SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
X Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1996
Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period to
Commission File Number 0-28316
TRICO MARINE SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 72-1252405
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
610 Palm Street
Houma, LA 70364
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 851-3833
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days. Yes X No
As of August 13, 1996 there were 6,811,439 shares outstanding of
the Registrant's Common Stock, par value $.01 per share.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
_____________ ____________
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,288 $ 1,117
Accounts receivable, net 9,516 7,417
Prepaid expenses and other current assets 722 156
______________ ____________
Total current assets 11,526 8,690
______________ ____________
Property and equipment, at cost:
Marine vessels 63,836 44,603
Transportation and other 621 856
______________ ____________
64,457 45,459
Less accumulated depreciation and amortization 8,034 6,195
______________ ____________
Net property and equipment 56,423 39,264
______________ ____________
Other assets, net 4,727 4,159
______________ ____________
$ 72,676 $ 52,113
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,944 $ 3,656
Accrued expenses 2,566 2,878
Current portion of long-term debt - 3,000
______________ ____________
Total current liabilities 5,510 9,534
______________ ____________
Long-term debt - 23,695
Subordinated debt and accrued interest thereon - 13,085
Deferred income taxes, net 4,498 87
______________ ____________
Total liabilities 10,008 46,401
______________ ____________
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value, 15,000,000 shares
authorized, and issued 6,883,471 and 3,123,371 shares,
outstanding 6,811,439 and 3,051,339 shares
at June 30, 1996 and December 31, 1995, respectively 69 31
Additional paid-in capital 61,502 5,649
Retained earnings 1,098 33
Treasury stock, at par value, 72,032 shares (1) (1)
______________ ____________
Total stockholders' equity 62,668 5,712
______________ ____________
$ 72,676 $ 52,113
============== ============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
____________________ ___________________
1996 1995 1996 1995
________ ________ ________ _______
<S> <C> <C> <C> <C>
Revenues:
Charter hire $11,099 $ 5,783 $19,475 $12,131
Other vessel income 12 9 20 21
_________ _________ ________ ________
Total revenues 11,111 5,792 19,495 12,152
_________ _________ ________ ________
Operating expenses:
Direct vessel operating expenses 5,761 4,173 10,552 8,693
General and administrative 724 625 1,385 1,280
Amortization of marine inspection costs 467 290 897 523
_________ _________ ________ ________
Total operating expenses 6,952 5,088 12,834 10,496
_________ _________ ________ ________
Depreciation expense 994 938 1,818 1,928
_________ _________ ________ ________
Operating income (loss) 3,165 (234) 4,843 (272)
Interest expense 624 930 1,660 1,902
Amortization of deferred financing costs
and goodwill 85 94 187 187
Gain on sale of vessels - (167) - (223)
Other income, net (29) (26) (41) (56)
_________ _________ ________ ________
Income (loss) before income taxes
and extraordinary item 2,485 (1,065) 3,037 (2,082)
Income tax expense (benefit) 867 (362) 1,055 (708)
_________ _________ ________ ________
Income (loss) before extraordinary item 1,618 (703) 1,982 (1,374)
Extraordinary item, net of taxes (917) - (917) -
_________ _________ ________ ________
Net income (loss) $ 701 $ (703) $ 1,065 $(1,374)
========= ========= ======== ========
Weighted average common shares and
equivalents outstanding 5,583,748 3,051,339 4,545,268 3,049,689
========= ========== ========= =========
Earnings per common share and equivalent
outstanding:
Income (loss) before
extraordinary item $ 0.29 $ (0.23) $ 0.44 $ (0.45)
Extraordinary item (0.16) 0.00 (0.21) 0.00
_________ _________ ________ ________
Net income (loss) $ 0.13 $ (0.23) $ 0.23 $ (0.45)
========= ========= ======== ========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
___________________
1996 1995
_____ _____
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,065 $ (1,374)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 2,932 2,666
Extraordinary charge 1,411 -
Deferred income taxes 561 (708)
Interest on subordinated debt 461 541
Gain on sale of vessels - (223)
Provision for doubtful accounts 70 120
Changes in operating assets and liabilities:
Accounts receivable (2,169) 1,947
Prepaid expenses and other current assets (597) (67)
Accounts payable and accrued expenses (1,025) 393
Other, net (410) (2)
_____________ ______________
Net cash provided by operating activities 2,299 3,293
_____________ ______________
Cash flows from investing activities:
Purchases of property and equipment (15,724) (2,921)
Deferred marine inspection costs (595) (397)
Proceeds from sales of vessels - 1,052
Investment in unconsolidated company (947) -
_____________ ______________
Net cash used in investing activities (17,266) (2,266)
_____________ ______________
Cash flows from financing activities:
Proceeds from issuance of common stock, net of
registration expenses 48,410 9
Proceeds from issuance of long-term and subordinated debt 6,169 2,302
Repayment of long-term and subordinated debt (38,929) (4,194)
Deferred financing costs and other (512) (225)
_____________ ______________
Net cash provided by (used in) financing
activities 15,138 (2,108)
_____________ ______________
Net increase (decrease) in cash 171 (1,081)
Cash and cash equivalents at beginning of period 1,117 1,770
_____________ ______________
Cash and cash equivalents at end of period $ 1,288 $ 689
============= ==============
Supplemental information:
Income taxes paid $ 2 $ -
============= ==============
Income taxes refunded $ - $ 11
============= ==============
Interest paid $ 4,442 $ 2,047
============= ==============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Financial Statement Presentation:
The consolidated financial statements for Trico Marine Services,
Inc. (the "Company") included herein are unaudited but reflect,
in management's opinion, all adjustments, consisting only of
normal recurring adjustments, that are necessary for a fair
presentation of the nature of the Company's business. The
results of operations for the three and six months ended June
30, 1996 are not necessarily indicative of the results that may
be expected for the full fiscal year or any future periods. The
financial statements included herein should be read in
conjunction with the financial statements and notes thereto
included in the Company's consolidated financial statements for
the year ended December 31, 1995.
Certain prior period amounts have been reclassified to conform
with the presentation shown in the interim consolidated financial
statements. These reclassifications had no effect on net income
(loss), total stockholders' equity or cash flows.
2. Initial Public Offering:
In May 1996, the Company completed an initial public offering of
3,292,500 shares of common stock, $.01 par value. The
proceeds received from the sale were $48,416,000, net of
underwriting discounts and other costs of $4,264,000. Of the
proceeds, the Company used $31,150,000 to prepay senior
debt, $6,000,000 to pay subordinated debt and $11,000,000 to
acquire four supply vessels. The balance of the proceeds was
used by the Company for additional working capital.
3. Amendment of Credit Agreement:
Effective March 6, 1996, the Company amended its agreement with
its bank lenders (the "Credit Agreement") to provide for an
increased total credit facility, extend principal payments and
restructure other portions of the Credit Agreement. The
outstanding principal balance of the Credit Agreement of
$31,150,000 was prepaid on May 21, 1996 together with a
prepayment fee of $75,000 from the proceeds of the Company's
initial public offering of common stock. As a result of the
prepayment of all amounts outstanding under the Credit Agreement
and the prepayment of all of the Company's subordinated debt, the
Company recorded an extraordinary charge of $917,000, net of taxes
of $494,000, for the write-off of the unamortized balance of
related debt issuance costs.
4. Foreign Acquisition:
On March 15, 1996, the Company acquired seven line handling
vessels and a 40% interest in a marine operating company located
in Brazil for a combined price of $4.2 million (the "Walker
Acquisition"). The Brazilian operating company owns an eighth
line handling vessel and operates it and the seven other acquired
vessels under long-term contracts with a customer located in
Brazil. The acquisition has been accounted for by the purchase
method of accounting. Of the purchase price, $3,565,000 has been
allocated to the acquired vessels purchased based upon their
relative fair value, $270,000 has been allocated to the Company's
investment in the stock of the Brazilian operating company with
the remaining $365,000 allocated to goodwill. In addition to the
purchase price above, $300,000 of contingent purchase price is
payable based upon the operating results of the acquired vessels
or the attainment by the Company of a certain contract to provide
offshore marine services in Brazil.
5. Stock Split:
On April 26, 1996, the Company's Board of Directors approved a
3.0253-for-1 split of the Company's common stock in the form of a
stock dividend. The financial statements have been restated to
reflect all effects of this stock split, including all share
amounts and per share data.
<PAGE>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
6. Stock Option and Incentive Plans:
In April 1996, the Company modified its 1993 Stock Option Plan to
include a provision for the 140,459 options not already
containing a provision to become exercisable at the consummation
of an "initial public offering" to become exercisable upon such a
transaction. Pursuant to the Company's 1996 Incentive
Compensation Plan, options to purchase 103,000 shares of the
Company's common stock were granted on April 26, 1996 to
officers, key members of management and certain long-term
employees at $16.00 per share, the initial public offering price,
and accordingly no expense was recognized.
7. Domestic Acquisition:
On May 22, 1996, the Company acquired for $11,000,000 all of the
outstanding capital stock of HOS Marine Partners, Inc. ("HOS"), a
special purpose company whose sole assets consist of four supply
vessels. In addition to the purchase price, the Company
recognized, in accordance with Statement of Financial Accounting
Standards No. 109, a deferred income tax liability of $3,850,000
for the deferred tax consequences of the differences between the
assigned values and the tax bases of the assets owned by HOS.
The acquisition was accounted for using the purchase method of
accounting and the results of operations from the date of
acquisition are included on the accompanying unaudited
consolidated financial statements. Of the $11,000,000 purchase
price and the recognized $3,850,000 deferred income tax liability,
$14,000,000 was allocated to the vessels based upon their relative
fair value, $279,000 was allocated to deferred tax assets based upon
the estimated realizable value of the net operating tax loss
carryforward of HOS and the remaining $571,000 was allocated to
goodwill.
8. Subsequent Events:
Effective July 26, 1996, the Company executed a $30,000,000
revolving credit agreement (the "New Credit Facility") with the
same group of lenders that provided the Company's previous Credit
Agreement which was prepaid on May 21, 1996 with proceeds from
the initial public offering. The New Credit Facility provides
for interest payments only until its maturity on June 30, 1999
and bears interest at LIBOR plus 1 1/2% per annum with a commitment
fee of 3/8 % per annum on the undrawn portion. The New Credit
Facility is collateralized by certain of the Company's vessels
and related assets and requires that the Company maintain certain
financial ratios. When the New Credit Facility was executed, the
Company had no outstanding borrowings.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS
This discussion and analysis of financial condition and results
of operations should be read in conjunction with the unaudited
consolidated financial statements and the related disclosures
included elsewhere herein.
RESULTS OF OPERATIONS
Revenues for the second quarter and six months ended June 30,
1996 were $11.1 million and $19.5 million, respectively, an
increase of 91.8% and 60.4% compared to the $5.8 million and
$12.2 million in revenues for the quarter and six months of 1995,
respectively. This increase was principally due to the improved
average day rates and utilization for the Company's supply boats,
the growth in the Company's vessel fleet, both in the Gulf of
Mexico ("Gulf") and Brazil, and the completion of the Company's
vessel upgrade program which adversely impacted vessel utilization
in 1995. The table below sets forth by vessel class, the average
day rates and utilization of the Company's vessels and the average
number of vessels owned during the periods indicated.
Three months ended June 30, Six months ended June 30,
__________________________ _________________________
1996 1995 1996 1995
____ ____ ____ ____
Average Day Rates:
Supply $4,256 $2,771 $3,887 $2,882
Lift 4,591 4,735 4,710 4,697
Crew/Line Handling 1,525 1,421 1,527 1,462
Utilization:
Supply 98% 69% 93% 74%
Lift 64% 41% 61% 42%
Crew/Line Handling 93% 83% 94% 79%
Average Number of Vessels:
Supply 18.5 16.0 17.3 16.0
Lift 6.0 6.0 6.0 5.9
Crew/Line Handling 25.0 16.8 21.7 17.5
All classes of vessels in the Company's fleet reported higher
utilization during the second quarter and first six months of
1996 compared to the prior periods of 1995. The greatest
increase was experienced by the Company's supply boats, which
averaged 98% and 93% utilization for the quarter and six month
period, respectively, up from 69% and 74% for the year-ago
periods. Supply boat day rates for the quarter and first six
months of 1996 rose 53.6% to $4,256 and 34.9% to $3,887,
respectively, compared to $2,771 and $2,882 for the comparable
1995 periods. The significant improvement in utilization and day
rates is due to both the improved market conditions in the Gulf
and the substantial downtime incurred in 1995 from the vessel
upgrade program.
During 1995, the Company began and completed a major capital
upgrade program in which four of the Company's supply boats were
lengthened from 165 feet to 180 or 190 feet, with the boats'
capacities for liquid mud and bulk cargo also increased.
Additionally, the Company rebuilt and lengthened a crew boat
which was placed in service late in 1995. In May 1996, with
proceeds from the initial public offering, the Company acquired
four supply boats located in the Gulf. The increase in revenues
for the second quarter reflects the addition of these vessels for
a portion of the quarter.
Utilization for the Company's lift boats increased to 64% and 61%
for the second quarter and six month period of 1996,
respectively, up from the 41% and 42% experienced in the
comparable 1995 periods. The lift boats experienced unusually
low utilization in the first half of 1995 due to drydocking
related downtime and weak market conditions which existed in the
1995 periods. Utilization for the crew boats and line handling
vessels increased to 93% and 94% for the quarter and six month
period of 1996, compared to 83% and 79% for the comparable 1995
periods, due to the improved market conditions in the Gulf for
the crew boats, and the addition in March of 1996 of eight line
handling vessels working under long-term charters offshore
Brazil.
During the second quarter and first six months of 1996, direct
vessel operating expenses increased to $5.8 million (51.8% of
revenues) and $10.6 million (54.1% of revenues), respectively,
compared to $4.2 million (72.0% of revenues) and $8.7 million
(71.5%) for the second quarter and first six months of 1995 due
to the expanded vessel fleet, and to a lesser extent, increased
labor, repair and maintenance costs. Direct vessel operating
expenses decreased as a percentage of revenues due to the
increase in revenues during the second quarter and first six
months of 1996.
Depreciation expense increased to $994,000 for the second quarter
of 1996, up from $938,000 for the year-ago quarter due to the
expanded vessel fleet and the vessel upgrade program.
Depreciation expense decreased to $1.8 million for the first six
months of 1996 from $1.9 million for the comparable 1995 period
due to increased depreciation in 1994 and 1995 caused by the
allocation of a portion of the 1993 vessel acquisition costs to
assets which have short depreciable lives and were fully
depreciated in the second quarter of 1995. Amortization of
marine inspection costs increased to $467,000 and $897,000 for
the second quarter and six month period of 1996, respectively,
from $290,000 and $523,000 in the comparable 1995 periods, due to
the amortization of increased drydocking and marine inspection
costs incurred in 1995.
General and administrative expenses increased to $724,000 (6.5%
of revenues) and $1.4 million (7.1% of revenues) in the 1996
second quarter and six month period, respectively, from $625,000
(10.8% of revenues) and $1.3 million (10.5% of revenues) for the
1995 periods due to additions of personnel in connection with the
growth in the Company's vessel fleet and Brazilian operations.
General and administrative expenses, as a percentage of revenues,
decreased in the second quarter and six month period as the
increase in revenues and additions to the vessel fleet did not
require proportionate increases in administrative expenses.
Interest expense decreased to $624,000 for the second quarter of
1996 and $1.7 million for the first six months of 1996, from
$930,000 and $1.9 million for the second quarter and first six
months of 1995. The decrease in interest expense was due to the
prepayment of all borrowings under the Company's bank credit
facility in May with proceeds from the public offering. Average
bank debt outstanding decreased to $18.2 million and $22.8
million in the second quarter and first six months of 1996,
respectively, compared to $26.3 million and $26.8 million for the
year-ago periods. In the second quarter and first six months of
1995 the Company recorded gains on the sales of certain crewboats
of $167,000 and $223,000, respectively.
In the second quarter and first six months of 1996, the Company
had income tax expense of $867,000 and $1.1 million,
respectively, compared to an income tax benefit of $362,000 and
$708,000 in the 1995 periods.
As a result of the prepayment of all debt outstanding under the
Company's bank credit facility and its subordinated debt in the
second quarter of 1996, the Company recorded an extraordinary
charge of $917,000, net of taxes of $494,000, for the write-off
of unamortized debt issuance costs.
LIQUIDITY AND CAPITAL RESOURCES
The Company's strategy has been to reduce financial leverage
incurred in connection with the acquisition of vessels from
Chrysler Capital Corporation in 1993, while adding value by
upgrading and expanding its vessel fleet. As part of this
strategy, in May 1996 the Company completed an initial public
offering of common stock which dramatically improved the
Company's financial condition. The issuance of common stock
enabled the Company to prepay all of its senior and subordinated
debt, acquire four supply vessels in the Gulf, and establish a
new $30.0 million credit facility to be used for additional
vessel acquisitions, vessel improvements and working capital.
Funds during the first six months of 1996 were provided by $48.4
million in net proceeds from the initial public offering, $6.2
million in borrowings under the Company's Credit Agreement prior
to the public offering, and $2.3 million in funds from operating
activities. During the period, the Company repaid $38.9 million
of debt, including $6.0 million of its subordinated debt, and
made capital expenditures totalling $17.3 million.
Capital expenditures for the period consisted principally of
$11.0 million for the acquisition of four supply vessels in the
Gulf completed in May, and $4.2 million for the Walker
Acquisition in Brazil in March. Other expenditures consisted of
U.S. Coast Guard drydocking costs, the remaining expenditures on
one supply boat which was lengthened as part of the 1995 vessel
upgrade program, and a portion of the acquisition and upgrade
costs of the Stones River. The Stones River is a 180 foot supply
boat, acquired in March 1996, which the Company is rebuilding and
lengthening to 214 feet and outfitting with bulk capacity of
7,800 cubic feet and liquid mud capacity of 2,200 barrels. This
vessel will be available for service in the first quarter of 1997
with an estimated total investment of $4.0 million.
In July 1996, the Company entered into a new $30.0 million revolving
credit facility (the "New Credit Facility") with the same group
of lenders to replace the bank facility repaid with the proceeds of
the public offering. The New Credit Facility will mature on
June 30, 1999 and bears interest at LIBOR plus 1 1/2% (currently
approximately 7.25%), with a fee of 3/8 % per annum on the undrawn
portion. The New Credit Facility is collateralized by certain of
the Company's existing vessels and related assets and requires the
Company to maintain certain financial ratios. At the closing of
the New Credit Facility there were no borrowings outstanding.
The Company is the successful bidder for a contract to build and
operate a SWATH vessel under a five year contract with Petrobras
in Brazil. The SWATH vessel will be used to transport up to 250
passengers from the Petrobras base in Macae, Brazil to offshore
platforms in the Campos Basin. In accordance with the bid
requirements, the Company successfully completed a model tank
test of the vessel and is in the process of finalizing the
contract with Petrobras. Assuming execution of the contract, the
Company expects to begin vessel construction in the third quarter
of 1996 with vessel operations to commence at the end of 1997.
The Company plans to finance a major portion of the vessel's
estimated $8.5 million cost through the Maritime Administration's
Title XI ship financing program with whom the Company has a
pending application.
The Company believes its capital expenditures for the second half
of 1996 will total approximately $6.5 million, including the
Stones River upgrade project, but excluding construction of the
SWATH vessel. Assuming prompt execution of the SWATH contract
with Petrobras, the Company estimates approximately $3.0 million
will be expended on the SWATH vessel in 1996.
The Company's capital requirements historically have been for the
acquisition of marine vessels, maintenance and improvements to
vessels and debt service. The Company believes cash generated
from operations and availability under the New Credit Facility
will provide sufficient funds for the identified capital projects
and working capital requirements. However, the Company's
strategy is to acquire other vessel fleets or single vessels in
order to expand its presence both in the Gulf and certain
selected international markets such as Brazil. Depending upon
the size of such future acquisitions, the Company may require
additional debt financing, possibly in excess of its current
credit facility, or additional equity.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The index below describes each exhibit filed as a
part of this report. Exhibits incorporated by
reference to a prior filing are designated by an
asterisk.
Exhibit 3.1*
Certificate of Incorporation of the Company
as filed with the Commission on March 29, 1996
as Exhibit 3.1 to the Registration Statement on
Form S-1 (Registration No. 333-2990).
Exhibit 3.2*
By Laws of the Company as filed with the
Commission on March 29, 1996 as Exhibit 3.2 to
the Registration Statement on Form S-1 (Registration
No. 333-2990).
Exhibit 10.1
$30,000,000 Revolving Credit Agreement dated as
of July 26, 1996
Exhibit 11.1
Computation of Earnings Per Share
Exhibit 27.1
Financial Date Schedule
(b) The Company did not file any reports on Form 8-K
during the quarter ended June 30,1996.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
TRICO MARINE SERVICES, INC.
(Registrant)
Date: August 13, 1996 /s/ Kenneth W. Bourgeois
_____________________________
Kenneth W. Bourgeois
Chief Accounting Officer and duly
authorized officer
REVOLVING CREDIT AGREEMENT
among
TRICO MARINE OPERATORS, INC.
TRICO MARINE ASSETS, INC.
TRICO MARINE SERVICES, INC.
and
THE FIRST NATIONAL BANK OF BOSTON,
HIBERNIA NATIONAL BANK, and
FIRST NATIONAL BANK OF COMMERCE
as Banks
and
THE FIRST NATIONAL BANK OF BOSTON,
as Agent
dated as of July 26, 1996
TABLE OF CONTENTS
SECTION PAGE
1. DEFINITIONS AND RULES OF INTERPRETATION 1
1.1 Definitions 1
1.2 Rules of Interpretation 9
2. THE REVOLVING CREDIT FACILITY 10
2.1 Commitment to Lend 10
2.2 Commitment Fee 10
2.3 Reduction of Total Commitment 10
2.4 The Notes 11
2.5 Interest on Loans 11
2.6 Requests for Loans 11
2.7 Conversion Options 11
2.7.1. Conversion to Different Type of Loan 11
2.7.2. Continuation of Type of Loan 12
2.7.3. Eurodollar Rate Loans 12
2.8 Funds for Loans 12
2.8.1. Funding Procedures 12
2.8.2. Advances by Agent 12
3. REPAYMENT OF THE LOANS 13
3.1. Maturity 13
3.2. Mandatory Repayments of Loans 13
3.3 Optional Repayments of Loans 13
4. [Intentionally Omitted] 13
5. CERTAIN GENERAL PROVISIONS 13
5.1 Closing Fee 13
5.2 Agent's Fees 14
5.3 Funds for Payments 14
5.3.1 Payments to Agent 14
5.3.2 No Offset, Etc 14
5.4 Computations 14
5.5 Additional Costs, Etc. 14
5.6 Capital Adequacy 15
5.7 Certificate 16
5.8 Interest on Overdue Amounts 16
5.9 Concerning Joint and Several Liability
of the Borrowers 16
5.10 Inability to Determine Eurodollar Rate 17
5.11 Illegality 18
5.12 Indemnity 18
6. SECURITY 18
7. REPRESENTATIONS AND WARRANTIES 18
7.1 Corporate Authority 19
7.1.1 Incorporation; Good Standing 18
7.1.2 Authorization 19
7.1.3 Enforceability 19
7.2 Governmental Approvals 19
7.3 Title to Properties; Leases 19
7.4 Financial Statements 19
7.5 No Material Changes; Solvency 20
7.6 Business 20
7.7 Litigation 20
7.8 [Intentionally Omitted] 20
7.9 Compliance With Other Instruments, Laws, Etc. 20
7.10 Tax Status 21
7.11 No Event of Default 21
7.12 Holding Company and Investment Company Acts 21
7.13 Absence of Financing Statements, Etc 21
7.14 Perfection of Security Interest; Collateral 21
7.15 Certain Transactions 21
7.16 Employee Benefit Plans 22
7.16.1 In General 22
7.16.2 Terminability of Welfare Plans 22
7.16.3 Guaranteed Pension Plans;
Multiemployer Plan 22
7.17 Regulations U and X 22
7.18 Environmental Compliance 22
7.19 Subsidiaries; Capitalization 23
7.20 Chief Executive Office; Books and Records 24
7.21 Disclosure 24
7.22 Fiscal Year 24
7.23 No Labor Agreements. 24
7.24 Concerning the Vessels 24
8. AFFIRMATIVE COVENANTS 25
8.1 Punctual Payment 25
8.2 Maintenance of Office 25
8.3 Records and Accounts 25
8.4 Financial Statements, Certificates and Information25
8.5 Notices 26
8.5.1 Defaults 26
8.5.2 Environmental Events 26
8.5.3 Notification of Claims against Collateral 27
8.5.4 Notice of Litigation and Judgments 27
8.6 Corporate Existence; Maintenance of Properties 27
8.7 Insurance 27
8.8 Taxes and Claims 27
8.9 Inspection of Properties and Books, Etc. 28
8.10 Compliance with Laws, Contracts, Licenses,
and Permits 28
8.11 Intentionally Omitted 28
8.12 Use of Proceeds 28
8.13 Concerning the Vessels 28
8.14 Additional Vessels 28
8.15 Further Assurances 29
9. CERTAIN NEGATIVE COVENANTS 29
9.1 Restrictions on Indebtedness 29
9.2 Restrictions on Liens 30
9.3 Restrictions on Investments 31
9.4 Distributions 32
9.5 Merger, Consolidation and Sale of Assets 32
9.5.1 Mergers and Acquisitions 32
9.5.2 Disposition of Assets 32
9.6 Compliance with Environmental Laws 33
9.7 Employee Benefit Plans 33
9.8 Business Activities 33
9.9 Change of Chief Executive Office or Corporate Name33
9.10 Fiscal Year 33
9.11 Transactions with Affiliates 33
10. FINANCIAL COVENANTS 34
10.1 Operating Cash Flow to Total Debt Service 34
10.2 Funded Debt to Tangible Net Worth Ratio 34
10.3 Minimum Tangible Net Worth 34
10.4 Collateral Value Ratio 34
11. CLOSING CONDITIONS 34
11.1 Delivery of Documents 34
11.2 Certified Copies of Charter Documents 34
11.3 Corporate Action 34
11.4 Incumbency Certificate 34
11.5 Validity of Liens 35
11.6 Perfection Certificates and UCC Search Results 35
11.7 Certificates of Insurance 35
11.8 Financial Condition 35
11.9 Opinions of Counsel 35
11.10 Payment of Fees and Expenses 35
11.11 Closing Certificate; Borrowing Notice 35
12 CONDITIONS TO ALL BORROWINGS 35
12.1 Representations True; No Event of Default 36
12.2 No Legal Impediment 36
12.3 Governmental Regulation 36
12.4 Proceedings and Documents 36
13. EVENTS OF DEFAULT; ACCELERATION; ETC. 36
13.1 Events of Default and Acceleration 36
13.2 Termination of Commitments 38
13.3 Remedies 39
13.4 Distribution of Collateral Proceeds 39
14. SETOFF 40
15. THE AGENT 40
15.1 Authorization 40
15.2 Employees and Agents 41
15.3 No Liability 41
15.4 No Representations 41
15.5 Payments 41
15.5.1 Payments to Agents 41
15.5.2 Distribution by Agent 41
15.5.3 Delinquent Banks 42
15.6 Holders of Notes 42
15.7 Indemnity 42
15.8 Agent as Bank 42
15.9 Resignation 42
15.10 Notification of Defaults and Events of Default 43
15.11 Duties in the Case of Enforcement 43
16. EXPENSES 43
17. INDEMNIFICATION 44
18. SURVIVAL OF COVENANTS, ETC. 44
19. ASSIGNMENT AND PARTICIPATION 44
19.1 Conditions to Assignment by Banks 44
19.2 Certain Representations and Warranties;
Limitations; Covenants 45
19.3 Register 45
19.4
19.5 Participations 46
19.6 Disclosure 46
19.7 Assignee or Participant Affiliated with
the Borrower 46
19.8 Miscellaneous Assignment Provisions 47
19.9 Assignment by Borrowers 47
20. NOTICES, ETC 47
21. GOVERNING LAW 48
22. HEADINGS 48
23. COUNTERPARTS 48
24. ENTIRE AGREEMENT, ETC. 48
25. WAIVER OF JURY TRIAL 48
26. CONSENTS, AMENDMENTS, WAIVERS, ETC. 48
27. SEVERABILITY 49
28. TRANSITIONAL ARRANGEMENTS 49
Exhibits:
Exhibit A Form of Note
Exhibit B Form of Loan Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Schedules:
Schedule 1.1 Banks; Commitments; Commitment Percentages;
Address for Notices; Closing Fee
Schedule 7.3 Title to Properties
Schedule 7.18 Environmental Matters
Schedule 7.19 Subsidiaries
Schedule 7.24(a) Ownership of Vessels; U.S. Flag Vessels;
Vanuatu Flag Vessels
Schedule 7.24(b) Vessels with Coast Guard Certification
Schedule 7.24(c) Classed Vessels
Schedule 9.1 Existing Indebtedness
Schedule 9.2 Existing Liens
Schedule 9.3 Existing Investments
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT, dated as of July 26, 1996
is by and among (a) TRICO MARINE OPERATORS, INC. ("Marine
Operators"), a Louisiana corporation having its principal place
of business and chief executive office at 610 Palm Avenue Houma,
Louisiana 70364, TRICO MARINE ASSETS, INC. ("Marine Assets"), a
Delaware corporation having its principal place of business and
chief executive office at 610 Palm Avenue, Houma, Louisiana 70364
(each of Marine Operators and Marine Assets, a "Borrower", and,
collectively, the "Borrowers"), (b) TRICO MARINE SERVICES, INC.
(the "Parent"), a Delaware corporation having its principal place
of business and chief executive office at 610 Palm Avenue, Houma,
Louisiana 70364, (c) THE FIRST NATIONAL BANK OF BOSTON, HIBERNIA
NATIONAL BANK, FIRST NATIONAL BANK OF COMMERCE, such other
lenders as may become parties to this Agreement from time to time
in accordance with the provisions hereof, and (d) THE FIRST
NATIONAL BANK OF BOSTON as agent for itself and the other
lenders.
WHEREAS, Marine Operators and Marine Assets have requested
the Banks to extend credit on a secured basis to Marine Operators
and Marine Assets in order to enable them to borrow upon the
terms and conditions set forth herein and on a revolving credit
basis Loans from time to time prior to the Maturity Date (as
defined herein); and
WHEREAS, the Banks are willing to make secured loans to
Marine Operators and Marine Assets upon the terms and conditions
set forth herein; and
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto hereby
agree as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions. The following terms shall have the
meanings set forth in this 1 or elsewhere in the provisions of
this Agreement referred to below:
Adjusted Revolver Outstandings. With respect to any fiscal
period, an amount equal to ten percent (10%) of the average daily
amount of Loans Outstanding on each day during such period.
Affiliate. Any Person that directly or indirectly controls,
is controlled by or under common control with another Person. A
Person shall be deemed to control another Person if the
controlling Person 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. The First National Bank of Boston acting as agent
for the Banks.
Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
Assignment and Acceptance. See 19.1 hereof.
Balance Sheet Date. December 31, 1995.
Banks. FNBB and the other lending institutions listed on
Schedule 1.1 hereto and any other Person who becomes an assignee
of any rights and obligations of a Bank pursuant to 19 hereof.
Base Rate. The higher of (a) the annual rate of interest
announced from time to time by FNBB at its head office in Boston,
Massachusetts, as its "base rate" and (b) one-half of one percent
(1/2%) above the Federal Funds Effective Rate. For the purposes
of this definition, "Federal Funds Effective Rate" shall mean,
for any day, the 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, as
published for such day (or if such day is not a Business Day, for
the next preceding Business Day) by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three funds brokers
of recognized standing selected by the Agent.
Base Rate Loan. Any Loan or portion thereof bearing
interest calculated by reference to the Base Rate.
Borrower(s). As defined in the preamble hereto.
Business Day. Any day on which banking institutions in
Boston, Massachusetts and New Orleans, Louisiana are open for the
transaction of banking business and, with respect to a Eurodollar
Rate Loan, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible
(such as patents, copyrights, trademarks, franchises and good
will); provided that Capital Assets shall not include any item
customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with
generally accepted accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred
by a Person in connection with the purchase or lease by such
Person of Capital Assets that would be required to be capitalized
and shown on the balance sheet of such Person in accordance with
generally accepted accounting principles.
Capitalized Leases. Leases under which a Person is the
lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the
balance sheet of the lessee or obligor in accordance with
generally accepted accounting principles.
CERCLA. See 7.18 hereof.
Closing Date. The first date on which the conditions set
forth in 11 have been satisfied, which in no event shall be
later than July 31, 1996.
Code. The Internal Revenue Code of 1986.
Collateral. Those Vessels listed on Schedule 7.24(a), and
Vessels acquired after the Closing Date in which a security
interest is required to be granted to the Agent under 8.14, and
the other property, rights and interests of the Borrowers and the
other Subsidiaries of the Parent that are or are intended to be
subject to the security interests and mortgages created by the
Security Documents.
Commitment. With respect to each Bank, the amount set forth
on Schedule 1.1 attached hereto as the amount of such Bank's
commitment to make Loans to the Borrowers, as the same may be
reduced from time to time pursuant to 2.3 hereof; or if such
commitment is terminated pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the
percentage set forth opposite its name on Schedule 1.1 attached
hereto with respect to Loans (as such percentage is adjusted by
the Agent from time to time to reflect assignments made pursuant
to 19 hereof).
Consolidated or consolidated. With reference to any term
defined herein, shall mean that term as applied to the accounts
of the Parent and its Subsidiaries, consolidated in accordance
with generally accepted accounting principles.
Conversion Request. A notice given by the Borrowers to the
Agent of the Borrowers' election to convert or continue a Loan in
accordance with 2.7.
Default. See 13 hereof.
Delinquent Bank. See 15.5.3 hereof.
Distribution. The declaration or payment of any dividend on
or in respect of any shares of any class of capital stock of any
Person, other than dividends payable solely in shares of common
stock of such Person; the purchase, redemption, or other
retirement of any shares of any class of capital stock of any
Person, directly or indirectly through a Subsidiary of such
Person or otherwise; the return of capital by any Person to its
shareholders as such; or any other distribution on or in respect
of any shares of any class of capital stock of such Person.
Dollars or $. Dollars in lawful currency of the United
States of America.
Drawdown Date. The date on which any Loan is made or is to
be made.
Eligible Assignee. Any of (a) a commercial bank or finance
company organized under the laws of the United States, or any
State thereof or the District of Columbia, and having total
assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia,
and having a net worth of at least $100,000,000, calculated in
accordance with generally accepted accounting principles; (c) a
commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation
and Development (the "OECD"), or a political subdivision of any
such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized
or another country which is also a member of the OECD; (d) the
central bank of any country which is a member of the OECD; and
(e) if, but only if, an Event of Default has occurred and is
continuing, any other bank, insurance company, commercial finance
company or other financial institution approved by the Agent,
such approval not to be unreasonably withheld, provided, in each
case, that such entity is a citizen of the United States within
the meaning of Section 2 of the Shipping Act of 1916, as amended.
Employee Benefit Plan. Any employee benefit plan within the
meaning of 3(2) of ERISA maintained or contributed to by a
Borrower or the Parent or any ERISA Affiliate, other than a
Multiemployer Plan.
Environmental Laws. See 7.18(a) hereof.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single
employer with a Borrower or the Parent under 414 of the Code.
ERISA Reportable Event. A reportable event with respect to
a Guaranteed Pension Plan within the meaning of 4043 of ERISA
and the regulations promulgated thereunder as to which the
requirement of notice has not been waived.
Eurocurrency Reserve Rate. For any day with respect to a
Eurodollar Rate Loan, the maximum rate (expressed as a decimal)
at which any lender subject thereto would be required to maintain
reserves under Regulation D of the Board of Governors of the
Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such
liabilities were outstanding. The Eurocurrency Reserve Rate
shall be adjusted automatically on and as of the effective date
of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks
are open for international business (including dealings in Dollar
deposits) in London or such other eurodollar interbank market as
may be selected by the Agent in its sole discretion acting in
good faith.
Eurodollar Lending Office. Initially, the Agent's Head
Office; thereafter, such other office of the Agent, if any, that
shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a
Eurodollar Rate Loan, the rate of interest equal to (a) the rate
per annum (rounded upwards to the nearest 1/16 of one percent) at
which the Agent's Eurodollar Lending Office is offered Dollar
deposits two (2) Eurodollar Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where
the eurodollar and foreign currency and exchange operations of
such Eurodollar Lending Office are customarily conducted at or
about 10:00 a.m., Boston time, for delivery on the first day of
such Interest Period for the number of days comprised therein and
in an amount comparable to the amount of the Eurodollar Rate Loan
to which such Interest Period applies, divided by (b) a number
equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loan. Any Loan or portion thereof bearing
interest calculated by reference to the Eurodollar Rate.
Event of Default. See 13 hereof.
Fee Letter. That certain letter agreement, dated as of the
Closing Date, between the Borrowers and the Agent, as the same
may be amended, supplemented, modified or restated and in effect
from time to time.
FNBB. The First National Bank of Boston in its individual
capacity.
Funded Debt. With respect to any Person and as at any date
of determination, the aggregate amount of all Indebtedness of
such Person for borrowed money (other than short-term trade
credit incurred in the ordinary course of business), the deferred
purchase price of assets (other than short-term trade credit
incurred in the ordinary course of business), and Capitalized
Leases.
generally accepted accounting principles. (a) When used in
10, whether directly or indirectly through reference to a
capitalized term used therein, means principles that are
consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and its predecessors in
effect on the Balance Sheet Date and (b) when used in general,
other than as provided above, means such principles as in effect
from time to time.
Guaranteed Pension Plan. Any employee pension benefit plan
within the meaning of 3(2) of ERISA maintained or contributed to
by a Borrower or the Parent or any ERISA Affiliate the benefits
of which are guaranteed on termination in full or in part by the
PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
HOS. HOS Marine Partners, Inc., a Delaware corporation.
HOS Guaranty. The guaranty agreement dated as of the
Closing Date, executed by HOS in favor of the Agent and each of
the Banks, in form and substance satisfactory to the Agent and
the Banks, as the same may be amended, supplemented, modified or
restated and in effect from time to time.
HOS Security Agreement. The security agreement dated as of
the Closing Date, between HOS and the Agent, in form and
substance satisfactory to the Agent and the Banks, as the same
may be amended, supplemented, modified or restated and in effect
from time to time.
HOS Vessel Mortgage. The first preferred vessel mortgage
with respect to the HOS Vessels, dated as of the Closing Date, in
form and substance satisfactory to the Agent and the Banks, as
the same may be amended, supplemented, modified or restated and
in effect from time to time.
HOS Vessels. Those Vessels owned by HOS, as set forth on
Schedule 7.24 hereto.
Indebtedness. As to any Person, without duplication, all
obligations, contingent and otherwise, that in accordance with
generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which
reference should be made by footnotes thereto, including in any
event and whether or not so classified: (a) all debt and similar
monetary obligations, whether direct or indirect; (b) all
liabilities secured by any mortgage, pledge, security interest,
lien, charge, or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured
thereby shall have been assumed; and (c) all guarantees,
endorsements and other contingent obligations whether direct or
indirect in respect of indebtedness of others, including any
obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or
to assure the owner of indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the
purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, and the
obligations, contingent and otherwise, to reimburse the issuer in
respect of any letters of credit.
Interest Payment Date. (a) As to any Base Rate Loan, the
last day of the calendar quarter commencing with the calendar
quarter that includes the Drawdown Date thereof; and (b) as to
any Eurodollar Rate Loan in respect of which the Interest Period
is (i) three (3) months or less, the last day of such Interest
Period and (ii) more than three (3) months, the date that is
three (3) months from the first day of such Interest Period and,
in addition, the last day of such Interest Period.
Interest Period. With respect to each Loan, (a) initially,
the period commencing on the Drawdown Date of such Loan and
ending on the last day of one of the periods set forth below, as
selected by the Borrowers in a Loan Request (i) for any Base Rate
Loan, the last day of the calendar quarter; and (ii) for any
Eurodollar Rate Loan, 1, 2, 3, or 6 months; and (b) thereafter,
each period commencing on the last day of the next preceding
Interest Period applicable to such Loan and ending on the last
day of one of the periods set forth above, as selected by the
Borrowers in a Conversion Request; provided that all of the
foregoing provisions relating to Interest Periods are subject to
the following:
(a) if any Interest Period with respect to a
Eurodollar Rate Loan would otherwise end on a day that is
not a Eurodollar Business Day, that Interest Period shall be
extended to the next succeeding Eurodollar Business Day
unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding
Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate
Loan would end on a day that is not a Business Day, that
Interest Period shall end on the next succeeding Business
Day;
(c) if the Borrowers shall fail to give notice as
provided in 2.7, the Borrowers shall be deemed to have
requested a conversion of the affected Eurodollar Rate Loan
to a Base Rate Loan and the continuance of all Base Rate
Loans as Base Rate Loans on the last day of the then current
Interest Period with respect thereto;
(d) any Interest Period that begins on the last
Eurodollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end
on the last Eurodollar Business Day of a calendar month; and
(e) any Interest Period relating to any Eurodollar
Rate Loan that would otherwise extend beyond the Maturity
Date shall end on the Maturity Date.
Investments. All expenditures made and all liabilities
incurred (contingently or otherwise) for the acquisition of stock
or Indebtedness of, or for loans, advances, capital contributions
or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness), or
obligations of, any Person. In determining the aggregate amount
of Investments outstanding at any particular time: (a) the amount
of any Investment represented by a guaranty shall be taken at not
less than the principal amount of the obligations guaranteed and
still outstanding; (b) there shall be included as an Investment
all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (c) there
shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase,
redemption, retirement, repayment, liquidating dividend or
liquidating distribution); and (d) there shall not be deducted
from the aggregate amount of Investments any decrease in the
value thereof.
Loan Documents. This Agreement, the Notes, the Security
Documents, and the Fee Letter.
Loan Request. See 2.6 hereof.
Loans. Loans made or to be made by the Banks to the
Borrowers pursuant to 2 hereof.
Majority Banks. As of any date of determination, the Banks
having Commitment Percentages aggregating to at least sixty-six
and two-thirds percent (66-2/3%) on such date.
Marine Assets. As defined in the preamble.
Marine Operators. As defined in the preamble.
Maturity Date. June 30, 1999.
Multiemployer Plan. Any multiemployer plan within the
meaning of 3(37) of ERISA maintained or contributed to by a
Borrower, the Parent or any ERISA Affiliate.
Net Income. The consolidated net income (or deficit) of the
Parent and its Subsidiaries, after deduction of all expenses,
taxes and other proper charges, determined in accordance with
generally accepted accounting principles, after eliminating
therefrom all extraordinary nonrecurring items of income or loss.
Notes. See 2.4.
Obligations. All indebtedness, obligations and liabilities
of the Borrowers to any of the Banks and the Agent, individually
or collectively, existing on the date of this Agreement or
arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract,
operation of law or otherwise, in each case arising or incurred
under or related to this Agreement or any of the other Loan
Documents or any agreements with respect to interest rate swaps,
caps, collars or other agreements protecting the Borrowers
against fluctuations in interest rates between the Borrowers and
any of the Banks or in respect of any of the Loans or any of the
Notes or other instruments at any time evidencing any thereof.
Operating Cash Flow. With respect to any Person and any
particular fiscal period, an amount equal to (a) such Person's
Net Income for such period, plus (b) all interest expense for
such period, plus (c) all income tax expense for such period,
plus (d) all depreciation and amortization charges for such
period, less (e) without duplication, the aggregate amount of
cash taxes paid by such Person with respect to such period, less
(f) that portion of Capital Expenditures made by such Person
during such period for the maintenance, repair, or dry-docking
of, and inspection costs relating to, Capital Assets.
Outstanding. With respect to any Loan, the aggregate unpaid
principal thereof as of any date of determination.
Parent Guaranty. The guaranty agreement dated as of the
Closing Date, from the Parent to the Agent and each of the Banks,
as amended, supplemented, modified or restated with the consent
of the Banks and in effect from time to time.
PBGC. The Pension Benefit Guaranty Corporation created by
4002 of ERISA and any successor entity or entities having
similar responsibilities.
Perfection Certificates. The Perfection Certificates as
defined in the Security Agreement.
Permitted Liens. Liens, security interests and other
encumbrances permitted by 9.2 hereof.
Person. Any individual, corporation, partnership, limited
partnership, limited liability company, limited liability
partnership, trust, unincorporated association, business, or
other legal entity, and any government or any governmental agency
or political subdivision thereof.
Record. The grid attached to a Note, or the continuation of
such grid, or any other similar record, including computer
records, maintained by any Bank with respect to any Loan referred
to in such Note.
Security Agreement. The Security Agreement dated as of the
Closing Date among the Borrowers and the Agent, as the same may
be amended, supplemented, modified or restated and in effect from
time to time.
Security Documents. The Security Agreement, the U.S. Vessel
Mortgage, the Vanuatu Vessel Mortgage, the Parent Guaranty, the
HOS Guaranty, the HOS Security Agreement, the HOS Vessel
Mortgage, all security agreements and guaranties delivered to the
Agent and the Banks pursuant to 9.3(e) hereof, and all
instruments and documents required to be delivered pursuant
thereto, in each case, as the same may be amended and in effect
from time to time.
Subsidiary. Any corporation, association, trust, or other
business entity of which the designated parent shall at any time
own directly or indirectly through a Subsidiary or Subsidiaries
at least a majority (by number of votes) of the outstanding
voting stock or other voting equity interests.
SWATH Vessel. The small waterline area twin hull crew boat
to be built for Marine Assets.
Tangible Net Worth. With respect to any Person, the excess
of Total Assets over Total Liabilities, and less the sum of:
(a) the total book value of all assets of such Person
properly classified as intangible assets under generally
accepted accounting principles, including such items as good
will, the purchase price of acquired assets in excess of the
fair market value thereof, trademarks, trade names, service
marks, brand names, copyrights, patents and licenses, and
rights with respect to the foregoing; plus
(b) with respect to the Borrowers, all amounts
representing any write-up in the book value of any assets of
a Borrower resulting from a revaluation thereof subsequent
to the Closing Date; plus
(c) to the extent otherwise includable in the
computation of Tangible Net Worth, any subscriptions
receivable.
Total Assets. All assets of a Person determined in
accordance with generally accepted accounting principles.
Total Debt Service. For any fiscal period of any Person, an
amount equal to (a) the Total Financial Obligations of such
Person for such period plus (b) the Total Interest Expense of
such Person for such period plus (c) Adjusted Revolver
Outstandings of such Person for such period, in each case
determined in accordance with generally accepted accounting
principles consistently applied.
Total Financial Obligations. With respect to any fiscal
period and any Person, an amount equal to the sum of all
principal payments (including the principal portion of
Capitalized Lease payments) on Funded Debt that become due and
payable or that are to become due and payable during such fiscal
period pursuant to any agreement or instrument to which such
Person is a party. Demand obligations shall be deemed to be due
and payable during any fiscal period during which such
obligations are outstanding.
Total Interest Expense. For any period and with respect to
any Person, the aggregate amount of interest required to be paid
in cash by such Person during such period on all Indebtedness of
such Person outstanding during all or any part of such period,
whether such interest was or is required to be reflected as an
item of expense or capitalized, including payments consisting of
interest in respect of Capitalized Leases and including
commitment fees, agency fees, facility fees and similar fees or
expenses in connection with the borrowing of money, but, with
respect to the Borrowers, excluding the Closing Fee.
Total Liabilities. All liabilities of any Person determined
in accordance with generally accepted accounting principles.
Total Commitment. The sum of the Commitments of the Banks,
as in effect from time to time.
Type. As to any Loan, its nature as a Base Rate Loan or a
Eurodollar Rate Loan.
U.S. Vessel Mortgage. The first preferred vessel mortgage
with respect to the U.S. Flag Vessels (other than the HOS
Vessels), in form and substance satisfactory to the Agent and the
Banks, dated as of the Closing Date, as the same may be amended,
supplemented, modified or restated and in effect from time to
time.
Vanuatu Vessel Mortgage. The first preferred vessel
mortgage with respect to the Vanuatu Flag Vessels, in form and
substance satisfactory to the Agent and the Banks, dated as of
the Closing Date, as the same may be amended, supplemented,
modified or restated and in effect from time to time.
Vessel Mortgages. Collectively, the U.S. Vessel Mortgage,
the Vanuatu Vessel Mortgage, the HOS Vessel Mortgage, and any
other vessel mortgage from any of the Borrowers or any other
Subsidiary of the Parent to the Agent for the benefit of the
Banks.
Vessel(s). Collectively, all vessels owned by any of the
Borrowers or, as the case may be, HOS, from time to time,
including, without limitation those vessels listed on Schedule
7.24(a), and individually, any of such vessels.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented
from time to time in accordance with its terms and the terms of
this Agreement, (b) the singular includes the plural and the
plural includes the singular, (c) a reference to any law includes
any amendment or modification to such law, (d) a reference to any
Person includes its permitted successors and permitted assigns,
(e) accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting
principles applied on a consistent basis by the accounting entity
to which they refer, (f) the words "include", "includes" and
"including" are not limiting, (g) all terms not specifically
defined herein or by generally accepted accounting principles,
which terms are defined in the Uniform Commercial Code as in
effect in Massachusetts, have the meanings assigned to them
therein, (h) reference to a particular "" refers to that section
of this Agreement unless otherwise indicated, (i) the words
"herein", "hereof", "hereunder" and words of like import shall
refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement, and (j) the phrase
"jointly and severally" as used herein shall mean, for purposes
of Louisiana law, "jointly and severally and solidarily".
2. THE REVOLVING CREDIT FACILITY.
2.1. Commitment to Lend. Subject to the terms and
conditions set forth in this Agreement, each of the Banks
severally agrees to lend to the Borrowers and the Borrowers may
borrow, repay, and reborrow from time to time between the Closing
Date and the Maturity Date upon notice by the Borrowers to the
Agent given in accordance with 2.6, such sums as are requested
by the Borrowers up to a maximum aggregate principal amount
outstanding (after giving effect to all amounts requested) at any
one time equal to such Bank's Commitment, provided that the sum
of the outstanding amount of the Loans (after giving effect to
all amounts requested) shall not at any time exceed the Total
Commitment. The Loans shall be made pro rata in accordance with
each Bank's Commitment Percentage. Each request for a Loan
hereunder shall constitute a representation and warranty by the
Borrowers that the conditions set forth in 11 and 12 hereof, in
the case of the initial Loans to be made on the Closing Date, and
12 hereof, in the case of all other Loans, have been satisfied
on the date of such request.
2.2. Commitment Fee. The Borrowers hereby jointly and
severally agree to pay to the Agent for the accounts of the Banks
in accordance with their respective Commitment Percentages a
commitment fee (the "Commitment Fee") calculated at the rate of
three-eighths of one percent (3/8%) per annum on the average
daily amount during each calendar quarter or portion thereof from
Closing Date to the Maturity Date by which the Total Commitment
exceeds the outstanding amount of Loans during such calendar
quarter. The Commitment Fee shall be payable quarterly in
arrears on the last day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first
such date following the Closing Date, with a final payment on the
Maturity Date or any earlier date on which the Commitments shall
terminate.
2.3. Reduction of Total Commitment. The Borrowers shall
have the right at any time and from time to time upon five (5)
Business Days' prior written notice to the Agent to reduce by
$250,000 or a larger integral multiple of $100,000 or terminate
entirely the unborrowed portion of the Total Commitment,
whereupon the Commitments of the Banks shall be reduced pro rata
in accordance with their respective Commitment Percentages of the
amount specified in such notice or, as the case may be,
terminated. Promptly after receiving any notice of the Borrowers
delivered pursuant to this 2.3, the Agent will notify the Banks
of the substance thereof. Upon the effective date of any such
reduction or termination, the Borrowers shall pay to the Agent
for the respective accounts of the Banks the full amount of any
Commitment Fee then accrued on the amount of the reduction,
provided that so long as the Total Commitment is not terminated
entirely, the Borrower may pay any such accrued Commitment Fee on
the last Business Day of the then-current fiscal quarter. No
reduction of the Commitments may be reinstated.
2.4. The Notes. The Loans shall be evidenced by separate
promissory notes of the Borrowers in substantially the form of
Exhibit A hereto (each a "Note"), dated as of the Closing Date
and completed with appropriate insertions. One Note shall be
payable to the order of each Bank in a principal amount equal to
such Bank's Commitment or, if less, the outstanding amount of all
Loans made by such Bank, plus interest accrued thereon, as set
forth below. The Borrowers irrevocably authorize each Bank to
make or cause to be made, at or about the time of the Drawdown
Date of any Loan or at the time of receipt of any payment of
principal on such Bank's Note, an appropriate notation on such
Bank's Record reflecting the making of such Loan or (as the case
may be) the receipt of such payment. The outstanding amount of
the Loans set forth on such Bank's Record shall be prima facie
evidence of the principal amount thereof owing and unpaid to such
Bank, but the failure to record, or any error in so recording,
any such amount on such Bank's Record shall not limit or
otherwise affect the joint and several obligations of the
Borrowers hereunder or under any Note to make payments of
principal of or interest on any Note when due.
2.5. Interest on Loans. Except as otherwise provided in
5.8 hereof,
(a) Each Base Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending
on the last day of the Interest Period with respect thereto
at the rate per annum equal to the Base Rate plus three-
quarters of one percent (_%). Any change in the interest
rate resulting from a change in the Base Rate is to be
effective at the beginning of the day of such change in the
Base Rate. The Agent will give the Banks and the Borrowers
prompt notice in writing of any change in the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for
the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect
thereto at the rate per annum equal to the Eurodollar Rate
for such Interest Period plus one and one-half percent
(1 1/2%).
The Borrowers jointly and severally promise to pay interest on
the outstanding amount of the Loans on each Interest Payment Date
with respect thereto.
2.6. Requests for Loans. The Borrowers shall give to the
Agent written notice in the form of Exhibit C hereto (or
telephonic notice confirmed in a writing in the form of Exhibit C
hereto) of each Loan requested hereunder (a "Loan Request") no
less than (a) one (1) Business Day prior to any Drawdown Date of
any Base Rate Loan or (b) three (3) Eurodollar Business Days
prior to any Drawdown Date of any Eurodollar Rate Loan. Each
such notice shall specify (i) the principal amount of the Loan
requested, (ii) the proposed Drawdown Date of such Loan, (iii)
the Interest Period for such Loan, and (iv) the Type of such
Loan. Promptly upon receipt of any such notice, the Agent shall
notify each of the Banks thereof. Each such notice shall be
irrevocable and binding on the Borrowers and shall obligate the
Borrowers to accept the Loan requested from the Banks on the
proposed Drawdown Date. Each Loan Request shall be in a minimum
aggregate amount of $250,000 or a larger integral multiple of
$100,000.
2.7. Conversion Options.
2.7.1 Conversion to Different Type of Loan.
The Borrowers may elect from time to time to convert any
Outstanding Loan to a Loan of another Type, provided that
(a) with respect to any such conversion of a Eurodollar Rate
Loan to a Base Rate Loan, (i) the Borrowers shall give the
Agent at least two (2) Business Days prior written notice of
such election and (ii) such conversion shall only be made on
the last day of the Interest Period with respect thereto;
(b) with respect to any such conversion of a Base Rate Loan
to a Eurodollar Rate Loan, the Borrowers shall give the
Agent at least three (3) Eurodollar Business Days prior
written notice of such election and (c) no Loan may be
converted into a Eurodollar Rate Loan when any Default or
Event of Default has occurred and is continuing. On the
date on which such conversion is being made each Bank shall
take such action as is necessary to transfer such Loans to
its Domestic Lending Office or its Eurodollar Lending
Office, as the case may be. All or any part of Outstanding
Loans of any Type may be converted as provided herein,
provided that partial conversions shall be in an aggregate
principal amount of $250,000 or a whole multiple of $100,000
in excess thereof. Each Conversion Request relating to the
conversion of a Loan to a Eurodollar Rate Loan shall be
irrevocable by the Borrowers.
2.7.2. Continuation of Type of Loan.
Any Loans of any Type may be continued as such upon the
expiration of an Interest Period with respect thereto by
compliance by the Borrowers with the notice provisions
contained in 2.7.1; provided that no Eurodollar Rate Loan
may be continued as such when any Default or Event of
Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Loan on the last day
of the first Interest Period relating thereto ending during
the continuance of any Default or Event of Default of which
the officers of the Agent active upon the Borrowers' account
have actual knowledge. In the event that the Borrowers fail
to provide any such notice with respect to the continuation
of any Eurodollar Rate Loan as such, then such Eurodollar
Rate Loan shall be automatically converted to a Base Rate
Loan on the last day of the first Interest Period relating
thereto.
2.7.3. Eurodollar Rate Loans.
Any conversion to or from Eurodollar Rate Loans shall be in such
amounts and be made pursuant to such elections so that,
after giving effect thereto, the aggregate principal amount
of all Eurodollar Rate Loans having the same Interest Period
shall not be less than $250,000 or a whole multiple of
$100,000 in excess thereof.
2.8. Funds for Loans.
2.8.1. Funding Procedures. Not later than 11 o'clock
a.m. (Boston time) on the proposed Drawdown Date of any
Loans, each of the Banks will make available to the Agent,
at its Head Office, in immediately available funds, the
amount of such Bank's Commitment Percentage of the amount of
the requested Loans. Upon receipt from each Bank of such
amount, and upon receipt of the documents required by 11
and 12 hereof and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Agent will
make available to the Borrowers the aggregate amount of such
Loans made available to the Agent by the Banks. The failure
or refusal of any Bank to make available to the Agent at the
aforesaid time and place on any Drawdown Date the amount of
its Commitment Percentage of the requested Loans shall not
relieve any other Bank from its several obligation hereunder
to make available to the Agent the amount of such other
Bank's Commitment Percentage of any requested Loans.
2.8.2. Advances by Agent. The Agent may, unless
notified to the contrary by any Bank prior to a Drawdown
Date, assume that such Bank has made available to the Agent
on such Drawdown Date the amount of such Bank's Commitment
Percentage of the Loans to be made on such Drawdown Date,
and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the
Borrowers a corresponding amount. If any Bank makes
available to the Agent such amount on a date after such
Drawdown Date, such Bank shall pay to the Agent on demand an
amount equal to the product of (a) the average computed for
the period referred to in clause (c) below, of the weighted
average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such
period, times (b) the amount of such Bank's Commitment
Percentage of such Loans, times (c) a fraction, the
numerator of which is the number of days that elapse from
and including such Drawdown Date to the date on which the
amount of such Bank's Commitment Percentage of such Loans
shall become immediately available to the Agent, and the
denominator of which is 365. A statement of the Agent
submitted to such Bank with respect to any amounts owing
under this paragraph shall be prima facie evidence of the
amount due and owing to the Agent by such Bank. If the
amount of such Bank's Commitment Percentage of such Loans is
not made available to the Agent by such Bank within three
(3) Business Days following such Drawdown Date, the Agent
shall be entitled to recover such amount from the Borrowers
on demand, with interest thereon at the rate per annum
applicable to the Loans made on such Drawdown Date.
3. REPAYMENT OF THE LOANS.
3.1. Maturity. The Borrowers hereby jointly and severally
promise to pay on the Maturity Date, and there shall become
absolutely due and payable on the Maturity Date, all of the Loans
outstanding on such date, together with any and all accrued and
unpaid interest thereon.
3.2. Mandatory Repayments of Loans. If at any time the
sum of the outstanding amount of the Loans exceeds the Total
Commitment, then the Borrowers shall immediately pay the amount
of such excess to the Agent for application to the Loans.
3.3. Optional Repayments of Loans. The Borrowers shall
have the right, at their election, to repay the outstanding
amount of the Loans, as a whole or in part, at any time without
penalty or premium, provided that the full or partial prepayment
of the Outstanding amount of any Eurodollar Rate Loan pursuant to
this 3.3 may be made only on the last day of the Interest Period
relating thereto. The Borrowers shall give the Agent, no later
than 10:00 a.m., Boston time, at least two (2) Business Days'
prior written notice, of any proposed repayment of Base Rate
Loans pursuant to this 3.3, and three (3) Eurodollar Business
Days notice of any proposed repayment of Eurodollar Rate Loans
pursuant to this 3.3, in each case specifying the proposed date
of payment of Loans and the principal amount to be paid. Each
such partial prepayment of the Loans shall be accompanied by the
payment of accrued interest on the principal repaid to the date
of payment and shall be in the minimum principal amount of
$250,000 or a larger integral multiple of $100,000. Each partial
prepayment shall be allocated among the Banks, in proportion, as
nearly as practicable, to the respective unpaid principal amount
of each Bank's Note, with adjustments to the extent practicable
to equalize any prior repayments not exactly in proportion.
4. [Intentionally Omitted.]
5. CERTAIN GENERAL PROVISIONS.
5.1. Closing Fee. The Borrowers joint and severally agree
to pay a fee equal to $62,500 (the "Closing Fee") on the Closing
Date to the Agent for the accounts of the Banks in accordance
with Schedule 1.1 hereto.
5.2. Agent's Fees. The Borrowers shall pay to the Agent
for its own account on October 29, 1996 and on each anniversary
thereof, an Agent's fee in the amount set forth as the Agent's
fee in the Fee Letter (the "Agent's Fee").
5.3. Funds for Payments.
5.3.1. Payments to Agent. All payments of principal,
interest, the Commitment Fee and any other amounts due
hereunder or under any of the other Loan Documents shall be
made to the Agent, for the respective accounts of the Banks
and the Agent, at the Agent's head office or at such other
location in the Boston, Massachusetts, area that the Agent
may from time to time designate, in each case in immediately
available funds.
5.3.2. No Offset, Etc. All payments by the Borrowers
hereunder and under any of the other Loan Documents shall be
made without setoff or counterclaim and free and clear of
and without deduction for any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory
loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority
therein unless the Borrowers are compelled by law to make
such deduction or withholding. If any such obligation is
imposed upon the Borrowers with respect to any amount
payable by them hereunder or under any of the other Loan
Documents, the Borrowers will pay to the Agent, for the
account of the Banks or (as the case may be) the Agent, on
the date on which such amount is due and payable hereunder
or under such other Loan Document, such additional amount in
Dollars as shall be necessary to enable the Banks or the
Agent to receive the same net amount which the Banks or the
Agent would have received on such due date had no such
obligation been imposed upon the Borrowers. The Borrowers
will deliver promptly to the Agent certificates or other
valid vouchers for all taxes or other charges deducted from
or paid with respect to payments made by the Borrowers
hereunder or under such other Loan Document.
5.4. Computations. All computations of interest on the
Loans and of the Commitment Fee shall be based on a 360-day year
and paid for the actual number of days elapsed. Except as
otherwise provided in the definition of the term "Interest
Period" with respect to Eurodollar Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on
a day that is not a Business Day, the due date for such payment
shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension. The outstanding
amount of the Loans as reflected on the Records from time to time
shall be considered correct and binding on the Borrowers unless
within fifteen (15) Business Days after receipt of any notice by
the Agent or any of the Banks of such outstanding amount, the
Agent or such Bank shall notify the Borrowers to the contrary.
5.5. Additional Costs, Etc. If any present or future
applicable law, which expression, as used herein, includes
statutes, rules and regulations thereunder and interpretations
thereof by any competent court or by any governmental or other
regulatory body or official charged with the administration or
the interpretation thereof and requests, directives, instructions
and notices at any time or from time to time hereafter made upon
or otherwise issued to any Bank or the Agent by any central bank
or other fiscal, monetary or other authority (whether or not
having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy,
impost, duty, charge, fee, deduction or withholding of any
nature with respect to this Agreement, the other Loan
Documents, such Bank's Commitment, or the Loans (other than
taxes based upon or measured by the income or profits of
such Bank or the Agent), or
(b) materially change the basis of taxation (except
for changes in taxes on income or profits) of payments to
any Bank of the principal of or the interest on any Loans or
any other amounts payable to any Bank or the Agent under
this Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other
than to the extent specifically provided for elsewhere in
this Agreement) any special deposit, reserve, assessment,
liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or
commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other
conditions or requirements with respect to this Agreement,
the other Loan Documents, the Loans, such Bank's Commitment,
or any class of loans or commitments of which any of the
Loans or such Bank's Commitment forms a part,
and the result of any of the foregoing is:
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining
any of the Loans or such Bank's Commitment, or
(ii) to reduce the amount of principal, interest
or other amount payable to such Bank or the Agent
hereunder on account of such Bank's Commitment or any
of the Loans, or
(iii) to require such Bank or the Agent to
make any payment or to forego any interest or other sum
payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or
deemed received by such Bank or the Agent from the
Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made
by such Bank or (as the case may be) the Agent at any time and
from time to time and as often as the occasion therefor may
arise, pay to such Bank or the Agent such additional amounts as
will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other
sum.
5.6. Capital Adequacy. If after the date hereof any Bank
or the Agent determines that (a) the adoption of or change in any
law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) regarding
capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (b)
compliance by such Bank or the Agent or any corporation
controlling such Bank or the Agent with any law, governmental
rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital
adequacy, has the effect of reducing the return on such Bank's or
the Agent's commitment with respect to any Loans to a level below
that which such Bank or the Agent could have achieved but for
such adoption, change or compliance (taking into consideration
such Bank's or the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's
capital) by any amount deemed by such Bank or (as the case may
be) the Agent to be material, then such Bank or the Agent may
notify the Borrowers of such fact. To the extent that the amount
of such reduction in the return on capital is not reflected in
the Base Rate, the Borrowers jointly and severally agree to pay
such Bank or (as the case may be) the Agent for the amount of
such reduction in the return on capital as and when such
reduction is determined upon presentation by such Bank or (as the
case may be) the Agent of a certificate in accordance with 5.7
hereof. Each Bank shall allocate such cost increases among its
customers in good faith and on an equitable basis.
5.7. Certificate. A certificate setting forth any
additional amounts payable pursuant to 5.5 or 5.6 and a brief
explanation of such amounts which are due, submitted by any Bank
or the Agent to the Borrowers, shall be conclusive, absent
manifest error, that such amounts are due and owing.
5.8. Interest On Overdue Amounts.
Overdue principal and (to the extent permitted by applicable law)
interest on the Loans and all other overdue amounts payable
hereunder or under any of the other Loan Documents shall bear
interest compounded monthly and payable on demand at a rate per
annum equal to two percent (2%) above the Base Rate until such
amount shall be paid in full (after as well as before judgment).
5.9. Concerning Joint and Several Liability of the
Borrowers.
(a) Each of the Borrowers is accepting joint and
several liability hereunder in consideration of the
financial accommodation to be provided by the Banks under
this Agreement, for the mutual benefit, directly and
indirectly, of each of the Borrowers and in consideration of
the undertakings of each of the Borrowers to accept joint
and several liability for the obligations of each of them.
(b) Each of the Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a
surety but also as a co-debtor, joint and several liability
with the other Borrower with respect to the payment and
performance of all of the Obligations arising under this
Agreement, it being the intention of the parties hereto that
all the Obligations shall be the joint and several
obligations of both of the Borrowers without preferences or
distinction among them.
(c) If and to the extent that either of the Borrowers
shall fail to make any payment with respect to any of the
obligations hereunder as and when due or to perform any of
such obligations in accordance with the terms thereof, then
in each such event, the other Borrower will make such
payment with respect to, or perform, such obligation.
(d) The obligations of each Borrower under the
provisions of this 5.9 constitute full recourse obligations
of such Borrower, enforceable against it to the full extent
of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other
circumstances whatsoever.
(e) Except as otherwise expressly provided herein,
each Borrower hereby waives notice of acceptance of its
joint and several liability, notice of any and all Loans
made under this Agreement, notice of occurrence of any Event
of Default, or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted
by the Banks under or in respect of any of the Obligations
hereunder, any requirement of diligence and, generally, all
demands, notices and other formalities of every kind in
connection with this Agreement. Each Borrower hereby
assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the
Obligations hereunder, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence
by the Banks at any time or times in respect of any default
by any Borrower in the performance or satisfaction of any
term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by the Banks in
respect of any of the Obligations hereunder, and the taking,
addition, substitution or release, in whole or in part, at
any time or times, of any security for any of such
Obligations or the addition, substitution or release, in
whole or in part, of any Borrower. Without limiting the
generality of the foregoing, each Borrower assents to any
other action or delay in acting or failure to act on the
part of the Banks, including, without limitation, any
failure strictly or diligently to assert any right or to
pursue any remedy or to comply fully with applicable laws or
regulations thereunder which might, but for the provisions
of this 5.9, afford grounds for terminating, discharging or
relieving such Borrower, in whole or in part, from any of
its obligations under this 5.9, it being the intention of
each Borrower that, so long as any of the Obligations
hereunder remain unsatisfied, the obligations of such
Borrower under this 5.9 shall not be discharged except by
performance and then only to the extent of such performance.
The Obligations of each Borrower under this 5.9 shall not
be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or
similar proceeding with respect to any reconstruction or
similar proceeding with respect to any Borrower or any Bank.
The joint and several liability of the Borrowers hereunder
shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of
formation of any Borrower or any Bank.
(f) The provisions of this 5.9 are made for the
benefit of the Banks and their successors and assigns, and
may be enforced by them from time to time against either of
the Borrowers as often as occasion therefor may arise and
without requirement on the part of the Banks first to
marshall any of their claims or to exercise any of their
rights against the other Borrower or to exhaust any remedies
available to them against the other Borrower or to resort to
any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The
provisions of this 5.9 shall remain in effect until all the
Obligations hereunder shall have been paid in full or
otherwise fully satisfied. If at any time, any payment, or
any part thereof, made in respect of any of the Obligations,
is rescinded or must otherwise be restored or returned by
the Banks upon the insolvency, bankruptcy or reorganization
of the Borrowers, or otherwise, the provisions of this 5.9
will forthwith be reinstated in effect, as though such
payment had not been made.
5.10. Inability
to Determine Eurodollar Rate.
In the event that, prior to the commencement of any Interest
Period relating to any Eurodollar Rate Loan, the Agent shall
determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar
Rate that would otherwise determine the rate of interest to be
applicable to any Eurodollar Rate Loan during any Interest
Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the
Borrowers and the Banks) to the Borrowers. In such event (a)
each Loan Request or Conversion Request with respect to each
Eurodollar Rate Loan shall be automatically withdrawn and shall
be deemed a request for a Base Rate Loan, (b) each Eurodollar
Rate Loan will automatically, on the last day of the then current
Interest Period thereof, become a Base Rate Loan, and (c) the
obligations of the Banks to make Eurodollar Rate Loans shall be
suspended until the Agent or the Majority Banks determine that
the circumstances giving rise to such suspension no longer exist,
whereupon the Agent shall so notify the Borrowers.
5.11. Illegality.
Notwithstanding any other provisions herein, if any present or
future law, regulation, treaty or directive or the interpretation
or application thereof shall make it unlawful for the Banks to
make or maintain Eurodollar Rate Loans, the Agent shall forthwith
give notice of such circumstances to the Borrowers and thereupon
(a) the commitment of the Banks to make Eurodollar Rate Loans or
convert Loans of another Type to Eurodollar Rate Loans shall
forthwith be suspended and (b) the Loans then Outstanding as
Eurodollar Rate Loans, if any, shall be converted automatically
to Base Rate Loans on the last day of each Interest Period
applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law. The Borrowers hereby agree to
promptly pay the Agent, for the pro rata accounts of the Banks,
upon demand, any additional amounts necessary to compensate the
Banks for any costs incurred by the Banks in making any
conversion in accordance with this 5.11, including any interest
or fees payable by the Banks to lenders of funds obtained by it
in order to make or maintain its Eurodollar Rate Loans hereunder.
5.12. Indemnity.
Except to the extent of breakage costs arising from a prepayment
of a Eurodollar Rate Loan as a result of an event set forth in
5.10, the Borrowers agree to indemnify the Banks and to hold the
Banks harmless from and against any loss, cost or expense
(including loss of anticipated profits) that the Banks may
sustain or incur as a consequence of (a) default by the Borrowers
in payment of the principal amount of or any interest on any
Eurodollar Rate Loans as and when due and payable, including any
such loss or expense arising from interest or fees payable by the
Banks to lenders of funds obtained by it in order to maintain its
Eurodollar Rate Loans, (b) default by the Borrowers in making a
borrowing after the Borrowers have given (or are deemed to have
given) a Loan Request or a Conversion Request relating thereto in
accordance with 2.6 or 2.7 or (c) the making of any payment on
a Eurodollar Rate Loan or the making of any conversion of any
such Loan to a Base Rate Loan on a day that is not the last day
of the applicable Interest Period with respect thereto, including
interest or fees payable by any Bank to lenders of funds obtained
by it in order to maintain any such Loans.
6. SECURITY. (a) The Obligations shall be secured by a
perfected first priority security interest (subject only to
Permitted Liens entitled to priority under applicable law) (i) in
those Vessels listed on Schedule 7.24(a) and on additional
Vessels as may be required by 8.14 and (ii) on certain other
assets of the Borrowers relating to such Vessels, including,
without limitation, accounts, chattel paper, contract rights,
insurance proceeds, inventory, equipment, general intangibles and
goods, whether now owned or hereafter acquired, pursuant to the
terms of the Security Documents to which either or both of the
Borrowers are party.
(b) The Obligations shall also be guaranteed equally and
ratably by the Parent Guaranty.
(c) The Obligations shall also be guaranteed equally and
ratably by the HOS Guaranty, which Guaranty shall be secured by
the HOS Security Agreement and the HOS Vessel Mortgage.
7. REPRESENTATIONS AND WARRANTIES. The Parent and each of
the Borrowers jointly and severally represent and warrant to the
Banks and the Agent as follows:
7.1. Corporate Authority.
7.1.1. Incorporation; Good Standing. Each of the
Parent and the Borrowers and each of the Parent's other
Subsidiaries (a) is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation, (b) has all requisite corporate power to own
its property and conduct its business as now conducted and
as presently contemplated, and (c) is in good standing as a
foreign corporation and is duly authorized to do business in
each jurisdiction where such qualification is necessary
except where a failure to be so qualified would not have a
material adverse effect on the business, assets or financial
condition of the Parent and its Subsidiaries, taken as a
whole.
7.1.2. Authorization. The execution, delivery and
performance of this Agreement and the other Loan Documents
and the transactions contemplated hereby and thereby (a) are
within the corporate authority of each of the Borrowers and
the Parent, (b) have been duly authorized by all necessary
corporate proceedings by each of the Borrowers and the
Parent, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or
regulation to which either of the Borrowers or the Parent is
subject or any judgment, order, writ, injunction, license or
permit applicable to either of the Borrowers or the Parent
and (d) do not conflict with any provision of the corporate
charter or bylaws of, or any agreement or other instrument
binding upon, either of the Borrowers or the Parent.
7.1.3. Enforceability. The execution and delivery of
this Agreement and the other Loan Documents to which it is a
party will result in valid and legally binding obligations
of each of the Borrowers and the Parent enforceable against
each such Person in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally
the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific
performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor
may be brought.
7.2. Governmental Approvals. The execution, delivery and
performance by each of the Borrowers and the Parent of this
Agreement and the other Loan Documents to which such Person is a
party and the transactions contemplated hereby and thereby do not
and will not require the approval or consent of, or filing with,
any governmental agency or authority other than those already
obtained.
7.3. Title to Properties; Leases. Except as indicated on
Schedule 7.3 attached hereto, the Parent and its Subsidiaries own
all of the assets reflected in the consolidated balance sheet of
the Parent and its Subsidiaries as at the Balance Sheet Date
(except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), subject to no
rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other
encumbrances except Permitted Liens.
7.4. Financial Statements. There have been furnished to
each of the Banks a consolidated balance sheet of the Parent and
its Subsidiaries as at the Balance Sheet Date, and consolidated
statements of income and cash flows for the fiscal year then
ended, certified by Coopers & Lybrand LLP. Such balance sheet
and statements of income and cash flows were prepared in
accordance with generally accepted accounting principles and
fairly present the financial condition of the Parent and its
Subsidiaries as of the close of business on the Balance Sheet
Date and the results of operations for the fiscal year then
ended. There are no liabilities, contingent or otherwise, of the
Parent or any of its Subsidiaries, as of the Balance Sheet Date,
that would in accordance with generally accepted accounting
principles be required to be disclosed on a balance sheet or
footnotes thereto, which were not disclosed in such balance sheet
and the notes related thereto.
7.5. No Material Changes; Solvency.
(a) Since the Balance Sheet Date there have been no changes
in the business or financial condition or results of operations
of the Parent and its Subsidiaries which have been, either
individually or in the aggregate, materially adverse to the
Parent and its Subsidiaries, taken as a whole.
(b) Each of the Borrowers and the Parent (before and after
giving effect to the transactions contemplated by this Agreement
and the other Loan Documents) (i) is solvent, (ii) has assets
having a fair value in excess of its liabilities, (iii) has
assets having a fair value in excess of the amount required to
pay its liabilities on existing debts as such debts become
absolute and matured, and (iv) has, and expects to continue to
have, access to adequate capital for the conduct of its business
and the ability to pay its debts from time to time incurred in
connection with the operation of its business as such debts
mature.
7.6. Business. Each of the Borrowers enjoys peaceful and
undisturbed possession under all leases of real or personal
property of which it is lessee, none of which contains any
unusual or burdensome provision which will materially adversely
affect or impair the operations of such Borrower and all such
leases are valid and subsisting and in full force and effect.
Each of the Borrowers owns or possesses the right to use all the
franchises, rights, licenses, operating rights, patents,
trademarks, permits, service marks, trade names, and copyrights
necessary for the conduct of its business as conducted and as
proposed to be conducted, without any conflict with the rights of
others.
7.7. Litigation. There are no actions, suits, proceedings
or investigations of any kind pending or threatened against the
Parent or any of its Subsidiaries before any court, tribunal or
administrative agency or board that, if adversely determined,
would be likely, either in any case or in the aggregate, to
materially adversely affect the properties, assets, financial
condition, prospects or business of the Parent and its
Subsidiaries, taken as a whole, or materially impair the right of
the Parent or any of its Subsidiaries to carry on business
substantially as now conducted by it, or result in any
substantial liability not adequately covered by insurance, or for
which adequate reserves are not maintained on the consolidated
balance sheet of the Parent and its Subsidiaries, or which
question the validity of this Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or
thereto.
7.8. [Intentionally Omitted].
7.9. Compliance With Other Instruments, Laws, Etc.
Neither the Parent nor any of its Subsidiaries is in violation of
any provision of its charter documents, bylaws, or any agreement
or instrument to which it may be subject or by which it or any of
its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing
cases in a manner that could result in the imposition of
substantial penalties or materially and adversely affect the
financial condition, properties or business of the Parent and its
Subsidiaries, taken as a whole.
7.10. Tax Status. The Parent and its Subsidiaries (a)
have made or filed all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to
which any of them is subject, (b) have paid all taxes and other
governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being
contested in good faith and by appropriate proceedings and (c)
have set aside on their books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the
Borrowers and the Parent know of no basis for any such claim.
7.11. No Event of Default. No Default or Event of Default
has occurred and is continuing.
7.12. Holding Company and Investment Company Acts.
Neither the Parent nor any of its Subsidiaries is a "holding
company", or a "subsidiary company" of a "holding company", or an
affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are
defined in the Investment Company Act of 1940.
7.13. Absence of Financing Statements, Etc. Except with
respect to Permitted Liens, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage or
other document filed or recorded with any filing records,
registry, or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or
security interest in, any assets or property of the Parent or any
of its Subsidiaries or rights thereunder.
7.14. Perfection of Security Interest; Collateral. All
filings, assignments, pledges and deposits of documents or
instruments have been made and all other actions have been taken
that are necessary under applicable law, to establish and perfect
the Agent's security interest in the Collateral. The Collateral
and the Agent's rights with respect to the Collateral are not
subject to any setoff, claims, withholdings or other defenses. A
Borrower, the Parent, or a Subsidiary of the Parent, as
applicable is the owner of the Collateral free from any lien,
security interest, encumbrance and any other claim or demand,
except for Permitted Liens. All of the Obligations of the
Borrowers to the Banks and the Agent under or in respect of the
Loan Documents will, at all times from and after the execution
and delivery of each of the Security Documents, be entitled to
the benefits of and be secured by each of such Security
Documents.
7.15. Certain Transactions. Except for arm's length
transactions pursuant to which either of the Borrowers or the
Parent or any of the Parent's other Subsidiaries makes payments
in the ordinary course of business upon terms no less favorable
than such Person could obtain from third parties, none of the
officers, directors, or employees of either of the Borrowers or
the Parent or any of the Parent's other Subsidiaries is presently
a party to any contract, agreement or other arrangement providing
for the furnishing of services (other than for services as
employees, officers and directors) to or by, providing for rental
of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to
the knowledge of such Person, any corporation, partnership, trust
or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director,
trustee or partner.
7.16. Employee Benefit Plans.
7.16.1. In General. Each Employee Benefit Plan has
been maintained and operated in compliance in all material
respects with the provisions of ERISA and, to the extent
applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions.
7.16.2. Terminability of Welfare Plans. Under each
Employee Benefit Plan which is an employee welfare benefit
plan within the meaning of 3(1) or 3(2)(B) of ERISA, no
benefits are due unless the event giving rise to the benefit
entitlement occurs prior to plan termination (except as
required by Title I, Part 6 of ERISA). Either of the
Borrowers or the Parent or an ERISA Affiliate, as
appropriate, may terminate each such Plan at any time (or at
any time subsequent to the expiration of any applicable
bargaining agreement) in the discretion of such Person
without liability to any Person.
7.16.3. Guaranteed Pension Plans; Multiemployer
Plans. Neither of the Borrowers, the Parent nor any ERISA
Affiliate has sponsored, maintained, made any contributions
to or has any liability in respect of any Guaranteed Pension
Plan or Multiemployer Plan.
7.17. Regulations U and X. The proceeds of the Loans
shall be used to fund the acquisition of vessels, and for general
corporate purposes. No portion of any Loan is to be used for the
purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R.
Parts 221 and 224.
7.18. Environmental Compliance. Each of the Borrowers and
the Parent has taken all steps reasonably necessary to
investigate the past and present condition and usage of the real
estate owned or leased by it and the operations conducted thereon
and, based upon such diligent investigation, has determined that:
(a) none of the Borrowers, the Parent or any of the
Parent's other Subsidiaries or any operator of its real
estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters,
including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), the
Federal Clean Water Act, the Federal Clean Air Act, the
Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health,
safety or the environment (hereinafter "Environmental
Laws"), which violation would have a material adverse effect
on the business, assets or financial condition of the Parent
and its Subsidiaries, taken as a whole;
(b) except as set forth on Schedule 7.18 attached
hereto, neither of the Borrowers nor the Parent nor any of
the Parent's other Subsidiaries has received notice from any
third party including, without limitation: any federal,
state or local governmental authority, (i) that any one of
them has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party
under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii)
that any hazardous waste, as defined by 42 U.S.C. 9601(5),
any hazardous substances as defined by 42 U.S.C. 9601(14),
any pollutant or contaminant as defined by 42 U.S.C.
9601(33) and any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which any one of
them has generated, transported or disposed of has been
found at any site at which a federal, state or local agency
or other third party has conducted or has ordered that
either of the Borrowers or the Parent or any of the Parent's
other Subsidiaries conduct a remedial investigation, removal
or other response action pursuant to any Environmental Law;
or (iii) that it is or shall be a named party to any claim,
action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or
otherwise) arising out of any third party's incurrence of
costs, expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Substances;
(c) except as set forth on Schedule 7.18 attached
hereto: (i) no portion of the real estate owned or leased by
either Borrower or the Parent has been used for the
handling, processing, storage or disposal of Hazardous
Substances except in accordance in all material respects
with applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate;
(ii) in the course of any activities conducted by the
Borrowers, the Parent or the Parent's other Subsidiaries or
operators of such Person's properties, no Hazardous
Substances have been generated or are being used on the Real
Estate except in accordance in all material respects with
applicable Environmental Laws; (iii) there have been no
releases (i.e. any past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping) or threatened
releases of Hazardous Substances on, upon, into or from the
properties of either of the Borrowers or the Parent or any
of the Parent's other Subsidiaries, which releases would
have a material adverse effect on the value of any of such
real estate or adjacent properties or the environment; (iv)
to the best of the Parent's and the Borrowers' knowledge,
there have been no releases on, upon, from or into any real
property in the vicinity of any of such real estate which,
through soil or groundwater contamination, may have come to
be located on, and which would have a material adverse
effect on the value of, the real estate; and (v) in
addition, any Hazardous Substances that have been generated
on any of the real estate have been transported offsite only
by carriers having an identification number issued by the
EPA, treated or disposed of only by treatment or disposal
facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and
facilities have been and are, to the best of the Parent's
and the Borrowers' knowledge, operating in compliance with
such permits and applicable Environmental Laws; and
(d) neither of the Borrowers nor the Parent nor any of
the Parent's other Subsidiaries nor any of the real estate
is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the
giving of notice to any governmental agency or the recording
or delivery to other Persons of an environmental disclosure
document or statement by virtue of the transactions set
forth herein and contemplated hereby, or as a condition to
the effectiveness of any transactions contemplated hereby.
7.19. Subsidiaries, Capitalization. (a) Except as
disclosed on Schedule 7.19 attached hereto, neither of the
Borrowers has any Subsidiaries. Except to the extent permitted
under 9.3(f), neither of the Borrowers is engaged in any joint
venture or partnership with any other Person.
(b) Marine Operators' capital stock consists solely of 100
shares of authorized common stock, no par value per share, of
which 100 shares are outstanding, fully paid and nonassessable
and are owned beneficially and of record by the Parent. Marine
Asset's capital stock consists solely of 3,000 shares of
authorized common stock, $.01 par value per share, of which 100
shares are outstanding, fully paid and nonassessable and are
owned beneficially and of record by the Parent. Except as
disclosed on Schedule 7.19 attached hereto, the Parent has no
Subsidiaries.
7.20. Chief Executive Office; Books and Records. Each of
the Borrowers' and the Parent's chief executive office is at 610
Palm Avenue, Houma, Louisiana 70364, at which location its books
and records are kept. Marine Operators' federal employer
identification number is 72-109-6124. Marine Assets' federal
employer identification number is 72-125-2404. The Parent's
federal employer identification number is 72-125-2405.
7.21. Disclosure. The Loan Documents and the other
information furnished by the Borrowers to the Banks does not
contain any untrue statement of a material fact or omit to state
a material fact (known to either of the Borrowers or the Parent
in the case of any document or information not furnished by it)
necessary in order to make the statements herein or therein not
misleading. There is no fact known to either of the Borrowers or
the Parent which materially adversely affects, or which is
reasonably likely in the future to materially adversely affect,
exclusive or effects resulting from changes in general economic
conditions, the business, assets, financial condition or
prospects of the Parent and its Subsidiaries, taken as a whole.
7.22. Fiscal Year. The Parent has a fiscal year which is
the twelve months ending on December 31 of each year.
7.23. No Labor Agreements. Neither of the Borrowers nor
the Parent has any labor agreements in effect with any unionized
group of employees.
7.24. Concerning the Vessels. (a) Schedule 7.24(a) sets
forth a true and correct list describing each of the Vessels
owned on the Closing Date by either of the Borrowers or HOS and
subject to the US Vessel Mortgage, the Vanuatu Vessel Mortgage,
or the HOS Vessel Mortgage and correctly sets forth whether each
such Vessel is owned by Marine Assets, Marine Operators, or HOS.
All Vessels registered under the laws of the United States of
America (the "U.S. Flag Vessels") are described as such on
Schedule 7.24(a). All Vessels registered under the laws of
Vanuatu (the "Vanuatu Flag Vessels") are described as such on
Schedule 7.24(a). Each Vessel has been appropriately registered
under the laws of the United States of America or Vanuatu, as the
case may be, and as of the Closing Date except as disclosed to
the Banks in writing, neither the Borrowers nor HOS own any
Vessels other than the U.S. Flag Vessels and the Vanuatu Flag
Vessels.
(b) Each U.S. Flag Vessel complies with all applicable
requirements of the Shipping Act of 1916, as amended and in
effect, and all applicable regulations thereunder. Each Vanuatu
Flag Vessel complies with all applicable requirements of the
maritime laws of Vanuatu and the United States of America and all
applicable regulations thereunder. Each of the Borrowers, HOS
and the Parent is a citizen of the United States for purposes of
operating each of the U.S. Flag Vessels in the coastwise trade in
accordance with Section 2 of the Shipping Act of 1916, as amended
and in effect, and the regulations thereunder. Each bareboat or
demise charterer of each of the U.S. Flag Vessels operated in the
coastwise trade of the United States (i) is a citizen of the
United States for purposes of operating and maintaining such U.S.
Flag Vessels in the coastwise trade in accordance with Section 2
of the Shipping Act of 1916, as amended and in effect, and the
regulations thereunder or (ii) is in compliance with the
citizenship requirements set forth in 46 App. U.S.C.A. 883-1.
Each of the Vessels listed on Schedule 7.24(b) attached hereto is
covered by a valid Coast Guard Certificate of Inspection, and
Schedule 7.24(c) attached hereto lists the load line Certificate
or Class of those Vessels classed by the American Bureau of
Shipping (or any other classification society or societies
satisfactory to the Agent and the Banks). Each Vessel is covered
by hull and machinery, protection and indemnity, war risk, loss
of earnings and excess liability insurance in accordance by the
requirements of the applicable Vessel Mortgage. Each U.S. Flag
Vessel operated and maintained as a vessel in the coastwise trade
of the United States is so operated in accordance with the
Shipping Act of 1916, as amended and in effect, and the
regulations thereunder, and all other U.S. Flag Vessels if
operated and maintained in the coastwise trade would be eligible
to be so operated in accordance with the Shipping Act of 1916, as
amended and in effect, and the regulations thereunder.
8. AFFIRMATIVE COVENANTS. The Parent and each of the
Borrowers jointly and severally covenant and agree that, so long
as any Loan or Note is outstanding or any Bank has any obligation
to make any Loans:
8.1. Punctual Payment. The Borrowers will duly and
punctually pay or cause to be paid the principal and interest on
the Loans and the Commitment Fee, and the Agent's Fee provided
for in this Agreement, all in accordance with the terms of this
Agreement, the Notes and the other Loan Documents.
8.2. Maintenance of Office. Each of the Borrowers and the
Parent will maintain its chief executive office at 610 Palm
Avenue, Houma, Louisiana 70364, or at such other place in the
United States of America as such Person shall designate upon
written notice to the Agent, where notices, presentations and
demands to or upon such Person in respect of the Loan Documents
may be given or made.
8.3. Records and Accounts. Each of the Borrowers and the
Parent will and the Parent will cause each of its other
Subsidiaries to (a) keep true and accurate records and books of
account in which full, true and correct entries will be made in
accordance with generally accepted accounting principles and (b)
maintain adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and
amortization of its properties, contingencies, and other
reserves.
8.4. Financial Statements, Certificates and Information.
The Parent and the Borrowers will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later
than ninety (90) days after the end of each fiscal year of
the Parent, the consolidated balance sheet of the Parent and
its Subsidiaries as at the end of such year, and the related
consolidated statement of income and consolidated statement
of cash flow for such year, each setting forth in
comparative form the figures for the previous fiscal year
and all statements to be in reasonable detail, prepared in
accordance with generally accepted accounting principles,
and certified without qualification by Coopers & Lybrand LLP
or by other independent certified public accountants of
recognized national standing, which statements shall include
a footnote which identifies any Default or Event of Default;
(b) as soon as practicable, but in any event not later
than forty-five (45) days after the end of each of the first
three fiscal quarters of the Parent, copies of the unaudited
consolidated balance sheet of the Parent and its
Subsidiaries as at the end of such quarter, and the related
consolidated statement of income and consolidated statement
of cash flow for the portion of the Parent's fiscal year
then elapsed, all in reasonable detail and prepared in
accordance with generally accepted accounting principles,
together with a certification by the principal financial or
accounting officers of each of the Borrowers that the
information contained in such financial statements fairly
presents the financial position of the Parent and its
Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) promptly upon the delivery of the financial
statements referred to in subsections (a) and (b) above, a
statement certified by the principal financial or accounting
officers of the Borrowers in substantially the form of
Exhibit D attached hereto and setting forth in reasonable
detail computations evidencing compliance with the covenants
contained in 10 hereof and (if applicable) reconciliations
to reflect changes in generally accepted accounting
principles since the Balance Sheet Date;
(d) promptly upon the filing or mailing thereof,
copies of all material information of a financial nature
filed with the Securities and Exchange Commission or sent to
the stockholders of the Parent;
(e) from time to time such other financial data and
information (including accountants' management letters) as
the Agent or any Bank may reasonably request; and
(f) once each calendar year, or more frequently as
determined by the Agent if an Event of Default shall have
occurred and be continuing, upon the request of the Agent,
the Borrowers will obtain and deliver to the Agent appraisal
reports in form and substance and from appraisers
satisfactory to the Agent, stating the then current fair
market, orderly liquidation and forced liquidation values of
all or any portion of the Vessels listed on Schedule 7.24(a)
and such other Vessels as may have been mortgaged in favor
of the Agent pursuant to 8.14, provided, that no more than
one such appraisal per calendar year shall be conducted and
made at the expense of the Borrowers. Such appraisal may
include an inspection of each such Vessel by marine
engineers or other surveyors selected by the Agent in its
sole discretion.
8.5. Notices.
8.5.1. Defaults. The Parent and the Borrowers will
promptly notify the Agent in writing of the occurrence of
any Default or Event of Default. If any Person shall give
any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default)
under this Agreement or any other note, evidence of
indebtedness, indenture or other obligation to which or with
respect to which the Parent or any of its Subsidiaries is a
party or obligor, whether as principal or surety, the Parent
and the Borrowers shall forthwith give written notice
thereof to the Agent, describing the notice or action and
the nature of the claimed default.
8.5.2. Environmental Events. The Parent and the
Borrowers will promptly give notice to the Agent (a) of any
material violation of any Environmental Law that the Parent
or any of its Subsidiaries reports in writing or is
reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to
any federal, state or local environmental agency and (b)
upon becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any
agency of potential environmental liability, or any federal,
state or local environmental agency or board, that has the
potential to materially adversely affect the assets,
liabilities, financial conditions or operations of the
Parent and its Subsidiaries, taken as a whole, or the
Agent's security interests pursuant to the Security
Documents.
8.5.3. Notification of Claims against Collateral.
The Parent and the Borrowers will, immediately upon becoming
aware thereof, notify the Agent in writing of any setoff,
claims, withholdings or other defenses to which any of the
Collateral, or the Agent's rights with respect to the
Collateral, are subject, involving in any one case or in the
aggregate, an amount of $1,000,000 or more.
8.5.4. Notice of Litigation and Judgments. The
Parent and the Borrowers will, and the Parent will cause
each of its other Subsidiaries to, give notice to the Agent
in writing within fifteen (15) days of becoming aware of any
litigation or proceedings or any pending litigation and
proceedings affecting the Parent or any of its Subsidiaries
or to which the Parent or any of its Subsidiaries is or
becomes a party involving an uninsured claim against the
Parent or any of its Subsidiaries that could reasonably be
expected to have a materially adverse effect on the Parent
and its Subsidiaries, taken as a whole, and stating the
nature and status of such litigation or proceedings. The
Parent and the Borrowers will, and the Parent will cause
each of its other Subsidiaries to, give notice to the Agent,
in writing, in form and detail satisfactory to the Agent,
within ten (10) days of any judgment not covered by
insurance, final or otherwise, against the Parent or any of
its Subsidiaries in an amount in excess of $500,000.
8.6. Corporate Existence; Maintenance of Properties.
Except as permitted under 9.5.1 hereof, the Parent and each of
the Borrowers will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate
existence, rights and franchises and those of the Parent's other
Subsidiaries. The Parent and each of the Borrowers (a) will
cause all of its properties and those of the Parent's other
Subsidiaries used or useful in the conduct of its business or the
business of such Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all
necessary equipment, (b) will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of such Person may be necessary
so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) will,
and the Parent will cause each of its other Subsidiaries to,
continue to engage primarily in the businesses now conducted by
them and in related businesses; provided that nothing in this
8.6 shall prevent the Parent or either of the Borrowers from
discontinuing the operation and maintenance of any of its
properties or those of the Parent's other Subsidiaries if such
discontinuance is, in the judgment of such Person, desirable in
the conduct of its or their business and does not in the
aggregate materially adversely affect the business of the Parent
and its Subsidiaries on a consolidated basis.
8.7. Insurance. The Parent and each of the Borrowers
will, and the Parent will cause each of its other Subsidiaries
to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against
such casualties and contingencies as shall be in accordance with
the general practices of businesses engaged in similar activities
in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be reasonable
and prudent and in accordance with the terms of the Security
Agreement and the Vessel Mortgages.
8.8. Taxes and Claims. The Parent and each of the
Borrowers will, and the Parent will cause each of its other
Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges (other than taxes,
assessments and other governmental charges imposed by foreign
jurisdictions that in the aggregate are not material to the
business or assets of the Borrowers on an individual basis or of
the Parent and its Subsidiaries on a consolidated basis) imposed
upon it and its real properties, sales and activities, or any
part thereof, or upon the income or profits therefrom, as well as
all claims for labor, materials, or supplies that if unpaid might
by law become a lien or charge upon any of its property; provided
that any such tax, assessment, charge, levy or claim need not be
paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if such
Person shall have set aside on its books adequate reserves with
respect thereto to the extent required in accordance with
generally accepted accounting principles; and provided further
that the Parent, each of the Borrowers and each other Subsidiary
of the Parent will pay all such taxes, assessments, charges,
levies or claims forthwith upon the commencement of proceedings
to foreclose any lien that may have attached as security
therefor.
8.9. Inspection of Properties and Books, Etc. The Parent
and each of the Borrowers shall permit the Banks, through the
Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Parent, the
Borrowers or any of the Parent's other Subsidiaries to examine
the books of account of the Parent and its Subsidiaries (and to
make copies thereof and extracts therefrom), and to discuss the
affairs, finances and accounts of the Parent and its Subsidiaries
with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Agent
or any Bank may reasonably request.
8.10. Compliance with Laws, Contracts, Licenses, and
Permits. The Parent and each of the Borrowers will, and the
Parent will cause each of its other Subsidiaries to, comply in
all material respects with (a) the applicable laws and
regulations wherever its business is conducted, including all
Environmental Laws, (b) the provisions of its charter documents
and by-laws, (c) all agreements and instruments by which it or
any of its properties may be bound and (d) all applicable
decrees, orders, and judgments.
8.11. Intentionally Omitted.
8.12. Use of Proceeds. The Borrowers will use the
proceeds of the Loans solely to fund the acquisition of new
vessels and for general corporate purposes.
8.13. Concerning the Vessels. Each of the Borrowers shall
at all times operate each Vessel in compliance in all respects
with all applicable governmental rules, regulations and
requirements pertaining to such Vessels (including, without
limitation, all requirements of the Shipping Act of 1916, as
amended and in effect, applicable to each U.S. Flag Vessel) and,
to the extent required to be classed, in compliance in all
respects with all rules, regulations and requirements of the
applicable classification society. Each of the Borrowers and the
Parent shall at all times maintain and shall assure that each
demise or bareboat charterer of the U.S. Flag Vessels operated
and maintained in the coastwise trade of the United States shall
maintain, as required, its citizenship of the United States for
purposes of operating each of the U.S. Flag Vessels in the
coastwise trade in accordance with Section 2 of the Shipping Act
of 1916, as amended and in effect, and the regulations thereunder
or the citizenship requirements set forth in 46 App. U.S.C.A.
883-1. Upon request, the Borrowers shall furnish to the Agent
and the Banks the certificate of each classification society
covering each of the Vessels listed on Schedule 7.24(c) attached
hereto no later than thirty (30) days after the end of each
fiscal year of the Parent. The Borrowers shall keep each Vessel
registered under the laws of the United States or, as the case
may be, Vanuatu, and maintain in full force and effect the Coast
Guard Certificate of Inspection of each such Vessel which
requires such a certificate and furnish to the Agent copies of
all renewals and extensions thereof.
8.14. Additional Vessels. If, after the Closing Date,
either of the Borrowers acquires any Vessels, such Borrower shall
promptly notify the Agent of such acquisition and shall, if the
aggregate appraised fair market value of the Vessels in which the
Agent has a first priority perfected security interest is less
than 140% of the then Outstanding Loans, within fourteen (14)
days of such acquisition, take all such actions as are necessary
or desirable in the opinion of the Agent (including, without
limitation, executing and delivering to the Agent a first
preferred vessel mortgage with respect to such Vessel(s)) to
grant to the Agent, for the benefit of the Banks, a legal, valid
and enforceable (except for Permitted Liens entitled to priority
under applicable law) security interest in such Vessel(s) to
secure the Obligations, so that after giving effect to such
grant, the aggregate appraised fair market value of Vessels in
which the Agent has a first priority perfected security interest
equals or exceeds 140% of the then Outstanding Loans. In the
event that the Borrowers are not required to grant the Agent a
security interest in such Vessel(s) under the preceding sentence,
the Borrowers will keep such Vessel(s) free and clear of liens
and encumbrances except as permitted under 9.2 hereof.
8.15. Further Assurances. The Parent and each of the
Borrowers will cooperate with the Banks and the Agent and execute
such further instruments and documents as the Banks or the Agent
shall reasonably request to carry out to their satisfaction the
transactions contemplated by this Agreement and the other Loan
Documents.
9. CERTAIN NEGATIVE COVENANTS. The Parent and each of the
Borrowers jointly and severally covenant and agree that, so long
as any Loan or Note is outstanding or any Bank has any obligation
to make any Loans:
9.1. Restrictions on Indebtedness. The Parent and each of
the Borrowers will not, and the Parent will not permit any of its
other Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising
under any of the Loan Documents;
(b) Indebtedness of the Borrowers or the Parent in
respect of current liabilities incurred in the ordinary
course of business not incurred through (i) the borrowing of
money, or (ii) the obtaining of credit except for credit on
an open account basis customarily extended and in fact
extended in connection with normal purchases of goods and
services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor,
materials and supplies to the extent that payment therefor
shall not at the time be required to be made in accordance
with the provisions of 8.8;
(d) Indebtedness in respect of judgments or awards
that have been in force for less than the applicable period
for taking an appeal so long as execution is not levied
thereunder or in respect of which such Person shall at the
time in good faith be prosecuting an appeal or proceedings
for review and in respect of which a stay of execution shall
have been obtained pending such appeal or review;
(e) endorsements for collection, deposit or
negotiation and warranties of products or services, in each
case incurred in the ordinary course of business;
(f) Indebtedness existing on Closing Date of this
Agreement and listed and described on Schedule 9.1 hereto;
(g) Indebtedness incurred after the date hereof in
connection with the acquisition or construction (and within
90 days of such acquisition or construction) of any real or
personal property by the Parent, either of the Borrowers or
any other Subsidiary of the Parent, Indebtedness assumed in
connection with any acquisition (whether of assets or stock)
of a business by any of such Persons, and Capitalized
Leases, provided that the aggregate principal amount of all
such Indebtedness under this clause (g) shall not exceed
$20,000,000 at any time;
(h) Indebtedness of the Parent or either Borrower with
respect to the SWATH Vessel in an aggregate principal amount
not to exceed $9,000,000;
(i) Indebtedness of a wholly-owned Subsidiary of the
Parent or either Borrower owing to the Parent or such
Borrower, provided that the related Investment of the Parent
or such Borrower in such wholly-owned Subsidiary is
permitted by 9.3(e) hereof;
(j) contingent obligations arising in connection with
(i) surety, performance or other similar bonds obtained in
the ordinary course of business, consistent with past
practices, and (ii) standby letters of credit issued in lieu
of such bonds.
9.2. Restrictions on Liens. The Parent and each of the
Borrowers will not, and the Parent will not permit any of its
other Subsidiaries to, (a) create or incur or suffer to be
created or incurred or to exist any lien, encumbrance, mortgage,
pledge, charge, restriction or other security interest of any
kind upon any of its property or assets of any character whether
now owned or hereafter acquired, or upon the income or profits
therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the
same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c)
acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase
money security agreement, device or arrangement; (d) suffer to
exist for a period of more than sixty (60) days after the same
shall have been incurred any Indebtedness or claim or demand
against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over
its general creditors; (e) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles,
chattel paper or instruments, with or without recourse; or (f)
enter into or permit to remain in effect any agreement by which
such Person agrees not to encumber, mortgage, pledge, restrict or
grant a security interest in any of its assets, provided that the
Parent, each of the Borrowers and any other Subsidiary of the
Parent may create or incur or suffer to be created or incurred or
to exist any one or more of the following Permitted Liens:
(i) liens to secure taxes, assessments and other
government charges in respect of obligations not overdue or
liens on properties to secure claims for labor, material or
supplies or other Vessel operating expenses in respect of
obligations not overdue;
(ii) deposits or pledges made in connection with, or
to secure payment of, workmen's compensation, unemployment
insurance, old age pensions or other social security
obligations;
(iii) deposits to secure the performance of bids,
trade contracts, leases, statutory obligations, surety and
performance bonds and other obligations of a similar nature,
in each case made or incurred in the ordinary course of
business and in respect of obligations which are not
overdue;
(iv) liens on properties in respect of judgments or
awards, the Indebtedness with respect to which is permitted
by 9.1(d) hereof;
(v) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties in existence
less than 120 days from the date of creation thereof in
respect of obligations not overdue;
(vi) encumbrances consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title
thereto, landlord's or lessor's liens under leases to which
such Person is a party, and other minor liens or
encumbrances none of which in the opinion of such Person
interferes materially with the use of the property affected
in the ordinary conduct of the business of such Person,
which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Parent and
its Subsidiaries on a consolidated basis;
(vii) liens outstanding on the Closing Date and listed
on Schedule 9.2 attached hereto;
(viii) security interests in and mortgages or negative
pledges on real or personal property acquired or constructed
after the Closing Date and liens on assets acquired subject
to such liens or negative pledges, to secure Indebtedness of
the type and amount permitted by 9.1(g) hereof, incurred or
assumed in connection with the acquisition of such property,
which security interests, mortgages or negative pledges
cover only the real or personal property so acquired (and
the accounts, contracts and insurance proceeds associated
with such property);
(ix) liens on the SWATH Vessel, charters thereof and
construction and related agreements with respect thereto, to
secure the Indebtedness permitted by 9.1(h) hereof; and
(x) liens in favor of the Agent for the benefit of the
Banks and the Agent under the Loan Documents.
9.3. Restrictions on Investments. The Parent and each of
the Borrowers will not, and the Parent will not permit any of its
other Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except:
(a) Investments in marketable direct or guaranteed
obligations of the United States of America that mature
within one (1) year from the date of purchase by such Person
and repurchase agreements relating to the foregoing;
(b) Investments in demand deposits, certificates of
deposit, bankers acceptances and time deposits of United
States banks having total assets in excess of
$1,000,000,000;
(c) Investments in securities commonly known as
"commercial paper" issued by a corporation organized and
existing under the laws of the United States of America or
any state thereof that at the time of purchase have been
rated and the ratings for which are not less than "P 1" if
rated by Moody's Investors Service, Inc. and not less than
"A 1" if rated by Standard and Poor's Ratings Group;
(d) Investments existing on the Closing Date and
listed on Schedule 9.3 attached hereto;
(e) Investments by the Parent in either Borrower and
Investments by the Parent or either Borrower in wholly-owned
Subsidiaries of the Parent or such Borrower, provided that
(if such Subsidiary is not a Borrower) Schedule 7.19 hereto
is amended by the Borrowers to list each such Subsidiary and
each such Subsidiary shall have (i) executed and delivered
to the Banks a guaranty which is satisfactory to the Banks
in all respects, (ii) delivered to the Agent all such
documents and instruments, including, without limitation,
legal opinions, as the Agent shall have reasonably
requested, and (iii) if required pursuant to 8.14, (A)
delivered to the Agent a security agreement and all such
other documents and instruments as the Agent may have
reasonably requested, including, without limitation,
evidences of insurance, legal opinions and UCC financing
statements, and (B) taken all such actions as the Agent may
have reasonably requested, in each case in order to grant to
the Agent, for the benefit of the Banks, a valid and
enforceable first priority security interest in all of the
assets of such Subsidiary (except as otherwise permitted
under 8.14), free and clear of all defects and encumbrances
except for Permitted Liens; and
(f) Investments in joint ventures and non-guarantor
Subsidiaries in lines of business related to the Borrowers'
business not to exceed $10,000,000 in the aggregate.
9.4. Distributions. Neither of the Borrowers nor the
Parent will make any Distributions, other than Distributions by
either Borrower to the Parent for the payment by the Parent of
such Borrower's allocable share of income taxes, franchise taxes,
professional fees and other operating expenses, provided that the
aggregate amount of Distributions made by such Borrower to the
Parent in respect of the Parent's consolidated income tax
liability shall not exceed the amount of income taxes for which
such Borrower would have been liable had the accounts of such
Borrower not been consolidated with the accounts of the Parent.
9.5. Merger, Consolidation and Sale of Assets.
9.5.1. Mergers and Acquisitions. The Parent and each
of the Borrowers will not, and the Parent will not permit
any of its other Subsidiaries to, become a party to any
merger or consolidation, except so long as no Default or
Event of Default then exists or would result therefrom, (i)
the merger or consolidation of one or more of the
Subsidiaries of the Parent with and into the Parent, (ii)
the merger or consolidation of two or more Subsidiaries of
the Parent provided, that in the case of the merger of a
guarantor Subsidiary with a non-guarantor Subsidiary, the
guarantor Subsidiary shall be the surviving corporation in
such merger, or (iii) so long as such merger would not
otherwise violate this Agreement, the merger of one or more
other corporations with and into the Parent, a Borrower or a
guarantor Subsidiary of a Borrower, provided that in the
case of any merger permitted under this 9.5.1, if such
merger or consolidation involves either of the Borrowers,
such Borrower is the surviving corporation. The Parent and
each of the Borrowers will not, and the Parent will not
permit any of its other Subsidiaries to agree to or effect
any asset acquisition of a business which is not engaged
primarily in a line of business substantially similar to the
business now conducted by the Borrowers.
9.5.2. Disposition of Assets. The Parent and each of
the Borrowers will not, and the Parent will not permit any
of its other Subsidiaries to, become a party to or agree to
or effect any disposition of assets, other than the
disposition of assets in the ordinary course of business,
consistent with past practices. Notwithstanding the
foregoing, the Borrowers may sell or otherwise dispose of
obsolete assets, the fair market value of which does not
exceed $1,000,000 in the aggregate in any fiscal year,
provided that in connection with any such sale or other
disposition the following conditions have been satisfied:
(i) no Default or Event of Default exists or will
occur as a result of such sale, as certified by the
Borrowers on the date of any such disposition; and
(ii) each such sale is to a third party on an arm's-
length basis for cash in an amount representing fair and
reasonable market value therefor.
9.6. Compliance with Environmental Laws. Except as
otherwise set forth on Schedule 7.18 attached hereto, the Parent
and each of the Borrowers will not, and the Parent will not
permit any of its other Subsidiaries to, (a) use any of the real
estate or any portion thereof for the handling, processing,
storage or disposal of Hazardous Substances, except in accordance
in all material respects with applicable Environmental Laws, (b)
cause or permit to be located on any of the real estate any
underground tank or other underground storage receptacle for
Hazardous Substances, except in accordance in all material
respects with applicable Environmental Laws, (c) generate any
Hazardous Substances on any of the real estate, except in
accordance in all material respects with applicable Environmental
Laws, (d) conduct any activity at any real estate or use any real
estate in any manner so as to cause a release (i.e. releasing,
spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping)
or threatened release of Hazardous Substances on, upon or into
the real estate, except in accordance in all material respects
with applicable Environmental Laws, or (e) otherwise conduct any
activity at any real estate or use any real estate in any manner
that would violate, in any material respect, any Environmental
Law or bring such real estate in violation, in a material
respect, of any Environmental Law.
9.7. Employee Benefit Plans. Neither of the Borrowers nor
the Parent nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the
meaning of 406 of ERISA or 4975 of the Code which could
result in a material liability for the Parent or any of its
Subsidiaries; or
(b) sponsor, maintain, make contributions to or incur
liabilities in respect of any Guaranteed Pension Plan or
Multiemployer Plan.
9.8. Business Activities. Neither of the Borrowers nor the
Parent will engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than
business involving the operation, ownership or management of
vessels used for transportation or service.
9.9. Change of Chief Executive Office or Corporate Name.
Neither of the Borrowers nor the Parent will change its chief
executive office, federal employer identification number or its
corporate name, unless it shall have (a) given the Banks at least
30 days' advance written notice of such change, and (b) filed in
all necessary jurisdictions such UCC-3 financing statements or
other documents as may be necessary to continue without
impairment or interruption the perfection and priority of the
liens on the Collateral in favor of the Agent pursuant to the
Security Documents.
9.10. Fiscal Year. The Parent will not change the date of
the end of its fiscal year from that set forth in 7.22 hereof.
9.11. Transactions with Affiliates. Except as otherwise
expressly permitted by the terms hereof, the Parent, and each of
the Borrowers will not and the Parent will not permit any of its
other Subsidiaries to (a) engage in any transaction with any
Affiliate on terms more favorable to such Affiliate than would
have been obtainable on an arm's-length basis, considered from
the perspective of the Parent or such Borrower, as the case may
be, or (b) pay, or enter into any agreement requiring such Person
to pay, salary or bonus or other compensation payments to any
officer or management employee of such Person or holder of any
title or office, in an amount in excess of reasonable
compensation paid for similar services by similar businesses
similarly situated.
10. FINANCIAL COVENANTS.
10.1. Operating Cash Flow to Total Debt Service. The
Parent and the Borrowers will not permit the ratio of the
consolidated Operating Cash Flow of the Parent and its
Subsidiaries to the consolidated Total Debt Service of the Parent
and its Subsidiaries for any period of four consecutive fiscal
quarters (or such shorter period as has elapsed since October 1,
1995) to be less than 1.5 to 1.
10.2. Funded Debt to Tangible Net Worth Ratio. The Parent
and the Borrowers will not, at any time, permit the ratio of the
consolidated Funded Debt of the Parent and its Subsidiaries to
the consolidated Tangible Net Worth of the Parent and its
Subsidiaries to exceed 1.0 to 1.
10.3. Minimum Tangible Net Worth. The Parent and the
Borrowers will not, at any time, permit the consolidated Tangible
Net Worth of the Parent and its Subsidiaries at any time to be
less than the sum of $45,000,000 plus, on a cumulative basis, 50%
of positive consolidated Net Income of the Parent and its
Subsidiaries for each fiscal quarter subsequent to the Closing
Date.
10.4. Collateral Value Ratio. The Parent and the
Borrowers will not, at any time, permit the appraised fair market
value of the Vessels subject to the US Vessel Mortgage, the
Vanuatu Vessel Mortgage and the HOS Vessel Mortgage (as stated in
the most current appraisals delivered to the Agent pursuant to
8.4(f) hereof) to be less than 140% of the Outstanding Loans.
11. CLOSING CONDITIONS. Each Bank's obligation to make
the initial Loans hereunder shall be subject to the satisfaction
of the following conditions precedent on or prior to the Closing
Date:
11.1. Delivery of Documents. Each of the Loan Documents
shall have been duly executed and delivered by the respective
parties thereto, shall be in full force and effect and shall be
in form and substance satisfactory to each of the Banks. Each
Bank shall have received a fully executed copy of each such
document.
11.2. Certified Copies of Charter Documents. Each of the
Banks shall have received from the Parent and each of the
Borrowers, a copy, certified by a duly authorized officer of such
Person to be true and complete on the Closing Date, of each of
(a) its charter or other incorporation documents as in effect on
such date of certification, and (b) its by-laws as in effect on
such date.
11.3. Corporate Action. All corporate action necessary
for the valid execution, delivery and performance by the Parent
and each of the Borrowers of this Agreement and the other Loan
Documents to which it is or is to become a party shall have been
duly and effectively taken, and evidence thereof satisfactory to
the Banks shall have been provided to each of the Banks.
11.4. Incumbency Certificate. Each of the Banks shall
have received from the Parent and each of the Borrowers an
incumbency certificate, dated as of the Closing Date, signed by a
duly authorized officer of such Person, and giving the name and
bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of such
Person, each of the Loan Documents to which such Person is or is
to become a party; (b) in the case of each of the Borrowers, to
make Loan Requests; and (c) to give notices and to take other
action on such Person's behalf under the Loan Documents.
11.5. Validity of Liens. The Security Documents shall be
effective to create in favor of the Agent a legal, valid and
enforceable first (except for Permitted Liens entitled to
priority under applicable law) security interest in the
Collateral. The U.S. Vessel Mortgage and the HOS Vessel Mortgage
shall each constitute a first preferred mortgage as defined in 46
U.S.C. 31322. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the
opinion of the Agent to perfect, protect and preserve such
security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance
satisfactory to the Agent.
11.6. Perfection Certificates and UCC Search Results. The
Agent shall have received from each of the Borrowers a completed
and fully executed Perfection Certificate and the results of UCC
and other searches with respect to its Collateral, indicating no
liens other than Permitted Liens and otherwise in form and
substance satisfactory to the Agent.
11.7. Certificates of Insurance. The Agent shall have
received (a) a certificate of insurance from an independent
insurance broker dated as of the Closing Date, identifying
insurers, types of insurance, insurance limits, and policy terms,
and otherwise describing the insurance obtained in accordance
with the provisions of the Security Agreement and the U.S. Vessel
Mortgage and (b) certified copies of all policies evidencing such
insurance (or certificates therefore signed by the insurer or an
agent authorized to bind the insurer) showing the Agent as
additional insured or loss payee, as applicable.
11.8. Financial Condition. The Banks shall have received
the financial statements referred to in 7.4 hereof, and the
Banks shall be satisfied that such financial statements fairly
present the business and financial condition of the Parent and
its Subsidiaries as of the dates thereof and for the periods then
ended.
11.9. Opinions of Counsel. Each of the Banks and the
Agent shall have received a favorable opinion addressed to the
Banks and the Agent, dated as of the Closing Date, in form and
substance satisfactory to the Banks and the Agent, from Jones,
Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P.
11.10. Payment of Fees and Expenses. The Borrowers shall
have paid to the Agent for the accounts of the Banks, the Closing
Fee pursuant to 5.1 hereof, all fees and expenses of the Agent's
special counsel through the Closing Date, and all other amounts
to be paid pursuant to 16 as accrued through the Closing Date.
The Borrowers shall have paid all interest, commitment fees and
any other fees and expenses in respect of the existing credit
agreement through the Closing Date, calculated as of the Closing
Date (pro-rated in the case of any fractional periods).
11.11. Closing Certificate; Borrowing Notice. The Agent
shall have received a closing certificate from the Borrowers and
the Parent dated as of the Closing Date, in form and substance
satisfactory to the Banks. The Borrowers shall have delivered to
the Agent a Loan Request with respect to any Loans requested to
be made on the Closing Date.
12. CONDITIONS TO ALL BORROWINGS. Each Banks' obligation
to make any Loan, whether on or after the Closing Date, shall
also be subject to the satisfaction of the following conditions
precedent:
12.1. Representations True; No Event of Default. Each of
the representations and warranties of each of the Borrowers and
the Parent contained in this Agreement, the other Loan Documents
or in any document or instrument delivered pursuant to or in
connection with this Agreement shall be true as of the date as of
which they were made and shall also be true at and as of the time
of the making of such Loan, with the same effect as if made at
and as of that time (except to the extent of changes resulting
from transactions contemplated or permitted by this Agreement and
the other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not
materially adverse, and to the extent that such representations
and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be
continuing.
12.2. No Legal Impediment. No change shall have occurred
in any law or regulations thereunder or interpretations thereof
that in the reasonable opinion of any Bank would make it illegal
for such Bank to make such Loan.
12.3. Governmental Regulation. Each Bank shall have
received such statements in substance and form reasonably
satisfactory to such Bank as such Bank shall require for the
purpose of compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
12.4. Proceedings and Documents. All proceedings in
connection with the transactions contemplated by this Agreement,
the other Loan Documents and all other documents incident thereto
shall be satisfactory in substance and in form to the Banks and
to the Agent and the Agent's Special Counsel, and the Banks, the
Agent and such counsel shall have received all information and
such counterpart originals or certified or other copies of such
documents as the Agent may reasonably request.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1 Events of Default and Acceleration. If any of the
following events ("Events of Default" or, if the giving of notice
or the lapse of time or both is required, then, prior to such
notice or lapse of time, "Defaults") shall occur:
(a) the Borrowers shall fail to pay any principal of
the Loans when the same shall become due and payable,
whether at the stated date of maturity or any accelerated
date of maturity or at any other date fixed for payment;
(b) the Borrowers shall fail to pay any interest on
the Loans, the Commitment Fee, the Agent's Fee, or other
sums due hereunder or under any of the other Loan Documents,
within three (3) days of when the same shall become due and
payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for
payment;
(c) (i) either of the Borrowers or the Parent shall
fail to comply with any of the covenants contained in 8.4,
8.5, the first sentence of 8.6 or 9 hereof, or (ii) either
of the Borrowers or the Parent shall fail to comply with any
of the covenants contained in 10 hereof and such failure
continues for fourteen (14) days;
(d) either of the Borrowers or the Parent shall fail
to perform any term, covenant or agreement contained herein
or in any of the other Loan Documents (other than those
specified elsewhere in this 13) for thirty (30) days after
written notice of such failure has been given to the Parent
and the Borrowers by the Agent;
(e) any representation or warranty of the Parent or
either of the Borrowers in this Agreement or any of the
other Loan Documents or in any other document or instrument
delivered pursuant to or in connection with this Agreement
shall prove to have been false in any material respect upon
the date when made or deemed to have been made or repeated;
(f) the Parent, either of the Borrowers or any of the
Parent's other Subsidiaries shall fail to pay at maturity,
or within any applicable period of grace, any obligation for
borrowed money in excess of $500,000 or credit received or
in respect of any Capitalized Leases, or fail to observe or
perform any material term, covenant or agreement contained
in any agreement by which it is bound, evidencing or
securing borrowed money in excess of $500,000 or credit
received or in respect of any Capitalized Leases for such
period of time as would permit (assuming the giving of
appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to
accelerate the maturity thereof;
(g) the Parent, either of the Borrowers or any of the
Parent's other Subsidiaries shall make an assignment for the
benefit of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment
of a trustee or other custodian, liquidator or receiver of
any such Person or of any substantial part of the assets of
any such Person or shall commence any case or other
proceeding relating to any such Person under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be
filed or any such case or other proceeding shall be
commenced against any such Person and such Person shall
indicate its approval thereof, consent thereto or
acquiescence therein;
(h) a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating
the Parent, either of the Borrowers or any of the Parent's
other Subsidiaries bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree
or order for relief is entered in respect of any such Person
in an involuntary case under federal bankruptcy laws as now
or hereafter constituted;
(i) there shall remain in force, undischarged,
unsatisfied and unstayed, for more than thirty days, whether
or not consecutive, any final judgment against the Parent,
either of the Borrowers or any of the Parent's other
Subsidiaries that, with other outstanding final judgments,
undischarged, against such Persons exceeds in the aggregate
$500,000;
(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or with the express prior
written agreement, consent or approval of the Banks, or any
action at law, suit or in equity or other legal proceeding
to cancel, revoke or rescind any of the Loan Documents shall
be commenced by or on behalf of the Parent, either of the
Borrowers or any of the Parent's other Subsidiaries party
thereto or any of their respective stockholders, or any
court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination
that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is
illegal, invalid or unenforceable in accordance with the
terms thereof;
(k) intentionally omitted;
(l) the Parent, either of the Borrowers or any of the
Parent's other Subsidiaries shall be enjoined, restrained or
in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any
material part of its business;
(m) there shall occur any material damage to, or loss,
theft or destruction of, any Collateral, whether or not
insured, or any strike, lockout, labor dispute, embargo,
condemnation, act of God or public enemy, or other casualty,
which in any such case causes, for more than fifteen (15)
consecutive days, the cessation or substantial curtailment
of revenue producing activities at any facility of the
Parent, either of the Borrowers or any of the Parent's other
Subsidiaries if such event or circumstance is not covered by
business interruption insurance and would have a material
adverse effect on the business or financial condition of the
Parent and its Subsidiaries, taken as a whole;
(n) the Parent, either of the Borrowers or any of the
Parent's other Subsidiaries shall be indicted for a federal
crime, a punishment for which could include the forfeiture
of any assets of the Borrowers having a fair market value in
excess of $500,000;
(o) any person or group of persons (within the meaning
of Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as
amended, but excluding (i) Berkshire Fund III Investment
Corp. and its Affiliates and (ii) persons who are employees
of the Parent or a Subsidiary of the Parent) shall have the
acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission
under said Act) of 40% or more of the outstanding shares of
common stock of the Parent; or, during any period of twelve
consecutive calendar months, individuals who were directors
of the Parent on the first day of such period shall cease to
constitute a majority of the board of directors of the
Parent; or
(p) if the Parent shall at any time, legally or
beneficially own less than 100% of the shares of the voting
common stock of each of the Borrowers;
then, and in any such event, so long as the same may be
continuing, the Agent may, and upon the request of the Majority
Banks shall, by notice in writing to the Borrowers declare all
amounts owing with respect to this Agreement, the Notes and the
other Loan Documents to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived by the Borrowers; provided that in the event of
any Event of Default specified in 13.1(g), 13.1(h) or 13.1(j),
all such amounts shall become immediately due and payable
automatically and without any requirement of notice from the
Agent or any Bank.
13.2 Termination of Commitments. If any one or more of
the Events of Default specified in 13.1(g), 13.1(h) or 13.1(j)
shall occur, any unused portion of the credit hereunder shall
forthwith terminate and each of the Banks shall be relieved of
all obligations to make Loans to the Borrowers. If any other
Event of Default shall have occurred and be continuing, or if on
any Drawdown Date the conditions precedent to the making of the
Loans to be made on such Drawdown Date are not satisfied, the
Agent may and, upon the request of the Majority Banks, shall, by
notice to the Borrowers, terminate the unused portion of the
credit hereunder, and upon such notice being given such unused
portion of the credit hereunder shall terminate immediately and
each of the Banks shall be relieved of all further obligations to
make Loans. If any such notice is given to the Borrowers the
Agent will forthwith furnish a copy thereof to each of the Banks.
No termination of the credit hereunder shall relieve either of
the Borrowers of any of the Obligations or any of its existing
obligations to any of the Banks arising under other agreements or
instruments.
13.3 Remedies. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not
the Banks shall have accelerated the maturity of the Loans
pursuant to 13.1 hereof, each Bank, if owed any amount with
respect to the Loans, may proceed to protect and enforce its
rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant
or agreement contained in this Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to
such Bank are evidenced, including as permitted by applicable law
the obtaining of the ex parte appointment of a receiver, and, if
such amount shall have become due, by declaration or otherwise,
proceed to enforce the payment thereof or any other legal or
equitable right of such Bank. No remedy herein conferred upon
any Bank or the Agent or the holder of any Note is intended to be
exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
13.4 Distribution of Collateral Proceeds. In the event
that, following the occurrence or during the continuance of any
Default or Event of Default, the Agent or any Bank, as the case
may be, receives any monies in connection with the enforcement of
any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be)
the reimbursement of the Agent for or in respect of all
reasonable costs, expenses, disbursements and losses which
shall have been incurred or sustained by the Agent in
connection with the collection of such monies by the Agent,
for the exercise, protection or enforcement by the Agent of
all or any of the rights, remedies, powers and privileges of
the Agent under this Agreement or any of the other Loan
Documents or in respect of the Collateral (including,
without limitation, the protection, insurance, repair, costs
of preparing for sale and sale of any Collateral) and to
support the provision of adequate indemnity to the Agent
against all taxes or liens which by law shall have, or may
have, priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or
preference as the Majority Banks may determine; provided,
however, that distributions in respect of such Obligations
shall be made (i) pari passu among Obligations with respect
to the Agent's Fee payable under 5.2 hereof and all other
Obligations and (ii) Obligations owing to the Banks with
respect to each type of Obligation such as interest,
principal, fees and expenses, shall be made among the Banks
pro rata; and provided, further, that the Agent may in its
discretion make proper allowance to take into account any
Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or
other provisions for payment in full satisfactory to the
Banks and the Agent of all of the Obligations, to the
payment of any obligations required to be paid pursuant to
9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to
the Borrowers or to such other Persons as are entitled
thereto.
14. SETOFF. Regardless of the adequacy of any collateral,
during the continuance of any Event of Default, any deposits or
other sums credited by or due from any of the Banks to either of
the Borrowers and any securities or other property of either of
the Borrowers in the possession of such Bank may be applied to or
set off by such Bank against the payment of Obligations and any
and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter
arising, of the Borrowers to such Bank. Each of the Banks agrees
with each other Bank that (a) if an amount to be set off is to be
applied to Indebtedness of either of the Borrowers to such Bank,
other than Indebtedness evidenced by the Notes held by such Bank,
such amount shall be applied ratably to such other Indebtedness
and to the Indebtedness evidenced by all such Notes held by such
Bank, and (b) if such Bank shall receive from either of the
Borrowers, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the claim
evidenced by the Notes held by such Bank by proceedings against
either of the Borrowers at law or in equity or by proof thereof
in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to
the payment of the Note or Notes held by such Bank any amount in
excess of its ratable portion of the payments received by all of
the Banks with respect to the Notes held by all of the Banks,
such Bank will make such disposition and arrangements with the
other Banks with respect to such excess, either by way of
distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of
the Notes held by its proportionate payment as contemplated by
this Agreement; provided that if all or any part of such excess
payment is thereafter recovered from such Bank, such disposition
and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.
15. THE AGENT.
15.1. Authorization. The Agent is authorized to take such
action on behalf of each of the Banks and to exercise all such
powers as are hereunder and under any of the other Loan Documents
and any related documents delegated to the Agent, together with
such powers as are reasonably incident thereto, provided that no
duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent. The
relationship between the Agent and each of the Banks is that of
an independent contractor. The use of the terms "Agent" is for
convenience only and is used to describe, as a form of
convention, the independent contractual relationship between the
Agent and each of the Banks. Nothing contained in this Agreement
or any of the other Loan Documents shall be construed to create
an agency, trust or other fiduciary relationship between the
Agent and any of the Banks. As an independent contractor
empowered by the Banks to exercise certain rights and perform
certain duties and responsibilities hereunder and under the other
Loan Documents, the Agent is nevertheless a "representative" of
the Banks, as that term is defined in Article 1 of the Uniform
Commercial Code, for purposes of actions for the benefit of the
Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions
include the designation of the Agent as "secured party",
"mortgagee" or the like on all financing statements and other
documents and instruments, whether recorded or otherwise,
relating to the attachment, perfection, priority or enforcement
of any security interests, mortgages or deeds of trust in
collateral security intended to secure the payment or performance
of any of the Obligations, all for the benefit of the Banks and
the Agent. The Agent is hereby authorized and empowered to
release Collateral without the consent of the Banks upon the sale
of such Collateral pursuant to 9.5.2 hereof.
15.2. Employees and Agents. The Agent may exercise its
powers and execute its duties by or through employees or agents
and shall be entitled to take, and to rely on, advice of counsel
concerning all matters pertaining to its rights and duties under
this Agreement and the other Loan Documents. The Agent may
utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and
expenses of any such Persons shall be paid by the Borrowers.
15.3. No Liability. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other
Person assisting them in their duties nor any agent or employee
thereof, shall be liable for any waiver, consent or approval
given or any action taken, or omitted to be taken, in good faith
by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the
consequences of any oversight or error of judgment whatsoever,
except that the Agent or such other Person, as the case may be,
may be liable for losses due to its willful misconduct or gross
negligence.
15.4. No Representations. The Agent shall not be
responsible for the execution or validity or enforceability of
this Agreement, the Notes, any of the other Loan Documents or any
instrument at anytime constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by
or on behalf of the Parent or either of the Borrowers, or be
bound to ascertain or inquire as to the performance or observance
of any of the terms, conditions, covenants or agreements herein
or in any instrument at any time constituting, or intended to
constitute, collateral security for the Obligations or the Notes
or to inspect any of the properties, books or records of the
Parent or any of its Subsidiaries. The Agent shall not be bound
to ascertain whether any notice, consent, waiver or request
delivered to it by the Parent or either of the Borrowers or any
holder of any of the Notes shall have been duly authorized or is
true, accurate and complete. The Agent has not made nor does it
now make any representations or warranties, express or implied,
nor does it assume any liability to the Banks, with respect to
the credit worthiness or financial condition of the Parent,
either of the Borrowers or any of the Parent's other
Subsidiaries. Each Bank acknowledges that it has, independently
and without reliance upon the Agent or any other Bank, and based
upon such information and documents as it has deemed appropriate,
made its own credit analysis and decision to enter into this
Agreement.
15.5. Payments.
15.5.1. Payments to Agent. A payment by the
Borrowers to the Agent hereunder or any of the other Loan
Documents for the account of any Bank shall constitute a
payment to such Bank. The Agent agrees promptly to
distribute to each Bank its pro rata share (in accordance
with its Commitment Percentage) of payments received by the
Agent, except as otherwise expressly provided herein or in
any of the other Loan Documents.
15.5.2. Distribution by Agent. If in the opinion of
the Agent the distribution of any amount received by it in
such capacity hereunder, under the Notes or under any of the
other Loan Documents might involve it in liability, it may
refrain from making such distribution until its right to
make such distribution shall have been adjudicated by a
court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such
court.
15.5.3. Delinquent Banks. Notwithstanding anything
to the contrary contained in this Agreement or any of the
other Loan Documents, any Bank that fails (a) to make
available to the Agent its applicable pro rata share of any
Loan or (b) to comply with the provisions of 14 with
respect to making dispositions and arrangements with the
other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of
its applicable pro rata share of such payments due and to
payable to all of the Banks, in each case as, when and to
the full extent required by the provisions of this
Agreement, shall be deemed delinquent (a "Delinquent Bank")
and shall be deemed a Delinquent Bank until such time as
such delinquency is satisfied. A Delinquent Bank shall be
deemed to have assigned any and all payments due to it from
the Borrowers, whether on account of outstanding Loans,
interest, fees or otherwise, to the remaining nondelinquent
Banks for application to, and reduction of, their respective
pro rata shares of all outstanding Loans. The Delinquent
Bank hereby authorizes the Agent to distribute such payments
to the nondelinquent Banks in proportion to their respective
pro rata shares of all outstanding Loans. A Delinquent Bank
shall be deemed to have satisfied in full a delinquency when
and if, as a result of application of the assigned payments
to all outstanding Loans of the nondelinquent Banks, the
Banks' respective pro rata shares of all outstanding Loans
have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment
causing such delinquency.
15.6. Holders of Notes. The Agent may deem and treat the
payee of any Note as the absolute owner thereof for all purposes
hereof until it shall have been furnished in writing with a
different name by such payee or by a subsequent holder.
15.7. Indemnity. The Banks ratably (computed by reference
to each Bank's Commitment Percentage) agree hereby to indemnify
and hold harmless the Agent from and against any and all claims,
actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the
Agent has not been reimbursed by the Borrowers as required by
16), and liabilities of every nature and character arising out
of or related to this Agreement, the Notes, or any of the other
Loan Documents or the transactions contemplated or evidenced
hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be
directly caused by the Agent's willful misconduct or gross
negligence.
15.8. Agent as Bank. In its individual capacity, FNBB
shall have the same obligations and the same rights, powers and
privileges in respect to its Commitment and the Loans made by it,
and as the holder of any of the Notes, as it would have were it
not also the Agent.
15.9. Resignation. The Agent may resign at any time by
giving sixty (60) days' prior written notice thereof to the Banks
and the Borrowers. Upon any such resignation, the Majority Banks
shall have the right to appoint a successor Agent. Unless a
Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable
to the Borrowers. If no successor Agent shall have been so
appointed by the Majority Banks and shall have accepted such
appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a
financial institution having a rating of not less than A or its
equivalent by Standard & Poor's Ratings Group. 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
retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations, if any, hereunder. After any
retiring Agent's resignation, the provisions of this Agreement
and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Agent.
15.10. Notification of Defaults and Events of Default.
Each Bank hereby agrees that, upon learning of the existence of a
Default or an Event of Default, it shall promptly notify the
Agent thereof. The Agent hereby agrees that upon receipt of any
notice under this 15.10 it shall promptly notify the other Banks
of the existence of such Default or Event of Default.
15.11. Duties in the Case of Enforcement. In case one or
more Events of Default has occurred and shall be continuing, and
whether or not acceleration of the Obligations shall have
occurred, the Agent shall, if (i) so requested by the Majority
Banks and (ii) the Banks have provided to the Agent such
additional indemnities and assurances against expenses and
liabilities as the Agent may reasonably request, proceed to
enforce the provisions of the Security Documents authorizing the
sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other
rights or remedies as it may have in respect of such Collateral.
The Majority Banks may direct the Agent in writing as to the
method and the extent of any such sale or other disposition, the
Banks hereby ratably (computed by reference to each Bank's
Commitment Percentage) agreeing to indemnify and hold the Agent
harmless from all liabilities incurred in respect of all actions
taken or omitted in accordance with such directions, provided
that the Agent need not comply with any such direction to the
extent that the Agent reasonably believes the Agent's compliance
with such direction to be unlawful or commercially unreasonable
in any applicable jurisdiction.
16. EXPENSES. The Borrowers hereby jointly and severally
agree to pay (a) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the
other agreements and instruments mentioned herein, (b) any taxes
(including any interest and penalties in respect thereto) payable
by the Agent or any of the Banks (other than taxes based upon the
Agent's or any Bank's net income) on or with respect to the
transactions contemplated by this Agreement (the Borrowers hereby
jointly and severally agreeing to indemnify the Agent and each
Bank with respect thereto), (c) the reasonable fees, expenses and
disbursements of the Agent's Special Counsel or any local counsel
to the Agent incurred in connection with the preparation,
administration or interpretation of the Loan Documents and other
instruments mentioned herein, each closing hereunder, and
amendments, modifications, approvals, consents or waivers hereto
or hereunder and the termination hereof, (d) except as otherwise
specified herein, the fees, expenses and disbursements of the
Agent incurred by the Agent in connection with the preparation,
administration or interpretation of the Loan Documents and other
instruments mentioned herein, including all engineering and
appraisal charges, (e) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees and
costs, which attorneys may be employees of any Bank or the Agent,
and reasonable consulting, accounting, appraisal, investment
banking and similar professional fees and charges) incurred by
any Bank or the Agent in connection with (i) the enforcement of
or preservation of rights under any of the Loan Documents against
the Parent, either of the Borrowers or any of the Parent's other
Subsidiaries or the administration thereof after the occurrence
of a Default or Event of Default and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in
any way related to any Bank's or the Agent's relationship with
the Parent, either of the Borrowers or any of the Parent's other
Subsidiaries and (f) all reasonable fees, expenses and
disbursements of any Bank or the Agent incurred in connection
with UCC searches, UCC filings, vessel mortgage recordings, or
mortgage recordings. The covenants of this 16 shall survive
payment or satisfaction of payment of amounts owing with respect
to the Notes.
17. INDEMNIFICATION. The Borrowers jointly and severally
agree to indemnify and hold harmless the Agent and the Banks from
and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and
character arising out of this Agreement or any of the other Loan
Documents or the transactions contemplated hereby including,
without limitation, (a) any actual or proposed use by the
Borrowers, the Parent or any of the Parent's other Subsidiaries
of the proceeds of any of the Loans, (b) any actual or alleged
infringement of any patent, copyright, trademark, service mark or
similar right of the Parent or either of the Borrowers or any of
the Parent's other Subsidiaries comprised in the Collateral, (c)
the Borrowers entering into or performing this Agreement or any
of the other Loan Documents or (d) with respect to the Parent and
its Subsidiaries and their respective properties and assets, the
violation of any Environmental Law, the presence, disposal,
escape, seepage, leakage, spillage, discharge, emission, release
or threatened release of any Hazardous Substances or any action,
suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited
to claims with respect to wrongful death, personal injury or
damage to property), in each case including, without limitation,
the reasonable fees and disbursements of counsel and allocated
costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or
the preparation therefor, the Banks and the Agent shall be
entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrowers hereby jointly and severally
agree to pay promptly the reasonable fees and expenses of such
counsel. If, and to the extent that the obligations of the
Borrowers under this 17 are unenforceable for any reason, the
Borrowers hereby jointly and severally agree to make the maximum
contribution to the payment in satisfaction of such obligations
which is permissible under applicable law. The obligations of
the Borrowers under this 17 shall be "Obligations" hereunder.
The covenants contained in this 17 shall survive payment of
satisfaction in full of all other Obligations.
18. SURVIVAL OF COVENANTS, ETC. All covenants,
agreements, representations and warranties made herein, in the
Notes, in any of the other Loan Documents or in any documents or
other papers delivered by or on behalf of the Parent or either of
the Borrowers pursuant hereto shall be deemed to have been relied
upon by the Banks and the Agent, notwithstanding any
investigation heretofore or hereafter made by any of them, and
shall survive the making by the Banks of the Loans, as herein
contemplated, and shall continue in full force and effect so long
as any amount due under this Agreement or the Notes or any of the
other Loan Documents remains outstanding or any Bank has any
obligation to make any Loans, and for such further time as may be
otherwise expressly specified in this Agreement. All statements
contained in any certificate or other paper delivered to any Bank
or the Agent at any time by or on behalf of the Parent or either
of the Borrowers pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations
and warranties by such Person hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1. Conditions to Assignment by Banks. Except as
provided herein, each Bank may assign to one or more Eligible
Assignees all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of
its Commitment Percentage and Commitment and the same portion of
Loans owing to it and the Note held by it); provided that (a)
each of the Agent and, unless a Default or an Event of Default
shall have occurred and be continuing, the Borrowers shall have
given its prior written consent to such assignment, which
consent, in the case of the Borrowers, will not be unreasonably
withheld, (b) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's rights and
obligations with respect to the Loans under this Agreement, (c)
each assignment shall be in a minimum amount of $3,000,000 or a
larger integral multiple of $1,000,000, and (d) the parties to
such assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an Assignment
and Acceptance, substantially in the form of Exhibit E hereto (an
"Assignment and Acceptance"), together with any Notes subject to
such assignment. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least
five (5) Business Days after the execution thereof, (i) the
assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank
shall, to the extent provided in such assignment and upon payment
to the Agent of the registration fee referred to in 19.3, be
released from its obligations under this Agreement.
19.2. Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and
Acceptance, the parties to the assignment thereunder confirm to
and agree with each other and the other parties hereto as
follows: (a) other than the representation and warranty that it
is the legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim, the assigning Bank
makes no representation or warranty, express or implied, and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the other
Loan Documents or any other instrument or document furnished
pursuant hereto or the attachment, perfection or priority of any
security interest or mortgage; (b) the assigning Bank makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Parent, either of the
Borrowers or any of the Parent's other Subsidiaries or any other
Person primarily or secondarily liable in respect of any of the
Obligations, or the performance or observance by the Parent,
either of the Borrowers and the Parent's other Subsidiaries or
any other Person primarily or secondarily liable in respect of
any of the Obligations of any of their obligations under this
Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (c)
such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial
statements referred to in 7.4 and 8.4 and such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (d) such assignee will, independently and without
reliance upon the assigning Bank, the Agent or any other Bank 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;
(e) such assignee represents and warrants that it is an Eligible
Assignee; (f) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together
with such powers as are reasonably incidental thereto; (g) such
assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement
are required to be performed by it as a Bank; and (h) such
assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance.
19.3. Register. The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or
similar list (the "Register") for the recordation of the names
and addresses of the Banks and the Commitment Percentage of, and
principal amount of the Loans owing to the Banks from time to
time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrowers, the Agent and the
Banks may treat each Person whose name is recorded in the
Register as a Bank hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrowers
and the Banks at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the
assigning Bank agrees to pay to the Agent a registration fee in
the sum of $2,500, as to which payment the Borrowers shall have
no responsibility.
19.4. New Notes. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together
with each Note subject to such assignment, the Agent shall (a)
record the information contained therein in the Register, and (b)
give prompt notice thereof to the Borrowers and the Banks (other
than the assigning Bank). Within five (5) Business Days after
receipt of such notice, the Borrowers, at their own expense,
shall execute and deliver to the Agent, in exchange for each
surrendered Note, a new Note to the order of such Eligible
Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance and,
if the assigning Bank has retained some portion of its
obligations hereunder, a new Note to the order of the assigning
Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the
surrendered Notes, shall be in an aggregate principal amount
equal to the aggregate principal amount of the surrendered Notes,
shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of
the assigned Notes. Within five (5) days of issuance of any new
Notes pursuant to this 19.4, the Borrowers shall deliver an
opinion of counsel, addressed to the Banks and the Agent,
relating to the due authorization, execution and delivery of such
new Notes and the legality, validity and binding effect thereof,
in form and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Borrowers.
19.5. Participations. Each Bank may sell participations
to one or more banks or other entities in all or a portion of
such Bank's rights and obligations under this Agreement and the
other Loan Documents; provided that (a) each such participation
shall be in an amount of $2,000,000 or a larger integral multiple
of $1,000,000, (b) any such sale or participation shall not
affect the rights and duties of the selling Bank hereunder to the
Borrowers and (c) the only rights granted to the participant
pursuant to such participation arrangements with respect to
waivers, amendments or modifications of the Loan Documents shall
be the rights to approve waivers, amendments or modifications
that would reduce the principal of or the interest rate on any
Loans, extend the term or increase the amount of the Commitment
of such Bank as it relates to such participant, reduce the amount
of any Commitment Fee to which such participant is entitled or
extend any regularly scheduled payment date for principal or
interest.
19.6. Disclosure. The Parent and the Borrowers agree that
in addition to disclosures made in accordance with standard and
customary banking practices any Bank may disclose information
obtained by such Bank pursuant to this Agreement to assignees or
participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential
assignees or participants shall agree (a) to treat in confidence
such information unless such information otherwise becomes public
knowledge, (b) not to disclose such information to a third party,
except as required by law or legal process and (c) not to make
use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
19.7. Assignee or Participant Affiliated with the
Borrower. If any assignee Bank is an Affiliate of either of the
Borrowers, then any such assignee Bank shall have no right to
vote as a Bank hereunder or under any of the other Loan Documents
for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Agent
pursuant to 13.1 or 13.2, and the determination of the Majority
Banks shall for all purposes of this Agreement and the other Loan
Documents be made without regard to such assignee Bank's interest
in any of the Loans. If any Bank sells a participating interest
in any of the Loans to a participant, and such participant is
either of the Borrowers or an Affiliate of either of the
Borrowers, then such transferor Bank shall promptly notify the
Agent of the sale of such participation. A transferor Bank shall
have no right to vote as a Bank hereunder or under any of the
other Loan Documents for purposes of granting consents or waivers
or for purposes of agreeing to amendments or modifications to any
of the Loan Documents or for purposes of making requests to the
Agent pursuant to 13.1 or 13.2 to the extent that such
participation is beneficially owned by either of the Borrowers or
any Affiliate of either of the Borrowers, and the determination
of the Majority Banks shall for all purposes of this Agreement
and the other Loan Documents be made without regard to the
interest of such transferor Bank in the Loans to the extent of
such participation.
19.8. Miscellaneous Assignment Provisions. Any assigning
Bank shall retain its rights to be indemnified pursuant to 17
with respect to any claims or actions arising prior to the date
of such assignment. If any assignee Bank is not incorporated
under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or
fees are payable hereunder or under any of the other Loan
Documents for its account, deliver to the Borrowers and the Agent
certification as to its exemption from deduction or withholding
of any United States federal income taxes. Anything contained in
this 19 to the contrary notwithstanding, any Bank may at any
time pledge all or any portion of its interest and rights under
this Agreement (including all or any portion of its Notes) to any
of the twelve Federal Reserve Banks organized under 4 of the
Federal Reserve Act, 12 U.S.C. 341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
19.9. Assignment by Borrowers. The Borrowers shall not
assign or transfer any of their rights or obligations under any
of the Loan Documents without the prior written consent of each
of the Banks.
20. NOTICES, ETC. Except as otherwise expressly provided
in this Agreement, all notices and other communications made or
required to be given pursuant to this Agreement or the Notes
shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by telegraph,
telecopy, telefax or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Parent or either of the Borrowers,
at 610 Palm Avenue, Houma, Louisiana 70364, Attention:
President, or at such other address for notice as the
Borrower shall last have furnished in writing to the
Person giving the notice, with a copy to Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., Place
St. Charles, 201 St. Charles Avenue, New Orleans,
Louisiana 70170, Attention: William B. Masters, Esq.;
(b) if to the Agent, at 100 Federal Street,
Boston, Massachusetts 02110, USA, Attention: Daniel
O'Connor, Managing Director, or such other address for
notice as the Agent shall last have furnished in
writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set
forth on Schedule 1.1 hereto, or such other address for
notice as such Bank shall have last furnished in
writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly
given or made and to have become effective (i) if delivered by
hand, overnight courier or facsimile to a responsible officer of
the party to which it is directed, at the time of the receipt
thereof by such officer or the sending of such facsimile and (ii)
if sent by registered or certified first-class mail, postage
prepaid, on the third Business Day following the mailing thereof.
21. GOVERNING LAW. THIS AGREEMENT AND EACH OF THE
OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, ARE CONTRACTS UNDER SEAL UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF
SAID COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). EACH OF THE BORROWERS AND THE PARENT AGREES THAT
ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON
SUCH BORROWER OR THE PARENT BY MAIL AT THE ADDRESS SPECIFIED IN
20. EACH OF THE BORROWERS AND THE PARENT HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY
SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
22. HEADINGS. The captions in this Agreement are for
convenience of reference only and shall not define or limit the
provisions hereof.
23. COUNTERPARTS. This Agreement and any amendment hereof
may be executed in several counterparts and by each party on a
separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Agreement it shall
not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is
sought.
24. ENTIRE AGREEMENT, ETC. The Loan Documents and any
other documents executed in connection herewith or therewith
express the entire understanding of the parties with respect to
the transactions contemplated hereby. Neither this Agreement nor
any term hereof may be changed, waived, discharged or terminated,
except as provided in 26.
25. WAIVER OF JURY TRIAL. The Parent and each of the
Borrowers hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with
this Agreement, the Notes or any of the other Loan Documents, any
rights or obligations hereunder or thereunder or the performance
of such rights and obligations. Except as prohibited by law, the
Parent and each of the Borrowers hereby waives any right it may
have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition
to, actual damages. The Parent and each of the Borrowers (a)
certifies that no representative, agent or attorney of any Bank
or the Agent has represented, expressly or otherwise, that such
Bank or the Agent would not, in the event of litigation, seek to
enforce the foregoing waivers and (b) acknowledges that the Agent
and the Banks have been induced to enter into this Agreement, the
other Loan Documents to which it is a party by, among other
things, the waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as
otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement to be given by
one or more or all of the Banks may be given, and any term of
this Agreement or of any other instrument related hereto or
mentioned herein may be amended, and the performance or
observance by the Parent and the Borrowers of any terms of this
Agreement or such other instrument or the continuance of any
Default or Event of Default may be waived (either generally or in
a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Borrower and the
written consent of the Majority Banks. Notwithstanding the
foregoing, (i) the amount of the respective Loans, the rate of
interest on the Notes (other than interest accruing pursuant to
5.8.2 following the effective date of any waiver by the Majority
Banks of the Default or Event of Default relating thereto), the
term of, and scheduled payments on, the Notes, the amount of the
Commitments of the Banks, and the amount of the Commitment Fee
hereunder may not be changed without the written consent of the
Parent, the Borrowers and the written consent of each Bank
affected thereby; (ii) the definitions of Commitment Percentage
and Majority Banks and this 26 may not be amended without the
written consent of all of the Banks; (iii) no Collateral may be
released without the written consent of all of the Banks if,
after giving effect to such release, the Parent and the Borrowers
would not be in compliance with 10.4 hereof; and (iv) the amount
of the Agent's Fee and 15 may not be amended without the written
consent of the Agent. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part
of any Bank in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or
demand upon the Borrowers shall entitle the Borrowers to other or
further notice or demand in similar or other circumstances.
27. SEVERABILITY. The provisions of this Agreement are
severable and if any one clause or provision hereof shall be held
invalid or unenforceable in whole or in part in any jurisdiction,
then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and
shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this
Agreement in any jurisdiction.
28. TRANSITIONAL ARRANGEMENTS. On the Closing Date this
Agreement shall supersede the existing credit agreement in its
entirety and the rights and obligations of the parties evidenced
by the existing credit agreement shall be evidenced by this
Agreement and the other Loan Documents, and the Loans as defined
in the existing credit agreement shall be converted to Loans
hereunder, without constituting a novation or discharge thereof.
All interest, fees and expenses, if any, owing or accrued under
or in respect of the existing credit agreement through the
Closing Date shall be calculated as of the Closing Date (pro-
rated in the case of any fractional periods), and shall be paid
on the Closing Date.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as a sealed instrument as of the date first set forth
above.
TRICO MARINE OPERATORS, INC.
By:________________________________
Name:
Title:
TRICO MARINE ASSETS, INC.
By:________________________________
Name:
Title:
TRICO MARINE SERVICES, INC.
By:________________________________
Name:
Title:
THE FIRST NATIONAL BANK
OF BOSTON, individually and
as Agent
By:________________________________
Name:
Title:
HIBERNIA NATIONAL BANK
By:________________________________
Name:
Title:
FIRST NATIONAL BANK OF
COMMERCE
By:________________________________
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF
REVOLVING CREDIT NOTE
$_______________ July __, 1996
FOR VALUE RECEIVED, the undersigned TRICO MARINE OPERATORS, INC.,
a Louisiana corporation, and TRICO MARINE ASSETS, INC., a
Delaware corporation, (collectively, the "Borrowers" and each,
individually, a "Borrower), hereby absolutely and
unconditionally, jointly and severally and solidarily (as
provided in 5.9 of the Credit Agreement referred to below)
promise to pay to the order of [INSERT NAME OF PAYEE BANK] (the
"Bank") at the office of The First National Bank of Boston, as
Agent, 100 Federal Street, Boston, Massachusetts 02110, or at
such other location as the Agent may designate from time to time:
(a)on the Maturity Date, the principal amount of [INSERT BANK'S
COMMITMENT] ($________) or, if less, the aggregate unpaid
principal amount of Loans advanced by the Bank to the Borrowers
pursuant to the Revolving Credit Agreement dated as of July __,
1996 (as the same may be amended, modified, supplemented or
restated and in effect from time to time, the "Credit
Agreement"), among the Borrowers, Trico Marine Services, Inc.,
The First National Bank of Boston, such other lending
institutions which are or may become parties thereto from time to
time, and The First National Bank of Boston as agent for the
itself and such other lending institutions (the "Agent"); and
(b)interest from the date hereof on the principal amount from
time to time outstanding to and including the date on which the
principal amount hereof is paid in full at the times and at the
rates provided in the Credit Agreement.
This Note and the other Notes issued of even date herewith
evidence borrowings under, and have been issued by the Borrowers
in accordance with the terms of, the Credit Agreement. The Bank
and any holder hereof is entitled to the benefits of the Credit
Agreement, the Security Documents and the other Loan Documents,
and may enforce the agreements of the Borrowers contained
therein, and any holder hereof may exercise the respective
remedies provided for thereby or otherwise available in respect
thereof, all in accordance with the respective terms thereof.
All capitalized terms used in this Note and not otherwise defined
herein which are defined in the Credit Agreement shall have the
same meanings herein as in the Credit Agreement.
The Borrowers irrevocably authorize the Bank to make or cause to
be made, at or about the time of the Drawdown Date of any Loan or
at the time of receipt of any payment of principal of this Note,
an appropriate notation on the grid attached to this Note, or the
continuation of such grid, or any other similar record, including
computer records, reflecting the making of such Loan or (as the
case may be) the receipt of such payment. The outstanding amount
of the Loans set forth on the grid attached to this Note, or the
continuation of such grid, or any other similar record, including
computer records, maintained by the Bank with respect to any
Loans shall be prima facie evidence of the principal amount
thereof owing and unpaid to the Bank, but the failure to record,
or any error in so recording, any such amount on any such grid,
continuation or other record shall not limit or otherwise affect
the obligation of the Borrowers hereunder or under the Credit
Agreement to make payments of principal of and interest on this
Note when due.
The Borrowers have the right in certain circumstances and the
obligation under certain other circumstances to prepay the whole
or part of the principal of this Note on the terms and conditions
specified in the Credit Agreement. This Note is a revolving
note, and it is contemplated that by reason of prepayments
hereon, there may be times when no indebtedness is owing
hereunder; notwithstanding any such occurrence, the Note shall
remain valid and shall be in full force and effect as to each
principal advance made hereunder subsequent to each such
occurrence.
If any one or more of the Events of Default shall occur, the
entire unpaid principal amount of this Note and all of the unpaid
interest accrued thereon may become or be declared due and
payable in the manner and with the effect provided in the Credit
Agreement.
No delay or omission on the part of the Bank or any holder hereof
in exercising any right hereunder shall operate as a waiver of
such right or of any other rights of the Bank or such holder, nor
shall any delay, omission or waiver on any one occasion be deemed
a bar or waiver of the same or any other right on any further
occasion.
The Borrowers and every endorser and guarantor of this Note or
the obligation represented hereby waive presentment, demand,
notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or
enforcement of this Note, and assent to any extension or
postponement of the time of payment or any other indulgence, to
any substitution, exchange or release of collateral and to the
addition or release of any other party or person primarily or
secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWERS HEREUNDER SHALL
FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING
THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE
MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS
OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON SUCH BORROWERS BY MAIL
AT THE ADDRESS SPECIFIED IN 20 OF THE CREDIT AGREEMENT. EACH OF
THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument
under the laws of the Commonwealth of Massachusetts.
--
IN WITNESS WHEREOF, each of Trico Marine Operators, Inc. and
Trico Marine Assets, Inc. has caused this Note to be signed in
its corporate name and its corporate seal to be impressed thereon
by its duly authorized officer as of the day and year first above
written.
[Corporate Seal]TRICO MARINE OPERATORS, INC.
By:__________________________________
Name:
Title:
[Corporate Seal]TRICO MARINE ASSETS, INC.
By:__________________________________
Name:
Title:
--
<PAGE>
EXHIBIT B
FORM OF
LOAN REQUEST
, 199_
To the Banks (as
defined in the Credit Agreement referred to below)
c/o The First National Bank
of Boston, as Agent
100 Federal Street
Boston, Massachusetts 02110
Attention: Transportation Division
Re:Loan Request
Ladies and Gentlemen:
The undersigned, Trico Marine Operators, Inc. and Trico Marine
Assets, Inc. (collectively, the "Borrowers") hereby request that
the Banks make a Loan pursuant to the terms and conditions set
forth in the Revolving Credit Agreement dated as of July [__],
1996 (such agreement, as amended and in effect from time to time,
the "Credit Agreement"), among the Borrowers, Trico Marine
Services, Inc., The First National Bank of Boston and the other
lending institutions which are or may become parties thereto from
time to time (collectively, the "Banks"), and The First National
Bank of Boston as agent for the Banks (the "Agent"), as the same
may be amended and in effect from time to time as set forth
below.
Capitalized terms which are used herein without definition and
which are defined in the Credit Agreement shall have the same
meanings herein as in the Credit Agreement.
The Borrowers request that the Banks make a [Base Rate Loan in
the principal amount of $_________] [Eurodollar Rate Loan in the
principal amount of $_______, with an Interest Period of ________
months] on the Drawdown Date of [____________]. We understand
that this request obligates us to accept the requested Revolving
Credit Loan on the proposed Drawdown Date.
The Borrowers hereby represent, warrant and certify to you that
(1)the appraised value of the Vessels (as stated in the most
recent appraisals delivered to the Agent pursuant to 8.4(g) of
the Credit Agreement) is $________;
(2)the aggregate amount of Outstanding Loans, after giving effect
to the Loan requested hereunder, is $__________;
(3)the amount set forth in item (2) above multiplied by 1.4 is
equal to $________; and
(4)the availability under Credit Agreement (item 1 minus item 3)
is equal to $________.
The Borrowers hereby represent, warrant and certify to you that
(a) the proceeds specified herein shall be used in accordance
with the provisions of the Credit Agreement, (b) the
representations and warranties of the Borrowers contained in the
Credit Agreement or otherwise made by the Borrowers in connection
with the transactions contemplated thereby were true and correct
in all respects when made and are true and correct in all
respects on and as of the date hereof with the same effect as if
made herein (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement
and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are
not materially adverse, and except to the extent that such
representations and warranties relate expressly to an earlier
date), (c) the Borrowers have performed and complied in all
respects with all of the terms and conditions contained in the
Credit Agreement required to be performed or complied with by the
Borrowers prior to or at the time of the borrowing requested
herein, and (d) at and as of the date hereof, no Default or Event
of Default exists and no Default or Event of Default shall result
from the consummation of the borrowing requested herein.
Very truly yours,
TRICO MARINE OPERATORS, INC.
By:______________________________
Name:
Title:
TRICO MARINE ASSETS, INC.
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF
COMPLIANCE CERTIFICATE
[Date]
To the Banks (as defined in the
Credit Agreement referred to below)
c/o The First National Bank of Boston, as Agent
100 Federal Street
Boston, Massachusetts 02110
Attn: Transportation Division
Ladies and Gentlemen:
Reference is made to the Revolving Credit Agreement dated as of July
[__], 1996 (as amended and in effect from time to time, the "Credit
Agreement"), by and among Trico Marine Operators, Inc., Trico Marine
Assets, Inc., (collectively, the "Borrowers"), Trico Marine Services,
Inc., The First National Bank of Boston and the other lending
institutions which are or may become parties thereto from time to time
(collectively, the "Banks"), and the First National Bank of Boston as
agent for the Banks (the "Agent"). Capitalized terms used herein
without definition which are defined in the Credit Agreement shall
have the respective meanings assigned to such terms in the Credit
Agreement.
Pursuant to Section 8.4(c) of the Agreement, the Borrowers, by the
undersigned officers of the Borrowers (who have reviewed the Loan
Documents) hereby certify to each of you as follows: (a) the
information furnished in the calculations set forth on the Covenant
Compliance Worksheet attached hereto as Annex A was true and correct
as of the last day of the fiscal [year] [quarter] immediately
preceding the date of this certificate; (b) as of the date of this
certificate, there exists no Default or Event of Default or condition
which would, with either or both the giving of notice or the lapse of
time, result in a Default or an Event of Default; and (c) the
financial statements delivered herewith were prepared in accordance
with generally accepted accounting principles applied on a basis
consistent with prior periods (except, in the case of quarterly
statements, for provisions for footnotes and, in all cases, except as
disclosed therein).
IN WITNESS WHEREOF, each of Trico Marine Operators, Inc. and Trico
Marine Assets, Inc. has executed this Compliance Certificate as of the
date first written above.
TRICO MARINE OPERATORS, INC.
By:_______________________________
Name:
Title:
TRICO MARINE ASSETS, INC.
By:_______________________________
Name:
Title:
Annex A
Covenant Compliance Worksheet
I.Operating Cash Flow to Total Debt Service (calculated on a
consolidated basis) (Section 10.1)
A.Net Income:_________
B.Plus: interest expense:_________
C.Plus: income tax expense:_________
D.Plus: depreciation and amortization:_________
E.Less: Cash taxes (without duplication):_________
F.Less: Capital Expenditures (for maintenance, repair
dry-docking, inspection of Capital Assets):_________
G.Operating Cash Flow (A+B+C+D-E-F):_________
H.Total Financial Obligations:_________
I.Plus: Total Interest Expense:_________
J.Plus: Adjusted Revolver Outstandings_________
K.Total Debt Service (H+I+J):_________
Computed Ratio (G'K):_________
Minimum ratio allowed:1.5: 1
Excess (deficiency) in ratio:_________
II.Funded Debt to Tangible Net Worth Ratio (calculated on a
consolidated basis) (Section 10.2)
A.Indebtedness:__________
(other than short-term trade credit)
B.Plus: Deferred purchase price of assets__________
(other than short-term trade credit)
C.Plus: Capitalized Leases__________
D.Funded Debt (A+B+C):__________
E.Total Assets:__________
F.Less: Total Liabilities__________
G.Less: intangible assets__________
H.Less: write-up in book value
subsequent to Closing Date:__________
I.Less: subscriptions receivable__________
J.Tangible Net Worth (E-F-G-H-I)__________
K.Computed ratio (D'J)__________
Maximum ratio allowed:1.0:1
Excess (deficiency) in ratio:__________
III.Minimum Tangible Net Worth (calculated on a consolidated
basis)
(Section 10.3)
A:Tangible Net Worth:__________
B.$45,000,000$45,000,000
C.Plus: 50% of positive consolidated Net Income for
each fiscal quarter since the Closing Date:__________
D.Minimum Tangible Net Worth (B+C)__________
Excess (deficiency) in Net Worth (A-D):__________
IV.Collateral Value Ratio (Section 10.4)
A.Appraised value of the Vessels subject to US Vessel
Mortgage and Vanuatu Vessel Mortgage (at most
recent appraisal):___________
B.Loans Outstanding___________
C.Minimum ratio of appraised Vessels to
Outstanding Loans:1.4: 1
D.Actual ratio of appraised Vessels to
Outstanding Loans (A / B):___________
Excess (deficiency) in ratio:___________
<PAGE>
EXHIBIT D
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated as of , 199_
Reference is made to the Revolving Credit Agreement dated as of
July __, 1996 (as amended and in effect from time to time, the
"Credit Agreement"), by and among Trico Marine Operators, Inc., a
Louisiana corporation, Trico Marine Assets, Inc., a Delaware
corporation, (collectively, the "Borrowers"), Trico Marine
Services, Inc., the lending institutions referred to therein as
Banks (collectively, the "Banks"), and The First National Bank of
Boston, as agent (in such capacity, the "Agent") for the Banks.
Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Credit Agreement.
(the "Assignor") and
(the "Assignee") hereby agree as follows:
1.Subject to the terms and conditions of this Assignment and
Acceptance, the Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes without
recourse to the Assignor, as of the Effective Date (as
hereinafter defined), a ____________% interest in and to all the
Assignor's rights, benefits, indemnities and obligations with
respect to its Commitment, its Commitment Percentage, the Loans
owing to it and the Note held by it.
2.The Assignor (a) represents and warrants that (i) it is legally
authorized to enter into this Assignment and Acceptance, (ii) as
of the date hereof, its Commitment Percentage (without giving
effect to assignments thereof which have not yet become
effective) is _________%, and the outstanding balance of its
Loans (unreduced by any assignments thereof which have not yet
become effective) is $_________, and (iii) immediately after
giving effect to all assignments which have not yet become
effective, the Assignor's Commitment Percentage will be
sufficient to give effect to this Assignment and Acceptance, (b)
makes no representation or warranty, express or implied, and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any of the other
Loan Documents or any other instrument or document furnished
pursuant thereto or the attachment, perfection or priority of any
security interest or mortgage, other than that it is the legal
and beneficial owner of the interest being assigned by it
hereunder free and clear of any claim or encumbrance; (c) makes
no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrowers or any other
Person primarily or secondarily liable in respect of any of the
Obligations, or the performance or observance by the Borrowers or
any other Person primarily or secondarily liable in respect of
any of the Obligations or any of its obligations under the Credit
Agreement or any of the other Loan Documents or any other
instrument or document delivered or executed pursuant thereto;
and (d) attaches hereto the Notes delivered to it under the
Credit Agreement.
The Assignor requests that the Borrowers exchange the Assignor's
Notes for new Notes payable to the Assignor and the Assignee as
follows:
Notes Payable to
the Order of: Amount of Note:
[Name of Assignor][Note ($_____)]
[Name of Assignee][Note ($_____)]
3.The Assignee (a) represents and warrants that (i) it is duly
and legally authorized to enter into this Assignment and
Acceptance, (ii) the execution, delivery and performance of this
Assignment and Acceptance do not conflict with any provision of
law or of the charter or by-laws of the Assignee, or of any
agreement binding on the Assignee, (iii) all acts, conditions and
things required to be done and performed and to have occurred
prior to the execution, delivery and performance of this
Assignment and Acceptance, and to render the same the legal,
valid and binding obligation of the Assignee, enforceable against
it in accordance with its terms, have been done and performed and
have occurred in due and strict compliance with all applicable
laws; (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial
statements delivered pursuant to 7.4 and 8.4 thereof and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Assignment and Acceptance; (c) agrees that it will, independently
and without reliance upon the Assignor, the Agent or any other
Bank 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 the Credit
Agreement; (d) represents and warrants that it is an Eligible
Assignee; (e) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
the Credit Agreement and the other Loan Documents as are
delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (f) agrees that
it will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank.
4.The effective date for this Assignment and Acceptance shall be
__________, 19__ (the "Effective Date"). Following the execution
of this Assignment and Acceptance and the consent of the
Borrowers hereto having been obtained, if required under the
terms of the Credit Agreement, each party hereto shall deliver
its duly executed counterpart hereof to the Agent for consent by
the Agent and recording in the Register by the Agent. Upon the
Agent's acceptance and consent to this Assignment and Acceptance
and the Agent's receipt of the required registration fee in the
amount of $2500, the Agent will record this Assignment and
Acceptance in the Register and Schedule 1.1 to the Credit
Agreement shall thereupon be replaced as of the Effective Date by
the Schedule 1.1 annexed hereto.
5.Upon such acceptance and recording, from and after the
Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder,
and (ii) the Assignor shall, with respect to that portion of its
interest under the Credit Agreement assigned hereunder,
relinquish its rights and be released from its obligations under
the Credit Agreement; provided, however, that the Assignor shall
retain its rights to be indemnified pursuant to 17 of the Credit
Agreement with respect to any claims or actions arising prior to
the Effective Date.
6.Upon such acceptance of this Assignment and Acceptance by the
Agent and such recording, from and after the Effective Date, the
Agent shall make all payments in respect of the rights and
interests assigned hereby (including payments of principal,
interest, fees and other amounts) to the Assignee. The Assignor
and the Assignee shall make any appropriate adjustments in
payments for periods prior to the Effective Date by the Agent or
with respect to the making of this assignment directly between
themselves.
7.THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE EFFECT AS A
SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAWS).
8.This Assignment and Acceptance may be executed in any number of
counterparts which shall together constitute but one and the same
agreement.
--
IN WITNESS WHEREOF, intending to be legally bound, each of the
undersigned has caused this Assignment and Acceptance to be
executed on its behalf by its officer thereunto duly authorized,
as of the date first above written.
[THE ASSIGNOR]
By:__________________________________
Name:
Title:
[THE ASSIGNEE]
By:__________________________________
Name:
Title:
CONSENTED TO:
TRICO MARINE OPERATORS, INC.
By:_______________________________
Name:
Title:
TRICO MARINE ASSETS, INC.
By:_______________________________
Name:
Title:
THE FIRST NATIONAL BANK
OF BOSTON, as Agent
By:_______________________________
Name:
Title:
TRICO MARINE SERVICES, INC.
EXHIBIT 11.1
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except share and per share amount
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
____________________ __________________
1996 1995 1996 1995
________ ________ ________ _________
<S> <C> <C> <C> <C>
Net income (loss) before
extraordinary item 1,618 (703) 1,982 (1,374)
Extraordinary item, net of taxes (917) - (917) -
___________ __________ ___________ _________
Net income (loss) 701 (703) 1,065 (1,374)
=========== ========== =========== =========
Computation of weighted average
number of shares outstanding:
Issued : 6,811,439
Weighted average shares
outstanding 4,952,049 3,051,339 4,001,694 3,049,689
Add: Incremental shares
applicable to stock
options based on the
Treasury Stock method
using average market
price 631,699 - 543,574 -
___________ __________ ___________ ____________
Weighted average common shares
and equivalents
outstanding 5,583,748 3,051,339 4,545,268 3,049,689
============ =========== =========== ===========
Earnings per common share and
equivalent outstanding:
Income (loss) before
extraordinary item $ 0.29 $ (0.23) $ 0.44 $ (0.45)
Extraordinary item (0.16) - (0.21) -
___________ __________ ___________ _________
Net income (loss) $ 0.13 $ (0.23) $ 0.23 $ (0.45)
========== =========== =========== =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE PERIOD ENDING JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,288
<SECURITIES> 0
<RECEIVABLES> 10,066
<ALLOWANCES> 550
<INVENTORY> 0
<CURRENT-ASSETS> 11,526
<PP&E> 64,457
<DEPRECIATION> 8,034
<TOTAL-ASSETS> 72,676
<CURRENT-LIABILITIES> 5,510
<BONDS> 0
0
0
<COMMON> 69
<OTHER-SE> 62,599
<TOTAL-LIABILITY-AND-EQUITY> 72,676
<SALES> 19,495
<TOTAL-REVENUES> 19,495
<CGS> 14,652
<TOTAL-COSTS> 14,652
<OTHER-EXPENSES> 187
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,660
<INCOME-PRETAX> 3,037
<INCOME-TAX> 1,055
<INCOME-CONTINUING> 1,982
<DISCONTINUED> 0
<EXTRAORDINARY> 917
<CHANGES> 0
<NET-INCOME> 1,065
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
