THIRD AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.16
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of November 9,
2010, between RigNet, Inc. a Delaware corporation (“Borrower”), the undersigned lenders
(collectively, “Lenders” and each individually, a “Lender”), and Bank of America, N.A., a national
banking association, as Administrative Agent (in such capacity, “Agent”) for itself and the other
Lenders. Capitalized terms used but not defined in this Amendment have the meanings given them in
the Credit Agreement (defined below).
RECITALS
A. Borrower, Agent and Lenders from time to time party thereto, entered into that certain
Credit Agreement dated as of May 29, 2009 (as amended by that First Amendment to Credit Agreement
dated as of June 10, 2010, that Second Amendment to Credit Agreement dated as of August 19, 2010,
and as further amended, restated, or supplemented from time to time, the “Credit Agreement”).
B. Borrower has requested that Lenders extend credit in the form of a $5,500,000 advancing
term loan to Borrower under the Credit Agreement.
C. Borrower, Lenders and Agent agree to amend the Credit Agreement, subject to the terms and
conditions of this Amendment.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the undersigned hereby agree as follows:
1. Amendments to Credit Agreement.
(a) Section 1.01 (Defined Terms) of the Credit Agreement is amended to delete the
definition of “Commitment” in its entirety and replace it with the following:
“Commitment” means, as to each Lender, its obligation to make Loans to Borrower
pursuant to Section 2.01, on the Closing Date, on the Additional Term Loan Closing
Date, and on each Equipment Term Loan Advance Date, as the case may be, in an
aggregate principal amount at any one time outstanding not to exceed the amount set
forth opposite such Lender’s name on Schedule 2.01.
(b) Section 1.01 (Defined Terms) of the Credit Agreement is amended to add the
following new defined terms in the appropriate alphabetical order:
“Equipment Term Loan Advance Date” means the date that all the conditions precedent
in Section 4.02 are satisfied or waived in accordance with Section 10.01 and the
Loans in respect of the Equipment Term Loan Commitment are extended by the Lenders.
“Equipment Term Loan Advance Period” means the period commencing on November 9, 2010
and ending on May 9, 2011.
“Equipment Term Loan Commitment” means $5,500,000.
(c) Section 2.01 (Term Loan Commitment) is hereby deleted in its entirety and replaced
with the following:
“2.01 Term Loan Commitments.
(a) Borrower acknowledges and confirms that on the Closing Date, Lenders made a
single advance term loan (the “Existing Term Loan”) to Borrower in the original
principal amount of $35,000,000 in the aggregate, and that the Outstanding Amount is
equal to $23,333,333.33 as of November 9, 2010. Borrower may prepay the Loans under
the Existing Term Loan under Section 2.03, and shall repay such Loans under the
Existing Term Loan pursuant to Section 2.04, but once prepaid or repaid, such Loans
shall not be reborrowed. The Borrowing under the Existing Term Loan on the Closing
Date shall bear interest based on the Eurodollar Daily Floating Rate, subject to
subsequent conversion at Borrower’s option to Eurodollar Rate Loans, as further
provided herein. Borrower reaffirms its obligation to pay the Existing Term Loan in
accordance with the terms and conditions of this Agreement and the other Loan
Documents.
(b) Borrower acknowledges and confirms that on the Additional Term Loan Closing
Date Lenders made a single advance term loan (the “Additional Term Loan”) to
Borrower in the original principal amount of $10,000,000, and that the Outstanding
Amount is equal to $10,000,000 as of November 9, 2010. Borrower may prepay the
Loans under the Additional Term Loan under Section 2.03, and shall repay such Loans
pursuant to Section 2.04, but once prepaid or repaid, such Loans shall not be
reborrowed. The Borrowing under the Additional Term Loan on the Additional Term
Loan Closing Date shall bear interest based on the Eurodollar Daily Floating Rate,
subject to subsequent conversion at Borrower’s option to Eurodollar Rate Loans, as
further provided herein. Borrower reaffirms its obligation to pay the Additional
Term Loan in accordance with the terms and conditions of this Agreement and the
other Loan Documents.
(c) Subject to the terms and conditions of this Agreement, each Lender
severally and not jointly agrees to make one or more term loans (the “Equipment Term
Loan”) to Borrower during the Equipment Term Loan Advance Period in an aggregate
amount equal to such Lender’s portion of the Equipment Term Loan Commitment as
listed on Schedule 2.01 (each such loan, together with the Existing Term Loan, and
the Additional Term Loan, a “Loan”). After giving effect to the Borrowings on each
Equipment Term Loan Advance Date (i) the Outstanding Amount under the Equipment Term
Loan shall not exceed $5,500,000, and (ii) the aggregate Outstanding Amount of the
Loans of any Lender shall not exceed such Lender’s Commitment as listed on Schedule
2.01. Borrower may prepay the Loans under the Equipment Term Loan under Section
2.03, and shall repay such Loans pursuant to Section 2.04, but once prepaid or
repaid, such Loans shall not be reborrowed. Each Borrowing under the Equipment Term
Loan shall bear interest at Borrower’s option based on the Eurodollar Daily Floating
Rate plus the Applicable Rate or the Eurodollar Base Rate plus the Applicable Rate,
as further provided herein. Lenders’ Commitment to make Loans under the Equipment
Term Loan expires on the last day of the Equipment Term Loan Advance Period. In
addition to the foregoing and in addition to the conditions precedent set out in
Article IV below, Loans under the Equipment Term Loan are subject to the following
limitations:
(i) no Loans under the Equipment Term Loan may be made after
expiration of the Equipment Term Loan Advance Period;
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(ii) no Loan under the Equipment Term Loan may exceed 75% of the cost
of the equipment purchased on or after October 1, 2010 or to be purchased
with the proceeds of such Loan as evidenced and supported by the invoice or
purchase order in respect of purchase of such equipment as delivered to
Agent;
(iii) no more than three (3) Loans under the Equipment Term Loan may
be made in any calendar month; and
(iv) each Loan under the Equipment Term Loan shall be in a minimum
amount of $100,000.”
(d) Section 2.02 (Conversions and Continuations of Loans) of the Credit Agreement is
hereby amended by deleting subsection (b) in its entirety and replacing it with the
following:
“(b) Following receipt of a Loan Notice, Agent shall promptly notify each
Lender of the amount of its Applicable Percentage of the applicable Loans, and if no
timely notice of a conversion or continuation is provided by Borrower, Agent shall
notify each Lender of the details of any automatic conversion to Eurodollar Rate
Loans described in the preceding subsection. On the Closing Date, the Additional
Term Loan Closing Date and on each Equipment Term Loan Advance Date (as the case may
be), each Lender shall make the amount of its Loan available to Agent in immediately
available funds at Agent’s Office not later than 1:00 p.m. on the Business Day
specified in the applicable Loan Notice. Upon satisfaction of the applicable
conditions set forth in Sections 4.01 and 4.02 on the Closing Date, the Additional
Term Loan Closing Date and on the Equipment Term Loan Advance Date (as the case may
be), Agent shall make the funds so received available to Borrower in like funds as
received by Agent either by (i) crediting the account of Borrower on the books of
Bank of America with the amount of such funds or (ii) wire transfer of such funds,
in each case in accordance with instructions provided to (and reasonably acceptable
to) Agent by Borrower.”
(e) Section 2.04 (Repayment of Loans) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
“2.04 Repayment of Loans.
(a) In respect of the Outstanding Amounts under the Existing Term Loan,
commencing on September 30, 2010, and continuing on the last Business Day of
each quarter thereafter, Borrower shall repay to the Lenders holding such
Outstanding Amounts, a principal installment each in the aggregate amount
equal to $2,187,500.00.
(b) In respect of the Outstanding Amounts under the Equipment Term
Loan, commencing on June 30, 2011 and continuing on the last Business Day of
each quarter thereafter, Borrower shall repay to the Lenders holding such
Outstanding Amounts a principal installment each in an amount equal to the
quotient of (i) the Outstanding Amount of Loans under the Equipment Term
Loan at the expiration of the Equipment Term Loan Advance Period divided by
(ii) sixty (60).
(c) On the Maturity Date, Borrower shall repay to the Lenders the
Outstanding Amount of all Loans, together with any accrued and unpaid
interest.
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Any payment of the Loans shall be applied first to Loans bearing
interest based on the Eurodollar Daily Floating Rate and then to Eurodollar
Rate Loans beginning with those Loans with the least number of days
remaining in the Interest Period applicable thereto and ending with those
Loans with the most number of days remaining in the Interest Period
applicable thereto.”
(f) Section 4.02 (Conditions to all Credit Extensions) of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:
“4.02 Conditions to all Credit Extensions. The obligation of each Lender to
honor any Request for Credit Extension, including any Request for Credit Extension
on the Additional Term Loan Closing Date or on any Equipment Term Loan Advance Date,
is subject to the following conditions precedent:
(a) The representations and warranties of Borrower and each other
Loan Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or therewith,
shall be true and correct in all material respects on and as of the date of such
Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and correct
in all material respects as of such earlier date, and except that for purposes of
this Section 4.02, the representations and warranties contained in subsections (a)
and (b) of Section 5.05 shall be deemed to refer to the most recent financial
statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.
(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.
(c) Agent shall have received a Request for Credit Extension in accordance with
the requirements hereof, and in respect of a Loan under the Equipment Term Loan,
Agent shall have received a copy of the purchase order or invoice for the equipment
purchased after October 1, 2010 or to be purchased with the proceeds of such Loan
and such other further and supporting information as Agent may reasonably request.”
(g) Section 6.11 (Use of Proceeds) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
“6.11 Use of Proceeds. Use the proceeds of the Credit Extensions (a) in
respect of the Existing Term Loan, to refinance existing Indebtedness, (b)
in respect of the Additional Term Loan, for working capital and capital
expenditures, and (c) in respect of the Equipment Term Loan, to reimburse
Borrower for purchases of equipment made after October 1, 2010 and to
finance additional purchases of equipment, and in each case not in
contravention of any Law or of any Loan Document.”
(h) Exhibit A (Loan Notice) to the Credit Agreement is hereby deleted in its entirety
and replaced with Exhibit A to this Amendment.
(i) Schedule 2.01 (Commitments and Applicable Percentages) of the Credit Agreement is
hereby deleted in its entirety and replaced with Schedule 2.01 to this Amendment.
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2. Conditions. This Amendment shall be effective as of the date first set forth above
once each of the following has been delivered to Agent:
(a) this Amendment executed by Borrower, Required Lenders, and Agent;
(b) an executed Guarantors’ Consent and Agreement in form, scope and substance
satisfactory to the Agent;
(c) a Promissory Note executed by Borrower and made payable to Bank of America, N.A.,
in the face amount of $5,500,000 in respect of the Equipment Term Loan;
(d) an Officer’s Certificate from Borrower certifying as to incumbency of officers, no
changes to articles of incorporation and bylaws since the date of the certificate delivered
in connection with the Credit Agreement or including only modified constituent documents,
and resolutions adopted by the Borrower’s Board of Directors authorizing this Amendment;
(e) Certificates of Existence and Good Standing of Borrower and each Guarantor from its
jurisdiction of organization;
(f) an Officer’s Certificate from each Guarantor certifying as to incumbency of
officers, no changes to its constitutional documents since the date of the certificate
delivered in connection with the Credit Agreement, and resolutions adopted by the such
Guarantor’s board of directors or managers, as applicable, authorizing this Amendment and
the increased amount of its obligations under its respective Guaranty;
(g) Borrower shall have paid to the Agent for the ratable benefit of the Lenders
holding the Equipment Term Loan Commitment a fee in the amount of $55,000, which fee shall
be duly earned when paid and shall be non-refundable; and
(h) such other documents as Agent may reasonably request.
3. Representations and Warranties. Borrower represents and warrants to Agent and each
Lender that (a) it possesses all requisite power and authority to execute, deliver and comply with
the terms of this Amendment, (b) this Amendment has been duly authorized and approved by all
requisite corporate action on the part of Borrower, (c) no other consent of any Person (other than
Agent and Required Lenders) is required for this Amendment to be effective, (d) the execution and
delivery of this Amendment does not violate its organizational documents, (e) the representations
and warranties in each Loan Document to which it is a party are true and correct in all material
respects on and as of the date of this Amendment as though made on the date of this Amendment
(except to the extent that such representations and warranties speak to a specific date), (f) it is
in full compliance with all covenants and agreements contained in each Loan Document to which it is
a party, and (g) no Default or Event of Default has occurred and is continuing. The
representations and warranties made in this Amendment shall survive the execution and delivery of
this Amendment. No investigation by Agent or any Lender is required for Agent or any Lender to
rely on the representations and warranties in this Amendment.
4. Scope of Amendment; Reaffirmation; Release. All references to the Credit
Agreement shall refer to the Credit Agreement as amended by this Amendment. Except as affected by
this Amendment, the Loan Documents are unchanged and continue in full force and effect. However,
in the event of any inconsistency between the terms of the Credit Agreement (as amended by this
Amendment) and any other Loan Document, the terms of the Credit Agreement shall control and such
other document shall be deemed to be amended to conform to the terms of the Credit Agreement.
Borrower hereby reaffirms its obligations under the Loan Documents to which it is a party and
agrees that all Loan
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Documents to which it is a party remain in full force and effect and continue to be legal,
valid, and binding obligations enforceable in accordance with their terms (as the same are affected
by this Amendment). Borrower hereby releases Agent and Lenders from any liability for actions
or omissions in connection with the Credit Agreement and the other Loan Documents prior to the date
of this Amendment.
5. Miscellaneous.
(a) No Waiver of Defaults. This Amendment does not constitute (i) a waiver of,
or a consent to, (A) any provision of the Credit Agreement or any other Loan Document not
expressly referred to in this Amendment, or (B) any present or future violation of, or
default under, any provision of the Loan Documents, or (ii) a waiver of Agent’s or any
Lender’s right to insist upon future compliance with each term, covenant, condition and
provision of the Loan Documents.
(b) Form. Each agreement, document, instrument or other writing to be
furnished to Agent and Lenders under any provision of this Amendment must be in form and
substance satisfactory to Agent and its counsel.
(c) Headings. The headings and captions used in this Amendment are for
convenience only and will not be deemed to limit, amplify or modify the terms of this
Amendment, the Credit Agreement, or the other Loan Documents.
(d) Costs, Expenses and Attorneys’ Fees. Borrower agrees to pay or reimburse
Agent on demand for all its reasonable out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation, and execution of this Amendment, including,
without limitation, the reasonable fees and disbursements of Agent’s counsel.
(e) Successors and Assigns. This Amendment shall be binding upon and inure to
the benefit of each of the undersigned and their respective successors and permitted
assigns.
(f) Multiple Counterparts. This Amendment may be executed in any number of
counterparts with the same effect as if all signatories had signed the same document. All
counterparts must be construed together to constitute one and the same instrument. This
Amendment may be transmitted and signed by facsimile or portable document format (PDF). The
effectiveness of any such documents and signatures shall, subject to applicable law, have
the same force and effect as manually-signed originals and shall be binding on Borrower,
Agent and Lenders. Agent may also require that any such documents and signatures be
confirmed by a manually-signed original; provided that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile or PDF document or signature.
(g) Governing Law. This Amendment and the other Loan Documents must be
construed, and their performance enforced, under Texas law.
(h) Entirety. The Loan Documents (as amended hereby) Represent the Final
Agreement Among Borrower, Agent and Lenders, and May Not Be Contradicted by Evidence of
Prior, Contemporaneous, or Subsequent Oral Agreements by the Parties. There Are No
Unwritten Oral Agreements among the Parties.
[Signatures appear on the following pages.]
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This Amendment is executed as of the date set out in the preamble to this Amendment.
| BORROWER: RIGNET, INC., a Delaware corporation |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
| Xxxxxx X. Xxxxxxxxx | ||||
| Chief Financial Officer | ||||
Signature Page to Third Amendment to Credit Agreement
| AGENT: BANK OF AMERICA, N.A., a national banking association |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Xxxx Xxxxxx | ||||
| Assistant Vice President | ||||
Signature Page to Third Amendment to Credit Agreement
| LENDER: BANK OF AMERICA, N.A., a national banking association |
||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||
| Xxxxxxxx X. Xxxxx | ||||
| Vice President | ||||
Signature Page to Third Amendment to Credit Agreement
| LENDER: COMERICA BANK, a Texas banking association |
||||
| By: | /s/ Xxxxxx X. XxXxxxxxxx | |||
| Xxxxxx X. XxXxxxxxxx | ||||
| Vice President | ||||
Signature Page to Third Amendment to Credit Agreement
EXHIBIT A
FORM OF LOAN NOTICE
Date: ___________, _____
| To: | Bank of America, N.A., as Agent |
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of May 29, 2009 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), among RigNet, Inc., a
Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, Bank of
America, N.A., as Administrative Agent for itself and the other Lenders.
The undersigned hereby requests (select one):
A Borrowing of the Equipment Term Loan
A conversion or continuation of Loans
| 1. | On _______________________________(a Business Day). | ||
| 2. | In the amount of $____________________. | ||
| 3. | Comprised of _______________________. |
[Type of Loan requested]
| 4. | For Eurodollar Rate Loans: with an Interest Period of _____ months. |
The Borrowing, if any, requested herein complies with the applicable terms and conditions of
Section 2.01 of the Agreement. Attached to this Loan Notice is a copy of the invoice for the
equipment to be purchased, in part, with the proceeds of the requested Loan.
| RIGNET, INC., a Delaware corporation, |
||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Exhibit A
SCHEDULE 2.01
COMMITMENTS
AND APPLICABLE PERCENTAGES
AND APPLICABLE PERCENTAGES
Existing Term Loan
| Lender | Commitment | Applicable Percentage | ||||||
Bank of America, N.A. |
$ | 20,000,000 | 57.142857143 | % | ||||
Comerica Bank |
$ | 15,000,000 | 42.857142857 | % | ||||
Total |
$ | 35,000,000 | 100.000000000 | % | ||||
Additional Term Loan
| Lender | Commitment | Applicable Percentage | ||||||
Bank of America, N.A. |
$ | 5,714,285.71 | 57.142857143 | % | ||||
Comerica Bank |
$ | 4,285,714.29 | 42.857142857 | % | ||||
Total |
$ | 10,000,000.00 | 100.000000000 | % | ||||
Equipment Term Loan
| Lender | Commitment | Applicable Percentage | ||||||
Bank of America, N.A. |
$ | 5,500,000 | 100.00 | % | ||||
Comerica Bank |
$ | 0 | 0.00 | % | ||||
Total |
$ | 5,500,000 | 100.000000000 | % | ||||
Schedule 2.01
