COLLATERAL ACCOUNT AGREEMENT
Exhibit 4.3
COLLATERAL ACCOUNT AGREEMENT, dated as of April 4, 2008, made by SUPERIOR OFFSHORE
INTERNATIONAL, INC., a Delaware corporation (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
As security for those certain letters of credit listed on Schedule I hereto (such listed
letters of credit, the “L/C Agreement”), the Pledgor has agreed to enter into this
Agreement for the benefit of the Administrative Agent, the issuer of such letters of credit and
their respective successors and assigns (each individually, a “Secured Party”,
collectively, the “Secured Parties”).
In addition, Secured Parties will offer certain other services (commercial credit cards and
stored value cards (the “Cards”)) in accordance with agreements in form and substance
substantially identical to the ones attached as Exhibit A (the “Services Agreements”).
Cash Collateral deposited into the Collateral Account will also be used to secure the obligations
of Pledgor to the Second Parties.
1. Defined Terms. 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. 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, Inc. 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 date of termination of each L/C Agreement
and of the final and irrevocable termination of all the Secured Parties’ obligations to make any
payments thereunder or under the letters of credit issued thereunder and the termination of all
Cards and the Secured Parties’ obligations to make any payments or reimbursements thereunder.
“Moody’s”: Xxxxx’x Investors Service, Inc.
“Permitted Investments”: (i) investments in certificates of deposit and time deposits
maturing before the Collateral Account Termination 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 Moody’s 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 references to all obligations and liabilities
of the Pledgor which may arise under or in connection with this Agreement and the Underlying
Agreements.
“S&P”: Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies,
Inc.
“UCC”: the Uniform Commercial Code in effect in the State of Texas or any other
applicable jurisdiction from time to time.
“Underlying Agreements”: the collective reference to the L/C Agreement and the
Services Agreements.
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 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 Collateral Account subject
to
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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 immediately available
funds in the Collateral Account so that the total amount deposited in the Collateral Account as of
the Closing Date is not less than an amount equal to (a) $12,606,508.52 to secure the letters of
credit outstanding on the date hereof (as listed on Schedule I hereto) plus (b) $150,000.00
to secure the Cards issued on or as of the date hereof.
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, 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.
(b) The Pledgor will maintain the security interest created by this Agreement as a first
priority, perfected security interest, 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.
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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 default hereunder and/or under an Underlying
Agreement 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.
(b) The Securities Intermediary shall have no obligation to invest collected funds during the
first night after their collection.
(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 an event of default hereunder and/or under an Underlying Agreement, if Cash
Collateral remains in the 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 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 Secured Parties shall have a right of set-off against the Collateral Account and all
of the rights and remedies of a secured party under the Texas Uniform Commercial Code,
or other applicable law, and all rights and remedies provided herein and in any Underlying
Agreement, all of which rights and remedies shall, to the full extent permitted by law, be
cumulative.
(c) Upon the payment of any draw under any letter of credit subject hereto, or if the Pledgor
fails to pay any fees payable with respect to such letters of credit as and when due (giving effect
to any applicable grace or cure period) the Pledgor hereby directs Secured Parties to set-off
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the
Collateral Account in the amount of such draw, and to liquidate any Permitted Investments then held
in the Collateral Account as the Secured Parties deem necessary in connection therewith.
(d) Upon the Pledgor’s failure to pay any amounts then due and owing under any Card on or
before the due date for such payment in accordance with the applicable Services Agreement (giving
effect to any applicable grace or cure period), the Pledgor hereby directs Secured Parties to
set-off the Collateral Account in the amount of the past due amount, and to liquidate any Permitted
Investments then held in the Collateral Account as the Secured Parties deem necessary in connection
therewith.
(e) 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
hereunder and/or under any Underlying Agreement, 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.
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).
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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 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) If any letter of credit expires in accordance with its terms without being drawn upon or
is otherwise returned to a Secured Party for cancellation without being drawn upon, the Pledgor
hereby directs the Secured Parties to transfer from the Collateral Account to such account as the
Pledgor shall specify in writing an amount equal to 105% of the face amount of such letter of
credit, less all accrued but unpaid fees and expenses related to such expired letter of credit, and
to liquidate any Permitted Investments as the Secured Party deems necessary in connection with such
transfer.
(b) Upon the termination or expiration of the Cards and the timely payment of the amounts due
thereunder, the Pledgor hereby directs the Secured Parties to transfer from the Collateral Account
to such account as the Pledgor shall specify in writing an amount equal to 100% of the maximum
credit limit of such terminated or expired Card, less all accrued but unpaid fees and expenses
related to such Card, and to liquidate any Permitted Investments as the Secured Party deems
necessary in connection with such transfer.
(c) The Administrative Agent will release to such account as the Pledgor shall specify in
writing amounts on deposit (or to the credit of), if any, in the Collateral Account on the
Collateral Account Termination Date.
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 addressed as follows:
To Administrative Agent:
JPMorgan Chase Bank, N.A.
000 Xx. Xxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxxxxx XX 00000
Attention: Xxxxxx X. Xxxxxx
000 Xx. Xxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxxxxx XX 00000
Attention: Xxxxxx X. Xxxxxx
To Pledgor:
Superior Offshore International, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxx
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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.
(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.
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.
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(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 Texas. For purposes
of the UCC, Texas 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 Texas.
Collateral
Account Agreement
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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, Inc., as the Pledgor |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | EVP & Chief Financial Officer | |||
| JPMORGAN CHASE BANK, N.A., as the Administrative Agent |
||||
| By: | /s/ Xxxxxxx Xxxx | |||
| Name: | Xxxxxxx Xxxx | |||
| Title: | Vice President | |||
| JPMORGAN CHASE BANK, N.A., as the Securities Intermediary |
||||
| By: | /s/ Xxxxxxx Xxxx | |||
| Name: | Xxxxxxx Xxxx | |||
| Title: | Vice President | |||
[Signature Page to Collateral Account Agreement]
Schedule I
Existing Letters of Credit
| L/C Number | L/C Type | Expiry | Amount | Beneficiary | ||||||||||||||
| CTCS-347437 | A70S | May 26, 2008 | $ | 742,064.04 | The Commercial Bank of Qatar | |||||||||||||
| CTCS-625823 | A70S | Nov. 30, 2008 | $ | 25,000.00 | Western Surety Company | |||||||||||||
| CTCS-289573 | A70S | Jan. 21, 2009 | $ | 8,000,000.00 | Xxxxxxxx Offshore Services, LLC | |||||||||||||
| CTCS-305857 | A70S | Dec. 1, 2008 | $ | 500,000.00 | Standard Bank of South Africa | |||||||||||||
| CTCS-313377 | A70S | Aug. 15, 2009 | $ | 2,725,000.00 | JPMorgan Chase Bank, N.A. | |||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
Total Amount of L/C
Obligations |
$ | 11,992,064.04 | ||||||||||||||||
Amount of Cash
Collateral required
by this Agreement
to secure L/C
Obligations |
$ | 12,606,508.52 | ||||||||||||||||
Collateral
Account Agreement — Schedule I
Exhibit A
Services Agreements
(See attached)
Collateral
Account Agreement — Exhibit B
