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GUARANTY AGREEMENT
Dated as of November 20, 1998
by
OCEAN ENERGY, INC.,
a Louisiana corporation
in favor of
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent,
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Syndication Agent,
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
as Documentation Agent,
BARCLAYS BANK PLC,
as Managing Agent,
PARIBAS,
SOCIETE GENERALE, SOUTHWEST AGENCY,
AND
CREDIT SUISSE FIRST BOSTON
as Co-Agents,
and
THE LENDERS NOW OR HEREAFTER PARTIES TO THE CREDIT AGREEMENT
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Terms Defined in Recitals ......................................1
Section 1.02 Certain Definitions ............................................1
Section 1.03 Credit Agreement Definitions ...................................2
ARTICLE II
The Guaranty
Section 2.01 Obligations Guaranteed .........................................2
Section 2.02 Nature of Guaranty .............................................2
Section 2.03 Lenders' Rights ................................................2
Section 2.04 Guarantor's Waivers ............................................2
Section 2.05 Maturity of Obligations; Payment ...............................3
Section 2.06 Lenders' Expenses ..............................................3
Section 2.07 Obligation .....................................................3
Section 2.08 Events and Circumstances Not Reducing or Discharging the
Guarantor's Obligations.........................................3
Section 2.09 Limitations on Obligation of the Guarantor Hereunder ...........5
Section 2.10 Subrogation ....................................................5
ARTICLE III
Representations, Warranties and Covenants
Section 3.01 Representations and Warranties .................................5
Section 3.02 Covenants ......................................................6
ARTICLE IV
Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims ..........................7
Section 4.02 Claims in Bankruptcy ...........................................7
Section 4.03 Payments Held in Trust .........................................7
Section 4.04 Liens Subordinate ..............................................7
Section 4.05 Notation of Records ............................................8
ARTICLE V
Miscellaneous
Section 5.01 Successors and Assigns .........................................8
Section 5.02 Notices ........................................................8
Section 5.03 Authority of Administrative Agent ..............................8
Section 5.04 CONSTRUCTION .................................................. 8
Section 5.05 Survival of Obligations ........................................9
Section 5.06 Status as Specified or Designated Senior Indebtedness. .........9
Section 5.07 Interest. .....................................................10
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GUARANTY AGREEMENT
This GUARANTY AGREEMENT dated as of November 20, 1998 is by OCEAN
ENERGY, INC., a corporation duly organized and validly existing under the laws
of the state of Louisiana (the "Guarantor"), in favor of each of the following:
each of the financial institutions that is now or hereafter a party to the
Credit Agreement (as defined below) as a lender (individually, a "Lender" and,
collectively, the "Lenders"); CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, AS
ADMINISTRATIVE AGENT for the Lenders (in such capacity, the "Administrative
Agent"), XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, AS SYNDICATION AGENT for
the Lenders (in such capacity, the "Syndication Agent"), BANK OF AMERICA
NATIONAL TRUST & SAVINGS ASSOCIATION, AS DOCUMENTATION AGENT for the Lenders
(in such capacity, the "Documentation Agent"), BARCLAYS BANK PLC, AS MANAGING
AGENT, AND PARIBAS, SOCIETE GENERALE, SOUTHWEST AGENCY, AND CREDIT SUISSE FIRST
BOSTON, AS CO-AGENTS for the Lenders (in such capacity, the "Co-Agents").
RECITALS
A. Ocean Energy, Inc., a Delaware corporation (the "Company"), the
Administrative Agent, the Syndication Agent, the Documentation Agent, the
Co-Agents (collectively the "Agents") and the Lenders have executed that
certain Second Amended and Restated Global Credit Agreement of even date
herewith (such credit agreement, as amended, the "Credit Agreement").
B. One of the terms and conditions stated in the Credit Agreement for
the making of the loans and extensions of credit described in the Credit
Agreement is the execution and delivery to the Agents and the Lenders of this
Guaranty Agreement.
C. NOW, THEREFORE, (i) in order to comply with the terms and
conditions of the Credit Agreement, (ii) to induce the Lenders to enter into
the Credit Agreement, and (iii) for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Guarantor hereby
agrees as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED IN RECITALS. As used in this Guaranty
Agreement, the terms defined in the Recitals shall have the meanings indicated
in the Recitals.
SECTION 1.02 CERTAIN DEFINITIONS. As used in this Guaranty Agreement,
including the Recitals, the following terms shall have the following meanings,
unless the context otherwise requires:
"Guarantor Claims" shall have the meaning indicated in Section 4.01.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the same
may from time to time be amended or supplemented.
"Obligations" shall mean (a) the payment and performance of all
present and future indebtedness, obligations and liabilities of the Company to
the Agents and the Lenders under the Credit Agreement, including but not
limited to, (i) the full and punctual payment of the Notes issued thereunder,
and any and all promissory notes given in substitution for such Notes or in
modification, renewal, extension or rearrangement thereof in whole or in part,
and (ii) the reimbursement and other obligations of the Company under and with
respect to
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Letters of Credit and Letter of Credit Agreements now outstanding or hereafter
issued under the Credit Agreement; (b) all obligations of the Guarantor under
this Guaranty Agreement; and (c) all interest (whether pre- or post petition),
charges, expenses, reasonable attorneys' or other fees and any other sums
payable to the Agents and the Lenders in connection with the execution,
administration or enforcement of any of their rights and remedies hereunder or
any other Loan Document.
SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are defined in the
Credit Agreement shall have the same meanings herein as therein.
ARTICLE II
THE GUARANTY
SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably
and unconditionally guarantees the prompt payment at maturity of the
Obligations.
SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute,
irrevocable, completed and continuing guaranty of payment and not a guaranty of
collection, and no notice of the Obligations or any extension of credit already
or hereafter contracted by or extended to the Company need be given to the
Guarantor. This guaranty may not be revoked by the Guarantor and shall continue
to be effective with respect to debt under the Obligations arising or created
after any attempted revocation by the Guarantor and shall remain in full force
and effect until the Obligations are paid in full and the Aggregate Commitments
are terminated, notwithstanding that from time to time prior thereto no
Obligations may be outstanding. The Company, the Agents and the Lenders may
modify, alter, rearrange, extend for any period and/or renew from time to time,
the Obligations and the Agents and the Lenders may waive any Defaults or Events
of Default without notice to the Guarantor and in such event the Guarantor will
remain fully bound hereunder on the Obligations. Subject to the terms of the
Credit Agreement, this Guaranty Agreement may be enforced by the Agents and/or
the Lenders and any subsequent holder of the Obligations and shall not be
discharged by the assignment or negotiation of all or part of the Obligations.
The Guarantor hereby expressly waives presentment, demand, notice of
non-payment, protest and notice of protest and dishonor, notice of Event of
Default, notice of intent to accelerate the maturity and notice of acceleration
of the maturity and any other notice in connection with the Obligations, and
also notice of acceptance of this Guaranty Agreement, acceptance on the part of
the Agents and the Lenders being conclusively presumed by their request for
this Guaranty Agreement and delivery of the same to the Administrative Agent.
SECTION 2.03 LENDERS' RIGHTS. Subject to the terms of the Credit
Agreement, the Guarantor authorizes the Lenders (or the Administrative Agent on
behalf of the Lenders), without notice or demand and without affecting the
Guarantor's obligation hereunder, to take and hold agreed-upon security for the
payment of the Obligations, and exchange, enforce, waive and release any such
security; and to apply such security and direct the order or manner of sale
thereof as the Agents and the Lenders in their discretion may determine; and to
obtain a guaranty of the Obligations from any one or more Persons and at any
time or times to enforce, waive, rearrange, modify, limit or release any of
such other Persons from their obligations under such guaranties.
SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to
require the Agents and the Lenders to (a) proceed against the Company or any
other Person liable on the Obligations, (b) enforce their rights against any
other guarantor of the Obligations, (c) proceed or enforce their rights against
or exhaust any security given to secure the Obligations, (d) have the Company
joined with the Guarantor in any suit arising out of this Guaranty Agreement
and/or the Obligations, or (e) pursue any other remedy whatsoever. Neither
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the Agents nor the Lenders shall be required to mitigate damages or take any
action to reduce, collect or enforce the Obligations. The Guarantor waives any
defense arising by reason of any disability, lack of corporate authority or
power, or other defense of the Company or any other guarantor of the
Obligations, and shall remain liable hereon regardless of whether the Company
or any other guarantor be found not liable thereon for any reason.
SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees
that if the maturity of the Obligations is accelerated by bankruptcy or
otherwise, such maturity shall also be deemed accelerated for the purpose of
this Guaranty Agreement without demand or notice to the Guarantor. The
Guarantor will, forthwith upon notice from the Administrative Agent of the
Company's failure to pay the Obligations at maturity, pay to the Administrative
Agent for the benefit of the Agents and the Lenders at the Administrative
Agent's Principal Office, the amount due and unpaid by the Company and
guaranteed hereby. The failure of the Administrative Agent to give this notice
shall not in any way release the Guarantor hereunder.
SECTION 2.06 LENDERS' EXPENSES. If the Guarantor fails to pay the
Obligations after notice from the Administrative Agent of the Company's failure
to pay any Obligations at maturity (whether by acceleration or otherwise), and
if the Agents or the Lenders obtain the services of an attorney for collection
of amounts owing by the Guarantor hereunder, or obtain advice of counsel in
respect of any of their rights under this Guaranty Agreement, or if suit is
filed to enforce this Guaranty Agreement, or if proceedings are had in any
bankruptcy, receivership or other judicial proceedings for the establishment or
collection of any amount owing by the Guarantor hereunder, or if any amount
owing by the Guarantor hereunder is collected through such proceedings, the
Guarantor agrees to pay to the Administrative Agent at its Principal Office the
reasonable attorneys' fees of the Agents and the Lenders.
SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of
the Guarantor for the payment of the Obligations guaranteed hereby shall be
primary and not secondary.
SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of
the following to the fullest extent permitted by law, agrees that its
obligations under this Guaranty Agreement shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any
rights (including without limitation rights to notice) which it might otherwise
have as a result of or in connection with any of the following:
(a) Modifications, etc. Any renewal, extension, modification, or
increase in the amount of the Aggregate Commitments as in effect on the
Effective Date, decrease, alteration or rearrangement of all or any part of the
Obligations, any Loan Document or any instrument executed in connection
therewith, or any contract or understanding between the Company, any Agent
and/or the Lenders, or any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or
compromise that might be granted or given by the Agents or the Lenders to the
Company, the Guarantor or any Person liable on the Obligations;
(c) Condition of the Company or the Guarantor. The insolvency,
bankruptcy, arrangement, reorganization, adjustment, composition, liquidation,
disability, dissolution or lack of power of the Company or the Guarantor or any
other Person at any time liable for the payment of all or part of the
Obligations; or 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;
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(d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Loan Document,
including the Notes, for any reason whatsoever, including without limitation
the fact that the Obligations, or any part thereof, exceed the amount permitted
by law, the act of creating the Obligations or any part thereof is ultra xxxxx,
the officers or representatives executing any Loan Document or otherwise
creating the Obligations acted in excess of their authority, the Obligations
violate applicable usury laws, the Company has valid defenses, claims or
offsets (whether at law, in equity or by agreement) which render the
Obligations wholly or partially uncollectible from the Company, the creation,
performance or repayment of the Obligations (or the execution, delivery and
performance of any Loan Document) is illegal, uncollectible, legally impossible
or unenforceable, or the Credit Agreement, the Notes or other Loan Documents
have been forged or otherwise are irregular or not genuine or authentic;
(e) Release of Obligors. Any full or partial release of the obligation
of the Company on the Obligations or any part thereof, of any co-guarantors, or
any other Person now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform, guarantee or
assure the payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Company will be liable to perform the Obligations, or
that the Agents and the Lenders will look to other parties to perform the
Obligations;
(f) Security. The taking or accepting of any security, collateral or
guaranty, or other assurance of payment, for all or any part of the
Obligations;
(g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, Property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
(h) Care and Diligence. The failure of any Agent or any Lender or any
other Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of such collateral, Property or security;
(i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;
(j) Payments Rescinded. Any payment by the Company to any Agent or
Lender is held to constitute a preference under the bankruptcy laws, or for any
reason an Agent or Lender is required to refund such payment or pay such amount
to the Company or someone else; or
(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
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intention of the Guarantor that the Guarantor shall be obligated to pay the
Obligations when due, notwithstanding any occurrence, circumstance, event,
action, or omission whatsoever, whether contemplated or uncontemplated, and
whether or not otherwise or particularly described herein, except for the full
and final payment and satisfaction of the Obligations.
SECTION 2.09 LIMITATIONS ON OBLIGATION OF THE GUARANTOR HEREUNDER. The
parties hereto (i) intend that the obligation of the Guarantor hereunder be
limited to the maximum amount that would not result in the obligation created
hereby being avoidable under Section 548 of the Federal Bankruptcy Code (11
U.S.C. 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 Aggregate Commitments are terminated; provided that,
notwithstanding the foregoing, the Guarantor reserves its rights of contribution
and reimbursement, if any, from its co-guarantors, if any, and other Persons
liable on the Obligations or otherwise. Except as described in this Section
2.10, the Guarantor further waives any benefit of any right to participate in
any security now or hereafter held by the Agents and/or the Lenders.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01 REPRESENTATIONS AND WARRANTIES. In order to induce the
Agents and the Lenders to accept this Guaranty Agreement, the Guarantor
represents and warrants to the Agents and the Lenders (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.
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(c) No Breach. The execution and delivery by the Guarantor of this
Guaranty Agreement and the other Loan Documents to which it is a party, the
consummation of the transactions herein or therein contemplated, and the
compliance with the terms and provisions hereof will not (i) conflict with or
result in a breach of, or require any consent under (A) the charter or by-laws
of the Guarantor, or (B) any applicable law or regulation, or any order, writ,
injunction or decree of any court or other Governmental Authority, or any
material agreement or instrument to which the Guarantor is a party or by which
it is bound or to which it is subject in each case in such manner as could
reasonably be expected to have a Material Adverse Effect; or (ii) constitute a
default under any such agreement or instrument, or result in the creation or
imposition of any Lien upon any of the revenues or Property of the Guarantor in
each case in such manner as could reasonably be expected to have a Material
Adverse Effect.
(d) Corporate Action. The Guarantor has all necessary corporate power
and authority to execute, deliver and perform its obligations under this
Guaranty Agreement and the Loan Documents to which it is a party; and the
execution, delivery and performance by the Guarantor of this Guaranty Agreement
and the other Loan Documents to which such Person is a party have been duly
authorized by all necessary corporate action on its part. This Guaranty
Agreement and the Loan Documents to which the Guarantor is a party constitute
the legal, valid and binding obligation of the Guarantor, enforceable against
the Guarantor in accordance with their terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights and general principals of equity.
(e) Approvals. Other than consents heretofore obtained or described in
the Credit Agreement, no authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority are necessary for the
execution, delivery or performance by the Guarantor of this Guaranty Agreement
or the Loan Documents to which it is a party or for the validity or
enforceability thereof. It is understood that continued performance by the
Guarantor of this Guaranty Agreement and the other Loan Documents to which it is
a party will require various filings, such as filings related to environmental
matters, ERISA matters, Taxes and intellectual property, filings required to
maintain corporate and similar standing and existence, filings pursuant to the
Uniform Commercial Code and other security filings and recordings and filings
required by the SEC, routine filings in the ordinary course of business, and
filings required in connection with the exercise by the Lenders and the Agents
of remedies in connection with the Loan Documents.
(f) Solvency. The Guarantor (i) is not insolvent and will not be
rendered insolvent as a result of this Guaranty Agreement, (ii) is not engaged
in a business or a transaction, or about to engage in a business or a
transaction, for which any Property or assets remaining with the Guarantor are
unreasonably small capital, and (iii) does not intend to incur, or believe it
will incur, debts that will be beyond its ability to pay as such debts mature.
(g) No Representation by Agents or Lenders. Neither any Agent, any
Lender nor any other Person has made any representation, warranty or statement
to the Guarantor in order to induce the Guarantor to execute this Guaranty
Agreement.
SECTION 3.02 COVENANTS. The Guarantor acknowledges that it is has read
the Credit Agreement and hereby covenants and agrees to comply with covenants
and agreements set forth therein which restrict Restricted Subsidiaries of the
Company in so far as such covenants and agreements apply to it.
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ARTICLE IV
SUBORDINATION OF INDEBTEDNESS
SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Company to
the Guarantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation be direct, contingent, primary,
secondary, several, joint and several, or otherwise, and irrespective of whether
such debts or obligations be evidenced by note, contract, open account, or
otherwise, and irrespective of the Person or Persons in whose favor such debts
or obligations may, at their inception, have been, or may hereafter be created,
or the manner in which they have been or may hereafter be acquired by the
Guarantor. Except for payments permitted by the Credit Agreement, until the
Obligations shall be paid and satisfied in full, the Aggregate Commitments are
terminated and the Guarantor shall have performed all of its obligations
hereunder and the Loan Documents to which it is a party, the Guarantor shall not
receive or collect, directly or indirectly, from the Company any amount upon the
Guarantor Claims.
SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Company, the Administrative Agent on behalf of the
Agents and the Lenders shall have the right to prove their claim in any
proceeding, so as to establish their rights hereunder and receive directly from
the receiver, trustee or other court custodian, dividends and payments which
would otherwise be payable upon Guarantor Claims. The Guarantor hereby assigns
such dividends and payments to the Administrative Agent for the benefit of the
Agents and the Lenders. Should any Agent or Lender receive, for application upon
the Obligations, any such dividend or payment which is otherwise payable to the
Guarantor, and which, as between the Company and the Guarantor, shall constitute
a credit upon the Guarantor Claims, then upon payment in full of the
Obligations, the Guarantor shall become subrogated to the rights of the Agents
and the Lenders to the extent that such payments to the Agents and the Lenders
on the Guarantor Claims have contributed toward the liquidation of the
Obligations, and such subrogation shall be with respect to that proportion of
the Obligations which would have been unpaid if the Agents and the Lenders had
not received dividends or payments upon the Guarantor Claims.
SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, the Guarantor agrees (a)
to hold in trust for the Agents and the Lenders an amount equal to the amount of
all funds, payments, claims or distributions so received, and (b) that it shall
have absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Administrative Agent, for the
benefit of the Agents and the Lenders; and the Guarantor covenants promptly to
pay the same to the Administrative Agent.
SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
upon the Company's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens upon the Company's assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
the Guarantor, any Agent or Lender presently exist or are hereafter created or
attach. Without the prior written consent of the Administrative Agent, the
Guarantor, during the period in which any of the Obligations are outstanding or
the Aggregate Commitments are in effect, shall not (a) exercise or enforce any
creditor's right it may have against the Company, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Lien, mortgages, deeds of
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trust, security interest, collateral rights, judgments or other encumbrances on
assets of the Company held by the Guarantor.
SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of the Administrative Agent, all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by the Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and
shall be in every particular available to the successors and assigns of the
Agents and the Lenders and is and shall always be fully binding upon the legal
representatives, successors and assigns of the Guarantor, notwithstanding that
some or all of the monies, the repayment of which this Guaranty Agreement
applies, may be actually advanced after any bankruptcy, receivership,
reorganization or other event affecting either the Company or the Guarantor.
SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in the manner and to the
address of the Guarantor as provided for in Section 12.02 of the Credit
Agreement.
SECTION 5.03 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Guaranty Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guaranty Agreement shall, as between
the Agents and the Lenders, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Guarantor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or refrain from acting; and the Guarantor
shall not be under any obligation, or entitlement, to make any inquiry
respecting such authority.
SECTION 5.04 CONSTRUCTION.
(a) THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE
VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
(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
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THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE THE
ADMINISTRATIVE AGENT OR ANY LENDER FROM OBTAINING JURISDICTION OVER THE
GUARANTOR IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) THE GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT, AS THE
CASE MAY BE, AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT OR ANY LENDER OR
ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY
OTHER JURISDICTION.
(e) THE GUARANTOR AND, BY ITS ACCEPTANCE HEREOF, EACH AGENT AND EACH
LENDER HEREBY (I) IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS GUARANTY AGREEMENT OR ANY LOAN DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY
COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY AGREEMENT, THE
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
5.04.
SECTION 5.05 SURVIVAL OF OBLIGATIONS. To the extent that any payments
on the Obligations or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Obligations so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Agents' and the Lenders' Liens, rights, powers and
remedies under this Guaranty Agreement and each Loan Document shall continue in
full force and effect. In such event, each Loan Document shall be automatically
reinstated and the Guarantor shall take such action as may be reasonably
requested by the Administrative Agent and the Lenders to effect such
reinstatement.
SECTION 5.06 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;
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and that as such, the Agents and the Lenders 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 5.07 INTEREST. It is in the interest of the Guarantor, the
Agents and the Lenders to conform strictly to all applicable usury laws.
Accordingly, reference is made to Section 12.15 of the Credit Agreement which is
incorporated herein by reference for all purposes.
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WITNESS THE EXECUTION HEREOF, effective as of the date first written
above.
OCEAN ENERGY, INC., a Louisiana corporation
By: ---------------------------------------
Xxxxxxxx X. Xxxxxxxx
Executive Vice President
Chief Financial Officer
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