10/17/00
CREDIT AGREEMENT
BY AND AMONG
SUPERIOR ENERGY SERVICES, INC.
(AS BORROWER),
BANK ONE, LOUISIANA, NATIONAL ASSOCIATION
(AS AGENT),
▇▇▇▇▇ FARGO BANK TEXAS, N.A.
(AS SYNDICATION AGENT)
WHITNEY NATIONAL BANK
(AS DOCUMENTATION AGENT)
AND
THE LENDERS PARTY HERETO
__________________________________
AS OF OCTOBER 17, 2000
__________________________________
BANC ONE CAPITAL MARKETS, INC.
(AS ARRANGER)
TABLE OF CONTENTS
PAGE NO.
ARTICLE I. DEFINITIONS
1.1 Definitions of Certain Terms Used Herein............................. 1
ARTICLE II. THE CREDITS
2.1 Term Loans........................................................... 16
2.2 Revolving Loans; Swing Line Loan..................................... 17
2.3 Letters of Credit.................................................... 18
2.4 Types of Advances.................................................... 19
2.5 Commitment Fee; Reductions in Aggregate Revolving Loan Commitment.... 19
2.6 Minimum Amount of Each Advance....................................... 19
2.7 Prepayments.......................................................... 19
2.8 Method of Selecting Types and Eurodollar Interest Periods for New
Advances........................................................... 20
2.9 Conversion and Continuation of Outstanding Advances.................. 21
2.10 Changes in Interest Rate, etc........................................ 22
2.11 Rates Applicable After Default....................................... 22
2.12 Method of Payment.................................................... 22
2.13 Noteless Agreement; Evidence of Indebtedness......................... 23
2.14 Telephonic Notices................................................... 23
2.15 Interest Payment Dates; Interest and Fee Basis....................... 24
2.16 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions...............................................24
2.17 Lending Installations................................................ 24
2.18 Non-Receipt of Funds by the Agent.................................... 24
2.19 Collateral........................................................... 25
ARTICLE III. YIELD PROTECTION; TAXES
3.1 Yield Protection..................................................... 26
3.2 Changes in Capital Adequacy Regulations.............................. 26
3.3 Availability of Types of Advances.................................... 27
3.4 Funding Indemnification.............................................. 27
3.5 Taxes................................................................ 27
3.6 Lender Statements; Survival of Indemnity............................. 29
3.7 Replacement of Lender................................................ 29
ARTICLE IV. CONDITIONS PRECEDENT
4.1 Initial Advance...................................................... 31
4.2 Each Advance......................................................... 33
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.1 Existence and Standing............................................... 34
5.2 Authorization and Validity........................................... 34
5.3 No Conflict; Government Consent...................................... 34
5.4 Financial Statements................................................. 35
5.5 Material Adverse Change.............................................. 35
5.6 Taxes................................................................ 35
5.7 Litigation and Contingent Obligations................................ 35
5.8 Subsidiaries......................................................... 35
5.9 ERISA................................................................ 36
5.10 Accuracy of Information.............................................. 36
5.11 Regulation U......................................................... 36
5.12 Material Agreements.................................................. 36
5.13 Compliance With Laws................................................. 36
5.14 Ownership of Properties.............................................. 36
5.15 Plan Assets; Prohibited Transactions................................. 36
5.16 Environmental Matters................................................ 37
5.17 Investment Company Act............................................... 37
5.18 Public Utility Holding Company Act................................... 37
5.19 Solvency............................................................. 37
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............................................................... 43
6.13 Sale of Assets .......................................................43
6.14 Investments.......................................................... 44
6.15 Liens................................................................ 45
6.16 Acquisitions......................................................... 46
6.17 Transactions with Affiliates......................................... 47
6.18 Appraisals........................................................... 47
6.19 Financial Covenants.................................................. 47
ARTICLE VII. DEFAULTS....................................................... 49
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration......................................................... 51
8.2 Amendments........................................................... 51
8.3 Preservation of Rights............................................... 52
ARTICLE IX. GENERAL PROVISIONS
9.1 Survival of Representations.......................................... 53
9.2 Governmental Regulation.............................................. 53
9.3 Headings............................................................. 53
9.4 Entire Agreement..................................................... 53
9.5 Several Obligations; Benefits of this Agreement...................... 53
9.6 Expenses; Indemnification............................................ 53
9.7 Numbers of Documents................................................. 54
9.8 Accounting........................................................... 54
9.9 Severability of Provisions........................................... 54
9.10 Nonliability of Lenders.............................................. 54
9.11 Confidentiality...................................................... 55
9.12 Nonreliance.......................................................... 55
9.13 Disclosure........................................................... 55
ARTICLE X. THE AGENT
10.1 Appointment; Nature of Relationship.................................. 56
10.2 Powers............................................................... 56
10.3 General Immunity..................................................... 56
10.4 No Responsibility for Loans, Recitals, etc........................... 56
10.5 Action on Instructions of Lenders.................................... 57
10.6 Employment of Agents and Counsel..................................... 57
10.7 Reliance on Documents; Counsel....................................... 57
10.8 Agent's Reimbursement and Indemnification............................ 57
10.9 Notice of Default.................................................... 58
10.10 Rights as a Lender................................................... 58
10.11 Lender Credit Decision............................................... 58
10.12 Successor Agent...................................................... 59
10.13 Agent's Fee; Arranger's Fee.......................................... 59
10.14 Delegation to Affiliates............................................. 59
10.15 Execution of Collateral Documents.................................... 59
10.16 Collateral Releases.................................................. 60
ARTICLE XI. SETOFF; RATABLE PAYMENTS
11.1 Setoff............................................................... 61
11.2 Ratable Payments..................................................... 61
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns............................................... 62
12.2 Participations....................................................... 62
12.3 Assignments.......................................................... 63
12.4 Dissemination of Information......................................... 64
12.5 Tax Treatment........................................................ 64
ARTICLE XIII. NOTICES
13.1 Notices.............................................................. 65
13.2 Change of Address.................................................... 65
ARTICLE XIV. COUNTERPARTS................................................... 66
ARTICLE XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL
15.1 Choice of Law........................................................ 67
15.2 Consent to Jurisdiction.............................................. 67
15.3 Waiver of Jury Trial................................................. 67
SCHEDULES
1 Commitment Amounts of the Lenders.................................... 71
2 Pricing Schedule..................................................... 73
3 List of Borrower's Subsidiaries...................................... 75
4 Eligible Accounts and Eligible Inventory............................. 77
5 Existing Permitted Indebtedness...................................... 81
6 Existing Permitted Investments....................................... 83
7 Existing Permitted Liens............................................. 84
8 Existing Additional Contingent Consideration......................... 85
EXHIBITS
A Compliance Certificate............................................... 86
B Assignment Agreement................................................ 90
C Borrowing Base Certificate........................................... 98
RESTATED CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 17, 2000, is among
SUPERIOR ENERGY SERVICES, INC., as Borrower, BANK ONE, LOUISIANA,
NATIONAL ASSOCIATION, as Agent, ▇▇▇▇▇ FARGO BANK TEXAS, N.A., as
Syndication Agent, WHITNEY NATIONAL BANK, as Documentation Agent, and
the lenders party hereto (the "Lenders"), who agree 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 any 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, 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 or voting power) of the outstanding ownership interests
of a partnership or limited liability company.
"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 8.
Notwithstanding the foregoing definition, the amount of Additional
Contingent Consideration to be included in the defined term
"Indebtedness" for the purposes of calculating the financial covenants
in Section 6.17, shall be the amount of Additional Contingent
Consideration (excluding any accrued interest) which through the date of
calculation of such covenant and based on the performance of the
acquired company through the date of calculation of such covenant, the
Borrower reasonably anticipates paying to the sellers at maturity.
"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, Louisiana, National Association, 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, ▇▇▇▇▇ Fargo Bank Texas, N.A., as Syndication Agent and Whitney
National Bank, as Documentation Agent.
"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 Superior Energy Services, Inc., a Delaware
corporation, 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,
$25,000,000 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 Moody's, (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 hereunder.
"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
Borrower and its 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 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 Borrower or its 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 appearing on Reuters Screen FRBD 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 Reuters Screen FRBD is not available to the Agent
for any reason, the applicable Eurodollar Base Rate for the relevant
Eurodollar Interest Period shall instead be the applicable British
Bankers' Association Interest Settlement Rate for deposits in U.S.
dollars as reported by any other generally recognized financial
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, and (ii) 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 Borrower, 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) scheduled principal repayments on the Term Loan 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
Borrower and its 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.
"Interest Expense" means, with reference to any period, the
interest expense of the Borrower and its 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.
"Lenders" means the lending institutions listed on the signature
pages of this Agreement 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 the signature pages hereof or on a Schedule 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 Borrower and its Subsidiaries taken as a
whole, (ii) the ability of the 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 ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Equity Proceeds" means the aggregate cash proceeds received by
the Borrower or any Subsidiary 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 Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Net Sales Proceeds" means the aggregate cash proceeds received by
the Borrower or any Subsidiary 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 Borrower or Subsidiary 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 Borrower and its 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.
"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.
"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 at any time, the
percentage obtained by dividing (i) the sum of such Lender's Term Loan
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 all the Term Loans
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
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 all the Term Loans and Revolving Loans 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 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 adjacent to the caption "Revolving Loan Commitment" opposite its
signature below 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 October 31, 2005 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" is defined in Section 2.1.1.
"Term Loan Commitment" means, for each Lender, the obligation of
such Lender to make Term Loans not exceeding the amount set forth
adjacent to the caption "Term Loan Commitment" opposite its signature
below 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 Termination Date" means October 31, 2005.
"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. Each Lender severally agrees to
make, on the Closing Date, a term loan to the Borrower in an amount
equal to such Lender's Term Loan Commitment (each individually a "Term
Loan" and, collectively, the "Term Loans"). All Term Loans shall be
made by the Lenders on the Closing Date simultaneously, it being
understood that no Lender shall be responsible for any failure by any
other Lender to perform its obligation to make any Term Loan hereunder
nor shall the Term Loan Commitment of any Lender be increased or
decreased as a result of any such failure.
2.1.2. REPAYMENT OF THE TERM LOANS. The Term Loans shall be
repaid in consecutive quarterly installments of principal, payable on
each Payment Date commencing on December 31, 2000 and continuing each
March 31, June 30, September 30 and December 31 thereafter until the
Term Loan Termination Date, and the Term Loans shall be permanently
reduced by the amount of each such installment on the date payment
thereof is made hereunder. The quarterly installments shall be in the
following aggregate amounts for the calendar quarters ending during the
years indicated:
PERIOD AGGREGATE QUARTERLY INSTALLMENT
Closing date through and $ 2,500,000
including September 30, 2001
October 1, 2001 through and $ 3,750,000
including September 30, 2002
October 1, 2002 through and $ 5,000,000
including September 30, 2003
October 1, 2003 through and $ 6,250,000
including September 30, 2004
October 1, 2004 through and $10,000,000
including June 30, 2005
Notwithstanding the foregoing, the then outstanding principal balance of
the Term Loans, if any, shall be due and payable on the Term Loan
Termination Date. No portion of any Term Loan shall be reborrowed once
it is repaid. In addition to the foregoing installments payments, the
Borrower may make voluntary prepayments and shall make mandatory
prepayments as described in Section 2.7.
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. 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 $5,000,000 (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. The expiry date of all Letters
of Credit shall be one year from the date of issuance (although a one-
year Letter of Credit may provide for a one-year renewal period), but in
no event later than five Business Days prior to the Revolving Loan
Termination Date.
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
Indebtedness 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 the Term Loan (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 the Term Loan 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 2.75 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 under Section 2.1.2. in the 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 Term
Loan Termination Date 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. Except as provided to the contrary herein, the
Secured Obligations shall be secured by the following: (i) first
priority perfected security interest in all inventory, accounts,
equipment, vessels, 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); and (iii) solidary (joint and several) guaranties by each of
the Domestic Subsidiaries, including any Domestic Subsidiaries acquired
or created after the Closing Date. The Borrower covenants and agrees
to cause any Domestic Subsidiary acquired or created after the Closing
Date to execute a guaranty of the Secured Obligations and to execute
appropriate Collateral Documents (including lockbox and pledged deposits
agreements) concerning the assets of the Domestic Subsidiary to further
secure the Obligations, within 60 days after the acquisition or creation
of such Domestic Subsidiary; provided, however, that the Borrower shall
not be required to cause a Subsidiary to execute a guaranty of the
Secured Obligations or security interest in assets if either the total
assets and total revenues of such Subsidiary are less than 5% of the
total assets and total revenues of the Borrower and its Subsidiaries.
In addition, 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, within 60
days after the acquisition or creation of such Subsidiary.
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 of the Borrower and
the corresponding organization documents of all of its
Domestic Subsidiaries, together with all amendments, each
certified by the Secretary or Assistant secretary of Borrower,
and a certificate of good standing for the Borrower and its
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.
(ii) Copies, certified by the Secretary or Assistant Secretary of
the 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
Borrower or any Subsidiary 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 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 Borrower and/or all
of its Domestic Subsidiaries, together with the stock
certificates affected by the security interests described in
Section 2.19.
(vii) A written opinion of the Borrower's counsel, addressed to the
Lenders, in form and substance satisfactory to the Agent.
(viii) Audited consolidated financial statements of the Borrower and
its Subsidiaries for the fiscal year ended December 31, 1999,
accompanied by the unqualified opinion of the Borrower's
independent certified public accountants; and interim
unaudited consolidated financial statements of the Borrower
and its Subsidiaries for the fiscal quarters ended March 31,
2000 and June 30, 2000 certified by the Authorized Officer of
the Borrower, prepared in accordance with GAAP.
(ix) Pro forma opening financial statements and projections of the
Borrower giving effect to all completed acquisitions and the
closing of the Loan, together with such information as the
Agent may reasonably require to confirm the tax, legal and
business assumptions made in the financial statements provided
to the Agent.
(x) Lien searches covering the Collateral evidencing no liens or
encumbrances against the Collateral, except for liens and
encumbrances securing Indebtedness that will be refinanced in
full with the proceeds of the initial Advances on the Loans
and for Permitted Liens.
(xi) Written money transfer instructions addressed to the Agent and
signed by an Authorized Officer, together with such other
related money transfer authorizations as the Agent may have
reasonably requested.
(xii) One or more insurance certificates evidencing the insurance
required to be maintained by the Borrower and the Domestic
Subsidiaries pursuant to this Agreement and the Collateral
Documents.
(xiii) Copies of all environmental reports or surveys relating to
immovable (real) property of the Borrower and its
Subsidiaries, to the extent in the possession of the Borrower
or its Subsidiaries.
(xiv) For any Collateral that constitutes documented vessels: (a)
appraisals or surveys of fair market value, and (b) abstracts
of title, all in form and substance satisfactory to the Agent.
(xv) Certificate of an Authorized Officer of the Borrower to the
effect that (a) there has been no Material Adverse Effect
since December 31, 1999 and (b) on the Closing Date no
Unmatured Default or Default exists.
(xvi) Such other documents as any Lender or its counsel may have
reasonably requested.
(xvii) Immediately following the initial Advances on the Loans on
the Closing Date, the Borrower will continue to have at least
$30,000,000 of availability under the Revolving Loan
Commitment.
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 Borrower and its
Subsidiaries has occurred since the Closing Date or the date
of any financial statements of the Borrower 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 Borrower that the conditions contained in Sections
4.2(i) and (ii) have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. EXISTENCE AND STANDING. The Borrower is a corporation and
each of its 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 Borrower and its
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 Borrower and
its 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 Borrower and its Subsidiaries is a party constitute legal, valid and
binding obligations of the Borrower and its Subsidiaries enforceable
against the Borrower and its 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 Borrower and its 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 Borrower or any of its Subsidiaries or (ii) the
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 Borrower or any of its 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 Borrower or a Subsidiary 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 Borrower or
any of its Subsidiaries, is required to be obtained by the Borrower or
any of its 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, 1999 and the
unaudited March 31, 2000 and June 30, 2000 financial statements of the
Borrower and its 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 Borrower 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, 1999 there has
been no change in the business, Property, prospects, condition
(financial or otherwise) or results of operations of the Borrower and
its Subsidiaries, taken as a whole, which could reasonably be expected
to have a Material Adverse Effect.
5.6. TAXES. The Borrower and its 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 Borrower or any of its 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 ______________, ____. No tax
liens have been filed with respect to any such taxes. The charges,
accruals and reserves on the books of the Borrower and its 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 Borrower or any of its 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, the Borrower
has no 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 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 Borrower or any of its 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 Borrower
and its Subsidiaries which are subject to any limitation on sale,
pledge, or other restriction hereunder.
5.12. MATERIAL AGREEMENTS. Neither the Borrower nor any of its
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 Borrower or its
Subsidiaries complies with the terms thereof. Neither the Borrower nor
any of its 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 Borrower, the Borrower and its 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
Borrower and/or its Subsidiaries will have good title, free of all Liens
other than Permitted Liens, to all of the Property and assets reflected
in the Borrower's most recent consolidated financial statements provided
to the Agent as owned by the Borrower and/or its Subsidiaries, excluding
sales in the ordinary course since that date.
5.15. PLAN ASSETS; PROHIBITED TRANSACTIONS. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R.
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 Borrower and its Subsidiaries,
in the course of which they identify and evaluate potential risks and
liabilities accruing to the Borrower due to Environmental Laws. On the
basis of this consideration, the Borrower has concluded that it is aware
of no non-compliance with the Environmental Laws that could reasonably
be expected to have a Material Adverse Effect. Neither the Borrower nor
any of its 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 Borrower nor any of its
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 Borrower nor
any of its 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 Borrower will maintain, for itself
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 Borrower'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 Borrower and its 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 of Borrower's fiscal
quarters of the Borrower and its Subsidiaries, consolidated
unaudited balance sheets 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) Together with the financial statements required under Sections
6.1(i) and (ii), a Compliance Certificate.
(iv) Within 20 days after the end of each month, 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
Borrower has actual knowledge that any Reportable Event has
occurred with respect to any Plan, a statement signed by an
Authorized Officer of the Borrower, describing said Reportable
Event and the action which the Borrower proposes to take with
respect thereto.
(viii) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to
the effect that the Borrower or any of its Subsidiaries is or
may be liable to any Person as a result of the release by the
Borrower, any of its 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 Borrower or any of its 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 Borrower, 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 Borrower or any of its 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 existing indebtedness of the Borrower and
its Subsidiaries 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 Borrower will, and will cause each
of its 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 Borrower will, and will cause each of its
Subsidiaries to, timely file complete and to the best of the 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 Borrower will, and will cause each of its
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
Borrower will, and will cause each of its 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 Borrower will, and will cause each of its 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 Borrower will, and will cause
each of its 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 Borrower will, and will cause each of its
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 Borrower and each of its Subsidiaries, to
examine and make copies of the books of accounts and other financial
records of the Borrower and each of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and each of its
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 Borrower will not, nor will it permit any of
its Subsidiaries to, 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, except that any
Subsidiary may declare and pay dividends or make distributions to the
Borrower or to a Wholly-Owned Subsidiary.
6.11. INDEBTEDNESS. 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 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) Indebtedness not described in clauses (i) through (xii) above
existing on the Closing Date as set forth on SCHEDULE 5 hereto
(xiv) Other unsecured Indebtedness not exceeding $5,000,000 in the
aggregate principal amount outstanding at any time.
(xv) 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.
(xvi) Indebtedness guaranteed by the Maritime Administration under
Title XI of the Merchant Marine Act of 1946, as amended, for
the construction of liftboats, up to the aggregate principal
amount of $45,000,000.
(xvii) The refinancing of any Indebtedness described in the foregoing
Section 6.11(i) through (xvi).
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 6.14.
6.13. SALE OF ASSETS. 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.
6.14. INVESTMENTS. 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 6.
(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.
6.15. LIENS. 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) Liens not described in clauses (i) through (viii) above
existing on the Closing Date as set forth on on SCHEDULE 7
hereto.
(x) Other Liens that secure less than $1,000,000 of Indebtedness,
provided that such Liens do not encumber real estate, vessels
or accounts.
(xi) 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.
(xii) Liens constituting security interests in liftboats securing
Indebtedness permitted by Section 6.11(xvi).
(xiii) Liens permitted by the Required Lenders in writing.
6.16. ACQUISITIONS. 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 $10,000,000; (iii) the total consideration (including all
Additional Contingent Consideration) of all Acquisitions during the term
of this Agreement shall not exceed $30,000,000 in the aggregate
(provided, however, that the acquisition of International Snubbing
Services, Inc. and its affiliates shall not count against this
$30,000,000 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 assets subject to the Acquisition
similar in nature to the Collateral and in the stock 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) the Borrower shall submit a legal opinion with respect to the
Acquisition to the Agent, in form and substance reasonably satisfactory
to the agent; (xii) 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
(xiii) 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.
6.17. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and
will not permit any of its 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
in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Borrower or such
Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.
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 Borrower 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 Borrower will not permit the
ratio (the "Leverage Ratio"), determined on a Pro Forma Basis, of (i)
Indebtedness as of the end of each fiscal quarter 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
Closing Date through and 3.25 to 1.00
including December 31, 2000
January 1, 2001 through and 3.00 to 1.00
including December 31, 2001
January 1, 2002 and thereafter 2.75 to 1.00
6.19.3 MINIMUM FIXED CHARGE COVERAGE RATIO. The Borrower 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.
6.19.4 MAXIMUM CAPITAL EXPENDITURES. The Borrower will not permit
its Capital Expenditures (on a non-cumulative basis) in any fiscal year
to be greater than $35,000,000, except that the Borrower may carry
forward to the succeeding fiscal year (but not any fiscal year
thereafter) 50% of the excess of $35,000,000 over Capital Expenditures
during a fiscal year.
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 Borrower or any of its 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 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 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 Borrower or any of its 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 Borrower or any of its 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 Borrower or any of
its Subsidiaries shall not pay, or admit in writing its inability to
pay, its debts generally as they become due.
7.6. The Borrower or any of its 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 Borrower
or any of its Subsidiaries, a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any of its
Subsidiaries or any Substantial Portion of its Property, or a proceeding
described in Section 7.6(iv) shall be instituted against the Borrower or
any of its 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 Borrower and its Subsidiaries which,
when taken together with all other Property of the Borrower and its
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 Borrower or any of its 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 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 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 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 Term Loan
Termination Date, 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 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 Borrower, the Agent and the
Lenders and supersede all prior agreements and understandings among the
Borrower, 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 ▇▇▇ 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 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, Louisiana,
National Association 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
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 August 24, 2000, 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 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 Term Loan Termination Date, 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 C 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 Borrower
and its 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 ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(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 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 Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
BORROWER: SUPERIOR ENERGY SERVICES, INC.
By:
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
AGENT: BANK ONE, LOUISIANA,
NATIONAL ASSOCIATION
By:
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SYNDICATION AGENT: ▇▇▇▇▇ FARGO BANK TEXAS, N.A.
By:
------------------------------
Name:
Title:
DOCUMENTATION AGENT: WHITNEY NATIONAL BANK
By:
-----------------------------
Name:
Title:
LENDERS: BANK ONE, LOUISIANA,
NATIONAL ASSOCIATION
By:
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK TEXAS, N.A.
By:
---------------------------
Name:
Title:
WHITNEY NATIONAL BANK
By:
---------------------------
Name:
Title:
HIBERNIA NATIONAL BANK
By:
----------------------------
Name:
Title:
NATIONAL BANK OF CANADA
By:
----------------------------
Name:
Title:
BANK OF SCOTLAND
By:
----------------------------
Name:
Title:
UNION PLANTERS BANK
By:
----------------------------
Name:
Title:
NATEXIS BANQUES POPULAIRES
By:
----------------------------
Name:
Title:
SCHEDULE I
COMMITMENT AMOUNTS OF THE LENDERS
NAME AND ADDRESS OF LENDER TERM LOAN REVOLVING LOAN AGGREGATE PRO RATA
COMMITMENT COMMITMENT AMOUNT SHARE
Bank One, Louisiana, N.A. $21,838,235.30 $11,911,764.70 $33,750,000.00 19.8529%
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇▇ ▇▇▇▇▇
TELEPHONE: (▇▇▇)▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ Fargo Bank Texas, N.A. $21,838,235.30 $11,911,764.70 $33,750,000.00 19.8529%
Energy Group
MAC T5002-031
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇ ▇▇▇▇▇▇
TELEPHONE: (▇▇▇)▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
Whitney National Bank $19,411,764.70 $10,588,235.30 $30,000,000.00 17.6471%
Corporate Banking
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Hibernia National Bank $12,941,176.46 $7,058,823.54 $20,000,000.00 11.7647%
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: S. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
TELEPHONE: (▇▇▇)▇▇▇-▇▇▇▇
FACSIMILE: (▇▇▇) ▇▇▇-▇▇▇▇
National Bank of Canada $12,941,176.47 $7,058,823.53 $20,000,000.00 11.7647%
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Bank of Scotland $ 9,705,882.35 $5,294,117.65 $15,000,000.00 8.8235%
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
Union Planters Bank $ 6,470,588.24 $ 3,529,411.76 $10,000,000.00 5.8824%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Natexis Banques Populaires $ 4,852,941.18 $ 2,647,058.82 $ 7,500,000.00 4.4118%
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Aggregate Commitments $110,000,000.00 $60,000,000.00 $170,000,000.00 100.00%
SCHEDULE 2
PRICING SCHEDULE
APPLICABLE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
MARGIN (LOAN) STATUS STATUS STATUS STATUS STATUS
Eurodollar Rate 1.25% 1.50% 1.75% 2.00% 2.375%
Floating Rate 0.00% 0.25% 0.50% 0.75% 1.00%
APPLICABLE FEE ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ LEVEL V
RATE STATUS STATUS STATUS STATUS STATUS
Commitment Fee 0.15% 0.25% 0.375% 0.50% 0.50%
APPLICABLE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
LETTER OF CREDIT STATUS STATUS STATUS STATUS STATUS
FEE RATE
Letter of Credit
Fee Rate 1.25% 1.50% 1.75% 2.00% 2.375%
For the purposes of this Pricing Schedule, the following terms have
the following meanings, subject to the final paragraph of this Pricing
Schedule:
"Financials" means the annual or quarterly financial statements of
the Borrower delivered pursuant to Section 6.1(i) or (ii).
"Level I Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower, the Leverage Ratio is less than 1.25 to
1.00.
"Level II Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower i) the Borrower has not qualified for
Level I Status and (ii) the Leverage Ratio is less than or equal to 1.75
to 1.00.
"Level III Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower (i) the Borrower has not qualified for
Level I Status or Level II Status and (ii) the Leverage Ratio is less
than 2.25 to 1.00.
"Level IV Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower (i) the Borrower has not qualified for
Level I Status, Level II Status or Level III Status and (ii) the
Leverage Ratio is less than 2.75 to 1.00.
"Level V Status" exists at any date if the Borrower has not
qualified for Level I Status, Level II Status, Level III Status or Level
IV Status.
"Status" means either Level I Status, Level II Status, Level III
Status, Level IV Status or Level V Status.
The Applicable Margin, Applicable Fee Rate and Applicable Letter of
Credit Fee Rates shall be determined in accordance with the foregoing
table based on the Borrower's Status as reflected in the then most
recent Financials. Adjustments, if any, to the Applicable Margin,
Applicable Fee Rate, or Applicable Letter of Credit Fee Rate shall be
effective five (5) Business Days after the Agent has received the
applicable Compliance Certificate, except that the Applicable Margin on
a Eurodollar Rate Advance shall be adjusted after the last day of the
then current Eurodollar Interest Period. If the Borrower fails to
deliver the Compliance Certificate to the Agent at the time required by
Section 6.1, then the Applicable Margin, Applicable Fee Rate and
Applicable Letter of Credit Fee Rate shall be the highest Applicable
Margin, Applicable Fee Rate and Applicable Letter of Credit Fee Rate set
forth in the foregoing table until five (5) days after such Compliance
Certificate is so delivered.
SCHEDULE 3
LIST OF BORROWER'S SUBSIDIARIES
Subsidiary Jurisdiction of Organization Owned Percent
Name Organization Type By Ownership
-----------------------------------------------------------------------------------------------------------------------
Ace Rental Tools, Inc. LA Corp. Borrower 100%
Cardinal Services, Inc. LA Corp. Borrower 100%
Connection Technology, Ltd. LA Corp. Borrower 100%
Drilling Logistics, Inc. LA Corp. Borrower 100%
Environmental Treatment Investments, Inc. LA Corp. Borrower 100%
F. & F. Wireline Service, Inc. LA Corp. Borrower 100%
Fastorq, Inc. LA Corp. Borrower. 100%
H.B. Rentals, L.C. LA LLC Borrower 100%
Hydro-Dynamics Oilfield Contractors, Inc. LA Corp. Borrower 100%
International Snubbing Services, Inc. LA Corp. Borrower 100%
Nautilus Pipe & Tool Rental, Inc. LA Corp. Borrower 100%
Non-Magnetic Rental Tools, Inc. LA Corp. Borrower 100%
Oil Stop, Inc. LA Corp. Borrower 100%
Production Management Companies, Inc. LA Corp. Borrower 100%
SEGEN LLC DE LLC Borrower 100%
SELIM LLC DE LLC Borrower 100%
Stabil Drill Specialties, Inc. LA Corp. Borrower 100%
Sub-Surface Tools, Inc. LA Corp. Borrower 100%
Superior Well Service, Inc. LA Corp. Borrower 100%
Tong Rentals and Supply Company, Inc. LA Corp. Borrower 100%
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, Inc. LA Corp. Borrower 100%
Concentric Rentals, S.A. Venezuela Corp. Borrower 100% *
Imperial Snubbing Services Limited Trinidad and Tobago Corp. Borrower 100% *
South East Australian Pty. Ltd. Australia Corp. Borrower 100% *
Production Management Equities, Inc. LA Corp. Production
Management
Companies, Inc. 100%
Production Management Industries, Inc. LA Corp. Production
Management
SE Finance LP DE ▇▇ ▇▇▇▇▇, LLC .0025% (GP)
SELIM, LLC 99.9975% (LP)
_____________
* Only 66% of the stock is pledged (See Section 2.19)
SCHEDULE 4
ELIGIBLE ACCOUNTS AND ELIGIBLE INVENTORY
I. ELIGIBLE ACCOUNTS
Based on the most recent Borrowing Base Certificate delivered to
the Agent and on other information available to the Agent, the Agent
shall in its reasonable credit judgment determine which Accounts of
Borrowers shall be "ELIGIBLE ACCOUNTS" for purposes of this Agreement.
"ACCOUNTS" means all amounts owed to the Borrower or its Subsidiaries on
account of sales, leases or rentals of equipment or services rendered in
the ordinary course of the Borrower's trade or business, net of unearned
interest, discounts or finance charges. In determining whether a
particular Account constitutes an Eligible Account, the Agent shall not
include any such Account to which any of the exclusionary criteria set
forth below applies. Eligible Accounts shall not include any Account of
the Borrower and its Subsidiaries:
(a) which does not arise from the sale of goods, leasing of assets
or property or the performance of services by the Borrower or its
Subsidiaries in the ordinary course of its business;
(b) upon which (i) the Borrower's and its Subsidiaries' right to
receive payment is not absolute, is not then due and payable, or is
contingent upon the fulfillment of any condition whatsoever or (ii) the
Borrower or its Subsidiaries are not able to bring suit or otherwise
enforce its remedies against the Account Debtor through judicial
process;
(c) to the extent any defense, counterclaim, setoff or dispute is
asserted as to such Account or if the Account represents a progress
billing consisting of an invoice for goods sold or used or services
rendered pursuant to a contract under which the Account Debtor's
obligations to pay that invoice is subject to the Borrower's or its
Subsidiaries' completion of further performance under such contract;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold
or assets or property leased to or services rendered and accepted by the
applicable Account Debtor;
(e) with respect to which an invoice or other notice of amounts
owing has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by the Borrower or its Subsidiaries or
(ii) is subject to any rights, claim, security interest or other
interest of any other Person, other than Liens in favor of the Agent, on
behalf of itself and Lenders;
(g) that arises from a sale to any director, officer, other
employee or affiliate of the Borrower other than (i) to portfolio
companies of First Reserve Corporation or (ii) Energy Partners, on an
arm's length basis;
(h) that is the obligation of an Account Debtor that is the United
States government or a political subdivision thereof, or any state or
municipality or department, agency or instrumentality thereof unless the
Agent, in its sole discretion, has agreed to the contrary in writing and
the Borrower or its Subsidiaries, if necessary or desirable, has
complied with the Federal Assignment of Claims Act of 1940, and any
amendments thereto, or any applicable state statute or municipal
ordinance of similar purpose and effect, with respect to such
obligation;
(i) that is the obligation of an Account Debtor located in a
foreign country other than Canada (but only to the extent that the Agent
and the Lenders have a perfected security interest in the Accounts)
unless payment thereof is assured by a letter of credit satisfactory to
the Agent as to form, amount and issuer;
(j) to the extent the Borrower or its Subsidiaries is liable for
goods sold or services rendered by the applicable Account Debtor to the
Borrower or its Subsidiaries, but only to the extent of the potential
offset;
(k) that arises with respect to goods which are delivered on a
▇▇▇▇-and-hold, cash-on-delivery basis or placed on consignment,
guaranteed sale or other terms by reason of which the payment by the
Account Debtor is or may be conditional;
(l) that is in default; PROVIDED, THAT, without limiting the
generality of the foregoing, an Account shall be deemed in default upon
the occurrence of any of the following:
(i) it is not paid within the earlier of: sixty (60) days
following its due date or ninety (90) days following its original
invoice date;
(ii) if any Account Debtor obligated upon such Account
suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or
(iii) if any petition is filed by or against any Account
Debtor obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership,
insolvency relief or other law or laws for the relief of debtors;
(m) which is the obligation of an Account Debtor if fifty percent
(50%) or more of the dollar amount of all Accounts owing by that Account
Debtor are ineligible under the other criteria set forth in this
Schedule 4.
(n) as to which the Agent's interest, on behalf of itself and
Lenders, therein is not a first priority perfected security interest;
(o) as to which any of the representations or warranties
pertaining to Accounts set forth in this Agreement or the Collateral
Documents is untrue;
(p) to the extent such Account is evidenced by a judgment,
instrument or chattel paper; or
(q) which is payable in any currency other than United States
Dollars.
For the purposes hereof, "Account Debtor" means any Person who may
become obligated to the Borrower or its Subsidiaries under, with respect
to, or on account of, an Account.
II. ELIGIBLE INVENTORY
Based on the most recent Borrowing Base Certificate delivered to
the Agent and on other information available to the Agent, the Agent
shall in its reasonable credit judgment determine which Inventory of
Borrowers shall be "ELIGIBLE INVENTORY" for purposes of this Agreement.
"INVENTORY" means book value of goods (tangible personal or corporeal
movable property) that are owned by Stabil Drill Specialties, Inc. and
Sub-Surface Tools, Inc. and are held by said Subsidiaries for sale or
lease or to be furnished under contracts of service. In determining
whether a particular type of Inventory constitutes Eligible Inventory,
the Agent shall not include any such Inventory to which any of the
exclusionary criteria set forth below applies. The Agent reserves the
right, at any time and from time to time after the Closing Date, to
adjust any such criteria, to establish new criteria and to adjust
advance rates with respect to Eligible Inventory, in its reasonable
credit judgment, subject to the approval of the Required Lenders in the
case of adjustments or new criteria or changes in advance rates which
have the effect of making more credit available. Eligible Inventory
shall not include any Inventory of the Borrower and its Subsidiaries:
(a) that is not subject to a perfected Lien in favor the Agent and
Lenders;
(b) that is located outside of the United States of America; and
(c) that is worn such that it is no longer useful in its intended
purpose or obsolete.
(d) any goods that are considered work in process under GAAP.
SCHEDULE 5
EXISTING PERMITTED INDEBTEDNESS (SECTION 6.11)
Notes Payable
HYDRO-DYNAMICS OILFIELD CONTRACTORS, INC. (DEBTOR)
Long-term notes payable to _________________________ in the
aggregate amount of $11,500.00 as of September 30, 2000.
PRODUCTION MANAGEMENT COMPANIES, INC.
Long-term notes payable to ________________________ in the
aggregate amount of $320,000 as of September 30, 2000.
STABIL DRILL SPECIALTIES, INC. (DEBTOR)
Long-term notes payable to ___________________________ in the
aggregate amount of $47,000 as of September 30, 2000.
Letters of Credit
PRODUCTION MANAGEMENT COMPANIES, INC. (ACCOUNT PARTY)
Bank One (issuer) in favor of National Union Fire Insurance Company
(beneficiary), face amount $700,000, expires November 12, 2000.
Bank One (issuer) in favor of ▇▇▇▇ and Company, Inc. (beneficiary),
amount $150,000, expires November 5, 2000.
OIL STOP, INC. (ACCOUNT PARTY)
Whitney National Bank (issuer) to Arab Tunisian Bank in favor of
Office de la Marine Marchande Ports-Tunisia, amount $12,174,
expires February 15, 2001.
Whitney National Bank (issuer) to Banque Marocaine in favor of
Office d'Exploitation des Ports-Marocco, amount $73,305, expires
December 15, 2000.
_____________________ (issuer) to Banque Marocaine in favor of
Office d'Exploitation des Ports-Marocco, amount $10,000, expires
December 15, 2000.
ABN Amro NV (issuer) to Banque Marocaine du Commerce in favor of
Office d'Exploitation des Ports-Marocco, amount $9,500, expires
December 15, 2000.
ABN Amro NV (issuer) to Banque Marocaine du Commerce in favor of
Office d'Exploitation des Ports-Marocco, amount $40,390, expires
January 30, 2001.
ABN Amro NV (issuer) to Banque Marocaine du Commerce in favor of
Office d'Exploitation des Ports-Marocco, amount $22,163,12, expires
April 30, 2001.
ABN Amro NV (issuer) to Arab Tunisian Bank in favor of Office de la
Marine Marchande Ports-Tunisia, face amount $40,580, expires
February 15, 2001.
ABN Amro NV (issuer) to General Management Coastal Safety & Salvage
Administration (Turkey), face amount $51,500, expires November 15,
2000.
NOTE: Each of the foregoing letters of credit are supported by
a Letter of Credit issued by the Agent for the ratable
benefit of the Lenders pursuant to the Credit Agreement.
SCHEDULE 6
EXISTING PERMITTED INVESTMENTS (SECTION 6.14)
SUPERIOR ENERGY SERVICES, INC.
Promissory note(s) of Lamb Energy Services, Inc., amount
$8,897,700, matures January 1, 2002.
ENVIRONMENTAL TREATMENT INVESTMENTS, INC.
Promissory notes of Environmental Treatment Team Holding, Inc.,
amount $10,200,000, matures December 31, 2003.
SCHEDULE 7
EXISTING PERMITTED LIENS (SECTION 6.15)
SCHEDULE 8
EXISTING ADDITIONAL CONTINGENT CONSIDERATION
Company/Business Contingent
Acquired Consideration Payable*
---------------- ----------------------
Concentric Technology, Ltd. $ 2,465,000
Drilling Logistics, Inc. $ 1,760,000
F & F Wireline Service, Ltd. $ 600,000
Fastorq, Inc. $ 2,590,000
H. B. Rentals, L.C. $ 5,240,664
Hydro-Dynamics Oilfield Contractors, Inc. $ -
International Snubbing Services, Inc. $ 10,000,000
Non-Magnetic Rental Tools, Inc. $ 2,000,000
Production Management Industries, Inc. $ 2,602,667
Stabil Drill Specialties, Inc. $ 7,500,000
Sub Surface Tools, Inc. $ 7,500,000
_________________
* Estimated as of the Closing Date.
EXHIBIT A
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of October 17, 2000 (as amended, modified,
renewed or extended from time to time, the "Credit Agreement") among
Superior Energy Services, Inc. (the "Borrower"), Bank One, Louisiana,
National Association, as Agent, and the Lenders party thereto. Unless
otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings defined in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected Treasurer of the Borrower;
2. I have reviewed the terms of the Credit Agreement and I have
made, or have caused to be made under my supervision, a detailed review
of the transactions and conditions of the Borrower and each of its
Subsidiaries during the accounting period covered by the attached
financial statements;
3. The examinations described in paragraph 2 did not disclose, and
I have no knowledge of, the existence of any condition or event which
constitutes a Default or Unmatured Default during or at the end of the
accounting period covered by the attached financial statements or as of
the date of this Certificate, except as set forth below; and
4. SCHEDULE I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants
of the Credit Agreement, all of which data and computations are true,
complete and correct.
5. SCHEDULE I, ITEM B hereto sets forth the determination of the
Applicable Margin, Applicable Fee Rate and Applicable Letter of Credit
Fee Rate, commencing on the fifth Business Day following the delivery
hereof.
Described below are the exceptions, if any, to Paragraph 3 by
listing, in detail, the nature of the condition or event, the period
during which it has existed and the action which the Borrower has taken,
is taking, or proposes to take with respect to each such condition or
event:
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
The foregoing certifications, together with the computations set
forth in SCHEDULE I hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this ____ day
of _____________ , _______.
________________________
SCHEDULE I TO COMPLIANCE CERTIFICATE
BORROWER'S FINANCIAL COVENANTS
(AS OF ____________)
A. NET WORTH (SECTION 6.19.1)
Net Worth as of June 30, 2000 $162,643,250
Plus Quarterly Positive Net Income
after July 1,2000 (50%) $__________
Plus Net Equity Proceeds after July 1, 2000 (100%) $__________
Required Net Worth $__________
Actual Net Worth $__________
B. LEVERAGE RATIO (SECTION 6.19.2)
Total Indebtedness (*)
$_________
Net Income for Trailing 4 Quarters $____________
Plus Interest Expense ____________
Plus Income Taxes ____________
Plus Depreciation ____________
Plus Amortization ____________
EBITDA $________
Ratio (actual) _____ to 1.00
Ratio (required) _____ to 1.00
C. FIXED CHARGE COVERAGE RATIO (SECTION 6.19.3)
EBITDA for Trailing 4 Quarters
(see B above) $____________
Minus Capitalized Expenses $____________
Adjusted Cash Flow $__________
Interest Expense $____________
Plus Scheduled Principal
Payments on Term Loans $____________
Plus Mandatory Principal
Payments on Term Loan $____________
Plus Cash Income Taxes
actually paid $___________
Total Fixed Charges $____________
Ratio (actual) ___ to 1.00
Ratio (required) 1.50 to 1.00
D. CAPITAL EXPENDITURES (SECTION 6.19.4)
Actual Capital Expenditures (Fiscal Year to Date) $____________
Maximum Capital Expenditures
Capital Expenditures (Current Fiscal YTD) $35,000,000.00
plus 50% Unspent Capital Expenditures
for Preceding Fiscal Year) $___________
Permitted Capital Expenditures $___________
_____________________
* Includes Additional Contingent Consideration of $___________, as
shown on attachment to this Compliance Certificate.
EXHIBIT B
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
___________ __________________(the "Assignor") and
________________________ (the "Assignee") is dated as of , 20___ . The
parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit
Agreement (which, as it may be amended, modified, renewed or extended
from time to time is herein called the "Credit Agreement") described in
Item 1 of SCHEDULE 1 attached hereto ("Schedule 1"). Capitalized terms
used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and assumes
from the Assignor, an interest in and to the Assignor's rights and
obligations under the Credit Agreement and the other Loan Documents,
such that after giving effect to such assignment the Assignee shall have
purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Loan Documents
relating to the facilities listed in Item 3 of SCHEDULE 1. The
aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4
of SCHEDULE 1.
3. EFFECTIVE DATE. The effective date of this Assignment
Agreement (the "Effective Date") shall be the later of the date
specified in Item 5 of SCHEDULE 1 or two Business Days (or such shorter
period agreed to by the Agent) after this Assignment Agreement, together
with any consents required under the Credit Agreement, are delivered to
the Agent. In no event will the Effective Date occur if the payments
required to be made by the Assignee to the Assignor on the Effective
Date are not made on the proposed Effective Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and
assignment of Loans hereunder, the Assignee shall pay the Assignor, on
the Effective Date, the amount agreed to by the Assignor and the
Assignee. On and after the Effective Date, the Assignee shall be
entitled to receive from the Agent all payments of principal, interest
and fees with respect to the interest assigned hereby. The Assignee
will promptly remit to the Assignor any interest on Loans and fees
received from the Agent which relate to the portion of the Commitment or
Loans assigned to the Assignee hereunder for periods prior to the
Effective Date and not previously paid by the Assignee to the Assignor.
In the event that either party hereto receives any payment to which the
other party hereto is entitled under this Assignment Agreement, then the
party receiving such amount shall promptly remit it to the other party
hereto.
5. RECORDATION FEE. The Assignor and Assignee each agree to pay
one-half of the recordation fee required to be paid to the Agent in
connection with this Assignment Agreement unless otherwise specified in
Item 6 of SCHEDULE 1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the interest being assigned by it
hereunder, (ii) such interest is free and clear of any adverse claim
created by the Assignor and (iii) the execution and delivery of this
Assignment Agreement by the Assignor is duly authorized. It is
understood and agreed that the assignment and assumption hereunder are
made without recourse to the Assignor and that the Assignor makes no
other representation or warranty of any kind to the Assignee. Neither
the Assignor nor any of its officers, directors, employees, agents or
attorneys shall be responsible for (i) the due execution, legality,
validity, enforceability, genuineness, sufficiency or collectibility of
any Loan Document, including without limitation, documents granting the
Assignor and the other Lenders a security interest in assets of the
Borrower or any guarantor, (ii) any representation, warranty or
statement made in or in connection with any of the Loan Documents, (iii)
the financial condition or creditworthiness of the Borrower or any
guarantor, (iv) the performance of or compliance with any of the terms
or provisions of any of the Loan Documents, (v) inspecting any of the
property, books or records of the Borrower, (vi) the validity,
enforceability, perfection, priority, condition, value or sufficiency of
any collateral securing or purporting to secure the Loans or (vii) any
mistake, error of judgment, or action taken or omitted to be taken in
connection with the Loans or the Loan Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee
(i) confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements requested by the
Assignee and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
this Assignment Agreement, (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and
based on such documents and information at it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under the Loan Documents, (iii) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably
incidental thereto, (iv) confirms that the execution and delivery of
this Assignment Agreement by the Assignee is duly authorized, (v) agrees
that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender, (vi) agrees that its payment instructions
and notice instructions are as set forth in the attachment to SCHEDULE
1, (vii) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits
and interests in and under the Loan Documents will not be "plan assets"
under ERISA, (viii) agrees to indemnify and hold the Assignor harmless
against all losses, costs and expenses (including, without limitation,
reasonable attorneys' fees) and liabilities incurred by the Assignor in
connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment
Agreement, and (ix) if applicable, attaches the forms prescribed by the
Internal Revenue Service of the United States certifying that the
Assignee is entitled to receive payments under the Loan Documents
without deduction or withholding of any United States federal income
taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by
the internal law, and not the law of conflicts, of the State of
Louisiana.
9. NOTICES. Notices shall be given under this Assignment
Agreement in the manner set forth in the Credit Agreement. For the
purpose hereof, the addresses of the parties hereto (until notice of a
change is delivered) shall be the address set forth in the attachment to
SCHEDULE 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement
may be executed in counterparts. Transmission by facsimile of an
executed counterpart of this Assignment Agreement shall be deemed to
constitute due and sufficient delivery of such counterpart and such
facsimile shall be deemed to be an original counterpart of this
Assignment Agreement.
IN WITNESS WHEREOF, the duly authorized officers of the parties
hereto have executed this Assignment Agreement by executing SCHEDULE 1
hereto as of the date first above written.
SCHEDULE 1
TO ASSIGNMENT AGREEMENT
1. Description and Date of Credit Agreement: Credit Agreement dated as
of October 17, 2000 among Superior Energy Services, Inc., Bank One,
Louisiana, National Association, as Agent, and the Lenders party
thereto.
2. Date of Assignment Agreement: _____________ , _________
3. Amounts Outstanding (As of Date of Item 2 above):
Term Loan Revolving Loan
Facility Facility
--------- --------------
a. Assignee's percentage
of each Facility purchased
under the Assignment
Agreement ______ % ______ %
b. Amount of each Facility
purchased under the
Assignment Agreement $_______ $________
4. Assignee's Revolving
Loan Commitment purchased
hereunder: $______
5. Proposed Effective Date: ________________
6. Non-standard Recordation Fee
Arrangement
ACCEPTED AND CONSENTED TO/BY ACCEPTED AND CONSENTED TO/BY
SUPERIOR ENERGY SERVICES, INC. BANK ONE, LOUISIANA,
NATIONAL ASSOCIATION
By: By:
------------------------ ---------------------
Name: Name:
Title: Title:
ATTACHMENT TO SCHEDULE 1 TO ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
CONTACT:
Name:_________________________ Telephone No.:___________________
Fax No.:______________________
PAYMENT INFORMATION:
Name & ABA # of Destination Bank: ________________________________________
Account Name & Number for Wire Transfer:__________________________________
Other Instructions:_______________________________________________________
ADDRESS FOR NOTICES FOR ASSIGNOR:_________________________________________
ASSIGNEE INFORMATION
CREDIT CONTACT:
Name:_____________________________ Telephone No.:____________________
Fax No.:__________________________
KEY OPERATIONS CONTACTS:
Booking Installation:______________ Booking Installation:_____________
Name:______________________________ Name:_____________________________
Telephone No.:_____________________ Telephone No.:____________________
Fax No.:___________________________ Fax No.:__________________________
PAYMENT INFORMATION:
Name & ABA # of Destination Bank:_________________________________________
_________________________________________
Account Name & Number for Wire Transfer:__________________________________
__________________________________
Other Instructions:_______________________________________________________
ADDRESS FOR NOTICES FOR ASSIGNEE:_________________________________________
_________________________________________
_________________________________________
AGENT INFORMATION
Assignee will be called promptly upon receipt of the signed agreement.
INITIAL FUNDING CONTACT: SUBSEQUENT OPERATIONS CONTACT:
Name:_________________________ Name:_________________________
Telephone No.:________________ Telephone No.:_____________________
Fax No.:______________________ Fax No.:___________________________
INITIAL FUNDING STANDARDS:
Cibor - Fund 2 days after rates are set.
AGENT WIRE INSTRUCTIONS:
ADDRESS FOR NOTICES FOR AGENT:
EXHIBIT C
BORROWING BASE CERTIFICATE