COLLATERAL ACCOUNT AGREEMENT
Exhibit 10.11
COLLATERAL ACCOUNT AGREEMENT, dated as of February 27, 2007, made by SUPERIOR OFFSHORE
INTERNATIONAL, L.L.C., a Louisiana limited liability company (the “Pledgor”), in favor of
JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, the “the Administrative
Agent”) and as Securities Intermediary (in such capacity, the “Securities
Intermediary”) for the Secured Parties (as hereinafter defined).
Preliminary Statement
Pursuant to Section 1.1 and Section 2.2 of the Credit Agreement dated as of the date hereof
among the Pledgor, Wilmington Trust Company, as Collateral Agent, the several lenders from time to
time parties thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), the Pledgor
has agreed to enter into this Agreement for the benefit of the Administrative Agent, the Lenders
(as defined in the Credit Agreement), and their respective successors and assigns (each
individually, a “Secured Party”, collectively, the “Secured Parties”).
1. Defined Terms. (a) Capitalized terms not otherwise defined herein shall have the meanings set forth in the
Credit Agreement.
(b) As used herein, the following terms shall have the following meanings:
“Agreement”: this Collateral Account Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
“Cash Collateral”: the collective reference to:
(a) all cash, instruments, securities, other financial assets and funds deposited from
time to time in the Collateral Account;
(b) all investments of funds in the Collateral Account and all instruments, securities
and other financial assets evidencing such investments;
(c) all interest, dividends, cash, instruments, securities and other financial assets
and other property received in respect of, or as proceeds of, or in substitution or exchange
for, any of the foregoing; and
(d) any security entitlement to any of the foregoing.
“Collateral Account”: account no. 2330509502 established at the office of JPMorgan
Chase Bank, N.A. at 000 Xx. Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx XX 00000 Attention:
Xxxxx XxXxxx, for the Administrative Agent as entitlement holder thereto designated “Superior
Offshore International, L.L.C. Collateral Account” with such abbreviations as may be required to
comply with the Securities Intermediary’s operating systems.
“Collateral”: the collective reference to the Cash Collateral and the Collateral
Account.
“Collateral Account Termination Date”: the earlier of (i) the first date on which the
amount on deposit in the Collateral Account is zero, (ii) the Maturity Date and (iii) the date on
which the Obligations are prepaid in full.
“Permitted Investments”: (i) investments in certificates of deposit and time deposits
maturing before the Maturity Date issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, the domestic office of the Administrative Agent, (ii) commercial
paper rated, at the time of acquisition, at least “A-1” or the equivalent thereof by S&P or “P-1”
or the equivalent thereof by Xxxxx’x in either case maturing within twelve months after the date of
acquisition and (iii) other investments approved by the Administrative Agent.
“Secured Obligations”: the collective reference to the Obligations and all
obligations and liabilities of the Pledgor which may arise under or in connection with this
Agreement.
“UCC”: the Uniform Commercial Code in effect in the State of New York or any other
applicable jurisdiction from time to time.
2. Grant of Security Interest. As collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Pledgor hereby grants to the Administrative Agent, for
the benefit of the Collateral Agent and for the ratable benefit of the Secured Parties, a security
interest in the Collateral.
3. Establishment and Maintenance of Collateral Account. (a) The Collateral Account shall be a “Securities Account” as such term is defined in Section
8-501(a) of the UCC. The Securities Intermediary shall, subject to the terms of this Agreement,
treat the Administrative Agent as entitled to exercise the rights that comprise any financial asset
credited to the Collateral Account. All securities or other property underlying any financial
assets credited to the Collateral Account shall be registered in the name of the Securities
Intermediary (or its nominee), endorsed to the Securities Intermediary (or its nominee) or in blank
or credited to another securities account maintained in the name of the Securities Intermediary and
in no case will any financial asset credited to the Collateral Account be registered in the name of
the Pledgor, payable to the order of the Pledgor or specially indorsed to the Pledgor except to the
extent the foregoing have been specially endorsed to the Securities Intermediary (or its nominee)
or in blank.
(b) The Cash Collateral Account shall be maintained until the Collateral Account Termination
Date.
(c) The Collateral shall be subject to the exclusive dominion and control of the
Administrative Agent, which shall hold the Collateral and administer the Cash Collateral Account
subject to the terms and conditions of this Agreement. The Pledgor shall have no right of
withdrawal from the Collateral Account, except as expressly provided herein.
4. “Financial Assets” Election. The Securities Intermediary hereby agrees that each item of property (whether investment
property, financial asset, security, instrument or cash) credited to the Collateral Account shall
be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.
5. Deposit of Funds. On the Closing Date, the Pledgor shall deposit in the Collateral Account immediately
available funds in an amount equal to $64,662,253,31 from the proceeds of the Term Loans made on
the Closing Date.
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6. Representations and Warranties of the Pledgor. The Pledgor represents and warrants to the Administrative Agent that:
(a) The Pledgor has the power and authority and the legal right to execute and deliver, to
perform its obligations under, and to grant the security interest in the Collateral pursuant to,
this Agreement and has taken all necessary action to authorize its execution, delivery and
performance of, and grant of the security interest in the Collateral pursuant to, this Agreement.
(b) This Agreement constitutes a legal, valid and binding obligation of the Pledgor
enforceable against the Pledgor in accordance with its terms and creates in favor of the
Administrative Agent a perfected, first priority security interest in the Collateral, subject only
to nonconsensual Liens permitted by the Credit Agreement which may have priority by operation of
law, enforceable in accordance with its terms, except in each case as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
7. Covenants of the Pledgor. The Pledgor covenants and agrees with the Administrative Agent that:
(a) The Pledgor will not sell, assign, transfer, exchange, or otherwise dispose of, or grant
any option with respect to, the Collateral, or create, incur or permit to exist any Lien or option
in favor of, or any claim of any Person with respect to, any of the Collateral, or any interest
therein, except for the security interest created by this Agreement and nonconsensual Liens
permitted by the Credit Agreement.
(b) The Pledgor will maintain the security interest created by this Agreement as a first
priority, perfected security interest, subject only to nonconsensual Liens permitted by the Credit
Agreement which may have priority by operation of law, and defend the right, title and interest of
the Administrative Agent and the Secured Parties in and to the Collateral against the claims and
demands of all Persons whomsoever. At any time and from time to time, upon the request of the
Administrative Agent, and at the sole expense of the Pledgor, the Pledgor will promptly and duly
execute and deliver such further instruments and documents and take such further actions as the
Administrative Agent reasonably may request for the purposes of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted, including, without
limitation, the filing of financing statements under the UCC.
8. Investment of Cash Collateral. (a) Subject to the provisions of Section 8(b), collected funds on deposit in the Collateral
Account shall be invested by the Securities Intermediary from time to time in Permitted
Investments; provided, however, that so long as no Event of Default shall have
occurred and be continuing, the Securities Intermediary shall, if and to the extent that the
Pledgor so directs, make such investments in
Permitted Investments at the direction of the Pledgor. All investments shall be made in the
name of the Securities Intermediary or a nominee of the Securities Intermediary and in a manner,
determined by the Administrative Agent in its sole discretion, that preserves the Administrative
Agent’s perfected, first priority security interest on behalf of the Secured Parties in such
investments subject only to nonconsensual Liens permitted by the Credit Agreement which may have
priority by operation of law.
(b) The Securities Intermediary shall have no obligation to invest collected funds during the
first night after their collection.
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(c) The Securities Intermediary shall have no responsibility to the Pledgor for any loss or
liability arising in respect of investments of the Cash Collateral in Permitted Investments
(including, without limitation, as a result of the liquidation of any portion thereof before
maturity).
(d) The Pledgor will pay or reimburse the Securities Intermediary for any and all costs,
expenses and liabilities of the Securities Intermediary incurred in connection with this Agreement,
the maintenance and operation of the Collateral Account and the investment of the Collateral, and
any reasonable investment charges or other fees in connection with maintenance of the Collateral
Account.
9. Remedies. (a) Following the acceleration of the Obligations, if Cash Collateral remains in the Cash
Collateral Account, the Administrative Agent may, without notice of any kind, except for notices
required by law which may not be waived, apply the Cash Collateral, after deducting all reasonable
costs and expenses of every kind incurred in respect thereof or in any way relating to the Cash
Collateral or the rights of the Administrative Agent and the Secured Parties hereunder, including,
without limitation, reasonable attorneys’ fees and disbursements of counsel to the Administrative
Agent, to the payment (pursuant to Section 6.5 of the Guarantee and Collateral Agreement) in whole
or in part of the Secured Obligations, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law, including, without
limitation, Section 9-608(a)(1)(C) of the UCC, need the Administrative Agent account for the
surplus, if any, to the Pledgor. In addition to the rights, powers and remedies granted to it
under this Agreement and in any other agreement securing, evidencing or relating to the Secured
Obligations, the Administrative Agent shall, following the acceleration of the Obligations, have
all the rights, powers and remedies available at law, including, without limitation, the rights and
remedies of a secured party under the UCC. To the extent permitted by law, the Pledgor waives
presentment, demand, protest and all notices of any kind and all claims, damages and demands it may
acquire against the Administrative Agent or any Secured Party arising out of the exercise by them
of any rights hereunder.
(b) The Pledgor shall remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Secured Obligations, and the fees and
disbursements of any attorneys employed by the Administrative Agent or any Secured Party to collect
such deficiency and any other expenses incurred by the Administrative Agent or any Secured Party in
connection with such collection.
10. Administrative Agent’s Appointment as Attorney-in-Fact. (a) The Pledgor hereby irrevocably constitutes and appoints the Administrative Agent and any
officer or agent of the Administrative Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the
Pledgor and in the name of the Pledgor or in the Administrative Agent’s own name, from time to time
in the Administrative
Agent’s discretion, for the purpose of carrying out the terms of this Agreement, to take, upon
the occurrence and during the continuation of an Event of Default, any and all appropriate action
and to execute any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, including, without limitation, any endorsements,
assignments or other instruments of transfer.
(b) The Pledgor hereby ratifies all that said attorneys shall lawfully do or cause to be done
pursuant to the power of attorney granted in Section 10(a). All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are irrevocable until this
Agreement is terminated and the security interests created hereby are released.
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11. Duty of the Securities Intermediary and the Administrative Agent. The Securities Intermediary’s and the Administrative Agent’s sole duty with respect to the
custody, safekeeping and physical preservation of any Collateral in its possession, under Section
9-207 of the UCC or otherwise, shall be to comply with the specific duties and responsibilities set
forth herein. Except as specifically set forth herein, the powers conferred on the Administrative
Agent in this Agreement are solely for the protection of the Administrative Agent’s and the Secured
Parties’ interests in the Collateral and shall not impose any duty upon the Administrative Agent or
any Secured Party to exercise any such powers. Neither the Administrative Agent nor any Secured
Party nor its or their directors, officers, employees or agents shall be liable for any action
lawfully taken or omitted to be taken by any of them under or in connection with the Collateral or
this Agreement, except for its or their gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
The Securities Intermediary may conclusively rely on a direction which it believes in good
faith is from a person or persons having authority to take such action. The Securities
Intermediary shall incur no liability to any Secured Party or the Pledgor for acting on any
instruction, direction or other communication on which the Securities Intermediary is authorized to
rely pursuant to this Agreement, or for any delay in delivery or non-delivery or error in
transmission (in each case, other than in the case of gross negligence or willful misconduct).
12. Filing of Financing Statements. Pursuant to applicable law, the Pledgor authorizes the Administrative Agent to file
financing statements with respect to the Collateral in such form and in such filing offices as the
Administrative Agent reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement.
13. Authority of Administrative Agent. The Pledgor acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative Agent or the exercise
or non-exercise by the Administrative Agent of any option, right, request, judgment or other right
or remedy provided for herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Pledgor, the Administrative Agent shall be conclusively presumed to be
acting as Administrative Agent for the Secured Parties with full and valid authority so to act or
refrain from acting, and the Pledgor shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
14. Certain Releases. Amounts on deposit in the Collateral Account will be
released to the Pledgor upon request of the Pledgor under the following circumstances:
(a) Upon receipt of third party invoices in form and substance reasonably satisfactory
to the Administrative Agent with respect to vessel payments and/or related equipment
purchases for the Superior Achiever, the Administrative Agent will release an amount
certified by the Pledgor to the Administrative Agent as being the amount due in accordance
with the terms of such invoices.
(b) The Administrative Agent will release amounts on deposit (or to the credit of), if
any, in the Collateral Account on the Collateral Account Termination Date upon certification
by the Pledgor to the Administrative Agent that the Collateral Account Termination Date has
occurred.
(c) To the extent the then amount of Cash Collateral in the Collateral Account exceeds
an amount equal to $64,662,253.31 less amounts released pursuant to clause (a) above, the
Administrative Agent will release to the Pledgor amounts representing the return on any
investment of the collected funds on deposit in the Collateral Account.
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Notwithstanding the foregoing, amounts may not be released from the Collateral Account to the
Pledgor if on the proposed release date a Default or Event of Default exists or would result from
the proposed application of the released amounts. The Pledgor shall be deemed to represent and
warrant that the condition set forth in the proceeding sentence is true on each release date.
Amounts released to the Pledgor from the Collateral Account must be applied by the Pledgor for the
purpose for which such funds were released. The agreements in this Section 14 shall survive
termination of this Agreement.
15. Termination. At the close of business of the Securities Intermediary on the Collateral Account
Termination Date, this Agreement and all obligations (other than those expressly stated to survive
termination) of the parties hereunder shall terminate.
16. Notices. All notices and other communications to or between the respective parties hereto to be
effective shall be given pursuant to the provisions of Section 9.2 of the Credit Agreement.
17. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.
18. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Pledgor, the Administrative Agent
and the Securities Intermediary, subject to any consent required in accordance with Section 9.1 of
the Credit Agreement.
(b) Neither the Administrative Agent nor any Secured Party shall by any act (except by a
written instrument pursuant to Section 18(a) hereof) of delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event
of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Administrative Agent or any Secured Party, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Administrative Agent or any
Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which the Administrative Agent or such Secured Party would otherwise have on
any future occasion.
(c) The rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by law.
19. Section Headings. The section headings used in this Agreement are for convenience of reference only and are
not to affect the construction hereof or be taken into consideration in the interpretation hereof.
20. Successors and Assigns. This Agreement and the Collateral Account shall be binding upon the successors and assigns of
the Pledgor and the Securities Intermediary and shall inure to the benefit of the Administrative
Agent and the Secured Parties and their successors and assigns.
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21. Indemnity and Expenses. (a) The Pledgor agrees to indemnify the Administrative Agent, from and against any and all
claims, losses and liabilities to the extent relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), other than such claims, losses or liabilities resulting from the Administrative
Agent’s gross negligence or willful misconduct as finally determined by a court of competent
jurisdiction.
(b) The Pledgor shall pay to the Administrative Agent upon demand the amount of any and all
costs and expenses, including the reasonable fees and expenses of its counsel, that the
Administrative Agent may incur in connection with (i) the administration of this Agreement, (ii)
the custody, preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of
the Administrative Agent or the Securities Intermediary hereunder, or (iv) the failure by the
Pledgor to perform or observe any of the provisions hereof.
(c) The agreements in this Section 21 shall survive termination of this Agreement.
22. Governing Law. Both this Agreement and the Collateral Account shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York. For purposes of the UCC, New
York shall be deemed to be the Securities Intermediary’s jurisdiction and the Collateral Account
(as well as the securities entitlements related thereto) shall be governed by the laws of the State
of New York.
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IN WITNESS WHEREOF, the Pledgor, the Administrative Agent and the Securities Intermediary
have caused this Collateral Agreement to be duly executed and delivered as of the date first above
written.
| SUPERIOR OFFSHORE INTERNATIONAL, L.L.C., as the Pledgor |
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| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Chief Financial Officer | |||
| JPMORGAN CHASE BANK, N.A., as the Administrative Agent |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President | |||
| JPMORGAN CHASE BANK, N.A., as the Securities Intermediary |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President | |||
Signature Page to Collateral Account Agreement
