FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 10.1
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated
as of July 20, 2010 (but effective as of July 1, 2010) is among SESI, L.L.C., as Borrower, SUPERIOR
ENERGY SERVICES, INC., as Parent, JPMORGAN CHASE BANK, N.A., as Agent (the “Agent”), and the
Lenders party hereto, who agree as follows:
RECITALS
A. The Borrower, Parent, Agent and certain of the Lenders have heretofore executed a Second
Amended and Restated Credit Agreement dated as of May 29, 2009 (the “Credit Agreement”).
B. The Borrower has requested modifications of the Credit Agreement in the following respects:
(i) increase of the Revolving Loan Commitments from $325,000,000 to $400,000,000 with the option to
increase further to $550,000,000; (ii) reduce the Applicable Margins for the Eurodollar Rate and
Floating Rate; (iii) extend the Revolving Loan Termination Date from June 14, 2011 to July 20,
2014; (iv) increase the basket of permitted unsecured Funded Indebtedness from $50,000,000 to
$75,000,000; (v) delete the Fixed Charge Coverage Ratio and substitute an EBITDA to Interest
Expense Ratio; (vi) substitute Xxxxx Fargo Bank, N.A. for JPMorgan Chase Bank, N.A. as the Swing
Line Lender; (vii) modify the Adjusted Leverage Ratio; and (viii) refresh the basket for permitted
Investments as of the date of this Agreement. The Agent and Lenders are willing to accept the
Borrower’s request on the terms and conditions set forth below.
C. Capitalized terms used herein, and not otherwise defined herein, shall have the meanings
defined in the Credit Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings, the parties hereby
agree as follows:
ARTICLE 1
AMENDMENTS TO THE CREDIT AGREEMENT
AMENDMENTS TO THE CREDIT AGREEMENT
1.1 Section 1.1 (Definition of Certain Terms Used Herein) of the Credit Agreement is
hereby amended but only as to the following definitions added, amended or deleted:
“AutoBorrow Agreement” means any agreement providing for automatic borrowing services
between the Borrower and a Swing Line Lender.
“EBITDA to Interest Expense Ratio” is defined in Section 6.18.3.
“Fixed Charge Coverage Ratio” is hereby deleted.
“Revolving Loan Termination Date” means July 20, 2014 or any earlier date upon which
the Aggregate Revolving Loan Commitment is reduced to zero or otherwise terminated pursuant
to the terms of Section 2.4; provided, however, if by April 30, 2014, the 67/8%
Senior Notes have not been either paid in full and terminated or refinanced with maturity
dates after July 20, 2014, then the Revolving Loan Termination Date shall be April 30, 2014.
“Swing Line Lender” means Xxxxx Fargo Bank, N.A., in its capacity as the lender of
Swing Line Loans.
1.2 Section 2.1.1(a) (Making the Revolving Loans) of the Credit Agreement is hereby
amended to substitute “$400,000,000” for “$325,000,000.”
1.3 A new Section 2.1.1(c) is hereby added to the Credit Agreement as follows:
(c) The Borrower and the Agent, without the consent of any other Lenders, may increase
the aggregate of the Revolving Loan Commitments up to the aggregate amount of $150,000,000
(to a total of $550,000,000), by either or both of the following methods: (i) one or more
existing Lenders increases its Revolving Loan Commitment and/or (ii) one or more additional
banks or other entities issue Revolving Loan Commitments and become parties to and Lenders
under this Agreement; provided, that each of the Lenders shall have the first right
to increase its Revolving Loan Commitment in an amount equal to its Pro Rata Share of the
total increase in the Revolving Loan Commitments; and provided further that any new Lender
shall be a state or national commercial bank located in the United States or a bank
organized under a jurisdiction other than the United States but having a branch or agency
within the United States and not an Affiliate of Parent, Borrower or any Subsidiary. No
Lender shall be required to increase its Revolving Loan Commitment. In the event of either
or both of (i) and (ii) above, the Agent shall amend and restate Schedule 1 hereto
to reflect the revised Revolving Loan Commitments of all Lenders and their adjusted Pro Rata
Shares; the Agent shall promptly distribute the revised Schedule 1 to the Borrower
and to all Lenders. Any additional Lenders shall become a party to this Agreement by
delivering to the Agent an executed signature page of this Agreement. The Borrower shall
execute and deliver new Revolving Loan Notes to existing Lenders for the increased amount of
their Revolving Loan Commitments and shall deliver new Revolving Loan Notes to new Lenders
for the amount of their Revolving Loan Commitments.
1.4 Sections 2.1.4 (Making the Swing Line Loans) and 2.1.5 (Procedure for Swing
Line Borrowing; Refunding of Swing Line Loans) are hereby amended in their entirety to read as
follows:
2.1.4 Making the Swing Line Loan. (a) Subject to the terms and conditions
hereof (and if an AutoBorrow Agreement is in effect, subject to the terms and conditions of
said AutoBorrow Agreement), the Swing Line Lender agrees to make a portion of the credit
otherwise available to the Borrower under the Revolving Loan Commitments prior to the
Revolving Loan Termination Date by making swing line loans (“Swing Line
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Loans”) to the Borrower; provided that (i) the aggregate principal amount of Swing Line
Loans outstanding at any time shall not exceed $25,000,000 (notwithstanding that the Swing
Line Loans outstanding at any time, when aggregated with the Swingline Lender’s other
outstanding Revolving Loans, may exceed such amount), (ii) the Borrower shall not request,
and the Swing Line Lender shall not make, any Swing Line Loan if, after giving effect to the
making of such Swing Line Loan, the aggregate amount of the Available Revolving Commitments
would be less than zero, and (iii) the Swing Line Lender confirms with the Agent that all of
the conditions to funding in Section 4.2 are then satisfied. During the Revolving
Commitment Period, the Borrower may use the Swing Line Loan by borrowing, repaying and
reborrowing, all in accordance with the terms and conditions hereof. No Lender shall have
any rights or obligations under the AutoBorrow Agreement, but each Lender shall have the
obligation to purchase and fund risk participations in the Swing Line Loans and to refinance
Swing Line Loans as provided below. Swing Line Loans shall bear interest at the Floating
Rate only
(c) The Borrower shall repay to the Swing Line Lender the then unpaid principal amount
of each Swing Line Loan on the earlier of the Revolving Loan Termination Date and the first
date after such Swing Line Loan is made that is the 15th or last day of a calendar month and
is at least two Business Days after such Swing Line Loan is made; provided that on each date
that a Revolving Loan is borrowed, the Borrower shall repay all Swing Line Loans then
outstanding. The Borrower irrevocably authorizes the Swing Line Lender to charge the
Borrower’s accounts with the Swing Line Lender (up to the amount available in each such
account) in order to immediately pay the amount of such Borrowing to the extent amounts
received from the Borrower are not sufficient to repay in full such Borrowing.
(d) Each Swing Line Loan shall bear interest on the outstanding principal amount
thereof, for each day from and including the day such Swing Line Loan is made, but excluding
the date it is paid, at a rate per annum equal to the Floating Rate for such day.
2.1.5 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans.
(a) If the Borrower has entered into an AutoBorrow Agreement with the Swing Line Lender
and such agreement is in effect, each Swing Line Borrowing and each prepayment thereof shall
be made as provided in such AutoBorrow Agreement. In all other cases, the provisions of
Clauses (b) and (c) below shall apply.
(b) Whenever the Borrower desires that the Swing Line Lender make Swing Line Loans it
shall give the Agent and the Swing Line Lender irrevocable notice in the manner set forth in
Section 2.13 (which notice must be received by the Agent and the Swing Line Lender not later
than 2:00 P.M., New York City time, on the proposed Borrowing Date), specifying (i) the
amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day
prior to the Revolving Loan Termination Date). Promptly after receipt said notice by the
Swing Line Lender, the Swing Line Lender will confirm with the Agent (by telephone or in
writing) that the Agent has also received said notice, and if
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not, the Swing Line Lender will provide said notice to the Agent. Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Agent prior to 3:00 P.M. on
the date of the proposed Swing Line Loan directing the Swing Line Lender not to make the
Swing Line Loan because the Swing Line Loan would exceed the limitations set forth in
Section 2.1.4(a) hereof or because all of the conditions to funding in Section 4.2 are not
then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender
will, not later than 3:00 P.M. on the proposed Borrowing Date make the Swing Line Loan
available to the Borrower by depositing such proceeds in the account of the Borrower with
the Swing Line Lender on such Borrowing Date in immediately available funds. Each borrowing
under the Swing Line Commitment shall be in an amount equal to $500,000 or a whole multiple
of $100,000 in excess thereof.
(c) The Swing Line Lender, at any time and from time to time in its sole and absolute
discretion may, on behalf of the Borrower (which hereby irrevocably directs the Swing Line
Lender to act on its behalf), on one Business Day’s notice given by the Swing Line Lender to
the Agent no later than 12:00 Noon, New York City time, request each Lender to make, and
each Lender hereby agrees to make, a Revolving Loan, in an amount equal to such Lender’s Pro
Rata Share of the aggregate amount of the Swing Line Loans (the “Refunded Swing Line Loans”)
outstanding on the date of such notice, to repay the Swing Line Lender. Each Lender shall
make the amount of such Revolving Loan available to the Agent at the Funding Office in
immediately available funds, not later than 10:00 A.M., New York City time, one Business Day
after the date of such notice. The proceeds of such Revolving Loans shall be immediately
made available by the Agent to the Swing Line Lender for application by the Swing Line
Lender to the repayment of the Refunded Swing Line Loans. The Borrower irrevocably
authorizes the Agent to charge the Borrower’s accounts with the Agent in order to
immediately pay the amount of such Refunded Swing Line Loans to the extent amounts received
from the Lenders are not sufficient to repay in full such Refunded Swing Line Loans.
(d) If prior to the time a Revolving Loan would have otherwise been made pursuant to
Section 2.1.5(b), one of the events described in Section 7.6 or 7.7 shall have occurred and
be continuing with respect to the Borrower or if for any other reason, as determined by the
Swing Line Lender in its sole discretion, Revolving Loans may not be made as contemplated by
Section 2.1.5(b), each Lender shall, on the date such Revolving Loan was to have been made
pursuant to the notice referred to in Section 2.1.5(b), purchase for cash an undivided
participating interest in the then outstanding Swing Line Loans by paying to the Agent an
amount (the “Swing Line Participation Amount”) equal to (i) such Lender’s Pro Rata Share
times (ii) the sum of the aggregate principal amount of Swing Line Loans then outstanding
that were to have been repaid with such Revolving Loans. The Participation Amounts shall
immediately be made available by the Agent to the Swing Line Lender for application by the
Swing Line Lender to the repayment of the Refunded Swing Line Loans.
(e) Whenever, at any time after the Swing Line Lender has received from any Lender such
Lender’s Swing Line Participation Amount, the Swing Line Lender receives any payment on
account of the Swing Line Loans, the Swing Line Lender will distribute
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to the Agent for payment to each Lender, each Lender’s Swing Line Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period of time
during which such Lender’s participating interest was outstanding and funded and, in the
case of principal and interest payments, to reflect such Lender’s pro rata portion of such
payment if such payment is not sufficient to pay the principal of and interest on all Swing
Line Loans then due); provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Lender will return to the Agent for
payment to the Swing Line Lender any portion thereof previously distributed to it by the
Agent on behalf of the Swing Line Lender.
(f) Each Lender’s obligation to make the Loans referred to in Section 2.1.5(b) and to
purchase participating interests pursuant to Section 2.1.5(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that such Lender or the Borrower may have
against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the failure to
satisfy any of the other conditions specified in Section 4, (iii) any adverse change in the
condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement or any
other Loan Document by the Borrower, any other Loan Party or any other Lender or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any of the
foregoing.
1.5 Section 6.11 (Funded Indebtedness; Rate Management Obligations) of the Credit
Agreement is hereby amended as to Clause (a)(viii) only, as follows:
| (viii) | Other unsecured Funded Indebtedness not exceeding $75,000,000 in the aggregate principal amount outstanding at any time. |
1.6 Section 6.18.2 (Maximum Adjusted Leverage Ratio) of the Credit Agreement is hereby
amended in its entirety to read as follows:
6.18.2 Maximum Adjusted Leverage Ratio. The Parent will not permit the ratio
(the “Adjusted Leverage Ratio”), determined on a Pro Forma Basis, of (i) Funded
Indebtedness, plus Additional Contingent Consideration, plus the present value of all
obligations for platform decommissioning, wellbore plug and abandonment, and pipeline
decommissioning, in each case as reflected on the Borrower’s financial statements in
accordance with GAAP as of the end of each fiscal quarter (the determination date), less
performance bond amounts and escrow account amounts securing decommissioning obligations as
of the determination date, to (ii) EBITDA for the four fiscal quarters ending with such
determination date, to be greater than 3.65 to 1.00.
1.7 Section 6.18.3 (Minimum Fixed Charge Coverage Ratio) of the Credit Agreement is
hereby deleted in its entirety and replaced with a new Section 6.18.3 (Minimum EBITDA to
Interest Expense Ratio), as follows:
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6.18.3 Minimum EBITDA to Interest Expense Ratio. The Parent will not permit
the ratio, determined on a Pro Forma Basis (the “EBITDA to Interest Expense Ratio”), of (i)
EBITDA for the four fiscal quarters ending with each fiscal quarter (the determination date)
to (ii) Interest Expense actually paid in cash during the four fiscal quarters ending with
such determination date, to be less than 3.00 to 1.00.
Notwithstanding the foregoing provisions of Subsections 6.18.1, 6.18.2 and 6.18.3, for each
of the first three fiscal quarters of the fiscal year ending December 31, 2010, EBITDA and
Interest Expense shall be calculated on the basis of EBITDA for the fiscal year to date
annualized.
Furthermore, all accounting determinations for purposes of calculating or determining the
financial covenants set forth in this Section 6.18 (Financial Covenants) shall be
made in accordance with GAAP applied on a basis consistent in all material respects with
that used in preparing the audited financial statements of the Parent for the fiscal year
ended December 31, 2009 (the “2009 Financials”). If after December 31, 2009, GAAP shall
change from the basis used in preparing the 2009 Financials, the Compliance Certificate
shall set forth the adjustments to the Parent’s financial statements necessary to
demonstrate compliance with the covenants contained herein based on GAAP used for the 2009
Financials.
1.8 The limitations on new Investments set forth in Section 6.19 (Investments) shall
apply only to investments occurring after the date of this Amendment.
1.9 Schedule 1 (Commitment Amounts of the Lenders) to the Credit Agreement is hereby deleted
in its entirety and replaced with Schedule 1 attached hereto. To the extent that a
Lender’s Pro Rata Share as shown on Schedule 1 attached hereto is different from such
Lender’s Pro Rata Share under the Credit Agreement as originally executed, such Lender hereby
assigns or accepts the interests of other Lenders’ Pro Rata Shares in order to reflect such
difference; said assignment(s) shall be without any representation or warranty by the assignor(s)
and without recourse to the assignor(s). The parties hereto acknowledge that Bank of Scotland is
no longer a party to the Credit Agreement, effective on the date of this Amendment.
1.10 Schedule 2 (Pricing Schedule) to the Credit Agreement is hereby deleted in its entirety
and replaced with Schedule 2 attached hereto.
1.11 Schedule 1 to Exhibit A (Compliance Certificate) is hereby deleted in its entirety and
replaced with Schedule 1 to Exhibit A attached hereto.
1.11 Except as specifically amended hereby, all of the remaining terms and conditions of the
Credit Agreement remain in full force and effect.
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ARTICLE 2
CONDITIONS PRECEDENT
CONDITIONS PRECEDENT
2.1 This First Amendment shall be effective upon the Agent’s receipt of the following, in form
and substance satisfactory to the Agent:
(i) First Amendment. This Agreement, executed and delivered by the Agent, the Parent,
the Borrower and the Lenders.
(ii) Notes. Replacement Revolving Loan Notes executed by the Borrower evidencing
their respective Revolving Loan Commitments.
(iii) Collateral Documents. Acknowledgments or amendments of all of the existing
Collateral Documents reflecting the execution and delivery of this Amendment.
(iv) Legal Opinion. Legal opinion of Jones, Walker, Waechter, Poitevent, Carrere &
Xxxxxxx L.L.P., Louisiana counsel to the Parent, Borrower and its Subsidiaries, in the form and
substance satisfactory to the Agent. Such legal opinion shall cover such other matters incident to
the transactions contemplated by this Agreement as the Agent may reasonably require.
(v) Entity Documents. Copies of the certificate of incorporation and bylaws and
articles of organization (or certificate of formation) and operating agreement (or limited
liability company agreement) of any Domestic Subsidiaries created after the date of the Credit
Agreement, and copies of any amendments to certificates of incorporation, bylaws, articles of
organization (or certificates of formation) or operating agreements executed since the date of the
Credit Agreement, each certified by the Secretary or Assistant Secretary of said Domestic
Subsidiary.
(vi) Closing Certificates. Closing certificates by the Secretary or Assistant
Secretary of the Parent, Borrower and the authorized person for each Subsidiary, of its Board of
Directors’ resolutions or consent of members or partners, and of resolutions or actions of any
other body authorizing the execution of the Amendment, including an incumbency certificate,
executed by the Secretary or Assistant Secretary of the Borrower, which shall identify by name and
title of the Authorized Officers and any other officers of the Borrower authorized to sign the
Amendment, upon which certificate the Agent and the Lenders shall be entitled to rely until
informed of any change in writing by the Borrower.
(vii) Other Documents. Such other documents as any Lender or its counsel may have
reasonably requested.
(viii) Fees. Payment of certain amendment fees and structuring fees as set forth in
separate agreements with the Borrower.
(ix) No Default. Absence of any Default or Event of Default under the Credit
Agreement.
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(x) No Material Change. Absence of any Material Adverse Effect relating to the
Parent, Borrower and Borrower’s Subsidiaries occurring since March 31, 2010.
ARTICLE 3
MISCELLANEOUS
MISCELLANEOUS
3.1 The Parent and Borrower reaffirm to the Agent and Lenders that the representations and
warranties contained in Article V of the Credit Agreement were true and correct when made, and are
repeated at and as of the date hereof and are true and correct in all material respects at and as
of the date hereof, except as such representations and warranties relate to matters that are
permitted by the Credit Agreement to be true only as of the Closing Date.
3.2 This Amendment is a contract, and the replacement Notes will be contracts, made under and
shall be construed in accordance with and governed by the laws of the United States of America and
the State of Louisiana.
3.3 This Amendment constitutes a Loan Document (as that term is defined in the Credit
Agreement).
3.4 This Amendment does not, and the replacement Notes will not, constitute a novation of the
Credit Agreement or the Obligations represented by the Credit Agreement, the Notes and the
Collateral Documents.
3.5 This Amendment may be executed in any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one in the same instrument.
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IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have executed this Amendment as of
the date first above written.
| BORROWER: | SESI, L.L.C. | |||||||
| By: | Superior Energy Services, Inc. | |||||||
| Member Manager | ||||||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||||||
| Name: | Xxxxxx X. Xxxxxx | |||||||
| Title: | Chief Financial Officer | |||||||
| PARENT: | SUPERIOR ENERGY SERVICES, INC. | |||||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||||||
| Name: | Xxxxxx X. Xxxxxx | |||||||
| Title: | Chief Financial Officer | |||||||
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| AGENT, CO-LEAD ARRANGER AND LENDER: |
JPMORGAN CHASE BANK, N.A. | |||||||
| By: | /s/ Xxxxx X. Xxxxxxxxxx | |||||||
| Name: | Xxxxx X. Xxxxxxxxxx | |||||||
| Title: | Vice President | |||||||
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| CO-LEAD ARRANGER AND LENDER: | XXXXX FARGO BANK, N.A. | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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| CO-DOCUMENTATION AGENT AND LENDER: |
WHITNEY NATIONAL BANK | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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| CO-DOCUMENTATION AGENT AND LENDER: |
PNC BANK, NATIONAL ASSOCIATION | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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| CO-DOCUMENTATION AGENT AND LENDER: |
COMERICA BANK, NA | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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| CO-DOCUMENTATION AGENT AND LENDER: |
BANK OF AMERICA, N.A. | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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| CO-DOCUMENTATION AGENT AND LENDER: |
BNP PARIBAS | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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| LENDER: | NATIXIS | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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| LENDER: | CAPITAL ONE, NATIONAL ASSOCIATION |
|||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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| LENDER: | HSBC BANK USA, N.A. | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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