sv4
As filed with the Securities and Exchange Commission on September 23, 2011
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OASIS PETROLEUM INC.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware
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1311
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80-0554627 |
(State or Other Jurisdiction of
Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number) |
1001 Fannin Street, Suite 1500
Houston, Texas 77002
(281) 404-9500
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrants Principal Executive Offices)
Thomas B. Nusz
Chairman, President and Chief Executive Officer
Oasis Petroleum Inc.
1001 Fannin Street, Suite 1500
Houston, Texas 77002
(281) 404-9500
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
Copies to:
David P. Oelman
Matthew R. Pacey
Vinson & Elkins L.L.P.
1001 Fannin, Suite 2500
Houston, Texas 77002-6760
(713) 758-2222
Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in connection with the
formation of a holding company and there is compliance with General Instruction G, check the
following box. o
If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer þ
(Do not check if a smaller reporting company)
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Smaller reporting company o |
If applicable, place an X in the box to designate the appropriate rule provision relied upon in
conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issue Tender Offer) o
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) o
Calculation of Registration Fee
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Title of Each Class of Securities to Be Registered |
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Amount to be Registered |
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Amount of Registration Fee (1) |
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7.25% Senior Notes due 2019 |
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$ |
400,000,000 |
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$ |
46,440 |
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Guarantees of 7.25% Senior Notes due 2019 (2) |
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None (3) |
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(1) |
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Calculated pursuant to Rule 457(f)(2) under the Securities Act of 1933. |
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(2) |
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Oasis Petroleum LLC, Oasis Petroleum North America LLC, Oasis Petroleum Marketing LLC and
Oasis Well Services LLC, our existing material subsidiaries, will guarantee the notes being
registered. |
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(3) |
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Pursuant to Rule 457(n) of the Securities Act of 1933, no registration fee is required for
the Guarantees. |
Each registrant hereby amends this registration statement on such date or dates as may
be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
TABLE OF ADDITIONAL REGISTRANT GUARANTORS
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State or Other |
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Jurisdiction of |
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IRS Employer |
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Incorporation or |
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Identification |
Exact Name of Registrant Guarantors(1) |
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Formation |
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Number |
Oasis Petroleum LLC |
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Delaware |
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20-8541479 |
Oasis Petroleum North America LLC |
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Delaware |
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26-0188694 |
Oasis Petroleum Marketing LLC |
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Delaware |
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45-2735679 |
Oasis Well Services LLC |
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Delaware |
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45-2609441 |
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(1) |
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The address for the Registrant Guarantors is 1001 Fannin Street, Suite 1500, Houston, TX
77002, and the telephone number for the Registrant Guarantors is (281) 404-9500. The Primary
Industrial Classification Code for the Registrant Guarantors is 1311. |
The information in this prospectus is not complete and may be changed. We may not sell
these securities until the registration statement filed with the Securities and Exchange Commission
is effective. This prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any jurisdiction where the offering is not permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER 23, 2011
PROSPECTUS
Offer to Exchange
Up To $400,000,000 of
7.25% Senior Notes due 2019
That Have Not Been Registered Under
The Securities Act of 1933
For
Up To $400,000,000 of
7.25% Senior Notes due 2019
That Have Been Registered Under
The Securities Act of 1933
Terms of the New 7.25% Senior Notes due 2019 Offered in the Exchange Offer:
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The terms of the new notes are identical to the terms of the old notes that were issued
on February 2, 2011, except that the new notes will be registered under the Securities Act
of 1933 and will not contain restrictions on transfer, registration rights or provisions
for additional interest. |
Terms of the Exchange Offer:
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We are offering to exchange up to $400,000,000 of our old notes for new notes with
materially identical terms that have been registered under the Securities Act of 1933 and
are freely tradable. |
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We will exchange all old notes that you validly tender and do not validly withdraw
before the exchange offer expires for an equal principal amount of new notes. |
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The exchange offer expires at 5:00 p.m., New York City time, on , 2011,
unless extended. |
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Tenders of old notes may be withdrawn at any time prior to the expiration of the
exchange offer. |
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The exchange of new notes for old notes will not be a taxable event for U.S. federal
income tax purposes. |
You should carefully consider the risk factors beginning on page 8 of this prospectus before
participating in the exchange offer.
Each broker-dealer that receives new notes for its own account pursuant to the exchange offer
must acknowledge that it will deliver a prospectus in connection with any resale of such new notes.
This prospectus, as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of new notes received in exchange for old notes where such
old notes were acquired by such broker-dealer as a result of market-making activities or other
trading activities. Please read Plan of Distribution.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2011
This prospectus is part of a registration statement we filed with the Securities and Exchange
Commission. In making your investment decision, you should rely only on the information contained
or incorporated by reference in this prospectus and in the accompanying letter of transmittal. We
have not authorized anyone to provide you with any other information. We are not making an offer
to sell these securities or soliciting an offer to buy these securities in any jurisdiction where
an offer or solicitation is not authorized or in which the person making that offer or solicitation
is not qualified to do so or to anyone whom it is unlawful to make an offer or solicitation. You
should not assume that the information contained in this prospectus, as well as the information we
previously filed with the Securities and Exchange Commission that is incorporated by reference
herein, is accurate as of any date other than its respective date.
TABLE OF CONTENTS
In this prospectus, we, us, our, the Company, and Oasis refer to Oasis Petroleum
Inc. and its existing material subsidiaries, unless otherwise indicated or the context otherwise
requires.
This prospectus incorporates important business and financial information about us that is not
included or delivered with this prospectus. Such information is available without charge to
holders of old notes upon written or oral request made to Oasis Petroleum Inc., 1001 Fannin Street,
Suite 1500, Houston, TX 77002 (Telephone (281) 404-9500). To obtain timely delivery of any
requested information, holders of old notes must make any request no later than five business days
prior to the expiration of the exchange offer.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contains forward-looking
statements intended to qualify for the safe harbors from liability established by the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the
Exchange Act. These forward-looking statements are subject to a number of risks and uncertainties,
many of which are beyond our control. All statements, other than statements of historical fact
included in this prospectus and the documents incorporated by reference, regarding our strategy,
future operations, financial position, estimated revenues and losses, projected costs, prospects,
plans and objectives of management are forward-looking statements. When used in this prospectus,
the words could, believe, anticipate, intend, estimate, expect, may, continue,
predict, potential, project and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain such identifying words. When
considering forward looking statements, you should keep in mind the risk factors and other
cautionary statements described under the heading Risk Factors included in this prospectus, and
the risk factors and other cautionary statements described under the headings Risk Factors
included in our Annual Report on Form 10-K for the year ended December 31, 2010 and included in our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011, each of
which is incorporated by reference in this
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prospectus, and, to the extent applicable, any
subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
These forward looking statements are based on managements current belief, based on currently
available information, as to the outcome and timing of future events. Without limiting the
generality of the foregoing, certain statements incorporated by reference or included in this
prospectus constitute forward-looking statements.
Forward-looking statements may include statements about our:
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business strategy; |
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reserves; |
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technology; |
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cash flows and liquidity; |
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financial strategy, budget, projections and operating results; |
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oil and natural gas realized prices; |
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timing and amount of future production of oil and natural gas; |
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availability of drilling, completion and production equipment and materials; |
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availability of qualified personnel; |
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owning and operating a services company; |
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the amount, nature and timing of capital expenditures, including future development
costs; |
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availability and terms of capital; |
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drilling and completion of wells; |
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infrastructure for salt water disposal; |
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gathering, transportation and marketing of oil and natural gas; |
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exploitation or property acquisitions; |
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costs of exploiting and developing our properties and conducting other operations; |
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general economic conditions; |
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inclement weather conditions; |
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competition in the oil and natural gas industry; |
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effectiveness of our risk management activities; |
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environmental liabilities; |
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counterparty credit risk; |
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governmental regulation and taxation of the oil and natural gas industry; |
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developments in oil-producing and natural gas-producing countries;
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uncertainty regarding our future operating results; |
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estimated future net reserves and present value thereof; and |
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plans, objectives, expectations and intentions contained in this prospectus that are not
historical. |
All forward-looking statements speak only as of the date they are made. You should not place
undue reliance on these forward-looking statements. Although we believe that our plans, intentions
and expectations reflected in or suggested by the forward-looking statements we make in this
prospectus and the documents incorporated by reference are reasonable, we can give no assurance
that these plans, intentions or expectations will be achieved. We disclose important factors that
could cause our actual results to differ materially from our expectations under Risk Factors
beginning on page 8 of this prospectus and those risk factors incorporated by reference to our
Annual Report on Form 10-K for the year ended December 31, 2010 and our Quarterly Reports on Form
10-Q for the quarters ended March 31, 2011 and June 30, 2011, each of which is incorporated by
reference in this prospectus, and, to the extent applicable, any subsequently filed Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. These cautionary statements qualify all
forward-looking statements attributable to us or persons acting on our behalf.
All subsequent written and oral forward-looking statements attributable to us or to persons
acting on our behalf are expressly qualified in their entirety by the foregoing. We undertake no
obligation to publicly release the results of any revisions to any such forward-looking statements
that may be made to reflect events or circumstances after the date of this prospectus or to reflect
the occurrence of unanticipated events. See also Where You Can Find More Information;
Incorporation by Reference.
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PROSPECTUS SUMMARY
This summary highlights some of the information contained in this prospectus and does not
contain all of the information that may be important to you. You should read this entire
prospectus and the documents incorporated by reference and to which we refer you before making an
investment decision. You should carefully consider the information set forth under Risk Factors
beginning on page 8 of this prospectus, the other cautionary statements described in this
prospectus, and the risk factors and other cautionary statements, including those described under
the heading Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2010
and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011,
each of which is incorporated by reference in this prospectus, and, to the extent applicable, any
subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. In addition,
certain statements include forward-looking information that involves risks and uncertainties. See
Cautionary Statement Regarding Forward-Looking Statements.
In this prospectus we refer to the notes to be issued in the exchange offer as the new notes
and the notes issued on February 2, 2011 as the old notes. We refer to the new notes and the old
notes collectively as the notes.
Oasis Petroleum Inc.
We are an independent exploration and production company focused on the development and
acquisition of unconventional oil and natural gas resources. For additional information about our
business, operations and financial results, see the documents listed under Where You Can Find More
Information; Incorporation By Reference.
Our principal executive offices are located at 1001 Fannin Street, Suite 1500, Houston, TX
77002 and our telephone number at that address is (281) 404-9500.
Risk Factors
Investing in the notes involves substantial risks. You should carefully consider all the
information contained in this prospectus, including information in documents incorporated by
reference, prior to participating in the exchange offer. In particular, we urge you to consider
carefully the factors set forth under Risk Factors beginning on page 8 of this prospectus and
those risk factors incorporated by reference to our Annual Report on Form 10-K for the year ended
December 31, 2010, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011 and
June 30, 2011 and, to the extent applicable, any subsequently filed Quarterly Reports on Form 10-Q
or Current Reports on Form 8-K.
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Exchange Offer
On February 2, 2011, we completed a private offering of the old notes. We entered into a
registration rights agreement with the initial purchasers in the private offering in which we
agreed to deliver to you this prospectus and to use commercially reasonable efforts to complete the
exchange offer within 360 days after the date we issued the old notes.
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Exchange Offer
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We are offering to exchange new notes for old notes. |
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Expiration Date
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The exchange offer will expire at 5:00 p.m., New
York City time, on , 2011, unless
we decide to extend it. |
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Condition to the Exchange Offer
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The registration rights agreement does not require
us to accept old notes for exchange if the exchange
offer, or the making of any exchange by a holder of
the old notes, would violate any applicable law or
interpretation of the staff of the Securities and
Exchange Commission. The exchange offer is not
conditioned on a minimum aggregate principal amount
of old notes being tendered. |
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Procedures for Tendering Old Notes
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To participate in the exchange offer, you must
follow the procedures established by The Depository
Trust Company, which we call DTC, for tendering
notes held in book-entry form. These procedures,
which we call ATOP, require that (i) the exchange
agent receive, prior to the expiration date of the
exchange offer, a computer generated message known
as an agents message that is transmitted through
DTCs automated tender offer program, and (ii) DTC
confirms that: |
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DTC has received your instructions to exchange
your notes, and
you agree to be bound by the terms of the letter
of transmittal. |
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For more information on tendering your old notes,
please refer to the section in this prospectus
entitled Exchange OfferTerms of the Exchange
Offer, Exchange OfferProcedures for Tendering, and
Description of NotesBook Entry; Delivery and
Form. |
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Guaranteed Delivery Procedures
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None. |
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Withdrawal of Tenders
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You may withdraw your tender of old notes at any
time prior to the expiration date. To withdraw,
you must submit a notice of withdrawal by telegram,
facsimile transmission or letter to the exchange
agent using ATOP procedures before 5:00 p.m., New
York City time, on the expiration date of the
exchange offer. Please refer to the section in
this prospectus entitled Exchange
OfferWithdrawal of Tenders. |
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Acceptance of Old Notes and
Delivery of New Notes
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If you fulfill all conditions required for proper
acceptance of old notes, we will accept any and all
old notes that you properly tender in the exchange
offer on or before 5:00 p.m. New York City time on
the expiration date. We will return any old note
that we do not accept for exchange to you without
expense promptly after the expiration date and
acceptance of the old notes for exchange. Please
refer to the section in this prospectus entitled
Exchange OfferTerms of the Exchange Offer. |
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Fees and Expenses
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We will bear expenses related to the exchange
offer. Please refer to the section in this
prospectus entitled Exchange OfferFees and
Expenses. |
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Use of Proceeds
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The issuance of the new notes will not provide us
with any new proceeds. We are making this exchange
offer solely to satisfy our obligations under our
registration rights agreement. |
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Consequences of Failure to Exchange
Old Notes
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If you do not exchange your old notes in this
exchange offer, you will no longer be able to
require us to register the old notes under the
Securities Act of 1933 except in limited
circumstances provided under the registration
rights agreement. In addition, you will not be
able to resell, offer to resell or otherwise
transfer the old notes unless we have registered
the old notes under the Securities Act of 1933, or
unless you resell, offer to resell or otherwise
transfer them under an exemption from the
registration requirements of, or in a transaction
not subject to, the Securities Act of 1933. |
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U.S. Federal Income Tax Consequences
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The exchange of new notes for old notes in the
exchange offer will not be a taxable event for U.S.
federal income tax purposes. Please read Material
United States Federal Income Tax Consequences. |
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Exchange Agent
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We have appointed U.S. Bank National Association as
exchange agent for the exchange offer. You should
direct questions and requests for assistance,
requests for additional copies of this prospectus
or the letter of transmittal to the exchange agent
addressed as follows: U.S. Bank Corporate Trust
Services, Attn: Lori Buckles,
Specialized Finance Department, 60 Livingston Avenue
St. Paul, Minnesota 55107. Eligible institutions
may make requests by facsimile at (651) 495-8138
and may confirm facsimile delivery by calling (651)
495-3520. |
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Terms of the New Notes
The new notes will be identical to the old notes except that the new notes are registered
under the Securities Act of 1933 and will not have restrictions on transfer, registration rights or
provisions for additional interest. The new notes will evidence the same debt as the old notes,
and the same indenture will govern the new notes and the old notes.
The following summary contains basic information about the new notes and is not intended to be
complete. It does not contain all information that may be important to you. For a more complete
understanding of the new notes, please refer to the section entitled Description of Notes in this
prospectus.
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Issuer
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Oasis Petroleum Inc. |
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Securities Offered
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$400 million aggregate principal amount of 7.25% senior
notes due 2019. |
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Maturity
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February 1, 2019. |
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Interest Payment Dates
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Interest on the notes will be paid semi-annually in
arrears on February 1 and August 1 and of each year
commencing on August 1, 2011. Interest on each new
note will accrue from the last interest payment date on
which interest was paid on the old note tendered in
exchange thereof. |
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Guarantees
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The payment of the principal, premium and interest on
the new notes will be jointly and severally guaranteed
on a senior unsecured basis by all of our existing
material subsidiaries, and certain future subsidiaries.
See Description of NotesCovenantsSubsidiary
Guarantees. |
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Ranking
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The new notes will be our general senior unsecured
obligations and will: |
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rank senior in right of payment to any of our
future subordinated indebtedness; |
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rank pari passu in right of payment with any
of our existing and future senior indebtedness; |
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rank effectively junior in right of payment to
all of our existing and futured secured indebtedness,
including indebtedness under our revolving credit
facility, to the extent of the value of the assets of
our constituting collateral securing such indebtedness;
and |
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rank effectively junior in right of payment to
any indebtedness or liabilities of any of our
subsidiaries that do not guarantee the notes. |
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The guarantees will be the guarantors general senior
unsecured obligations and will: |
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rank senior in right of payment to any future
subordinated indebtedness of such Subsidiary Guarantor; |
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rank pari passu in right of payment with any
existing and future senior indebtedness of such
Subsidiary Guarantor; and |
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rank effectively junior in right of payment to
all existing and future secured indebtedness of such
Subsidiary Guarantor (including any indebtedness under
our revolving credit facility), to the extent of the
value of the assets of such Subsidiary Guarantor
constituting collateral securing such indebtedness. |
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Optional Redemption
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We will have the option to redeem the new notes, in
whole or in part, at any time on or after February 1,
2015, in each case at the redemption prices described
in this prospectus under the heading Description of
NotesOptional Redemption, together with any accrued
and unpaid interest to the date of such redemption. |
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At any time prior to February 1, 2015, we may redeem
the new notes, in whole or in part, at a redemption
price plus an applicable make-whole premium described
under Description of NotesOptional Redemption,
together with any accrued and unpaid interest to the
date of such redemption. |
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In addition, prior to February 1, 2014, we may, from
time to time, redeem up to 35% of the aggregate
principal amount of the notes with net cash proceeds of
certain equity offerings at a redemption price equal to
107.25% of the principal amount of the new notes, plus
any accrued and unpaid interest to the date of
redemption. |
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Mandatory Offers to Purchase
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Upon the occurrence of a change of control, holders of
the new notes will have the right to require us to
purchase all or any portion of the new notes at a price
equal to not less than 101% of the aggregate principal
amount of the new notes repurchased, plus any accrued
and unpaid interest, if any, on the new notes
repurchased, to the date of purchase. In connection
with certain asset dispositions, we will be required to
use the net cash proceeds of the asset sale to make an
offer to purchase the new notes at 100% of the
principal amount, plus any accrued and unpaid interest,
if any, to the date of purchase. |
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Certain Covenants
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We will issue the new notes under an indenture, dated
as of February 2, 2011, with U.S. Bank National
Association, as trustee. The indenture, among other
things, limits our and our restricted subsidiaries
ability to: |
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make investments; |
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incur additional indebtedness or issue
preferred stock; |
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create liens; |
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sell assets; |
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enter into agreements that restrict dividends
or other payments by restricted subsidiaries; |
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consolidate, merge or transfer all or
substantially all of the assets of our company; |
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engage in transactions with our affiliates; |
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pay dividends or make other distributions on
capital stock or prepay subordinated indebtedness; and |
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create unrestricted subsidiaries.
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These covenants are subject to important exceptions and
qualifications, which are described under Description
of NotesCovenants. However, most of the covenants
will terminate if both Standard & Poors Ratings
Services and Moodys Investors Service, Inc. assign the
notes an investments grade rating and no default exists
with respect to the notes. |
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Transfer Restrictions;
Absence of a Public Market
for the New Notes
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The new notes generally will be freely transferable,
but will also be new securities for which there will
not initially be a market. There can be no assurance
as to the development or liquidity of any market for
the new notes. We do not intend to apply for a
listing of the new notes on any securities exchange or
any automated dealer quotation system. |
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Risk Factors
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Investing in the new notes involves risks. See Risk
Factors beginning on page 8 for a discussion of
certain factors you should consider in evaluating an
investment in the new notes. |
6
Ratio of Earnings to Fixed Charges
The following table sets forth our ratios of consolidated earnings to fixed charges for the
periods presented:
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Period from |
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February 26, 2007 |
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(Inception) |
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Six Months Ended |
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Year Ended December 31, |
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through |
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June 30, 2011 |
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2010 |
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2009 |
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2008 |
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December 31, 2007 |
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Ratio of earnings to fixed charges (1) |
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4.54 |
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9.72 |
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(1) |
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Due to our net pre-tax loss for the years ended December 31, 2009 and December 31, 2008 and
for the period from February 26, 2007 (Inception) through December 31, 2007, the ratio
coverage was less than 1:1. The Company would have needed additional earnings of $15.2
million, $34.4 million and $13.6 million for the years ended December 31, 2009 and December
31, 2008 and for the period from February 26, 2007 (Inception) through December 31, 2007,
respectively, to achieve a coverage of 1:1. |
For purposes of computing the ratio of earnings to fixed charges, earnings consists of
pre-tax income from continuing operations before fixed charges. Fixed charges consists of
interest expense, amortized capital expenses related to indebtedness and an estimate of interest
within rental expense.
7
RISK FACTORS
Investing in the notes involves risks. You should carefully consider the information included
or incorporated by reference in this prospectus, including the matters addressed under Cautionary
Note Regarding Forward-Looking Statements, and the following risks before investing in the notes.
In addition, you should read the risk factors in our Annual Report on Form 10-K for the year ended
December 31, 2010 and our Quarterly Reports on Form 10-Q for the periods ended March 31, 2011 and
June 30, 2011, which are incorporated by reference in this prospectus and, to the extent
applicable, any subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
We are subject to certain risks and hazards due to the nature of the business activities we
conduct. The risks mentioned in the previous paragraph, any of which could materially and
adversely affect our business, financial condition, cash flows, and results of operations, are not
the only risks we face. We may experience additional risks and uncertainties not currently known
to us; or, as a result of developments occurring in the future, conditions that we currently deem
to be immaterial may also materially and adversely affect our business, financial condition, cash
flows, and results of operations.
Risks Relating to the Notes
If you do not properly tender your old notes, you will continue to hold unregistered old notes and
your ability to transfer old notes will remain restricted and may be adversely affected.
We will only issue new notes in exchange for old notes that you timely and properly tender.
Therefore, you should allow sufficient time to ensure timely delivery of the old notes and you
should carefully follow the instructions on how to tender your old notes. Neither we nor the
exchange agent is required to tell you of any defects or irregularities with respect to your tender
of old notes.
If you do not exchange your old notes for new notes pursuant to the exchange offer, the old
notes you hold will continue to be subject to the existing transfer restrictions. In general, you
may not offer or sell the old notes except under an exemption from, or in a transaction not subject
to, the Securities Act of 1933 and applicable state securities laws. We do not plan to register
old notes under the Securities Act of 1933 unless our registration rights agreement with the
initial purchasers of the old notes requires us to do so. Further, if you continue to hold any old
notes after the exchange offer is consummated, you may have trouble selling them because there will
be fewer of these notes outstanding.
We may not be able to generate enough cash flow to meet our debt obligations.
We expect our earnings and cash flow to vary significantly from year to year due to the nature
of our industry. As a result, the amount of debt that we can manage in some periods may not be
appropriate for us in other periods. Additionally, our future cash flow may be insufficient to meet
our debt obligations and other commitments, including our obligations under the notes. Any
insufficiency could negatively impact our business. A range of economic, competitive, business and
industry factors will affect our future financial performance, and, as a result, our ability to
generate cash flow from operations and to pay our debt, including our obligations under the notes.
Many of these factors, such as oil and natural gas prices, economic and financial conditions in our
industry and the global economy and initiatives of our competitors, are beyond our control. If we
do not generate enough cash flow from operations to satisfy our debt obligations, we may have to
undertake alternative financing plans, such as:
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selling assets; |
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reducing or delaying capital investments; |
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seeking to raise additional capital; or |
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refinancing or restructuring our debt. |
If for any reason we are unable to meet our debt service and repayment obligations, we would
be in default under the terms of the agreements governing our debt, which would allow our creditors
at that time to declare all
8
outstanding indebtedness to be due and payable, which would in turn
trigger cross-acceleration or cross-default
rights between the relevant agreements. In addition, our lenders could compel us to apply all
of our available cash to repay our borrowings or they could prevent us from making payments on the
notes. If amounts outstanding under our revolving credit facility or the notes were to be
accelerated, we cannot assure you that our assets would be sufficient to repay in full the money
owed to the lenders or to our other debt holders, including you as a noteholder.
We may be able to incur substantially more debt. This could exacerbate the risks associated with our indebtedness.
We and our subsidiaries may be able to incur substantial additional indebtedness in the
future, including under our revolving credit facility. As of June 30, 2011, our $600 million
revolving credit facility had a borrowing base of $137.5 million for secured borrowings, subject to
periodic borrowing base redeterminations. As of June 30, 2011, we had no outstanding indebtedness
under our revolving credit facility. Any borrowings under our revolving credit facility will be
secured, and as a result, effectively senior to the notes and the guarantees of the notes by the
guarantors, to the extent of the value of the collateral securing that indebtedness. In addition,
the holders of any future debt we may incur that ranks equally with the notes will be entitled to
share ratably with the holders of the notes in any proceeds distributed in connection with any
insolvency, liquidation, reorganization, dissolution or other winding-up of us. This may have the
effect of reducing the amount of proceeds paid to you. If new debt is added to our current debt
levels, the related risks that we and our subsidiaries now face could intensify.
Payment of principal and interest on the notes will be effectively subordinated to our senior
secured debt to the extent of the value of the assets securing that debt and structurally
subordinated to the liabilities of any of our subsidiaries that do not guarantee the notes.
The notes are not secured. Therefore, the notes will be effectively subordinated to claims of
our secured creditors, and the subsidiary guarantees will be effectively subordinated to the claims
of the secured creditors of our subsidiary guarantors. As of June 30, 2011, we and our subsidiary
guarantors had no outstanding secured indebtedness. Holders of our secured obligations, including
obligations under the credit agreement that governs our revolving credit facility, will have claims
that are prior to claims of the holders of the notes with respect to the assets securing those
obligations. In the event of a liquidation, dissolution, reorganization, bankruptcy or any similar
proceeding, our assets and those of our subsidiaries will be available to pay obligations on the
notes and the guarantees only after holders of our senior secured debt have been paid the value of
the assets securing such debt. Although all of our material subsidiaries will initially guarantee
the notes, in the future, under certain circumstances, the guarantees are subject to release and we
may have subsidiaries that are not guarantors. In that case, the notes would be structurally
subordinated to the claims of all creditors, including trade creditors and tort claimants, of our
subsidiaries that are not guarantors. In the event of a liquidation, dissolution, reorganization,
bankruptcy or similar proceeding of the business of a subsidiary that is not a guarantor, creditors
of that subsidiary would generally have the right to be paid in full before any distribution is
made to us or the holders of the notes. Accordingly, there may not be sufficient funds remaining to
pay amounts due on all or any of the notes. As of June 30, 2011, our non-guarantor subsidiaries had
no indebtedness outstanding.
The indenture governing the notes and our revolving credit facility contain operating and financial
restrictions that may restrict our business and financing activities.
The indenture governing the notes and our revolving credit facility contain, and any future
indebtedness we incur may contain, a number of restrictive covenants that will impose significant
operating and financial restrictions on us, including restrictions on our ability to, among other
things:
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sell assets, including equity interests in our subsidiaries; |
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pay distributions on, redeem or repurchase our common stock or redeem or repurchase our
subordinated debt; |
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make investments; |
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incur or guarantee additional indebtedness or issue preferred stock; |
9
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create or incur certain liens; |
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make certain acquisitions and investments; |
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redeem or prepay other debt; |
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enter into agreements that restrict distributions or other payments from our restricted
subsidiaries to us; |
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consolidate, merge or transfer all or substantially all of our assets; |
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engage in transactions with affiliates; |
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create unrestricted subsidiaries; |
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enter into sale and leaseback transactions; and |
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engage in certain business activities. |
As a result of these covenants, we will be limited in the manner in which we conduct our
business, and we may be unable to engage in favorable business activities or finance future
operations or capital needs.
Our ability to comply with some of the covenants and restrictions contained in our revolving
credit facility may be affected by events beyond our control. If market or other economic
conditions deteriorate, our ability to comply with these covenants may be impaired. A failure to
comply with the covenants, ratios or tests in our revolving credit facility or any future
indebtedness could result in an event of default under our revolving credit facility or our future
indebtedness, which, if not cured or waived, could have a material adverse affect on our business,
financial condition and results of operations. If an event of default under our revolving credit
facility occurs and remains uncured, the lenders thereunder:
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would not be required to lend any additional amounts to us; |
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could elect to declare all borrowings outstanding, together with accrued and unpaid
interest and fees, to be due and payable; |
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may have the ability to require us to apply all of our available cash to repay these
borrowings; or |
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may prevent us from making debt service payments under our other agreements. |
A payment default or an acceleration under our revolving credit facility could result in an
event of default and an acceleration under the indenture for the notes.
If the indebtedness under the notes were to be accelerated, there can be no assurance that we
would have, or be able to obtain, sufficient funds to repay such indebtedness in full. In addition,
our obligations under our revolving credit facility are collateralized by perfected first priority
liens and security interests on substantially all of our assets, including mortgage liens on oil
and natural gas properties having at least 80% of the reserve value as determined by reserve
reports, and if we are unable to repay our indebtedness under the revolving credit facility, the
lenders could seek to foreclose on our assets. Please see Description of Notes.
Because all of our operations are conducted through our subsidiaries, our ability to service our
debt is largely dependent on our receipt of distributions or other payments from our subsidiaries.
We are a holding company, and all of our operations are conducted through our subsidiaries. As
a result, our ability to service our debt is largely dependent on the earnings of our subsidiaries
and the payment of those earnings to us in the form of dividends, loans or advances and through
repayment of loans or advances from us. Our subsidiaries are legally distinct from us and have no
obligation to pay amounts due on our debt or to make funds available to us for such payment. The
ability of our subsidiaries to pay dividends, repay intercompany notes or make other advances to us
is subject to restrictions imposed by applicable laws, tax considerations and the agreements
10
governing our subsidiaries. In addition, such payment may be restricted by claims against our
subsidiaries by their creditors, including suppliers, vendors, lessors and employees.
We may not be able to fund a change of control offer.
Under the terms of the indenture, if we sell certain assets or in the event of a change of
control, we will be required, subject to certain conditions, to offer to purchase all outstanding
notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest
thereon to the date of purchase. If a change of control were to occur today, we would not have
sufficient funds available to purchase all of the outstanding notes were they to be tendered in
response to an offer made as a result of a change of control. We cannot assure you that we will
have sufficient funds available or that we will be permitted by our other debt instruments to
fulfill these obligations upon a change of control in the future. Furthermore, certain change of
control events would constitute an event of default under our credit agreement. Please see
Description of NotesRepurchase at the Option of HoldersChange of Control.
In a recent decision, the Chancery Court of Delaware raised the possibility that a change of
control put right occurring as a result of a failure to have continuing directors comprising a
majority of a board of directors may be unenforceable on public policy grounds. Therefore, you may
not be entitled to receive this protection under the indenture.
The term change of control is limited to certain specified transactions and may not include
other events that might adversely affect our financial condition. Our obligation to repurchase the
notes upon a change of control would not necessarily afford holders of the notes protection in the
event of a highly leveraged transaction, reorganization, merger or similar transaction involving
us.
Many of the covenants contained in the indenture will terminate if the notes are rated investment
grade by both Standard & Poors Ratings Services and Moodys Investors Service, Inc. and no default
has occurred and is continuing.
Many of the covenants in the indenture governing the notes will terminate if the notes are
rated investment grade by both Standard & Poors and Moodys, provided at such time no default with
respect to the notes has occurred and is continuing. The covenants will restrict, among other
things, our ability to pay dividends, incur debt and to enter into certain other transactions.
There can be no assurance that the notes will ever be rated investment grade, or that if they are
rated investment grade, that the notes will maintain such ratings. However, termination of these
covenants would allow us to engage in certain transactions that would not be permitted while these
covenants were in force. Please see Description of NotesCovenant Termination.
The guarantees by certain of our subsidiaries of the notes could be deemed fraudulent conveyances
under certain circumstances, and a court may try to subordinate or void these subsidiary
guarantees.
Under U.S. bankruptcy law and comparable provisions of state fraudulent transfer laws, a
guarantee can be voided, or claims under a guarantee may be subordinated to all other debts of that
guarantor if, among other things, the guarantor, at the time it incurred the indebtedness evidenced
by its guarantee:
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intended to hinder, delay or defraud any present or future creditor or received less
than reasonably equivalent value or fair consideration for the incurrence of the guarantee; |
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was insolvent or rendered insolvent by reason of such incurrence; |
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was engaged in a business or transaction for which the guarantors remaining assets
constituted unreasonably small capital; or |
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intended to incur, or believed that it would incur, debts beyond its ability to pay
those debts as they mature. |
In addition, any payment by that guarantor under a guarantee could be voided and required to
be returned to the guarantor or to a fund for the benefit of the creditors of the guarantor. The
measures of insolvency for purposes of
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these fraudulent transfer laws will vary depending upon the
law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally,
however, a subsidiary guarantor would be considered insolvent if:
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the sum of its debts, including contingent liabilities, was greater than the fair
saleable value of all of its assets; |
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the present saleable value of its assets was less than the amount that would be required
to pay its probable liability, including contingent liabilities, on its existing debts as
they become absolute and mature; or |
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it could not pay its debts as they became due. |
Your ability to transfer the notes may be limited by the absence of an active trading market, and
there is no assurance that any active trading market will develop for the notes.
The old notes have not been registered under the Securities Act of 1933, and may not be resold
by holders thereof unless the old notes are subsequently registered or an exemption from the
registration requirements of the Securities Act is available. However, we cannot assure you that,
even following registration or exchange of the old notes for new notes, that an active trading
market for the old notes or the new notes will exist, and we will have no obligation to create such
a market. At the time of the private placement of the old notes, the initial purchasers advised us
that they intended to make a market in the old notes and, if issued, the new notes. The initial
purchasers are not obligated, however, to make a market in the old notes or the new notes and any
market making may be discontinued at any time at their sole discretion. No assurance can be given
as to the liquidity of or trading market for the old notes or the new notes.
The liquidity of any trading market for the notes and the market price quoted for the notes
will depend upon the number of holders of the notes, the overall market for high yield securities,
our financial performance or prospects or the prospects for companies in our industry generally,
the interest of securities dealers in making a market in the notes and other factors.
12
EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
At the closing of the offering of the old notes, we entered into a registration rights
agreement with the initial purchasers pursuant to which we agreed, for the benefit of the holders
of the old notes, at our cost, to use commercially reasonable efforts to:
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file an exchange offer registration statement with the SEC with respect to the exchange
offer for the new notes, and |
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have the exchange offer completed by the 360th day following issuance of the
notes. |
Additionally, we agreed to offer to the new notes in exchange for surrender of the old notes
upon the SECs declaring the exchange offer registration statement effective. We agreed to use
commercially reasonable efforts to cause the exchange offer registration statement to be effective
continuously, and to keep the exchange offer open for a period of not less than 20 business days.
For each old note surrendered to us pursuant to the exchange offer, the holder of such old
note will receive a new note having a principal amount equal to that of the surrendered old note.
Interest on each new note will accrue from the last interest payment date on which interest was
paid on the surrendered old note. The registration rights agreement also provides an agreement to
include in the prospectus for the exchange offer certain information necessary to allow a
broker-dealer who holds old notes that were acquired for its own account as a result of
market-making activities or other ordinary course trading activities (other than old notes acquired
directly from us or one of our affiliates) to exchange such old notes pursuant to the exchange
offer and to satisfy the prospectus delivery requirements in connection with resales of new notes
received by such broker-dealer in the exchange offer. We agreed to use commercially reasonable
efforts to maintain the effectiveness of the exchange offer registration statement for these
purposes for a period of 180 days after the completion of the exchange offer, which period may be
extended under certain circumstances.
The preceding agreement is needed because any broker-dealer who acquires old notes for its own
account as a result of market-making activities or other trading activities is required to deliver
a prospectus meeting the requirements of the Securities Act. This prospectus covers the offer and
sale of the new notes pursuant to the exchange offer and the resale of new notes received in the
exchange offer by any broker-dealer who held old notes acquired for its own account as a result of
market-making activities or other trading activities other than old notes acquired directly from us
or one of our affiliates.
Based on interpretations by the staff of the SEC set forth in no-action letters issued to
third parties, we believe that the new notes issued pursuant to the exchange offer would in general
be freely tradable after the exchange offer without further registration under the Securities Act.
However, any purchaser of old notes who is an affiliate of ours or who intends to participate in
the exchange offer for the purpose of distributing the related new notes:
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will not be able to rely on the interpretation of the staff of the SEC, |
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will not be able to tender its old notes in the exchange offer, and |
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must comply with the registration and prospectus delivery requirements of the Securities
Act in connection with any sale or transfer of the old notes unless such sale or transfer
is made pursuant to an exemption from such requirements. |
Each holder of the old notes (other than certain specified holders) who desires to exchange
old notes for the new notes in the exchange offer will be required to make the representations
described below under Procedures for TenderingYour Representations to Us.
We further agreed to file with the SEC a shelf registration statement to register for public
resale of old notes held by any holder who provides us with certain information for inclusion in
the shelf registration statement if:
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the exchange offer would violate any by applicable law or applicable interpretation of
the staff of the SEC, or |
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the exchange offer is not for any other reason completed by the 360th day
following the date of issuance of the notes, or |
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upon completion of the exchange offer, any initial purchaser shall so request in
connection with any offering or sale of notes. |
We have agreed to use commercially reasonable efforts to keep the shelf registration statement
continuously effective until the earlier of one year following its effective date and such time as
all notes covered by the shelf registration statement have been sold. We refer to this period as
the shelf effectiveness period.
The registration rights agreement provides that, in the event that either the exchange offer
is not completed or the shelf registration statement, if required, is not declared effective (or
does not automatically become effective) on or prior to the 360th calendar day following
the date of issuance of the notes, the interest rate on the old notes will be increased by 1.00%
per annum until the exchange offer is completed or the shelf registration statement is declared
effective (or automatically becomes effective) under the Securities Act, at which time the
increased interest shall cease to accrue.
If the shelf registration statement has been declared effective (or automatically becomes
effective) and thereafter either ceases to be effective or the prospectus contained therein ceases
to be usable for resales of the notes at any time during the shelf effectiveness period, and such
failure to remain effective or usable for resales of the notes exists for more than 30 calendar
days (whether or not consecutive) in any 12-month period, then the interest rate on the old notes
will be increased by 1.00% per annum commencing on the 31st day in such 12-month period
and ending on such date that the shelf registration statement has again been declared (or
automatically becomes) effective or the prospectus again becomes usable, at which time the
increased interest shall cease to accrue.
Holders of the old notes will be required to make certain representations to us (as described
in the registration rights agreement) in order to participate in the exchange offer and will be
required to deliver information to be used in connection with the shelf registration statement.
If we effect the registered exchange offer, we will be entitled to close the registered
exchange offer 20 business days after its commencement as long as we have accepted all old notes
validly rendered in accordance with the terms of the exchange offer and no brokers or dealers
continue to hold any old notes.
This summary of the material provisions of the registration rights agreement does not purport
to be complete and is subject to, and is qualified in its entirety by reference to, all the
provisions of the registration rights agreement, a copy of which is incorporated by reference in
this prospectus.
Except as set forth above, after consummation of the exchange offer, holders of old notes
which are the subject of the exchange offer have no registration or exchange rights under the
registration rights agreement. See Consequences of Failure to Exchange.
Terms of the Exchange Offer
Subject to the terms and conditions described in this prospectus and in the letter of
transmittal, we will accept for exchange any old notes properly tendered and not withdrawn prior to
5:00 p.m. New York City time on the expiration date. We will issue new notes in principal amount
equal to the principal amount of old notes surrendered in the exchange offer. Old notes may be
tendered only for new notes and only in minimum denominations of $2,000 and integral multiples of
$1,000 in excess thereof.
The exchange offer is not conditioned upon any minimum aggregate principal amount of old notes
being tendered for exchange.
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As of the date of this prospectus, $400,000,000 in aggregate principal amount of the old notes
is outstanding. This prospectus and the letter of transmittal are being sent to all registered
holders of old notes. There will be no fixed record date for determining registered holders of old
notes entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions of the registration
rights agreement, the applicable requirements of the Securities Act of 1933 and the Securities
Exchange Act of 1934 and the rules and regulations of the SEC. Old notes that the holders thereof
do not tender for exchange in the exchange offer will remain outstanding and continue to accrue
interest. These old notes will continue to be entitled to the rights and benefits such holders
have under the indenture relating to the notes.
We will be deemed to have accepted for exchange properly tendered old notes when we have given
oral (promptly followed in writing) or written notice of the acceptance to the exchange agent and
complied with the applicable provisions of the registration rights agreement. The exchange agent
will act as agent for the tendering holders for the purposes of receiving the new notes from us.
If you tender old notes in the exchange offer, you will not be required to pay brokerage
commissions or fees or, subject to the letter of transmittal, transfer taxes with respect to the
exchange of old notes. We will pay all charges and expenses, other than certain applicable taxes
described below, in connecting with the exchange offer. It is important that you read the section
labeled Fees and Expenses for more details regarding fees and expenses incurred in the exchange
offer.
We will return any old notes that we do not accept for exchange for any reason without expense
to their tendering holder promptly after the expiration or termination of the exchange offer.
Expiration Date
The exchange offer will expire at 5:00 p.m., New York City time, on , 2011,
unless, in our sole discretion, we extend it.
Extensions, Delays in Acceptance, Termination or Amendment
We expressly reserve the right, at any time or various times, to extend the period of time
during which the exchange offer is open. We may delay acceptance of any old notes by giving oral
(promptly followed in writing) or written notice of such extension to their holders. During any
such extensions, all old notes previously tendered will remain subject to the exchange offer, and
we may accept them for exchange.
In order to extend the exchange offer, we will notify the exchange agent orally (promptly
followed in writing) or in writing of any extension. We will notify the registered holders of old
notes of the extension no later than 9:00 a.m., New York City time, on the business day after the
previously scheduled expiration date.
If any of the conditions described below under Conditions to the Exchange Offer have not
been satisfied, we reserve the right, in our sole discretion:
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to delay accepting for exchange any old notes, |
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to extend the exchange offer, or |
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to terminate the exchange offer, |
by giving oral (promptly followed in writing) or written notice of such delay, extension or
termination to the exchange agent. Subject to the terms of the registration rights agreement, we
also reserve the right to amend the terms of the exchange offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be followed promptly by
oral (promptly followed in writing) or written notice thereof to the registered holders of old
notes. If we amend the exchange offer in a manner that we determine to constitute a material
change, we will promptly disclose such amendment by means of a prospectus supplement. The
supplement will be distributed to the registered
holders of the old notes. Depending upon the
significance of the amendment and the manner of disclosure to the registered
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holders, we may extend
the exchange offer. In the event of a material change in the exchange offer, including the waiver
by us of a material condition, we will extend the exchange offer period if necessary so that at
least five business days remain in the exchange offer following notice of the material change.
Conditions to the Exchange Offer
We will not be required to accept for exchange, or exchange any new notes for, any old notes
if the exchange offer, or the making of any exchange by a holder of old notes, would violate
applicable law or any applicable interpretation of the staff of the SEC. Similarly, we may
terminate the exchange offer as provided in this prospectus before accepting old notes for exchange
in the event of such a potential violation.
In addition, we will not be obligated to accept for exchange the old notes of any holder that
has not made to us the representations described under Purpose and Effect of the Exchange
Offer, Procedures for Tendering and Plan of Distribution and such other representations as
may be reasonably necessary under applicable SEC rules, regulations or interpretations to allow us
to use an appropriate form to register the new notes under the Securities Act.
We expressly reserve the right to amend or terminate the exchange offer, and to reject for
exchange any old notes not previously accepted for exchange, upon the occurrence of any of the
conditions to the exchange offer specified above. We will give prompt oral (promptly followed in
writing) or written notice of any extension, amendment, non-acceptance or termination to the
holders of the old notes as promptly as practicable.
These conditions are for our sole benefit, and we may assert them or waive them in whole or in
part at any time or at various times in our sole discretion. If we fail at any time to exercise
any of these rights, this failure will not mean that we have waived our rights. Each such right
will be deemed an ongoing right that we may assert at any time or at various times.
In addition, we will not accept for exchange any old notes tendered, and will not issue new
notes in exchange for any such old notes, if at such time any stop order has been threatened or is
in effect with respect to the registration statement of which this prospectus constitutes a part or
the qualification of the indenture relating to the notes under the Trust Indenture Act of 1939.
Procedures for Tendering
In order to participate in the exchange offer, you must properly tender your old notes to the
exchange agent as described below. It is your responsibility to properly tender your notes. We
have the right to waive any defects. However, we are not required to waive defects and are not
required to notify you of defects in your tender.
If you have any questions or need help in exchanging your notes, please call the exchange
agent, whose address and phone number are set forth in Prospectus SummaryThe Exchange
OfferExchange Agent.
All of the old notes were issued in book-entry form, and all of the old notes are currently
represented by global certificates held for the account of DTC. We have confirmed with DTC that
the old notes may be tendered using the Automated Tender Offer Program (ATOP) instituted by DTC.
The exchange agent will establish an account with DTC for purposes of the exchange offer promptly
after the commencement of the exchange offer and DTC participants may electronically transmit their
acceptance of the exchange offer by causing DTC to transfer their old notes to the exchange agent
using the ATOP procedures. In connection with the transfer, DTC will send an agents message to
the exchange agent. The agents message will be deemed to state that DTC has received instructions
from the participant to tender old notes and that the participant agrees to be bound by the terms
of the letter of transmittal.
By using the ATOP procedures to exchange old notes, you will not be required to deliver a
letter of transmittal to the exchange agent. However, you will be bound by its terms just as if
you had signed it.
There is no procedure for guaranteed late delivery of the notes.
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Determinations Under the Exchange Offer
We will determine in our sole discretion all questions as to the validity, form, eligibility,
time of receipt, acceptance of tendered old notes and withdrawal of tendered old notes. Our
determination will be final and binding. We reserve the absolute right to reject any old notes not
properly tendered or any old notes our acceptance of which would, in the opinion of our counsel, be
unlawful. We also reserve the right to waive any defect, irregularities or conditions of tender as
to particular old notes. Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and binding on all
parties. Unless waived, all defects or irregularities in connection with tenders of old notes must
be cured within such time as we shall determine. Although we intend to notify holders of defects
or irregularities with respect to tenders of old notes, neither we, the exchange agent nor any
other person will incur any liability for failure to give such notification. Tenders of old notes
will not be deemed made until such defects or irregularities have been cured or waived. Any old
notes received by the exchange agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned to the tendering holder, unless
otherwise provided in the letter of transmittal, promptly following the expiration date.
When We Will Issue New Notes
In all cases, we will issue new notes for old notes that we have accepted for exchange under
the exchange offer only after the exchange agent timely receives:
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a book-entry confirmation of such old notes into the exchange agents account at DTC;
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a properly transmitted agents message. |
Return of Old Notes Not Accepted or Exchanged
If we do not accept any tendered old notes for exchange or if old notes are submitted for a
greater principal amount than the holder desires to exchange, the unaccepted or non-exchanged old
notes will be returned without expense to their tendering holder. Such non-exchanged old notes
will be credited to an account maintained with DTC. These actions will occur promptly after the
expiration or termination of the exchange offer.
Your Representations to Us
By agreeing to be bound by the letter of transmittal, you will represent to us that, among
other things:
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any new notes that you receive will be acquired in the ordinary course of your business; |
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you have no arrangement or understanding with any person or entity to participate in the
distribution of the new notes; |
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you are not our affiliate, as defined in Rule 405 of the Securities Act of 1933; and |
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if you are a broker-dealer that will receive new notes for your own account in exchange
for old notes, you acquired those notes as a result of market-making activities or other
trading activities and you will deliver a prospectus (or to the extent permitted by law,
make available a prospectus) in connection with any resale of such new notes. |
Withdrawal of Tenders
Except as otherwise provided in this prospectus, you may withdraw your tender at any time
prior to 5:00 p.m. New York City time on the expiration date. For a withdrawal to be effective you
must comply with the appropriate procedures of DTCs ATOP system. Any notice of withdrawal must
specify the name and number of the account at DTC to be credited with withdrawn old notes and
otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form, eligibility and time of receipt of
notice of withdrawal. Our determination shall be final and binding on all parties. We will deem
any old notes so withdrawn not to have been validly tendered for exchange for purposes of the
exchange offer.
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Any old notes that have been tendered for exchange but are not exchanged for any reason will
be credited to an account maintained with DTC for the old notes. This crediting will take place as
soon as practicable after withdrawal, rejection of tender or termination of the exchange offer.
You may retender properly withdrawn old notes by following the procedures described under
Procedures for Tendering above at any time prior to 5:00 p.m., New York City time, on the
expiration date.
Fees and Expenses
We will bear the expenses of soliciting tenders. The principal solicitation is being made by
mail; however, we may make additional solicitation by facsimile, telephone, electronic mail or in
person by our officers and regular employees and those of our affiliates.
We have not retained any dealer-manager in connection with the exchange offer and will not
make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We
will, however, pay the exchange agent reasonable and customary fees for its services and reimburse
it for its related reasonable out-of-pocket expenses.
We will pay the cash expenses to be incurred in connection with the exchange offer. They
include:
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all registration and filing fees and expenses; |
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all fees and expenses of compliance with federal securities and state blue sky or
securities laws; |
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accounting fees, legal fees incurred by us, disbursements and printing, messenger and
delivery services, and telephone costs; and |
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related fees and expenses. |
Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of old notes under the
exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether
imposed on the registered holder or any other person, if a transfer tax is imposed for any reason
other than the exchange of old notes under the exchange offer.
Consequences of Failure to Exchange
If you do not exchange new notes for your old notes under the exchange offer, you will remain
subject to the existing restrictions on transfer of the old notes. In general, you may not offer
or sell the old notes unless the offer or sale is either registered under the Securities Act of
1933 or exempt from the registration under the Securities Act of 1933 and applicable state
securities laws. Except as required by the registration rights agreement, we do not intend to
register resales of the old notes under the Securities Act of 1933.
Accounting Treatment
We will record the new notes in our accounting records at the same carrying value as the old
notes. This carrying value is the aggregate principal amount of the old notes less any bond
discount, as reflected in our accounting records on the date of exchange. Accordingly, we will not
recognize any gain or loss for accounting purposes in connection with the exchange offer.
Other
Participation in the exchange offer is voluntary, and you should carefully consider whether to
accept. You are urged to consult your financial and tax advisors in making your own decision on
what action to take.
We may in the future seek to acquire untendered old notes in open market or privately
negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans
to acquire any old notes that are not tendered in the exchange offer or to file a registration
statement to permit resales of any untendered old notes.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratios of consolidated earnings to fixed charges for the
periods presented:
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Period from |
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February 26, 2007 |
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(Inception) |
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Six Months Ended |
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Year Ended December 31, |
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through |
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June 30, 2011 |
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2010 |
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2009 |
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2008 |
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December 31, 2007 |
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Ratio of earnings to fixed charges (1) |
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4.54 |
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9.72 |
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(1) |
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Due to our net pre-tax loss for the years ended December 31, 2009 and December 31, 2008 and
for the period from February 26, 2007 (Inception) through December 31, 2007, the ratio
coverage was less than 1:1. The Company would have needed additional earnings of $15.2
million, $34.4 million and $13.6 million for the years ended December 31, 2009 and December
31, 2008 and for the period from February 26, 2007 (Inception)
through December 31, 2007,
respectively, to achieve a coverage of 1:1. |
For purposes of computing the ratio of earnings to fixed charges, earnings consists of
pre-tax income from continuing operations before fixed charges. Fixed charges consists of
interest expense, amortized capital expenses related to indebtedness and an estimate of interest
within rental expense.
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USE OF PROCEEDS
The exchange offer is intended to satisfy our obligations under the registration rights
agreement. We will not receive any proceeds from the issuance of the new notes in the exchange
offer. In consideration for issuing the new notes as contemplated by this prospectus, we will
receive old notes in a like principal amount. The form and terms of the new notes are identical in
all respects to the form and terms of the old notes, except the new notes will be registered under
the Securities Act of 1933 and will not contain restrictions on transfer, registration rights or
provisions for additional interest. Old notes surrendered in exchange for the new notes will be
retired and cancelled and will not be reissued. Accordingly, the issuance of the new notes will
not result in any change in outstanding indebtedness.
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DESCRIPTION OF NOTES
We will issue the new notes under the indenture dated as of February 2, 2011 (the base indenture)
between us and U.S. Bank National Association, as trustee, as supplemented by a supplemental
indenture between us, the initial Subsidiary Guarantors and the trustee. In this description of
notes, when we refer to the indenture, we mean the base indenture as supplemented by such
supplemental indenture. The terms of the new notes will include those stated in the indenture and
those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended.
The following description is a summary of the material provisions of the indenture. It does not
restate the indenture in its entirety. We urge you to read the indenture because it, and not this
description, defines your rights as holders of the new notes. A copy of each of the base indenture
and the supplemental indenture is incorporated by reference into this prospectus.
You can find the definitions of terms used in this description of notes below under the caption
Definitions. Capitalized terms used in this description but not defined below under the caption
Definitions have the meanings assigned to them in the indenture. In this description, the words
Oasis, we, us, and our refer only to Oasis Petroleum Inc., and not to any of its
Subsidiaries or Affiliates. References to the notes refer to the new notes and the old notes.
The indenture treats the registered holder of a note as the owner of it for all purposes. Only
registered holders of the notes have rights under the indenture, and all references to holders in
this description are to registered holders of the notes.
If the exchange offer contemplated by this prospectus is consummated, holders of old notes who do
not exchange those notes for new notes in the exchange offer will vote together with holders of new
notes for all relevant purposes under the indenture. In that regard, the indenture requires that
certain actions by the holders thereunder must be taken, and certain rights must be exercised, by
specified minimum percentages of the aggregate principal amount of the outstanding securities
issued under the indenture. In determining whether holders of the requisite percentage in principal
amount of notes have given any notice, consent or waiver or taken any other action permitted under
the indenture, any old notes that remain outstanding after the exchange offer will be aggregated
with the new notes, and the holders of such old notes and the new notes will vote together as a
single class for all such purposes. Accordingly, all references herein to specified percentages in
aggregate principal amount of the notes outstanding shall be deemed to mean, at any time after the
exchange offer for the old notes is consummated, such percentages in aggregate principal amount of
the old notes and the new notes then outstanding.
Brief Description of the Notes and the Subsidiary Guarantees
The New Notes
Like the old notes, the new notes will:
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be general unsecured, senior obligations of Oasis; |
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rank senior in right of payment to all existing and future subordinated indebtedness of
Oasis; |
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rank pari passu in right of payment with any existing and future senior indebtedness of
Oasis; |
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rank effectively junior in right of payment to Oasis existing and future secured
indebtedness, including indebtedness under the Senior Credit Agreement, to the extent of the
assets of Oasis constituting collateral securing that indebtedness; and |
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be unconditionally guaranteed by the Subsidiary Guarantors on a senior unsecured basis. |
The Subsidiary Guarantees
Like the old notes, the new notes will be guaranteed on a senior unsecured basis by the Subsidiary
Guarantors. As of the date of this prospectus, the Subsidiary Guarantors consist of Oasis
Petroleum LLC, Oasis Petroleum North America LLC, Oasis Petroleum Marketing LLC and Oasis Well
Services LLC, which are all of our existing Material
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Subsidiaries; however, in the future, we will not be required to cause any Subsidiary to guarantee
the notes, except in the circumstances described below under CovenantsSubsidiary Guarantees.
Each Subsidiary Guarantee will:
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be a general unsecured, senior obligation of the applicable Subsidiary Guarantor; |
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rank senior in right of payment to all existing and future subordinated indebtedness of such
Subsidiary Guarantor; |
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rank pari passu in right of payment with any existing and future senior indebtedness of such
Subsidiary Guarantor; and |
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rank effectively junior in right of payment to all existing and future secured indebtedness
of such Subsidiary Guarantor (including any Indebtedness under the Senior Credit Agreement),
to the extent of the assets of such Subsidiary Guarantor constituting collateral securing that
indebtedness. |
As of the date of this prospectus, all of our Material Subsidiaries are Restricted Subsidiaries.
However, under the circumstances described below under the caption CovenantsDesignation of
Restricted and Unrestricted Subsidiaries, we will be permitted to designate Subsidiaries as
Unrestricted Subsidiaries. Our Unrestricted Subsidiaries will not be subject to many of the
restrictive covenants in the indenture, and will not guarantee the notes.
Principal, Maturity and Interest
We will issue the new notes with an initial maximum aggregate principal amount of up to $400
million. We may issue additional notes (Additional Notes) under the indenture from time to time
after the date hereof. Any issuance of Additional Notes is subject to all of the covenants in the
indenture, including the covenant described below under the caption CovenantsIncurrence of
Indebtedness and Issuance of Preferred Stock. The new notes, together with any Additional Notes
and unexchanged old notes, will be treated as a single class for all purposes under the indenture,
including, without limitation, waivers, amendments, redemptions and offers to purchase. We may also
issue other debt securities under the indenture. If issued, such other debt securities will not
vote together with the notes on any matter. The notes will mature on February 1, 2019, and will be
issued in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000.
Interest on the notes will accrue at the rate of 7.25% per annum and will be payable semi-annually
in arrears on February 1 and August 1, beginning on August 1, 2011. Interest on overdue principal,
premium, if any, and interest will accrue at the applicable interest rate on the notes. Oasis will
make each interest payment to the holders of record of the notes on the immediately preceding
January 15 and July 15. Interest on the notes will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.
Methods of Receiving Payments on the Notes
If a holder of notes has given wire transfer instructions to Oasis, Oasis will pay all principal,
interest and premium, if any, on that holders notes in accordance with those instructions. All
other payments on the notes will be made at the office or agency of the paying agent and registrar
in New York, New York, unless we elect to make interest payments by check mailed to the noteholders
at their address set forth in the register of holders.
Paying Agent and Registrar
The trustee has been appointed as the initial paying agent and registrar for the notes. Oasis may
change the paying agent or registrar without prior notice to the holders of the notes, and Oasis or
any of the Restricted Subsidiaries may act as paying agent or registrar.
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Subsidiary Guarantees of the Notes
Our payment obligations with respect to the new notes, like the old notes, will be jointly and
severally guaranteed on a senior, unsecured basis by the Subsidiary Guarantors. As of the date of
this prospectus, all of our Material Subsidiaries are Subsidiary Guarantors of the old notes, and
each of them will guarantee the new notes. Additional Subsidiaries will be required to become
Subsidiary Guarantors under the circumstances described under CovenantsSubsidiary Guarantees.
The Subsidiary Guarantees will be joint and several obligations of the Subsidiary Guarantors and
limited to the maximum amount the Guarantors are permitted to guarantee under applicable law
without creating a fraudulent conveyance. See Risk FactorsRisks Related to the NotesThe
guarantees by certain of our subsidiaries of the notes could be deemed fraudulent conveyances under
certain circumstances, and a court may try to subordinate or void these subsidiary guarantees.
A Subsidiary Guarantor may not sell or otherwise dispose of all or substantially all of its
properties or assets to, or consolidate with or merge with or into (regardless of whether such
Subsidiary Guarantor is the surviving Person), another Person, other than Oasis or another
Subsidiary Guarantor, unless:
(1) immediately after giving effect to that transaction, no Default or Event of Default exists;
and
(2) either:
(a) (i) such Subsidiary Guarantor is the surviving Person or (ii) the Person acquiring the
properties or assets in any such sale or other disposition or the Person formed by or
surviving any such consolidation or merger (if other than such Subsidiary Guarantor) assumes
all the obligations of such Subsidiary Guarantor under the indenture (including its
Subsidiary Guarantee) pursuant to a supplemental indenture satisfactory to the trustee; or
(b) such transaction does not violate the provisions of the indenture described under the
caption Repurchase at the Option of HoldersAsset Sales.
The Subsidiary Guarantee of a Subsidiary Guarantor will be released as set forth under the caption
CovenantsSubsidiary Guarantees, and will also be released immediately:
(1) upon any sale or other disposition of all or substantially all of the properties or assets
of such Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is
not (either before or after giving effect to such transaction) Oasis or a Restricted Subsidiary,
if the sale or other disposition does not violate the provisions of the indenture described
below under the caption Repurchase at the Option of HoldersAsset Sales;
(2) upon any sale or other disposition of the Capital Stock of such Subsidiary Guarantor to a
Person that is not (either before or after giving effect to such transaction) Oasis or a
Restricted Subsidiary, if the sale or other disposition does not violate the provisions of the
indenture described under Repurchase at the Option of HoldersAsset Sales and such
Subsidiary Guarantor no longer qualifies as a Subsidiary of Oasis as a result of such
disposition;
(3) upon designation of such Subsidiary Guarantor as an Unrestricted Subsidiary, in accordance
with the provisions of the indenture described below under the caption CovenantsDesignation
of Restricted and Unrestricted Subsidiaries;
(4) upon legal defeasance, covenant defeasance or satisfaction and discharge of the indenture as
provided pursuant to the defeasance or satisfaction and discharge provisions of the indenture as
described below under the captions Legal Defeasance and Covenant Defeasance and
Satisfaction and Discharge; or
(5) upon the liquidation or dissolution of such Subsidiary Guarantor, provided no Default or
Event of Default occurs as a result thereof or has occurred or is continuing.
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Optional Redemption
Except as described below in this section or in the last paragraph of Repurchase at the Option
of HoldersChange of Control, the notes are not redeemable until February 1, 2015. On and after
February 1, 2015, Oasis may redeem all or a part of the notes, from time to time, at the following
redemption prices (expressed as a percentage of principal amount) plus accrued and unpaid interest,
if any, on the notes redeemed to the applicable redemption date (subject to the rights of holders
of notes on the relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the twelve-month period beginning on February 1 of the years indicated
below:
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Redemption Price |
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2015 |
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2016 |
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101.813 |
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2017 and thereafter |
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100.000 |
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At any time or from time to time prior to February 1, 2015, Oasis may also redeem all or a part of
the notes, at a redemption price equal to the Make-Whole Price, subject to the rights of holders of
notes on the relevant record date to receive interest due on the relevant interest payment date.
Make-Whole Price with respect to any notes to be redeemed, means an amount equal to the greater
of:
(1) 100% of the principal amount of such notes; and
(2) the sum of the present values of (a) the redemption price of such notes at February 1, 2015
(as set forth above) and (b) the remaining scheduled payments of interest from the redemption
date to February 1, 2015 (not including any portion of such payments of interest accrued as of
the redemption date) discounted back to the redemption date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 50
basis points;
plus, in the case of both (1) and (2), accrued and unpaid interest on such notes, if any, to the
redemption date.
Comparable Treasury Issue means, with respect to notes to be redeemed, the U.S. Treasury security
selected by an Independent Investment Banker as having a maturity most nearly equal to the period
from the redemption date to February 1, 2015, that would be utilized at the time of selection and
in accordance with customary financial practice, in pricing new issues of corporate debt securities
of a comparable maturity; provided that if such period is less than one year, then the U.S.
Treasury security having a maturity of one year shall be used.
Comparable Treasury Price means, with respect to any redemption date, (1) the average of the
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest of such Reference Treasury Dealer Quotations, or (2) if the trustee obtains fewer than five
such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations.
Independent Investment Banker means J.P. Morgan Securities LLC, Wells Fargo Securities, LLC or
one of their respective successors, or, if such firms or their respective successors, if any, as
the case may be, are unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by Oasis.
Reference Treasury Dealer means each of J.P. Morgan Securities LLC, Wells Fargo Securities, LLC
and three additional primary Government Securities dealers in New York City (each a Primary
Treasury Dealer) selected by Oasis, and their respective successors; provided, however, that if
any such firm or any such successor, as the case may be, shall cease to be a primary Government
Securities dealer in New York City, Oasis shall substitute therefor another Primary Treasury
Dealer.
Reference Treasury Dealer Quotations means, with respect to each Reference Treasury Dealer and
any redemption date, the average, as determined by the trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the trustee by such
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Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding
such redemption date.
Treasury Rate means, with respect to any redemption date, (1) the yield, under the heading which
represents the average for the immediately preceding week, appearing in the most recently published
statistical release designated H.15(159) or any successor publication that is published weekly by
the Board of Governors of the Federal Reserve System and that establishes yields on actively traded
U.S. Treasury securities adjusted to constant maturity under the caption Treasury Constant
Maturities, for the maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the stated maturity, yields for the two published maturities
most closely corresponding to the Comparable Treasury Issue shall be determined, and the Treasury
Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to
the nearest month) or (2) if such release (or any successor release) is not published during the
week preceding the calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a
price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such redemption date. The Treasury Rate shall be calculated on
the third Business Day preceding the redemption date.
The notice of redemption with respect to the foregoing redemption need not set forth the Make-Whole
Price but only the manner of calculation thereof. Oasis will notify the trustee of the Make-Whole
Price with respect to any redemption promptly after the calculation, and the trustee shall not be
responsible for such calculation.
Prior to February 1, 2014, Oasis may on any one or more occasions redeem up to 35% of the principal
amount of the notes with all or a portion of the net cash proceeds of one or more Equity Offerings
at a redemption price equal to 107.25% of the principal amount thereof, plus accrued and unpaid
interest, if any, on the notes redeemed to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant interest payment date);
provided that
(1) at least 65% of the aggregate principal amount of the notes issued on the Issue Date
(excluding notes held by Oasis and its Subsidiaries) remains outstanding after each such
redemption; and
(2) the redemption occurs within 180 days after the closing of such Equity Offering.
Notice of any redemption upon an Equity Offering may be given prior to the completion of the
related Equity Offering, and any such redemption or notice may at Oasis discretion, be subject to
one or more conditions precedent, including, but not limited to completion of the related Equity
Offering.
Unless Oasis defaults in the payment of the redemption price, interest, if any, will cease to
accrue on the notes or portions thereof called for redemption on the applicable redemption date.
Selection and Notice
If less than all of the notes are to be redeemed at any time, the trustee will select notes for
redemption on a pro rata basis (or, in the case of notes in global form, the trustee will select
notes for redemption based on DTCs method that most nearly approximates a pro rata selection),
unless otherwise required by law or applicable stock exchange requirements.
No notes of $2,000 or less can be redeemed in part. Notices of redemption will be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to each holder of notes
to be redeemed at its registered address, except that redemption notices may be mailed more than 60
days prior to a redemption date if the notice is issued in connection with a defeasance of the
notes or a satisfaction and discharge of the indenture.
If any note is to be redeemed in part only, the notice of redemption that relates to such note
shall state the portion of the principal amount thereof to be redeemed. A new note in principal
amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof
upon cancellation of the original note. Notes called for redemption become due on the date fixed
for redemption, unless the redemption is subject to a condition precedent that is not satisfied or
waived. On and after the redemption date, interest ceases to accrue on notes or portions of
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notes called for redemption, unless Oasis defaults in making the redemption payment. Any redemption
or notice of redemption may, at our discretion, be subject to one or more conditions precedent and,
in the case of a redemption with the net cash proceeds of an Equity Offering, be given prior to the
completion of the related Equity Offering.
Open Market Purchases; No Mandatory Redemption or Sinking Fund
We may at any time and from time to time purchase notes in the open market or otherwise. We are not
required to make mandatory redemption or sinking fund payments with respect to the notes. However,
under certain circumstances, we may be required to offer to purchase notes pursuant to the
covenants described under the caption Repurchase at the Option of Holders.
Repurchase at the Option of Holders
Change of Control
If a Change of Control occurs, each holder of notes will have the right to require Oasis to
repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess of $2,000)
of that holders notes pursuant to an offer (a Change of Control Offer) on the terms set forth in
the indenture. In the Change of Control Offer, Oasis will offer a payment in cash (the Change of
Control Payment) equal to not less than 101% of the aggregate principal amount of notes
repurchased plus accrued and unpaid interest, if any, on the notes repurchased to the date of
purchase (the Change of Control Payment Date), subject to the rights of holders of notes on the
relevant record date to receive interest due on the relevant interest payment date. Within 30 days
following any Change of Control, Oasis will mail a notice to each holder describing the transaction
or transactions that constitute the Change of Control and offering to repurchase notes on the
Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days
and no later than 60 days from the date such notice is mailed, pursuant to the procedures required
by the indenture and described in such notice. Oasis will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent
those laws and regulations are applicable in connection with the repurchase of the notes as a
result of a Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of the indenture, Oasis will comply with
the applicable securities laws and regulations and will not be deemed to have breached its
obligations under the Change of Control provisions of the indenture by virtue of such compliance.
On the Change of Control Payment Date, Oasis will, to the extent lawful:
(1) accept for payment all notes or portions of notes properly tendered pursuant to the Change
of Control Offer;
(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of
all notes or portions of notes properly tendered; and
(3) deliver or cause to be delivered to the trustee the notes properly accepted together with an
Officers Certificate stating the aggregate principal amount of notes or portions of notes being
purchased by Oasis.
The paying agent will promptly mail or wire transfer to each holder of notes properly tendered the
Change of Control Payment for such notes (or, if all the notes are then in global form, make such
payment through the facilities of DTC), and the trustee will promptly authenticate and mail (or
cause to be transferred by book entry) to each holder a new note equal in principal amount to any
unpurchased portion of the notes surrendered, if any; provided that each such new note will be in a
principal amount of $2,000 or an integral multiple of $1,000 in excess of $2,000. Any note so
accepted for payment will cease to accrue interest on and after the Change of Control Payment Date
unless Oasis defaults in making the Change of Control Payment. Oasis will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
The provisions described herein that require Oasis to make a Change of Control Offer following a
Change of Control will be applicable regardless of whether any other provisions of the indenture
are applicable. Except as described above with respect to a Change of Control, the indenture will
not contain provisions that permit the holders of the notes to require that Oasis repurchase or
redeem the notes in the event of a takeover, recapitalization or similar transaction.
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Oasis will not be required to make a Change of Control Offer upon a Change of Control if a third
party makes the Change of Control Offer in the manner, at the price, at the times and otherwise in
compliance with the requirements set forth in the indenture applicable to a Change of Control Offer
made by Oasis and purchases all notes properly tendered and not withdrawn under the Change of
Control Offer.
A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon the
occurrence of such Change of Control, if a definitive agreement is in place for the Change of
Control at the time of making the Change of Control Offer. Notes repurchased by Oasis pursuant to a
Change of Control Offer will have the status of notes issued but not outstanding or will be retired
and cancelled, at Oasis option. Notes purchased by a third party pursuant to the preceding
paragraph will have the status of notes issued and outstanding.
The definition of Change of Control includes a phrase relating to the direct or indirect sale,
lease, transfer, conveyance or other disposition of all or substantially all of the properties or
assets of Oasis and its Restricted Subsidiaries taken as a whole. Although there is a limited body
of case law interpreting the phrase substantially all, there is no precise established definition
of the phrase under applicable law. Accordingly, the ability of a holder of notes to require Oasis
to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of
less than all of the properties or assets of Oasis and its Restricted Subsidiaries taken as a whole
to another Person or group may be uncertain.
In the event that holders of at least 90% of the aggregate principal amount of the outstanding
notes accept a Change of Control Offer and Oasis (or any third party making such Change of Control
Offer, in lieu of Oasis, as described above) purchases all of the notes held by such holders, Oasis
will have the right, upon not less than 30 nor more than 60 days prior notice, given not more than
30 days following a Change of Control Payment Date, to redeem all, but not less than all, of the
notes that remain outstanding at a redemption price equal to the Change of Control Payment plus, to
the extent not included in the Change of Control Payment, accrued and unpaid interest, if any, on
the notes that remain outstanding, to the date of redemption (subject to the right of holders on
the relevant record date to receive interest due on the relevant interest payment date).
Asset Sales
Oasis will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless:
(1) Oasis (or the Restricted Subsidiary, as the case may be) receives consideration at the time
of such Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests
issued or sold or otherwise disposed of; and
(2) at least 75% of the aggregate consideration received in respect of such Asset Sale by Oasis
or such Restricted Subsidiary (considered together on a cumulative basis, with all consideration
received by Oasis or any of its Restricted Subsidiaries in respect of other Asset Sales
consummated since the Issue Date), is in the form of cash or Cash Equivalents. For purposes of
this provision, each of the following will be deemed to be cash:
(a) any liabilities, as shown on Oasis most recent consolidated balance sheet, of Oasis or
any Restricted Subsidiary (other than contingent liabilities, Subordinated Debt and any
obligations in respect of preferred stock) that are assumed by the transferee of any such
assets or Equity Interests pursuant to a customary novation agreement (or other legal
documentation with the same effect) that includes a full release of Oasis or such Restricted
Subsidiary from any and all liability therefor;
(b) any securities, notes or other obligations received by Oasis or any such Restricted
Subsidiary from such transferee that are converted by Oasis or such Restricted Subsidiary
into cash within 90 days after the date of the Asset Sale, to the extent of the cash received
in that conversion; and
(c) any Capital Stock or assets of the kind referred to in clause (2) of the third paragraph
of this covenant.
Notwithstanding the foregoing, the 75% limitation referred to above shall be deemed satisfied with
respect to any Asset Sale in which the cash or Cash Equivalents portion of the consideration
received therefrom, determined in
27
accordance with the foregoing provision on an after-tax basis, is equal to or greater than what the
after-tax proceeds would have been had such Asset Sale complied with the aforementioned 75%
limitation.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale or, if Oasis has entered
into a binding commitment or commitments with respect to any of the actions described in clauses
(2) or (3) below, within the later of (x) 365 days after the receipt of any Net Proceeds from an
Asset Sale or (y) 120 days after the entering into of such commitment or commitments, Oasis (or the
applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds:
(1) to permanently repay Senior Debt;
(2) to invest in Additional Assets; or
(3) to make capital expenditures in respect of a Related Business of Oasis or any of its
Restricted Subsidiaries.
However, pending application or investment of such Net Proceeds as provided in clauses (1) through
(3), such Net Proceeds may be applied to temporarily reduce revolving credit Indebtedness. An
amount equal to any Net Proceeds from Asset Sales that are not applied or invested as provided in
clauses (1) through (3) above will constitute Excess Proceeds.
Within ten Business Days after the aggregate amount of Excess Proceeds exceeds $20.0 million, Oasis
will make an offer (an Asset Sale Offer) to all holders of notes and all holders of other
Indebtedness that is pari passu with the notes containing provisions similar to those set forth in
the indenture with respect to offers to purchase or redeem with the proceeds of sales of assets, to
purchase the maximum principal amount of notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100%
of the principal amount plus accrued and unpaid interest, if any, to the date of purchase, and will
be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, Oasis
or any Restricted Subsidiary may use those Excess Proceeds for any purpose not otherwise prohibited
by the indenture. If the aggregate principal amount of notes and other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, Oasis will use the
Excess Proceeds to purchase the notes and such other pari passu Indebtedness on a pro rata basis.
Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
Notwithstanding the foregoing, the sale, conveyance or other disposition of all or substantially
all of the properties or assets of Oasis and its Restricted Subsidiaries, taken as a whole, will be
governed by the provisions of the indenture described under the caption Repurchase at the Option
of HoldersChange of Control and/or the provisions described under the caption
CovenantsMerger, Consolidation or Sale of Substantially All Assets and not by the provisions
of the Asset Sales covenant.
Oasis will comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent those laws and regulations are applicable
in connection with each repurchase of notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales provisions of the
indenture, or compliance with the Asset Sales provisions of the indenture would constitute a
violation of any such laws or regulations, Oasis will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under the Asset Sales
provisions of the indenture by virtue of such compliance.
The Senior Credit Agreement contains, and future agreements may contain, prohibitions of certain
events, including events that would constitute a Change of Control or an Asset Sale and including
repurchases of or other prepayments in respect of the notes. The exercise by the holders of notes
of their right to require Oasis to repurchase the notes upon a Change of Control or an Asset Sale
could cause a default under these other agreements, even if the Change of Control or Asset Sale
itself does not, due to the financial effect of such repurchases on Oasis or otherwise. In the
event a Change of Control or Asset Sale occurs at a time when Oasis is prohibited from purchasing
notes, Oasis could seek the consent of the applicable lenders to the purchase of notes or could
attempt to refinance the Indebtedness that contain such prohibitions. If Oasis does not obtain a
consent or repay that Indebtedness, Oasis will remain prohibited from purchasing notes. In that
case, Oasis failure to purchase tendered notes would
constitute an Event of Default under the indenture which could, in turn, constitute a default under
other
28
Indebtedness. Finally, Oasis ability to pay cash to the holders of notes upon a repurchase
may be limited by Oasis then-existing financial resources. See Risk FactorsRisks Related to the
NotesWe may not be able to fund a change of control offer.
Covenants
Restricted Payments
Oasis will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of Oasis
or any of its Restricted Subsidiaries Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving Oasis or any of its Restricted
Subsidiaries) or to the direct or indirect holders of Oasis or any of its Restricted
Subsidiaries Equity Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of Oasis and other than dividends or
distributions payable to Oasis or any Restricted Subsidiary);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation,
any such purchase, redemption, acquisition or retirement made in connection with any merger or
consolidation involving Oasis) any Equity Interests of Oasis or any direct or indirect parent
company of Oasis;
(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or
retire for value any Subordinated Debt, except a payment of interest or principal at the Stated
Maturity thereof (excluding (a) any intercompany Indebtedness between or among Oasis and any of
its Restricted Subsidiaries or (b) the purchase or other acquisition of Subordinated Debt
acquired in anticipation of satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of such purchase or other acquisition);
or
(4) make any Restricted Investment;
(all such payments and other actions set forth in clauses (1) through (4) above being collectively
referred to as Restricted Payments), unless, at the time of and after giving effect to such
Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a
consequence of such Restricted Payment;
(2) Oasis would, at the time of such Restricted Payment and after giving pro forma effect
thereto as if such Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the
covenant described below under the caption Incurrence of Indebtedness and Issuance of
Preferred Stock; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments
made by Oasis and its Restricted Subsidiaries since the Issue Date (excluding Restricted
Payments permitted by clauses (2), (3), (4), (5), (6), (7), (8), (9) and (12) of the next
succeeding paragraph), is equal to or less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of Oasis for the period (taken as one accounting
period) from the beginning of the most recent fiscal quarter commencing before the Issue Date
to the end of Oasis most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit); plus
(b) 100% of (A) (i) the aggregate net cash proceeds and (ii) the Fair Market Value of (x)
marketable securities (other than marketable securities of Oasis or an Affiliate of Oasis),
(y) Capital Stock of a Person (other than Oasis or an Affiliate of Oasis) engaged primarily
in any Related Business and (z) other assets
used or useful in any Related Business, in each case received by Oasis since the Issue Date
as a contribution
29
to its common equity capital or from the issue or sale of Equity Interests
of Oasis (other than Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt securities of Oasis that
have been converted into or exchanged for such Equity Interests (other than Equity Interests
(or Disqualified Stock or debt securities) sold to a Subsidiary of Oasis), (B) with respect
to Indebtedness that is incurred on or after the Issue Date, the amount by which such
Indebtedness of Oasis or any of its Restricted Subsidiaries is reduced on Oasis consolidated
balance sheet upon the conversion or exchange after the Issue Date of any such Indebtedness
into or for Equity Interests of Oasis (other than Disqualified Stock), and (C) the aggregate
net cash proceeds, if any, received by Oasis or any of its Restricted Subsidiaries upon any
conversion or exchange described in clause (A) or (B) above; plus
(c) with respect to Restricted Investments made by Oasis and its Restricted Subsidiaries
after the Issue Date, an amount equal to the sum, without duplication, of (A) the net
reduction in such Restricted Investments in any Person resulting from (i) repayments of loans
or advances, or other transfers of assets, in each case to Oasis or any Restricted
Subsidiary, (ii) other repurchases, repayments or redemptions of such Restricted Investments,
(iii) the sale of any such Restricted Investment to a purchaser other than Oasis or a
Subsidiary of Oasis or (iv) the release of any Guarantee (except to the extent any amounts
are paid under such Guarantee) that constituted a Restricted Investment plus (B) with respect
to any Unrestricted Subsidiary designated as such after the Issue Date that is redesignated
as a Restricted Subsidiary after the Issue Date, the lesser of (i) the Fair Market Value of
Oasis Investment in such Subsidiary held by Oasis or any of its Restricted Subsidiaries at
the time of such redesignation and (ii) the aggregate amount of Investments made by Oasis or
any of its Restricted Subsidiaries in such Subsidiary upon or after designation of such
Subsidiary as an Unrestricted Subsidiary and prior to the redesignation of such Subsidiary as
a Restricted Subsidiary; plus
(d) 100% of any dividends received by Oasis or a Restricted Subsidiary after the Issue Date
from an Unrestricted Subsidiary, to the extent such dividends were not otherwise included in
the Consolidated Net Income of Oasis for such period.
The preceding provisions will not prohibit:
(1) the payment of any dividend or the consummation of any irrevocable redemption within 60 days
after the date of declaration of the dividend or giving of the redemption notice, as the case
may be, if at the date of declaration or notice, the dividend or redemption payment would have
complied with the provisions of the indenture;
(2) the making of any Restricted Payment in exchange for, or out of the net cash proceeds from
the substantially concurrent sale (other than to a Subsidiary of Oasis) of, Equity Interests of
Oasis (other than Disqualified Stock and other than Equity Interests issued or sold to an
employee stock ownership plan, option plan or similar trust to the extent such sale to an
employee stock ownership plan, option plan or similar trust is financed by loans from or
Guaranteed by Oasis or any of its Restricted Subsidiaries unless such loans have been repaid
with cash on or prior to the date of determination) or from the substantially concurrent
contribution of common equity capital to Oasis; provided that the amount of any such net cash
proceeds that are utilized for any such Restricted Payment will be excluded from clause (3)(b)
of the preceding paragraph and clause (7) of this paragraph;
(3) the purchase, redemption, defeasance or other acquisition or retirement for value of
Subordinated Debt (including the payment of any required premium and any fees and expenses
incurred in connection with such purchase, redemption, defeasance or other acquisition or
retirement) with the net cash proceeds from a substantially concurrent incurrence of Permitted
Refinancing Indebtedness;
(4) the purchase, redemption or other acquisition or retirement for value of any Equity
Interests of Oasis or any Restricted Subsidiary held by any of Oasis or any of its Restricted
Subsidiaries current or former directors or employees in connection with the exercise or
vesting of any equity compensation (including, without limitation, stock options, restricted
stock and phantom stock) in order to satisfy Oasis or such Restricted Subsidiarys tax
withholding obligation with respect to such exercise or vesting;
30
(5) purchases of Capital Stock deemed to occur upon the exercise of stock options if such
Capital Stock represents a portion of the exercise price thereof;
(6) payments to fund the purchase, redemption or other acquisition or retirement for value by
Oasis of fractional Equity Interests arising out of stock dividends, splits or combinations,
business combinations or other transactions permitted by the indenture;
(7) as long as no Default has occurred and is continuing or would be caused thereby, the
purchase, redemption or other acquisition or retirement for value of any Equity Interests of
Oasis or any Restricted Subsidiary held by any of Oasis (or any of its Restricted
Subsidiaries) current or former directors or employees; provided that the aggregate price paid
for all such purchased, redeemed, acquired or retired Equity Interests may not exceed the sum of
(a) $20.0 million plus (b) the aggregate amount of cash proceeds received by Oasis from the sale
of Oasis Equity Interests (other than Disqualified Stock) to any such directors or employees
that occurs after the Issue Date; provided that the amount of such cash proceeds utilized for
any such purchase, redemption or other acquisition or retirement will be excluded from clause
(3)(b) of the immediately preceding paragraph and clause (2) of this paragraph plus (c) the cash
proceeds of key man life insurance policies received by Oasis and its Restricted Subsidiaries
after the Issue Date;
(8) as long as no Default has occurred and is continuing or would be caused thereby, the
declaration and payment of regularly scheduled or accrued dividends to holders of any class or
series of Disqualified Stock of Oasis or any class or series of preferred stock of any
Restricted Subsidiary issued on or after the Issue Date in accordance with the Fixed Charge
Coverage Ratio test described below under the caption Incurrence of Indebtedness and Issuance
of Preferred Stock;
(9) the payment of any dividend (or, in the case of any partnership or limited liability
company, any similar distribution) by a Restricted Subsidiary to the holders of Equity Interests
(other than Disqualified Stock) of such Restricted Subsidiary; provided that such dividend or
similar distribution is paid to all holders of such Equity Interests on a pro rata basis based
on their respective holdings of such Equity Interests;
(10) purchases of Subordinated Debt at a purchase price not greater than (a) 101% of the
principal amount of such Subordinated Debt and accrued and unpaid interest thereon in the event
of a Change of Control or (b) 100% of the principal amount of such Subordinated Debt and accrued
and unpaid interest thereon in the event of an Asset Sale in connection with any change of
control offer or asset sale offer required by the terms of such Subordinated Debt, but only if:
(i) in the case of a Change of Control, Oasis has first complied with and fully satisfied its
obligations under the covenant described under Repurchase at the Option of HoldersChange
of Control; or
(ii) in the case of an Asset Sale, Oasis has complied with and fully satisfied its
obligations under the covenant described under Repurchase at the Option of HoldersAsset
Sales;
(11) payments or distributions to dissenting stockholders pursuant to applicable law in
connection with a merger, consolidation or transfer of all or substantially all of the assets of
Oasis that complies with the provisions described under the caption Merger, Consolidation or
Sale of Substantially All Assets; and
(12) other Restricted Payments in an aggregate amount at any time outstanding not to exceed
$25.0 million.
The amount of all Restricted Payments (other than cash) shall be the Fair Market Value, on the date
of such Restricted Payment, of the Restricted Investment proposed to be made or the asset(s) or
securities proposed to be paid, transferred or issued by Oasis or such Restricted Subsidiary, as
the case may be, pursuant to such Restricted Payment. The Fair Market Value of any cash Restricted
Payment shall be its face amount, and the Fair Market Value of any non-cash Restricted Payment
shall be determined in accordance with the definition of that term. For purposes of determining
compliance with this covenant, in the event that a Restricted Payment meets the criteria of more
than one of the exceptions described in (1) through (12) above or is entitled to be made pursuant
to the first paragraph of this covenant, Oasis shall, in its sole discretion, classify such
Restricted Payment, or later classify, reclassify or re-divide all or a portion of such Restricted
Payment, in any manner that complies with this covenant.
31
Incurrence of Indebtedness and Issuance of Preferred Stock
Oasis will not, and will not permit any of its Restricted Subsidiaries to directly or indirectly
create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, incur; with incurrence having a
correlative meaning) any Indebtedness (including Acquired Debt), and Oasis will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any preferred
stock; provided, however, that Oasis may incur Indebtedness (including Acquired Debt) and issue
Disqualified Stock, and Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) and
issue preferred stock, if (a) the Fixed Charge Coverage Ratio for Oasis most recently ended four
full fiscal quarters for which internal financial statements are available immediately preceding
the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred
stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro
forma basis (including a pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the Disqualified Stock or preferred stock had been issued, as the
case may be, at the beginning of such four-quarter period and (b) no Default would occur as a
consequence of, and no Event of Default would be continuing following, the incurrence of the
Indebtedness or the transactions relating to such incurrence, including any related application of
the proceeds thereof.
Notwithstanding the foregoing, the first paragraph of this covenant will not prohibit the
incurrence of any of the following items of Indebtedness or the issuance of any Disqualified Stock
or preferred stock described in clauses (5) and (7) below (collectively, Permitted Debt):
(1) the incurrence by Oasis and any Subsidiary Guarantor of Indebtedness under Credit Facilities
in an aggregate principal amount at any one time outstanding under this clause (1) (with letters
of credit being deemed to have a principal amount equal to the maximum potential liability of
Oasis and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $200.0
million and (ii) the sum of $100.0 million plus an amount equal to 25.0% of Adjusted
Consolidated Net Tangible Assets of Oasis, determined as of the date of the incurrence of such
Indebtedness after giving pro forma effect to such incurrence and the application of the
proceeds therefrom;
(2) the incurrence by Oasis and its Restricted Subsidiaries of Existing Indebtedness;
(3) the incurrence by Oasis of Indebtedness represented by the notes and the related Subsidiary
Guarantees;
(4) the incurrence by Oasis or any of its Restricted Subsidiaries of Indebtedness represented by
Capital Lease Obligations, mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase price or cost of design,
construction, installation, improvement, deployment, refurbishment or modification of property,
plant or equipment or furniture, fixtures and equipment, in each case, used in the business of
Oasis or any of its Restricted Subsidiaries, in an aggregate principal amount at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund,
refinance, replace, defease, discharge or otherwise retire for value any Indebtedness incurred
pursuant to this clause (4), not to exceed the greater of (a) $15.0 million and (b) 2.0% of
Adjusted Consolidated Net Tangible Assets of Oasis, determined as of the date of the incurrence
of such Indebtedness;
(5) the incurrence or issuance by Oasis or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend,
renew, refund, refinance, replace, defease, discharge or otherwise retire for value any
Indebtedness (other than intercompany Indebtedness) or Disqualified Stock of Oasis, or
Indebtedness (other than intercompany Indebtedness) or preferred stock of any Restricted
Subsidiary, in each case that was permitted by the indenture to be incurred or issued under the
first paragraph of this covenant or clause (2), (3), (4), (10), (14) or (15) of this paragraph
or this clause (5);
(6) the incurrence by Oasis or any of its Restricted Subsidiaries of intercompany Indebtedness
between or among Oasis and any of its Restricted Subsidiaries; provided, however, that (a) if
Oasis or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not Oasis
or a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment
in full in cash of all obligations then due with respect to the notes, in the case of Oasis, or
the Subsidiary Guarantee, in the case of a Subsidiary Guarantor; and (b) (i) any subsequent
issuance or transfer of Equity Interests that results in any such Indebtedness being held by a
Person other than Oasis or a Restricted Subsidiary and (ii) any sale or other transfer of any
such Indebtedness to a Person that is not either Oasis or a Restricted Subsidiary will be
deemed, in each case, to constitute an incurrence
32
of such Indebtedness by Oasis or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (6);
(7) the issuance by any of Oasis Restricted Subsidiaries to Oasis or to any of its Restricted
Subsidiaries of any preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such
preferred stock being held by a Person other than Oasis or a Restricted Subsidiary; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either
Oasis or a Restricted Subsidiary,
will be deemed, in each case, to constitute an issuance of such preferred stock by such
Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence of obligations of Oasis or a Restricted Subsidiary pursuant to Interest Rate
and Currency Hedges, in each case entered into in the ordinary course of business for the
non-speculative purpose of limiting risks that arise in the ordinary course of business of Oasis
and its Restricted Subsidiaries;
(9) the Guarantee by Oasis or any of the Subsidiary Guarantors of Indebtedness of Oasis or a
Restricted Subsidiary that was permitted to be incurred by another provision of this covenant;
provided that if the Indebtedness being Guaranteed is subordinated to or pari passu with the
notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent
as the Indebtedness Guaranteed;
(10) the incurrence by Oasis or any Restricted Subsidiary of Permitted Acquisition Indebtedness;
(11) the incurrence by Oasis or any Restricted Subsidiary of Indebtedness arising from the
honoring by a bank or other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within
five Business Days;
(12) the incurrence by Oasis or any Restricted Subsidiary of Indebtedness consisting of the
financing of insurance premiums in customary amounts consistent with the operations and business
of Oasis and its Restricted Subsidiaries;
(13) the incurrence by Oasis or any Restricted Subsidiary of Indebtedness constituting
reimbursement obligations with respect to letters of credit; provided that, upon the drawing of
such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(14) the incurrence by any Foreign Subsidiary of Indebtedness that, in the aggregate together
with all other Indebtedness of all Foreign Subsidiaries, (including all Permitted Refinancing
Indebtedness incurred to extend, renew, refund, refinance, replace, defease, discharge or
otherwise retire for value any Indebtedness incurred pursuant to this clause (14)) does not
exceed the greater of (a) 20.0% of the Adjusted Consolidated Net Tangible Assets of all Foreign
Subsidiaries, considered as a consolidated enterprise, determined as of the date of the
incurrence of such Indebtedness after giving pro forma effect to such incurrence and the
application of the proceeds therefrom and (b) $25.0 million; and
(15) the incurrence by Oasis or any of the Subsidiary Guarantors of Indebtedness in an aggregate
principal amount that, when taken together with all other Indebtedness of Oasis and its
Restricted Subsidiaries outstanding on the date of such incurrence (other than Indebtedness
permitted by clauses (1) through (14) above or the first paragraph of this covenant) and any
Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace,
defease, discharge or otherwise retire for value any Indebtedness incurred pursuant to this
clause (15) does not exceed the greater of (a) 5.0% of Adjusted Consolidated Net Tangible Assets
of Oasis, determined as of the date of the incurrence of such Indebtedness after giving pro
forma effect to such incurrence and the application of the proceeds therefrom and (b) $35.0
million.
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Oasis will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness
(including Permitted Debt) that is contractually subordinated in right of payment to any other
Indebtedness of Oasis or such Subsidiary Guarantor unless such Indebtedness is also contractually
subordinated in right of payment to the notes and the applicable Subsidiary Guarantee, on
substantially identical terms; provided, however, that no Indebtedness will be deemed to be
contractually subordinated in right of payment to any other Indebtedness of Oasis solely by virtue
of being unsecured or by virtue of being secured on a first or junior Lien basis.
For purposes of determining compliance with this Incurrence of Indebtedness and Issuance of
Preferred Stock covenant, (a) in the event that an item of proposed Indebtedness, Disqualified
Stock or preferred stock meets the criteria of more than one of the categories of Permitted Debt
described in clauses (1) through (15) of the second paragraph of this covenant, or is entitled to
be incurred or issued pursuant to the first paragraph of this covenant, Oasis will be permitted to
divide and classify such item on the date of its incurrence or issuance, or later divide and
reclassify all or a portion of such item, in any manner that complies with this covenant and (b)
all Indebtedness outstanding on the Issue Date under the Senior Credit Agreement shall be deemed
Incurred on the Issue Date under clause (1) of the second paragraph of this covenant. The accrual
of interest, the accretion or amortization of original issue discount, the payment of interest on
any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification
of preferred stock as Indebtedness due to a change in accounting principles, and the payment of
dividends on Disqualified Stock or preferred stock in the form of additional Disqualified Stock or
preferred stock of the same class will be deemed not to be an incurrence of Indebtedness or an
issuance of Disqualified Stock or preferred stock for purposes of this covenant; provided, in each
such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges
of Oasis as accrued.
For purposes of determining compliance with any U.S. dollar-denominated restriction on the
incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated
in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on
the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in
the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to
refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause
the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated
restriction shall be deemed not to have been exceeded so long as the principal amount of such
refinancing Indebtedness does not exceed the principal amount of such Indebtedness being
refinanced. Notwithstanding any other provision of this covenant, the maximum amount of
Indebtedness that Oasis or any Restricted Subsidiary may incur pursuant to this covenant shall not
be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The
principal amount of any Permitted Refinancing Indebtedness incurred to refinance other
Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be
calculated based on the currency exchange rate applicable to the currencies in which such Permitted
Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Limitation on Liens
Oasis will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur or permit to exist any Lien (the Initial Lien), other than Permitted Liens, upon
any of its property or assets (including Capital Stock and Indebtedness of any Subsidiaries of
Oasis and including any income or profits from such property or assets), whether owned on the Issue
Date or thereafter acquired, which Lien secures any Subordinated Debt or other Indebtedness,
unless:
(1) in the case of Liens securing Subordinated Debt of Oasis or a Subsidiary Guarantor, the
notes or Subsidiary Guarantee, as applicable, are secured by a Lien on such property or assets
on a senior basis to the Subordinated Debt so secured with the same priority as the notes or
such Subsidiary Guarantee, as applicable, has to such Subordinated Debt until such time as such
Subordinated Debt is no longer so secured by a Lien; and
(2) in the case of Liens securing other Indebtedness of Oasis or a Subsidiary Guarantor, the
notes or Subsidiary Guarantees, as applicable, are secured by a Lien on such property or assets
on an equal and ratable basis with the other Indebtedness so secured until such time as such
other Indebtedness is no longer so secured by a Lien.
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Any Lien securing the notes or Subsidiary Guarantees created pursuant to the preceding paragraph
shall provide by its terms that such Lien shall be automatically and unconditionally released and
discharged upon the unconditional release and discharge of the Initial Lien.
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
Oasis will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly,
create or permit to exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to:
(a) pay dividends or make any other distributions on its Capital Stock to Oasis or any of its
Restricted Subsidiaries, or pay any Indebtedness owed to Oasis or any of its Restricted
Subsidiaries;
(b) make loans or advances to Oasis or any of its Restricted Subsidiaries; or
(c) sell, lease or transfer any of its properties or assets to Oasis or any of its Restricted
Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or restrictions existing under,
by reason of or with respect to:
(1) the Senior Credit Agreement, any Existing Indebtedness, Capital Stock or any other
agreements or instruments, in each case in effect on February 2, 2011 and any amendments,
restatements, modifications, renewals, extensions, supplements, increases, refundings,
replacements or refinancings thereof; provided that the encumbrances and restrictions in any
such amendments, restatements, modifications, renewals, extensions, supplements, increases,
refundings, replacements or refinancings are, in the reasonable good faith judgment of the Chief
Executive Officer and the Chief Financial Officer of Oasis, no more restrictive, taken as a
whole, than those contained in the applicable agreements or instruments as in effect on February
2, 2011;
(2) the indenture, the notes and the Subsidiary Guarantees;
(3) applicable law, rule, regulation, order, approval, permit or similar restriction;
(4) any instrument governing Indebtedness or Capital Stock of a Person acquired by Oasis or any
of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the
extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of
such acquisition), which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property or assets of the
Person, so acquired and any amendments, restatements, modifications, renewals, extensions,
supplements, increases, refundings, replacements or refinancings thereof; provided, that the
encumbrances and restrictions in any such amendments, restatements, modifications, renewals,
extensions, supplements, increases, refundings, replacements or refinancings are, in the
reasonable good faith judgment of the Chief Executive Officer and Chief Financial Officer of
Oasis, no more restrictive, taken as a whole, than those in effect on the date of the
acquisition; provided, further, that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of the indenture to be incurred;
(5) customary non-assignment provisions in contracts, leases and licenses (including, without
limitation, licenses of intellectual property) entered into in the ordinary course of business;
(6) any agreement for the sale or other disposition of the Equity Interests in, or all or
substantially all of the properties or assets of, a Restricted Subsidiary, that restricts
distributions by the applicable Restricted Subsidiary pending the sale or other disposition;
(7) Permitted Refinancing Indebtedness; provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are not materially more
restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness
being refinanced;
(8) Liens permitted to be incurred under the provisions of the covenant described above under
the caption Limitation on Liens that limit the right of the debtor to dispose of the assets
subject to such Liens;
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(9) the issuance of preferred stock by a Restricted Subsidiary or the payment of dividends
thereon in accordance with the terms thereof; provided that issuance of such preferred stock is
permitted pursuant to the covenant described under the caption Incurrence of Indebtedness and
Issuance of Preferred Stock and the terms of such preferred stock do not expressly restrict the
ability of a Restricted Subsidiary to pay dividends or make any other distributions on its
Capital Stock (other than requirements to pay dividends or liquidation preferences on such
preferred stock prior to paying any dividends or making any other distributions on such other
Capital Stock);
(10) other Indebtedness of Oasis or any of its Restricted Subsidiaries permitted to be incurred
pursuant to an agreement entered into subsequent to the Issue Date in accordance with the
covenant described under the caption Incurrence of Indebtedness and Issuance of Preferred
Stock; provided that the provisions relating to such encumbrance or restriction contained in
such Indebtedness are not materially less favorable to Oasis and its Restricted Subsidiaries,
taken as a whole, in the reasonable good faith judgment of the Chief Executive Officer and Chief
Financial Officer of Oasis, than the provisions contained in the Senior Credit Agreement as in
effect on the Issue Date;
(11) Indebtedness incurred or Capital Stock issued by any Restricted Subsidiary, provided that
the restrictions contained in the agreements or instruments governing such Indebtedness or
Capital Stock (a) apply only in the event of a payment default or a default with respect to a
financial covenant in such agreement or instrument or (b) will not materially affect Oasis
ability to pay all principal, interest and premium, if any, on the notes, in the reasonable good
faith judgment of the Chief Executive Officer and Chief Financial Officer of Oasis;
(12) customary provisions restricting subletting or assignment of any lease governing a
leasehold interest;
(13) Hedging Obligations permitted from time to time under the indenture;
(14) restrictions on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business; and
(15) with respect only to encumbrances or restrictions of the type referred to in clause (c) of
the immediately preceding paragraph:
(a) customary nonassignment provisions (including provisions forbidding subletting) in leases
governing leasehold interests or Farm-In Agreements or Farm-Out Agreements relating to
leasehold interests in oil and gas properties to the extent such provisions restrict the
transfer of the lease, the property leased thereunder or the other interests therein;
(b) provisions limiting the disposition or distribution of assets or property in, or transfer
of Capital Stock of, joint venture agreements, asset sale agreements, sale-leaseback
agreements, stock sale agreements and other similar agreements entered into (i) in the
ordinary course of business, or (ii) with the approval of Oasis Board of Directors, which
limitations are applicable only to the assets, property or Capital Stock that are the subject
of such agreements; and
(c) Capital Lease Obligations, security agreements, mortgages, purchase money agreements or
similar instruments to the extent such encumbrance or restriction restricts the transfer of
the property (including Capital Stock) subject to such Capital Lease Obligations, security
agreements, mortgages, purchase money agreements or similar instruments.
Transactions with Affiliates
Oasis will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate of Oasis
(each, an Affiliate Transaction), unless:
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(1) the Affiliate Transaction is on terms that are no less favorable to Oasis or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable transaction by
Oasis or such Restricted Subsidiary with a Person that is not an Affiliate of Oasis; and
(2) Oasis delivers to the trustee:
(a) with respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $15.0 million, a resolution of the Board of
Directors of Oasis set forth in an Officers Certificate certifying that such Affiliate
Transaction or series of related Affiliate Transactions complies with this covenant and that
such Affiliate Transaction or series of related Affiliate Transactions has been approved by a
majority of the disinterested members of the Board of Directors of Oasis; and
(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $30.0 million, an opinion as to the fairness
to Oasis or such Restricted Subsidiary of such Affiliate Transaction or series of related
Affiliate Transactions from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
The following items will not be deemed to be Affiliate Transactions and, therefore, will not be
subject to the provisions of the prior paragraph:
(1) any employment, consulting or similar agreement or arrangement, stock option or stock
ownership plan, employee benefit plan, officer or director indemnification agreement, restricted
stock agreement, severance agreement or other compensation plan or arrangement entered into by
Oasis or any of its Restricted Subsidiaries in the ordinary course of business and payments,
awards, grants or issuances of securities pursuant thereto;
(2) transactions between or among Oasis and/or its Restricted Subsidiaries;
(3) transactions with a Person (other than an Unrestricted Subsidiary) that is an Affiliate of
Oasis solely because Oasis owns, directly or through a Subsidiary, an Equity Interest in, or
controls, such Person;
(4) reasonable fees and expenses and compensation paid to, and indemnity or insurance provided
on behalf of, officers, directors or employees of Oasis or any of its Restricted Subsidiaries;
(5) any issuance of Equity Interests (other than Disqualified Stock) of Oasis to, or receipt of
a capital contribution from, Affiliates of Oasis;
(6) Restricted Payments that do not violate the provisions of the indenture described above
under the caption Restricted Payments or any Permitted Investments;
(7) loans or advances to employees in the ordinary course of business or consistent with past
practice;
(8) advances to or reimbursements of employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business;
(9) the performance of obligations of Oasis or any of its Restricted Subsidiaries under the
terms of any written agreement to which Oasis or any of its Restricted Subsidiaries was a party
on February 2, 2011, as these agreements may be amended, modified or supplemented from time to
time; provided, however, that any future amendment, modification or supplement entered into
after the Issue Date will be permitted to the extent that its terms do not materially and
adversely affect the rights of any holders of the notes (as determined in good faith by the
Board of Directors of Oasis) as compared to the terms of the agreements in effect on February 2,
2011;
(10) (a) guarantees of performance by Oasis and its Restricted Subsidiaries of Unrestricted
Subsidiaries in the ordinary course of business, except for Guarantees of Indebtedness in
respect of borrowed money, and (b) pledges of Equity Interests of Unrestricted Subsidiaries for
the benefit of lenders of Unrestricted Subsidiaries;
37
(11) transactions between Oasis or any Restricted Subsidiary and any Person, a director of which
is also a director of Oasis or any direct or indirect parent company of Oasis and such director
is the sole cause for such Person to be deemed an Affiliate of Oasis or any Restricted
Subsidiary; provided, however, that such director abstains from voting as director of Oasis or
such direct or indirect parent company of Oasis, as the case may be, on any matter involving
such other Person; and
(12) transactions with customers, clients, suppliers, or purchasers or sellers of goods or
services, in each case in the ordinary course of business and otherwise in compliance with the
terms of the indenture, provided that in the reasonable determination of the Board of Directors
of Oasis or the senior management of Oasis, such transactions are on terms not materially less
favorable to Oasis or the relevant Restricted Subsidiary than those that could reasonably be
expected to be obtained in a comparable transaction at such time on an arms-length basis from a
Person that is not an Affiliate of Oasis.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors of Oasis may designate any Restricted Subsidiary to be an Unrestricted
Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated
as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned
by Oasis and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary
will be deemed to be an Investment made as of the time of the designation. That designation will
only be permitted if the applicable Restricted Subsidiary meets the definition of an Unrestricted
Subsidiary and if such Investment would be permitted at that time, either pursuant to (a) the
covenant described above under the caption Restricted Payments or (b) the definition of
Permitted Investment.
Any designation of a Subsidiary of Oasis as an Unrestricted Subsidiary will be evidenced to the
trustee by filing with the trustee a certified copy of a resolution of the Board of Directors of
Oasis giving effect to such designation and an Officers Certificate certifying that such
designation complied with the preceding conditions and was permitted by the covenant described
above under the caption Restricted Payments. If, at any time, any Unrestricted Subsidiary would
fail to meet the requirements of the definition of Unrestricted Subsidiary set forth below under
Definitions, it will thereafter cease to be an Unrestricted Subsidiary for purposes of the
indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted
Subsidiary as of such date and, if such Indebtedness is not permitted to be incurred as of such
date under the covenant described under the caption Incurrence of Indebtedness and Issuance of
Preferred Stock, Oasis will be in Default of such covenant.
The Board of Directors of Oasis may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted
Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under
the covenant described under the caption Incurrence of Indebtedness and Issuance of Preferred
Stock, calculated on a pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period; and (2) no Default or Event of Default would be in existence
following such designation.
Reports
Regardless of whether required by the rules and regulations of the SEC, so long as any notes are
outstanding, Oasis will file with the SEC for public availability, within the time periods
specified in the SECs rules and regulations (unless the SEC will not accept such a filing, in
which case Oasis will comply with the requirements described in the second succeeding paragraph):
(1) all quarterly and annual reports that would be required to be filed with the SEC on Forms
10-Q and 10-K if Oasis were required to file such reports; and
(2) all current reports that would be required to be filed with the SEC on Form 8-K if Oasis
were required to file such reports.
All such reports will be prepared in all material respects in accordance with all of the rules and
regulations applicable to such reports. Each annual report on Form 10-K will include a report on
Oasis consolidated financial statements by Oasis certified independent accountants.
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If, at any time, Oasis is no longer subject to the periodic reporting requirements of the Exchange
Act for any reason, Oasis will nevertheless continue filing the reports specified in the preceding
paragraphs of this covenant with the SEC within the time periods specified above unless the SEC
will not accept such a filing. Oasis will not take any action for the purpose of causing the SEC
not to accept any such filings. If, notwithstanding the foregoing, the SEC will not accept Oasis
filings for any reason, Oasis will post the reports referred to in the preceding paragraphs on its
website within the time periods that would apply if Oasis were required to file those reports with
the SEC.
If Oasis has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly
and annual financial information required by the preceding paragraphs will include a reasonably
detailed presentation, either on the face of the financial statements or in the footnotes thereto,
and in Managements Discussion and Analysis of Financial Condition and Results of Operations, of
the financial condition and results of operations of Oasis and its Restricted Subsidiaries separate
from the financial condition and results of operations of the Unrestricted Subsidiaries.
In addition, Oasis agrees that, for so long as any notes remain outstanding, if at any time it is
not required to file with the SEC the reports required by the preceding paragraphs, it will furnish
to the holders of notes and to securities analysts and prospective investors, upon their request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Subsidiary Guarantees
If, after February 2, 2011, (a) any Material Domestic Subsidiary that is not already a Subsidiary
Guarantor incurs any Indebtedness in excess of a De Minimis Amount, or issues any preferred stock
or (b) any Domestic Restricted Subsidiary incurs any Indebtedness whatsoever in respect of
obligations under the Senior Credit Agreement, then such Subsidiary (referred to in clause (a) or
(b) of this sentence) will become a Subsidiary Guarantor by executing and delivering a supplemental
indenture, in the form provided for in the indenture, to the trustee within 30 days of the date on
which it incurred such Indebtedness or issued such preferred stock (in each case, referred to in
clause (a) or (b) of this sentence). The Subsidiary Guarantee of a Subsidiary Guarantor will be
released upon request of the Subsidiary Guarantor at such time as such Subsidiary Guarantor is not
liable for any Indebtedness and has no preferred stock outstanding, as long as at the time of such
release, (i) no Default or Event of Default has occurred and is continuing, (ii) the Subsidiary
Guarantor is not an obligor party to any undrawn Credit Facility or any Credit Facility under which
letters of credit are outstanding or any instrument governing the terms of undrawn Indebtedness or
any Guarantee thereof and (iii) the Subsidiary Guarantor has not been liable under any Indebtedness
whatsoever during the immediately preceding 181 consecutive days.
Merger, Consolidation or Sale of Substantially All Assets
Oasis will not (1) consolidate or merge with or into another Person (regardless of whether Oasis is
the surviving corporation), convert into another form of entity or continue in another
jurisdiction; or (2), directly or indirectly, sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets, in one or more related
transactions, to another Person, unless:
(1) either: (a) Oasis is the surviving corporation; or (b) the Person formed by or surviving any
such consolidation or merger or resulting from such conversion (if other than Oasis) or to which
such sale, assignment, transfer, lease, conveyance or other disposition has been made is a
corporation, limited liability company or limited partnership organized or existing under the
laws of the United States, any state of the United States or the District of Columbia;
(2) the Person formed by or surviving any such conversion, consolidation or merger (if other
than Oasis) or the Person to which such sale, assignment, transfer, lease, conveyance or other
disposition has been made assumes all the obligations of Oasis under the notes and the indenture
pursuant to agreements reasonably satisfactory to the trustee;
provided that, unless such Person is a corporation, a corporate co-issuer of the notes will be
added to the indenture by a supplement reasonably satisfactory to the trustee;
39
(3) immediately after such transaction or transactions, no Default or Event of Default exists;
and
(4) Oasis or the Person formed by or surviving any such consolidation or merger (if other than
Oasis), or to which such sale, assignment, transfer, lease, conveyance or other disposition has
been made, would (on the date of such transaction after giving pro forma effect thereto and to
any related financing transactions as if the same had occurred at the beginning of the
applicable four-quarter period) either (a) be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph
of the covenant described above under the caption Incurrence of Indebtedness and Issuance of
Preferred Stock; or (b) have a Fixed Charge Coverage Ratio that is not less than the Fixed
Charge Coverage Ratio of Oasis and its Restricted Subsidiaries immediately before such
transaction.
For purposes of this covenant, the sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the properties or assets of one or more Subsidiaries of
Oasis, which properties or assets, if held by Oasis instead of such Subsidiaries, would constitute
all or substantially all of the properties or assets of Oasis on a consolidated basis, shall be
deemed to be the transfer of all or substantially all of the properties or assets of Oasis.
The surviving entity will succeed to, and be substituted for, and may exercise every right and
power of, Oasis under the indenture; provided, however, that Oasis will not be released from the
obligation to pay the principal of, premium, if any, and interest on the notes in the case of a
lease of all or substantially all of Oasis properties or assets in a transaction that is subject
to, and that complies with the provisions of, this covenant.
Notwithstanding the restrictions described in the foregoing clause (4), any Restricted Subsidiary
may consolidate with, merge into or dispose of all or part of its properties or assets to Oasis,
Oasis may merge into a Restricted Subsidiary for the purpose of reincorporating Oasis in another
jurisdiction, and any Restricted Subsidiary may consolidate with, merge into or dispose of all or
part of its properties or assets to another Restricted Subsidiary.
Although there is a limited body of case law interpreting the phrase substantially all, there is
no precise established definition of the phrase under applicable law. Accordingly, in certain
circumstances there may be a degree of uncertainty as to whether a particular transaction would
involve all or substantially all of the properties or assets of a Person.
Covenant Termination
From and after the occurrence of an Investment Grade Rating Event, we and our Restricted
Subsidiaries will no longer be subject to the following provisions of the indenture (collectively,
the Terminated Covenants):
(a) clause (4) of the covenant described under CovenantsMerger, Consolidation or Sale of
Substantially All Assets and
(b) the provisions of the indenture described above under the following headings:
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Repurchase at the Option of HoldersAsset Sales; |
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CovenantsRestricted Payments; |
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CovenantsIncurrence of Indebtedness and Issuance of Preferred Stock; |
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CovenantsDividend and Other Payment Restrictions Affecting Subsidiaries;
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CovenantsTransactions with Affiliates. |
Furthermore, after an Investment Grade Rating Event, Oasis may not designate any of its
Subsidiaries as Unrestricted Subsidiaries.
Consequently, after the date on which we and our Restricted Subsidiaries are no longer subject to
the Terminated Covenants, the notes will be entitled to substantially reduced covenant protection.
However, we and our Restricted
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Subsidiaries will remain subject to all other covenants in the indenture, including those described
above under Repurchase at the Option of HoldersChange of Control and CovenantsSubsidiary
Guarantees.
Events of Default
Under the indenture, each of the following constitutes an Event of Default with respect to the
notes:
(1) default for 30 days in the payment when due of interest on the notes;
(2) default in the payment when due of the principal of, or premium, if any, on the notes;
(3) failure by Oasis to comply with its obligations under CovenantsMerger, Consolidation or
Sale of Substantially All Assets or to consummate a purchase of notes when required pursuant to
the covenants described under the caption Repurchase at the Option of Holders;
(4) failure by Oasis or any of its Restricted Subsidiaries for 30 days after written notice from
the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding
notes to comply with the provisions described under the captions CovenantsRestricted
Payments or CovenantsIncurrence of Indebtedness and Issuance of Preferred Stock or to
comply with the provisions described under the captions Repurchase at the Option of Holders
to the extent not described in clause (3) above;
(5) failure by Oasis or any of its Restricted Subsidiaries for 60 days (or 180 days in the case
of a Reporting Failure) after written notice from the trustee or the holders of at least 25% in
aggregate principal amount of the then outstanding notes to comply with any of the other
agreements in the indenture or the notes;
(6) default under any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed by Oasis or any of
its Restricted Subsidiaries (or the payment of which is Guaranteed by Oasis or any of its
Restricted Subsidiaries), other than Indebtedness owed to Oasis or any of its Restricted
Subsidiaries, whether such Indebtedness or Guarantee now exists, or is created after February 2,
2011, which default:
(a) is caused by a failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such Indebtedness
(Payment Default); or
(b) results in the acceleration of such Indebtedness prior to its maturity;
and, in each case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or more;
(7) failure by Oasis or any Significant Subsidiary or group of Oasis Restricted Subsidiaries
that, taken together (as of the latest audited consolidated financial statements for Oasis and
its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments
aggregating in excess of $10.0 million (net of any amounts that a reputable and creditworthy
insurance company has acknowledged liability for in writing), which judgments are not paid,
discharged or stayed for a period of 60 days;
(8) except as permitted by the indenture, any Subsidiary Guarantee is held in a judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full force and
effect, or any Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary Guarantor,
denies or disaffirms its obligations under its Subsidiary Guarantee; or
(9) certain events of bankruptcy, insolvency or reorganization with respect to Oasis or a
Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the
latest audited consolidated financial statements for Oasis and its Restricted Subsidiaries),
would constitute a Significant Subsidiary.
41
The indenture provides that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to Oasis, any Restricted Subsidiary that is a Significant
Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all then outstanding notes will become due and payable immediately without
further action or notice. However, the effect of such provision may be limited by applicable law.
If any other Event of Default occurs and is continuing, the trustee or the holders of at least 25%
in aggregate principal amount of the then outstanding notes may declare all of the notes to be due
and payable immediately by notice in writing to Oasis and, in case of a notice by holders, also to
the trustee specifying the respective Event of Default and that it is a notice of acceleration.
Subject to certain limitations, holders of a majority in aggregate principal amount of the then
outstanding notes may direct the trustee in its exercise of any trust or power with respect to the
notes. The trustee may withhold from holders of the notes notice of any continuing Default or Event
of Default if it determines that withholding notice is in their interest, except a Default or Event
of Default relating to the payment of principal, interest or premium, if any.
Subject to the provisions of the indenture relating to the duties of the trustee in case an Event
of Default occurs and is continuing, the trustee will be under no obligation to exercise any of the
rights or powers under the indenture at the request or direction of any holders of notes unless
such holders have offered to the trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of principal, premium, if any,
or interest, when due, no holder of a note may pursue any remedy with respect to the indenture or
the notes unless:
(a) such holder has previously given the trustee notice of a continuing Event of Default;
(b) holders of at least 25% in aggregate principal amount of the then outstanding notes have
made a written request to the trustee to pursue the remedy;
(c) such holders have offered the trustee reasonable security or indemnity against any loss,
liability or expense;
(d) the trustee has not complied with such request within 60 days after the receipt of the
request and the offer of security or indemnity; and
(e) holders of a majority in aggregate principal amount of the then outstanding notes have not
given the trustee a direction that is inconsistent with such request within such 60-day period.
The holders of a majority in aggregate principal amount of the then outstanding notes by notice to
the trustee may, on behalf of the holders of all of the notes, rescind an acceleration or waive any
existing Default or Event of Default and its consequences under the indenture except a continuing
Default or Event of Default in the payment of interest or premium, if any, on, or the principal of,
the notes.
Notwithstanding the foregoing, if an Event of Default specified in clause (6) above shall have
occurred and be continuing, such Event of Default and any consequential acceleration (to the extent
not in violation of any applicable law or in conflict with any judgment or decree of a court of
competent jurisdiction) shall be automatically rescinded if (a) (i) the Indebtedness that is the
subject of such Event of Default has been repaid or (ii) if the default relating to such
Indebtedness is waived by the holders of such Indebtedness or cured and if such Indebtedness has
been accelerated, then the holders thereof have rescinded their declaration of acceleration in
respect of such Indebtedness, in each case within 20 days after the declaration of acceleration
with respect thereto, and (b) any other existing Events of Default, except nonpayment of principal,
premium, if any, or interest on the Notes that became due solely because of the acceleration of the
Notes, have been cured or waived.
Oasis is required to deliver to the trustee annually an Officers Certificate regarding compliance
with the indenture. Upon becoming aware of any Default or Event of Default, Oasis is required
within five Business Days to deliver to the trustee a statement specifying such Default or Event of
Default.
42
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator, stockholder, member, manager or partner of Oasis or
any Subsidiary Guarantor, as such, will have any liability for any obligations of Oasis or the
Subsidiary Guarantors under the notes, the indenture, the Subsidiary Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes
by accepting a note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the notes. The waiver may not be effective to waive liabilities under
the federal securities laws.
Legal Defeasance and Covenant Defeasance
Oasis may, at any time, at the option of its Board of Directors evidenced by a resolution set forth
in an Officers Certificate, elect to have all of its obligations discharged with respect to the
outstanding notes and all obligations of the Subsidiary Guarantors discharged with respect to their
Subsidiary Guarantees (Legal Defeasance) except for:
(1) the rights of holders of outstanding notes to receive payments in respect of the principal
of, or interest or premium, if any, on such notes when such payments are due from the trust
referred to below;
(2) Oasis obligations with respect to the notes concerning issuing temporary notes,
registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an
office or agency for payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the trustee, and Oasis and the
Subsidiary Guarantors obligations in connection therewith; and
(4) the Legal Defeasance and Covenant Defeasance provisions of the indenture.
In addition, Oasis may, at its option and at any time, elect to have the obligations of Oasis and
the Subsidiary Guarantors released with respect to the provisions of the indenture described above
under Repurchase at the Option of Holders and under Covenants (other than the covenant
described under CovenantsMerger, Consolidation or Sale of Substantially All Assets, except to
the extent described below) and the limitation imposed by clause (4) under CovenantsMerger,
Consolidation or Sale of Substantially All Assets (such release and termination being referred to
as Covenant Defeasance), and thereafter any omission to comply with such obligations or
provisions will not constitute a Default or Event of Default with respect to the notes. In the
event Covenant Defeasance occurs in accordance with the indenture, the Events of Default described
under clauses (3) through (7) under the caption Events of Default and the Event of Default
described under clause (9) under the caption Events of Default (but only with respect to
Subsidiaries of Oasis), in each case, will no longer constitute an Event of Default with respect to
the notes. In addition, upon the occurrence of Covenant Defeasance all obligations of the
Subsidiary Guarantors with respect to their Subsidiary Guarantees will be discharged.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) Oasis must irrevocably deposit with the trustee, in trust, for the benefit of the holders of
the notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in
U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the
opinion of a nationally recognized investment bank, appraisal firm or firm of independent public
accountants to pay the principal of, or interest and premium, if any, on the outstanding notes
on the stated date for payment thereof or on the applicable redemption date, as the case may be,
and Oasis must specify whether the notes are being defeased to such stated date for payment or
to a particular redemption date;
(2) in the case of Legal Defeasance, Oasis must deliver to the trustee an opinion of counsel
reasonably acceptable to the trustee confirming that (a) Oasis has received from, or there has
been published by, the Internal Revenue Service a ruling or (b) since February 2, 2011, there
has been a change in the applicable U.S. federal income tax law, in either case to the effect
that, and based thereon such opinion of counsel will confirm that, the holders of the
outstanding notes will not recognize income, gain or loss for U.S. federal income tax purposes
as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
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(3) in the case of Covenant Defeasance, Oasis has delivered to the trustee an opinion of counsel
reasonably acceptable to the trustee confirming that the holders of the outstanding notes will
not recognize income, gain or loss for U.S. federal income tax purposes as a result of such
Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant Defeasance had
not occurred;
(4) no Default or Event of Default has occurred and is continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of funds to be applied to
such deposit or the grant of Liens securing such borrowing);
(5) such Legal Defeasance or Covenant Defeasance and the related deposit will not result in a
breach or violation of, or constitute a default under, any material agreement or instrument
(other than the indenture) to which Oasis or any of its Subsidiaries is a party or by which
Oasis or any of its Subsidiaries is bound;
(6) Oasis must deliver to the trustee an Officers Certificate stating that the deposit was not
made by Oasis with the intent of preferring the holders of notes over the other creditors of
Oasis with the intent of defeating, hindering, delaying or defrauding any creditors of Oasis or
others;
(7) Oasis must deliver to the trustee an Officers Certificate, stating that all conditions
precedent set forth in clauses (1) through (6) of this paragraph have been complied with; and
(8) Oasis must deliver to the trustee an opinion of counsel, stating that all conditions
precedent set forth in clauses (2), (3) and (5) of this paragraph have been complied with.
Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the indenture, the debt securities issued
thereunder (including the notes) or any Guarantee thereof may be amended or supplemented with the
consent of the holders of a majority in aggregate principal amount of the then-outstanding debt
securities of each series affected by such amendment or supplemental indenture, with each such
series voting as a separate class (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, debt securities) and, subject to certain
exceptions relating to waivers of past Defaults and rights of holders of notes to receive payment,
any existing Default or Event of Default or compliance with any provision of the indenture or the
debt securities issued thereunder (including the notes) or any Guarantee thereof may be waived with
respect to each series of debt securities with the consent of the holders of a majority in
aggregate principal amount of the then- outstanding debt securities of such series voting as a
separate class (including, without limitation, consents obtained in connection with a purchase of,
or tender offer or exchange offer for, debt securities).
Without the consent of each holder of the outstanding debt securities affected, an amendment,
supplement or waiver may not (with respect to any notes held by a non-consenting holder):
(1) change the Stated Maturity of the principal of, or any installment of principal of or
interest on, any debt security, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or reduce the amount of the
principal of an original issue discount security that would be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to the indenture, or change any
place of payment where, or the coin or currency in which, any debt security or any premium or
the interest thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or
after the redemption date therefor);
(2) reduce the percentage in principal amount of the then-outstanding debt securities of any
series, the consent of whose holders is required for any such amendment, supplement or waiver;
(3) modify any of the provisions set forth in (i) the provisions of the indenture related to the
holders unconditional right to receive principal, premium, if any, and interest on the debt
securities or (ii) the provisions of the indenture related to the waiver of past Defaults under
such indenture except to increase any such
44
percentage or to provide that certain other provisions of such indenture cannot be modified or
waived without the consent of the holder of each then-outstanding debt security affected
thereby;
(4) waive a redemption payment with respect to any debt security; provided, however, that any
purchase or repurchase of debt securities shall not be deemed a redemption of the debt
securities;
(5) release any Subsidiary Guarantor from any of its obligations under its Subsidiary Guarantee
or the indenture, except in accordance with the terms of such indenture (as supplemented by any
supplemental indenture); or
(6) make any change in the foregoing amendment and waiver provisions of the indenture.
Notwithstanding the foregoing, without the consent of any holder of debt securities, Oasis, the
Subsidiary Guarantors (if any) and the trustee may amend or supplement the indenture or the debt
securities or the Guarantees thereof issued thereunder to:
(1) cure any ambiguity or defect or to correct or supplement any provision therein that may be
inconsistent with any other provision therein;
(2) evidence the succession of another Person to Oasis and the assumption by any such successor
of the covenants of Oasis therein and, to the extent applicable, to the debt securities;
(3) provide for uncertificated notes in addition to or in place of certificated notes;
(4) add a Subsidiary Guarantee and cause any Person to become a Subsidiary Guarantor, and/or to
evidence the succession of another Person to a Subsidiary Guarantor and the assumption by any
such successor of the Subsidiary Guarantee of such Subsidiary Guarantor therein;
(5) secure the debt securities of any series;
(6) add to the covenants of Oasis such further covenants, restrictions, conditions or provisions
as Oasis shall consider to be appropriate for the benefit of the holders of all or any series of
debt securities (and if such covenants, restrictions, conditions or provisions are to be for the
benefit of less than all series of debt securities, stating that such covenants are expressly
being included solely for the benefit of such series) or to surrender any right or power therein
conferred upon Oasis and to make the occurrence, or the occurrence and continuance, of a Default
in any such additional covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies provided in the indenture as
set forth therein; provided, that in respect of any such additional covenant, restriction,
condition or provision, such supplemental indenture may provide for a particular period of grace
after Default (which period may be shorter or longer than that allowed in the case of other
Defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit
the remedies available to the trustee upon such an Event of Default or may limit the right of
the holders of a majority in aggregate principal amount of the debt securities of such series to
waive such an Event of Default;
(7) make any change to any provision of the indenture that would provide any additional rights
or benefits to the holders of the debt securities issued thereunder or that does not adversely
affect the rights or interests of any such holder;
(8) provide for the issuance of additional debt securities in accordance with the provisions set
forth in the indenture on the date of such indenture;
(9) add any additional Defaults or Events of Default in respect of all or any series of debt
securities;
(10) change or eliminate any of the provisions of the indenture; provided that any such
change or elimination shall become effective only when there is no debt security outstanding of
any series created prior to the execution of such supplemental indenture that is entitled to the
benefit of such provision;
45
(11) establish the form or terms of debt securities of any series as permitted thereunder,
including to reopen any series of any debt securities as permitted thereunder;
(12) evidence and provide for the acceptance of appointment thereunder by a successor trustee
with respect to the debt securities of one or more series and to add to or change any of the
provisions of the indenture as shall be necessary to provide for or facilitate the
administration of the trusts thereunder by more than one trustee, pursuant to the requirements
of such indenture;
(13) conform the text of the indenture (and/or any supplemental indenture) or any debt
securities issued thereunder to any provision of a description of such debt securities appearing
in a prospectus or prospectus supplement or an offering memorandum or offering circular pursuant
to which such debt securities were offered to the extent that such provision was intended to be
a verbatim recitation of a provision of such indenture (and/or any supplemental indenture) or
any debt securities or Guarantees issued thereunder;
(14) add a corporate co-issuer in accordance with the covenant set forth under the caption
CovenantsMerger, Consolidation or Sale of Substantially All Assets; or
(15) modify, eliminate or add to the provisions of the indenture to such extent as shall be
necessary to effect the qualification of such indenture under the Trust Indenture Act, or under
any similar federal statute subsequently enacted, and to add to such indenture such other
provisions as may be expressly required under the Trust Indenture Act.
The consent of the holders is not necessary under the indenture to approve the particular form of
any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the
substance thereof. After an amendment, supplement or waiver under the indenture requiring approval
of the holders becomes effective, Oasis shall mail to the holders of debt securities affected
thereby a notice briefly describing such amendment, supplement or waiver. However, the failure to
give such notice to all such holders, or any defect therein, will not impair or affect the validity
of the applicable amendment, supplement or waiver.
Satisfaction and Discharge
The indenture will be discharged and will cease to be of further effect as to all notes issued
thereunder (except as to surviving rights of registration of transfer or exchange of the notes and
as otherwise specified in the indenture), when:
(a) all notes that have been authenticated, except lost, stolen or destroyed notes that have
been replaced or paid and notes for whose payment money has been deposited in trust and
thereafter repaid to Oasis, have been delivered to the trustee for cancellation; or
(b) all notes that have not been delivered to the trustee for cancellation have become due
and payable by reason of the mailing of a notice of redemption or otherwise or will become
due and payable within one year and Oasis or any Subsidiary Guarantor has irrevocably
deposited or caused to be deposited with the trustee as trust funds in trust solely for the
benefit of the holders, cash in U.S. dollars, non-callable Government Securities, or a
combination of cash in U.S. dollars and non-callable Government Securities, in amounts as
will be sufficient, without consideration of any reinvestment of interest, to pay and
discharge the entire Indebtedness on the notes not delivered to the trustee for cancellation
for principal, premium, if any, and accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is continuing on the date of the deposit
(other than a Default or Event of Default resulting from the borrowing of funds to be applied to
such deposit or the grant of Liens securing such borrowing);
46
(3) such deposit will not result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than the indenture) to which Oasis or any Subsidiary
Guarantor is a party or by which Oasis or any Subsidiary Guarantor is bound;
(4) Oasis or any Subsidiary Guarantor has paid or caused to be paid all sums payable by it under
the indenture; and
(5) Oasis has delivered irrevocable instructions to the trustee to apply the deposited money
toward the payment of the notes at maturity or on the redemption date, as the case may be.
In addition, Oasis must deliver to the trustee (a) an Officers Certificate, stating that all
conditions precedent set forth in clauses (1) through (5) above have been satisfied and (b) an
opinion of counsel, stating that all conditions precedent set forth in clauses (3) and (5) above
have been satisfied.
Concerning the Trustee
If the trustee becomes a creditor of Oasis or any Subsidiary Guarantor, the indenture will limit
the right of the trustee to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or otherwise. The trustee will be
permitted to engage in other transactions; however, if it acquires any conflicting interest (as
defined in the Trust Indenture Act) after a Default has occurred and is continuing, it must
eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee (if
the indenture has been qualified under the Trust Indenture Act) or resign.
The holders of a majority in aggregate principal amount of the then outstanding notes will have the
right to direct the time, method and place of conducting any proceeding for exercising any remedy
available to the trustee, subject to certain exceptions. If an Event of Default occurs and is
continuing, the trustee will be required, in the exercise of its powers, to use the degree of care
of a prudent man in the conduct of his own affairs. Subject to such provisions, the trustee will be
under no obligation to exercise any of its rights or powers under the indenture at the request of
any holder of notes, unless such holder has offered to the trustee reasonable security or indemnity
against any loss, liability or expense.
Governing Law
The indenture, the notes and the Subsidiary Guarantees are to be governed by the laws of the State
of New York.
Book-Entry, Delivery and Form
The new notes will be represented by one or more notes in registered, global form without interest
coupons (collectively, the Global Notes). The Global Notes will be deposited with the trustee as
custodian for The Depository Trust Company (DTC), and registered in the name of DTC or its
nominee, in each case for credit to an account of a direct or indirect participant in DTC as
described below.
Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to
another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global
Notes may not be exchanged for definitive new notes in registered certificated form (Certificated
Notes) except in the limited circumstances described below. See Exchange of Global Notes for
Certificated Notes. Except in the limited circumstances described below, owners of beneficial
interests in the Global Notes will not be entitled to receive physical delivery of notes in
certificated form.
Depository Procedures
The following description of the operations and procedures of DTC is provided solely as a matter of
convenience. These operations and procedures are solely within the control of DTCs settlement
system and are subject to changes by DTC. Oasis takes no responsibility for these operations and
procedures and urges investors to contact DTC or their participants directly to discuss these
matters.
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DTC has advised Oasis that DTC is a limited-purpose trust company created to hold securities for
its participating organizations (collectively, the Participants) and to facilitate the clearance
and settlement of transactions in those securities between the Participants through electronic
book-entry changes in accounts of its Participants. The Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other organizations. Access to
DTCs system is also available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a Participant, either
directly or indirectly (collectively, the Indirect Participants). Persons who are not
Participants may beneficially own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership interests in, and transfers of ownership
interests in, each security held by or on behalf of DTC are recorded on the records of the
Participants and Indirect Participants.
DTC has also advised Oasis that, pursuant to procedures established by it:
(1) upon deposit of the Global Notes, DTC will credit the accounts of the Participants
designated by the exchange agent with portions of the principal amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on, and the transfer of
ownership of these interests will be effected only through, records maintained by DTC (with
respect to the Participants) or by the Participants and the Indirect Participants (with respect
to other owners of beneficial interests in the Global Notes).
Investors in the Global Notes who are Participants may hold their interests therein directly
through DTC. Investors in the Global Notes who are not Participants may hold their interests
therein indirectly through organizations which are Participants in such system. The laws of some
states may require that certain Persons take physical delivery in definitive form of securities
that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such
Persons will be limited to that extent. Because DTC can act only on behalf of the Participants,
which in turn act on behalf of the Indirect Participants, the ability of a Person having beneficial
interests in a Global Note to pledge such interests to Persons that do not participate in the DTC
system, or otherwise take actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests.
Except as described below, owners of interests in the Global Notes will not have notes registered
in their names, will not receive physical delivery of Certificated Notes and will not be considered
the registered owners or holders thereof under the indenture for any purpose.
Payments in respect of the principal of, and interest and premium, if any, on a Global Note
registered in the name of DTC or its nominee will be payable to DTC in its capacity as the
registered holder under the indenture. Under the terms of the indenture, Oasis, the Subsidiary
Guarantors and the trustee will treat the Persons in whose names the new notes, including the
Global Notes, are registered as the owners of the new notes for the purpose of receiving payments
and for all other purposes. Consequently, neither Oasis, the Subsidiary Guarantors, the trustee nor
any agent of any of them has or will have any responsibility or liability for:
(1) any aspect of DTCs records or any Participants or Indirect Participants records relating
to or payments made on account of beneficial ownership interest in the Global Notes or for
maintaining, supervising or reviewing any of DTCs records or any Participants or Indirect
Participants records relating to the beneficial ownership interests in the Global Notes; or
(2) any other matter relating to the actions and practices of DTC or any of its Participants or
Indirect Participants.
DTC has advised Oasis that its current practice, at the due date of any payment in respect of
securities such as the new notes (including principal and interest), is to credit the accounts of
the relevant Participants with the payment on the payment date unless DTC has reason to believe
that it will not receive payment on such payment date. Each relevant Participant is credited with
an amount proportionate to its beneficial ownership of an interest in the principal amount of the
relevant security as shown on the records of DTC. Payments by the Participants and the Indirect
Participants to the beneficial owners of new notes will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the Indirect Participants
and will not be the
48
responsibility of DTC, the trustee or Oasis. Neither Oasis nor the trustee will be liable for any
delay by DTC or any of its Participants in identifying the beneficial owners of the new notes, and
Oasis and the trustee may conclusively rely on and will be protected in relying on instructions
from DTC or its nominee for all purposes.
Transfers between Participants will be effected in accordance with DTCs procedures, and will be
settled in same-day funds.
DTC has advised Oasis that it will take any action permitted to be taken by a holder of notes only
at the direction of one or more Participants to whose account DTC has credited the interests in the
Global Notes and only in respect of such portion of the aggregate principal amount of the notes as
to which such Participant or Participants has or have given such direction. However, if there is an
Event of Default under the notes, DTC reserves the right to exchange the Global Notes for legended
new notes in certificated form, and to distribute such new notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate
transfers of interests in the Rule 144A Global Notes and the Regulation S Global Notes among
participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to
continue to perform such procedures, and may discontinue such procedures at any time. Neither Oasis
nor the trustee nor any of their respective agents will have any responsibility for the performance
by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their
respective obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for Certificated Notes if:
(1) DTC (a) notifies Oasis that it is unwilling or unable to continue as depositary for the
Global Note or (b) has ceased to be a clearing agency registered under the Exchange Act, and in
each case Oasis fails to appoint a successor depositary within 90 days;
(2) Oasis, at its option, notifies the trustee in writing that it elects to cause the issuance
of Certificated Notes (DTC has advised Oasis that, in such event, under its current practices,
DTC would notify its Participants of Oasis request, but will only withdraw beneficial interests
from a Global Note at the request of each Participant); or
(3) a Default or Event of Default has occurred and is continuing and DTC notifies the trustee of
its decision to exchange the Global Note for Certificated Notes.
In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon
prior written notice given to the trustee by or on behalf of DTC in accordance with the indenture.
In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests
in Global Notes will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the depositary (in accordance with its customary procedures).
Exchange of Certificated Notes for Global Notes
Certificated Notes may not be exchanged for beneficial interests in any Global Note unless the
transferor first delivers to the trustee a written certificate (in the form provided in the
indenture) to the effect that such transfer will comply with the appropriate transfer restrictions
applicable to such new notes.
Same Day Settlement and Payment
Oasis will make payments in respect of the new notes represented by the Global Notes (including
principal, premium, if any, and interest) by wire transfer of immediately available funds to the
accounts specified by DTC or its nominee. Oasis will make all payments of principal, interest and
premium, if any, with respect to Certificated Notes by wire transfer of immediately available funds
to the accounts specified by the holders thereof or, if no such account is specified, by mailing a
check to each such holders registered address. The new notes represented by the Global Notes are
expected to trade in DTCs Same-Day Funds Settlement System, and any permitted secondary market
trading activity in such new notes will, therefore, be required by DTC to be settled in immediately
available funds. Oasis expects that secondary trading in any Certificated Notes will also be
settled in immediately available funds.
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Definitions
Acquired Debt means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged with or
into or became a Subsidiary of such specified Person, regardless of whether such Indebtedness is
incurred in connection with, or in contemplation of, such other Person merging with or into, or
becoming a Restricted Subsidiary of, such specified Person, but excluding Indebtedness which is
extinguished, retired or repaid in connection with such Person merging with or becoming a
Subsidiary of such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
Additional Assets means:
(1) any property or assets (other than Indebtedness and Capital Stock) to be used by Oasis or a
Restricted Subsidiary in a Related Business;
(2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by Oasis or another Restricted Subsidiary;
(3) Capital Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary; or
(4) Capital Stock of any Restricted Subsidiary; provided that all the Capital Stock of such
Subsidiary held by Oasis or any of its Restricted Subsidiaries shall entitle Oasis or such
Restricted Subsidiary to not less than a pro rata portion of all dividends or other
distributions made by such Subsidiary upon any of such Capital Stock;
provided, however, that, in the case of clauses (2), (3) and (4), such Subsidiary is primarily
engaged in a Related Business.
Adjusted Consolidated Net Tangible Assets means, with respect to any specified Person or Persons
(all of such specified Persons, whether one or more, being referred to in this definition as the
Referent Person), as of the date of determination (without duplication), the remainder of:
(a) the sum of:
(i) discounted future net revenues from proved oil and gas reserves of such Person and its
Restricted Subsidiaries calculated in accordance with SEC guidelines before any provincial,
territorial, state, federal or foreign income taxes, as estimated by Oasis in a reserve
report prepared as of the end of Oasis most recently completed fiscal year for which audited
financial statements are available and giving effect to applicable Oil and Natural Gas
Hedging Contracts, (A) as increased by, as of the date of determination, the estimated
discounted future net revenues from (1) estimated proved oil and gas reserves acquired since
such year end, which reserves were not reflected in such year end reserve report, and (2)
estimated oil and gas reserves attributable to upward revisions of estimates of proved oil
and gas reserves (including previously estimated development costs incurred during the period
and the accretion of discount since the prior period end) since such year end due to
exploration, development, exploitation or other activities, and (B) as decreased by, as of
the date of determination, the estimated discounted future net revenues from (1) estimated
proved oil and gas reserves reflected in such reserve report produced or disposed of since
such year end, and (2) estimated oil and gas reserves attributable to downward revisions of
estimates of proved oil and gas reserves reflected in such reserve report since such year end
due to changes in geological conditions or other factors that would, in accordance with
standard industry practice, cause such revisions, in each case described in this clause (i)
calculated in accordance with SEC guidelines and estimated by Oasis petroleum engineers or
any independent petroleum engineers engaged by Oasis for that purpose;
(ii) the capitalized costs that are attributable to oil and gas properties of the Referent
Person and its Restricted Subsidiaries to which no proved oil and gas reserves are
attributable, based on Oasis books and records as of a date no earlier than the date of
Oasis latest available annual or quarterly financial statements;
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(iii) the Net Working Capital of the Referent Person on a date no earlier than the date of
Oasis latest annual or quarterly financial statements; and
(iv) the greater of (A) the net book value of other tangible assets of the Referent Person
and its Restricted Subsidiaries, as of a date no earlier than the date of Oasis latest
annual or quarterly financial statements, and (B) the appraised value, as estimated by
independent appraisers, of other tangible assets of the Referent Person and its Restricted
Subsidiaries, as of a date no earlier than the date of Oasis latest audited financial
statements (provided that Oasis shall not be required to obtain such appraisal solely for the
purpose of determining this value); minus
(b) the sum of:
(i) the net book value of any Capital Stock of a Restricted Subsidiary of the Referent Person
that is not owned by the Referent Person or another Restricted Subsidiary of the Referent
Person;
(ii) to the extent not otherwise taken into account in determining Adjusted Consolidated Net
Tangible Assets of the Referent Person, any net gas-balancing liabilities of the Referent
Person and its Restricted Subsidiaries reflected in Oasis latest audited financial
statements;
(iii) to the extent included in (a)(i) above, the discounted future net revenues, calculated
in accordance with SEC guidelines (utilizing the prices utilized in Oasis year-end reserve
report), attributable to reserves that are required to be delivered by the Referent Person to
third parties to fully satisfy the obligations of the Referent Person and its Restricted
Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using
the schedules specified with respect thereto); and
(iv) the discounted future net revenues, calculated in accordance with SEC guidelines,
attributable to reserves subject to Dollar-Denominated Production Payments that, based on the
estimates of production and price assumptions included in determining the discounted future
net revenues specified in (a)(i) above, would be necessary to fully satisfy the payment
obligations of the Referent Person and its Subsidiaries with respect to Dollar-Denominated
Production Payments (determined, if applicable, using the schedules specified with respect
thereto).
If Oasis changes its method of accounting from the successful efforts or a similar method to the
full cost method of accounting, Adjusted Consolidated Net Tangible Assets of the Referent Person
will continue to be calculated as if Oasis were still using the successful efforts or a similar
method of accounting.
Affiliate of any specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified Person. For purposes
of this definition, control, as used with respect to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes
of this definition, the terms controlling, controlled by and under common control with have
correlative meanings.
Asset Sale means:
(1) the sale, lease, conveyance or other disposition of any assets or rights (including by way
of a Production Payment or a sale and leaseback transaction); provided that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of Oasis and its
Restricted Subsidiaries taken as a whole will be governed by the provisions of the indenture
described above under the caption Repurchase at the Option of HoldersChange of Control
and/or the provisions described above under the caption CovenantsMerger, Consolidation or
Sale of Substantially All Assets and not by the provisions of the Asset Sales covenant; and
(2) the issuance of Equity Interests in any of Oasis Restricted Subsidiaries (other than
directors qualifying shares) or the sale of Equity Interests held by Oasis or its Subsidiaries
in any of its Subsidiaries.
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Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:
(1) any single transaction or series of related transactions that involves assets having a Fair
Market Value of less than $10.0 million;
(2) a transfer of assets between or among Oasis and its Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to Oasis or to a Restricted
Subsidiary;
(4) the sale, lease or other disposition of equipment, inventory, products, services, accounts
receivable or other assets in the ordinary course of business, including in connection with any
compromise, settlement or collection of accounts receivable, and any sale or other disposition
of damaged, worn-out or obsolete assets or assets that are no longer useful in the conduct of
the business of Oasis and its Restricted Subsidiaries;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment that does not violate the covenant described above under the caption
CovenantsRestricted Payments, including the issuance or sale of Equity Interests or the
sale, lease or other disposition of products, services, equipment, inventory, accounts
receivable or other assets pursuant to any such Restricted Payment;
(7) the consummation of a Permitted Investment, including, without limitation, unwinding any
Hedging Obligations, and including the issuance or sale of Equity Interests or the sale, lease
or other disposition of products, services, equipment, inventory, accounts receivable or other
assets pursuant to any such Permitted Investment;
(8) a disposition of Hydrocarbons or mineral products inventory in the ordinary course of
business;
(9) the farm-out, lease or sublease of developed or undeveloped crude oil or natural gas
properties owned or held by Oasis or any Restricted Subsidiary in exchange for crude oil and
natural gas properties owned or held by another Person;
(10) the creation or perfection of a Lien (but not, except as contemplated in clause (11) below,
the sale or other disposition of the properties or assets subject to such Lien);
(11) the creation or perfection of a Permitted Lien and the exercise by any Person in whose
favor a Permitted Lien is granted of any of its rights in respect of that Permitted Lien;
(12) the licensing or sublicensing of intellectual property, including, without limitation,
licenses for seismic data, in the ordinary course of business and which do not materially
interfere with the business of Oasis and its Restricted Subsidiaries;
(13) surrender or waiver of contract rights or the settlement, release or surrender of contract,
tort or other claims of any kind;
(14) any Production Payments and Reserve Sales; provided that all such Production Payments and
Reserve Sales (other than incentive compensation programs on terms that are reasonably customary
in the oil and gas business for geologists, geophysicists and other providers of technical
services to Oasis or a Restricted Subsidiary) shall have been created, incurred, issued, assumed
or Guaranteed in connection with the financing of, and within 60 days after the acquisition of,
the oil and gas properties that are subject thereto;
(15) the sale or other disposition (regardless of whether in the ordinary course of business) of
oil and gas properties; provided that, at the time of such sale or other disposition, such
properties do not have attributed to them any proved reserves; and
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(16) any trade or exchange by Oasis or any Restricted Subsidiary of properties or assets used or
useful in a Related Business for other properties or assets used or useful in a Related Business
owned or held by another Person (including Capital Stock of a Person engaged in a Related
Business that is or becomes a Restricted Subsidiary), including any cash or Cash Equivalents
necessary in order to achieve and exchange of equivalent value, provided that the Fair Market
Value of the properties or assets traded or exchanged by Oasis or such Restricted Subsidiary
(including any cash or Cash Equivalents to be delivered by Oasis or such Restricted Subsidiary)
is reasonably equivalent to the Fair Market Value of the properties or assets (together with any
cash or Cash Equivalents) to be received by Oasis or such Restricted Subsidiary, and provided,
further, that any cash received in the transaction must be applied in accordance with the
covenant described above under Repurchase at the Option of HoldersAsset Sales as if such
transaction were an Asset Sale.
Beneficial Owner has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that in calculating the beneficial ownership of any particular person (as
that term is used in Section 13(d)(3) of the Exchange Act), such person will be deemed to have
beneficial ownership of all securities that such person has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is exercisable only
after the passage of time or upon the occurrence of a subsequent condition. The terms Beneficially
Owns, Beneficially Owned and Beneficially Owning will have a corresponding meaning.
Board of Directors means:
(1) with respect to a corporation, the board of directors of the corporation or any committee
thereof duly authorized to act on behalf of such board;
(2) with respect to a partnership, the board of directors of the general partner of the
partnership;
(3) with respect to a limited liability company, the managers or managing member or members of
such limited liability company (as applicable) or any duly authorized committee of managers or
managing members (as applicable) thereof; and
(4) with respect to any other Person, the board of directors or duly authorized committee of
such Person serving a similar function.
Business Day means any day other than a Legal Holiday.
Capital Lease Obligation means, at the time any determination is to be made, the amount of the
liability in respect of a capital lease that would at that time be required to be capitalized on a
balance sheet in accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first date upon which
such lease may be prepaid by the lessee without payment of a penalty.
Capital Stock means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership interests (whether
general or limited) or membership interests; and
(4) any other interest or participation that confers on a Person the right to receive a share of
the profits and losses of, or distributions of assets of, the issuing Person, but excluding from
all of the foregoing any debt securities convertible into Capital Stock, regardless of whether
such debt securities include any right of participation with Capital Stock.
53
Cash Equivalents means:
(1) United States dollars;
(2) Government Securities having maturities of not more than one year from the date of
acquisition;
(3) marketable general obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof maturing within
one year from the date of acquisition thereof and, at the time of acquisition thereof, having a
credit rating of A or better from either S&P or Moodys;
(4) certificates of deposit, demand deposit accounts and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers acceptances with
maturities not exceeding one year and overnight bank deposits, in each case, with any domestic
commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch
Rating of B or better;
(5) repurchase obligations with a term of not more than seven days for underlying securities of
the types described in clauses (2), (3) and (4) above entered into with any financial
institution meeting the qualifications specified in clause (4) above;
(6) commercial paper having one of the two highest ratings obtainable from Moodys or S&P and,
in each case, maturing within one year after the date of acquisition;
(7) money market funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (1) through (6) of this definition; and
(8) deposits in any currency available for withdrawal on demand with any commercial bank that is
organized under the laws of any country in which Oasis or any Restricted Subsidiary maintains
its chief executive office or is engaged in the Related Business; provided that all such
deposits are made in such accounts in the ordinary course of business.
Change of Control means:
(1) any person or group of related persons (as such terms are used in Section 13(d) of the
Exchange Act) is or becomes a Beneficial Owner, directly or indirectly, of more than 50% of the
total voting power of the Voting Stock of Oasis (or its successor by merger, consolidation or
purchase of all or substantially all of its properties or assets) (for the purposes of this
clause, such person or group shall be deemed to Beneficially Own any Voting Stock of Oasis held
by an entity, if such person or group Beneficially Owns, directly or indirectly, more than 50%
of the voting power of the Voting Stock of such entity);
(2) the first day on which a majority of the members of the Board of Directors of Oasis are not
Continuing Directors;
(3) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of Oasis and its Restricted Subsidiaries taken as
a whole to any person (as such term is used in Section 13(d) of the Exchange Act); or
(4) the adoption or approval by the stockholders of Oasis of a plan for the liquidation or
dissolution of Oasis.
Consolidated Cash Flow means, with respect to any specified Person for any period, the
Consolidated Net Income of such Person for such period plus, without duplication:
(1) provision for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was deducted in
computing such Consolidated Net Income; plus
54
(2) the Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the
extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus
(3) exploration and abandonment expense (if applicable) to the extent deducted in calculating
Consolidated Net Income; plus
(4) depreciation, depletion, amortization (including amortization of intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period), impairment, other
non-cash expenses and other non-cash items (excluding any such non-cash expense to the extent
that it represents an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation, depletion,
amortization, impairment and other non-cash expenses were deducted in computing such
Consolidated Net Income; plus
(5) any interest expense attributable to any Oil and Natural Gas Hedging Contract, to the extent
that such interest expense was deducted in computing such Consolidated Net Income; minus
(6) non-cash items increasing such Consolidated Net Income for such period, other than items
that were accrued in the ordinary course of business, and minus
(7) the sum of (a) the amount of deferred revenues that are amortized during such period and are
attributable to reserves that are subject to Volumetric Production Payments and (b) amounts
recorded in accordance with GAAP as repayments of principal and interest pursuant to
Dollar-Denominated Production Payments;
in each case, on a consolidated basis and determined in accordance with GAAP. Notwithstanding the
preceding sentence, clauses (1) through (5) relating to amounts of a Restricted Subsidiary of the
referent Person will be added to Consolidated Net Income to compute Consolidated Cash Flow of such
Person only to the extent (and in the same proportion) that the Net Income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of such Person and, to the
extent the amounts set forth in clauses (1) through (5) are in excess of those necessary to offset
a net loss of such Restricted Subsidiary or if such Restricted Subsidiary has net income for such
period included in Consolidated Net Income, only if a corresponding amount would be permitted at
the date of determination to be dividended to the referent Person by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), pursuant to the terms of its
charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or the holders of its Capital
Stock.
Consolidated Net Income means, with respect to any specified Person for any period, the aggregate
of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated
basis, determined in accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting will be included only to the extent of the
amount of dividends or similar distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted Subsidiary of
that Net Income is not at the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, members or partners;
(3) the cumulative effect of a change in accounting principles will be excluded;
(4) any gain (loss) realized upon the sale or other disposition of any property, plant or
equipment of such Person or its consolidated Restricted Subsidiaries (including pursuant to any
sale or leaseback transaction) that is not sold or otherwise disposed of in the ordinary course
of business and any gain (loss) realized upon the sale or other disposition of any Capital Stock
of any Person will be excluded;
55
(5) any asset impairment writedowns on oil and gas properties under GAAP or SEC guidelines will
be excluded;
(6) any non-cash mark-to-market adjustments to assets or liabilities resulting in unrealized
gains or losses in respect of Hedging Obligations (including those resulting from the
application of SFAS 133) shall be excluded; and
(7) to the extent deducted in the calculation of Net Income, any non-cash or other charges
associated with any premium or penalty paid, write-off of deferred financing costs or other
financial recapitalization charges in connection with redeeming or retiring any Indebtedness
will be excluded.
Consolidated Tangible Assets means, with respect to any Person as of any date, the amount which,
in accordance with GAAP, would be set forth under the caption Total Assets (or any like caption)
on a consolidated balance sheet of such Person and its Restricted Subsidiaries, less all goodwill,
patents, tradenames, trademarks, copyrights, franchises, experimental expenses, organization
expenses and any other amounts classified as intangible assets in accordance with GAAP.
Continuing Directors means, as of any date of determination, any member of the Board of Directors
of Oasis who:
(1) was a member of such Board of Directors on the Issue Date; or
(2) was nominated for election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.
Credit Facilities means, with respect to Oasis or any of its Restricted Subsidiaries, one or more
debt facilities (including, without limitation, the Senior Credit Agreement), commercial paper
facilities or Debt Issuances providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to any lenders, other financiers or to special
purpose entities formed to borrow from (or sell such receivables to) any lenders or other
financiers against such receivables), letters of credit, bankers acceptances, other borrowings or
Debt Issuances, in each case, as amended, restated, modified, renewed, extended, refunded, replaced
or refinanced (in each case, without limitation as to amount), in whole or in part, from time to
time (including through one or more Debt Issuances).
Currency Agreement means in respect of a Person any foreign exchange contract, currency swap
agreement or other similar agreement as to which such Person is a party or a beneficiary.
Debt Issuances means, with respect to Oasis or any Restricted Subsidiary, one or more issuances
after the Issue Date of Indebtedness evidenced by notes, debentures, bonds or other similar
securities or instruments.
Default means any event which is, or after notice or passage of time or both would be, an Event
of Default.
De Minimis Amount means a principal amount of Indebtedness that does not exceed $1.0 million.
Disqualified Stock means any Capital Stock that, by its terms (or by the terms of any security
into which it is convertible, or for which it is exchangeable, in each case at the option of the
holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the
date on which the notes mature. Notwithstanding the preceding sentence, any Capital Stock that
would constitute Disqualified Stock solely because the holders of the Capital Stock have the right
to require Oasis to repurchase or redeem such Capital Stock upon the occurrence of a Change of
Control or an Asset Sale will not constitute Disqualified Stock if the terms of such Capital Stock
provide that Oasis may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with the covenant described above under the caption
CovenantsRestricted Payments. The amount of Disqualified Stock deemed to be outstanding at
any time for purposes of the indenture will be the maximum amount that Oasis
56
and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory
redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.
Dollar-Denominated Production Payments means production payment obligations recorded as
liabilities in accordance with GAAP, together with all undertakings and obligations in connection
therewith.
Domestic Restricted Subsidiary means any Restricted Subsidiary that was formed under the laws of
the United States or any state of the United States or the District of Columbia or that Guarantees
or otherwise provides direct credit support for any Indebtedness of Oasis or any Restricted
Subsidiary (other than a Foreign Subsidiary).
Equity Interests means Capital Stock and all warrants, options or other rights to acquire Capital
Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital
Stock).
Equity Offering means (1) an offering for cash by Oasis of its Capital Stock (other than
Disqualified Stock), or options, warrants or rights with respect to its Capital Stock or (2) a cash
contribution to Oasis common equity capital from any Person.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Existing Indebtedness means Indebtedness of Oasis and its Subsidiaries (other than Indebtedness
under the Senior Credit Agreement, the notes and the Subsidiary Guarantees) in existence on
February 2, 2011, until such amounts are repaid.
Fair Market Value means the value that would be paid by a willing buyer to an unaffiliated
willing seller in a transaction not involving distress or necessity of either party. Fair Market
Value of an asset or property in excess of $10.0 million shall be determined by the Board of
Directors of Oasis acting in good faith, whose determination shall be conclusive and evidenced by a
resolution of such Board of Directors, and any lesser Fair Market Value may be determined by an
officer of Oasis acting in good faith.
Farm-In Agreement means an agreement whereby a Person agrees to pay all or a share of the
drilling, completion or other expenses of an exploratory or development well (which agreement may
be subject to a maximum payment obligation, after which expenses are shared in accordance with the
working or participation interests therein or in accordance with the agreement of the parties) or
perform the drilling, completion or other operation on such well in exchange for an ownership
interest in an oil or gas property.
Farm-Out Agreement means a Farm-In Agreement, viewed from the standpoint of the party that
transfers an ownership interest to another.
Fixed Charge Coverage Ratio means with respect to any specified Person for any four-quarter
reference period, the ratio of the Consolidated Cash Flow of such Person for such period to the
Fixed Charges of such Person for such period. In the event that the specified Person or any of its
Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases, redeems, defeases or
otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred stock subsequent to the commencement of the period for which the
Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the Calculation Date), then the
Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of
Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter
reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers, consolidations or otherwise (including acquisitions of
assets used or useful in a Related Business), or any Person or any of its Restricted
Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and
including in each case any related financing transactions and increases in ownership
57
of Restricted Subsidiaries, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date will be given pro forma effect as if
they had occurred on the first day of the four-quarter reference period, and any Consolidated
Cash Flow for such period will be calculated giving pro forma
effect to any operating improvements or cost savings that have occurred or are reasonably
expected to occur in the reasonable judgment of the principal accounting officer or Chief
Financial Officer of Oasis (regardless of whether those operating improvements or cost savings
could then be reflected in pro forma financial statements prepared in accordance with Regulation
S-X under the Securities Act or any other regulation or policy of the SEC related thereto);
(2) the Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of
prior to the Calculation Date, will be excluded;
(3) the Fixed Charges attributable to discontinued operations, as determined in accordance with
GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the
Calculation Date, will be excluded, but only to the extent that the obligations giving rise to
such Fixed Charges will not be obligations of the specified Person or any of its Restricted
Subsidiaries following the Calculation Date;
(4) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have
been a Restricted Subsidiary at all times during such four-quarter period;
(5) any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to
have been a Restricted Subsidiary at any time during such four-quarter period; and
(6) if any Indebtedness bears a floating rate of interest, the interest expense on such
Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the
applicable rate for the entire period (taking into account any Hedging Obligation applicable to
such Indebtedness, but if the remaining term of such Hedging Obligation is less than 12 months,
then such Hedging Obligation shall only be taken into account for that portion of the period
equal to the remaining term thereof).
Fixed Charges means, with respect to any specified Person for any period, the sum, without
duplication, of:
(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued (excluding (i) any interest attributable to Production Payments
and Reserve Sales, (ii) write-off of deferred financing costs and (iii) accretion of interest
charges on future plugging and abandonment obligations, future retirement benefits and other
obligations that do not constitute Indebtedness, but including, without limitation, amortization
of debt issuance costs and original issue discount, noncash interest payments, the interest
component of any deferred payment obligations other than that attributable to any Oil and
Natural Gas Hedging Contract, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers acceptance financings), and net of the effect of all payments made
or received pursuant to Interest Rate Agreements; plus
(2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was
capitalized during such period; plus
(3) any interest on Indebtedness of another Person that is Guaranteed by the specified Person or
one or more of its Restricted Subsidiaries or secured by a Lien on assets of such specified
Person or one or more of its Restricted Subsidiaries, regardless of whether such Guarantee or
Lien is called upon; plus
(4) all dividends, whether paid or accrued and regardless of whether in cash, on any series of
preferred stock of such Person or any of its Restricted Subsidiaries, other than dividends on
Equity Interests payable solely in Equity Interests of Oasis (other than Disqualified Stock) or
to Oasis or a Restricted Subsidiary,
in each case, on a consolidated basis and determined in accordance with GAAP.
Foreign Subsidiary means any Restricted Subsidiary other than a Domestic Restricted Subsidiary.
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GAAP means generally accepted accounting principles in the United States, which are in effect
from time to time. All ratios and computations based on GAAP contained in the indenture will be
computed in conformity with GAAP. At any time after the Issue Date, Oasis may elect to apply International Financial Reporting
Standards, or IFRS, accounting principles in lieu of GAAP and, upon any such election, references
herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in the
indenture); provided that any such election, once made, shall be irrevocable; provided, further,
that any calculation or determination in the indenture that requires the application of GAAP for
periods that include fiscal quarters ended prior to Oasis election to apply IFRS shall remain as
previously calculated or determined in accordance with GAAP. Oasis shall give notice of any such
election made in accordance with this definition to the trustee and the holders of notes.
Government Securities means direct obligations of, or obligations Guaranteed by, the United
States of America, and the payment for which the United States pledges its full faith and credit.
Guarantee means a guarantee other than by endorsement of negotiable instruments for collection in
the ordinary course of business, direct or indirect, in any manner including, without limitation,
by way of a pledge of assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services or
to take or pay or to maintain financial statement conditions or otherwise), or entered into for
purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part). Guarantee used as
a verb has a correlative meaning.
Hedging Obligations of any Person means the obligations of such Person pursuant to any Interest
Rate and Currency Hedges and any Oil and Natural Gas Hedging Contracts.
Hydrocarbons means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all constituents, elements or compounds
thereof and products refined or processed therefrom.
Indebtedness means, with respect to any specified Person, without duplication, any indebtedness
of such Person, regardless of whether contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, credit agreements, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof);
(3) in respect of bankers acceptances;
(4) representing Capital Lease Obligations;
(5) in respect of any Guarantee by such Person of production or payment with respect to a
Production Payment (but not any other contractual obligation in respect of such Production
Payment);
(6) representing the balance deferred and unpaid of the purchase price of any property or
services due more than six months after such property is acquired or such services are
completed, except any such balance that constitutes an accrued expense or a trade payable; or
(7) representing any Interest Rate and Currency Hedges,
if and to the extent any of the preceding items (other than letters of credit and Interest Rate and
Currency Hedges) would appear as a liability upon a balance sheet of the specified Person prepared
in accordance with GAAP. In addition, the term Indebtedness includes (a) all Indebtedness of any
other Person, of the types described above in clauses (1) through (7), secured by a Lien on any
asset of the specified Person (regardless of whether such Indebtedness is assumed by the specified
Person); provided that the amount of such Indebtedness will be the lesser of (i) the Fair Market
Value of such asset at such date of determination and (ii) the amount of such Indebtedness of
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such other Person, and (b) to the extent not otherwise included, the Guarantee by the specified Person
of any Indebtedness of any other Person, of the types described above in clauses (1) through (7)
above. Furthermore, the amount of any Indebtedness outstanding as of any date will be the accreted
value thereof, in the case of any Indebtedness issued with original issue discount; and the principal amount thereof, together with
any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
Notwithstanding the foregoing, the following shall not constitute Indebtedness:
(i) accrued expenses and trade accounts payable arising in the ordinary course of business;
(ii) except as provided in clause (5) of the first paragraph of this definition, any obligation
in respect of any Production Payment and Reserve Sales;
(iii) any obligation in respect of any Farm-In Agreement;
(iv) any indebtedness which has been defeased in accordance with GAAP or defeased pursuant to
the deposit of cash or Government Securities (in an amount sufficient to satisfy all such
indebtedness obligations at maturity or redemption, as applicable, and all payments of interest
and premium, if any) in a trust or account created or pledged for the sole benefit of the
holders of such indebtedness, and subject to no other Liens, and the other applicable terms of
the instrument governing such indebtedness;
(v) oil or natural gas balancing liabilities incurred in the ordinary course of business and
consistent with past practice;
(vi) any obligation in respect of any Oil and Natural Gas Hedging Contract;
(vii) any unrealized losses or charges in respect of Hedging Obligations (including those
resulting from the application of the Financial Standards Accounting Boards Accounting
Standards Codification (ASC) 815);
(viii) any obligations in respect of (a) bid, performance, completion, surety, appeal and
similar bonds, (b) obligations in respect of bankers acceptances, (c) insurance obligations or
bonds and other similar bonds and obligations and (d) any Guarantees or letters of credit
functioning as or supporting any of the foregoing bonds or obligations; provided, however, that
such bonds or obligations mentioned in subclause (a), (b), (c) or (d) of this clause (viii), are
incurred in the ordinary course of the business of Oasis and its Restricted Subsidiaries and do
not relate to obligations for borrowed money;
(ix) any Disqualified Stock of Oasis or preferred stock of a Restricted Subsidiary;
(x) any obligation arising from any agreement providing for indemnities, guarantees, purchase
price adjustments, holdbacks, contingency payment obligations based on the performance of the
acquired or disposed assets or similar obligations (other than Guarantees of Indebtedness)
incurred by any Person in connection with the acquisition or disposition of assets; and
(xi) all contracts and other obligations, agreements instruments or arrangements described in
clauses (20), (21), (22) and (23) of the definition of Permitted Liens.
Interest Rate Agreement means with respect to any Person any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other
similar agreement or arrangement as to which such Person is party or a beneficiary.
Interest Rate and Currency Hedges of any Person means the obligations of such Person pursuant to
any Interest Rate Agreement or Currency Agreement.
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Investment Grade Rating means a rating equal to or higher than:
(1) Baa3 (or the equivalent) by Moodys; or
(2) BBB- (or the equivalent) by S&P,
or, if either such entity ceases to rate the notes for reasons outside of the control of Oasis, the
equivalent investment grade credit rating from any other Rating Agency.
Investment Grade Rating Event means the first day on which (a) the notes have an Investment Grade
Rating from at least two Rating Agencies, (b) no Default with respect to the notes has occurred and
is then continuing under the indenture and (c) Oasis has delivered to the trustee an Officers
Certificate certifying as to the satisfaction of the conditions set forth in clauses (a) and (b) of
this definition.
Investments means, with respect to any Person, all direct or indirect investments by such Person
in other Persons (including Affiliates) in the forms of loans (including Guarantees or other
obligations, advances or capital contributions (excluding endorsements of negotiable instruments
and documents in the ordinary course of business, and commission, travel and similar advances to
officers, employees and consultants made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with
all items that are or would be classified as investments on a balance sheet of such Person prepared
in accordance with GAAP. If Oasis or any Restricted Subsidiary sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary, Oasis will be
deemed to have made an Investment on the date of any such sale or disposition equal to the Fair
Market Value of Oasis Investments in such Restricted Subsidiary that were not sold or disposed of
in an amount determined as provided in the final paragraph of the covenant described above under
the caption CovenantsRestricted Payments. The acquisition by Oasis or any Subsidiary of Oasis
of a Person that holds an Investment in a third Person will be deemed to be an Investment by Oasis
or such Subsidiary in such third Person in an amount equal to the Fair Market Value of the
Investments held by the acquired Person in such third Person in an amount determined as provided in
the final paragraph of the covenant described above under the caption CovenantsRestricted
Payments. Except as otherwise provided in the indenture, the amount of an Investment will be
determined at the time the Investment is made and without giving effect to subsequent changes in
value.
Issue Date means the date on which notes were first issued under the indenture, February 2, 2011.
Legal Holiday means a Saturday, a Sunday or a day on which banking institutions in the City of
New York or at a place of payment are authorized by law, regulation or executive order to remain
closed.
Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset, regardless of whether filed, recorded or
otherwise perfected under applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction other than a precautionary
financing statement respecting a lease not intended as a security agreement.
Material Domestic Subsidiary means any Domestic Restricted Subsidiary having Consolidated
Tangible Assets that constitute more than 0.5% of Oasis Consolidated Tangible Assets.
Moodys means Moodys Investors Service, Inc. or any successor to the rating agency business
thereof.
Net Income means, with respect to any specified Person, the net income (loss) of such Person,
determined in accordance with GAAP and before any reduction in respect of non-cash preferred stock
dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on such gain or loss,
realized in connection with: (a) any Asset Sale (including, without limitation, any cash
received pursuant to any sale and leaseback transaction) or (b) the disposition of any
securities by such Person or the extinguishment of any Indebtedness of such Person; and
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(2) any extraordinary gain or loss, together with any related provision for taxes on such
extraordinary gain or loss.
Net Proceeds means the aggregate cash proceeds received by Oasis or any of its Restricted
Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon
the sale or other disposition of any non-cash consideration received in any Asset Sale), net of:
(1) all legal, accounting, investment banking, title and recording tax expenses, commissions and
other fees and expense incurred, and all federal, state, provincial, foreign and local taxes
required to be paid or accrued as a liability under GAAP (after taking into account any
available tax credits or deductions and any tax sharing agreements), as a consequence of such
Asset Sale;
(2) all payments made on any Indebtedness which is secured by any assets subject to such Asset
Sale, in accordance with the terms of such Indebtedness, or which must by its terms, or in order
to obtain a necessary consent to such Asset Sale, or by applicable law be repaid out of the
proceeds from such Asset Sale;
(3) all distributions and other payments required to be made to holders of minority interests in
Subsidiaries or joint ventures as a result of such Asset Sale; and
(4) the deduction of appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, or held in escrow, in either case for adjustment in respect of the sale
price or for any liabilities associated with the assets disposed of in such Asset Sale and
retained by Oasis or any Restricted Subsidiary after such Asset Sale.
Net Working Capital means (a) all current assets of Oasis and its Restricted Subsidiaries except
current assets from Oil and Natural Gas Hedging Contracts, less (b) all current liabilities of
Oasis and its Restricted Subsidiaries, except (i) current liabilities included in Indebtedness,
(ii) current liabilities associated with asset retirement obligations relating to oil and gas
properties and (iii) any current liabilities from Oil and Natural Gas Hedging Contracts, in each
case as set forth in the consolidated financial statements of Oasis prepared in accordance with
GAAP (excluding any adjustments made pursuant to the Financial Standards Accounting Boards
Accounting Standards Codification (ASC) 815).
Non-Recourse Debt means Indebtedness:
(1) as to which neither Oasis nor any Restricted Subsidiary (a) provides any Guarantee or credit
support of any kind (including any undertaking, Guarantee, indemnity, agreement or instrument
that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor or
otherwise), in each case other than Liens on and pledges of the Equity Interests of any
Unrestricted Subsidiary or any joint venture owned by Oasis or any Restricted Subsidiary to the
extent securing otherwise Non-Recourse Debt of such Unrestricted Subsidiary or joint venture;
(2) no default with respect to which (including any rights that the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of Oasis or any Restricted Subsidiary to
declare a default under such other Indebtedness or cause the payment thereof to be accelerated
or payable prior to its Stated Maturity; and
(3) the explicit terms of which provide there is no recourse against any of the assets of Oasis
or its Restricted Subsidiaries, except for any Equity Interests referred to in clause (1) of
this definition.
Obligations means any principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any Indebtedness.
Officer means, in the case of Oasis, the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, any Vice President, the Treasurer or the Secretary of Oasis
and, in the case of any Subsidiary Guarantor, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer or the
Secretary of such Subsidiary Guarantor.
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Officers Certificate means, in the case of Oasis, a certificate signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of Oasis and, in the case of
any Subsidiary Guarantor, a certificate signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary
of such Subsidiary Guarantor.
Oil and Natural Gas Hedging Contract means any Hydrocarbon hedging agreements and other
agreements or arrangements entered into in the ordinary course of business in the oil and gas
industry for the purpose of protecting against fluctuations in Hydrocarbon prices.
OPNA means Oasis Petroleum North America LLC, a Delaware limited liability company and a
Subsidiary of Oasis.
Permitted Acquisition Indebtedness means Indebtedness or Disqualified Stock of Oasis or any of
Oasis Restricted Subsidiaries to the extent such Indebtedness or Disqualified Stock was
Indebtedness or Disqualified Stock of:
(1) a Subsidiary prior to the date on which such Subsidiary became a Restricted Subsidiary; or
(2) a Person that was merged or consolidated into Oasis or a Restricted Subsidiary;
provided that on the date such Subsidiary became a Restricted Subsidiary or the date such Person
was merged or consolidated into Oasis or a Restricted Subsidiary, as applicable, after giving pro
forma effect thereto,
(a) the Restricted Subsidiary or Oasis, as applicable, would be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described
under CovenantsIncurrence of Indebtedness and Issuance of Preferred Stock, or
(b) the Fixed Charge Coverage Ratio for Oasis would be greater than the Fixed Charge Coverage
Ratio for Oasis immediately prior to such transaction.
Permitted Business Investments means Investments and expenditures made in the ordinary course of,
and of a nature that is or shall have become customary in, a Related Business as means of actively
exploiting, exploring for, acquiring, developing, processing, gathering, marketing or transporting
oil, natural gas, other Hydrocarbons and minerals (including with respect to plugging and
abandonment) through agreements, transactions, interests or arrangements that permit one to share
risks or costs of such activities or comply with regulatory requirements regarding local ownership,
including without limitation, (a) ownership interests in oil, natural gas, other Hydrocarbons and
minerals properties, liquefied natural gas facilities, processing facilities, gathering systems,
pipelines, storage facilities or related systems or ancillary real property interests; (b)
Investments in the form of or pursuant to operating agreements, working interests, royalty
interests, mineral leases, processing agreements, Farm-In Agreements, Farm-Out Agreements,
contracts for the sale, transportation or exchange of oil, natural gas, other Hydrocarbons and
minerals, production sharing agreements, participation agreements, development agreements, area of
mutual interest agreements, unitization agreements, pooling agreements, joint bidding agreements,
service contracts, joint venture agreements, partnership agreements (whether general or limited),
subscription agreements, stock purchase agreements, stockholder agreements and other similar
agreements (including for limited liability companies) with third parties; and (c) direct or
indirect ownership interests in drilling rigs and related equipment, including, without limitation,
transportation equipment.
Permitted Investments means:
(1) any Investment in Oasis or in a Restricted Subsidiary;
(2) any Investment in Cash Equivalents;
(3) any Investment by Oasis or any Restricted Subsidiary in a Person, if as a result of such
Investment:
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(a) such Person becomes a Restricted Subsidiary; or
(b) such Person is merged or consolidated with or into, or transfers or conveys substantially
all of its properties or assets to, or is liquidated into, Oasis or a Restricted Subsidiary;
(4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale
that was made pursuant to and in compliance with the covenant described above under the caption
Repurchase at the Option of HoldersAsset Sales;
(5) any Investments received in compromise or resolution of (a) obligations of trade creditors
or customers that were incurred in the ordinary course of business of Oasis or any of its
Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of any trade creditor or customer; or (b) litigation,
arbitration or other disputes with Persons who are not Affiliates;
(6) Investments represented by Hedging Obligations;
(7) advances to or reimbursements of employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business, in each case to
the extent they constitute Investments;
(8) loans or advances to employees in the ordinary course of business or consistent with past
practice, in each case to the extent they constitute Investments;
(9) advances and prepayments for asset purchases in the ordinary course of business in a Related
Business of Oasis or any of its Restricted Subsidiaries;
(10) receivables owing to Oasis or any Restricted Subsidiary created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary trade terms as Oasis or
any such Restricted Subsidiary deems reasonable under the circumstances;
(11) surety and performance bonds and workers compensation, utility, lease, tax, performance
and similar deposits and prepaid expenses in the ordinary course of business;
(12) guarantees by Oasis or any of its Restricted Subsidiaries of operating leases (other than
Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each
case entered into by Oasis or any such Restricted Subsidiary in the ordinary course of business;
(13) Investments of a Restricted Subsidiary acquired after the Issue Date or of any entity
merged into Oasis or merged into or consolidated with a Restricted Subsidiary in accordance with
the covenant described under CovenantsMerger, Consolidation or Sale of Substantially All
Assets or the covenant described in the third paragraph under Subsidiary Guarantees of the
Notes (as applicable) to the extent that such Investments were not made in contemplation of or
in connection with such acquisition, merger or consolidation and were in existence on the date
of such acquisition, merger or consolidation;
(14) Permitted Business Investments;
(15) Investments received as a result of a foreclosure by Oasis or any of its Restricted
Subsidiaries with respect to any secured Investment in default;
(16) Investments in any units of any oil and gas royalty trust;
(17) Investments existing on the Issue Date, and any extension, modification or renewal of any
such Investments existing on the Issue Date, but only to the extent not involving additional
advances, contributions or other Investments of cash or other assets or other increases of such
Investments (other than as a result of the accrual or
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accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such
Investments as in effect on the Issue Date);
(18) repurchases of or other Investments in the notes; and
(19) other Investments in any Person having an aggregate Fair Market Value (measured on the date
each such Investment was made and without giving effect to subsequent changes in value), when
taken together with all other Investments made pursuant to this clause (19) that are at the time
outstanding not to exceed the greater of (a) 3.0% of Adjusted Consolidated Net Tangible Assets
of Oasis and (b) $20.0 million.
Permitted Liens means, with respect to any Person:
(1) Liens securing Indebtedness incurred under Credit Facilities pursuant to subparagraph (1) of
the second paragraph of the covenant described under the caption CovenantsIncurrence of
Indebtedness and Issuance of Preferred Stock; provided that the aggregate amount of such
indebtedness does not exceed the aggregate amount that would be allowed under such subparagraph
(1);
(2) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4)
of the second paragraph of the covenant entitled CovenantsIncurrence of Indebtedness and
Issuance of Preferred Stock covering only the assets acquired with or financed by such
Indebtedness;
(3) pledges or deposits by such Person under workers compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts
(other than for the payment of Indebtedness) or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or deposits or cash or United
States government bonds to secure surety or appeal bonds to which such Person is a party, or
deposits as security for contested taxes or import or customs duties or for the payment of rent,
in each case incurred in the ordinary course of business;
(4) landlords, carriers, warehousemens, mechanics, materialmens, repairmens or similar
Liens arising by contract or statute in the ordinary course of business and with respect to
amounts which are not yet delinquent or are being contested in good faith by appropriate
proceedings;
(5) Liens for taxes, assessments or other governmental charges or which are being contested in
good faith by appropriate proceedings provided appropriate reserves required pursuant to GAAP
have been made in respect thereof;
(6) Liens in favor of the issuers of surety or performance bonds or bankers acceptances issued
pursuant to the request of and for the account of such Person in the ordinary course of its
business;
(7) encumbrances, easements or reservations of, or rights of others for, licenses, rights of
way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning
or other restrictions as to the use of real properties or Liens incidental to the conduct of the
business of such Person or to the ownership of its properties which do not in the aggregate
materially adversely affect the value of said properties or materially impair their use in the
operation of the business of such Person;
(8) leases and subleases of real property which do not materially interfere with the ordinary
conduct of the business of Oasis and its Restricted Subsidiaries, taken as a whole;
(9) any attachment or judgment Liens not giving rise to an Event of Default;
(10) Liens for the purpose of securing the payment of all or a part of the purchase price of, or
Capital Lease Obligations with respect to, or the repair, improvement or construction cost of,
assets or property acquired or repaired, improved or constructed in the ordinary course of
business; provided that:
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(a) the aggregate principal amount of Indebtedness secured by such Liens is otherwise
permitted to be incurred under the indenture and does not exceed the cost of the assets or
property so acquired or repaired, improved or constructed plus fees and expenses in
connection therewith; and
(b) such Liens are created within 180 days of repair, improvement or construction or
acquisition of such assets or property and do not encumber any other assets or property of
Oasis or any Restricted Subsidiary other than such assets or property and assets affixed or
appurtenant thereto (including improvements);
(11) Liens arising solely by virtue of any statutory or common law provisions relating to
bankers Liens, rights of set-off or similar rights and remedies as to deposit accounts or other
funds maintained or deposited with a depositary institution; provided that:
(a) such deposit account is not a dedicated cash collateral account and is not subject to
restrictions against access by Oasis in excess of those set forth by regulations promulgated
by the Federal Reserve Board; and
(b) such deposit account is not intended by Oasis or any Restricted Subsidiary to provide
collateral to the depository institution;
(12) Liens arising from Uniform Commercial Code financing statement filings regarding operating
leases entered into by Oasis and its Restricted Subsidiaries in the ordinary course of business;
(13) Liens existing on the Issue Date;
(14) Liens on property at the time Oasis or a Restricted Subsidiary acquired the property,
including any acquisition by means of a merger or consolidation with or into Oasis or a
Restricted Subsidiary; provided, however, that such Liens are not created, incurred or assumed
in connection with, or in contemplation of, such acquisition; provided further, however, that
such Liens may not extend to any other property owned by Oasis or any Restricted Subsidiary
other than those of the Person merged or consolidated with Oasis or such Restricted Subsidiary;
(15) Liens on property or Capital Stock of a Person at the time such Person becomes a Restricted
Subsidiary; provided, however, that such Liens are not created, incurred or assumed in
connection with, or in contemplation of, such other Person becoming a Restricted Subsidiary;
provided further, however, that such Liens may not extend to any other property owned by Oasis
or any Restricted Subsidiary;
(16) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to Oasis
or a Subsidiary Guarantor;
(17) Liens securing the notes, the Subsidiary Guarantees and other obligations arising under the
indenture;
(18) Liens securing Permitted Refinancing Indebtedness of Oasis or a Restricted Subsidiary
incurred to refinance Indebtedness of Oasis or a Restricted Subsidiary that was previously so
secured; provided that any such Lien is limited to all or part of the same property or assets
(plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that
secured (or, under the written arrangements under which the original Lien arose, could secure)
the Indebtedness being refinanced or is in respect of property or assets that is the security
for a Permitted Lien hereunder;
(19) Liens in respect of Production Payments and Reserve Sales;
(20) Liens on pipelines and pipeline facilities that arise by operation of law;
(21) Liens arising under joint venture agreements, partnership agreements, oil and gas leases or
subleases, assignments, purchase and sale agreements, division orders, contracts for the sale,
purchasing, processing, transportation or exchange of oil or natural gas, unitization and
pooling declarations and agreements, development agreements, area of mutual interest agreements,
licenses, sublicenses, net profits interests, participation agreements, Farm-Out Agreements,
Farm-In Agreements, carried working interest, joint operating,
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unitization, royalty, sales and
similar agreements relating to the exploration or development of, or production from, oil and
gas properties entered into in the ordinary course of business in a Related Business;
(22) Liens reserved in oil and gas mineral leases for bonus, royalty or rental payments and for
compliance with the terms of such leases;
(23) Liens on, or related to, properties or assets to secure all or part of the costs incurred
in the ordinary course of a Related Business for exploration, drilling, development, production,
processing, transportation, marketing, storage, abandonment or operation;
(24) Liens arising under the indenture in favor of the trustee for its own benefit and similar
Liens in favor of other trustees, agents and representatives arising under instruments governing
Indebtedness permitted to be incurred under the indenture; provided that such Liens are solely
for the benefit of the trustees, agents or representatives in their capacities as such and not
for the benefit of the holders of the Indebtedness;
(25) Liens securing obligations of Oasis and its Restricted Subsidiaries under non-speculative
Hedging Obligations;
(26) Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any joint
venture owned by Oasis or any Restricted Subsidiary to the extent securing Non-Recourse Debt of
such Unrestricted Subsidiary or joint venture;
(27) Liens securing Indebtedness of any Foreign Subsidiary which Indebtedness is permitted by
the indenture; and
(28) Liens incurred in the ordinary course of business of Oasis or any Restricted Subsidiary
with respect to obligations that, at any one time outstanding, do not exceed the greater of (a)
$10.0 million and (b) 1.0% of Adjusted Consolidated Net Tangible Assets of Oasis.
Permitted Refinancing Indebtedness means any Indebtedness of Oasis or any of its Restricted
Subsidiaries, any Disqualified Stock of Oasis or any preferred stock of any Restricted Subsidiary
(a) issued in exchange for, or the net proceeds of which are used to extend, renew, refund,
refinance, replace, defease, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to or a deferral or renewal of ((a) and (b)
above, collectively, a Refinancing), any other Indebtedness of Oasis or any of its Restricted
Subsidiaries (other than intercompany Indebtedness), any Disqualified Stock of Oasis or any
preferred stock of a Restricted Subsidiary in a principal amount or, in the case of Disqualified
Stock of Oasis or preferred stock of a Restricted Subsidiary, liquidation preference, not to exceed
(after deduction of reasonable and customary fees and expenses incurred in connection with the
Refinancing) the lesser of:
(1) the principal amount or, in the case of Disqualified Stock or preferred stock, liquidation
preference, of the Indebtedness, Disqualified Stock or preferred stock so Refinanced (plus, in
the case of Indebtedness, the amount of premium, if any paid in connection therewith), and
(2) if the Indebtedness being Refinanced was issued with any original issue discount, the
accreted value of such Indebtedness (as determined in accordance with GAAP) at the time of such
Refinancing.
Notwithstanding the preceding, no Indebtedness, Disqualified Stock or preferred stock will be
deemed to be Permitted Refinancing Indebtedness, unless:
(1) such Indebtedness, Disqualified Stock or preferred stock has a final maturity date or
redemption date, as applicable, no earlier than the final maturity date or redemption date, as
applicable, of, and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or preferred stock
being Refinanced;
(2) if the Indebtedness, Disqualified Stock or preferred stock being Refinanced is contractually
subordinated or otherwise junior in right of payment to the notes, such Indebtedness,
Disqualified Stock or preferred stock has a
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final maturity date or redemption date, as
applicable, no earlier than the final maturity date or redemption date, as applicable, of, and
is contractually subordinated or otherwise junior in right of payment to, the notes, on terms
at least as favorable to the holders of notes as those contained in the documentation governing
the Indebtedness, Disqualified Stock or preferred stock being Refinanced at the time of the
Refinancing; and
(3) such Indebtedness or Disqualified Stock is incurred or issued by Oasis or such Indebtedness,
Disqualified Stock or preferred stock is incurred or issued by the Restricted Subsidiary who is
the obligor on the Indebtedness being Refinanced or the issuer of the Disqualified Stock or
preferred stock being Refinanced; provided that a Restricted Subsidiary that is also a
Subsidiary Guarantor may guarantee Permitted Refinancing Indebtedness incurred by Oasis,
regardless of whether such Restricted Subsidiary was an obligor or guarantor of the Indebtedness
being Refinanced.
Person means any individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, limited liability company, government or any agency or
political subdivision thereof or any other entity.
Production Payments means Dollar-Denominated Production Payments and Volumetric Production
Payments, collectively.
Production Payments and Reserve Sales means the grant or transfer by Oasis or a Subsidiary of
Oasis to any Person of a royalty, overriding royalty, net profits interest, Production Payment,
partnership or other interest in oil and gas properties, reserves or the right to receive all or a
portion of the production or the proceeds from the sale of production attributable to such
properties, including any such grants or transfers pursuant to incentive compensation programs on
terms that are reasonably customary in the oil and gas business for geologists, geophysicists and
other providers of technical services to Oasis or a Subsidiary of Oasis.
Rating Agency means each of S&P and Moodys, or if (and only if) S&P or Moodys or both shall not
make a rating on the notes publicly available, a nationally recognized statistical rating agency or
agencies, as the case may be, selected by Oasis, which shall be substituted for S&P or Moodys, or
both, as the case may be.
Related Business means any business which is the same as or related, ancillary or complementary
to any of the businesses of Oasis and its Restricted Subsidiaries on the Issue Date, which includes
(1) the acquisition, exploration, exploitation, development, production, operation and disposition
of interests in oil, gas and other hydrocarbon properties, and the utilization of Oasis and its
Restricted Subsidiaries properties, (2) the gathering, marketing, treating, processing, storage,
refining, selling and transporting of any production from such interests or properties and products
produced in association therewith, (3) any power generation and electrical transmission business,
(4) oil field sales and services and related activities, (5) development, purchase and sale of real
estate and interests therein, and (6) any business or activity relating to, arising from, or
necessary, appropriate or incidental to the activities described in the foregoing clauses (1)
through (5) of this definition.
Reporting Failure means the failure of Oasis to file with the SEC and make available or otherwise
deliver to the trustee and each holder of notes, within the time periods specified in
"CovenantsReports (after giving effect to any grace period specified under Rule 12b-25 under
the Exchange Act), the periodic reports, information, documents or other reports that Oasis may be
required to file with the SEC pursuant to such provision.
Restricted Investment means any Investment other than a Permitted Investment.
Restricted Subsidiary means any Subsidiary of Oasis other than an Unrestricted Subsidiary.
S&P means Standard & Poors Ratings Services, a division of The McGraw-Hill Companies, Inc.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
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Senior Credit Agreement means the Amended and Restated Credit Agreement dated as of February 26,
2010, as amended by that certain First Amendment to Amended and Restated Credit Agreement and
Consent dated as of June 3, 2010, as further amended by the Second Amendment to Amended and
Restated Credit Agreement and Consent dated as of August 11, 2010, and as further amended by the Third Amendment to Amended and Restated
Credit Agreement and Limited Waiver dated as of January 21, 2011, among (i) OPNA, as borrower, (ii)
the Company and Oasis Petroleum LLC, a Delaware limited liability company and a Subsidiary of the
Company, as guarantors, (iii) BNP Paribas, as administrative agent and lender, and (iv) the lenders
party thereto from time to time, and any related notes, Guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as amended, restated,
modified, supplemented, increased, renewed, refunded, replaced (including replacement after the
termination of such credit facility), supplemented, restructured or refinanced in whole or in part
from time to time in one or more agreements or instruments.
Senior Debt means:
(1) all Indebtedness of Oasis or any of its Restricted Subsidiaries outstanding under Credit
Facilities and all Hedging Obligations with respect thereto;
(2) the notes and any other Indebtedness of Oasis or any of its Restricted Subsidiaries
permitted to be incurred under the terms of the indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is subordinated in right of payment to
the notes or any Subsidiary Guarantee; and
(3) all Obligations with respect to the items listed in the preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding sentence, Senior Debt will not include:
(a) any intercompany Indebtedness of Oasis or any of its Subsidiaries to Oasis or any of its
Affiliates;
(b) any Indebtedness that is incurred in violation of the indenture; or
(c) any trade payables or taxes owed or owing by Oasis or any Restricted Subsidiary.
Significant Subsidiary means any Restricted Subsidiary that would be a significant subsidiary
of Oasis within the meaning of Rule 1-02 under Regulation S-X under the Securities Act.
Stated Maturity means, with respect to any installment of interest or principal on any series of
Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in
the documentation governing such Indebtedness as of its issue date, and will not include any
contingent obligations to repay, redeem or repurchase any such interest or principal prior to the
date originally scheduled for the payment thereof.
Subordinated Debt means Indebtedness of Oasis or a Subsidiary Guarantor that is contractually
subordinated in right of payment (by its terms or the terms of any document or instrument relating
thereto), to the notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as applicable.
Subsidiary means, with respect to any specified Person:
(1) any corporation, association or other business entity (other than a partnership) of which
more than 50% of the total voting power of its Voting Stock is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person
(or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general partner of which is
such Person or a Subsidiary of such Person or (b) the only general partners of which are that
Person or one or more Subsidiaries of that Person (or any combination thereof).
Subsidiary Guarantee means any Guarantee of the notes by any Subsidiary Guarantor in accordance
with the provisions of the indenture described under the caption CovenantsSubsidiary
Guarantees.
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Subsidiary Guarantor means each Restricted Subsidiary that has become obligated under a
Subsidiary Guarantee, in accordance with the terms of the guarantee provisions of the indenture,
but only for so long as such Subsidiary remains so obligated pursuant to the terms of the
indenture.
Unrestricted Subsidiary means any Subsidiary of Oasis (including any newly acquired or newly
formed Subsidiary or a Person becoming a Subsidiary through merger or consolidation or Investment
therein) that is designated by the Board of Directors of Oasis as an Unrestricted Subsidiary
pursuant to a resolution of such Board of Directors, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is a Person with respect to which neither Oasis nor any of its Restricted Subsidiaries has
any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Persons financial condition or to cause such Person to achieve any
specified levels of operating results; and
(3) has not guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of Oasis or any of its Restricted Subsidiaries, except to the extent such Guarantee
or credit support would be released upon such designation.
Any Subsidiary of an Unrestricted Subsidiary shall also be an Unrestricted Subsidiary.
Volumetric Production Payments means production payment obligations recorded as deferred revenue
in accordance with GAAP, together with all related undertakings and obligations.
Voting Stock of any specified Person as of any date means the Capital Stock of such Person that
is at the time entitled (without regard to the occurrence of any contingency and after giving
effect to any voting agreement or stockholders agreement that effectively transfers voting power)
to vote in the election of the Board of Directors of such Person.
Weighted Average Life to Maturity means, when applied to any Indebtedness at any date, the number
of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect of the Indebtedness, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and the making of
such payment; by
(2) the then outstanding principal amount of such Indebtedness.
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PLAN OF DISTRIBUTION
You may transfer new notes issued under the exchange offer in exchange for the old notes if:
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you acquire the new notes in the ordinary course of your business; |
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you have no arrangement or understanding with any person to participate in the
distribution (within the meaning of the Securities Act of 1933) of such new notes in
violation of the provisions of the Securities Act of 1933; and |
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you are not our affiliate (within the meaning of Rule 405 under the Securities Act of
1933). |
Each broker-dealer that receives new notes for its own account pursuant to the exchange offer
in exchange for old notes that were acquired by such broker-dealer as a result of market-making or
other trading activities must acknowledge that it will deliver a prospectus in connection with any
resale of such new notes. This prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of new notes received in exchange for old
notes where such old notes were acquired as a result of market-making activities or other trading
activities.
If you wish to exchange new notes for your old notes in the exchange offer, you will be
required to make representations to us as described in Exchange OfferPurpose and Effect of the
Exchange Offer and Procedures for TenderingYour Representations to Us in this prospectus and
in the letter of transmittal. In addition, if you are a broker-dealer who receives new notes for
your own account in exchange for old notes that were acquired by you as a result of market-making
activities or other trading activities, you will be required to acknowledge that you will deliver a
prospectus in connection with any resale by you of such new notes.
We will not receive any proceeds from any sale of new notes by broker-dealers. New notes
received by broker-dealers for their own account pursuant to the exchange offer may be sold from
time to time on one or more transactions in any of the following ways:
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in the over-the-counter market; |
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in negotiated transactions; |
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through the writing of options on the new notes or a combination of such methods of
resale; |
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at market prices prevailing at the time of resale; |
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at prices related to such prevailing market prices; or |
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at negotiated prices. |
Any such resale may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such broker-dealer or the
purchasers of any such new notes.
Any broker-dealer that resells new notes that were received by it for its own account pursuant
to the exchange offer in exchange for old notes that were acquired by such broker-dealer as a
result of market-making or other trading activities may be deemed to be an underwriter within the
meaning of the Securities Act of 1933. The letter of transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an underwriter within the meaning of the Securities Act of 1933. We agreed to permit the use
of this prospectus for a period of up to 180 days after the completion of the exchange offer by
such broker-dealers to satisfy this prospectus delivery requirement. Furthermore, we agreed to
amend or supplement this prospectus during such period if so requested in order to expedite or
facilitate the disposition of any new notes by broker-dealers.
We have agreed to pay all expenses incident to the exchange offer other than fees and expenses
of counsel to the holders and brokerage commissions and transfer taxes, if any, and will indemnify
the holders of the old notes (including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act of 1933.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of the material federal income tax considerations
relevant to the exchange of old notes for new notes, but does not purport to be a complete analysis
of all potential tax effects. The discussion is based upon the Internal Revenue Code of 1986, as
amended (the Code), Treasury Regulations, Internal Revenue Service rulings and pronouncements and
judicial decisions now in effect, all of which may be subject to change at any time by legislative,
judicial or administrative action. These changes may be applied retroactively in a manner that
could adversely affect a holder of new notes. Some holders, including financial institutions,
insurance companies, regulated investment companies, tax-exempt organizations, dealers in
securities or currencies, persons whose functional currency is not the U.S. dollar, or persons who
hold the notes as part of a hedge, conversion transaction, straddle or other risk reduction
transaction may be subject to special rules not discussed below. We recommend that each holder
consult his own tax advisor as to the particular tax consequences of exchanging such holders old
notes for new notes, including the applicability and effect of any foreign, state, local or other
tax laws or estate or gift tax considerations.
We believe that the exchange of old notes for new notes will not be an exchange or otherwise a
taxable event to a holder for United States federal income tax purposes. Accordingly, a holder will
not recognize gain or loss upon receipt of a new note in exchange for an old note in the exchange,
and the holders basis and holding period in the new note will be the same as its basis and holding
period in the corresponding old note immediately before the exchange.
LEGAL MATTERS
The validity of the new notes offered in this exchange offer will be passed upon for us by
Vinson & Elkins L.L.P., Houston, Texas.
EXPERTS
The consolidated financial statements of Oasis Petroleum Inc. and subsidiaries incorporated in
this prospectus by reference to our Current Report on Form 8-K dated July 15, 2011 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered
public accounting firm, given on the authority of said firm as experts in auditing and accounting.
Estimated quantities of proved reserves of Oasis Petroleum Inc., the future net revenues from
those reserves and their present value is based, in part, on estimates of the proved reserves and
present values of proved reserves as of December 31, 2008, 2009 and 2010. The reserve estimates at
December 31, 2008 are based on reports prepared by W.D. Von Gonten & Co., independent reserve
engineers. The reserve estimates at December 31, 2009 and 2010 are based on reports prepared by
DeGolyer and MacNaughton, independent reserve engineers. We have incorporated these estimates in
reliance on the authority of such firm as an expert in such matters.
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
Oasis files annual, quarterly and current reports and other information with the SEC. You may
read and copy any materials that Oasis has filed with the SEC at the SECs Public Reference Room at
100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet
site that contains reports, proxy and information statements, and other information regarding us.
The SECs website address is www.sec.gov. You may also inspect our SEC records at our website at
www.oasispetroleum.com. We do not intend for information contained in our website to be part of
this prospectus.
This prospectus incorporates by reference the documents listed below that Oasis has previously
filed with the SEC and any future filings made with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act (excluding any information furnished pursuant to Item 2.02 or Item 7.01
on any Current Report on Form 8-K) after the date on which the registration statement that includes
this prospectus was initially filed with the SEC and until the notes offering pursuant to this
registration statement is terminated. They contain important information about
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Oasis and the financial condition of Oasis. The information incorporated by reference is considered to be a part
of this prospectus, except for any information that is superseded by information that is included
directly in this prospectus or incorporated by reference subsequent to the date of this prospectus.
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Oasis SEC filings (file no. 001-32886) |
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Period or date filed |
Annual Report on Form 10-K
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Year ended December 31, 2010 |
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Quarterly Reports on Form 10-Q
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Quarters ended March 31, 2011 and June 30, 2011 |
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Current Reports on Form 8-K
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Filed on January 24, 2011, January 28, 2011,
February 2, 2011, February 18, 2011, March 28,
2011, May 11, 2011, June 22, 2011, June 24,
2011, July 15, 2011, August 3, 2011 (two
Current Reports on Form 8-K filed) and
September 2, 2011. |
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Definitive Proxy Statement on Schedule 14A
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Filed on March 16, 2011 (those parts
incorporated by reference in Oasiss Annual
Report on Form 10-K for the year ended
December 31, 2010). |
You can obtain copies of any of these documents without charge upon written or oral request by
requesting them in writing or by telephone at:
Oasis Petroleum Inc.
1001 Fannin, Suite 1500
Houston, TX 77002
Telephone number: (281) 404-9500
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ANNEX A:
LETTER OF TRANSMITTAL
TO TENDER
OLD 7.25% SENIOR NOTES DUE 2019
OF
OASIS PETROLEUM INC.
PURSUANT TO THE EXCHANGE OFFER AND PROSPECTUS
DATED , 2011
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON , 2011 (THE EXPIRATION DATE), UNLESS THE EXCHANGE OFFER IS
EXTENDED BY THE ISSUER.
The Exchange Agent for the Exchange Offer is:
U.S. Bank National Association
If you wish to exchange your issued and outstanding 7.25% Senior Notes due 2019 (old notes)
for an equal aggregate principal amount of newly issued 7.25% Senior Notes due 2019 (new notes)
with materially identical terms that have been registered under the Securities Act of 1933, as
amended (the Securities Act) pursuant to the exchange offer, you must validly tender (and not
withdraw) your old notes to the Exchange Agent prior to the Expiration Date.
We refer you to the Prospectus, dated , 2011 (the Prospectus), of Oasis
Petroleum Inc. (the Issuer), and this Letter of Transmittal (the Letter of Transmittal), which
together describe the Issuers offer (the Exchange Offer) to exchange the old notes for a like
aggregate principal amount of new notes. Capitalized terms used but not defined herein have the
respective meaning given to them in the Prospectus.
The Issuer reserves the right, at any time or from time to time, to extend the Exchange Offer
at its discretion, in which event the term Expiration Date shall mean the latest date to which
the Exchange Offer is extended. The Issuer shall notify the Exchange Agent and each registered
holder of the old notes of any extension by oral (promptly followed in writing) or written notice
prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled
Expiration Date.
This Letter of Transmittal is to be used by holders of the old notes. Tender of old notes is
to be made according to the Automated Tender Offer Program (ATOP) of The Depository Trust Company
(DTC) pursuant to the procedures set forth in the Prospectus under the caption Exchange
OfferProcedures for Tendering. DTC participants that are accepting the Exchange Offer must
transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry
delivery to the Exchange Agents DTC account. DTC will then send a computer generated message
known as an agents message to the Exchange Agent for its acceptance. For you to validly tender
your old notes in the Exchange Offer the Exchange Agent must receive, prior to the Expiration Date,
an agents message under the ATOP procedures that confirms that:
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DTC has received your instructions to tender your old notes; and |
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you agree to be bound by the terms of this Letter of Transmittal. |
BY USING THE ATOP PROCEDURES TO TENDER OLD NOTES, YOU WILL NOT BE REQUIRED TO DELIVER THIS
LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT. HOWEVER, YOU WILL BE BOUND BY ITS TERMS, AND YOU WILL
BE DEEMED TO HAVE MADE THE ACKNOWLEDGMENTS AND THE REPRESENTATIONS AND WARRANTIES IT CONTAINS, JUST
AS IF YOU HAD SIGNED IT.
A-1
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
1. By tendering old notes in the Exchange Offer, you acknowledge receipt of the
Prospectus and this Letter of Transmittal.
2. By tendering old notes in the Exchange Offer, you represent and warrant that you have
full authority to tender the old notes described above and will, upon request, execute and deliver
any additional documents deemed by the Issuer to be necessary or desirable to complete the tender
of old notes.
3. You understand that the tender of the old notes pursuant to all of the procedures set
forth in the Prospectus will constitute an agreement between you and the Issuer as to the terms and
conditions set forth in the Prospectus.
4. By tendering old notes in the Exchange Offer, you acknowledge that the Exchange Offer
is being made in reliance upon interpretations contained in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the SEC), including Exxon Capital
Holdings Corp., SEC No-Action Letter (available April 13, 1989), Morgan Stanley & Co., Inc., SEC
No-Action Letter (available June 5, 1991) and Shearman & Sterling, SEC No-Action Letter (available
July 2, 1993), that the new notes issued in exchange for the old notes pursuant to the Exchange
Offer may be offered for resale, resold and otherwise transferred by holders thereof without
compliance with the registration and prospectus delivery provisions of the Securities Act (other
than a broker-dealer who purchased old notes exchanged for such new notes directly from the Issuer
to resell pursuant to Rule 144A or any other available exemption under the Securities Act of 1933,
as amended (the Securities Act) and any such holder that is an affiliate of the Issuer within
the meaning of Rule 405 under the Securities Act), provided that such new notes are acquired in the
ordinary course of such holders business and such holders are not participating in, and have no
arrangement with any other person to participate in, the distribution of such new notes.
5. By tendering old notes in the Exchange Offer, you hereby represent and warrant that:
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the new notes acquired pursuant to the Exchange Offer are being obtained in the
ordinary course of business of you, whether or not you are the holder; |
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you have no arrangement or understanding with any person to participate in the
distribution of old notes or new notes within the meaning of the Securities Act; |
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you are not an affiliate, as such term is defined under Rule 405 promulgated under
the Securities Act, of the Company; and |
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if you are a broker-dealer, that you will receive the new notes for your own account
in exchange for old notes that were acquired as a result of market-making activities or other
trading activities and that you acknowledge that you will deliver a prospectus (or, to the
extent permitted by law, make available a prospectus) in connection with any resale of such new
notes. |
You may, if you are unable to make all of the representations and warranties contained in Item
5 above and as otherwise permitted in the Registration Rights Agreement (as defined below), elect
to have your old notes registered in the shelf registration statement described in the Registration
Rights Agreement, dated as of February 2, 2011 (the Registration Rights Agreement), by and among
the Issuer, Oasis Petroleum LLC, Oasis Petroleum North America LLC, and the Initial Purchasers (as
defined therein). Such election may be made by notifying the Issuer in writing at 1001 Fannin,
Suite 1500, Houston, TX 77002, Attention: Corporate Secretary. By making such election, you agree,
as a holder of old notes participating in a shelf registration, to indemnify and hold harmless the
Issuer, each of the directors of the Issuer, each of the officers of the Issuer who signs such
shelf registration statement, each person who controls the Issuer within the meaning of either the
Securities Act or the Securities Exchange Act of 1934, as amended (the Exchange Act), and each
other holder of old notes, from and against any and all losses, claims, damages or liabilities
caused by any untrue statement or alleged untrue statement of a material fact contained in any
shelf registration statement or prospectus, or in any supplement thereto or amendment thereof, or
caused by the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading; but only with
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respect to information relating to you furnished in
writing by or on behalf of you expressly for use in a shelf registration statement, a prospectus or any amendments or supplements thereto. Any such
indemnification shall be governed by the terms and subject to the conditions set forth in the
Registration Rights Agreement, including, without limitation, the provisions regarding notice,
retention of counsel, contribution and payment of expenses set forth therein. The above summary of
the indemnification provision of the Registration Rights Agreement is not intended to be exhaustive
and is qualified in its entirety by the Registration Rights Agreement.
6. If you are a broker-dealer that will receive new notes for your own account in exchange
for old notes that were acquired as a result of market-making activities or other trading
activities, you acknowledge by tendering old notes in the Exchange Offer, that you will deliver a
prospectus in connection with any resale of such new notes; however, by so acknowledging and by
delivering a prospectus, you will not be deemed to admit that you are an underwriter within the
meaning of the Securities Act.
7. If you are a broker-dealer and old notes held for your own account were not acquired as
a result of market-making or other trading activities, such old notes cannot be exchanged pursuant
to the Exchange Offer.
8. Any of your obligations hereunder shall be binding upon your successors, assigns, executors,
administrators, trustees in bankruptcy and legal and personal representatives.
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INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Book-Entry Confirmations.
Any confirmation of a book-entry transfer to the Exchange Agents account at DTC of old notes
tendered by book-entry transfer (a Book-Entry Confirmation), as well as Agents Message and any
other documents required by this Letter of Transmittal, must be received by the Exchange Agent at
its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date.
2. Partial Tenders.
Tenders of old notes will be accepted only in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The entire principal amount of old notes delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise communicated to the Exchange
Agent. If the entire principal amount of all old notes is not tendered, then old notes for the
principal amount of old notes not tendered and new notes issued in exchange for any old notes
accepted will be delivered to the holder via the facilities of DTC promptly after the old notes are
accepted for exchange.
3. Validity of Tenders.
All questions as to the validity, form, eligibility (including time of receipt), acceptance,
and withdrawal of tendered old notes will be determined by the Issuer, in its sole discretion,
which determination will be final and binding. The Issuer reserves the absolute right to reject
any or all tenders not in proper form or the acceptance for exchange of which may, in the opinion
of counsel for the Issuer, be unlawful. The Issuer also reserves the absolute right to waive any
of the conditions of the Exchange Offer or any defect or irregularity in the tender of any old
notes. The Issuers interpretation of the terms and conditions of the Exchange Offer (including
the instructions on the Letter of Transmittal) will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of old notes must be cured within
such time as the Issuers shall determine. Although the Issuer intends to notify holders of defects
or irregularities with respect to tenders of old notes, neither the Issuer, the Exchange Agent, nor
any other person shall be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give such notification. Tenders of old notes will
not be deemed to have been made until such defects or irregularities have been cured or waived.
Any old notes received by the Exchange Agent that are not properly tendered and as to which the
defects or irregularities have not been cured or waived will be returned by the Exchange Agent to
the tendering holders, unless otherwise provided in the Letter of Transmittal, promptly following
the Expiration Date.
4. Waiver of Conditions.
The Issuer reserves the absolute right to waive, in whole or part, up to the expiration of the
Exchange Offer, any of the conditions to the Exchange Offer set forth in the Prospectus or in this
Letter of Transmittal.
5. No Conditional Tender.
No alternative, conditional, irregular or contingent tender of old notes will be accepted.
6. Request for Assistance or Additional Copies.
Requests for assistance or for additional copies of the Prospectus or this Letter of
Transmittal may be directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this Letter of Transmittal. Holders may also contact their broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.
7. Withdrawal.
Tenders may be withdrawn only pursuant to the limited withdrawal rights set forth in the
Prospectus under the caption Exchange OfferWithdrawal of Tenders.
A-4
8. No Guarantee of Late Delivery.
There is no procedure for guarantee of late delivery in the Exchange Offer.
IMPORTANT: BY USING THE ATOP PROCEDURES TO TENDER OLD NOTES, YOU WILL NOT BE REQUIRED TO DELIVER
THIS LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT. HOWEVER, YOU WILL BE BOUND BY ITS TERMS, AND YOU
WILL BE DEEMED TO HAVE MADE THE ACKNOWLEDGMENTS AND THE REPRESENTATIONS AND WARRANTIES IT CONTAINS,
JUST AS IF YOU HAD SIGNED IT.
A-5
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Our certificate of incorporation provides that a director will not be liable to the
corporation or its stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (1) for any breach of the directors duty of loyalty to the corporation or its
stockholders, (2) for acts or omissions not in good faith or which involved intentional misconduct
or a knowing violation of the law, (3) under section 174 of the DGCL for unlawful payment of
dividends or improper redemption of stock or (4) for any transaction from which the director
derived an improper personal benefit. In addition, if the DGCL is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of a director of the
corporation, in addition to the limitation on personal liability provided for in our certificate of
incorporation, will be limited to the fullest extent permitted by the amended DGCL. Our bylaws
provide that the corporation will indemnify, and advance expenses to, any officer or director to
the fullest extent authorized by the DGCL.
Section 145 of the DGCL provides that a corporation may indemnify directors and officers as
well as other employees and individuals against expenses, including attorneys fees, judgments,
fines and amounts paid in settlement in connection with specified actions, suits and proceedings
whether civil, criminal, administrative, or investigative, other than a derivative action by or in
the right of the corporation, if they acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar
standard is applicable in the case of derivative actions, except that indemnification extends only
to expenses, including attorneys fees, incurred in connection with the defense or settlement of
such action and the statute requires court approval before there can be any indemnification where
the person seeking indemnification has been found liable to the corporation. The statute provides
that it is not exclusive of other indemnification that may be granted by a corporations
certificate of incorporation, bylaws, disinterested director vote, stockholder vote, agreement or
otherwise.
Our certificate of incorporation also contains indemnification rights for our directors and
our officers. Specifically, our certificate of incorporation provides that we shall indemnify our
officers and directors to the fullest extent authorized by the DGCL. Further, we may maintain
insurance on behalf of our officers and directors against expense, liability or loss asserted
incurred by them in their capacities as officers and directors.
We have obtained directors and officers insurance to cover our directors, officers and some
of our employees for certain liabilities.
We have entered into written indemnification agreements with our directors and officers. Under
these agreements, if an officer or director makes a claim of indemnification to us, either a
majority of the independent directors or independent legal counsel selected by the independent
directors must review the relevant facts and make a determination whether the officer or director
has met the standards of conduct under Delaware law that would permit (under Delaware law) and
require (under the indemnification agreement) us to indemnify the officer or director.
Item 21. Exhibits and Financial Statement Schedules.
(a) |
|
The following documents are filed as exhibits to this Registration Statement, including those
exhibits incorporated herein by reference to a prior filing of the Company under the
Securities Act or the Exchange Act as indicated in parentheses: |
II-1
|
|
|
Exhibit |
|
|
No. |
|
Description of Exhibit |
4.1
|
|
Specimen Common Stock Certificate (filed as Exhibit 4.1 to the Companys
Registration Statement on Form S-1/A on May 19, 2010, and incorporated
herein by reference). |
|
|
|
4.2
|
|
Indenture dated as of February 2, 2011 among the Company and U.S. Bank
National Association, as trustee (filed as Exhibit 4.1 to the Companys
Current Report on Form 8-K on February 2, 2011, and incorporated herein by
reference). |
|
|
|
4.3
|
|
Supplemental Indenture dated as of February 2, 2011 among the Company, the
Guarantors and U.S. Bank National Association, as trustee (filed as
Exhibit 4.2 to the Companys Current Report on Form 8-K on February 2,
2011, and incorporated herein by reference). |
|
|
|
*4.4
|
|
Supplemental Indenture dated as of September 19, 2011 among the Company,
the Guarantors and U.S. Bank National Association, as trustee. |
|
|
|
4.5
|
|
Registration Rights Agreement dated as of February 2, 2011 among the
Company, the Guarantors and J.P. Morgan Securities LLC, as representative
of the several initial purchasers (filed as Exhibit 4.3 to the Companys
Current Report on Form 8-K on February 2, 2011, and incorporated herein by
reference). |
|
|
|
*5.1
|
|
Opinion of Vinson & Elkins L.L.P. |
|
|
|
*12.1
|
|
Computation of Ratio of Earnings to Fixed Charges. |
|
|
|
*23.1
|
|
Consent of PricewaterhouseCoopers LLP. |
|
|
|
*23.2
|
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Consent of W.D. Von Gonten & Co. |
|
|
|
*23.3
|
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Consent of DeGolyer and MacNaughton. |
|
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|
*23.4
|
|
Consent of Vinson & Elkins L.L.P. (included as part of Exhibit 5.1 hereto). |
|
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*24.1
|
|
Powers of Attorney (included on each signature page hereto). |
|
|
|
*25.1
|
|
Statement of Eligibility on Form T-1 of U.S. Bank National Association. |
|
|
|
* |
|
Filed herewith. |
|
(b) |
|
Financial Data Schedule. |
Schedules are omitted because they either are not required or are not applicable or because
equivalent information has been included in the financial statements, the notes thereto or
elsewhere herein.
Item 22. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrants, we have been advised
that in the opinion of the Securities and Exchange Commission such indemnification is against
public policy and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of a registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, such registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
Each registrant hereby undertakes:
To file, during any period in which offers or sales are being made, a post-effective amendment
to this registration statement:
(a) |
|
to include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
|
(b) |
|
to reflect in the prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered would not exceed
that |
II-2
|
|
|
which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the Calculation of Registration Fee table in the
effective registration statement; and |
|
(c) |
|
to include any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such information in the
registration statement. |
That, for the purpose of determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
To remove from registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser, if such registrant is subject to Rule 430C, each prospectus filed pursuant to Rule
424(b) as part of a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale prior to such first
use, supersede or modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document immediately prior to such
date of first use.
That, for the purpose of determining liability of such registrant under the Securities Act of
1933 to any purchaser in the initial distribution of the securities, in a primary offering of
securities of such registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell such securities to such
purchaser:
|
(a) |
|
any preliminary prospectus or prospectus of the undersigned registrants
relating to the offering required to be filed pursuant to Rule 424; |
|
|
(b) |
|
any free writing prospectus relating to the offering prepared by or on behalf
of such registrant or used or referred to by the undersigned registrants; |
|
|
(c) |
|
the portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrants or their securities
provided by or on behalf of such registrant; and |
|
|
(d) |
|
any other communication that is an offer in the offering made by such
registrant to the purchaser. |
That, for purposes of determining any liability under the Securities Act of 1933, each filing
of a registrant annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee benefit plans annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
To deliver or cause to be delivered with the prospectus, to each person to whom the prospectus
is sent or given, the latest annual report to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause
to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report
that is specifically incorporated by reference in the prospectus to provide such interim financial
information.
II-3
To respond to requests for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the registration statement through
the date of responding to the request.
To supply by means of a post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused
this Registration Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on September 23, 2011.
|
|
|
|
|
|
OASIS PETROLEUM INC.
|
|
|
By: |
/s/ Thomas B. Nusz
|
|
|
|
Thomas B. Nusz |
|
|
|
Chairman, President and Chief Executive Officer |
|
|
Each person whose signature appears below appoints Thomas B. Nusz, Taylor L. Reid and Michael
H. Lou, and each of them, any of whom may act without the joinder of the other, as his true and
lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and any Registration Statement
(including any amendment thereto) that is to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all
other documents in connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes as he might or would
do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of
them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following persons in the capacities and the dates indicated.
|
|
|
|
|
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
|
Chairman, President and Chief |
|
|
Thomas B. Nusz
|
|
Executive Officer
(Principal Executive Officer)
|
|
September 23, 2011 |
|
|
|
|
|
|
|
Executive Vice President, Chief |
|
|
Taylor L. Reid
|
|
Operating Officer and Director
|
|
September 23, 2011 |
|
|
|
|
|
|
|
Executive Vice President and |
|
|
Michael H. Lou
|
|
Chief Financial Officer
|
|
September 23, 2011 |
|
|
(Principal Financial Officer) |
|
|
|
|
|
|
|
|
|
Senior Vice President and |
|
|
Roy
W. Mace
|
|
Chief Accounting Officer |
|
|
|
|
(Principal Accounting Officer)
|
|
September 23, 2011 |
|
|
|
|
|
|
|
|
|
|
William J. Cassidy
|
|
Director
|
|
September 23, 2011 |
|
|
|
|
|
|
|
|
|
|
Ted Collins, Jr.
|
|
Director
|
|
September 23, 2011 |
|
|
|
|
|
/s/ Michael McShane
Michael McShane
|
|
Director
|
|
September 23, 2011 |
|
|
|
|
|
/s/ Douglas E. Swanson, Jr.
|
|
|
|
|
Douglas E. Swanson, Jr.
|
|
Director
|
|
September 23, 2011 |
|
|
|
|
|
|
|
|
|
|
Robert L. Zorich
|
|
Director
|
|
September 23, 2011 |
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused
this Registration Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on September 23, 2011.
|
|
|
|
|
|
OASIS PETROLEUM LLC
OASIS PETROLEUM NORTH AMERICA LLC
OASIS PETROLEUM MARKETING LLC
OASIS WELL SERVICES LLC
|
|
|
By: |
/s/ Thomas B. Nusz
|
|
|
|
Thomas B. Nusz |
|
|
|
President and Chief Executive Officer |
|
|
Each person whose signature appears below appoints Thomas B. Nusz, Taylor L. Reid and Michael
H. Lou, and each of them, any of whom may act without the joinder of the other, as his true and
lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and any Registration Statement
(including any amendment thereto) that is to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all
other documents in connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes as he might or would
do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of
them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following persons in the capacities and the dates indicated.
|
|
|
|
|
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
|
President and Chief Executive Officer
|
|
September 23, 2011 |
Thomas B. Nusz
|
|
(Principal Executive Officer) |
|
|
|
|
|
|
|
|
|
Executive Vice President and
|
|
September 23, 2011 |
Michael H. Lou
|
|
Chief Financial Officer |
|
|
|
|
(Principal Financial Officer) |
|
|
|
|
|
|
|
|
|
Senior Vice President and
|
|
September 23, 2011 |
Roy W. Mace
|
|
Chief Accounting Officer |
|
|
|
|
(Principal Accounting Officer) |
|
|
II-6
INDEX TO EXHIBITS
|
|
|
Exhibit |
|
|
No. |
|
Description of Exhibit |
4.1
|
|
Specimen Common Stock Certificate (filed as Exhibit 4.1 to the Companys
Registration Statement on Form S-1/A on May 19, 2010, and incorporated
herein by reference). |
|
|
|
4.2
|
|
Indenture dated as of February 2, 2011 among the Company and U.S. Bank
National Association, as trustee (filed as Exhibit 4.1 to the Companys
Current Report on Form 8-K on February 2, 2011, and incorporated herein by
reference). |
|
|
|
4.3
|
|
Supplemental Indenture dated as of February 2, 2011 among the Company, the
Guarantors and U.S. Bank National Association, as trustee (filed as
Exhibit 4.2 to the Companys Current Report on Form 8-K on February 2,
2011, and incorporated herein by reference). |
|
|
|
*4.4
|
|
Supplemental Indenture dated as of September 19, 2011 among the Company,
the Guarantors and U.S. Bank National Association, as trustee. |
|
|
|
4.5
|
|
Registration Rights Agreement dated as of February 2, 2011 among the
Company, the Guarantors and J.P. Morgan Securities LLC, as representative
of the several initial purchasers (filed as Exhibit 4.3 to the Companys
Current Report on Form 8-K on February 2, 2011, and incorporated herein by
reference). |
|
|
|
*5.1
|
|
Opinion of Vinson & Elkins L.L.P. |
|
|
|
*12.1
|
|
Computation of Ratio of Earnings to Fixed Charges. |
|
|
|
*23.1
|
|
Consent of PricewaterhouseCoopers LLP. |
|
|
|
*23.2
|
|
Consent of W.D. Von Gonten & Co. |
|
|
|
*23.3
|
|
Consent of DeGolyer and MacNaughton. |
|
|
|
*23.4
|
|
Consent of Vinson & Elkins L.L.P. (included as part of Exhibit 5.1 hereto). |
|
|
|
*24.1
|
|
Powers of Attorney (included on each signature page hereto). |
|
|
|
*25.1
|
|
Statement of Eligibility on Form T-1 of U.S. Bank National Association. |
II-7