibit 10.2 to the Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on March 31, 1998; Amendment No.1, dated as of November 24, 1998, is incorporated by reference to Exhibit 10.34 to the Annual Report on Form 10-K for the year ended December 31, 1998, of Ocean Energy, Inc. (Registration No. 0-25058).
*#10.3 UMC 1987 Nonqualified Stock Option Plan, as amended, (the Plan is
incorporated herein by
OCEAN ENERGY, INC.
reference to Exhibit 10.3 to UMC's Form S-1 (No.
33-63532) filed with the SEC on May 28, 1993; the Third Amendment, dated
November 16, 1993, is incorporated herein by reference to Exhibit 10.4 to
UMC's 1993 Form 10-K filed with the SEC on March 7, 1994; the Fourth
Amendment, dated April 6, 1994, is incorporated by reference to Exhibit
10.6 to UMC's 1994 Form 10-K filed with the SEC on March 10, 1995; the
Fifth Amendment, dated November 19, 1997, is incorporated by reference to
Exhibit 4.7 to UMC's Form S-3 (No. 333-42467) filed with the SEC on
December 17, 1997); the Sixth Amendment, dated March 27, 1998 (filed
herewith); the Seventh Amendment, dated February 1, 1999 (filed herewith).
*#10.4 UMC 1994 Employee Nonqualified Stock Option Plan, as amended (the Plan is incorporated by reference to Exhibit 4.14 to UMC's Form S-8 (No. 33-79160) filed with the SEC on May 19, 1994; the First Amendment, dated November 16, 1994, is incorporated by reference to Exhibit 4.11.1 to UMC's Form S-8 (No. 33-86480) filed with the SEC on November 18, 1994; the Second Amendment, dated May 22, 1996, is incorporated by reference to Exhibit 4.3.2 to UMC's Form S-8 (No. 333-05401) filed with the SEC on June 6, 1996; the Third Amendment, dated November 13, 1996, is incorporated by reference to Exhibit 4.3.3 to UMC's Form S-8 (No. 333-28017) filed with the SEC on May 29, 1997; the Fourth Amendment, dated May 29, 1997, is incorporated herein by reference to Exhibit 4.3.4 to UMC's Form S-8 (No. 333-28017) filed with the SEC on May 29, 1997; the Fifth Amendment, dated November 19, 1997, is incorporated by reference to Exhibit 4.8 to UMC's Form S-3 (No. 333-42467) filed with the SEC on December 17, 1997; the Sixth Amendment, dated March 27, 1998 is filed herewith).
#10.5Amendment to UMC 1994 Non-Qualified Stock Option Agreement for Former Employees of General Atlantic Resources, Inc. dated as of April 16, 1996 among UMC and Donald D. Wolf (incorporated by reference to Exhibit 10.22 to UMC's Form 10-Q for the period ended September 30, 1996 filed with the Securities and Exchange Commission on August 8, 1996).
*#10.6 UMC 1994 Outside Directors' Nonqualified Stock Option Plan, as amended (the Plan is incorporated herein by reference to Exhibit 4.15 to UMC's Form S-8 (No. 33-79160) filed with the SEC on May 19, 1994; the First Amendment, dated May 22, 1996, is incorporated by reference to Exhibit 4.4.1 to UMC's Form S-8 (No. 333-05401) filed with the SEC on June 6, 1996; the Second Amendment, dated November 13, 1996, is incorporated herein by reference to Exhibit 4.4 to UMC's Form S-8 (No. 333-28017) filed with the SEC on May 29, 1997; the Third Amendment, dated November 19, 1997, is incorporated by reference to Exhibit 4.9 to UMC's Form S-3 (No. 333-42467) filed with the SEC on December 17, 1997); Fourth Amendment, dated March 27, 1998 is filed herewith).
*#10.7 UMC Petroleum Corporation Supplemental Benefit Plan effective January 1, 1994, approved by the Board of Directors on March 29, 1994 (the Plan is incorporated by reference to Exhibit 10.10 to UMC's 1994 Form 10-K filed with the SEC on March 10, 1995; the Second Amendment dated March 30, 1999 is filed herewith).
*#10.8 1994 Long-Term Incentive Plan (the Plan, as amended, is incorporated by reference to Exhibit 10.3 to Amendment No. 2 to the Registration Statement on Form S-1 (No. 33-84308) of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on October 31, 1994); the Second Amendment, dated March 27, 1998 is filed herewith).
*#10.9 1996 Long-Term Incentive Plan, as amended (the Plan, as amended, is incorporated by reference to Exhibit 99.1 to the Form S-8 (No. 333-45117) of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on January 29, 1998); the Second Amendment, dated March 27, 1998, is filed herewith).
#10.10 Long-Term Incentive Plan for Non-Executive Employees, as amended
(incorporated by reference to Exhibit 99.1 to the Form S-8 (No. 333-45119)
of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on
January 29, 1998; Amendment No. 2, incorporated by reference to Exhibit
99.2 to the Form S-8 (No. 333-49185) of Ocean Energy, Inc., filed with the
SEC on April 1, 1998;
OCEAN ENERGY, INC.
Amendment No. 3, dated as of May 20, 1998, is incorporated by reference to Exhibit 10.46 to the Annual Report on Form 10-K for the year ended December 31, 1998, of Ocean Energy, Inc. (Registration No. 0-25058).
#10.11 1998 Long-Term Incentive Plan, incorporated by reference to Appendix E to Ocean Energy, Inc.'s Joint Proxy Statement Prospectus on Form S-4 (333-43933) filed with the SEC on January 9, 1998.
#10.12 Ocean Energy, Inc. Deferred Compensation Plan incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K for the year ended December 31, 1997 of Ocean Energy, Inc. (Registration No. 0-25058).
#10.13 Severance Protection Agreement, dated as of December 20, 1997, by and between United Meridian Corporation, UMC Petroleum Corporation and the Executives named therein incorporated by reference to Exhibit 10.1 to United Meridian's Form 8-K filed with the Securities and Exchange Commission on December 23, 1997; Amendment No. 1 to Severance Protection Agreement, dated as of November 24, 1998 by and between Ocean Energy, Inc. and Jonathan M. Clarkson, as incorporated by reference to Exhibit 10.36 to the Annual Report on Form 10-K for the year ended December 31, 1998, of Ocean Energy, Inc. (Registration No. 0-25058).
*10.14 The Fifth Amendment to the Seagull Energy Corporation Management Stability Plan dated March 29, 1999.
*#10.15 Amendment to Employment Agreement by and between the Company and James T. Hackett dated November 24, 1998.
*#10.16 Amendment to Employment and Consulting Agreement by and between the Company and Barry J. Galt dated November 24, 1998.
*#10.17 Ocean Energy, Inc. 1999 Change of Control Severance Plan dated February 8, 1999; the First Amendment dated March 29, 1999.
#10.18 Form of Employment Agreement among the Company and certain executive officers and directors (incorporated by reference to Exhibit 10.21 to Annual Report on Form 10-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on February 20, 1998).
*#10.19 Form of Indemnification Agreements among the Company and certain executive officers and directors .
*27.1 Financial Data Schedule.
27.2 Restated Financial Data Schedule for the year ended December 31, 1998 (incorporated by reference to the Annual Report on Form 10-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on February 16, 1999).
27.3 Restated Financial Data Schedule for the years ended December 31, 1997 and 1996 and the quarterly periods in the year ended December 31, 1997 (incorporated by reference to Exhibit 27.1 to the Current Report on Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on May 6, 1998).
27.4 Restated Financial Data Schedule for the quarter ended March 31, 1998 (incorporated by reference to Exhibit 27.1 to the Form 10-Q of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on May 15, 1998).
27.5 Restated Financial Data Schedule for the quarter ended June 30, 1998 (incorporated by reference to Exhibit 27.1 to the Form 10-Q of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC
OCEAN ENERGY, INC.
on August 14, 1998).
27.6 Restated Financial Data Schedule for the quarter ended September 30, 1998 (incorporated by reference to Exhibit 27.1 to the Form 10-Q of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on November 16, 1998).
* Filed herewith.
# Identifies management contracts and compensatory plans or arrangements.
(b) Reports on Form 8-K: On March 12, 1999, the Company filed a Current Report on Form 8-K dated March 10, 1999 with respect to the Amendment and Restatement of the Seagull Energy Corporation Rights Agreement. The items reported in such Current Report were Item 5 (Other Events) and Item 7 (Financial Statements and Exhibits). On April 8, 1999, the Company filed a Current Report on Form 8-K dated March 30, 1999 with respect to the Merger. The items reported in such Current Report were Item 2 (Acquisition or Disposition of Assets) and Item 7 (Financial Statements and Exhibits). On May 4, 1999, the Company filed a Current Report on Form 8-K dated April 26, 1999 with respect to the appointment of auditors. The item reported in such Current Report was Item 5 (Other Events).
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Ocean Energy Corporation
By: /s/ William L. Transier
William L. Transier
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: May 17, 1999
By: /s/ Gordon L. McConnell
Gordon L. McConnell
Vice President and Controller
(Principal Accounting Officer)
Date: May 17, 1999
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Exhibit Index
Page
Number
*4.1 Revolving Credit Agreement, dated as of March 30, 1999, among the Company,
Chase Bank of Texas, National Association ("Chase Texas") (Individually and
as Administrative Agent), The Chase Manhattan Bank ("Chase Manhattan") (as
Auction Administrative Agent), Bank of America National Trust and Savings
Association ("Bank of America") (Individually and as Syndication Agent),
Bank One Texas, N. A. ("Bank One") (Individually and as Documentation
Agent), Societe Generale, Southwest Agency ("Societe Generale")
(Individually and as Managing Agent), the Bank of Montreal (Individually
and as Managing Agent), and the other Banks signatory thereto.
*4.2 364-Day Credit Agreement, dated as of March 30, 1999, among the Company,
Chase Texas (Individually and as Administrative Agent), Chase Manhattan (as
Auction Administrative Agent), Bank of America (Individually and as
Syndication Agent), Bank One (Individually and as Documentation Agent),
Societe Generale (Individually and as Managing Agent), the Bank of Montreal
(Individually and as Managing Agent), and the other Banks signatory
thereto.
*4.3 Indenture, dated as of July 8, 1998, among Ocean Energy, Inc., its
Subsidiary Guarantors, and U.S. Bank Trust National Association, relating
to the 8 3/8% Series A Senior Subordinated Notes due 2008 and the 8 3/8%
Series B Senior Subordinated Notes due 2008 (the Indenture is incorporated
by reference to Exhibit 10.22 to the Form 10-Q for the period ended June
30, 1998 of Ocean Energy, Inc. (Registration No. 0-25058) filed with the
Securities and Exchange Commission ("SEC") on August 14, 1998; the First
Supplemental Indenture, dated March 30, 1999, is filed herewith).
*4.4 Indenture, dated as of July 8, 1998, among Ocean Energy, Inc., its
Subsidiary Guarantors, and Norwest Bank Minnesota, National Association
(Norwest Bank) as Trustee, relating to the 7 5/8% Senior Notes due 2005
(the Indenture is incorporated by reference to Exhibit 10.23 to the Form
10-Q for the period ended June 30, 1998 of Ocean Energy, Inc. (Registration
No. 0-25058) filed with the SEC on August 14, 1998; the First Supplemental
Indenture, dated March 30, 1999, is filed herewith).
*4.5 Indenture, dated as of July 8, 1998, among Ocean Energy, Inc., its
Subsidiary Guarantors, and Norwest Bank as Trustee, relating to the 8 1/4%
Senior Notes due 2018 (the Indenture is incorporated by reference to
Exhibit 10.24 to the Form 10-Q for the period ended June 30, 1998 of Ocean
Energy, Inc. (Registration No. 0-25058) filed with the SEC on August 14,
1998; the First Supplemental Indenture, dated March 30, 1999, is filed
herewith).
*4.6 Indenture, dated as of July 2, 1997, among Ocean Energy, Inc., the
Subsidiary Guarantors Named Therein and State Street Bank and Trust
Company, as Trustee, relating to the 8 7/8% Senior Subordinated Notes due
2007 (the Indenture is incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-4 (No. 333-32715) of Ocean Energy, Inc.
filed with the SEC on August 1, 1997; the First Supplemental Indenture,
dated as of March 27, 1998, is incorporated by reference to Exhibit 10.11
to the Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with
the SEC on March 31, 1998; the Second Supplemental Indenture, dated as of
March 30, 1999 is filed herewith).
*4.7 Indenture, dated as of September 26, 1996, among Ocean Energy, Inc. (f/k/a
Flores & Rucks, Inc.), the Subsidiary Guarantors Named Therein and Fleet
National Bank, as Trustee, relating to the 9 3/4% Senior Subordinated Notes
Due 2006 (the Indenture is incorporated by reference to Exhibit 4.1 to the
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996 of
Ocean Energy, Inc. (Registration No. 0-25058); the First Supplemental
Indenture, dated as of March 27, 1998, is incorporated by reference to
Exhibit 10.10 to the Form 8-K of Ocean Energy, Inc. (Registration No.
0-25058) filed with the SEC on March 31, 1998; the Second Supplemental
Indenture, dated March 30, 1999, is filed herewith).
|
Exhibit Index
Page
Number
*4.8 Indenture, dated as of October 30, 1995, 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 Bank of Montreal Trust Company, as Trustee,
relating to the 10 3/8% Senior Subordinated Notes Due 2005 (the Indenture
is incorporated by reference to Exhibit 4.20 to UMC's Annual Report on Form
10-K for the year ended December 31, 1995; the First Supplemental
Indenture, dated as of November 4, 1997, is incorporated by reference to
Exhibit 4.11 to the Form 10-Q for the quarter ended September 30, 1998 of
Ocean Energy, Inc. (Registration No. 0-25058); the Second Supplemental
Indenture, dated as of March 27, 1998, is incorporated by reference to
Exhibit 10.12 to the Form 8-K of Ocean Energy, Inc. (Registration No.
0-25058) filed with the SEC on March 31, 1998; the Third Supplemental
Indenture, dated March 30, 1999, is filed herewith).
*4.9 Indenture, dated as of December 1, 1994, among Ocean Energy, Inc. (f/k/a
Flores & Rucks, Inc.), the Subsidiary Guarantors Named Therein and Shawmut
Bank Connecticut, National Association, as Trustee, relating to the 13 1/2%
Senior Notes Due 2004, (the Indenture is incorporated by reference to
Exhibit 4.1 to the Annual Report on Form 10-K for the year ended December
31, 1994 of Ocean Energy, Inc. (Registration No. 0-25058); the First
Supplemental Indenture, dated as of September 19, 1996, is incorporated by
reference to Exhibit 4.1 to the Form 8-K of Ocean Energy, Inc.
(Registration No. 0-25058) filed with the SEC on October 10, 1996; the
Second Supplemental Indenture, dated as of July 14, 1997, is incorporated
by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 of Ocean Energy, Inc. (Registration No.
0-25058); the Third Supplemental Indenture, dated as of March 27, 1998, is
incorporated by reference to Exhibit 10.9 to the Form 8-K of Ocean Energy,
Inc. (Registration No. 0-25058) filed with the SEC on March 31, 1998; the
Fourth Supplemental Indenture, dated March 30, 1999, is filed herewith).
*4.10First Supplemental Indenture, date as of March 30, 1999, to the Senior
Indenture, dated as of September 1, 1997, relating to the 7 1/2% Senior
Notes Due 2027.
*4.11First Supplemental Indenture, date as of March 30, 1999, to the Senior
Indenture, dated as of July 15, 1993, relating to the 7 7/8% Senior Notes
Due 2003.
*4.12First Supplemental Indenture, date as of March 30, 1999, to the Senior
Subordinated Indenture, dated as of July 15, 1993, relating to the 8 5/8%
Senior Subordinated Notes Due 2005.
4.13 Amendment No. 2 to Amended and Restated Rights Agreement, dated as of March
10, 1999, by and between the Company and BankBoston, N.A. (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed
with the Securities and Exchange Commission on March 12, 1999).
#10.1 Employment Agreement, dated as of March 27, 1998, among Ocean Energy, Inc.
and John B. Brock, as amended (the Agreement is incorporated by reference
to Exhibit 10.1 to the Form 8-K of Ocean Energy, Inc. (Registration No.
0-25058) filed with the SEC on March 31, 1998; Amendment No.1, dated as of
November 24, 1998, is incorporated by reference to Exhibit 10.33 to the
Annual Report on Form 10-K for the year ended December 31, 1998, of Ocean
Energy, Inc. (Registration No. 0-25058).
#10.2 Employment Agreement, dated as of March 27, 1998, among Ocean Energy, Inc.
and James C. Flores, as amended (the Agreement is incorporated by reference
to Exhibit 10.2 to the Form 8-K of Ocean Energy, Inc. (Registration No.
0-25058) filed with the SEC on March 31, 1998; Amendment No.1, dated as of
November 24, 1998, is incorporated by reference to Exhibit 10.34 to the
Annual Report on Form 10-K for the year ended December 31, 1998, of Ocean
Energy, Inc. (Registration No. 0-25058).
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Exhibit Index
Page
Number
*#10.3 UMC 1987 Nonqualified Stock Option Plan, as amended, (the Plan is
incorporated herein by reference to Exhibit 10.3 to UMC's Form S-1 (No.
33-63532) filed with the SEC on May 28, 1993; the Third Amendment, dated
November 16, 1993, is incorporated herein by reference to Exhibit 10.4 to
UMC's 1993 Form 10-K filed with the SEC on March 7, 1994; the Fourth
Amendment, dated April 6, 1994, is incorporated by reference to Exhibit
10.6 to UMC's 1994 Form 10-K filed with the SEC on March 10, 1995; the
Fifth Amendment, dated November 19, 1997, is incorporated by reference to
Exhibit 4.7 to UMC's Form S-3 (No. 333-42467) filed with the SEC on
December 17, 1997); the Sixth Amendment, dated March 27, 1998 (filed
herewith); the Seventh Amendment, dated February 1, 1999 (filed herewith).
*#10.4 UMC 1994 Employee Nonqualified Stock Option Plan, as amended (the Plan is
incorporated by reference to Exhibit 4.14 to UMC's Form S-8 (No. 33-79160)
filed with the SEC on May 19, 1994; the First Amendment, dated November 16,
1994, is incorporated by reference to Exhibit 4.11.1 to UMC's Form S-8 (No.
33-86480) filed with the SEC on November 18, 1994; the Second Amendment,
dated May 22, 1996, is incorporated by reference to Exhibit 4.3.2 to UMC's
Form S-8 (No. 333-05401) filed with the SEC on June 6, 1996; the Third
Amendment, dated November 13, 1996, is incorporated by reference to Exhibit
4.3.3 to UMC's Form S-8 (No. 333-28017) filed with the SEC on May 29, 1997;
the Fourth Amendment, dated May 29, 1997, is incorporated herein by
reference to Exhibit 4.3.4 to UMC's Form S-8 (No. 333-28017) filed with the
SEC on May 29, 1997; the Fifth Amendment, dated November 19, 1997, is
incorporated by reference to Exhibit 4.8 to UMC's Form S-3 (No. 333-42467)
filed with the SEC on December 17, 1997; the Sixth Amendment, dated March
27, 1998 is filed herewith).
#10.5Amendment to UMC 1994 Non-Qualified Stock Option Agreement for Former
Employees of General Atlantic Resources, Inc. dated as of April 16, 1996
among UMC and Donald D. Wolf (incorporated by reference to Exhibit 10.22 to
UMC's Form 10-Q for the period ended September 30, 1996 filed with the
Securities and Exchange Commission on August 8, 1996).
*#10.6 UMC 1994 Outside Directors' Nonqualified Stock Option Plan, as amended
(the Plan is incorporated herein by reference to Exhibit 4.15 to UMC's Form
S-8 (No. 33-79160) filed with the SEC on May 19, 1994; the First Amendment,
dated May 22, 1996, is incorporated by reference to Exhibit 4.4.1 to UMC's
Form S-8 (No. 333-05401) filed with the SEC on June 6, 1996; the Second
Amendment, dated November 13, 1996, is incorporated herein by reference to
Exhibit 4.4 to UMC's Form S-8 (No. 333-28017) filed with the SEC on May 29,
1997; the Third Amendment, dated November 19, 1997, is incorporated by
reference to Exhibit 4.9 to UMC's Form S-3 (No. 333-42467) filed with the
SEC on December 17, 1997); Fourth Amendment, dated March 27, 1998 is filed
herewith).
*#10.7 UMC Petroleum Corporation Supplemental Benefit Plan effective January 1,
1994, approved by the Board of Directors on March 29, 1994 (the Plan is
incorporated by reference to Exhibit 10.10 to UMC's 1994 Form 10-K filed
with the SEC on March 10, 1995; the Second Amendment dated March 30, 1999
is filed herewith).
*#10.8 1994 Long-Term Incentive Plan (the Plan, as amended, is incorporated by
reference to Exhibit 10.3 to Amendment No. 2 to the Registration Statement
on Form S-1 (No. 33-84308) of Ocean Energy, Inc. (Registration No. 0-25058)
filed with the SEC on October 31, 1994); the Second Amendment, dated March
27, 1998 is filed herewith).
*#10.9 1996 Long-Term Incentive Plan, as amended (the Plan, as amended, is
incorporated by reference to Exhibit 99.1 to the Form S-8 (No. 333-45117)
of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on
January 29, 1998); the Second Amendment, dated March 27, 1998, is filed
herewith).
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Exhibit Index
Page
Number
#10.10 Long-Term Incentive Plan for Non-Executive Employees, as amended
(incorporated by reference to Exhibit 99.1 to the Form S-8 (No. 333-45119)
of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on
January 29, 1998; Amendment No. 2, incorporated by reference to Exhibit
99.2 to the Form S-8 (No. 333-49185) of Ocean Energy, Inc., filed with the
SEC on April 1, 1998; Amendment No. 3, dated as of May 20, 1998, is
incorporated by reference to Exhibit 10.46 to the Annual Report on Form
10-K for the year ended December 31, 1998, of Ocean Energy, Inc.
(Registration No. 0-25058).
#10.11 1998 Long-Term Incentive Plan, incorporated by reference to Appendix E to
Ocean Energy, Inc.'s Joint Proxy Statement Prospectus on Form S-4
(333-43933) filed with the SEC on January 9, 1998.
#10.12 Ocean Energy, Inc. Deferred Compensation Plan incorporated by reference
to Exhibit 10.24 to the Annual Report on Form 10-K for the year ended
December 31, 1997 of Ocean Energy, Inc. (Registration No. 0-25058).
#10.13 Severance Protection Agreement, dated as of December 20, 1997, by and
between United Meridian Corporation, UMC Petroleum Corporation and the
Executives named therein incorporated by reference to Exhibit 10.1 to
United Meridian's Form 8-K filed with the Securities and Exchange
Commission on December 23, 1997; Amendment No. 1 to Severance Protection
Agreement, dated as of November 24, 1998 by and between Ocean Energy, Inc.
and Jonathan M. Clarkson, as incorporated by reference to Exhibit 10.36 to
the Annual Report on Form 10-K for the year ended December 31, 1998, of
Ocean Energy, Inc. (Registration No. 0-25058).
*10.14 The Fifth Amendment to the Seagull Energy Corporation Management
Stability Plan dated March 29, 1999.
*#10.15 Amendment to Employment Agreement by and between the Company and James
T. Hackett dated November 24, 1998.
*#10.16 Amendment to Employment and Consulting Agreement by and between the
Company and Barry J. Galt dated November 24, 1998.
*#10.17 Ocean Energy, Inc. 1999 Change of Control Severance Plan dated February
8, 1999; the First Amendment dated March 29, 1999.
#10.18 Form of Employment Agreement among the Company and certain executive
officers and directors (incorporated by reference to Exhibit 10.21 to
Annual Report on Form 10-K of Ocean Energy, Inc. (Registration No. 0-25058)
filed with the SEC on February 20, 1998).
*#10.19 Form of Indemnification Agreements among the Company and certain
executive officers and directors .
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Exhibit Index
Page
Number
*27.1 Financial Data Schedule.
27.2 Restated Financial Data Schedule for the year ended December 31, 1998
(incorporated by reference to the Annual Report on Form 10-K of Ocean
Energy, Inc. (Registration No. 0-25058) filed with the SEC on February 16,
1999).
27.3 Restated Financial Data Schedule for the years ended December 31, 1997 and
1996 and the quarterly periods in the year ended December 31, 1997
(incorporated by reference to Exhibit 27.1 to the Current Report on Form
8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with the SEC on
May 6, 1998).
27.4 Restated Financial Data Schedule for the quarter ended March 31, 1998
(incorporated by reference to Exhibit 27.1 to the Form 10-Q of Ocean
Energy, Inc. (Registration No. 0-25058) filed with the SEC on May 15,
1998).
27.5 Restated Financial Data Schedule for the quarter ended June 30, 1998
(incorporated by reference to Exhibit 27.1 to the Form 10-Q of Ocean
Energy, Inc. (Registration No. 0-25058) filed with the SEC on August 14,
1998).
27.6 Restated Financial Data Schedule for the quarter ended September 30, 1998
(incorporated by reference to Exhibit 27.1 to the Form 10-Q of Ocean
Energy, Inc. (Registration No. 0-25058) filed with the SEC on November 16,
1998).
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* Filed herewith.
# Identifies management contracts and compensatory plans or arrangements.
REVOLVING CREDIT AGREEMENT
$500,000,000 REVOLVING CREDIT
AND COMPETITIVE BID FACILITY
AMONG
OCEAN ENERGY, INC.,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
Individually and as Administrative Agent,
THE CHASE MANHATTAN BANK,
as Auction Administrative Agent,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
Individually, and as Syndication Agent,
BANK ONE, TEXAS, N.A.,
Individually, and as Documentation Agent,
SOCIETE GENERALE, SOUTHWEST AGENCY,
Individually, and as Managing Agent,
BANK OF MONTREAL,
Individually, and as Managing Agent,
AND
THE OTHER BANKS SIGNATORY HERETO
March 30, 1999
CHASE SECURITIES INC.,
AS LEAD ARRANGER AND SOLE BOOK MANAGER
TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS............................................................1
1.1 Certain Defined Terms.........................................................................1
1.2 Accounting Terms and Determinations..........................................................18
1.3 Types of Loans...............................................................................18
1.4 Miscellaneous................................................................................18
SECTION 2. COMMITMENTS; COMPETITIVE BID FACILITY........................................................18
2.1 Committed Loans..............................................................................18
2.2 Letters of Credit............................................................................19
2.3 Reductions and Changes of Commitments........................................................22
2.4 Fees.........................................................................................22
2.5 Affiliates; Lending Offices..................................................................22
2.6 Several Obligations..........................................................................23
2.7 Repayment of Loans; Evidence of Debt.........................................................23
2.8 Use of Proceeds..............................................................................23
2.9 Competitive Bid Procedure....................................................................23
SECTION 3. BORROWINGS, PREPAYMENTS AND SELECTION OF INTEREST RATES......................................26
3.1 Borrowings...................................................................................26
3.2 Prepayments..................................................................................26
3.3 Selection of Interest Rates..................................................................26
SECTION 4. PAYMENTS OF PRINCIPAL AND INTEREST...........................................................27
4.1 Repayment of Loans and Reimbursement Obligations.............................................27
4.2 Interest.....................................................................................27
SECTION 5. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC..............................................28
5.1 Payments.....................................................................................28
5.2 Pro Rata Treatment...........................................................................28
5.3 Computations.................................................................................28
5.4 Minimum and Maximum Amounts..................................................................29
5.5 Certain Actions, Notices, Etc................................................................29
5.6 Non-Receipt of Funds by Administrative Agent.................................................30
5.7 Sharing of Payments, Etc.....................................................................30
SECTION 6. YIELD PROTECTION AND ILLEGALITY..............................................................31
6.1 Additional Costs.............................................................................31
6.2 Limitation on Types of Loans.................................................................33
6.3 Illegality...................................................................................33
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6.4 Substitute Alternate Base Rate Loans.........................................................34
6.5 Compensation.................................................................................34
6.6 Additional Costs in Respect of Letters of Credit.............................................34
6.7 Capital Adequacy.............................................................................35
6.8 Limitation on Additional Charges; Substitute Banks; Non-Discrimination.......................35
SECTION 7. CONDITIONS PRECEDENT.........................................................................36
7.1 Initial Loans................................................................................36
7.2 Initial and Subsequent Loans.................................................................39
SECTION 8. REPRESENTATIONS AND WARRANTIES...............................................................40
8.1 Corporate Existence..........................................................................40
8.2 Corporate Power and Authorization............................................................40
8.3 Binding Obligations..........................................................................40
8.4 No Legal Bar or Resultant Lien...............................................................40
8.5 No Consent...................................................................................40
8.6 Financial Condition..........................................................................41
8.7 Investments and Guaranties...................................................................41
8.8 Liabilities and Litigation...................................................................41
8.9 Taxes and Governmental Charges...............................................................42
8.10 Title to Properties..........................................................................42
8.11 Defaults.....................................................................................42
8.12 Location of Businesses and Offices...........................................................42
8.13 Compliance with Law..........................................................................42
8.14 Margin Stock.................................................................................43
8.15 Subsidiaries.................................................................................43
8.16 ERISA........................................................................................43
8.17 Investment Company Act.......................................................................44
8.18 Public Utility Holding Company Act...........................................................44
8.19 Environmental Matters........................................................................44
8.20 Claims and Liabilities.......................................................................45
8.21 Solvency.....................................................................................45
8.22 Year 2000....................................................................................45
SECTION 9. AFFIRMATIVE COVENANTS........................................................................46
9.1 Financial Statements and Reports.............................................................46
9.2 Officers' Certificates.......................................................................47
9.3 Taxes and Other Liens........................................................................48
9.4 Maintenance..................................................................................48
9.5 Further Assurances...........................................................................48
9.6 Performance of Obligations...................................................................48
9.7 Reimbursement of Expenses....................................................................49
(2)
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9.8 Insurance....................................................................................50
9.9 Accounts and Records.........................................................................50
9.10 Notice of Certain Events.....................................................................50
9.11 ERISA Information and Compliance.............................................................51
SECTION 10. NEGATIVE COVENANTS...........................................................................52
10.1 Debts, Guaranties and Other Obligations......................................................52
10.2 Liens........................................................................................55
10.3 Dividend Payment Restrictions................................................................58
10.4 Mergers and Sales of Assets..................................................................58
10.5 Proceeds of Loans............................................................................59
10.6 ERISA Compliance.............................................................................59
10.7 Total Leverage Ratio.........................................................................59
10.8 Senior Leverage Ratio........................................................................60
10.9 Minimum Net Worth............................................................................60
10.10 Nature of Business...........................................................................60
10.11 Covenants in Other Agreements................................................................60
SECTION 11. DEFAULTS.....................................................................................60
11.1 Events of Default............................................................................60
11.2 Collateral Account...........................................................................63
11.3 Preservation of Security for Unmatured Reimbursement Obligations.............................63
11.4 Right of Setoff..............................................................................64
SECTION 12. AGENTS.......................................................................................64
12.1 Appointment, Powers and Immunities...........................................................64
12.2 Reliance by Agents...........................................................................65
12.3 Defaults.....................................................................................65
12.4 Rights as a Bank.............................................................................66
12.5 Indemnification..............................................................................66
12.6 Non-Reliance on Agents and Other Banks.......................................................66
12.7 Failure to Act...............................................................................67
12.8 Resignation or Removal of Administrative Agent...............................................67
SECTION 13. MISCELLANEOUS................................................................................68
13.1 Waiver.......................................................................................68
13.2 Notices......................................................................................68
13.3 Indemnification..............................................................................68
13.4 Amendments, Etc..............................................................................69
13.5 Successors and Assigns.......................................................................70
13.6 Limitation of Interest.......................................................................72
13.7 Survival.....................................................................................73
(3)
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13.8 Captions.....................................................................................74
13.9 Counterparts.................................................................................74
13.10 GOVERNING LAW; FORUM SELECTION;
CONSENT TO JURISDICTION......................................................................74
13.11 WAIVER OF JURY TRIAL; PUNITIVE DAMAGES.......................................................75
13.12 Severability.................................................................................75
13.13 Chapter 15 Not Applicable....................................................................75
13.14 Confidential Information.....................................................................75
13.15 Tax Forms....................................................................................76
13.16 Entire Agreement.............................................................................77
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EXHIBITS:
Exhibit A Unrestricted Subsidiaries Exhibit B Form of Request for Extension of Credit Exhibit C Subsidiaries (with Addresses) Exhibit D Form of Compliance Certificate Exhibit E Assignment and Acceptance Exhibit F Form of Competitive Bid Request Exhibit G Form of Notice to Banks of Competitive Bid Request Exhibit H Form of Competitive Bid Exhibit I Form of Competitive Bid Administrative Questionnaire Exhibit J Continuing Letters of Credit Exhibit K Form of Guaranty Agreement Exhibit L Disclosure Statement Exhibit M Commitments |
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT, dated as of March 30, 1999 (the
"Effective Date"), is by and among OCEAN ENERGY, INC. (the "Company"), a
corporation duly organized and validly existing under the laws of the State of
Texas, each of the banks which is or which may from time to time become a
signatory hereto (individually, a "Bank" and, collectively, the "Banks"), BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("Bank of America"), as
Syndication Agent for the Banks (in such capacity, the "Syndication Agent"),
BANK ONE, TEXAS, N.A. ("Bank One"), as Documentation Agent for the Banks (in
such capacity, the "Documentation Agent"), SOCIETE GENERALE, SOUTHWEST AGENCY
("Societe Generale") and BANK OF MONTREAL ("Bank of Montreal"), as Managing
Agents for the Banks (in such capacity, the "Managing Agents"), THE CHASE
MANHATTAN BANK, as Auction Administrative Agent for the Banks (in such capacity,
the "Auction Administrative Agent"), and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION ("Chase"), as Administrative Agent for the Banks (in such capacity,
together with its successors in such capacity, "Administrative Agent").
The parties hereto agree as follows:
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.1 Certain Defined Terms. As used herein, the following terms shall have the following meanings (all terms defined in this Section 1.1 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa):
"Additional Costs" shall have the meaning ascribed to such term in
Section 6.1 hereof.
"Affiliate" shall mean, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person and, if such Person is an individual, any member of the immediate family (including parents, siblings, spouse, children, stepchildren, grandchildren, nephews and nieces) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As used in this definition, "control" (including, with correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).
"Agents" shall mean the Administrative Agent, the Auction Administrative Agent, the Documentation Agent, the Syndication Agent and the Managing Agents, together with any successors in any such capacities.
"Agreement" shall mean this Revolving Credit Agreement, as such agreement from time to time may be amended, amended and restated, supplemented or otherwise modified.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to the higher of (a) the Prime Rate in effect on such day or (b) 1/2 of 1% plus the Federal Funds Rate in effect for such day (rounded upwards, if necessary, to the nearest 1/16th of 1%). For purposes hereof, "Federal Funds Rate" shall mean, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Administrative Agent from three Federal funds brokers of recognized standing selected by it. For purposes of this Agreement, any change in the Alternate Base Rate due to a change in the Federal Funds Rate shall be effective on the effective date of such change in the Federal Funds Rate. If for any reason Administrative Agent shall have determined (which determination shall be conclusive and binding, absent manifest error) that it is unable to ascertain the Federal Funds Rate for any reason, including, without limitation, the inability or failure of Administrative Agent to obtain sufficient bids or publications in accordance with the terms hereof, the Alternate Base Rate shall be the Prime Rate until the circumstances giving rise to such inability no longer exist. For the purposes hereof, "Prime Rate" shall mean the prime rate as announced from time to time by Administrative Agent, and thereafter entered in the minutes of Administrative Agent's Loan and Discount Committee. Without notice to the Company or any other Person, the Prime Rate shall change automatically from time to time as and in the amount by which said prime rate shall fluctuate. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. Administrative Agent may make commercial loans or other loans at rates of interest at, above or below the Prime Rate. For purposes of this Agreement any change in the Alternate Base Rate due to a change in the Prime Rate shall be effective on the date such change in the Prime Rate is announced.
"Alternate Base Rate Loans" shall mean Loans which bear interest at a rate based upon the Alternate Base Rate.
"APC" shall mean Alaska Pipeline Company, an Alaska corporation, a Subsidiary of the Company.
"Applicable Lending Office" shall mean, for each Bank and for each Type of Loan, such office of such Bank (or of an affiliate of such Bank) as such Bank may from time to time specify to Administrative Agent and the Company as the office by which its Loans of such Type are to be made and/or issued and maintained.
"Applicable Margin" shall mean, on any day, with respect to any Alternate Base Rate Loan or Eurodollar Loan, the applicable per annum percentage set forth at the appropriate intersection in the table shown below, based on the Rating as of the close of business on the preceding Business Day:
Alternate Base Rate Eurodollar Loan
Rating Loan Applicable Margin Applicable Margin
------ ---------------------- -----------------
BBB-/Baa3 and higher 0.000% 1.000%
BB+/Ba1 0.200% 1.200%
BB/Ba2 0.450% 1.450%
BB-/Ba3 and lower 0.700% 1.700%
=============================== ================================= =============================
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"Applications" shall mean all applications and agreements for Letters of Credit, or similar instruments or agreements, now or hereafter executed by any Person in connection with any Letter of Credit now or hereafter issued or to be issued.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, as amended, and any successor statute.
"Business Day" shall mean any day other than a day on which commercial
banks are authorized or required to close in Houston, Texas or New York, New
York, and where such term is used in the definition of "Quarterly Date" in this
Section 1.1 or if such day relates to a borrowing of, a payment or prepayment of
principal of or interest on, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment, prepayment or
Interest Period, a day which is also a day on which dealings in Dollar deposits
are carried out in the relevant interbank market.
"Capital Lease Obligations" shall mean, as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or personal property which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
"Change of Control" shall mean a change resulting when any Unrelated Person or any Unrelated Persons acting together which would constitute a Group together with any Affiliates or Related Persons thereof (in each case also constituting Unrelated Persons) shall at any time either (i) Beneficially Own more than 35% of the aggregate voting power of all classes of Voting Stock of the Company or (ii) during any period of two consecutive years ending on or after the Effective Date, as determined as of the last day of each calendar quarter after the Effective Date, the individuals (the "Incumbent Directors") who at the beginning of such period constituted the Board of Directors of the Company (other than additions thereto or removals therefrom from time to time thereafter approved by a vote of the Board of Directors in accordance with the Company's by-laws) shall cease for any reason to constitute 51% or more of the Board of Directors of the Company. As used herein (a) "Beneficially Own" means "beneficially own" as defined in Rule 13d-3 of the
Securities Exchange Act of 1934, as amended, or any successor provision thereto; provided, however, that, for purposes of this definition, a Person shall not be deemed to Beneficially Own securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's Affiliates until such tendered securities are accepted for purchase or exchange; (b) "Group" means a "group" for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; (c) "Unrelated Person" means at any time any Person other than the Company or any Subsidiary and other than any trust for any employee benefit plan of the Company or any Subsidiary of the Company; (d) "Related Person" of any Person shall mean any other Person owning (1) 5% or more of the outstanding common stock of such Person or (2) 5% or more of the Voting Stock of such Person; and (e) "Voting Stock" of any Person shall mean capital stock of such Person which ordinarily has voting power for the election of directors (or persons performing similar functions) of such Person, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency.
"Chapter 1D" shall mean Chapter 1D of Article 5069 of the Texas Credit Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article 5069-1.04, Vernon's Texas Civil Statutes, as amended).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor statute, together with all regulations, rulings and interpretations thereof or thereunder by the Internal Revenue Service.
"Commitment Percentage" shall mean, as to any Bank, the percentage equivalent of a fraction the numerator of which is the amount of such Bank's Commitment and the denominator of which is the aggregate amount of the Commitments of all Banks.
"Commitment" shall mean, as to any Bank, the obligation, if any, of
such Bank to make Committed Loans and incur Letter of Credit Liabilities in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount, if any, set forth opposite such Bank's name on Exhibit M under the
caption "Commitment" (as the same may be reduced from time to time pursuant to
Section 2.3).
"Committed Loans" shall mean the loans provided for in Section 2.1 hereof.
"Competitive Bid" shall mean an offer by a Bank to make a Competitive Loan pursuant to Section 2.9 hereof.
"Competitive Bid Administrative Questionnaire" shall mean a questionnaire substantially in the form of Exhibit I hereto.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a Bank pursuant to Section 2.9 hereof, the fixed rate of interest, in each case, offered by the Bank making such Competitive Bid.
"Competitive Bid Request" shall have the meaning ascribed to such term in Section 2.9 hereof.
"Competitive Loans" shall mean loans provided for in Section 2.9 hereof.
"Consolidated Net Worth" means, with respect to the Company and its 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, 1999 and not in excess of $30,000,000 in the aggregate, and the amount of noncash write downs occurring on or after January 1, 1999 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.
"Cover" for Letter of Credit Liabilities shall be effected by paying to Administrative Agent immediately available funds, to be held by Administrative Agent in a collateral account maintained by Administrative Agent at its Principal Office and collaterally assigned as security for the financial accommodations extended pursuant to this Agreement using documentation satisfactory to Administrative Agent, in an amount equal to any required prepayment. Such amount shall be retained by Administrative Agent in such collateral account until such time as (x) in the case of Cover being provided pursuant to Section 2.2(a), the applicable Letter of Credit shall have expired and Reimbursement Obligations, if any, with respect thereto shall have been fully satisfied or (y) in the case of Cover being provided pursuant to Section 3.2(b), the outstanding principal amount of all Revolving Credit Obligations is not greater than the aggregate amount of the Commitments.
"Default" shall mean an Event of Default or an event which with notice or lapse of time or both would, unless cured or waived, become an Event of Default.
"Disclosure Statement" shall mean the Disclosure Statement delivered to Administrative Agent by the Company and attached as Exhibit L hereto.
"Dividend Payment" shall mean, with respect to any Person, dividends (in cash, property or obligations) on, or other payments or distributions on account of, or the redemption of, or the setting apart of money for a sinking or other analogous fund for the purchase, redemption, retirement or other acquisition of, any shares of any class of capital stock of such Person, or the exchange or conversion of any shares of any class of capital stock of such Person for or into any obligations of or shares of any other class of capital stock of such Person or any other property, but excluding dividends to the extent payable in, or exchanges or conversions for or into, shares of common stock of the Company or options or warrants to purchase common stock of the Company.
"Dollars" and "$" shall mean lawful money of the United States of America.
"EBITDAX" shall mean net earnings (excluding material gains and losses on sales and retirement of assets, non-cash write downs, charges resulting from accounting convention changes and deductions for exploration expenses) before deduction for federal and state taxes, interest expense (including capitalized interest), operating lease rentals or depreciation, depletion and amortization expense, all determined in accordance with GAAP; provided, however, for the purpose of any calculation, that (i) for the fiscal quarter ending March 31, 1998, EBITDAX shall be deemed to equal $159,765,000, (ii) for the fiscal quarter ending June 30, 1998, EBITDAX shall be deemed to equal $142,023,000, (iii) for the fiscal quarter ending September 30, 1998, EBITDAX shall be deemed to equal $107,171,000, and (iv) for the fiscal quarter ending December 31, 1998, EBITDAX shall be deemed to equal $122,134,000.
"ENSTAR Alaska" shall collectively mean (i) the gas distribution system in south-central Alaska known as ENSTAR Natural Gas Company, a division of the Company, and (ii) APC.
"Environmental Claim" means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution or contamination of the air, surface
water, ground water or land or the clean-up of such pollution or contamination;
(iii) solid, gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) the manufacture, processing, distribution
in commerce or use of Hazardous Substances. An "Environmental Claim" includes,
but is not limited to, a common law action, as well as a proceeding to issue,
modify or terminate an Environmental Permit, or to adopt or amend a regulation
to the extent that such a proceeding attempts to redress violations of an
applicable permit, license, or regulation as alleged by any Governmental
Authority.
"Environmental Liabilities" includes all liabilities arising from any
Environmental Claim, Environmental Permit or Requirement of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to:
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and obligations,
and all costs and expenses necessary to cause the issuance, reissuance or
renewal of any Environmental Permit including reasonable attorneys' fees and
court costs.
"Environmental Permit" means any permit, license, approval or other authorization under any applicable Legal Requirement relating to pollution or protection of health or the environment, including laws, regulations or other requirements relating to emissions, discharges, releases or threatened releases of pollutants, contaminants or hazardous substances or toxic materials or wastes into ambient air, surface water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants or Hazardous Substances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and all rules, regulations and interpretations by the Internal Revenue Service or the Department of Labor thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which is a member of a group of which any Obligor is a member and
which is under common control within the meaning of the regulations under
Section 414 of the Code.
"Eurodollar Base Rate" shall mean, with respect to any Interest Period
for any Eurodollar Loan, the lesser of (A) the rate per annum (rounded upwards,
if necessary, to the nearest 1/16th of 1%) equal to the average of the offered
quotations appearing on Telerate Page 3750 (or if such Telerate Page shall not
be available, any successor or similar service as may be selected by
Administrative Agent and the Company) as of 11:00 a.m., Houston, Texas time (or
as soon thereafter as practicable) on the day two Business Days prior to the
first day of such Interest Period for Dollar deposits having a term comparable
to such Interest Period and in an amount comparable to the principal amount of
the Eurodollar Loan to which such Interest Period relates or (B) the Highest
Lawful Rate. If none of such Telerate Page 3750 nor any successor or similar
service is available, then the "Eurodollar Base Rate" shall mean, with respect
to any Interest Period for any applicable Eurodollar Loan, the lesser of (A) the
rate per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%)
determined by Administrative Agent to be the average of the rates quoted by the
Reference Banks at approximately 11:00 a.m., Houston, Texas time (or as soon
thereafter as practicable) on the day two Business Days prior to the first day
of such Interest Period for the offering by such Reference Banks 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 which such Interest Period relates or (B) the Highest
Lawful Rate. If any Reference Bank does not furnish a timely quotation,
Administrative Agent shall determine the relevant interest rate on the basis of
the quotation or quotations furnished by the remaining Reference Bank or Banks;
if none of such quotations is available on a timely basis, the provisions of
Section 6.2 shall apply. Each determination of the Eurodollar Base Rate shall be
conclusive and binding, absent manifest error, and may be computed using any
reasonable averaging and attribution method.
"Eurodollar Loans" shall mean Loans the interest on which is determined on the basis of rates referred to in the definition of "Eurodollar Base Rate" in this Section 1.1.
"Eurodollar Rate" shall mean, for any Interest Period for any Eurodollar Loan, a rate per annum determined by Administrative Agent to be equal to the Eurodollar Base Rate for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such term in
Section 11 hereof.
"Existing Seagull Credit Facility" shall mean that certain Amended and Restated Credit Agreement, dated as of December 24, 1997, by and among Seagull, each of the banks which is or which may from time to time become a signatory thereto, Morgan Guaranty Trust Company of New York, as Documentation Agent, NationsBank of Texas, N.A., as Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent, as such agreement from time to time may be amended, amended and restated, supplemented or otherwise modified.
"Existing Old Ocean Bridge Facility" shall mean that certain Letter Agreement, dated February 3, 1999, among The Chase Manhattan Bank, Morgan Guaranty Trust Company of New York, Old Ocean Energy, the Guarantor, and Lion GPL, S.A. and the "Security Instruments" as defined therein, as each is amended, waived or otherwise modified to the date hereof.
"Existing Old Ocean Credit Facility" shall mean that certain Second Amended and Restated Global Credit Agreement, dated as of November 20, 1998, by and among Old Ocean Energy, each of the lenders which is or which may from time to time become a signatory thereto, Morgan Guaranty Trust Company of New York, as Syndication Agent, Bank of America National Trust & Savings Association, as Documentation Agent, Barclays Bank PLC, as Managing Agent, Paribas, Societe Generale, Southwest Agency, and Credit Suisse First Boston, as Co-Agents, and Chase Bank of Texas, National Association, as Administrative Agent, as such agreement from time to time may be amended, amended and restated, supplemented or otherwise modified.
"Facility Amount" shall mean the aggregate amount of the Commitments (which amount shall initially be $500,000,000), as such amount may be reduced from time to time pursuant to the terms of this Agreement.
"Facility Fee Percentage" shall mean, on any date, the applicable per annum percentage set forth at the appropriate intersection in the table shown below, based on the Rating as of the close of business on the preceding Business Day:
Rating Facility Fee Percentage
BBB-/Baa3 and higher 0.250%
BB+/Ba1 and lower 0.300%
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"Financial Statements" shall mean the financial statement or statements, together with the notes and schedules thereto, described or referred to in Sections 8.6 and 9.1.
"GAAP" shall mean as to a particular Person, such accounting practice as, in the opinion of KPMG Peat Marwick or other independent accountants of recognized national standing retained by such Person and acceptable to the Majority Banks, conforms at the time to generally accepted accounting principles, consistently applied. Generally accepted accounting principles means those principles and practices (a) which are recognized as such by the Financial Accounting Standards
Board, (b) which are applied for all periods after the date hereof in a manner consistent with the manner in which such principles and practices were applied to the most recent audited financial statements of the relevant Person furnished to the Banks, except only for such changes in principles and practices with which the applicable independent public accountants concur and which are disclosed to the Banks in writing, and (c) which are consistently applied for all periods after the date hereof so as to reflect properly the financial condition and results of operations of such Person.
"Governmental Authority" shall mean any sovereign governmental authority, the United States of America, any State of the United States and any political subdivision of any of the foregoing, and any central bank, agency, instrumentality, department, commission, board, bureau, authority, court or other tribunal or quasi-governmental authority in each case whether executive, legislative, judicial, regulatory or administrative, having jurisdiction over the Company, any of its Subsidiaries, any of their respective property, Administrative Agent or any Bank.
"Guarantee" by any Person means any obligation, contingent or otherwise, of any such Person directly or indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise, other than agreements to purchase assets, goods, securities or services at an arm's length price in the ordinary course of business) or (ii) entered into for the purpose of assuring in any other manner the holder of such Indebtedness of the payment thereof or to protect such holder against loss in respect thereof (in whole or in part), provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" shall mean Ocean Energy, Inc., a Louisiana corporation.
"Guaranty Agreement" shall mean the guaranty agreement substantially in the form of Exhibit K, with appropriate insertions and deletions, executed or to be executed by the Guarantor, as such agreement from time to time may be amended, amended and restated, supplemented or otherwise modified.
"Havre" shall mean Havre Pipeline Company, LLC, a Texas limited liability company.
"Hazardous Substance" shall mean petroleum products, and any hazardous or toxic waste or substance defined or regulated as such from time to time by any law, rule, regulation or order described in the definition of "Requirements of Environmental Law".
"Highest Lawful Rate" shall mean, on any day, the maximum nonusurious rate of interest permitted for that day by whichever of applicable federal or Texas law permits the higher interest rate, stated as a rate per annum. On each day, if any, that Chapter 1D establishes the Highest Lawful
Rate, the Highest Lawful Rate shall be the "applicable interest rate ceiling" (as defined in Chapter 1D) for that day.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate and all other liquid or gaseous hydrocarbons and related minerals, in each case whether in a natural or a processed state.
"Indebtedness" shall mean, as to any Person: (i) indebtedness of such
Person for borrowed money (whether by loan or the issuance and sale of debt
securities) or for the deferred purchase or acquisition price of property or
services, including, without limitation, obligations payable out of Hydrocarbon
production; (ii) obligations, whether fixed or contingent, of such Person in
respect of letters of credit, acceptances or similar instruments issued or
accepted by banks and other financial institutions for the account of such
Person or any other Person; (iii) Capital Lease Obligations of such Person; (iv)
Redemption Obligations of such Person and other obligations of such Person to
redeem or otherwise retire shares of capital stock of such Person or any other
Person, in each case to the extent that the redemption obligations will arise
prior to the stated maturity of the Obligations; (v) indebtedness of others of
the type described in clause (i), (ii), (iii) or (iv) above secured by a Lien on
the property of such Person, whether or not the respective obligation so secured
has been assumed by such Person, to the extent of the fair market value of such
property; and (vii) indebtedness of others of the type described in clause (i),
(ii), (iii) or (iv) above Guaranteed by such Person, to the extent of such
Guarantee.
"Interest Period" shall mean:
(a) With respect to any Eurodollar Loan, the period commencing on (i) the date such Loan is made or converted into or continued as a Eurodollar Loan or (ii) in the case of a roll-over to a successive Interest Period, the last day of the immediately preceding Interest Period 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 5.5 hereof, except that each such Interest Period which commences 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.
(b) With respect to any other Competitive Loan, the period commencing on the date such Loan is made and ending on the date specified in the Competitive Bid in which the offer to make the Competitive Loan was extended; provided, however, that each such period shall have a duration of not less than seven calendar days or more than 180 calendar days.
Notwithstanding the foregoing: (i) no Interest Period applicable to any Eurodollar Loan or any Competitive Loan may commence before and end after the date of any scheduled reduction in the Commitments if, after giving effect thereto, the aggregate principal amount of the Eurodollar Loans or Competitive Loans which have Interest Periods which end after such reduction date shall be greater than the aggregate principal amount of the Commitments scheduled to be in effect after such
reduction 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 (or, in the case of an Interest Period for Eurodollar Loans, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day); (iii) no Interest Period applicable to any Eurodollar Loan or any Competitive Loan shall extend beyond the end of the scheduled Revolving Credit Availability Period, and (iv) no Interest Period for any Eurodollar Loans shall have a duration of less than one month and, if the Interest Period therefor would otherwise be a shorter period, such Loans shall not be available hereunder.
"Investments" shall mean with respect to any Person any advance, loan or other extension of credit or capital contribution (other than prepaid expenses in the ordinary course of business) to (by means of transfers of property or assets or otherwise) purchase or own any stocks, bonds, notes, debentures or other securities of, or incur contingent liability with respect to (except for the endorsement of checks in the ordinary course of business and except for the Indebtedness and Liens permitted under this Agreement), any other Person.
"Issuer" shall mean each Bank or any of its Affiliates issuing a Letter of Credit hereunder.
"Legal Requirement" shall mean any law, statute, ordinance, decree, requirement, order, judgment, rule, regulation (or interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority, now or hereafter in effect.
"Letter of Credit" shall mean (i) any letter of credit issued by an Issuer in the manner and subject to the terms and provisions of Section 2.2 hereof and (ii) each letter of credit outstanding on the Effective Date listed on Exhibit J hereto which letters of credit will be deemed to be issued and outstanding under this Agreement as of the Effective Date.
"Letter of Credit Fee" shall mean a per annum rate equal to the Applicable Margin for Eurodollar Loans in effect from time to time.
"Letter of Credit Liabilities" shall mean, at any time and in respect of any Letter of Credit, the sum of (i) the amount available for drawings under such Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement Obligations at the time due and payable in respect of previous drawings made under such Letter of Credit.
"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge, charge, collateral assignment, security interest or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, a Person 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.
"Loan Documents" shall mean this Agreement, the Guaranty Agreement, all Applications, all instruments, certificates and agreements now or hereafter executed or delivered to Administrative
Agent or any Bank pursuant to any of the foregoing, and all amendments, modifications, renewals, extensions, increases and rearrangements of, and substitutions for, any of the foregoing.
"Loans" shall mean Committed Loans and Competitive Loans.
"Majority Banks" shall mean (a) prior to the termination of the Commitments, Banks having greater than 50% of the aggregate amount of the Commitments and (b) after the termination of the Commitments, Banks having greater than 50% of the aggregate principal amount of the Loans and the Letter of Credit Liabilities.
"Margin Regulations" shall mean, as applicable, Regulations U and X of the Board of Governors of the Federal Reserve System, as from time to time in effect.
"Material Adverse Effect" shall mean a material adverse effect on the business, condition (financial or otherwise), operations or properties (including proven oil and gas reserves) of the Company and its Subsidiaries, taken as a whole, or on the ability of the Company to perform its material obligations under any Loan Document to which it is a party.
"Merger" shall have the meaning set forth in Section 7.1(j).
"Merger Agreement" shall have the meaning set forth in Section 7.1(j).
"95 Indenture" shall mean that certain Indenture among the Company (as
successor by merger to Old Ocean Energy), as issuer, Guarantor (as successor by
merger to UMC), as initial subsidiary guarantor, and U.S. Bank Trust National
Association (formerly known as First Bank of New York, National Association), as
trustee, dated as of October 30, 1995, providing for the issuance of the
Company's $150,000,000 10-3/8% Senior Subordinated Notes due 2005, as amended by
(i) the First Supplemental Indenture thereto dated as of November 4, 1997, (ii)
the Second Supplemental Indenture thereto dated as of March 27, 1998 and (iii)
the Third Supplemental Indenture thereto dated as of March 30, 1999, 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 hereunder.
"96 Indenture" shall mean that certain indenture dated as of September 26, 1996 among the Company (as successor by merger to Old Ocean Energy), as issuer, the subsidiary guarantor named therein, and State Street Bank and Trust Company, as trustee, providing for the issuance of the Company's $160,000,000 9-3/4% Senior Subordinated Notes due 2006, as amended by (i) the First Supplemental Indenture thereto dated as of March 27, 1998 and (ii) the Second Supplemental Indenture thereto dated as of March 30, 1999, 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 hereunder.
"97 Indenture" shall mean that certain Indenture dated as of July 2, 1997 among the Company (as successor by merger to Old Ocean Energy), as issuer, the subsidiary guarantor named therein, and State Street Bank and Trust Company, as trustee, providing for the issuance of the Company's $200,000,000 8-7/8% Senior Subordinated Notes due 2007, as amended by (i) the First Supplemental Indenture thereto dated as of March 27, 1998 and (ii) the Second Supplemental Indenture thereto dated as of March 30, 1999, 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 hereunder.
"98 Senior Subordinated Indenture" shall mean that certain Indenture dated as of July 8, 1998 among the Company (as successor by merger to Old Ocean Energy), as issuer, the subsidiary guarantor named therein, U.S. Bank Trust National Association, as trustee, providing for the issuance of the Company's $250,000,000 8-3/8% Senior Subordinated Notes due 2008, as amended by the First Supplemental Indenture thereto dated as of March 30, 1999, 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 hereunder.
"Obligations" shall mean, as at any date of determination thereof, the sum of the following: (i) the aggregate principal amount of Loans outstanding hereunder plus (ii) the aggregate amount of the Letter of Credit Liabilities hereunder plus (iii) all other liabilities, obligations and indebtedness of the Company, any Subsidiary of the Company or any other Obligor under any Loan Document.
"Obligor" shall mean the Company and the Guarantor.
"Old Ocean Energy" shall mean Ocean Energy, Inc., a Delaware corporation.
"Organizational Documents" shall mean, with respect to a corporation, the certificate of incorporation, articles of incorporation and bylaws of such corporation; with respect to a partnership, the partnership agreement establishing such partnership; with respect to a joint venture, the joint venture agreement establishing such joint venture; with respect to a limited liability company, the certificate of formation and operating agreement (or comparable documents) of such limited liability company; and with respect to a trust, the instrument establishing such trust; in each case including any and all modifications thereof as of the date of the Loan Document referring to such Organizational Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, a corporation, a company, a bank, a voluntary association, a partnership, a trust, an unincorporated organization, any Governmental Authority or any other entity.
"Plan" shall mean an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either (a) maintained by the Company or any ERISA Affiliate for employees of the Company or any ERISA Affiliate or (b) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which the Company or any ERISA Affiliate is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.
"Post-Default Rate" shall mean, in respect of any principal of any Loan, any Reimbursement Obligation or any other amount payable by the Company under this Agreement or any other 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 equal to the lesser of (a) the sum of (x) with respect to Eurodollar Loans, 2% per annum plus the applicable Eurodollar Rate then in effect plus the Applicable Margin for Eurodollar Loans until the expiration of the applicable Interest Period, (y) with respect to Competitive Loans, 2% per annum plus the applicable fixed rate offered by the applicable Bank and accepted by the Company in accordance with Section 2.9 hereof, and (z) with respect to Alternate Base Rate Loans and with respect to Eurodollar Loans after the expiration of the applicable Interest Period (and also with respect to indebtedness other than Loans), 2% plus the Alternate Base Rate as in effect from time to time plus the Applicable Margin for Alternate Base Rate Loans or (b) the Highest Lawful Rate.
"Principal Office" shall mean the principal office of Administrative Agent, presently located at 1 Chase Manhattan Plaza, 8th Floor, New York, New York 10081, Attention: Agent Services.
"Quarterly Dates" shall mean the last day of each March, June, September and December, provided that, if any such date is not a Business Day, then the relevant Quarterly Date shall be the next succeeding Business Day.
"Rating" shall mean the senior unsecured debt rating for the Company publicly announced by Standard & Poor's Ratings Group or Moody's Investors Service, Inc., or their respective successors. In the event the ratings are not equivalent, the higher rating shall be treated as the "Rating" hereunder; provided, that if such ratings differ by more than one (1) level, the Rating shall be the average, rounded upwards, of the two ratings. In the event that there is no Rating published by either Standard & Poor's Ratings Group or Moody's Investors Service, Inc. or their respective successors, then the Rating shall be deemed to be BB-/Ba3.
"Redemption Obligations" shall mean with respect to any Person all mandatory redemption obligations of such Person with respect to preferred stock or other equity securities issued by such Person or put rights in favor of the holder of such preferred stock or other equity securities, to the extent that such redemption obligations or put rights will arise prior to the stated maturity of the Obligations. Notwithstanding the foregoing, customary redemption obligations and put rights associated with a Change of Control or sale of assets shall not constitute Redemption Obligations.
"Reference Banks" shall mean Chase and such other Banks (up to a maximum of two (2) additional Banks) as the Company, with the approval of Administrative Agent (which approval shall not be unreasonably withheld), may from time to time designate.
"Regulation D" shall mean Regulation D of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented from time to time and any successor or other regulation relating to reserve requirements.
"Regulatory Change" shall mean, with respect to any Bank, any change on
or after the date of this Agreement in Legal Requirements (including Regulation
D) or the adoption or making on or after such date of any interpretation,
directive or request applying to a class of banks including such Bank under any
Legal Requirements (whether or not having the force of law) by any Governmental
Authority.
"Reimbursement Obligations" shall mean, as at any date, the obligations of the Company then outstanding in respect of Letters of Credit under this Agreement, to reimburse Administrative Agent for the account of the applicable Issuer for the amount paid by the applicable Issuer in respect of any drawing under such Letter of Credit.
"Relevant Party" shall mean the Company and each other party to any of the Loan Documents other than (a) the Banks and (b) the Agents.
"Request for Extension of Credit" shall mean a request for extension of credit duly executed by any Responsible Officer of the Company, appropriately completed and substantially in the form of Exhibit B attached hereto.
"Requirements of Environmental Law" means all requirements imposed by any law (including for example and without limitation The Resource Conservation and Recovery Act and The Comprehensive Environmental Response, Compensation, and Liability Act), rule, regulation, or order of any federal, state or local executive, legislative, judicial, regulatory or administrative agency, board or authority in effect at the applicable time which relate to (i) noise; (ii) pollution, protection or clean-up of the air, surface water, ground water or land; (iii) solid, gaseous or liquid waste generation, treatment, storage, disposal or transportation; (iv) exposure to Hazardous Substances; (v) the safety or health of employees or (vi) regulation of the manufacture, processing, distribution in commerce, use, discharge or storage of Hazardous Substances.
"Reserve Requirement" shall mean, for any Eurodollar Loan for any Interest Period therefor, the stated maximum rate for all reserves (including any marginal, supplemental or emergency reserves) required to be maintained during such Interest Period under Regulation D by any member bank of the Federal Reserve System or any Bank against "Eurocurrency liabilities" (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Reserve Requirement shall reflect and include any other reserves required to be maintained by such member banks by reason of any Regulatory Change against (i) any category of liabilities which includes deposits by
reference to which the Eurodollar Rate is to be determined as provided in the definition of "Eurodol lar Base Rate" in this Section 1.1 or (ii) any category of extensions of credit or other assets which include Eurodollar Loans. Any determination by Administrative Agent of the Reserve Requirement shall be conclusive and binding, absent manifest error, and may be made using any reasonable averaging and attribution method.
"Responsible Officer" shall mean the chairman of the board, the president, any executive vice president, the vice president of finance and administration, the chief executive officer or the chief operating officer or any equivalent officer (regardless of title) and in the case of the Company, any other vice president, and in respect of financial or accounting matters, shall also include the chief financial officer, the treasurer and the controller or any equivalent officer (regardless of title).
"Restricted Subsidiary" shall mean each Subsidiary of the Company that, at the particular time in question, (i) owns directly or indirectly any material assets or any interest in any other Restricted Subsidiary and (ii) has been designated as a Restricted Subsidiary by the Company or has not been designated as an Unrestricted Subsidiary by the Company either (a) on Exhibit A attached hereto or (b) in accordance with the terms and provisions of this Agreement. The Unrestricted Subsidiaries on the Effective Date are listed on Exhibit A attached hereto and each other Subsidiary of Company as of the Effective Date shall be a Restricted Subsidiary. A Restricted Subsidiary shall remain such (even if it no longer owns directly or indirectly any interest in any of the material assets or any interest in any other Restricted Subsidiary) until designated as an Unrestricted Subsidiary in accordance with the terms and provisions of this Agreement.
"Revolving Credit Availability Period" shall mean the period from and including the date hereof to but not including March 30, 2004 or the date the Commitments are terminated pursuant to Section 11.1, whichever is first to occur.
"Revolving Credit Obligations" shall mean, as at any date of determination thereof, the sum of the following (determined without duplication): (i) the aggregate principal amount of Loans outstanding hereunder plus (ii) the aggregate amount of the Letter of Credit Liabilities hereunder.
"Seagull" shall mean Seagull Energy Corporation, a Texas corporation.
"Senior Debt" shall mean Total Debt, other than Subordinated Indebtedness.
"Senior Leverage Ratio" shall mean the ratio of (a) Senior Debt to (b) EBITDAX of the Company and its Restricted Subsidiaries on a consolidated basis for the last four rolling fiscal quarters.
"Specified Assets" shall have the meaning set forth in Section 10.4.
"Subordinated Indebtedness" shall mean all unsecured Indebtedness of the Company which is subordinated, upon terms satisfactory to the Administrative Agent, in right of payment to the payment in full in cash of all Obligations.
"Subsidiary" shall mean, with respect to any Person (the "parent"), (a) any corporation of which at least a majority of the outstanding shares of stock having by the terms thereof ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether or not at the time stock of any other class or classes of such corporation 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 the parent or one or more of the Subsidiaries of the parent or by the parent and one or more of the Subsidiaries of the parent, and (b) any partnership, limited partnership, joint venture or other form of entity, the majority of the legal or beneficial ownership of which is at the time directly or indirectly owned or controlled by the parent or one or more of the Subsidiaries of the parent or by the parent and one or more of the Subsidiaries of the parent.
"Tangible Net Worth" shall mean with respect to any Person the sum of the redemption price of preferred stock, par value of common stock, capital in excess of par value of common stock (additional paid-in capital) and retained earnings, less treasury stock, goodwill, deferred development costs, franchises, licenses, patents, trademarks and copyrights and all other assets which are properly classified as intangible assets in accordance with GAAP less any Redemption Obligations.
"364-Day Credit Agreement" shall mean that certain 364-Day Credit Agreement of even date herewith by and among the Company, each of the banks which is or which may from time to time become a signatory thereto, Bank of America National Trust and Savings Association, as Documentation Agent, Bank One, Texas, N.A., as Syndication Agent, Societe Generale, Southwest Agency and Bank of Montreal, as Managing Agents for the Banks, The Chase Manhattan Bank, as Auction Administrative Agent for the Banks, and Chase Bank of Texas, National Association, as Administrative Agent, as such agreement from time to time may be amended, amended and restated, supplemented or otherwise modified.
"Total Debt" shall mean all Indebtedness of the Company and its Restricted Subsidiaries on a consolidated basis, but excluding (i) Indebtedness of the Company or any Restricted Subsidiary of the types described in Section 10.1, part (i), clauses (c) through (g), (j), (k) and (l), (ii) fifty percent (50%) of the amount of (A) obligations in respect of letters of credit or similar instruments not supporting indebtedness for borrowed money and (B) obligations in connection with bank guarantees, bonds, surety or similar obligations required or requested by Governmental Authorities in connection with the usual and customary operation of and the obtaining of oil and gas properties, and (iii) Indebtedness of the Company or any Restricted Subsidiary of the types described in Section 10.1, part (i), clause (h), up to an aggregate amount of $10,000,000.
"Total Leverage Ratio" shall mean the ratio of (a) Total Debt to (b) EBITDAX of the Company and its Restricted Subsidiaries on a consolidated basis for the last four rolling fiscal quarters.
"Type" shall have the meaning assigned to such term in Section 1.3 hereof.
"Unfunded Liabilities" shall mean, with respect to any Plan, at any time, the amount (if any) by which (a) the present value of all benefits under such Plan exceeds (b) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent actuarial valuation report for such Plan, but only to the extent that such excess represents a potential liability of any ERISA Affiliate to the PBGC or a Plan under Title IV of ERISA.
"United States" or "U.S." shall mean the United States of America, its fifty states and the District of Columbia.
"Unrestricted Subsidiary" shall mean each Subsidiary of the Company which is (i) designated as an Unrestricted Subsidiary on Exhibit A attached hereto or (ii) designated as an Unrestricted Subsidiary by the Company at any time after the Effective Date and either (A) such Subsidiary has a Tangible Net Worth of less than $25,000,000 or (B) with the consent of the Administrative Agent and the Majority Banks. An Unrestricted Subsidiary shall remain such until designated as a Restricted Subsidiary in accordance with the terms and provisions of this Agreement.
1.2 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 delivered hereunder shall be prepared, in accordance with GAAP. To enable the ready determination of compliance with the provisions hereof, the Company will not change from December 31 in each year the date on which its fiscal year ends, nor from March 31, June 30 and September 30 the dates on which the first three fiscal quarters in each fiscal year end.
1.3 Types of Loans. Loans hereunder are distinguished by "Type". The "Type" of a Loan refers to the determination whether such Loan is a Eurodollar Loan, a Competitive Loan or an Alternate Base Rate Loan.
1.4 Miscellaneous. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Any reference to Sections shall refer to Sections of this Agreement.
SECTION 2. COMMITMENTS; COMPETITIVE BID FACILITY.
2.1 Committed Loans. From time to time on or after the date hereof and during the Revolving Credit Availability Period, each Bank shall make Committed Loans under this Section
to the Company in an aggregate principal amount at any one time outstanding up to but not exceeding such Bank's Commitment Percentage of the amount by which the Facility Amount exceeds the aggregate unpaid principal balance of all Competitive Loans and Letter of Credit Liabilities from time to time outstanding. Subject to the conditions herein, any such Committed Loan repaid prior to the end of the Revolving Credit Availability Period may be reborrowed pursuant to the terms of this Agreement; provided, that any and all such Committed Loans shall be due and payable in full at the end of the Revolving Credit Availability Period.
2.2 Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions hereof, and on the condition that aggregate Letter of Credit Liabilities shall never exceed $100,000,000, the Company shall have the right, in addition to Committed Loans provided for in Section 2.1 hereof, to utilize the Commitments from time to time from and after the Effective Date through the expiration of the Revolving Credit Availability Period by obtaining the issuance of letters of credit for the account of the Company and on behalf of the Company by the applicable Issuer if the Company shall so request in the notice referred to in Section 2.2(b)(i). Upon the date of the issuance of a Letter of Credit, the applicable Issuer shall be deemed, without further action by any party hereto, to have sold to each Bank, and each Bank shall be deemed, without further action by any party hereto, to have purchased from the applicable Issuer, a participation, to the extent of such Bank's Commitment Percentage, in such Letter of Credit and the related Letter of Credit Liabilities. Any Letter of Credit having an expiry date after the end of the Revolving Credit Availability Period shall have been fully Covered or shall be backed by a letter of credit in form and substance, and issued by an issuer, acceptable to Administrative Agent in its reasonably exercised discretion. Subject to the terms and conditions hereof, upon the request of the Company, if Chase is the designated Issuer, Chase shall issue the applicable Letter of Credit and if any other Bank is the designated Issuer, such Bank may, but shall not be obligated to, issue such Letter of Credit.
(b) Additional Provisions. The following additional provisions shall apply to each Letter of Credit:
(i) The Company shall give Administrative Agent at least three (3) Business Days' prior notice (effective upon receipt) specifying the proposed Issuer and the date such Letter of Credit is to be issued and describing the proposed terms of such Letter of Credit and the nature of the transaction proposed to be supported thereby, and shall furnish such additional information regarding such transaction as Administrative Agent or the applicable Issuer may reasonably request. Upon receipt of such notice Administrative Agent shall promptly notify each Bank of the contents thereof and of such Bank's Commitment Percentage of the amount of such proposed Letter of Credit.
(ii) No Letter of Credit may be issued if after giving effect thereto the Revolving Credit Obligations would exceed the Facility Amount. On each day during the period commencing with the issuance of any Letter of Credit and until such Letter of Credit shall have expired or been
terminated, the Commitment of each Bank shall be deemed to be utilized for all purposes hereof in an amount equal to such Bank's Commitment Percentage of the amount then available for drawings under such Letter of Credit.
(iii) Upon receipt from the beneficiary of any Letter of Credit of any demand for payment thereunder, the applicable Issuer shall promptly notify the Company and each Bank as to the amount to be paid as a result of such demand and the payment date. If at any time the applicable Issuer shall have made a payment to a beneficiary of a Letter of Credit in respect of a drawing under such Letter of Credit, each Bank will pay to the applicable Issuer immediately upon demand by the applicable Issuer at any time during the period commencing after such payment until reimbursement thereof in full by the Company, an amount equal to such Bank's Commitment Percentage of such payment, together with interest on such amount for each day from the date of demand for such payment (or, if such demand is made after 11:00 a.m. Houston, Texas time on such date, from the next succeeding Business Day) to the date of payment by such Bank of such amount at a rate of interest per annum equal to the Federal Funds Rate for such period.
(iv) The Company shall be irrevocably and unconditionally obligated forthwith to reimburse the applicable Issuer for any amount paid by the applicable Issuer upon any drawing under any Letter of Credit, without presentment, demand, protest or other formalities of any kind. Such reimbursement may, subject to satisfaction of any other applicable conditions set forth in this Agreement be made by borrowing of Loans. In the event any such reimbursement is not made by borrowing of Loans, the Company shall make such reimbursement in immediately available funds within five (5) days after demand therefor by the applicable Issuer. The applicable Issuer will pay to each Bank such Bank's Commitment Percentage of all amounts received from the Company for application in payment, in whole or in part, of the Reimbursement Obligation in respect of any Letter of Credit, but only to the extent such Bank has made payment to the applicable Issuer in respect of such Letter of Credit pursuant to clause (iii) above.
(v) The Company will pay to Administrative Agent at the Principal Office for the account of each Bank a fee on such Bank's Commitment Percentage of the daily average amount available for drawings under each Letter of Credit, in each case for the period from and including the date of issuance of such Letter of Credit to and including the date of expiration or termination thereof at a rate per annum equal to the Letter of Credit Fee in effect from time to time, such fee to be paid in arrears on the Quarterly Dates and on the date of the expiration or termination thereof. Administrative Agent will pay to each Bank, promptly after receiving any payment in respect of letter of credit fees referred to in the preceding sentence of this clause (v), an amount equal to such Bank's Commitment Percentage of such fees. The Company shall pay to the applicable Issuer an administration and issuance fee in an amount equal to 1/8 of 1% per annum of the daily average amount available for drawings under such Letter of Credit, in each case for the period from and including the date of issuance of such Letter of Credit to and including the date of expiration or termination thereof, such fee to be paid in arrears on the Quarterly Dates and on the date of the expiration or termination thereof. Such administration and issuance fee shall be retained by the applicable Issuer.
(vi) The issuance by the applicable Issuer of each Letter of Credit shall, in addition to the conditions precedent set forth in Section 7 hereof, be subject to the conditions precedent that such Letter of Credit shall be in such form and contain such terms as shall be reasonably satisfactory to the applicable Issuer and that the Company shall have executed and delivered such other instruments and agreements relating to such Letter of Credit as the applicable Issuer shall have reasonably requested and are not inconsistent with the terms of this Agreement including an Application therefor. In the event of a conflict between the terms of this Agreement and the terms of any Application, the terms of this Agreement shall control. Without limiting the generality of the foregoing sentence, in the event any such Application shall include requirements for Cover, it is agreed that there shall be no requirements for the Company to provide Cover except as expressly required in this Agreement.
(c) Indemnification. The Company hereby indemnifies and holds harmless the Agents, the applicable Issuer and each Bank from and against any and all claims and damages, losses, liabilities, costs or expenses which such Bank, the applicable Issuer or Agent may incur (or which may be claimed against such Bank, the applicable Issuer or any Agent by any Person whatsoever) in connection with the execution and delivery or transfer of or payment or failure to pay under any Letter of Credit, including, without limitation, any claims, damages, losses, liabilities, costs or expenses which such Agent, the applicable Issuer or such Bank, as the case may be, may incur (WHETHER INCURRED AS A RESULT OF ITS OWN NEGLIGENCE OR OTHERWISE) by reason of or in connection with the failure of any other Bank (whether as a result of its own negligence or otherwise) to fulfill or comply with its obligations to such Agent, the applicable Issuer or such Bank, as the case may be, hereunder (but nothing herein contained shall affect any rights the Company may have against such defaulting Bank); provided that, the Company shall not be required to indemnify any Bank, the applicable Issuer or such Agent for (i) any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (A) the willful misconduct or gross negligence of the party seeking indemnification, or (B) such Bank's, the applicable Issuer's or the applicable Agent's, as the case may be, failure to pay under any Letter of Credit after the presentation to it of a request required to be paid under applicable law. Nothing in this Section 2.2(c) is intended to limit the obligations of the Company under any other provision of this Agreement or (ii) any claims, damages, losses, liabilities, costs or expenses between or among the Agents, the Banks, the applicable Issuer and their respective shareholders.
(d) Co-issuance or Separate Issuance of Letters of Credit. The Company may, at its option, request that any requested Letter of Credit which exceeds $1,000,000 be issued severally, but not jointly, by any two or more of the Banks or issued through separate Letters of Credit issued by any two or more of the Banks, respectively, each in an amount equal to a portion of the amount of the applicable Letter of Credit requested by the Company. In either such event, the Banks issuing such Letters of Credit shall each constitute an "Issuer" and the Letters of Credit so issued shall each constitute a "Letter of Credit" for all purposes hereunder and under the Loan Documents. Notwithstanding the foregoing, no Bank other than Chase shall have any obligation to issue any Letter of Credit, but may do so at its option.
2.3 Reductions and Changes of Commitments.
(a) Mandatory. On March 30, 2004, all Commitments shall be terminated in their entirety unless terminated at an earlier date pursuant to Section 11.1.
(b) Optional. The Company shall have the right to terminate or reduce the unused portion of the Commitments at any time or from time to time, provided that: (i) the Company shall give notice of each such termination or reduction to Administrative Agent as provided in Section 5.5 hereof and (ii) each such partial reduction shall be permanent and in an aggregate amount equal to an integral multiple of $1,000,000 which equals or exceeds $5,000,000.
(c) No Reinstatement. Any reduction in or termination of the Commitments may not be reinstated without the approval of Administrative Agent and any Bank whose Commitment (or the applicable part thereof) is to be so reinstated.
2.4 Fees.
(a) The Company shall pay to Administrative Agent for the account of each Bank a facility fee accruing from the Effective Date, computed for each day at a rate per annum equal to the Facility Fee Percentage times such Bank's pro rata share (based on its respective Commitment) of the Facility Amount on such day. Such facility fees shall be payable on the Quarterly Dates and on the earlier of the date the Commitments are terminated in their entirety or the last day of the Revolving Credit Availability Period.
(b) The Company agrees to pay to Administrative Agent fees as provided in the separate letter agreements executed by and between Administrative Agent and the Company.
2.5 Affiliates; Lending Offices.
(a) Any Bank may, if it so elects, fulfill any obligation to make a Eurodollar Loan or Competitive Loan by causing a branch, foreign or otherwise, or Affiliate of such Bank to make such Loan and may transfer and carry such Loan at, to or for the account of any branch office or Affiliate of such Bank; provided that, in such event for the purposes of this Agreement such Loan shall be deemed to have been made by such Bank and the obligation of the Company to repay such Loan shall nevertheless be to such Bank and shall be deemed to be held by such Bank and, to the extent of such Loan, to have been made for the account of such branch or Affiliate.
(b) Notwithstanding any provision of this Agreement to the contrary, each Bank shall be entitled to fund and maintain its funding of all or any part of its Loans hereunder in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if such Bank had actually funded and maintained each Eurodollar Loan during each Interest Period through the purchase of deposits having a maturity corresponding to such Interest Period and bearing an interest rate equal to the Eurodollar Rate for such Interest Period.
2.6 Several Obligations. The failure of any Bank to make any Loan to be made by it on the date specified therefor shall not relieve any other Bank of its obligation to make its Loan on such date, but neither Administrative Agent nor any Bank shall be responsible for the failure of any other Bank to make a Loan to be made by such other Bank.
2.7 Repayment of Loans; Evidence of Debt.
(a) Each Bank shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of Company to such Bank resulting from each Loan made by such Bank, including the amounts of principal and interest payable and paid to such Bank from time to time hereunder.
(b) Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder and, if applicable, the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from Company to each Bank hereunder and (iii) the amount of any sum received by Administrative Agent hereunder for the account of the Banks and each Bank's share thereof.
(c) The entries made in the accounts maintained pursuant to paragraph
(a) or (b) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Bank or Administrative Agent to maintain such accounts or any error therein
shall not in any manner affect the obligation of any Obligor to repay the Loans
or other Obligations in accordance with the terms of this Agreement or the other
Loan Documents.
(d) Any Bank may request that Loans made by it be evidenced by a promissory note. In such event, Company shall prepare, execute and deliver to such Bank promissory notes payable to the order of such Bank (or, if requested by such Bank, to such Bank and its registered assigns and in a form approved by Administrative Agent). Thereafter, the Loans evidenced by such promissory notes and interest thereon may (including after assignment pursuant to Section 13.5) be represented by one or more promissory notes in such form payable to the order of the payee named therein.
2.8 Use of Proceeds. The proceeds of the Loans shall be used for general corporate purposes.
2.9 Competitive Bid Procedure.
(a) In order to request Competitive Bids, the Company shall hand deliver, telex or telecopy to Auction Administrative Agent a duly completed request substantially in the form of Exhibit F, with the blanks appropriately completed (a "Competitive Bid Request"), to be received by Auction Administrative Agent not later than 11:00 a.m., Houston, Texas time, five (5) Business Days before the date specified for a proposed Competitive Loan. No Alternate Base Rate Loan shall be requested in, or, except pursuant to Section 6, made pursuant to, a Competitive Bid Request. A Competitive Bid Request that does not conform substantially to the format of Exhibit F may be
rejected at Auction Administrative Agent's sole discretion, and Auction Administrative Agent shall promptly notify the Company of such rejection by telecopier. Each Competitive Bid Request shall in each case refer to this Agreement and specify (x) the date of such Competitive Loans (which shall be a Business Day) and the aggregate principal amount thereof (which shall not be less than $25,000,000 or greater than the unused portion of the Facility Amount on such date and shall be an integral multiple of $5,000,000) and (y) the Interest Period with respect thereto (which may not end after the termination of the Revolving Credit Availability Period). Promptly after its receipt of a Competitive Bid Request that is not rejected as aforesaid, Auction Administrative Agent shall invite by telecopier (in substantially the form set forth in Exhibit H hereto) the Banks to bid, on the terms and conditions of this Agreement, to make Competitive Loans pursuant to such Competitive Bid Request. Notwithstanding the foregoing, Auction Administrative Agent shall have no obligation to invite any Bank to make a Competitive Bid pursuant to this Section until such Bank has delivered a properly completed Competitive Bid Administrative Questionnaire to Auction Administrative Agent.
(b) Each Bank may, in its sole discretion, make one or more Competitive Bids to the Company responsive to each Competitive Bid Request. Each Competitive Bid by a Bank must be received by Auction Administrative Agent via telecopier, in the form of Exhibit H hereto, not later than 11:00 a.m., Houston, Texas time, four (4) Business Days before the date specified for a proposed Competitive Loan. Competitive Bids that do not conform substantially to the format of Exhibit H may be rejected by Auction Administrative Agent after conferring with, and upon the instruction of, the Company, and Auction Administrative Agent shall notify the Bank of such rejection as soon as practicable. Each Competitive Bid shall refer to this Agreement and (x) specify the principal amount (which shall be in a minimum principal amount of $5,000,000 and in an integral multiple of $1,000,000 and which may equal the entire aggregate principal amount of the Competitive Loan requested by the Company) of the Competitive Loan that the Bank is willing to make to the Company, (y) specify the Competitive Bid Rate at which the Bank is prepared to make the Competitive Loan and (z) confirm the Interest Period with respect thereto specified by the Company in its Competitive Bid Request. A Competitive Bid submitted by a Bank pursuant to this paragraph (b) shall be irrevocable.
(c) Auction Administrative Agent shall, by 2:00 p.m. four (4) Business Days before the date specified for a proposed Competitive Loan, notify the Company by telecopier of all the Competitive Bids made, the Competitive Bid Rate and the maximum principal amount of each Competitive Loan in respect of which a Competitive Bid was made and the identity of the Bank that made each bid. Auction Administrative Agent shall send a copy of all Competitive Bids to the Company for its records as soon as practicable after completion of the bidding process set forth in this Section 2.9.
(d) The Company may in its sole and absolute discretion, subject only to the provisions of this Section 2.9(d), accept or reject any Competitive Bid referred to in Section 2.9(c); provided, however, that the aggregate amount of the Competitive Bids so accepted by the Company may not exceed the principal amount of the Competitive Loan requested by the Company. The Company
shall notify Auction Administrative Agent by telecopier whether and to what
extent it has decided to accept or reject any or all of the bids referred to in
Section 2.9(c), not later than 11:00 a.m., Houston, Texas time, three (3)
Business Days before the date specified for a proposed Competitive Loan;
provided, however, that (w) the failure by the Company to give such notice shall
be deemed to be a rejection of all the bids referred to in Section 2.9(c) and
(x) no bid shall be accepted for a Competitive Loan unless such Competitive Loan
is in a minimum principal amount of $5,000,000 and an integral multiple of
$1,000,000. Notwithstanding the foregoing, if the Company accepts more than one
bid made in response to a Competitive Bid Request and the available principal
amount of Competitive Loans to be allocated among the Banks is not sufficient to
enable Competitive Loans to be allocated to each Bank in a minimum principal
amount of $5,000,000 and in integral multiples of $1,000,000, then the Company
shall select the Banks to be allocated such Competitive Loans and shall round
allocations up or down to the next higher or lower multiple of $1,000,000 as it
shall deem appropriate. In addition, the Company shall be permitted under the
foregoing procedures to accept a bid or bids in a principal amount of less than
$5,000,000 (i) in order to enable the Company to accept bids equal to (but not
in excess of) the principal amount of the Competitive Loan requested by the
Company or (ii) in order to enable the Company to accept all remaining bids, or
all remaining bids at a particular Competitive Bid Rate. A notice given by
Company pursuant to this paragraph (d) shall be irrevocable.
(e) Auction Administrative Agent shall promptly notify each bidding Bank whether or not its Competitive Bid has been accepted (and if so, in what amount and at what Competitive Bid Rate) by telex or telecopier sent by Auction Administrative Agent, and each successful bidder will thereupon become bound, subject to the other applicable conditions hereof, to make the Competitive Loan in respect of which its bid has been accepted. After completing the notifications referred to in the immediately preceding sentence, Auction Administrative Agent shall (i) notify Administrative Agent of each Competitive Bid that has been accepted, the amount thereof and the Competitive Bid Rate therefor and (ii) notify each Bank of the aggregate principal amount of all Competitive Bids accepted.
(f) No Competitive Loan shall be made within five (5) Business Days of the date of any other Competitive Loan, unless the Company and Auction Administrative Agent shall mutually agree otherwise.
(g) If Administrative Agent shall at any time have a Commitment hereunder and shall elect to submit a Competitive Bid in its capacity as a Bank, it shall submit such bid directly to the Company one quarter of an hour earlier than the latest time at which the other Banks are required to submit their bids to Auction Administrative Agent pursuant to paragraph (b) above.
(h) All notices required by this Section 2.9 shall be made in accordance with Section 13.2 and the Competitive Bid Administrative Questionnaire most recently placed on file by each Bank with Auction Administrative Agent.
SECTION 3. BORROWINGS, PREPAYMENTS AND SELECTION OF INTEREST RATES.
3.1 Borrowings. The Company shall give Administrative Agent notice of each borrowing to be made hereunder as provided in Sections 2.9 and 5.5 hereof. Not later than 2:00 p.m. Houston, Texas time on the date specified for each such borrowing hereunder, each Bank shall make available the amount of the Loan, if any, to be made by it on such date to Administrative Agent, at its Principal Office, in immediately available funds, for the account of the Company. The amount so received by 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 designated by the Company maintained with Administrative Agent at the Principal Office.
3.2 Prepayments.
(a) Optional Prepayments. Subject to the provisions of Sections 4, 5 and 6, the Company shall have the right to prepay, on any Business Day, in whole or in part, without the payment of any penalty or fee, Loans at any time or from time to time, provided that, the Company shall give Administrative Agent notice of each such prepayment as provided in Section 5.5 hereof. Eurodollar Loans and Competitive Loans may be prepaid on the last day of an Interest Period applicable thereto. Neither Eurodollar Loans nor Competitive Loans may be otherwise prepaid unless prepayment is accompanied by payment of all compensation required by Section 6.
(b) Mandatory Prepayments and Cover. The Company shall from time to
time on demand by Administrative Agent prepay the Loans (or provide Cover for
Letter of Credit Liabilities) in such amounts as shall be necessary so that at
all times the aggregate outstanding principal amount of all Revolving Credit
Obligations shall not be in excess of the sum of (i) the aggregate amount of the
Commitments, as reduced from time to time pursuant to Section 2.3 hereof plus
(ii) any Cover provided under this Section 3.2(b).
3.3 Selection of Interest Rates. Subject to the terms and provisions of this Agreement, the Company shall have the right either to convert any Loan (in whole or in part) into a Loan of another Type (provided that no such conversion of Eurodollar Loans or Competitive Loans shall be permitted other than on the last day of an Interest Period applicable thereto) or to continue such Loan (in whole or in part) as a Loan of the same Type. In the event the Company fails to so give such notice prior to the end of the applicable Interest Period with respect to any Eurodollar Loan or Competitive Loan, such Loan shall become an Alternate Base Rate Loan on the last day of such Interest Period. Notwithstanding any other provision of this Agreement, if a Default shall have occurred and be continuing on the last day of an Interest Period applicable to a Eurodollar Loan or Competitive Loan, such Loan shall automatically be converted to an Alternate Base Rate Loan.
SECTION 4. PAYMENTS OF PRINCIPAL AND INTEREST.
4.1 Repayment of Loans and Reimbursement Obligations. The Company hereby unconditionally promises to pay to Administrative Agent for the account of each Bank (a) (i) each Loan in full at the end of the Interest Period applicable to such Loan unless such Loan is continued or converted in accordance with the terms hereof, and (ii) the then unpaid principal amount of all outstanding Loans on the date of the expiration of the Revolving Credit Availability Period, and (b) the amount of each Reimbursement Obligation promptly upon its occurrence. The amount of any Reimbursement Obligation may, if the applicable conditions precedent specified in Section 7 hereof have been satisfied, be paid with the proceeds of Loans.
4.2 Interest.
(a) Subject to Section 13.6 hereof, the Company will pay to Administrative Agent for the account of each Bank interest on the unpaid principal amount of each Loan made by such Bank for the period commencing on the date of such Loan to but excluding the date such Loan shall be paid in full, at the lesser of (I) the following rates per annum:
(i) if such Loan is an Alternate Base Rate Loan, the Alternate Base Rate plus the Applicable Margin,
(ii) if such Loan is a Eurodollar Loan, the applicable Eurodollar Rate plus the Applicable Margin, and
(iii) if such Loan is a Competitive Loan, the applicable fixed rate offered by the applicable Bank and accepted by the Company in accordance with Section 2.9 hereof,
or (II) the Highest Lawful Rate.
(b) Notwithstanding any of the foregoing but subject to Section 13.6 hereof, the Company will pay to Administrative Agent for the account of each Bank interest at the applicable Post-Default Rate on any principal of any Loan made by such Bank, on any Reimbursement Obligation and on any other amount payable by the Company hereunder to or for the account of such Bank (but, if such amount is interest, only to the extent legally allowed), which 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.
(c) Accrued interest on each Alternate Base Rate Loan shall be payable on each Quarterly Date. Accrued interest on each Eurodollar Loan or Competitive Bid Loan shall be payable on the last day of each Interest Period for such Loan (and, if such Interest Period exceeds three months' duration, on the last day of each three month period, commencing on the first three month anniversary of such Interest Period). Notwithstanding the foregoing, (i) accrued interest payable at the Post-Default Rate shall be due and payable from time to time on demand of Administrative
Agent or the Majority Banks (through Administrative Agent) and (ii) accrued interest on any amount prepaid or converted pursuant to Section 6 hereof shall be paid on the amount so prepaid or converted.
SECTION 5. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC.
5.1 Payments.
(a) Except to the extent otherwise provided herein, all payments of principal, interest, Reimbursement Obligations and other amounts to be made by the Company or any other Obligor hereunder shall be made in Dollars, in immediately available funds, to Administrative Agent at the Principal Office (or in the case of a successor Administrative Agent, at the principal office of such successor Administrative Agent in the United States), not later than 11:00 a.m., Houston, Texas time on the date on which such payment 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).
(b) The Company or such other Obligor shall, at the time of making each payment hereunder, specify to Administrative Agent the Loans or other amounts payable by the Company or such Obligor hereunder or thereunder to which such payment is to be applied. Each payment received by Administrative Agent hereunder or any other Loan Document for the account of a Bank shall be paid promptly to such Bank, in immediately available funds for the account of such Bank's Applicable Lending Office.
(c) If the due date of any payment hereunder or any other Loan Document falls on a day which is not a Business Day, the due date for such payment (subject to the definition of Interest Period) 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.
5.2 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each borrowing from the Banks under Section 2.1 hereof shall be made ratably
from the Banks on the basis of their respective Commitments and each payment of
commitment or facility fees shall be made for the account of the Banks, and each
termination or reduction of the Commitments of the Banks under Section 2.3
hereof shall be applied, pro rata, according to the Banks' respective
Commitments; (b) each payment by the Company of principal of or interest on
Loans of a particular Type shall be made to Administrative Agent for the account
of the Banks pro rata in accordance with the respective unpaid principal amounts
of such Loans held by the Banks; and (c) the Banks (other than the applicable
Issuer) shall purchase from the applicable Issuer participations in the Letters
of Credit to the extent of their respective Commitment Percentages.
5.3 Computations. Interest on Competitive Loans and interest based on the Eurodollar Base Rate or the Federal Funds Rate will 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 payable, unless the effect of so computing shall be to cause the rate of interest to exceed the Highest
Lawful Rate, in which case interest shall be calculated on the basis of the
actual number of days elapsed in a year composed of 365 or 366 days, as the case
may be. All other interest and fees shall be computed on the basis of a year of
365 (or 366) days and actual days elapsed (including the first day but excluding
the last day) occurring in the period for which payable.
5.4 Minimum and Maximum Amounts. Except for prepayments made pursuant to Section 3.2(b) hereof, and subject to the provisions of Section 2.9 hereof with respect to Competitive Loans, each borrowing and repayment of principal of Loans, each termination or reduction of Commitments, each optional prepayment and each conversion of Type shall be in an aggregate principal amount at least equal to (a) in the case of Eurodollar Loans and Competitive Loans, $5,000,000, and (b) in the case of Alternate Base Rate Loans, $1,000,000 (borrowings or prepayments of Loans of different Types or, in the case of Eurodollar Loans and Competitive Loans, having different Interest Periods at the same time hereunder to be deemed separate borrowings and prepayments for purposes of the foregoing, one for each Type or Interest Period). Upon any mandatory prepayment that would reduce Eurodollar Loans or Competitive Loans, respectively, having the same Interest Period to less than $5,000,000 such Loans shall automatically be converted into Alternate Base Rate Loans on the last day of the applicable Interest Period. Notwithstanding anything to the contrary contained in this Agreement, there shall not be, at any one time, more than eight (8) Interest Periods in effect with respect to Eurodollar Loans or Competitive Loans, in the aggregate.
5.5 Certain Actions, Notices, Etc. Notices to Administrative Agent of any termination or reduction of Commitments, of borrowings and prepayments, conversions and continuations of Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by Administrative Agent not later than 11:00 a.m., Houston, Texas time on the number of Business Days prior to the date of the relevant termination, reduction, borrowing and/or
repayment, conversion or continuance specified below:
Notice Number of Business Days Prior
------ -----------------------------
Termination or Reduction of 2
Commitments
Borrowing or prepayment of or same day
conversion into Alternate Base Rate
Loans
Borrowing or prepayment of or 3
conversion into or continuance of
Eurodollar Loans
=============================================== =========================================
|
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing or
prepayment shall specify the amount and Type of the Loans to be borrowed or
prepaid (subject to Sections 3.2(a) and 5.4 hereof), the date of borrowing or
prepayment (which shall be a Business Day) and, in the case of Eurodollar Loans,
the duration of the Interest Period therefor (subject to the definition of
"Interest Period"). Each such notice of conversion of a Loan into a Loan of
another Type shall identify such Loan (or portion thereof) being converted and
specify the Type of Loan into which such Loan is being converted (subject to
Section 5.4 hereof) and the date for conversion (which shall be a Business Day)
and, unless such Loan is being converted into an Alternate Base Rate Loan, the
duration (subject to the definition of "Interest Period") of the Interest Period
therefor which is to commence as of the last day of the then current Interest
Period therefor (or the date of conversion, if such Loan is being converted from
an Alternate Base Rate Loan). Each such notice of continuation of a Loan (or
portion thereof) as the same Type of Loan shall identify such Loan (or portion
thereof) being continued (subject to Section 5.4 hereof) and the duration
(subject to the definition of "Interest Period") of the Interest Period therefor
which is to commence as of the last day of the then current Interest Period
therefor. Administrative Agent shall promptly notify the affected Banks of the
contents of each such notice. Notice of any prepayment having been given, the
principal amount specified in such notice, together with interest thereon to the
date of prepayment, shall be due and payable on such prepayment date. Section
2.9 hereof shall control the time periods applicable to Competitive Loans.
5.6 Non-Receipt of Funds by Administrative Agent. Unless Administrative Agent shall have been notified by a Bank or the Company (the "Payor") prior to the date on which such Bank is to make payment to Administrative Agent of the proceeds of a Loan to be made by it hereunder (or the payment of any amount by such Bank to reimburse the applicable Issuer for a drawing under any Letter of Credit) or the Company is to make a payment to Administrative Agent for the account of one or more of the Banks, as the case may be (such payment being herein called the "Required Payment"), which notice shall be effective upon receipt, that the Payor does not intend to make the Required Payment to Administrative Agent, 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 on such date and, if the Payor has not in fact made the Required Payment to Administrative Agent on or before such date, the recipient of such payment (or, if such recipient is the beneficiary of a Letter of Credit, the Company and, if the Company fails to pay the amount thereof to Administrative Agent forthwith upon demand, the Banks ratably in proportion to their respective Commitment Percentages) shall, on demand, pay to Administrative Agent the amount made available to it together with interest thereon in respect of the period commencing on the date such amount was so made available by Administrative Agent until the date Administrative Agent recovers such amount at a rate per annum equal to the Federal Funds Rate for such period.
5.7 Sharing of Payments, Etc. If a Bank shall obtain payment of any principal of or interest on any Loan made by it under this Agreement, or on any Reimbursement Obligation or other obligation then due to such Bank hereunder, through the exercise of any right of set-off, banker's
lien, counterclaim or similar right, or otherwise, it shall promptly purchase from the other Banks participations in the Loans made, or Reimbursement Obligations or other obligations held, by the other Banks in such amounts, and make such other adjustments from time to time as shall be equitable to the end that all the Banks shall share the benefit of such payment (net of any expenses which may be incurred by such Bank in obtaining or preserving such benefit) pro rata in accordance with the unpaid principal and interest on the Obligations then due to each of them (provided, however, that the foregoing shall not apply to payments of Competitive Loans made prior to the termination of the Commitments following the occurrence of an Event of Default). To such end all the Banks 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, to the fullest extent it may effectively do so under applicable law, that any Bank so purchasing a participation in the Loans made, or Reimbursement Obligations or other obligations held, by other Banks may exercise all rights of set-off, bankers' lien, counterclaim or similar rights with respect to such participation as fully as if such Bank were a direct holder of Loans and Reimbursement Obligations or other obligations in the amount of such participation. Nothing contained herein shall require any Bank to exercise any such right or shall affect the right of any Bank to exercise, and retain the benefits of exercising, any such right with respect to any other Indebtedness or obligation of any Obligor.
SECTION 6. YIELD PROTECTION AND ILLEGALITY.
6.1 Additional Costs.
(a) Subject to Section 13.6, the Company shall pay to Administrative Agent, on demand for the account of each Bank from time to time such amounts as such Bank may determine to be necessary to compensate it for any costs incurred by such Bank which such Bank determines are attributable to its making or maintaining of any Eurodollar Loan or any Competitive Loan hereunder or its obligation to make any such Loan hereunder, or any reduction in any amount receivable by such Bank hereunder in respect of any of such Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called "Additional Costs"), in each case resulting from any Regulatory Change which:
(i) subjects such Bank (or makes it apparent that such Bank is subject) to any tax (including without limitation any United States interest equalization tax), levy, impost, duty, charge or fee (collectively, "Taxes"), or any deduction or withholding for any Taxes on or from the payment due under any Eurodollar Loan or any Competitive Loan or other amounts due hereunder, other than income and franchise taxes of each jurisdiction (or any subdivision thereof) in which such Bank has an office or its Applicable Lending Office; or
(ii) changes the basis of taxation of any amounts payable to such Bank under this Agreement in respect of any of such Loans (other than changes which affect taxes measured by or imposed on the overall net income or franchise taxes of such Bank or of its Applicable
Lending Office for any of such Loans by each jurisdiction (or any subdivision thereof) in which such Bank has an office or such Applicable Lending Office); or
(iii) imposes or modifies or increases or deems applicable any reserve, special deposit or similar requirements (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System) relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Bank or loans made by such Bank, or against any other funds, obligations or other property owned or held by such Bank (including any of such Loans or any deposits referred to in the definition of "Eurodollar Base Rate" in Section 1.1 hereof) and such Bank actually incurs such additional costs.
Each Bank (if so requested by the Company through Administrative Agent) will
designate a different available Applicable Lending Office for the Eurodollar
Loans or the Competitive Loans of such Bank or take such other action as the
Company may request if such designation or action will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole opinion of
such Bank exercised in good faith, be disadvantageous to such Bank (provided
that such Bank shall have no obligation so to designate an Applicable Lending
Office for Eurodollar Loans located in the United States of America). Each Bank
will furnish the Company with a statement setting forth the basis and amount of
each request by such Bank for compensation under this Section 6.1(a); subject to
Section 6.8, such certificate shall be conclusive, absent manifest error, and
may be prepared using any reasonable averaging and attribution methods.
(b) Without limiting the effect of the foregoing provisions of this
Section 6.1, in the event that, by reason of any Regulatory Change, any Bank
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 Bank 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 Bank which includes Eurodollar
Loans or Competitive Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets which it may hold, then, if such
Bank so elects by notice to the Company (with a copy to Administrative Agent),
the obligation of such Bank to make Eurodollar Loans or Competitive Loans, as
the case may be, hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect (in which case the provisions of Section 6.4
hereof shall be applicable).
(c) Good faith determinations and allocations by any Bank for purposes of this Section 6.1 of the effect of any Regulatory Change on its costs of maintaining its obligations to make Loans or of making or maintaining Loans or on amounts receivable by it in respect of Loans, and of the additional amounts required to compensate such Bank in respect of any Additional Costs, shall be conclusive, absent manifest error.
(d) The Company's obligation to pay Additional Costs and compensation with regard to each Eurodollar Loan and each Competitive Loan shall survive termination of this Agreement.
6.2 Limitation on Types of Loans. Anything herein to the contrary notwithstanding, if, with respect to any Eurodollar Loans:
(a) Administrative Agent determines in good faith (which determination shall be conclusive) that quotations of interest rates for the relevant deposits referred to in the definition of "Eurodollar Base Rate" in Section 1.1 hereof are not being provided by the Reference Banks in the relevant amounts or for the relevant maturities for purposes of determining the rate of interest for such Loans for Interest Periods therefor as provided in this Agreement; or
(b) the Majority Banks determine in good faith (which determination shall be conclusive) and notify Administrative Agent that the relevant rates of interest referred to in the definition of "Eurodollar Base Rate" in Section 1.1 hereof upon the basis of which the rates of interest for such Loans are to be determined do not accurately reflect the cost to such Banks of making or maintaining such Loans for Interest Periods therefor; or
(c) Administrative Agent determines in good faith (which determination shall be conclusive) that by reason of circumstances affecting the interbank Dollar market generally, deposits in United States dollars in the relevant interbank Dollar market are not being offered for the applicable Interest Period and in an amount equal to the amount of the Eurodollar Loan requested by the Company;
then Administrative Agent shall promptly notify the Company and each Bank thereof, and, so long as such condition remains in effect, the Banks shall be under no obligation to make Eurodollar Loans (but shall maintain until the end of the Interest Period then in effect the Eurodollar Loans then outstanding).
6.3 Illegality. Notwithstanding any other provision of this Agreement
to the contrary, if (x) by reason of the adoption of any applicable Legal
Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Bank with any request or directive (whether or not having the
force of law) of any central bank or other Governmental Authority or (y)
circumstances affecting the relevant interbank Dollar market or the position of
a Bank therein shall at any time make it unlawful or impracticable in the sole
discretion of a Bank exercised in good faith for such Bank or its Applicable
Lending Office to (a) honor its obligation to make Eurodollar Loans or
Competitive Loans hereunder, or (b) maintain Eurodollar Loans or Competitive
Loans hereunder, then such Bank shall promptly notify the Company thereof
through Administrative Agent and such Bank's obligation to make or maintain
Eurodollar Loans or Competitive Loans, as the case may be, hereunder shall be
suspended until such time as such Bank may again make and maintain Eurodollar
Loans or Competitive Loans, as the case may be (in which case the provisions of
Section 6.4 hereof shall be applicable). Before giving such notice pursuant to
this Section 6.3, such Bank will designate a different available Applicable
Lending Office for the Eurodollar Loans or the Competitive Loans, as the case
may be, of such Bank or take such other action as the Company may request if
such designation or action will avoid the need to suspend such Bank's obligation
to make Eurodollar
Loans or Competitive Loans, as the case may be, hereunder and will not, in the sole opinion of such Bank exercised in good faith, be disadvantageous to such Bank (provided, that such Bank shall have no obligation so to designate an Applicable Lending Office for Eurodollar Loans located in the United States of America).
6.4 Substitute Alternate Base Rate Loans. If the obligation of any Bank to make or maintain Eurodollar Loans or Competitive Loans, as the case may be, shall be suspended pursuant to Section 6.1, 6.2 or 6.3 hereof, all Loans which would otherwise be made by such Bank as Eurodollar Loans or Competitive Loans, as the case may be, shall be made instead as Alternate Base Rate Loans (and, if an event referred to in Section 6.1(b) or 6.3 hereof has occurred and such Bank so requests by notice to the Company with a copy to Administrative Agent, each Eurodollar Loan or each Competitive Loan, as the case may be, of such Bank then outstanding shall be automatically converted into an Alternate Base Rate Loan on the date specified by such Bank in such notice) and, to the extent that Eurodollar Loans or Competitive Loans, as the case may be, are so made as (or converted into) Alternate Base Rate Loans, all payments of principal which would otherwise be applied to such Eurodollar Loans or such Competitive Loans, as the case may be, shall be applied instead to such Alternate Base Rate Loans.
6.5 Compensation. Subject to Section 13.6 hereof, the Company shall pay to Administrative Agent for the account of each Bank, within four (4) Business Days after demand therefor by such Bank through Administrative Agent, such amount or amounts as shall be sufficient (in the reasonable opinion of such Bank) to compensate it for any loss, cost or expense actually incurred by it (exclusive of any lost profits or opportunity costs) as a result of:
(a) any payment, prepayment or conversion of a Eurodollar Loan or a Competitive Loan made by such Bank on a date other than the last day of an Interest Period for such Loan; or
(b) any failure by the Company to borrow a Eurodollar Loan or a Competitive Loan to be made by such Bank on the date for such borrowing specified in the relevant notice of borrowing under Section 5.5 or Section 2.9 hereof;
such compensation to include, without limitation, any loss or expense actually incurred (exclusive of any lost profits or opportunity costs) by reason of the liquidation or reemployment of deposits or other funds acquired by the applicable Bank to fund or maintain its share of any Loan. Subject to Section 6.8, each determination of the amount of such compensation by a Bank shall be conclusive and binding, absent manifest error, and may be computed using any reasonable averaging and attribution method.
6.6 Additional Costs in Respect of Letters of Credit. If as a result of any Regulatory Change there shall be imposed, modified or deemed applicable any tax, reserve, special deposit or similar requirement against or with respect to or measured by reference to Letters of Credit issued or to be issued hereunder or participations in such Letters of Credit, and the result shall be to increase the cost to any Bank of issuing or maintaining any Letter of Credit or any participation
therein, or reduce any amount receivable by any Bank hereunder in respect of any Letter of Credit or any participation therein (which increase in cost, or reduction in amount receivable, shall be the result of such Bank's reasonable allocation of the aggregate of such increases or reductions resulting from such event), then such Bank shall notify the Company through Administrative Agent, and upon demand therefor by such Bank through Administrative Agent, the Company (subject to Section 13.6 hereof) shall pay to such Bank, from time to time as specified by such Bank, such additional amounts as shall be sufficient to compensate such Bank for such increased costs or reductions in amount. Before making such demand pursuant to this Section 6.6, such Bank will designate a different available Applicable Lending Office for the Letter of Credit of such Bank or take such other action as the Company may request, if such designation or action will avoid the need for, or reduce the amount of, such compensation and will not, in the sole opinion of such Bank exercised in good faith, be disadvantageous to such Bank. A statement as to such increased costs or reductions in amount incurred by such Bank, submitted by such Bank to the Company, shall be conclusive as to the amount thereof, absent manifest error.
6.7 Capital Adequacy. If any Bank shall have determined that a Regulatory Change resulting in the adoption after the date hereof or effectiveness after the date hereof (whether or not previously announced) of any applicable law, rule, regulation or treaty regarding capital adequacy, or any change therein after the date hereof, or any change in the interpretation or administration thereof after the date hereof by any Governmental Authority charged with the interpretation or administration thereof, or compliance by any Bank (or its Applicable Lending Office) with any request or directive after the date hereof regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority has or would have the effect of reducing the rate of return on such Bank's capital as a consequence of such Bank's obligations hereunder, under the Loans made by it and under the Letters of Credit to a level below that which such Bank could have achieved but for such adoption, change or compliance (taking into consideration such Bank's policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, upon satisfaction of the conditions precedent set forth in this Section 6.7, upon demand by such Bank (with a copy to Administrative Agent), the Company (subject to Section 13.6 hereof) shall pay to such Bank such additional amount or amounts as will compensate such Bank for such reduction. A certificate as to such amounts, submitted to the Company and Administrative Agent by such Bank, setting forth the basis for such Bank's determination of such amounts, shall constitute a demand therefor and shall be conclusive and binding for all purposes, absent manifest error. The Company shall pay the amount shown as due on any such certificate within four (4) Business Days after delivery of such certificate. Subject to Section 6.8, in preparing such certificate, a Bank may employ such assumptions and allocations of costs and expenses as it shall in good faith deem reasonable and may use any reasonable averaging and attribution method.
6.8 Limitation on Additional Charges; Substitute Banks; Non-Discrimination. Anything in this Section 6 notwithstanding:
(a) the Company shall not be required to pay to any Bank reimbursement with regard to any costs or expenses, unless such Bank notifies the Company of such costs or expenses within 90 days after the date paid or incurred;
(b) none of the Banks shall be permitted to pass through to the Company charges and costs under this Section 6 on a discriminatory basis (i.e., which are not also passed through by such Bank to other customers of such Bank similarly situated where such customer is subject to documents providing for such pass through); and
(c) if any Bank elects to pass through to the Company any material charge or cost under this Section 6 or elects to terminate the availability of Eurodollar Loans for any material period of time, the Company may, within 60 days after the date of such event and so long as no Default shall have occurred and be continuing, elect to terminate such Bank as a party to this Agreement; provided that, concurrently with such termination the Company shall (i) if Administrative Agent and each of the other Banks shall consent, pay that Bank all principal, interest and fees and other amounts owed to such Bank through such date of termination or (ii) have arranged for another financial institution approved by Administrative Agent (such approval not to be unreasonably withheld) as of such date, to become a substitute Bank for all purposes under this Agreement in the manner provided in Section 13.5; provided further that, prior to substitution for any Bank, the Company shall have given written notice to Administrative Agent of such intention and the Banks shall have the option, but no obligation, for a period of 60 days after receipt of such notice, to increase their Commitments in order to replace the affected Bank in lieu of such substitution.
SECTION 7. CONDITIONS PRECEDENT.
7.1 Initial Loans. The obligation of each Bank or any applicable Issuer to make its initial Loans on or after the date hereof or issue or participate in a Letter of Credit on or after the date hereof (if such Letter of Credit is issued prior to the funding of the initial Loans on or after the date hereof) hereunder is subject to the following conditions precedent, each of which shall have been fulfilled or waived to the satisfaction of the Administrative Agent:
(a) Corporate Action and Status. Administrative Agent shall have received from the appropriate Governmental Authorities certified copies of the Organizational Documents (other than bylaws) of the Company and the Guarantor, and evidence satisfactory to Administrative Agent of all corporate action taken by the Company and the Guarantor authorizing the execution, delivery and performance of the Loan Documents and all other documents related to this Agreement to which it is a party (including, without limitation, a certificate of the secretary of each such party setting forth the resolutions of its Board of Directors authorizing the transactions contemplated thereby and attaching a copy of its bylaws), together with such certificates as may be appropriate to demonstrate the qualification and good standing of and payment of taxes by the Company and the Guarantor in Texas, Louisiana, Montana, Oklahoma, New Mexico and Wyoming, as applicable.
(b) Incumbency. The Company, the Guarantor and each other Relevant Party shall have delivered to Administrative Agent a certificate in respect of the name and signature of each of the officers (i) who is authorized to sign on its behalf the applicable Loan Documents related to any Loan or the issuance of any Letter of Credit and (ii) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with any Loan or the issuance of any Letter of Credit. Administrative Agent and each Bank may conclusively rely on such certificates until they receive notice in writing from the Company, the Guarantor or the appropriate Relevant Party to the contrary.
(c) 364-Day Credit Agreement. Administrative Agent shall have received counterparts of the 364-Day Credit Agreement executed and delivered by or on behalf of each of the parties thereto or the Administrative Agent shall have received evidence satisfactory to it of the execution and delivery by each such Person of a counterpart of such 364-Day Credit Agreement.
(d) Loan Documents. The Company and each other Relevant Party shall have duly executed and delivered the other Loan Documents to which it is a party (in such number of copies as Administrative Agent shall have requested) and each such Loan Document shall be in form satisfactory to the Administrative Agent. Each such Loan Document shall be in substantially the form furnished to the Banks prior to their execution of this Agreement, together with such changes therein as the Administrative Agent may approve.
(e) Fees and Expenses. The Company shall have paid to Administrative Agent for the account of each Bank all accrued and unpaid commitment fees and other fees in the amounts previously agreed upon in writing among the Company and Administrative Agent; and shall have in addition paid to each Agent all amounts payable under the letter agreements referred to in Section 2.4(b) hereof and under Section 9.7 hereof on or before the date of this Agreement.
(f) Opinions of Counsel. Administrative Agent shall have received (1) an opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel to the Company and the Guarantor, in form and substance reasonably satisfactory to the Agents, and (2) such opinions of counsel to the Company and other Relevant Parties as the Agents shall reasonably request with respect to the Company, the Guarantor and the Loan Documents.
(g) Execution by Banks and Agents. Administrative Agent shall have received counterparts of this Agreement executed and delivered by or on behalf of each of the Banks and the Agents or Administrative Agent shall have received evidence satisfactory to it of the execution and delivery by each of the Banks and Agents of a counterpart hereof.
(h) Consents. Administrative Agent shall have received evidence satisfactory to it that, except as disclosed in the Disclosure Statement, all material consents of each Governmental Authority and of each other Person, if any, reasonably required in connection with (a) the Loans and the Letters of Credit, (b) the execution, delivery and performance of this Agreement and the other
Loan Documents have been satisfactorily obtained, and (c) the consummation of the Merger and all related transactions. All applicable appeal periods shall have expired and there shall be, in the judgment of the Administrative Agent, in its sole discretion, no governmental or judicial action, actual or threatened, restraining, preventing or imposing burdensome conditions on the Merger and all related transactions, including, without limitation, the issuance, closing and funding of this Agreement and the facilities thereunder.
(i) Margin Regulations. After giving effect to such Loan or Letters of Credit, the Company and Banks shall be in compliance with the Margin Regulations.
(j) Consummation of Merger. The merger among Seagull and Old Ocean Energy (the "Merger") shall have been consummated as contemplated by and pursuant to that certain Agreement and Plan of Merger, dated November 24, 1998, as amended by Amendment No. 1 to Agreement and Plan of Merger, dated as of December 9, 1998 (as amended, the "Merger Agreement"), among such parties, and Administrative Agent shall have received (i) satisfactory evidence of the consummation of such Merger and (ii) a certificate from a Responsible Officer of the Company certifying that the Merger has been consummated.
(k) Financial Reports; Filings. Administrative Agent shall have received copies of (i) all financial statements, reports, notices and proxy statements either (A) requested by the Administrative Agent or any Bank or (B) sent by the Company, Seagull or Old Ocean Energy to its stockholders and (ii) all SEC filings concerning the Merger.
(l) Litigation. No litigation or administrative proceeding or other legal or regulatory developments prohibiting or enjoining the consummation of the Merger shall exist.
(m) Event of Default under Existing Credit Facilities. Exclusive of the Merger, no "Event of Default" (as defined in the Existing Seagull Credit Facility) for Seagull or "Event of Default" (as defined in the Existing Old Ocean Credit Facility) for Old Ocean Energy shall have occurred and be continuing.
(n) Termination of Existing Credit Facilities. Administrative Agent shall have received evidence satisfactory to it that all obligations under (i) the Existing Seagull Credit Facility, (ii) the Existing Old Ocean Credit Facility and (iii) the Existing Old Ocean Bridge Facility, have been paid, fulfilled or satisfied in full or otherwise terminated.
(o) Lien Searches. Administrative Agent shall have received certified copies of Uniform Commercial Code Requests for Information or Copies (Form UCC-11), or a similar search report certified by a party acceptable to the Administrative Agent, dated a date reasonably near to the date of the initial Loan, listing all effective financing statements which name the Company, Seagull, the Guarantor or, at the request of the Administrative Agent, any other Subsidiary (under its present name and any previous names) as the debtor and which are filed in the following
jurisdictions: Delaware, Texas, Louisiana, Montana, Oklahoma, New Mexico and Wyoming, together with copies of such financing statements.
(p) Other Documents. Administrative Agent shall have received such other documents consistent with the terms of this Agreement and relating to the transactions contemplated hereby as Administrative Agent may reasonably request.
All provisions and payments required by this Section 7.1 are subject to the provisions of Section 13.6.
7.2 Initial and Subsequent Loans. The obligation of each Bank or any applicable Issuer to make any Loan (including, without limitation, its initial Loan) to be made by it hereunder (excluding conversions of Loans to Alternate Base Rate Loans, as to which no conditions precedent exist) or to issue or participate in any Letter of Credit is subject to the additional conditions precedent that (i) Administrative Agent shall have received a Request for Extension of Credit and such other certifications as Administrative Agent may reasonably require, (ii) in the case of Competitive Loans, the Company shall have complied with the provisions of Section 2.9 hereof and (iii) as of the date of such Loan or such issuance, and after giving effect thereto:
(a) no Default shall have occurred and be continuing;
(b) except for facts timely disclosed to Administrative Agent from time to time in writing, which facts (i) are not materially more adverse to the Company and its Subsidiaries or any other Obligor, (ii) do not materially decrease the ability of the Banks to collect the Obligations as and when due and payable and (iii) do not materially increase the liability of any Agent or any of the Banks, in each case compared to those facts existing on the date hereof and the material details of which have been set forth in the Financial Statements delivered to Administrative Agent prior to the date hereof or in the Disclosure Statement, and except for the representations set forth in the Loan Documents which, by their terms, are expressly (or by means of similar phrasing) made as of the Effective Date or as of the date hereof, as the case may be, only, the representations and warranties made in each Loan Document shall be true and correct in all material respects on and as of the date of the making of such Loan or such issuance, with the same force and effect as if made on and as of such date;
(c) the making of such Loan or the issuance of such Letter of Credit shall not violate any Legal Requirement applicable to any Bank; and
(d) no event or condition shall have occurred since the effectiveness of this Agreement which reasonably could be expected to result in a Material Adverse Effect.
Each Request for Extension of Credit by the Company hereunder or request for issuance of a Letter of Credit shall include a representation and warranty by the Company to the effect set forth in Subsections 7.2(a) and (b) (both as of the date of such notice and, unless the Company otherwise
notifies Administrative Agent prior to the date of such borrowing or issuance, as of the date of such borrowing or issuance).
SECTION 8. REPRESENTATIONS AND WARRANTIES. To induce the Banks to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, the Company represents and warrants (such representations and warranties to survive any investigation and the making of the Loans and the issuance of the Letters of Credit) to the Banks and the Agents as follows:
8.1 Corporate Existence. The Company, the Guarantor and each Subsidiary of the Company are corporations duly incorporated and organized, legally existing and in good standing under the laws of the respective jurisdictions in which they are incorporated, and are duly qualified as foreign corporations in all jurisdictions wherein the property owned or the business transacted by them makes such qualification necessary and the failure to so qualify could reasonably be expected to result in a Material Adverse Effect.
8.2 Corporate Power and Authorization. Each of the Company, the Guarantor and each Subsidiary of the Company is duly authorized and empowered to execute, deliver, and perform this Agreement and the other Loan Documents to which it is a party; and all corporate action on the Company's part and on the part of the Guarantor and each Subsidiary of the Company for the due execution, delivery, and performance of this Agreement and the other Loan Documents to which each of the Company, the Guarantor and each such Subsidiary is a party has been duly and effectively taken.
8.3 Binding Obligations. This Agreement and the other Loan Documents constitute legal, valid and binding obligations of the Company and its Subsidiaries and the Guarantor, to the extent each is a party thereto, enforceable against the Company and its Subsidiaries and the Guarantor, to the extent each is a party thereto, in accordance with their respective terms, except as may be limited by any bankruptcy, insolvency, moratorium or other similar laws or judicial decisions affecting creditors' rights generally and general principles of equity whether considered at law or in equity.
8.4 No Legal Bar or Resultant Lien. The Company's and each of its Subsidiaries' and the Guarantor's creation, issuance, execution, delivery and performance of this Agreement and the other Loan Documents, to the extent they are parties thereto, do not and will not violate any provisions of the Organizational Documents of the Company, the Guarantor or any Subsidiary of the Company or any Legal Requirement to which the Company, the Guarantor or any Subsidiary of the Company is subject or by which its property may be presently bound or encumbered, or result in the creation or imposition of any Lien upon any properties of the Company, the Guarantor or any Subsidiary of the Company, other than those permitted by this Agreement.
8.5 No Consent. Except as set forth in the Disclosure Statement, the Company's and each of its Subsidiaries' and the Guarantor's execution, delivery, and performance of this
Agreement, the Merger Agreement and the other Loan Documents to which they are parties do not and will not require the consent or approval of any Person other than such consents and/or approvals obtained by the Company contemporaneously with or prior to the execution of this Agreement, including, without limitation, any Governmental Authorities, other than those consents the failure to obtain which could not be reasonably expected to have a Material Adverse Effect.
8.6 Financial Condition.
(a) The audited consolidated annual financial statements of Seagull and its Subsidiaries for the year ended December 31, 1998, which have been delivered to the Banks, have been prepared in accordance with GAAP, and present fairly the financial condition and results of the operations of Seagull and its Subsidiaries for the period or periods stated. The audited consolidated annual financial statements of Old Ocean Energy and its Subsidiaries for the year ended December 31, 1998, which have been delivered to the Banks, have been prepared in accordance with GAAP, and present fairly the financial condition and results of the operations of Old Ocean Energy and its Subsidiaries for the period or periods stated. No Material Adverse Effect has occurred since December 31, 1998, except as disclosed to the Banks in the Disclosure Statement.
(b) The unaudited pro forma consolidated annual financial statements of the Company and its Subsidiaries for the year ended December 31, 1998, which are presented to give effect to the Merger and which have been delivered to the Banks, have been prepared in accordance with GAAP. No material adverse change, either in any case or in the aggregate, has occurred since December 31, 1998 in the assets, liabilities, financial condition, business, operations, affairs or circumstances of the Company and its Subsidiaries taken as a whole, except as disclosed to the Banks in the Disclosure Statement.
8.7 Investments and Guaranties. As of the Effective Date, no Subsidiary of the Company had made Investments in or advances to, and neither the Company, Seagull or Old Ocean Energy nor any Subsidiary of any of them had made Guarantees of, the obligations of any Person, except as (a) disclosed to the Banks in the Disclosure Statement or (b) not prohibited by applicable provisions of Section 10.
8.8 Liabilities and Litigation. Neither the Company or any Subsidiary
of the Company, Seagull or any Subsidiary of Seagull, nor Old Ocean Energy or
any Subsidiary of Old Ocean Energy, respectively, has any material (individually
or in the aggregate) liabilities, direct or contingent, except as (a) disclosed
or referred to in the Financial Statements, (b) disclosed to the Banks in the
Disclosure Statement, (c) disclosed in a notice to Administrative Agent pursuant
to Section 9.10 with respect to such as could reasonably be expected to have a
Material Adverse Effect or (d) not prohibited by applicable provisions of
Section 10. Except as (a) described in the Financial Statements, (b) otherwise
disclosed to the Banks in the Disclosure Statement, (c) disclosed in a notice to
Administrative Agent pursuant to Section 9.10 with respect to such as could
reasonably be expected to have a Material Adverse Effect or (d) not prohibited
by applicable provisions of Section 10, no litigation, legal, administrative or
arbitral proceeding, investigation, or other action
of any nature exists or (to the knowledge of the Company) is threatened against or affecting the Company or any Subsidiary of the Company, Seagull or any Subsidiary of Seagull, or Old Ocean Energy or any Subsidiary of Old Ocean Energy, respectively, which could reasonably be expected to result in any judgment which could reasonably be expected to have a Material Adverse Effect, or which in any manner challenges or may challenge or draw into question the validity of this Agreement or any other Loan Document, or enjoins or threatens to enjoin or otherwise restrain any of the transactions contemplated by any of them.
8.9 Taxes and Governmental Charges. The Company and its Subsidiaries, Seagull and its Subsidiaries, and Old Ocean Energy and its Subsidiaries, respectively, have filed, or obtained extensions with respect to the filing of, all material tax returns and reports required to be filed and have paid all material taxes, assessments, fees and other governmental charges levied upon any of them or upon any of their respective properties or income which are due and payable, including interest and penalties, or have provided adequate reserves for the payment thereof.
8.10 Title to Properties. The Company and its Subsidiaries and the
Guarantor have good and defensible title to their respective properties
(including, without limitation, all fee and leasehold interests), free and clear
of all Liens except (a) those referred to in the Financial Statements, (b) as
disclosed to the Banks in the Disclosure Statement or (c) as permitted by
Section 10.2.
8.11 Defaults. Neither the Company or any Subsidiary of the Company,
Seagull or any Subsidiary of Seagull nor Old Ocean Energy or any Subsidiary of
Old Ocean Energy is in default, which default could reasonably be expected to
have a Material Adverse Effect, under any indenture, mortgage, deed of trust,
agreement or other instrument to which the Company or any Subsidiary of the
Company, Seagull or any Subsidiary of Seagull or Old Ocean Energy or any
Subsidiary of Old Ocean Energy, respectively, is a party or by which the Company
or any Subsidiary of the Company, Seagull or any Subsidiary of Seagull or Old
Ocean Energy or any Subsidiary of Old Ocean Energy, respectively, or the
property of the Company or any Subsidiary of the Company, Seagull or any
Subsidiary of Seagull or Old Ocean Energy or any Subsidiary of Old Ocean Energy,
respectively, is bound, except as (a) disclosed to the Banks in the Disclosure
Statement, (b) disclosed in a notice to Administrative Agent pursuant to Section
9.10 with respect to such as could reasonably be expected to have a Material
Adverse Effect or (c) specifically permitted by applicable provisions of Section
10. No Default under this Agreement or any other Loan Document has occurred and
is continuing.
8.12 Location of Businesses and Offices. Except to the extent that Administrative Agent has been furnished written notice to the contrary or of additional locations, pursuant to Section 9.10, the Company's principal place of business and chief executive offices are located at the address stated on the signature page hereof and the principal places of business and chief executive offices of the Guarantor and each other Subsidiary are described on Exhibit C hereto.
8.13 Compliance with Law. Neither the Company or any Subsidiary of the Company, Seagull or any Subsidiary of Seagull nor Old Ocean Energy or any Subsidiary of Old Ocean Energy
(except as (a) disclosed to the Banks in the Disclosure Statement, (b) disclosed in a notice to Administrative Agent pursuant to Section 9.10 with respect to such as could reasonably be expected to have a Material Adverse Effect or (c) not prohibited by applicable provisions of Section 10):
(a) is in violation of any Legal Requirement; or
(b) has failed to obtain any license, permit, franchise or other governmental authorization necessary to 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.
8.14 Margin Stock. None of the proceeds of the Loans will be used for the purpose of, and neither the Company, the Guarantor nor any Subsidiary of the Company is engaged in the business of extending credit for the purpose of (a) purchasing or carrying any "margin stock" as defined in Regulation U of the Board of Governors of the Federal Reserve System (12 C.F.R. Part 221) or (b) reducing or retiring any indebtedness which was originally incurred to purchase or carry margin stock, if such purpose under either (a) or (b) above would constitute this transaction a "purpose credit" within the meaning of said Regulation U, or for any other purpose which would constitute this transaction a "purpose credit". Neither the Company, the Guarantor nor any Subsidiary of the Company is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stocks. Neither the Company, the Guarantor nor any Subsidiary of the Company nor any Person acting on behalf of the Company, the Guarantor or any Subsidiary of the Company has taken or will take any action which might cause any of the Loan Documents, including this Agreement, to violate Regulation U or any other regulation of the Board of Governors of the Federal Reserve System, or to violate any similar provision of the Securities Exchange Act of 1934 or any rule or regulation under any such provision thereof.
8.15 Subsidiaries. The Company has no Subsidiaries as of the date of this Agreement except those shown in Exhibit C hereto.
8.16 ERISA. With respect to each Plan, the Company and each ERISA Affiliate have fulfilled their obligations, including obligations under the minimum funding standards of ERISA and the Code, and are in compliance in all material respects with the provisions of ERISA and the Code. The Company has no knowledge of any event which could result in a liability of the Company or any ERISA Affiliate to the PBGC or a Plan (other than to make contributions in the ordinary course). Since the effective date of Title IV of ERISA, there have not been any nor are there now existing any events or conditions that would cause the Lien provided under Section 4068 of ERISA to attach to any property of the Company or any ERISA Affiliate. There are no Unfunded Liabilities with respect to any Plan. No "prohibited transaction" has occurred with respect to any Plan.
8.17 Investment Company Act. Neither the Company nor any of its Subsidiaries is an investment company within the meaning of the Investment Company Act of 1940, as amended, or, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company, within the meaning of said Act.
8.18 Public Utility Holding Company Act. Neither the Company nor any of its Subsidiaries (i) is subject to regulation under the Public Utility Holding Company Act of 1935, as amended (the "PUHC Act"), except as to Section 9(a)(2) thereof (15 U.S.C.A. ss.79(i)(a)(2)), or (ii) is in violation of any of the provisions, rules, regulations or orders of or under the PUHC Act. Further, none of the transactions contemplated under this Agreement, including without limitation, the making of the Loans and the issuance of the Letters of Credit, shall cause or constitute a violation of any of the provisions, rules, regulations or orders of or under the PUHC Act and the PUHC Act does not in any manner impair the legality, validity or enforceability of this Agreement. The Company has duly filed with the Securities and Exchange Commission good faith applications (each a "PUHCA Application") under Section 2(a)(8) of the PUHC Act (15 U.S.C.A. ss.79(b)(a)(8)) for a declaration of non-subsidiary status pursuant to such Section 2(a)(8) with respect to each Person (each a "Specified Shareholder") which owns, controls or holds with power to vote, directly or indirectly, a sufficient quantity of the voting securities of the Company to be construed as a "holding company", as such term is defined in the PUHC Act, in respect of the Company. All of the information contained in such PUHCA Applications, as amended, was true as of the most recent filing date with respect thereto (provided that the Company may, unless it has actual current knowledge to the contrary, rely solely upon written information furnished by any Specified Shareholder with respect to background information about the Specified Shareholder and the nature of the ownership by such Specified Shareholder or its Affiliates of the voting securities of the Company), and the Company knows of no reason why each such PUHCA Application, if acted upon by the Securities and Exchange Commission, would not be approved. True and correct copies of each such PUHCA Application and any amendments thereto, as filed, have been furnished to Administrative Agent. The Company has not received any written notice from the Securities and Exchange Commission with respect to any such PUHCA Application other than as disclosed in writing to Administrative Agent.
8.19 Environmental Matters. Except as disclosed in the Disclosure Statement, (i) the Company and its Subsidiaries have obtained and maintained in effect all Environmental Permits (or has initiated the necessary steps to transfer the Environmental Permits into its name), the failure to obtain which could reasonably be expected to have a Material Adverse Effect, (ii) the Company and its Subsidiaries and their properties, assets, business and operations have been and are in compliance with all applicable Requirements of Environmental Law and Environmental Permits failure to comply with which could reasonably be expected to have a Material Adverse Effect, (iii) the Company and its Subsidiaries and their properties, assets, business and operations are not subject to any (A) Environmental Claims or (B) Environmental Liabilities, in either case direct or contingent, and whether known or unknown, arising from or based upon any act, omission, event, condition or circumstance occurring or existing on or prior to the date hereof which could reasonably be expected to have a Material Adverse Effect, and (iv) no Responsible Officer of the
Company or any of its Subsidiaries has received any notice of any violation or alleged violation of any Requirements of Environmental Law or Environmental Permit or any Environmental Claim in connection with its assets, properties, business or operations which could reasonably be expected to have a Material Adverse Effect. The liability (including without limitation any Environmental Liability and any other damage to persons or property), if any, of the Company and its Subsidiaries and with respect to their properties, assets, business and operations which is reasonably expected to arise in connection with Requirements of Environmental Laws currently in effect and other environmental matters presently known by a Responsible Officer of the Company will not have a Material Adverse Effect. No Responsible Officer of the Company knows of any event or condition with respect to Environmental Matters with respect to any of its properties or the properties of any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect. For purposes of this Section 8.19, "Environmental Matters" shall mean matters relating to pollution or protection of the environment, including, without limitation, emissions, discharges, releases or threatened releases of Hazardous Substances into the environment (including, without limitation, ambient air, surface water or ground water, or land surface or subsurface), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances.
8.20 Claims and Liabilities. Except as disclosed to the Banks in writing, neither the Company or any of its Subsidiaries nor the Guarantor has accrued any liabilities under gas purchase contracts for gas not taken, but for which it is liable to pay if not made up and which, if not paid, would have a Material Adverse Effect. Except as disclosed to the Banks in writing, no claims exist against the Company or its Subsidiaries or the Guarantor for gas imbalances which claims if adversely determined would have a Material Adverse Effect. No purchaser of product supplied by the Company or any of its Subsidiaries or the Guarantor has any claim against the Company or any of its Subsidiaries for product paid for, but for which delivery was not taken as and when paid for, which claim if adversely determined would have a Material Adverse Effect.
8.21 Solvency. Neither the Company, the Guarantor nor the Company and its Subsidiaries, on a consolidated basis, is "insolvent", as such term is used and defined in (i) the Bankruptcy Code and (ii) the Texas Uniform Fraudulent Transfer Act, Tex. Bus. & Com. Code Ann. SECTION 4.001 et seq.
8.22 Year 2000. Any reprogramming required to permit the proper functioning, in and following the year 2000, of (i) the computer systems of the Company and its Subsidiaries and (ii) equipment containing embedded microchips (including systems and equipment supplied by others or with which the systems interface of the Company and its Subsidiaries) and the testing of all such systems and equipment, as so reprogrammed, will be completed by September 30, 1999. The cost to the Company and its Subsidiaries of such reprogramming and testing and of the reasonably foreseeable consequences of year 2000 to the Company and its Subsidiaries (including, without limitation, reprogramming errors and the failure of others' systems or equipment) will not result in a Default or a Material Adverse Effect. Except for such of the reprogramming referred to in the preceding sentence as may be necessary, the computer and management information systems
of the Company and its Subsidiaries are and, with ordinary course upgrading and maintenance, will continue for the term of this Agreement to be, sufficient to permit the Company to conduct its business without Material Adverse Effect.
SECTION 9. AFFIRMATIVE COVENANTS. A deviation from the provisions of this Section 9 will not constitute a Default under this Agreement if such deviation is consented to in writing by the Majority Banks. Without the prior written consent of the Majority Banks, the Company agrees with the Banks and the Agents that, so long as any of the Commitments is in effect and until payment in full of all Obligations and the termination or expiry of all Letters of Credit:
9.1 Financial Statements and Reports. The Company will promptly furnish to any Bank from time to time upon request such information regarding the business and affairs and financial condition of the Company and its Subsidiaries and the Guarantor as such Bank may reasonably request, and will furnish to the Agents and each of the Banks:
(a) Annual Reports - promptly after becoming available and in any event within 100 days after the close of each fiscal year of the Company:
(i) the audited consolidated balance sheet of the Company and its Subsidiaries as of the end of such year;
(ii) the audited consolidated statement of earnings of the Company and its Subsidiaries for such year;
(iii) the audited consolidated statement of cash flows of the Company and its Subsidiaries for such year;
setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, and, in the case of the audited Financial Statements, audited and accompanied by the related opinion of KPMG Peat Marwick or other independent certified public accountants of recognized national standing acceptable to the Majority Banks, which opinion shall state that such audited balance sheets and statements have been prepared in accordance with GAAP consistently followed throughout the period indicated and fairly present the consolidated financial condition and results of operations of the applicable Persons as at the end of, and for, such fiscal year; and
(b) Quarterly Reports - as soon as available and in any event within 50 days after the end of each of the first three quarterly periods in each fiscal year of the Company:
(i) the unaudited consolidated balance sheet of the Company and its Subsidiaries as of the end of such quarter;
(ii) the unaudited consolidated statement of earnings of the Company and its Subsidiaries for such quarter and for the period from the beginning of the fiscal year to the close of such quarter;
(iii) the unaudited consolidated statement of cash flows of the Company and its Subsidiaries for such quarter and for the period from the beginning of the fiscal year to the close of such quarter;
all of items (i) through (iii) above prepared on substantially the same accounting basis as the annual reports described in Subsection 9.1(a), subject to normal changes resulting from year-end adjustments; and
(c) [Intentionally omitted]; and
(d) SEC and Other Reports - promptly upon their becoming publicly available, one copy of each financial statement, report, notice or definitive proxy statement sent by the Company or any Subsidiary to shareholders generally, and of each regular or periodic report and any registration statement, prospectus or written communication (other than transmittal letters) in respect thereof filed by the Company or any of its Subsidiaries with, or received by the Company or any of its Subsidiaries in connection therewith from, any securities exchange or the Securities and Exchange Commission or any successor agency.
All of the balance sheets and other financial statements referred to in this Section 9.1 will be in such detail as any Bank may reasonably request and will conform to GAAP applied on a basis consistent with those of the Financial Statements as of December 31, 1998. In addition, if GAAP shall change with respect to any matter relative to determination of compliance with this Agreement, the Company will also provide financial information necessary for the Banks to determine compliance with this Agreement.
9.2 Officers' Certificates.
(a) Concurrently with the furnishing of the annual financial statements pursuant to Subsection 9.1(a), commencing with the annual financial statements required to be delivered in 1999, the Company will furnish or cause to be furnished to Administrative Agent certificates of compliance, as follows:
(i) a certificate signed by the principal financial officer of the Company in the form of Exhibit D; and
(ii) a certificate from the independent public accountants stating that their audit has not disclosed the existence of any condition which constitutes a Default, or if their audit has disclosed the existence of any such condition, specifying the nature and period of existence.
(b) Concurrently with the furnishing of the quarterly financial statements pursuant to Subsection 9.1(b), the Company will furnish to Administrative Agent a principal financial officer's certificate in the form of Exhibit D.
9.3 Taxes and Other Liens. The Company will and will cause each Subsidiary of the Company to pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon the Company or such Subsidiary, or upon the income or any property of the Company or such Subsidiary, as well as all claims of any kind (including claims for labor, materials, supplies, rent and payment of proceeds attributable to Hydrocarbon production) which, if unpaid, might result in or become a Lien upon any or all of the property of the Company or such Subsidiary; provided, however, that neither the Company nor such Subsidiary will be required to pay any such tax, assessment, charge, levy or claims if the amount, applicability or validity thereof will currently be contested in good faith by appropriate proceedings diligently conducted and if the Company or such Subsidiary will have set up reserves therefor adequate under GAAP.
9.4 Maintenance. Except as referred to in Sections 8.1 and 8.13 and except as permitted under Section 10.4 the Company will and will cause each Subsidiary of the Company to: (i) maintain its corporate existence; (ii) maintain its rights and franchises, except for any mergers or consolidations otherwise permitted by this Agreement and except to the extent failure to so maintain the same would not have a Material Adverse Effect; (iii) observe and comply (to the extent that any failure would have a Material Adverse Effect) with all valid Legal Requirements (including without limitation Requirements of Environmental Law); and (iv) maintain (except to the extent failure to so maintain the same would not have a Material Adverse Effect) its properties (and any properties leased by or consigned to it or held under title retention or conditional sales contracts) consistent with the standards of a reasonably prudent operator at all times and make all repairs, replacements, additions, betterments and improvements to its properties consistent with the standards of a reasonably prudent operator.
9.5 Further Assurances. The Company will, and will cause each Subsidiary of the Company to, cure promptly any defects in the execution and delivery of the Loan Documents, including this Agreement. The Company at its expense will promptly execute and deliver to Administrative Agent upon request all such other and further documents, agreements and instruments (or cause any of its Subsidiaries to take such action) in compliance with or accomplishment of the covenants and agreements of the Company or any of its Subsidiaries in the Loan Documents, including this Agreement, or to correct any omissions in the Loan Documents, or to make any recordings, to file any notices, or obtain any consents, all as may be necessary or appropriate in connection therewith.
9.6 Performance of Obligations. The Company will pay the Loans according to the reading, tenor and effect of this Agreement; and the Company will do and perform every act and discharge all of the obligations provided to be performed and discharged by the Company under this Agreement and the other Loan Documents at the time or times and in the manner specified, and
cause each of its Subsidiaries to take such action with respect to their obligations to be performed and discharged under the Loan Documents to which they respectively are parties.
9.7 Reimbursement of Expenses. Whether or not any Loan is ever made or any Letter of Credit is ever issued, the Company agrees to pay or reimburse Administrative Agent for paying the reasonable fees and expenses of Mayer, Brown & Platt, special counsel to the Agents, together with the reasonable fees and expenses of local counsel engaged by the Agents, in connection with the negotiation of the terms and structure of the Obligations, the preparation, execution and delivery of this Agreement and the other Loan Documents and the making of the Loans and the issuance of Letters of Credit hereunder, as well as any modification, supplement or waiver of any of the terms of this Agreement and the other Loan Documents. The Company will promptly upon request and in any event within 30 days from the date of receipt by the Company of a copy of a bill for such amounts, reimburse any Bank or any Agent for all amounts reasonably expended, advanced or incurred by such Bank or such Agent to satisfy any obligation of the Company under this Agreement or any other Loan Document, to protect the properties or business of the Company or any Subsidiary of the Company, to collect the Obligations, or to enforce the rights of such Bank or such Agent under this Agreement or any other Loan Document, which amounts will include without limitation all court costs, attorneys' fees (but not including allocated costs of in-house counsel), any engineering fees and expenses, fees of auditors, accountants and appraisers, investigation expenses, all transfer, stamp, documentary or similar taxes, assessments or charges levied by any governmental or revenue authority in respect of any of the Loan Documents or any other document referred to therein, all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any lien contemplated by any of the Loan Documents or any document referred to therein, fees and expenses incurred in connection with such Bank's participation as a member of a creditors' committee in a case commenced under the Bankruptcy Code or other similar law of the United States or any state thereof, fees and expenses incurred in connection with lifting the automatic stay prescribed in ss.362 Title 11 of the United States Code, and fees and expenses incurred in connection with any action pursuant to ss.1129 Title 11 of the United States Code and all other customary out-of-pocket expenses incurred by such Bank or such Agent in connection with such matters, together with interest after the expiration of the 30-day period stated above in this Section if no Event of Default has occurred and is continuing, or from the date of the request to the Company if an Event of Default has occurred and is continuing, at either (i) the Post-Default Rate on each such amount until the date of reimbursement to such Bank or such Agent, or (ii) if no Event of Default will have occurred and be continuing, the Alternate Base Rate plus the highest Applicable Margin for Alternate Base Rate Loans (not to exceed the Highest Lawful Rate) on each such amount until the date of the Company's receipt of written demand or request by such Bank or such Agent for the reimbursement of same, and thereafter at the applicable Post-Default Rate until the date of reimbursement to such Bank or such Agent. The obligations of the Company under this Section are compensatory in nature, shall be deemed liquidated as to amount upon receipt by the Company of a copy of any invoice therefor, and will survive the non-assumption of this Agreement in a case commenced under the Bankruptcy Code or other similar law of the United States or any state thereof, and will remain binding on the Company and any trustee, receiver, or liquidator of the Company appointed in any such case.
9.8 Insurance. The Company and its Subsidiaries will maintain, with
financially sound and reputable insurers, insurance with respect to their
respective properties and business against such liabilities, casualties, risks
and contingencies and in such types and amounts as is customary in the case of
corporations engaged in the same or similar businesses and similarly situated.
Upon the request of Administrative Agent acting at the instruction of the
Majority Banks, the Company will furnish or cause to be furnished to
Administrative Agent from time to time a summary of the insurance coverage of
the Company and its Subsidiaries in form and substance satisfactory to the
Majority Banks in their reasonable judgment, and if requested will furnish
Administrative Agent copies of the applicable policies. In the case of any fire,
accident or other casualty causing loss or damage to any properties of the
Company or any of its Subsidiaries, the proceeds of such policies will be used
(i) to repair or replace the damaged property, (ii) to prepay the Obligations,
or (iii) so long as no Default has occurred and is continuing, for general
corporate purposes, at the election of the Company.
9.9 Accounts and Records. The Company will keep and will cause each Subsidiary of the Company to keep books of record and account which fairly reflect all dealings or transactions in relation to their respective businesses and activities, in accordance with GAAP, which books of record and account will be maintained, to the extent necessary to enable compliance with all provisions of this Agreement, separately for each such Subsidiary, the Company and any division of the Company.
9.10 Notice of Certain Events. The Company will promptly notify Administrative Agent (and Administrative Agent will then notify all of the Banks and other Agents) if a Responsible Officer of the Company learns of the occurrence of, or if the Company causes or intends to cause, as the case may be:
(i) any event which constitutes a Default, together with a detailed statement by a Responsible Officer of the Company of the steps being taken to cure the effect of such Default; or
(ii) the receipt of any notice from, or the taking of any other action by, the holder of any promissory note, debenture or other evidence of indebtedness of the Company or any Subsidiary of the Company or of any security (as defined in the Securities Act of 1933, as amended) of the Company or any Subsidiary of the Company with respect to a claimed default, together with a detailed statement by a Responsible Officer of the Company specifying the notice given or other action taken by such holder and the nature of the claimed default and what action the Company or such Subsidiary is taking or proposes to take with respect thereto; or
(iii) any legal, judicial or regulatory proceedings affecting the Company or any Subsidiary of the Company or any of the properties of the Company or any Subsidiary of the Company in which the amount involved is materially adverse to the Company and its Subsidiaries taken as a whole, and is not covered by insurance or which, if adversely determined, would have a Material Adverse Effect; or
(iv) any dispute between the Company or any Subsidiary of the Company and any Governmental Authority or any other Person which, if adversely determined, could reasonably be expected to have a Material Adverse Effect; or
(v) the occurrence of a default or event of default by the Company or any Subsidiary of the Company under any other agreement to which it is a party, which default or event of default could reasonably be expected to have a Material Adverse Effect; or
(vi) any change in the accuracy of the representations and warranties of the Company or any Subsidiary contained in this Agreement or any other Loan Document; or
(vii) any material violation or alleged material violation of any Requirements of Environmental Law or Environmental Permit or any Environmental Claim or any Environmental Liability; or
(viii) any tariff and rate cases and other material reports filed by the Company or any of its Subsidiaries with any Governmental Authority and any notice to the Company or any of its Subsidiaries from any Governmental Authority concerning noncompliance with any applicable Legal Requirement; or
(ix) within 10 days after the date on which a Responsible Officer of the Company has actual knowledge thereof, the receipt of any notice by the Company or any of its Subsidiaries of any claim of nonpayment of, or any attempt to collect or enforce, accounts payable of the Company or any of its Subsidiaries exceeding, in the case of any one account payable at one time outstanding, $5,000,000 and in the case of all accounts payable in the aggregate at any one time outstanding, $10,000,000; or
(x) any requirement for the payment of all or any portion of any Indebtedness of the Company or any of its Subsidiaries prior to the stated maturity thereof (whether by acceleration or otherwise) or as the result of any failure to maintain or the reaching of any threshold amount provided in any promissory note, bond, debenture, or other evidence of Indebtedness or under any credit agreement, loan agreement, indenture or similar agreement executed in connection with any of the foregoing; or
(xi) any notice from the Securities and Exchange Commission with respect to any Application (as defined in Section 8.18 hereof).
9.11 ERISA Information and Compliance. The Company will promptly furnish to Administrative Agent (i) immediately upon receipt, a copy of any notice of complete or partial withdrawal liability under Title IV of ERISA and any notice from the PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to administer any Plan, (ii) if requested by Administrative Agent, acting on the instruction of the Majority Banks, promptly after the filing thereof with the United States Secretary of Labor or the PBGC or the Internal Revenue Service,
copies of each annual and other report with respect to each Plan or any trust created thereunder, (iii) immediately upon becoming aware of the occurrence of any "reportable event", as such term is defined in Section 4043 of ERISA, for which the disclosure requirements of Regulation Section 2615.3 promulgated by the PBGC have not been waived, or of any "prohibited transaction", as such term is defined in Section 4975 of the Code, in connection with any Plan or any trust created thereunder, a written notice signed by the President or the principal financial officer of the Company or the applicable ERISA Affiliate specifying the nature thereof, what action the Company or the applicable ERISA Affiliate is taking or proposes to take with respect thereto, and, when known, any action taken by the PBGC, the Internal Revenue Service or the Department of Labor with respect thereto, (iv) promptly after the filing or receiving thereof by the Company or any ERISA Affiliate of any notice of the institution of any proceedings or other actions which may result in the termination of any Plan, and (v) each request for waiver of the funding standards or extension of the amortization periods required by Sections 303 and 304 of ERISA or Section 412 of the Code promptly after the request is submitted by the Company or any ERISA Affiliate to the Secretary of the Treasury, the Department of Labor or the Internal Revenue Service, as the case may be. To the extent required under applicable statutory funding requirements, the Company will fund, or will cause each ERISA Affiliate to fund, all current service pension liabilities as they are incurred under the provisions of all Plans from time to time in effect, and comply with all applicable provisions of ERISA, except to the extent that any such failure to comply could not reasonably be expected to have a Material Adverse Effect. The Company covenants that it shall and shall cause each ERISA Affiliate to (1) make contributions to each Plan in a timely manner and in an amount sufficient to comply with the contribution obligations under such Plan and the minimum funding standards requirements of ERISA; (2) prepare and file in a timely manner all notices and reports required under the terms of ERISA including but not limited to annual reports; and (3) pay in a timely manner all required PBGC premiums, in each case, to the extent failure to do so would have a Material Adverse Effect.
SECTION 10. NEGATIVE COVENANTS. A deviation from the provisions of this
Section 10 will not constitute a Default under this Agreement if such deviation
is consented to in writing by the Majority Banks. The Company agrees with the
Banks and the Agents that, so long as any of the Commitments is in effect and
until payment in full of all Obligations and the termination or expiry of all
Letters of Credit:
10.1 Debts, Guaranties and Other Obligations.
(i) Of Restricted Subsidiaries. The Company will not permit any of its Restricted Subsidiaries to incur, create, assume or in any manner become or be liable in respect of any Indebtedness (including obligations for the payment of rentals); and the Company will not permit any of its Restricted Subsidiaries to Guarantee or otherwise in any way become or be responsible for obligations of any other Person, whether by agreement to purchase the Indebtedness of any other Person or agreement for the furnishing of funds to any other Person through the purchase or lease of goods, supplies or services (or by way of stock purchase, capital contribution, advance or loan)
for the purpose of paying or discharging the Indebtedness of any other Person, or otherwise, except that the foregoing restrictions will not apply to:
(a) Indebtedness pursuant to (1) the Loan Documents and (2) the 364-Day Credit Agreement and the "Loan Documents" referred to therein;
(b) Indebtedness of any Restricted Subsidiary existing on the date of this Agreement which is described in the Disclosure Statement, and (A) with respect to any such Indebtedness which constitutes Senior Debt, any extensions, renewals or replacements of such Indebtedness upon terms no more onerous to such Restricted Subsidiary than the terms of this Agreement or the terms of the instruments evidencing such Senior Debt as of the effective date of this Agreement, and (B) with respect to any such Indebtedness which constitutes Subordinated Indebtedness, any extensions, renewals or replacements of such Indebtedness which (I) remains Subordinated Indebtedness and(II)does not require principal repayment of such Subordinated Indebtedness prior to expiration of the Revolving Credit Availability Period;
(c) endorsements of negotiable or similar instruments for collection or deposit in the ordinary course of business;
(d) trade payables, lease acquisition and lease maintenance obligations, extensions of credit from suppliers or contractors, liabilities incurred in exploration, development and operation of any Restricted Subsidiary's oil and gas properties or similar obligations from time to time incurred in the ordinary course of business, other than for borrowed money, which are paid within 90 days after the invoice date (inclusive of applicable grace periods) or (i) are being contested in good faith, if such reserve as required by GAAP has been made therefor or (ii) trade accounts payable of any Restricted Subsidiaries (with respect to which no legal proceeding to enforce collection has been commenced or, to the knowledge of any Responsible Officer of the Company, threatened) not exceeding, in the aggregate at any time outstanding, $50,000,000;
(e) taxes, assessments or other government charges which are not yet due or are being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as will be required by GAAP will have been made therefor;
(f) intercompany Indebtedness owed to the Company by any Restricted Subsidiary and intercompany Indebtedness owed to any Restricted Subsidiary by any other Restricted Subsidiary;
(g) any Guarantee existing on the date of this Agreement of payment or performance by any Person under any agreement so long as the obligation guaranteed does not constitute Indebtedness for borrowed money;
(h) obligations of any Restricted Subsidiary under gas purchase contracts for gas not taken, as to which such Restricted Subsidiary is liable to pay if not made up;
(i) obligations of any Restricted Subsidiary under any contract for sale for future delivery of oil or gas (whether or not the subject oil or gas is to be delivered) or other similar agreement;
(j) obligations of any Restricted Subsidiary under any hedging contract, forward contract, swap agreement, futures contract or other similar agreement;
(k) obligations of any Restricted Subsidiary under any interest rate or currency swap agreement, or any contract implementing any interest rate or currency cap, collar or floor, or any similar interest rate or currency hedging contract;
(l) obligations in connection with gas imbalances arising in th ordinary course of business;
(m) Guarantees of obligations of Havre by Guarantor in an amount not exceeding $20,000,000 in the aggregate in connection with Indebtedness of Havre;
(n) liabilities under capital leases and lease agreements which do not cover oil and gas properties to the extent (i) the incurrence and existence of such liabilities will still enable each Restricted Subsidiary to comply with all requirements of this Agreement and (ii) not exceeding, in the aggregate at any time outstanding, $35,000,000;
(o) until such time as the Guaranty Agreement is no longer in effect, any Guarantee by Guarantor of the payment or performance of the Company with respect to Indebtedness of Company permitted by Section 10.1(iii);
(p) obligations in connection with bank guarantees, bonds, surety or similar obligations required or requested by Governmental Authorities in connection with the usual and customary operation of and the obtaining of oil and gas properties; and
(q) in addition to Indebtedness permitted by clauses (a) through
(p) above, Indebtedness of any Restricted Subsidiary in an
aggregate principal amount not exceeding $10,000,000 at any
time outstanding.
(ii) Of Unrestricted Subsidiaries. The Company will not permit any of its Unrestricted Subsidiaries to (a) incur, create, assume or in any manner become or be liable in respect of any Indebtedness (including obligations for the payment of rentals), or (b) Guarantee or otherwise in any way become or be responsible for obligations of any other Person, whether by agreement to purchase the Indebtedness of any other Person or agreement for the furnishing of funds to any other Person through the purchase or lease of goods, supplies or services (or by way of stock purchase, capital contribution, advance or loan) for the purpose of paying or discharging the Indebtedness of any other Person, or otherwise, except that the foregoing restrictions will not apply to any Indebtedness not exceeding $200,000,000 in the aggregate for all Unrestricted Subsidiaries.
(iii) Of the Company. The Company may incur Indebtedness for borrowed money only if such Indebtedness is at prevailing market rates of interest and contains covenants, conditions and events of default not materially more onerous to the Company than the covenants, conditions and event of default set forth in one or more of the various indentures and other debt instruments of the Company in existence on the Effective Date.
10.2 Liens. The Company will not and will not permit any of its Restricted Subsidiaries to create, incur, assume or permit to exist any Lien on any of its or their properties (now owned or hereafter acquired), except:
(a) Liens securing (i) the Loans or other obligations under the Loan Documents, and (ii) the "Loans" (as defined in the 364-Day Credit Agreement) and other obligations under the 364-Day Credit Agreement and the "Loan Documents" referred to therein, provided that such Liens (A) are for the equal and ratable benefit of the Agents and the Banks under each of this Agreement and the 364-Day Credit Agreement and (B) cover the same collateral;
(b) Liens for taxes, assessments or other governmental charges or levies not yet due or which are being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as will be required by GAAP will have been made therefor;
(c) Liens of landlords, vendors, contractors, subcontractors, carriers, warehousemen, mechanics, laborers or materialmen or other like Liens arising by law or contract in the ordinary course of business for sums not yet due or being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as will be required by GAAP will have been made therefor;
(d) Liens existing on property owned by the Company or any of its Restricted Subsidiaries on the date of this Agreement which have been disclosed to the Banks in the Disclosure Statement, together with any renewals, extensions, amendments, refinancings, rearrangements, modifications, restatements or supplements, but not increases, thereof from time to time;
(e) pledges or deposits made in the ordinary course of business in connection with worker's compensation, unemployment insurance, social security and other like laws;
(f) inchoate liens arising under ERISA to secure the contingent liability of the Company permitted by Section 9.11;
(g) Liens in the ordinary course of business, not to exceed in the aggregate $25,000,000 as to the Company and its Restricted Subsidiaries at any time in effect, regarding (i) the performance of bids, tenders, contracts (other than for the repayment of borrowed money or the deferred purchase price of property or services) or leases, (ii) statutory obligations, (iii) surety appeal bonds or (iv) Liens to secure progress or partial payments made to the Company or any of its Restricted Subsidiaries and other Liens of like nature;
(h) covenants, restrictions, easements, servitudes, permits, conditions, exceptions, reservations, minor rights, minor encumbrances, minor irregularities in title or conventional rights of reassignment prior to abandonment which do not materially interfere with the occupation, use and enjoyment by the Company or any Restricted Subsidiary of its respective assets in the normal course of business as presently conducted, or materially impair the value thereof for the purpose of such business;
(i) Liens of operators under joint operating agreements or similar contractual arrangements with respect to the relevant entity's proportionate share of the expense of exploration, development and operation of oil, gas and mineral leasehold or fee interests owned jointly with others, to the extent that same relate to sums not yet due or which are being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as will be required by GAAP will have been made therefor;
(j) Liens created pursuant to the creation of trusts or other arrangements funded solely with cash, cash equivalents or other marketable investments or securities of the type customarily subject to such arrangements in customary financial practice with respect to long-term or medium-term indebtedness for borrowed money, the sole purpose of which is to make provision for the retirement or defeasance, without prepayment, of Indebtedness permitted under Section 10.1;
(k) Liens in favor of the Company on the assets or properties of ENSTAR Alaska;
(l) Liens securing purchase money Indebtedness or Capital Lease Obligations incurred in compliance with Section 10.1 of this Agreement;
(m) Liens on the capital stock or other equity interest of any Unrestricted Subsidiary securing obligations of such Unrestricted Subsidiary;
(n) any Lien existing on any real or personal property of any corporation or partnership at the time it becomes a Restricted Subsidiary or of any other Restricted Subsidiary, or existing prior to the time of acquisition upon any real or personal property acquired by the Company or any of its Restricted Subsidiaries;
(o) legal or equitable encumbrances deemed to exist by reason of the existence of any litigation or other legal proceeding or arising out of a judgment or award with respect to which an appeal is being prosecuted in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as will be required by GAAP will have been made therefor;
(p) any Liens securing Indebtedness neither assumed nor guaranteed by the Company or any of its Restricted Subsidiaries nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by the Company or any of its Restricted Subsidiaries 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 full 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 arises in the normal course of business as presently conducted and does not materially impair the use of the property covered by such Lien for the purposes for which such property is held by the Company or its applicable Restricted Subsidiary;
(q) rights reserved to or vested in any municipality or governmental, statutory or public authority by the terms of any right, power, franchise, grant, license or permit, or by any provision of law, to terminate such right, power, franchise, grant, license or permit or to purchase, condemn, expropriate or recapture or to designate a purchaser of any of the property of the Company or any of its Restricted Subsidiaries;
(r) rights reserved to or vested in any municipality or governmental, statutory or public authority to control or regulate any property of the Company or any of its Restricted Subsidiaries, or to use such property in a manner which does not materially impair the use of such property for the purposes for which it is held by the Company or its applicable Restricted Subsidiary;
(s) any obligations or duties affecting the property of the Company or any of its Restricted Subsidiaries to any municipality, governmental, statutory or public authority with respect to any franchise, grant, license or permit;
(t) rights of a common owner of any interest in real estate, rights-of-way or easements held by the Company or any of its Restricted Subsidiaries and such common owner as tenants in common or through other common ownership;
(u) as to assets located in Canada, reservations, limitations, provisos and conditions in any original grant from the Crown or freehold lessor of any of the properties of the Company or its Subsidiaries;
(v) other Liens securing Indebtedness not exceeding, in the aggregate, $10,000,000 at any one time outstanding;
(w) Liens covering cash collateral accounts relating to obligations pursuant to Letters of Credit issued in connection with this Agreement;
(x) Liens securing Indebtedness of the Company or any Restricted Subsidiary of the types described in Section 10.1(i)(p) covering the oil and gas properties to which such Indebtedness relates, provided that the aggregate amount of all such Indebtedness so secured under this Section 10.2(x) shall not exceed $50,000,000 in the aggregate at any one time outstanding; and
(y) Liens (i) granted to or existing in favor of third parties on margin accounts of the Company or any of its Restricted Subsidiaries relating to exchange traded contracts for the delivery of natural gas pursuant to which the Company or any such Restricted Subsidiary intends to take actual delivery of such natural gas within forty (40) days from the then current date in the ordinary course of business and not for speculative purposes, and (ii) on margin accounts of the Company or any of its Restricted Subsidiaries relating to exchange traded contracts for the delivery of natural gas, provided, however, the aggregate balance of the margin accounts subject to the Liens permitted by this clause (ii) shall not exceed from time to time $10,000,000.
10.3 Dividend Payment Restrictions. The Company will not declare or make any Dividend Payment if any Default or Event of Default has occurred and is continuing or would result therefrom.
10.4 Mergers and Sales of Assets. Except for sales of the assets
described in the Disclosure Statement (the "Specified Assets"), the Company will
not (a) merge or consolidate with, or sell, assign, lease or otherwise dispose
of, whether in one transaction or in a series of transactions, more than (i) ten
percent (10%) in the aggregate (not including Specified Assets) of the Company's
and its Restricted Subsidiaries' consolidated total assets (whether now owned or
hereafter acquired) to any Person or Persons during any twelve month period or
(ii) twenty-five percent (25%) in the aggregate (not including Specified Assets)
of the Company's and its Restricted Subsidiaries' consolidated total assets as
of the date hereof to any Person or Persons during the Revolving Credit
Availability Period, or permit any Restricted Subsidiary to do so (other than to the Company or another Restricted Subsidiary or the issuance by any Restricted Subsidiary of any stock to the Company or another Restricted Subsidiary), or (b) sell, assign, lease or otherwise dispose of, whether in one transaction or in a series of transactions, any other properties if receiving therefor consideration other than cash or other consideration readily convertible to cash or which is less than the fair market value of the relevant properties, or permit any Restricted Subsidiary to do so; provided that the Company or any Restricted Subsidiary may merge or consolidate with any other Person and any Restricted Subsidiary may transfer properties to any other Restricted Subsidiary or to the Company so long as, in each case, (i) immediately thereafter and giving effect thereto, no event will occur and be continuing which constitutes a Default, (ii) in the case of any such merger or consolidation to which the Company is a party, the Company is the surviving Person, (iii) in the case of any such merger or consolidation to which any Restricted Subsidiary is a party (but not the Company), after giving effect to all transactions closing concurrently relating to such merger or consolidation, the surviving Person is a Restricted Subsidiary and (iv) the surviving Person ratifies each applicable Loan Document and provided further that any Restricted Subsidiary may merge or consolidate with any other Restricted Subsidiary so long as, in each case (i) immediately thereafter and giving effect thereto, no event will occur and be continuing which constitutes a Default and (ii) the surviving Person ratifies each applicable Loan Document.
10.5 Proceeds of Loans. The Company will not permit the proceeds of the Loans to be used for any purpose other than those permitted by this Agreement.
10.6 ERISA Compliance. The Company will not at any time permit any Plan maintained by it or any Restricted Subsidiary to:
(a) engage in any "prohibited transaction" as such term is defined in Section 4975 of the Code;
(b) incur any "accumulated funding deficiency" as such term is defined in Section 302 of ERISA; or
(c) terminate or be terminated in a manner which could result in the imposition of a Lien on the property of the Company or any Restricted Subsidiary pursuant to Section 4068 of ERISA,
in each case, to the extent that permitting the Plan to do so would have a Material Adverse Effect.
10.7 Total Leverage Ratio. The Company will not permit its Total Leverage Ratio to be (i) at any time through March 31, 2001, more than 4.25 to 1.00, (ii) at any time from April 1, 2001 through March 31, 2002, more than 4.00 to 1.00, (iii) at any time on or after April 1, 2002, more than 3.75 to 1.00.
10.8 Senior Leverage Ratio. The Company will not permit its Senior Leverage Ratio to be at any time more than 3.00 to 1.00.
10.9 Minimum Net Worth. The Company will not permit its Consolidated Net Worth as of the end of any fiscal quarter to be less than (i) $770,000,000 plus (ii) an amount equal to 50% of the sum of the Company's and its Restricted Subsidiaries' consolidated net income for each calendar quarter, beginning with the calendar quarter ending March 31, 1999, during which such consolidated net income is greater than $0 plus (iii) an amount equal to 50% of the net cash proceeds received by the Company and its Restricted Subsidiaries from the issuance of any common stock, preferred stock or other equity for each calendar quarter, beginning with the calendar quarter ending March 31, 1999.
10.10 Nature of Business. The Company will not engage in, and will not permit any Restricted Subsidiary to engage in, businesses other than oil and gas exploration and production, gas processing, transmission, distribution, marketing and storage and gas and liquids pipeline operations and activities related or ancillary thereto; provided, that if the Company acquires one or more Restricted Subsidiaries in transactions otherwise permitted by the terms hereof, any such Restricted Subsidiary may be engaged in businesses other than those listed in this Section so long as the assets of such Restricted Subsidiaries which are used in the conduct of such other businesses do not constitute more than five percent (5%) of the consolidated total assets of the Company (inclusive of the assets of the Restricted Subsidiary so acquired).
10.11 Covenants in Other Agreements. The Company will not and will not permit any of its Restricted Subsidiaries to become a party to or to agree that it or any of its property is bound by any agreement, indenture, mortgage, deed of trust or any other instrument ("Instruments") directly or indirectly (i) restricting any loans, advances or any other Investments to or in the Company by any of its Restricted Subsidiaries, (ii) restricting the ability of any Restricted Subsidiary to make tax payments or management fee payments to the Company, or (iii) restricting the ability or capacity of any Restricted Subsidiary to make Dividend Payments to the Company, except for (a) instruments in existence on the date hereof and (b) instruments entered into after the date hereof containing restrictions not materially more restrictive than the restrictions permitted under clause (a) above.
SECTION 11. DEFAULTS.
11.1 Events of Default. If one or more of the following events (herein called "Events of Default") shall occur and be continuing:
(a) Payments - (i) the Company or any other Relevant Party fails to make any payment or prepayment of any installment of principal on the Loans or any Reimbursement Obligation payable under this Agreement or the other Loan Documents when due or (ii) the Company or any other Relevant Party fails to make any payment or prepayment of interest with respect to the Loans, any Reimbursement Obligation or any other fee, amount or Obligation under this Agreement or the
other Loan Documents and such failure to pay continues unremedied for a period of five (5) Business Days; or
(b) Representations and Warranties - any representation or warranty made by the Company or any other Relevant Party in this Agreement or in any other Loan Document or in any instrument executed in connection herewith or therewith proves to have been incorrect in any material respect as of the date thereof; or any representation, statement (including Financial Statements), certificate or data furnished or made by the Company or any other Relevant Party (or any officer of the Company or any other Relevant Party) under or in connection with this Agreement or any other Loan Document, including without limitation in the Disclosure Statement, proves to have been untrue in any material respect, as of the date as of which the facts therein set forth were stated or certified; or
(c) Affirmative Covenants - (i) default shall be made in the due observance or performance of any of the covenants or agreements contained in Sections 9.10 (or in Section 9.6 to the extent such default is considered an Event of Default under the other Subsections of this Section 11.1) or (ii) default is made in the due observance or performance of any of the other covenants or agreements contained in Section 9 of this Agreement or any other affirmative covenant of the Company or any other Relevant Party contained in this Agreement or any other Loan Document and such default continues unremedied for a period of 30 days after (x) notice thereof is given by Administrative Agent to the Company or (y) such default otherwise becomes known to the Company, whichever is earlier; or
(d) Negative Covenants - default is made in the due observance or
performance by the Company of any of the covenants or agreements contained in
Section 10 of this Agreement or of any other negative covenant of the Company or
any other Relevant Party contained in this Agreement or any other Loan Document;
or
(e) Other Obligations - default is made in the due observance or performance by the Company or any of its Restricted Subsidiaries (as principal or guarantor or other surety) of any of the covenants or agreements contained in any bond, debenture, note or other evidence of Indebtedness in excess of $25,000,000 (singly or aggregating several such bonds, debentures, notes or other evidence of Indebtedness) which default gives the holder the right to accelerate the maturity of such Indebtedness, other than the Loan Documents, or under any credit agreement, loan agreement, indenture, promissory note or similar agreement or instrument executed in connection with any of the foregoing, to which it (respectively) is a party and such default is unwaived or continues unremedied beyond the expiration of any applicable grace period which may be expressly allowed under such instrument or agreement; or
(f) Involuntary Bankruptcy or Receivership Proceedings - a receiver, conservator, liquidator or trustee of the Company, the Guarantor, any Restricted Subsidiary or of any of their property is appointed by the order or decree of any court or agency or supervisory authority having jurisdiction, and such decree or order remains in effect for more than 60 days; or the Company, the
Guarantor or any Restricted Subsidiary is adjudicated bankrupt or insolvent; or any of its property is sequestered by court order and such order remains in effect for more than 60 days; or a petition is filed against the Company, the Guarantor or any Restricted Subsidiary under any state or federal bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, liquidation or receivership law of any jurisdiction, whether now or hereafter in effect, and is not dismissed within 60 days after such filing; or
(g) Voluntary Petitions or Consents - the Company, the Guarantor or any Restricted Subsidiary commences a voluntary case or other proceeding seeking liquidation, reorganization, arrangement, insolvency, readjustment of debt, dissolution, liquidation or other relief with respect to itself or its debt or other liabilities under any bankruptcy, insolvency or other similar law nor or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or consents to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or fails generally to, or cannot, pay its debts generally as they become due or takes any corporate action to authorize or effect any of the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of Insolvency the Company, the Guarantor or any Restricted Subsidiary makes an assignment for the benefit of its creditors, or admits in writing its inability to pay its debts generally as they become due, or consents to the appointment of a receiver, trustee, or liquidator of the Company, the Guarantor, any Restricted Subsidiary or of all or any part of their property; or
(i) Undischarged Judgments - judgments (individually or in the aggregate) for the payment of money in excess of $10,000,000 in excess of insurance coverage are rendered by any court or other governmental body against the Company or any of its Restricted Subsidiaries or the Guarantor and the Company or such Restricted Subsidiary or the Guarantor does not discharge the same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof within 60 days from the date of entry thereof, and within said period of 60 days from the date of entry thereof or such longer period during which execution of such judgment will have been stayed, the Company, such Restricted Subsidiary or the Guarantor fails to appeal therefrom and cause the execution thereof to be stayed during such appeal while providing such reserves therefor as may be required under GAAP; or
(j) Subsidiary Defaults - the Guarantor or any Restricted Subsidiary of the Company takes, suffers, or permits to exist any of the events or conditions referred to in Subsections 11.1(f), (g) or (h); or
(k) Change in Control - there should occur any Change of Control.
THEREUPON: Administrative Agent may (and, if directed by the Majority Banks, shall) (a) declare the Commitments terminated (whereupon the Commitments shall be terminated) and/or (b) terminate any Letter of Credit providing for such termination by sending a notice of termination
as provided therein and/or (c) declare the principal amount then outstanding of and the accrued interest on the Loans and Reimbursement Obligations and all fees and all other Obligations to be forthwith due and payable, whereupon such amounts shall be and become immediately due and payable, without notice (including without limitation notice of acceleration and notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Company; provided that in the case of the occurrence of an Event of Default with respect to the Company referred to in clause (f) or (g) of this Section 11.1 or in clause (j) of this Section 11.1 to the extent it refers to clauses (f) or (g), the Commitments shall be automatically terminated and the principal amount then outstanding of and the accrued interest on the Loans and Reimbursement Obligations and all fees and all other Obligations payable hereunder shall be and become automatically and immediately due and payable, without notice (including but not limited to notice of intent to accelerate and notice of acceleration) and without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Company and/or (d) exercise any and all other rights available to it under the Loan Documents, at law or in equity.
11.2 Collateral Account. The Company hereby agrees, in addition to the provisions of Section 11.1 hereof, that upon the occurrence and during the continuance of any Event of Default, it shall, if requested by Administrative Agent or the Majority Banks (through Administrative Agent), pay to Administrative Agent an amount in immediately available funds equal to the then aggregate amount available for drawings under all Letters of Credit issued for the account of the Company, which funds shall be held by Administrative Agent as Cover.
11.3 Preservation of Security for Unmatured Reimbursement Obligations. In the event that, following (i) the occurrence of an Event of Default and the exercise of any rights available to Administrative Agent under the Loan Documents, and (ii) payment in full of the principal amount then outstanding of and the accrued interest on the Loans and Reimbursement Obligations and fees and all other Obligations payable hereunder and under any Letters of Credit shall remain outstanding and undrawn upon, Administrative Agent shall be entitled to hold (and the Company hereby grants and conveys to Administrative Agent a security interest in and to) all cash or other property ("Proceeds of Remedies") realized or arising out of the exercise by Administrative Agent of any rights available to it under the Loan Documents, at law or in equity, including, without limitation, the proceeds of any foreclosure, as collateral for the payment of any amounts due or to become due under or in respect of such Letters of Credit. Such Proceeds of Remedies shall be held for the ratable benefit of the applicable Issuers. The rights, titles, benefits, privileges, duties and obligations of Administrative Agent with respect thereto shall be governed by the terms and provisions of this Agreement. Administrative Agent may, but shall have no obligation to, invest any such Proceeds of Remedies in such manner as Administrative Agent, in the exercise of its sole discretion, deems appropriate. Such Proceeds of Remedies shall be applied to Reimbursement Obligations arising in respect of any such Letters of Credit and/or the payment of any Issuer's obligations under any such Letter of Credit when such Letter of Credit is drawn upon. The Company hereby agrees to execute and deliver to the Agents and the Banks such security agreements, pledges or other documents as any of the Agents or any of the Banks may, from time to time, require to perfect the pledge, lien and security interest in and to any such Proceeds of Remedies provided for in this Section 11.3.
11.4 Right of Setoff. Upon (i) the occurrence and during the
continuance of any Event of Default referred to in clauses (f), (g) or (h) of
Section 11.1, or in clause (j) of Section 11.1 to the extent it refers to
clauses (f), (g) or (h), or upon (ii) the occurrence and continuance of any
other Event of Default and upon the making of the notice specified in Section
11.1 to authorize Administrative Agent to declare the Loans due and payable
pursuant to the provisions of this Agreement, or if (iii) the Company or any of
its Subsidiaries becomes insolvent, however evidenced, the Banks are hereby
authorized at any time and from time to time, without notice to the Company or
any of its Subsidiaries (any such notice being expressly waived by the Company
and its Subsidiaries), to setoff and apply any and all deposits (general or
special, time or demand, provisional or final, whether or not such setoff
results in any loss of interest or other penalty, and including without
limitation all certificates of deposit) at any time held, and any other funds or
property at any time held, and other Indebtedness at any time owing by any Bank
to or for the credit or the account of the Company against any and all of the
Obligations irrespective of whether or not such Bank will have made any demand
under this Agreement and although such obligations may be unmatured. Should the
right of any Bank to realize funds in any manner set forth hereinabove be
challenged and any application of such funds be reversed, whether by court order
or otherwise, the Banks shall make restitution or refund to the Company pro rata
in accordance with their Commitments. The Banks agree promptly to notify the
Company and Administrative Agent after any such setoff and application, provided
that the failure to give such notice will not affect the validity of such setoff
and application. The rights of the Agents and the Banks under this Section are
in addition to other rights and remedies (including without limitation other
rights of setoff) which the Agents or the Banks may have.
SECTION 12. AGENTS.
12.1 Appointment, Powers and Immunities. Each Bank hereby irrevocably appoints and authorizes each Agent to act as its agent hereunder and under the Letters of Credit and the other Loan Documents with such powers as are specifically delegated to such Agent by the terms hereof and thereof, together with such other powers as are reasonably incidental thereto. Each Agent (which term as used in this Section 12 shall include reference to its affiliates and its own and their affiliates' officers, directors, employees and agents) shall not (a) have any duties or responsibilities except those expressly set forth in this Agreement, the Letters of Credit, and the other Loan Documents, or shall by reason of this Agreement or any other Loan Document be a trustee or fiduciary for any Bank; (b) be responsible to any Bank for any recitals, statements, representations or warranties contained in this Agreement, the Letters of Credit or any other Loan Document, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement, the Letters of Credit or any other Loan Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, the Letters of Credit, or any other Loan Document or any other document referred to or provided for herein or therein or any property covered thereby or for any failure by any Relevant Party or any other Person to perform any of its obligations hereunder or thereunder; (c) be required to initiate or conduct any litigation or collection proceedings hereunder or under the Letters of Credit or any other Loan Document except to the extent such Agent is so requested by the Majority Banks, or (d) be responsible for any
action taken or omitted to be taken by it hereunder or under the Letters or Credit or any other Loan Document or any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, INCLUDING, WITHOUT LIMITATION, PURSUANT TO THEIR OWN NEGLIGENCE, except for its own gross negligence or willful misconduct. Each Agent 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 with reasonable care. Without in any way limiting any of the foregoing, each Bank acknowledges that neither any Agent nor any Issuer shall have any greater responsibility in the operation of the Letters of Credit than is specified in either (i) the Uniform Customs and Practice for Documentary Credits (1993 Revision, International Chamber of Commerce Publication No. 500) and (ii) the International Standby Practices (ISP98, International Chamber of Commerce Publication No. 590) . In any foreclosure proceeding concerning any collateral for the Loans, each holder of a Loan if bidding for its own account or for its own account and the accounts of other Banks is prohibited from including in the amount of its bid an amount to be applied as a credit against Obligations owing to such Bank or the Obligations owing to the other Banks; instead, such holder must bid in cash only; provided that this provision is for the sole benefit of the Agents and the Banks and shall not inure to the benefit of the Company or any of its Subsidiaries. However, in any such foreclosure proceeding, Administrative Agent may (but shall not be obligated to) submit a bid for all Banks (including itself) in the form of a credit against the Obligations of all of the Banks, and Administrative Agent or its designee may (but shall not be obligated to) accept title to such collateral for and on behalf of all Banks.
12.2 Reliance by Agents. Each Agent shall be entitled to rely 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 upon advice and statements of legal counsel (which may be counsel for the Company), independent accountants and other experts selected by such Agent. As to any matters not expressly provided for by this Agreement, the Letters of Credit, or any other Loan Document, each Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and thereunder in accordance with instructions of the Majority Banks (or, where unanimous consent is required by the terms hereof or of the other Loan Documents, all of the Banks), and any action taken or failure to act pursuant thereto shall be binding on all of the Banks. Pursuant to instructions of the Majority Banks (except as otherwise provided in Section 13.4 hereof), Administrative Agent shall have the authority to execute releases of security documents on behalf of the Banks without the joinder of any Bank. The Company and any third-party may conclusively rely upon any such release delivered by Administrative Agent without investigation as to whether such release has been approved by the Majority Banks.
12.3 Defaults. Administrative Agent shall not be deemed to have knowledge of the occurrence of a Default (other than the non-payment of principal of or interest on Loans or Reimbursement Obligations) unless it has received notice from a Bank or the Company specifying such Default and stating that such notice is a "Notice of Default". In the event that Administrative Agent receives such a notice of the occurrence of a Default, Administrative Agent shall give prompt notice thereof to the Banks (and shall give each Bank prompt notice of each such non-payment).
Administrative Agent shall (subject to Section 12.7 hereof) take such action with respect to such Default as shall be directed by the Majority Banks and within its rights under the Loan Documents and at law or in equity, provided that, unless and until Administrative Agent shall have received such directions, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, permitted hereby with respect to such Default as it shall deem advisable in the best interests of the Banks and within its rights under the Loan Documents, at law or in equity.
12.4 Rights as a Bank. With respect to its Commitments and the Loans made and the Letter of Credit Liabilities, Chase, Bank of America, Bank One, Societe Generale and Bank of Montreal, respectively, each in its capacity as a Bank hereunder, shall have the same rights and powers hereunder as any other Bank and may exercise the same as though it were not acting as an Agent and the term "Bank" or "Banks" shall, unless the context otherwise indicates, include Chase, Bank of America, Bank One, Societe Generale and Bank of Montreal, respectively, each in its individual capacity. Administrative Agent may (without having to account therefor to any Bank) accept deposits from, lend money to and generally engage in any kind of banking, trust, letter of credit, agency or other business with the Company (and any of its Affiliates) as if it were not acting as Administrative Agent, and Administrative Agent may accept fees and other consideration from the Company and its Affiliates (in addition to the fees heretofore agreed to between the Company and Administrative Agent) for services in connection with this Agreement or otherwise without having to account for the same to the Banks.
12.5 Indemnification. The Banks agree to indemnify each Agent (to the extent not reimbursed under Section 2.2(c), Section 9.7 or Section 13.3 hereof, but without limiting the obligations of the Company under said Sections 2.2(c), 9.7 and 13.3), ratably in accordance with their respective Commitments, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever (INCLUDING, BUT NOT LIMITED TO, THE CONSEQUENCES OF THE NEGLIGENCE OF AGENT) which may be imposed on, incurred by or asserted against such Agent in any way relating to or arising out of this Agreement, the Letters of Credit or any other Loan Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses which the Company is obligated to pay under Sections 2.2(c), 9.7 and 13.3 hereof but excluding, unless a Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of their respective agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, provided that no Bank shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified. The obligations of the Banks under this Section 12.5 shall survive the termination of this Agreement and the repayment of the Obligations.
12.6 Non-Reliance on Agents and Other Banks. Each Bank agrees that it has received current financial information with respect to the Company and that it has, independently and without reliance on any Agent or any other Bank and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Company and decision to enter into this
Agreement and that it will, independently and without reliance upon any Agent or any other Bank, 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 of the other Loan Documents. Each Agent shall not be required to keep itself informed as to the performance or observance by any Relevant Party of this Agreement, the Letters of Credit or any of the other Loan Documents or any other document referred to or provided for herein or therein or to inspect the properties or books of the Company or any Relevant Party. Except for notices, reports and other documents and information expressly required to be furnished to the Banks by Administrative Agent hereunder, under the Letters of Credit or the other Loan Documents, the Agents shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the affairs, financial condition or business of the Company or any other Relevant Party (or any of their affiliates) which may come into the possession of such Agent.
12.7 Failure to Act. Except for action expressly required of Administrative Agent hereunder, under the Letters of Credit and under the other Loan Documents, Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction by the Banks of their indemnification obligations under Section 12.5 hereof against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.
12.8 Resignation or Removal of Administrative Agent. Subject to the appointment and acceptance of a successor Administrative Agent as provided below, Administrative Agent may resign at any time by giving notice thereof to the Banks and the Company, and Administrative Agent may be removed at any time with or without cause by the Majority Banks. Upon any such resignation or removal, the Majority Banks shall have the right to appoint a successor Administrative Agent (subject to the consent of the Company, which consent shall not be unreasonably withheld), provided deposits with a successor Administrative Agent shall be insured by the Federal Deposit Insurance Corporation or its successor. If no successor Administrative Agent shall have been so appointed by the Majority Banks and shall have accepted such appointment within 30 days after the retiring Administrative Agent's giving of notice of resignation or the Majority Banks' removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Banks, appoint a successor Administrative Agent (subject to the consent of the Company, which consent shall not be unreasonably withheld). Any successor Administrative Agent shall be a bank which has an office in the United States and a combined capital and surplus of at least $1,000,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. A successor Administrative Agent shall promptly specify by notice to the Company and the Banks its Principal Office referred to in Sections 3.1 and 5.1. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Section 12 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 Administrative Agent.
SECTION 13. MISCELLANEOUS.
13.1 Waiver. No waiver of any Default shall be a waiver of any other Default. No failure on the part of any Agent or any Bank to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided in the Loan Documents are cumulative and not exclusive of any remedies provided by law or in equity.
13.2 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telegraph, telecopy
(confirmed by mail), cable, mail or other writing and telexed, 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 the Company, Administrative Agent given in accordance with this
Section 13.2. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly received when transmitted by
telex or telecopier during regular business hours, delivered to the telegraph or
cable office or personally delivered or, in the case of a mailed notice, three
(3) days after deposit in the United States mails, postage prepaid, certified
mail with return receipt requested (or upon actual receipt, if earlier), in each
case given or addressed as aforesaid.
13.3 Indemnification. The Company shall indemnify the Agents, the
Banks, and each Affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become subject
(REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE SIMPLE (BUT NOT GROSS)
NEGLIGENCE OF THE PERSON INDEMNIFIED), insofar as such losses, liabilities,
claims or damages arise out of or result from any (i) actual or proposed use by
the Company of the proceeds of any extension of credit (whether a Loan or a
Letter of Credit) by any Bank hereunder, (ii) breach by the Company of this
Agreement or any other Loan Document, (iii) violation by the Company or any of
its Subsidiaries of any Legal Requirement, including but not limited to those
relating to Hazardous Substances, (iv) Liens or security interests previously or
hereafter granted on any real or personal property, to the extent resulting from
any Hazardous Substance located in, on or under any such property, (v) ownership
by the Banks or the Agents of any real or personal property following
foreclosure, to the extent such losses, liabilities, claims or damages arise out
of or result from any Hazardous Substance located in, on or under such property,
including, without limitation, losses, liabilities, claims or damages which are
imposed upon Persons under laws relating to or regulating Hazardous Substances
solely by virtue of ownership, (vi) Bank's or Agent's being deemed an operator
of any such real or personal property by a court or other regulatory or
administrative agency or tribunal in circumstances in which neither any of the
Agents nor any of the Banks is generally operating or generally exercising
control over such property, to the extent such losses, liabilities, claims or
damages arise out of or result from any
Hazardous Substance located in, on or under such property, (vii) investigation,
litigation or other proceeding (including any threatened investigation or
proceeding) relating to any of the foregoing, and the Company shall reimburse
each Agent, each Bank, and each Affiliate thereof and their respective
directors, officers, employees and agents, upon demand, for any expenses
(including legal fees) incurred in connection with any such investigation or
proceeding or (viii) taxes (excluding income taxes and franchise taxes) payable
or ruled payable by any Governmental Authority in respect of any Loan Document,
together with interest and penalties, if any; provided, however, that the
Company shall not have any obligations pursuant to this Section 13.3 with
respect to any losses, liabilities, claims, damages or expenses (a) arising from
or relating solely to events, conditions or circumstances which, as to clauses
(iv), (v) or (vi) above, first came into existence or which first occurred after
the date on which the Company or any of its Subsidiaries conveyed to an
unrelated third party all of the Company's or the applicable Subsidiary's
rights, titles and interests to the applicable real or personal property
(whether by deed, deed-in-lieu, foreclosure or otherwise) other than a
conveyance made in violation of any Loan Document, (b) incurred by the Person
seeking indemnification by reason of the gross negligence or willful misconduct
of such Person, or (c) asserted by one or more indemnified parties or
stockholders thereof against one or more indemnified parties. If the Company
ever disputes a good faith claim for indemnification under this Section 13.3 on
the basis of the proviso set forth in the preceding sentence, the full amount of
indemnification provided for shall nonetheless be paid, subject to later
adjustment or reimbursement at such time (if any) as a court of competent
jurisdiction enters a final judgment as to the applicability of any such
exceptions or an agreement is reached with respect thereto.
13.4 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, nor any consent to any departure by the
Company therefrom, shall in any event be effective unless the same shall be
agreed or consented to by the Majority Banks and the Company, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, that no amendment, waiver or consent
shall, unless in writing and signed by each Bank affected thereby, do any of the
following: (a) increase the Commitment of such Bank (it being understood that
the waiver of any reduction in the Commitments or any mandatory repayment other
than (x) the repayment of all Loans at the end of the Revolving Credit
Availability Period and (y) the mandatory reductions of the Commitments provided
for in Section 2.3(a) and (z) the mandatory prepayments required by the terms of
Section 3.2(b), shall not be deemed to be an increase in any Commitment) or
subject the Banks to any additional obligation; (b) reduce the principal of, or
interest on, any Loan, Reimbursement Obligation or fee hereunder; (c) postpone
any scheduled date fixed for any payment or mandatory prepayment of principal
of, or interest on, any Loan, Reimbursement Obligation, fee or other sum to be
paid hereunder; (d) change the percentage of any of the Commitments or of the
aggregate unpaid principal amount of any of the Loans and Letter of Credit
Liabilities, or the number of Banks, which shall be required for the Banks or
any of them to take any action under this Agreement; (e) change any provision
contained in Sections 2.2(c), 9.7 or 13.3 hereof or this Section 13.4 or Section
6.7 hereof, or (f) release all or substantially all of any security for the
obligations of the Company under this Agreement or all or substantially all of
the personal liability of any obligor created under any of the Loan Documents.
Anything in this Section 13.4 to the contrary, no
amendment, waiver or consent shall be made with respect to Section 12 without the consent of Administrative Agent.
13.5 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of the Company, the Agents and the Banks and their respective successors and assigns. The Company may not assign or transfer any of its rights or obligations hereunder without the prior written consent of all of the Banks. Each Bank may sell participations to any Person in all or part of any Loan or Letter of Credit, or all or part of its Commitments, in which event, without limiting the foregoing, the provisions of Section 6 shall inure to the benefit of each purchaser of a participation and the pro rata treatment of payments, as described in Section 5.2, shall be determined as if such Bank had not sold such participation. In the event any Bank shall sell any participation, such Bank shall retain the sole right and responsibility to enforce the obligations of the Company relating to the Loans or Letters of Credit, including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement other than amendments, modifications or waivers with respect to (i) any fees payable hereunder to the Banks and (ii) the amount of principal or the rate of interest payable on, or the dates fixed for the scheduled repayment of principal of, the Loans.
(b) Each Bank may assign to one or more Banks or any other Person all or a portion of its interests, rights and obligations under this Agreement, provided, however, that (i) other than in the case of an assignment to another Bank that is, at the time of such assignment, a party hereto or an Affiliate of such Bank, the Company must give its prior written consent, which consent will not be unreasonably withheld, (ii) the aggregate amount of the Commitment and/or Loans or Letters of Credit of the assigning Bank subject to each such assignment (determined as of the date the Assignment and Acceptance (as defined below) with respect to such assignment is delivered to Administrative Agent) shall in no event be less than $10,000,000 (or $5,000,000 in the case of an assignment to an Affiliate of a Bank or between Banks) unless either (A) if Bank's Commitment is less than $10,000,000 or $5,000,000, as applicable, such amount is equal to all of such Bank's Commitment under this Agreement or (B) each of the Company and the Administrative Agent otherwise consent, (iii) notwithstanding any other term or provision of this Agreement, unless the Company shall have otherwise consented in writing (such consent not to be unreasonably withheld), each such assignment shall be pro rata with respect to the Loans, the Letters of Credit and the Commitment of the assignor, and (iv) the parties to each such assignment shall execute and deliver to Administrative Agent, for its acceptance and recording in the Register (as defined below), an Assignment and Acceptance in the form of Exhibit E hereto (each an "Assignment and Acceptance") with blanks appropriately completed, together with any note or notes subject to such assignment and a processing and recordation fee of $2,500 paid by the assignee (for which the Company shall have no liability). Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least five Business Days after the execution thereof, (A) the assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Bank hereunder and (B) the Bank thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement. Notwithstanding anything contained in this Agreement to the contrary, any Bank may at any time assign all or any portion of its rights under this Agreement and the notes issued to it as collateral to a Federal Reserve Bank; provided, that no such assignment shall release the assigning Bank from any of its obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance, the Bank assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than the representation and warranty that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim, such Bank assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any of the other Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any of the other Loan Documents or any other instrument or document furnished pursuant thereto; (ii) such Bank assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Company or the performance or observance by the Company of any of its obligations under this Agreement or any of the other Loan Documents or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 8.6 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon any Agent, such Bank assignor or any other Bank 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 Agreement and the other Loan Documents; (v) such assignee appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to such Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all obligations that by the terms of this Agreement and the other Loan Documents are required to be performed by it as a Bank.
(d) Administrative Agent shall maintain at its office a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Banks and the Commitments of, and principal amount of the Loans owing to, each Bank from time to time (the "Register"). The entries in the Register shall be conclusive, in the absence of manifest error, and the Company, the Agents and the Banks may treat each person the name of which is recorded in the Register as a Bank hereunder for all purposes of this Agreement and the other Loan Documents. The Register shall be available for inspection by the Company or any Bank at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an assigning Bank and the assignee thereunder together with any note or notes subject to such assignment, the written consent to such assignment executed by the Company and the fee payable in respect thereto,
Administrative Agent shall, if such Assignment and Acceptance has been completed
with blanks appropriately filled, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Company. If applicable, within five (5) Business
Days after receipt of notice, the Company, at its own expense, shall execute and
deliver to Administrative Agent in exchange for the surrendered notes new notes
to the order of such assignee in an amount equal to the Commitments and/or Loans
or Letters of Credit assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained Commitments and/or Loans hereunder, new
notes to the order of the assigning Bank in an amount equal to the Commitment
and/or Loans retained by it hereunder. Such new notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the respective note. Thereafter,
such surrendered notes, if any, shall be marked renewed and substituted and the
originals delivered to the Company (with copies, certified by the Company as
true, correct and complete, to be retained by Administrative Agent).
(f) Any Bank may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 13.5, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Company furnished to such Bank by or on behalf of the Company; provided, however, that, prior to any such disclosure, the Company shall have consented thereto, which consent shall not be unreasonably withheld, and each such assignee or participant, or proposed assignee or participant, shall execute an agreement whereby such assignee or participant shall agree to preserve the confidentiality of any Confidential Information (defined in Section 13.14) on terms substantially the same as those provided in Section 13.14.
(g) The Company will have the right to consent to any material intercreditor arrangements in connection with an assignment by any Bank of any interest, right or obligation under this Agreement which is not pro rata with respect to the Loans, the Letters of Credit and the Commitment of the assignor and the Company may deny its consent to any such arrangements which, in the reasonable judgement of the Company, would adversely affect the Company in a material respect.
(h) The provisions of this Section shall not apply to the assignment and pledge of a Bank's rights hereunder or under any note to any Federal Reserve Bank for collateral purposes pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank; provided that such assignment and pledge shall not relieve such Bank of any of its obligations hereunder.
13.6 Limitation of Interest. The Company, the Agents and the Banks intend to strictly comply with all applicable laws, including applicable usury laws. Accordingly, the provisions of this Section 13.6 shall govern and control over every other provision of this Agreement or any other Loan Document which conflicts or is inconsistent with this Section, even if such provision declares that it controls. As used in this Section, the term "interest" includes the aggregate of all charges,
fees, benefits or other compensation which constitute interest under applicable law, provided that, to the maximum extent permitted by applicable law, (a) any non-principal payment shall be characterized as an expense or as compensation for something other than the use, forbearance or detention of money and not as interest, and (b) all interest at any time contracted for, reserved, charged or received shall be amortized, prorated, allocated and spread, in equal parts during the full term of the Obligations. In no event shall the Company or any other Person be obligated to pay, or any Bank have any right or privilege to reserve, receive or retain, (a) any interest in excess of the maximum amount of nonusurious interest permitted under the laws of the State of Texas or the applicable laws (if any) of the United States or of any other applicable state, or (b) total interest in excess of the amount which such Bank could lawfully have contracted for, reserved, received, retained or charged had the interest been calculated for the full term of the Obligations at the Highest Lawful Rate. On each day, if any, that the interest rate (the "Stated Rate") called for under this Agreement or any other Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall automatically be fixed by operation of this sentence at the Highest Lawful Rate for that day, and shall remain fixed at the Highest Lawful Rate for each day thereafter until the total amount of interest accrued equals the total amount of interest which would have accrued if there were no such ceiling rate as is imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate unless and until the Stated Rate again exceeds the Highest Lawful Rate when the provisions of the immediately preceding sentence shall again automatically operate to limit the interest accrual rate. The daily interest rates to be used in calculating interest at the Highest Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate per annum by the number of days in the calendar year for which such calculation is being made. None of the terms and provisions contained in this Agreement or in any other Loan Document which directly or indirectly relate to interest shall ever be construed without reference to this Section 13.6, or be construed to create a contract to pay for the use, forbearance or detention of money at an interest rate in excess of the Highest Lawful Rate. If the term of any Obligation is shortened by reason of acceleration of maturity as a result of any Default or by any other cause, or by reason of any required or permitted prepayment, and if for that (or any other) reason any Bank at any time, including but not limited to, the stated maturity, is owed or receives (and/or has received) interest in excess of interest calculated at the Highest Lawful Rate, then and in any such event all of any such excess interest shall be canceled automatically as of the date of such acceleration, prepayment or other event which produces the excess, and, if such excess interest has been paid to such Bank, it shall be credited pro tanto against the then-outstanding principal balance of the Company's obligations to such Bank, effective as of the date or dates when the event occurs which causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of such excess shall be promptly refunded to its payor. Chapter 346 of the Texas Finance Code (which regulates certain revolving credit accounts (formerly Tex. Rev. Civ. Stat. Ann.
Art. 5069, Ch. 15)) shall not apply to this Agreement.
13.7 Survival. The obligations of the Company under Sections 2.2(c), 6, 9.7 and 13.3 hereof and the obligations of the Banks under Section 13.6 hereof shall survive the repayment of the Loans and Reimbursement Obligations and the termination of the Commitments and the Letters of Credit.
13.8 Captions. Captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.
13.9 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement and any of the parties hereto may execute this Agreement by signing any such counterpart.
13.10 GOVERNING LAW; FORUM SELECTION; CONSENT TO JURISDICTION. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED) THE OTHER LOAN DOCUMENTS ARE PERFORMABLE IN HARRIS COUNTY, TEXAS, WHICH SHALL BE A PROPER PLACE OF VENUE FOR SUIT ON OR IN RESPECT THEREOF. THE COMPANY IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING IN RESPECT OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE BROUGHT IN THE DISTRICT COURTS OF HARRIS COUNTY, TEXAS OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION (COLLECTIVELY, THE "SPECIFIED COURTS"). THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS. THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT BROUGHT IN ANY SPECIFIED COURT, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE COMPANY FURTHER (1) AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE CITY OF HOUSTON, TEXAS, IN CONNECTION WITH ANY SUCH SUIT, ACTION OR PROCEEDING AND TO DELIVER TO ADMINISTRATIVE AGENT EVIDENCE THEREOF AND (2) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS AS PROVIDED IN THIS AGREEMENT OR AS OTHERWISE PROVIDED BY TEXAS LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT OR ANY BANK TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW. THE COMPANY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED) THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS (OTHER THAN THE CONFLICT OF LAWS RULES) OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
13.11 WAIVER OF JURY TRIAL; PUNITIVE DAMAGES. THE COMPANY, EACH AGENT AND EACH BANK HEREBY (I) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (II) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (III) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (IV) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
13.12 Severability. Whenever possible, each provision of the Loan Documents shall be interpreted in such manner as to be effective and valid under applicable law. If any provision of any Loan Document shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions of such Loan Document shall not be affected or impaired thereby.
13.13 Chapter 15 Not Applicable. Chapter 15, Subtitle 3, Title 79, Revised Civil Statutes of Texas, 1925, as amended, shall not apply to this Agreement or to any Loan or Letter of Credit, nor shall this Agreement or any Loan or Letter of Credit be governed by or be subject to the provisions of such Chapter 15 in any manner whatsoever.
13.14 Confidential Information. Each Agent and each Bank separately agrees that:
(a) As used herein, the term "Confidential Information" means written information about the Company or the transactions contemplated herein furnished by the Company to the Agents and/or the Banks which is specifically designated as confidential by the Company; Confidential Information, however, shall not include information which (i) was publicly known or available, or otherwise available on a non-confidential basis to any Bank, at the time of disclosure from a source other than the Company, (ii) subsequently becomes publicly known through no act or omission by such Bank, (iii) otherwise becomes available on a non-confidential basis to any Bank other than
through disclosure by the Company or (iv) has been in the possession of any Bank for a period of more than two years from the date on which such information originally was furnished to such Bank by the Company, unless the Company shall have requested the Agents and the Banks in writing, at least 30 days prior to the end of such two-year period, to maintain the confidentiality of such information for another two (2) year period (or for successive two (2) year periods); provided that the Company shall not unreasonably withhold its consent to a request made after the initial two (2) year period to eliminate information from "Confidential Information".
(b) Each Agent and each Bank agrees that it will take normal and
reasonable precautions to maintain the confidentiality of any Confidential
Information furnished to such Person; provided, however, that such Person may
disclose Confidential Information (i) upon the Company's consent; (ii) to its
auditors; (iii) when required by any Legal Requirement; (iv) as may be required
or appropriate in any report, statement or testimony submitted to any
Governmental Authority having or claiming to have jurisdiction over it; (v) to
such Person's and its Subsidiaries' or Affiliates' officers, directors,
employees, agents, representatives and professional consultants in connection
with this Agreement or administration of the Loans and Letters of Credit; (vi)
as may be required or appropriate, should such Bank elect to assign or grant
participations in any of the Obligations in connection with (1) the enforcement
of the Obligations to any such Person under any of the Loan Documents or related
agreements, or (2) any potential transfer pursuant to this Agreement of any
Obligation owned by any Bank (provided any potential transferee has been
approved by the Company if required by this Agreement, which approval shall not
be unreasonably withheld, and has agreed in writing to be bound by substantially
the same provisions regarding Confidential Information contained in this
Section); (vii) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation or administrative proceeding;
(viii) to any other Bank; (ix) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under the other Loan Documents; or
(x) to correct any false or misleading information which may become public
concerning such Person's relationship to the Company.
13.15 Tax Forms. With respect to each Bank which is organized under the laws of a jurisdiction outside the United States, on the day of the initial borrowing hereunder and from time to time thereafter if requested by the Company or Administrative Agent, such Bank shall provide Administrative Agent and the Company with the forms prescribed by the Internal Revenue Service of the United States certifying as to such Bank's status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to such Bank hereunder or other documents satisfactory to the Company and Administrative Agent indicating that all payments to be made to such Bank hereunder are subject to such tax at a rate reduced by an applicable tax treaty. Unless the Company and Administrative Agent shall have received such forms or such documents indicating that payments hereunder are not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Company or Administrative Agent shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Bank organized under the laws of a jurisdiction outside the United States.
13.16 Entire Agreement. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.
OCEAN ENERGY, INC., a Texas corporation
By:
Name: Stephen A. Thorington
Title: Senior Vice President - Finance,
Treasury & Corporate Development
Address for Notices:
1001 Fannin, Suite 1700
Houston, Texas 77002
Attention: Stephen A. Thorington
Phone: (713) 951-1319
Fax: (713) 951-4846
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as a Bank and as Administrative Agent By: Name: Title: Address for Notices: 1 Chase Manhattan Plaza, 8th Floor New York, New York 10081 Attention: Ms. Debbie Rockower Phone: (212) 552-7446 Fax: (212) 552-5700 |
with a copy to:
Chase Bank of Texas, National Association
712 Main Street
Houston, Texas 77002
Attention: Manager, Energy Division
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE CHASE MANHATTAN BANK, as
Auction Administrative Agent
By:
Name:
Title:
Address for Notices:
1 Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Ms. Debbie Rockower
Phone: (212) 552-7446
Fax: (212) 552-5700
|
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
and as Syndication Agent
By:
Name:
Title:
Address for Notices:
Attention:
Phone:
Fax:
with further notice to:
Phone:
Fax:
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
BANK ONE, TEXAS, N.A., as a Bank and as
Documentation Agent By: Name: Christine M. Macan Title: Vice President Address for Notices: 910 Travis, TX2-4330 Houston, Texas 77002 Attention: Jo Linda Papadakis Phone: (713) 751-6235 Fax: (713) 751-7894 |
with further notice to:
910 Travis, TX2-4330 Houston, Texas 77002 Attention: Christine M. Macan Phone: (713) 751-3484 Fax: (713) 751-3544 |
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
SOCIETE GENERALE, SOUTHWEST
AGENCY, as a Bank and as a Managing Agent By: Name: Richard Erbert Title: Vice President |
Lending Office for all Loans:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Address for Notices:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Attention: Loan Administration
Phone: (214) 754-0171
Fax: (214) 979-2792
with further notice to:
Societe Generale 1111 Bagby, Suite 2020 Houston, Texas 77002 Attention: Richard Erbert Phone: (713) 650-0824 Fax: (713) 759-6318 |
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
BANK OF MONTREAL, as a Bank and as a
Managing Agent
By:
Name: Melissa Bauman
Title: Director
|
Address for Notices:
115 S. LaSalle, 11th Floor
Chicago, Illinois 60603
Attention: Craig Reynolds
Phone: (312) 750-6047
Fax: (312) 750-6061
with further notice to:
Melissa Bauman
700 Louisiana, Suite 4400
Houston, Texas 77002
Phone: (713) 546-9723
Fax: (713) 223-4007
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
BANKBOSTON, N.A., as a Bank and as Co-
Agent By: Name: Terrence Ronan Title: Director |
Address for Notices:
100 Federal Street
Boston, MA 02110
Attention: Terrence Ronan
Phone: (617) 434-5472
Fax: (617) 434-3652
with further notice to:
100 Federal Street
Boston, MA 02110
Attention: Fidel Vasquez
Loan Officer
Phone: (617) 434-1906
Fax: (617) 434-3652
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
ABN AMRO BANK N.A., HOUSTON
AGENCY, as a Bank and as Co-Agent
By:
Name:
Title:
By:
Name:
Title:
Address for Notices:
3 Riverway, Suite 1700
Houston, Texas 77056
Attention: Jamie A. Conn
Phone: (713) 964-3356
Fax: (713) 961-1699
|
with further notice to:
208 South LaSalle Street, Suite 1500 Chicago, IL 60604-1003 Attention: Karen MacAllister Phone: (312) 992-5123 Fax: (312) 992-5111
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
CREDIT SUISSE FIRST BOSTON, as a
Bank and as Co-Agent
By:
Name: Douglas E. Maher
Title: Vice President
Address for Notices:
11 Madison Avenue, 20th Floor
New York, New York 10010-3629
Attention: Douglas E. Maher
Phone: (212) 325-3641
Fax: (212) 325-8615
|
with further notice to:
600 Travis Street, 30th Floor
Houston, Texas 77002
Attention: R. Scott Brown
Phone: (713) 220-6774
Fax: (713) 237-0325
|
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
WELLS FARGO BANK (TEXAS),
NATIONAL ASSOCIATION, as a Bank
By:
Name: J. Alan Alexander
Title: Vice President
Address for Notices:
Wells Fargo Bank, N.A.
201 Third Street, 8th Floor
San Francisco, CA 94103
Attention: Oscar Enriquez
Phone: (415) 477-5425
Fax: (415) 979-0675
|
with further notice to:
Wells Fargo Bank (Texas), N.A.
Energy Dept.
1000 Louisiana, 3rd Floor
Houston, Texas 77002
Attention: J. Alan Alexander
Phone: (713) 319-1368
Fax: (713) 739-1087
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
CREDIT LYONNAIS, NEW YORK
BRANCH, as a Bank
By:
Name: Phillipe Soustra
Title: Senior Vice President
Address for Notices:
Credit Lyonnais
1000 Louisiana, Suite 5360
Houston, Texas 77002
Attention: Jeff Baker
Phone: (713) 753-8711
Fax: (713) 751-0307
|
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE BANK OF NOVA SCOTIA, as a Bank
and as Co-Agent
By:
Name:
Title:
Address for Notices:
600 Peachtree Street N.E., Suite 2700
Atlanta, GA 30308
Attention: Phyllis Walker
Phone: (404) 877-1552
Fax: (404) 888-8998
with further notice to:
1100 Louisiana, Suite 3000 Houston, Texas 77002 Attention: Mark Ammerman Phone: (713) 759-3442 Fax: (713) 759-2425 |
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
SOUTHWEST BANK OF TEXAS, N.A., as
a Bank By: Name: A. Stephen Kennedy Title: Vice President/Manager Energy Lending Address for Notices: 4400 Post Oak Parkway Houston, Texas 77027 Attention: Ann Greer Phone: (713) 235-8881 ext 1792 Fax: (713) 439-5954 |
with further notice to:
4400 Post Oak Parkway Houston, Texas 77027 Attention: A. Stephen Kennedy Phone: (713) 235-8881 ext 1707 Fax: (713) 439-5925
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE BANK OF TOKYO-MITSUBISHI,
LTD., as a Bank
By:
Name:
Title:
Address for Notices:
1100 Louisiana Street, Suite 2800
Houston, Texas 77002-5216
Attention: J. M. McIntyre
Phone: (713) 655-3845
Fax: (713) 655-3855
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE BANK OF NEW YORK, as a Bank and
as Co-Agent
By:
Name: John N. Watt
Title: Vice President
|
Address for Notices:
One Wall Street, 19th Floor
New York, New York 10286
Attention: Terry Foran
Phone: (212) 635-7921
Fax: (212) 635-7923
with further notice to:
One Wall Street, 19th Floor
New York, New York 10286
Attention: Peter Keller
Phone: (212) 635-7861
Fax: (212) 635-7923
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as a Bank and
as Co-Agent
By:
Name: Kevin McCann
Title: Vice President
Address for Notices:
60 Wall Street, 5th Floor
New York, New York 10260
Attention: John Kowalczuk
Phone: (212) 648-0381
Fax: (212) 648-5416
|
with further notice to:
60 Wall Street, 5th Floor
New York, New York 10260
Attention: Philip McNeal
Phone: (212) 648-0309
Fax: (212) 648-5416
|
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE FUJI BANK LIMITED, NEW YORK
BRANCH, as a Bank
By:
Name:
Title:
Address for Notices:
2 World Trade Center, 79th Floor
New York, New York 10048
Attention: Ricky Simmons
Phone: (212) 898-2066
Fax: (212) 321-9407
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE SANWA BANK, LIMITED, as a Bank
By:
Name:
Title:
Address for Notices:
1200 Smith Street, Suite 2670
Houston, Texas 77002
Attention: Clyde Redford
Phone: (713) 652-3190
Fax: (713) 654-1462
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
GUARANTY AGREEMENT
(Revolving Credit Agreement)
THIS GUARANTY AGREEMENT dated as of March 30, 1999 is by OCEAN ENERGY, INC., a corporation duly organized and validly existing under the laws of the state of Louisiana (the "Guarantor"), in favor of each of the financial institutions that is now or hereafter a party to the Credit Agreement (as defined below) as a "Bank" (individually, a "Bank" and, collectively, the "Banks"); CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as administrative agent for the Banks (in such capacity, the "Administrative Agent"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as syndication agent for the Banks (in such capacity, the "Syndication Agent"), BANK ONE, TEXAS, N.A., as documentation agent for the Banks (in such capacity, the "Documentation Agent"), SOCIETE GENERALE, SOUTHWEST AGENCY and BANK OF MONTREAL, as managing agents for the Banks (in such capacity, the "Managing Agents"), and THE CHASE MANHATTAN BANK, as auction administrative agent for the Banks (in such capacity, the "Auction Administrative Agent").
Recitals
A. Ocean Energy, Inc., a Texas corporation (the "Company"), the Administrative Agent, the Syndication Agent, the Documentation Agent, the Managing Agents and the Auction Administrative Agent (collectively the "Agents") and the Banks have executed that certain Revolving 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, the issuance of Letters of Credit and extensions of credit described in the Credit Agreement is the execution and delivery to the Agents and the Banks of this Guaranty Agreement.
D. NOW, THEREFORE, (i) in order to comply with the terms and conditions of the Credit Agreement, (ii) to induce the Banks 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 1.1 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 1.2 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 4.1.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the same may from time to time be amended, amended and restated, supplemented or otherwise modified.
"Loan Document" shall mean "Loan Document" as defined in the Credit Agreement.
"Material Adverse Effect" shall mean a material adverse effect on the business, condition (financial or otherwise), operations or properties (including proven oil and gas reserves) of the Guarantor and its Subsidiaries, taken as a whole, or on the ability of the Guarantor to perform its material obligations under the Loan Documents to which it is a party taken as a whole.
"Obligations" shall mean (a) the payment and performance of all present and future "Obligations" (as defined in the Credit Agreement) and any other obligations and liabilities of the Company to the Agents and the Banks under the Credit Agreement, including but not limited to, (i) the full and punctual payment of the Loans and any and all promissory notes given in connection with the Credit Agreement, or in modification, renewal, extension or rearrangement thereof in whole or in part, and (ii) the full and punctual payment of all Letter of Credit Liabilities; (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 Banks in connection with the execution, administration or enforcement of any of their rights and remedies hereunder or any other Loan Document.
Section 1.3 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
Guaranty
Section 2.1 Obligations Guaranteed. The Guarantor hereby irrevocably and unconditionally guarantees the prompt payment at maturity of the Obligations.
Section 2.2 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 Commitments are terminated, notwithstanding that from time to time prior thereto no Obligations may be outstanding. The Company, the Agents and the Banks may modify, alter, rearrange, extend for any period and/or renew from time to time, the Obligations and the Agents and the Banks 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 Banks 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 Banks being conclusively presumed by their request for this Guaranty Agreement and delivery of the same to the Administrative Agent.
Section 2.3 Banks' Rights. Subject to the terms of the Credit Agreement, the Guarantor authorizes the Banks (or the Administrative Agent on behalf of the Banks), 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 Banks 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 2.4 Guarantor's Waivers. The Guarantor waives any right to require the Agents and the Banks 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 Agents nor the Banks 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 2.5 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 Banks 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 2.6 Banks' 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 Banks 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 Banks.
Section 2.7 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 2.8 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, 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 Commitments as in effect on the date hereof, 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 Banks, 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 Banks 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 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 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 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 Banks 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 Bank 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 Bank is held to constitute a preference under the bankruptcy laws, or for any reason an Agent or Bank 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 2.9 Limitations on Obligation of the Guarantor Hereunder. The parties hereto (i) intend that the obligation of the Guarantor hereunder be limited to the maximum amount that would not result in the obligation created hereby being avoidable under Section 548 of the Federal Bankruptcy Code (11 U.S.C. Section 548; hereinafter "Section 548") or other applicable state fraudulent conveyance or transfer law and (ii) agree that this Guaranty Agreement shall be so construed. Accordingly, the obligation of the Guarantor hereunder is limited to an amount that is the greater of (x) the "reasonably equivalent value" or "fair consideration" received by the Guarantor in exchange for the obligation incurred hereunder, within the meaning of Section 548, as amended, or any applicable state fraudulent conveyance or transfer law, as amended; or (y) the lesser of (1) the maximum amount that will not render the Guarantor insolvent or (2) the maximum amount that will not leave the Guarantor with any Property deemed an unreasonably small capital. Clauses (1) and (2) are and shall be determined pursuant to Section 548, as amended, or other applicable state fraudulent conveyance or transfer law, as amended.
Section 2.10 Subrogation. The Guarantor shall not exercise any rights which it may acquire by way of subrogation, reimbursement, exoneration, indemnification or participation, by any payment made under this Guaranty Agreement, under any other Loan Document or otherwise until the Obligations have been paid in full and the Commitments are terminated. Except as described in this Section, the Guarantor further waives any benefit of any right to participate in any security now or hereafter held by the Agents and/or the Banks.
Article III
Representations, Warranties and Covenants
Section 3.1 Representations and Warranties. In order to induce the Agents and the Banks to accept this Guaranty Agreement, the Guarantor represents and warrants to the Agents and Banks (which representations and warranties will survive the creation of the Obligations and any extension of credit thereunder) that:
(a) Benefit to the Guarantor. The Guarantor is a wholly-owned Subsidiary of the Company and the Guarantor's guaranty pursuant to this Guaranty Agreement reasonably may be expected to benefit, directly or indirectly, the Guarantor; and the Guarantor has determined that this Guaranty Agreement is necessary and convenient to the conduct, promotion and attainment of the business of the Guarantor and the Company.
(b) Corporate Existence. The Guarantor: (i) is duly organized and validly existing under the laws of the jurisdiction of its formation; (ii) has all requisite power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being conducted; and (iii) is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify would have a Material Adverse Effect.
(c) No Breach. The execution and delivery by the Guarantor of this Guaranty Agreement and the other Loan Documents to which it is a party, the consummation of the transactions herein
or therein contemplated, and the compliance with the terms and provisions hereof will not (i) conflict with or result in a breach of, or require any consent under (A) the charter or by-laws of the Guarantor, or (B) any applicable law or regulation, or any order, writ, injunction or decree of any court or other Governmental Authority, or any material agreement or instrument to which the Guarantor is a party or by which it is bound or to which it is subject in each case in such manner as could reasonably be expected to have a Material Adverse Effect; or (ii) constitute a default under any such agreement or instrument, or result in the creation or imposition of any Lien upon any of the revenues or property of the Guarantor in each case in such manner as could reasonably be expected to have a Material Adverse Effect.
(d) Corporate Action. The Guarantor has all necessary corporate power and authority to execute, deliver and perform its obligations under this Guaranty Agreement and the Loan Documents to which it is a party; and the execution, delivery and performance by the Guarantor of this Guaranty Agreement and the other Loan Documents to which such Person is a party have been duly authorized by all necessary corporate action on its part. This Guaranty Agreement and the Loan Documents to which the Guarantor is a party constitute the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with their terms, except as may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights and general principals of equity.
(e) Approvals. Other than consents heretofore obtained or described in the Credit Agreement, no authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority are necessary for the execution, delivery or performance by the Guarantor of this Guaranty Agreement or the Loan Documents to which it is a party or for the validity or enforceability thereof. It is understood that continued performance by the Guarantor of this Guaranty Agreement and the other Loan Documents to which it is a party will require various filings, such as filings related to environmental matters, ERISA matters, Taxes and intellectual property, filings required to maintain corporate and similar standing and existence, filings pursuant to the Uniform Commercial Code and other security filings and recordings and filings required by the SEC, routine filings in the ordinary course of business, and filings required in connection with the exercise by the Banks and the Agents of remedies in connection with the Loan Documents.
(f) Solvency. The Guarantor (i) is not insolvent and will not be rendered insolvent as a result of this Guaranty Agreement, (ii) is not engaged in a business or a transaction, or about to engage in a business or a transaction, for which any property or assets remaining with the Guarantor are unreasonably small capital, and (iii) does not intend to incur, or believe it will incur, debts that will be beyond its ability to pay as such debts mature.
(g) No Representation by Agents or Banks. Neither any Agent, any Bank nor any other Person has made any representation, warranty or statement to the Guarantor in order to induce the Guarantor to execute this Guaranty Agreement.
Section 3.2 Covenants. The Guarantor acknowledges that it is has read the Credit Agreement and hereby covenants and agrees to comply with covenants and agreements set forth
therein which restrict Restricted Subsidiaries of the Company in so far as such covenants and agreements apply to it.
Article IV
Subordination of Indebtedness
Section 4.1 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 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 4.2 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 Banks 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 Banks. Should any Agent or Bank 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 and the termination of the Commitments, the Guarantor shall become subrogated to the rights of the Agents and the Banks to the extent that such payments to the Agents and the Banks 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 Banks had not received dividends or payments upon the Guarantor Claims.
Section 4.3 Payments Held in Trust. In the event that notwithstanding Sections 4.1 and 4.2, 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 Banks 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 Banks; and the Guarantor covenants promptly to pay the same to the Administrative Agent.
Section 4.4 Liens Subordinate. The Guarantor agrees that, until the Obligations are paid in full and the 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 Bank 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 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 4.5 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 5.1 Successors and Assigns. This Guaranty Agreement is and shall be in every particular available to the successors and assigns of the Agents and the Banks 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 5.2 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 provided for in Section 13.2 of the Credit Agreement and to the address of the Guarantor set forth on the signature page to this Guaranty Agreement.
Section 5.3 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 Banks, 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 Banks 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 5.4 CONSTRUCTION.
(a) THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY AGREEMENT OR THE OTHER LOAN DOCUMENTS TO WHICH THE GUARANTOR IS A PARTY MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY AGREEMENT, THE GUARANTOR HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE THE ADMINISTRATIVE AGENT OR ANY BANK FROM OBTAINING JURISDICTION OVER THE GUARANTOR IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) THE GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT, AS THE CASE MAY BE, AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT OR ANY BANK OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY OTHER JURISDICTION.
(e) THE GUARANTOR AND, BY ITS ACCEPTANCE HEREOF, EACH AGENT AND EACH BANK HEREBY (I) IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AGREEMENT OR ANY LOAN DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 5.4.
Section 5.5 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 Banks' 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 Banks to effect such reinstatement.
Section 5.6 Status as Specified or Designated Senior Indebtedness. The Guarantor hereby acknowledges and confirms that:
(a) this Guaranty Agreement and the obligations of the Guarantor hereunder are "Guarantor Senior Indebtedness" and "Specified Guarantor Senior Indebtedness" under and for purposes of the 95 Indenture; and
(b) this Guaranty Agreement and the obligations of the Guarantor hereunder are "Guarantor Senior Indebtedness" and "Designated Guarantor Senior Indebtedness" under and for purposes of the 96 Indenture, the 97 Indenture and the 98 Senior Subordinated Indenture;
and that as such, the Agents and the Banks are entitled to the rights and privileges afforded holders of Guarantor Senior Indebtedness, Specified Guarantor Senior Indebtedness or Designated Guarantor Senior Indebtedness, as applicable, under each of such Indentures.
Section 5.7 Interest. It is in the interest of the Guarantor and the Agents and the Banks to conform strictly to all applicable usury laws. Accordingly, reference is made to Section 13.6 of the Credit Agreement which is incorporated herein by reference for all purposes.
WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
OCEAN ENERGY, INC., a Louisiana corporation
By:
Name: James C. Flores,
Title: President
Address: c/o Ocean Energy, Inc.
1001 Fannin, Suite 1700
Houston, Texas 77002
Contact: Stephen A. Thorington
Telephone: (713) 951-1319
Telecopy: (713) 951-4846
|
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as a Bank and as Administrative Agent By: Name: Title: Address for Notices: 1 Chase Manhattan Plaza, 8th Floor New York, New York 10081 Attention: Ms. Debbie Rockower Phone: (212) 552-7446 Fax: (212) 552-5700 |
with a copy to:
Chase Bank of Texas, National Association
712 Main Street
Houston, Texas 77002
Attention: Manager, Energy Division
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE CHASE MANHATTAN BANK, as
Auction Administrative Agent
By:
Name:
Title:
Address for Notices:
1 Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Ms. Debbie Rockower
Phone: (212) 552-7446
Fax: (212) 552-5700
|
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
and as Syndication Agent
By:
Name:
Title:
Address for Notices:
Attention:
Phone:
Fax:
with further notice to:
Phone:
Fax:
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
BANK ONE, TEXAS, N.A., as a Bank and as
Documentation Agent By: Name: Christine M. Macan Title: Vice President Address for Notices: 910 Travis, TX2-4330 Houston, Texas 77002 Attention: Jo Linda Papadakis Phone: (713) 751-6235 Fax: (713) 751-7894 |
with further notice to:
910 Travis, TX2-4330 Houston, Texas 77002 Attention: Christine M. Macan Phone: (713) 751-3484 Fax: (713) 751-3544 |
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
SOCIETE GENERALE, SOUTHWEST
AGENCY, as a Bank and as a Managing Agent By: Name: Richard Erbert Title: Vice President |
Lending Office for all Loans:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Address for Notices:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Attention: Loan Administration
Phone: (214) 754-0171
Fax: (214) 979-2792
with further notice to:
Societe Generale 1111 Bagby, Suite 2020 Houston, Texas 77002 Attention: Richard Erbert Phone: (713) 650-0824 Fax: (713) 759-6318 |
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
BANK OF MONTREAL, as a Bank and as a
Managing Agent
By:
Name: Melissa Bauman
Title: Director
|
Address for Notices:
115 S. LaSalle, 11th Floor
Chicago, Illinois 60603
Attention: Craig Reynolds
Phone: (312) 750-6047
Fax: (312) 750-6061
with further notice to:
Melissa Bauman
700 Louisiana, Suite 4400
Houston, Texas 77002
Phone: (713) 546-9723
Fax: (713) 223-4007
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
BANKBOSTON, N.A., as a Bank and as Co-
Agent By: Name: Terrence Ronan Title: Director |
Address for Notices:
100 Federal Street
Boston, MA 02110
Attention: Terrence Ronan
Phone: (617) 434-5472
Fax: (617) 434-3652
with further notice to:
100 Federal Street
Boston, MA 02110
Attention: Fidel Vasquez
Loan Officer
Phone: (617) 434-1906
Fax: (617) 434-3652
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
ABN AMRO BANK N.A., HOUSTON
AGENCY, as a Bank and as Co-Agent
By:
Name:
Title:
By:
Name:
Title:
Address for Notices:
3 Riverway, Suite 1700
Houston, Texas 77056
Attention: Jamie A. Conn
Phone: (713) 964-3356
Fax: (713) 961-1699
|
with further notice to:
208 South LaSalle Street, Suite 1500 Chicago, IL 60604-1003 Attention: Karen MacAllister Phone: (312) 992-5123 Fax: (312) 992-5111
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
CREDIT SUISSE FIRST BOSTON, as a
Bank and as Co-Agent
By:
Name: Douglas E. Maher
Title: Vice President
Address for Notices:
11 Madison Avenue, 20th Floor
New York, New York 10010-3629
Attention: Douglas E. Maher
Phone: (212) 325-3641
Fax: (212) 325-8615
|
with further notice to:
600 Travis Street, 30th Floor
Houston, Texas 77002
Attention: R. Scott Brown
Phone: (713) 220-6774
Fax: (713) 237-0325
|
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
WELLS FARGO BANK (TEXAS),
NATIONAL ASSOCIATION, as a Bank
By:
Name: J. Alan Alexander
Title: Vice President
Address for Notices:
Wells Fargo Bank, N.A.
201 Third Street, 8th Floor
San Francisco, CA 94103
Attention: Oscar Enriquez
Phone: (415) 477-5425
Fax: (415) 979-0675
|
with further notice to:
Wells Fargo Bank (Texas), N.A.
Energy Dept.
1000 Louisiana, 3rd Floor
Houston, Texas 77002
Attention: J. Alan Alexander
Phone: (713) 319-1368
Fax: (713) 739-1087
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
CREDIT LYONNAIS, NEW YORK
BRANCH, as a Bank
By:
Name: Phillipe Soustra
Title: Senior Vice President
Address for Notices:
Credit Lyonnais
1000 Louisiana, Suite 5360
Houston, Texas 77002
Attention: Jeff Baker
Phone: (713) 753-8711
Fax: (713) 751-0307
|
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE BANK OF NOVA SCOTIA, as a Bank
and as Co-Agent
By:
Name:
Title:
Address for Notices:
600 Peachtree Street N.E., Suite 2700
Atlanta, GA 30308
Attention: Phyllis Walker
Phone: (404) 877-1552
Fax: (404) 888-8998
with further notice to:
1100 Louisiana, Suite 3000 Houston, Texas 77002 Attention: Mark Ammerman Phone: (713) 759-3442 Fax: (713) 759-2425 |
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
SOUTHWEST BANK OF TEXAS, N.A., as
a Bank By: Name: A. Stephen Kennedy Title: Vice President/Manager Energy Lending Address for Notices: 4400 Post Oak Parkway Houston, Texas 77027 Attention: Ann Greer Phone: (713) 235-8881 ext 1792 Fax: (713) 439-5954 |
with further notice to:
4400 Post Oak Parkway Houston, Texas 77027 Attention: A. Stephen Kennedy Phone: (713) 235-8881 ext 1707 Fax: (713) 439-5925
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE BANK OF TOKYO-MITSUBISHI,
LTD., as a Bank
By:
Name:
Title:
Address for Notices:
1100 Louisiana Street, Suite 2800
Houston, Texas 77002-5216
Attention: J. M. McIntyre
Phone: (713) 655-3845
Fax: (713) 655-3855
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE BANK OF NEW YORK, as a Bank and
as Co-Agent
By:
Name: John N. Watt
Title: Vice President
|
Address for Notices:
One Wall Street, 19th Floor
New York, New York 10286
Attention: Terry Foran
Phone: (212) 635-7921
Fax: (212) 635-7923
with further notice to:
One Wall Street, 19th Floor
New York, New York 10286
Attention: Peter Keller
Phone: (212) 635-7861
Fax: (212) 635-7923
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as a Bank and
as Co-Agent
By:
Name: Kevin McCann
Title: Vice President
Address for Notices:
60 Wall Street, 5th Floor
New York, New York 10260
Attention: John Kowalczuk
Phone: (212) 648-0381
Fax: (212) 648-5416
|
with further notice to:
60 Wall Street, 5th Floor
New York, New York 10260
Attention: Philip McNeal
Phone: (212) 648-0309
Fax: (212) 648-5416
|
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE FUJI BANK LIMITED, NEW YORK
BRANCH, as a Bank
By:
Name:
Title:
Address for Notices:
2 World Trade Center, 79th Floor
New York, New York 10048
Attention: Ricky Simmons
Phone: (212) 898-2066
Fax: (212) 321-9407
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
THE SANWA BANK, LIMITED, as a Bank
By:
Name:
Title:
Address for Notices:
1200 Smith Street, Suite 2670
Houston, Texas 77002
Attention: Clyde Redford
Phone: (713) 652-3190
Fax: (713) 654-1462
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
364-DAY CREDIT AGREEMENT
$300,000,000 CREDIT
AND COMPETITIVE BID FACILITY
AMONG
OCEAN ENERGY, INC.,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
Individually and as Administrative Agent,
THE CHASE MANHATTAN BANK,
as Auction Administrative Agent,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
Individually, and as Syndication Agent,
BANK ONE, TEXAS, N.A.,
Individually, and as Documentation Agent,
SOCIETE GENERALE, SOUTHWEST AGENCY,
Individually, and as Managing Agent,
BANK OF MONTREAL,
Individually, and as Managing Agent,
AND
THE OTHER BANKS SIGNATORY HERETO
March 30, 1999
CHASE SECURITIES INC.,
as Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
Section 1. Definitions and Accounting Matters......................................................... 1
1.1 Certain Defined Terms...................................................................... 1
1.2 Accounting Terms and Determinations........................................................ 19
1.3 Types of Loans............................................................................. 19
1.4 Miscellaneous.............................................................................. 19
Section 2. Commitments; Competitive Bid Facility...................................................... 19
2.1 Committed Loans............................................................................ 19
(a) Revolving Loans..................................................................... 19
(b) Term Loans.......................................................................... 19
2.2 Extension of Revolving Commitment Termination Date
and Revolving Commitments.................................................................. 20
2.3 Reductions and Changes of Commitments...................................................... 22
2.4 Fees....................................................................................... 23
2.5 Affiliates; Lending Offices................................................................ 23
2.6 Several Obligations........................................................................ 23
2.7 Repayment of Loans; Evidence of Debt....................................................... 24
2.8 Use of Proceeds............................................................................ 24
2.9 Competitive Bid Procedure.................................................................. 24
Section 3. Borrowings, Prepayments and Selection of Interest Rates.................................... 26
3.1 Borrowings................................................................................. 26
3.2 Prepayments................................................................................ 27
3.3 Selection of Interest Rates................................................................ 27
Section 4. Payments of Principal and Interest......................................................... 27
4.1 Repayment of Loans......................................................................... 27
4.2 Interest................................................................................... 28
Section 5. Payments; Pro Rata Treatment; Computations, Etc............................................ 28
5.1 Payments................................................................................... 28
5.2 Pro Rata Treatment......................................................................... 29
5.3 Computations............................................................................... 29
5.4 Minimum and Maximum Amounts................................................................ 29
5.5 Certain Actions, Notices, Etc.............................................................. 30
5.6 Non-Receipt of Funds by Administrative Agent............................................... 31
5.7 Sharing of Payments, Etc................................................................... 31
Section 6. Yield Protection and Illegality............................................................ 32
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6.1 Additional Costs.............................................................................32
6.2 Limitation on Types of Loans.................................................................33
6.3 Illegality...................................................................................34
6.4 Substitute Alternate Base Rate Loans.........................................................34
6.5 Compensation.................................................................................35
6.6 [Intentionally omitted]......................................................................35
6.7 Capital Adequacy.............................................................................35
6.8 Limitation on Additional Charges; Substitute Banks; Non-Discrimination.......................36
Section 7. Conditions Precedent.........................................................................36
7.1 Initial Loans................................................................................36
7.2 Initial and Subsequent Loans.................................................................39
Section 8. Representations and Warranties...............................................................40
8.1 Corporate Existence..........................................................................40
8.2 Corporate Power and Authorization............................................................40
8.3 Binding Obligations..........................................................................40
8.4 No Legal Bar or Resultant Lien...............................................................40
8.5 No Consent...................................................................................40
8.6 Financial Condition..........................................................................41
8.7 Investments and Guaranties...................................................................41
8.8 Liabilities and Litigation...................................................................41
8.9 Taxes and Governmental Charges...............................................................42
8.10 Title to Properties..........................................................................42
8.11 Defaults.....................................................................................42
8.12 Location of Businesses and Offices...........................................................42
8.13 Compliance with Law..........................................................................42
8.14 Margin Stock.................................................................................43
8.15 Subsidiaries.................................................................................43
8.16 ERISA........................................................................................43
8.17 Investment Company Act.......................................................................43
8.18 Public Utility Holding Company Act...........................................................44
8.19 Environmental Matters........................................................................44
8.20 Claims and Liabilities.......................................................................45
8.21 Solvency.....................................................................................45
8.22 Year 2000....................................................................................45
Section 9. Affirmative Covenants........................................................................46
9.1 Financial Statements and Reports.............................................................46
9.2 Officers' Certificates.......................................................................47
9.3 Taxes and Other Liens........................................................................48
9.4 Maintenance..................................................................................48
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9.5 Further Assurances...........................................................................48
9.6 Performance of Obligations...................................................................48
9.7 Reimbursement of Expenses....................................................................48
9.8 Insurance....................................................................................49
9.9 Accounts and Records.........................................................................50
9.10 Notice of Certain Events.....................................................................50
9.11 ERISA Information and Compliance.............................................................51
Section 10. Negative Covenants...........................................................................52
10.1 Debts, Guaranties and Other Obligations......................................................52
10.2 Liens........................................................................................55
10.3 Dividend Payment Restrictions................................................................58
10.4 Mergers and Sales of Assets..................................................................58
10.5 Proceeds of Loans............................................................................59
10.6 ERISA Compliance.............................................................................59
10.7 Total Leverage Ratio.........................................................................59
10.8 Senior Leverage Ratio........................................................................59
10.9 Minimum Net Worth............................................................................59
10.10 Nature of Business...........................................................................60
10.11 Covenants in Other Agreements................................................................60
Section 11. Defaults.....................................................................................60
11.1 Events of Default............................................................................60
11.2 [Intentionally omitted]......................................................................63
11.3 [Intentionally omitted]......................................................................63
11.4 Right of Setoff..............................................................................63
Section 12. Agents.......................................................................................63
12.1 Appointment, Powers and Immunities...........................................................63
12.2 Reliance by Agents...........................................................................64
12.3 Defaults.....................................................................................64
12.4 Rights as a Bank.............................................................................65
12.5 Indemnification..............................................................................65
12.6 Non-Reliance on Agents and Other Banks.......................................................65
12.7 Failure to Act...............................................................................66
12.8 Resignation or Removal of Administrative Agent...............................................66
Section 13. Miscellaneous................................................................................67
13.1 Waiver.......................................................................................67
13.2 Notices......................................................................................67
13.3 Indemnification..............................................................................67
13.4 Amendments, Etc..............................................................................68
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13.5 Successors and Assigns.......................................................................69
13.6 Limitation of Interest.......................................................................71
13.7 Survival.....................................................................................72
13.8 Captions.....................................................................................72
13.9 Counterparts.................................................................................73
13.10 GOVERNING LAW; FORUM SELECTION;
CONSENT TO JURISDICTION......................................................................73
13.11 WAIVER OF JURY TRIAL; PUNITIVE DAMAGES.......................................................74
13.12 Severability.................................................................................74
13.13 Chapter 15 Not Applicable....................................................................74
13.14 Confidential Information.....................................................................74
13.15 Tax Forms....................................................................................75
13.16 Entire Agreement.............................................................................75
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EXHIBITS:
Exhibit A Unrestricted Subsidiaries Exhibit B Form of Request for Extension of Credit Exhibit C Subsidiaries (with Addresses) Exhibit D Form of Compliance Certificate Exhibit E Assignment and Acceptance Exhibit F Form of Competitive Bid Request Exhibit G Form of Notice to Banks of Competitive Bid Request Exhibit H Form of Competitive Bid Exhibit I Form of Competitive Bid Administrative Questionnaire Exhibit J Form of Certificate of Extension Exhibit K Form of Guaranty Agreement Exhibit L Disclosure Statement Exhibit M Commitments |
364-DAY CREDIT AGREEMENT
This 364-DAY CREDIT AGREEMENT, dated as of March 30, 1999 (the
"Effective Date"), is by and among OCEAN ENERGY, INC. (the "Company"), a
corporation duly organized and validly existing under the laws of the State of
Texas, each of the banks which is or which may from time to time become a
signatory hereto (individually, a "Bank" and, collectively, the "Banks"), BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("Bank of America"), as
Syndication Agent for the Banks (in such capacity, the "Syndication Agent"),
BANK ONE, TEXAS, N.A. ("Bank One"), as Documentation Agent for the Banks (in
such capacity, the "Documentation Agent"), SOCIETE GENERALE, SOUTHWEST AGENCY
("Societe Generale") and BANK OF MONTREAL ("Bank of Montreal"), as Managing
Agents for the Banks (in such capacity, the "Managing Agents"), THE CHASE
MANHATTAN BANK, as Auction Administrative Agent for the Banks (in such capacity,
the "Auction Administrative Agent"), and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION ("Chase"), as Administrative Agent for the Banks (in such capacity,
together with its successors in such capacity, "Administrative Agent").
The parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.1 Certain Defined Terms. As used herein, the following terms shall have the following meanings (all terms defined in this Section 1.1 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa):
"Accepting Banks" shall have the meaning set forth in Section 2.2(c).
"Additional Costs" shall have the meaning ascribed to such term in
Section 6.1 hereof.
"Affiliate" shall mean, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person and, if such Person is an individual, any member of the immediate family (including parents, siblings, spouse, children, stepchildren, grandchildren, nephews and nieces) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As used in this definition, "control" (including, with correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).
"Agents" shall mean the Administrative Agent, the Auction Administrative Agent, the Documentation Agent, the Syndication Agent and the Managing Agents, together with any successors in any such capacities.
"Agreement" shall mean this 364-Day Credit Agreement, as such agreement from time to time may be amended, amended and restated, supplemented or otherwise modified.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to the higher of (a)the Prime Rate in effect on such day or (b) 1/2 of 1% plus the Federal Funds Rate in effect for such day (rounded upwards, if necessary, to the nearest 1/16th of 1%). For purposes hereof, "Federal Funds Rate" shall mean, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Administrative Agent from three Federal funds brokers of recognized standing selected by it. For purposes of this Agreement, any change in the Alternate Base Rate due to a change in the Federal Funds Rate shall be effective on the effective date of such change in the Federal Funds Rate. If for any reason Administrative Agent shall have determined (which determination shall be conclusive and binding, absent manifest error) that it is unable to ascertain the Federal Funds Rate for any reason, including, without limitation, the inability or failure of Administrative Agent to obtain sufficient bids or publications in accordance with the terms hereof, the Alternate Base Rate shall be the Prime Rate until the circumstances giving rise to such inability no longer exist. For the purposes hereof, "Prime Rate" shall mean the prime rate as announced from time to time by Administrative Agent, and thereafter entered in the minutes of Administrative Agent's Loan and Discount Committee. Without notice to the Company or any other Person, the Prime Rate shall change automatically from time to time as and in the amount by which said prime rate shall fluctuate. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. Administrative Agent may make commercial loans or other loans at rates of interest at, above or below the Prime Rate. For purposes of this Agreement any change in the Alternate Base Rate due to a change in the Prime Rate shall be effective on the date such change in the Prime Rate is announced.
"Alternate Base Rate Loans" shall mean Loans which bear interest at a rate based upon the Alternate Base Rate.
"APC" shall mean Alaska Pipeline Company, an Alaska corporation, a Subsidiary of the Company.
"Applicable Lending Office" shall mean, for each Bank and for each Type of Loan, such office of such Bank (or of an affiliate of such Bank) as such Bank may from time to time specify to Administrative Agent and the Company as the office by which its Loans of such Type are to be made and/or issued and maintained.
"Applicable Margin" shall mean, on any day, with respect to any Alternate Base Rate Loan or Eurodollar Loan, the applicable per annum percentage set forth at the appropriate intersection in
the table shown below, based on the Rating as of the close of business on the preceding Business Day:
Alternate Base Rate Eurodollar Loan
Rating Loan Applicable Margin Applicable Margin
------ ---------------------- -----------------
BBB-/Baa3 and higher 0.000% 1.075%
BB+/Ba1 0.250% 1.250%
BB/Ba2 0.500% 1.500%
BB-/Ba3 and lower 0.750% 1.750%
=============================== ================================= =============================
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"Bankruptcy Code" shall mean the United States Bankruptcy Code, as amended, and any successor statute.
"Business Day" shall mean any day other than a day on which commercial
banks are authorized or required to close in Houston, Texas or New York, New
York, and where such term is used in the definition of "Quarterly Date" in this
Section 1.1 or if such day relates to a borrowing of, a payment or prepayment of
principal of or interest on, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment, prepayment or
Interest Period, a day which is also a day on which dealings in Dollar deposits
are carried out in the relevant interbank market.
"Capital Lease Obligations" shall mean, as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or personal property which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
"Certificate of Extension" shall mean a certificate of Company, executed by a Responsible Officer and delivered to the Administrative Agent, in substantially the form of Exhibit J, which requests an extension of the then scheduled Revolving Commitment Termination Date pursuant to Section 2.2.
"Change of Control" shall mean a change resulting when any Unrelated Person or any Unrelated Persons acting together which would constitute a Group together with any Affiliates or Related Persons thereof (in each case also constituting Unrelated Persons) shall at any time either (i) Beneficially Own more than 35% of the aggregate voting power of all classes of Voting Stock of the Company or (ii) during any period of two consecutive years ending on or after the Effective Date, as determined as of the last day of each calendar quarter after the Effective Date, the individuals (the "Incumbent Directors") who at the beginning of such period constituted the Board
of Directors of the Company (other than additions thereto or removals therefrom
from time to time thereafter approved by a vote of the Board of Directors in
accordance with the Company's by-laws) shall cease for any reason to constitute
51% or more of the Board of Directors of the Company. As used herein
(a)"Beneficially Own" means "beneficially own" as defined in Rule 13d-3 of the
Securities Exchange Act of 1934, as amended, or any successor provision thereto;
provided, however, that, for purposes of this definition, a Person shall not be
deemed to Beneficially Own securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's Affiliates
until such tendered securities are accepted for purchase or exchange; (b)"Group"
means a "group" for purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended; (c)"Unrelated Person" means at any time any Person other than
the Company or any Subsidiary and other than any trust for any employee benefit
plan of the Company or any Subsidiary of the Company; (d) "Related Person" of
any Person shall mean any other Person owning (1) 5% or more of the outstanding
common stock of such Person or (2) 5% or more of the Voting Stock of such
Person; and (e) "Voting Stock" of any Person shall mean capital stock of such
Person which ordinarily has voting power for the election of directors (or
persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason of
any contingency.
"Chapter 1D" shall mean Chapter 1D of Article 5069 of the Texas Credit Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article 5069-1.04, Vernon's Texas Civil Statutes, as amended).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor statute, together with all regulations, rulings and interpretations thereof or thereunder by the Internal Revenue Service.
"Commitment Percentage" shall mean, as to any Bank, the percentage equivalent of a fraction the numerator of which is the amount of such Bank's Commitment and the denominator of which is the aggregate amount of the Commitments of all Banks.
"Commitment" shall mean, as to any Bank, such Bank's Revolving Commitment or Term Commitment then in effect, as the case may be.
"Committed Loans" shall mean the Revolving Loans and the Term Loans provided for in Section 2.1 hereof.
"Competitive Bid" shall mean an offer by a Bank to make a Competitive Loan pursuant to Section 2.9 hereof.
"Competitive Bid Administrative Questionnaire" shall mean a questionnaire substantially in the form of Exhibit I hereto.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a Bank pursuant to Section 2.9 hereof, the fixed rate of interest, in each case, offered by the Bank making such Competitive Bid.
"Competitive Bid Request" shall have the meaning ascribed to such term in Section 2.9 hereof.
"Competitive Loans" shall mean loans provided for in Section 2.9 hereof.
"Consolidated Net Worth" means, with respect to the Company and its 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, 1999 and not in excess of $30,000,000 in the aggregate, and the amount of noncash write downs occurring on or after January1, 1999 of long-lived assets in compliance with GAAP or SEC guidelines, and excluding any extraordinary or non-recurring net gains or losses together with any related provision for taxes on such gain or loss, realized in connection with any extraordinary or nonrecurring gains or losses, and plus or minus, as appropriate, foreign currency translation adjustments, all as determined on a consolidated basis.
"Credit Obligations" shall mean, as at any date of determination thereof, the aggregate principal amount of Loans outstanding hereunder.
"Declining Banks" shall have the meaning set forth in Section 2.2(c).
"Default" shall mean an Event of Default or an event which with notice or lapse of time or both would, unless cured or waived, become an Event of Default.
"Disclosure Statement" shall mean the Disclosure Statement delivered to Administrative Agent by the Company and attached as Exhibit L hereto.
"Dividend Payment" shall mean, with respect to any Person, dividends (in cash, property or obligations) on, or other payments or distributions on account of, or the redemption of, or the setting apart of money for a sinking or other analogous fund for the purchase, redemption, retirement or other acquisition of, any shares of any class of capital stock of such Person, or the exchange or conversion of any shares of any class of capital stock of such Person for or into any obligations of or shares of any other class of capital stock of such Person or any other property, but excluding dividends to the extent payable in, or exchanges or conversions for or into, shares of common stock of the Company or options or warrants to purchase common stock of the Company.
"Dollars" and "$" shall mean lawful money of the United States of America.
"EBITDAX" shall mean net earnings (excluding material gains and losses on sales and retirement of assets, non-cash write downs, charges resulting from accounting convention changes and deductions for exploration expenses) before deduction for federal and state taxes, interest expense (including capitalized interest), operating lease rentals or depreciation, depletion and amortization expense, all determined in accordance with GAAP; provided, however, for the purpose of any calculation, that (i) for the fiscal quarter ending March 31, 1998, EBITDAX shall be deemed to equal $159,765,000, (ii) for the fiscal quarter ending June 30, 1998, EBITDAX shall be deemed to equal $142,023,000, (iii) for the fiscal quarter ending September 30, 1998, EBITDAX shall be deemed to equal $107,171,000, and (iv) for the fiscal quarter ending December31, 1998, EBITDAX shall be deemed to equal $122,134,000.
"ENSTAR Alaska" shall collectively mean (i) the gas distribution system in south-central Alaska known as ENSTAR Natural Gas Company, a division of the Company, and (ii) APC.
"Environmental Claim" means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution or contamination of the air, surface
water, ground water or land or the clean-up of such pollution or contamination;
(iii) solid, gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) the manufacture, processing, distribution
in commerce or use of Hazardous Substances. An "Environmental Claim" includes,
but is not limited to, a common law action, as well as a proceeding to issue,
modify or terminate an Environmental Permit, or to adopt or amend a regulation
to the extent that such a proceeding attempts to redress violations of an
applicable permit, license, or regulation as alleged by any Governmental
Authority.
"Environmental Liabilities" includes all liabilities arising from any
Environmental Claim, Environmental Permit or Requirement of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to:
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and obligations,
and all costs and expenses necessary to cause the issuance, reissuance or
renewal of any Environmental Permit including reasonable attorneys' fees and
court costs.
"Environmental Permit" means any permit, license, approval or other authorization under any applicable Legal Requirement relating to pollution or protection of health or the environment, including laws, regulations or other requirements relating to emissions, discharges, releases or threatened releases of pollutants, contaminants or hazardous substances or toxic materials or wastes into ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants or Hazardous Substances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and all rules, regulations and interpretations by the Internal Revenue Service or the Department of Labor thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which is a member of a group of which any Obligor is a member and
which is under common control within the meaning of the regulations under
Section 414 of the Code.
"Eurodollar Base Rate" shall mean, with respect to any Interest Period
for any Eurodollar Loan, the lesser of (A) the rate per annum (rounded upwards,
if necessary, to the nearest 1/16th of 1%) equal to the average of the offered
quotations appearing on Telerate Page 3750 (or if such Telerate Page shall not
be available, any successor or similar service as may be selected by
Administrative Agent and the Company) as of 11:00 a.m., Houston, Texas time (or
as soon thereafter as practicable) on the day two Business Days prior to the
first day of such Interest Period for Dollar deposits having a term comparable
to such Interest Period and in an amount comparable to the principal amount of
the Eurodollar Loan to which such Interest Period relates or (B) the Highest
Lawful Rate. If none of such Telerate Page 3750 nor any successor or similar
service is available, then the "Eurodollar Base Rate" shall mean, with respect
to any Interest Period for any applicable Eurodollar Loan, the lesser of (A) the
rate per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%)
determined by Administrative Agent to be the average of the rates quoted by the
Reference Banks at approximately 11:00 a.m., Houston, Texas time (or as soon
thereafter as practicable) on the day two Business Days prior to the first day
of such Interest Period for the offering by such Reference Banks 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 which such Interest Period relates or (B) the Highest
Lawful Rate. If any Reference Bank does not furnish a timely quotation,
Administrative Agent shall determine the relevant interest rate on the basis of
the quotation or quotations furnished by the remaining Reference Bank or Banks;
if none of such quotations is available on a timely basis, the provisions of
Section 6.2 shall apply. Each determination of the Eurodollar Base Rate shall be
conclusive and binding, absent manifest error, and may be computed using any
reasonable averaging and attribution method.
"Eurodollar Loans" shall mean Loans the interest on which is determined on the basis of rates referred to in the definition of "Eurodollar Base Rate" in this Section 1.1.
"Eurodollar Rate" shall mean, for any Interest Period for any Eurodollar Loan, a rate per annum determined by Administrative Agent to be equal to the Eurodollar Base Rate for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such term in Section11 hereof.
"Existing Seagull Credit Facility" shall mean that certain Amended and Restated Credit Agreement, dated as of December 24, 1997, by and among Seagull, each of the banks which is or
which may from time to time become a signatory thereto, Morgan Guaranty Trust Company of New York, as Documentation Agent, NationsBank of Texas, N.A., as Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent, as such agreement from time to time may be amended, amended and restated, supplemented or otherwise modified.
"Existing Old Ocean Bridge Facility" shall mean that certain Letter Agreement, dated February 3, 1999, among The Chase Manhattan Bank, Morgan Guaranty Trust Company of New York, Old Ocean Energy, the Guarantor, and Lion GPL, S.A. and the "Security Instruments" as defined therein, as each is amended, waived or otherwise modified to the date hereof.
"Existing Old Ocean Credit Facility" shall mean that certain Second Amended and Restated Global Credit Agreement, dated as of November 20, 1998, by and among Old Ocean Energy, each of the lenders which is or which may from time to time become a signatory thereto, Morgan Guaranty Trust Company of New York, as Syndication Agent, Bank of America National Trust & Savings Association, as Documentation Agent, Barclays Bank PLC, as Managing Agent, Paribas, Societe Generale, Southwest Agency, and Credit Suisse First Boston, as Co-Agents, and Chase Bank of Texas, National Association, as Administrative Agent, as such agreement from time to time may be amended, amended and restated, supplemented or otherwise modified.
"Facility Amount" shall mean the aggregate amount of the Commitments (which amount shall initially be $300,000,000), as such amount may be reduced from time to time pursuant to the terms of this Agreement.
"Facility Fee Percentage" shall mean, on any date, the applicable per annum percentage set forth at the appropriate intersection in the table shown below, based on the Rating as of the close of business on the preceding Business Day:
Rating Facility Fee Percentage
BBB-/Baa3 and higher 0.175%
BB+/Ba1 and lower 0.250%
=================================== ==================================
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"Financial Statements" shall mean the financial statement or statements, together with the notes and schedules thereto, described or referred to in Sections8.6 and 9.1.
"GAAP" shall mean as to a particular Person, such accounting practice as, in the opinion of KPMG Peat Marwick or other independent accountants of recognized national standing retained by such Person and acceptable to the Majority Banks, conforms at the time to generally accepted accounting principles, consistently applied. Generally accepted accounting principles means those principles and practices (a) which are recognized as such by the Financial Accounting Standards Board, (b) which are applied for all periods after the date hereof in a manner consistent with the manner in which such principles and practices were applied to the most recent audited financial
statements of the relevant Person furnished to the Banks, except only for such changes in principles and practices with which the applicable independent public accountants concur and which are disclosed to the Banks in writing, and (c) which are consistently applied for all periods after the date hereof so as to reflect properly the financial condition and results of operations of such Person.
"Governmental Authority" shall mean any sovereign governmental authority, the United States of America, any State of the United States and any political subdivision of any of the foregoing, and any central bank, agency, instrumentality, department, commission, board, bureau, authority, court or other tribunal or quasi-governmental authority in each case whether executive, legislative, judicial, regulatory or administrative, having jurisdiction over the Company, any of its Subsidiaries, any of their respective property, Administrative Agent or any Bank.
"Guarantee" by any Person means any obligation, contingent or otherwise, of any such Person directly or indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise, other than agreements to purchase assets, goods, securities or services at an arm's length price in the ordinary course of business) or (ii) entered into for the purpose of assuring in any other manner the holder of such Indebtedness of the payment thereof or to protect such holder against loss in respect thereof (in whole or in part), provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" shall mean Ocean Energy, Inc., a Louisiana corporation.
"Guaranty Agreement" shall mean the guaranty agreement substantially in the form of Exhibit K, with appropriate insertions and deletions, executed or to be executed by the Guarantor, as such agreement from time to time may be amended, amended and restated, supplemented or otherwise modified.
"Havre" shall mean Havre Pipeline Company, LLC, a Texas limited liability company.
"Hazardous Substance" shall mean petroleum products, and any hazardous or toxic waste or substance defined or regulated as such from time to time by any law, rule, regulation or order described in the definition of "Requirements of Environmental Law".
"Highest Lawful Rate" shall mean, on any day, the maximum nonusurious rate of interest permitted for that day by whichever of applicable federal or Texas law permits the higher interest rate, stated as a rate per annum. On each day, if any, that Chapter 1D establishes the Highest Lawful Rate, the Highest Lawful Rate shall be the "applicable interest rate ceiling" (as defined in Chapter1D) for that day.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate and all other liquid or gaseous hydrocarbons and related minerals, in each case whether in a natural or a processed state.
"Indebtedness" shall mean, as to any Person: (i) indebtedness of such
Person for borrowed money (whether by loan or the issuance and sale of debt
securities) or for the deferred purchase or acquisition price of property or
services, including, without limitation, obligations payable out of Hydrocarbon
production; (ii) obligations, whether fixed or contingent, of such Person in
respect of letters of credit, acceptances or similar instruments issued or
accepted by banks and other financial institutions for the account of such
Person or any other Person; (iii) Capital Lease Obligations of such Person; (iv)
Redemption Obligations of such Person and other obligations of such Person to
redeem or otherwise retire shares of capital stock of such Person or any other
Person, in each case to the extent that the redemption obligations will arise
prior to the stated maturity of the Obligations; (v) indebtedness of others of
the type described in clause (i), (ii), (iii) or (iv) above secured by a Lien on
the property of such Person, whether or not the respective obligation so secured
has been assumed by such Person, to the extent of the fair market value of such
property; and (vii) indebtedness of others of the type described in clause (i),
(ii), (iii) or (iv) above Guaranteed by such Person, to the extent of such
Guarantee.
"Interest Period" shall mean:
(a) With respect to any Eurodollar Loan, the period commencing on (i) the date such Loan is made or converted into or continued as a Eurodollar Loan or (ii) in the case of a roll-over to a successive Interest Period, the last day of the immediately preceding Interest Period 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 5.5 hereof, except that each such Interest Period which commences 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.
(b) With respect to any other Competitive Loan, the period commencing on the date such Loan is made and ending on the date specified in the Competitive Bid in which the offer to make the Competitive Loan was extended; provided, however, that each such period shall have a duration of not less than seven calendar days or more than 180 calendar days.
Notwithstanding the foregoing: (i) no Interest Period applicable to any Eurodollar Loan or any Competitive Loan may commence before and end after the date of any scheduled reduction in the Commitments if, after giving effect thereto, the aggregate principal amount of the Eurodollar Loans or Competitive Loans which have Interest Periods which end after such reduction date shall be greater than the aggregate principal amount of the Commitments scheduled to be in effect after such reduction 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 (or, in the case of an Interest Period for Eurodollar Loans, if such next succeeding Business Day falls in the next succeeding calendar month,
on the next preceding Business Day); (iii) with respect to each Bank, no Interest Period applicable to any Eurodollar Loan or any Competitive Loan shall extend beyond the then scheduled Stated Maturity Date applicable to each such Bank, and (iv)no Interest Period for any Eurodollar Loans shall have a duration of less than one month and, if the Interest Period therefor would otherwise be a shorter period, such Loans shall not be available hereunder.
"Investments" shall mean with respect to any Person any advance, loan or other extension of credit or capital contribution (other than prepaid expenses in the ordinary course of business) to (by means of transfers of property or assets or otherwise) purchase or own any stocks, bonds, notes, debentures or other securities of, or incur contingent liability with respect to (except for the endorsement of checks in the ordinary course of business and except for the Indebtedness and Liens permitted under this Agreement), any other Person.
"Legal Requirement" shall mean any law, statute, ordinance, decree, requirement, order, judgment, rule, regulation (or interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority, now or hereafter in effect.
"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge, charge, collateral assignment, security interest or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, a Person 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.
"Loan Documents" shall mean this Agreement, the Guaranty Agreement, all instruments, certificates and agreements now or hereafter executed or delivered to Administrative Agent or any Bank pursuant to any of the foregoing, and all amendments, modifications, renewals, extensions, increases and rearrangements of, and substitutions for, any of the foregoing.
"Loans" shall mean Committed Loans and Competitive Loans.
"Majority Banks" shall mean (a) prior to the termination of the Commitments, Banks having greater than 50% of the aggregate amount of the Commitments and (b) after the termination of the Commitments, Banks having greater than 50% of the aggregate principal amount of the Loans.
"Margin Regulations" shall mean, as applicable, Regulations U and X of the Board of Governors of the Federal Reserve System, as from time to time in effect.
"Material Adverse Effect" shall mean a material adverse effect on the business, condition (financial or otherwise), operations or properties (including proven oil and gas reserves) of the Company and its Subsidiaries, taken as a whole, or on the ability of the Company to perform its material obligations under any Loan Document to which it is a party.
"Merger" shall have the meaning set forth in Section 7.1(j).
"Merger Agreement" shall have the meaning set forth in Section 7.1(j).
"Net Cash Proceeds" shall mean the cash or cash equivalent proceeds
received by the Company or any Subsidiary as a result of a sale of property or
other asset of Company or any Subsidiary, in each case after deducting all of
the following, as applicable, (i) all brokerage commissions, legal fees,
accounting fees and other fees, costs and expenses paid, reimbursed or accrued
by the Company or any of its Subsidiaries and allocable to such transaction,
(ii) all taxes and governmental charges paid, reimbursed or accrued by the
Company or any of its Subsidiaries in connection with such transaction, (iii)
payment of any outstanding obligations secured by such property or asset, (iv)
payment in satisfaction of all minority interests in such property or asset, and
(v) any reserves maintained by the Company or any of its Subsidiaries for any
purchase price adjustments, closing adjustments, indemnity or other obligations
in connection with such transaction. Proceeds of any such transaction consisting
of notes, stock, securities or other non-cash assets or property shall not be
included as Net Cash Proceeds; provided, however, any cash or cash equivalents
received as a result of the sale, pledge or transfer of any such note, stock,
securities or other non-cash assets or property or as a payment on account of or
otherwise realized on account of principal or capital of any note, stock,
securities or other non-cash assets or property (but not dividends, interest or
operating income in respect of any assets or property) shall be treated as cash
or cash equivalent proceeds received by Company or any Subsidiary at the time
such cash or cash equivalent is received by Company or any Subsidiary.
"95 Indenture" shall mean that certain Indenture among the Company (as
successor by merger to Old Ocean Energy), as issuer, Guarantor (as successor by
merger to UMC), as initial subsidiary guarantor, and U.S. Bank Trust National
Association (formerly known as First Bank of New York, National Association), as
trustee, dated as of October 30, 1995, providing for the issuance of the
Company's $150,000,000 10-3/8% Senior Subordinated Notes due 2005, as amended by
(i) the First Supplemental Indenture thereto dated as of November 4, 1997, (ii)
the Second Supplemental Indenture thereto dated as of March 27, 1998 and (iii)
the Third Supplemental Indenture thereto dated as of March 30, 1999, 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 hereunder.
"96 Indenture" shall mean that certain indenture dated as of September 26, 1996 among the Company (as successor by merger to Old Ocean Energy), as issuer, the subsidiary guarantor named therein, and State Street Bank and Trust Company, as trustee, providing for the issuance of the Company's $160,000,000 9-3/4% Senior Subordinated Notes due 2006, as amended by (i) the First Supplemental Indenture thereto dated as of March 27, 1998 and (ii) the Second Supplemental Indenture thereto dated as of March 30, 1999, 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 hereunder.
"97 Indenture" shall mean that certain Indenture dated as of July 2, 1997 among the Company (as successor by merger to Old Ocean Energy), as issuer, the subsidiary guarantor named
therein, and State Street Bank and Trust Company, as trustee, providing for the issuance of the Company's $200,000,000 8-7/8% Senior Subordinated Notes due 2007, as amended by (i) the First Supplemental Indenture thereto dated as of March 27, 1998 and (ii) the Second Supplemental Indenture thereto dated as of March 30, 1999, 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 hereunder.
"98 Senior Subordinated Indenture" shall mean that certain Indenture dated as of July 8, 1998 among the Company (as successor by merger to Old Ocean Energy), as issuer, the subsidiary guarantor named therein, U.S. Bank Trust National Association, as trustee, providing for the issuance of the Company's $250,000,000 8-3/8% Senior Subordinated Notes due 2008, as amended by the First Supplemental Indenture thereto dated as of March 30, 1999, 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 hereunder.
"Obligations" shall mean, as at any date of determination thereof, the sum of the following: (i) the aggregate principal amount of Loans outstanding hereunder plus (ii) all other liabilities, obligations and indebtedness of the Company, any Subsidiary of the Company or any other Obligor under any Loan Document.
"Obligor" shall mean the Company and the Guarantor.
"Old Ocean Energy" shall mean Ocean Energy, Inc., a Delaware corporation.
"Organizational Documents" shall mean, with respect to a corporation, the certificate of incorporation, articles of incorporation and bylaws of such corporation; with respect to a partnership, the partnership agreement establishing such partnership; with respect to a joint venture, the joint venture agreement establishing such joint venture; with respect to a limited liability company, the certificate of formation and operating agreement (or comparable documents) of such limited liability company; and with respect to a trust, the instrument establishing such trust; in each case including any and all modifications thereof as of the date of the Loan Document referring to such Organizational Document.
"Original Revolving Commitment Termination Date" means March 28, 2000.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, a corporation, a company, a bank, a voluntary association, a partnership, a trust, an unincorporated organization, any Governmental Authority or any other entity.
"Plan" shall mean an employee pension benefit plan which is covered by TitleIV of ERISA or subject to the minimum funding standards under Section412 of the Code and is either (a)maintained by the Company or any ERISA Affiliate for employees of the Company or any ERISA Affiliate or (b) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which the Company or any ERISA Affiliate is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.
"Post-Default Rate" shall mean, in respect of any principal of any Loan or any other amount payable by the Company under this Agreement or any other 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 equal to the lesser of (a) the sum of (x) with respect to Eurodollar Loans, 2% per annum plus the applicable Eurodollar Rate then in effect plus the Applicable Margin for Eurodollar Loans until the expiration of the applicable Interest Period, (y) with respect to Competitive Loans, 2% per annum plus the applicable fixed rate offered by the applicable Bank and accepted by the Company in accordance with Section 2.9 hereof, and (z) with respect to Alternate Base Rate Loans and with respect to Eurodollar Loans after the expiration of the applicable Interest Period (and also with respect to indebtedness other than Loans), 2% plus the Alternate Base Rate as in effect from time to time plus the Applicable Margin for Alternate Base Rate Loans or (b) the Highest Lawful Rate.
"Principal Office" shall mean the principal office of Administrative Agent, presently located at 1 Chase Manhattan Plaza, 8th Floor, New York, New York 10081, Attention: Agent Services.
"Quarterly Dates" shall mean the last day of each March, June, September and December, provided that, if any such date is not a Business Day, then the relevant Quarterly Date shall be the next succeeding Business Day.
"Rating" shall mean the senior unsecured debt rating for the Company publicly announced by Standard & Poor's Ratings Group or Moody's Investors Service, Inc., or their respective successors. In the event the ratings are not equivalent, the higher rating shall be treated as the "Rating" hereunder; provided, that if such ratings differ by more than one (1) level, the Rating shall be the average, rounded upwards, of the two ratings. In the event that there is no Rating published by either Standard & Poor's Ratings Group or Moody's Investors Service, Inc. or their respective successors, then the Rating shall be deemed to be BB-/Ba3.
"Redemption Obligations" shall mean with respect to any Person all mandatory redemption obligations of such Person with respect to preferred stock or other equity securities issued by such Person or put rights in favor of the holder of such preferred stock or other equity securities, to the extent that such redemption obligations or put rights will arise prior to the stated maturity of the Obligations. Notwithstanding the foregoing, customary redemption obligations and put rights associated with a Change of Control or sale of assets shall not constitute Redemption Obligations.
"Reference Banks" shall mean Chase and such other Banks (up to a maximum of two (2) additional Banks) as the Company, with the approval of Administrative Agent (which approval shall not be unreasonably withheld), may from time to time designate.
"Regulation D" shall mean Regulation D of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented from time to time and any successor or other regulation relating to reserve requirements.
"Regulatory Change" shall mean, with respect to any Bank, any change on
or after the date of this Agreement in Legal Requirements (including Regulation
D) or the adoption or making on or after such date of any interpretation,
directive or request applying to a class of banks including such Bank under any
Legal Requirements (whether or not having the force of law) by any Governmental
Authority.
"Relevant Party" shall mean the Company and each other party to any of the Loan Documents other than (a) the Banks and (b) the Agents.
"Replacement Banks" shall have the meaning set forth in Section 2.2(c) (ii).
"Request for Extension of Credit" shall mean a request for extension of credit duly executed by any Responsible Officer of the Company, appropriately completed and substantially in the form of ExhibitB attached hereto.
"Requirements of Environmental Law" means all requirements imposed by any law (including for example and without limitation The Resource Conservation and Recovery Act and The Comprehensive Environmental Response, Compensation, and Liability Act), rule, regulation, or order of any federal, state or local executive, legislative, judicial, regulatory or administrative agency, board or authority in effect at the applicable time which relate to (i) noise; (ii) pollution, protection or clean-up of the air, surface water, ground water or land; (iii) solid, gaseous or liquid waste generation, treatment, storage, disposal or transportation; (iv)exposure to Hazardous Substances; (v) the safety or health of employees or (vi) regulation of the manufacture, processing, distribution in commerce, use, discharge or storage of Hazardous Substances.
"Reserve Requirement" shall mean, for any Eurodollar Loan for any Interest Period therefor, the stated maximum rate for all reserves (including any marginal, supplemental or emergency reserves) required to be maintained during such Interest Period under Regulation D by any member bank of the Federal Reserve System or any Bank against "Eurocurrency liabilities" (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Reserve Requirement shall reflect and include any other reserves required to be maintained by such member banks by reason of any Regulatory Change against (i) any category of liabilities which includes deposits by reference to which the Eurodollar Rate is to be determined as provided in the definition of "Eurodollar Base Rate" in this Section 1.1 or (ii) any category of extensions of credit or other assets which include Eurodollar Loans. Any determination by Administrative Agent of the Reserve
Requirement shall be conclusive and binding, absent manifest error, and may be made using any reasonable averaging and attribution method.
"Responsible Officer" shall mean the chairman of the board, the president, any executive vice president, the vice president of finance and administration, the chief executive officer or the chief operating officer or any equivalent officer (regardless of title) and in the case of the Company, any other vice president, and in respect of financial or accounting matters, shall also include the chief financial officer, the treasurer and the controller or any equivalent officer (regardless of title).
"Restricted Subsidiary" shall mean each Subsidiary of the Company that, at the particular time in question, (i)owns directly or indirectly any material assets or any interest in any other Restricted Subsidiary and (ii) has been designated as a Restricted Subsidiary by the Company or has not been designated as an Unrestricted Subsidiary by the Company either (a)on Exhibit A attached hereto or (b) in accordance with the terms and provisions of this Agreement. The Unrestricted Subsidiaries on the Effective Date are listed on Exhibit A attached hereto and each other Subsidiary of Company as of the Effective Date shall be a Restricted Subsidiary. A Restricted Subsidiary shall remain such (even if it no longer owns directly or indirectly any interest in any of the material assets or any interest in any other Restricted Subsidiary) until designated as an Unrestricted Subsidiary in accordance with the terms and provisions of this Agreement.
"Revolving Commitment" shall mean, as to any Bank, the obligation, if any, of such Bank to make Revolving Loans in an aggregate principal amount at any one time outstanding up to but not exceeding the amount, if any, set forth opposite such Bank's name on Exhibit M under the caption "Commitment" (as the same may be reduced from time to time pursuant to Section2.3).
"Revolving Commitment Termination Date" shall mean the earliest of:
(a) the Original Revolving Commitment Termination Date, or such other later date as may result from any extension requested by Company and consented to by the Banks pursuant to Section2.2;
(b) the date on which the Facility Amount is terminated in full or reduced to zero pursuant to Section 2.3; and
(c) the date on which the Commitments otherwise are terminated in full and reduced to zero pursuant to the terms of Section11.1.
Upon the occurrence of any event described in clause (b) or (c), the Revolving Commitments shall terminate automatically and without any further action.
"Revolving Credit Agreement" shall mean that certain Revolving Credit Agreement of even date herewith by and among the Company, each of the banks which is or which may from time to time become a signatory thereto, Bank of America National Trust and Savings Association, as
Documentation Agent, Bank One, Texas, N.A., as Syndication Agent, Societe Generale, Southwest Agency and Bank of Montreal, as Managing Agents for the Banks, The Chase Manhattan Bank, as Auction Administrative Agent for the Banks, and Chase Bank of Texas, National Association, as Administrative Agent, as such agreement from time to time may be amended, amended and restated, supplemented or otherwise modified.
"Revolving Loans" shall mean the loans provided for in Section 2.1(a) hereof.
"Seagull" shall mean Seagull Energy Corporation, a Texas corporation.
"Senior Debt" shall mean Total Debt, other than Subordinated Indebtedness.
"Senior Leverage Ratio" shall mean the ratio of (a) Senior Debt to (b) EBITDAX of the Company and its Restricted Subsidiaries on a consolidated basis for the last four rolling fiscal quarters.
"Specified Assets" shall have the meaning set forth in Section 10.4.
"Stated Maturity Date" shall mean the date occurring 364 days after the Term Commitment Termination Date.
"Subordinated Indebtedness" shall mean all unsecured Indebtedness of the Company which is subordinated, upon terms satisfactory to the Administrative Agent, in right of payment to the payment in full in cash of all Obligations.
"Subsidiary" shall mean, with respect to any Person (the "parent"), (a) any corporation of which at least a majority of the outstanding shares of stock having by the terms thereof ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether or not at the time stock of any other class or classes of such corporation 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 the parent or one or more of the Subsidiaries of the parent or by the parent and one or more of the Subsidiaries of the parent, and (b) any partnership, limited partnership, joint venture or other form of entity, the majority of the legal or beneficial ownership of which is at the time directly or indirectly owned or controlled by the parent or one or more of the Subsidiaries of the parent or by the parent and one or more of the Subsidiaries of the parent.
"Tangible Net Worth" shall mean with respect to any Person the sum of the redemption price of preferred stock, par value of common stock, capital in excess of par value of common stock (additional paid-in capital) and retained earnings, less treasury stock, goodwill, deferred development costs, franchises, licenses, patents, trademarks and copyrights and all other assets which are properly classified as intangible assets in accordance with GAAP less any Redemption Obligations.
"Term Commitment" shall mean, as to any Bank, such Bank's obligation to make Term Loans pursuant to Section 2.1(b) of this Agreement in an aggregate principal amount equal to the lesser of (i) the aggregate Revolving Loans outstanding to all Banks as of the Revolving Commitment Termination Date or (ii) the Revolving Commitments in effect as of the Revolving Commitment Termination Date.
"Term Commitment Termination Date" shall mean the earlier of
(a) the Business Day after the Revolving Commitment Termination Date; and
(b) the date on which the Commitments otherwise are terminated in full and reduced to zero pursuant to the terms of Section11.1.
Upon the occurrence of any event described in clause (b), the Term Commitments shall terminate automatically and without any further action.
"Term Loans" shall mean the loans provided for in Section 2.1(b) hereof.
"Total Debt" shall mean all Indebtedness of the Company and its Restricted Subsidiaries on a consolidated basis, but excluding (i) Indebtedness of the Company or any Restricted Subsidiary of the types described in Section 10.1, part (i), clauses (c) through (g), (j), (k) and (l), (ii) fifty percent (50%) of the amount of (A) obligations in respect of letters of credit or similar instruments not supporting indebtedness for borrowed money and (B) obligations in connection with bank guarantees, bonds, surety or similar obligations required or requested by Governmental Authorities in connection with the usual and customary operation of and the obtaining of oil and gas properties, and (iii)Indebtedness of the Company or any Restricted Subsidiary of the types described in Section10.1, part (i), clause (h), up to an aggregate amount of $10,000,000.
"Total Leverage Ratio" shall mean the ratio of (a) Total Debt to (b) EBITDAX of the Company and its Restricted Subsidiaries on a consolidated basis for the last four rolling fiscal quarters.
"Type" shall have the meaning assigned to such term in Section 1.3 hereof.
"Unfunded Liabilities" shall mean, with respect to any Plan, at any time, the amount (if any) by which (a) the present value of all benefits under such Plan exceeds (b) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent actuarial valuation report for such Plan, but only to the extent that such excess represents a potential liability of any ERISA Affiliate to the PBGC or a Plan under Title IV of ERISA.
"United States" or "U.S." shall mean the United States of America, its fifty states and the District of Columbia.
"Unrestricted Subsidiary" shall mean each Subsidiary of the Company which is (i)designated as an Unrestricted Subsidiary on ExhibitA attached hereto or (ii) designated as an Unrestricted Subsidiary by the Company at any time after the Effective Date and either (A) such Subsidiary has a Tangible Net Worth of less than $25,000,000 or (B) with the consent of the Administrative Agent and the Majority Banks. An Unrestricted Subsidiary shall remain such until designated as a Restricted Subsidiary in accordance with the terms and provisions of this Agreement.
1.2 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 delivered hereunder shall be prepared, in accordance with GAAP. To enable the ready determination of compliance with the provisions hereof, the Company will not change from December31 in each year the date on which its fiscal year ends, nor from March 31, June 30 and September 30 the dates on which the first three fiscal quarters in each fiscal year end.
1.3 Types of Loans. Loans hereunder are distinguished by "Type". The "Type" of a Loan refers to the determination whether such Loan is a Eurodollar Loan, a Competitive Loan or an Alternate Base Rate Loan.
1.4 Miscellaneous. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Any reference to Sections shall refer to Sections of this Agreement.
Section 2. Commitments; Competitive Bid Facility.
2.1 Committed Loans. From time to time on or after the date hereof on the terms and subject to the conditions of this Agreement, each Bank shall make Committed Loans described in this Section 2.1.
(a) Revolving Loans. From time to time on or after the date hereof and prior to the Revolving Commitment Termination Date, each Bank shall make Revolving Loans under this Section to the Company in an aggregate principal amount at any one time outstanding up to but not exceeding such Bank's Commitment Percentage of the amount by which the Facility Amount exceeds the aggregate unpaid principal balance of all Competitive Loans from time to time outstanding. Subject to the conditions herein, any such Revolving Loan repaid prior to the Revolving Commitment Termination Date may be reborrowed pursuant to the terms of this Agreement.
(b) Term Loans. On the Revolving Commitment Termination Date (unless such date shall occur as a result of clause (c) of the definition thereof), each Bank will make one Term Loan to the Company equal to such Bank's Commitment Percentage of the Term Commitment. No amounts paid or prepaid with respect to the Term Loan may be reborrowed. Eurodollar Loans and
Competitive Loans for which the Interest Period shall not have terminated as of the Revolving Commitment Termination Date shall be continued as Eurodollar Loans or Competitive Loans, as the case may be, for the applicable Interest Period and Alternate Base Rate Loans shall be continued as Alternate Base Rate Loans after the Revolving Commitment Termination Date, unless the Company shall have elected otherwise by delivery of a Request for Extension of Credit. Any principal repayments received on the Revolving Commitment Termination Date for Revolving Loans not converted into Term Loans shall be applied first to Alternate Base Rate Loans and, after Alternate Base Rate Loans have been paid in full, to either Eurodollar Loans and Competitive Loans, unless the Company shall have otherwise instructed the Administrative Agent in writing. Upon a Bank making such Term Loan, its Term Commitment shall terminate and it shall have no further Commitment to make Loans.
2.2 Extension of Revolving Commitment Termination Date and Revolving Commitments.
(a) Subject to the other provisions of this Agreement, the Revolving Commitments shall be effective for an initial period from the date hereof to the Original Revolving Commitment Termination Date; provided that the Revolving Commitment Termination Date, and concomitantly the Revolving Commitments, may be extended for successive 364 day periods expiring on the date which is 364 days from the then scheduled Revolving Commitment Termination Date. If Company shall request in a Certificate of Extension delivered to the Administrative Agent not more than 60 days and not less than 45 days prior to the Revolving Commitment Termination Date that the Revolving Commitment Termination Date be extended for 364 days from the then scheduled Revolving Credit Termination Date, then the Administrative Agent shall promptly notify each Bank of such request and each Bank shall notify the Administrative Agent, no later than 30 days prior to the Revolving Credit Termination Date, whether such Bank, in the exercise of its sole discretion, will extend the Revolving Commitment Termination Date for such 364 day period. Any Bank which shall not timely notify the Administrative Agent whether it will extend the Revolving Commitment Termination Date shall be deemed to not have agreed to extend the Revolving Commitment Termination Date. No Bank shall have any obligation whatsoever to agree to extend the Revolving Commitment Termination Date. Any agreement to extend the Revolving Commitment Termination Date by any Bank shall be irrevocable, except as provided in clause (c) of this Section.
(b) If all Banks notify the Administrative Agent pursuant to clause (a) of this Section of their agreement to extend the Revolving Commitment Termination Date, then the Administrative Agent shall so notify each Bank and Company, and such extension shall be effective without other or further action by any party hereto for such additional 364 day period.
(c) If Banks constituting at least the Majority Banks approve the extension of the then scheduled Revolving Commitment Termination Date (such Banks agreeing to extend the Revolving Commitment Termination Date herein called the "Accepting Banks") and if one or more Banks shall notify, or be deemed to notify, the Administrative Agent pursuant to clause (a) of this Section that they will not extend the then scheduled Revolving Commitment Termination Date (such Banks
herein called the "Declining Banks"), then (A) the Administrative Agent shall promptly so notify Company and the Accepting Banks, (B) the Accepting Banks shall, upon Company's election to extend the then scheduled Revolving Commitment Termination Date in accordance with clause (i) or (ii) below, extend the then scheduled Revolving Commitment Termination Date and (C)Company shall, pursuant to a notice delivered to the Administrative Agent, the Accepting Banks and the Declining Banks, no later than the tenth (10th) day following the date by which each Bank is required, pursuant to clause (a) of this Section, to approve or disapprove the requested extension of the Revolving Commitment Termination Date, either:
(i) elect to extend the Revolving Commitment Termination Date with respect to the Accepting Banks and direct the Declining Banks to terminate their Revolving Commitments, which termination shall become effective on the date which would have been the Revolving Commitment Termination Date except for the operation of this Section. On such date, (x) Company shall deliver a notice of the effectiveness of the termination of the Revolving Commitments of such Declining Banks to the Declining Banks with a copy to the Administrative Agent and (y) Company shall request a Term Loan from such Declining Banks (other than Declining Banks that are replaced by Replacement Banks pursuant to paragraph (ii) below) pursuant to the terms of Section 2.1(b) (and each such Declining Bank shall make such Term Loan), and (z) upon the payment in full in immediately available funds of all Obligations of Company owing to such Declining Banks in connection with such Term Loans on the Stated Maturity Date in effect at the time each such Declining Bank made its election to be a Declining Bank (i.e., 364 days after the date of such Term Loan), including any amounts required pursuant to Section6, the Declining Banks shall each cease to be Banks hereunder for all purposes, other than for purposes of Sections 6 and 13, and shall cease to have any obligations or any Commitment hereunder, other than to the Agents pursuant to Section 12, and the Administrative Agent shall promptly notify the Accepting Banks and Company of the new Revolving Commitment Termination Date applicable to such Accepting Banks; or
(ii) elect to extend the Revolving Commitment Termination Date with respect to the Accepting Banks and, prior to or no later than the then scheduled Revolving Commitment Termination Date, (A) to replace one or more of the Declining Banks with another lender or lenders reasonably acceptable to the Administrative Agent (such lenders herein called the "Replacement Banks") and (B) Company shall pay in full in immediately available funds all Obligations of Company owing to any Declining Bank that is not being replaced pursuant to this paragraph (other than Obligations being purchased by the Replacement Banks); provided that (x) the Replacement Bank or Replacement Banks shall purchase, and the Declining Bank or Declining Banks shall sell, the Declining Bank's or Declining Banks' rights and obligations hereunder without recourse or expense to, or warranty by, such Declining Bank or Declining Banks being replaced for a purchase price equal to the aggregate outstanding principal amount of the Obligations payable to such Declining Bank or Declining Banks plus any accrued but unpaid interest on such Obligations and accrued but unpaid fees or other amounts owing in respect of such Declining Bank's or
Declining Banks' Loans and Commitments hereunder, and (y) upon the payment of such amounts referred to in clause(x) and the execution of an Assignment and Acceptance agreement by the Replacement Bank or Replacement Banks and the Declining Bank or Declining Banks (which each such Declining Bank agrees to execute promptly), the Replacement Bank or Replacement Banks shall each constitute a Bank hereunder and the Declining Bank or Declining Banks being so replaced shall no longer constitute a Bank (other than for purposes of Sections6 and 13), and shall no longer have any obligations hereunder, other than to the Agents pursuant to Section 12; or
(iii) elect to revoke and cancel the extension request in such Certificate of Extension by giving notice of such revocation and cancellation to the Administrative Agent (which shall promptly notify the Banks thereof) no later than the tenth (10th) day following the date by which each Bank is required, pursuant to clause (a) of this Section, to approve or disapprove the requested extension of the Revolving Commitment Termination Date, and concomitantly the total Revolving Commitments.
If Company fails to timely provide the election notice referred to in this clause(c), Company shall be deemed to have revoked and canceled the extension request in the Certificate of Extension and to have elected not to extend the Revolving Commitment Termination Date.
2.3 Reductions and Changes of Commitments.
(a) Mandatory.
(i) On the Stated Maturity Date, all Commitments shall be terminated in their entirety unless terminated at an earlier date pursuant to Section11.1.
(ii) Upon the sale, transfer, conveyance or assignments of any
properties or other assets of Company or its Subsidiaries (other than a sale,
transfer, conveyance or assignment (A) in the ordinary course of business, (B)
to the Company or any of its Subsidiaries or (C) of any Specified Assets),
(i)the Revolving Commitment or the Term Commitment, as applicable, automatically
and permanently shall be reduced by, and (ii) the Commitment of each Bank
automatically and permanently shall be reduced on a pro-rata basis in an amount
sufficient to reduce the aggregate amount of such Commitments by, 75% of the
amount by which Net Cash Proceeds exceeds $100,000,000 in the aggregate for all
such sales during any calendar year received by Company or any of its
Subsidiaries in connection with such sale, transfer, assignment or conveyance
and the Company shall make mandatory prepayments on the Loans on or within ten
(10) days after receipt of such Net Cash Proceeds to the extent necessary so
that after giving effect to such mandatory prepayments the sum of all Loans
(including any Loan to be made but not yet made pursuant to a Request for
Extension of Credit) outstanding at any time would not exceed the total
Commitments.
(b) Optional. The Company shall have the right to terminate or reduce the unused portion of the Commitments at any time or from time to time, provided that: (i) the Company shall
give notice of each such termination or reduction to Administrative Agent as provided in Section5.5 hereof and (ii) each such partial reduction shall be permanent and in an aggregate amount equal to an integral multiple of $1,000,000 which equals or exceeds $5,000,000.
(c) No Reinstatement. Any reduction in or termination of the Commitments may not be reinstated without the approval of Administrative Agent and any Bank whose Commitment (or the applicable part thereof) is to be so reinstated.
2.4 Fees.
(a) The Company shall pay to Administrative Agent for the account of each Bank a facility fee accruing from the Effective Date, computed for each day at a rate per annum equal to the Facility Fee Percentage times such Bank's pro rata share (based on its respective Commitment) of the Facility Amount on such day. Such facility fees shall be payable on the Quarterly Dates and on the earlier of the date the Commitments are terminated in their entirety or the Stated Maturity Date.
(b) The Company agrees to pay to Administrative Agent fees as provided in the separate letter agreements executed by and between Administrative Agent and the Company.
2.5 Affiliates; Lending Offices.
(a) Any Bank may, if it so elects, fulfill any obligation to make a Eurodollar Loan or Competitive Loan by causing a branch, foreign or otherwise, or Affiliate of such Bank to make such Loan and may transfer and carry such Loan at, to or for the account of any branch office or Affiliate of such Bank; provided that, in such event for the purposes of this Agreement such Loan shall be deemed to have been made by such Bank and the obligation of the Company to repay such Loan shall nevertheless be to such Bank and shall be deemed to be held by such Bank and, to the extent of such Loan, to have been made for the account of such branch or Affiliate.
(b) Notwithstanding any provision of this Agreement to the contrary, each Bank shall be entitled to fund and maintain its funding of all or any part of its Loans hereunder in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if such Bank had actually funded and maintained each Eurodollar Loan during each Interest Period through the purchase of deposits having a maturity corresponding to such Interest Period and bearing an interest rate equal to the Eurodollar Rate for such Interest Period.
2.6 Several Obligations. The failure of any Bank to make any Loan to be made by it on the date specified therefor shall not relieve any other Bank of its obligation to make its Loan on such date, but neither Administrative Agent nor any Bank shall be responsible for the failure of any other Bank to make a Loan to be made by such other Bank.
2.7 Repayment of Loans; Evidence of Debt.
(a) Each Bank shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of Company to such Bank resulting from each Loan made by such Bank, including the amounts of principal and interest payable and paid to such Bank from time to time hereunder.
(b) Administrative Agent shall maintain accounts in which it shall record (i)the amount of each Loan made hereunder and, if applicable, the Interest Period applicable thereto, (ii)the amount of any principal or interest due and payable or to become due and payable from Company to each Bank hereunder and (iii)the amount of any sum received by Administrative Agent hereunder for the account of the Banks and each Bank's share thereof.
(c) The entries made in the accounts maintained pursuant to paragraph(a) or(b) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Bank or Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of any Obligor to repay the Loans or other Obligations in accordance with the terms of this Agreement or the other Loan Documents.
(d) Any Bank may request that Loans made by it be evidenced by a promissory note. In such event, Company shall prepare, execute and deliver to such Bank promissory notes payable to the order of such Bank (or, if requested by such Bank, to such Bank and its registered assigns and in a form approved by Administrative Agent). Thereafter, the Loans evidenced by such promissory notes and interest thereon may (including after assignment pursuant to Section 13.5) be represented by one or more promissory notes in such form payable to the order of the payee named therein.
2.8 Use of Proceeds. The proceeds of the Loans shall be used for general corporate purposes.
2.9 Competitive Bid Procedure.
(a) In order to request Competitive Bids, the Company shall hand
deliver, telex or telecopy to Auction Administrative Agent a duly completed
request substantially in the form of Exhibit F, with the blanks appropriately
completed (a "Competitive Bid Request"), to be received by Auction
Administrative Agent not later than 11:00 a.m., Houston, Texas time, five (5)
Business Days before the date specified for a proposed Competitive Loan. No
Alternate Base Rate Loan shall be requested in, or, except pursuant to Section
6, made pursuant to, a Competitive Bid Request. A Competitive Bid Request that
does not conform substantially to the format of Exhibit F may be rejected at
Auction Administrative Agent's sole discretion, and Auction Administrative Agent
shall promptly notify the Company of such rejection by telecopier. Each
Competitive Bid Request shall in each case refer to this Agreement and specify
(x) the date of such Competitive Loans (which shall be a Business Day) and the
aggregate principal amount thereof (which shall not be less than $25,000,000 or
greater than the unused portion of the Facility Amount on such date and shall be
an
integral multiple of $5,000,000) and (y) the Interest Period with respect thereto (which may not end after the termination of the then scheduled Stated Maturity Date). Promptly after its receipt of a Competitive Bid Request that is not rejected as aforesaid, Auction Administrative Agent shall invite by telecopier (in substantially the form set forth in Exhibit H hereto) the Banks to bid, on the terms and conditions of this Agreement, to make Competitive Loans pursuant to such Competitive Bid Request. Notwithstanding the foregoing, Auction Administrative Agent shall have no obligation to invite any Bank to make a Competitive Bid pursuant to this Section until such Bank has delivered a properly completed Competitive Bid Administrative Questionnaire to Auction Administrative Agent.
(b) Each Bank may, in its sole discretion, make one or more Competitive Bids to the Company responsive to each Competitive Bid Request. Each Competitive Bid by a Bank must be received by Auction Administrative Agent via telecopier, in the form of Exhibit H hereto, not later than 11:00a.m., Houston, Texas time, four (4) Business Days before the date specified for a proposed Competitive Loan. Competitive Bids that do not conform substantially to the format of Exhibit H may be rejected by Auction Administrative Agent after conferring with, and upon the instruction of, the Company, and Auction Administrative Agent shall notify the Bank of such rejection as soon as practicable. Each Competitive Bid shall refer to this Agreement and (x) specify the principal amount (which shall be in a minimum principal amount of $5,000,000 and in an integral multiple of $1,000,000 and which may equal the entire aggregate principal amount of the Competitive Loan requested by the Company) of the Competitive Loan that the Bank is willing to make to the Company, (y) specify the Competitive Bid Rate at which the Bank is prepared to make the Competitive Loan and (z)confirm the Interest Period with respect thereto specified by the Company in its Competitive Bid Request. A Competitive Bid submitted by a Bank pursuant to this paragraph (b) shall be irrevocable.
(c) Auction Administrative Agent shall, by 2:00 p.m. four (4) Business Days before the date specified for a proposed Competitive Loan, notify the Company by telecopier of all the Competitive Bids made, the Competitive Bid Rate and the maximum principal amount of each Competitive Loan in respect of which a Competitive Bid was made and the identity of the Bank that made each bid. Auction Administrative Agent shall send a copy of all Competitive Bids to the Company for its records as soon as practicable after completion of the bidding process set forth in this Section 2.9.
(d) The Company may in its sole and absolute discretion, subject only to the provisions of this Section 2.9(d), accept or reject any Competitive Bid referred to in Section 2.9(c); provided, however, that the aggregate amount of the Competitive Bids so accepted by the Company may not exceed the principal amount of the Competitive Loan requested by the Company. The Company shall notify Auction Administrative Agent by telecopier whether and to what extent it has decided to accept or reject any or all of the bids referred to in Section 2.9(c), not later than 11:00 a.m., Houston, Texas time, three (3) Business Days before the date specified for a proposed Competitive Loan; provided, however, that (w) the failure by the Company to give such notice shall be deemed to be a rejection of all the bids referred to in Section 2.9(c) and (x) no bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000. Notwithstanding the foregoing, if the Company accepts more than one bid made in response to a Competitive Bid Request and the available principal amount of Competitive Loans to be allocated among the Banks is not sufficient to enable Competitive Loans to be allocated to each Bank in a minimum principal amount of $5,000,000 and in integral multiples of $1,000,000, then the Company shall select the Banks to be allocated such Competitive Loans and shall round allocations up or down to the next higher or lower multiple of $1,000,000 as it shall deem appropriate. In addition, the Company shall be permitted under the foregoing procedures to accept a bid or bids in a principal amount of less than $5,000,000 (i) in order to enable the Company to accept bids equal to (but not in excess of) the principal amount of the Competitive Loan requested by the Company or (ii) in order to enable the Company to accept all remaining bids, or all remaining bids at a particular Competitive Bid Rate. A notice given by Company pursuant to this paragraph(d) shall be irrevocable.
(e) Auction Administrative Agent shall promptly notify each bidding Bank whether or not its Competitive Bid has been accepted (and if so, in what amount and at what Competitive Bid Rate) by telex or telecopier sent by Auction Administrative Agent, and each successful bidder will thereupon become bound, subject to the other applicable conditions hereof, to make the Competitive Loan in respect of which its bid has been accepted. After completing the notifications referred to in the immediately preceding sentence, Auction Administrative Agent shall (i) notify Administrative Agent of each Competitive Bid that has been accepted, the amount thereof and the Competitive Bid Rate therefor and (ii) notify each Bank of the aggregate principal amount of all Competitive Bids accepted.
(f) No Competitive Loan shall be made within five (5) Business Days of the date of any other Competitive Loan, unless the Company and Auction Administrative Agent shall mutually agree otherwise.
(g) If Administrative Agent shall at any time have a Commitment hereunder and shall elect to submit a Competitive Bid in its capacity as a Bank, it shall submit such bid directly to the Company one quarter of an hour earlier than the latest time at which the other Banks are required to submit their bids to Auction Administrative Agent pursuant to paragraph (b) above.
(h) All notices required by this Section 2.9 shall be made in accordance with Section13.2 and the Competitive Bid Administrative Questionnaire most recently placed on file by each Bank with Auction Administrative Agent.
Section 3. Borrowings, Prepayments and Selection of Interest Rates.
3.1 Borrowings. The Company shall give Administrative Agent notice of each borrowing to be made hereunder as provided in Sections 2.9 and 5.5 hereof. Not later than 2:00 p.m. Houston, Texas time on the date specified for each such borrowing hereunder, each Bank shall make available the amount of the Loan, if any, to be made by it on such date to Administrative Agent, at
its Principal Office, in immediately available funds, for the account of the Company. The amount so received by 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 designated by the Company maintained with Administrative Agent at the Principal Office.
3.2 Prepayments.
(a) Optional Prepayments. Subject to the provisions of Sections4, 5 and 6, the Company shall have the right to prepay, on any Business Day, in whole or in part, without the payment of any penalty or fee, Loans at any time or from time to time, provided that, the Company shall give Administrative Agent notice of each such prepayment as provided in Section 5.5 hereof. Eurodollar Loans and Competitive Loans may be prepaid on the last day of an Interest Period applicable thereto. Neither Eurodollar Loans nor Competitive Loans may be otherwise prepaid unless prepayment is accompanied by payment of all compensation required by Section 6.
(b) Mandatory Prepayments. Subject to Section 2.3(a)(ii), the Company shall from time to time on demand by Administrative Agent prepay the Loans in such amounts as shall be necessary so that at all times the aggregate outstanding principal amount of all Credit Obligations shall not be in excess of the aggregate amount of the Commitments, as reduced from time to time pursuant to Section 2.3 hereof.
3.3 Selection of Interest Rates. Subject to the terms and provisions of this Agreement, the Company shall have the right either to convert any Loan (in whole or in part) into a Loan of another Type (provided that no such conversion of Eurodollar Loans or Competitive Loans shall be permitted other than on the last day of an Interest Period applicable thereto) or to continue such Loan (in whole or in part) as a Loan of the same Type. In the event the Company fails to so give such notice prior to the end of the applicable Interest Period with respect to any Eurodollar Loan or Competitive Loan, such Loan shall become an Alternate Base Rate Loan on the last day of such Interest Period. Notwithstanding any other provision of this Agreement, if a Default shall have occurred and be continuing on the last day of an Interest Period applicable to a Eurodollar Loan or Competitive Loan, such Loan shall automatically be converted to an Alternate Base Rate Loan.
Section 4. Payments of Principal and Interest.
4.1 Repayment of Loans. The Company hereby unconditionally promises to pay to Administrative Agent for the account of each Bank (a) each Loan in full at the end of the Interest Period applicable to such Loan unless such Loan is continued or converted in accordance with the terms hereof, and (b)the then unpaid principal amount of all outstanding Loans on the then scheduled Stated Maturity Date.
4.2 Interest.
(a) Subject to Section13.6 hereof, the Company will pay to Administrative Agent for the account of each Bank interest on the unpaid principal amount of each Loan made by such Bank for the period commencing on the date of such Loan to but excluding the date such Loan shall be paid in full, at the lesser of (I) the following rates per annum:
(i) if such Loan is an Alternate Base Rate Loan, the Alternate Base Rate plus the Applicable Margin,
(ii) if such Loan is a Eurodollar Loan, the applicable Eurodollar Rate plus the Applicable Margin, and
(iii) if such Loan is a Competitive Loan, the applicable fixed rate offered by the applicable Bank and accepted by the Company in accordance with Section 2.9 hereof,
or (II) the Highest Lawful Rate.
(b) Notwithstanding any of the foregoing but subject to Section 13.6 hereof, the Company will pay to Administrative Agent for the account of each Bank interest at the applicable Post-Default Rate on any principal of any Loan made by such Bank and on any other amount payable by the Company hereunder to or for the account of such Bank (but, if such amount is interest, only to the extent legally allowed), which 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.
(c) Accrued interest on each Alternate Base Rate Loan shall be payable
on each Quarterly Date. Accrued interest on each Eurodollar Loan or Competitive
Bid Loan shall be payable on the last day of each Interest Period for such Loan
(and, if such Interest Period exceeds three months' duration, on the last day of
each three month period, commencing on the first three month anniversary of such
Interest Period). Notwithstanding the foregoing, (i) accrued interest payable at
the Post-Default Rate shall be due and payable from time to time on demand of
Administrative Agent or the Majority Banks (through Administrative Agent) and
(ii)accrued interest on any amount prepaid or converted pursuant to Section 6
hereof shall be paid on the amount so prepaid or converted.
Section 5. Payments; Pro Rata Treatment; Computations, Etc.
5.1 Payments.
(a) Except to the extent otherwise provided herein, all payments of principal, interest and other amounts to be made by the Company or any other Obligor hereunder shall be made in Dollars, in immediately available funds, to Administrative Agent at the Principal Office (or in the
case of a successor Administrative Agent, at the principal office of such successor Administrative Agent in the United States), not later than 11:00 a.m., Houston, Texas time on the date on which such payment 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).
(b) The Company or such other Obligor shall, at the time of making each payment hereunder, specify to Administrative Agent the Loans or other amounts payable by the Company or such Obligor hereunder or thereunder to which such payment is to be applied. Each payment received by Administrative Agent hereunder or any other Loan Document for the account of a Bank shall be paid promptly to such Bank, in immediately available funds for the account of such Bank's Applicable Lending Office.
(c) If the due date of any payment hereunder or any other Loan Document falls on a day which is not a Business Day, the due date for such payment (subject to the definition of Interest Period) 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.
5.2 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each borrowing from the Banks under Section 2.1 hereof shall be made ratably
from the Banks on the basis of their respective Commitments and each payment of
commitment or facility fees shall be made for the account of the Banks, and each
termination or reduction of the Commitments of the Banks under Section 2.3
hereof shall be applied, pro rata, according to the Banks' respective
Commitments; and (b) each payment by the Company of principal of or interest on
Loans of a particular Type shall be made to Administrative Agent for the account
of the Banks pro rata in accordance with the respective unpaid principal amounts
of such Loans held by the Banks.
5.3 Computations. Interest on Competitive Loans and interest based on the Eurodollar Base Rate or the Federal Funds Rate will 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 payable, unless the effect of so computing shall be to cause the rate of interest to exceed the Highest Lawful Rate, in which case interest shall be calculated on the basis of the actual number of days elapsed in a year composed of 365 or 366 days, as the case may be. All other interest and fees shall be computed on the basis of a year of 365 (or 366) days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable.
5.4 Minimum and Maximum Amounts. Except for prepayments made pursuant to Section 3.2(b) hereof, and subject to the provisions of Section 2.9 hereof with respect to Competitive Loans, each borrowing and repayment of principal of Loans, each termination or reduction of Commitments, each optional prepayment and each conversion of Type shall be in an aggregate principal amount at least equal to (a)in the case of Eurodollar Loans and Competitive Loans, $5,000,000, and (b)in the case of Alternate Base Rate Loans, $1,000,000 (borrowings or prepayments of Loans of different Types or, in the case of Eurodollar Loans and Competitive Loans, having different Interest Periods at the same time hereunder to be deemed separate borrowings and
prepayments for purposes of the foregoing, one for each Type or Interest Period). Upon any mandatory prepayment that would reduce Eurodollar Loans or Competitive Loans, respectively, having the same Interest Period to less than $5,000,000 such Loans shall automatically be converted into Alternate Base Rate Loans on the last day of the applicable Interest Period. Notwithstanding anything to the contrary contained in this Agreement, there shall not be, at any one time, more than eight (8) Interest Periods in effect with respect to Eurodollar Loans or Competitive Loans, in the aggregate.
5.5 Certain Actions, Notices, Etc. Notices to Administrative Agent of any termination or reduction of Commitments, of borrowings and prepayments, conversions and continuations of Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by Administrative Agent not later than 11:00 a.m., Houston, Texas time on the number of Business Days prior to the date of the relevant termination, reduction, borrowing and/or repayment, conversion or continuance specified below:
Notice Number of Business Days Prior
------ -----------------------------
Termination or Reduction of 2
Commitments
Borrowing or prepayment of or same day
conversion into Alternate Base Rate
Loans
Borrowing or prepayment of or 3
conversion into or continuance of
Eurodollar Loans
=============================================== =========================================
|
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing or
prepayment shall specify the amount and Type of the Loans to be borrowed or
prepaid (subject to Sections 3.2(a) and 5.4 hereof), the date of borrowing or
prepayment (which shall be a Business Day) and, in the case of Eurodollar Loans,
the duration of the Interest Period therefor (subject to the definition of
"Interest Period"). Each such notice of conversion of a Loan into a Loan of
another Type shall identify such Loan (or portion thereof) being converted and
specify the Type of Loan into which such Loan is being converted (subject to
Section 5.4 hereof) and the date for conversion (which shall be a Business Day)
and, unless such Loan is being converted into an Alternate Base Rate Loan, the
duration (subject to the definition of "Interest Period") of the Interest Period
therefor which is to commence as of the last day of the then current Interest
Period therefor (or the date of conversion, if such Loan is being converted from
an Alternate Base Rate Loan). Each such notice of continuation of a Loan (or
portion thereof) as the same Type of Loan shall identify such Loan (or portion
thereof) being continued (subject to Section 5.4 hereof) and the duration
(subject to the definition of "Interest Period") of the Interest Period therefor
which is to commence as of the last day of the then current
Interest Period therefor. Administrative Agent shall promptly notify the affected Banks of the contents of each such notice. Notice of any prepayment having been given, the principal amount specified in such notice, together with interest thereon to the date of prepayment, shall be due and payable on such prepayment date. Section 2.9 hereof shall control the time periods applicable to Competitive Loans.
5.6 Non-Receipt of Funds by Administrative Agent. Unless Administrative Agent shall have been notified by a Bank or the Company (the "Payor") prior to the date on which such Bank is to make payment to Administrative Agent of the proceeds of a Loan to be made by it hereunder or the Company is to make a payment to Administrative Agent for the account of one or more of the Banks, as the case may be (such payment being herein called the "Required Payment"), which notice shall be effective upon receipt, that the Payor does not intend to make the Required Payment to Administrative Agent, 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 on such date and, if the Payor has not in fact made the Required Payment to Administrative Agent on or before such date, the recipient of such payment shall, on demand, pay to Administrative Agent the amount made available to it together with interest thereon in respect of the period commencing on the date such amount was so made available by Administrative Agent until the date Administrative Agent recovers such amount at a rate per annum equal to the Federal Funds Rate for such period.
5.7 Sharing of Payments, Etc. If a Bank shall obtain payment of any principal of or interest on any Loan made by it under this Agreement, or on any other obligation then due to such Bank hereunder, through the exercise of any right of set-off, banker's lien, counterclaim or similar right, or otherwise, it shall promptly purchase from the other Banks participations in the Loans made, or other obligations held, by the other Banks in such amounts, and make such other adjustments from time to time as shall be equitable to the end that all the Banks shall share the benefit of such payment (net of any expenses which may be incurred by such Bank in obtaining or preserving such benefit) pro rata in accordance with the unpaid principal and interest on the Obligations then due to each of them (provided, however, that the foregoing shall not apply to payments of Competitive Loans made prior to the termination of the Commitments following the occurrence of an Event of Default). To such end all the Banks 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, to the fullest extent it may effectively do so under applicable law, that any Bank so purchasing a participation in the Loans made, or other obligations held, by other Banks may exercise all rights of set-off, bankers' lien, counterclaim or similar rights with respect to such participation as fully as if such Bank were a direct holder of Loans and other obligations in the amount of such participation. Nothing contained herein shall require any Bank to exercise any such right or shall affect the right of any Bank to exercise, and retain the benefits of exercising, any such right with respect to any other Indebtedness or obligation of any Obligor.
Section 6. Yield Protection and Illegality.
6.1 Additional Costs.
(a) Subject to Section 13.6, the Company shall pay to Administrative Agent, on demand for the account of each Bank from time to time such amounts as such Bank may determine to be necessary to compensate it for any costs incurred by such Bank which such Bank determines are attributable to its making or maintaining of any Eurodollar Loan or any Competitive Loan hereunder or its obligation to make any such Loan hereunder, or any reduction in any amount receivable by such Bank hereunder in respect of any of such Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called "Additional Costs"), in each case resulting from any Regulatory Change which:
(i) subjects such Bank (or makes it apparent that such Bank is subject) to any tax (including without limitation any United States interest equalization tax), levy, impost, duty, charge or fee (collectively, "Taxes"), or any deduction or withholding for any Taxes on or from the payment due under any Eurodollar Loan or any Competitive Loan or other amounts due hereunder, other than income and franchise taxes of each jurisdiction (or any subdivision thereof) in which such Bank has an office or its Applicable Lending Office; or
(ii) changes the basis of taxation of any amounts payable to such Bank under this Agreement in respect of any of such Loans (other than changes which affect taxes measured by or imposed on the overall net income or franchise taxes of such Bank or of its Applicable Lending Office for any of such Loans by each jurisdiction (or any subdivision thereof) in which such Bank has an office or such Applicable Lending Office); or
(iii) imposes or modifies or increases or deems applicable any reserve, special deposit or similar requirements (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System) relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Bank or loans made by such Bank, or against any other funds, obligations or other property owned or held by such Bank (including any of such Loans or any deposits referred to in the definition of "Eurodollar Base Rate" in Section 1.1 hereof) and such Bank actually incurs such additional costs.
Each Bank (if so requested by the Company through Administrative Agent) will designate a different available Applicable Lending Office for the Eurodollar Loans or the Competitive Loans of such Bank or take such other action as the Company may request if such designation or action will avoid the need for, or reduce the amount of, such compensation and will not, in the sole opinion of such Bank exercised in good faith, be disadvantageous to such Bank (provided that such Bank shall have no obligation so to designate an Applicable Lending Office for Eurodollar Loans located in the United States of America). Each Bank will furnish the Company with a statement setting forth the basis and amount of each request by such Bank for compensation under this Section 6.1(a);
subject to Section6.8, such certificate shall be conclusive, absent manifest error, and may be prepared using any reasonable averaging and attribution methods.
(b) Without limiting the effect of the foregoing provisions of this
Section 6.1, in the event that, by reason of any Regulatory Change, any Bank
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 Bank 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 Bank which includes Eurodollar
Loans or Competitive Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets which it may hold, then, if such
Bank so elects by notice to the Company (with a copy to Administrative Agent),
the obligation of such Bank to make Eurodollar Loans or Competitive Loans, as
the case may be, hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect (in which case the provisions of Section6.4 hereof
shall be applicable).
(c) Good faith determinations and allocations by any Bank for purposes of this Section6.1 of the effect of any Regulatory Change on its costs of maintaining its obligations to make Loans or of making or maintaining Loans or on amounts receivable by it in respect of Loans, and of the additional amounts required to compensate such Bank in respect of any Additional Costs, shall be conclusive, absent manifest error.
(d) The Company's obligation to pay Additional Costs and compensation with regard to each Eurodollar Loan and each Competitive Loan shall survive termination of this Agreement.
6.2 Limitation on Types of Loans. Anything herein to the contrary notwithstanding, if, with respect to any Eurodollar Loans:
(a) Administrative Agent determines in good faith (which determination shall be conclusive) that quotations of interest rates for the relevant deposits referred to in the definition of "Eurodollar Base Rate" in Section 1.1 hereof are not being provided by the Reference Banks in the relevant amounts or for the relevant maturities for purposes of determining the rate of interest for such Loans for Interest Periods therefor as provided in this Agreement; or
(b) the Majority Banks determine in good faith (which determination shall be conclusive) and notify Administrative Agent that the relevant rates of interest referred to in the definition of "Eurodollar Base Rate" in Section 1.1 hereof upon the basis of which the rates of interest for such Loans are to be determined do not accurately reflect the cost to such Banks of making or maintaining such Loans for Interest Periods therefor; or
(c) Administrative Agent determines in good faith (which determination shall be conclusive) that by reason of circumstances affecting the interbank Dollar market generally, deposits in United States dollars in the relevant interbank Dollar market are not being offered for the
applicable Interest Period and in an amount equal to the amount of the Eurodollar Loan requested by the Company;
then Administrative Agent shall promptly notify the Company and each Bank thereof, and, so long as such condition remains in effect, the Banks shall be under no obligation to make Eurodollar Loans (but shall maintain until the end of the Interest Period then in effect the Eurodollar Loans then outstanding).
6.3 Illegality. Notwithstanding any other provision of this Agreement
to the contrary, if (x)by reason of the adoption of any applicable Legal
Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Bank with any request or directive (whether or not having the
force of law) of any central bank or other Governmental Authority or (y)
circumstances affecting the relevant interbank Dollar market or the position of
a Bank therein shall at any time make it unlawful or impracticable in the sole
discretion of a Bank exercised in good faith for such Bank or its Applicable
Lending Office to (a) honor its obligation to make Eurodollar Loans or
Competitive Loans hereunder, or (b) maintain Eurodollar Loans or Competitive
Loans hereunder, then such Bank shall promptly notify the Company thereof
through Administrative Agent and such Bank's obligation to make or maintain
Eurodollar Loans or Competitive Loans, as the case may be, hereunder shall be
suspended until such time as such Bank may again make and maintain Eurodollar
Loans or Competitive Loans, as the case may be (in which case the provisions of
Section 6.4 hereof shall be applicable). Before giving such notice pursuant to
this Section 6.3, such Bank will designate a different available Applicable
Lending Office for the Eurodollar Loans or the Competitive Loans, as the case
may be, of such Bank or take such other action as the Company may request if
such designation or action will avoid the need to suspend such Bank's obligation
to make Eurodollar Loans or Competitive Loans, as the case may be, hereunder and
will not, in the sole opinion of such Bank exercised in good faith, be
disadvantageous to such Bank (provided, that such Bank shall have no obligation
so to designate an Applicable Lending Office for Eurodollar Loans located in the
United States of America).
6.4 Substitute Alternate Base Rate Loans. If the obligation of any Bank to make or maintain Eurodollar Loans or Competitive Loans, as the case may be, shall be suspended pursuant to Section 6.1, 6.2 or 6.3 hereof, all Loans which would otherwise be made by such Bank as Eurodollar Loans or Competitive Loans, as the case may be, shall be made instead as Alternate Base Rate Loans (and, if an event referred to in Section 6.1(b) or 6.3 hereof has occurred and such Bank so requests by notice to the Company with a copy to Administrative Agent, each Eurodollar Loan or each Competitive Loan, as the case may be, of such Bank then outstanding shall be automatically converted into an Alternate Base Rate Loan on the date specified by such Bank in such notice) and, to the extent that Eurodollar Loans or Competitive Loans, as the case may be, are so made as (or converted into) Alternate Base Rate Loans, all payments of principal which would otherwise be applied to such Eurodollar Loans or such Competitive Loans, as the case may be, shall be applied instead to such Alternate Base Rate Loans.
6.5 Compensation. Subject to Section 13.6 hereof, the Company shall pay to Administrative Agent for the account of each Bank, within four (4) Business Days after demand therefor by such Bank through Administrative Agent, such amount or amounts as shall be sufficient (in the reasonable opinion of such Bank) to compensate it for any loss, cost or expense actually incurred by it (exclusive of any lost profits or opportunity costs) as a result of:
(a) any payment, prepayment or conversion of a Eurodollar Loan or a Competitive Loan made by such Bank on a date other than the last day of an Interest Period for such Loan; or
(b) any failure by the Company to borrow a Eurodollar Loan or a Competitive Loan to be made by such Bank on the date for such borrowing specified in the relevant notice of borrowing under Section 5.5 or Section 2.9 hereof;
such compensation to include, without limitation, any loss or expense actually incurred (exclusive of any lost profits or opportunity costs) by reason of the liquidation or reemployment of deposits or other funds acquired by the applicable Bank to fund or maintain its share of any Loan. Subject to Section6.8, each determination of the amount of such compensation by a Bank shall be conclusive and binding, absent manifest error, and may be computed using any reasonable averaging and attribution method.
6.6 [Intentionally omitted].
6.7 Capital Adequacy. If any Bank shall have determined that a Regulatory Change resulting in the adoption after the date hereof or effectiveness after the date hereof (whether or not previously announced) of any applicable law, rule, regulation or treaty regarding capital adequacy, or any change therein after the date hereof, or any change in the interpretation or administration thereof after the date hereof by any Governmental Authority charged with the interpretation or administration thereof, or compliance by any Bank (or its Applicable Lending Office) with any request or directive after the date hereof regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority has or would have the effect of reducing the rate of return on such Bank's capital as a consequence of such Bank's obligations hereunder and under the Loans made by it to a level below that which such Bank could have achieved but for such adoption, change or compliance (taking into consideration such Bank's policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, upon satisfaction of the conditions precedent set forth in this Section 6.7, upon demand by such Bank (with a copy to Administrative Agent), the Company (subject to Section 13.6 hereof) shall pay to such Bank such additional amount or amounts as will compensate such Bank for such reduction. A certificate as to such amounts, submitted to the Company and Administrative Agent by such Bank, setting forth the basis for such Bank's determination of such amounts, shall constitute a demand therefor and shall be conclusive and binding for all purposes, absent manifest error. The Company shall pay the amount shown as due on any such certificate within four (4) Business Days after delivery of such certificate. Subject to Section6.8, in preparing such certificate, a Bank may employ
such assumptions and allocations of costs and expenses as it shall in good faith deem reasonable and may use any reasonable averaging and attribution method.
6.8 Limitation on Additional Charges; Substitute Banks; Non-Discrimination. Anything in this Section 6 notwithstanding:
(a) the Company shall not be required to pay to any Bank reimbursement with regard to any costs or expenses, unless such Bank notifies the Company of such costs or expenses within 90 days after the date paid or incurred;
(b) none of the Banks shall be permitted to pass through to the Company charges and costs under this Section 6 on a discriminatory basis (i.e., which are not also passed through by such Bank to other customers of such Bank similarly situated where such customer is subject to documents providing for such pass through); and
(c) if any Bank elects to pass through to the Company any material charge or cost under this Section 6 or elects to terminate the availability of Eurodollar Loans for any material period of time, the Company may, within 60 days after the date of such event and so long as no Default shall have occurred and be continuing, elect to terminate such Bank as a party to this Agreement; provided that, concurrently with such termination the Company shall (i) if Administrative Agent and each of the other Banks shall consent, pay that Bank all principal, interest and fees and other amounts owed to such Bank through such date of termination or (ii) have arranged for another financial institution approved by Administrative Agent (such approval not to be unreasonably withheld) as of such date, to become a substitute Bank for all purposes under this Agreement in the manner provided in Section 13.5; provided further that, prior to substitution for any Bank, the Company shall have given written notice to Administrative Agent of such intention and the Banks shall have the option, but no obligation, for a period of 60 days after receipt of such notice, to increase their Commitments in order to replace the affected Bank in lieu of such substitution.
Section 7. Conditions Precedent.
7.1 Initial Loans. The obligation of each Bank to make its initial Loans on or after the date hereof is subject to the following conditions precedent, each of which shall have been fulfilled or waived to the satisfaction of the Administrative Agent:
(a) Corporate Action and Status. Administrative Agent shall have received from the appropriate Governmental Authorities certified copies of the Organizational Documents (other than bylaws) of the Company and the Guarantor, and evidence satisfactory to Administrative Agent of all corporate action taken by the Company and the Guarantor authorizing the execution, delivery and performance of the Loan Documents and all other documents related to this Agreement to which it is a party (including, without limitation, a certificate of the secretary of each such party setting forth the resolutions of its Board of Directors authorizing the transactions contemplated thereby and attaching a copy of its bylaws), together with such certificates as may be appropriate to demonstrate
the qualification and good standing of and payment of taxes by the Company and the Guarantor in Texas, Louisiana, Montana, Oklahoma, New Mexico and Wyoming, as applicable.
(b) Incumbency. The Company, the Guarantor and each other Relevant Party shall have delivered to Administrative Agent a certificate in respect of the name and signature of each of the officers (i)who is authorized to sign on its behalf the applicable Loan Documents related to any Loan and (ii) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with any Loan. Administrative Agent and each Bank may conclusively rely on such certificates until they receive notice in writing from the Company, the Guarantor or the appropriate Relevant Party to the contrary.
(c) Revolving Credit Agreement. Administrative Agent shall have received counterparts of the Revolving Credit Agreement executed and delivered by or on behalf of each of the parties thereto or the Administrative Agent shall have received evidence satisfactory to it of the execution and delivery by each such Person of a counterpart of such Revolving Credit Agreement.
(d) Loan Documents. The Company and each other Relevant Party shall have duly executed and delivered the other Loan Documents to which it is a party (in such number of copies as Administrative Agent shall have requested) and each such Loan Document shall be in form satisfactory to the Administrative Agent. Each such Loan Document shall be in substantially the form furnished to the Banks prior to their execution of this Agreement, together with such changes therein as the Administrative Agent may approve.
(e) Fees and Expenses. The Company shall have paid to Administrative Agent for the account of each Bank all accrued and unpaid commitment fees and other fees in the amounts previously agreed upon in writing among the Company and Administrative Agent; and shall have in addition paid to each Agent all amounts payable under the letter agreements referred to in Section2.4(b) hereof and under Section 9.7 hereof on or before the date of this Agreement.
(f) Opinions of Counsel. Administrative Agent shall have received (1) an opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel to the Company and the Guarantor, in form and substance reasonably satisfactory to the Agents, and (2) such opinions of counsel to the Company and other Relevant Parties as the Agents shall reasonably request with respect to the Company, the Guarantor and the Loan Documents.
(g) Execution by Banks and Agents. Administrative Agent shall have received counterparts of this Agreement executed and delivered by or on behalf of each of the Banks and the Agents or Administrative Agent shall have received evidence satisfactory to it of the execution and delivery by each of the Banks and Agents of a counterpart hereof.
(h) Consents. Administrative Agent shall have received evidence satisfactory to it that, except as disclosed in the Disclosure Statement, all material consents of each Governmental
Authority and of each other Person, if any, reasonably required in connection
with (a) the Loans, (b) the execution, delivery and performance of this
Agreement and the other Loan Documents have been satisfactorily obtained, and
(c) the consummation of the Merger and all related transactions. All applicable
appeal periods shall have expired and there shall be, in the judgment of the
Administrative Agent, in its sole discretion, no governmental or judicial
action, actual or threatened, restraining, preventing or imposing burdensome
conditions on the Merger and all related transactions, including, without
limitation, the issuance, closing and funding of this Agreement and the
facilities thereunder.
(i) Margin Regulations. After giving effect to such Loan, the Company and Banks shall be in compliance with the Margin Regulations.
(j) Consummation of Merger. The merger among Seagull and Old Ocean Energy (the "Merger") shall have been consummated as contemplated by and pursuant to that certain Agreement and Plan of Merger, dated November 24, 1998, as amended by Amendment No. 1 to Agreement and Plan of Merger, dated as of December 9, 1998 (as amended, the "Merger Agreement"), among such parties, and Administrative Agent shall have received (i) satisfactory evidence of the consummation of such Merger and (ii) a certificate from a Responsible Officer of the Company certifying that the Merger has been consummated.
(k) Financial Reports; Filings. Administrative Agent shall have received copies of (i)all financial statements, reports, notices and proxy statements either (A) requested by the Administrative Agent or any Bank or (B) sent by the Company, Seagull or Old Ocean Energy to its stockholders and (ii) all SEC filings concerning the Merger.
(l) Litigation. No litigation or administrative proceeding or other legal or regulatory developments prohibiting or enjoining the consummation of the Merger shall exist.
(m) Event of Default under Existing Credit Facilities. Exclusive of the Merger, no "Event of Default" (as defined in the Existing Seagull Credit Facility) for Seagull or "Event of Default" (as defined in the Existing Old Ocean Credit Facility) for Old Ocean Energy shall have occurred and be continuing.
(n) Termination of Existing Credit Facilities. Administrative Agent shall have received evidence satisfactory to it that all obligations under (i) the Existing Seagull Credit Facility, (ii) the Existing Old Ocean Credit Facility and (iii) the Existing Old Ocean Bridge Facility, have been paid, fulfilled or satisfied in full or otherwise terminated.
(o) Lien Searches. Administrative Agent shall have received certified copies of Uniform Commercial Code Requests for Information or Copies (Form UCC-11), or a similar search report certified by a party acceptable to the Administrative Agent, dated a date reasonably near to the date of the initial Loan, listing all effective financing statements which name the Company, Seagull, the Guarantor or, at the request of the Administrative Agent, any other Subsidiary (under
its present name and any previous names) as the debtor and which are filed in the following jurisdictions: Delaware, Texas, Louisiana, Montana, Oklahoma, New Mexico and Wyoming, together with copies of such financing statements.
(p) Other Documents. Administrative Agent shall have received such other documents consistent with the terms of this Agreement and relating to the transactions contemplated hereby as Administrative Agent may reasonably request.
All provisions and payments required by this Section 7.1 are subject to the provisions of Section 13.6.
7.2 Initial and Subsequent Loans. The obligation of each Bank to make
any Loan (including, without limitation, its initial Loan) to be made by it
hereunder (excluding conversions of Loans to Alternate Base Rate Loans or Term
Loans made pursuant to Section 2.1(b), in each case as to which no conditions
precedent exist) is subject to the additional conditions precedent that
(i)Administrative Agent shall have received a Request for Extension of Credit
and such other certifications as Administrative Agent may reasonably require,
(ii) in the case of Competitive Loans, the Company shall have complied with the
provisions of Section 2.9 hereof and (iii) as of the date of such Loan, and
after giving effect thereto:
(a) no Default shall have occurred and be continuing;
(b) except for facts timely disclosed to Administrative Agent from time to time in writing, which facts (i) are not materially more adverse to the Company and its Subsidiaries or any other Obligor, (ii) do not materially decrease the ability of the Banks to collect the Obligations as and when due and payable and (iii) do not materially increase the liability of any Agent or any of the Banks, in each case compared to those facts existing on the date hereof and the material details of which have been set forth in the Financial Statements delivered to Administrative Agent prior to the date hereof or in the Disclosure Statement, and except for the representations set forth in the Loan Documents which, by their terms, are expressly (or by means of similar phrasing) made as of the Effective Date or as of the date hereof, as the case may be, only, the representations and warranties made in each Loan Document shall be true and correct in all material respects on and as of the date of the making of such Loan, with the same force and effect as if made on and as of such date;
(c) the making of such Loan shall not violate any Legal Requirement applicable to any Bank; and
(d) no event or condition shall have occurred since the effectiveness of this Agreement which reasonably could be expected to result in a Material Adverse Effect.
Each Request for Extension of Credit by the Company hereunder shall include a representation and warranty by the Company to the effect set forth in Subsections 7.2(a) and (b)
(both as of the date of such notice and, unless the Company otherwise notifies Administrative Agent prior to the date of such borrowing, as of the date of such borrowing).
Section 8. Representations and Warranties. To induce the Banks to enter into this Agreement and to make the Loans, the Company represents and warrants (such representations and warranties to survive any investigation and the making of the Loans) to the Banks and the Agents as follows:
8.1 Corporate Existence. The Company, the Guarantor and each Subsidiary of the Company are corporations duly incorporated and organized, legally existing and in good standing under the laws of the respective jurisdictions in which they are incorporated, and are duly qualified as foreign corporations in all jurisdictions wherein the property owned or the business transacted by them makes such qualification necessary and the failure to so qualify could reasonably be expected to result in a Material Adverse Effect.
8.2 Corporate Power and Authorization. Each of the Company, the Guarantor and each Subsidiary of the Company is duly authorized and empowered to execute, deliver, and perform this Agreement and the other Loan Documents to which it is a party; and all corporate action on the Company's part and on the part of the Guarantor and each Subsidiary of the Company for the due execution, delivery, and performance of this Agreement and the other Loan Documents to which each of the Company, the Guarantor and each such Subsidiary is a party has been duly and effectively taken.
8.3 Binding Obligations. This Agreement and the other Loan Documents constitute legal, valid and binding obligations of the Company and its Subsidiaries and the Guarantor, to the extent each is a party thereto, enforceable against the Company and its Subsidiaries and the Guarantor, to the extent each is a party thereto, in accordance with their respective terms, except as may be limited by any bankruptcy, insolvency, moratorium or other similar laws or judicial decisions affecting creditors' rights generally and general principles of equity whether considered at law or in equity.
8.4 No Legal Bar or Resultant Lien. The Company's and each of its Subsidiaries' and the Guarantor's creation, issuance, execution, delivery and performance of this Agreement and the other Loan Documents, to the extent they are parties thereto, do not and will not violate any provisions of the Organizational Documents of the Company, the Guarantor or any Subsidiary of the Company or any Legal Requirement to which the Company, the Guarantor or any Subsidiary of the Company is subject or by which its property may be presently bound or encumbered, or result in the creation or imposition of any Lien upon any properties of the Company, the Guarantor or any Subsidiary of the Company, other than those permitted by this Agreement.
8.5 No Consent. Except as set forth in the Disclosure Statement, the Company's and each of its Subsidiaries' and the Guarantor's execution, delivery, and performance of this Agreement, the Merger Agreement and the other Loan Documents to which they are parties do not
and will not require the consent or approval of any Person other than such consents and/or approvals obtained by the Company contemporaneously with or prior to the execution of this Agreement, including, without limitation, any Governmental Authorities, other than those consents the failure to obtain which could not be reasonably expected to have a Material Adverse Effect.
8.6 Financial Condition.
(a) The audited consolidated annual financial statements of Seagull and its Subsidiaries for the year ended December31,1998, which have been delivered to the Banks, have been prepared in accordance with GAAP, and present fairly the financial condition and results of the operations of Seagull and its Subsidiaries for the period or periods stated. The audited consolidated annual financial statements of Old Ocean Energy and its Subsidiaries for the year ended December31,1998, which have been delivered to the Banks, have been prepared in accordance with GAAP, and present fairly the financial condition and results of the operations of Old Ocean Energy and its Subsidiaries for the period or periods stated. No Material Adverse Effect has occurred since December 31, 1998, except as disclosed to the Banks in the Disclosure Statement.
(b) The unaudited pro forma consolidated annual financial statements of the Company and its Subsidiaries for the year ended December31,1998, which are presented to give effect to the Merger and which have been delivered to the Banks, have been prepared in accordance with GAAP. No material adverse change, either in any case or in the aggregate, has occurred since December 31, 1998 in the assets, liabilities, financial condition, business, operations, affairs or circumstances of the Company and its Subsidiaries taken as a whole, except as disclosed to the Banks in the Disclosure Statement.
8.7 Investments and Guaranties. As of the Effective Date, no Subsidiary of the Company had made Investments in or advances to, and neither the Company, Seagull or Old Ocean Energy nor any Subsidiary of any of them had made Guarantees of, the obligations of any Person, except as (a) disclosed to the Banks in the Disclosure Statement or (b) not prohibited by applicable provisions of Section10.
8.8 Liabilities and Litigation. Neither the Company or any Subsidiary of the Company, Seagull or any Subsidiary of Seagull, nor Old Ocean Energy or any Subsidiary of Old Ocean Energy, respectively, has any material (individually or in the aggregate) liabilities, direct or contingent, except as (a)disclosed or referred to in the Financial Statements, (b) disclosed to the Banks in the Disclosure Statement, (c) disclosed in a notice to Administrative Agent pursuant to Section9.10 with respect to such as could reasonably be expected to have a Material Adverse Effect or (d) not prohibited by applicable provisions of Section10. Except as (a) described in the Financial Statements, (b)otherwise disclosed to the Banks in the Disclosure Statement, (c) disclosed in a notice to Administrative Agent pursuant to Section9.10 with respect to such as could reasonably be expected to have a Material Adverse Effect or (d) not prohibited by applicable provisions of Section10, no litigation, legal, administrative or arbitral proceeding, investigation, or other action of any nature exists or (to the knowledge of the Company) is threatened against or affecting the
Company or any Subsidiary of the Company, Seagull or any Subsidiary of Seagull, or Old Ocean Energy or any Subsidiary of Old Ocean Energy, respectively, which could reasonably be expected to result in any judgment which could reasonably be expected to have a Material Adverse Effect, or which in any manner challenges or may challenge or draw into question the validity of this Agreement or any other Loan Document, or enjoins or threatens to enjoin or otherwise restrain any of the transactions contemplated by any of them.
8.9 Taxes and Governmental Charges. The Company and its Subsidiaries, Seagull and its Subsidiaries, and Old Ocean Energy and its Subsidiaries, respectively, have filed, or obtained extensions with respect to the filing of, all material tax returns and reports required to be filed and have paid all material taxes, assessments, fees and other governmental charges levied upon any of them or upon any of their respective properties or income which are due and payable, including interest and penalties, or have provided adequate reserves for the payment thereof.
8.10 Title to Properties. The Company and its Subsidiaries and the Guarantor have good and defensible title to their respective properties (including, without limitation, all fee and leasehold interests), free and clear of all Liens except (a) those referred to in the Financial Statements, (b) as disclosed to the Banks in the Disclosure Statement or (c) as permitted by Section10.2.
8.11 Defaults. Neither the Company or any Subsidiary of the Company, Seagull or any Subsidiary of Seagull nor Old Ocean Energy or any Subsidiary of Old Ocean Energy is in default, which default could reasonably be expected to have a Material Adverse Effect, under any indenture, mortgage, deed of trust, agreement or other instrument to which the Company or any Subsidiary of the Company, Seagull or any Subsidiary of Seagull or Old Ocean Energy or any Subsidiary of Old Ocean Energy, respectively, is a party or by which the Company or any Subsidiary of the Company, Seagull or any Subsidiary of Seagull or Old Ocean Energy or any Subsidiary of Old Ocean Energy, respectively, or the property of the Company or any Subsidiary of the Company, Seagull or any Subsidiary of Seagull or Old Ocean Energy or any Subsidiary of Old Ocean Energy, respectively, is bound, except as (a) disclosed to the Banks in the Disclosure Statement, (b) disclosed in a notice to Administrative Agent pursuant to Section9.10 with respect to such as could reasonably be expected to have a Material Adverse Effect or (c) specifically permitted by applicable provisions of Section10. No Default under this Agreement or any other Loan Document has occurred and is continuing.
8.12 Location of Businesses and Offices. Except to the extent that Administrative Agent has been furnished written notice to the contrary or of additional locations, pursuant to Section9.10, the Company's principal place of business and chief executive offices are located at the address stated on the signature page hereof and the principal places of business and chief executive offices of the Guarantor and each other Subsidiary are described on ExhibitC hereto.
8.13 Compliance with Law. Neither the Company or any Subsidiary of the Company, Seagull or any Subsidiary of Seagull nor Old Ocean Energy or any Subsidiary of Old Ocean Energy (except as (a)disclosed to the Banks in the Disclosure Statement, (b) disclosed in a notice to
Administrative Agent pursuant to Section9.10 with respect to such as could reasonably be expected to have a Material Adverse Effect or (c) not prohibited by applicable provisions of Section10):
(a) is in violation of any Legal Requirement; or
(b) has failed to obtain any license, permit, franchise or other governmental authorization necessary to 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.
8.14 Margin Stock. None of the proceeds of the Loans will be used for the purpose of, and neither the Company, the Guarantor nor any Subsidiary of the Company is engaged in the business of extending credit for the purpose of (a) purchasing or carrying any "margin stock" as defined in Regulation U of the Board of Governors of the Federal Reserve System (12 C.F.R. Part 221) or (b) reducing or retiring any indebtedness which was originally incurred to purchase or carry margin stock, if such purpose under either (a) or (b) above would constitute this transaction a "purpose credit" within the meaning of said Regulation U, or for any other purpose which would constitute this transaction a "purpose credit". Neither the Company, the Guarantor nor any Subsidiary of the Company is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stocks. Neither the Company, the Guarantor nor any Subsidiary of the Company nor any Person acting on behalf of the Company, the Guarantor or any Subsidiary of the Company has taken or will take any action which might cause any of the Loan Documents, including this Agreement, to violate RegulationU or any other regulation of the Board of Governors of the Federal Reserve System, or to violate any similar provision of the Securities Exchange Act of 1934 or any rule or regulation under any such provision thereof.
8.15 Subsidiaries. The Company has no Subsidiaries as of the date of this Agreement except those shown in ExhibitC hereto.
8.16 ERISA. With respect to each Plan, the Company and each ERISA Affiliate have fulfilled their obligations, including obligations under the minimum funding standards of ERISA and the Code, and are in compliance in all material respects with the provisions of ERISA and the Code. The Company has no knowledge of any event which could result in a liability of the Company or any ERISA Affiliate to the PBGC or a Plan (other than to make contributions in the ordinary course). Since the effective date of TitleIV of ERISA, there have not been any nor are there now existing any events or conditions that would cause the Lien provided under Section 4068 of ERISA to attach to any property of the Company or any ERISA Affiliate. There are no Unfunded Liabilities with respect to any Plan. No "prohibited transaction" has occurred with respect to any Plan.
8.17 Investment Company Act. Neither the Company nor any of its Subsidiaries is an investment company within the meaning of the Investment Company Act of 1940, as amended, or,
directly or indirectly, controlled by or acting on behalf of any Person which is an investment company, within the meaning of said Act.
8.18 Public Utility Holding Company Act. Neither the Company nor any of its Subsidiaries (i) is subject to regulation under the Public Utility Holding Company Act of 1935, as amended (the "PUHC Act"), except as to Section 9(a)(2) thereof (15 U.S.C.A. ss.79(i)(a)(2)), or (ii)is in violation of any of the provisions, rules, regulations or orders of or under the PUHC Act. Further, none of the transactions contemplated under this Agreement, including without limitation, the making of the Loans, shall cause or constitute a violation of any of the provisions, rules, regulations or orders of or under the PUHC Act and the PUHC Act does not in any manner impair the legality, validity or enforceability of this Agreement. The Company has duly filed with the Securities and Exchange Commission good faith applications (each a "PUHCA Application") under Section 2(a)(8) of the PUHC Act (15 U.S.C.A. ss.79(b)(a)(8)) for a declaration of non-subsidiary status pursuant to such Section 2(a)(8) with respect to each Person (each a "Specified Shareholder") which owns, controls or holds with power to vote, directly or indirectly, a sufficient quantity of the voting securities of the Company to be construed as a "holding company", as such term is defined in the PUHC Act, in respect of the Company. All of the information contained in such PUHCA Applications, as amended, was true as of the most recent filing date with respect thereto (provided that the Company may, unless it has actual current knowledge to the contrary, rely solely upon written information furnished by any Specified Shareholder with respect to background information about the Specified Shareholder and the nature of the ownership by such Specified Shareholder or its Affiliates of the voting securities of the Company), and the Company knows of no reason why each such PUHCA Application, if acted upon by the Securities and Exchange Commission, would not be approved. True and correct copies of each such PUHCA Application and any amendments thereto, as filed, have been furnished to Administrative Agent. The Company has not received any written notice from the Securities and Exchange Commission with respect to any such PUHCA Application other than as disclosed in writing to Administrative Agent.
8.19 Environmental Matters. Except as disclosed in the Disclosure Statement, (i) the Company and its Subsidiaries have obtained and maintained in effect all Environmental Permits (or has initiated the necessary steps to transfer the Environmental Permits into its name), the failure to obtain which could reasonably be expected to have a Material Adverse Effect, (ii) the Company and its Subsidiaries and their properties, assets, business and operations have been and are in compliance with all applicable Requirements of Environmental Law and Environmental Permits failure to comply with which could reasonably be expected to have a Material Adverse Effect, (iii) the Company and its Subsidiaries and their properties, assets, business and operations are not subject to any (A) Environmental Claims or (B) Environmental Liabilities, in either case direct or contingent, and whether known or unknown, arising from or based upon any act, omission, event, condition or circumstance occurring or existing on or prior to the date hereof which could reasonably be expected to have a Material Adverse Effect, and (iv) no Responsible Officer of the Company or any of its Subsidiaries has received any notice of any violation or alleged violation of any Requirements of Environmental Law or Environmental Permit or any Environmental Claim in connection with its assets, properties, business or operations which could reasonably be expected
to have a Material Adverse Effect. The liability (including without limitation any Environmental Liability and any other damage to persons or property), if any, of the Company and its Subsidiaries and with respect to their properties, assets, business and operations which is reasonably expected to arise in connection with Requirements of Environmental Laws currently in effect and other environmental matters presently known by a Responsible Officer of the Company will not have a Material Adverse Effect. No Responsible Officer of the Company knows of any event or condition with respect to Environmental Matters with respect to any of its properties or the properties of any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect. For purposes of this Section 8.19, "Environmental Matters" shall mean matters relating to pollution or protection of the environment, including, without limitation, emissions, discharges, releases or threatened releases of Hazardous Substances into the environment (including, without limitation, ambient air, surface water or ground water, or land surface or subsurface), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances.
8.20 Claims and Liabilities. Except as disclosed to the Banks in writing, neither the Company or any of its Subsidiaries nor the Guarantor has accrued any liabilities under gas purchase contracts for gas not taken, but for which it is liable to pay if not made up and which, if not paid, would have a Material Adverse Effect. Except as disclosed to the Banks in writing, no claims exist against the Company or its Subsidiaries or the Guarantor for gas imbalances which claims if adversely determined would have a Material Adverse Effect. No purchaser of product supplied by the Company or any of its Subsidiaries or the Guarantor has any claim against the Company or any of its Subsidiaries for product paid for, but for which delivery was not taken as and when paid for, which claim if adversely determined would have a Material Adverse Effect.
8.21 Solvency. Neither the Company, the Guarantor nor the Company and its Subsidiaries, on a consolidated basis, is "insolvent", as such term is used and defined in (i) the Bankruptcy Code and (ii) the Texas Uniform Fraudulent Transfer Act, Tex. Bus. & Com. Code Ann. ss.24.001 et seq.
8.22 Year 2000. Any reprogramming required to permit the proper functioning, in and following the year 2000, of (i) the computer systems of the Company and its Subsidiaries and (ii)equipment containing embedded microchips (including systems and equipment supplied by others or with which the systems interface of the Company and its Subsidiaries) and the testing of all such systems and equipment, as so reprogrammed, will be completed by September 30, 1999. The cost to the Company and its Subsidiaries of such reprogramming and testing and of the reasonably foreseeable consequences of year 2000 to the Company and its Subsidiaries (including, without limitation, reprogramming errors and the failure of others' systems or equipment) will not result in a Default or a Material Adverse Effect. Except for such of the reprogramming referred to in the preceding sentence as may be necessary, the computer and management information systems of the Company and its Subsidiaries are and, with ordinary course upgrading and maintenance, will continue for the term of this Agreement to be, sufficient to permit the Company to conduct its business without Material Adverse Effect.
Section 9. Affirmative Covenants. A deviation from the provisions of this Section9 will not constitute a Default under this Agreement if such deviation is consented to in writing by the Majority Banks. Without the prior written consent of the Majority Banks, the Company agrees with the Banks and the Agents that, so long as any of the Commitments is in effect and until payment in full of all Obligations:
9.1 Financial Statements and Reports. The Company will promptly furnish to any Bank from time to time upon request such information regarding the business and affairs and financial condition of the Company and its Subsidiaries and the Guarantor as such Bank may reasonably request, and will furnish to the Agents and each of the Banks:
(a) Annual Reports - promptly after becoming available and in any event within 100days after the close of each fiscal year of the Company:
(i) the audited consolidated balance sheet of the Company and its Subsidiaries as of the end of such year;
(ii) the audited consolidated statement of earnings of the Company and its Subsidiaries for such year;
(iii) the audited consolidated statement of cash flows of the Company and its Subsidiaries for such year;
setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, and, in the case of the audited Financial Statements, audited and accompanied by the related opinion of KPMG Peat Marwick or other independent certified public accountants of recognized national standing acceptable to the Majority Banks, which opinion shall state that such audited balance sheets and statements have been prepared in accordance with GAAP consistently followed throughout the period indicated and fairly present the consolidated financial condition and results of operations of the applicable Persons as at the end of, and for, such fiscal year; and
(b) Quarterly Reports - as soon as available and in any event within 50 days after the end of each of the first three quarterly periods in each fiscal year of the Company:
(i) the unaudited consolidated balance sheet of the Company and its Subsidiaries as of the end of such quarter;
(ii) the unaudited consolidated statement of earnings of the Company and its Subsidiaries for such quarter and for the period from the beginning of the fiscal year to the close of such quarter;
(iii) the unaudited consolidated statement of cash flows of the Company and its Subsidiaries for such quarter and for the period from the beginning of the fiscal year to the close of such quarter;
all of items (i) through (iii) above prepared on substantially the same accounting basis as the annual reports described in Subsection9.1(a), subject to normal changes resulting from year-end adjustments; and
(c) [Intentionally omitted]; and
(d) SEC and Other Reports - promptly upon their becoming publicly available, one copy of each financial statement, report, notice or definitive proxy statement sent by the Company or any Subsidiary to shareholders generally, and of each regular or periodic report and any registration statement, prospectus or written communication (other than transmittal letters) in respect thereof filed by the Company or any of its Subsidiaries with, or received by the Company or any of its Subsidiaries in connection therewith from, any securities exchange or the Securities and Exchange Commission or any successor agency.
All of the balance sheets and other financial statements referred to in this Section9.1 will be in such detail as any Bank may reasonably request and will conform to GAAP applied on a basis consistent with those of the Financial Statements as of December31,1998. In addition, if GAAP shall change with respect to any matter relative to determination of compliance with this Agreement, the Company will also provide financial information necessary for the Banks to determine compliance with this Agreement.
9.2 Officers' Certificates.
(a) Concurrently with the furnishing of the annual financial statements pursuant to Subsection9.1(a), commencing with the annual financial statements required to be delivered in 1999, the Company will furnish or cause to be furnished to Administrative Agent certificates of compliance, as follows:
(i) a certificate signed by the principal financial officer of the Company in the form of ExhibitD; and
(ii) a certificate from the independent public accountants stating that their audit has not disclosed the existence of any condition which constitutes a Default, or if their audit has disclosed the existence of any such condition, specifying the nature and period of existence.
(b) Concurrently with the furnishing of the quarterly financial statements pursuant to Subsection9.1(b), the Company will furnish to Administrative Agent a principal financial officer's certificate in the form of Exhibit D.
9.3 Taxes and Other Liens. The Company will and will cause each Subsidiary of the Company to pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon the Company or such Subsidiary, or upon the income or any property of the Company or such Subsidiary, as well as all claims of any kind (including claims for labor, materials, supplies, rent and payment of proceeds attributable to Hydrocarbon production) which, if unpaid, might result in or become a Lien upon any or all of the property of the Company or such Subsidiary; provided, however, that neither the Company nor such Subsidiary will be required to pay any such tax, assessment, charge, levy or claims if the amount, applicability or validity thereof will currently be contested in good faith by appropriate proceedings diligently conducted and if the Company or such Subsidiary will have set up reserves therefor adequate under GAAP.
9.4 Maintenance. Except as referred to in Sections8.1 and 8.13 and except as permitted under Section 10.4 the Company will and will cause each Subsidiary of the Company to: (i)maintain its corporate existence; (ii) maintain its rights and franchises, except for any mergers or consolidations otherwise permitted by this Agreement and except to the extent failure to so maintain the same would not have a Material Adverse Effect; (iii) observe and comply (to the extent that any failure would have a Material Adverse Effect) with all valid Legal Requirements (including without limitation Requirements of Environmental Law); and (iv) maintain (except to the extent failure to so maintain the same would not have a Material Adverse Effect) its properties (and any properties leased by or consigned to it or held under title retention or conditional sales contracts) consistent with the standards of a reasonably prudent operator at all times and make all repairs, replacements, additions, betterments and improvements to its properties consistent with the standards of a reasonably prudent operator.
9.5 Further Assurances. The Company will, and will cause each Subsidiary of the Company to, cure promptly any defects in the execution and delivery of the Loan Documents, including this Agreement. The Company at its expense will promptly execute and deliver to Administrative Agent upon request all such other and further documents, agreements and instruments (or cause any of its Subsidiaries to take such action) in compliance with or accomplishment of the covenants and agreements of the Company or any of its Subsidiaries in the Loan Documents, including this Agreement, or to correct any omissions in the Loan Documents, or to make any recordings, to file any notices, or obtain any consents, all as may be necessary or appropriate in connection therewith.
9.6 Performance of Obligations. The Company will pay the Loans according to the reading, tenor and effect of this Agreement; and the Company will do and perform every act and discharge all of the obligations provided to be performed and discharged by the Company under this Agreement and the other Loan Documents at the time or times and in the manner specified, and cause each of its Subsidiaries to take such action with respect to their obligations to be performed and discharged under the Loan Documents to which they respectively are parties.
9.7 Reimbursement of Expenses. Whether or not any Loan is ever
made, the Company agrees to pay or reimburse Administrative Agent for paying the reasonable fees and expenses of
Mayer, Brown & Platt, special counsel to the Agents, together with the reasonable fees and expenses of local counsel engaged by the Agents, in connection with the negotiation of the terms and structure of the Obligations, the preparation, execution and delivery of this Agreement and the other Loan Documents and the making of the Loans hereunder, as well as any modification, supplement or waiver of any of the terms of this Agreement and the other Loan Documents. The Company will promptly upon request and in any event within 30 days from the date of receipt by the Company of a copy of a bill for such amounts, reimburse any Bank or any Agent for all amounts reasonably expended, advanced or incurred by such Bank or such Agent to satisfy any obligation of the Company under this Agreement or any other Loan Document, to protect the properties or business of the Company or any Subsidiary of the Company, to collect the Obligations, or to enforce the rights of such Bank or such Agent under this Agreement or any other Loan Document, which amounts will include without limitation all court costs, attorneys' fees (but not including allocated costs of in-house counsel), any engineering fees and expenses, fees of auditors, accountants and appraisers, investigation expenses, all transfer, stamp, documentary or similar taxes, assessments or charges levied by any governmental or revenue authority in respect of any of the Loan Documents or any other document referred to therein, all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any lien contemplated by any of the Loan Documents or any document referred to therein, fees and expenses incurred in connection with such Bank's participation as a member of a creditors' committee in a case commenced under the Bankruptcy Code or other similar law of the United States or any state thereof, fees and expenses incurred in connection with lifting the automatic stay prescribed in ss.362 Title 11 of the United States Code, and fees and expenses incurred in connection with any action pursuant to ss.1129 Title 11 of the United States Code and all other customary out-of-pocket expenses incurred by such Bank or such Agent in connection with such matters, together with interest after the expiration of the 30-day period stated above in this Section if no Event of Default has occurred and is continuing, or from the date of the request to the Company if an Event of Default has occurred and is continuing, at either (i) the Post-Default Rate on each such amount until the date of reimbursement to such Bank or such Agent, or (ii) if no Event of Default will have occurred and be continuing, the Alternate Base Rate plus the highest Applicable Margin for Alternate Base Rate Loans (not to exceed the Highest Lawful Rate) on each such amount until the date of the Company's receipt of written demand or request by such Bank or such Agent for the reimbursement of same, and thereafter at the applicable Post-Default Rate until the date of reimbursement to such Bank or such Agent. The obligations of the Company under this Section are compensatory in nature, shall be deemed liquidated as to amount upon receipt by the Company of a copy of any invoice therefor, and will survive the non-assumption of this Agreement in a case commenced under the Bankruptcy Code or other similar law of the United States or any state thereof, and will remain binding on the Company and any trustee, receiver, or liquidator of the Company appointed in any such case.
9.8 Insurance. The Company and its Subsidiaries will maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and business against such liabilities, casualties, risks and contingencies and in such types and amounts as is customary in the case of corporations engaged in the same or similar businesses and similarly situated. Upon the request of Administrative Agent acting at the instruction of the Majority Banks, the Company will
furnish or cause to be furnished to Administrative Agent from time to time a summary of the insurance coverage of the Company and its Subsidiaries in form and substance satisfactory to the Majority Banks in their reasonable judgment, and if requested will furnish Administrative Agent copies of the applicable policies. In the case of any fire, accident or other casualty causing loss or damage to any properties of the Company or any of its Subsidiaries, the proceeds of such policies will be used (i)to repair or replace the damaged property, (ii) to prepay the Obligations, or (iii) so long as no Default has occurred and is continuing, for general corporate purposes, at the election of the Company.
9.9 Accounts and Records. The Company will keep and will cause each Subsidiary of the Company to keep books of record and account which fairly reflect all dealings or transactions in relation to their respective businesses and activities, in accordance with GAAP, which books of record and account will be maintained, to the extent necessary to enable compliance with all provisions of this Agreement, separately for each such Subsidiary, the Company and any division of the Company.
9.10 Notice of Certain Events. The Company will promptly notify Administrative Agent (and Administrative Agent will then notify all of the Banks and other Agents) if a Responsible Officer of the Company learns of the occurrence of, or if the Company causes or intends to cause, as the case may be:
(i) any event which constitutes a Default, together with a detailed statement by a Responsible Officer of the Company of the steps being taken to cure the effect of such Default; or
(ii) the receipt of any notice from, or the taking of any other action by, the holder of any promissory note, debenture or other evidence of indebtedness of the Company or any Subsidiary of the Company or of any security (as defined in the Securities Act of 1933, as amended) of the Company or any Subsidiary of the Company with respect to a claimed default, together with a detailed statement by a Responsible Officer of the Company specifying the notice given or other action taken by such holder and the nature of the claimed default and what action the Company or such Subsidiary is taking or proposes to take with respect thereto; or
(iii) any legal, judicial or regulatory proceedings affecting the Company or any Subsidiary of the Company or any of the properties of the Company or any Subsidiary of the Company in which the amount involved is materially adverse to the Company and its Subsidiaries taken as a whole, and is not covered by insurance or which, if adversely determined, would have a Material Adverse Effect; or
(iv) any dispute between the Company or any Subsidiary of the Company and any Governmental Authority or any other Person which, if adversely determined, could reasonably be expected to have a Material Adverse Effect; or
(v) the occurrence of a default or event of default by the Company or any Subsidiary of the Company under any other agreement to which it is a party, which default or event of default could reasonably be expected to have a Material Adverse Effect; or
(vi) any change in the accuracy of the representations and warranties of the Company or any Subsidiary contained in this Agreement or any other Loan Document; or
(vii) any material violation or alleged material violation of any Requirements of Environmental Law or Environmental Permit or any Environmental Claim or any Environmental Liability; or
(viii) any tariff and rate cases and other material reports filed by the Company or any of its Subsidiaries with any Governmental Authority and any notice to the Company or any of its Subsidiaries from any Governmental Authority concerning noncompliance with any applicable Legal Requirement; or
(ix) within 10 days after the date on which a Responsible Officer of the Company has actual knowledge thereof, the receipt of any notice by the Company or any of its Subsidiaries of any claim of nonpayment of, or any attempt to collect or enforce, accounts payable of the Company or any of its Subsidiaries exceeding, in the case of any one account payable at one time outstanding, $5,000,000 and in the case of all accounts payable in the aggregate at any one time outstanding, $10,000,000; or
(x) any requirement for the payment of all or any portion of any Indebtedness of the Company or any of its Subsidiaries prior to the stated maturity thereof (whether by acceleration or otherwise) or as the result of any failure to maintain or the reaching of any threshold amount provided in any promissory note, bond, debenture, or other evidence of Indebtedness or under any credit agreement, loan agreement, indenture or similar agreement executed in connection with any of the foregoing; or
(xi) any notice from the Securities and Exchange Commission with respect to any Application (as defined in Section 8.18 hereof).
9.11 ERISA Information and Compliance. The Company will promptly furnish to Administrative Agent (i) immediately upon receipt, a copy of any notice of complete or partial withdrawal liability under Title IV of ERISA and any notice from the PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to administer any Plan, (ii) if requested by Administrative Agent, acting on the instruction of the Majority Banks, promptly after the filing thereof with the United States Secretary of Labor or the PBGC or the Internal Revenue Service, copies of each annual and other report with respect to each Plan or any trust created thereunder, (iii)immediately upon becoming aware of the occurrence of any "reportable event", as such term is defined in Section 4043 of ERISA, for which the disclosure requirements of Regulation Section2615.3 promulgated by the PBGC have not been waived, or of any "prohibited transaction",
as such term is defined in Section 4975 of the Code, in connection with any Plan or any trust created thereunder, a written notice signed by the President or the principal financial officer of the Company or the applicable ERISA Affiliate specifying the nature thereof, what action the Company or the applicable ERISA Affiliate is taking or proposes to take with respect thereto, and, when known, any action taken by the PBGC, the Internal Revenue Service or the Department of Labor with respect thereto, (iv) promptly after the filing or receiving thereof by the Company or any ERISA Affiliate of any notice of the institution of any proceedings or other actions which may result in the termination of any Plan, and (v) each request for waiver of the funding standards or extension of the amortization periods required by Sections 303 and 304 of ERISA or Section 412 of the Code promptly after the request is submitted by the Company or any ERISA Affiliate to the Secretary of the Treasury, the Department of Labor or the Internal Revenue Service, as the case may be. To the extent required under applicable statutory funding requirements, the Company will fund, or will cause each ERISA Affiliate to fund, all current service pension liabilities as they are incurred under the provisions of all Plans from time to time in effect, and comply with all applicable provisions of ERISA, except to the extent that any such failure to comply could not reasonably be expected to have a Material Adverse Effect. The Company covenants that it shall and shall cause each ERISA Affiliate to (1) make contributions to each Plan in a timely manner and in an amount sufficient to comply with the contribution obligations under such Plan and the minimum funding standards requirements of ERISA; (2) prepare and file in a timely manner all notices and reports required under the terms of ERISA including but not limited to annual reports; and (3) pay in a timely manner all required PBGC premiums, in each case, to the extent failure to do so would have a Material Adverse Effect.
Section 10. Negative Covenants. A deviation from the provisions of this Section10 will not constitute a Default under this Agreement if such deviation is consented to in writing by the Majority Banks. The Company agrees with the Banks and the Agents that, so long as any of the Commitments is in effect and until payment in full of all Obligations:
10.1 Debts, Guaranties and Other Obligations.
(i) Of Restricted Subsidiaries. The Company will not permit any of its Restricted Subsidiaries to incur, create, assume or in any manner become or be liable in respect of any Indebtedness (including obligations for the payment of rentals); and the Company will not permit any of its Restricted Subsidiaries to Guarantee or otherwise in any way become or be responsible for obligations of any other Person, whether by agreement to purchase the Indebtedness of any other Person or agreement for the furnishing of funds to any other Person through the purchase or lease of goods, supplies or services (or by way of stock purchase, capital contribution, advance or loan) for the purpose of paying or discharging the Indebtedness of any other Person, or otherwise, except that the foregoing restrictions will not apply to:
(a) Indebtedness pursuant to (1) the Loan Documents and (2) the Revolving Credit Agreement and the "Loan Documents" referred to therein;
(b) Indebtedness of any Restricted Subsidiary existing on the date of this Agreement which is described in the Disclosure Statement, and (A)with respect to any such Indebtedness which constitutes Senior Debt, any extensions, renewals or replacements of such Indebtedness upon terms no more onerous to such Restricted Subsidiary than the terms of this Agreement or the terms of the instruments evidencing such Senior Debt as of the effective date of this Agreement, and (B) with respect to any such Indebtedness which constitutes Subordinated Indebtedness, any extensions, renewals or replacements of such Indebtedness which (I) remains Subordinated Indebtedness and (II) does not require principal repayment of such Subordinated Indebtedness prior to the then scheduled Stated Maturity Date;
(c) endorsements of negotiable or similar instruments for collection or deposit in the ordinary course of business;
(d) trade payables, lease acquisition and lease maintenance
obligations, extensions of credit from suppliers or
contractors, liabilities incurred in exploration,
development and operation of any Restricted Subsidiary's oil
and gas properties or similar obligations from time to
time incurred in the ordinary course of business, other than
for borrowed money, which are paid within 90 days after the
invoice date (inclusive of applicable grace periods) or
(i) are being contested in good faith, if such reserve
as required by GAAP has been made therefor or (ii) trade
accounts payable of any Restricted Subsidiaries (with
respect to which no legal proceeding to enforce
collection has been commenced or, to the knowledge of any
Responsible Officer of the Company, threatened) not
exceeding, in the aggregate at any time outstanding,
$50,000,000;
(e) taxes, assessments or other government charges which are not yet due or are being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as will be required by GAAP will have been made therefor;
(f) intercompany Indebtedness owed to the Company by any Restricted Subsidiary and intercompany Indebtedness owed to any Restricted Subsidiary by any other Restricted Subsidiary;
(g) any Guarantee existing on the date of this Agreement of payment or performance by any Person under any agreement so long as the obligation guaranteed does not constitute Indebtedness for borrowed money;
(h) obligations of any Restricted Subsidiary under gas purchase contracts for gas not taken, as to which such Restricted Subsidiary is liable to pay if not made up;
(i) obligations of any Restricted Subsidiary under any contract for sale for future delivery of oil or gas (whether or not the subject oil or gas is to be delivered) or other similar agreement;
(j) obligations of any Restricted Subsidiary under any hedging contract, forward contract, swap agreement, futures contract or other similar agreement;
(k) obligations of any Restricted Subsidiary under any interest rate or currency swap agreement, or any contract implementing any interest rate or currency cap, collar or floor, or any similar interest rate or currency hedging contract;
(l) obligations in connection with gas imbalances arising in the ordinary course of business;
(m) Guarantees of obligations of Havre by Guarantor in an amount not exceeding $20,000,000 in the aggregate in connection with Indebtedness of Havre;
(n) liabilities under capital leases and lease agreements which do not cover oil and gas properties to the extent (i) the incurrence and existence of such liabilities will still enable each Restricted Subsidiary to comply with all requirements of this Agreement and (ii) not exceeding, in the aggregate at any time outstanding, $35,000,000;
(o) until such time as the Guaranty Agreement is no longer in effect, any Guarantee by Guarantor of the payment or performance of the Company with respect to Indebtedness of Company permitted by Section 10.1(iii);
(p) obligations in connection with bank guarantees, bonds, surety or similar obligations required or requested by Governmental Authorities in connection with the usual and customary operation of and the obtaining of oil and gas properties; and
(q) in addition to Indebtedness permitted by clauses (a) through
(p) above, Indebtedness of any Restricted Subsidiary in an
aggregate principal amount not exceeding $10,000,000 at any
time outstanding.
(ii) Of Unrestricted Subsidiaries. The Company will not permit any of its Unrestricted Subsidiaries to (a) incur, create, assume or in any manner become or be liable in respect of any Indebtedness (including obligations for the payment of rentals), or (b) Guarantee or otherwise in any way become or be responsible for obligations of any other Person, whether by agreement to purchase the Indebtedness of any other Person or agreement for the furnishing of funds to any other Person through the purchase or lease of goods, supplies or services (or by way of stock purchase, capital contribution, advance or loan) for the purpose of paying or discharging the Indebtedness of
any other Person, or otherwise, except that the foregoing restrictions will not apply to any Indebtedness not exceeding $200,000,000 in the aggregate for all Unrestricted Subsidiaries.
(iii) Of the Company. The Company may incur Indebtedness for borrowed money only if such Indebtedness is at prevailing market rates of interest and contains covenants, conditions and events of default not materially more onerous to the Company than the covenants, conditions and event of default set forth in one or more of the various indentures and other debt instruments of the Company in existence on the Effective Date.
10.2 Liens. The Company will not and will not permit any of its Restricted Subsidiaries to create, incur, assume or permit to exist any Lien on any of its or their properties (now owned or hereafter acquired), except:
(a) Liens securing (i) the Loans or other obligations under the Loan Documents, and (ii) the "Loans" (as defined in the Revolving Credit Agreement) and other obligations under the Revolving Credit Agreement and the "Loan Documents" referred to therein, provided that such Liens (A) are for the equal and ratable benefit of the Agents and the Banks under each of this Agreement and the Revolving Credit Agreement and (B) cover the same collateral;
(b) Liens for taxes, assessments or other governmental charges or levies not yet due or which are being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as will be required by GAAP will have been made therefor;
(c) Liens of landlords, vendors, contractors, subcontractors, carriers, warehousemen, mechanics, laborers or materialmen or other like Liens arising by law or contract in the ordinary course of business for sums not yet due or being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as will be required by GAAP will have been made therefor;
(d) Liens existing on property owned by the Company or any of its Restricted Subsidiaries on the date of this Agreement which have been disclosed to the Banks in the Disclosure Statement, together with any renewals, extensions, amendments, refinancings, rearrangements, modifications, restatements or supplements, but not increases, thereof from time to time;
(e) pledges or deposits made in the ordinary course of business in connection with worker's compensation, unemployment insurance, social security and other like laws;
(f) inchoate liens arising under ERISA to secure the contingent liability of the Company permitted by Section9.11;
(g) Liens in the ordinary course of business, not to exceed in the aggregate $25,000,000 as to the Company and its Restricted Subsidiaries at any time in effect, regarding (i) the performance of bids, tenders, contracts (other than for the repayment of borrowed money or the deferred purchase price of property or services) or leases, (ii) statutory obligations, (iii) surety appeal bonds or (iv) Liens to secure progress or partial payments made to the Company or any of its Restricted Subsidiaries and other Liens of like nature;
(h) covenants, restrictions, easements, servitudes, permits, conditions, exceptions, reservations, minor rights, minor encumbrances, minor irregularities in title or conventional rights of reassignment prior to abandonment which do not materially interfere with the occupation, use and enjoyment by the Company or any Restricted Subsidiary of its respective assets in the normal course of business as presently conducted, or materially impair the value thereof for the purpose of such business;
(i) Liens of operators under joint operating agreements or similar contractual arrangements with respect to the relevant entity's proportionate share of the expense of exploration, development and operation of oil, gas and mineral leasehold or fee interests owned jointly with others, to the extent that same relate to sums not yet due or which are being contested in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as will be required by GAAP will have been made therefor;
(j) Liens created pursuant to the creation of trusts or other arrangements funded solely with cash, cash equivalents or other marketable investments or securities of the type customarily subject to such arrangements in customary financial practice with respect to long-term or medium-term indebtedness for borrowed money, the sole purpose of which is to make provision for the retirement or defeasance, without prepayment, of Indebtedness permitted under Section10.1;
(k) Liens in favor of the Company on the assets or properties of ENSTAR Alaska;
(l) Liens securing purchase money Indebtedness or Capital Lease Obligations incurred in compliance with Section 10.1 of this Agreement;
(m) Liens on the capital stock or other equity interest of any Unrestricted Subsidiary securing obligations of such Unrestricted Subsidiary;
(n) any Lien existing on any real or personal property of any corporation or partnership at the time it becomes a Restricted Subsidiary or of any other Restricted Subsidiary, or existing prior to the time of acquisition upon any real or personal property acquired by the Company or any of its Restricted Subsidiaries;
(o) legal or equitable encumbrances deemed to exist by reason of the existence of any litigation or other legal proceeding or arising out of a judgment or award with respect to which an appeal is being prosecuted in good faith by appropriate action promptly initiated and diligently conducted, if such reserve as will be required by GAAP will have been made therefor;
(p) any Liens securing Indebtedness neither assumed nor guaranteed by the Company or any of its Restricted Subsidiaries nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by the Company or any of its Restricted Subsidiaries 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 full 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 arises in the normal course of business as presently conducted and does not materially impair the use of the property covered by such Lien for the purposes for which such property is held by the Company or its applicable Restricted Subsidiary;
(q) rights reserved to or vested in any municipality or governmental, statutory or public authority by the terms of any right, power, franchise, grant, license or permit, or by any provision of law, to terminate such right, power, franchise, grant, license or permit or to purchase, condemn, expropriate or recapture or to designate a purchaser of any of the property of the Company or any of its Restricted Subsidiaries;
(r) rights reserved to or vested in any municipality or governmental, statutory or public authority to control or regulate any property of the Company or any of its Restricted Subsidiaries, or to use such property in a manner which does not materially impair the use of such property for the purposes for which it is held by the Company or its applicable Restricted Subsidiary;
(s) any obligations or duties affecting the property of the Company or any of its Restricted Subsidiaries to any municipality, governmental, statutory or public authority with respect to any franchise, grant, license or permit;
(t) rights of a common owner of any interest in real estate, rights-of-way or easements held by the Company or any of its Restricted Subsidiaries and such common owner as tenants in common or through other common ownership;
(u) as to assets located in Canada, reservations, limitations, provisos and conditions in any original grant from the Crown or freehold lessor of any of the properties of the Company or its Subsidiaries;
(v) other Liens securing Indebtedness not exceeding, in the aggregate, $10,000,000 at any one time outstanding;
(w) Liens covering cash collateral accounts relating to obligations pursuant to Letters of Credit issued in connection with the Revolving Credit Agreement;
(x) Liens securing Indebtedness of the Company or any Restricted Subsidiary of the types described in Section 10.1(i)(p) covering the oil and gas properties to which such Indebtedness relates, provided that the aggregate amount of all such Indebtedness so secured under this Section10.2(x) shall not exceed $50,000,000 in the aggregate at any one time outstanding; and
(y) Liens (i) granted to or existing in favor of third parties
on margin accounts of the Company or any of its
Restricted Subsidiaries relating to exchange traded
contracts for the delivery of natural gas pursuant to
which the Company or any such Restricted Subsidiary
intends to take actual delivery of such natural gas within
forty (40) days from the then current date in the ordinary
course of business and not for speculative purposes, and
(ii) on margin accounts of the Company or any of its
Restricted Subsidiaries relating to exchange traded
contracts for the delivery of natural gas, provided,
however, the aggregate balance of the margin accounts
subject to the Liens permitted by this clause (ii) shall not
exceed from time to time $10,000,000.
10.3 Dividend Payment Restrictions. The Company will not declare or make any Dividend Payment if any Default or Event of Default has occurred and is continuing or would result therefrom.
10.4 Mergers and Sales of Assets. Except for sales of the assets
described in the Disclosure Statement (the "Specified Assets"), the Company will
not (a) merge or consolidate with, or sell, assign, lease or otherwise dispose
of, whether in one transaction or in a series of transactions, more than (i) ten
percent (10%) in the aggregate (not including Specified Assets) of the Company's
and its Restricted Subsidiaries' consolidated total assets (whether now owned or
hereafter acquired) to any Person or Persons during any twelve month period or
(ii) twenty-five percent (25%) in the aggregate (not including Specified Assets)
of the Company's and its Restricted Subsidiaries' consolidated total assets as
of the date hereof to any Person or Persons prior to the Stated Maturity Date,
or permit any Restricted Subsidiary to do so (other than to the Company or
another Restricted Subsidiary or the issuance by any Restricted Subsidiary of
any stock to the Company or another Restricted Subsidiary), or (b) sell, assign,
lease or otherwise dispose of, whether in one transaction or in a series of
transactions, any other properties if receiving therefor consideration other
than cash or other consideration readily convertible to cash or which is less
than the fair market value of the relevant properties, or permit any Restricted
Subsidiary to do so; provided that the Company or any Restricted Subsidiary may
merge or consolidate with any other Person and any Restricted Subsidiary may
transfer properties to any other Restricted Subsidiary or to the Company so long
as, in each
case, (i) immediately thereafter and giving effect thereto, no event will occur and be continuing which constitutes a Default, (ii) in the case of any such merger or consolidation to which the Company is a party, the Company is the surviving Person, (iii) in the case of any such merger or consolidation to which any Restricted Subsidiary is a party (but not the Company), after giving effect to all transactions closing concurrently relating to such merger or consolidation, the surviving Person is a Restricted Subsidiary and (iv) the surviving Person ratifies each applicable Loan Document and provided further that any Restricted Subsidiary may merge or consolidate with any other Restricted Subsidiary so long as, in each case (i) immediately thereafter and giving effect thereto, no event will occur and be continuing which constitutes a Default and (ii) the surviving Person ratifies each applicable Loan Document.
10.5 Proceeds of Loans. The Company will not permit the proceeds of the Loans to be used for any purpose other than those permitted by this Agreement.
10.6 ERISA Compliance. The Company will not at any time permit any Plan maintained by it or any Restricted Subsidiary to:
(a) engage in any "prohibited transaction" as such term is defined in Section 4975 of the Code;
(b) incur any "accumulated funding deficiency" as such term is defined in Section 302 of ERISA; or
(c) terminate or be terminated in a manner which could result in the imposition of a Lien on the property of the Company or any Restricted Subsidiary pursuant to Section 4068 of ERISA,
in each case, to the extent that permitting the Plan to do so would have a Material Adverse Effect.
10.7 Total Leverage Ratio. The Company will not permit its Total Leverage Ratio to be (i) at any time through March 31, 2001, more than 4.25 to 1.00, (ii) at any time from April 1, 2001 through March 31, 2002, more than 4.00 to 1.00, (iii) at any time on or after April 1, 2002, more than 3.75 to 1.00.
10.8 Senior Leverage Ratio. The Company will not permit its Senior Leverage Ratio to be at any time more than 3.00 to 1.00.
10.9 Minimum Net Worth. The Company will not permit its Consolidated Net Worth as of the end of any fiscal quarter to be less than (i)$770,000,000 plus (ii)an amount equal to 50% of the sum of the Company's and its Restricted Subsidiaries' consolidated net income for each calendar quarter, beginning with the calendar quarter ending March 31, 1999, during which such consolidated net income is greater than $0 plus (iii) an amount equal to 50% of the net cash proceeds received by the Company and its Restricted Subsidiaries from the issuance of any common stock,
preferred stock or other equity for each calendar quarter, beginning with the calendar quarter ending March 31, 1999.
10.10 Nature of Business. The Company will not engage in, and will not permit any Restricted Subsidiary to engage in, businesses other than oil and gas exploration and production, gas processing, transmission, distribution, marketing and storage and gas and liquids pipeline operations and activities related or ancillary thereto; provided, that if the Company acquires one or more Restricted Subsidiaries in transactions otherwise permitted by the terms hereof, any such Restricted Subsidiary may be engaged in businesses other than those listed in this Section so long as the assets of such Restricted Subsidiaries which are used in the conduct of such other businesses do not constitute more than five percent (5%) of the consolidated total assets of the Company (inclusive of the assets of the Restricted Subsidiary so acquired).
10.11 Covenants in Other Agreements. The Company will not and will not permit any of its Restricted Subsidiaries to become a party to or to agree that it or any of its property is bound by any agreement, indenture, mortgage, deed of trust or any other instrument ("Instruments") directly or indirectly (i) restricting any loans, advances or any other Investments to or in the Company by any of its Restricted Subsidiaries, (ii) restricting the ability of any Restricted Subsidiary to make tax payments or management fee payments to the Company, or (iii) restricting the ability or capacity of any Restricted Subsidiary to make Dividend Payments to the Company, except for (a) instruments in existence on the date hereof and (b) instruments entered into after the date hereof containing restrictions not materially more restrictive than the restrictions permitted under clause (a) above.
Section 11. Defaults.
11.1 Events of Default. If one or more of the following events (herein called "Events of Default") shall occur and be continuing:
(a) Payments - (i) the Company or any other Relevant Party fails to make any payment or prepayment of any installment of principal on the Loans payable under this Agreement or the other Loan Documents when due or (ii) the Company or any other Relevant Party fails to make any payment or prepayment of interest with respect to the Loans or any other fee, amount or Obligation under this Agreement or the other Loan Documents and such failure to pay continues unremedied for a period of five (5) Business Days; or
(b) Representations and Warranties - any representation or warranty made by the Company or any other Relevant Party in this Agreement or in any other Loan Document or in any instrument executed in connection herewith or therewith proves to have been incorrect in any material respect as of the date thereof; or any representation, statement (including Financial Statements), certificate or data furnished or made by the Company or any other Relevant Party (or any officer of the Company or any other Relevant Party) under or in connection with this Agreement or any other Loan Document, including without limitation in the Disclosure Statement, proves to
have been untrue in any material respect, as of the date as of which the facts therein set forth were stated or certified; or
(c) Affirmative Covenants - (i) default shall be made in the due observance or performance of any of the covenants or agreements contained in Sections9.10 (or in Section9.6 to the extent such default is considered an Event of Default under the other Subsections of this Section11.1) or (ii) default is made in the due observance or performance of any of the other covenants or agreements contained in Section9 of this Agreement or any other affirmative covenant of the Company or any other Relevant Party contained in this Agreement or any other Loan Document and such default continues unremedied for a period of 30 days after (x) notice thereof is given by Administrative Agent to the Company or (y) such default otherwise becomes known to the Company, whichever is earlier; or
(d) Negative Covenants - default is made in the due observance or performance by the Company of any of the covenants or agreements contained in Section10 of this Agreement or of any other negative covenant of the Company or any other Relevant Party contained in this Agreement or any other Loan Document; or
(e) Other Obligations - default is made in the due observance or performance by the Company or any of its Restricted Subsidiaries (as principal or guarantor or other surety) of any of the covenants or agreements contained in any bond, debenture, note or other evidence of Indebtedness in excess of $25,000,000 (singly or aggregating several such bonds, debentures, notes or other evidence of Indebtedness) which default gives the holder the right to accelerate the maturity of such Indebtedness, other than the Loan Documents, or under any credit agreement, loan agreement, indenture, promissory note or similar agreement or instrument executed in connection with any of the foregoing, to which it (respectively) is a party and such default is unwaived or continues unremedied beyond the expiration of any applicable grace period which may be expressly allowed under such instrument or agreement; or
(f) Involuntary Bankruptcy or Receivership Proceedings - a receiver, conservator, liquidator or trustee of the Company, the Guarantor, any Restricted Subsidiary or of any of their property is appointed by the order or decree of any court or agency or supervisory authority having jurisdiction, and such decree or order remains in effect for more than 60 days; or the Company, the Guarantor or any Restricted Subsidiary is adjudicated bankrupt or insolvent; or any of its property is sequestered by court order and such order remains in effect for more than 60 days; or a petition is filed against the Company, the Guarantor or any Restricted Subsidiary under any state or federal bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, liquidation or receivership law of any jurisdiction, whether now or hereafter in effect, and is not dismissed within 60 days after such filing; or
(g) Voluntary Petitions or Consents - the Company, the Guarantor or any Restricted Subsidiary commences a voluntary case or other proceeding seeking liquidation, reorganization, arrangement, insolvency, readjustment of debt, dissolution, liquidation or other relief with respect
to itself or its debt or other liabilities under any bankruptcy, insolvency or other similar law nor or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or consents to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or fails generally to, or cannot, pay its debts generally as they become due or takes any corporate action to authorize or effect any of the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of Insolvency the Company, the Guarantor or any Restricted Subsidiary makes an assignment for the benefit of its creditors, or admits in writing its inability to pay its debts generally as they become due, or consents to the appointment of a receiver, trustee, or liquidator of the Company, the Guarantor, any Restricted Subsidiary or of all or any part of their property; or
(i) Undischarged Judgments - judgments (individually or in the aggregate) for the payment of money in excess of $10,000,000 in excess of insurance coverage are rendered by any court or other governmental body against the Company or any of its Restricted Subsidiaries or the Guarantor and the Company or such Restricted Subsidiary or the Guarantor does not discharge the same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof within 60 days from the date of entry thereof, and within said period of 60 days from the date of entry thereof or such longer period during which execution of such judgment will have been stayed, the Company, such Restricted Subsidiary or the Guarantor fails to appeal therefrom and cause the execution thereof to be stayed during such appeal while providing such reserves therefor as may be required under GAAP; or
(j) Subsidiary Defaults - the Guarantor or any Restricted Subsidiary of the Company takes, suffers, or permits to exist any of the events or conditions referred to in Subsections11.1(f), (g) or (h); or
(k) Change in Control - there should occur any Change of Control.
THEREUPON: Administrative Agent may (and, if directed by the Majority Banks,
shall) (a) declare the Commitments terminated (whereupon the Commitments shall
be terminated) and/or (b) declare the principal amount then outstanding of and
the accrued interest on the Loans and all fees and all other Obligations to be
forthwith due and payable, whereupon such amounts shall be and become
immediately due and payable, without notice (including without limitation notice
of acceleration and notice of intent to accelerate), presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company; provided that in the case of the occurrence of an Event
of Default with respect to the Company referred to in clause (f) or (g) of this
Section 11.1 or in clause(j) of this Section11.1 to the extent it refers to
clauses(f) or (g), the Commitments shall be automatically terminated and the
principal amount then outstanding of and the accrued interest on the Loans and
all fees and all other Obligations payable hereunder shall be and become
automatically and immediately due and payable, without notice (including but not
limited to notice of intent to accelerate and notice of acceleration) and
without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the Company and/or (d)exercise any and all other rights available to it under the Loan Documents, at law or in equity.
11.2 [Intentionally omitted].
11.3 [Intentionally omitted].
11.4 Right of Setoff. Upon (i) the occurrence and during the
continuance of any Event of Default referred to in clauses (f), (g) or (h) of
Section11.1, or in clause (j) of Section11.1 to the extent it refers to clauses
(f), (g) or (h), or upon (ii) the occurrence and continuance of any other Event
of Default and upon the making of the notice specified in Section11.1 to
authorize Administrative Agent to declare the Loans due and payable pursuant to
the provisions of this Agreement, or if (iii) the Company or any of its
Subsidiaries becomes insolvent, however evidenced, the Banks are hereby
authorized at any time and from time to time, without notice to the Company or
any of its Subsidiaries (any such notice being expressly waived by the Company
and its Subsidiaries), to setoff and apply any and all deposits (general or
special, time or demand, provisional or final, whether or not such setoff
results in any loss of interest or other penalty, and including without
limitation all certificates of deposit) at any time held, and any other funds or
property at any time held, and other Indebtedness at any time owing by any Bank
to or for the credit or the account of the Company against any and all of the
Obligations irrespective of whether or not such Bank will have made any demand
under this Agreement and although such obligations may be unmatured. Should the
right of any Bank to realize funds in any manner set forth hereinabove be
challenged and any application of such funds be reversed, whether by court order
or otherwise, the Banks shall make restitution or refund to the Company pro rata
in accordance with their Commitments. The Banks agree promptly to notify the
Company and Administrative Agent after any such setoff and application, provided
that the failure to give such notice will not affect the validity of such setoff
and application. The rights of the Agents and the Banks under this Section are
in addition to other rights and remedies (including without limitation other
rights of setoff) which the Agents or the Banks may have.
Section 12. Agents.
12.1 Appointment, Powers and Immunities. Each Bank hereby irrevocably appoints and authorizes each Agent to act as its agent hereunder and under the other Loan Documents with such powers as are specifically delegated to such Agent by the terms hereof and thereof, together with such other powers as are reasonably incidental thereto. Each Agent (which term as used in this Section 12 shall include reference to its affiliates and its own and their affiliates' officers, directors, employees and agents) shall not (a) have any duties or responsibilities except those expressly set forth in this Agreement and the other Loan Documents, or shall by reason of this Agreement or any other Loan Document be a trustee or fiduciary for any Bank; (b) be responsible to any Bank for any recitals, statements, representations or warranties contained in this Agreement or any other Loan Document, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or any other document referred to or provided for herein or therein or any property covered thereby or for any failure by any Relevant Party or any other Person to perform any of its obligations hereunder or thereunder; (c) be required to initiate or conduct any litigation or collection proceedings hereunder or any other Loan Document except to the extent such Agent is so requested by the Majority Banks, or (d) be responsible for any action taken or omitted to be taken by it hereunder or any other Loan Document or any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, INCLUDING, WITHOUT LIMITATION, PURSUANT TO THEIR OWN NEGLIGENCE, except for its own gross negligence or willful misconduct. Each Agent 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 with reasonable care. In any foreclosure proceeding concerning any collateral for the Loans, each holder of a Loan if bidding for its own account or for its own account and the accounts of other Banks is prohibited from including in the amount of its bid an amount to be applied as a credit against Obligations owing to such Bank or the Obligations owing to the other Banks; instead, such holder must bid in cash only; provided that this provision is for the sole benefit of the Agents and the Banks and shall not inure to the benefit of the Company or any of its Subsidiaries. However, in any such foreclosure proceeding, Administrative Agent may (but shall not be obligated to) submit a bid for all Banks (including itself) in the form of a credit against the Obligations of all of the Banks, and Administrative Agent or its designee may (but shall not be obligated to) accept title to such collateral for and on behalf of all Banks.
12.2 Reliance by Agents. Each Agent shall be entitled to rely 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 upon advice and statements of legal counsel (which may be counsel for the
Company), independent accountants and other experts selected by such Agent. As
to any matters not expressly provided for by this Agreement or any other Loan
Document, each Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and thereunder in accordance with instructions
of the Majority Banks (or, where unanimous consent is required by the terms
hereof or of the other Loan Documents, all of the Banks), and any action taken
or failure to act pursuant thereto shall be binding on all of the Banks.
Pursuant to instructions of the Majority Banks (except as otherwise provided in
Section 13.4 hereof), Administrative Agent shall have the authority to execute
releases of security documents on behalf of the Banks without the joinder of any
Bank. The Company and any third-party may conclusively rely upon any such
release delivered by Administrative Agent without investigation as to whether
such release has been approved by the Majority Banks.
12.3 Defaults. Administrative Agent shall not be deemed to have knowledge of the occurrence of a Default (other than the non-payment of principal of or interest on Loans) unless it has received notice from a Bank or the Company specifying such Default and stating that such notice is a "Notice of Default". In the event that Administrative Agent receives such a notice of the occurrence of a Default, Administrative Agent shall give prompt notice thereof to the Banks (and
shall give each Bank prompt notice of each such non-payment). Administrative Agent shall (subject to Section 12.7 hereof) take such action with respect to such Default as shall be directed by the Majority Banks and within its rights under the Loan Documents and at law or in equity, provided that, unless and until Administrative Agent shall have received such directions, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, permitted hereby with respect to such Default as it shall deem advisable in the best interests of the Banks and within its rights under the Loan Documents, at law or in equity.
12.4 Rights as a Bank. With respect to its Commitments and the Loans made, Chase, Bank of America, Bank One, Societe Generale and Bank of Montreal, respectively, each in its capacity as a Bank hereunder, shall have the same rights and powers hereunder as any other Bank and may exercise the same as though it were not acting as an Agent and the term "Bank" or "Banks" shall, unless the context otherwise indicates, include Chase, Bank of America, Bank One, Societe Generale and Bank of Montreal, respectively, each in its individual capacity. Administrative Agent may (without having to account therefor to any Bank) accept deposits from, lend money to and generally engage in any kind of banking, trust, letter of credit, agency or other business with the Company (and any of its Affiliates) as if it were not acting as Administrative Agent, and Administrative Agent may accept fees and other consideration from the Company and its Affiliates (in addition to the fees heretofore agreed to between the Company and Administrative Agent) for services in connection with this Agreement or otherwise without having to account for the same to the Banks.
12.5 Indemnification. The Banks agree to indemnify each Agent (to the extent not reimbursed under Section 9.7 or Section 13.3 hereof, but without limiting the obligations of the Company under said Sections 9.7 and 13.3), ratably in accordance with their respective Commit ments, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever (INCLUDING, BUT NOT LIMITED TO, THE CONSEQUENCES OF THE NEGLIGENCE OF AGENT) which may be imposed on, incurred by or asserted against such Agent in any way relating to or arising out of this Agreement or any other Loan Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses which the Company is obligated to pay under Sections 9.7 and 13.3 hereof but excluding, unless a Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of their respective agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, provided that no Bank shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified. The obligations of the Banks under this Section 12.5 shall survive the termination of this Agreement and the repayment of the Obligations.
12.6 Non-Reliance on Agents and Other Banks. Each Bank agrees that it has received current financial information with respect to the Company and that it has, independently and without reliance on any Agent or any other Bank and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Company and decision to enter into this
Agreement and that it will, independently and without reliance upon any Agent or any other Bank, 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 of the other Loan Documents. Each Agent shall not be required to keep itself informed as to the performance or observance by any Relevant Party of this Agreement or any of the other Loan Documents or any other document referred to or provided for herein or therein or to inspect the properties or books of the Company or any Relevant Party. Except for notices, reports and other documents and information expressly required to be furnished to the Banks by Administrative Agent hereunder, under the other Loan Documents, the Agents shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the affairs, financial condition or business of the Company or any other Relevant Party (or any of their affiliates) which may come into the possession of such Agent.
12.7 Failure to Act. Except for action expressly required of Administrative Agent hereunder and under the other Loan Documents, Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction by the Banks of their indemnification obligations under Section 12.5 hereof against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.
12.8 Resignation or Removal of Administrative Agent. Subject to the appointment and acceptance of a successor Administrative Agent as provided below, Administrative Agent may resign at any time by giving notice thereof to the Banks and the Company, and Administrative Agent may be removed at any time with or without cause by the Majority Banks. Upon any such resignation or removal, the Majority Banks shall have the right to appoint a successor Administrative Agent (subject to the consent of the Company, which consent shall not be unreasonably withheld), provided deposits with a successor Administrative Agent shall be insured by the Federal Deposit Insurance Corporation or its successor. If no successor Administrative Agent shall have been so appointed by the Majority Banks and shall have accepted such appointment within 30 days after the retiring Administrative Agent's giving of notice of resignation or the Majority Banks' removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Banks, appoint a successor Administrative Agent (subject to the consent of the Company, which consent shall not be unreasonably withheld). Any successor Administrative Agent shall be a bank which has an office in the United States and a combined capital and surplus of at least $1,000,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. A successor Administrative Agent shall promptly specify by notice to the Company and the Banks its Principal Office referred to in Sections 3.1 and 5.1. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Section 12 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 Administrative Agent.
Section 13. Miscellaneous.
13.1 Waiver. No waiver of any Default shall be a waiver of any other Default. No failure on the part of any Agent or any Bank to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided in the Loan Documents are cumulative and not exclusive of any remedies provided by law or in equity.
13.2 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telegraph, telecopy
(confirmed by mail), cable, mail or other writing and telexed, 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 the Company, Administrative Agent given in accordance with this
Section 13.2. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly received when transmitted by
telex or telecopier during regular business hours, delivered to the telegraph or
cable office or personally delivered or, in the case of a mailed notice, three
(3) days after deposit in the United States mails, postage prepaid, certified
mail with return receipt requested (or upon actual receipt, if earlier), in each
case given or addressed as aforesaid.
13.3 Indemnification. The Company shall indemnify the Agents, the
Banks, and each Affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become subject
(REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE SIMPLE (BUT NOT GROSS)
NEGLIGENCE OF THE PERSON INDEMNIFIED), insofar as such losses, liabilities,
claims or damages arise out of or result from any (i)actual or proposed use by
the Company of the proceeds of any extension of credit by any Bank hereunder,
(ii)breach by the Company of this Agreement or any other Loan Document,
(iii)violation by the Company or any of its Subsidiaries of any Legal
Requirement, including but not limited to those relating to Hazardous
Substances, (iv)Liens or security interests previously or hereafter granted on
any real or personal property, to the extent resulting from any Hazardous
Substance located in, on or under any such property, (v) ownership by the Banks
or the Agents of any real or personal property following foreclosure, to the
extent such losses, liabilities, claims or damages arise out of or result from
any Hazardous Substance located in, on or under such property, including,
without limitation, losses, liabilities, claims or damages which are imposed
upon Persons under laws relating to or regulating Hazardous Substances solely by
virtue of ownership, (vi)Bank's or Agent's being deemed an operator of any such
real or personal property by a court or other regulatory or administrative
agency or tribunal in circumstances in which neither any of the Agents nor any
of the Banks is generally operating or generally exercising control over such
property, to the extent such losses, liabilities, claims or damages arise out of
or result from any Hazardous Substance located
in, on or under such property, (vii)investigation, litigation or other proceeding (including any threatened investigation or proceeding) relating to any of the foregoing, and the Company shall reimburse each Agent, each Bank, and each Affiliate thereof and their respective directors, officers, employees and agents, upon demand, for any expenses (including legal fees) incurred in connection with any such investigation or proceeding or (viii) taxes (excluding income taxes and franchise taxes) payable or ruled payable by any Governmental Authority in respect of any Loan Document, together with interest and penalties, if any; provided, however, that the Company shall not have any obligations pursuant to this Section13.3 with respect to any losses, liabilities, claims, damages or expenses (a) arising from or relating solely to events, conditions or circumstances which, as to clauses (iv), (v) or (vi) above, first came into existence or which first occurred after the date on which the Company or any of its Subsidiaries conveyed to an unrelated third party all of the Company's or the applicable Subsidiary's rights, titles and interests to the applicable real or personal property (whether by deed, deed-in-lieu, foreclosure or otherwise) other than a conveyance made in violation of any Loan Document, (b) incurred by the Person seeking indemnification by reason of the gross negligence or willful misconduct of such Person, or (c)asserted by one or more indemnified parties or stockholders thereof against one or more indemnified parties. If the Company ever disputes a good faith claim for indemnification under this Section13.3 on the basis of the proviso set forth in the preceding sentence, the full amount of indemnification provided for shall nonetheless be paid, subject to later adjustment or reimbursement at such time (if any) as a court of competent jurisdiction enters a final judgment as to the applicability of any such exceptions or an agreement is reached with respect thereto.
13.4 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, nor any consent to any departure by the Company therefrom, shall in any event be effective unless the same shall be agreed or consented to by the Majority Banks and the Company, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, that no amendment, waiver or consent shall, unless in writing and signed by each Bank affected thereby, do any of the following: (a) increase the Commitment of such Bank (it being understood that the waiver of any reduction in the Commitments or any mandatory repayment other than (x) the repayment of all Loans on the Stated Maturity Date and (y) the mandatory reductions of the Commitments provided for in Section2.3(a) and (z) the mandatory prepayments required by the terms of Section3.2(b), shall not be deemed to be an increase in any Commitment) or subject the Banks to any additional obligation; (b) reduce the principal of, or interest on, any Loan or fee hereunder; (c)postpone any scheduled date fixed for any payment or mandatory prepayment of principal of, or interest on, any Loan, fee or other sum to be paid hereunder; (d) change the percentage of any of the Commitments or of the aggregate unpaid principal amount of any of the Loans, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Agreement; (e)change any provision contained in Sections 9.7 or 13.3 hereof or this Section 13.4 or Section6.7 hereof, or (f)release all or substantially all of any security for the obligations of the Company under this Agreement or all or substantially all of the personal liability of any obligor created under any of the Loan Documents. Anything in this Section 13.4 to the contrary, no amendment, waiver or consent shall be made with respect to Section 12 without the consent of Administrative Agent.
13.5 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of the Company, the Agents and the Banks and their respective successors and assigns. The Company may not assign or transfer any of its rights or obligations hereunder without the prior written consent of all of the Banks. Each Bank may sell participations to any Person in all or part of any Loan, or all or part of its Commitments, in which event, without limiting the foregoing, the provisions of Section6 shall inure to the benefit of each purchaser of a participation and the pro rata treatment of payments, as described in Section 5.2, shall be determined as if such Bank had not sold such participation. In the event any Bank shall sell any participation, such Bank shall retain the sole right and responsibility to enforce the obligations of the Company relating to the Loans, including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement other than amendments, modifications or waivers with respect to (i) any fees payable hereunder to the Banks and (ii) the amount of principal or the rate of interest payable on, or the dates fixed for the scheduled repayment of principal of, the Loans.
(b) Each Bank may assign to one or more Banks or any other Person all or a portion of its interests, rights and obligations under this Agreement, provided, however, that (i) other than in the case of an assignment to another Bank that is, at the time of such assignment, a party hereto or an Affiliate of such Bank, the Company must give its prior written consent, which consent will not be unreasonably withheld, (ii) the aggregate amount of the Commitment and/or Loans of the assigning Bank subject to each such assignment (determined as of the date the Assignment and Acceptance (as defined below) with respect to such assignment is delivered to Administrative Agent) shall in no event be less than $10,000,000 (or $5,000,000 in the case of an assignment to an Affiliate of a Bank or between Banks) unless either (A) if Bank's Commitment is less than $10,000,000 or $5,000,000, as applicable, such amount is equal to all of such Bank's Commitment under this Agreement or (B) each of the Company and the Administrative Agent otherwise consent, (iii) notwithstanding any other term or provision of this Agreement, unless the Company shall have otherwise consented in writing (such consent not to be unreasonably withheld), each such assignment shall be pro rata with respect to the Loans and the Commitment of the assignor, and (iv)the parties to each such assignment shall execute and deliver to Administrative Agent, for its acceptance and recording in the Register (as defined below), an Assignment and Acceptance in the form of ExhibitE hereto (each an "Assignment and Acceptance") with blanks appropriately completed, together with any note or notes subject to such assignment and a processing and recordation fee of $2,500 paid by the assignee (for which the Company shall have no liability). Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least five Business Days after the execution thereof, (A) the assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Bank hereunder and (B) the Bank thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement. Notwithstanding anything contained in this Agreement to the contrary, any Bank may at any time assign all or any portion of its rights under this Agreement
and the notes issued to it as collateral to a Federal Reserve Bank; provided, that no such assignment shall release the assigning Bank from any of its obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance, the Bank assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than the representation and warranty that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim, such Bank assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any of the other Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any of the other Loan Documents or any other instrument or document furnished pursuant thereto; (ii) such Bank assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Company or the performance or observance by the Company of any of its obligations under this Agreement or any of the other Loan Documents or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 8.6 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon any Agent, such Bank assignor or any other Bank 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 Agreement and the other Loan Documents; (v) such assignee appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to such Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all obligations that by the terms of this Agreement and the other Loan Documents are required to be performed by it as a Bank.
(d) Administrative Agent shall maintain at its office a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Banks and the Commitments of, and principal amount of the Loans owing to, each Bank from time to time (the "Register"). The entries in the Register shall be conclusive, in the absence of manifest error, and the Company, the Agents and the Banks may treat each person the name of which is recorded in the Register as a Bank hereunder for all purposes of this Agreement and the other Loan Documents. The Register shall be available for inspection by the Company or any Bank at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an assigning Bank and the assignee thereunder together with any note or notes subject to such assignment, the written consent to such assignment executed by the Company and the fee payable in respect thereto, Administrative Agent shall, if such Assignment and Acceptance has been completed with blanks appropriately filled, (i)accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Company. If applicable,
within five (5) Business Days after receipt of notice, the Company, at its own expense, shall execute and deliver to Administrative Agent in exchange for the surrendered notes new notes to the order of such assignee in an amount equal to the Commitments and/or Loans assumed by it pursuant to such Assignment and Acceptance and, if the assigning Bank has retained Commitments and/or Loans hereunder, new notes to the order of the assigning Bank in an amount equal to the Commitment and/or Loans retained by it hereunder. Such new notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of the respective note. Thereafter, such surrendered notes, if any, shall be marked renewed and substituted and the originals delivered to the Company (with copies, certified by the Company as true, correct and complete, to be retained by Administrative Agent).
(f) Any Bank may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 13.5, disclose to the assignee or participant or proposed assignee or participant, any information relating to the Company furnished to such Bank by or on behalf of the Company; provided, however, that, prior to any such disclosure, the Company shall have consented thereto, which consent shall not be unreasonably withheld, and each such assignee or participant, or proposed assignee or participant, shall execute an agreement whereby such assignee or participant shall agree to preserve the confidentiality of any Confidential Information (defined in Section13.14) on terms substantially the same as those provided in Section13.14.
(g) The Company will have the right to consent to any material intercreditor arrangements in connection with an assignment by any Bank of any interest, right or obligation under this Agreement which is not pro rata with respect to the Loans and the Commitment of the assignor and the Company may deny its consent to any such arrangements which, in the reasonable judgement of the Company, would adversely affect the Company in a material respect.
(h) The provisions of this Section shall not apply to the assignment and pledge of a Bank's rights hereunder or under any note to any Federal Reserve Bank for collateral purposes pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank; provided that such assignment and pledge shall not relieve such Bank of any of its obligations hereunder.
13.6 Limitation of Interest. The Company, the Agents and the Banks intend to strictly comply with all applicable laws, including applicable usury laws. Accordingly, the provisions of this Section13.6 shall govern and control over every other provision of this Agreement or any other Loan Document which conflicts or is inconsistent with this Section, even if such provision declares that it controls. As used in this Section, the term "interest" includes the aggregate of all charges, fees, benefits or other compensation which constitute interest under applicable law, provided that, to the maximum extent permitted by applicable law, (a) any non-principal payment shall be characterized as an expense or as compensation for something other than the use, forbearance or detention of money and not as interest, and (b) all interest at any time contracted for, reserved,
charged or received shall be amortized, prorated, allocated and spread, in equal parts during the full term of the Obligations. In no event shall the Company or any other Person be obligated to pay, or any Bank have any right or privilege to reserve, receive or retain, (a) any interest in excess of the maximum amount of nonusurious interest permitted under the laws of the State of Texas or the applicable laws (if any) of the United States or of any other applicable state, or (b) total interest in excess of the amount which such Bank could lawfully have contracted for, reserved, received, retained or charged had the interest been calculated for the full term of the Obligations at the Highest Lawful Rate. On each day, if any, that the interest rate (the "Stated Rate") called for under this Agreement or any other Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall automatically be fixed by operation of this sentence at the Highest Lawful Rate for that day, and shall remain fixed at the Highest Lawful Rate for each day thereafter until the total amount of interest accrued equals the total amount of interest which would have accrued if there were no such ceiling rate as is imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate unless and until the Stated Rate again exceeds the Highest Lawful Rate when the provisions of the immediately preceding sentence shall again automatically operate to limit the interest accrual rate. The daily interest rates to be used in calculating interest at the Highest Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate per annum by the number of days in the calendar year for which such calculation is being made. None of the terms and provisions contained in this Agreement or in any other Loan Document which directly or indirectly relate to interest shall ever be construed without reference to this Section 13.6, or be construed to create a contract to pay for the use, forbearance or detention of money at an interest rate in excess of the Highest Lawful Rate. If the term of any Obligation is shortened by reason of acceleration of maturity as a result of any Default or by any other cause, or by reason of any required or permitted prepayment, and if for that (or any other) reason any Bank at any time, including but not limited to, the stated maturity, is owed or receives (and/or has received) interest in excess of interest calculated at the Highest Lawful Rate, then and in any such event all of any such excess interest shall be canceled automatically as of the date of such acceleration, prepayment or other event which produces the excess, and, if such excess interest has been paid to such Bank, it shall be credited pro tanto against the then-outstanding principal balance of the Company's obligations to such Bank, effective as of the date or dates when the event occurs which causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of such excess shall be promptly refunded to its payor. Chapter 346 of the Texas Finance Code (which regulates certain revolving credit accounts (formerly Tex. Rev.
Civ. Stat. Ann. Art. 5069, Ch. 15)) shall not apply to this Agreement.
13.7 Survival. The obligations of the Company under Sections 6, 9.7 and 13.3 hereof and the obligations of the Banks under Section 13.6 hereof shall survive the repayment of the Loans and the termination of the Commitments.
13.8 Captions. Captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.
13.9 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement and any of the parties hereto may execute this Agreement by signing any such counterpart.
13.10 GOVERNING LAW; FORUM SELECTION; CONSENT TO JURISDICTION. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED) THE OTHER LOAN DOCUMENTS ARE PERFORMABLE IN HARRIS COUNTY, TEXAS, WHICH SHALL BE A PROPER PLACE OF VENUE FOR SUIT ON OR IN RESPECT THEREOF. THE COMPANY IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING IN RESPECT OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE BROUGHT IN THE DISTRICT COURTS OF HARRIS COUNTY, TEXAS OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION (COLLECTIVELY, THE "SPECIFIED COURTS"). THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS. THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT BROUGHT IN ANY SPECIFIED COURT, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE COMPANY FURTHER (1) AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE CITY OF HOUSTON, TEXAS, IN CONNECTION WITH ANY SUCH SUIT, ACTION OR PROCEEDING AND TO DELIVER TO ADMINISTRATIVE AGENT EVIDENCE THEREOF AND (2) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS AS PROVIDED IN THIS AGREEMENT OR AS OTHERWISE PROVIDED BY TEXAS LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT OR ANY BANK TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW. THE COMPANY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED) THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS (OTHER THAN THE CONFLICT OF LAWS RULES) OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
13.11 WAIVER OF JURY TRIAL; PUNITIVE DAMAGES. THE COMPANY, EACH AGENT AND EACH BANK HEREBY (I) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (II) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (III) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (IV)ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
13.12 Severability. Whenever possible, each provision of the Loan Documents shall be interpreted in such manner as to be effective and valid under applicable law. If any provision of any Loan Document shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions of such Loan Document shall not be affected or impaired thereby.
13.13 Chapter 15 Not Applicable. Chapter 15, Subtitle 3, Title 79, Revised Civil Statutes of Texas, 1925, as amended, shall not apply to this Agreement or to any Loan, nor shall this Agreement or any Loan be governed by or be subject to the provisions of such Chapter 15 in any manner whatsoever.
13.14 Confidential Information. Each Agent and each Bank separately agrees that:
(a) As used herein, the term "Confidential Information" means written information about the Company or the transactions contemplated herein furnished by the Company to the Agents and/or the Banks which is specifically designated as confidential by the Company; Confidential Information, however, shall not include information which (i) was publicly known or available, or otherwise available on a non-confidential basis to any Bank, at the time of disclosure from a source other than the Company, (ii) subsequently becomes publicly known through no act or omission by such Bank, (iii) otherwise becomes available on a non-confidential basis to any Bank other than through disclosure by the Company or (iv) has been in the possession of any Bank for a period of more than two years from the date on which such information originally was furnished to such Bank by the Company, unless the Company shall have requested the Agents and the Banks in writing, at least 30 days prior to the end of such two-year period, to maintain the confidentiality of such
information for another two (2) year period (or for successive two (2) year periods); provided that the Company shall not unreasonably withhold its consent to a request made after the initial two (2) year period to eliminate information from "Confidential Information".
(b) Each Agent and each Bank agrees that it will take normal and reasonable precautions to maintain the confidentiality of any Confidential Information furnished to such Person; provided, however, that such Person may disclose Confidential Information (i) upon the Company's consent; (ii) to its auditors; (iii) when required by any Legal Requirement; (iv) as may be required or appropriate in any report, statement or testimony submitted to any Governmental Authority having or claiming to have jurisdiction over it; (v) to such Person's and its Subsidiaries' or Affiliates' officers, directors, employees, agents, representatives and professional consultants in connection with this Agreement or administration of the Loans; (vi) as may be required or appropriate, should such Bank elect to assign or grant participations in any of the Obligations in connection with (1) the enforcement of the Obligations to any such Person under any of the Loan Documents or related agreements, or (2) any potential transfer pursuant to this Agreement of any Obligation owned by any Bank (provided any potential transferee has been approved by the Company if required by this Agreement, which approval shall not be unreasonably withheld, and has agreed in writing to be bound by substantially the same provisions regarding Confidential Information contained in this Section); (vii) as may be required or appropriate in response to any summons or subpoena or in connection with any litigation or administrative proceeding; (viii) to any other Bank; (ix) to the extent reasonably required in connection with the exercise of any remedy hereunder or under the other Loan Documents; or (x) to correct any false or misleading information which may become public concerning such Person's relationship to the Company.
13.15 Tax Forms. With respect to each Bank which is organized under the laws of a jurisdiction outside the United States, on the day of the initial borrowing hereunder and from time to time thereafter if requested by the Company or Administrative Agent, such Bank shall provide Administrative Agent and the Company with the forms prescribed by the Internal Revenue Service of the United States certifying as to such Bank's status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to such Bank hereunder or other documents satisfactory to the Company and Administrative Agent indicating that all payments to be made to such Bank hereunder are subject to such tax at a rate reduced by an applicable tax treaty. Unless the Company and Administrative Agent shall have received such forms or such documents indicating that payments hereunder are not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Company or Administrative Agent shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Bank organized under the laws of a jurisdiction outside the United States.
13.16 Entire Agreement. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.
OCEAN ENERGY, INC., a Texas corporation
By:
Name: Stephen A. Thorington
Title: Senior Vice President - Finance,
Treasury & Corporate Development
Address for Notices:
1001 Fannin, Suite 1700
Houston, Texas 77002
Attention: Stephen A. Thorington
Phone: (713) 951-1319
Fax: (713) 951-4846
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as a Bank and as Administrative Agent By: Name: Title: Address for Notices: 1 Chase Manhattan Plaza, 8th Floor New York, New York 10081 Attention: Ms. Debbie Rockower Phone: (212) 552-7446 Fax: (212) 552-5700 |
with a copy to:
Chase Bank of Texas, National Association
712 Main Street
Houston, Texas 77002
Attention: Manager, Energy Division
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
THE CHASE MANHATTAN BANK, as
Auction Administrative Agent
By:
Name:
Title:
Address for Notices:
1 Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Ms. Debbie Rockower
Phone: (212) 552-7446
Fax: (212) 552-5700
|
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
and as Syndication Agent
By:
Name:
Title:
Address for Notices:
Attention:
Phone:
Fax:
with further notice to:
Phone:
Fax:
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
BANK ONE, TEXAS, N.A., as a Bank and as
Documentation Agent By: Name: Christine M. Macan Title: Vice President Address for Notices: 910 Travis, TX2-4330 Houston, Texas 77002 Attention: Jo Linda Papadakis Phone: (713) 751-6235 Fax: (713) 751-7894 |
with further notice to:
910 Travis, TX2-4330 Houston, Texas 77002 Attention: Christine M. Macan Phone: (713) 751-3484 Fax: (713) 751-3544 |
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
SOCIETE GENERALE, SOUTHWEST
AGENCY, as a Bank and as a Managing Agent By: Name: Richard Erbert Title: Vice President |
Lending Office for all Loans:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Address for Notices:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Attention: Loan Administration
Phone: (214) 754-0171
Fax: (214) 979-2792
with further notice to:
Societe Generale 1111 Bagby, Suite 2020 Houston, Texas 77002 Attention: Richard Erbert Phone: (713) 650-0824 Fax: (713) 759-6318 |
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
BANK OF MONTREAL, as a Bank and as a
Managing Agent
By:
Name: Melissa Bauman
Title: Director
|
Address for Notices:
115 S. LaSalle, 11th Floor
Chicago, Illinois 60603
Attention: Craig Reynolds
Phone: (312) 750-6047
Fax: (312) 750-6061
with further notice to:
Melissa Bauman
700 Louisiana, Suite 4400
Houston, Texas 77002
Phone: (713) 546-9723
Fax: (713) 223-4007
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
BANKBOSTON, N.A., as a Bank and as Co-
Agent By: Name: Terrence Ronan Title: Director |
Address for Notices:
100 Federal Street
Boston, MA 02110
Attention: Terrence Ronan
Phone: (617) 434-5472
Fax: (617) 434-3652
with further notice to:
100 Federal Street
Boston, MA 02110
Attention: Fidel Vasquez
Loan Officer
Phone: (617) 434-1906
Fax: (617) 434-3652
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
ABN AMRO BANK N.A., HOUSTON
AGENCY, as a Bank and as Co-Agent
By:
Name:
Title:
By:
Name:
Title:
Address for Notices:
3 Riverway, Suite 1700
Houston, Texas 77056
Attention: Jamie A. Conn
Phone: (713) 964-3356
Fax: (713) 961-1699
|
with further notice to:
208 South LaSalle Street, Suite 1500 Chicago, IL 60604-1003 Attention: Karen MacAllister Phone: (312) 992-5123 Fax: (312) 992-5111
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
CREDIT SUISSE FIRST BOSTON, as a
Bank and as Co-Agent
By:
Name: Douglas E. Maher
Title: Vice President
Address for Notices:
11 Madison Avenue, 20th Floor
New York, New York 10010-3629
Attention: Douglas E. Maher
Phone: (212) 325-3641
Fax: (212) 325-8615
|
with further notice to:
600 Travis Street, 30th Floor
Houston, Texas 77002
Attention: R. Scott Brown
Phone: (713) 220-6774
Fax: (713) 237-0325
|
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
WELLS FARGO BANK (TEXAS),
NATIONAL ASSOCIATION, as a Bank
By:
Name: J. Alan Alexander
Title: Vice President
Address for Notices:
Wells Fargo Bank, N.A.
201 Third Street, 8th Floor
San Francisco, CA 94103
Attention: Oscar Enriquez
Phone: (415) 477-5425
Fax: (415) 979-0675
|
with further notice to:
Wells Fargo Bank (Texas), N.A. Energy Dept. 1000 Louisiana, 3rd Floor Houston, Texas 77002 Attention: J. Alan Alexander Phone: (713) 319-1368 Fax: (713) 739-1087 |
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
CREDIT LYONNAIS, NEW YORK
BRANCH, as a Bank
By:
Name: Phillipe Soustra
Title: Senior Vice President
Address for Notices:
Credit Lyonnais
1000 Louisiana, Suite 5360
Houston, Texas 77002
Attention: Jeff Baker
Phone: (713) 753-8711
Fax: (713) 751-0307
|
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
THE BANK OF NOVA SCOTIA, as a Bank
and as Co-Agent
By:
Name:
Title:
Address for Notices:
600 Peachtree Street N.E., Suite 2700
Atlanta, GA 30308
Attention: Phyllis Walker
Phone: (404) 877-1552
Fax: (404) 888-8998
with further notice to:
1100 Louisiana, Suite 3000 Houston, Texas 77002 Attention: Mark Ammerman Phone: (713) 759-3442 Fax: (713) 759-2425 |
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
SOUTHWEST BANK OF TEXAS, N.A., as
a Bank By: Name: A. Stephen Kennedy Title: Vice President/Manager Energy Lending Address for Notices: 4400 Post Oak Parkway Houston, Texas 77027 Attention: Ann Greer Phone: (713) 235-8881 ext 1792 Fax: (713) 439-5954 |
with further notice to:
4400 Post Oak Parkway Houston, Texas 77027 Attention: A. Stephen Kennedy Phone: (713) 235-8881 ext 1707 Fax: (713) 439-5925
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
THE BANK OF TOKYO-MITSUBISHI,
LTD., as a Bank
By:
Name:
Title:
Address for Notices:
1100 Louisiana Street, Suite 2800
Houston, Texas 77002-5216
Attention: J. M. McIntyre
Phone: (713) 655-3845
Fax: (713) 655-3855
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
THE BANK OF NEW YORK, as a Bank and
as Co-Agent
By:
Name: John N. Watt
Title: Vice President
|
Address for Notices:
One Wall Street, 19th Floor
New York, New York 10286
Attention: Terry Foran
Phone: (212) 635-7921
Fax: (212) 635-7923
with further notice to:
One Wall Street, 19th Floor
New York, New York 10286
Attention: Peter Keller
Phone: (212) 635-7861
Fax: (212) 635-7923
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as a Bank and
as Co-Agent
By:
Name: Kevin McCann
Title: Vice President
Address for Notices:
60 Wall Street, 5th Floor
New York, New York 10260
Attention: John Kowalczuk
Phone: (212) 648-0381
Fax: (212) 648-5416
|
with further notice to:
60 Wall Street, 5th Floor
New York, New York 10260
Attention: Philip McNeal
Phone: (212) 648-0309
Fax: (212) 648-5416
|
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
THE FUJI BANK LIMITED, NEW YORK
BRANCH, as a Bank
By:
Name:
Title:
Address for Notices:
2 World Trade Center, 79th Floor
New York, New York 10048
Attention: Ricky Simmons
Phone: (212) 898-2066
Fax: (212) 321-9407
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
THE SANWA BANK, LIMITED, as a Bank
By:
Name:
Title:
Address for Notices:
1200 Smith Street, Suite 2670
Houston, Texas 77002
Attention: Clyde Redford
Phone: (713) 652-3190
Fax: (713) 654-1462
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
GUARANTY AGREEMENT
(364-Day Credit Agreement)
THIS GUARANTY AGREEMENT dated as of March 30, 1999 is by OCEAN ENERGY,
INC., a corporation duly organized and validly existing under the laws of the state of Louisiana (the "Guarantor"), in favor of each of the financial institutions that is now or hereafter a party to the Credit Agreement (as defined below) as a "Bank" (individually, a "Bank" and, collectively, the "Banks"); CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as administrative agent for the Banks (in such capacity, the "Administrative Agent"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as syndication agent for the Banks (in such capacity, the "Syndication Agent"), BANK ONE, TEXAS, N.A., as documentation agent for the Banks (in such capacity, the "Documentation Agent"), SOCIETE GENERALE, SOUTHWEST AGENCY and BANK OF MONTREAL, as managing agents for the Banks (in such capacity, the "Managing Agents"), and THE CHASE MANHATTAN BANK, as auction administrative agent for the Banks (in such capacity, the "Auction Administrative Agent").
Recitals
A. Ocean Energy, Inc., a Texas corporation (the "Company"), the Administrative Agent, the Syndication Agent, the Documentation Agent, the Managing Agents and the Auction Administrative Agent (collectively the "Agents") and the Banks have executed that certain 364-Day 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 Banks of this Guaranty Agreement.
D. NOW, THEREFORE, (i) in order to comply with the terms and conditions of the Credit Agreement, (ii) to induce the Banks 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 1.1 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 1.2 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 4.1.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the same may from time to time be amended, amended and restated, supplemented or otherwise modified.
"Loan Document" shall mean "Loan Document" as defined in the Credit Agreement.
"Material Adverse Effect" shall mean a material adverse effect on the business, condition (financial or otherwise), operations or properties (including proven oil and gas reserves) of the Guarantor and its Subsidiaries, taken as a whole, or on the ability of the Guarantor to perform its material obligations under the Loan Documents to which it is a party taken as a whole.
"Obligations" shall mean (a) the payment and performance of all present and future "Obligations" (as defined in the Credit Agreement) and any other obligations and liabilities of the Company to the Agents and the Banks under the Credit Agreement, including but not limited to, the full and punctual payment of the Loans and any and all promissory notes given in connection with the Credit Agreement, or in modification, renewal, extension or rearrangement thereof in whole or in part; (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 Banks in connection with the execution, administration or enforcement of any of their rights and remedies hereunder or any other Loan Document.
Section 1.3 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
Guaranty
Section 2.1 Obligations Guaranteed. The Guarantor hereby irrevocably and unconditionally guarantees the prompt payment at maturity of the Obligations.
Section 2.2 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 Commitments are terminated, notwithstanding that from time to time prior thereto no Obligations may be outstanding. The Company, the Agents and the Banks may modify, alter, rearrange, extend for any period and/or renew from time to time, the Obligations and the Agents and the Banks 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 Banks 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 Banks being conclusively presumed by their request for this Guaranty Agreement and delivery of the same to the Administrative Agent.
Section 2.3 Banks' Rights. Subject to the terms of the Credit Agreement, the Guarantor authorizes the Banks (or the Administrative Agent on behalf of the Banks), 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 Banks 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 2.4 Guarantor's Waivers. The Guarantor waives any right to require the Agents and the Banks 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 Agents nor the Banks 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 2.5 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 Banks 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 2.6 Banks' 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 Banks 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 Banks.
Section 2.7 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 2.8 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, 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 Commitments as in effect on the date hereof, 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 Banks, 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 Banks 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 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 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 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 Banks 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 Bank 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 Bank is held to constitute a preference under the bankruptcy laws, or for any reason an Agent or Bank 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 2.9 Limitations on Obligation of the Guarantor Hereunder. The parties hereto (i) intend that the obligation of the Guarantor hereunder be limited to the maximum amount that would not result in the obligation created hereby being avoidable under Section 548 of the Federal
Bankruptcy Code (11 U.S.C. Section 548; hereinafter "Section 548") or other applicable state fraudulent conveyance or transfer law and (ii) agree that this Guaranty Agreement shall be so construed. Accordingly, the obligation of the Guarantor hereunder is limited to an amount that is the greater of (x) the "reasonably equivalent value" or "fair consideration" received by the Guarantor in exchange for the obligation incurred hereunder, within the meaning of Section 548, as amended, or any applicable state fraudulent conveyance or transfer law, as amended; or (y) the lesser of (1) the maximum amount that will not render the Guarantor insolvent or (2) the maximum amount that will not leave the Guarantor with any Property deemed an unreasonably small capital. Clauses (1) and (2) are and shall be determined pursuant to Section 548, as amended, or other applicable state fraudulent conveyance or transfer law, as amended.
Section 2.10 Subrogation. The Guarantor shall not exercise any rights which it may acquire by way of subrogation, reimbursement, exoneration, indemnification or participation, by any payment made under this Guaranty Agreement, under any other Loan Document or otherwise until the Obligations have been paid in full and the Commitments are terminated. Except as described in this Section, the Guarantor further waives any benefit of any right to participate in any security now or hereafter held by the Agents and/or the Banks.
Article III
Representations, Warranties and Covenants
Section 3.1 Representations and Warranties. In order to induce the Agents and the Banks to accept this Guaranty Agreement, the Guarantor represents and warrants to the Agents and Banks (which representations and warranties will survive the creation of the Obligations and any extension of credit thereunder) that:
(a) Benefit to the Guarantor. The Guarantor is a wholly-owned Subsidiary of the Company and the Guarantor's guaranty pursuant to this Guaranty Agreement reasonably may be expected to benefit, directly or indirectly, the Guarantor; and the Guarantor has determined that this Guaranty Agreement is necessary and convenient to the conduct, promotion and attainment of the business of the Guarantor and the Company.
(b) Corporate Existence. The Guarantor: (i) is duly organized and validly existing under the laws of the jurisdiction of its formation; (ii) has all requisite power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being conducted; and (iii) is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify would have a Material Adverse Effect.
(c) No Breach. The execution and delivery by the Guarantor of this Guaranty Agreement and the other Loan Documents to which it is a party, the consummation of the transactions herein or therein contemplated, and the compliance with the terms and provisions hereof will not (i) conflict with or result in a breach of, or require any consent under (A) the charter or by-laws of the Guarantor, or (B) any applicable law or regulation, or any order, writ, injunction or decree of any
court or other Governmental Authority, or any material agreement or instrument to which the Guarantor is a party or by which it is bound or to which it is subject in each case in such manner as could reasonably be expected to have a Material Adverse Effect; or (ii) constitute a default under any such agreement or instrument, or result in the creation or imposition of any Lien upon any of the revenues or property of the Guarantor in each case in such manner as could reasonably be expected to have a Material Adverse Effect.
(d) Corporate Action. The Guarantor has all necessary corporate power and authority to execute, deliver and perform its obligations under this Guaranty Agreement and the Loan Documents to which it is a party; and the execution, delivery and performance by the Guarantor of this Guaranty Agreement and the other Loan Documents to which such Person is a party have been duly authorized by all necessary corporate action on its part. This Guaranty Agreement and the Loan Documents to which the Guarantor is a party constitute the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with their terms, except as may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights and general principals of equity.
(e) Approvals. Other than consents heretofore obtained or described in the Credit Agreement, no authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority are necessary for the execution, delivery or performance by the Guarantor of this Guaranty Agreement or the Loan Documents to which it is a party or for the validity or enforceability thereof. It is understood that continued performance by the Guarantor of this Guaranty Agreement and the other Loan Documents to which it is a party will require various filings, such as filings related to environmental matters, ERISA matters, Taxes and intellectual property, filings required to maintain corporate and similar standing and existence, filings pursuant to the Uniform Commercial Code and other security filings and recordings and filings required by the SEC, routine filings in the ordinary course of business, and filings required in connection with the exercise by the Banks and the Agents of remedies in connection with the Loan Documents.
(f) Solvency. The Guarantor (i) is not insolvent and will not be rendered insolvent as a result of this Guaranty Agreement, (ii) is not engaged in a business or a transaction, or about to engage in a business or a transaction, for which any property or assets remaining with the Guarantor are unreasonably small capital, and (iii) does not intend to incur, or believe it will incur, debts that will be beyond its ability to pay as such debts mature.
(g) No Representation by Agents or Banks. Neither any Agent, any Bank nor any other Person has made any representation, warranty or statement to the Guarantor in order to induce the Guarantor to execute this Guaranty Agreement.
Section 3.2 Covenants. The Guarantor acknowledges that it is has read the Credit Agreement and hereby covenants and agrees to comply with covenants and agreements set forth therein which restrict Restricted Subsidiaries of the Company in so far as such covenants and agreements apply to it.
Article IV
Subordination of Indebtedness
Section 4.1 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 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 4.2 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 Banks 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 Banks. Should any Agent or Bank 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 and the termination of the Commitments, the Guarantor shall become subrogated to the rights of the Agents and the Banks to the extent that such payments to the Agents and the Banks 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 Banks had not received dividends or payments upon the Guarantor Claims.
Section 4.3 Payments Held in Trust. In the event that notwithstanding Sections 4.1 and 4.2, 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 Banks 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 Banks; and the Guarantor covenants promptly to pay the same to the Administrative Agent.
Section 4.4 Liens Subordinate. The Guarantor agrees that, until the Obligations are paid in full and the 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 Bank 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 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 4.5 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 5.1 Successors and Assigns. This Guaranty Agreement is and shall be in every particular available to the successors and assigns of the Agents and the Banks 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 5.2 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 provided for in Section 13.2 of the Credit Agreement and to the address of the Guarantor set forth on the signature page to this Guaranty Agreement.
Section 5.3 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 Banks, 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 Banks 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 5.4 CONSTRUCTION.
(a) THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY AGREEMENT OR THE OTHER LOAN DOCUMENTS TO WHICH THE GUARANTOR IS A PARTY MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY AGREEMENT, THE GUARANTOR HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE THE ADMINISTRATIVE AGENT OR ANY BANK FROM OBTAINING JURISDICTION OVER THE GUARANTOR IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) THE GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT, AS THE CASE MAY BE, AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT OR ANY BANK OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY OTHER JURISDICTION.
(e) THE GUARANTOR AND, BY ITS ACCEPTANCE HEREOF, EACH AGENT AND EACH BANK HEREBY (I) IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AGREEMENT OR ANY LOAN DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 5.4.
Section 5.5 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 Banks' 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 Banks to effect such reinstatement.
Section 5.6 Status as Specified or Designated Senior Indebtedness. The Guarantor hereby acknowledges and confirms that:
(a) this Guaranty Agreement and the obligations of the Guarantor hereunder are "Guarantor Senior Indebtedness" and "Specified Guarantor Senior Indebtedness" under and for purposes of the 95 Indenture; and
(b) this Guaranty Agreement and the obligations of the Guarantor hereunder are "Guarantor Senior Indebtedness" and "Designated Guarantor Senior Indebtedness" under and for purposes of the 96 Indenture, the 97 Indenture and the 98 Senior Subordinated Indenture;
and that as such, the Agents and the Banks are entitled to the rights and privileges afforded holders of Guarantor Senior Indebtedness, Specified Guarantor Senior Indebtedness or Designated Guarantor Senior Indebtedness, as applicable, under each of such Indentures.
Section 5.7 Interest. It is in the interest of the Guarantor and the Agents and the Banks to conform strictly to all applicable usury laws. Accordingly, reference is made to Section 13.6 of the Credit Agreement which is incorporated herein by reference for all purposes.
WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
OCEAN ENERGY, INC., a Louisiana corporation
By:
Name: James C. Flores,
Title: President
Address: c/o Ocean Energy, Inc.
1001 Fannin, Suite 1700
Houston, Texas 77002
Contact: Stephen A. Thorington
Telephone: (713) 951-1319
Telecopy: (713) 951-4846
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OCEAN ENERGY, INC.,
a Texas corporation,
successor by merger to
OCEAN ENERGY, INC.
a Delaware corporation,
as Issuer,
OCEAN ENERGY, INC.,
a Louisiana corporation,
as Subsidiary Guarantor,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
FIRST Supplemental Indenture
Dated as of March 30, 1999
to
Indenture
Dated as of July 8, 1998
8 3/8% Senior Subordinated Notes due 2008
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of March 30, 1999, by and among Ocean Energy, Inc., a Texas corporation (the "COMPANY"), as successor by merger to Ocean Energy, Inc., a Delaware corporation ("OLD OEI"), Ocean Energy, Inc., a Louisiana corporation and wholly-owned subsidiary of the Company ("OEI-SUB"), as subsidiary guarantor, and U.S. Bank Trust National Association, as trustee (the "TRUSTEE").
RECITALS
WHEREAS, Old OEI, as issuer, OEI Sub, as subsidiary guarantor, and the Trustee are parties to that certain indenture, dated as of July 8, 1998 (the "INDENTURE"), providing for the issuance of an aggregate principal amount of $250,000,000 of 8-3/8% Senior Subordinated Notes due 2008; and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of November 24, 1998, as amended by Amendment No. 1 thereto, dated as of December 9, 1998 (as so amended, the "MERGER AGREEMENT"), by and between Old OEI and the Company (formerly known as Seagull Energy Corporation), Old OEI has merged (the "MERGER") with and into the Company, with the Company as the surviving entity, and the Company has changed its name from "Seagull Energy Corporation" to "Ocean Energy, Inc."; and
WHEREAS, pursuant to the Merger Agreement, the Company has assumed all of the obligations of Old OEI under the Indenture, as required under Section 8.1 thereof; and
WHEREAS, pursuant to Section 8.1(v) 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(a) 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 evidence the succession of another Person to the Old OEI and the assumption by any such successor of the covenants of Old OEI contained in the Indenture and in the Securities.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are 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 the obligations of Old OEI for the due and punctual payment of the principal of (and premium, if any, on) and interest on the Securities and the performance and observance of every covenant
of the Indenture on the part of Old OEI, to be performed or observed, and (ii) succeeds to, and becomes substituted for, and may exercise every right and power of, Old OEI 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. Confirmation of Guarantee by OEI-Sub. OEI-Sub hereby expressly confirms that, after 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 the Securities, and (ii) the prompt payment in full of the 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 on 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.
4. Change of Corporate Name. Any and all references in the Indenture and the Securities to OCEAN ENERGY, INC., a Delaware corporation, or the "Company," shall be deemed henceforth to refer to OCEAN ENERGY, INC., a Texas corporation.
5. Ratification of Indenture; Supplemental Indenture 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 of Securities heretofore or hereafter authenticated and delivered under the Indenture shall be bound hereby.
6. 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.
7. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
8. Counterparts. The parties may sign any number of copies or counterparts of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
9. Effect of Headings. The Section headings herein are for convenience only and shall not affect 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 Texas corporation
By:
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
By:
Name:
Title:
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By:
Name:
Title:
OCEAN ENERGY, INC.,
a Texas corporation,
successor by merger to
OCEAN ENERGY, INC.
a Delaware corporation,
as Issuer,
OCEAN ENERGY, INC.,
a Louisiana corporation,
as Subsidiary Guarantor,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
FIRST Supplemental Indenture
Dated as of March 30, 1999
to
Indenture
Dated as of July 8, 1998
7 5/8% Senior Notes due 2005
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of March 30, 1999, by and among Ocean Energy, Inc., a Texas corporation (the "COMPANY"), as successor by merger to Ocean Energy, Inc., a Delaware corporation ("OLD OEI"), Ocean Energy, Inc., a Louisiana corporation and wholly-owned subsidiary of the Company ("OEI-SUB"), as subsidiary guarantor, and Norwest Bank Minnesota, National Association, as trustee (the "TRUSTEE").
RECITALS
WHEREAS, Old OEI, as issuer, OEI-Sub, as subsidiary guarantor, and the Trustee are parties to that certain Indenture, dated as of July 8, 1998 (the "INDENTURE"), providing for the issuance of an aggregate principal amount of $125,000,000 of 7-5/8% Senior Notes due 2005; and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of November 24, 1998, as amended by Amendment No. 1 thereto, dated as of December 9, 1998 (as so amended, the "MERGER AGREEMENT"), by and between Old OEI and the Company (formerly known as Seagull Energy Corporation), Old OEI has merged (the "MERGER") with and into the Company, with the Company as the surviving entity, and the Company has changed its name from "Seagull Energy Corporation" to "Ocean Energy, Inc."; and
WHEREAS, pursuant to the Merger Agreement, the Company has assumed all of the obligations of Old OEI under the Indenture, as required under Section 5.01 thereof; and
WHEREAS, pursuant to Section 9.01(b) 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 provide for the assumption of the obligations of Old OEI under the Indenture by a Successor upon the merger of Old OEI.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are 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 the obligations of Old OEI under the Indenture and the Notes, and (ii) becomes substituted for, and may exercise every right and power of, Old OEI under the Indenture with the same effect as if the Company had originally been named as the issuer of the Notes under the Indenture.
3. Change of Corporate Name. Any and all references in the Indenture and Notes to OCEAN ENERGY, INC., a Delaware corporation, or the "Company," shall be deemed henceforth to refer to OCEAN ENERGY, INC., a Texas corporation.
4. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF, SHALL GOVERN AND BE USED TO
CONSTRUE THIS SUPPLEMENTAL INDENTURE.
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 of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.
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 Texas corporation
By:
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
By:
Name:
Title:
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By:
Name:
Title:
OCEAN ENERGY, INC.,
a Texas corporation,
successor by merger to
OCEAN ENERGY, INC.
a Delaware corporation,
as Issuer,
OCEAN ENERGY, INC.,
a Louisiana corporation,
as Subsidiary Guarantor,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
FIRST Supplemental Indenture
Dated as of March 30, 1999
to
Indenture
Dated as of July 8, 1998
8 1/4% Senior Notes due 2018
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of March 30, 1999, by and among Ocean Energy, Inc., a Texas corporation (the "COMPANY"), as successor by merger to Ocean Energy, Inc., a Delaware corporation ("OLD OEI"), Ocean Energy, Inc., a Louisiana corporation and wholly-owned subsidiary of the Company ("OEI-SUB"), as subsidiary guarantor, and Norwest Bank Minnesota, National Association, as trustee (the "TRUSTEE").
RECITALS
WHEREAS, Old OEI, as issuer, and OEI-Sub, as subsidiary guarantor, have heretofore executed and delivered to the Trustee an Indenture, dated as of July 8, 1998 (the "INDENTURE"), providing for the issuance of an aggregate principal amount of $125,000,000 of 8 1/4% Senior Notes due 2018; and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of November 24, 1998, as amended by Amendment No. 1 thereto, dated as of December 9, 1998 (as so amended, the "MERGER AGREEMENT"), by and between Old OEI and the Company (formerly known as Seagull Energy Corporation), Old OEI has merged (the "MERGER") with and into the Company, with the Company as the surviving entity, and the Company has changed its name from "Seagull Energy Corporation" to "Ocean Energy, Inc."; and
WHEREAS, pursuant to the Merger Agreement, the Company has assumed all of the obligations of OEI under the Indenture, as required under Section 5.01 thereof; and
WHEREAS, pursuant to Section 9.01 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 provide for the assumption of the obligations of Old OEI under the Indenture by a Successor upon the merger of Old OEI.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are 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 Old OEI under the Indenture and the Notes, and (ii) becomes substituted for, and may exercise every right and power of, Old OEI under the Indenture with the same effect as if the Company had originally been named as the issuer of the Notes under the Indenture.
3. Change of Corporate Name. Any and all references in the Indenture and the Notes to OCEAN ENERGY, INC., a Delaware corporation, or the "Company," shall be deemed henceforth to refer to OCEAN ENERGY, INC., a Texas corporation.
4. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF, SHALL GOVERN AND BE USED TO
CONSTRUE THIS SUPPLEMENTAL INDENTURE.
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 of reference only, are not to be considered part hereof and shall in no way modify or restrict any of the provisions hereof.
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 Texas corporation
By:
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee
By:
Name:
Title:
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By:
Name:
Title:
OCEAN ENERGY, INC.,
a Texas corporation,
successor by merger to
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
SECOND Supplemental Indenture
Dated as of March 30, 1999
to
Indenture
Dated as of July 2, 1997
8 7/8% Senior Subordinated Notes due 2007
007364.0077 DALLAS 200106 v2
SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of March 30, 1999, by and among Ocean Energy, Inc., a Texas corporation (the "COMPANY"), as successor by merger to Ocean Energy, Inc., a Delaware corporation ("OLD OEI"), Ocean Energy, Inc., a Louisiana corporation and wholly-owned subsidiary of the Company ("OEI-SUB"), as subsidiary guarantor, and State Street Bank and Trust Company, as trustee (the "TRUSTEE").
RECITALS
WHEREAS, Old OEI, as issuer, OEI-Sub, as subsidiary guarantor and the Trustee are parties to that certain Indenture, dated as of July 2, 1997, as supplemented by the First Supplemental Indenture, dated as of March 27, 1998, by and among Old OEI, OEI-Sub and the Trustee (as so supplemented, the "INDENTURE"), providing for the issuance of an aggregate principal amount of $200,000,000 of 8-7/8% Senior Subordinated Notes due 2007; and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of November 24, 1998, as amended by Amendment No. 1 thereto, dated as of December 9, 1998 (as so amended, the "MERGER AGREEMENT"), by and between Old OEI and the Company (formerly known as Seagull Energy Corporation), Old OEI has merged (the "MERGER") with and into the Company, with the Company as the surviving entity, and the Company has changed its name from "Seagull Energy Corporation" to "Ocean Energy, Inc."; and
WHEREAS, pursuant to the Merger Agreement, the Company has assumed all of the obligations of Old OEI under the Indenture, as required under Section 8.1 thereof; 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(a) 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 evidence the succession of another Person to Old OEI and the assumption by any such successor of the covenants of Old OEI contained in the Indenture and in the Securities.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are 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 the obligations of Old OEI for the due and punctual payment of the principal of (and premium, if any,
on) and interest on the Securities and the performance and observance of every covenant of the Indenture on the part of Old OEI to be performed or observed, and (ii) succeeds to, and becomes substituted for, and may exercise every right and power of, Old OEI 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. Confirmation of Guarantee by OEI-Sub. OEI-Sub hereby expressly confirms that, after 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 the Securities, and (ii) the prompt payment in full of the 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 on 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.
4. Change of Corporate Name. Any and all references in the Indenture and the Securities to OCEAN ENERGY, INC., a Delaware corporation, or the "Company," shall be deemed henceforth to refer to OCEAN ENERGY, INC., a Texas corporation.
5. Designation of Unrestricted Subsidiaries. The Company's Board of Directors has designated Texneft, Inc. and Thousand Oaks Dev. Corp., J.V. 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 Indenture 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 of Securities heretofore or hereafter authenticated and delivered under the Indenture shall be bound hereby.
7. 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.
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 or counterparts 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 affect 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 Texas corporation
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
Name:
Title:
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By:
Name:
Title:
OCEAN ENERGY, INC.,
a Texas corporation,
successor by merger to
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
SECOND Supplemental Indenture
Dated as of March 30, 1999
to
Indenture
Dated as of September 26, 1996
9 3/4% Senior Subordinated Notes due 2006
007364.0077 DALLAS 200151 v2
SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of March 30, 1999, by and among Ocean Energy, Inc., a Texas corporation (the "COMPANY"), as successor by merger to Ocean Energy, Inc., a Delaware corporation ("OLD OEI"), Ocean Energy, Inc., a Louisiana corporation and wholly-owned subsidiary of the Company ("OEI-SUB"), as subsidiary guarantor, and State Street Bank and Trust Company, successor-in-interest to Fleet National Bank, as trustee (the "TRUSTEE").
RECITALS
WHEREAS, Old OEI (then known as Flores & Rucks, Inc., a Delaware corporation), as issuer, OEI-Sub (then known as Flores & Rucks, Inc., a Louisiana corporation), as subsidiary guarantor, and the Trustee are parties to that certain Indenture, dated as of September 26, 1996, as supplemented by the First Supplemental Indenture, dated as of March 27, 1998, by and among Old OEI, OEI-Sub and the Trustee (as so supplemented, the "INDENTURE"), providing for the issuance of an aggregate principal amount of $160,000,000 of 9 3/4% Senior Subordinated Notes due 2006; aND
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of November 24, 1998, as amended by Amendment No. 1 thereto, dated as of December 9, 1998 (as so amended, the "MERGER AGREEMENT"), by and between Old OEI and the Company (formerly known as Seagull Energy Corporation), Old OEI has merged (the "MERGER") with and into the Company, with the Company as the surviving entity, and the Company has changed its name from "Seagull Energy Corporation" to "Ocean Energy, Inc."; and
WHEREAS, pursuant to the Merger Agreement, the Company has assumed all of the obligations of Old OEI under the Indenture, as required under Section 8.1 thereof; 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(a) 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 evidence the succession of another Person to Old OEI and the assumption by any such successor of the covenants of Old OEI contained in the Indenture and in the Securities.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are 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 the obligations of Old OEI for the due and punctual payment of the principal of (and premium, if any, on) and interest on all of the Securities and the performance and observance of every covenant of the Indenture on the part of Old OEI to be performed or observed, and (ii) succeeds to, and becomes substituted for, and may exercise every right and power of, Old OEI 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. Confirmation of Guarantee by OEI-Sub. OEI-Sub hereby expressly confirms that, after 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 the Securities, and (ii) the prompt payment in full of the 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 on 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.
4. Change of Corporate Name. Any and all references in the Indenture and the Securities to OCEAN ENERGY, INC., a Delaware corporation, or the "Company," shall be deemed henceforth to refer to OCEAN ENERGY, INC., a Texas corporation.
5. Designation of Unrestricted Subsidiaries. The Company's Board of Directors has designated Texneft, Inc. and Thousand Oaks Dev. Corp. J.V. 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 Indenture 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 of Securities heretofore or hereafter authenticated and delivered under the Indenture shall be bound hereby.
7. 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.
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 or counterparts 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 affect 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 Texas corporation
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
Name:
Title:
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By:
Name:
Title:
OCEAN ENERGY, INC.,
a Texas corporation,
successor by merger to
OCEAN ENERGY, INC.
a Delaware corporation,
as Issuer,
OCEAN ENERGY, INC.,
a Louisiana corporation,
as Subsidiary Guarantor,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
THIRD Supplemental Indenture
Dated as of March 30, 1999
to
Indenture
Dated as of October 30, 1995
10 3/8% Senior Subordinated Notes due 2005
THIRD SUPPLEMENTAL INDENTURE
THIRD SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of March 30, 1999, by and among Ocean Energy, Inc., a Texas corporation (the "COMPANY"), as successor by merger to Ocean Energy, Inc., a Delaware corporation ("OLD OEI"), Ocean Energy, Inc., a Louisiana corporation and wholly-owned subsidiary of the Company ("OEI-SUB"), as subsidiary guarantor, and U.S. Bank Trust National Association, formerly known as First Trust of New York, National Association, as trustee (the "TRUSTEE").
RECITALS
WHEREAS, Old OEI, as successor by merger to United Meridian Corporation, a Delaware corporation ("UMC"), as issuer, OEI-Sub, as successor by merger to UMC Petroleum Corporation, a Delaware corporation ("UMC-SUB"), as subsidiary guarantor, and the Trustee are parties to that certain Indenture, dated as of October 30, 1995, as supplemented by the First Supplemental Indenture, dated as of November 4, 1997, among UMC, UMC-Sub and First Trust of New York, National Association, successor to Bank of Montreal Trust Company, as Trustee, and the Second Supplemental Indenture, dated as of March 27, 1998, by and among Old OEI, OEI-Sub, and the Trustee (as so supplemented, the "INDENTURE"), providing for the issuance of an aggregate principal amount of $150,000,000 of 10.375% Senior Subordinated Notes due 2005; and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of November 24, 1998, as amended by Amendment No. 1 thereto, dated as of December 9, 1998 (as so amended, the "MERGER AGREEMENT"), by and between Old OEI and the Company (formerly known as Seagull Energy Corporation), Old OEI has merged (the "MERGER") with and into the Company, with the Company as the surviving entity, and the Company has changed its name from "Seagull Energy Corporation" to "Ocean Energy, Inc."; and
WHEREAS, pursuant to the Merger Agreement, the Company has assumed all of the obligations of OEI under the Indenture, as required under Section 8.1 thereof; 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(a) 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 evidence the succession of another Person to Old OEI and the assumption by any such successor of the covenants of Old OEI contained in the Indenture and in the Securities.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are 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 Old OEI under the Securities and the Indenture, and (ii) succeeds to, and becomes substituted for, and may exercise every right and power of, Old OEI 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. Confirmation of Guarantee by OEI-Sub. OEI-Sub hereby expressly confirms that, after 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 the Securities, and (ii) the prompt payment in full of principal of and interest on the Securities when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Securities, if any, to the extent lawful, and the prompt payment in full and performance of 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.
4. Change of Corporate Name. Any and all references in the Indenture and the Securities to OCEAN ENERGY, INC., a Delaware corporation, or the "Company," shall be deemed henceforth to refer to OCEAN ENERGY, INC., a Texas corporation.
5. Ratification of Indenture; Supplemental Indenture Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the obligations of the Company thereunder and under the Securities 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 under the Indenture shall be bound hereby.
6. 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.
7. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
8. Counterparts. The parties may sign any number of copies or counterparts 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 affect 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 Texas corporation
By:
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee
By:
Name:
Title:
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By:
Name:
Title:
OCEAN ENERGY, INC.,
a Texas corporation,
successor by merger to
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
FOURTH Supplemental Indenture
Dated as of March 30, 1999
to
Indenture
Dated as of December 1, 1994
13 1/2% Senior Notes due 2004
007364.0077 DALLAS 199867 v2
007364.0077 DALLAS 199867 v2
FOURTH SUPPLEMENTAL INDENTURE
FOURTH SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of March 30, 1999, by and among Ocean Energy, Inc., a Texas corporation (the "COMPANY"), as successor by merger to Ocean Energy, Inc., a Delaware corporation ("OLD OEI"), Ocean Energy, Inc., a Louisiana corporation and wholly-owned subsidiary of the Company ("OEI-SUB"), as subsidiary guarantor, and State Street Bank and Trust Company, as trustee (the "TRUSTEE").
RECITALS
WHEREAS, Old OEI, as issuer, OEI-Sub, as subsidiary guarantor, and the Trustee are parties to that certain Indenture, dated as of December 1, 1994, as supplemented by the First Supplemental Indenture, dated as of September 19, 1996, between Old OEI (then known as Flores & Rucks, Inc., a Delaware corporation), OEI-Sub (then known as Flores & Rucks, Inc., a Louisiana corporation) and Fleet National Bank (formerly known as Shawmut Bank Connecticut, National Association), as trustee, the Second Supplemental Indenture, dated as of July 14, 1997, by and between Old OEI, OEI-Sub, and the Trustee, as successor-in-interest to Fleet National Bank, and the Third Supplemental Indenture dated as of March 27, 1998, by and among Old OEI, OEI-Sub and the Trustee (as so supplemented, the "INDENTURE"), providing for the issuance of an aggregate principal amount of $125,000,000 of 13 1/2% Senior Notes due 2004; and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of November 24, 1998, as amended by Amendment No. 1 thereto, dated as of December 9, 1998 (as so amended, the "MERGER AGREEMENT"), by and between Old OEI and the Company (formerly known as Seagull Energy Corporation, a Texas corporation), Old OEI has merged (the "MERGER") with and into the Company, with the Company as the surviving entity, and the Company has changed its name from "Seagull Energy Corporation" to "Ocean Energy, Inc."; and
WHEREAS, pursuant to the Merger Agreement, the Company has assumed all of the obligations of Old OEI under the Indenture, as required under Section 8.1 thereof; 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(a) 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 evidence the succession of another Person to Old OEI and the assumption by any such successor of the covenants of Old OEI contained in the Indenture and in the Securities.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are 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 the obligations of Old OEI for the due and punctual payment of the principal of (and premium, if any, on) and interest on all the Securities and the performance and observance of every covenant of the Indenture on the part of Old OEI to be performed or observed, and (ii) succeeds to, and becomes substituted for, and may exercise every right and power of, Old OEI 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. Confirmation of Guarantee by OEI-Sub. OEI-Sub hereby expressly confirms that, after 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 the Securities, and (ii) the prompt payment in full of the 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 on the Securities, if any, to the extent lawful, and the prompt payment in full and performance of 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.
4. Change of Corporate Name. Any and all references in the Indenture and the Securities to OCEAN ENERGY, INC., a Delaware corporation, or the "Company," shall be deemed henceforth to refer to OCEAN ENERGY, INC., a Texas corporation.
5. Ratification of Indenture; Supplemental Indenture 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 under the Indenture shall be bound hereby.
6. 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.
7. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
8. Counterparts. The parties may sign any number of copies or counterparts 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 affect 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 Texas corporation
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
Name:
Title:
SUBSIDIARY GUARANTOR:
OCEAN ENERGY, INC., a Louisiana corporation
By:
Name:
Title:
OCEAN ENERGY, INC.,
a Texas corporation,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
FIRST Supplemental Indenture
Dated as of March 30, 1999
to
SENIOR Indenture
Dated as of September 1, 1997
7 1/2% Senior Notes due 2027
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of March 30, 1999, by and among Ocean Energy, Inc. (formerly known as Seagull Energy Corporation), a Texas corporation (the "Issuer"), Ocean Energy, Inc., a Louisiana corporation ("OEI Sub"), and The Bank of New York, a New York banking association, as trustee (the "Trustee").
RECITALS
WHEREAS, the Issuer and the Trustee are parties to that certain Senior Indenture, dated as of September 1, 1997 (the "Indenture"), pursuant to which the Issuer has issued an aggregate principal amount of $150,000,000 of 7 1/2% Senior Notes due 2027; and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of November 24, 1998, as amended by Amendment No. 1 thereto, dated as of December 9, 1998, by and between Ocean Energy, Inc., a Delaware corporation ("Old Ocean"), and the Issuer, Old Ocean has merged with and into the Issuer, with the Issuer as the surviving entity, and the Issuer has changed its name to "Ocean Energy, Inc., a Texas corporation"; and
WHEREAS, OEI Sub is a wholly owned subsidiary of the Issuer; and
WHEREAS, pursuant to Section 8.1(c) of the Indenture, the Issuer, when authorized by a resolution of its Board of Directors, and the Trustee may enter into one or more supplemental indentures without the consent of the Holders to add to the covenants of the Issuer under the Indenture such further covenants, restrictions, conditions or provisions as the Issuer and the Trustee shall consider to be for the protection of the Holders of all or any series of Securities; and
WHEREAS, the Issuer desires and has requested the Trustee to join with
it and OEI Sub in entering into this Supplemental Indenture for the purpose of
amending and supplementing the Indenture in certain respects as permitted by
Section 8.1(c).
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer, 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. Change of Corporate Name. Any and all references in the Indenture to Seagull Energy Corporation or the "Issuer" shall be deemed henceforth to refer to Ocean Energy, Inc., a Texas corporation.
3. Designation of Restricted Subsidiaries. The Issuer's Board of Directors has designated the Subsidiaries listed in the resolutions attached hereto as Exhibit A to be "Restricted Subsidiaries" under the Indenture. The Issuer hereby delivers to the Trustee the certified resolutions of the Board of Directors giving effect to such designations, which are attached hereto as Exhibit A.
4. Amendments.
(a) Article One. Article One of the Indenture is hereby amended to add the following terms and their respective definitions in proper alphabetical order:
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the amount by which the fair value of the properties and assets of such Subsidiary Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such date.
"Subsidiary Guarantee" means any guarantee of the Securities by any Subsidiary Guarantor pursuant to Article Thirteen hereof.
"Subsidiary Guarantor" means each of the Issuer's Restricted
Subsidiaries, if any, that becomes a guarantor of the Securities pursuant to
Section 13.1 hereof and executes a supplemental indenture in which such
Restricted Subsidiary agrees to be bound by the terms of this Indenture as a
Subsidiary Guarantor, in each case until such time as the Subsidiary Guarantee
of such Person is released in accordance with the provisions of Article Thirteen
hereof.
(b) Section 8.1. Section 8.1 of the Indenture is hereby amended as follows:
(i) by deleting the word "and" at the end of paragraph (e);
(ii) by deleting the "." at the end of paragraph (f) and inserting "; and" in place thereof; and
(iii) by adding a new paragraph (g) as follows:
"(g) to reflect the release of any Subsidiary Guarantor from its Subsidiary Guarantee, or the addition of any Restricted Subsidiary of the Issuer as a Subsidiary Guarantor, in the manner provided in this Indenture."
(c) Article Thirteen. The following is hereby added as Article Thirteen of the Indenture:
ARTICLE THIRTEEN
GUARANTEES
SECTION 13.1 Subsidiary Guarantees.
The Issuer may designate any Restricted Subsidiary to be a Subsidiary Guarantor. Any such designation shall be evidenced by a certified resolution of the Board of Directors delivered to the Trustee. Subject to Section 13.5 hereof, each Subsidiary Guarantor hereby, jointly and severally, unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, the Securities and the obligations of the Issuer hereunder and thereunder, that:
(a) the principal of, premium, if any, and interest on the Securities will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal, premium, if any (to the extent permitted by law), and interest on any interest, if any, on the Securities, and all other payment obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full and performed, all in accordance with the terms hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration, redemption or otherwise.
Failing payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and severally obligated to pay the same immediately. An Event of Default under this Indenture or the Securities shall constitute an event of default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the obligations of the Subsidiary Guarantors hereunder in the same manner and to the same extent as the obligations of the Issuer. The Subsidiary Guarantors agree that their obligations hereunder shall be unconditional, irrespective of the validity or enforceability of the Securities or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Subsidiary Guarantor. Each Subsidiary Guarantor waives diligence, presentment, demand of payment, notice of acceleration, notice of intent to accelerate, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever. If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Subsidiary Guarantors, or any liquidator or other similar official acting in relation to either the Issuer or the Subsidiary Guarantors, any amount paid by the Issuer or any Subsidiary Guarantor to the Trustee or such Holder, the Subsidiary Guarantee, to the extent theretofore discharged by such payment, shall be reinstated in full force and effect. Each Subsidiary Guarantor agrees that it shall not be entitled to, and waives, any right to exercise any right of subrogation in relation to the Holders in respect of any obligations guaranteed by the
Subsidiary Guarantee, except as provided under Section 13.5 hereof. Each Subsidiary Guarantor further agrees that, as between the Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed by the Subsidiary Guarantee may be accelerated as provided in Article 5 hereof for the purposes of its Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed thereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 5 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by each Subsidiary Guarantor for the purpose of its Subsidiary Guarantee. The Subsidiary Guarantors shall have the right to seek contribution from any non-paying Subsidiary Guarantor pursuant to Section 13.5 after the Securities and the obligations hereunder shall have been paid in full to the Holders under the Subsidiary Guarantees.
SECTION 13.2 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 13.1 hereof, each Subsidiary Guarantor shall execute and deliver a supplemental indenture, which supplemental indenture shall be executed on behalf of such Subsidiary Guarantor, by manual or facsimile signature, by an officer of such Subsidiary Guarantor.
Each Subsidiary Guarantor agrees that its Subsidiary Guarantee set forth in Section 13.1 hereof shall remain in full force and effect notwithstanding any failure to endorse on each Security (whether issued before or after the date such Subsidiary Guarantor becomes a Subsidiary Guarantor) a notation of such Subsidiary Guarantee.
SECTION 13.3 Subsidiary Guarantors May Consolidate, Etc., on Certain Terms.
No Subsidiary Guarantor may consolidate or merge with or into (whether or not such Subsidiary Guarantor is the surviving Person) another Person unless the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor, another Subsidiary Guarantor or the Issuer) assumes all the obligations of such Subsidiary Guarantor pursuant to a supplemental indenture, in a form reasonably satisfactory to the Trustee, under the Securities and this Indenture. In the case of any such consolidation or merger and upon the assumption by the successor Person, by supplemental indenture executed and delivered to the Trustee, of the Subsidiary Guarantee, such successor Person shall succeed to and be substituted for the Subsidiary Guarantor with the same effect as if it had been named herein as a Subsidiary Guarantor.
SECTION 13.4 Releases of Subsidiary Guarantees.
The Issuer may designate any Subsidiary Guarantor, at any time and from time to time, to be released from its Subsidiary Guarantee if (i) no Event of Default has occurred and is continuing, and (ii) such designation and release will not cause the occurrence of an Event of Default. Any such designation shall be evidenced by a certified resolution of the Board of Directors delivered to the Trustee. Upon delivery of such certified resolution to the Trustee, such Subsidiary Guarantor shall be automatically and immediately released from all of its obligations
under its Subsidiary Guarantee, this Indenture and the Securities. If requested by the Issuer, the Trustee will join with the Issuer and such Subsidiary Guarantor in executing and delivering a supplemental indenture evidencing the release of such Subsidiary Guarantor from all of its obligations under its Subsidiary Guarantee, this Indenture and the Securities.
SECTION 13.5 Limitation on Subsidiary Guarantor Liability; Contribution.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a fraudulent transfer or fraudulent conveyance for purposes of any federal, state or foreign law. To effectuate the foregoing intention, the Holders and each Subsidiary Guarantor hereby irrevocably agree that the obligations of each Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to this Section 13.5, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law. This Section 13.5 is for the benefit of the creditors of each Subsidiary Guarantor.
In order to provide for just and equitable contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the event any payment or distribution is made by any Subsidiary Guarantor (a "Funding Guarantor") under its Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution from each other Subsidiary Guarantor (if any) in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Issuer's obligations with respect to the Securities or any other Subsidiary Guarantor's obligations with respect to its Subsidiary Guarantee.
5. Designation of Subsidiary Guarantor. The Issuer's Board of Directors has
designated OEI Sub to be a Subsidiary Guarantor under the Indenture. The Issuer
hereby delivers to the Trustee the certified resolution of the Board of
Directors giving effect to such designation, which is attached hereto as Exhibit
A. OEI Sub hereby agrees to be a Subsidiary Guarantor under the Indenture, and
agrees to guarantee the Securities and be bound by the other covenants and
obligations of a Subsidiary Guarantor, all to the extent set forth in the
Indenture, as modified by this Supplemental Indenture.
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 of Securities 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
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. Headings. The Section headings herein are for convenience only and shall not affect the construction thereof.
[Signature Page Follows]
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 Texas corporation
By:
Stephen A. Thorington,
Senior Vice President - Finance,
Treasury & Corporate Development
THE BANK OF NEW YORK, as Trustee
By:
Name:
Title:
OCEAN ENERGY, INC., a Louisiana corporation
By:
James C. Flores, President
OCEAN ENERGY, INC.,
a Texas corporation,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
FIRST Supplemental Indenture
Dated as of March 30, 1999
to
SENIOR Indenture
Dated as of July 15, 1993
7 7/8% Senior Notes due 2003
7
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of March 30, 1999, by and among Ocean Energy, Inc. (formerly known as Seagull Energy Corporation), a Texas corporation (the "ISSUER"), Ocean Energy, Inc., a Louisiana corporation ("OEI SUB"), and The Bank of New York, a New York banking association, as trustee (the "TRUSTEE").
RECITALS
WHEREAS, the Issuer and the Trustee are parties to that certain Senior Indenture, dated as of July 15, 1993 (the "Indenture"), pursuant to which the Issuer has issued an aggregate principal amount of $100,000,000 of 77/8% Senior Notes due 2003; and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of November 24, 1998, as amended by Amendment No. 1 thereto, dated as of December 9, 1998, by and between Ocean Energy, Inc., a Delaware corporation ("OLD OCEAN"), and the Issuer, Old Ocean has merged with and into the Issuer, with the Issuer as the surviving entity, and the Issuer has changed its name to "Ocean Energy, Inc., a Texas corporation"; and
WHEREAS, OEI Sub is a wholly owned subsidiary of the Issuer; and
WHEREAS, pursuant to Section 8.1(c) of the Indenture, the Issuer, when authorized by a resolution of its Board of Directors, and the Trustee may enter into one or more supplemental indentures without the consent of the Holders to add to the covenants of the Issuer under the Indenture such further covenants, restrictions, conditions or provisions as the Issuer and the Trustee shall consider to be for the protection of the Holders of all or any series of Securities; and
WHEREAS, the Issuer desires and has requested the Trustee to join with
it and OEI Sub in entering into this Supplemental Indenture for the purpose of
amending and supplementing the Indenture in certain respects as permitted by
Section 8.1(c).
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer, 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. Change of Corporate Name. Any and all references in the Indenture to Seagull Energy Corporation or the "Issuer" shall be deemed henceforth to refer to Ocean Energy, Inc., a Texas corporation.
3. Designation of Restricted Subsidiaries. The Issuer's Board of Directors has designated the Subsidiaries listed in the resolutions attached hereto as Exhibit A to be "Restricted Subsidiaries" under the Indenture. The Issuer hereby delivers to the Trustee the certified resolutions of the Board of Directors giving effect to such designations, which are attached hereto as Exhibit A.
4. Amendments.
(a) Article One. Article One of the Indenture is hereby amended to add the following terms and their respective definitions in proper alphabetical order:
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the amount by which the fair value of the properties and assets of such Subsidiary Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such date.
"Subsidiary Guarantee" means any guarantee of the Securities by any Subsidiary Guarantor pursuant to Article Thirteen hereof.
"Subsidiary Guarantor" means each of the Issuer's Restricted
Subsidiaries, if any, that becomes a guarantor of the Securities pursuant to
Section 13.1 hereof and executes a supplemental indenture in which such
Restricted Subsidiary agrees to be bound by the terms of this Indenture as a
Subsidiary Guarantor, in each case until such time as the Subsidiary Guarantee
of such Person is released in accordance with the provisions of Article Thirteen
hereof.
(b) Section 8.1. Section 8.1 of the Indenture is hereby amended as follows:
(i) by deleting the word "and" at the end of
paragraph (e);
(ii) by deleting the "." at the end of paragraph (f)
and inserting "; and" in place thereof; and
(iii) by adding a new paragraph (g) as follows:
"(g) to reflect the release of any Subsidiary Guarantor from its Subsidiary Guarantee, or the addition of any Restricted Subsidiary of the Issuer as a Subsidiary Guarantor, in the manner provided in this Indenture."
(c) Article Thirteen. The following is hereby added as Article Thirteen of the Indenture:
ARTICLE THIRTEEN
GUARANTEES
SECTION 13.1 Subsidiary Guarantees.
The Issuer may designate any Restricted Subsidiary to be a Subsidiary Guarantor. Any such designation shall be evidenced by a certified resolution of the Board of Directors delivered to the Trustee. Subject to Section 13.5 hereof, each Subsidiary Guarantor hereby, jointly and severally, unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, the Securities and the obligations of the Issuer hereunder and thereunder, that:
(a) the principal of, premium, if any, and interest on the Securities will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal, premium, if any (to the extent permitted by law), and interest on any interest, if any, on the Securities, and all other payment obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full and performed, all in accordance with the terms hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration, redemption or otherwise.
Failing payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and severally obligated to pay the same immediately. An Event of Default under this Indenture or the Securities shall constitute an event of default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the obligations of the Subsidiary Guarantors hereunder in the same manner and to the same extent as the obligations of the Issuer. The Subsidiary Guarantors agree that their obligations hereunder shall be unconditional, irrespective of the validity or enforceability of the Securities or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Subsidiary Guarantor. Each Subsidiary Guarantor waives diligence, presentment, demand of payment, notice of acceleration, notice of intent to accelerate, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever. If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Subsidiary Guarantors, or any liquidator or other similar official acting in relation to either the Issuer or the Subsidiary Guarantors, any amount paid by the Issuer or any Subsidiary Guarantor to the Trustee or such Holder, the Subsidiary Guarantee, to the extent theretofore discharged by such payment, shall be reinstated in full force and effect. Each Subsidiary Guarantor agrees that it shall not be entitled to, and waives, any right to exercise any right of subrogation in relation to the Holders in respect of any obligations guaranteed by the
Subsidiary Guarantee, except as provided under Section 13.5 hereof. Each Subsidiary Guarantor further agrees that, as between the Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed by the Subsidiary Guarantee may be accelerated as provided in Article 5 hereof for the purposes of its Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed thereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 5 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by each Subsidiary Guarantor for the purpose of its Subsidiary Guarantee. The Subsidiary Guarantors shall have the right to seek contribution from any non-paying Subsidiary Guarantor pursuant to Section 13.5 after the Securities and the obligations hereunder shall have been paid in full to the Holders under the Subsidiary Guarantees.
SECTION 13.2 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 13.1 hereof, each Subsidiary Guarantor shall execute and deliver a supplemental indenture, which supplemental indenture shall be executed on behalf of such Subsidiary Guarantor, by manual or facsimile signature, by an officer of such Subsidiary Guarantor.
Each Subsidiary Guarantor agrees that its Subsidiary Guarantee set forth in Section 13.1 hereof shall remain in full force and effect notwithstanding any failure to endorse on each Security (whether issued before or after the date such Subsidiary Guarantor becomes a Subsidiary Guarantor) a notation of such Subsidiary Guarantee.
SECTION 13.3 Subsidiary Guarantors May Consolidate, Etc., on Certain Terms.
No Subsidiary Guarantor may consolidate or merge with or into (whether or not such Subsidiary Guarantor is the surviving Person) another Person unless the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor, another Subsidiary Guarantor or the Issuer) assumes all the obligations of such Subsidiary Guarantor pursuant to a supplemental indenture, in a form reasonably satisfactory to the Trustee, under the Securities and this Indenture. In the case of any such consolidation or merger and upon the assumption by the successor Person, by supplemental indenture executed and delivered to the Trustee, of the Subsidiary Guarantee, such successor Person shall succeed to and be substituted for the Subsidiary Guarantor with the same effect as if it had been named herein as a Subsidiary Guarantor.
SECTION 13.4 Releases of Subsidiary Guarantees.
The Issuer may designate any Subsidiary Guarantor, at any time and from time to time, to be released from its Subsidiary Guarantee if (i) no Event of Default has occurred and is continuing, and (ii) such designation and release will not cause the occurrence of an Event of Default. Any such designation shall be evidenced by a certified resolution of the Board of Directors delivered to the Trustee. Upon delivery of such certified resolution to the Trustee, such Subsidiary Guarantor shall be automatically and immediately released from all of its obligations
under its Subsidiary Guarantee, this Indenture and the Securities. If requested by the Issuer, the Trustee will join with the Issuer and such Subsidiary Guarantor in executing and delivering a supplemental indenture evidencing the release of such Subsidiary Guarantor from all of its obligations under its Subsidiary Guarantee, this Indenture and the Securities.
SECTION 13.5 Limitation on Subsidiary Guarantor Liability; Contribution.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a fraudulent transfer or fraudulent conveyance for purposes of any federal, state or foreign law. To effectuate the foregoing intention, the Holders and each Subsidiary Guarantor hereby irrevocably agree that the obligations of each Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to this Section 13.5, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law. This Section 13.5 is for the benefit of the creditors of each Subsidiary Guarantor.
In order to provide for just and equitable contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the event any payment or distribution is made by any Subsidiary Guarantor (a "Funding Guarantor") under its Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution from each other Subsidiary Guarantor (if any) in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Issuer's obligations with respect to the Securities or any other Subsidiary Guarantor's obligations with respect to its Subsidiary Guarantee.
5. Designation of Subsidiary Guarantor. The Issuer's Board of Directors has
designated OEI Sub to be a Subsidiary Guarantor under the Indenture. The Issuer
hereby delivers to the Trustee the certified resolution of the Board of
Directors giving effect to such designation, which is attached hereto as Exhibit
A. OEI Sub hereby agrees to be a Subsidiary Guarantor under the Indenture, and
agrees to guarantee the Securities and be bound by the other covenants and
obligations of a Subsidiary Guarantor, all to the extent set forth in the
Indenture, as modified by this Supplemental Indenture.
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 of Securities 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
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. Headings. The Section headings herein are for convenience only and shall not affect the construction thereof.
[Signature Page Follows]
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 Texas corporation
By:
Stephen A. Thorington, Senior Vice President - Finance, Treasury & Corporate Development
THE BANK OF NEW YORK, as Trustee
By:
Name:
Title:
OCEAN ENERGY, INC., a Louisiana corporation
By:
James C. Flores, President
OCEAN ENERGY, INC.,
a Texas corporation,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
FIRST Supplemental Indenture
Dated as of March 30, 1999
to
SENIOR SUBORDINATED Indenture
Dated as of July 15, 1993
8 5/8% Senior Subordinated Notes due 2005
7
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of March 30, 1999, by and among Ocean Energy, Inc. (formerly known as Seagull Energy Corporation), a Texas corporation (the "ISSUER"), Ocean Energy, Inc., a Louisiana corporation ("OEI SUB"), and The Bank of New York, a New York banking association, as trustee (the "TRUSTEE").
RECITALS
WHEREAS, the Issuer and the Trustee are parties to that certain Senior Subordinated Indenture, dated as of July 15, 1993 (the "INDENTURE"), pursuant to which the Issuer has issued an aggregate principal amount of $150,000,000 of 85/8% Senior Subordinated Notes due 2005; and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of November 24, 1998, as amended by Amendment No. 1 thereto, dated as of December 9, 1998, by and between Ocean Energy, Inc., a Delaware corporation ("OLD OCEAN"), and the Issuer, Old Ocean has merged with and into the Issuer, with the Issuer as the surviving entity, and the Issuer has changed its name to "Ocean Energy, Inc., a Texas corporation"; and
WHEREAS, OEI Sub is a wholly owned subsidiary of the Issuer; and
WHEREAS, pursuant to Section 8.1(c) of the Indenture, the Issuer, when authorized by a resolution of its Board of Directors, and the Trustee may enter into one or more supplemental indentures without the consent of the Holders to add to the covenants of the Issuer under the Indenture such further covenants, restrictions, conditions or provisions as the Issuer and the Trustee shall consider to be for the protection of the Holders of all or any series of Securities; and
WHEREAS, the Issuer desires and has requested the Trustee to join with
it and OEI Sub in entering into this Supplemental Indenture for the purpose of
amending and supplementing the Indenture in certain respects as permitted by
Section 8.1(c).
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer, 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. Change of Corporate Name. Any and all references in the Indenture to Seagull Energy Corporation or the "Issuer" shall be deemed henceforth to refer to Ocean Energy, Inc., a Texas corporation.
3. Designation of Restricted Subsidiaries. The Issuer's Board of Directors has designated the Subsidiaries listed in the resolutions attached hereto as Exhibit A to be "Restricted Subsidiaries" under the Indenture. The Issuer hereby delivers to the Trustee the certified resolutions of the Board of Directors giving effect to such designations, which are attached hereto as Exhibit A.
4. Amendments.
(a) Article One. Article One of the Indenture is hereby amended to add the following terms and their respective definitions in proper alphabetical order:
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the amount by which the fair value of the properties and assets of such Subsidiary Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such date.
"Guarantor Senior Indebtedness" means Indebtedness of a Subsidiary Guarantor outstanding at any time except (a) any Indebtedness as to which, by the terms of the instrument creating or evidencing the same, it is provided that such Indebtedness is not senior in right of payment to such Subsidiary Guarantor's Subsidiary Guarantee, (b) the Subsidiary Guarantee of such Subsidiary Guarantor, (c) any Indebtedness of a Subsidiary Guarantor to a wholly-owned subsidiary of such Subsidiary Guarantor, (d) interest accruing after the filing of a petition initiating any proceeding of the type referred to in Sections 5.1(e) and 5.1(f) unless such interest is an allowed claim enforceable against such Subsidiary Guarantor in a proceeding under federal or state bankruptcy laws and (e) trade payables.
"Subsidiary Guarantee" means any guarantee of the Securities by any Subsidiary Guarantor pursuant to Article Fourteen hereof.
"Subsidiary Guarantor" means each of the Issuer's Restricted
Subsidiaries, if any, that becomes a guarantor of the Securities pursuant to
Section 14.1 hereof and executes a supplemental indenture in which such
Restricted Subsidiary agrees to be bound by the terms of this Indenture as a
Subsidiary Guarantor, in each case until such time as the Subsidiary Guarantee
of such Person is released in accordance with the provisions of Article Fourteen
hereof.
(b) Section 8.1. Section 8.1 of the Indenture is hereby amended as follows:
(i) by deleting the word "and" at the end of
paragraph (e);
(ii) by deleting the "." at the end of paragraph (f)
and inserting "; and" in place thereof; and
(iii) by adding a new paragraph (g) as follows:
"(g) to reflect the release of any Subsidiary Guarantor from its Subsidiary Guarantee, or the addition of any Restricted Subsidiary of the Issuer as a Subsidiary Guarantor, in the manner provided in this Indenture."
(c) Article Fourteen. The following is hereby added as Article Fourteen of the Indenture:
ARTICLE FOURTEEN
GUARANTEES
SECTION 14.1 Subsidiary Guarantees.
The Issuer may designate any Restricted Subsidiary to be a Subsidiary Guarantor. Any such designation shall be evidenced by a certified resolution of the Board of Directors delivered to the Trustee. Subject to Section 14.5 hereof, each Subsidiary Guarantor hereby, jointly and severally, unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, the Securities and the obligations of the Issuer hereunder and thereunder, that:
(a) the principal of, premium, if any, and interest on the Securities will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal, premium, if any (to the extent permitted by law), and interest on any interest, if any, on the Securities, and all other payment obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full and performed, all in accordance with the terms hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration, redemption or otherwise.
Failing payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and severally obligated to pay the same immediately. An Event of Default under this Indenture or the Securities shall constitute an event of default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the obligations of the Subsidiary Guarantors hereunder in the same manner and to the same extent as the obligations of the Issuer. The Subsidiary Guarantors agree that their obligations hereunder shall be unconditional, irrespective of the validity or enforceability of the Securities or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Subsidiary Guarantor. Each Subsidiary Guarantor waives diligence, presentment, demand of payment, notice of acceleration, notice of intent to accelerate, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice
and all demands whatsoever. If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Subsidiary Guarantors, or any liquidator or other similar official acting in relation to either the Issuer or the Subsidiary Guarantors, any amount paid by the Issuer or any Subsidiary Guarantor to the Trustee or such Holder, the Subsidiary Guarantee, to the extent theretofore discharged by such payment, shall be reinstated in full force and effect. Each Subsidiary Guarantor agrees that it shall not be entitled to, and waives, any right to exercise any right of subrogation in relation to the Holders in respect of any obligations guaranteed by the Subsidiary Guarantee, except as provided under Section 14.5 hereof. Each Subsidiary Guarantor further agrees that, as between the Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed by the Subsidiary Guarantee may be accelerated as provided in Article 5 hereof for the purposes of its Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed thereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 5 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by each Subsidiary Guarantor for the purpose of its Subsidiary Guarantee. The Subsidiary Guarantors shall have the right to seek contribution from any non-paying Subsidiary Guarantor pursuant to Section 14.5 after the Securities and the obligations hereunder shall have been paid in full to the Holders under the Subsidiary Guarantees.
SECTION 14.2 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 14.1 hereof, each Subsidiary Guarantor shall execute and deliver a supplemental indenture, which supplemental indenture shall be executed on behalf of such Subsidiary Guarantor, by manual or facsimile signature, by an officer of such Subsidiary Guarantor.
Each Subsidiary Guarantor agrees that its Subsidiary Guarantee set forth in Section 14.1 hereof shall remain in full force and effect notwithstanding any failure to endorse on each Security (whether issued before or after the date such Subsidiary Guarantor becomes a Subsidiary Guarantor) a notation of such Subsidiary Guarantee.
SECTION 14.3 Subsidiary Guarantors May Consolidate, Etc., on Certain Terms.
No Subsidiary Guarantor may consolidate or merge with or into (whether or not such Subsidiary Guarantor is the surviving Person) another Person unless the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor, another Subsidiary Guarantor or the Issuer) assumes all the obligations of such Subsidiary Guarantor pursuant to a supplemental indenture, in a form reasonably satisfactory to the Trustee, under the Securities and this Indenture. In the case of any such consolidation or merger and upon the assumption by the successor Person, by supplemental indenture executed and delivered to the Trustee, of the Subsidiary Guarantee, such successor Person shall succeed to and be substituted for the Subsidiary Guarantor with the same effect as if it had been named herein as a Subsidiary Guarantor.
SECTION 14.4 Releases of Subsidiary Guarantees.
The Issuer may designate any Subsidiary Guarantor, at any time and from time to time, to be released from its Subsidiary Guarantee if (i) no Event of Default has occurred and is continuing, and (ii) such designation and release will not cause the occurrence of an Event of Default. Any such designation shall be evidenced by a certified resolution of the Board of Directors delivered to the Trustee. Upon delivery of such certified resolution to the Trustee, such Subsidiary Guarantor shall be automatically and immediately released from all of its obligations under its Subsidiary Guarantee, this Indenture and the Securities. If requested by the Issuer, the Trustee will join with the Issuer and such Subsidiary Guarantor in executing and delivering a supplemental indenture evidencing the release of such Subsidiary Guarantor from all of its obligations under its Subsidiary Guarantee, this Indenture and the Securities.
SECTION 14.5 Limitation on Subsidiary Guarantor Liability; Contribution.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a fraudulent transfer or fraudulent conveyance for purposes of any federal, state or foreign law. To effectuate the foregoing intention, the Holders and each Subsidiary Guarantor hereby irrevocably agree that the obligations of each Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to this Section 14.5, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law. This Section 14.5 is for the benefit of the creditors of each Subsidiary Guarantor.
In order to provide for just and equitable contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the event any payment or distribution is made by any Subsidiary Guarantor (a "Funding Guarantor") under its Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution from each other Subsidiary Guarantor (if any) in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Issuer's obligations with respect to the Securities or any other Subsidiary Guarantor's obligations with respect to its Subsidiary Guarantee.
SECTION 14.6 Subsidiary Guarantees Subordinated to Guarantor Senior Indebtedness.
Each Subsidiary Guarantor covenants and agrees, and each Holder of Securities of each series, by his acceptance thereof, likewise covenants and agrees, that anything in this Indenture or the Securities of any series to the contrary notwithstanding, that the Subsidiary Guarantees are subordinate and junior in right of payment to all Guarantor Senior Indebtedness to the same extent as the Securities are subordinate and junior to Senior Indebtedness. Such subordination shall be subject to the terms, conditions, covenants and exclusions set forth in Article Thirteen as
if the terms of Article Thirteen were repeated in full in this Article Fourteen and modified as appropriate to apply to the Subsidiary Guarantees and other obligations of each Subsidiary Guarantor instead of the Securities and other obligations of the Issuer.
5. Designation of Subsidiary Guarantor. The Issuer's Board of Directors has
designated OEI Sub to be a Subsidiary Guarantor under the Indenture. The Issuer
hereby delivers to the Trustee the certified resolution of the Board of
Directors giving effect to such designation, which is attached hereto as Exhibit
A. OEI Sub hereby agrees to be a Subsidiary Guarantor under the Indenture, and
agrees to guarantee the Securities and be bound by the other covenants and
obligations of a Subsidiary Guarantor, all to the extent set forth in the
Indenture, as modified by this Supplemental Indenture.
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 of Securities 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 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. Headings. The Section headings herein are for convenience only and shall not affect the construction thereof.
[Signature Page Follows]
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 Texas corporation
By:
Stephen A. Thorington,
Senior Vice President - Finance,
Treasury & Corporate Development
THE BANK OF NEW YORK, as Trustee
By:
Name:
Title:
OCEAN ENERGY, INC., a Louisiana corporation
By:
James C. Flores, President
SEVENTH AMENDMENT TO THE
UNITED MERIDIAN CORPORATION
1987 NONQUALIFIED STOCK OPTION PLAN
WHEREAS, OCEAN ENERGY, INC. (the "Company"), as successor to UNITED MERIDIAN CORPORATION, has heretofore adopted the UNITED MERIDIAN CORPORATION 1987 NONQUALFIED STOCK OPTION PLAN (the "Plan"); and
WHEREAS, Section 7 of the Plan provides that the Board of Directors of the Company may amend the Plan at any time;
NOW, THEREFORE, the Plan shall be amended as follows, effective as of February 1, 1999:
1. Section 4(f)(1) of the Plan shall be deleted and the following shall be substituted therefor:
"(1) In the event that optionee terminates or is terminated from his relationship with the Company and its Affiliates, and the provisions of Sections 4(f)(2), 4(f)(3) and 4(i) do not apply, the options granted to optionee pursuant to this Plan may be exercised to the extent the optionee was entitled to exercise the option immediately prior to such termination, at any time within ninety days (or such greater period as the Committee may determine) after the date of such termination (if otherwise within the option period)."
2. As amended hereby, the Plan is specifically ratified and reaffirmed.
EXECUTED this day of , 1999.
OCEAN ENERGY, INC.
By:
Name:
Title:
SIXTH AMENDMENT
TO THE
UNITED MERIDIAN CORPORATION
1987 NONQUALIFIED STOCK OPTION PLAN
WHEREAS, there is reserved to the Board of Directors of the Company in Section 7 of the United Meridian Corporation 1987 Nonqualified Stock Option Plan (the "Plan") the right to amend the Plan;
NOW, THEREFORE, as of the effective date of the Ocean Energy, Inc. 1998 Long-Term Incentive Plan, the Plan is hereby amended as follows:
1. Section 2 is amended to read as follows:
"Notwithstanding anything in the Plan to the contrary, no options or other awards may be granted under the Plan on or after the effective date of this Sixth Amendment."
Except as amended by this Sixth Amendment, the Plan shall continue without interruption or change.
Dated: March 27, 1998
SIXTH AMENDMENT
TO THE
UNITED MERIDIAN CORPORATION
1994 EMPLOYEE NONQUALIFIED STOCK OPTION PLAN
WHEREAS, there is reserved to the Board of Directors of the Company in Section 7 of the United Meridian Corporation 1994 Employee Nonqualified Stock Option Plan (the "Plan") the right to amend the Plan;
NOW, THEREFORE, as of the effective date of the Ocean Energy, Inc. 1998 Long-Term Incentive Plan, the Plan is hereby amended as follows:
1. Section 2 is amended to read as follows:
"Notwithstanding anything in the Plan to the contrary, no options or other awards may be granted under the Plan on or after the effective date of this Sixth Amendment."
Except as amended by this Sixth Amendment, the Plan shall continue without interruption or change.
Dated: March 27, 1998
FOURTH AMENDMENT
TO THE
UNITED MERIDIAN CORPORATION
1994 OUTSIDE DIRECTORS' NONQUALIFIED STOCK OPTION PLAN
WHEREAS, there is reserved to the Board of Directors of the Company in Section 7 of the United Meridian Corporation 1994 Outside Directors' Nonqualified Stock Option Plan (the "Plan") the right to amend the Plan;
NOW, THEREFORE, as of the effective date of the Ocean Energy, Inc. 1998 Long-Term Incentive Plan, the Plan is hereby amended as follows:
1. Section 2 is amended to read as follows:
"Notwithstanding anything in the Plan to the contrary, no options or other awards may be granted under the Plan on or after the effective date of this Fourth Amendment."
Except as amended by this Fourth Amendment, the Plan shall continue without interruption or change.
Dated: March 27, 1998
SECOND AMENDMENT TO
OCEAN ENERGY, INC.
SUPPLEMENTAL BENEFIT PLAN
WHEREAS, OCEAN ENERGY, INC. , a Louisiana corporation (the "Company"), has heretofore adopted the OCEAN ENERGY, INC. SUPPLEMENTAL BENEFIT PLAN (the "Plan"); and
WHEREAS, the Company desires to amend the Plan;
NOW, THEREFORE, the Plan shall be amended as follows, effective as of March 30, 1999:
1. The definition of the term "Board" in Section 1.1 of the Plan shall be deleted and the following shall be substituted therefor:
"Board: The Board of Directors of Ocean Energy, Inc., a Texas corporation."
2. The definition of the term "Compensation" in Section 1.1 of the Plan shall be deleted and the following shall be substituted therefor:
"Compensation: As appropriate with respect to any Participant for a Plan Year, (i)(a) amounts of 'Pay' described in Section 1.32 of the UMC Petroleum Savings Plan ( or the applicable successor provision) during the periods in which the Participant participates in such plan, (b) amounts of "Compensation" described in Section 1.02 of the Flores & Rucks, Inc. 401(k) Savings Plan (or applicable successor provision) during the periods in which the Participant participates in such plan or (c) amounts of compensation that a Participant may elect to defer under any other 401(k) plan, determined without regard to the limitations imposed by Section 401(a)(17) of the Code and (ii) any amount (other than as described in clause (i)) that is paid in a lump sum cash payment (other than pursuant to this Plan) and that is required to be reported on the Participant's federal income tax withholding statement (Form W-2)."
3. The following new definitions shall be added to Section 1.1 of the Plan:
"Corporate Change: The occurrence of any of the following events: (i) Ocean Energy, Inc., a Texas corporation ('OEI') shall not be the surviving entity in any merger or consolidation (or survives only as a subsidiary of another entity), (ii) OEI sells all or substantially all of its assets to any other person or entity (other than a wholly-owned subsidiary), (iii) OEI is to be dissolved and liquidated, or (iv) as a result of or in connection with a contested election for the members of the Board such that the members constituting the Board immediately following the consummation of the merger of Ocean Energy, Inc. with and into Seagull Energy Corporation shall cease to constitute a majority of the Board.
Trust: The trust, if any, established under the Trust Agreement.
Trust Agreement: The agreement, if any, entered into between the Company and the Trustee pursuant Section 6.5.
Trust Fund: The funds and properties, if any, held pursuant to the provisions of the Trust Agreement, together with all income, profit, and increments thereto."
4. Section 6.5 of the Plan shall be deleted and the following shall be substituted therefor:
"6.5 Rights to Company's Assets. No Participant shall have any right to, or interest in, any assets of the Company upon termination of employment or otherwise, except as provided from time to time under this Plan, and then only to the extent of the benefits payable under the Plan to such Participant. The Plan is intended to constitute an unfunded, unsecured plan of deferred compensation for a select group of management or highly compensated employees of the Company. Plan benefits herein provided are to be paid out of the Company's general assets. Nevertheless, in the event of a 'Corporate Change,' the Committee shall establish the Trust and direct the Company to enter into the Trust Agreement and the Company shall transfer money or other property to the Trustee equal to the amounts credited to Participants' Accounts under the Plan and, subject to the terms hereof and of the Trust Agreement, the Trustee shall pay Plan benefits to Participants and their beneficiaries out of the Trust Fund. The Company shall remain the owner of all assets in the Trust Fund and the assets shall be subject to the claims of the Company's creditors if the Company ever becomes insolvent. For purposes hereof, the Company shall be considered 'insolvent' if (a) the Company is unable to pay its debts as they become due, or (b) the Company is subject to a pending proceeding as a debtor under the United Sates Bankruptcy Code (or any successor federal statute). The chief executive officer of the Company and its board of directors shall have the duty to inform the Trustee in writing if the Company becomes insolvent. When so informed, the Trustee shall suspend payments to the Participants and hold the assets for the benefit of the Company's general creditors. If the Trustee receives a written allegation that the Company is insolvent, the Trustee shall suspend payments to the Participants and hold the Trust Fund for the benefit of the Company's general creditors, and shall determine whether the Company is insolvent. If the Trustee determines that the Company is not insolvent, the Trustee shall resume payments to the Participant. No Participant or beneficiary shall have any preferred claim to, or any beneficial ownership interest in, any assets of the Trust Fund."
5. As amended hereby, the Plan is specifically ratified and reaffirmed.
EXECUTED effective as of March 30, 1999.
OCEAN ENERGY, INC.
By:
Name:
Title:
SECOND AMENDMENT
TO THE
OCEAN ENERGY, INC.
1994 LONG-TERM INCENTIVE PLAN
WHEREAS, there is reserved to the Board of Directors of Ocean Energy, Inc. in Section 7 of the Ocean Energy, Inc. 1994 Long-Term Incentive Plan (the
"Plan") the right to amend the Plan;
NOW, THEREFORE, as of the effective date of the Ocean Energy, Inc. 1998 Long-Term Incentive Plan, the Plan is hereby amended as follows:
1. Section 6(i)(iii)(C) is amended to read as follows:
"Notwithstanding anything in the Plan or in an Award Agreement to the contrary, Non-Qualified Stock Options (including, without limitation, that portion of any Option denominated as an Incentive Stock Option which does not qualify as an incentive stock option under Section 422 of the Code) may be transferred by the optionee to one or more permitted transferees; provided that (i) there may be no consideration given for such transfer, (ii) the optionee (or such optionee's estate or representative) shall remain obligated to satisfy all employment tax and other withholding tax obligations associated with the exercise of the transferred Options, (iii) the optionee shall notify the Company in writing that such transfer has occurred, the identity and address of the permitted transferee and the relationship of the permitted transferee to the optionee, and (iv) such transfer shall be effected pursuant to transfer documents approved from time to time by the Company. Any permitted transferee may not further assign or transfer the transferred Option otherwise than by will or the laws of descent and distribution. Following any permitted transfer, any such Options shall continue to be subject to the same terms and conditions as were applicable to the Option immediately prior to the transfer, provided that the term "optionee" as used in the Plan shall be deemed to refer also to each permitted transferee where required by the context. A transferred Option may only be exercised by a transferee to the same extent such Option could, at such time, be exercised by the optionee "but for" such transfer. The term "permitted transferees" shall mean one or more of the following: (i) any member of the optionee's immediately family; (ii) a trust established for the exclusive benefit of one or more members of such immediately family; (iii) a partnership in which such immediately family members are the only partners; or (iv) any other person approved from time to time by the Committee. The term "immediate family" is defined for such purpose as spouses, children, stepchildren and grandchildren, including relationships arising from adoption."
Except as amended by this Second Amendment, the Plan shall continue without interruption or change.
Dated: March 27, 1998
SECOND AMENDMENT
TO THE
OCEAN ENERGY, INC.
1996 LONG-TERM INCENTIVE PLAN
WHEREAS, there is reserved to the Board of Directors of Ocean Energy, Inc. in Section 7 of the Ocean Energy, Inc. Long-Term Incentive Plan for Nonexecutive
Employees (the "Plan") the right to amend the Plan;
NOW, THEREFORE, as of the effective date of the Ocean Energy, Inc. 1998 Long-Term Incentive Plan, the Plan is hereby amended as follows:
1. Section 4 is amended by adding thereto the following:
"Notwithstanding anything in the Plan to the contrary, no Awards may be granted under the Plan on or after the effective date of this Second Amendment."
2. Section 6(i)(iii)(C) is amended to read as follows:
"Notwithstanding anything in the Plan or in an Award Agreement to the contrary, Non-Qualified Stock Options (including, without limitation, that portion of any Option denominated as an Incentive Stock Option which does not qualify as an incentive stock option under Section 422 of the Code) may be transferred by the optionee to one or more permitted transferees; provided that (i) there may be no consideration given for such transfer, (ii) the optionee (or such optionee's estate or representative) shall remain obligated to satisfy all employment tax and other withholding tax obligations associated with the exercise of the transferred Options, (iii) the optionee shall notify the Company in writing that such transfer has occurred, the identity and address of the permitted transferee and the relationship of the permitted transferee to the optionee, and (iv) such transfer shall be effected pursuant to transfer documents approved from time to time by the Company. Any permitted transferee may not further assign or transfer the transferred Option otherwise than by will or the laws of descent and distribution. Following any permitted transfer, any such Options shall continue to be subject to the same terms and conditions as were applicable to the Option immediately prior to the transfer, provided that the term "optionee" as used in the Plan shall be deemed to refer also to each permitted transferee where required by the context. A transferred Option may only be exercised by a transferee to the same extent such Option could, at such time, be exercised by the optionee "but for" such transfer. The term "permitted transferees" shall mean one or more of the following: (i) any member of the optionee's immediately family; (ii) a trust established for the exclusive benefit of one or more members of such immediately family; (iii) a partnership in which such immediately family members are the only partners; or (iv) any other person approved from time to time by the Committee. The term "immediate family" is defined for such purpose as spouses, children, stepchildren and grandchildren, including relationships arising from adoption."
Except as amended by this Second Amendment, the Plan shall continue without interruption or change.
Dated: March 27, 1998
FIFTH AMENDMENT TO
SEAGULL ENERGY CORPORATION
MANAGEMENT STABILITY PLAN
WHEREAS, SEAGULL ENERGY CORPORATION (the "Company") has heretofore adopted and currently maintains the SEAGULL ENERGY CORPORATION MANAGEMENT STABILITY PLAN (the "Plan"); and
WHEREAS, the Company desires to amend the Plan in certain respects;
NOW, THEREFORE, the Plan is hereby amended as follows, effective as of March 29, 1999:
1. Section 1.1(n) of the Plan shall be deleted and the following shall be substituted therefor:
"(n) 'Involuntary Termination' shall mean any termination of a Covered Employee's employment with the Employer
which:
(1) does not result from a voluntary resignation by the Covered Employee (other than a resignation pursuant to Clause (2) of this Section 1.1(n)); or
(2) results from a resignation by a Covered Employee on or before the date which is sixty days after the date the Covered Employee receives notice of a Change in Duties;
provided, however, that the term 'Involuntary Termination' shall not include a Termination for Cause, a termination of a Covered Employee's employment occurring as a result of or in connection with the sale or other divestiture by the Employer of a division, subsidiary, or other business segment (including, without limitation, a divestiture by sale of shares of stock or of assets) if such Covered Employee is offered continued employment by the acquiror of such business segment immediately upon such sale or divestiture, or any termination as a result of a Covered Employee's death, disability under circumstances entitling him to benefits under the Employer's long-term disability plan or Retirement."
2. As amended hereby, the Plan is specifically ratified and reaffirmed.
EXECUTED this _________ day of March, 1999.
SEAGULL ENERGY CORPORATION
By:
Name:
Title:
AMENDMENT TO
EMPLOYMENT AGREEMENT
WHEREAS, SEAGULL ENERGY CORPORATION ("Company") and JAMES T. HACKETT ("Executive") have heretofore entered into an Employment Agreement (the "Agreement"), which was effective as of September 16, 1998; and
WHEREAS, Company and Executive desire to amend the Agreement in certain respects, contingent on, and effective upon, the consummation of the transactions (the "Merger") contemplated by the Agreement and Plan of Merger between Company and Ocean Energy, Inc. dated as of November 24, 1998, as the same may be amended from time to time (the "Merger Agreement");
NOW, THEREFORE, Company and Executive agree that the Agreement shall be amended as follows, effective as of the Merger Effective Time (which shall have the same meaning as the term "Effective Time" in the Merger Agreement):
1. The second sentence of paragraph 1.2 of the Agreement shall be deleted; provided, however, that if Executive is not elected as Chairman of the Board of Directors of Company (or a successor to Company or any publicly-traded parent (as such term is hereinafter defined) of Company or any successor of Company) prior to the date that is eighteen months after the Merger Effective Time, the failure to elect Executive to such position or the failure to reelect Executive to such position or the removal of Executive from such position shall be deemed to constitute a failure described in paragraph 2.3(i)(C) of the Agreement and an Involuntary Termination (as such term is defined in the Severance Agreement dated August 25, 1998 between Company and Executive). The term "parent" shall mean any corporation, partnership, limited liability company or other entity that owns shares of the capital stock of Company with at least a majority of the voting power of Company's outstanding shares of capital stock.
2. A new paragraph 3.10 shall be added to Article III of the Agreement:
"3.10 Effect of Merger. Notwithstanding any provision in this Agreement to the contrary, the consummation of the transactions (the "Merger") contemplated by the Agreement and Plan of Merger between Company and Ocean Energy, Inc. dated as of November 24, 1998, as the same may be amended from time to time (the "Merger Agreement"), shall be deemed to be a "change of control" with respect to Executive for all purposes under this Agreement, the Severance Agreement, the 1995 Plan and the 1998 Plan."
3. Paragraph 5.2 of the Agreement shall be deleted and the following shall be substituted therefor:
"5.2 Noncompetition. Executive shall not, directly or indirectly for Executive or for others, in any geographic area or market where Company or any of
its affiliates are conducting any business or have during the previous twelve months conducted such business:
(i) engage in any business competitive with the business conducted by Company; or
(ii) render advice or services to, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business competitive with the business conducted by Company with respect to such competitive business.
These noncompetition obligations shall apply (A) during the period that Executive is employed by Company, (B) during any period after Executive's termination of employment by Company for a reason encompassed by paragraph 2.2(ii) when Company is providing Executive with Termination Benefits pursuant to Article 7, and (C) if Executive terminates his employment with Company for a reason encompassed by paragraph 2.3(ii) prior to the earlier of (1) the second anniversary of the Effective Date or (2) the date that is eighteen months after the Merger Effective Time, during the two-year period commencing on the date of Executive's termination of employment."
4. As amended hereby, the Agreement is specifically ratified and reaffirmed. If the Merger Agreement is terminated without the consummation of the transactions contemplated thereby, this Amendment shall be null and void and of no effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the 24th day of November, 1998 to be effective as of the Merger Effective Time.
SEAGULL ENERGY CORPORATION
By:____________________________________
Name: William L. Transier
Title: Executive Vice President and
Chief Financial Officer
"COMPANY"
"EXECUTIVE"
AMENDMENT TO
EMPLOYMENT AND CONSULTING AGREEMENT
WHEREAS, SEAGULL ENERGY CORPORATION ("Seagull") and BARRY J. GALT
("Galt") have heretofore entered into an Employment and Consulting Agreement (the "Agreement"), which was effective as of August 24, 1998; and
WHEREAS, Seagull and Galt desire to amend the Agreement in certain respects, contingent on, and effective upon, the consummation of the transactions (the "Merger") contemplated by the Agreement and Plan of Merger between Company and Ocean Energy, Inc. dated as of November 24, 1998, as the same may be amended from time to time (the "Merger Agreement");
NOW, THEREFORE, Seagull and Galt agree that the Agreement shall be amended as follows, effective as of the Merger Effective Time (which shall have the same meaning as the term "Effective Time" in the Merger Agreement):
1. Paragraph 3 of the Agreement shall be deleted and the following shall be substituted therefor:
"3. Vice Chairman. Effective as of January 1, 1999, the Board of Directors has elected Galt to serve as Vice Chairman of the Board of Directors. As Vice Chairman, Galt shall have such powers and duties as designated in Seagull's bylaws and as from time to time may be assigned to him by the Board of Directors or the Chairman of the Board of Directors. The designation of Vice Chairman shall continue through the earlier of (a) the Merger Effective Time (which shall have the same meaning as the term 'Effective Time' in the Agreement and Plan of Merger between Company and Ocean Energy, Inc. dated as of November 24, 1998, as the same may be amended from time to time (the 'Merger Agreement')) or (b) the adjournment of the 1999 Annual Meeting, after which Galt acknowledges that he will cease to serve as Vice Chairman."
2. The following sentence shall be added to paragraph 6(a) of the Agreement:
"Notwithstanding any provision in this Agreement to the contrary, the consummation of the transactions contemplated by the Merger Agreement, shall be deemed to be a 'Change of Control' (or, if applicable, a 'Corporate Change') with respect to Executive for all purposes under this Agreement, the Severance Agreement dated March 17, 1997 between Seagull and Galt, the Plan and the Company's other stock plans."
3. As amended hereby, the Agreement is specifically ratified and reaffirmed. If the Merger Agreement is terminated without the consummation of the transactions contemplated thereby, this Amendment shall be null and void and of no effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the 24th day of November, 1998 to be effective as of the Merger Effective Time.
SEAGULL ENERGY CORPORATION
By: ____________________________________
Name: William L. Transier
Title: Executive Vice President and
Chief Financial Officer
"SEAGULL"
"GALT"
OCEAN ENERGY, INC.
1999 CHANGE OF CONTROL
SEVERANCE PLAN
The OCEAN ENERGY, INC. 1999 CHANGE OF CONTROL SEVERANCE PLAN (the "Plan") is hereby adopted pursuant to the authorization of the Board of Directors of OCEAN ENERGY, INC. (a Louisiana Corporation) (the "Company"). The Plan supercedes and replaces in full any severance plan, practice or policy (written or oral) of the Company existing with respect to Covered Employees prior to the Effective Date.
I.
DEFINITIONS AND CONSTRUCTION
1.1 Definitions. Where the following words and phrases appear in the Plan, they shall have the respective meanings set forth below, unless their context clearly indicates to the contrary.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Change in Duties" shall mean the occurrence, within two years after the date upon which a Change of Control occurs, of any one or more of the following:
(1) with respect to a Covered Employee of Severance Level A, a significant reduction in the duties of such Covered Employee from those applicable to him immediately prior to the date on which a Change of Control occurs;
(2) a reduction in a Covered Employee's annual salary from that provided to him immediately prior to the date on which a Change of Control occurs;
(3) a change in the location of a Covered Employee's principal place of employment by the Employer by more than 50 miles from the location where he was principally employed immediately prior to the date on which a Change of Control occurs.
(c) "Change of Control" shall mean consummation of the merger contemplated by the Agreement & Plan of Merger between Seagull Energy Corporation and Ocean Energy, Inc. dated as of November 24, 1998.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Committee" shall mean the Administration Committee appointed by the Board to administer this Plan.
(f) "Company" shall mean Ocean Energy, Inc. (a Louisiana Corporation).
(g) "Compensation" shall mean the greater of (1) a Covered Employee's annual salary plus his Severance Factor, if any, immediately prior to the date on which a Change of Control occurs or (2) a Covered Employee's annual salary plus his Severance Factor, if any, at the time of his Involuntary Termination. "Three Months' Compensation" shall mean Compensation divided by 4. "Semi-Monthly Compensation" shall mean Compensation divided by 24.
(h) "Covered Employee" shall mean any individual who, on the
date upon which a Change of Control occurs, is a regular, full-time
salaried employee of the Employer or an hourly employee of the Employer
who is normally scheduled to work 550 or more hours per year, other
than (1) any individual whose terms of employment are governed by a
collective bargaining agreement between a collective bargaining unit
and the Employer unless such agreement provides for coverage of such
individual under the Plan, (2) any individual who is a party to a
written agreement with the Employer providing for severance payments or
benefits upon such individual's termination of employment with the
Employer, (3) an employee who is classified as a temporary, casual, or
an independent contractor under the Employer's employment policies, and
(4) an employee of a non-U.S. subsidiary unless said employee is a U.S.
expatriate or third country national.
(i) "Effective Date" shall mean the date the Board approves the Plan.
(j) "Employer" shall mean the Company and Ocean Energy Resources, Inc. and each eligible organization designated as an Employer in accordance with the provisions of Section 4.4 of the Plan.
(k) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.
(l) "Involuntary Termination" shall mean any termination of a Covered Employee's employment with the Employer which:
(1) does not result from a voluntary resignation by the Covered Employee (other than a resignation pursuant to Clause (2) of this Section 1.1(l)); or
(2) results from a resignation by a Covered Employee on or before the date which is sixty days after the date the Covered Employee receives notice of a Change in Duties;
provided, however, that the term "Involuntary Termination" shall not include a Termination for Cause or any termination as a result of a Covered Employee's death, disability under circumstances entitling him to benefits under the Employer's long-term disability plan or Retirement.
(m) "Retirement" shall mean the Covered Employee's voluntary resignation on or after the date he reaches age sixty-five (other than a resignation within sixty days after the date the Covered Employee receives notice of a Change in Duties or a resignation at the request of the Employer).
(n) "Severance Factor" shall mean the percentage of annual salary for a Covered Employee's Severance Level determined in accordance with the following schedule and expressed as a dollar amount which, when added to the annual salary, results in the Compensation to be used in the severance benefit calculation.
Severance Level Severance Factor
A 38%
B 30%
C 25%
D 18%
E 0%
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(o) "Severance Level" shall mean the following category into which a Covered Employee is designated based on his annual salary immediately prior to the date on which a Change of Control occurs or, if greater, at the time of his Involuntary Termination for the purpose of determining his severance benefit amount.
Severance Level Annual Salary
A $140,000 and above
B $114,900 - $139,999
C $ 99,600 - $114,899
D $ 68,000 - $ 99,599
E Less than $ 68,000
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(p) "Termination for Cause" shall mean any termination of a Covered Employee's employment with the Employer by reason of the Covered Employee's (1) gross negligence in the performance of the Covered Employee's duties and responsibilities, which negligence results in material harm to the business, interests, or reputation of the Employer, (2) violation of any material Employer policy, including, without limitation, the theft, embezzlement or misappropriation or material misuse of any Employer funds or property, (3) criminal or civil conviction for a crime involving moral turpitude, (4) willfull and continued failure to perform the Covered Employee's duties and responsibilities, or (5) misconduct that, in the Employer's good faith determination, is materially harmful to the business, interests, or reputation of the Employer.
(q) "Welfare Benefit Coverages" shall mean the medical, dental, life insurance, accidental death and dismemberment, and vision coverages provided by the Employer to its active employees.
1.2 Number and Gender. Wherever appropriate herein, word used in the singular shall be considered to include the plural and the plural to include the singular. The masculine gender, where appearing in this Plan, shall be deemed to include the feminine gender.
1.3 Headings. The headings of Articles and Sections herein are included solely for convenience and if there is any conflict between such headings and the text of the Plan, the text shall control.
II.
SEVERANCE BENEFITS
2.1 Severance Benefits. Subject to the provisions of Section 2.2 hereof, if a Covered Employee's employment by the Employer or successor thereto shall be subject to an Involuntary Termination which occurs within two years after the date upon which a Change of Control occurs, then the Covered Employee shall be entitled to the following severance benefits:
(a) A lump sum cash payment in accordance with the following schedule:
Severance Level Benefit Amount
A 2 x Compensation
B 1.5 x Compensation
C 1.25 x Compensation
D 1 x Compensation
E Lesser of:
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(1) the sum of (A) Semi-Monthly Compensation as of his Involuntary Termination for each full year and fraction thereof of continuous employment with the Employer as a Covered Employee from his most recent date of hire, and (B) Semi-Monthly Compensation for each full $10,000 increment of such Covered Employee's annual salary at the time of his Involuntary Termination; provided, however, that in no event shall any Covered Employee receive less than Three Months' Compensation; or
(2) 1 x Compensation.
(b) A Covered Employee shall be entitled to continue the Welfare Benefit Coverages for himself and, where applicable, his eligible dependents following his Involuntary Termination for a number of months determined in accordance with the following schedule:
Severance Level Number of Months
A 24
B 18
C 15
D 12
E The number of months
for which cash
payments are made
under Paragraph (a)
above (rounded to
the nearest whole
month if necessary);
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provided however, the Covered Employee must continue either to pay the premiums paid by active employees of the Employer for such coverages or to pay the actual (nonsubsidized) cost of such coverages for which the Employer does not subsidize for active employees. Such benefit rights shall apply only to those Welfare Benefit Coverages which the Employer has in effect from time to time for active employees, and the applicable payments shall adjust as premiums for active employees of the Employer or actual costs, whichever is applicable, change. Welfare Benefit Coverage(s) shall immediately end upon the Covered Employee's obtainment of new employment and eligibility for similar Welfare Benefit Coverage(s) (with the Covered Employee being obligated hereunder to promptly report such eligibility to the Employer). Nothing herein shall be deemed to adversely affect in any way the additional rights, after consideration of this extension period, of Covered Employees and their eligible dependents to health care continuation coverage as required pursuant to Part 6 of Title I of ERISA.
(c) A Covered Employee of Severance Level A shall be entitled to receive out-placement services in connection with obtaining new employment up to a maximum cost of $6,000.
(d) The severance benefits payable under this Plan shall be paid to a Covered Employee at the time he receives his final termination pay, or as soon as administratively practicable thereafter, subject to the conditions set forth in Section 2.2 of the Plan. Any severance benefits paid pursuant to this Section will be deemed to be a severance payment and not "Compensation" for purposes of determining benefits under the Employer's qualified plans and shall be subject to any required tax withholding.
2.2 Release and Full Settlement. Anything to the contrary herein notwithstanding, as a condition to the receipt of any severance payment hereunder, a Covered Employee whose employment by the Employer has been subject to an Involuntary Termination shall first execute a release, in the form established by the Committee, releasing the Committee, the Employer, and the Employer's shareholders, partners, officers, directors, employees and agents from any and all claims and from any and all causes of action of any kind or character, including but not limited to all claims or causes of action arising out of such Covered Employee's employment with the Employer or the termination of such employment, and the performance of the Employer's obligations hereunder and the receipt of any benefits provided hereunder by such Covered Employee shall constitute full settlement of all such claims and causes of action.
2.3 Mitigation. A Covered Employee shall not be required to mitigate the amount of any payment provided for in this Article II by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Article II be reduced by any compensation or benefit earned by the Covered Employee as the result of employment by another employer or by retirement benefits. The benefits under the Plan are in addition to any other benefits to which a Covered Employee is otherwise entitled. Notwithstanding the foregoing, in the event that salary continuation or severance payments are payable by the Employer to a Covered Employee for any reason other than under this Plan ("Other Severance Payments"), including, but not limited to, under any other Employer plan, policy or agreement, other than a "plan" within the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or as a result of the application of the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Section 2101 et. seq. (the "WARN Act"), or an election by the Employer to make payments in lieu of notice as if the WARN Act applied, whether or not it does so apply, to any Involuntary Termination of a Covered Employee, no severance payments shall be payable as provided in Section 2.1(a) to such Covered Employee except to the extent such severance payments exceed the aggregate amount of Other Severance Payments payable to such Covered Employee.
2.4 Severance Pay Plan Limitation. This Plan is intended to be an
employee welfare benefit plan within the meaning of section 3(1) of ERISA and
the Labor Department regulations promulgated thereunder. Therefore, anything to
the contrary herein notwithstanding, in no event shall any Covered Employee
receive total payments under the Plan that exceed the equivalent of twice such
Covered Employee's "annual compensation" (as such term is defined in 29 CFR
Section 2510.3-2(b)(2)) during the year immediately preceding his Involuntary
Termination. If total payments under the Plan to a Covered Employee would
otherwise exceed the limitation in the preceding sentence, the amount payable to
such Covered Employee pursuant to Section 2.1(a) shall be reduced in order to
satisfy such limitation.
2.5 Certain Additional Payments by the Employer. Notwithstanding anything to the contrary in the Plan, in the event that any payment or distribution by the Employer to or for the benefit of a Covered Employee, whether paid or payable or distributed or distributable pursuant to the terms of the Plan or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the "Excise Tax"), the Employer shall pay to the Covered Employee an additional payment (a "Gross-up Payment") in an amount such that after payment by the Covered Employee of all of taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, the Covered Employee retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payment. The Employer and the Covered Employee shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment. The Covered Employee shall notify the Employer in writing of any claim by the Internal Revenue Service which, if successful, would require the Employer to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially determined by the Employer and the Covered Employee) within ten days of the receipt of such claim. The Employer shall notify the Covered Employee in writing at least ten days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If the Employer decides to contest such claim, the Covered Employee shall cooperate fully with the Employer in such action; provided, however, the Employer shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold the Covered Employee harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of the Employer's action. If, as a result of the Employer's action with respect to a claim, the Covered Employee receives a refund of any amount paid by the Employer with respect to such claim, the Covered Employee shall promptly pay such refund to the Employer. If the Employer fails to timely notify the Covered Employee whether it will contest such claim or the Employer determines not to contest such claim, then the Employer shall immediately pay to the Covered Employee the portion of such claim, if any, which it has not previously paid to the Covered Employee.
III.
ADMINISTRATION OF PLAN
3.1 Committee's Powers and Duties. It shall be a principal duty of the Committee to see that the Plan is carried out, in accordance with its terms, for the exclusive benefit of persons entitled to participate in the Plan. The Committee shall be the named fiduciary and shall have full power to administer the Plan in all of its details, subject to applicable requirements of law. For this purpose, the Committee's powers shall include, but not be limited to, the following authority, in addition to all other powers provided by this Plan:
(a) to make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan;
(b) to interpret the Plan, its interpretation thereof to be final and conclusive on all persons claiming benefits under the Plan;
(c) to decide all questions concerning the Plan and the eligibility of any person to participate in the Plan;
(d) to make a determination as to the right of any person to a benefit under the Plan (including, without limitation, to determine whether and when there has been a termination of a Covered Employee's employment and the cause of such termination);
(e) to appoint such agents, counsel, accountants, consultants, claims administrator and other persons as may be required to assist in administering the Plan;
(f) to allocate and delegate its responsibilities under the Plan and to designate other persons to carry out any of its responsibilities under the Plan, any such allocation, delegation or designation to be in writing;
(g) to sue or cause suit to be brought in the name of the
Plan; and
(h) to obtain from the Employer and from Covered Employees such information as is necessary for the proper administration of the Plan.
3.2 Member's Own Participation. No Covered Employee or agent of the Committee may act, vote, or otherwise influence a decision of the Committee specifically relating to himself as a participant in the Plan.
3.3 Indemnification. The Company shall indemnify and hold harmless each member of the Committee against any and all expenses and liabilities arising out of his administrative functions or fiduciary responsibilities, including any expenses and liabilities that are caused by or result from an act or omission constituting the negligence of such member in the performance of such functions or responsibilities, but excluding expenses and liabilities that are caused by or result from such member's own gross negligence or willful misconduct. Expenses against which such member shall be indemnified hereunder shall include, without limitation, the amounts of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted or a proceeding brought or settlement thereof.
3.4 Compensation, Bond and Expenses. The members of the Committee shall not receive compensation with respect to their services for the Committee. To the extent required by applicable law, but not otherwise, Committee members shall furnish bond or security for the performance of their duties hereunder. Any expenses properly incurred by the Committee incident to the administration, termination or protection of the Plan, including the cost of furnishing bond, shall be paid by the Company.
3.5 Claims Procedure. Any employee that the Committee determines is entitled to a benefit under the Plan is not required to file a claim for benefits. Any employee who is not paid a benefit and who believes that he is entitled to a benefit or who has been paid a benefit and who believes that he is entitled to a greater benefit may file a claim for benefits under the Plan in writing with the Committee. In any case in which a claim for Plan benefits by a Covered Employee is denied or modified, the Committee shall furnish written notice to the claimant within ninety days (or within 180 days if additional information requested by the Committee necessitates an extension of the ninety-day period), which notice shall:
(a) state the specific reason or reasons for the denial or modification;
(b) provide specific reference to pertinent Plan provisions on which the denial or modification is based;
(c) provide a description of any additional material or information necessary for the Covered Employee or his representative to perfect the claim, and an explanation of why such material or information is necessary; and
(d) explain the Plan's claim review procedure as contained herein.
In the event a claim for Plan benefits is denied or modified, if the Covered Employee or his representative desires to have such denial or modification reviewed, he must, within sixty days following receipt of the notice of such denial or modification, submit a written request for review by the Committee of its initial decision. In connection with such request, the Covered Employee or his representative may review any pertinent documents upon which such denial or modification was based and may submit issues and comments in writing. Within sixty days following such request for review the Committee shall, after providing a full and fair review, render its final decision in writing to the Covered Employee and his representative, if any, stating specific reasons for such decision and making specific references to pertinent Plan provisions upon which the decision is based. If special circumstances require an extension of such sixty-day period, the Committee's decision shall be rendered as soon as possible, but not later than 120 days after receipt of the request for review. If an extension of time for review is required, written notice of the extension shall be furnished to the Covered Employee and his representative, if any, prior to the commencement of the extension period.
3.6 Mandatory Arbitration. If a Covered Employee or his representative is not satisfied with the decision of the Committee pursuant to the Plan's claims review procedure, such Covered Employee or his representative may, within sixty days of receipt of the written decision of the Committee, request by written notice to the Committee, that his claim be submitted to arbitration pursuant to the employee benefit plan claims arbitration rules of the American Arbitration Association. Such arbitration shall be the sole and exclusive procedure available to a Covered Employee or his representative for review of a decision of the Committee. In reviewing the decision of the Committee, the arbitrator shall use the standard of review which would be used by a Federal court in reviewing such decision under the provisions of ERISA. The Covered Employee or his representative and the Plan shall share equally the cost of such arbitration. The arbitrator's decision shall be final and legally binding on both parties. This Section shall be governed by the provisions of the Federal Arbitration Act.
IV.
GENERAL PROVISIONS
4.1 Funding. The benefits provided herein shall be unfunded and shall be provided from the Employer's general assets.
4.2 Cost of Plan. The entire cost of the Plan shall be borne by the Employer and no contributions shall be required of the Covered Employees.
4.3 Plan Year. The Plan shall operate on a plan year consisting of the twelve consecutive month period commencing on January 1 of each year with a short plan year commencing on the Effective Date and ending on December 31, 1999.
4.4 Other Participating Employers. The Committee may designate any entity or organization eligible by law to participate in this Plan as an Employer by written instrument delivered to the Secretary of the Company and the designated Employer. Such written instrument shall specify the effective date of such designated participation, may incorporate specific provisions relating to the operation of the Plan which apply to the designated Employer only and shall become, as to such designated Employer and its employees, a part of the Plan. Each designated Employer shall be conclusively presumed to have consented to its designation and to have agreed to be bound by the terms of the Plan and any and all amendments thereto upon its submission of information to the Committee required by the terms of or with respect to the Plan; provided, however, that the terms of the Plan may be modified so as to increase the obligations of an Employer only with the consent of such Employer, which consent shall be conclusively presumed to have been given by such Employer upon its submission of any information to the Committee required by the terms of or with respect to the Plan. Except as modified by the Committee in its written instrument, the provisions of this Plan shall be applicable with respect to each Employer separately, and amounts payable hereunder shall be paid by the Employer which employs the particular Covered Employee.
4.5 Amendment and Termination. The Plan may be amended from time to time at the discretion of the Board. Notwithstanding the foregoing, this Plan may not be amended to reduce benefits or rights to benefits within two years following a Change of Control. For purposes of this Section, a change in the designation by the Committee of Participating Employers pursuant to Section 4.4 shall be deemed to be an amendment to the Plan. The Plan shall terminate two years after the date of the Change in Control except with respect to severance benefits payable as a result of Involuntary Terminations occurring prior to such date.
4.6 Not Contract of Employment. The adoption and maintenance of the Plan shall not be deemed to be a contract of employment between the Employer and any person or to be consideration for the employment of any person. Nothing herein contained shall be deemed to give any person the right to be retained in the employ of the Employer or to restrict the right of the Employer to discharge any person at any time nor shall the Plan be deemed to give the Employer the right to require any person to remain in the employ of the Employer or to restrict any person's right to terminate his employment at any time.
4.7 Severability. Any provision in the Plan that is prohibited or unenforceable in any jurisdiction by reason of applicable law shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
4.8 Nonalienation. Covered Employees shall not have any right to pledge, hypothecate, anticipate or assign benefits or rights under the Plan, except by will or the laws of descent and distribution.
4.9 Effect of Plan. This Plan is intended to supersede all prior oral or written policies of the Employer and all prior oral or written communications to Covered Employees with respect to the subject matter hereof, and all such prior policies or communications are hereby null and void and of no further force and effect. Further, this Plan shall be binding upon the Employer and any successor of the Employer, by merger or otherwise, and shall inure to the benefit of and be enforceable by the Employer's Covered Employees.
4.10 Governing Law. The Plan shall be interpreted and construed in accordance with the laws of the State of Texas, except to the extent preempted by federal law.
EXECUTED this 8th day of February, 1999.
OCEAN ENERGY, INC.
By:
Name: Robert K. Reeves
Title: Executive Vice President,
General Counsel & Secretary
FIRST AMENDMENT TO
OCEAN ENERGY, INC.
1999 CHANGE OF CONTROL SEVERANCE PLAN
WHEREAS, OCEAN ENERGY, INC., a Louisiana corporation (the "Company")has heretofore adopted and currently maintains the OCEAN ENERGY, INC. 1999 CHANGE OF CONTROL SEVERANCE PLAN (the "Plan"); and
WHEREAS, the Company desires to amend the Plan in certain respects;
NOW, THEREFORE, the Plan is hereby amended as follows, effective as of March 29, 1999:
1. Section 1.1(l) of the Plan shall be deleted and the following shall be substituted therefor:
"(l) 'Involuntary Termination' shall mean any termination of a Covered Employee's employment with the Employer
which:
(1) does not result from a voluntary resignation by the Covered Employee (other than a resignation pursuant to Clause (2) of this Section 1.1(l)); or
(2) results from a resignation by a Covered Employee on or before the date which is sixty days after the date the Covered Employee receives notice of a Change in Duties;
provided, however, that the term 'Involuntary Termination' shall not include a Termination for Cause, a termination of a Covered Employee's employment occurring as a result of or in connection with the sale or other divestiture by the Employer of a division, subsidiary, or other business segment (including, without limitation, a divestiture by sale of shares of stock or of assets) if such Covered Employee is offered continued employment by the acquiror of such business segment immediately upon such sale or divestiture, or any termination as a result of a Covered Employee's death, disability under circumstances entitling him to benefits under the Employer's long-term disability plan or Retirement."
2. As amended hereby, the Plan is specifically ratified and reaffirmed.
EXECUTED this _________ day of March, 1999.
OCEAN ENERGY, INC.
By:
Name:
Title:
FORM OF
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is effective ______________, 1999, between Ocean Energy, Inc., a Texas corporation (the "Corporation"), and the undersigned director or officer of the Corporation ("Indemnitee").
WHEREAS, the Corporation has adopted Articles of Incorporation (the "Articles") and Bylaws (the "Bylaws") providing for indemnification of the Corporation's directors and officers to the maximum extent authorized by the Texas Business Corporation Act, as amended from time to time (the "State Statute"); and
WHEREAS, such Articles, Bylaws and State Statute contemplate that contracts and insurance policies may be entered into with respect to indemnification of directors and officers; and
WHEREAS, recent developments have raised questions concerning the adequacy and reliability of the protection which might be afforded to directors and officers from acquisition of policies of Directors and Officers Liability Insurance ("D&O Insurance"), covering certain liabilities which might be incurred by directors and officers in the performance of their services to the Corporation; and
WHEREAS, it is reasonable, prudent and necessary for the Corporation to obligate itself contractually to indemnify Indemnitee so that he will serve or continue to serve the Corporation free from undue concern that he will not be adequately protected; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Corporation on condition that he be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee do hereby covenant and agree as follows:
1. DEFINITIONS. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened, pending or completed action, suit, inquiry or proceeding, whether brought by or in the right of the Corporation or otherwise and whether of a civil, criminal, administrative, arbitrative or investigative nature, in which Indemnitee is or will be involved as a party, as a witness or otherwise, by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Corporation, by reason of any action taken by him or of any inaction on his part while acting as a director, officer, employee or agent or by reason of the fact that he is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, limited liability company or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification or reimbursement can be provided under this Agreement; provided that any such action, suit or proceeding which is brought by Indemnitee against that Corporation or directors or officers of the Corporation, other than an action brought by Indemnitee to enforce his rights under this Agreement, shall not be deemed a Proceeding without prior approval by a majority of the Board of Directors of the Corporation.
(b) The term "Expenses" shall include, without limitation, any judgments, fines and penalties against Indemnitee in connection with a Proceeding; amounts paid by Indemnitee in settlement of a Proceeding; and all attorneys' fees and disbursements, accountants' fees, private investigation fees and disbursements, retainers, court costs, transcript costs, fees of experts, fees and expenses of witnesses, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements, or expenses, reasonably incurred by or for Indemnitee in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in a Proceeding or establishing Indemnitee's right of entitlement to indemnification for any of the foregoing.
(c) References to "other enterprise" shall include employee benefit plans; references to "Fines" shall include any excise tax assessed with respect to any employee benefit plan; references to "serving at the request of the Corporation" shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interest of the Corporation" as referred to in this Agreement.
(d) The term "substantiating documentation" shall mean copies of bills or invoices for costs incurred by or for Indemnitee, or copies of court or agency orders or decrees or settlement agreements, as the case may be, accompanied by a sworn statement from Indemnitee that such bills, invoices, court or agency orders or decrees or settlement agreements, represent costs or liabilities meeting the definition of "Expenses" herein.
(e) The terms "he" and "his" have been used for convenience and mean "she" and "her" if Indemnitee is a female.
2. INDEMNITY OF DIRECTOR OR OFFICER. The Corporation hereby agrees to hold harmless and indemnify Indemnitee against Expenses to the full extent authorized or permitted by the provisions of the State Statute, or by any amendment thereof, or by other statutory provisions authorizing or permitting such indemnification adopted after the date hereof.
3. ADDITIONAL INDEMNITY. The Corporation hereby further agrees to hold harmless and indemnify Indemnitee against Expenses incurred by reason of the fact that Indemnitee 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, limited liability company or other enterprise, including, without limitation, any predecessor, subsidiary or affiliated entity of the Corporation, but only if Indemnitee acted in good faith and, in the case of conduct in his official capacity, in a manner he reasonably believed to be in the best interests of the Corporation and, in all other cases, not opposed to the best interests of the Corporation. Additionally, in the case of a criminal proceeding, Indemnitee must have had no reasonable cause to believe that his conduct was unlawful. The termination of any Proceeding by judgment, order of the court, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the Corporation, and with respect to any criminal proceeding, that such person had reasonable cause to believe that his conduct was unlawful.
4. CHOICE OF COUNSEL. If Indemnitee is not an officer of the Corporation, he, together with the other directors who are not officers of the Corporation (the "Outside Directors"), shall be entitled to employ, and be reimbursed for the fees and disbursements of, counsel separate from that chosen by Indemnitees who are officers of the Corporation. The principal counsel for Outside Directors ("Principal Counsel") shall be determined by majority vote of the Outside Directors, and the Principal Counsel for the Indemnitees who are not Outside Directors ("Separate Counsel") shall be determined by majority vote of such Indemnitees. The obligation of the Corporation to reimburse Indemnitee for the fees and disbursements of counsel hereunder shall not extend to the fees and disbursements of any counsel employed by Indemnitee other than Principal Counsel or Separate Counsel, as the case may be, unless, in the opinion of other counsel for Indemnitee, concurred in by Principal Counsel or Separate Counsel, as the case may be, Indemnitee may have defenses available to him that are in addition to or different from those of the other Indemnitees such that there is a substantial possibility that Principal Counsel of Separate Counsel, as the case may be, will have a conflict of interest in representing Indemnitee.
5. ADVANCES OF EXPENSES. Expenses (other than judgments, penalties, fines and settlements) incurred by Indemnitee shall be paid by the Corporation, in advance of the final disposition of the Proceeding, within 10 days after receipt of Indemnitee's written request accompanied by substantiating documentation and Indemnitee's written affirmation that he has met the standard of conduct for indemnification and a written undertaking to repay such amount to the extent it is ultimately determined that indemnitee is not entitled to indemnification. No objections based on or involving the question whether such charges meet the definition of "Expenses," including any question regarding the reasonableness of such Expenses, shall be grounds for failure to advance to such Indemnitee, or to reimburse such Indemnitee for, the amount claimed within such 10-day period, and the undertaking of Indemnitee set forth in Section 7 hereof to repay any such amount to the extent it is ultimately determined that Indemnitee is not entitled to indemnification shall be deemed to include an undertaking to repay any such amounts determined not to have met such definition.
6. RIGHT OF INDEMNITEE TO INDEMNIFICATION UPON APPLICATION; PROCEDURE UPON APPLICATION. Any indemnification under this Agreement, other than pursuant to Section 5 hereof, shall be made no later than 45 days after receipt by the Corporation of the written request of Indemnitee, accompanied by substantiating documentation, unless a determination is made within said 45-day period by (1) the Board of Directors by a majority vote of a quorum consisting of directors who are not or were not parties to such Proceeding, or (2) independent legal counsel in a written opinion (which counsel shall be appointed if such a quorum is not obtainable), that Indemnitee has not met the relevant standards for indemnification set forth in Section 3 hereof.
The right to indemnification or advances as provided by this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors or independent legal counsel) to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because Indemnitee has met the applicable standards of conduct, nor an actual determination by the Corporation (including its Board of Directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
7. UNDERTAKING BY INDEMNITEE. Indemnitee hereby undertakes to repay to the Corporation any advances of Expenses pursuant to Section 3 hereof to the extent that it is ultimately determined that Indemnitee is not entitled to indemnification.
8. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification and advancement of expenses provided by this Agreement shall not deemed exclusive of any other rights to which Indemnitee may be entitled under the Articles, the Bylaws, the State Statute, D&O Insurance, any agreement, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. However, Indemnitee shall reimburse the Corporation for amounts paid to him pursuant to such other rights to the extent such payments duplicate any payments received pursuant to this Agreement.
9. CONTINUATION OF INDEMNITY. All agreements and obligations of the Corporation contained herein shall continue during the period Indemnitee is a director or officer 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, limited liability company or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding.
10. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of Expenses, but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
11. SETTLEMENT OF CLAIMS. The Corporation shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without the Corporation's written consent. The Corporation shall not settle any Proceeding in any manner which would impose any penalty or limitation on Indemnitee without Indemnitee's written consent. Neither the Corporation nor Indemnitee will unreasonably withhold their consent to any proposed settlement. The Corporation shall not be liable to indemnify Indemnitee under this Agreement with regard to any judicial award if the Corporation was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action.
12. ENFORCEMENT.
(a) The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Corporation hereby in order to induce Indemnitee to serve as a director or officer of the Corporation, and acknowledges that Indemnitee is relying upon this Agreement in continuing as a director or officer.
(b) In the event Indemnitee is required to bring any action or other proceeding to enforce rights or to collect moneys due under this Agreement and is successful in such action, the Corporation shall reimburse Indemnitee for all of Indemnitee's Expenses in bringing and pursuing such action.
13. GOVERNING LAW; BINDING EFFECT; AMENDMENT AND TERMINATION.
(a) This Agreement shall be interpreted and enforced in accordance with the laws of the State of Texas.
(b) This Agreement shall be binding upon the Corporation, its successors and assigns, and shall inure to the benefit of Indemnitee, his heirs, personal representatives and assigns and to the benefit of the Corporation, its successors and assigns.
(c) No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by the Corporation and Indemnitee.
14. SEVERABILITY. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable (a) the validity, legality and enforceability of the remaining provisions of this Agreement shall not be in any way affected or impaired thereby, and (b) to the fullest extent possible, the provisions of this Agreement shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. Each section of this Agreement is a separate and independent portion of this Agreement. If the indemnification to which Indemnitee is entitled as respects any aspect of any claim varies between two or more sections of this Agreement, that section providing the most comprehensive indemnification shall apply.
15. NOTICE. Notice to the Corporation shall be directed to Ocean Energy, Inc., 1001 Fannin, Suite 1600, Houston, Texas 77002, Attention: General Counsel. Notice to Indemnitee shall be directed to the address set forth under his signature hereto. The foregoing addresses may be changed from time to time
by the addressee upon notice to the other parties.
Notice shall be deemed received three days after the date postmarked if sent by prepaid mail, properly addressed.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.
OCEAN ENERGY, INC.
By:
Name:
Title:
INDEMNITEE
Name:
Address:
| ARTICLE 5 |
| MULTIPLIER: 1,000 |
| PERIOD TYPE | YEAR |
| FISCAL YEAR END | DEC 31 1999 |
| PERIOD END | MAR 31 1999 |
| CASH | 32,790 |
| SECURITIES | 0 |
| RECEIVABLES | 183,803 |
| ALLOWANCES | 0 |
| INVENTORY | 28,943 |
| CURRENT ASSETS | 265,597 |
| PP&E | 4,588,261 |
| DEPRECIATION | 1,798,478 |
| TOTAL ASSETS | 3,339,030 |
| CURRENT LIABILITIES | 422,524 |
| BONDS | 1,944,524 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 1 |
| COMMON | 16,639 |
| OTHER SE | 881,464 |
| TOTAL LIABILITY AND EQUITY | 3,339,030 |
| SALES | 105,694 |
| TOTAL REVENUES | 105,694 |
| CGS | 45,160 |
| TOTAL COSTS | 136,844 |
| OTHER EXPENSES | 40,169 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 25,170 |
| INCOME PRETAX | (96,489) |
| INCOME TAX | (15,438) |
| INCOME CONTINUING | (81,852) |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | (81,852) |
| EPS PRIMARY | (0.79) |
| EPS DILUTED | (0.79) |