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DRAFT
October 25, 1997
SUBORDINATED CREDIT AGREEMENT
Dated as of October 28, 1997
Among
TRANSCOASTAL MARINE SERVICES, INC.
as Borrower,
JOINT ENERGY DEVELOPMENT INVESTMENTS,
LIMITED PARTNERSHIP
as Agent,
and
THE LENDERS SIGNATORY HERETO
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above...................................1
Section 1.02 Certain Defined Terms.................................1
Section 1.03 Accounting Terms and Determinations..................13
ARTICLE II
COMMITMENTS
Section 2.01 Loans................................................14
Section 2.02 Borrowings, Continuations and Conversions............14
Section 2.03 Changes of Commitments...............................15
Section 2.04 Fees.................................................16
Section 2.05 Several Obligations..................................16
Section 2.06 Notes................................................16
Section 2.07 Prepayments..........................................16
Section 2.08 Lending Offices......................................17
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans...................................17
Section 3.02 Interest.............................................17
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments.............................................18
Section 4.02 Pro Rata Treatment...................................19
Section 4.03 Computations.........................................19
Section 4.04 Non-receipt of Funds by the Agent....................19
Section 4.05 Set-off; Sharing of Payments, Etc....................19
Section 4.06 Taxes................................................20
ARTICLE V
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CAPITAL ADEQUACY
Section 5.01 Additional Costs.....................................22
Section 5.02 Limitation on Eurodollar Loans.......................23
Section 5.03 Illegality...........................................24
Section 5.04 Base Rate Loans Pursuant to Sections 5.01,
5.02 and 5.03........................................24
Section 5.05 Compensation.........................................24
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Initial Funding......................................25
Section 6.02 Initial and Subsequent Loans.........................26
ARTICLE VII THROUGH ARTICLE XII TO BE SAME AS IN THE SENIOR CREDIT
AGREEMENT EXCEPT SECTION 10.01(B) WHICH WILL BE MODIFIED AS
ATTACHED
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default...................................28
Annex I - List of Commitments
Exhibit A - Form of Note
Exhibit B - Form of Borrowing, Continuation and Conversion Request
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Legal Opinion of _____________________
Exhibit E - List of Security Instruments
Exhibit F - Form of Assignment Agreement
Schedule 7.02 - Liabilities
Schedule 7.03 - Litigation
Schedule 7.09 - Taxes
Schedule 7.10 - Titles, etc.
Schedule 7.14 - Subsidiaries and Partnerships
Schedule 7.17 - Environmental Matters
Schedule 7.19 - Insurance
[Schedule 7.__ - Hedging Agreements]
[Schedule 7.__ - Material Agreements]
Schedule 9.01 - Debt
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Schedule 9.02 - Liens
Schedule 9.03 - Investments, Loans and Advances
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THIS SUBORDINATED CREDIT AGREEMENT dated as of October ___,
1997 is among: TRANSCOASTAL MARINE SERVICES, INC., a corporation formed under
the laws of the State of Delaware (the "Borrower"); each of the lenders that is
a signatory hereto or which becomes a signatory hereto as provided in Section
12.06 (individually, together with its successors and assigns, a "Lender" and,
collectively, the "Lenders"); and JOINT ENERGY DEVELOPMENT INVESTMENTS, LIMITED
PARTNERSHIP, a limited partnership formed under the laws of the State of
Delaware, as agent for the Lenders (in such capacity, the "Agent").
R E C I T A L S
A. The Borrower has requested that the Lenders provide certain loans
to the Borrower; and
B. The Lenders have agreed to make such loans subject to the terms and
conditions of this Agreement.
C. In consideration of the mutual covenants and agreements herein
contained and of the loans and commitments hereinafter referred to, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above. As used in this Agreement,
the terms "Agent," "Borrower," "Lender" and "Lenders," shall have the meanings
indicated above.
Section 1.02 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms defined in this
Article I or in other provisions of this Agreement in the singular to have the
same meanings when used in the plural and vice versa):
"Additional Costs" shall have the meaning assigned such term
in Section 5.01(a).
"Affected Loans" shall have the meaning assigned such term
in Section 5.04.
"Affiliate" of any Person shall mean (i) any Person directly
or indirectly controlled by, controlling or under common control with
such first Person, (ii) any director or officer of such first Person or
of any Person referred to in clause (i) above and (iii) if any Person
in clause (i) above is an individual, any member of the immediate
family (including parents, spouse and children) of such individual and
any trust whose principal beneficiary is such individual or one or more
members of such immediate family and any Person who is controlled by
any such member or trust. For purposes of this definition, any Person
which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other governing
body of a corporation or 10% or more of the partnership or other
ownership interests of any other Person (other than as a limited
partner of such other
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Person) will be deemed to "control" (including, with its correlative
meanings, "controlled by" and "under common control with") such
corporation or other Person.
"Agreement" shall mean this Subordinated Credit Agreement, as
the same may from time to time be amended or supplemented.
"Aggregate Commitments" at any time shall equal the amount
calculated in accordance with Section 2.03(a).
"Aggregate Maximum Credit Amounts" at any time shall equal the
sum of the Maximum Credit Amounts of the Lenders ($15,000,000), as the
same may be reduced pursuant to Section 2.03(b).
"Applicable Lending Office" shall mean, for each Lender and
for each Type of Loan, the lending office of such Lender (or an
Affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other offices of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower as the office by which its Loans of such
Type are to be made and maintained.
"Applicable Margin" shall mean (i) 1/2 of 1% per annum with
respect to Base Rate Loans; and (ii) three and three-fourths of one
percent (3.75%) per annum with respect to Eurodollar Loans.
"Assignment" shall have the meaning assigned such term in
Section 12.06(b).
"Available Amount" shall be the amount determined pursuant to
Section 2.03(b).
"Base Rate" shall mean, with respect to any Base Rate Loan,
for any day, the higher of (i) the Federal Funds Rate for any such day
plus 1/2 of 1% or (ii) the Prime Rate for such day. Each change in any
interest rate provided for herein based upon the Base Rate resulting
from a change in the Base Rate shall take effect at the time of such
change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates
based upon the Base Rate.
"Business Day" shall mean any day other than a day on which
commercial banks are authorized or required to close in New York, New
York and, where such term is used in the definition of "Quarterly Date"
or if such day relates to a borrowing or continuation of, a payment or
prepayment of principal of or interest on, or a conversion of or into,
or the Interest Period for, a Eurodollar Loan or a notice by the
Borrower with respect to any such borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day
on which dealings in Dollar deposits are carried out in the London
interbank market.
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"Closing Date" shall mean October 28, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time and any successor statute.
"Commitment" shall mean, for any Lender, its obligation to
make Loans up to the lesser of such Lender's Maximum Credit Amount or
the Lender's Percentage Share of the amount equal to the then effective
Available Amount.
"Consolidated Net Income" shall mean with respect to the
Borrower and its Consolidated Subsidiaries, for any period, the
aggregate of the net income (or loss) of the Borrower and its
Consolidated Subsidiaries after allowances for taxes for such period,
determined on a consolidated basis in accordance with GAAP; provided
that there shall be excluded from such net income (to the extent
otherwise included therein) the following: (i) the net income of any
Person in which the Borrower or any Consolidated Subsidiary has an
interest (which interest does not cause the net income of such other
Person to be consolidated with the net income of the Borrower and its
Consolidated Subsidiaries in accordance with GAAP), except to the
extent of the amount of dividends or distributions actually paid in
such period by such other Person to the Borrower or to a Consolidated
Subsidiary, as the case may be; (ii) the net income (but not loss) of
any Consolidated Subsidiary to the extent that the declaration or
payment of dividends or similar distributions or transfers or loans by
that Consolidated Subsidiary is not at the time permitted by operation
of the terms of its charter or any agreement, instrument or
Governmental Requirement applicable to such Consolidated Subsidiary, or
is otherwise restricted or prohibited in each case determined in
accordance with GAAP; (iii) the net income (or loss) of any Person
acquired in a pooling-of-interests transaction for any period prior to
the date of such transaction; (iv) any extraordinary gains or losses,
including gains or losses attributable to Property sales not in the
ordinary course of business; and (v) the cumulative effect of a change
in accounting principles and any gains or losses attributable to
writeups or writedowns of assets.
"Consolidated Subsidiaries" shall mean each Subsidiary of the
Borrower (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been)
consolidated with the financial statements of the Borrower in
accordance with GAAP.
"Debt" shall mean, for any Person the sum of the following
(without duplication): (i) all obligations of such Person for borrowed
money or evidenced by bonds, debentures, notes or other similar
instruments (including principal, interest, fees and charges); (ii) all
obligations of such Person (whether contingent or otherwise) in respect
of bankers' acceptances, letters of credit, surety or other bonds and
similar instruments; (iii) all obligations of such Person to pay the
deferred purchase price of Property or services (other than for
borrowed money); (iv) all obligations under leases which shall have
been, or should have been, in accordance with GAAP, recorded as capital
leases in respect of which such Person is liable
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(whether contingent or otherwise); (v) all obligations under leases
which require such Person or its Affiliate to make payments over the
term of such lease, including payments at termination, which are
substantially equal to at least eighty percent (80%) of the purchase
price of the Property subject to such lease plus interest as an imputed
rate of interest; (vi) all Debt (as described in the other clauses of
this definition) and other obligations of others secured by a Lien on
any asset of such Person, whether or not such Debt is assumed by such
Person; (vii) all Debt (as described in the other clauses of this
definition) and other obligations of others guaranteed by such Person
or in which such Person otherwise assures a creditor against loss of
the debtor or obligations of others; (viii) all obligations or
undertakings of such Person to maintain or cause to be maintained the
financial position or covenants of others or to purchase the Debt or
Property of others; (ix) obligations to deliver goods or services in
consideration of advance payments ; (x) obligations to pay for goods or
services whether or not such goods or services are actually received or
utilized by such Person; (xi) any capital stock of such Person in which
such Person has a mandatory obligation to redeem such stock; (xii) any
Debt of a Special Entity for which such Person is liable either by
agreement or because of a Governmental Requirement; and (xiv) all
obligations of such Person under Hedging Agreements.
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of Default.
"Discretionary Amount" at any time shall equal an amount not
to exceed $5,000,000.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"EBITDA" shall mean, for any period, the sum of Consolidated
Net Income for such period plus the following expenses or charges to
the extent deducted from Consolidated Net Income in such period:
interest, taxes, depreciation, depletion and amortization, minus all
non cash income added to Consolidated Net Income in such period.
"Effective Date" shall have the meaning assigned such term in
Section 12.17.
"Environmental Laws" shall mean any and all Governmental
Requirements pertaining to health or the environment in effect in any
and all jurisdictions in which the Borrower or any Subsidiary is
conducting or at any time has conducted business, or where any Property
of the Borrower or any Subsidiary is located, including without
limitation, the Oil Pollution Act of 1990 ("OPA"), the Clean Air Act,
as amended, the Comprehensive Environmental, Response, Compensation,
and Liability Act of 1980 ("CERCLA"), as amended, the Federal Water
Pollution Control Act, as amended, the Occupational Safety and Health
Act of 1970, as amended, the Resource Conservation and Recovery Act of
1976 ("RCRA"), as amended, the Safe Drinking Water Act, as amended, the
Toxic Substances Control Act, as amended, the
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Superfund Amendments and Reauthorization Act of 1986, as amended, the
Hazardous Materials Transportation Act, as amended, and other
environmental conservation or protection laws. The term "oil" shall
have the meaning specified in OPA, the terms "hazardous substance" and
"release" (or "threatened release") have the meanings specified in
CERCLA, and the terms "solid waste" and "disposal" (or "disposed") have
the meanings specified in RCRA; provided, however, that (i) in the
event either OPA, CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment and (ii) to the
extent the laws of the state in which any Property of the Borrower or
any Subsidiary is located establish a meaning for "oil," "hazardous
substance," "release," "solid waste" or "disposal" which is broader
than that specified in either OPA, CERCLA or RCRA, such broader meaning
shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether
or not incorporated) which together with the Borrower or any Subsidiary
would be deemed to be a "single employer" within the meaning of section
4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of section 414
of the Code.
"ERISA Event" shall mean (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder, (ii) the
withdrawal of the Borrower, any Subsidiary or any ERISA Affiliate from
a Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (iii) the filing of a notice of
intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, (iv) the institution of
proceedings to terminate a Plan by the PBGC or (v) any other event or
condition which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer,
any Plan.
"Eurodollar Loans" shall mean Loans the interest rates on
which are determined on the basis of rates referred to in the
definition of "Fixed Eurodollar Rate".
"Event of Default" shall have the meaning assigned such term
in Section 10.01.
"Excepted Liens" shall mean: (i) Liens for taxes, assessments
or other governmental charges or levies not yet due or which are being
contested in good faith by appropriate action and for which adequate
reserves have been maintained; (ii) Liens in connection with workmen's
compensation, unemployment insurance or other social security, old age
pension or public liability obligations not yet due or which are being
contested in good faith by appropriate action and for which adequate
reserves have been maintained in accordance with GAAP; (iii)
operators', vendors',
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carriers', warehousemen's, repairmen's, mechanics', workmen's,
materialmen's, construction or other like Liens arising by operation of
law in the ordinary course of business or statutory landlord's liens,
each of which is in respect of obligations that have not been
outstanding more than 90 days or which are being contested in good
faith by appropriate proceedings and for which adequate reserves have
been maintained in accordance with GAAP; (iv) encumbrances (other than
to secure the payment of borrowed money or the deferred purchase price
of Property or services), easements, restrictions, servitudes, permits,
conditions, covenants, exceptions or reservations in any rights of way
or other Property of the Borrower or any Subsidiary for the purpose of
roads, pipelines, transmission lines, transportation lines, distribu
tion lines for the removal of gas, oil, coal or other minerals or
timber, and other like purposes, or for the joint or common use of real
estate, rights of way, facilities and equipment, and defects,
irregularities, zoning restrictions and deficiencies in title of any
rights of way or other Property which in the aggregate do not
materially impair the use of such rights of way or other Property for
the purposes of which such rights of way and other Property are held by
the Borrower or any Subsidiary or materially impair the value of such
Property subject thereto; (v) deposits of cash or securities to secure
the performance of bids, trade contracts, leases, statutory obligations
and other obligations of a like nature incurred in the ordinary course
of business; and (vi) Liens permitted by the Security Instruments.
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal
to the weighted average of the rates on overnight federal funds
transactions with a member of the Federal Reserve System arranged by
federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day, provided
that (i) if the date for which such rate is to be determined is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the
average rate charged to the Agent on such day on such transactions as
determined by the Agent.
"Fee Letter" shall mean that certain letter agreement from the
Agent to the Borrower dated of even date with this Agreement concerning
certain fees in connection with this Agreement and any agreements or
instruments executed in connection therewith, as the same may be
amended or replaced from time to time.
"Financial Statements" shall mean the financial statement or
statements of the Borrower and the Founding Companies described or
referred to in Section 7.02.
"Fixed Eurodollar Rate" shall mean, for any Interest Period
for each Eurodollar Loan, an interest rate per annum equal to the rate
of interest per annum reported, on the date two Business Days prior to
the first day of such Interest Period, on Telerate Access Service Page
3750 (British Bankers Association Interest Settlement Rates) provided
by Telerate Systems Incorporated (or if such Page shall
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cease to be publicly available, as reported by Reuters or any other
publicly available source of similar market data selected by the Agent)
as the London Interbank Offered Rate for U.S. Dollar deposits having a
term comparable to such Interest Period.
"Fixed Rate" shall mean, with respect to any Eurodollar Loan,
a rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by the Agent to be equal to the quotient of (i) the
Fixed Eurodollar Rate for such Loan for the Interest Period for such
Loan divided by (ii) 1 minus the Reserve Requirement for such Loan for
such Interest Period.
"Founding Companies" shall mean ▇▇▇▇▇▇▇ Construction Company
(together with three affiliated companies, ___________, __________ and
_______________), CSI Hydrostatic Testers, Inc. (together with its
subsidiary and affiliate _______________ and ______________), HBH, Inc.
and The Red Fox Companies of New Iberia, Inc.
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"Governmental Authority" shall include the country, the state,
county, city and political subdivisions in which any Person or such
Person's Property is located or which exercises valid jurisdiction over
any such Person or such Person's Property, and any court, agency,
department, commission, board, bureau or instrumentality of any of them
including monetary authorities which exercises valid jurisdiction over
any such Person or such Person's Property. Unless otherwise specified,
all references to Governmental Authority herein shall mean a
Governmental Authority having jurisdiction over, where applicable, the
Borrower, its Subsidiaries or any of their Property or the Agent, any
Lender or any Applicable Lending Office.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or
other directive or requirement (whether or not having the force of
law), including, without limitation, Environmental Laws, energy
regulations and occupational, safety and health standards or controls,
of any Governmental Authority.
"Guarantor" shall mean each Subsidiary now or hereafter
executing a Guaranty Agreement.
"Guaranty Agreement" shall mean each guaranty agreement, in
form and substance reasonably satisfactory to the Agent, now or
hereafter executed by a Subsidiary in favor of the Agent and the
Lenders, as the same may be amended or modified from time to time.
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"Hedging Agreements" shall mean any commodity, interest rate
or currency swap, cap, floor, collar, forward agreement or other
exchange or protection agreements or any option with respect to any
such transaction.
"Highest Lawful Rate" shall mean, with respect to each Lender,
the maximum nonusurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged or
received on the Notes or on other Indebtedness under laws applicable to
such Lender which are presently in effect or, to the extent allowed by
law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable
laws now allow.
"Indebtedness" shall mean any and all amounts owing or to be
owing by the Borrower to the Agent and/or Lenders in connection with
the Loan Documents now or hereafter arising between the Borrower and
any Lender and permitted by the terms of this Agreement and all
renewals, extensions and/or rearrangements of any of the above.
"Indemnified Parties" shall have the meaning assigned such
term in Section 12.03(b).
"Indemnity Matters" shall mean any and all actions, suits,
proceedings (including any investigations, litigation or inquiries),
claims, demands and causes of action made or threatened against a
Person and, in connection therewith, all losses, liabilities, damages
(including, without limitation, consequential damages) or reasonable
costs and expenses of any kind or nature whatsoever incurred by such
Person whether caused by the sole or concurrent negligence of such
Person seeking indemnification.
"Initial Funding" shall mean the funding of the initial Loans
pursuant to Section 6.01 hereof.
"Intercreditor and Subordination Agreement" shall mean that
certain Intercreditor and Subordination Agreement of even date herewith
between the Borrower, the Agent, the Lenders, the agent under the
Senior Revolving Credit Agreement and the lenders under the Senior
Revolving Credit Agreement, as such agreement may be amended or
modified from time to time.
"Interest Period" shall mean, with respect to any Eurodollar
Loan, the period commencing on the date such Eurodollar Loan is made
and ending on the numerically corresponding day in the first, second,
third or sixth calendar month thereafter, as the Borrower may select as
provided in Section 2.02 (or such longer period as may be requested by
the Borrower and agreed to by the Majority Lenders), except that each
Interest Period which commences on the last Business Day of a calendar
month (or on any day for which there is no numerically corresponding
day
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in the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may
commence before and end after the Termination Date; (ii) each Interest
Period which would otherwise end on a day which is not a Business Day
shall end on the next succeeding Business Day (or, if such next
succeeding Business Day falls in the next succeeding calendar month, on
the next preceding Business Day); and (iii) no Interest Period shall
have a duration of less than one month and, if the Interest Period for
any Eurodollar Loans would otherwise be for a shorter period, such
Loans shall not be available hereunder.
"Lien" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or
contract, and whether such obligation or claim is fixed or contingent,
and including but not limited to (i) the lien or security interest
arising from a mortgage, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purposes of this Agreement,
the Borrower or any Subsidiary shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale
agreement, or leases under a financing lease or other arrangement
pursuant to which title to the Property has been retained by or vested
in some other Person in a transaction intended to create a financing.
"Loan Documents" shall mean this Agreement, the Notes and the
Security Instruments.
"Loans" shall mean the loans as provided for by Section
2.01(a).
"Majority Lenders" shall mean, at any time while no Loans are
outstanding, Lenders having at least sixty-six and two-thirds percent
(66-2/3%) of the Aggregate Commitments and, at any time while Loans are
outstanding, Lenders holding at least sixty-six and two-thirds percent
(66-2/3%) of the outstanding aggregate principal amount of the Loans
(without regard to any sale by a Lender of a participation in any Loan
under Section 12.06(c)).
"Material Adverse Effect" shall mean any material and adverse
effect on (i) the assets, liabilities, financial condition, business,
operations or affairs of the Borrower and any of its Subsidiaries or
from the facts represented or warranted in any Loan Document or (ii)
the ability of the Borrower and any of its Subsidiaries to carry out
their business as at the Closing Date or as proposed as of the Closing
Date to be conducted or meet their obligations under the Loan Documents
on a timely basis.
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"Maximum Credit Amount" shall mean, as to each Lender, the
amount set forth opposite such Lender's name on Annex I under the
caption "Maximum Credit Amounts" (as the same may be reduced pursuant
to Section 2.03(c) hereof pro rata to each Lender based on its
Percentage Share) as modified from time to time to reflect any
assignments permitted by Section 12.06(b).
"Mortgaged Property" shall mean the Property owned by the
Borrower and which is subject to the Liens existing and to exist under
the terms of the Security Instruments.
"Multiemployer Plan" shall mean a Plan defined as such in
Section 3(37) or 4001(a)(3) of ERISA.
"Notes" shall mean the Notes provided for by Section 2.06,
together with any and all renewals, extensions for any period,
increases, rearrangements, substitutions or modifications thereof.
"Other Taxes" shall have the meaning assigned such term in
Section 4.06(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions.
"Percentage Share" shall mean the percentage of the Aggregate
Commitments to be provided by a Lender under this Agreement as
indicated on Annex I hereto, as modified from time to time to reflect
any assignments permitted by Section 12.06(b).
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust,
unincorporated organization or government or any agency,
instrumentality or political subdivision thereof, or any other form of
entity.
"Plan" shall mean any employee pension benefit plan, as
defined in Section 3(2) of ERISA, which (i) is currently or hereafter
sponsored, maintained or contributed to by the Borrower, any Subsidiary
or an ERISA Affiliate or (ii) was at any time during the preceding six
calendar years sponsored, maintained or contributed to, by the
Borrower, any Subsidiary or an ERISA Affiliate.
"Post-Default Rate" shall mean, in respect of any principal of
any Loan or any other amount payable by the Borrower under this
Agreement or any Note, a rate per annum during the period commencing on
the date of an Event of Default until such amount is paid in full or
all Events of Default are cured or waived equal to 3% per annum above
the Base Rate as in effect from time to time plus the Applicable Margin
(if any), but in no event to exceed the Highest Lawful Rate provided
that, for a Eurodollar Loan, the "Post-Default Rate" for such principal
shall be, for the period commencing on the date of the Event of Default
and ending on the earlier to occur of the last day of the Interest
Period therefor or the date all Events of Default are
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cured or waived, 3% per annum above the interest rate for such Loan as
provided in Section 3.02(ii), but in no event to exceed the Highest
Lawful Rate.
"Prime Rate" shall mean the rate of interest from time to time
announced publicly by The Chase Manhattan Bank at the principal office
in New York, New York as its prime commercial lending rate. Such rate
is set by the Agent as a general reference rate of interest, taking
into account such factors as the Agent may deem appropriate, it being
understood that many of the Agent's commercial or other loans are
priced in relation to such rate, that it is not necessarily the lowest
or best rate actually charged to any customer and that the Agent may
make various commercial or other loans at rates of interest having no
relationship to such rate.
"Principal Office" shall mean the principal office of the
Agent, presently located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or
such other location as designated by the Agent from time to time.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last day of each March, June,
September, and October, in each year, the first of which shall be
December 12, 1997; provided, however, that if any such day is not a
Business Day, such Quarterly Date shall be the next succeeding Business
Day.
"Registration Statement" shall mean that certain Registration
Statement of the Borrower on Form S-1 filed with the SEC on August 29,
1997, as amended on October 8, 1997.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System (or any successor), as the same
may be amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Lender,
any change after the Closing Date in any Governmental Requirement
(including Regulation D) or the adoption or making after such date of
any interpretations, directives or requests applying to a class of
lenders (including such Lender or its Applicable Lending Office) of or
under any Governmental Requirement (whether or not having the force of
law) by any Governmental Authority charged with the interpretation or
administration thereof.
"Required Payment" shall have the meaning assigned such term
in Section 4.04.
"Reserve Requirement" shall mean, for any Interest Period for
any Eurodollar Loan, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are
required to be maintained
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during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one
billion Dollars against "Eurocurrency liabilities" (as such term is
used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change
against (i) any category of liabilities which includes deposits by
reference to which the Fixed Eurodollar Rate for Eurodollar Loans is to
be determined as provided in the definition of "Fixed Eurodollar Rate"
or (ii) any category of extensions of credit or other assets which
include a Eurodollar Loan.
"Responsible Officer" shall mean, as to any Person, the Chief
Executive Officer, the President or any Vice President of such Person
and, with respect to financial matters, the term "Responsible Officer"
shall include the Chief Financial Officer of such Person. Unless
otherwise specified, all references to a Responsible Officer herein
shall mean a Responsible Officer of the Borrower.
"SEC" shall mean the Securities and Exchange Commission or
any successor Governmental Authority.
"Security Instruments" shall mean, the Fee Letter, the
agreements or instruments described or referred to in Exhibit E, the
Intercreditor and Subordination Agreement and any and all other
agreements or instruments now or hereafter executed and delivered by
the Borrower or any other Person (other than participation or similar
agreements between any Lender and any other lender or creditor with
respect to any Indebtedness pursuant to this Agreement) in connection
with, or as security for the payment or performance of the Notes, this
Agreement, as such agreements may be amended, supplemented or restated
from time to time.
"Special Entity" shall mean any joint venture, limited
liability company or partnership, general or limited partnership or any
other type of partnership or company other than a corporation in which
the Borrower or one or more of its other Subsidiaries is a member,
owner, partner or joint venturer and owns, directly or indirectly, at
least a majority of the equity of such entity or controls such entity,
but excluding any tax partnerships that are not classified as
partnerships under state law. For purposes of this definition, any
Person which owns directly or indirectly an equity investment in
another Person which allows the first Person to manage or elect
managers who manage the normal activities of such second Person will be
deemed to "control" such second Person (e.g. a sole general partner
controls a limited partnership).
"Senior Credit Agreement" shall mean that certain Senior
Credit Agreement of even date herewith between the Borrower and Joint
Energy Development Investments, Limited Partnership providing for loans
up to but not to exceed $60,000,000.
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"Senior Debt" shall mean indebtedness of the Borrower not to
exceed a principal amount of $60,000,000 under and pursuant to the
terms of the Senior Credit Agreement.
"Senior Liens" shall mean Liens on assets of the Borrower
and/or its Subsidiaries securing the Senior Debt which are expressly
first and superior to the Liens securing the Indebtedness.
"Subsidiary" shall mean (i) any corporation of which at least
a majority of the outstanding shares of stock having by the terms
thereof ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled
by the Borrower or one or more of its Subsidiaries or by the Borrower
and one or more of its Subsidiaries, (ii) any Special Entity and (iii)
each Founding Company prior to the date it becomes a Subsidiary. Unless
otherwise indicated herein, each reference to the term "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Taxes" shall have the meaning assigned such term in Section
4.06(a).
"Termination Date" shall mean, unless the Commitments are
sooner terminated pursuant to Section 10.02 hereof, one day after the
Termination Date defined in the Senior Credit Agreement.
"Total Capitalization" shall mean Debt of the Borrower plus
the net worth of the Borrower determined in accordance with GAAP.
"Type" shall mean, with respect to any Loan, a Base Rate Loan
or a Eurodollar Loan.
"Warrants" shall mean ______________________________.
"Wholly-Owned Subsidiary" shall mean, as to the Borrower, any
Subsidiary of which all of the outstanding shares of stock having by
the terms thereof ordinary voting power to elect the board of directors
of such corporation, other than directors' qualifying shares, are owned
or controlled by the Borrower or one or more of the Wholly-Owned
Subsidiaries or by the Borrower and one or more of the Wholly-Owned
Subsidiaries.
Section 1.03 Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder
shall be made, and all financial statements and certificates and reports as to
financial matters required to be furnished to the Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP, applied on a basis consistent with
the audited financial
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statements of the Borrower referred to in Section 7.02 (except for changes
concurred with by the Borrower's independent public accountants).
ARTICLE II
COMMITMENTS
Section 2.01 Loans.
(a) Loans. Each Lender severally agrees, on the terms of this
Agreement, to make Loans to the Borrower during the period from and
including (i) the Closing Date or (ii) such later date that such Lender
becomes a party to this Agreement as provided in Section 12.06(b), to
but excluding, the Termination Date in an aggregate principal amount up
to but not exceeding the amount of such Lender's Commitment as then in
effect; provided, however, that the aggregate principal amount of all
such Loans by all Lenders hereunder at any one time outstanding shall
not exceed the Aggregate Commitments. Subject to the terms of this
Agreement, during the period from the Closing Date to but excluding,
the Termination Date, the Borrower may borrow and repay, but may not
reborrow the amount described in this Section 2.01(a).
(b) Limitation on Types of Loans. Subject to the other terms
and provisions of this Agreement, at the option of the Borrower, the
Loans may be Base Rate Loans or Eurodollar Loans; provided that,
without the prior written consent of the Majority Lenders, no more than
five (5) Eurodollar Loans may be outstanding at any time to any Lender.
Section 2.02 Borrowings, Continuations and Conversions.
(a) Borrowings. The Borrower shall give the Agent (which shall
promptly notify the Lenders) advance notice as hereinafter provided of
each borrowing hereunder, which shall specify the aggregate amount of
such borrowing, the Type and the date (which shall be a Business Day)
of the Loans to be borrowed and (in the case of Eurodollar Loans) the
duration of the Interest Period therefor.
(b) Minimum Amounts. All Base Rate Loan borrowings shall be in
amounts of at least $1,000,000 or the remaining balance of the
Aggregate Commitments, if less, or any whole multiple of $1,000,000 in
excess thereof, and all Eurodollar Loans shall be in amounts of at
least $1,000,000 or any whole multiple of $1,000,000 in excess thereof.
(c) Notices. All borrowings, continuations and conversions
shall require advance written notice to the Agent (which shall promptly
notify the Lenders) in the form of Exhibit B hereto (or telephonic
notice promptly confirmed by such a written notice), which in each case
shall be irrevocable, from the Borrower to be received by the Agent not
later than 11:00 a.m. Houston, Texas time at least one Business Day
prior to the date of each Base Rate Loan borrowing and three Business
Days prior to the date of each Eurodollar Loan borrowing, continuation
or conversion. Without in any way limiting the Borrower's obligation to
confirm in writing any telephonic notice, the Agent may act without
liability
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upon the basis of telephonic notice believed by the Agent in good faith
to be from the Borrower prior to receipt of written confirmation. In
each such case, the Borrower hereby waives the right to dispute the
Agent's record of the terms of such telephonic notice except in the
case of gross negligence or willful misconduct by the Agent.
(d) Continuation Options. Subject to the provisions made in
this Section 2.02(d), the Borrower may elect to continue all or any
part of any Eurodollar Loan beyond the expiration of the then current
Interest Period relating thereto by giving advance notice as provided
in Section 2.02(c) to the Agent (which shall promptly notify the
Lenders) of such election, specifying the amount of such Loan to be
continued and the Interest Period therefor. In the absence of such a
timely and proper election, the Borrower shall be deemed to have
elected to convert such Eurodollar Loan to a Base Rate Loan pursuant to
Section 2.02(e). All or any part of any Eurodollar Loan may be
continued as provided herein, provided that (i) any continuation of any
such Loan shall be (as to each Loan as continued for an applicable
Interest Period) in amounts of at least $1,000,000 or any whole
multiple of $1,000,000 in excess thereof and (ii) no Default shall have
occurred and be continuing. If a Default shall have occurred and be
continuing, each Eurodollar Loan shall be converted to a Base Rate Loan
on the last day of the Interest Period applicable thereto.
(e) Conversion Options. The Borrower may elect to convert all
or any part of any Eurodollar Loan on the last day of the then current
Interest Period relating thereto to a Base Rate Loan by giving advance
notice to the Agent (which shall promptly notify the Lenders) of such
election. Subject to the provisions made in this Section 2.02(e), the
Borrower may elect to convert all or any part of any Base Rate Loan at
any time and from time to time to a Eurodollar Loan by giving advance
notice as provided in Section 2.02(c) to the Agent (which shall
promptly notify the Lenders) of such election. All or any part of any
outstanding Loan may be converted as provided herein, provided that (i)
any conversion of any Base Rate Loan into a Eurodollar Loan shall be
(as to each such Loan into which there is a conversion for an
applicable Interest Period) in amounts of at least $1,000,000 or any
whole multiple of $1,000,000 in excess thereof and (ii) no Default
shall have occurred and be continuing. If a Default shall have occurred
and be continuing, no Base Rate Loan may be converted into a Eurodollar
Loan.
(f) Advances. Not later than 11:00 a.m. Houston, Texas time on
the date specified for each borrowing hereunder, each Lender shall make
available the amount of the Loan to be made by it on such date to the
Agent, to an account which the Agent shall specify, in immediately
available funds, for the account of the Borrower. The amounts so
received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Borrower by depositing the
same, in immediately available funds, in an account of the Borrower,
designated by the Borrower and maintained at the Principal Office.
Section 2.03 Changes of Commitments.
(a) The Aggregate Commitments shall at all times be equal to
the lesser of (i) the Aggregate Maximum Credit Amounts after
adjustments resulting from reductions pursuant to Section 2.03(c)
hereof or (ii) the Available Amount as determined from time to time.
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(b) The Available Amount as of the Effective Date shall be
$10,000,000. From time to time the Borrower may request an increase in
the Available Amount by written notice to the Agent whereupon the Agent
will notify the Lenders of such request. Any such increase shall
require the consent of all the Lenders, which consent shall be within
their sole and absolute discretion. If all the Lenders have not given
their consent to the requested increase within ten (10) Business Days
of the Agent's receipt of such request, such request shall be deemed
denied. In no event shall the aggregate of any such increases exceed
the Discretionary Amount.
Section 2.04 Fees.
(a) The Borrower shall pay to the Agent for the account of
each Lender a commitment fee on the daily average unused amount of the
Aggregate Commitments for the period from and including the Closing
Date up to but excluding the Termination Date at a rate per annum equal
to one half of one percent (.5%). Accrued commitment fees shall be
payable quarterly in arrears on each Quarterly Date and on the
Termination Date.
(b) The Borrower shall pay to the Agent for its account such
other fees as are set forth in the Fee Letter on the dates specified
therein to the extent not paid prior to the Closing Date.
[(c) Duration Fee - to come]
Section 2.05 Several Obligations. The failure of any Lender to
make any Loan to be made by it on the date specified therefor shall not relieve
any other Lender of its obligation to make its Loan on such date, but no Lender
shall be responsible for the failure of any other Lender to make a Loan to be
made by such other Lender.
Section 2.06 Notes. The Loans made by each Lender shall be
evidenced by a single promissory note of the Borrower in substantially the form
of Exhibit A hereto, dated (i) the Closing Date or (ii) the effective date of an
Assignment pursuant to Section 12.06(b), payable to the order of such Lender in
a principal amount equal to its Aggregate Commitment as in effect and otherwise
duly completed and such substitute Notes as required by Section 12.06(b). The
date, amount, Type, interest rate and Interest Period of each Loan made by each
Lender, and all payments made on account of the principal thereof, shall be
recorded by such Lender on its books for its Notes, and, prior to any transfer,
may be endorsed by such Lender on a schedule attached to such Notes or any
continuation thereof or on any separate record maintained by such Lender.
Failure to make any such notation or to attach a schedule shall not affect any
Lender's or the Borrower's rights or obligations in respect of such Loans or
affect the validity of such transfer by any Lender of its Note.
Section 2.07 Prepayments.
(a) Subject to the Intercreditor and Subordination Agreement,
the Borrower may prepay the Base Rate Loans upon not less than one (1)
Business Day's prior notice to the Agent (which shall promptly notify
the Lenders), which notice shall specify the prepayment
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date (which shall be a Business Day) and the amount of the prepayment
(which shall be at least $1,000,000 or the remaining aggregate
principal balance outstanding on the Notes) and shall be irrevocable
and effective only upon receipt by the Agent, provided that interest on
the principal prepaid, accrued to the prepayment date, shall be paid on
the prepayment date. The Borrower may prepay Eurodollar Loans on the
same condition as for Base Rate Loans and in addition such prepayments
of Eurodollar Loans shall be subject to the terms of Section 5.05 and
shall be in an amount equal to all of the Eurodollar Loans for the
Interest Period prepaid.
(b) The Borrower's receipt of all net cash proceeds from the
issuance of any equity (subsequent to the Borrower's initial public
offering), the placement of any public or private debt instruments or
any other borrowing in excess of $____________ shall be used to prepay
all amounts outstanding under the Aggregate Commitments.
[(c) Commencing with the fiscal quarter ending March 31, 1998,
if the Debt to EBITDA Coverage Ratio defined in Section 9.15 is greater
than 2.5 to 1.0, then the Borrower shall within ten (10) days of
receipt of written notice thereof prepay the Loans in an aggregate
principal amount necessary to bring the ratio back to 2.5 to 1.0.]
(d) Prepayments permitted or required under this Section 2.07
shall be without premium or penalty, except as required under Section
5.05 for prepayment of Eurodollar Loans. Any prepayments on the Loans
may be reborrowed subject to the then effective Aggregate Commitments.
Section 2.08 Lending Offices. The Loans of each Type made by
each Lender shall be made and maintained at such Lender's Applicable Lending
Office for Loans of such Type.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans. The Borrower will pay to the
Agent, for the account of each Lender, the principal payments required by this
Section 3.01. On the Termination Date the Borrower shall repay the outstanding
aggregate principal and accrued and unpaid interest under the Notes. All
payments hereunder are subject to the terms and provisions of the Intercreditor
and Subordination Agreement.
Section 3.02 Interest. The Borrower will pay to the Agent, for
the account of each Lender, interest on the unpaid principal amount of each Loan
made by such Lender for the period commencing on the date such Loan is made to
but excluding the date such Loan shall be paid in full, at the following rates
per annum:
(i) if such a Loan is a Base Rate Loan, the Base Rate (as in
effect from time to time) plus the Applicable Margin (as in effect from
time to time), but in no event to exceed the Highest Lawful Rate; and
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(ii) if such a Loan is a Eurodollar Loan, for each Interest
Period relating thereto, the Fixed Rate for such Loan plus the
Applicable Margin (as in effect from time to time), but in no event to
exceed the Highest Lawful Rate.
Notwithstanding the foregoing, the Borrower will pay to the Agent, for the
account of each Lender interest at the applicable Post-Default Rate on any
principal of any Loan made by such Lender, and (to the fullest extent permitted
by law) on any other amount payable by the Borrower hereunder, under any Loan
Document or under any Note held by such Lender to or for account of such Lender,
for the period commencing on the date of an Event of Default until the same is
paid in full or all Events of Default are cured or waived.
Accrued interest on Base Rate Loans shall be payable on each Quarterly
Date commencing on December 31, 1997, and accrued interest on each Eurodollar
Loan shall be payable on the last day of the Interest Period therefor and, if
such Interest Period is longer than three months at three-month intervals
following the first day of such Interest Period, except that interest payable at
the Post-Default Rate shall be payable from time to time on demand and interest
on any Eurodollar Loan that is converted into a Base Rate Loan (pursuant to
Section 5.04) shall be payable on the date of conversion (but only to the extent
so converted).
Promptly after the determination of any interest rate provided for
herein or any change therein, the Agent shall notify the Lenders to which such
interest is payable and the Borrower thereof. Each determination by the Agent of
an interest rate or fee hereunder shall, except in cases of manifest error, be
final, conclusive and binding on the parties.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments. Except to the extent otherwise provided
herein, all payments of principal, interest and other amounts to be made by the
Borrower under the Loan Documents shall be made in Dollars, in immediately
available funds, to the Agent at such account as the Agent shall specify by
notice to the Borrower from time to time, not later than 11:00 a.m. New York
time on the date on which such payments shall become due (each such payment made
after such time on such due date to be deemed to have been made on the next
succeeding Business Day). Such payments shall be made without (to the fullest
extent permitted by applicable law) defense, set-off or counterclaim. Each
payment received by the Agent under this Agreement or any Note for account of a
Lender shall be paid promptly to such Lender in immediately available funds.
Except as provided in clause (ii) of the definition of "Interest Period", if the
due date of any payment under this Agreement or any Note would otherwise fall on
a day which is not a Business Day such date shall be extended to the next
succeeding Business Day and interest shall be payable for any principal so
extended for the period of such extension. At the time of each payment to the
Agent of any principal of or interest on any borrowing, the Borrower shall
notify the Agent of the Loans to which such payment shall apply. In the absence
of such notice the Agent may specify the Loans to which such payment shall
apply, but to the extent possible such payment or prepayment will be applied
first to the Loans comprised of Base Rate Loans.
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Section 4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein each Lender agrees that: (i) each borrowing from the
Lenders under Section 2.01 and each continuation and conversion under Section
2.02 shall be made from the Lenders pro rata in accordance with their Percentage
Share, each payment of commitment fee or other fees under Section 2.04(a) shall
be made for account of the Lenders pro rata in accordance with their Percentage
Share, and each termination or reduction of the amount of the Aggregate Maximum
Credit Amounts under Section 2.03(c) shall be applied to the Commitment of each
Lender, pro rata according to the amounts of its respective Commitment; (ii)
each payment of principal of Loans by the Borrower shall be made for account of
the Lenders pro rata in accordance with the respective unpaid principal amount
of the Loans held by the Lenders; and (iii) each payment of interest on Loans by
the Borrower shall be made for account of the Lenders pro rata in accordance
with the amounts of interest due and payable to the respective Lenders.
Section 4.03 Computations. Interest on Eurodollar Loans and
fees shall be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which such interest is payable, unless such calculation would exceed
the Highest Lawful Rate, in which case interest shall be calculated on the per
annum basis of a year of 365 or 366 days, as the case may be. Interest on Base
Rate Loans shall be computed on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which such interest is payable.
Section 4.04 Non-receipt of Funds by the Agent. Unless the
Agent shall have been notified by a Lender or the Borrower prior to the date on
which such notifying party is scheduled to make payment to the Agent (in the
case of a Lender) of the proceeds of a Loan to be made by it hereunder or (in
the case of the Borrower) a payment to the Agent for account of one or more of
the Lenders hereunder (such payment being herein called the "Required Payment"),
which notice shall be effective upon receipt, that it does not intend to make
the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient(s)
on such date and, if such Lender or the Borrower (as the case may be) has not in
fact made the Required Payment to the Agent, the recipient(s) of such payment
shall, on demand, 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 but excluding the date the
Agent recovers such amount at a rate per annum which, for any Lender as
recipient, will be equal to the Federal Funds Rate, and for the Borrower as
recipient, will be equal to the Base Rate plus the Applicable Margin.
Section 4.05 Set-off; Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim a
Lender may otherwise have, each Lender shall have the right and be
entitled (after consultation with the Agent), at its option, to offset
balances held by it or by any of its Affiliates for account of the
Borrower or any Subsidiary at any of its offices, in Dollars or in any
other currency, against any principal of or interest on any of such
Lender's Loans, or any other amount payable to such Lender hereunder,
which is not paid when due (regardless of whether such balances are
then due to the Borrower), in which
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case it shall promptly notify the Borrower and the Agent thereof,
provided that such Lender's failure to give such notice shall not
affect the validity thereof.
(b) If any Lender shall obtain payment of any principal of or
interest on any Loan made by it to the Borrower under this Agreement
through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise, and, as a result of such
payment, such Lender shall have received a greater percentage of the
principal or interest then due hereunder by the Borrower to such Lender
than the percentage received by any other Lenders, it shall promptly
(i) notify the Agent and each other Lender thereof and (ii) purchase
from such other Lenders participations in (or, if and to the extent
specified by such Lender, direct interests in) the Loans made by such
other Lenders (or in interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of
such excess payment (net of any expenses which may be incurred by such
Lender in obtaining or preserving such excess payment) pro rata in
accordance with the unpaid principal and/or interest on the Loans held
by each of the Lenders. To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. The Borrower agrees that any Lender so
purchasing a participation (or direct interest) in the Loans made by
other Lenders (or in interest due thereon, as the case may be) may
exercise all rights of set-off, banker's lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender
were a direct holder of Loans in the amount of such participation.
Nothing contained herein shall require any Lender to exercise any such
right or shall affect the right of any Lender to exercise, and retain
the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a set-off to which this Section 4.05 applies,
such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of
the Lenders entitled under this Section 4.05 to share the benefits of
any recovery on such secured claim.
Section 4.06 Taxes.
(a) Payments Free and Clear. Any and all payments by the
Borrower hereunder shall be made, in accordance with Section 4.01, free
and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender
and the Agent, taxes imposed on its income, and franchise or similar
taxes imposed on it, by (i) any jurisdiction (or political subdivision
thereof) of which the Agent or such Lender, as the case may be, is a
citizen or resident or in which such Lender has an Applicable Lending
Office, (ii) the jurisdiction (or any political subdivision thereof) in
which the Agent or such Lender is organized, or (iii) any jurisdiction
(or political subdivision thereof) in which such Lender or the Agent is
presently doing business in which taxes are imposed solely as a result
of doing business in such jurisdiction (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder to the Lenders or the Agent (i) the sum payable shall
be increased by the amount
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necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
4.06) such Lender or the Agent (as the case may be) shall receive an
amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxing
authority or other Governmental Authority in accordance with applicable
law.
(b) Other Taxes. In addition, to the fullest extent permitted
by applicable law, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with
respect to, this Agreement, any Assignment or any Security Instrument
(hereinafter referred to as "Other Taxes").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE BORROWER WILL INDEMNIFY EACH LENDER AND THE AGENT
FOR THE FULL AMOUNT OF TAXES AND OTHER TAXES (INCLUDING, BUT NOT
LIMITED TO, ANY TAXES OR OTHER TAXES IMPOSED BY ANY GOVERNMENTAL
AUTHORITY ON AMOUNTS PAYABLE UNDER THIS SECTION 4.06) PAID BY SUCH
LENDER OR THE AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY LENDER), AS
THE CASE MAY BE, AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND
EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT
SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED UNLESS THE
PAYMENT OF SUCH TAXES WAS NOT CORRECTLY OR LEGALLY ASSERTED AND SUCH
LENDER'S PAYMENT OF SUCH TAXES OR OTHER TAXES WAS THE RESULT OF ITS
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. ANY PAYMENT PURSUANT TO SUCH
INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30) DAYS AFTER THE DATE
ANY LENDER OR THE AGENT, AS THE CASE MAY BE, MAKES WRITTEN DEMAND
THEREFOR. IF ANY LENDER OR THE AGENT RECEIVES A REFUND OR CREDIT IN
RESPECT OF ANY TAXES OR OTHER TAXES FOR WHICH SUCH LENDER OR THE AGENT
HAS RECEIVED PAYMENT FROM THE BORROWER IT SHALL PROMPTLY NOTIFY THE
BORROWER OF SUCH REFUND OR CREDIT AND SHALL, IF NO DEFAULT HAS OCCURRED
AND IS CONTINUING, WITHIN THIRTY (30) DAYS AFTER RECEIPT OF A REQUEST
BY THE BORROWER (OR PROMPTLY UPON RECEIPT, IF THE BORROWER HAS
REQUESTED APPLICATION FOR SUCH REFUND OR CREDIT PURSUANT HERETO), PAY
AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT TO THE BORROWER WITHOUT
INTEREST (BUT WITH ANY INTEREST SO REFUNDED OR CREDITED), PROVIDED THAT
THE BORROWER, UPON THE REQUEST OF SUCH LENDER OR THE AGENT, AGREES TO
RETURN SUCH REFUND OR CREDIT (PLUS PENALTIES, INTEREST OR OTHER
CHARGES) TO SUCH LENDER OR THE AGENT IN THE EVENT SUCH LENDER OR THE
AGENT IS REQUIRED TO REPAY SUCH REFUND OR CREDIT.
ARTICLE V
CAPITAL ADEQUACY
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Section 5.01 Additional Costs.
(a) Eurodollar Regulations, etc. The Borrower shall pay
directly to each Lender from time to time such amounts as such Lender
may determine to be necessary to compensate such Lender for any costs
which it determines are attributable to its making or maintaining of
any Eurodollar Loans hereunder or its obligation to make any Eurodollar
Loans hereunder, or any reduction in any amount receivable by such
Lender hereunder in respect of any of such Eurodollar Loans or such
obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any
amounts payable to such Lender under this Agreement or any Note in
respect of any of such Eurodollar Loans (other than taxes imposed on
the overall net income of such Lender or of its Applicable Lending
Office for any of such Eurodollar Loans by the jurisdiction in which
such Lender has its principal office or Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit, minimum capital,
capital ratio or similar requirements (other than the Reserve
Requirement utilized in the determination of the Fixed Rate for such
Loan) relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of such Lender (including any of
such Eurodollar Loans or any deposits referred to in the definition of
"Fixed Eurodollar Rate" in Section 1.02 hereof), or the Commitment or
Loans of such Lender or the Eurodollar interbank market; or (iii)
imposes any other condition affecting this Agreement or any Note (or
any of such extensions of credit or liabilities) or such Lender's
Commitment or Loans. Each Lender will notify the Agent and the Borrower
of any event occurring after the Closing Date which will entitle such
Lender to compensation pursuant to this Section 5.01(a) as promptly as
practicable after it obtains knowledge thereof and determines to
request such compensation, and will designate a different Applicable
Lending Office for the Loans of such Lender affected by such event if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender, provided that such Lender shall have no
obligation to so designate an Applicable Lending Office located in the
United States. If any Lender requests compensation from the Borrower
under this Section 5.01(a), the Borrower may, by notice to such Lender,
suspend the obligation of such Lender to make additional Loans of the
Type with respect to which such compensation is requested until the
Regulatory Change giving rise to such request ceases to be in effect
(in which case the provisions of Section 5.04 shall be applicable).
(b) Regulatory Change. Without limiting the effect of the
provisions of Section 5.01(a), in the event that, by reason of any
Regulatory Change or any other circumstances arising after the Closing
Date affecting such Lender, the Eurodollar interbank market or such
Lender's position in such market, any Lender either (i) incurs
Additional Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest
rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender which
includes Eurodollar Loans or (ii) becomes subject to restrictions on
the amount of such a category of liabilities or assets which it may
hold, then, if such Lender so elects by notice to the Borrower, the
obligation of such Lender to make additional Eurodollar Loans shall be
suspended until such Regulatory Change or
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other circumstances ceases to be in effect (in which case the
provisions of Section 5.04 shall be applicable).
(c) Capital Adequacy. Without limiting the effect of the
foregoing provisions of this Section 5.01 (but without duplication),
the Borrower shall pay directly to any Lender from time to time on
request such amounts as such Lender may reasonably determine to be
necessary to compensate such Lender or its parent or holding company
for any costs which it determines are attributable to the maintenance
by such Lender or its parent or holding company (or any Applicable
Lending Office), pursuant to any Governmental Requirement following any
Regulatory Change, of capital in respect of its Commitment, its Notes
or its Loans, such compensation to include, without limitation, an
amount equal to any reduction of the rate of return on assets or equity
of such Lender or its parent or holding company (or any Applicable
Lending Office) to a level below that which such Lender or its parent
or holding company (or any Applicable Lending Office) could have
achieved but for such Governmental Requirement. Such Lender will notify
the Borrower that it is entitled to compensation pursuant to this
Section 5.01(c) as promptly as practicable after it determines to
request such compensation.
(d) Compensation Procedure. Any Lender notifying the Borrower
of the incurrence of additional costs under this Section 5.01 shall in
such notice to the Borrower and the Agent set forth in reasonable
detail the basis and amount of its request for compensation.
Determinations and allocations by each Lender for purposes of this
Section 5.01 of the effect of any Regulatory Change pursuant to Section
5.01(a) or (b), or of the effect of capital maintained pursuant to
Section 5.01(c), on its costs or rate of return of maintaining Loans or
its obligation to make Loans, or on amounts receivable by it in respect
of Loans, and of the amounts required to compensate such Lender under
this Section 5.01, shall be conclusive and binding for all purposes,
provided that such determinations and allocations are made on a
reasonable basis. Any request for additional compensation under this
Section 5.01 shall be paid by the Borrower within thirty (30) days of
the receipt by the Borrower of the notice described in this Section
5.01(d).
Section 5.02 Limitation on Eurodollar Loans. Anything herein
to the contrary notwithstanding, if, on or prior to the determination of any
Fixed Eurodollar Rate for any Interest Period:
(i) the Agent determines (which determination shall be
conclusive, absent manifest error) that quotations of interest rates
for the relevant deposits referred to in the definition of "Fixed
Eurodollar Rate" in Section 1.02 are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining
rates of interest for Eurodollar Loans as provided herein; or
(ii) the Agent determines (which determination shall be
conclusive, absent manifest error) that the relevant rates of interest
referred to in the definition of "Fixed Eurodollar Rate" in Section
1.02 upon the basis of which the rate of interest for Eurodollar Loans
for such Interest Period is to be determined are not sufficient to
adequately cover the cost to the Lenders of making or maintaining
Eurodollar Loans;
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then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans.
Section 5.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Loans hereunder, then such Lender shall promptly notify the Borrower thereof and
such Lender's obligation to make Eurodollar Loans shall be suspended until such
time as such Lender may again make and maintain Eurodollar Loans (in which case
the provisions of Section 5.04 shall be applicable).
Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02
and 5.03. If the obligation of any Lender to make Eurodollar Loans shall be
suspended pursuant to Sections 5.01, 5.02 or 5.03 ("Affected Loans"), all
Affected Loans which would otherwise be made by such Lender shall be made
instead as Base Rate Loans (and, if an event referred to in Section 5.01(b) or
Section 5.03 has occurred and such Lender so requests by notice to the Borrower,
all Affected Loans of such Lender then outstanding shall be automatically
converted into Base Rate Loans on the date specified by such Lender in such
notice) and, to the extent that Affected Loans are so made as (or converted
into) Base Rate Loans, all payments of principal which would otherwise be
applied to such Lender's Affected Loans shall be applied instead to its Base
Rate Loans.
Section 5.05 Compensation. The Borrower shall pay to each
Lender within thirty (30) days of receipt of written request of such Lender
(which request shall set forth, in reasonable detail, the basis for requesting
such amounts and which shall be conclusive and binding for all purposes provided
that such determinations are made on a reasonable basis), such amount or amounts
as shall compensate it for any loss, cost, expense or liability which such
Lender determines are attributable to:
(i) any payment, prepayment or conversion of a Eurodollar Loan
properly made by such Lender or the Borrower for any reason (including,
without limitation, the acceleration of the Loans pursuant to Section
10.02) on a date other than the last day of the Interest Period for
such Loan; or
(ii) any failure by the Borrower for any reason (including but
not limited to, the failure of any of the conditions precedent
specified in Article VI to be satisfied) to borrow, continue or convert
a Eurodollar Loan from such Lender on the date for such borrowing,
continuation or conversion specified in the relevant notice given
pursuant to Section 2.02(c).
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the principal amount so paid, prepaid or converted
or not borrowed for the period from the date of such payment, prepayment or
conversion or failure to borrow to the last day of the Interest Period for such
Loan (or, in the case of a failure to borrow, the Interest Period for such Loan
which would have commenced on the date specified for such borrowing) at the
applicable rate of interest for such Loan provided for herein over (ii) the
interest component of the amount such Lender would have bid in the London
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interbank market for Dollar deposits of leading banks in amounts comparable to
such principal amount and with maturities comparable to such period (as
reasonably determined by such Lender).
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Initial Funding.
The obligation of the Lenders to make the Initial Funding is
subject to the receipt by the Agent and the Lenders of all fees payable pursuant
to Section 2.04 on or before the Closing Date and the receipt by the Agent of
the following documents and satisfaction of the other conditions provided in
this Section 6.01, each of which shall be satisfactory to the Agent in form and
substance:
(a) A certificate of the Secretary or an Assistant Secretary
of the Borrower and of each Subsidiary setting forth (i) resolutions of
its board of directors with respect to the authorization of the
Borrower and of each Subsidiary to execute and deliver the Loan
Documents to which it is a party and to enter into the transactions
contemplated in those documents, (ii) the officers of the Borrower and
of each Subsidiary (y) who are authorized to sign the Loan Documents to
which Borrower is a party and (z) who will, until replaced by another
officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices
and other communications in connection with this Agreement and the
transactions contemplated hereby, (iii) specimen signatures of the
authorized officers, and (iv) the articles or certificate of
incorporation and bylaws of the Borrower and of each Subsidiary,
certified as being true and complete. The Agent and the Lenders may
conclusively rely on such certificate until the Agent receives notice
in writing from the Borrower to the contrary.
(b) Certificates of the appropriate state agencies with
respect to the existence, qualification and good standing of the
Borrower and of each Subsidiary.
(c) A compliance certificate which shall be substantially in
the form of Exhibit C, duly and properly executed by a Responsible
Officer and dated as of the Closing Date.
(d) The Notes, duly completed and executed.
(e) The Security Instruments, including those described on
Exhibit E, duly completed and executed in sufficient number of
counterparts for recording, if necessary.
(f) The opinions of the following special counsel to the
Borrower and each Guarantor, each in form and substance satisfactory to
the Agent:
(i) Chamberlain, Hrdlicka, White, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇
(ii) [New York counsel]
(iii) [Louisiana counsel]
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(iv) [Panamanian counsel]
(g) A certificate of insurance coverage of the Borrower and of
each Subsidiary evidencing that the Borrower and each Subsidiary is
carrying insurance in accordance with Section 7.19 hereof.
(h) Completion, satisfactory to the Agent, of due diligence of
the Borrower and the Founding Companies, which shall include, without
limitation, the status of title to the Borrower's and each Subsidiary's
Properties.
(i) The Agent shall be satisfied with the environmental
condition of the Founding Companies' Properties.
(j) Completion of an initial public offering by the Borrower
of its common stock pursuant to the Registration Statement which
results in no less than $75,000,000 gross cash proceeds to the
Borrower.
(k) Listing of the common stock of the Borrower on the NASDAQ
NMS or any exchange acceptable to the Agent.
(l) Completion of the Borrower's acquisition of Founding
Companies as contemplated in the Registration Statement.
(m) [Warrants]
(n) The Agent shall have been furnished with appropriate UCC
search certificates reflecting the filing of all financing statements
required to perfect the security interests granted by the Security
Instruments and reflecting no prior liens or security interests other
than the Senior Liens.
(o) The Agent shall have been furnished evidence of proper
perfection of each mortgage on a documented vessel and that such
mortgage is subject only to the Senior Liens.
(p) The Agent shall have been furnished title policies
regarding real property.
(q) Senior Debt in the principal amount of $40,000,000 shall
be simultaneously funded pursuant to the Senior Credit Agreement.
(r) Such other documents as the Agent or any Lender or special
counsel to the Agent may reasonably request.
Section 6.02 Initial and Subsequent Loans. The obligation of
the Lenders to make Loans to the Borrower upon the occasion of each borrowing
hereunder (including the Initial Funding) is subject to the further conditions
precedent that, as of the date of such Loans and after giving effect thereto:
(i) no Default shall have occurred and be continuing; (ii) no Material Adverse
Effect shall have occurred; and (iii) the representations and warranties made by
the Borrower in
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Article VII and in the Security Instruments shall be true on and as of the date
of the making of such Loans with the same force and effect as if made on and as
of such date and following such new borrowing, except to the extent such
representations and warranties are expressly limited to an earlier date or the
Majority Lenders may expressly consent in writing to the contrary. Each request
for a borrowing by the Borrower hereunder shall constitute a certification by
the Borrower to the effect set forth in the preceding sentence (both as of the
date of such notice and, unless the Borrower otherwise notifies the Agent prior
to the date of and immediately following such borrowing as of the date thereof).
ARTICLE VII THROUGH ARTICLE XII TO BE SAME AS IN THE
SENIOR CREDIT AGREEMENT EXCEPT SECTION 10.01(B) WHICH WILL BE MODIFIED AS
ATTACHED
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ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. One or more of the
following events shall constitute an "Event of Default":
(a) the Borrower shall default in the payment or prepayment
when due of any principal of or interest on any Loan or any fees or
other amount payable by it hereunder or under any Security Instrument
and such default, other than a default of a payment or prepayment of
principal (which shall have no cure period), shall continue unremedied
for a period of 3 Business Days; or
(b) the Borrower or any Subsidiary shall default in the
payment when due of any principal of or interest on any of its other
Debt aggregating $250,000 or more, or any event specified in any note,
agreement, indenture or other document evidencing or relating to any
such Debt (other than the Senior Credit Agreement and the loan
documents executed in connection therewith) shall occur if the effect
of such event is to cause, or (with the giving of any notice or the
lapse of time or both) to permit the holder or holders of such Debt (or
a trustee or agent on behalf of such holder or holders) to cause, such
Debt to become due prior to its stated maturity; or
(c) any representation, warranty or certification made or
deemed made herein or in any Security Instrument by the Borrower or any
Subsidiary, or any certificate furnished to any Lender or the Agent
pursuant to the provisions hereof or any Security Instrument, shall
prove to have been false or misleading as of the time made or furnished
in any material respect; or
(d) the Borrower shall default in the performance of any of
its obligations under Article IX or any other Article of this Agreement
other than under Article VIII; or the Borrower shall default in the
performance of any of its obligations under Article VIII or any
Security Instrument (other than the payment of amounts due which shall
be governed by Section 10.01(a)) and such default shall continue
unremedied for a period of thirty (30) days after the earlier to occur
of (i) notice thereof to the Borrower by the Agent or any Lender
(through the Agent), or (ii) the Borrower otherwise becoming aware of
such default; or
(e) the Borrower shall admit in writing its inability to, or
be generally unable to, pay its debts as such debts become due; or
(f) the Borrower shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Federal Bankruptcy
Code (as now or hereafter in effect), (iv) file a petition seeking to
take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, liquidation or composition or readjustment
of debts,
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(v) fail to controvert in a timely and appropriate manner, or acquiesce
in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code, or (vi) take any corporate action
for the purpose of effecting any of the foregoing; or
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