AMENDED AND RESTATED CREDIT AGREEMENT
BY AND AMONG
SESI, L.L.C.
(AS BORROWER),
SUPERIOR ENERGY SERVICES, INC.
(AS PARENT),
BANK ONE, NA
(AS AGENT),
XXXXX FARGO BANK TEXAS, N.A.
(AS SYNDICATION AGENT)
WHITNEY NATIONAL BANK
(AS DOCUMENTATION AGENT)
AND
THE LENDERS PARTY HERETO
----------------------------------
AS OF AUGUST 14, 2003
----------------------------------
BANC ONE CAPITAL MARKETS, INC.
(AS SOLE LEAD ARRANGER AND SOLE BOOK MANAGER)
TABLE OF CONTENTS
PAGE NO.
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ARTICLE I. DEFINITIONS
1.1 DEFINITIONS OF CERTAIN TERMS USED HEREIN 2
ARTICLE II. THE CREDITS
2.1 TERM LOANS 17
2.2 REVOLVING LOANS; SWING LINE LOAN 17
2.3 LETTERS OF CREDIT 19
2.4 TYPES OF ADVANCES 20
2.5 COMMITMENT FEE; REDUCTIONS IN AGGREGATE REVOLVING LOAN COMMITMENT 20
2.6 MINIMUM AMOUNT OF EACH ADVANCE 21
2.7 PREPAYMENTS 21
2.8 METHOD OF SELECTING TYPES AND EURODOLLAR INTEREST PERIODS FOR NEW ADVANCES 22
2.9 CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES 22
2.10 CHANGES IN INTEREST RATE, ETC 23
2.11 RATES APPLICABLE AFTER DEFAULT 23
2.12 METHOD OF PAYMENT 24
2.13 NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS 24
2.14 TELEPHONIC NOTICES 25
2.15 INTEREST PAYMENT DATES; INTEREST AND FEE BASIS 25
2.16 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS 25
2.17 LENDING INSTALLATIONS 25
2.18 NON-RECEIPT OF FUNDS BY THE AGENT 26
2.19 COLLATERAL 26
ARTICLE III. YIELD PROTECTION; TAXES
3.1 YIELD PROTECTION 28
3.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS 28
3.3 AVAILABILITY OF TYPES OF ADVANCES 29
3.4 FUNDING INDEMNIFICATION 29
3.5 TAXES 29
3.6 LENDER STATEMENTS; SURVIVAL OF INDEMNITY 31
3.7 REPLACEMENT OF LENDER 31
ARTICLE IV. CONDITIONS PRECEDENT
4.1 Initial Advance 33
4.2 Each Advance 34
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.1 Existence and Standing 35
5.2 Authorization and Validity 35
5.3 No Conflict; Government Consent 35
5.4 Financial Statements 36
5.5 Material Adverse Change 36
5.6 Taxes 36
5.7 Litigation and Contingent Obligations 36
5.8 Subsidiaries 36
5.9 ERISA 37
5.10 Accuracy Of Information 37
5.11 Regulation U 37
5.12 Material Agreements 37
5.13 Compliance With Laws 37
5.14 Ownership of Properties 37
5.15 Plan Assets; Prohibited Transactions 37
5.16 Environmental Matters 38
5.17 Investment Company Act 38
5.18 Public Utility Holding Company Act 38
5.19 Solvency 38
ARTICLE VI. COVENANTS
6.1 Financial Reporting 39
6.2 Use of Proceeds 40
6.3 Notice of Default 40
6.4 Conduct of Business 41
6.5 Taxes 41
6.6 Insurance 41
6.7 Compliance with Laws; Environmental Matters 41
6.8 Maintenance of Properties 41
6.9 Inspection 42
6.10 Dividends 42
6.11 Indebtedness 42
6.12 Merger 44
6.13 Sale of Assets 44
6.14 Investments 45
6.15 Liens 46
6.16 Acquisitions 48
6.17 Transactions with Affiliates 48
6.18 Appraisals 49
6.19 Financial Covenants 49
6.20 Plug and Abandonment Liabilities 50
ARTICLE VII. DEFAULTS 51
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration 53
8.2 Amendments 53
8.3 Preservation of Rights 54
ARTICLE IX. GENERAL PROVISIONS
9.1 Survival Of Representations 55
9.2 Governmental Regulation 55
9.3 Headings 55
9.4 Entire Agreement 55
9.5 Several Obligations; Benefits of this Agreement 55
9.6 Expenses; Indemnification 55
9.7 Numbers Of Documents 56
9.8 Accounting 56
9.9 Severability of Provisions 56
9.10 Nonliability of Lenders 56
9.11 Confidentiality 57
9.12 Nonreliance 57
9.13 Disclosure 57
ARTICLE X. THE AGENT
10.1 Appointment; Nature of Relationship 58
10.2 Powers 58
10.3 General Immunity 58
10.4 No Responsibility for Loans, Recitals, etc. 58
10.5 Action on Instructions of Lenders 59
10.6 Employment of Agents and Counsel 59
10.7 Reliance on Documents; Counsel 59
10.8 Agent's Reimbursement and Indemnification 59
10.9 Notice of Default 60
10.10 Rights as a Lender 60
10.11 Lender Credit Decision 60
10.12 Successor Agent 61
10.13 Agent's Fee; Arranger's Fee 61
10.14 Delegation to Affiliates 61
10.15 Execution of Collateral Documents 61
10.16 Collateral Releases 62
ARTICLE XI. SETOFF; RATABLE PAYMENTS
11.1 Setoff 63
11.2 Ratable Payments 63
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns 64
12.2 Participations 64
12.3 Assignments 65
12.4 Dissemination of Information 66
12.5 Tax Treatment 66
ARTICLE XIII. NOTICES
13.1 Notices 67
13.2 Change of Address 67
ARTICLE XIV. COUNTERPARTS 68
ARTICLE XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1 Choice of Law 69
15.2 Consent to Jurisdiction 69
15.3 Waiver of Jury Trial 69
SCHEDULES
1 Commitment Amounts of the Lenders 73
2 Pricing Schedule 81
3 List of Borrower's Subsidiaries 83
4 Eligible Accounts and Eligible Inventory 85
5 Existing Permitted Indebtedness 89
6 Existing Permitted Investments 90
7 Existing Permitted Liens 91
8 Existing Additional Contingent Consideration 92
EXHIBITS
A Compliance Certificate 93
B Assignment Agreement 97
C Borrowing Base Certificate 104
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 14,
2003, is among SESI, L.L.C., as Borrower, SUPERIOR ENERGY SERVICES INC., as
Parent, BANK ONE, NA, as Agent, XXXXX FARGO BANK TEXAS, N.A., as Syndication
Agent, WHITNEY NATIONAL BANK, as Documentation Agent, and the lenders party
hereto, who agree as follows:
RECITALS
A. Superior Energy Services, Inc., (the "Parent"), SESI,
L.L.C. ("Borrower"), Agent, Syndication Agent, Documentation Agent and the
Lenders party thereto have executed an Amended and Restated Credit Agreement
dated as of December 31, 2000 (as amended, the "Original Credit Agreement")
providing for a Term Loan One in the principal amount of $50,000,000 (with a
current principal balance of $12,000,000), a Term Loan Two in the principal
amount of $32,000,000 (with a current principal balance of $22,400,000 and a
Revolving Loan in the aggregate principal amount of $75,000,000.
B. The Borrower has requested a $23,000,000 increase in the
aggregate principal amount of Term Loan One from $12,000,000 to $35,000,000.
C. The parties hereto wish to reflect the foregoing
transactions through an amendment and restatement of the Original Credit
Agreement. For convenience, the parties hereto have agreed to restate the
Original Credit Agreement to incorporate all amendments to date as well as the
further amendments contemplated in these Recitals.
NOW, THEREFORE, in consideration of their mutual covenants and
undertakings, the Borrower, Parent, Agent, Syndication Agent, Documentation
Agent and the Lender hereby amend and restate the Original Credit Agreement in
full to read as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions of Certain Terms Used Herein. As used in
this Agreement, the following terms shall have the following meanings:
"Acquisition" means any transaction, or series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business concern or
all or substantially all of the assets of any firm, corporation or limited
liability company or division thereof that is a going business concern, whether
through purchase of assets, merger or otherwise, or (ii) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the outstanding
ownership interest of a partnership or limited liability company; "Acquisition"
shall not include the formation of a Wholly-Owned Subsidiary of the Borrower or
any Wholly-Owned Subsidiary of any Wholly-Owned Subsidiary of the Borrower.
"Additional Contingent Consideration" means consideration payable by
the Borrower or its Subsidiaries to sellers subsequent to the closing of an
Acquisition that is dependent on the performance of the acquired company
following the Acquisition. The total Additional Contingent Consideration as of
the Closing Date is set forth on Schedule 6. Notwithstanding the foregoing
definition, the amount of Additional Contingent Consideration to be included in
the defined term "Indebtedness" for the purposes of determining the financial
covenants in Section 6.19, shall be the amount of Additional Contingent
Consideration (excluding any accrued interest) which through the date of
determination of such covenant and based on the performance of the acquired
company through the date of determination of such covenant, the Borrower
reasonably anticipates paying to the sellers within the 12 months following the
date of determination.
"Adjusted Leverage Ratio" is defined in Section 6.19.3.
"Advance" means a borrowing hereunder, (i) made by the Lenders on
the same Borrowing Date, (ii) converted or continued by the Lenders on the same
date of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurodollar
Loans, for the same Eurodollar Interest Period, or (iii) made by the Agent on
the Swing Line Loan.
"Affected Lender" is defined in Section 3.7.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
A Person shall be deemed to control
another Person if the controlling Person owns 20% or more of any class of voting
securities (or other ownership interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
stock, by contract or otherwise.
"Agent" means Bank One, NA, in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, and any successor Agent appointed pursuant to Article X.
"Agents" means the Agent, Xxxxx Fargo Bank Texas, N.A., as Syndication Agent and
Whitney National Bank, as Documentation Agent.
"Aggregate Pro Rata Share" means, with respect to all Lenders, at
any time, the percentage obtained by dividing (i) the sum of such Lender's Term
Loan One and Term Loan Two outstanding and Revolving Loan Commitment at such
time (in each case as adjusted from time to time in accordance with the
provisions of this Agreement) by (ii) the sum of the aggregate amount of the
Term Loan One and Term Loan Two outstanding hereunder at such time and the
Aggregate Revolving Loan Commitment at such time, provided, however, that if all
of the Revolving Loan Commitments are terminated pursuant to the terms of this
Agreement, then "Aggregate Pro Rata Share" means, with respect to any Lender at
any time, the percentage obtained by dividing (x) the sum of such Lender's Term
Loan One and Term Loan Two and Revolving Loans outstanding at such time
(excluding the amounts outstanding on the Swing Line Loan) by (y) the sum of the
aggregate amount of the Term Loan One, Term Loan Two and Revolving Loans
outstanding hereunder at such time.
"Aggregate Revolving Loan Commitment" means the aggregate of the
Revolving Loan Commitments of all the Lenders, as reduced from time to time
pursuant to the terms hereof.
"Aggregate Term Loan Commitment" means the aggregate of the Term
Loan Commitments of all the Lenders.
"Agreement" means this amended and restated credit agreement, as it
may be amended or modified and in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per
annum equal to the higher of (i) the Prime Rate for such day or (ii) the Federal
Funds Effective Rate for such day plus 1/2% per annum. "Prime Rate" means a rate
per annum equal to the prime rate of interest announced from time to time by
Bank One, NA (which is not necessarily the lowest rate charged to any customer),
changing when and as said prime rate changes. "Federal Funds Effective Rate"
means, for any day, an interest rate per annum equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published for
such day (or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
at approximately 10:00 a.m. (Chicago time) on such day on such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by the Agent in its sole
discretion.
"Applicable Fee Rate" means, at any time, the percentage rate per
annum at which commitment fees are accruing on the unused portion of the
Aggregate Revolving Loan Commitment at such time as set forth in the Pricing
Schedule.
"Applicable Letter of Credit Fee Rate" means, at any time, with
respect to Letters of Credit, the percentage rate per annum which is applicable
at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at
any time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors.
"Article" means an article of this Agreement unless another document
is specifically referenced.
"Asset Sale" means the sale of any fixed assets, excluding sales in
the ordinary course of business in any calendar year, in a single transaction or
a series of related transactions, provided that such transaction or series of
transactions results in the receipt of Net Sales Proceeds in excess of $500,000
individually and $2,000,000 in the aggregate per calendar year. Notwithstanding
the foregoing, the following transactions will be deemed not to be Asset Sales:
(A) a sale of assets by the Borrower to a Subsidiary or by a Subsidiary to the
Borrower or to another Subsidiary; (B) any trade or exchange by the Borrower or
any Subsidiary of equipment or other assets for equipment or other assets owned
or held by another Person, provided that the fair market value of the assets
traded or exchanged by the Borrower or such Subsidiary (together with any cash
or cash equivalents) is reasonably equivalent to the fair market value of the
assets (together with any cash or cash equivalent) to be received by the
Borrower or such Subsidiary; (C) a sale of assets which are promptly replaced
thereafter by assets of a similar type and value or otherwise useful in and to
the business of the Borrower or one of the Subsidiaries; and (D) obsolete or
worn-out equipment sold in the ordinary course of business.
"Assignment Agreement" means any assignment agreement in the form of
Exhibit B, executed and delivered pursuant to Section 12.3.
"Authorized Officer" means any of the President, any Vice President,
Chief Financial Officer or Treasurer of the Borrower, acting singly.
"Borrower" means SESI, L.L.C., a Delaware limited liability company,
and its successors and assigns.
"Borrowing Base" means at any time an amount equal to 80% of
Eligible Accounts plus
the lesser of 50% of Eligible Inventory or 40% of the Aggregate Revolving Loan
Commitment.
"Borrowing Base Certificate" means a certificate executed and
delivered by the Borrower to the Agent from time to time setting forth the
Borrowing Base as of a certain date and substantially in the form attached as
Exhibit C.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or
rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday)
on which banks generally are open in New Orleans for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in New Orleans for the conduct of substantially all of their commercial
lending activities and interbank wire transfers can be made on the Fedwire
system.
"Capital Expenditures" means, without duplication, any expenditures
for any purchase or other acquisition of any asset which would be classified as
a fixed or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP excluding (i) expenditures of
insurance proceeds to rebuild or replace any asset after a casualty loss, (ii)
leasehold improvement expenditures for which the Borrower or a Subsidiary is
reimbursed promptly by the lessor and (iii) expenditures constituting
consideration for Permitted Acquisition.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"Capitalized Lease Expenses" means, with reference to any period,
the lease expenses of the Borrower and its Subsidiaries with respect to
Capitalized Leases calculated on a consolidated basis for such period.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Cash Equivalent Investments" means (i) short-term obligations of,
or fully guaranteed by, the United States of America, (ii) commercial paper
rated A-1 or better by S&P or P-1 or better by Xxxxx'x, (iii) demand deposit
accounts maintained in the ordinary course of business, (iv) certificates of
deposit issued by, and time deposits with, commercial banks (whether domestic or
foreign) having capital and surplus in excess of $100,000,000 or with any
Lender; provided in each case that the same provides for payment of both
principal and interest (and not
principal alone or interest alone) and is not subject to any contingency
regarding the payment of principal or interest, (v) money market mutual funds,
and (vi) repurchase obligations with a term of not more than seven days for
underlying securities of the type described in clause (i) above entered into
with any financial institution meeting the qualifications specified in clause
(iv) above.
"Change" is defined in Section 3.2.
"Change in Control" means the acquisition, after the date hereof, by
any Person, or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 35% or more of the outstanding
shares of voting stock of the Borrower.
"Closing Date" means the date upon which the conditions precedent to
the initial Advance have been satisfied or waived by the Lenders and the Term
Loans and initial Revolving Loans are made under this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
"Collateral" shall mean all of the types of property described in
Section 2.19, or as otherwise described as such in any Collateral Documents.
"Collateral Documents" means, collectively, all guaranties and all
security agreements, financing statements, mortgages, deeds of trust,
assignments creating and perfecting security interests, liens, or encumbrances
in the assets of the Borrower and its Subsidiaries in favor of the Agent, for
the benefit of the Lenders to secure the Secured Obligations.
"Commitment" means, for each Lender, collectively, such Lender's
Revolving Loan Commitment and Term Loan Commitment.
"Compliance Certificate" means the certificate required from the
Borrower from time to time in the form of Exhibit A, signed by an Authorized
Officer of the Borrower.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Default" means an event described in Article VII.
"Domestic Subsidiaries" means Subsidiaries of the Borrower
incorporated or organized under the laws of any state of the United States of
America.
"EBITDA" means Net Income plus, to the extent deducted in
determining Net Income, (i) Interest Expense, (ii) Income Taxes, (iii)
depreciation expense, (iv) amortization expense, (v) other non-cash charges, and
(vi) extraordinary losses, minus, to the extent included in
determining Net Income, extraordinary gains, all calculated for the Parent,
Borrower and Borrower's Subsidiaries on a consolidated basis; provided, however,
that following a Permitted Acquisition by the Borrower or any of its
Subsidiaries, calculation of EBITDA for the fiscal quarter in which such
Permitted Acquisition occurred and each of the three fiscal quarters immediately
following such Permitted Acquisition shall be made on a Pro Forma Basis.
"Eligible Accounts" is defined on Schedule 4.
"Eligible Inventory" is defined on Schedule 4.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"Equity Issuance" means the issuance, sale or other disposition by
the Parent, Borrower or any Subsidiary of its capital stock, any rights,
warrants or options to purchase or acquire any shares of its capital stock or
any other security representing, convertible into or exchangeable for an equity
interest in the Parent, Borrower or Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance
for the relevant Eurodollar Interest Period, the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars as reported by
any generally recognized information service as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Eurodollar Interest Period, and
having a maturity equal to such Eurodollar Interest Period, provided that, (i)
if no such British Bankers' Association Interest Settlement Rate is available to
the Agent, the applicable Eurodollar Base Rate for the relevant Eurodollar
Interest Period shall instead be the rate determined by the Agent to be the rate
at which Bank One, NA or one of its Affiliate banks offers to place deposits in
U.S. dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Eurodollar Interest Period, in the approximate amount of Bank One, NA's
relevant Eurodollar Loan and having a maturity equal to such Eurodollar Interest
Period.
"Eurodollar Interest Period" means, with respect to a Eurodollar
Advance, a period of
one, two, three months or six months (or other period acceptable to all of the
Lenders) commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Eurodollar Interest Period shall end on the day which
corresponds numerically to such date one, two, three or six months (or other
period acceptable to all of the Lenders) thereafter, provided, however, that if
there is no such numerically corresponding day in such next, second or third
succeeding month, such Eurodollar Interest Period shall end on the last Business
Day of such next, second or third succeeding month. If an Eurodollar Interest
Period would otherwise end on a day which is not a Business Day, such Eurodollar
Interest Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Eurodollar Interest Period shall end on the immediately preceding
Business Day. Notwithstanding the foregoing, from the period from the Closing
Date through the earlier of the completion of the syndication of the Obligations
or 90 days after the Closing Date, at the Agent's option, the Eurodollar
Interest Period shall not exceed 14 days.
"Eurodollar Loan" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for
the relevant Eurodollar Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to such Eurodollar Interest Period, divided by
(b) one minus the Reserve Requirement (expressed as a decimal) applicable to
such Eurodollar Interest Period, plus (ii) the Applicable Margin.
"Excess Cash Flow" means, for any fiscal year of the Parent, and
without duplication, (i) the sum of (a) Net Income, (b) depreciation and
amortization, and (c) all extraordinary or nonrecurring cash gains, business
interruption insurance proceeds and cash gains attributable to the sale of
assets out of the ordinary course of business, minus (ii) the sum of (x)
required principal repayments on the Term Loan and other Indebtedness pursuant
to Section 2.1.2, (y) Capital Expenditures made during such fiscal year
(excluding the financed portion thereof), and (z) cash consideration paid to the
sellers in connection with a Permitted Acquisition (excluding the financed
portion thereof).
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Floating Rate" means, for any day, a rate per annum equal to (i)
the Alternate Base Rate for such day plus (ii) the Applicable Margin, in each
case changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America, applied in a manner
consistent with that used in preparing the financial statements referred to in
Section 5.4.
"Income Taxes" means, with reference to any period, all federal,
state and local income taxes paid or provided for (accrued) by the Parent,
Borrower and Borrower's Subsidiaries, calculated on a consolidated basis for
such period.
"Indebtedness" of a Person means, without duplication, such Person's
(i) obligations for borrowed money, (ii) obligations representing the deferred
purchase price of Property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (iii) obligations, whether or not assumed, secured by Liens or payable
out of the proceeds or production from Property now or hereafter owned or
acquired by such Person, (iv) obligations which are evidenced by notes, bonds,
debentures, acceptances, or other instruments, (v) obligations to purchase
securities or other Property arising out of or in connection with the sale of
the same or substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) any other obligation for borrowed money or other financial
accommodation which in accordance with GAAP would be shown as a liability on the
consolidated balance sheet of such Person; (viii) all reimbursement obligations
relating to letters of credit, bankers' acceptances and similar instruments (but
excluding performance bonds), (ix) all liabilities with respect to unfunded
vested benefits under any Plan, (x) all endorsements (other than for collection
or deposit in the ordinary course of business), (xi) all Additional Contingent
Consideration, and (xii) all obligations under guaranties for any obligations
described in clauses (i) through (xi) hereof.
"Intercreditor Agreement" means that certain Intercreditor Agreement
dated as of July 11, 2002, as amended, supplemented or restated from time to
time, by and between the Agents on behalf of the Lenders and Bank One, NA on
behalf of the Lamb Energy Lenders regarding the sharing of certain Collateral.
"Interest Expense" means, with reference to any period, the interest
expense of the Parent, Borrower and Borrower's Subsidiaries calculated on a
consolidated basis for such period, and, in the case of a Permitted Acquisition,
imputed interest determined as set forth in the definition of Pro Forma Basis.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers, employees and consultants
made in the ordinary course of business), extension of credit (other than
accounts receivable arising in the ordinary course of business on
terms customary in the trade) or contribution of capital by such Person; stocks,
bonds, mutual funds, partnership interests, notes, debentures or other
securities owned by such Person; any deposit accounts and certificate of deposit
owned by such Person; and structured notes, derivative financial instruments and
other similar instruments or contracts owned by such Person.
"Issuing Bank" is defined in Section 2.3.1.
"Lamb Energy" means Lamb Energy Services, L.L.C.
"Lamb Energy Credit Agreement" means that certain Credit Agreement
dated as of June 11, 2002 by and among Lamb Energy, Bank One as agent and the
Lamb Energy Lenders.
"Lamb Energy Lenders" means those certain Lenders hereof who are
parties to the Lamb Energy Credit Agreement.
"Lamb Energy Loans" means a revolving line of credit in the amount
of $3,000,000 and a term loan in the original principal amount of $12,000,000
(and all renewals, extensions, amendments and substitutions thereof) made by the
Lamb Energy Lenders to Lamb Energy pursuant to the Lamb Energy Credit Agreement.
"Lenders" means the lending institutions listed on Schedule 1 hereto
(as amended or replaced from time to time) and their respective successors and
assigns. Unless otherwise specified herein, the term "Lenders" includes the
Agent in its capacity as a lender.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on Schedule 1 hereto (or any superseding Schedule 1) or otherwise selected by
such Lender or the Agent pursuant to Section 2.17.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued by a Lender upon the application of the Borrower or
any of its Subsidiaries as set forth in Section 2.3.
"Leverage Ratio" is defined in Section 6.19.2.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan
(including the Swing Line Loan) made pursuant to Article II (or any conversion
or continuation thereof), and collectively all
Revolving Loans and Term Loans, whether made or continued as or converted to
Floating Rate Loans or Eurodollar Loans.
"Loan Documents" means this Agreement, any Notes issued pursuant to
Section 2.13 and the Collateral Documents.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Parent, Borrower and Borrower's Subsidiaries taken as a
whole, (ii) the ability of the Parent or Borrower to perform its obligations
under the Loan Documents or (iii) the validity or enforceability of any of the
Loan Documents or the rights or remedies of the Agent or the Lenders thereunder.
"Material Indebtedness" is defined in Section 7.5.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Equity Proceeds" means the aggregate cash proceeds received by
the Parent, Borrower or any of Borrower's Subsidiaries in respect of any Equity
Issuance, net of (without duplication) the direct costs relating to such Equity
Issuance (including without limitation, legal, accounting and investment banking
fees and underwriting discounts and commissions).
"Net Income" means, with reference to any period, the net income (or
loss) of the Parent, Borrower and Borrower's Subsidiaries calculated on a
consolidated basis for such period.
"Net Sales Proceeds" means the aggregate cash proceeds received by
the Parent, Borrower or any of Borrower's Subsidiaries in respect of any Asset
Sale, net of (without duplication) (i) the direct costs relating to such Asset
Sale (including, without limitation, legal, accounting and investment banking
fees, sales commissions, recording fees, title transfer fees, title insurance
premiums, appraiser fees and costs incurred in connection with preparing such
asset for sale) and any relocation or other related expenses incurred as a
result thereof, (ii) amounts required to be applied to the repayment of
Indebtedness (other than under this Agreement) secured by a Lien on the asset or
assets that were the subject of such Asset Sale, and (iii) any amounts placed in
escrow or reserves established in accordance with GAAP until such time as the
escrow arrangement is terminated, in which case such Net Sales Proceeds shall
include the amounts returned to the Parent, Borrower or any of Borrower's
Subsidiaries from such escrow arrangement, taxes paid or estimated to be paid as
a result thereof.
"Net Worth" means, as of any time, total stockholders' equity of the
Parent, Borrower and Borrower's Subsidiaries calculated on a consolidated basis
as of such time.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" means any Term Note or any Revolving Note, or the Swing Line
Note.
"Obligations" means all Indebtedness of the Borrower to the Lenders,
from time to time,
arising under the Loan Documents, including without limitation, all unpaid
principal of and accrued and unpaid interest on the Loans, all commercial and
standby letters of credit and bankers acceptances, issued by any Lender, all
accrued and unpaid fees and all expenses, reimbursements, indemnities and other
obligations of the Borrower to the Lenders or to any Lender, the Agent or any
indemnified party arising under the Loan Documents.
"Operating Lease" of a Person means any lease of Property (other
than a Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Other Taxes" is defined in Section 3.5(ii).
"Overadvances" is defined in Section 2.2.2.
"Participants" is defined in Section 12.2.1.
"Parent" means Superior Energy Services, Inc., a Delaware
corporation and the sole member of the Borrower.
"Payment Date" means the last day of each month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Acquisition" means an Acquisition permitted by the terms
of Section 6.16, or otherwise consented to by the Agent and the Required
Lenders.
"Permitted Liens" is defined in Section 6.15.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code as to which the Borrower may have any liability.
"Power Offshore Vessels" means the eight liftboats acquired by the
Borrower or a Subsidiary from Power Offshore Service, L.L.C. on or about May 22,
2002.
"Pricing Schedule" means Schedule 2.
"Pro Forma Basis" means, following a Permitted Acquisition, the
calculation of the Indebtedness and EBITDA components of the Leverage Ratio and
fixed charge coverage ratio for the fiscal quarter in which such Permitted
Acquisition occurred and each of the three fiscal
quarters immediately following such Permitted Acquisition with reference to the
audited historical financial results of the Person, business, division or group
of assets acquired in such Permitted Acquisition (or if such audited historical
financial results are not available, such management prepared financial
statements as are acceptable to the Agent) and the Borrower and its Subsidiaries
for the applicable test period after giving effect on a pro forma basis to such
Permitted Acquisition and assuming that such Permitted Acquisition had been
consummated at the beginning of such test period. For purposes of calculating
the EBITDA on a Pro Forma Basis, (i) the Borrower may exclude expenses
reasonably believed by the Borrower will be saved as a result of the
Acquisition, but only to the extent approved by the Agent in writing, and (ii)
the Borrower shall include in such calculation, as imputed interest expense,
interest on the cash paid by the Borrower to the sellers in connection with the
Permitted Acquisition, during such test period at the Eurodollar Rate (assuming
a 3-month Eurodollar Interest Period) as of the last day of such test period.
"Pro Rata Share" means, with respect to any Lender making a Term
Loan One and a Revolving Loan, at any time, the percentage obtained by dividing
(i) the sum of such Lender's Term Loan One outstanding and Revolving Loan
Commitment at such time (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement) by (ii) the sum of the
aggregate amount of the Term Loan One outstanding hereunder at such time and the
Aggregate Revolving Loan Commitment at such time, provided, however, that if all
of the Revolving Loan Commitments are terminated pursuant to the terms of this
Agreement, then "Pro Rata Share" means, with respect to any Lender at any time,
the percentage obtained by dividing (x) the sum of such Lender's Term Loan One
and Revolving Loans outstanding at such time (excluding the amounts outstanding
on the Swing Line Loan) by (y) the sum of the aggregate amount of the Term Loan
One and Revolving Loans outstanding hereunder at such time. "Pro Rata Share"
means, with respect to any Lender making a Term Loan Two, at any time, the
percentage obtained by dividing (i) the sum of such Lender's Term Loan Two
outstanding at such time (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement) by (ii) the sum of the
aggregate amount of the Term Loan Two outstanding hereunder at such time.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into between
the Borrower and any Lender or Affiliate thereof which is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.
"Rate Management Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (i) any
and all Rate Management Transactions, and (ii) any and all cancellations, buy
backs, reversals, terminations or assignments of any Rate Management
Transactions.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section
4043 of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC has by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event, provided, however, that a failure to meet
the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders whose Aggregate Pro Rata Shares, in
the aggregate, are 66 2/3% or greater, but in any event, at least two Lenders.
"Reserve Requirement" means, with respect to an Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation D
on Eurocurrency liabilities.
"Revolving Loan" is defined in Section 2.2.1.
"Revolving Loan Commitment" means, for each Lender, the obligation
of such Lender to make Revolving Loans not exceeding the amount set forth on
Schedule 1 under the caption "Revolving Loan Commitment" (as amended or replaced
from time to time) or as set forth in any Assignment Agreement relating to any
assignment that has become effective pursuant to Section 12.3, as such amount
may be modified from time to time pursuant to the terms hereof.
"Revolving Loan Termination Date" means August 13, 2006 or any
earlier date upon which the Aggregate Revolving Loan Commitment is reduced to
zero or otherwise terminated pursuant to the terms of Section 2.5.
"Revolving Note" means any promissory note evidencing Revolving
Loans issued at the request of a Lender pursuant to Section 2.13.
"Risk-Based Capital Guidelines" is defined in Section 3.2.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations and
(ii) all Rate Management Obligations owing to one or more Lenders.
"Subsidiary" means (i) any corporation, more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by the Borrower or by one or
more of its Subsidiaries or by the Borrower and one or more of its Subsidiaries,
or (ii) any partnership, limited liability company, association, joint venture
or similar business organization, more than 50% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the Net Income of the Borrower and its Subsidiaries
as reflected in the financial statements referred to in clause (i) above.
"Swing Line Loan" is defined in Section 2.2.4.
"Swing Line Note" means the promissory note evidencing the Swing
Line Loan.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"Term Loan" means, individually Term Loan One or Term Loan Two, and
collectively,
Term Loan One and Term Loan Two.
"Term Loan Commitment" means, for each Lender, the obligation of
such Lender to make Term Loans not exceeding the amount set forth on Schedule 1A
under the caption "Term Loan One Commitment" and the amount set forth on
Schedule 1B under the caption "Term Loan Two Commitment" (as amended from time
to time) or as set forth in any Assignment relating to any assignment that has
become effective pursuant to Section 12.3, as such amount may be modified from
time to time pursuant to the terms hereof.
"Term Loan One" and "Term Loan Two" are defined in Section 2.1.1.
"Term Loan Two Lenders" means those Lenders who make the Term Loan
Two.
"Term Note" means any promissory note evidencing a Term Loan issued
at the request of a Lender pursuant to Section 2.13.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance.
"Unmatured Default" means an event which but for the lapse of time
or the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all
of the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Term Loans.
2.1.1 Making the Term Loans. (a) Term Loan One. The Lenders
have made a "Term Loan One" to the Borrower in an aggregate original principal
amount of $50,000,000, which currently has an aggregate outstanding principal
balance of $12,000,000 as of the date of this Agreement, and shall mature on May
2, 2005. If the Borrower completes the acquisition of Premier Oilfield Services
Holdings Limited on or before September 30, 2003, at the request of the Borrower
not later than September 30, 2003, the Lenders severally agree to increase the
Term Loan One to an aggregate principal amount of $35,000,000, in which event
the entire Term Loan One shall mature on August 13, 2008. The Lenders agree to
make the additional Term Loan One Advances in accordance with their Pro Rata
Share of Term Loan One as shown on Schedule 1A. The increase in the Term Loan
One shall be made simultaneously by each of the Lenders, it being understood
that no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make the increase in the Term Loan One hereunder nor
shall the Term Loan One Commitment of any Lender be increased or decreased as a
result of any such failure. The Borrower shall execute and deliver new Term Loan
One Notes to the existing Lenders for the increased amount of their Term Loan
One Commitments. The Agent shall also promptly distribute revised Schedules 1A
and 1C, reflecting the increased Term Loan One Commitments to all Lenders. If
the Borrower fails to complete the acquisition of Premier Oilfield Services
Holdings Limited on or before September 30, 2003 and if the Borrower fails to
request the increase in Term Loan One by September 30, 2003, then the Lenders
shall no longer have the obligation to make additional Term Loan One Advances.
(b) Term Loan Two. The Term Loan Two Lenders have made a
"Term Loan Two" to the Borrower in an aggregate original principal amount of
$32,000,000, which has an aggregate outstanding principal balance of $22,400,000
as of the date of this Agreement, and shall mature on May 2, 2005. The amount of
each Term Loan Two Lender's Term Loan Two Commitment is shown on Schedule 1A.
2.1.2. Repayment of the Term Loans. (a) Term Loan One. If Term
Loan One is not increased as provided in Section 2.1.1 above, Term Loan One
shall continue to be repaid in equal consecutive installments of $1,600,000,
payable quarterly on each September 30, December 31, March 31, and June 30, with
a balance of all unpaid principal being due and payable at maturity on May 2,
2005. If Term Loan One is increased as provided in Section 2.1.1 above, Term
Loan One shall be repaid in equal consecutive installments of $1,750,000,
payable quarterly on each September 30 (beginning September 30, 2003), December
31, March 31, and June 30, with a balance of all unpaid principal being due and
payable on August 13, 2008. In addition to the foregoing installment payments,
the Borrower may make voluntary prepayments and shall make mandatory prepayments
as described in Section 2.7. Term Loan One shall be permanently reduced by the
amount of each such installment on the date payment thereof is made hereunder,
and no portion of Term Loan One may be reborrowed once it is repaid.
(b) Term Loan Two. Term Loan Two shall continue to be repaid
in equal consecutive installments of $1,600,000, payable quarterly on each
September 30, December 31, March 31 and June 30, with a balance of all unpaid
principal being due and payable at maturity on May 2, 2005. In addition to the
foregoing installment payments, the Borrower may make voluntary prepayments and
shall make mandatory prepayments as described in Section 2.7. Term Loan Two
shall be permanently reduced by the amount of each such installment on the date
payment thereof is made hereunder, and no portion of the Term Loan Two may be
reborrowed once it is repaid. The purpose of Term Loan Two was to finance the
acquisition of the Power Offshore Vessels. The obligations of the Borrower on
Term Loan Two shall be secured by a first preferred ship mortgage on the Power
Offshore Vessels.
2.2. Revolving Loans; Swing Line Loan.
2.2.1. Making the Revolving Loans. From and including the
Closing Date and prior to the Revolving Loan Termination Date, each Lender
severally agrees, on the terms and conditions set forth in this Agreement, to
make revolving loans to the Borrower from time to time in amounts not to exceed
in the aggregate at any one time outstanding (i) the amount of its Revolving
Loan Commitment (each individually a "Revolving Loan" and, collectively, the
"Revolving Loans") or (ii) the Borrowing Base, in each case minus the sum of the
aggregate principal amount of all outstanding Letters of Credit and the
outstanding principal on the Swing Line Loan. Each Advance under this Section
2.2.1 shall consist of Revolving Loans made by each Lender ratably in proportion
to such Lender's respective Pro Rata Share, it being understood that no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make any Revolving Loan hereunder nor shall the Revolving Loan
Commitment of any Lender be increased or decreased as a result of any such
failure. Subject to the terms of this Agreement, the Borrower may borrow, repay
and reborrow Revolving Loans at any time prior to the Revolving Loan Termination
Date. The Revolving Loan Commitments of the Lenders shall expire on the
Revolving Loan Termination Date, and all amounts due on the Revolving Loans
shall be payable on the Revolving Loan Termination Date.
2.2.2. Overadvances. At the request of Borrower, the Agent,
with the approval of all of the Lenders, in their sole discretion, may (but
shall have absolutely no obligation to), make Advances to the Borrower on behalf
of the Lenders in amounts which cause the outstanding balance of the aggregate
Revolving Loans to exceed the Borrowing Base (minus the outstanding principal on
the Swing Line Loan) (any such excess Revolving Loan Advances are herein
referred to collectively as "Overadvances"), and no such event or occurrence
shall cause or constitute a waiver by the Agent or the Lenders of any Unmatured
Default or Default that may result therefrom or of the Agent's or the Lenders'
right to refuse to make any further Advances, or incur any obligations under
Letters of Credit, as the case may be, at any time that an Overadvance exists or
would result therefrom. All Overadvances shall constitute Floating Rate Loans,
shall bear interest at the Default Rate and shall be payable on demand. The
authority of the Agent to make Overadvances is limited to an aggregate amount
not to exceed $1,000,000 at
any time, shall not cause the aggregate amount of all outstanding Revolving
Loans to exceed the Aggregate Revolving Loan Commitment, and may be revoked
prospectively by a written notice to Agent signed by Required Lenders. The
Borrower shall repay any Overadvances, in whole or in part, immediately upon
demand therefor by the Agent, and any failure to do so shall constitute a
Default.
2.2.3. Repayment of the Revolving Loans. On the Revolving Loan
Termination Date, the Borrower shall repay in full the outstanding principal
balance of the Revolving Loans.
2.2.4 Increase of Revolving Loans. 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 $100,000,000, 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. 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 Schedules 1A and 1C hereto to reflect the revised
Revolving Loan Commitments of all Lenders and their adjusted Pro Rata Shares;
the Agent shall promptly distribute the revised Schedules 1A and 1C 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 Line of Credit Notes to
existing Lenders for the increased amount of their Revolving Loan Commitments
and shall deliver new Line of Credit Notes to new Lenders for the amount of
their Revolving Loan Commitments.
2.2.5. Making the Swing Line Loan. From and including the
Closing Date, and prior to the Loan Termination Date, the Agent agrees, on the
terms and conditions set forth in this Agreement, to make a revolving loan to
the Borrower from time to time in amounts not to exceed in the aggregate at any
one time outstanding $7,000,000 (the "Swing Line Loan"). Subject to the terms of
this Agreement, the Borrower may borrow, repay and reborrow amounts on the Swing
Line Loans at any time prior to the Revolving Loan Termination Date. The
aggregate principal amount outstanding on the Swing Line Loan shall constitute a
portion of the Aggregate Revolving Loan Commitments (thereby reducing the
amounts available under the Aggregate Revolving Loan Commitments for Revolving
Loans and Letters of Credit on a dollar-for-dollar basis). The Swing Line Loan
shall bear interest at the Floating Rate. The Swing Line Loan shall be
considered a part of the Revolving Loans and any principal amounts outstanding
on the Swing Line Loan for five (5) Business Days shall be repaid through an
Advance on the Revolving Loans, whether or not an Unmatured Default or Default
has occurred and is existing, except that the Borrower shall repay the Swing
Line Loan in whole or in part immediately upon demand by the Agent, and failure
to do so shall constitute a Default.
2.3 Letters of Credit.
2.3.1 Issuance of Letters of Credit. From and including the
Closing Date, the Agent or, with the approval of the Borrower, any Lender (the
"Issuing Lender") shall issue one or more
standby Letters of Credit for the account of the Borrower or any of its
Subsidiaries, pursuant to the Issuing Lender's standard form of application for
standby letters of credit. The aggregate face amount of all outstanding Letters
of Credit (i) shall constitute a portion of the Aggregate Revolving Loan
Commitments (thereby reducing the Revolving Loan Commitments available for
Revolving Loans on a dollar-for-dollar basis), and (ii) shall not exceed
$10,000,000. If the expiry date of a Letter of Credit is initially after the
Revolving Loan Termination Date, and if the Revolving Loan Termination Date is
not extended to a date after the expiry date of the Letter of Credit, then the
Borrower shall, not later than five Business Days prior to the Revolving Loan
Termination Date, either cause the Letter of Credit to be returned to the
Issuing Lender, or secure the Letter of Credit by delivering to the Issuing
Lender, for the benefit of the Lenders, one of the following: (i) cash in the
face amount of the Letter of Credit which shall be held in pledge until the
Letter of Credit is paid or expires without being drawn upon; or (ii) a backup
letter of credit issued by a financial institution acceptable to the Agent and
the Issuing Lender in their sole discretion, for the benefit of the Issuing
Lender, in the face amount of the Letter of Credit and on terms satisfactory to
the Agent and the Issuing Lender.
2.3.2 Risk Participation. Immediately upon the issuance of a
Letter of Credit by the Issuing Lender, each other Lender shall be deemed to
have automatically, unconditionally and irrevocably (except as provided for in
Section 10.8) purchased from the Issuing Lender an undivided interest and
participation in such Letter of Credit, the obligations in respect thereof, and
the liability of the Issuing Lender, equal to the face amount of such Letter of
Credit multiplied by such Lender's Pro Rata Share.
2.3.3 Letter of Credit Fees. (a) The Borrower agrees to pay
the Issuing Lender a fronting fee in an amount agreed between the Borrower and
the Issuing Lender (but not less than 0.125% per annum on the face amount of the
Letter of Credit), payable quarterly in arrears on the last day of each calendar
quarter, for the term of the Letter of Credit, together with the Issuing
Lender's customary letter of credit issuance and processing fees. The fronting
fee and customary letter of credit issuance and processing fees shall be
retained by the Issuing Lender and shall not be shared with the other Lenders;
(b) In addition, the Borrower agrees to pay the Agent a fee
equal to the Applicable Letter of Credit Fee Rate (on a per annum basis) shown
on the Pricing Schedule times the aggregate face amount of all outstanding
Letters of Credit (as reduced from time to time), payable quarterly in arrears
on the last day of each calendar quarter, for the term of the Letter of Credit
and shall be shared by the Issuing Lender and the other Lenders on the basis of
each Lender's Pro Rata Share.
2.3.4 Guaranty of Subsidiaries. The Borrower hereby absolutely
and unconditionally guarantees the prompt and punctual payment of all
Obligations of all Subsidiaries to the Agent and Lenders arising from the
issuance of any Letters of Credit for the account of one or more Subsidiaries.
2.4. Types of Advances. The Advances must be either Floating
Rate Advances or Eurodollar Advances, or a combination thereof, selected by the
Borrower in accordance with
Sections 2.8 and 2.9.
2.5. Commitment Fee; Reductions in Aggregate Revolving Loan
Commitment. (a) The Borrower agrees to pay to the Agent, to be shared by the
Lenders on the basis of each Lender's Pro Rata Share, a commitment fee at a per
annum rate equal to the Applicable Fee Rate on the daily unused portion of the
Aggregate Revolving Loan Commitment from the date hereof to and including the
Revolving Loan Termination Date, payable quarterly in arrears on last day of
each calendar quarter hereafter and on the Revolving Loan Termination Date. For
the purposes hereof, "unused portion" shall mean the Aggregate Revolving Loan
Commitment, minus the aggregate principal amount outstanding on all Revolving
Loans, minus the aggregate face amount of all outstanding Letters of Credit.
Swing Line Loans shall not count as usage of any Lender's Revolving Loan
Commitment for purposes of calculating the commitment fee due hereunder.
(b) The Borrower may permanently reduce the Aggregate
Revolving Loan Commitment in whole, or in part ratably among the Lenders in
integral multiples of $1,000,000, upon at least five Business Days' written
notice to the Agent, which notice shall specify the amount of any such
reduction, provided, however, that the amount of the Aggregate Revolving Loan
Commitment may not be reduced below the aggregate principal amount of the
outstanding Revolving Loans, the Swing Line Loan and the aggregate face amount
of all outstanding Letters of Credit. All accrued commitment fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Revolving Loans hereunder.
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance
shall be in the minimum amount of $1,000,000 (and in multiples of $100,000 if in
excess thereof), and each Floating Rate Advance (other than an Advance to repay
a Swing Line Loan) shall be in the minimum amount of $200,000 (and in multiples
of $100,000, if in excess thereof), provided, however, that any Floating Rate
Advance may be in the amount of the unused Aggregate Revolving Loan Commitment.
2.7. Prepayments.
2.7.1. Optional Prepayments. The Borrower may from time to time
pay, without penalty or premium, in a minimum aggregate amount of $5,000,000 or
any integral multiple of $100,000 in excess thereof, any portion of the
outstanding Floating Rate Advances (or the full outstanding balance of all
Floating Rate Advances, if less than such minimum), upon one Business Days'
prior notice to the Agent. The Borrower may from time to time pay, subject to
the payment of any funding indemnification amounts required by Section 3.4 but
otherwise without penalty or premium, in a minimum aggregate amount of
$5,000,000 or any integral multiple of $100,000 in excess thereof, any portion
(or the full outstanding balance of all Eurodollar Advances, if less than such
minimum) of the outstanding Eurodollar Advances upon five Business Days' prior
notice to the Agent. Any such optional prepayments shall be applied to the
principal installments payable under Section 2.1.2 in the inverse order of
maturity.
2.7.2. Mandatory Prepayments. The Borrower shall make
prepayments of the
outstanding amount of Term Loan One and Term Loan Two (in addition to the
scheduled principal installments) upon not less than one Business Day's prior
notice to the Agent, in amounts equal to either or both of the following: (i)
75% of Excess Cash Flow of the Borrower for any fiscal year ending December 31,
2001 or thereafter, minus the aggregate principal amount of all voluntary
prepayments of Term Loan One and Term Loan Two made during such fiscal year; and
(ii) 100% of the Net Sales Proceeds received by the Borrower or any Subsidiary
from Asset Sales permitted by this Agreement or (if not permitted by this
Agreement) consented to by the Agent and the Required Lenders. In the case of
clause (i), the prepayment shall be made within 10 days after the Agent's
receipt of the annual audited financial statements of the Borrower, but in no
event later than 130 days after the end of each fiscal year of the Borrower;
provided that no such prepayment based on the Excess Cash Flow of the Borrower
for any fiscal year shall be required if the Leverage Ratio as of the end of
such fiscal year is less than or equal to 3.00 to 1.00. In the case of clause
(ii), the prepayment shall be made not later than 30 days after the consummation
of the Asset Sale. If such prepayment constitutes a repayment of a Eurodollar
Advance on a date which is not the last day of a Eurodollar Interest Period, the
Borrower shall not be required to pay any amounts that would otherwise be due
under this Agreement (including without limitation, Section 3.4) for the
repayment of a Eurodollar Rate Advance prior to the last day of the Eurodollar
Interest Period. Any such mandatory prepayment shall be applied to the principal
installments payable on Term Loan One in the inverse order of maturity; once
Term Loan One is repaid in full, any such mandatory prepayment shall be applied
to the principal installments payable on Term Loan Two in inverse order of
maturity.
2.8. Method of Selecting Types and Eurodollar Interest
Periods for New Advances. The Borrower shall select the Type of Advance and, in
the case of each Eurodollar Advance, the Eurodollar Interest Period applicable
thereto from time to time. The Borrower shall give the Agent irrevocable notice
(a "Borrowing Notice") not later than 10:00 a.m. (New Orleans time) at least one
Business Day before the Borrowing Date of each Floating Rate Advance (other than
a Swing Line Loan) and three Business Days before the Borrowing Date for each
Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of
such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and whether such Advance
is comprised of Term Loans or Revolving Loans, and
(iv) in the case of each Eurodollar Advance, the Eurodollar
Interest Period applicable thereto.
Not later than noon (Central time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in New Orleans
to the Agent at its address specified pursuant to Article XIII. The Agent will
make the funds so received from the Lenders available to the Borrower at the
Agent's aforesaid address.
The Borrower shall not be entitled to more than six Eurodollar Rate
tranches and one Floating Rate tranche at any one time on the Revolving Loan,
and only three Eurodollar Rate tranche and one Floating Rate tranche at any one
time on the Term Loan.
2.9. Conversion and Continuation of Outstanding Advances.
Floating Rate Advances (other than Swing Line Loans) shall continue as Floating
Rate Advances unless and until such Floating Rate Advances are converted into
Eurodollar Advances pursuant to this Section 2.9 or are repaid. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Eurodollar Interest Period therefor, at which time such Eurodollar
Advance shall be automatically converted into a Floating Rate Advance unless (x)
such Eurodollar Advance is or was repaid in accordance with Section 2.7 or 2.1.2
or (y) the Borrower shall have given the Agent a Conversion/Continuation Notice
(as defined below) requesting that, at the end of such Eurodollar Interest
Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or
another Eurodollar Interest Period. Subject to the terms of Section 2.6, the
Borrower may elect from time to time to convert all or any part of a Floating
Rate Advance into a Eurodollar Advance. The Borrower shall give the Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of a
Floating Rate Advance into a Eurodollar Advance or continuation of a Eurodollar
Advance not later than 10:00 a.m. (New Orleans time) at least three Business
Days prior to the date of the requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of
such conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to
be converted or continued, and whether such Advance is
comprised of Term Loans or Revolving Loans, and
(iii) the amount of such Advance which is to be converted into
or continued as a Eurodollar Advance and the duration of
the Eurodollar Interest Period applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate
Advance (other than a Swing Line Loan) shall bear interest on the outstanding
principal amount thereof, for each day from and including the date such Advance
is made or is automatically converted from a Eurodollar Advance into a Floating
Rate Advance pursuant to Section 2.9, to but excluding the date it is paid or is
converted into a Eurodollar Advance pursuant to Section 2.9 hereof, at a rate
per annum equal to the Floating Rate for such day. 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. Changes in
the rate of interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in the Alternate
Base Rate. Each Eurodollar Advance shall bear interest on the outstanding
principal amount thereof from and
including the first day of the Eurodollar Interest Period applicable thereto to
(but not including) the last day of such Eurodollar Interest Period at the
interest rate determined by the Agent as applicable to such Eurodollar Advance
based upon the Borrower's selections under Sections 2.8 and 2.9 and otherwise in
accordance with the terms hereof. No Eurodollar Interest Period with respect to
any Term Loan may end after the maturity date thereof and no Eurodollar Interest
Period with respect to any Revolving Loan may end after the Revolving Loan
Termination Date. The Borrower shall use commercially reasonable efforts to
select Eurodollar Interest Periods so that it is not necessary to repay any
portion of a Eurodollar Advance prior to the last day of the applicable
Eurodollar Interest Period in order to make a mandatory repayment required by
this Agreement.
2.11. Rates Applicable After Default. Notwithstanding anything
to the contrary contained in Section 2.8 or 2.9, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Eurodollar Interest Period at the rate otherwise applicable to such Eurodollar
Interest Period plus 2% per annum and (ii) each Floating Rate Advance shall bear
interest at a rate per annum equal to the Floating Rate in effect from time to
time plus 2% per annum, provided that, during the continuance of a Default under
Section 7.6 or 7.7, the interest rates set forth in clauses (i) and (ii) above
shall be applicable to all Advances without any election or action on the part
of the Agent or any Lender.
2.12. Method of Payment. All payments of the Secured
Obligations hereunder shall be made, without setoff, deduction, or counterclaim,
in immediately available funds to the Agent at the Agent's address specified
pursuant to Article XIII, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by noon (Central time) on the
date when due and, shall (except with respect to repayment of the Swing Line
Loan) be applied ratably by the Agent among the Lenders. Each payment delivered
to the Agent for the account of any Lender shall be delivered promptly by the
Agent to such Lender in the same type of funds that the Agent received at its
address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with the
Agent for each payment of principal, interest and bank fees as they become due
hereunder; all other fees due hereunder shall be paid by Borrower upon the
receipt of an invoice at Borrower's address.
2.13. Noteless Agreement; Evidence of Indebtedness. (i) Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the Obligations of the Borrower to such Lender resulting
from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to
time hereunder.
(ii) The Agent shall also maintain accounts in which it will
record (a) the amount of each Loan made hereunder, the Type thereof and the
Eurodollar Interest Period with respect thereto, (b) the amount of any principal
or interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (c) the amount of any sum received by the Agent
hereunder from the Borrower and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained
pursuant to paragraphs (i) and (ii) above shall be prima facie evidence of the
existence and amounts of the Obligations therein recorded; provided, however,
that the failure of the Agent or any Lender to maintain such accounts or any
error therein shall not in any manner affect the obligation of the Borrower to
repay the Obligations in accordance with their terms.
(iv) Any Lender may request that its Revolving Loans or Term
Loans, or the Agent may request that its Swing Line Loan, be evidenced by a
Note. In such event, the Borrower shall execute and deliver to such Lender a
Note for such Loans payable to the order of such Lender in a form supplied by
the Agent and acceptable to such Lender. Thereafter, the Loans evidenced by such
Note and interest thereon shall at all times (including after any assignment
pursuant to Section 12.3) be represented by one or more Notes payable to the
order of the payee named therein or any assignee pursuant to Section 12.3,
except to the extent that any such Lender or assignee subsequently returns any
such Note for cancellation and requests that such Loans once again be evidenced
as described in paragraphs (i) and (ii) above.
2.14. Telephonic Notices. The Borrower hereby authorizes the
Lenders and the Agent to extend, convert or continue Advances, effect selections
of Types of Advances and to transfer funds based on telephonic notices made by
any person or persons the Agent or any Lender in good faith believes to be
acting on behalf of the Borrower, it being understood that the foregoing
authorization is specifically intended to allow Borrowing Notices and
Conversion/Continuation Notices to be given telephonically. The Borrower agrees
to deliver promptly to the Agent a written confirmation, if such confirmation is
requested by the Agent or any Lender, of each telephonic notice signed by an
Authorized Officer. If the written confirmation differs in any material respect
from the action taken by the Agent and the Lenders, the records of the Agent and
the Lenders shall govern absent manifest error.
2.15. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof and at
maturity. Interest at the Floating Rate shall be calculated for actual days
elapsed on the basis of a 365-day (366-day in leap year) basis. Interest accrued
on each Eurodollar Advance shall be payable on the last day of its applicable
Eurodollar Interest Period (or if the applicable Eurodollar Interest Period is
greater than three months, on the last day of the third month of such Eurodollar
Interest Period), on any date on which the Eurodollar Advance is prepaid,
whether by acceleration or otherwise, and at maturity. Interest at the
Eurodollar Rate and commitment fees shall be calculated for actual days elapsed
on the basis of a
360-day year. Interest shall be payable for the day an Advance is made but not
for the day of any payment on the amount paid if payment is received prior to
noon (local time) at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.16. Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Revolving Loan Commitment
reduction notice, Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it hereunder. The Agent will notify each Lender of
the interest rate and Eurodollar Interest Period applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give each
Lender prompt notice of each change in the Alternate Base Rate.
2.17. Lending Installations. Each Lender may book its Loans at
any Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender may, by written notice to the Agent and the Borrower in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.18. Non-Receipt of Funds by the Agent. Unless the Borrower
or a Lender, as the case may be, notifies the Agent prior to the date on which
it is scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal
or interest to the Agent for the account of the Lenders, that it does not intend
to make such payment, the Agent may assume that such payment has been made. The
Agent may, but shall not be obligated to, make the amount of such payment
available to the intended recipient in reliance upon such assumption. If such
Lender or the Borrower, as the case may be, has not in fact made such payment to
the Agent, the recipient of such payment shall, on demand by the Agent, repay to
the Agent the amount so made available together with interest thereon in respect
of each day during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to (x) in the case of payment by a Lender, the Federal Funds
Effective Rate for such day for the first three days and, thereafter, the
interest rate applicable to the relevant Loan or (y) in the case of payment by
the Borrower, the interest rate applicable to the relevant Loan.
2.19 Collateral. (a) The Secured Obligations shall be secured
by the following: (i) first priority perfected security interest in all
inventory, accounts, equipment, vessels (except that so long as Term Loan Two
remains unpaid, the mortgage on the Power Offshore Vessels and all accounts,
equipment and general intangibles relating to the Power Offshore Vessels shall
be a second priority Lien), instruments, chattel paper, documents, general
intangibles (and proceeds thereof and in the case of inventory, all products
thereof) of the Borrower or any Domestic
Subsidiary; (ii) first priority perfected security interest in all outstanding
shares of stock or partnership or membership interests, as the case may be, of
each Subsidiary (except in the case of any direct Subsidiary of the Borrower or
any Domestic Subsidiary incorporated outside of the United States, the security
interest shall extend to 66% of the outstanding shares thereof); (iii) solidary
(joint and several) guaranties by each of the Domestic Subsidiaries, including
any Domestic Subsidiaries acquired or created after the Closing Date; (iv)
solidary (joint and several) guaranty of the Secured Obligations by the Parent;
and (v) first priority perfected security interest in the Parent's entire
membership interest of the Borrower.
(b) Notwithstanding the provisions of any Collateral
Documents to the contrary, Term Loan Two shall be secured solely by a first
priority preferred fleet mortgage of the Power Offshore Vessels and all
accounts, equipment and general intangibles relating to the Power Offshore
Vessels.
(c) To the extent required by Section 6.16(a)(x) hereof, the
Borrower covenants and agrees to execute a security agreement granting a first
priority security interest in all of the outstanding capital stock or membership
or partnership interest of any Domestic Subsidiary acquired or created after the
Closing Date, or 66% of the outstanding capital stock or membership or
partnership interest of any direct foreign Subsidiary acquired or created after
the Closing Date, in each case to further secure the Secured Obligations (other
than Term Loan Two), within 60 days after the acquisition or creation of such
Subsidiary, if the Borrower has invested at least $1,000,000 in such Domestic
Subsidiary. In addition, the Borrower covenants and agrees to cause any Domestic
Subsidiary acquired or created after December 31, 2000 that, as of the end of
any fiscal quarter after December 31, 2000, has total assets or total revenues
during that fiscal quarter that are at least equal to 5% of the total assets or
total revenues, as applicable, of the Borrower and its Domestic Subsidiaries
during that fiscal quarter, to execute a guaranty of the Secured Obligations
(other than Term Loan Two) and to execute appropriate Collateral Documents
(including lockbox and pledged deposits agreements) concerning the assets of the
Domestic Subsidiary similar in nature to the Collateral described in Section
2.19(a)(i) above to further secure the Secured Obligations (other than Term Loan
Two), within 60 days after the end of such fiscal quarter.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this
Agreement, the adoption of any law or any governmental or quasi-governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any change in the interpretation or administration thereof by
any governmental or quasi-governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender or applicable Lending Installation with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects any Lender or any applicable Lending
Installation to any Taxes, or changes the basis of taxation of payments (other
than with respect to Excluded Taxes) to any Lender in respect of its Eurodollar
Loans, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Lender or any applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest rate applicable to
Eurodollar Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining its Eurodollar Loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in connection
with its Eurodollar Loans, or requires any Lender or any applicable Lending
Installation to make any payment calculated by reference to the amount of
Eurodollar Loans held or interest received by it, by an amount deemed material
by such Lender, and the result of any of the foregoing is to increase the cost
to such Lender or applicable Lending Installation of making or maintaining its
Eurodollar Loans or Commitment or to reduce the return received by such Lender
or applicable Lending Installation in connection with such Eurodollar Loans or
Commitment, then, within 15 days of demand by such Lender, the Borrower shall
pay such Lender such additional amount or amounts as will compensate such Lender
for such increased cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporation controlling
such Lender is increased as a result of a Change, then, within 15 days of demand
by such Lender, the Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Loans or its Commitment to make Loans hereunder (after taking
into account such Lender's policies as to capital adequacy). "Change" means (i)
any change after the date of this Agreement in the Risk-
Based Capital Guidelines or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk- Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the date of this
Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender
reasonably determines that maintenance of its Eurodollar Loans at a suitable
Lending Installation would violate any applicable law, rule, regulation, or
directive, whether or not having the force of law, or if the Required Lenders
determine that (i) deposits of a type and maturity appropriate to match fund
Eurodollar Advances are not available or (ii) the interest rate applicable to
Eurodollar Advances does not accurately reflect the cost of making or
maintaining Eurodollar Advances, then the Agent shall suspend the availability
of Eurodollar Advances and require any affected Eurodollar Advances to be repaid
or converted to Floating Rate Advances, subject to the payment of any funding
indemnification amounts required by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable Eurodollar
Interest Period, whether because of acceleration, prepayment or otherwise (but
excluding a mandatory prepayment under Section 2.7.2), or a Eurodollar Advance
is not made on the date specified by the Borrower for any reason other than
default by the Lenders, the Borrower will indemnify each Lender for any loss or
cost incurred by it resulting therefrom, including, without limitation, any loss
or cost in liquidating or employing deposits acquired to fund or maintain such
Eurodollar Advance.
3.5. Taxes. (i) All payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any Note shall be made
free and clear of and without deduction for any and all Taxes. If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or the Agent, (a) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 3.5) such
Lender or the Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (b) the Borrower shall
make such deductions, (c) the Borrower shall pay the full amount deducted to the
relevant authority in accordance with applicable law and (d) the Borrower shall
furnish to the Agent the original copy of a receipt evidencing payment thereof
within 30 days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any
present or future stamp or documentary taxes and any other excise or property
taxes, charges or similar levies which arise
from any payment made hereunder or under any Note or from the execution or
delivery of, or otherwise with respect to, this Agreement or any Note ("Other
Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent and
each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent or such Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Payments due under this indemnification shall be made within 30 days of the date
the Agent or such Lender makes demand therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof (each a "Non-U.S. Lender")
agrees that it will, not less than ten Business Days after becoming a party to
this Agreement, (i) deliver to each of the Borrower and the Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, and (ii) deliver to each of the Borrower and the Agent a United
States Internal Revenue Form W-8 or W-9, as the case may be, and certify that it
is entitled to an exemption from United States backup withholding tax. Each
Non-U.S. Lender further undertakes to deliver to each of the Borrower and the
Agent (x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Agent. All forms or amendments described in the
preceding sentence shall certify that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form or amendment with respect to it and such Lender advises
the Borrower and the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed
to provide the Borrower with an appropriate form pursuant to clause (iv), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect to Taxes imposed by the
United States; provided that, should a Non-U.S. Lender which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (iv), above, the
Borrower shall take such steps as such Non-U.S. Lender shall reasonably request
to assist such Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or
reduction of withholding tax
with respect to payments under this Agreement or any Note pursuant to the law of
any relevant jurisdiction or any treaty shall deliver to the Borrower (with a
copy to the Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other
governmental authority of the United States or any other country or any
political subdivision thereof asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or properly completed, because such Lender
failed to notify the Agent of a change in circumstances which rendered its
exemption from withholding ineffective, or for any other reason), such Lender
shall indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax, withholding therefor, or otherwise, including penalties and
interest, and including taxes imposed by any jurisdiction on amounts payable to
the Agent under this subsection, together with all costs and expenses related
thereto (including attorneys fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent). The obligations of the Lenders
under this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of Eurodollar Advances under Section 3.3, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Agent) as to the amount due, if any, under Section
3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such amount and shall
be final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any Lender shall be
payable on demand after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive
payment of the Obligations and termination of this Agreement.
3.7. Replacement of Lender. If the Borrower is required
pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender
or if any Lender's obligation to make or continue, or to convert Floating Rate
Advances into, Eurodollar Advances shall be suspended pursuant to Section 3.3
(any Lender so affected an "Affected Lender"), the Borrower may elect, if such
amounts continue to be charged or such suspension is still effective, to replace
such Affected Lender as a Lender party to this Agreement, provided that no
Default or Unmatured Default shall have occurred and be continuing at the time
of such replacement, and provided
further that, concurrently with such replacement, (i) another bank or other
entity which is reasonably satisfactory to the Borrower and the Agent shall
agree, as of such date, to purchase for cash the Advances and other Obligations
due to the Affected Lender pursuant to an assignment substantially in the form
of Exhibit B and to become a Lender for all purposes under this Agreement and to
assume all obligations of the Affected Lender to be terminated as of such date
and to comply with the requirements of Section 12.3 applicable to assignments,
and (ii) the Borrower shall pay to such Affected Lender in same day funds on the
day of such replacement (A) all interest, fees and other amounts then accrued
but unpaid to such Affected Lender by the Borrower hereunder to and including
the date of termination, including without limitation payments due to such
Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any,
equal to the payment which would have been due to such Lender on the day of such
replacement under Section 3.4 had the Loans of such Affected Lender been prepaid
on such date rather than sold to the replacement Lender.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required to
make the initial Advance hereunder unless the Borrower has furnished to the
Agent and, if required by the Agent, with sufficient copies for the Lenders (or
has otherwise satisfied the Agent):
(i) Copies of the articles of incorporation and bylaws of
the Parent, articles of organization (or certificate of
formation) and operating agreement (or limited liability
company agreement) of Borrower, and the corresponding
organization documents of all of Borrower's Domestic
Subsidiaries, together with all amendments, each
certified by the Secretary or Assistant Secretary of
Parent or Borrower, and a certificate of good standing
or existence for the Parent, Borrower and Borrower's
Domestic Subsidiaries, each certified by the appropriate
governmental officer in its jurisdiction of
incorporation, and copies of the articles of
incorporation of any foreign Subsidiary, together with
all amendments certified by the secretary of said
Subsidiary, but only to the extent of any changes from
the date of the Original Credit Agreement.
(ii) Copies, certified 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 Loan Documents to which the Parent,
Borrower or any of Borrower's Subsidiaries is a party.
(iii) 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 Loan Documents to which the Borrower is a
party, upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change
in writing by the Borrower.
(iv) This Agreement executed by the Parent, Borrower, Agent
and Lenders.
(v) Any Notes requested by a Lender pursuant to Section 2.13
payable to the order of each such requesting Lender.
(vi) The Collateral Documents executed by the Parent,
Borrower and all Domestic Subsidiaries, together with
the stock certificates affected by the security
interests described in Section 2.19, but only to the
extent of any amendments required by the modifications
from the Original Credit Agreement reflected on this
Agreement.
(vii) A written opinion of the Parent's and Borrower's
counsel, addressed to the Lenders, in form and substance
satisfactory to the Agent.
(viii) Certificate of an Authorized Officer of the Parent and
the Borrower to the effect that (a) there has been no
Material Adverse Effect since December 31, 2002 and (b)
on the Closing Date no Unmatured Default or Default
exists.
(ix) Such other documents as any Lender or its counsel may
have reasonably requested.
4.2. Each Advance. The Lenders shall not (except as otherwise
set forth in Section 2.2.5 with respect to Revolving Loans for the purpose of
repaying Swing Line Loans) be required to make any Advance unless on the
applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are true and
correct in all material respects as of such Borrowing Date except to the
extent any such representation or warranty is stated to relate solely to
an earlier date, in which case such representation or warranty shall
have been true and correct in all material respects on and as of such
earlier date.
(iii) All matters incident to the making of such Advance shall
be satisfactory to the Lenders and their counsel.
(iv) No Material Adverse Effect relating to the Parent,
Borrower and Borrower's Subsidiaries has occurred since
the Closing Date or the date of any financial statements
of the Parent submitted subsequent to the Closing Date.
Each Borrowing Notice and each Conversion/Continuation Notice with
respect to each such Advance shall constitute a representation and warranty by
the Parent and Borrower that the conditions contained in Sections 4.2(i) and
(ii) have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Parent and Borrower represent and warrant to the Lenders that:
5.1. Existence and Standing. The Parent is a corporation, the
Borrower is a limited liability company, and each of the Borrower's Subsidiaries
is a corporation, partnership or limited liability company duly and properly
incorporated or organized, as the case may be, validly existing and (to the
extent such concept applies to such entity) in good standing under the laws of
its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except where such failure could not reasonably be expected to have a
Material Adverse Effect.
5.2. Authorization and Validity. Each of the Parent, Borrower
and Borrower's Subsidiaries has the power and authority and legal right to
execute and deliver the Loan Documents to which it is a party and to perform its
obligations thereunder. The execution and delivery by the Parent, Borrower and
Borrower's Subsidiaries of the Loan Documents to which it is a party and the
performance of its obligations thereunder have been duly authorized by proper
corporate or company proceedings, and the Loan Documents to which the Parent,
Borrower and Borrower's Subsidiaries is a party constitute legal, valid and
binding obligations of the Parent, Borrower and Borrower's Subsidiaries
enforceable against the Parent, Borrower and Borrower's Subsidiaries in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
5.3. No Conflict; Government Consent. Neither the execution
and delivery by the Parent, Borrower and Borrower's Subsidiaries of the Loan
Documents to which it is a party, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate
(i) any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on the Parent, Borrower or any of Borrower's Subsidiaries or (ii)
the Parent's, Borrower's or any Subsidiary's articles or certificate of
incorporation, partnership agreement, certificate of partnership, articles or
certificate of organization, by-laws, or operating or other management
agreement, as the case may be, or (iii) the provisions of any indenture,
instrument or agreement to which the Parent, Borrower or any of Borrower's
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of the
Parent, Borrower or Borrower's Subsidiaries pursuant to the terms of any such
indenture, instrument or agreement, except where such failure could not
reasonably be expected to have a Material Adverse Effect. No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority, or any subdivision thereof, which
has not been obtained by the Parent, Borrower or any of Borrower's Subsidiaries,
is required to be obtained by the Parent, Borrower or any of Borrower's
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the Advances under this Agreement, the payment and
performance by the Borrower of the Secured Obligations or the legality,
validity, binding effect or enforceability of any of the Loan Documents.
5.4. Financial Statements. The audited December 31, 2002 and
the unaudited March 31, 2003 financial statements of the Parent, Borrower and
Borrower's Subsidiaries heretofore delivered to the Lenders were prepared in
accordance with generally accepted accounting principles in effect on the date
such statements were prepared and fairly present the consolidated financial
condition and operations of the Parent and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.
5.5. Material Adverse Change. Since December 31, 2002 there
has been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Parent and its Subsidiaries, taken as
a whole, which could reasonably be expected to have a Material Adverse Effect.
5.6. Taxes. The Parent, Borrower and Borrower's Subsidiaries
have filed or caused to be filed all United States federal tax returns or
extensions relating thereto and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Parent, Borrower or any of Borrower's Subsidiaries,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with GAAP and as to which no
Lien exists. The United States income tax returns of the Borrower and its
Subsidiaries have been closed by the Internal Revenue Service through the fiscal
year ended December 31, 1998. No tax liens have been filed with respect to any
such taxes. The charges, accruals and reserves on the books of the Parent,
Borrower and Borrower's Subsidiaries in respect of any taxes or other
governmental charges are adequate.
5.7. Litigation and Contingent Obligations. There is no
litigation, arbitration, governmental investigation, proceeding or inquiry
pending or, to the knowledge of any of their officers, threatened against or
affecting the Parent, Borrower or Borrower's Subsidiaries which could reasonably
be expected to have a Material Adverse Effect or which seeks to prevent, enjoin
or delay the making of any Loans. Other than any liability incident to any
litigation, arbitration or proceeding which could not reasonably be expected to
have a Material Adverse Effect, neither the Parent, the Borrower nor Borrower's
Subsidiaries has any material contingent obligations not provided for or
disclosed in the financial statements referred to in Section 5.4, except for
Additional Contingent Consideration that may be payable in connection with an
Acquisition.
5.8. Subsidiaries. Schedule 3 contains an accurate list of
all Subsidiaries of the Parent and Borrower as of the Closing Date, setting
forth their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.
5.9. ERISA. Each Plan complies in all material respects with
all applicable requirements of law and regulations, no Reportable Event has
occurred with respect to any Plan, and the Borrower has not withdrawn from any
Plan or initiated steps to do so, and no steps have been taken to reorganize or
terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or
report furnished by the Parent, Borrower or Borrower's Subsidiaries in writing
to the Agent or to any Lender in connection with the negotiation of, or
compliance with, the Loan Documents contained any material misstatement of fact
or omitted to state a material fact or any fact necessary to make the statements
contained therein not materially misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Parent, Borrower
and Borrower's Subsidiaries which are subject to any limitation on sale, pledge,
or other restriction hereunder.
5.12. Material Agreements. Neither the Parent, Borrower nor
any of Borrower's Subsidiaries is a party to any agreement or instrument or
subject to any charter or other corporate restriction which could reasonably be
expected to have a Material Adverse Effect if the Parent, Borrower or Borrower's
Subsidiaries complies with the terms thereof. Neither the Parent, Borrower nor
any of Borrower's Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (i)
any agreement to which it is a party, which default could reasonably be expected
to have a Material Adverse Effect or (ii) any agreement or instrument evidencing
or governing Indebtedness.
5.13. Compliance With Laws. To the best of the knowledge of
the officers of the Parent and Borrower, the Parent, Borrower and Borrower's
Subsidiaries have complied with all laws, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, including, without
limitation, Regulation U, T and X of the Board of Governors of the Federal
Reserve System, and all Environmental Laws, except for any failure to comply
with any of the foregoing which could not reasonably be expected to have a
Material Adverse Effect.
5.14. Ownership of Properties. On the date of this Agreement,
the Parent, Borrower and Borrower's Subsidiaries will have good title, free of
all Liens other than Permitted Liens, to all of the Property and assets
reflected in the Parent's most recent consolidated financial statements provided
to the Agent as owned by the Parent, Borrower and Borrower's Subsidiaries,
excluding sales in the ordinary course since that date.
5.15. Plan Assets; Prohibited Transactions. Neither the Parent
nor the Borrower is an entity deemed to hold "plan assets" within the meaning of
29 C.F.R. Section 2510.3-101 of an employee benefit plan (as defined in Section
3(3) of ERISA) which is subject to Title I of ERISA or any plan (within the
meaning of Section 4975 of the Code), and neither the execution of this
Agreement nor the making of Loans hereunder gives rise to a prohibited
transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its
business, the officers of the Borrower consider the effect of Environmental Laws
on the business of the Parent, Borrower and Borrower's Subsidiaries, in the
course of which they identify and evaluate potential risks and liabilities
accruing due to Environmental Laws. On the basis of this consideration, the
Parent and Borrower have concluded that they are aware of no non-compliance with
the Environmental Laws that could reasonably be expected to have a Material
Adverse Effect. Neither the Parent, Borrower nor any of Borrower's Subsidiaries
has received any notice to the effect that its operations are not in material
compliance with any of the requirements of applicable Environmental Laws or are
the subject of any federal or state investigation evaluating whether any
remedial action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, which non-compliance or remedial action
could reasonably be expected to have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Parent, Borrower nor
any of Borrower's Subsidiaries is an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Parent,
Borrower nor any of Borrower's Subsidiaries is a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
5.19. Solvency. (i) Immediately after the consummation of the
transactions to occur on the date hereof and immediately following the making of
each Loan, if any, made on the date hereof and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
the Borrower and its Subsidiaries on a consolidated basis, at a fair valuation,
will exceed the debts and liabilities, subordinated, contingent or otherwise, of
the Borrower and its Subsidiaries on a consolidated basis; (b) the present fair
saleable value of the Property of the Borrower and its Subsidiaries on a
consolidated basis will be greater than the amount that will be required to pay
the probable liability of the Borrower and its Subsidiaries on a consolidated
basis on their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; (c)
the Borrower and its Subsidiaries on a consolidated basis will be able to pay
their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) the Borrower and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof. The Borrower does not intend to, or to permit any of its Subsidiaries
to, and does not believe that it or any of its Subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it or any such Subsidiary and
the timing of the amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Parent and Borrower will
maintain, for themselves and for each Subsidiary, a system of accounting
established and administered in accordance with GAAP, and furnish to the
Lenders:
(i) Within 90 days after the close of each of the Parent's
fiscal years, an unqualified audit report certified by
KPMG LLP or independent certified public accountants
acceptable to the Agent, prepared in accordance with
GAAP on a consolidated basis for Parent, Borrower and
Borrower's Subsidiaries, including balance sheets as of
the end of such period, related profit and loss
statement, statement of changes in shareholders equity
and statement of cash flows (but excluding any work
papers relating thereto), accompanied by a certificate
of said accountants that, in the course of their
examination necessary for their certification of the
foregoing, they have obtained no knowledge of any
Default or Unmatured Default, or if, in the opinion of
such accountants, any Default or Unmatured Default shall
exist, stating the nature and status thereof.
(ii) Within 45 days after the close of each fiscal quarter of
the Parent, consolidated unaudited balance sheets of the
Parent, Borrower and Borrower's Subsidiaries as at the
close of each fiscal quarter and consolidated profit and
loss statements for the period from the beginning of
such fiscal year to the end of such quarter, all
certified by its chief financial officer.
(iii) Simultaneously with the furnishing of the financial
statements required under Sections 6.1(i) and (ii), a
Compliance Certificate.
(iv) Within 20 days after the end of each fiscal quarter, a
Borrowing Base Certificate with respect to the Borrower
and its Subsidiaries, accompanied by such supporting
detail and documentation as shall be requested by the
Agent.
(v) Within 20 days after the close of each of Borrower's
fiscal quarters, an accounts receivable aging report for
the Borrower and its Subsidiaries as of the close of
such quarter, in form and substance satisfactory to the
Agent (including notations indicating which accounts
receivable are supported by letters of credit issued or
confirmed by banks located in the United States).
(vi) As soon as available, but in any event within 30 days
after the beginning of Borrower's fiscal year, a copy of
the operating plan (including a projected balance
sheet, income statements and funds flow statement) of
the Borrower and its Subsidiaries for each fiscal
quarter of such fiscal year and for such fiscal year as
a whole, including a statement of all material
assumptions on which such plan is based.
(vii) As soon as possible and in any event within 10 days
after the Parent or Borrower has actual knowledge that
any Reportable Event has occurred with respect to any
Plan, a statement signed by an Authorized Officer of the
Parent or Borrower, describing said Reportable Event and
the action which the Parent or Borrower proposes to take
with respect thereto.
(viii) As soon as possible and in any event within 10 days
after receipt by the Parent or Borrower, a copy of (a)
any notice or claim to the effect that the Parent,
Borrower or any of Borrower's Subsidiaries is or may be
liable to any Person as a result of the release by the
Parent, Borrower, any of Borrower's Subsidiaries, or any
other Person of any toxic or hazardous waste or
substance into the environment, and (b) any notice
alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the
Parent, Borrower or any of Borrower's Subsidiaries,
which, in either case, could reasonably be expected to
have a Material Adverse Effect.
(ix) Promptly upon the furnishing thereof to the shareholders
of the Parent, copies of all financial statements,
reports and proxy statements so furnished.
(x) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly
or other regular reports which the Parent, Borrower or
any of Borrower's Subsidiaries filed with the Securities
and Exchange Commission.
(xi) Such other information (including non-financial
information) as the Agent or any Lender may from
time to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to use the proceeds of the Loans for one or more of the following:
(i) to refinance indebtedness of the Parent existing on the Closing Date, (ii)
for Capital Expenditures and Acquisitions permitted by this Agreement, and (iii)
for general corporate purposes.
6.3. Notice of Default. The Borrower will (a) give prompt
notice in writing to the Lenders of the occurrence of any Default or Unmatured
Default and of any other development, financial or otherwise, which could
reasonably be expected to have a Material Adverse Effect, and (b) promptly
advise by written notice to the Agent of any material inaccuracy in any
representation or warranty set forth in Article V which occurs due to events or
circumstances arising after the Closing Date (whether or not the subject of such
inaccuracy could reasonably be expected to cause or give rise to a Material
Adverse Effect).
6.4. Conduct of Business. The Parent and Borrower will, and
will cause each of Borrower's Subsidiaries to, carry on and conduct its business
in substantially the same manner and in the same general fields of enterprise as
it is presently conducted and do all things necessary to remain duly
incorporated or organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a corporation, partnership or
limited liability company in its jurisdiction of incorporation or organization,
as the case may be, and maintain all requisite authority to conduct its business
in each jurisdiction in which its business is conducted, where the failure to do
so could not reasonably be expected to have a Material Adverse Effect.
6.5. Taxes. The Parent and Borrower will, and will cause each
of Borrower's Subsidiaries to, timely file complete and to the best of the
Parent's and Borrower's knowledge, correct United States federal and applicable
foreign, state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, or extensions relating thereto, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect, and except
those which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves have been set aside in accordance with
GAAP.
6.6. Insurance. The Parent and Borrower will, and will cause
each of Borrower's Subsidiaries to, maintain with financially sound and
reputable insurance companies insurance on all their Property in such amounts
and covering such risks as is consistent with sound business practice, or as
otherwise provided in the Collateral Documents, and the Borrower will furnish to
any Lender upon request full information as to the insurance carried.
6.7. Compliance with Laws; Environmental Matters. (a) The
Parent and Borrower will, and will cause each of Parent's Subsidiaries to,
comply in all material respects with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it or its Property may
be subject including, without limitation, Regulations U, T, and X of the Board
of Governors of the Federal Reserve System, and also including, without
limitation, ERISA and Environmental Laws.
(b) The Parent and Borrower will, and will cause each of Parent's
Subsidiaries to, and will use its reasonable best efforts to cause each of their
agents, contractors and sub-contractors (while such Persons are acting within
the scope of their contractual relationship with the Borrower or the
Subsidiaries) to comply in all material respects with all applicable
Environmental Laws, and to prevent the unauthorized release, discharge,
disposal, escape or spill of hazardous substances on or about the properties
owned or operated by the Borrower or the Subsidiaries.
6.8. Maintenance of Properties. The Parent and Borrower will,
and will cause each of Borrower's Subsidiaries to, do all things reasonably
necessary to maintain, preserve, protect and keep its Property in good repair,
working order and condition in light of the uses for such Property, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.
6.9. Inspection. The Parent and Borrower will, and will cause
each of Borrower's Subsidiaries to, permit the Agent and the Lenders, by their
respective representatives and agents, to inspect any of the Property, books and
financial records of the Parent, Borrower and each of Borrower's Subsidiaries,
to examine and make copies of the books of accounts and other financial records
of the Parent, Borrower and each of Borrower's Subsidiaries, and to discuss the
affairs, finances and accounts of the Parent, Borrower and each of Borrower's
Subsidiaries with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals, subject to prior reasonable
notice and during business hours, as the Agent or any Lender may designate.
6.10. Dividends. The Parent will not declare or pay any
dividends or make any distributions on its capital stock (other than dividends
payable in its own capital stock) or redeem, repurchase or otherwise acquire or
retire any of its capital stock at any time outstanding. The Borrower will not
make any distributions on its membership interest to the Parent, except to pay
operating and administrative expenses and taxes, in each case incurred in the
ordinary course of business. The Borrower's Subsidiaries may declare and pay
dividends or make distributions to the Borrower or to a wholly-owned Subsidiary
of the Borrower.
6.11. Indebtedness. (a) The Borrower will not, nor will it
permit any of its Subsidiaries to, create, incur or suffer to exist any
Indebtedness, except:
(i) The Loans.
(ii) Indebtedness arising under Rate Management Transactions
related to the Loans.
(iii) Trade credit or other contractual obligations to acquire
goods, supplies, and services, including, without
limitation, obligations incurred to employees for
compensation for services rendered in the ordinary
course of business, or merchandise on terms similar to
those granted to purchasers in similar lines of business
as Borrower or its Subsidiaries and incurred in the
ordinary course of business.
(iv) Rental payments on Operating Leases.
(v) Deferred taxes.
(vi) Unfunded pension fund and other employee benefit plan
obligations and liabilities, but only to the extent they
are permitted to remain unfunded under applicable law.
(vii) Endorsements for collection, deposits or negotiation and
warranties or products or services, in each case
incurred in the ordinary course of business.
(viii) Indebtedness in respect of performance, surety or appeal
bonds obtained in the ordinary course of Borrower's or
any Subsidiary' business.
(ix) Indebtedness from the Borrower in favor of one or more
of its Subsidiaries or from one or more of its
Subsidiaries in favor of the Borrower or one or more of
the Subsidiaries in favor of one or more of the other
Subsidiaries.
(x) Indebtedness representing the unpaid purchase price
and/or Capitalized Lease value of equipment used in the
operations of the Borrower and its Subsidiaries up to
the aggregate amount of $5,000,000 at any one time.
(xi) Indebtedness incurred in connection with the acquisition
or leasing of motor vehicles used by employees or
representatives of the Borrower and its Subsidiaries in
the ordinary course of business, up to the aggregate
amount of $6,000,000 at any one time.
(xii) Additional Contingent Consideration incurred by the
Borrower or any Subsidiary in connection with a
Permitted Acquisition.
(xiii) Other unsecured Indebtedness not exceeding $5,000,000 in
the aggregate principal amount outstanding at any time.
(xiv) Indebtedness incurred or assumed by the Borrower and its
Subsidiaries as a result of a Permitted Acquisition (a)
that is unsecured or secured only by collateral
consisting of property, plant and equipment of the
acquired business or entity that was provided by such
business or entity prior to the consummation of any such
Permitted Acquisition, and (b) that was not incurred in
anticipation of any such Permitted Acquisition, not
exceeding $5,000,000 in the aggregate.
(xv) Indebtedness of Superior Energy Liftboats, L.L.C.
guaranteed by the Maritime Administration under Title XI
of the Merchant Marine Act of 1946, as amended, for the
construction or refinancing of construction of
liftboats, up to the aggregate principal amount of
$75,000,000.
(xvi) Indebtedness incurred in connection with export
financing guaranteed by the Export-Import Bank of the
United States up to the aggregate amount of $20,000,000
at any one time.
(xvii) Indebtedness for the obligations to plug and abandon
offshore oil and gas xxxxx up to the amounts permitted
by Section 6.20.
(xviii) Senior unsecured indebtedness up to the aggregate amount
of $200,000,000 at any one time.
(xix) The refinancing of any Indebtedness described in the
foregoing Section 6.11(i) through (xvii).
(b) The Parent will not create, incur or suffer to exist any
Indebtedness, except:
(i) The guaranty of the Loans.
(ii) The guaranty of the Borrower's Indebtedness arising
under Rate Management Transactions related to the Loans.
(iii) Deferred taxes.
(iv) Unfunded pension fund and other employee benefit plan
obligations and liabilities, but only to the extent they
are permitted to remain unfunded under applicable law.
(v) Indebtedness in respect of performance, surety or appeal
bonds obtained in the ordinary course of Borrower's or
any Subsidiary' business.
(vi) The guaranty of the note issued by Superior Energy
Liftboats, L.L.C. to the Maritime Administration in
connection with the Indebtedness guaranteed by the
Maritime Administration under Title XI of the Merchant
Marine Act of 1946, as amended, for the construction or
refinancing of liftboats, up to the aggregate principal
amount of $75,000,000, on terms reasonably acceptable to
the Agent.
(vii) The guaranty in full of the Borrower's obligations to
plug and abandon offshore oil and gas xxxxx up to the
amounts permitted by Section 6.20.
(viii) The guarantee in full of the Lamb Energy Loan by
Borrower and Parent, on terms reasonably acceptable to the Agent.
6.12. Merger. The Borrower will not, nor will it permit any of
its Subsidiaries to, merge or consolidate with or into any other Person, except
that a Subsidiary may merge into the Borrower or a Wholly-Owned Subsidiary, the
Borrower or a Subsidiary may merge with another Person to affect an Acquisition
permitted by Section 6.16. The Parent will not merge or consolidate with or into
any other Person.
6.13. Sale of Assets. (a) The Borrower will not, nor will it
permit any of its Subsidiaries to, lease, sell or otherwise dispose of its
Property to any other Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) Leases, sales or other dispositions of its Property
that, together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other
than inventory in the ordinary course of business) as permitted by
this Section during the twelve-month period ending with the month in
which any such lease, sale or other disposition occurs, do not
constitute a Substantial Portion of the Property of the Borrower and
its Subsidiaries, taken as a whole.
(iii) Transfers of Property among the Borrower and its
Subsidiaries.
(iv) A sale of assets which are promptly replaced thereafter
by assets of a similar type and value, or otherwise
useful in the business of the Borrower or one of the
Subsidiaries.
(v) Obsolete or worn-out equipment sold in the ordinary
course of business.
(b) The Parent will not lease, sell or otherwise dispose of
any of its membership interest in the Borrower or any other Property to any
other Person.
6.14. Investments. (a) The Borrower will not, nor will it
permit any of its Subsidiaries to, make or suffer to exist any Investments,
except:
(i) Cash Equivalent Investments.
(ii) Advances or Investments by the Borrower in or to any one
or more of its Subsidiaries or by any Subsidiary in or
to the Borrower or any other Subsidiary.
(iii) Acquisition of current assets or liabilities arising
from the sale or lease or goods, the rendition of
services or the extension of credit in the ordinary
course of business of the Borrowers and its
Subsidiaries, including, without limitation, investments
in accounts, contract rights, chattel paper and notes
receivable.
(iv) Advances to officers, shareholders, and employees of
Borrower not to exceed $500,000 in the aggregate at any
one time.
(v) Rate Management Obligations in favor of any Lender.
(vi) Investments in Subsidiaries and other Investments
existing on the Closing Date and described on Schedule
5.
(vii) Permitted Acquisitions.
(viii) Strategic investments, including without limitation,
joint venture arrangements, loans and loans convertible
to equity, up to an aggregate, at any one time, of
$10,000,000.
(b) The Parent will not make or suffer to exist any
Investments, except for the
ownership of its membership interest in the Borrower.
6.15. Liens. (a) The Borrower will not, nor will it permit any
of its Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on
the Property of the Borrower or any of its Subsidiaries, except for the
following (collectively, the "Permitted Liens"):
(i) Liens for taxes, assessments or governmental charges or
levies on its Property if the same are being contested
in good faith and by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall
have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar liens arising in
the ordinary course of business which secure payment of
obligations not more than 90 days past due or which are
being contested in good faith by appropriate proceedings
and for which adequate reserves shall have been set
aside on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age
pensions, or other social security or retirement
benefits, or similar legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of
a nature generally existing with respect to properties
of a similar character and which do not in any material
way affect the marketability of the same or interfere
with the use thereof in the business of the Borrower or
its Subsidiaries.
(v) Liens in favor of the Agent, for the benefit of the
Lenders, granted pursuant to any Collateral Document.
(vi) Liens constituting purchase money security interests in
equipment securing Indebtedness permitted by Section
6.11 (x).
(vii) Liens constituting security interests in motor vehicles
securing Indebtedness permitted by Section 6.11(xi).
(viii) Attachment, judgment and other similar, non-tax Liens in
connection with court proceedings, but only if and for
so long as the execution or other enforcement of such
Liens is and continues to be effectively stayed and
bonded on appeal in a manner reasonably satisfactory to
Lenders for the full amount of such Liens, the validity
and amount of the claims secured thereby are being
actively contested in good faith and by appropriate
lawful proceedings, such Liens do not, in the aggregate,
materially detract from the value of the Property of the
Borrower or any of its Subsidiaries or materially impair
the use thereof in the operation of the
Borrower's or any of its Subsidiaries' business and such
Liens are and remain junior in priority to the Liens in
favor of the Lender.
(ix) Other Liens that secure less than $1,000,000 of
Indebtedness, provided that such Liens do not encumber
real estate, vessels or accounts.
(x) Liens in existence on the date of a Permitted
Acquisition, securing Indebtedness permitted by this
Agreement and encumbering the assets of any Subsidiary
acquired after the date of this Agreement.
(xi) Liens on the liftboats, charters and construction and
related agreements with respect thereto to secure the
Indebtedness permitted by Section 6.11(a)(xvi).
(xii) Liens securing the Lamb Energy Loans and the guaranty
thereof by the Borrower and Parent, subject to the terms
of the Intercreditor Agreement, on terms reasonably
acceptable to the Agent.
(xiii) Liens permitted by the Required Lenders in writing.
(b) The Parent will not create, incur, or suffer to exist
any Lien in, of or on the Property of the Borrower or any of its Subsidiaries,
except for the following (collectively, the "Permitted Liens"):
(i) Liens for taxes, assessments or governmental charges or
levies on its Property if the same are being contested
in good faith and by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall
have been set aside on its books.
(ii) Liens in favor of the Agent, for the benefit of the
Lenders, granted pursuant to any Collateral Document.
(iii) Attachment, judgment and other similar, non-tax Liens in
connection with court proceedings, but only if and for
so long as the execution or other enforcement of such
Liens is and continues to be effectively stayed and
bonded on appeal in a manner reasonably satisfactory to
Lenders for the full amount of such Liens, the validity
and amount of the claims secured thereby are being
actively contested in good faith and by appropriate
lawful proceedings, such Liens do not, in the aggregate,
materially detract from the value of the Property of the
Borrower or any of its Subsidiaries or materially impair
the use thereof in the operation of the Borrower's or
any of its Subsidiaries' business and such Liens are and
remain junior in priority to the Liens in favor of the
Lender.
(iv) Liens permitted by the Required Lenders in writing.
6.16. Acquisitions. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, make any Acquisition of any Person, except as
follows: (i) the Acquisition shall be with the consent of the Person
(non-hostile); (ii) the total consideration for the Acquisition shall not exceed
$20,000,000; (iii) the total consideration (including all Additional Contingent
Consideration) of all Acquisitions during any 12-month period shall not exceed
$50,000,000 in the aggregate (provided, however, that the acquisition of Premier
Oilfield Services Holdings Limited and its affiliates shall not count against
this $50,000,000 limit); (iv) the business and assets subject to the Acquisition
shall be in the same line of business as the Borrower and its Subsidiaries; (v)
the location of the corporate or company headquarters of the Person subject to
the Acquisition shall be in the United States of America and less than a
Substantial Portion of the assets of the Borrower and the Subsidiaries, taken as
a whole after giving effect to the Acquisition, shall be located outside of the
United States of America at any one time; (vi) at the time of the Acquisition,
no Unmatured Default and no Default shall exist; (vii) no Default shall exist as
a result of the Acquisition; (viii) in the case of a merger, the Borrower or a
Subsidiary of the Borrower shall be the surviving entity; (ix) immediately
following the Acquisition, the Borrower and its Subsidiaries shall be in
compliance with all material applicable laws and regulations; (x) the Borrower
and the affected Subsidiaries shall grant a security interest in the stock or
membership interest or partnership interest in any new Subsidiary in favor of
the Agent and the Lenders in which the Borrower has invested more than
$1,000,000; (xi) if the Person subject to the Acquisition becomes a Domestic
Subsidiary, the Domestic Subsidiary shall execute (A) if applicable, a security
agreement in any securities of any Subsidiaries of the new Subsidiary, (B) one
or more security agreements in the assets of the Domestic Subsidiary to the
extent required by Section 2.19(c), and (C) a solidary (joint and several)
guaranty of the Secured Obligations if required by Section 2.19(c); (xii) the
Borrower shall submit a legal opinion with respect to the Acquisition to the
Agent, in form and substance reasonably satisfactory to the agent; (xiii) based
on pro forma financial statements, the Borrower shall have at least $15,000,000
of availability under the Revolving Loan Commitment immediately following the
Acquisition; and (xiv) based on pro forma financial statements, the Leverage
Ratio immediately following the Acquisition shall be at least 0.375 below the
maximum Leverage Ratio required by this Agreement at the time of the
Acquisition. If the Borrower desires a waiver or modification of any of the
foregoing conditions in the case of a particular Acquisition, approval of the
Required Lenders must be obtained; any approval of a waiver or modification of a
condition for a particular Acquisition shall not apply to or be binding on the
Lenders with respect to any subsequent Acquisition.
(b) The Parent will not make any Acquisition of any Person,
except for the Acquisition of all of the membership interest of the Borrower.
Section 6.17 Transactions with Affiliates. The Borrower and the
Parent will not, and will not permit any of the Borrower's Subsidiaries to,
enter into any transaction (including, without limitation, the purchase or sale
of any Property or service) with, or make any payment or transfer to, any
Affiliate except (a) in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower's or Parent's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower,
Parent or such Subsidiary then the
Borrower, Parent or such Subsidiary would obtain in a comparable arms height and
length transaction; and (b) transactions between or among the Borrower and/or
the Parent and/or any Wholly-Owned Domestic Subsidiary of the Borrower and/or
Parent.
6.18 Appraisals. At any time following the Closing Date, the
Agent shall have the right to, or the Agent at the request of the Required
Lenders shall, order and obtain appraisals from a nationally recognized firm
reasonably acceptable to the Agent, and in form and substance satisfactory to
the Agent, of the fair market value of all of the fixed assets (including
property, plant, vessels and equipment) of the Borrower and its Subsidiaries, at
the Borrower's expense, once prior to the Revolving Loan Termination Date. The
Borrower shall cooperate with the Agent and the appraiser so as to facilitate
the delivery of the appraisal within 60 days after the Agent's request therefor.
6.19 Financial Covenants.
6.19.1 Minimum Net Worth. The Parent will not permit its Net
Worth, determined as of the end of each fiscal quarter, to be less than the sum
of (i) $162,643,250, plus (ii) 50% of positive Net Income for such fiscal
quarter (with no deduction for net losses) beginning with the fiscal quarter
ending September 30, 2000, plus (iii) 100% of Net Equity Proceeds during such
fiscal quarter, beginning with the fiscal quarter ending September 30, 2000.
6.19.2 Maximum Leverage Ratio. The Parent will not permit the
ratio (the "Leverage Ratio"), determined on a Pro Forma Basis, of (i)
Indebtedness (excluding the funded portion of any Indebtedness guaranteed by the
Federal Maritime Administration that is held in escrow and not yet available to
the Borrower and excluding any Additional Contingent Consideration payable more
than 12 months after the determination date) as of the end of each fiscal
quarter (the determination date) to (ii) EBITDA for the four fiscal quarters
ending with such fiscal quarter, to be greater than the following for the
periods indicated:
Period Maximum Leverage Ratio
------ ----------------------
July 1, 2003 through
and including September 30, 2003 3.25 to 1.00
October 1, 2003 through
March 31, 2004 3.00 to 1.00
April 1, 2004 through
Revolving Loan Termination Date 2.75 to 1.00
6.19.3 Maximum Adjusted Leverage Ratio. The Parent will not
permit the ratio (the "Adjusted Leverage Ratio"), determined on a Pro Forma
Basis, of (i) Indebtedness (excluding the funded portion of any Indebtedness
guaranteed by the Federal Maritime Administration that is held in escrow and not
yet available to the Borrower and excluding any Additional Contingent
Consideration payable more than 12 months after the determination date), plus
the present value of all obligations to plug and abandon oil and gas xxxxx as
reflected on the Borrower's financial statements in accordance with GAAP, in
each case, as of the end of each fiscal quarter (the
determination date) to (ii) EBITDA for the four fiscal quarters ending with such
fiscal quarter, to be greater than the following for the periods indicated:
Period Maximum Adjusted Leverage Ratio
------ -------------------------------
July 1, 2003 through and
including September 30, 2003 3.75 to 1.00
October 1, 2003 through and
including March 31, 2004 3.50 to 1.00
April 1, 2004 through Revolving
Loan Termination Date 3.25 to 1.00
Section 6.19.4 Minimum Fixed Charge Coverage Ratio. The Parent will
not permit the ratio, determined on a Pro Forma Basis as of the last day of each
fiscal quarter, of (i) EBITDA for the four fiscal quarters ending with such
fiscal quarter, to (ii) the sum of Interest Expense, plus scheduled principal
payments on the Term Loans (excluding any mandatory prepayments), plus cash
Income Taxes actually paid, in each case for such four-fiscal quarter period, to
be less than 1.50 to 1.00.
Section 6.19.5 Maximum Capital Expenditures. The Parent will not
permit Capital Expenditures (on a consolidated but non-cumulative basis) of the
Parent, the Borrower and their Subsidiaries during each fiscal year (including
the fiscal year ending December 31, 2003 to be greater than $60,000,000,
provided that such amount will be reviewed by the Lenders annually and may be
increased with the consent of the Agent and the Required Lenders.
Section 6.20 Plug and Abandonment Liabilities. The Borrower and/or
certain of its Subsidiaries are engaged in acquiring oil and gas xxxxx offshore
the United States. The Borrower covenants and agrees that it and its
Subsidiaries will not create or assume liabilities to plug and abandon offshore
xxxxx in excess of the lesser of (i) $85,000,000 gross future value at any one
time in the aggregate or (ii) the amount permitted by the Minerals Management
Service.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or
on behalf of the Parent, Borrower or any of Borrower's Subsidiaries to the
Lenders or the Agent under or in connection with this Agreement, any Loan, or
any certificate or information delivered in connection with this Agreement or
any other Loan Document shall be materially false on the date as of which made.
7.2. Nonpayment of any interest or principal on the Loan, or
nonpayment of any commitment fee or other obligations under any of the Loan
Documents, or nonpayment of any Rate Management Obligations to any Lender, or
nonpayment of any reimbursement obligations to a Lender under any Letter of
Credit, in each case within five days after the same becomes due.
7.3. The breach by the Parent or Borrower of any of the terms
or provisions of Section 6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17,
6.18 or 6.19.
7.4. The breach by the Parent or Borrower (other than a
breach which constitutes a Default under another Section of this Article VII) of
any of the terms or provisions of this Agreement or any other Loan Document
which is not remedied within 30 days after written notice from the Agent or any
Lender.
7.5. Failure of the Parent, Borrower or any of Borrower's
Subsidiaries to pay when due any Indebtedness to any Person other than the
Lenders aggregating in excess of $2,000,000 ("Material Indebtedness"); or the
default by the Parent, Borrower or any of Borrower's Subsidiaries in the
performance (beyond the applicable grace period with respect thereto, if any) of
any term, provision or condition contained in any agreement under which any such
Material Indebtedness was created or is governed, or any other event shall occur
or condition exist, the effect of which default or event is to cause, or to
permit the holder or holders of such Material Indebtedness to cause, such
Material Indebtedness to become due prior to its stated maturity; or any
Material Indebtedness of the Borrower or any of its Subsidiaries shall be
declared to be due and payable or required to be prepaid or repurchased (other
than by a regularly scheduled payment) prior to the stated maturity thereof; or
the Parent, Borrower or any of Borrower's Subsidiaries shall not pay, or admit
in writing its inability to pay, its debts generally as they become due.
Notwithstanding the foregoing, the default by Superior Energy Liftboats, L.L.C.
("Liftboats") on any Indebtedness permitted by Section 6.11(a)(xvi)
(Indebtedness guaranteed by the Maritime Administration) shall be excluded from
the effect of this Section 7.5, unless and until the Maritime Administration
makes a formal demand for payment under any guaranty issued by the Parent,
Borrower or other Subsidiary in connection therewith.
7.6. The Parent, Borrower or any of Borrower's Subsidiaries
shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the
Parent, Borrower or any of Borrower's Subsidiaries, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for the Parent,
Borrower or any of Borrower's Subsidiaries or any Substantial Portion of its
Property, or a proceeding described in Section 7.6(iv) shall be instituted
against the Parent, Borrower or any of Borrower's Subsidiaries and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of, all or
any portion of the Property of the Parent, Borrower and Borrower's Subsidiaries
which, when taken together with all other Property of the Parent, Borrower and
Borrower's Subsidiaries so condemned, seized, appropriated, or taken custody or
control of, during the twelve-month period ending with the month in which any
such action occurs, constitutes a Substantial Portion.
7.9. The Parent, Borrower or any of Borrower's Subsidiaries
shall fail within 60 days to pay, bond or otherwise discharge one or more (i)
judgments or orders for the payment of money in excess of $10,000,000 (or the
equivalent thereof in currencies other than U.S. Dollars) in the aggregate, or
(ii) nonmonetary judgments or orders which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, which
judgment(s), in any such case, is/are not stayed on appeal or otherwise being
appropriately contested in good faith.
7.10. Any Change in Control shall occur.
7.11. Any Collateral Document shall for any reason fail to
create a valid and perfected first priority security interest in any Substantial
Portion of the Collateral purported to be covered thereby, except as permitted
by the terms of this Agreement or any Collateral Document, or any Collateral
Document shall fail to remain in full force or effect or any action shall be
taken to discontinue or to assert the invalidity or unenforceability of any
Collateral Document.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or
7.7 occurs with respect to the Parent or Borrower, the obligations of the
Lenders to make Loans hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent or any Lender. If any other Default occurs, the
Required Lenders (or the Agent with the consent of the Required Lenders) may
terminate or suspend the obligations of the Lenders to make Loans hereunder, or
declare the Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Parent or Borrower) and before any
judgment or decree for the payment of the Obligations due shall have been
obtained or entered, the Required Lenders (in their sole discretion) shall so
direct, the Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article
VIII, the Required Lenders (or the Agent with the consent in writing of the
Required Lenders) and the Parent and Borrower may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to the
Loan Documents or changing in any manner the rights of the Lenders or the
Borrower hereunder or waiving any Default hereunder; provided, however, that no
such supplemental agreement shall, without the consent of each Lender affected
thereby:
(i) Extend the maturity of Loan, or extend or postpone any
payment of principal and/or interest due under any Loan,
or forgive all or any portion of the principal amount of
any Loan, or reduce the rate or extend the time of
payment of interest or fees thereon, or forebear in the
collection of any Loan, or grant a payment moratorium on
any Loan; or amend the definitions of "Alternate Base
Rate," "Applicable Margin", "Eurodollar Base Rate",
"Eurodollar Interest Period," or "Eurodollar Rate" or
amend the Pricing Schedule.
(ii) Reduce the percentage specified in the definition of
Required Lenders or any other percentage of Lenders
specified to be the applicable percentage in this
Agreement to act on specified matters, or amend the
definitions of "Required Lenders" or "Pro Rata Share".
(iii) Extend the Revolving Loan Termination Date or the
maturity date of any Term Loan, or increase or reduce
the amount of the Aggregate Revolving Loan Commitment or
of the Revolving Loan Commitment of any Lender
hereunder, or
of the Aggregate Term Loan Commitment or of the Term
Loan Commitment of any Lender hereunder, or permit the
Borrower to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Except as provided in the Collateral Documents, release
all or any Substantial Portion of the Collateral
(including any guarantor of the Secured Obligations);
provided, however, that the Agent may release any
Collateral in order to give effect to, or otherwise in
connection with, any asset sale, lease or other
disposition, or secured financing or other financing
transaction permitted by this Agreement, in which case
the Lenders authorize the Agent to execute and deliver
any and all related release documents without the
further consent of any Lender.
(vi) Waive any Default if the practical effect of such waiver
allows the Agent and/or Required Lenders to effectuate
any of the items or matters listed in clauses (i)
through (v) of this Section 8.2 (except that any waiver
or amendments of the financial covenants set forth in
Section 6.19 shall require the consent of the Required
Lenders).
No amendment of any provision of this Agreement relating to the
Agent shall be effective without the written consent of the Agent. The Agent may
waive payment of the fee required under Section 12.3.2 without obtaining the
consent of any other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the
Lenders or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default or
the inability of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 8.2, and
then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Agent and the Lenders until the Secured Obligations
have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Parent and Borrower contained in this Agreement shall survive
the making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Parent, Borrower, Borrower's Subsidiaries,
the Agent and the Lenders and supersede all prior agreements and understandings
among the Parent, Borrower, Borrower's Subsidiaries, the Agent and the Lenders
relating to the subject matter thereof other than the fee letter described in
Section 10.13.
9.5. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall
reimburse the Agent and the Arranger for any costs and out-of-pocket expenses
(including attorneys' fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent) paid or incurred by the Agent or the
Arranger in connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the Loan
Documents. The Borrower also agrees to reimburse the Agent, the Arranger and the
Lenders for any costs and out-of-pocket expenses (including attorneys' fees and
time charges of attorneys for the Agent, the Arranger and the Lenders, which
attorneys may be employees of the Agent, the Arranger or the Lenders) paid or
incurred by the Agent, the Arranger or any Lender in connection with the
collection and enforcement of the Loan Documents. The Borrower acknowledges that
from time
to time the Agent may prepare and may distribute to the Lenders (but shall have
no obligation or duty to prepare or to distribute to the Lenders) certain audit
reports (the "Reports") pertaining to the Borrower's assets for internal use by
the Agent from information furnished to it by or on behalf of the Borrower,
after the Agent has exercised its rights of inspection pursuant to this
Agreement.
(ii) The Borrower hereby further agrees to indemnify the
Agent, the Arranger, each Lender, their respective affiliates, and each of their
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
Arranger, any Lender or any affiliate is a party thereto) which any of them may
pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loan hereunder except
to the extent that they are determined in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification. The obligations of the
Borrower under this Section 9.6 shall survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.8. Accounting. Except as provided to the contrary herein,
all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP.
9.9. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the
Borrower on the one hand and the Lenders and the Agent on the other hand shall
be solely that of borrower and lenders. Neither the Agents, the Arranger nor any
Lender shall have any fiduciary responsibilities to the Borrower. Neither the
Agents, the Arranger nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations. The Borrower agrees that neither
the Agents, the Arranger nor any Lender shall have liability to the Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by the
Borrower in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Agents, the Arranger nor any Lender shall have any liability with respect to,
and the Borrower hereby waives, releases and agrees not to xxx for, any special,
indirect or consequential damages suffered by the Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any
confidential information which it may receive from the Parent or Borrower
pursuant to this Agreement in confidence, except for disclosure (i) to its
Affiliates and to other Lenders and their respective Affiliates, (ii) to legal
counsel, accountants, and other professional advisors to such Lender or to a
Transferee, (iii) to regulatory officials, (iv) to any Person as requested
pursuant to or as required by law, regulation, or legal process, (v) to any
Person in connection with any legal proceeding to which such Lender is a party,
(vi) to such Lender's direct or indirect contractual counterparties in swap
agreements or to legal counsel, accountants and other professional advisors to
such counterparties, and (vii) permitted by Section 12.4.
9.12. Nonreliance. Each Lender hereby represents that it is
not relying on or looking to any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) for the repayment of the Loans
provided for herein.
9.13. Disclosure The Borrower and each Lender hereby (i)
acknowledge and agree that the Agent and/or its Affiliates from time to time may
hold investments in, make other loans to or have other relationships with the
Borrower and its Affiliates, and (ii) waive any liability of the Agent or such
Affiliate of the Agent to the Borrower or any Lender, respectively, arising out
of or resulting from such investments, loans or relationships other than
liabilities arising out of the gross negligence or willful misconduct of the
Agent or its Affiliates.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA is
hereby appointed by each of the Lenders as its contractual representative
hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Agent to act as the contractual representative of
such Lender with the rights and duties expressly set forth herein and in the
other Loan Documents. The Agent agrees to act as such contractual representative
upon the express conditions contained in this Article X. Notwithstanding the use
of the defined term "Agent," it is expressly understood and agreed that the
Agents shall not have any fiduciary responsibilities to any Lender by reason of
this Agreement or any other Loan Document and that the Agent is merely acting as
the contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Agents (i) do not
hereby assume any fiduciary duties to any of the Lenders, (ii) are a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (iii) are acting as independent contractors, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Agents on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender hereby
waives.
10.2. Powers. The Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the Agent by
the terms of each thereof, together with such powers as are reasonably
incidental thereto; provided, however in the event of a conflict between the
terms and provisions of any Loan Document (other than this Agreement) and this
Agreement, the terms and conditions of this Agreement shall control. The Agent
shall have no implied duties to the Lenders, or any obligation to the Lenders to
take any action thereunder except any action specifically provided by the Loan
Documents, subject to any limitation contained in this Agreement, to be taken by
the Agent.
10.3. General Immunity. Neither the Agents nor any of their
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the
Agents nor any of their directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (a) any
statement, warranty or representation made in connection with any Loan Document
or any Advance hereunder; (b) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of
any condition specified in Article IV, except receipt of items required to be
delivered solely to the Agent; (d) the existence or possible existence of any
Default or Unmatured Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in the Collateral; or (g) the financial
condition of the Borrower or any guarantor of any of the Obligations or of any
of the Borrower's or any such guarantor's respective Subsidiaries. The Agents
shall have no duty to disclose to the Lenders information that is not required
to be furnished by the Borrower to the Agent at such time, but is voluntarily
furnished by the Borrower to the Agent (either in its capacity as Agent or in
its individual capacity).
10.5. Action on Instructions of Lenders. Except as may
otherwise be provided in Section 8.2, the Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and under any other
Loan Document in accordance with written instructions signed by the Required
Lenders, and such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders. The Lenders hereby acknowledge
that the Agent shall be under no duty to take any discretionary action permitted
to be taken by it pursuant to the provisions of this Agreement or any other Loan
Document unless it shall be requested in writing to do so by the Required
Lenders. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
10.6. Employment of Agents and Counsel. Except as may
otherwise be provided in Section 8.2, the Agent may execute any of its duties as
Agent hereunder and under any other Loan Document by or through employees,
agents, and attorneys-in-fact and shall not be answerable to the Lenders, except
as to money or securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. The Agent shall be entitled to advice of counsel
concerning the contractual arrangement between the Agent and the Lenders and all
matters pertaining to the Agent's duties hereunder and under any other Loan
Document.
10.7. Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Agent ratably in proportion to each
Lender's Pro Rata Share (i) for any amounts not reimbursed by the Borrower for
which the Agent is entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by
the Agent in connection with any dispute between the Agent and any Lender or
between two or more of the Lenders) and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby (including, without limitation, for any
such amounts incurred by or asserted against the Agent in connection with any
dispute between the Agent and any Lender or between two or more of the Lenders),
or the enforcement of any of the terms of the Loan Documents or of any such
other documents, provided that (a) no Lender shall be liable for any of the
foregoing to the extent any of the foregoing is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Agent and (b) any indemnification
required pursuant to Section 3.5(vii) shall, notwithstanding the provisions of
this Section 10.8, be paid by the relevant Lender in accordance with the
provisions thereof. The obligations of the Lenders under this Section 10.8 shall
survive payment of the Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender,
the Agent shall have the same rights and powers hereunder and under any other
Loan Document with respect to its Term Loan Commitment, its Revolving Loan
Commitment and its Loans as any Lender and may exercise the same as though it
were not the Agent, and the term "Lender" or "Lenders" shall, at any time when
the Agent is a Lender, unless the context otherwise indicates, include the Agent
in its individual capacity. The Agent and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of trust, debt, equity or
other transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agents, the Arranger or any
other Lender and based on the financial statements prepared by the Parent or
Borrower and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the Agents, the Arranger or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by
giving written notice
thereof to the Lenders and the Borrower, such resignation to be effective upon
the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents.
10.13. Agent's Fee; Arranger's Fee. The Borrower agrees to pay
to the Agent and the Arranger, for their own accounts, the fees agreed to by the
Borrower, the Agent and the Arranger pursuant to that certain letter agreement
dated the date of this Agreement, or as otherwise agreed from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders
agree that the Agent may delegate any of its duties under this Agreement to any
of its Affiliates. Any such Affiliate (and such Affiliate's directors, officers,
agents and employees) which performs duties in connection with this Agreement
shall be entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Execution of Collateral Documents. The Lenders hereby
empower and authorize the Agent to execute and deliver to the Borrower on their
behalf the Collateral Documents and all related financing statements and any
financing statements, agreements, documents or instruments as shall be necessary
or appropriate to effect the purposes of the Collateral Documents.
10.16. Collateral Releases. The Lenders hereby empower and
authorize the Agent to execute and deliver to the Borrower on their behalf any
agreements, documents or instruments as
shall be necessary or appropriate to effect any releases of Collateral which
shall be permitted by the terms hereof or of any other Loan Document or which
shall otherwise have been approved by the Required Lenders (or, if required by
the terms of Section 8.2, all of the Lenders) in writing.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any
rights of the Lenders under applicable law, if the Borrower becomes insolvent,
however evidenced, or any Default occurs, any and all deposits (including all
account balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments received
pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Loans held by the other Lenders so that after such
purchase each Lender will hold its Pro Rata Share of the Loans. If any Lender,
whether in connection with setoff or amounts which might be subject to setoff or
otherwise, receives Collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such Collateral ratably in proportion to their respective Pro Rata
Shares. In case any such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
If an amount to be setoff is to be applied to permitted Indebtedness
of the Borrower to a Lender other than Obligations under this Agreement, such
amount shall be applied ratably to such other Indebtedness and to the
Obligations.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the Parent,
Borrower and the Lenders and their respective successors and assigns, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents and (ii) any assignment by any Lender must
be made in compliance with Section 12.3. The parties to this Agreement
acknowledge that clause (ii) of this Section 12.1 relates only to absolute
assignments and does not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by any Lender of all or
any portion of its rights under this Agreement and any Note to a Federal Reserve
Bank; provided, however, that no such pledge or assignment creating a security
interest shall release the transferor Lender from its obligations hereunder
unless and until the parties thereto have complied with the provisions of
Section 12.3. The Agent may treat the Person which made any Loan or which holds
any Note as the owner thereof for all purposes hereof unless and until such
Person complies with Section 12.3; provided, however, that the Agent may in its
discretion (but shall not be required to) follow instructions from the Person
which made any Loan or which holds any Note to direct payments relating to such
Loan or Note to another Person. Any assignee of the rights to any Loan or any
Note agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder or assignee of the rights to such Loan.
12.2. Participations
12.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants") participating
interests in any Obligations owing to such Lender, any Note held by such Lender,
any Revolving Loan Commitment or Term Loan Commitment of such Lender or any
other interest of such Lender under the Loan Documents, or any Letter of Credit
issued by said Lender. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the owner of its Loans and the holder of any Note
issued to it in evidence thereof for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrower and the
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the
consent of any Participant, any amendment, modification or waiver of any
provision of the Loan Documents other than any amendment, modification or waiver
with respect to any Loan or Commitment in which such Participant has an interest
which forgives principal, interest or fees or reduces the interest rate or fees
payable with respect to any such Loan or Commitment, extends the Revolving Loan
Termination Date or the maturity date of any Term Loan, postpones any date fixed
for any regularly-scheduled payment of principal of, or interest or fees on, any
such Loan or Revolving Loan Commitment, releases any guarantor of any such Loan
or releases all or a Substantial Portion of the Collateral, if any, securing any
such Loan.
12.2.3. Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in Section 11.1
in respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents, provided that each
Lender shall retain the right of setoff provided in Section 11.1 with respect to
the amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 11.2 as if each Participant were a Lender.
12.3. Assignments
12.3.1. Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time assign
to one or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan Documents. Such assignment shall be
substantially in the form of Exhibit B or in such other form as may be agreed to
by the parties thereto. The consent of the Borrower and the Agent shall be
required prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof; provided, however, that if a
Default has occurred and is continuing, the consent of the Borrower shall not be
required. Any required consent of the Borrower shall not be unreasonably
withheld or delayed. Each such assignment with respect to a Purchaser which is
not a Lender or an Affiliate thereof shall (unless each of the Borrower and the
Agent otherwise consents) be in an amount not less than the lesser of (i)
$5,000,000 or (ii) the remaining amount of the assigning Lender's Commitment
(calculated as at the date of such assignment) or outstanding Loans (if the
applicable Commitment has been terminated). Furthermore, the assigning Lender
shall pay the Agent an assignment fee of $3,500 for each assignment.
12.3.2. Effect; Effective Date. Upon (i) delivery to the Agent
of an assignment, together with any consents required by Section 12.3.1, and
(ii) payment of a $3,500 fee to the Agent for processing such assignment (unless
such fee is waived by the Agent), such assignment shall become effective on the
effective date specified in such assignment. The assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Revolving Loan Commitment and Loans under the
applicable assignment agreement constitutes "plan assets" as defined under ERISA
and that the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under
ERISA. On and after the effective date of such assignment, such Purchaser shall
for all purposes be a Lender party to this Agreement and any other Loan Document
executed by or on behalf of the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as if it
were an original party hereto, and no further consent or action by the Borrower,
the Lenders or the Agent shall be required to release the transferor Lender with
respect to the percentage of the Aggregate Revolving Loan Commitment and Loans
assigned to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 12.3.2, the transferor Lender, the Agent and
the Borrower shall, if the transferor Lender or the Purchaser desires that its
Loans be evidenced by Notes, make appropriate arrangements so that new Notes or,
as appropriate, replacement Notes are issued to such transferor Lender and new
Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Revolving Loan
Commitments and outstanding Term Loans, as adjusted pursuant to such assignment.
12.4. Dissemination of Information. The Borrower authorizes
each Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Parent, Borrower and
Borrower's Subsidiaries, including without limitation any information contained
in any Reports; provided that each Transferee and prospective Transferee agrees
to be bound by Section 9.11 of this Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.14
with respect to Borrowing Notices, all notices, requests and other
communications to any party hereunder shall be in writing (including electronic
transmission, facsimile transmission or similar writing) and shall be given to
such party: (x) in the case of the Borrower, at 0000 Xxxxxx Xxxx, Xxxxxx,
Xxxxxxxxx 00000, Facsimile: (000) 000-0000 (Attention: President), (y) in the
case of the Agent or any Lender, at its address or facsimile number set forth on
Schedule 1 hereto or (z) in the case of any party, at such other address or
facsimile number as such party may hereafter specify for the purpose by notice
to the Agent and the Borrower in accordance with the provisions of this Section
13.1. Each such notice, request or other communication shall be effective (i) if
given by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received, (ii) if given
by mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, or (iii) if given by any other
means, when delivered (or, in the case of electronic transmission, received) at
the address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.
13.2. Change of Address. The Borrower, the Agent and any
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
14.1 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Agreement shall be effective when it has been
executed by the Parent, the Borrower, the Agent and the Lenders and each party
has notified the Agent by facsimile transmission or telephone that it has taken
such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT
OF LAWS PROVISIONS) OF THE STATE OF LOUISIANA, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER AND THE AGENT
HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR LOUISIANA STATE COURT SITTING IN NEW ORLEANS, LOUISIANA IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW ORLEANS, LOUISIANA.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
IN WITNESS WHEREOF, the Parent, the Borrower, the Lenders and the
Agent have executed this Agreement 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
AGENT: BANK ONE, NA
(Main Office Chicago)
By: /s/ XXXXXX X. XXXXX
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
SYNDICATION AGENT: XXXXX FARGO BANK TEXAS, N.A.
By: /s/ XXXXXX X. XXXXXXXX III
--------------------------------
Name: Xxxxxx X. Xxxxxxxx III
Title: Vice President
DOCUMENTATION AGENT: WHITNEY NATIONAL BANK
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
LENDERS: BANK ONE, NA
(Main Office Chicago)
By: /s/ XXXXXX X. XXXXX
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
XXXXX FARGO BANK TEXAS, N.A.
By: /s/ XXXXXX X. XXXXXXXX III
--------------------------------
Name: Xxxxxx X. Xxxxxxxx III
Title: Vice President
WHITNEY NATIONAL BANK
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
HIBERNIA NATIONAL BANK
By: /s/ XXXXXXX XXXXXXXX
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
PNC BANK, NATIONAL
ASSOCIATION
By: /s/ XXXX X. XXXXX
--------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
BANK OF SCOTLAND
By: /s/ XXXXXX XXXXXX
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
UNION PLANTERS BANK
By:
--------------------------------
Name:
Title:
NATEXIS BANQUES POPULAIRES
By: /s/ XXXXXXX XXXXXXX
--------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President/Manager
By: /s/ XXXXXXX X. XXXXXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President/Manager
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
