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, 1999
______ 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)
250 North American Court
Houma, LA 70363
(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 9, 1999 there were 28,383,416 shares outstanding of the
Registrant's Common Stock, par value $.01 per share.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)
<TABLE>
<CAPTION>
June 30 December 31,
1999 1998
------------ ---------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 31,675 $ 9,236
Accounts receivable, net 26,877 30,936
Prepaid expenses and other current assets 4,576 2,911
------------ ---------------
Total current assets 63,128 43,083
------------ ---------------
Property and equipment, at cost:
Land and buildings 3,479 3,402
Marine vessels 569,481 565,397
Construction-in-progress 41,267 45,861
Transportation and other 3,655 3,604
------------ ---------------
617,882 618,264
Less accumulated depreciation and amortization 61,788 47,855
------------ ---------------
Net property and equipment 556,094 570,409
------------ ---------------
Goodwill, net 114,565 116,170
Other assets 38,020 39,228
------------ ---------------
$ 771,807 $ 768,890
============ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ 3,261 $ 2,033
Accounts payable 10,007 11,058
Accrued expenses 8,119 9,894
Accrued interest 11,899 10,674
Income taxes payable 57 66
------------ ---------------
Total current liabilities 33,343 33,725
------------ ---------------
Long-term debt 393,112 402,518
Deferred income taxes, net 35,655 45,622
Other non-current liabilities 2,642 2,785
------------ ---------------
Total liabilities 464,752 484,650
------------ ---------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 100,000 shares
authorized, no shares issued - -
Common stock, $.01 par value, authorized
40,000,000 shares, issued 28,450,448 and
20,450,448 shares, outstanding 28,378,416 and
20,378,416 shares at June 30, 1999 and
December 31, 1998, respectively 285 205
Additional paid-in capital 265,181 218,807
Retained earnings 52,407 70,586
Accumulated other comprehensive loss (10,817) (5,357)
Treasury stock, at par value, 72,032 shares (1) (1)
Total stockholders' equity 307,055 284,240
------------ ---------------
$ 771,807 $ 768,890
============ ===============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- -----------------------
1999 1998 1999 1998
---------- --------- ---------- -----------
<S> <C> <C> <C> <C>
Revenues:
Charter hire $26,617 $52,906 $54,903 $101,772
Other vessel income 47 36 79 57
---------- --------- ---------- -----------
Total revenues 26,664 52,942 54,982 101,829
---------- --------- ---------- -----------
Operating expenses:
Direct vessel operating expenses and other 16,736 17,197 34,074 34,016
Asset write-down 1,111 - 1,111 -
General and administrative 2,921 2,476 5,455 4,770
Amortization of marine inspection costs 3,444 2,282 6,696 3,730
---------- --------- ---------- -----------
Total operating expenses 24,212 21,955 47,336 42,516
---------- --------- ---------- -----------
Depreciation and amortization expense 8,098 7,401 16,102 14,344
---------- --------- ---------- -----------
Operating income (loss) (5,646) 23,586 (8,456) 44,969
Interest expense 7,722 7,029 15,513 13,581
Amortization of deferred financing costs 491 427 969 855
Gain on sale of assets, net - (610) - (608)
Other income, net (237) (418) (295) (741)
---------- --------- ---------- -----------
Income (loss) before income taxes and
extraordinary item (13,622) 17,158 (24,643) 31,882
Income tax expense (benefit) (4,616) 5,434 (8,294) 10,314
---------- --------- ---------- -----------
Income (loss) before extraordinary item (9,006) 11,724 (16,349) 21,568
Extraordinary item, net of taxes (1,830) - (1,830) -
---------- --------- ---------- -----------
Net income (loss) $(10,836) $11,724 $(18,179) $21,568
========== ========== ========== ===========
Basic earnings per common share:
Income (loss) before extraordinary item $ (0.39) $ 0.58 $ (0.75) $ 1.06
Extraordinary item, net of taxes (0.08) - (0.09) -
---------- --------- ---------- -----------
Net income (loss) $ (0.47) $ 0.58 $ (0.84) $ 1.06
========== ========== ========== ===========
Average common shares outstanding 22,975,339 20,335,702 21,684,051 20,317,926
========== ========== ========== ===========
Diluted earnings per common share:
Income (loss) before extraordinary item $ (0.39) $ 0.56 $ (0.75) $ 1.02
Extraordinary item, net of taxes (0.08) - (0.09) -
---------- --------- ---------- -----------
Net income (loss) $ (0.47) $ 0.56 $ (0.84) $ 1.02
========== ========== ========== ===========
Average common shares outstanding 22,975,339 21,102,455 21,684,051 21,097,988
========== ========== ========== ===========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended
June 30,
-----------------------
1999 1998
---------- ----------
<S> <C> <C>
Net income (loss) $ (18,179) $ 21,568
Adjustments to reconcile net income(loss)
to net cash provided
by operating activities:
Depreciation and amortization 23,742 19,458
Deferred income taxes (8,339) 10,013
Gain on sales of assets - (608)
Provision for doubtful accounts - 60
Asset write-off 1,111 -
Extraordinary item 1,830 -
Changes in operating assets and liabilities:
Accounts receivable 3,490 (6,402)
Prepaid expenses and other current assets (1,805) 155
Accounts payable and accrued expenses (1,178) 2,617
Other, net (338) 239
---------- ----------
Net cash provided by
operating activities 334 47,100
---------- ----------
Cash flows from investing activities:
Purchases of property and equipment (8,832) (61,568)
Deferred marine inspection costs (7,855) (15,834)
Proceeds from sales of assets 37 1,274
Investment in and advances to
unconsolidated company - (1,219)
Other (260) (1,493)
---------- ----------
Net cash used in investing activities (16,910) (78,840)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of common stock,
net of expenses 46,454 243
Proceeds from issuance of long-term debt 41,238 125,962
Repayment of long-term debt (47,332) (89,459)
Deferred financing costs and other (1,180) (661)
---------- ----------
Net cash provided by financing activities 39,180 36,085
---------- ----------
Effect of exchange rate changes on cash and
cash equivalents (165) (314)
---------- ----------
Net increase in cash and cash equivalents 22,439 4,031
Cash and cash equivalents at beginning of period 9,236 10,940
---------- ----------
Cash and cash equivalents at end of period $ 31,675 $ 14,971
Supplemental information:
Income taxes paid $ 7 $ 3,746
========== ==========
Income taxes refunded $ - $ 3
========== ==========
Interest paid $ 15,328 $ 11,277
========== ==========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------------------------
1999 1998 1999 1998
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net Income (loss) $(10,836) $11,724 $(18,179) $21,568
----------- --------- ----------- ---------
Other comprehensive loss, net of tax:
Foreign currency translation adjustments (2,425) (815) (5,460) (4,114)
----------- --------- ----------- ---------
Comprehensive income (loss) $(13,261) $10,909 $(23,639) $17,454
=========== ========= =========== =========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
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 six months ended June 30, 1999 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,
1998.
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, total stockholders' equity or
cash flows.
2. EARNINGS PER SHARE:
For the three-month and six-month periods ending June 30, 1999, options to
purchase 1,841,855 common shares at prices ranging from $0.91 to $23.13 have
been excluded from the computation of diluted earnings per share because
inclusion of these shares would have been antidilutive.
3. SEPARATE FINANCIAL STATEMENTS FOR SUBSIDIARY GUARANTORS:
During 1997, the Company issued $280,000,000 of 8 1/2 % senior notes due 2005
in three different series. In November 1998, the Company completed an exchange
offer of all the existing series of senior notes for one series of senior notes
(the "Senior Notes"). The terms and conditions of the Senior Notes are
identical to the predecessor senior notes.
Pursuant to the terms of the indenture governing the Senior Notes, the Senior
Notes must be guaranteed by each of the Company's "significant subsidiaries"
(the "Subsidiary Guarantors"), whether such subsidiary was a "significant
subsidiary" at the time of the issuance of the Senior Notes or becomes a
"significant subsidiary" thereafter. Separate financial statements of the
Subsidiary Guarantors are not included in this report because (a) the Company
is a holding company with no assets or operations other than its investments in
its subsidiaries, (b) the Subsidiary Guarantors are wholly-owned subsidiaries
of the Company, comprise all of the Company's direct and indirect subsidiaries
(other than inconsequential subsidiaries) and, on a consolidated basis,
represent substantially all of the assets, liabilities, earnings and equity of
the Company, (c) each of the Subsidiary Guarantors must fully and
unconditionally guarantee the Company's obligations under the Senior Notes on a
joint and several basis (subject to a standard fraudulent conveyance savings
clause) and (d) management has determined that separate financial statements
and disclosures concerning the Subsidiary Guarantors are not material to
investors.
4. INCOME TAXES:
The Company's effective income tax rate for the three-month and six-month
periods ended June 30, 1999 was 34% and for the three-month and six-month
periods ended June 30, 1998 was 32%. The variance from the Company's statutory
rate is due to income contributed by Trico Supply ASA, which is deferred at the
Norwegian statutory rate of 28%, due to the Company's intent to permanently
reinvest the unremitted earnings and postpone their repatriation indefinitely.
5. NEW ACCOUNTING STANDARDS:
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards, No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"), effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. The effective date of SFAS No.
133 was deferred for one year with the issuance of Statement of Financial
Accounting Standards, No. 137, "Deferral of the Effective Date of SFAS No.
133," (SFAS No. 137). Accordingly, SFAS No. 133, as amended by SFAS No. 137,
is effective for all fiscal years beginning after June 15, 2000. The Company
is currently evaluating the impact SFAS No. 133 will have on its financial
statements, if any.
6. SEGMENT AND GEOGRAPHIC INFORMATION (IN THOUSANDS):
The Company is a provider of marine support services to the oil and gas
industry. Substantially all revenues result from the charter of vessels owned
by the Company. The Company's three reportable segments are based on
geographic area, consistent with the Company's management structure. The
accounting policies of the segments are the same, except for purposes of income
taxes and intercompany transactions and balances. The North Sea segment
provides for a flat tax rate of 28%, which is the Norwegian statutory tax rate.
Additionally, segment data includes intersegment revenues, receivables and
payables, and investments in consolidated subsidiaries. The Company evaluates
performance based on net income (loss). The U.S. segment represents the
Company's domestic operations. The North Sea segment includes Norway and the
United Kingdom, and the Other segment primarily represents the Company's
Brazilian operations. Segment data as of and for the three-month and six-month
periods ended June 30, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
Three Months Ended June 30, 1999 U.S. North Sea OTHER TOTALS
-------------------------------- ---- ---------- ----- ------
<S> <C> <C> <C> <C>
Revenues from external customers 10,278 14,869 1,518 26,664
Intersegment revenues 36 - - 36
Segment net income (loss) (12,681) 2,286 (441) (10,836)
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended June 30, 1998 U.S. NORTH SEA OTHER TOTALS
-------------------------------- ---- ---------- ----- ------
<S> <C> <C> <C> <C>
Revenues from external customers 30,391 22,551 - 52,942
Intersegment revenues - - - -
Segment net income 2,950 8,774 - 11,724
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30, 1999 U.S. North Sea OTHER TOTALS
-------------------------------- ---- ---------- ----- ------
<S> <C> <C> <C> <C>
Revenues from external customers 22,144 29,597 3,241 54,982
Intersegment revenues 252 - - 252
Segment net income (loss) (21,822) 4,556 (913) (18,179)
Segment total assets 559,196 285,491 32,879 877,566
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30, 1998 U.S. North Sea OTHER TOTALS
-------------------------------- ---- ---------- ----- ------
<S> <C> <C> <C> <C>
Revenues from external customers 61,343 40,486 - 101,829
Intersegment revenues - - - -
Segment net income 7,078 14,490 - 21,568
Segment total assets 566,166 292,491 3,066 861,723
</TABLE>
SEGMENT AND GEOGRAPHIC INFORMATION (IN THOUSANDS), CONTINUED:
A reconciliation of segment data to consolidated data as of and for the three-
month and six-month periods ended June 30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------
1999 1998
--------- ---------
<S> <C> <C>
Revenues
Total revenues from external customers and intersegment revenues for
reportable segments............................................. 26,700 52,942
Elimination of intersegment revenues................................ 36 -
-------- --------
Total consolidated revenues.................................. 26,664 52,942
======== ========
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1999 1998
--------- ---------
<S> <C> <C>
Revenues
Total revenues from external customers and intersegment revenues for
reportable segments............................................. 55,234 101,829
Elimination of intersegment revenues................................ (252) -
-------- ---------
Total consolidated revenues.................................. 54,982 101,829
======== =========
</TABLE>
<TABLE>
<CAPTION>
AS OF JUNE 30,
-------------------------
1999 1998
--------- ---------
<S> <C> <C>
Assets
Total assets for reportable segments................................ 877,566 861,723
Elimination of intersegment receivables............................. (3,558) -
Elimination of investment in subsidiaries........................... (102,201) (101,608)
--------- ---------
Total consolidated assets.................................... 771,807 760,115
========= =========
</TABLE>
7. Stock Sale:
On April 16, 1999, the Company entered into a definitive agreement whereby
affiliates of Inverness Management LLC ("Inverness") agreed to purchase
$50,000,000 of the Company's common shares in a private placement. Under the
terms of the agreement, Inverness purchased an aggregate of 8,000,000 shares of
the Company's common stock in two tranches at $6.25 per share. The first
tranche was closed on May 6, 1999, and the second tranche was closed on June
28, 1999. The net proceeds from the first tranche were primarily used to pay
down amounts outstanding under the Company's bank credit facility. As of June
30, 1999, the net proceeds from the second tranche were invested by the Company
in short-term money market instruments.
8. UNITED STATES GOVERNMENT GUARANTEED SHIP FINANCING BONDS:
On April 21, 1999, the Company issued $18,867,000 principal amount of 15 year
United States Government Guaranteed Ship Financing Bonds (the "Ship Bonds")
at an interest rate of 6.11% per annum. The Ship Bonds are due in 30 semi-
annual installments of principal and interest. The Ship Bonds are secured by
first preferred ship mortgages on two supply boats, the Spirit River and the
9. BANK CREDIT AGREEMENT:
Effective July 19, 1999, the Company executed a new $52,500,000 revolving
credit agreement (the "Bank Credit Facility"). The Bank Credit Facility
bears interest at a Eurocurrency rate plus a margin that depends on the
Company's leverage ratio and a commitment fee on the undrawn portion. The
Bank Credit Facility does not require any principal payments until July 19,
2002, when all amounts outstanding under the Bank Credit Facility will
mature. The Bank Credit Facility is collateralized by substantially all of the
Company's vessels other than its North Sea vessels. The Bank Credit Facility
contains certain covenants which require the Company to maintain certain debt
coverage and leverage ratios and net worth levels, limit capital expenditures,
prohibit equity distributions, limit the ability of the Company to create
liens or merge or consolidate with other entities. As a result of the
prepayment of all amounts outstanding under the Company's previous credit
facility, the Company recorded an extraordinary charge of $1,830,000, net
of taxes of $985,000, for the write-off of the unamortized balance of
related debt issuance costs.
10. ASSET WRITE-DOWN:
In June 1997, the Company acquired 12 supply vessels for the U.S. Gulf of
Mexico (the "Gulf" ) market area. The acquisition was accounted for using the
purchase method and the entire purchase price was allocated to the value of
the vessels. One of the vessels, acquired as part of this larger acquisition,
was deemed by Company management to be in a condition incapable of operation
at the time of acquisition and has never been activated. Due to the
substantially lower day rates available for its vessels, in general, and
the overall condition and age of this vessel, the Company determined that it
would not be economically feasible to refurbish and activate this vessel.
Accordingly, during the second quarter of 1999, the Company adjusted the
net book value of the vessel to an estimated value of $100,000, resulting in
a non-cash asset write-down of $1,111,000. The estimated value was determined
using discounted cash flows anticipated in connection with scrapping the
vessel. Operating losses, including depreciation, generated by the vessel
during the six-month periods ended June 30, 1999 and June 30, 1998 were
$49,000 and $40,000 respectively.
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, 1999 were $26.7
million and $55.0 million, respectively, compared to the $52.9 million and
$101.8 million in revenues for the second quarter and first six months of
1998, respectively. This decrease in revenues was due to the decrease in
average vessel day rates and utilization for all the Company's vessel
classes. Day rates and utilization for the Company's vessels are impacted
by the level of offshore oil and gas drilling, which is influenced by a
number of factors including oil and gas prices. The weakness in oil and gas
prices experienced in 1998 and early 1999, which resulted in the lowest
price for oil and gas in recent years, led to a general decline in most
areas of the Company's business and significantly affected the Company's
results for the first six months of 1999. 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.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Average Day Rates:
Supply $ 3,123 $ 8,065 $ 3,399 $ 8,111
Supply/Anchor Handling (N. Sea) 10,093 15,142 10,496 14,320
Lift 4,016 6,072 4,296 6,434
Crew/Line Handling 1,439 2,081 1,505 2,081
Utilization 1(1):
Supply 52% 70% 53% 70%
Supply/Anchor Handling (N. Sea) 95% 96% 91% 94%
Lift 47% 54% 47% 61%
Crew/Line Handling 83% 91% 82% 95%
Average Number of Vessels:
Supply 53.0 50.0 53.0 49.4
Supply/Anchor Handling (N. Sea) 17.0 17.0 17.0 16.6
Lift 6.0 6.0 6.0 6.0
Crew/Line Handling 21.0 22.3 21.0 22.6
</TABLE>
Supply boat day rates in the Gulf for the second quarter and first six months
of 1999 decreased 61.3% to $3,123 and 58.1% to $3,399, respectively,
compared to $8,065 and $8,111 for the comparable 1998 periods. Utilization
for the Gulf supply boat fleet also decreased for the second quarter and
six-month period due to weak market conditions in the Gulf compared to the
year-ago periods, the de-activation or " stacking" of 10 supply vessels and
an unusually high level of unscheduled vessel downtime for repairs and
maintenance. Vessel downtime for drydocking and refurbishment also impacted
the Company's supply boat utilization rates for both the 1999 and 1998 periods.
**FOOTNOTES**
1(1) Average utilization rates are average rates for all vessels based on a
365-day year. Vessels are considered utilized when they are being operated
or mobilized/demobilized under contracts with customers.
Toward the end of the second quarter of last year, the Company began to
experience decreases in average day rates and utilization for its Gulf
supply boat fleet as a result of decreased activity in the Gulf due to lower
oil and gas prices and increased overall fleet capacity due to newly-
constructed supply boats entering the market. These factors have led to
increased competition in the Gulf supply boat market. While oil and gas
prices have since increased to more favorable levels, which management believes
should lead to increased drilling activity offshore and increased demand for
marine support vessels, the Company did not experience any improvement in
its results for the second quarter of 1999.
Day rates for the Company's North Sea vessels have also declined substantially
during 1999 as a result of decreased activity in the North Sea due to lower
oil and gas prices. Average day rates for the Company's North Sea vessels
for the second quarter and first six months of 1999, decreased 33.3% to
$10,093 and 26.7% to $10,496, respectively, compared to $15,142 and $14,320
for the comparable 1998 periods. Utilization was 95% and 91% for second
quarter and first six months of 1999, compared to 96% and 94% for the year-
ago periods.
Lift boat day rates averaged $4,016 for the quarter and $4,296 for the first
six months of 1999, a decrease of 33.9% and 33.2%, respectively, compared to
$6,072 and $6,434 for the comparable 1998 periods due to decreased activity
levels in the Gulf. Utilization for the Company's lift boats decreased to
47% for both the second quarter and first six months of 1999, compared to
54% and 61% for the year-ago periods.
Day rates for crew boats and line handling vessels decreased 30.8% to $1,439
for the second quarter, from $2,081 for the second quarter of 1998, due to
the decrease in day rates for crew boats in the Gulf and the devaluation of
the Brazilian Real which affected the average day rate for the line handling
vessels. Utilization for the crew boats and line handling vessels decreased to
83% for the second quarter of 1999, compared to 91% for the comparable 1998
period due to the contract expiration of two of the line handling vessels
in Brazil.
During the second quarter and first six months of 1999, direct vessel operating
expenses were $16.6 million (62.4% of revenues) and $33.9 million (61.6% of
revenues), respectively, compared to $17.1 million (32.2% of revenues) and
$33.8 million (33.2% of revenues), for the second quarter and first six
months of 1998. Direct vessel operating expenses decreased in the second
quarter of 1999 compared to the year-ago quarter due to cost reduction
measures implemented by the Company, including the de-activation of 10
supply vessels. The decrease in direct vessel operating expenses was
partially offset by additional expenses associated with three new vessels
that were placed into service in the last half of 1998 and in the first
quarter of 1999. Direct vessel operating expenses as a percentage of
revenues increased due to the decrease in utilization and average vessel day
rates for the Company's vessel fleet, and the consolidation of the previously
unconsolidated Brazilian operations which, because of the small line handling
vessels it operates, has a lower gross profit margin than the Company's
operations as a whole.
Depreciation and amortization expense increased to $8.1 million and $16.1
million for the second quarter and first six months of 1999, respectively,
up from $7.4 million and $14.3 million for the year-ago periods as a result
of the Company's expanded vessel fleet and vessel upgrade capital
expenditures. Amortization of marine inspection costs increased to $3.4
million and $6.7 million for the quarter and six month period ended June
30,1999, respectively, from $2.3 million and $3.7 million in the comparable
1998 periods, due to the amortization of increased drydocking and marine
inspection costs associated with the Company's fleet upgrade and
refurbishment program.
General and administrative expenses increased to $2.9 million (10.9% of
revenues) and $5.5 million (9.9% of revenues) in the second quarter and
first six months of 1999, respectively, from $2.5 million (4.7% of revenues)
and $4.8 million (4.7% of revenues) for the 1998 periods due principally to
the consolidation of the previously unconsolidated Brazilian operations.
General and administrative expenses, as a percentage of revenues, increased in
the 1999 periods due to the decrease in utilization and average day rates for
the Company's vessel fleet.
Interest expense increased to $7.7 million for the second quarter of 1999 from
$7.0 million for the second quarter of 1998. This increase was due to
increased borrowings in 1999 that were used to fund the Company's various
vessel construction and upgrade projects.
In the second quarter and first six months of 1999, the Company had income tax
benefits of $4.6 million and $8.3 million, respectively, compared to income
tax expense of $5.4 million and $10.3 million in the 1998 periods. The
Company's effective income tax rate for the three-month period ended June
30, 1999 was 34%. The variance from the Company's statutory rate is due to
income contributed by Trico Supply, which is deferred at the Norwegian
statutory rate of 28%, due to the Company's intent to permanently reinvest
the unremitted earnings and postpone their repatriation indefinitely.
LIQUIDITY AND CAPITAL RESOURCES
Since its initial public offering in May 1996, the Company's strategy has been
to enhance its position as a leading supplier of marine support services by
pursuing opportunities to acquire vessel fleets and by diversifying into
international markets. Primarily as a result of acquisitions, the Company's
total assets have grown from $52.1 million at December 31, 1995, to $771.8
million at June 30, 1999. During the 1996 to 1997 period, the Company
completed the acquisition of Trico Supply, a then publicly traded Norwegian
company, for approximately $293.7 million, which amount includes certain
costs of the transaction, and acquired 37 supply boats in the Gulf at an
aggregate cost of $177.0 million.
The Company has also taken delivery in 1998 and 1999 of six newly constructed
vessels to increase its international market presence and deepwater
capabilities. Additionally, in 1997 and 1998 the Company undertook a vessel
improvement program consisting of extensive upgrading and refurbishment of
its Gulf supply boat fleet. While this refurbishment program resulted in
significant vessel downtime in 1998 and the first half of 1999, the Company
believes that the completion of the program has extended the service lives
of the refurbished vessels and will significantly reduced required
maintenance spending in the future.
As a result of the reduction in industry activity and resulting decreases in
day rates and utilization, the Company intends to limit capital expenditures
in 1999 to those required to complete its vessel upgrade and construction
projects and capital expenditures related to the regulatory-mandated
drydocking costs of its vessel fleet. During the first six months of 1999, the
Company spent approximately $8.8 million on vessel upgrade or construction
projects. During the second quarter, the Company continued construction in
Norway of a 275-foot, technologically advanced multi-purpose anchor handling
towing and supply vessel ("AHTS") with 23,800 horsepower that was completed
and delivered in July 1999. The Company also completed construction in July
1999 of the second of two 230-foot supply vessels at a shipyard on the U.S.
Gulf Coast. The Company's only planned capital expenditures for the last half
of 1999 consist of completing vessel upgrade and refurbishment projects and
regulatory-mandated drydocking costs. Due to the decreased day rates for
the Gulf supply boats, as part of this reduced capital expenditure plan, the
Company has de-activated or "stacked" an average of 10 of its Gulf supply
vessels during 1999 depending upon market conditions.
Funds during the first six months of 1999 were provided by $46.5 million in net
proceeds from the issuance of common stock, $22.3 million in borrowings
under the Company's bank credit facilities, $18.9 million of principal
amount of 15 year 6.11% Ship Financing Bonds guaranteed by the United States
Government, and generated $334,000 from operating activities. During the
period, the Company, repaid $47.3 million of debt and made capital
expenditures totaling $16.7 million, which included $7.9 million of deferred
marine inspection costs. Cash on hand increased by $22.4 million during the
period.
The Company has outstanding $280.0 million in aggregate principal amount of
8 1/2 % Senior Notes due 2005 (the "Senior Notes"). The Senior Notes are
unsecured and are required to be guaranteed by all of the Company's
Significant Subsidiaries (as such term is defined in the indenture governing
the Senior Notes, the "Subsidiary Guarantors"). Except in certain
circumstances, the Senior Notes may not be prepaid until August 1, 2001, at
which time they may be redeemed, at the option of the Company, in whole or
in part, at a redemption price equal to 104.25% plus accrued and unpaid
interest, with the redemption price declining ratably on August 1 of each of
the succeeding three years. The indenture governing the Senior Notes
contains certain covenants that, among other things, limit the ability of
the Company to incur additional indebtedness, pay dividends or make other
distributions, create certain liens, sell assets, or enter into certain
mergers or acquisitions.
On April 16, 1999, the Company entered into a definitive agreement whereby
affiliates of Inverness Management LLC ("Inverness") agreed to purchase
$50,000,000 of the Company's common shares in a private placement. Under
the terms of the agreement, Inverness purchased an aggregate of 8,000,000
shares of the Company's common stock in two tranches at $6.25 per share.
The first tranche was closed on May 6, 1999, and the second tranche was
closed on June 28, 1999. The net proceeds from the first tranche were primarily
used to pay down amounts outstanding under the Company's bank credit facility.
As of June 30, 1999, the net proceeds from the second tranche were invested by
the Company in short-term money market instruments.
The Company maintains a bank credit facility that provides a revolving line of
credit that can be used for acquisitions and general corporate purposes. On
July 19, 1999, the Company replaced its $85 million revolving line of credit
with a $52.5 million revolving credit facility (the "Bank Credit Facility").
The Bank Credit Facility is collateralized by a mortgage on substantially all
of the Company's vessels other than its North Sea Vessels. Amounts borrowed
under the Bank Credit Facility mature on July 19, 2002 and bear interest at a
Eurocurrency rate plus a margin that depends on the Company's leverage
ratio. The weighted average interest rate for the Bank Credit Facility was
8.1% as of August 12, 1999. The Bank Credit Facility requires the Company
to maintain certain debt coverage and leverage ratios and net worth levels,
limits capital expenditures, prohibits equity distributions, limits the
ability of the Company to create liens or merge or consolidate with other
entities.
In June 1998, the Company refinanced Trico Supply's existing bank credit
facilities with a revolving credit facility in the amount of NOK 650
million, or $82.5 million (the "Norwegian Bank Facility"). As of June 30,
1999, the Company had approximately NOK 375 million ($47.6 million) of debt
outstanding under the Norwegian Bank Facility. The Norwegian Bank Facility
is collateralized by a security interest in certain of the Company's North
Sea vessels, requires Trico Supply to maintain certain financial ratios and
limits the ability of Trico Supply to create liens, or merge or consolidate
with other entities. Amounts borrowed under the Norwegian Bank Facility
bear interest at NIBOR (Norwegian Interbank Offered Rate) plus a margin. The
weighted average interest rate for the Norwegian Bank Facility was 7.4% as
of June 30, 1999. The commitment amount for the Norwegian Bank Facility
reduces by NOK 50 million ($6.3 million) every six months beginning December
1998, with the balance of the commitment to expire in June 2003.
On April 21, 1999, the Company issued $18.9 million principal amount of 15 year
6.11% Ship Financing Bonds guaranteed by the United States Government. The
Ship Bonds are due in 30 semi-annual installments of principal and interest,
with the first principal payment beginning October 21, 1999, and are secured
by first preferred ship mortgages on the Spirit River and Hondo River
vessels. The proceeds were used to reduce the amounts outstanding under the
Company's Bank Credit Facility.
The Company believes that cash generated from operations together with
available borrowings under the Bank Credit Facility will be sufficient to
fund the Company's currently planned capital projects and working capital
requirements. The Company historically has grown through acquisitions, and
intends to pursue opportunities to make strategic acquisitions in the
future. To the extent the Company is successful in identifying such
opportunities, it most likely would require additional equity and/or debt
financing depending on the size of the acquisition. There can be no
assurance regarding the availability or terms of any such additional equity
or debt financing, and the Company could be adversely affected if it is
unable to obtain such additional financing or if the terms of any such
additional financing are not favorable to the Company.
YEAR 2000 COMPLIANCE
In accordance with the U.S. Securities and Exchange Commission's ("SEC") Staff
Legal Bulletin No. 5 and the SEC's subsequent interpretive release, the
Company has assessed both the cost of addressing and the cost or the
consequence of incomplete or untimely resolution of the Year 2000 ("Y2K")
issue. This process includes (i) the development of Y2K awareness, (ii) a
comprehensive review to identify systems that could be affected by the Y2K
issue, (iii) an assessment of potential risk factors (including non-
compliance by the Company's suppliers, subcontractors and customers), (iv)
the allocation of required resources, (v) a determination of the extent of
remediation work required, (vi) the development of an implementation plan
and time table, and (vii) the development of contingency plans.
The Company, in the normal course of business, is in the process of replacing
its accounting and certain other information systems, and expects their
installation at all locations to be completed by September 30, 1999. While the
Company's growth is driving the Company's efforts to replace these systems,
the Company does expect the implementation of the new systems to mitigate
any potential Y2K issues related to any of its existing systems.
In addition, the Company's information systems personnel have substantially
completed their review and remedial work with third party vendors to resolve
the potential problems associated with the year 2000 and the processing of
date sensitive information by the Company's computer and other systems. The
Company has completed evaluating the Y2K effect on non-information
technology systems, including telephone systems, office based electronic
equipment and devices with embedded microprocessors and has completed all
remedial work where required. The Company has also substantially completed
its review and remedial work on all vessel based electronic equipment and
devices with embedded microprocessors. Additionally, the Company has
contacted key vendors and suppliers to ensure that they have a Y2K
compliance plan in an effort to minimize the Company's exposure to their
potential Y2K problems. The Company anticipates completion of its
evaluation of vessel based non-information technology equipment, key vendors
and suppliers and any remedial action and/or a contingency plan, if
necessary, by August 31, 1999.
Because of the Company's purchase of new software and conversions to new
software, the Y2K issue is not expected to pose significant operational
problems for the Company's computer systems. However, if such modifications
or conversions are not made or are not completed on time, the Y2K issue
could have an adverse impact on the Company's operations. Among other
things the Company could be impacted by: the inability of the Company to
retain qualified personnel and outside consultants to successfully remediate
Y2K issues and implement a new business system as demand for their services
rises; the inability of the Company's customers to accurately and timely pay
invoices; the inability of the Company to access necessary capital from
lenders or other sources when required; and the inability of the Company's
significant suppliers, subcontractors and others to provide the necessary
materials, services or systems required to operate the Company's business.
The Company believes that it will be able to implement successfully the changes
necessary to address the Y2K issues with reliance on its third party vendors
and does not expect the cost of such changes to have a material impact on
the Company's financial position, results of operations or cash flows in
future periods.
CAUTIONARY STATEMENTS
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" includes certain "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act.
All statements other than statements of historical fact included in this
section regarding the Company's financial position and liquidity, its
strategic alternatives, future capital needs, business strategies, scheduled
drydockings and related vessel downtime, and other plans and objectives of
management of the Company for future operations and activities, are forward-
looking statements. These statements are based on certain assumptions and
analyses made by the Company's management in light of its experience and its
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate under the
circumstances. Such statements are subject to risks and uncertainties,
including the risks involved with the Company's acquisition of Trico Supply
and the integration thereof, the Company's dependence on the oil and gas
industry and the volatility of that industry, the Company's ability to
manage growth, competition in its industry, the risk of international
operations and currency fluctuations, general economic and business
conditions, the business opportunities that may be presented to and pursued
by the Company, changes in law or regulations and other factors, many of
which are beyond the control of the Company. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to
have been correct. Such statements are not guarantees of future performance
and the actual results or developments may differ materially from those
projected in the forward-looking statements.
CHANGES IN SECURITIES AND USE OF PROCEEDS
The following is a description of all sales of unregistered securities by the
Company during the quarter ended June 30, 1999. The sales were conducted
pursuant to a private placement made in reliance upon the exemption provided
by Section 4(2) of the Securities Act of 1933, as amended, and no
underwriters were involved in such placement.
In April 1999, the Company entered into a Purchase Agreement (the "Purchase
Agreement") with affiliates of Inverness Management LLC, a privately held
investment firm, to purchase $50,000,000 of Common Stock of the Company in a
private placement. Under the Purchase Agreement, Inverness/Phoenix Partners
LP and Executive Capital Partners I LP (the "Investors"), agreed to purchase
in two tranches 8,000,000 shares of the Company's Common Stock at $6.25 per
share. On May 6, 1999 the Company closed the first tranche and sold to the
Investors 4,000,000 shares of Common Stock for an aggregate consideration of
$25 million. On June 28, 1999, the Company closed the second tranche and
sold to the Investors 4,000,000 shares of Common Stock for an aggregate
consideration of $25,000,000. Pursuant to the terms of the Purchase
Agreement, the Company paid an aggregate of $2 million in transaction fees
($1 million upon completion of each tranche) to the Investors in connection
with the placement.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's market risk exposures primarily include interest rate and
exchange rate fluctuation on derivative and financial instruments as
summarized below. The Company's market risk sensitive instruments are
classified as "other than trading."
The Company has entered into a number of variable and fixed rate debt
obligations, denominated in both the U.S. Dollar and the Norwegian Kroner
(Norwegian debt payable in Norwegian Kroner). The instruments are subject
to interest rate risk. The Company manages this risk by monitoring its
ratio of fixed and variable rate debt obligations in view of changing market
conditions and from time to time altering that ratio. The Company has also
entered into an interest rate swap agreement in order to manage its interest
rate exposure.
The Company's foreign subsidiaries collect revenues and pay expenses in several
different foreign currencies. The Company monitors the exchange rate of its
foreign currencies and, when deemed appropriate, enters into hedging
transactions in order to mitigate the risk from foreign currency
fluctuations. The Company also manages its foreign currency risk by
attempting to contract foreign revenue in U.S. Dollars whenever practicable.
At June 30, 1999, there were no material unrealized gains or losses on open
foreign currency forward exchange contracts.
The Company's market risk estimates have not changed materially from those
disclosed in the Company's 1998 Form 10-K, incorporated herein by reference.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders of the Company was held on June 8,
1999 (the "Annual Meeting").
(b) At the Annual Meeting, Thomas E. Fairley and Benjamin F. Bailar were re-
elected to serve until the annual meeting of stockholders for the year
2002. In addition to the directors elected at the Annual Meeting, the
terms of Ronald O. Palmer, Garth H. Greimann, W. McComb Dunwoody, H.K.
Acord, Edward C. Hutcheson, Jr. and James C. Comis, III continued after
the Annual Meeting. Mr. Greimann subsequently resigned as a director of
the Company.
(c) At the Annual Meeting, holders of shares of the Company's Common Stock
elected two directors with the number of votes cast for and withheld for
such nominees as follows:
NAME FOR WITHHELD
Thomas E Fairley 17,763,891 208,013
Benjamin F. Bailar 17,758,091 213,813
With respect to the election of the directors, there were no abstentions and
non-votes totaled 2,406,512.
At the Annual Meeting, the stockholders also voted on and approved the
issuance and sale of 4,000,000 shares of the Company's Common Stock
pursuant to the terms of the Purchase Agreement, dated as of April 16,
1999, among the Company and Inverness/Phoenix Partners LP and Executive
Capital Partners I LP, as more fully described in the proxy materials
dated May 7, 1999. Holders of 7,232,957 shares voted for, holders of
838,532 shares voted against and holders of 75,140 shares abstained from
voting on such proposal. Non-votes with respect to such proposal totaled
12,231,787.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3.1 Amended and Restated Certificate of Incorporation of the Company.
{1}
3.2 By Laws of the Company.{1}
4.1 Specimen Common Stock Certificate.{2}
4.2 Third Amended and Restated Revolving Credit Agreement dated as of
July 19, 1999 by and among the Company, Trico Marine Operators,
Inc., Trico Marine Assets, Inc. and Wells Fargo Bank, N.A. as agent
for itself and the other lending institutions that may become party
thereto from the time to time in accordance with the terms thereof.
10.1 Purchase Agreement dated as of April 16, 1999 by and among the
Company, Inverness/Phoenix Partners LP and Executive Capital
Partners I LP.{3}
10.2 Stockholders' Agreement dated as of May 6, 1999 among the Company,
Inverness/Phoenix Partners LP and Executive Capital Partners I LP.{3}
11.1 Computation of Earnings Per Share.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K:
None.
______________________
{1} Incorporated by reference to the Company's Current Report on Form 8-K
dated July 21, 1997 and filed with the Commission on August 1, 1997.
{2} Incorporated by reference to the Company's Registration Statement on
Form S-1 (Registration Statement No. 333-2990).
{3} Incorporated by reference to the Company's definitive Proxy Statement
dated May 7, 1999.
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.
Date: August 13, 1999 By: /S/ KENNETH W. BOURGEOIS
----------------------------------
Kenneth W. Bourgeois
Chief Accounting Officer and duly authorized
officer
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
among
TRICO MARINE SERVICES, INC.
TRICO MARINE ASSETS, INC.
TRICO MARINE OPERATORS, INC.
and
the Banks named herein
and
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION
as Administrative Agent
WELLS FARGO BANK, N.A.
as Issuing Bank
CHRISTIANIA BANK OG KREDITKASSE ASA, NEW YORK BRANCH
as Documentation Agent
BANK ONE LOUISIANA, N.A.
as Syndication Agent
dated as of July 19, 1999
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
Section 1. DEFINITIONS AND RULES OF INTERPRETATION 2
SECTION 1.1 DEFINITIONS 2
SECTION 1.2 RULES OF INTERPRETATION 15
SECTION 2. THE REVOLVING CREDIT FACILITY 16
SECTION 2.1 COMMITMENT TO LEND 16
SECTION 2.2 COMMITMENT FEE 16
SECTION 2.3 REDUCTION OF COMMITMENTS 16
SECTION 2.4 THE NOTES 17
SECTION 2.5 INTEREST ON LOANS 17
SECTION 2.6 REQUESTS FOR LOANS 18
SECTION 2.7 LOANS TO COVER REIMBURSEMENT OBLIGATIONS 18
SECTION 2.8 ELECTION OF EUROCURRENCY RATE; NOTICE OF ELECTION; INTEREST
PERIODS; MINIMUM AMOUNTS 18
SECTION 2.9 FUNDS FOR LOANS 19
SECTION 2.9.1. FUNDING PROCEDURES 19
SECTION 2.9.2. ADVANCES BY ADMINISTRATIVE AGENT 20
SECTION 2.10 INTENTIONALLY OMITTED 20
SECTION 2.11 INTENTIONALLY OMITTED 20
SECTION 2.12 MATURITY OF THE LOANS 20
SECTION 2.13 MANDATORY REPAYMENTS OF LOANS 20
SECTION 2.14 OPTIONAL REPAYMENTS OF LOANS 21
SECTION 3. LETTERS OF CREDIT 21
SECTION 3.1 LETTER OF CREDIT COMMITMENT 21
SECTION 3.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT 21
SECTION 3.1.2. LETTER OF CREDIT APPLICATIONS 22
SECTION 3.1.3. TERMS OF LETTERS OF CREDIT 22
SECTION 3.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS 22
SECTION 3.1.5. PARTICIPATIONS OF BANKS 22
SECTION 3.2 REIMBURSEMENT OBLIGATION OF THE BORROWERS 22
SECTION 3.3 LETTER OF CREDIT PAYMENTS 23
SECTION 3.4 OBLIGATIONS ABSOLUTE 24
SECTION 3.5 RELIANCE BY ISSUER 24
SECTION 3.6 FEES 25
SECTION 4. INTENTIONALLY OMITTED 25
SECTION 5. CERTAIN GENERAL PROVISIONS 25
SECTION 5.1 FEES 25
SECTION 5.2 INTENTIONALLY OMITTED 25
SECTION 5.3 FUNDS FOR PAYMENTS 25
SECTION 5.3.1 PAYMENTS TO ADMINISTRATIVE AGENT 25
SECTION 5.3.2 NO OFFSET, ETC 25
SECTION 5.4 COMPUTATIONS 26
SECTION 5.5 ADDITIONAL COSTS, ETC. 27
SECTION 5.6 CAPITAL ADEQUACY 28
SECTION 5.7 CERTIFICATE 28
SECTION 5.8 INTEREST AFTER DEFAULT 28
SECTION 5.9 CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS 29
SECTION 5.10 INABILITY TO DETERMINE EUROCURRENCY RATE 30
SECTION 5.11 ILLEGALITY 30
SECTION 5.12 INDEMNITY 31
SECTION 5.13 REPLACEMENT OF BANKS 31
SECTION 6. COLLATERAL SECURITY AND GUARANTIES 32
SECTION 7. REPRESENTATIONS AND WARRANTIES 32
SECTION 7.1 CORPORATE AUTHORITY 32
SECTION 7.1.1. INCORPORATION; GOOD STANDING 32
SECTION 7.1.2. AUTHORIZATION 32
SECTION 7.1.3. ENFORCEABILITY 33
SECTION 7.2 GOVERNMENTAL APPROVALS 33
SECTION 7.3 TITLE TO PROPERTIES; LEASES 33
SECTION 7.4 FINANCIAL STATEMENTS 33
SECTION 7.5 NO MATERIAL CHANGES; SOLVENCY 34
SECTION 7.6 BUSINESS 34
SECTION 7.7 LITIGATION 34
SECTION 7.8 INTENTIONALLY OMITTED 35
SECTION 7.9 COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. 35
SECTION 7.10 TAX STATUS 35
SECTION 7.11 NO EVENT OF DEFAULT 35
SECTION 7.12 HOLDING COMPANY AND INVESTMENT COMPANY ACTS 35
SECTION 7.13 ABSENCE OF ENCUMBRANCES, ETC. 35
SECTION 7.14 PERFECTION OF SECURITY INTEREST; COLLATERAL 35
SECTION 7.15 CERTAIN TRANSACTIONS 36
SECTION 7.16 EMPLOYEE BENEFIT PLANS 36
SECTION 7.16.1. IN GENERAL 36
SECTION 7.16.2. TERMINABILITY OF WELFARE PLANS 36
SECTION 7.16.3. GUARANTEED PENSION PLANS; MULTIEMPLOYER PLANS 36
SECTION 7.17 REGULATIONS U AND X; USE OF PROCEEDS 36
SECTION 7.18 ENVIRONMENTAL COMPLIANCE 37
SECTION 7.19 SUBSIDIARIES 38
SECTION 7.20 CHIEF EXECUTIVE OFFICE; BOOKS AND RECORDS 39
SECTION 7.21 DISCLOSURE 39
SECTION 7.22 FISCAL YEAR 39
SECTION 7.23 NO LABOR AGREEMENTS 39
SECTION 7.24 CONCERNING THE VESSELS 39
SECTION 8. AFFIRMATIVE COVENANTS 40
SECTION 8.1 PUNCTUAL PAYMENT 40
SECTION 8.2 MAINTENANCE OF OFFICE 40
SECTION 8.3 RECORDS AND ACCOUNTS 40
SECTION 8.4 FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION 41
SECTION 8.5 NOTICES 42
SECTION 8.5.1. DEFAULTS 42
SECTION 8.5.2. ENVIRONMENTAL EVENTS 42
SECTION 8.5.3. NOTIFICATION OF CLAIMS AGAINST COLLATERAL 42
SECTION 8.5.4. NOTICE OF LITIGATION AND JUDGMENTS 42
SECTION 8.6 CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES 43
SECTION 8.7 INSURANCE 43
SECTION 8.8 TAXES AND CLAIMS 43
SECTION 8.9 INSPECTION OF PROPERTIES AND BOOKS, ETC. 44
SECTION 8.10 COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS 44
SECTION 8.11 USE OF PROCEEDS 44
SECTION 8.12 CONCERNING THE VESSELS 44
SECTION 8.13 FURTHER ASSURANCES 45
SECTION 8.14 ADDITIONAL GUARANTORS 45
SECTION 8.15 YEAR 2000 COMPLIANCE 45
SECTION 9. CERTAIN NEGATIVE COVENANTS 46
SECTION 9.1 RESTRICTIONS ON INDEBTEDNESS 46
SECTION 9.2 RESTRICTIONS ON LIENS 48
SECTION 9.3 RESTRICTIONS ON INVESTMENTS 50
SECTION 9.4 DISTRIBUTIONS 51
SECTION 9.5 MERGER, CONSOLIDATION AND SALE OF ASSETS 51
SECTION 9.5.1. MERGERS AND ACQUISITIONS 51
SECTION 9.5.2. DISPOSITION OF ASSETS 52
SECTION 9.6 COMPLIANCE WITH ENVIRONMENTAL LAWS 52
SECTION 9.7 EMPLOYEE BENEFIT PLANS 53
SECTION 9.8 BUSINESS ACTIVITIES 53
SECTION 9.9 CHANGE OF CHIEF EXECUTIVE OFFICE OR CORPORATE NAME 53
SECTION 9.10 FISCAL YEAR 53
SECTION 9.11 TRANSACTIONS WITH AFFILIATES 53
SECTION 9.12 MODIFICATION OF CERTAIN DOCUMENTS 53
SECTION 9.13 UPSTREAM LIMITATIONS 53
SECTION 9.14 INCONSISTENT AGREEMENTS 54
SECTION 9.15 NO PREPAYMENTS, ETC. 54
SECTION 10. FINANCIAL COVENANTS 54
SECTION 10.1 DEBT SERVICE COVERAGE RATIO 54
SECTION 10.2 LEVERAGE RATIO 54
SECTION 10.3 TANGIBLE NET WORTH 55
SECTION 10.4 MINIMUM MORTGAGED VESSEL VALUE 55
SECTION 10.5 CAPITAL EXPENDITURES 55
SECTION 11. CLOSING CONDITIONS 56
SECTION 11.1 DELIVERY OF DOCUMENTS 56
SECTION 11.2 CERTIFIED COPIES OF CORPORATE DOCUMENTS; RESOLUTIONS 56
SECTION 11.3 CORPORATE ACTION 56
SECTION 11.4 INCUMBENCY CERTIFICATE 56
SECTION 11.5 VALIDITY OF LIENS 56
SECTION 11.6 PERFECTION CERTIFICATES AND LIEN SEARCH RESULTS 57
SECTION 11.7 CERTIFICATES OF INSURANCE 57
SECTION 11.8 FINANCIAL CONDITION 57
SECTION 11.9 SOLVENCY CERTIFICATE 57
SECTION 11.10 OPINIONS OF COUNSEL 57
SECTION 11.11 PAYMENT OF FEES AND EXPENSES 57
SECTION 11.12 BORROWING NOTICE 58
SECTION 11.13 APPRAISALS OF VESSELS, CLASS CONFIRMATIONS 58
SECTION 11.14 CONCURRENT FUNDING 58
SECTION 11.15 YEAR 2000 58
SECTION 11.16 TERMINATION OF EXISTING CREDIT AGREEMENT 58
SECTION 11.17 CERTIFICATE OF EXISTENCE; GOOD STANDING AND QUALIFICATION
TO DO BUSINESS 58
SECTION 11.18 Other DOCUMENTS 59
SECTION 12. CONDITIONS TO ALL BORROWINGS 59
SECTION 12.1 REPRESENTATIONS TRUE; NO EVENT OF DEFAULT 59
SECTION 12.2 NO LEGAL IMPEDIMENT 59
SECTION 12.3 GOVERNMENTAL REGULATION 59
SECTION 12.4 PROCEEDINGS AND DOCUMENTS 59
SECTION 13. EVENTS OF DEFAULT; ACCELERATION; ETC. 60
SECTION 13.1 EVENTS OF DEFAULT AND ACCELERATION 60
SECTION 13.2 TERMINATION OF COMMITMENTS 62
SECTION 13.3 REMEDIES 62
SECTION 13.4 DISTRIBUTION OF COLLATERAL PROCEEDS 63
SECTION 14. SETOFF 64
SECTION 15. THE ADMINISTRATIVE AGENT 64
SECTION 15.1 AUTHORIZATION 64
SECTION 15.2 EMPLOYEES AND AGENTS 65
SECTION 15.3 NO LIABILITY 65
SECTION 15.4 NO REPRESENTATIONS 65
SECTION 15.5 PAYMENTS 66
SECTION 15.5.1. PAYMENTS TO ADMINISTRATIVE AGENT 66
SECTION 15.5.2. DISTRIBUTION BY ADMINISTRATIVE AGENT 66
SECTION 15.5.3. DELINQUENT BANKS 66
SECTION 15.6 HOLDERS OF NOTES 67
SECTION 15.7 INDEMNITY 67
SECTION 15.8 ADMINISTRATIVE AGENT AS BANK 67
SECTION 15.9 RESIGNATION 67
SECTION 15.10 NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT 68
SECTION 15.11 DUTIES IN THE CASE OF ENFORCEMENT 68
SECTION 15.12 DOCUMENTATION AGENT; SYNDICATION AGENT 68
SECTION 16. EXPENSES 68
SECTION 17. INDEMNIFICATION 69
SECTION 18. SURVIVAL OF COVENANTS, ETC. 70
SECTION 19. ASSIGNMENT AND PARTICIPATION 70
SECTION 19.1 CONDITIONS TO ASSIGNMENT BY BANKS 70
SECTION 19.2 CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; 71
COVENANTS 72
SECTION 19.3 REGISTER 72
SECTION 19.4 NEW NOTES 72
SECTION 19.5 PARTICIPATIONS 73
SECTION 19.6 DISCLOSURE 73
SECTION 19.7 ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER 73
SECTION 19.8 MISCELLANEOUS ASSIGNMENT PROVISIONS 74
SECTION 19.9 ASSIGNMENT BY BORROWERS 74
SECTION 20. NOTICES, ETC. 74
SECTION 21. GOVERNING LAW 75
SECTION 22. HEADINGS 75
SECTION 23. COUNTERPARTS 75
SECTION 24. ENTIRE AGREEMENT, ETC. 75
SECTION 25. WAIVER OF JURY TRIAL 75
SECTION 26. CONSENTS, AMENDMENTS, WAIVERS, ETC. 75
SECTION 27. SEVERABILITY 76
SECTION 28. PARI PASSU TREATMENT 76
SECTION 29. INTENTIONALLY OMITTED 77
SECTION 30. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION 77
SECTION 30.1 SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY 77
SECTION 30.2 CONFIDENTIALITY 78
SECTION 30.3 PRIOR NOTIFICATION 78
SECTION 30.4 OTHER 78
SECTION 31. INTEREST 79
SECTION 32. NO ORAL AGREEMENTS 80
SECTION 33. ARBITRATION 80
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
Schedule 7.19 Subsidiaries
Schedule 7.23 Labor Agreements
Schedule 7.24 Vessels of Borrowers and Parent
Schedule 9.1 Existing Indebtedness
Schedule 9.2 Vessel Liens
Schedule 9.3 Existing Investments
<PAGE>
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, amended
and restated as of July 19, 1999 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 250 North
American Court, Houma, Louisiana 70363, TRICO MARINE ASSETS, INC. ("Marine
Assets"), a Delaware corporation having its principal place of business and
chief executive office at 250 North American Court, Houma, Louisiana 70363
(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 250 North American Court, Houma, Louisiana
70363, (c) the financial institutions listed on SCHEDULE 1.1 hereto and
such other financial institutions as may become parties to this Agreement
from time to time in accordance with the terms hereof (individually, a
"Bank" and collectively, the "Banks"), (d) WELLS FARGO BANK, N.A., as
Issuing Bank, and (e) WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION as
administrative agent for itself, the Issuing Bank and such financial
institutions (the "Administrative Agent"), CHRISTIANIA BANK OG KREDITKASSE
ASA, New York Branch as documentation agent for itself and such financial
institutions (the "Documentation Agent") (collectively the "Agents" and/or
"Arrangers").
WHEREAS, pursuant to a Second Amended and Restated Revolving Credit
Agreement, dated as of March 13, 1998 (the "Existing Credit Agreement")
among Marine Operators, Marine Assets, the Parent, the banks party thereto
(the "Existing Banks") and BankBoston, N.A., as agent for the Existing
Banks (the "Existing Agent"), the Existing Banks and the Existing Agent
have made loans to, and otherwise extended credit to Marine Operators and
Marine Assets;
WHEREAS, pursuant to that certain Master Assignment of Notes and Other
Loan Documents and that certain Assignment of Preferred Fleet Mortgage,
Liens and Other Loan Documents (collectively, the "Assignment") each dated
of even date herewith, the Existing Agent and the Existing Banks shall
assign all of their rights, titles and liabilities under the Existing
Credit Agreement and the notes, security documents and other loan documents
to the Administrative Agent, the Issuing Bank and the Banks pursuant to the
terms thereof.
WHEREAS, immediately after giving effect to the Assignment, but
subject to the conditions precedent set forth herein, the Borrowers,
Parent, Administrative Agent, Documentation Agent and the Banks desire to
amend and restate the Existing Credit Agreement, the notes and the liens
arising under the loan documents defined in the Existing Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree that, on and as
of the Closing Date, the Existing Credit Agreement hereby is amended and
restated in its entirety as follows:
SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION.
SECTION 1.1 DEFINITIONS. The following terms shall have the meanings
set forth in this SECTION 1 or elsewhere in the provisions of this
Agreement referred to below:
ACQUISITION. Any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business
or division of a Person, or (b) the acquisition of the capital stock,
partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary of such Person.
ADJUSTMENT DATE. The first day of the month immediately following the
month in which a Compliance Certificate is delivered by the Borrowers
pursuant to SECTION 8.4(c) hereof.
ADMINISTRATIVE AGENT. As defined in the introductory paragraph
hereof.
ADMINISTRATIVE AGENT-RELATED PERSONS. Administrative Agent, its
Affiliates, and their respective officers, directors, employees,
representatives and agents.
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.
AGENTS. Collectively the Administrative Agent and the Documentation
Agent.
AGREEMENT. This Third Amended and Restated Revolving Credit
Agreement, including the Schedules and Exhibits hereto.
APPLICABLE MARGIN. With respect to Base Rate Loans and Eurocurrency
Rate Loans the respective rates as determined under the Pricing Grid at the
beginning of each quarter during the term thereof.
APPRAISAL. See SECTION 8.4(f) hereof.
ARRANGER. Wells Fargo and Christiania.
ASSIGNMENT. As defined in the preamble hereto.
ASSIGNMENT AND ACCEPTANCE. See SECTION 19.1 hereof.
BALANCE SHEET DATE. March 31, 1999.
BANKS. Wells Fargo 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 SECTION 19 hereof.
BASE RATE. For any day, the rate of interest in effect for such day
as publicly announced from time to time by the Administrative Agent as its
"reference rate" (the "reference rate" is a rate set by Administrative
Agent based upon various factors including costs and desired return,
general economic conditions and other factors and is used as a reference
point for pricing some loans, which may be priced at, above or below such
announced rate.) Any change in the reference rate announced by
Administrative Agent shall take effect at the opening of business on the
day specified in the public announcement of such change.
BASE RATE LOAN. Any Loan or portion thereof bearing interest
calculated by reference to the Base Rate.
BORROWERS. As defined in the preamble hereto.
BUSINESS DAY. Any day on which banking institutions in Houston,
Texas, San Francisco, California and New Orleans, Louisiana are open for
the transaction of banking business and, with respect to a Eurocurrency
Rate Loan, also a day which is a Eurocurrency Business Day.
CAPITAL ASSETS. Fixed assets, both tangible (such as vessels, 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 SECTION 7.18 hereof.
CHRISTIANIA. Christiania Bank og Kreditkasse ASA, New York Branch in
its individual capacity.
CLOSING DATE. The first date on which the conditions set forth in
SECTION 11 have been satisfied, which in no event shall be later than
September 1, 1999.
CLOSING FEE. See SECTION 5.1 hereof.
CODE. The Internal Revenue Code of 1986 as amended, and regulations
promulgated thereunder.
COLLATERAL. Those Vessels and other property, rights and interests of
the Borrowers 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, and to participate in the issuance, extension and renewal of
Letters of Credit for the account of the Borrowers, as the same may be
reduced from time to time; or if such commitment is terminated pursuant to
the provisions hereof, zero.
COMMITMENT FEE. See SECTION 2.2.
COMMITMENT PERCENTAGE. With respect to each Bank, the amount set
forth on SCHEDULE 1.1 attached hereto as such Bank's percentage of the
Total Commitment.
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.
CONSOLIDATED EBITDA. For any period, the consolidated Net Income of
the Parent and its Subsidiaries for such period, after all expenses and
other proper charges, but before payment or provision for any income taxes,
interest expense, depreciation or amortization for such period, determined
on a consolidated basis for such Persons in accordance with generally
accepted accounting principles.
CONSOLIDATED NET TANGIBLE ASSETS. With respect to the Parent and its
Restricted Subsidiaries and as at any date, the sum of the amounts that
would appear on a consolidated balance sheet of the Parent and its
Restricted Subsidiaries as the total assets of the Parent and its
Restricted Subsidiaries, determined on a consolidated basis for such
Persons in accordance with generally accepted accounting principles and
after deducting therefrom, (a) to the extent otherwise included,
unamortized debt discount and expenses and other unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names,
copyrights, licenses, organization or development expenses and other
intangible items and (b) the aggregate amount of liabilities of the Parent
and its Restricted Subsidiaries which may properly be classified as current
liabilities (including tax accrued as estimated), determined on a
consolidated basis for such Persons in accordance with generally accepted
accounting principles.
CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate
amount of interest required to be paid or accrued by the Parent and its
Subsidiaries during such period on all Indebtedness of the Parent and its
Subsidiaries 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 any
Capitalized Lease, and including commitment fees, agency fees, facility
fees, balance deficiency fees and similar fees or expenses in connection
with the borrowing of money.
CONVERSION REQUEST. A notice given by the Borrowers to the
Administrative Agent of such Borrower's election to convert a Loan to a
Loan of another Type or to continue a Loan as a Loan of a certain Type, in
each case in accordance with SECTION 2.8.
DEBT SERVICE COVERAGE RATIO. As at the end of any fiscal quarter, the
ratio of (a) the consolidated Operating Cash Flow of the Parent and its
Subsidiaries for the period of the four (4) consecutive fiscal quarters of
the Parent ending on such date to (b) consolidated Total Debt Service of
the Parent and its Subsidiaries for the period of four (4) consecutive
fiscal quarters of the Parent ending on such date; PROVIDED, that for
purposes of calculating the Debt Service Coverage Ratio for the fiscal
quarter of the Parent ending on (i) September 30, 1999, consolidated
Operating Cash Flow and Total Debt Service shall be the consolidated
Operating Cash Flow and Total Debt Service for the fiscal quarter then
ending, (ii) December 31, 1999, consolidated Operating Cash Flow and Total
Debt Service shall be the consolidated Operating Cash Flow and Total Debt
Service for the period of the two fiscal quarters then ending, and (iii)
March 31, 2000, consolidated Operating Cash Flow and Total Debt Service
shall be the consolidated Operating Cash Flow and Total Debt Service for
the period of the three fiscal quarters then ending PROVIDED, further, when
calculating the Debt Service Coverage Ratio for any Test Period in which a
Triggering Acquisition occurred, the calculation of the Debt Service
Coverage Ratio shall be made on a Pro Forma Basis.
DEFAULT. See SECTION 13 hereof.
DELINQUENT BANK. See SECTION 15.5.3 hereof.
DERIVATIVE CONTRACT. Any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or bill option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
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,
and the date on which all or any portion of any Loan is converted or
continued in accordance with SECTION 2.8.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning
of Section 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 SECTION 7.18(a).
ERISA. The Employee Retirement Income Security Act of 1974, as
amended, and regulations promulgated thereunder.
ERISA AFFILIATE. Any Person which is treated as a single employer
with a Borrower or the Parent under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of Section 4043 of ERISA as to
which the requirement of notice has not been waived.
EUROCURRENCY 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
Administrative Agent in its sole discretion acting in good faith.
EUROCURRENCY LENDING OFFICE. Initially, the Administrative Agent's
head office; thereafter, such other office of the Administrative Agent, if
any, that shall be making or maintaining Eurocurrency Rate Loans.
EUROCURRENCY RATE. For any Interest Period with respect to a
Eurocurrency 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
Administrative Agent's Eurocurrency Lending Office is offered Dollar
deposits two (2) Eurocurrency 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 Eurocurrency Lending
Office are customarily conducted at or about 11:00 a.m., London 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
Eurocurrency Rate Loan to which such Interest Period applies, divided by
(b) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if
applicable.
EUROCURRENCY RATE LOANS. Loans or any portion thereof bearing
interest calculated by reference to the Eurocurrency Rate.
EUROCURRENCY RESERVE RATE. For any day with respect to any
Eurocurrency 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.
EVENT OF DEFAULT. See SECTION 13 hereof.
EXCLUDED CAPITAL EXPENDITURES. For any fiscal year of the Parent,
collectively, (i) Capital Expenditures not to exceed $26,140,000 incurred
by the Borrowers during fiscal year 1999 in connection with the
construction and completion of Northern Admiral, Hondo River, Spirit River
and Stillwater River and (ii) any Capital Expenditure of the Parent or any
of its Subsidiaries, where not less than seventy-five percent (75%) of the
consideration paid or payable by the Parent and its Subsidiaries in
connection therewith is funded with the Proceeds of a Permitted Equity
Issuance.
EXISTING BANKS. As defined in the preamble hereto.
EXISTING CREDIT AGREEMENT. As defined in the preamble hereto.
EXISTING AGENT. As defined in the preamble hereto.
FEE LETTER. That certain letter agreement, dated as of June 18, 1999,
between the Parent, the Borrowers and the Administrative Agent, as the same
may be amended, supplemented, modified or restated and in effect from time
to time.
FUNDED DEBT. Without duplication and with respect to any Person and
as at any date of determination, the aggregate principal amount of
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), Reimbursement Obligations (contingent or
otherwise) in respect of Letters of Credit, and Capitalized Leases.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in SECTION
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 Section 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.
GUARANTIES. Collectively, the Parent Guaranty and any other guaranty
of any of the Obligations hereunder from the Parent or any of its
Subsidiaries to the Administrative Agent for the benefit of the Banks and
the Issuing Bank.
GUARANTORS. Collectively, the Parent and each other Subsidiary
(direct and indirect) of the Parent which shall deliver a guaranty of the
Obligations pursuant to SECTION 8.14 hereof.
HIGHEST LAWFUL RATE. As of a particular date, the maximum nonusurious
interest rate that under applicable federal and Texas law may then be
contracted for, charged or received by the Banks in connection with the
Obligations.
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; (c) all net obligations with respect to Derivative Contracts and
(d) 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.
INELIGIBLE SECURITIES. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1993 (12 U.S.C. Section 24, Seventh), as amended.
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 Eurocurrency 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
Business 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 Business
Day of the calendar quarter; and (ii) for any Eurocurrency Rate Loan, 1, 3,
or 6 months; and (b) thereafter, each period commencing on the last
Business Day of the next preceding Interest Period applicable to such Loan
and ending on the last Business 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 Eurocurrency Rate
Loan would otherwise end on a day that is not a Eurocurrency Business Day,
that Interest Period shall be extended to the next succeeding Eurocurrency
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 Eurocurrency Business Day;
(b) if the Borrowers shall fail to give notice as provided in
SECTION 2.8, the Borrowers shall be deemed to have requested a conversion
of the affected Eurocurrency Rate Loan to a Base Rate Loan, and the
continuance of all Base Rate Loans as Base Rate Loans, as the case may be,
on the last day of the then current Interest Period with respect thereto;
(c) any Interest Period that begins on the last Eurocurrency
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 Eurocurrency Business Day of a
calendar month; and
(d) any Interest Period relating to any Eurocurrency Rate Loan
that would otherwise extend beyond the Maturity Date shall end on the
Maturity Date.
INTERNATIONAL HOLDINGS. Trico Marine International Holdings BV, a
Netherlands corporation and a Subsidiary of the Parent.
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.
ISSUING BANK. Wells Fargo Bank, N.A. in its capacity as issuer of one
or more Letters of Credit hereunder, together with any replacement letter
of credit issuer.
LETTER OF CREDIT. See SECTION 3.1.1.
LETTER OF CREDIT APPLICATION. See SECTION 3.1.1.
LETTER OF CREDIT FEE(S). See SECTION 3.6.
LETTER OF CREDIT PARTICIPATION. See SECTION 3.1.4.
LETTER OF CREDIT RATE. At any time of determination, the Applicable
Margin for Eurocurrency Rate Loans in effect at such time.
LEVERAGE RATIO. As at the end of any fiscal quarter, the ratio of (a)
the consolidated Funded Debt of the Parent and its Subsidiaries at the end
of the fiscal quarter of the Parent ending on such date to (b) Consolidated
EBITDA of the Parent and its Subsidiaries for the period of the four (4)
consecutive fiscal quarters of the Parent ending on such date; PROVIDED,
that for purposes of calculating the Leverage Ratio for the fiscal quarter
of the Parent ending on (i) September 30, 1999, Consolidated EBITDA shall
be the Consolidated EBITDA for the fiscal quarter then ending multiplied by
four (4), (ii) December 31, 1999, Consolidated EBITDA shall be the
Consolidated EBITDA for the period of the two fiscal quarters then ending
multiplied by two (2), and (iii) March 31, 2000, consolidated EBITDA shall
be the Consolidated EBITDA for the period of the three fiscal quarters then
ending multiplied by one and one-third (1 1/3); PROVIDED, FURTHER, when
calculating the Leverage Ratio for any Test Period in which a Triggering
Acquisition occurred, the calculation of the Leverage Ratio shall be made
on a Pro Forma Basis.
LOAN DOCUMENTS. Collectively, this Agreement, the Notes, the Letter
of Credit Applications, the Letters of Credit, the Security Documents, the
Assignment, the Fee Letter and any other documents contemplated by any of
the foregoing or executed in connection with any of the foregoing.
LOAN REQUEST. See SECTION 2.6 hereof.
LOANS. Loans made or to be made by the Banks to the Borrowers
pursuant to SECTION 2 hereof.
MAINTENANCE CAPITAL EXPENDITURES. Capital Expenditures incurred in
connection with the maintenance, repair, or dry-docking of, and inspection
costs relating to, Vessels which are owned by the Borrowers.
MAJORITY BANKS. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Notes on such
Date; and if no such principal is outstanding, the Banks whose aggregate
Commitment Percentages on such date together constitute at least fifty-one
percent (51%) of the Total Commitment.
MARINE ASSETS. As defined in the preamble.
MARINE OPERATORS. As defined in the preamble.
MATERIAL ADVERSE EFFECT. (i) material adverse change in, or a
material adverse effect upon, the operations, business, properties or
financial condition of (x) the Parent, the Borrowers and their Subsidiaries
taken as a whole, or (y) the Parent, the Borrowers and the Guarantors taken
as a whole; (ii) a material impairment of the ability of any of the Parent,
either Borrower or any Guarantor to perform under any Loan Document and to
avoid any Default; or (c) a material adverse effect upon the rights and
remedies of the Administrative Agent, the Issuing Bank and the Banks under
any Loan Document.
MATURITY DATE. The earlier of (i) July 19, 2002 or (ii) the date on
which the Banks' Commitments terminate in accordance with the provisions of
this Agreement.
MAXIMUM CREDIT EXPOSURE. As of any date of determination, the greater
of (a) the Total Commitment and (b) the sum of (i) the Outstanding Loans,
plus (ii) the Maximum Drawing Amount, plus (iii) all Unpaid Reimbursement
Obligations, in each case, as of such date of determination.
MAXIMUM DRAWING AMOUNT. The sum of the maximum aggregate amount from
time to time that the beneficiaries may draw under outstanding Letters of
Credit, as such aggregate amount may be reduced from time to time pursuant
to the terms of the Letters of Credit.
MORTGAGED VESSELS. US Flag Vessels that are subject to a Vessel
Mortgage.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
Section 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 SECTION 2.4.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
the Parent, the Borrowers or the Guarantors to any of the Banks, the
Issuing Bank and the Administrative 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, arising or incurred under this Agreement or
the other Loan Documents or in respect of any of the Loans made or
Reimbursement Obligations incurred or any other instruments at any time
evidencing any thereof.
OECD. See SECTION 9.3(B).
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 even date
herewith, from the Parent to the Administrative Agent and each of the Banks
and the Issuing Bank, 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 Section
4002 of ERISA and any successor entity or entities having similar
responsibilities.
PERFECTION CERTIFICATES. The Perfection Certificates as defined in
the Security Agreement.
PERMITTED ACQUISITION. The acquisition by any Person, whether by
purchase, lease or otherwise, of any Person or specified group of assets;
provided that such Person is engaged, or such assets are used in, a line of
business substantially similar to the business now conducted by the Person
making such acquisition.
PERMITTED EQUITY ISSUANCE. The issuance by the Parent of common stock
or convertible preferred stock; PROVIDED that the terms of any such
convertible preferred stock shall be approved in writing by the
Administrative Agent.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by SECTION 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.
PRICING GRID. The annualized rates (stated in terms of basis points
("bps")) set forth below which shall be computed as of the first of each
calendar quarter during the term hereof for the Applicable Margin and
Commitment Fee based upon the Leverage Ratio computed at the end of the
immediately preceding quarter as follows:
<TABLE>
<CAPTION>
LEVEL LEVERAGE RATIO BASE RATE LOAN EUROCURRENCY RATE COMMITMENT
(BPS) LOAN (BPS) FEE (BPS)
<S> <C> <C> <C> <C>
I less than 1.75x 25.0 125.0 25.0
II 1.75x or more but less 25.0 150.0 25.0
than 2.25x
III 2.25x or more but less 37.5 175.0 37.5
than 2.75x
IV 2.75x or more but less 37.5 200.0 37.5
than 3.25x
V 3.25x or more but less 50.0 225.0 50.0
than 4.50x
VI 4.50x or more but less 50.0 250.0 50.0
than 6.00x
VII 6.00x or greater 75.0 275.0 50.0
</TABLE>
If usage exceeds $35,000,000 at any time the Leverage Ratio is 6.00 to
1.00 or greater, the Applicable Margin for Eurocurrency Rate Loans will
increase to 300.00 basis points. For purposes of this definition Usage
shall equal the sum of Outstanding Loans, Maximum Drawing Amount and Unpaid
Reimbursement Obligations.
The Applicable Margin and the Commitment Fee shall be determined for
each period commencing on an Adjustment Date through the date immediately
preceding the next Adjustment Date (each a "Rate Adjustment Period"), the
Applicable Margin or Commitment Fee, as applicable, shall be the applicable
percentage set forth on the Pricing Grid with respect to the Leverage Ratio,
calculated on a Pro Forma Basis, if applicable, as of the end of the
fiscal quarter of the Borrowers immediately preceding the date of the
Compliance Certificate relating to such Adjustment Date. If the Borrower
shall fail to deliver any Compliance Certificate pursuant to <section>8.4(c)
hereof, then, for the period commencing on the date such Compliance
Certificate was due pursuant to <section>8.4(c) through the Adjustment Date
immediately following the date on which such Compliance Certificate is
delivered, the Applicable Margin and the Commitment Fee shall be that
corresponding to Level VII of the Pricing Grid. Notwithstanding the
foregoing, the Applicable Margin and Commitment Fee shall be set at
Level VII from the Closing Date until the first Adjustment Date occurring
after the Closing Date.
PRO FORMA BASIS. Following a Triggering Acquisition, the calculation
of the Funded Debt and EBITDA components of the Leverage Ratio for the
fiscal quarter in which such Triggering Acquisition occurred and each of
the three fiscal quarters immediately following such Triggering Acquisition
with reference to the audited historical financial results of the Person,
business, division or group of assets acquired in such Triggering
Acquisition (or if such audited historical financial results are not
available, such management prepared financial statements as are reasonably
acceptable to the Administrative Agent) and the Parent and its Subsidiaries
for the applicable Test Period after giving effect on a pro forma basis to
such Triggering Acquisition and assuming that such Triggering Acquisition
had been consummated at the beginning of such Test Period. Other
reasonable cost savings, expenses and other income statement or operating
statement adjustments which are attributable to the change in ownership
and/or management resulting from such Triggering Acquisition as may be
approved by the Administrative Agent in writing (which approval shall not
be unreasonably withheld) shall also be deemed to have been realized on the
first day of the Test Period.
PROPERTY. Any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.
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.
REIMBURSEMENT OBLIGATION. The Borrowers' obligation to reimburse the
Issuing Bank and the Banks on account of any drawing under any Letter of
Credit as provided in SECTION 3.2.
RESTRICTED SUBSIDIARY. A Subsidiary of the Parent designated as a
"Restricted Subsidiary" under the Indentures relating to the Senior Notes.
SECTION 20 SUBSIDIARY. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the
Federal Reserve Board to underwrite and deal in certain Ineligible
Securities.
SECURITY AGREEMENT. The Third Amended and Restated Security Agreement
dated as of even date herewith among the Borrowers and the Administrative
Agent, as the same may be amended, supplemented, modified or restated and
in effect from time to time.
SECURITY DOCUMENTS. The Security Agreement, the Vessel Mortgages, the
Guaranties, all guaranties delivered to the Administrative Agent, the Banks
and the Issuing Bank pursuant to SECTION 8.14 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, and any other
document or instrument which purports to secure or assure payment of the
Obligations.
SENIOR NOTES. The 8 1/2% Senior Notes due 2005 of the Parent, in an
aggregate principal amount not to exceed $280,000,000, guaranteed by the
Borrowers and issued pursuant to such documentation as shall have been
previously delivered to, and approved by, the Administrative Agent.
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.
TANGIBLE NET WORTH. With respect to the Parent and the Borrowers, an
amount equal to Consolidated shareholders' equity minus the aggregate
amount of any treasury stock any intangible assets and any obligations due
from stockholders/employees and/or affiliates determined in accordance with
generally accepted accounting principles.
TEST PERIOD. The period of four (4) fiscal quarters included in any
calculation of the Leverage Ratio.
TITLE 11 SUBSIDIARY. Trico Marine International, Inc., the special
purpose Subsidiary of the Parent which was formed for the purpose of the
ownership and operation of the Stillwater River, Hondo River and Spirit
River vessels.
TOTAL COMMITMENT. The sum of the Commitments of the Banks as in
effect from time to time.
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, 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 Fees.
TRICO SHIPPING. Trico Shipping AS, a Norwegian corporation and a
Subsidiary of the Parent.
TRICO SUPPLY. Trico Supply ASA, a Norwegian joint stock company
(registration number 976853938) and a Subsidiary of the Parent.
TRIGGERING ACQUISITION. The acquisition by the Parent, the Borrower
or any of its Subsidiaries of any Person, business, division or specified
group of assets after the Closing Date involving consideration paid or to
be paid by the Parent, the Borrower and its Subsidiaries (including
assumption of liabilities) in one or a series of transactions in excess of
$10,000,000.
TYPE. As to any Loan, its nature as a Base Rate Loan or a
Eurocurrency Rate Loan.
UNIFORM CUSTOMS. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, or any successor version thereof
adopted by the Administrative Agent in the ordinary course of its business
as a letter of credit issuer and in effect at the time of issuance of such
Letter of Credit.
UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for
which the Borrowers do not reimburse the Issuing Bank and the Banks on the
date specified in, and in accordance with, SECTION 3.2.
US FLAG VESSELS. See SECTION 7.24(a).
US VESSEL MORTGAGE. The Third Amended and Restated First Preferred
Fleet Mortgage with respect to certain of the US Flag Vessels, dated as of
even date herewith, as may be further amended, supplemented, modified or
restated and in effect from time to time.
VESSEL MORTGAGES. Collectively, the US Vessel Mortgage and any other
vessel mortgage from either of the Borrowers or any other Subsidiary of the
Parent to the Administrative Agent for the benefit of any of the Banks.
VESSEL(S). Collectively, all vessels owned by either of the
Borrowers, from time to time, including, without limitation those vessels
listed on SCHEDULE 7.24 and individually, any of such vessels.
WELLS FARGO. Wells Fargo Bank (Texas), National Association in its
individual capacity.
YEAR 2000 COMPLIANT. See SECTION 7.25 hereof.
SECTION 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 Texas, have the meanings assigned to them therein, (h)
reference to a particular "Section" 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".
SECTION 2. THE REVOLVING CREDIT FACILITY.
SECTION 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 Administrative Agent given in accordance with SECTION 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, minus such Bank's
Commitment Percentage of the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations; provided that after giving effect to all
amounts requested (i) the sum of the outstanding amount of the Loans plus
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall
not at any time exceed the lesser of (a) the Total Commitment and (b) the
amount to which the Borrowers' secured Obligations are limited as set forth
in the proviso contained in SECTION 6 hereof; and (ii) the Borrowers are in
compliance with the covenant contained in SECTION 10.4 hereof. 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 SECTION 11 and SECTION 12 hereof, in the case of the initial Loans to be
made on the Closing Date, and SECTION 12 hereof, in the case of all other
Loans, have been satisfied on the date of such request. The parties hereto
hereby agree that, on and as of the Closing Date, the loans outstanding
under the Existing Credit Agreement shall become Loans hereunder.
SECTION 2.2 COMMITMENT FEE. The Borrowers hereby jointly and severally
agree to pay to the Administrative Agent for the accounts of the Banks in
accordance with their respective Commitment Percentages a commitment fee
(the "Commitment Fee") at the rate per annum equal to the amount set forth
on the Pricing Grid as the Commitment Fee 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 sum of the
outstanding principal amount of Loans, plus the Maximum Drawing Amount and
all Unpaid Reimbursement Obligations. The Commitment Fee shall be payable
quarterly in arrears on the last Business 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.
SECTION 2.3 REDUCTION OF COMMITMENTS.
(a) The Borrowers shall have the right at any time and from time
to time on or before the Maturity Date upon five (5) Business Days' prior
written notice to the Administrative Agent to reduce by $5,000,000 or a
larger integral multiple of $2,500,000 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 SECTION 2.3(a), the Administrative 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 Administrative
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 Borrowers
may pay any such accrued Commitment Fee on the last Business Day of the
then-current fiscal quarter.
(b) No reduction or termination of the Total Commitment once
made may be revoked; the portion of the Total Commitment reduced or
terminated may not be reinstated; and amounts in respect of such reduced or
terminated portion may not be reborrowed.
(c) Promptly after the effectiveness of any partial reduction in
the Total Commitment pursuant to this SECTION 2.3, the Administrative Agent
shall distribute to each Bank an updated SCHEDULE 1.1 reflecting such
reduction.
SECTION 2.4 THE NOTES.
The Loans shall be evidenced by separate amended and restated
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 with respect to
such Note 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 with respect to such Note 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.
SECTION 2.5 INTEREST ON LOANS. Except as otherwise provided in SECTION
5.8 hereof,
(a) Each Loan shall bear interest at the rate per annum equal to
the lesser of (i) the Base Rate or the Eurocurrency Rate PLUS, in each
case, the Applicable Margin, as set forth on the Pricing Grid, then
applicable to such Loans or (ii) the Highest Lawful Rate.
(b) The Borrowers jointly and severally promise to pay interest
on the outstanding amount of the Loans on each Interest Payment Date with
respect thereto. Interest shall also be paid on the date of any prepayment
of Loans under SECTION 2.13 or 2.14 for the portions of the Loans so
prepaid and upon payment (including prepayment) in full thereof and, during
the existence of any Event of Default, interest shall be paid on demand of
the Administrative Agent.
(c) 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 Administrative Agent will give the Banks and the
Borrowers prompt notice in writing of any change in the Base Rate.
SECTION 2.6 REQUESTS FOR LOANS. The Borrowers shall give to the
Administrative Agent written notice in the form of EXHIBIT B hereto (or
telephonic notice confirmed in a writing in the form of EXHIBIT B hereto)
of each Loan requested hereunder (a "Loan Request") no less than (a) one
(1) Business Day prior to any Drawdown Date of any Loan that is a Base Rate
Loan or (b) three (3) Eurocurrency Business Days prior to any Drawdown Date
of any Loan that is a Eurocurrency 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
Administrative 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 thereof. Each Loan Request shall be in a minimum aggregate
amount of $2,000,000 or a larger integral multiple of $250,000.
SECTION 2.7 LOANS TO COVER REIMBURSEMENT OBLIGATIONS. Notwithstanding
the notice and minimum amount requirements set forth in SECTION 2.6, the
Banks shall, subject to the satisfaction of the conditions set forth
herein, make Loans to the Borrowers on the date that any draft presented
under any Letter of Credit is honored by the Issuing Bank, or any date on
which the Issuing Bank otherwise makes a payment with respect thereto in an
amount sufficient to pay in full the obligations of the Borrowers under
SECTION 3.2 in respect of the honor of such draft or the making of such
payment. The Borrowers hereby request and authorize the Banks to make from
time to time such Loans by means of appropriate entries in the books and
records of the Banks and the proceeds of such Loans shall be payable to the
Issuing Bank. The Borrowers acknowledge and agree that the making of such
Loans shall, in each case, be subject in all respects to the provisions of
this Agreement as if they were Loans requested pursuant to a Loan Request,
including the limitations set forth in SECTION 2.1 and the requirement that
the applicable provisions of SECTION 12 be satisfied. Absent manifest
error on the part of the Banks, all actions taken by the Banks pursuant to
the provisions of this SECTION 2.7 shall be conclusive and binding on the
Borrowers. Loans made pursuant to this SECTION 2.7 shall be Base Rate
Loans (subject to conversion pursuant to SECTION 2.8 hereof) and shall bear
interest at the rate provided for Loans in SECTION 2.5 hereof. Each of the
Banks hereby acknowledges and agrees that (i) a Loan made pursuant to this
SECTION 2.7 shall be subject in all respects to the provisions of this
Agreement (including, without limitation, SECTION 2.9 hereof) and (ii) the
obligation of each Bank to make Loans under this Section shall be in
accordance with the amount of such Bank's Commitment Percentage of such
Loan.
SECTION 2.8 ELECTION OF EUROCURRENCY RATE; NOTICE OF ELECTION;
INTEREST PERIODS; MINIMUM AMOUNTS.
(a) At the Borrowers' option, so long as no Event of Default has
occurred and is then continuing, the Borrowers may (i) elect to convert any
Base Rate Loan or a portion thereof to a Eurocurrency Rate Loan, (ii) at
the time of any Loan Request specify that such requested Loan shall be a
Eurocurrency Rate Loan, or (iii) upon expiration of the applicable Interest
Period, elect to maintain an existing Eurocurrency Rate Loan as such,
provided in each case that the Borrowers shall give notice thereof to the
Administrative Agent pursuant to SECTION 2.8(b). Upon determining any
Eurocurrency Rate, the Administrative Agent shall forthwith provide notice
thereof to the Borrowers and the Banks, and each such notice to the
Borrowers shall be considered prima facie correct and binding, absent
manifest error.
(b) Three (3) Eurocurrency Business Days prior to the making of
any Eurocurrency Rate Loan or the conversion of any Base Rate Loan to a
Eurocurrency Rate Loan, or, in the case of an outstanding Eurocurrency Rate
Loan, the expiration date of the applicable Interest Period, the Borrowers
shall give written notice to the Administrative Agent, not later than 8:00
a.m. (San Francisco time) of their election pursuant to SECTION 2.8(a).
Each such notice delivered to the Administrative Agent shall specify the
aggregate principal amount of applicable Loans to be borrowed or maintained
as or converted to Eurocurrency Rate Loans and the requested duration of
the Interest Period that will be applicable to such Eurocurrency Rate Loan,
and shall be irrevocable and binding upon the Borrowers. If the Borrowers
shall fail to give the Administrative Agent notice of their election
hereunder, together with all of the other information required by this
SECTION 2.8(b), with respect to any Loan, whether at the end of an Interest
Period or otherwise, such Loan shall be deemed a Base Rate Loan. The
Administrative Agent shall promptly notify the Banks in writing (or by
telephone confirmed in writing or by facsimile) of any such election.
(c) Notwithstanding anything herein to the contrary, the
Borrowers may not specify an Interest Period with respect to all or any
portion of any Loan that would extend beyond the Maturity Date.
(d) No conversion of Loans pursuant to this SECTION 2.8 may
result in a Eurocurrency Rate Loan with a principal amount less than
$2,000,000.
(e) No more than six (6) Eurocurrency Rate Loans shall be
outstanding at any one time.
SECTION 2.9 FUNDS FOR LOANS.
SECTION 2.9.1. FUNDING PROCEDURES. Not later than 8:00 a.m. (San
Francisco time) on (i) the proposed Drawdown Date of any Loans, or (ii) the
date that any draft presented under any Letter of Credit is honored by the
Administrative Agent, or on any date on which the Administrative Agent
otherwise makes payment with respect thereto, and in connection therewith
the Administrative Agent makes Loans on behalf of the Banks to the
Borrowers pursuant to SECTION 2.7 hereof, each of the Banks will make
available to the Administrative Agent, at 201 Third Street, San Francisco,
California 94103, in immediately available funds, the amount of such
Bank's Commitment Percentage of such Loans made or to be made on such date.
Upon receipt from each Bank of such amount, and upon receipt of the
documents required by SECTION 11 and 12 hereof and the satisfaction of the
other conditions set forth therein, to the extent applicable, the
Administrative Agent will make available to the Borrowers the aggregate
amount of such Loans made available to the Administrative Agent by the
Banks. The failure or refusal of any Bank to make available to the
Administrative 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 Administrative Agent the amount of such other Bank's
Commitment Percentage of any requested Loans.
SECTION 2.9.2. ADVANCES BY ADMINISTRATIVE AGENT. The Administrative
Agent may, unless notified to the contrary by any Bank prior to a Drawdown
Date of a Loan, assume that such Bank has made available to the
Administrative 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 Administrative 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 Administrative Agent such
amount on a date after such Drawdown Date, such Bank shall pay to the
Administrative 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 Administrative Agent for federal
funds acquired by the Administrative 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 shall have elapsed 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 Administrative Agent, and the
denominator of which is 365. A statement of the Administrative 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
Administrative Agent by such Bank. If the amount of such Bank's Commitment
Percentage of such Loans is not made available to the Administrative Agent
by such Bank within three (3) Business Days following such Drawdown Date,
the Administrative Agent shall be entitled to recover such amount from the
Borrowers on demand, with interest thereon at the rate per annum applicable
to Base Rate Loans made on such Drawdown Date.
SECTION 2.10 INTENTIONALLY OMITTED.
SECTION 2.11 INTENTIONALLY OMITTED.
SECTION 2.12 MATURITY OF THE LOANS. The Loans shall be due and payable
on the Maturity Date. The Borrowers hereby jointly and severally promise
to pay to the Administrative Agent for the pro rata accounts of the Banks,
and there shall become absolutely due and payable on the Maturity Date, all
of the Loans outstanding on the Maturity Date.
SECTION 2.13 MANDATORY REPAYMENTS OF LOANS. If at any time (i) the sum
of the outstanding principal amount of the Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the Total
Commitment or (ii) the Borrowers are not in compliance with the covenant
contained in SECTION 10.4 hereof; then the Borrowers shall immediately pay
the amount of such excess or the amount which would cause the Borrowers to
be in compliance with such covenant to the Administrative Agent for the
respective accounts of the Banks for application: first, to any Unpaid
Reimbursement Obligations; second, to the Loans; and third, to provide to
the Administrative Agent cash collateral for Reimbursement Obligations as
contemplated by SECTION 3.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Loans shall be allocated among
the Banks, in proportion, as nearly as practicable, to each Reimbursement
Obligation owing to each such Bank or (as the case may be) the respective
unpaid principal amount of the Loans owing to such Bank, with adjustments
to the extent practicable to equalize any prior payments or repayments not
exactly in proportion.
SECTION 2.14 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 Loan
that is a Eurocurrency Rate Loan pursuant to this SECTION 2.14 may be made
only on the last day of the Interest Period relating thereto. The Borrowers
shall give the Administrative Agent, no later than 8:00 a.m., San Francisco
time, at least one (1) Business Day's prior written notice of any proposed
repayment of a Loan that is a Base Rate Loan pursuant to this SECTION 2.14,
and three (3) Eurocurrency Business Days' prior written notice of any
proposed repayment of a Loan that is a Eurocurrency Rate Loan pursuant to
this SECTION 2.14, in each case specifying the proposed date of payment of
such 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 $1,000,000 or a larger integral multiple of
$250,000. 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.
SECTION 3. LETTERS OF CREDIT.
SECTION 3.1 LETTER OF CREDIT COMMITMENT.
SECTION 3.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the Borrowers
of a letter of credit application on the Issuing Bank's customary form (a
"Letter of Credit Application") the Issuing Bank in reliance upon the
agreement of the Banks set forth in SECTION 3.1.4 and upon the
representations and warranties of the Borrowers contained herein, agrees to
issue, extend and renew for the account of the Borrowers from time to time
from the Closing Date to the date which is fourteen (14) Business Days
prior to the Maturity Date one or more standby letters of credit (each,
individually, a "Letter of Credit"), in such form as may be requested from
time to time by the Borrowers and agreed to by the Issuing Bank; provided,
however, that, after giving effect to such request, (a) the sum of the
aggregate Maximum Drawing Amount and all Unpaid Reimbursement Obligations
shall not exceed Twenty Million Dollars ($20,000,000) at any one time, (b)
the sum of (i) the Maximum Drawing Amount, (ii) all Unpaid Reimbursement
Obligations, and (iii) the amount of all Loans Outstanding shall not exceed
the Total Commitment or, if less the amount to which the Borrowers' secured
Obligations are limited as set forth in the proviso contained in SECTION 6
hereof and (c) the Borrowers are in compliance with the covenant contained
in SECTION 10.4 hereof.
SECTION 3.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Issuing Bank. In
the event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Agreement, then the provisions of
this Agreement shall, to the extent of any such inconsistency, govern.
SECTION 3.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a)
provide for the payment of sight drafts for honor thereunder when presented
in accordance with the terms thereof and when accompanied by the documents
described therein, (b) have an original expiry date no later than the date
which is three hundred sixty-five (365) days from the date of issuance and
(c) have a final expiry date no later than the date which is fourteen (14)
Business Days prior to the Maturity Date. Each Letter of Credit so issued,
extended or renewed shall be subject to the Uniform Customs.
SECTION 3.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank
severally agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment Percentage,
to reimburse the Issuing Bank on demand for the amount of each draft paid
by the Issuing Bank under each Letter of Credit to the extent that such
amount is not reimbursed by the Borrowers pursuant to SECTION 3.2 (such
agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank).
SECTION 3.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a
Bank in respect of a Letter of Credit Participation shall be treated as the
purchase by such Bank of a participating interest in the Borrower's
Reimbursement Obligation under SECTION 3.2 in an amount equal to such
payment. Each Bank shall share in accordance with its participating
interest in any interest which accrues pursuant to SECTION 3.2.
SECTION 3.2 REIMBURSEMENT OBLIGATION OF THE BORROWERS. In order to
induce the Issuing Bank to issue, extend and renew each Letter of Credit
and the Banks to participate therein, the Borrowers hereby agree to
reimburse or pay to the Administrative Agent, for the account of the
Issuing Bank or (as the case may be) the Banks, with respect to each Letter
of Credit issued, extended or renewed by the Issuing Bank hereunder,
(a) on each date that any draft presented under such Letter of
Credit is honored by the Issuing Bank or the Issuing Bank otherwise makes a
payment under or pursuant to such Letter of Credit, (i) the amount paid by
the Issuing Bank under or pursuant to such Letter of Credit and (ii) the
amount of any customary taxes, fees, charges or other reasonable costs and
expenses whatsoever incurred by the Issuing Bank or any Bank in connection
with any payment made by the Issuing Bank or any Bank under, or pursuant
to, such Letter of Credit (to the extent the reimbursement and payment of
such taxes, fees, charges, costs, or expenses are not otherwise provided
for elsewhere in this Agreement and excluding therefrom any amount payable
to the Issuing Bank by a Bank pursuant to SECTION 3.3) (it being understood
that such payments under this Section 3.2(a) to the Issuing Bank may be
made from the proceeds of a Loan made to the Borrowers pursuant to SECTION
2.7);
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Administrative
Agent for the benefit of the Banks and the Issuing Bank as cash collateral
for the Reimbursement Obligations; and
(c) upon the termination of the Total Commitment or the
acceleration of the Reimbursement Obligations with respect to all Letters
of Credit in accordance with SECTION 13, an amount equal to the then
Maximum Drawing Amount, which amount shall be held by the Administrative
Agent for the benefit of the Banks and the Issuing Bank as cash collateral
for the Reimbursement Obligations.
Each such payment shall be made to the Administrative Agent at 201 Third
Street, San Francisco, California 94103, in immediately available funds or
(in the case of clause (a)) from the direct application of the proceeds of
a Loan made pursuant to SECTION 2.7 hereof. Interest on any and all
amounts remaining unpaid by the Borrowers under this SECTION 3.2 at any
time from the date such amounts become due and payable (whether as stated
in this SECTION 3.2, by acceleration or otherwise) until payment in full
(whether before or after judgment) shall be payable to the Administrative
Agent on demand at the rate specified in SECTION 5.8 for overdue principal
of the Loans.
SECTION 3.3 LETTER OF CREDIT PAYMENTS. If any draft shall be presented
or other demand for payment shall be made under any Letter of Credit, the
Issuing Bank shall notify the Borrowers of the date and amount of the draft
presented or demand for payment and of the date and time when it expects to
pay such draft or honor such demand for payment. If the Borrowers fail to
reimburse the Issuing Bank as provided in SECTION 3.2 on or before the date
that such draft is paid or other payment is made by the Issuing Bank, the
Administrative Agent or the Issuing Bank may at any time thereafter notify
the Banks of the amount of any such Unpaid Reimbursement Obligation. No
later than 8:00 a.m. (San Francisco time) on the Business Day next
following the receipt of such notice, each Bank shall make available to the
Administrative Agent at 201 Third Street, San Francisco, California 94103,
in immediately available funds, such Bank's Commitment Percentage of such
Unpaid Reimbursement Obligation, together with 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 Administrative
Agent for federal funds acquired by the Administrative Agent during each
day included in such period, times (b) the amount equal to such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation, times (c) a
fraction, the numerator of which is the number of days that shall have
elapsed from and including the date the Issuing Bank paid the draft
presented for honor or otherwise made payment to the date on which such
Bank's Commitment Percentage of such Unpaid Reimbursement Obligation shall
become immediately available to the Issuing Bank, and the denominator of
which is 360. The responsibility of the Issuing Bank to the Borrowers and
the Banks shall be only to determine that the documents (including each
draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such
Letter of Credit.
SECTION 3.4 OBLIGATIONS ABSOLUTE. The Borrowers' obligations under
this SECTION 3 shall be absolute and unconditional under any and all
circumstances and irrespective of the occurrence of any Default or Event of
Default or any condition precedent whatsoever or any setoff, counterclaim
or defense to payment which the Borrowers may have or have had against the
Administrative Agent, the Issuing Bank, any Bank or any beneficiary of a
Letter of Credit. The Borrowers further agree with the Administrative
Agent, the Issuing Bank, and the Banks that the Administrative Agent, the
Issuing Bank, and the Banks shall not be responsible for, and the
Borrowers' Reimbursement Obligations under SECTION 3.2 shall not be
affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even if such documents should in fact prove
to be in any or all respects invalid, fraudulent or forged, or any dispute
between or among the Borrowers, the beneficiary of any Letter of Credit or
any financing institution or other party to which any Letter of Credit may
be transferred or any claims or defenses whatsoever of the Borrowers
against the beneficiary of any Letter of Credit or any such transferee.
The Administrative Agent, the Issuing Bank, and the Banks shall not be
liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit. The Borrowers agree that any action
taken or omitted by the Administrative Agent, the Issuing Bank or any Bank
under or in connection with each Letter of Credit and the related drafts
and documents, if done in good faith, shall be binding upon the Borrowers
and shall not result in any liability on the part of the Administrative
Agent, the Issuing Bank or any Bank to the Borrowers; provided that the
Administrative Agent, the Issuing Bank, or such Bank shall not be grossly
negligent in taking or omitting to take any such action.
SECTION 3.5 RELIANCE BY ISSUER. To the extent not inconsistent with
SECTION 3.4, the Issuing Bank shall be entitled to rely, and shall be fully
protected in relying upon, any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements
of legal counsel, independent accountants and other experts selected by the
Issuing Bank. The Issuing Bank shall be fully justified in failing or
refusing to take any action under this Agreement unless it shall first have
received such advice or concurrence of the Majority Banks as it reasonably
deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. The Issuing Bank shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement in accordance with a
request of the Majority Banks, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Banks and all
future holders of the Notes or of a Letter of Credit Participation.
SECTION 3.6 FEES. The Borrowers shall pay to the Issuing Bank and the
Banks in respect of each Letter of Credit the following fees (collectively,
the "Letter of Credit Fees"): (a) on the date of issuance and on each
anniversary of issuance of each Letter of Credit, a fee payable to the
Administrative Agent, for the accounts of the Banks in accordance with
their respective Commitment Percentages, annually in advance, equal to the
Letter of Credit Rate then in effect per annum on the face amount of such
Letter of Credit provided that, if such Letter of Credit has an expiry date
that is less than one year from the date of the issuance of such Letter of
Credit, such fee shall be multiplied by a fraction, the numerator of which
is the number of days from the date of issuance to the expiry date of such
Letter of Credit and the denominator of which is 365 and (b) on the date of
issuance, and at the time of each extension or renewal of each Letter of
Credit, a fee payable to the Administrative Agent for the account of the
Issuing Bank, equal to one- eighth percent (1/8%) of the face amount of
such Letter of Credit plus the Issuing Bank's customary issuance fee,
renewal fee or extension fee, as the case may be.
SECTION 4. INTENTIONALLY OMITTED.
SECTION 5. CERTAIN GENERAL PROVISIONS.
SECTION 5.1 FEES. The Borrowers jointly and severally agree to pay to
the Agents for their own accounts as set forth therein on the dates as set
forth in the Fee Letter, the fees to be paid on such dates in the amounts
set forth in the Fee Letter (herein the "Closing Fees").
SECTION 5.2 INTENTIONALLY OMITTED.
SECTION 5.3 FUNDS FOR PAYMENTS.
SECTION 5.3.1. PAYMENTS TO ADMINISTRATIVE AGENT. All payments of
principal, interest, the Reimbursement Obligations, the Letter of Credit
Fees, the Commitment Fee, and any other amounts due hereunder or under any
of the other Loan Documents shall be made to the Administrative Agent
(credit account 4081-657298, ref: Syndic/WFBCorp/Trico Marine), for the
respective accounts of the Banks, the Issuing Bank and the Administrative
Agent, at the Administrative Agent's head office or at such other location
that the Administrative Agent may from time to time designate, in each case
in immediately available funds.
SECTION 5.3.2. NO OFFSET, ETC.
(a) 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 it hereunder or under any
of the other Loan Documents, the Borrowers will pay to the Administrative
Agent, for the account of the applicable Banks, and the Issuing Bank or (as
the case may be) the Administrative 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 applicable
Banks, and the Issuing Bank or the Administrative Agent to receive the same
net amount which the applicable Banks, and the Issuing Bank or the
Administrative Agent would have received on such due date had no such
obligation been imposed upon the Borrowers. The Borrowers will deliver
promptly to the Administrative 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.
(b) On or before the date it becomes a party to this Agreement
and from time to time thereafter upon any change in status rendering any
certificate or document previously delivered pursuant to this SECTION 5.3.2
invalid or inaccurate, each Bank that is organized under the laws of a
jurisdiction outside the United States shall (if legally able to do so)
deliver to the Borrowers such certificates, documents or other evidence, as
required by the Code or Treasury Regulations issued pursuant thereto,
including Internal Revenue Service Form 1001 or Form 4224 and any other
certificate or statement of exemption required by Treasury Regulation
Section 1.1441-1, 1.1441-4 or 1.1441-6(c) or any subsequent version thereof
or subsequent version thereto, properly completed and duly executed by such
Bank establishing that such payment is (a) not subject to United States
Federal withholding tax under the Code because such payment is effectively
connected with conduct by such Bank of a trade or business in the United
States or (b) totally exempt from United States Federal withholding tax or,
if due to a change in law occurring after the date such Bank became a party
hereto, subject to a reduced rate of such tax under a provision of an
applicable tax treaty. The Borrower shall not be required to pay any
additional amounts to any Bank pursuant to this SECTION 5.3.2 to the extent
that the obligation to pay such additional amounts would not have arisen
but for a failure by such Bank to comply with the provisions of the
preceding sentence.
SECTION 5.4 COMPUTATIONS. All computations of interest on Base Rate
Loans, Letter of Credit Fees, or Commitment Fees shall be based on a 365-
day year and paid for the actual number of days elapsed. All computations
of interest on Eurocurrency Rate Loans 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
Eurocurrency 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 Administrative Agent or
any of the Banks of such outstanding amount, the Administrative Agent or
such Bank shall notify the Borrowers to the contrary.
SECTION 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 Administrative 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 Administrative Agent to any tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Agreement, the other Loan Documents, the Letters of
Credit, such Bank's Commitment, or the Loans (other than taxes based upon
or measured by the income or profits of such Bank or the Administrative
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 Administrative 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 letters of credit
issued by, or commitments of an office of any Bank, or
(d) impose on any Bank or the Administrative Agent any other
conditions or requirements with respect to this Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or any
class of loans, letters of credit 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, any
Letters of Credit, or such Bank's Commitment, or
(ii) to reduce the amount of principal, interest or other
amount payable to such Bank or the Administrative Agent hereunder
on account of such Bank's Commitment, any Letter of Credit, or
any of the Loans, or
(iii) to require such Bank or the Administrative Agent to
make any payment or to forego any interest or Reimbursement
Obligation or other sum payable hereunder, the amount of which
payment or foregone interest or Reimbursement Obligation or other
sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Administrative
Agent from any of 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 Administrative Agent at any time and from
time to time and as often as the occasion therefor may arise, pay to such
Bank or the Administrative Agent such additional amounts as will be
sufficient to compensate such Bank or the Administrative Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligations or other sum. For purposes of this SECTION 5.5, the term
"Bank" shall include the Issuing Bank.
SECTION 5.6 CAPITAL ADEQUACY. If after the date hereof any Bank or the
Administrative 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 Administrative Agent or any
corporation controlling such Bank or the Administrative 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 Administrative
Agent's commitment with respect to any Loans to a level below that which
such Bank or the Administrative Agent could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's or
the Administrative 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 Administrative Agent
to be material, then such Bank or the Administrative 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
Administrative 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 Administrative Agent of a certificate in
accordance with SECTION 5.7 hereof. Each Bank shall allocate such cost
increases among its customers in good faith and on an equitable basis. For
purposes of this SECTION 5.6, the term "Bank" shall include the Issuing
Bank.
SECTION 5.7 CERTIFICATE. A certificate setting forth any additional
amounts payable pursuant to SECTION 5.5 or 5.6 and a brief explanation of
such amounts which are due, submitted by any Bank, the Issuing Bank or the
Administrative Agent to the Borrowers, shall be conclusive, absent manifest
error, that such amounts are due and owing.
SECTION 5.8 INTEREST AFTER DEFAULT. During the continuance of an Event
of Default, the principal of the Loans not overdue shall, until such Event
of Default has been cured or remedied or waived in accordance with SECTION
26, bear interest at a rate per annum equal to the lesser of (i) two
percent (2%) above the rate of interest otherwise applicable to such Loans
pursuant to this Agreement or (ii) the Highest Lawful Rate. All overdue
amounts hereunder, including, without limitation, the principal of and
interest on (to the extent permitted by applicable law) the Loans, Unpaid
Reimbursement Obligations, Commitment Fees and Letter of Credit Fees shall
bear interest at the rate per annum equal to the lesser of (i) two percent
(2%) above the rate of interest applicable to Base Rate Loans or (ii) the
Highest Lawful Rate.
SECTION 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 and the Issuing Bank 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 SECTION 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
or the Issuing Bank 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 or the Issuing
Bank at any time or times in respect of any default 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 or the Issuing
Bank, 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
SECTION 5.9, afford grounds for terminating, discharging or relieving such
Borrower, in whole or in part, from any of its obligations under this
SECTION 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 SECTION 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 SECTION 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 or the
Issuing Bank.
(f) The provisions of this SECTION 5.9 are made for the benefit
of the Banks and the Issuing Bank 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 SECTION 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 any of the Banks or the Issuing Bank
upon the insolvency, bankruptcy or reorganization of the Borrowers, or
otherwise, the provisions of this SECTION 5.9 will forthwith be reinstated
in effect, as though such payment had not been made.
SECTION 5.10 INABILITY TO DETERMINE EUROCURRENCY RATE. In the event
that, prior to the commencement of any Interest Period relating to any
Eurocurrency Rate Loan, the Administrative Agent shall determine or be
notified by the Majority Banks that adequate and reasonable methods do not
exist for ascertaining the Eurocurrency Rate that would otherwise determine
the rate of interest to be applicable to any Eurocurrency Rate Loan during
any Interest Period, the Administrative 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 Eurocurrency Rate Loan
shall be automatically withdrawn and shall be deemed a request for a Base
Rate Loan, (b) each Eurocurrency 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 Eurocurrency Rate Loans shall
be suspended until the Administrative Agent or the Majority Banks determine
that the circumstances giving rise to such suspension no longer exist,
whereupon the Administrative Agent shall so notify the Borrowers.
SECTION 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 Eurocurrency Rate Loans, the Administrative Agent shall
forthwith give notice of such circumstances to the Borrowers and thereupon
(a) the commitment of the Banks to make Eurocurrency Rate Loans or convert
Loans of another Type to Eurocurrency Rate Loans shall forthwith be
suspended and (b) the Loans then outstanding as Eurocurrency Rate Loans, if
any, shall be converted automatically to Base Rate Loans on the last day of
each Interest Period applicable to such Eurocurrency Rate Loans or within
such earlier period as may be required by law. The Borrowers hereby
jointly and severally agree promptly to pay the Administrative 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 SECTION 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 Eurocurrency Rate Loans hereunder.
SECTION 5.12 INDEMNITY. Except to the extent of breakage costs arising
from a prepayment of a Eurocurrency Rate Loan as a result of an event set
forth in SECTION 5.10, each of the Borrowers agrees 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 such Borrower in payment of the
principal amount of or any interest on any Eurocurrency 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 Eurocurrency Rate Loans, (b) default by such Borrower
in making a borrowing after such Borrower has given (or is deemed to have
given) a Loan Request or a Conversion Request relating thereto in
accordance with SECTION 2.7, SECTION 2.8 or SECTION 2.9 or (c) the making
of any payment on a Eurocurrency 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.
SECTION 5.13 REPLACEMENT OF BANKS. If any Bank (an "Affected Bank") (i)
makes demand upon a Borrower for (or if a Borrower is otherwise required to
pay) amounts pursuant to SECTION 5.3.2, 5.5 or 5.6, (ii) is unable to make
or maintain Eurocurrency Rate Loans as a result of a condition described in
SECTION 5.10 or (iii) defaults in its obligation to make Loans, in
accordance with the terms of this Agreement (such Bank being referred to as
a "Defaulting Bank"), the Borrowers within ninety (90) days of receipt of
such demand, notice (or the occurrence of such other event causing the
Borrower to be required to pay such compensation or causing SECTION 5.10 to
be applicable), or default, as the case may be, by notice (a "Replacement
Notice") in writing to the Administrative Agent and such Affected Bank (A)
request the Affected Bank to cooperate with the Borrowers in obtaining a
replacement bank satisfactory to the Administrative Agent and the Borrower
(the "Replacement Bank"); (B) request the non-Affected Banks to acquire and
assume all of the Affected Bank's Loans and Commitments, as provided
herein, but none of such Banks shall be under an obligation to do so; or
(C) designate a Replacement Bank approved by the Administrative Agent, such
approval not to be unreasonably withheld or delayed. If any satisfactory
Replacement Bank shall be obtained, and/or if any one or more of the non-
Affected Banks shall agree to acquire and assume all of the Affected Bank's
Loans and Commitment, then such Affected Bank shall assign, in accordance
with SECTION 19, all of its Commitment, Loans, Letter of Credit
Participations, Notes and other rights and obligations under this Agreement
and all other Loan Documents to such Replacement Bank or non-Affected
Banks, as the case may be, in exchange for payment of the principal amount
so assigned and all interest and fees accrued on the amount so assigned,
plus all other Obligations then due and payable to the Affected Bank;
provided, however, that (i) such assignment shall be without recourse,
representation or warranty and shall be on terms and conditions reasonably
satisfactory to such Affected Bank as assignor and the assignee(s) and (ii)
prior to any such assignment, the Borrowers shall have paid to such
Affected Bank all amounts properly demanded and unreimbursed under SECTION
5.3.2, 5.5 or 5.6. Upon the effective date of such assignment, the
Borrowers shall issue replacement Notes to such Replacement Bank and/or
non-Affected Banks, as the case may be, and such institution shall become a
"Bank" for all purposes under this Agreement and the other Loan Documents.
SECTION 6. COLLATERAL SECURITY AND GUARANTIES. The Parent and the
Borrowers covenant and agree as follows: The Obligations of the Borrowers
shall be guaranteed equally and ratably by the Parent and each other
Subsidiary (direct and indirect) of the Parent, to the extent that such
other Subsidiary of the Parent is required to guaranty the Obligations in
accordance with SECTION 8.14 hereof. The Obligations of the Borrowers
shall be secured by a perfected first priority security interest (subject
only to Permitted Liens entitled to priority under applicable law) in (i)
certain US Flag Vessels to the extent contemplated by the US Vessel
Mortgage and such additional U.S. Vessels, from time to time, in accordance
with SECTION 10.4 hereof, and (ii) certain other assets of the Borrowers to
the extent contemplated by the Security Documents.
SECTION 7. REPRESENTATIONS AND WARRANTIES. The Parent and each of the
Borrowers jointly and severally represent and warrant to the Issuing Bank,
the Banks and the Administrative Agent on the Closing Date, on each
Drawdown Date and on the date of any issuance, extension or renewal of a
Letter of Credit as follows:
SECTION 7.1 CORPORATE AUTHORITY.
SECTION 7.1.1. INCORPORATION; GOOD STANDING. Each of the Parent, the
Borrowers, and the Parent's other Subsidiaries, (a) is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, (b) has all requisite corporate power to own
its property and conduct its business as now conducted, 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.
SECTION 7.1.2. AUTHORIZATION. The execution, delivery and
performance of this Agreement and the other Loan Documents to which the
Parent and its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (a) are within the corporate authority of
each of such Persons, (b) have been duly authorized by all necessary
corporate proceedings by each of such Persons, (c) do not conflict with or
result in any breach or contravention of any provision of law, statute,
rule or regulation to which any of such Persons is subject or any judgment,
order, writ, injunction, license, exemption or permit applicable to any of
such Persons or make any such Person ineligible for any beneficial tax
treatment or other regulatory or contractual treatment or status which is
of material importance to its business or financial status, (d) do not
require any waivers, consents or approvals by any of such Person's
creditors which have not been obtained, (e) do not require any consents or
approvals by any of such Person's shareholders (except such as will be duly
obtained on or prior to the Closing Date and will be in full force and
effect on and as of such date), and (f) do not conflict with or result in
any breach or contravention of any provision of any provision of the
corporate charter or bylaws of, or any credit agreement, indenture or other
agreement or other instrument binding upon any of such Persons.
SECTION 7.1.3. ENFORCEABILITY. The execution and delivery of this
Agreement and each of the other Loan Documents to which the Parent and its
Subsidiaries is or is to become a party will result in valid and legally
binding obligations of each of such Persons enforceable against it 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.
SECTION 7.2 GOVERNMENTAL APPROVALS. The execution, delivery and
performance of this Agreement and the other Loan Documents to which the
Parent and its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby do not and will not require any approval,
consent, order, authorization or license by, filing with, or notice to, any
governmental or regulatory agency or authority other than those already
obtained or given.
SECTION 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,
charters, conditional sales agreements, title retention agreements, liens
or other encumbrances except Permitted Liens.
SECTION 7.4 FINANCIAL STATEMENTS
(a) There have been furnished to each of the Banks a
consolidated balance sheet of the Parent and its Subsidiaries as at
December 31, 1998, and consolidated statements of income and cash flows for
the fiscal year then ended, certified by PricewaterhouseCoopers 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 December 31, 1998 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 December 31, 1998, 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.
(b) There have also been furnished to each of the Banks the
unaudited 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 portion of the fiscal year then ended. 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
such date and the results of operations for the portion of the fiscal year
then ended. There are no liabilities, contingent or otherwise, of the
Parent or any of its Subsidiaries, as of such 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.
SECTION 7.5 NO MATERIAL CHANGES; SOLVENCY.
(a) Since the Balance Sheet Date there have been no changes that
have had or could reasonably be expected to have a Material Adverse Effect.
(b) Each of the Parent and its Subsidiaries (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.
SECTION 7.6 BUSINESS. Each of the Parent and its Subsidiaries 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 or could reasonably expected to have a
Material Adverse Effect and all such leases are valid and subsisting and in
full force and effect. Each such Person 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.
SECTION 7.7 LITIGATION. There is no restraining order, injunction or
pending litigation applicable to the transactions contemplated by this
Agreement or the other Loan Documents. 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, arbitrator, tribunal or
administrative agency or board that, if adversely determined, would be
likely, either in any case or in the aggregate, to have a Material Adverse
Effect, or materially impair the right of any of such Persons to carry on
its 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.
SECTION 7.8 INTENTIONALLY OMITTED.
SECTION 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 that have had or could reasonably be expected to have
a Material Adverse Effect.
SECTION 7.10 TAX STATUS. The Parent and its Subsidiaries (a) have made
or filed all federal, state or other 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 such Persons know of no basis for any
such claim.
SECTION 7.11 NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing.
SECTION 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.
SECTION 7.13 ABSENCE OF ENCUMBRANCES, 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.
SECTION 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 Administrative Agent's
security interest in the Collateral. The Collateral and the Administrative
Agent's rights with respect to the Collateral are not subject to any
setoff, claims, withholdings or other defenses. A Borrower 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, the Issuing Bank and the Administrative
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 in accordance with the terms hereof and thereof.
SECTION 7.15 CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which the Parent or any of its 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 the Parent or any of its 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.
SECTION 7.16 EMPLOYEE BENEFIT PLANS.
SECTION 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.
SECTION 7.16.2. TERMINABILITY OF WELFARE PLANS. Under each Employee
Benefit Plan which is an employee welfare benefit plan within the meaning
of Section 3(1) or Section 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.
SECTION 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.
SECTION 7.17 REGULATIONS U AND X; USE OF PROCEEDS. The Borrowers will
use the proceeds of the Loans solely for purposes specified in Section
8.11. The Borrowers will obtain Letters of Credit solely for general
corporate purposes. No portion of any Loan is to be used, and no portion
of any Letter of Credit is to be obtained, 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. No portion of the proceeds of any
Loans is to be used, and no portion of any Letter of Credit is to be
obtained, for the purpose of (a) knowingly purchasing, or providing credit
support for the purchase of, Ineligible Securities from a Section 20
Subsidiary during any period in which such Section 20 Subsidiary makes a
market in such Ineligible Securities, (b) knowingly purchasing, or
providing credit support for the purchase of, during the underwriting or
placement period, any Ineligible Securities being underwritten or privately
placed by a Section 20 Subsidiary, or (c) making, or providing credit
support for the making of, payments of principal or interest on Ineligible
Securities underwritten or privately placed by a Section 20 Subsidiary and
issued by or for the benefit of the Parent or any of its Subsidiaries.
SECTION 7.18 ENVIRONMENTAL COMPLIANCE. Each of the Parent and its
Subsidiaries 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 the condition and usage of its
Vessels, and, based upon such diligent investigation, has determined that:
(a) none of the Parent or its Subsidiaries or any operator of
its real estate and/or Vessels 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 statute,
regulation, ordinance, order or decree of the United States of America or
any state or other jurisdiction thereof, or any other nation or
jurisdiction relating to health, safety or the environment, including,
without limitation, any international conventions to which their business
or assets are subject (hereinafter "Environmental Laws"), which violation
could reasonably be expected to have a Material Adverse Effect.
(b) except as set forth on SCHEDULE 7.18 attached hereto, none
of the Parent or its 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. Section 9601(5), any hazardous substances as
defined by 42 U.S.C. Section 9601(14), any pollutant or contaminant as
defined by 42 U.S.C. Section 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 any of such Persons 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 the Parent or its
Subsidiaries and no Vessel 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 such Persons or operators of such Person's
properties, no Hazardous Substances have been generated or are being used
on the real estate or any Vessel 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 (including, without limitation, the Vessels) of any of
such Persons which releases could reasonably be expected to have a Material
Adverse Effect; (iv) to the best of such Person's 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 could reasonably
be expected to have a Material Adverse Effect; 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 such Person's knowledge, operating in material compliance with
such permits and applicable Environmental Laws;
(d) none of the Parent or its 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; and
(e) all of the Vessels comply in all material respects with all
applicable international conventions, national, federal, state and other
governmental laws and regulations; the rules of the classification
societies under which the Vessels are classed and any contractual
obligations regarding the prevention of pollution and other marine
environmental hazards, including the transportation and management of
hazardous substances and waste disposal, and the Parent and its
Subsidiaries have made all required payments and contributions to statutory
environmental insurance schemes and other environmental insurance schemes
applicable to the Parent and its Subsidiaries and customary for the
business and operations conducted by them.
SECTION 7.19 SUBSIDIARIES. Each Subsidiary (whether direct or indirect)
of the Parent is set forth on SCHEDULE 7.19 attached hereto. As of the
Closing Date, no Subsidiary of the Parent, other than the Borrowers,
International Holdings, Trico Shipping and Trico Supply, guarantees the
obligations of the Parent under the Senior Notes. Except to the extent
permitted under SECTION 9.3(f), neither the Parent nor its Subsidiaries is
engaged in any joint venture or partnership with any other Person.
SECTION 7.20 CHIEF EXECUTIVE OFFICE; BOOKS AND RECORDS.
(a) Each of the Borrowers' and the Parent's chief executive
office is at 250 North American Court, Houma, Louisiana 70363, at which
location their respective books and records are kept.
(b) 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.
SECTION 7.21 DISCLOSURE. None of this Agreement, the other Loan
Documents or the other information furnished by the Parent or its
Subsidiaries to the Administrative Agent or the Banks contains any untrue
statement of a material fact or omits to state a material fact (known to
such Person 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 any such Person which has had or is reasonably
likely in the future to have a Material Adverse Effect, exclusive of
effects resulting from changes in general economic conditions.
SECTION 7.22 FISCAL YEAR. The Parent and each of its Subsidiaries has
a fiscal year which is the twelve months ending on December 31 of each
year.
SECTION 7.23 NO LABOR AGREEMENTS. Except as described on SCHEDULE 7.23,
none of the Parent nor any of its Subsidiaries has any labor agreements in
effect with any unionized group of employees.
SECTION 7.24 CONCERNING THE VESSELS.
(a) SCHEDULE 7.24 sets forth a true and correct list describing
each of the Vessels owned on the Closing Date by the Borrowers and the
Parent and their Subsidiaries and correctly sets forth whether each such
Vessel is owned by Marine Assets, Marine Operators or the Parent. Each
Vessel has been appropriately registered under the laws of its jurisdiction
of registration, including, with respect to each Vessel shown on SCHEDULE
7.24 hereof as being registered under the laws of the United States of
America (the "US Flag Vessels"), the laws of the United States of America,
and as of the Closing Date except as disclosed to the Banks in writing,
neither of the Borrowers own any Vessels registered under the laws of the
United States of America other than the US Flag Vessels.
(b) Each Vessel complies with all applicable maritime laws and
regulations, including, with respect to each US Flag Vessel, all applicable
requirements of the Shipping Act of 1916, as amended and in effect, and all
applicable regulations thereunder and all applicable requirements of the
maritime laws of the United States of America and all applicable
regulations thereunder. Each of the Borrowers and the Parent is a citizen
of the United States for purposes of operating each of the US 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 US 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 US 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.
Section 883-1. Each of the US Flag Vessels listed on SCHEDULE 7.24
attached hereto and which is in operation is covered by a valid Coast Guard
Certificate of Inspection, and SCHEDULE 7.24 attached hereto lists the US
Flag Vessels which have a load line certificate and which are classed by
the American Bureau of Shipping (or any other classification society or
societies satisfactory to the Administrative Agent and the Banks). Each US
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 US 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. In
addition to the information regarding US Flag Vessels, SCHEDULE 7.24 sets
forth a list of all other Vessels owned by the Borrowers and the Parent and
their Subsidiaries.
(c) Each Vessel subject to a Vessel Mortgage is covered by hull
and machinery, protection and indemnity, war risk, loss of earnings and
excess liability insurance in accordance with the requirements of such
Vessel Mortgage.
SECTION 8. AFFIRMATIVE COVENANTS. The Parent and each of the
Borrowers jointly and severally covenant and agree that, so long as any
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Bank has any obligation to make any Loans or the Issuing
Bank has any obligation to issue, extend or renew any Letters of Credit
hereunder:
SECTION 8.1 PUNCTUAL PAYMENT. The Borrowers will duly and punctually
pay or cause to be paid the principal and interest on the Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the Commitment Fees
and all other amounts provided for in this Agreement, all in accordance
with the terms of this Agreement, the Notes and the other Loan Documents.
SECTION 8.2 MAINTENANCE OF OFFICE. Each of the Borrowers and the
Parent will maintain its chief executive office at 250 North American
Court, Houma, Louisiana 70363, or at such other place in the United States
of America as such Person shall designate upon written notice to the
Administrative Agent, where notices, presentations and demands to or upon
such Person in respect of the Loan Documents may be given or made.
SECTION 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.
SECTION 8.4 FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Parent and the Borrowers will deliver to the Administrative Agent and 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 PricewaterhouseCoopers 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 and the Parent
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 and the Parent
in substantially the form of EXHIBIT C attached hereto (i) stating no
Default or Event of Default exists and is continuing, (ii) stating the
Borrowers and the Parent are in compliance with SECTION 8.6(c) hereof,
(iii) reaffirming the representations and warranties contained herein
including, without limitation, SECTION 7.21, or if any such representation
or warranty is stated to have been made solely as of an earlier date, such
representation or warranty is reaffirmed as if made on such date and (iv)
setting forth in reasonable detail computations (A) calculating the
Leverage Ratio for purposes of determining the Applicable Margin, (B)
evidencing compliance with the covenants contained in SECTION 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) on December 1 of each year an annual operating and capital
budget for the following year in a form reasonably acceptable to the
Administrative Agent;
(f) on each June 30 and January 31 of each calendar year of the
Parent, or more frequently as determined by the Administrative Agent or the
Majority Banks, the Borrowers will, at their own expense, obtain and
deliver to the Administrative Agent and the Banks appraisal reports in form
and substance and from appraisers reasonably satisfactory to the
Administrative Agent (each such report herein, an "Appraisal"), stating the
then current fair market values of the Vessels subject to a Vessel
Mortgage, PROVIDED, THAT, (i) the Administrative Agent may, upon notice to
the Borrowers, obtain such Appraisals and the cost of such Appraisals shall
be paid by the Borrowers and (ii) unless a Default or Event of Default
shall have occurred and be continuing, the Borrowers shall not be obligated
to pay for more than two Appraisals during any one calendar year; and
(g) from time to time such other financial data and information
(including accountants' management letters) as the Administrative Agent or
any Bank may reasonably request.
SECTION 8.5 NOTICES.
SECTION 8.5.1. DEFAULTS. The Parent and the Borrowers will promptly
notify the Administrative 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 Administrative Agent, describing the notice
or action and the nature of the claimed default.
SECTION 8.5.2. ENVIRONMENTAL EVENTS. The Parent and the Borrowers
will promptly give notice to the Administrative 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 national, federal, state or local environmental agency or board, that
has the potential to have a Material Adverse Effect or which has the
potential to adversely affect the Administrative Agent's, the Banks' or the
Issuing Bank's security interests pursuant to the Security Documents.
SECTION 8.5.3. NOTIFICATION OF CLAIMS AGAINST COLLATERAL. The Parent
and the Borrowers will, immediately upon becoming aware thereof, notify the
Administrative Agent in writing of any setoff, claims, withholdings or
other defenses to which any of the Collateral, or the Administrative
Agent's rights with respect to the Collateral, are subject, involving in
any one case an amount of $500,000 or more.
SECTION 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 Administrative 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 a claim, not fully covered by insurance, against
the Parent or any of its Subsidiaries that could reasonably be expected to
have a Material Adverse Effect, 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
Administrative Agent, in writing, in form and detail satisfactory to the
Administrative Agent, within ten (10) days of any judgment not fully
covered by insurance, final or otherwise, against the Parent or any of its
Subsidiaries in an amount in excess of $1,000,000.
SECTION 8.6 CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. Except as
permitted under SECTION 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 SECTION 8.6 shall prevent the
Parent or any 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 have a Material Adverse Effect.
SECTION 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 with respect to the Collateral in accordance with the terms of
the Security Documents.
SECTION 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
jurisdictions other than those in which such Person's business is
principally conducted 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.
SECTION 8.9 INSPECTION OF PROPERTIES AND BOOKS, ETC. The Parent and
each of the Borrowers shall permit the Issuing Bank and the Banks, through
the Administrative Agent or the Issuing Bank's 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 Administrative Agent, the Issuing Bank or any
Bank may reasonably request.
SECTION 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 or its
assets are owned or situated, including all Environmental Laws, (b) the
provisions of its charter documents and by-laws, (c) all stock exchange or
other applicable regulatory rules, (d) all agreements and instruments by
which it or any of its properties may be bound, (e) all applicable decrees,
orders, and judgments, and (f) the rules and requirements of any
classification society in which any Vessel is classed. If any
authorization, consent, approval, permit or license from any officer,
agency or instrumentality of any government shall become necessary or
required in order that the Parent, the Borrower or any of the Parent's
other Subsidiaries may fulfill any of its obligations hereunder, the Parent
and the Borrower will, or will cause such other Subsidiary to, immediately
take or cause to be taken all reasonable steps within the power of such
Person to obtain such authorization, consent, approval, permit or license
and furnish the Administrative Agent and the Banks with evidence thereof.
SECTION 8.11 USE OF PROCEEDS. The Borrowers will use the proceeds of
the Loans solely to refinance the indebtedness outstanding under the
Existing Credit Facility, for working capital and for general corporate
purposes. The Borrowers will obtain Letters of Credit solely for general
corporate purposes.
SECTION 8.12 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 US 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 US 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 US 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. Section 883-1. Upon request of the
Administrative Agent, the Borrowers shall furnish to the Administrative
Agent and the Banks the certificate of each classification society covering
each of the US Flag Vessels listed on SCHEDULE 7.24 attached hereto no
later than thirty (30) days after the end of each fiscal year of the
Parent. The Borrowers shall keep each US Flag Vessel registered under the
laws of the United States and each Vessel (other than a US Flag Vessel)
flagged under the laws of another jurisdiction and shall maintain in full
force and effect the Coast Guard Certificate of Inspection (or the
equivalent for any Vessel registered under the laws of another
jurisdiction) of each Vessel that is in operation and which requires such a
certificate and furnish to the Administrative Agent copies of all renewals
and extensions thereof.
SECTION 8.13 FURTHER ASSURANCES. The Parent and the Borrowers will and
will cause each of the Parent's other Subsidiaries to cooperate with the
Banks, the Issuing Bank and the Administrative Agent and execute such
further instruments and documents as the Banks, the Issuing Bank or the
Administrative Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Agreement and the other
Loan Documents.
SECTION 8.14 ADDITIONAL GUARANTORS. The Parent and the Borrowers will
cause each Subsidiary acquired or formed after the Closing Date,
contemporaneously with such formation or acquisition, to guaranty the
Obligations pursuant to a guaranty in form and substance satisfactory to
the Administrative Agent, which guaranty shall be a Security Document
hereunder; provided that the requirements of this SECTION 8.14 shall not
apply to (a) the Title 11 Subsidiary, (b) International Holdings, (c) Trico
Shipping, (d) Trico Supply and (e) any other Subsidiary formed after the
Closing Date to the extent, in each case, that such Subsidiary does not,
and is not required pursuant to the terms of the Indentures relating
thereto, to guaranty the obligations of the Parent under the Senior Notes.
SECTION 8.15 YEAR 2000 COMPLIANCE. Each of the Parent and the Borrowers
shall (a) perform all acts reasonably necessary to ensure that each of the
Parent, the Borrowers and their Subsidiaries, become Year 2000 Compliant in
a timely manner and (b) each of the Parent and the Borrower shall use its
reasonable commercial efforts to verify the systems of all its customers,
suppliers and vendors that are material to any of the Parent, the Borrowers
and their Subsidiaries and assess whether such customer, supplier or
vendors shall become Year 2000 Compliant in a timely manner. Such acts
shall include, without limitation, performing a comprehensive review and
assessment of all of the systems of the Parent, the Borrowers and their
Subsidiaries, and adopting a detailed plan, with itemized budget, for the
remediation, monitoring and testing of such systems. As used in this
paragraph, "Year 2000 Compliant" shall mean, in regard to any entity, that
all software, hardware, firmware, equipment, goods or systems utilized by
or material to the business operations or financial condition of such
entity, will properly perform date sensitive functions before, during and
after the year 2000. The Parent and the Borrowers shall, and shall cause
each Subsidiary to, promptly upon request, provide to the Administrative
Agent such certifications or other evidence of their compliance with the
terms of this paragraph as the Administrative Agent may from time to time
require.
SECTION 9. CERTAIN NEGATIVE COVENANTS. The Parent and each of the
Borrowers jointly and severally covenant and agree that, so long as any
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Bank has any obligation to make any Loans or the Issuing
Bank has any obligation to issue, extend or renew any Letters of Credit
hereunder:
SECTION 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, the Issuing Bank and the
Administrative Agent arising under any of the Loan Documents;
(b) Indebtedness of the Borrowers or the Parent or their
Subsidiaries 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 trade credit on an open account basis
customarily extended and in fact extended in connection with normal
purchases of goods and services, PROVIDED no such obligations in excess of
$250,000 in the aggregate outstanding at any time shall be outstanding past
the date which is the later of (i) 120 days past the invoice date or (ii)
60 days past the due date unless such obligation is being contested in good
faith and adequate reserves have been established in accordance with
generally accepted account principles;
(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 SECTION 8.8, PROVIDED that no notice
of lien has been filed or recorded under the Code or other applicable
requirement of law;
(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 and such Indebtedness at
any time outstanding is not in excess of $3,000,000;
(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 the Closing Date of this Agreement
and listed and described on SCHEDULE 9.1 hereto (acceptable to the
Administrative Agent and the Banks) and Indebtedness issued to refinance or
replace such Indebtedness, provided that (i) the obligor on the
Indebtedness so refinanced or replaced is the obligor on such refinancing
or replacement Indebtedness, (ii) the principal amount of Indebtedness
issued to refinance or replace such Indebtedness is not increased beyond
the amount outstanding thereunder (and in the case of revolving credit
facilities the maximum amount available for borrowing thereunder is not
increased above the amount in place on the Closing Date hereof), (iii) the
aggregate amount of such refinancing or replacement Indebtedness plus the
amount of Indebtedness listed on SCHEDULE 9.1 which is still outstanding
does not exceed the aggregate principal amount of the Indebtedness set
forth on SCHEDULE 9.1 hereto (such principal amount to include commitments
under revolving credit facilities), (iv) such refinancing or replacement
Indebtedness has a final maturity date no earlier than October 31, 2002,
(v) such Indebtedness is on terms and conditions (including, without
limitation, terms relating to interest rate, covenants, defaults, mandatory
prepayments and the ability of such Subsidiary to make dividends or loans
to the Parent or the Borrowers) not materially more onerous to the Parent,
the Borrower or such Subsidiary than the Indebtedness set forth on SCHEDULE
9.1 being refinanced, (vi) if secured, such Indebtedness is not secured by
liens on any assets of the Borrower or such Subsidiary which were not
previously subject to liens securing the Indebtedness set forth on SCHEDULE
9.1 being refinanced; and (vii) after giving effect to the incurrence of
such refinancing or replacement Indebtedness no Default or Event of Default
shall have occurred and be continuing and the Borrowers shall be in
compliance with the borrowing limitations set forth in SECTION 2.1;
(g) (i) 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, the Borrowers or any other Subsidiary of the Parent and
Indebtedness assumed in connection with any acquisition (whether of assets
or stock) of a business by any of such Persons so long as such indebtedness
existed at the time of any such acquisition and was not incurred in
anticipation of or in connection with any such acquisition, including
Indebtedness issued to refinance or replace such Indebtedness so long as
such refinancing or replacement Indebtedness otherwise complies with the
criteria set forth in SECTION 9.1(f)(I), (II), (IV), (V), (VI) and (VII)
(without reference to SCHEDULE 9.1 hereto) and (ii) Capitalized Leases;
PROVIDED, (A) that the aggregate principal amount of all such Indebtedness
under this clause (g) shall not, at any time, exceed $10,000,000, (B) the
Capital Expenditure or other acquisition associated with such Indebtedness
is permitted pursuant to SECTION 10.5 or SECTION 9.5 hereof, respectively,
and (C) after giving effect to the incurrence of any such Indebtedness
under this clause (g), no Default or Event of Default shall have occurred
and be continuing and the Borrowers shall be in compliance with the
borrowing limitations set forth in SECTION 2.1.
(h) Indebtedness of a wholly-owned Subsidiary of the Parent
(other than Borrowers) or a Borrower owing to the Parent or such Borrower,
provided that the Investment corresponding to such Indebtedness is
permitted pursuant to SECTION 9.3(e);
(i) contingent obligations arising in connection with (i) non-
delinquent 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;
(j) Indebtedness in respect of the Senior Notes and guaranties
thereof in an aggregate principal amount not to exceed $280,000,000;
(k) additional unsecured subordinated Indebtedness in an
aggregate principal amount and on terms and conditions (including, without
limitation, with respect to tenor, interest rate, voluntary and mandatory
payments and terms of the subordination provisions relating thereto)
acceptable to the Agents and the Majority Banks, in their sole discretion;
(l) additional unsecured Indebtedness in an aggregate principal
amount not to exceed $3,000,000; and
(m) Derivative Contracts of the Parent, the Borrowers and the
Parent's Subsidiaries (other than Subsidiaries of the Borrowers) that
qualify under generally accepted accounting principles as a hedge of fixed
or floating rate Indebtedness or foreign currency needs (and not as a
speculative investment) and which are entered into in the ordinary course
of their business.
SECTION 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 and liens on
properties to secure claims for labor, material or supplies or
other Vessel operating expenses in respect of obligations which,
in each case, are not overdue or are being contested in good
faith and as to which adequate reserves have been set aside on
the books of the Parent or a Borrower, as applicable, provided
that no notice of a lien has been filed or recorded under the
Code or other applicable law;
(ii) deposits or pledges required in the ordinary course
of business in connection with, or to secure payment of, payroll
taxes, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations (other than any
lien imposed by ERISA) and in each case, which do not secure the
payment of Indebtedness and which do not in the aggregate impair
in any material respect the use of the Property of the Parent and
its Subsidiaries in the operation of their business;
(iii) deposits of cash and equivalents to secure the non-
delinquent performance of bids, trade contracts (other than for
borrowed money), 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 and in each case,
which do not secure the payment of Indebtedness and which do not
in the aggregate impair in any material respect the use of the
Property of the Parent and its Subsidiaries in the operation of
their business;
(iv) liens on properties in respect of judgments or
awards, the Indebtedness with respect to which is permitted by
SECTION 9.1(d) hereof;
(v) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties arising in the
ordinary course of business and which are in existence less than
120 days from the date of creation thereof in respect of
obligations not overdue and remain payable without penalty or
which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto; and in each
case, which do not secure the payment of Indebtedness and which
do not in the aggregate impair in any material respect the use of
Property in the operation of the business of the Parent and its
Subsidiaries;
(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, and other minor liens or
encumbrances incurred in the ordinary course of business, none of
which in the aggregate are substantial in amount, and none of
which, individually or in the aggregate, interferes materially
with the use of the property affected in the ordinary conduct of
the business of the Parent or any of its Subsidiaries, and none
of which secure payment of Indebtedness;
(vii) liens outstanding on the Closing Date and listed on
SCHEDULE 9.2 attached hereto (acceptable to the Administrative
Agent and the Banks) and liens securing replacement or
refinancing Indebtedness permitted pursuant to SECTION 9.1(f),
provided that (i) such liens do not extend to any property of
such Person not previously subject to a lien securing the
Indebtedness set forth on SCHEDULE 9.2 being refinanced; and (ii)
after giving effect to incurrence of such lien no Default or
Event of Default shall have occurred and be continuing and the
Borrowers shall be in compliance with the borrowing limitations
set forth herein;
(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, so long as, in each case, such
liens only secure Indebtedness of the type and amount permitted
by SECTION 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 in favor of the Administrative Agent for the
benefit of the Banks and the Administrative Agent under the Loan
Documents; and
(x) liens on vessels owned by Trico Supply securing
Indebtedness set forth on SCHEDULE 9.1 hereto.
SECTION 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, the Netherlands or Norway 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 commercial banks organized under
the laws of any country which is a member of the Organization for Economic
Cooperation and Development (the "OECD") (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 or similar Dutch or Norwegian securities;
(d) Investments existing on the Closing Date and listed on
SCHEDULE 9.3 attached hereto (acceptable to the Administrative Agent and
the Banks);
(e) Investments by the Parent or a Borrower in a Borrower;
(f) Investments (directly or indirectly) by the Parent or the
Borrowers in a non-Guarantor Subsidiary or joint ventures; PROVIDED that
(i) the aggregate amount of such Investments made during any one fiscal
year shall not exceed $500,000 and (ii) no Default or Event of Default
exists or would result therefrom; PROVIDED, FURTHER, that the aggregate
amount of Investments existing as of the Balance Sheet Date in Subsidiaries
of the Parent shall be permitted hereunder.
(g) Investments in acquisitions permitted pursuant to SECTION
9.5.1. hereof; and
(h) Investments by the Borrowers in the Parent in an aggregate
amount not to exceed in any one fiscal year of the Borrowers the sum of (i)
the scheduled payments of principal and interest under the Senior Notes for
such fiscal year PLUS (ii) the Borrowers' allocable share of income taxes,
franchise taxes, professional fees and other operating expenses for such
year (it being understood that, with respect to the amount of each
Borrower's allocable share of income taxes, such amount 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) MINUS (iii) the aggregate amount of Distributions made
pursuant to SECTION 9.4 hereof during such fiscal year; PROVIDED that no
Investment (other than Investments the proceeds of which are used to pay
taxes) shall be made if, after giving effect to such Investment or such
payment of principal or interest under the Senior Notes, a Default or Event
of Default shall have occurred and be continuing.
SECTION 9.4 DISTRIBUTIONS. None of the Borrowers nor the Parent will
make any Distributions other than Distributions by the Borrowers to the
Parent in an aggregate amount not to exceed in any one fiscal year of the
Borrowers the sum of (i) the scheduled payments of principal and interest
under the Senior Notes for such fiscal year PLUS (ii) the Borrowers'
allocable share of income taxes, franchise taxes, professional fees and
other operating expenses for such year (it being understood that, with
respect to the amount of each Borrower's allocable share of income taxes,
such amount 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) MINUS (iii) the aggregate
amount of Investments made pursuant to SECTION 9.3(I) hereof during such
fiscal year; PROVIDED that no Distribution (other than Distributions in
respect of taxes) shall be made if, after giving effect to such
Distribution or such payment of principal or interest under the Senior
Notes, a Default or Event of Default shall have occurred and be continuing.
SECTION 9.5 MERGER, CONSOLIDATION AND SALE OF ASSETS.
SECTION 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 (other than a Borrower) 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, PROVIDED that in the case of any
merger permitted under this SECTION 9.5.1, if such merger or consolidation
involves either of the Borrowers, such Borrower is the surviving
corporation. The Parent will not, and will not permit any of its
Subsidiaries to agree to or effect any Acquisition, other than (i)
acquisitions by the Parent or any of its Subsidiaries, where not less than
seventy-five percent (75%) of the consideration paid or payable by the
Parent and its Subsidiaries in connection therewith is funded with the
proceeds of a Permitted Equity Issuance, and (ii) any other Permitted
Acquisition by the Parent or any of its Subsidiaries, other than the
Borrowers, PROVIDED that the Capital Expenditure associated with such
acquisition is permitted under this Agreement (including, without
limitation, pursuant to SECTION 10.5 hereof).
SECTION 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 sale or other
disposition of assets, provided, that the Parent, the Borrowers and the
Parent's other Subsidiaries may sell or otherwise dispose of any assets so
long as:
(i) immediately prior to and after, and after giving
effect to such sale or other disposition, no Default or Event of
Default shall then exist; and
(ii) the aggregate fair market value of all such assets
sold or otherwise disposed of during the term of this Agreement
shall not exceed an amount equal to $3,000,000 in any single
transaction or $10,000,000 in the aggregate; and
(iii) 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; and
(iv) the Borrowers shall use the net proceeds of such
sale or disposition to prepay the principal balance of the Loans,
Unpaid Reimbursement Obligations and Reimbursement Obligations in
the order and in the manner set forth in SECTION 2.13 hereof if
such disposition of assets would otherwise result in a violation
of SECTION 10.4 hereof.
SECTION 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 or
any Vessel 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 or any Vessel, except in accordance in all material
respects with applicable Environmental Laws, (d) conduct any activity at
any real estate or use any real estate or any Vessel 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 or on or from such Vessel, except in accordance in all
material respects with applicable Environmental Laws, or (e) otherwise
conduct any activity at any real estate or on any Vessel or use any real
estate or any Vessel in any manner that would violate, in any material
respect, any Environmental Law or bring such real estate or Vessel in
violation, in a material respect, of any Environmental Law.
SECTION 9.7 EMPLOYEE BENEFIT PLANS. None of the Borrowers nor the
Parent nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 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.
SECTION 9.6 BUSINESS ACTIVITIES. None of the Borrowers, the Parent nor
any of their Subsidiaries 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.
SECTION 9.9 CHANGE OF CHIEF EXECUTIVE OFFICE OR CORPORATE NAME. None
of the Borrowers, the Guarantors nor the Parent will change its chief
executive office, federal employer identification number or registered
number (as the case may be) or its corporate name, unless it shall have (a)
given the Banks and the Issuing Bank 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 or
desirable to continue without impairment or interruption the perfection and
priority of the liens on the Collateral in favor of the Administrative
Agent for the benefit of the Banks pursuant to the Security Documents.
SECTION 9.10 FISCAL YEAR. The Parent and its Subsidiaries will not
change the date of the end of its fiscal year from that set forth in
SECTION 7.22 hereof.
SECTION 9.11 TRANSACTIONS WITH AFFILIATES. Except as otherwise
expressly permitted by the terms hereof, the Parent and each of the
Borrowers will not and will not permit any of the Parent's other
Subsidiaries to 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 or Subsidiaries, as the case may be.
SECTION 9.12 MODIFICATION OF CERTAIN DOCUMENTS. The Parent and the
Borrowers will not and will not permit the Parent's other Subsidiaries to,
amend, supplement or waive in any material respect any of the terms or
conditions of the Senior Notes as set forth in the forms thereof delivered
to the Administrative Agent on or prior to the Closing Date.
SECTION 9.13 UPSTREAM LIMITATIONS. The Parent and the Borrowers will
not, nor will the Parent permit any of its Subsidiaries to, enter into any
agreement, contract or arrangement (other than this Agreement and the other
Loan Documents) restricting the ability of any Subsidiary of the Parent to
pay or make dividends or distributions in cash or kind or to make loans or
advances; provided that this limitation does not apply (i) to agreements
entered into by the Title 11 Subsidiary in effect on the date hereof, or
(ii) to restrictions on dividends or distributions arising from an event of
default under an agreement by Trico Supply or its Subsidiaries governing
Indebtedness permitted under SECTION 9.1(f) and SECTION 9.1(g) hereof.
SECTION 9.14 INCONSISTENT AGREEMENTS. The Parent and the Borrower will
not, nor will the Parent permit any of its Subsidiaries to, enter into any
contract, arrangement or agreement containing any provision which would be
violated or breached by the performance by the Parent, the Borrowers or any
of the Parent's other Subsidiaries of its obligations hereunder, under any
of the Loan Documents.
SECTION 9.15 NO PREPAYMENTS, ETC. The Parent will not, and will not
permit any of its Subsidiaries to, pay, repay, prepay, redeem, repurchase,
acquire, retire, defease, or otherwise acquire, all or any portion of the
Senior Notes in advance of the scheduled maturity date thereof.
SECTION 9.16 FINANCIAL COVENANTS. The Parent and each of the Borrowers
jointly and severally covenant and agree that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any
Bank has any obligation to make any Loans or the Issuing Bank has any
obligation to issue, extend or renew any Letters of Credit hereunder:
SECTION 10.1 DEBT SERVICE COVERAGE RATIO. The Parent and the Borrowers
will not permit the Debt Service Coverage Ratio, determined at the end of
each fiscal quarter of the Parent ending during a period set forth in the
table below, to be less than the ratio set forth opposite such period in
such table:
<TABLE>
<CAPTION>
PERIOD MINIMUM RATIO
<S> <C>
9/30/99 through 3/30/00 1.00:1.00
3/31/00 through 12/30/00 1.20:1.00
12/31/00 and thereafter 1.35:1.00
</TABLE>
SECTION 10.2 LEVERAGE RATIO. The Parent and the Borrowers will not
permit the Leverage Ratio, determined as at the end of each fiscal quarter
of the Parent ending during a period set forth in the table below, to be
greater than the ratio set forth opposite such period in such table:
<TABLE>
<CAPTION>
PERIOD MAXIMUM RATIO
<S> <C>
9/30/99 through 12/30/99 8.75:1.00
12/31/99 through 3/30/00 8.50:1.00
3/31/00 through 6/29/00 8.00:1.00
6/30/00 through 9/29/00 7.00:1.00
9/30/00 through 12/30/00 6.50:1.00
12/31/00 through 3/30/01 6.25:1.00
3/31/01 and thereafter 6.00:1.00
</TABLE>
SECTION 10.3 TANGIBLE NET WORTH. The Parent and the Borrowers on a
consolidated basis will maintain at all times a consolidated Tangible Net
Worth of not less than 85% of consolidated Tangible Net Worth at the
Closing Date plus (i) 50% of cumulative net income (if positive) after the
Closing Date, plus (ii) 100% of any net proceeds of equity issued.
SECTION 10.4 MINIMUM MORTGAGED VESSEL VALUE. The Parent and the
Borrowers will not, at any time, permit the appraised fair market value of
the Mortgaged Vessels (as stated in the most current appraisals delivered
to the Administrative Agent pursuant to SECTION 8.4(f) hereof) to be less
than 200% of the Maximum Credit Exposure at such time. If on any date the
fair market value of the Mortgaged Vessels as set forth in any Appraisal
provided pursuant to Section 8.4(f) hereof is less than 200% of the Maximum
Credit Exposure, then the Borrowers shall, as soon as possible, but in any
event within fourteen (14) days after the date of delivery of the
Appraisal, exercise any one or a combination of the following: (a) grant to
the Administrative Agent, for the benefit of the Banks and the Issuing
Bank, a perfected first priority security interest in one or more US Flag
Vessels having a fair market value that, in the aggregate, is equal to or
greater than the amount necessary to maintain a value of Mortgaged Vessels
with a fair market value equal to or greater than 200% of the Maximum
Credit Exposure; or (b) make a mandatory payment pursuant to Section 2.13
hereof, resulting in a corresponding permanent reduction in the Total
Commitment whereupon the Commitments of the Banks shall be reduced pro rata
in accordance with their respective Commitment Percentages, in an amount
sufficient to cause a reduction of the Maximum Credit Exposure such that
the fair market value of the Mortgaged Vessels as set forth in the most
recent Appraisal provided pursuant to Section 8.4(f) hereof is equal to or
greater than 200% of the Maximum Credit Exposure. The Borrowers shall pay
all reasonable costs and expenses of the Administrative Agent, the Issuing
Bank and Banks and of counsel to the Administrative Agent incurred in
connection with any such addition of Collateral. In the event the
Borrowers are required to grant a security interest in a Vessel pursuant to
this Section, Borrowers shall deliver an Appraisal on such Vessel, a
mortgage or amendment to the U.S. Vessel Mortgage which grants to the
Administrative Agent for the benefit of the Issuing Bank and the Banks, a
perfected first priority security interest in such Vessel, a security
agreement or amendment to the Security Agreement granting a perfected first
priority security interest in earnings, insurance and other Property
related to such Vessel, evidence of first lien priority and legal opinions
of Borrowers' counsel, each in form and substance reasonably satisfactory
to the Administrative Agent and the Majority Banks.
SECTION 10.5 CAPITAL EXPENDITURES. The Parent will not, and will not
permit any of its Subsidiaries to, make Capital Expenditures, other than
Excluded Capital Expenditures and Maintenance Capital Expenditures, in an
aggregate amount in any fiscal year of the Parent in excess of $20,000,000.
In addition, and as a further limitation, the Borrowers will not make any
Capital Expenditures other than (i) Maintenance Capital Expenditures, (ii)
Excluded Capital Expenditures, and (iii) additional Capital Expenditures;
PROVIDED that the aggregate amount of such additional Capital Expenditures
made by the Borrowers during any one fiscal year pursuant to this clause
(iii) shall not exceed $3,000,000.
SECTION 11. CLOSING CONDITIONS. The obligations of the Banks to amend
and restate the Existing Credit Agreement and to convert the loans
outstanding under the Existing Credit Agreement into Loans and to make the
initial Loans hereunder and of the Issuing Bank to issue the initial Letter
of Credit hereunder shall be subject to the satisfaction of the following
conditions precedent on or prior to the Closing Date:
SECTION 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.
SECTION 11.2 CERTIFIED COPIES OF CORPORATE DOCUMENTS; RESOLUTIONS. Each
of the Banks shall have received from the Parent, each of the Borrowers and
each of the Guarantors 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, (b) its by-laws as in effect on such date and (c)
resolutions of its board of directors authorizing the transaction
contemplated hereby.
SECTION 11.3 CORPORATE ACTION. All corporate action necessary for the
valid execution, delivery and performance by the Parent, each of the
Borrowers and each of the Guarantors 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.
SECTION 11.4 INCUMBENCY CERTIFICATE. Each of the Banks shall have
received from the Parent, each of the Borrowers and each of the Guarantors
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.
SECTION 11.5 VALIDITY OF LIENS. The Security Documents shall be
effective to create in favor of the Administrative Agent, for the benefit
of the Banks, and the Issuing Bank a legal, valid and enforceable first
priority (except for Permitted Liens entitled to priority under applicable
law) security interest in the Collateral. The US Vessel Mortgage shall
constitute a first preferred mortgage as defined in 46 U.S.C. Section
31322. All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Administrative Agent
and Majority Banks to perfect, protect and preserve such security interests
shall have been duly effected. The Administrative Agent and Majority Banks
shall have received evidence thereof in form and substance satisfactory to
the Administrative Agent.
SECTION 11.6 PERFECTION CERTIFICATES AND LIEN SEARCH RESULTS. The
Administrative Agent shall have received from each of the Borrowers a
completed and fully executed Perfection Certificate and the results of UCC,
U.S. Coast Guard and other lien searches with respect to its Collateral,
indicating no encumbrances other than Permitted Liens and otherwise in form
and substance satisfactory to the Administrative Agent; provided that the
requirements of this SECTION 11.6 may be satisfied by receipt by the
Administrative Agent of such lien search results no later than fourteen
(14) days after the Closing Date.
SECTION 11.7 CERTIFICATES OF INSURANCE. The Administrative 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
Documents 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 Administrative Agent as
additional insured or loss payee, as applicable.
SECTION 11.8 FINANCIAL CONDITION. The Banks shall have received the
financial statements referred to in SECTION 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.
SECTION 11.9 SOLVENCY CERTIFICATE. Each of the Banks shall have
received an officer's certificate from each of the Parent, the Borrowers
and the Guarantors dated as of the Closing Date as to the solvency of such
Person following the consummation of the transactions contemplated hereby,
which such certificates shall be in form and substance satisfactory to the
Banks.
SECTION 11.10 OPINIONS OF COUNSEL. Each of the Banks and the
Administrative Agent shall have received a favorable opinion addressed to
the Banks and the Administrative Agent, dated as of the Closing Date, in
form and substance satisfactory to the Banks and the Administrative Agent,
from: Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P.,
counsel to the Parent and the Borrowers.
SECTION 11.12 PAYMENT OF FEES AND EXPENSES. The Borrowers shall have
paid to the Administrative Agent for the accounts of the Banks, the Closing
Fees pursuant to SECTION 5.1 hereof, all fees and expenses of the
Administrative Agent's special counsel through the Closing Date (including
an estimate for post closing fees and expenses), and all other amounts to
be paid pursuant to SECTION 16 as accrued through the Closing Date.
SECTION 11.12 BORROWING NOTICE. The Borrowers shall have delivered to
the Administrative Agent a Loan Request with respect to any Loan requested
to be made on the Closing Date.
SECTION 11.13 APPRAISALS OF VESSELS, CLASS CONFIRMATIONS. The
Administrative Agent shall have received from marine surveyors satisfactory
to the Administrative Agent and Majority Banks a market value appraisal of
each of the Vessels owned by the Borrowers subject to a Vessel Mortgage.
Such appraisals shall be satisfactory to the Administrative Agent and
Majority Banks in all respects and shall evidence that the Mortgaged
Vessels have a fair market value equal to or greater than 250% of the
Maximum Credit Exposure on the Closing Date. The Administrative Agent
shall have received a certificate from the classification society with
respect to each such Vessel, issued as of a recent date and indicating that
such Vessel is in compliance with the requirements of applicable law for
use as intended.
SECTION 11.14 CONCURRENT FUNDING. Inverness Management, LLC will
concurrently fund, or will have funded, its entire $50,000,000 cash equity
investment in the Parent, the net proceeds of which will be used to reduce
the outstanding Indebtedness under the Existing Credit Agreement.
SECTION 11.15 YEAR 2000. The Administrative Agent and the Banks shall
have received and reviewed, with results satisfactory to the them,
information confirming that the Parent, the Borrowers and their
Subsidiaries are Year 2000 Compliant and information confirming that the
Parent, the Borrowers and their Subsidiaries have successfully addressed
the risks resulting from the failure of key vendors and customers to
successfully address the Year 2000 problem.
SECTION 11.16 TERMINATION OF EXISTING CREDIT AGREEMENT. The Existing
Banks shall have assigned the Existing Credit Agreement and all obligations
thereunder to the Agents and the Banks and BankBoston shall have assigned
the liens held by it for the benefit of the banks in the Existing Credit
Agreement to the Administrative Agent for the benefit of the Banks.
SECTION 11.17 CERTIFICATE OF EXISTENCE; GOOD STANDING AND QUALIFICATION
TO DO BUSINESS. Each of the Banks shall have received from the Parent and
each of the Borrowers certificates of existence and good standing from its
state of incorporation or formation, and certificates of qualification to
do business from each jurisdiction in which it does business.
SECTION 11.18 OTHER DOCUMENTS. Such other approvals, opinions,
documents or materials as the Administrative Agent or any Bank may request.
For the purpose of each Section under this Section 11, the term Bank
shall include the Issuing Bank.
SECTION 12. CONDITIONS TO ALL BORROWINGS. Each Banks' obligation to
make any Loan and of the Issuing Bank to issue, extend or renew any Letters
of Credit, whether on or after the Closing Date, shall also be subject to
the satisfaction of the following conditions precedent:
SECTION 12. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of the Parent and its Subsidiaries 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 or the issuance, extension or
renewal of such Letter of Credit, 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.
SECTION 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. It shall not be unlawful for the Issuing Bank, with respect to
any request relating to the issuance, extension or renewal of a Letter of
Credit, to issue, extend, or renew, or for any Bank to participate in the
issuance, extension or renewal of, such Letter of Credit.
SECTION 12.3 GOVERNMENTAL REGULATION. Each Bank and Issuing Bank shall
have received such statements in substance and form reasonably satisfactory
to such Bank and Issuing Bank as such Bank and Issuing 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.
SECTION 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 hereto and thereto shall be
satisfactory in substance and in form to the Issuing Bank, the Banks and to
the Administrative Agent and the Administrative Agent's Special Counsel,
and the Issuing Bank, the Banks, the Administrative Agent and such counsel
shall have received all information and such counterpart originals or
certified or other copies of such documents as the Administrative Agent may
reasonably request.
SECTION 13. EVENTS OF DEFAULT; ACCELERATION; ETC.
SECTION 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
or any Reimbursement Obligation 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, any Letter of Credit Fee or other sums due hereunder or
under any of the other Loan Documents owing by the Borrowers, 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) the Borrowers or the Parent shall fail to comply with
any of the covenants contained in SECTION 8.4, SECTION 8.5, the first
sentence of SECTION 8.6, SECTION 9 or SECTION 10 hereof;
(d) the Borrowers or the Parent or any Guarantor 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 SECTION
13.1) for thirty (30) days after written notice of such failure has been
given to the Parent by the Administrative Agent;
(e) any representation or warranty of the Parent, either
Borrower or any Guarantor 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, the Borrowers, any Guarantor or any of the
Parent's other Subsidiaries (other than Subsidiaries which are not
Restricted Subsidiaries) shall fail to pay when due, or within any
applicable period of grace, any amounts under Indebtedness of $1,000,000 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 Indebtedness in
excess of $1,000,000 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, the Borrowers or any of the Parent's
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, the Borrowers
or any of the Parent's 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, the Borrowers or any of the Parent's other
Subsidiaries that, with other outstanding final judgments, undischarged,
against such Persons exceeds in the aggregate $1,000,000;
(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, the Borrowers or any of the Parent's
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) the Parent, the Borrowers or any of the Parent's
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;
(l) 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, the Borrowers or any of
the Parent's Subsidiaries if such event or circumstance is not covered by
business interruption insurance and would have a Material Adverse Effect.
(m) the Parent, the Borrowers or any of the Parent's other
Subsidiaries shall be indicted for a crime, a punishment for which could
include the forfeiture of any assets of any such Person having a fair
market value in excess of $500,000;
(n) 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 persons who are
employees of the Parent or a Subsidiary of the Parent) shall acquire after
the date hereof beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of
25% 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;
(o) 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
Administrative Agent may, and upon the request of the Majority Banks shall,
by notice in writing to the Borrowers declare an amount equal to the
maximum aggregate amount that is or may thereafter become available for
drawing under any outstanding Letters of Credit to be immediately due and
payable, and declare all amounts owing with respect to this Agreement, the
Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become immediately due and payable in
each case without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration 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 SECTION 13.1(G), 13.1(H) or
13.1(j), all such amounts shall become immediately due and payable
automatically and without any further act of the Administrative Agent or
any Bank and without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or any other notice of any kind, all of
which are hereby expressly waived by the Parent and the Borrowers.
SECTION 13.2 TERMINATION OF COMMITMENTS. If any one or more of the
Events of Default specified in SECTION 13.1(g), SECTION 13.1(h) or SECTION
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 further
obligations, if any, to make Loans to the Borrowers and the Issuing Bank
shall be relieved of all further obligations to issue, extend or renew
Letters of Credit. If any other Event of Default shall have occurred and
be continuing, or if on any Drawdown Date or any date for issuing,
extending or renewing any Letter of Credit the conditions precedent to the
making of the Loans to be made on such Drawdown Date or (as the case may
be) to issuing, extending or renewing such Letter of Credit on such other
date are not satisfied, the Administrative 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 and the Issuing Bank shall be relieved of all further obligations, if
any, to issue, extend or renew Letters of Credit. If any such notice is
given to the Borrowers the Administrative Agent will forthwith furnish a
copy thereof to each of the Banks and the Issuing Bank. No termination of
the credit hereunder shall relieve either of the Borrowers of any of the
Obligations or any of their existing obligations to any of the Banks
arising under any other agreements or instruments.
SECTION 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 SECTION 13.1 hereof,
the Administrative Agent, the Issuing Bank and each Bank, if owed any
amount with respect to the Loans or the Reimbursement Obligations, 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 the
Administrative Agent, the Issuing Bank and 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 or Issuing Bank. No remedy
herein conferred upon the Issuing Bank, any Bank or the Administrative
Agent or the holder of any Note or purchaser of any Letter of Credit
Participation 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.
SECTION 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 Administrative Agent, the Issuing Bank 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 Administrative Agent for or in respect of all
reasonable costs, expenses, disbursements and losses (including without
limitation, reasonable fees, expenses and disbursements of Agents' counsel)
which shall have been incurred or sustained by the Administrative Agent in
connection with the collection of such monies by the Administrative Agent,
for the exercise, protection or enforcement by the Banks and the Issuing
Bank of all or any of the rights, remedies, powers and privileges of the
Banks and the Issuing Bank 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
Administrative Agent against all taxes or liens which by law shall have, or
may have, priority over the rights of the Administrative Agent to such
monies, and then to the payment of enforcement costs (as defined in SECTION
16 hereof) of the Banks;
(b) Second, to all other Obligations in such order or preference
as the Majority Banks may determine; provided, that (i) distributions in
respect of such Obligations shall be made pari passu among Obligations with
respect to the Administrative Agent's fee payable pursuant to the Fee
Letter and all other Obligations, (ii) Obligations owing to the Banks and
the Issuing Bank with respect to each type of Obligation such as interest,
principal, fees and expenses shall be made among the Banks, pro rata and
(iii) the Administrative 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, the Issuing Bank
and the Administrative Agent of all of the Obligations, to the payment of
any obligations required to be paid pursuant to Section 9.504(A)(3) of the
Uniform Commercial Code of the State of Texas; and
(d) Fourth, the excess, if any, shall be returned to the
Borrowers or to such other Persons as are entitled thereto.
SECTION 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 the Borrowers and any
securities or other property 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 the Borrowers to such Bank, other than Indebtedness
evidenced by the Notes held by such Bank or constituting Reimbursement
Obligations owed to 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 or constituting Reimbursement Obligations owed to such Bank,
and (b) if such Bank shall receive from any of the Borrowers or the Parent,
whether by voluntary payment, exercise of the right of setoff,
counterclaim, cross action, enforcement of the claim evidenced by the Notes
held by, or constituting Reimbursement Obligations owed to, such Bank by
proceedings against such Borrower 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, or Reimbursement Obligations owed to, 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, and Reimbursement Obligations
owed to, 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 it or Reimbursement Obligations owed it, 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. For purposes of this Section 14, the
term "Bank" shall include the Issuing Bank.
SECTION 15. THE ADMINISTRATIVE AGENT.
SECTION 15.1 AUTHORIZATION. The Administrative Agent is authorized to
take such action on behalf of each of the Banks and the Issuing Bank and to
exercise all such powers as are hereunder and under any of the other Loan
Documents and any related documents delegated to the Administrative 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 Administrative Agent. The
relationship between the Administrative Agent and each of the Banks and the
Issuing Bank is that of an independent contractor. The use of the term
"Administrative Agent" is for convenience only and is used to describe, as
a form of convention, the independent contractual relationship between the
Administrative Agent and each of the Banks and the Issuing Bank. 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 Administrative Agent and any of the Banks or the Issuing Bank.
As an independent contractor empowered by the Banks and the Issuing Bank to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Administrative Agent is
nevertheless a "representative" of the Banks and the Issuing Bank, as that
term is defined in Article 1 of the Uniform Commercial Code, for purposes
of actions for the benefit of the Banks, the Issuing Bank and the
Administrative Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation
of the Administrative 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, the Issuing Bank and the
Administrative Agent. The Administrative Agent is hereby authorized and
empowered to release Collateral without the consent of the Banks and the
Issuing Bank upon the sale of such Collateral pursuant to SECTION 9.5.2
hereof.
SECTION 15.2 EMPLOYEES AND AGENTS. The Administrative 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 Administrative Agent may
utilize the services of such Persons as the Administrative Agent in its
sole discretion may reasonably determine, and all reasonable fees and
expenses of any such Persons shall be paid by the Borrowers.
SECTION 15.3 NO LIABILITY. Neither the Administrative 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 Administrative Agent or such other Person, as
the case may be, may be liable for losses due to its willful misconduct or
gross negligence.
SECTION 15.4 NO REPRESENTATIONS. The Administrative Agent shall not be
responsible for the execution or validity or enforceability of this
Agreement, the Notes, the Letters of Credit, 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, the Borrowers or the
Guarantors, 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 Administrative Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Parent, any of
the Borrowers, any Guarantor or any holder of any of the Notes shall have
been duly authorized or is true, accurate and complete. The Administrative
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 or the
Issuing Bank, with respect to the credit-worthiness or financial condition
of the Parent, any of the Borrowers or any of the Parent's other
Subsidiaries. Each Bank and the Issuing Bank acknowledges that it has,
independently and without reliance upon the Administrative 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.
SECTION 15.5 PAYMENTS.
SECTION 15.5.1. PAYMENTS TO ADMINISTRATIVE AGENT. A payment by any
of the Borrowers or any Guarantor to the Administrative Agent hereunder or
any of the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank. The Administrative Agent agrees
promptly to distribute to each Bank its pro rata share of payments received
by the Administrative Agent, except as otherwise expressly provided herein
or in any of the other Loan Documents.
SECTION 15.5.2. DISTRIBUTION BY ADMINISTRATIVE AGENT. If in the
opinion of the Administrative 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
Administrative Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Administrative
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.
SECTION 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 Administrative Agent its
pro rata share of any Loan or to purchase any Letter of Credit
Participation or (b) to comply with the provisions of SECTION 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 pro rata share of such payments due and 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, Unpaid Reimbursement Obligations, interest,
fees or otherwise, to the remaining nondelinquent Banks for application to,
and reduction of, their respective pro rata shares of all outstanding Loans
and Unpaid Reimbursement Obligations. The Delinquent Bank hereby
authorizes the Administrative Agent to distribute such payments to such
nondelinquent Banks in proportion to their respective pro rata shares of
all outstanding Loans and Unpaid Reimbursement Obligations. 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 and Unpaid Reimbursement Obligations of such nondelinquent Banks, the
Banks' respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment
causing such delinquency.
SECTION 15.6 HOLDERS OF NOTES. The Administrative Agent may deem and
treat the payee of any Note or the purchaser of any Letter of Credit
Participation 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.
SECTION 15.7 INDEMNITY. The Issuing Bank and the Banks hereby ratably
agree to indemnify and hold harmless the Administrative Agent-Related
Persons from and against any and all claims, actions and suits (whether
groundless or otherwise), losses, damages, costs, expenses (including any
expense which the Administrative Agent has not been reimbursed by the
Borrowers as required by SECTION 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 Administrative Agent's actions taken hereunder or
thereunder ("indemnified liabilities"), INCLUDING SUCH INDEMNIFIED
LIABILITIES AS MAY ARISE OR BE CAUSED BY THE NEGLIGENCE, SOLE, JOINT
CONCURRENT, COMPARATIVE OR OTHERWISE OF THE INDEMNIFIED PERSON, except to
the extent that any of the same shall be directly caused by the indemnified
Person's willful misconduct or gross negligence.
SECTION 15.8 ADMINISTRATIVE AGENT AS BANK. In its individual capacity,
Wells Fargo shall have the same obligations and the same rights, powers and
privileges in respect to its Commitments and the Loans made by it, and as
the holder of any of the Notes and as the purchaser of any Letter of Credit
Participations, as it would have were it not also the Administrative Agent.
SECTION 15.9 RESIGNATION. The Administrative Agent may resign at any
time by giving thirty (30) 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 Administrative Agent. Unless a
Default or Event of Default shall have occurred and be continuing, such
successor Administrative Agent shall be reasonably acceptable to the
Borrowers. If no successor Administrative Agent shall have been so
appointed by the Majority Banks and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may, on
behalf of the Banks, appoint a successor Administrative 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 Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations, if any, hereunder. After
any retiring Administrative 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 Administrative Agent.
SECTION 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 Administrative Agent thereof. The
Administrative Agent hereby agrees that upon receipt of any notice under
this SECTION 15.10 it shall promptly notify the other Banks of the
existence of such Default or Event of Default.
SECTION 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 Administrative
Agent shall, if (i) so requested by the Majority Banks and (ii) the Banks
have provided to the Administrative Agent such additional indemnities and
assurances against expenses and liabilities as the Administrative 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 Administrative Agent in writing as to the
method and the extent of any such sale or other disposition, the Banks
hereby ratably agreeing to indemnify and hold the Administrative Agent
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the
Administrative Agent need not comply with any such direction to the extent
that the Administrative Agent reasonably believes the Administrative
Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
SECTION 15.12 DOCUMENTATION AGENT; SYNDICATION AGENT. The parties named
as "Documentation Agent" herein or as "Syndication Agent" on the cover
hereof shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to
all Banks. Without limiting the foregoing, neither the Documentation Agent
nor the Syndication Agent shall have or be deemed to have any fiduciary
relationship with any Bank. Each Bank acknowledges that it has not relied,
and will not rely, on the Documentation Agent or the Syndication Agent in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
SECTION 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 Administrative Agent or any of
the Banks or the Issuing Bank (other than taxes based upon the
Administrative Agent's or any Bank's or the Issuing 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
Administrative Agent and each Bank and the Issuing Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the
Administrative Agent's special counsel or any local counsel to the
Administrative 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 Administrative Agent incurred by the
Administrative 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 Issuing
Bank or the Administrative Agent, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and charges)
("enforcement costs") incurred by any Bank or the Issuing Bank, and all
enforcement costs incurred by the Administrative Agent in connection with
(i) the enforcement of or preservation of rights under any of the Loan
Documents against the Parent, any of the Borrowers, any of the Guarantors
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, the Issuing Bank's or the Administrative
Agent's relationship with the Parent, any of the Borrowers, any of the
Guarantors or any of the Parent's other Subsidiaries under the Loan
Documents or in connection with the transactions contemplated hereby and
(f) all reasonable fees, expenses and disbursements of any Bank or the
Administrative Agent incurred in connection with UCC or other lien
searches, UCC filings or registration of any other Security Documents,
vessel mortgage recordings, or mortgage recordings. The covenants of this
SECTION 16 shall survive payment or satisfaction of payment of amounts
owing with respect to the Notes.
SECTION 17. INDEMNIFICATION. The Borrowers jointly and severally agree
to indemnify and hold harmless each Administrative Agent-Related Person,
the Issuing Bank and each Bank and their respective directors, officers,
agents, representatives and employees (each an "Indemnified Person") 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 or
thereby, 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 or Letters of Credit, (b) any actual or
alleged infringement of any patent, copyright, trademark, service mark or
similar right of the Parent or any 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,
AND IN EACH CASE INCLUDING ANY LOSS, CLAIM, DAMAGE, EXPENSE, OR LIABILITY
RESULTING FROM ANY INDEMNIFIED PERSON'S NEGLIGENCE, OTHER THAN WITH RESPECT
TO CLAIMS OR DAMAGES RESULTING FROM ANY INDEMNIFIED PERSON'S OWN GROSS
NEGLIGENCE OR WILLFUL CONDUCT. This agreement shall not require the
Borrowers or the Parent to indemnify an employee of a Bank for losses that
such employee shall incur as a result of a dispute between such Bank and
such employee. In litigation, or the preparation therefor, the Banks, the
Issuing Bank and the Administrative 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 Section 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 Section 17 shall be "Obligations" hereunder. The covenants contained
in this Section 17 shall survive payment of satisfaction in full of all
other Obligations.
SECTION 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, any of the Borrowers or any of the Guarantors
pursuant to this Agreement shall be deemed to have been relied upon by the
Banks and the Administrative Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making
by the Banks of the Loans and the issuance, extension or renewal of any
Letters of Credit, as herein contemplated, and shall continue in full force
and effect so long as any Letter of Credit, or 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 or the Issuing
Bank has any obligation to issue, extend or renew any Letter of Credit, 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, the Issuing Bank or the Administrative Agent at any
time by or on behalf of the Parent, any of the Borrowers or any of the
Guarantors pursuant to this Agreement or in connection with the
transactions contemplated hereby shall constitute representations and
warranties by such Person hereunder.
SECTION 19. ASSIGNMENT AND PARTICIPATION.
SECTION 19.1 CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided
herein, each Bank and the Issuing Bank may assign to one or more banks or
institutions 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 and its participating interest in the risk relating to any
Letters of Credit); provided that (a) each of the Administrative Agent and
the Issuing Bank 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 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 (or, if applicable, the
Issuing Bank's) rights and obligations with respect to the Loans and other
Obligations under this Agreement, (c) each assignment shall be in a minimum
amount of $5,000,000 or a larger integral multiple of $1,000,000 (or less,
if such assignment would be all of such Bank's (or, if applicable, the
Issuing Bank's) interests, rights and obligations in respect of its Loans
and other Obligations), and (d) in the case of an assignment by a Bank) the
parties to such assignment shall execute and deliver to the Administrative
Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of EXHIBIT D hereto
(an "Assignment and Acceptance"), together with any Notes subject to such
assignment, and in the case of an assignment by the Issuing Bank, the
parties to such assignment shall execute and deliver to the Administrative
Agent an assignment and acceptance agreement ("L/C Assignment") in form and
substance satisfactory to the Administrative Agent. Upon such execution,
delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance (or, if applicable, L/C
Assignment), 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 (or,
if applicable, L/C Assignment), have the rights and obligations of a Bank
(or Issuing Bank) hereunder, and (ii) the assigning Bank (or Issuing Bank)
shall, to the extent provided in such assignment and upon payment to the
Administrative Agent of the registration fee referred to in SECTION 19.3,
be released from its obligations under this Agreement.
SECTION 19.2 CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS;
COVENANTS. By executing and delivering an Assignment and Acceptance (or,
if applicable, L/C Assignment), 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 (or Issuing 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 (or
Issuing Bank) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Parent, any
of the Borrowers, any of the Guarantors 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,
any of the Borrowers, any of the Guarantors 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 SECTION 7.4 and SECTION 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 (or, if applicable, L/C Assignment); (d) such assignee will,
independently and without reliance upon the assigning Bank (or Issuing
Bank), the Administrative 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
a bank or institution; (f) such assignee appoints and authorizes the
Administrative 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 Administrative 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 (or Issuing Bank); (h) such assignee represents
and warrants that it is legally authorized to enter into such Assignment
and Acceptance; and (i) such assignee acknowledges that it has made
arrangements with the assigning Bank satisfactory to such assignee with
respect to its pro rata share of Letter of Credit Fees, if any, in respect
of outstanding Letters of Credit and with respect to its pro rata share of
Commitment Fees.
SECTION 19.3 REGISTER. The Administrative 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 (a) the names and addresses of
the Banks and the Issuing Bank, (b) the Commitment Percentages of the Banks
from time to time, (c) the principal amount of the Loans owing to the Banks
from time to time, and (d) the Letter of Credit Participations purchased by
the Banks from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent, the Banks and the Issuing Bank may treat each Person
whose name is recorded in the Register as a Bank (or Issuing Bank)
hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrowers, the Banks and the Issuing Bank
at any reasonable time and from time to time upon reasonable prior notice.
Upon each such recordation, the assigning Bank (or Issuing Bank) agrees to
pay to the Administrative Agent a registration fee in the sum of $3,500, as
to which payment the Borrowers shall have no responsibility.
SECTION 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 Administrative 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
Administrative Agent, in exchange for each surrendered Note, a new Note to
the order of such assignee in an amount equal to the amount assumed by such
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. Each new Note shall provide that it is a replacement for
the surrendered Note, that it does not constitute a novation or discharge
thereof and that it shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Note, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the assigned Note. Within five (5) days of
issuance of any new Notes pursuant to this SECTION 19.4, the Borrowers
shall deliver an opinion of counsel, addressed to the Banks and the
Administrative 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.
SECTION 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 or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
SECTION 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.
SECTION 19.7 ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If
any assignee Bank is an Affiliate of the Parent or any of its Subsidiaries,
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
Administrative Agent pursuant to SECTION 13.1 or SECTION 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 or Reimbursement Obligations to
a participant, and such participant is either of the Borrowers or an
Affiliate of the Parent or any of its Subsidiaries, then such transferor
Bank shall promptly notify the Administrative 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 Administrative Agent pursuant to SECTION 13.1 or SECTION
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.
SECTION 19.8 MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank
and Issuing Bank shall retain its rights to be indemnified pursuant to
SECTION 17 with respect to any claims or actions arising prior to the date
of such assignment. If any assignee Bank or Issuing 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 Administrative Agent certification as to
its exemption from deduction or withholding of any United States federal
income taxes. Anything contained in this SECTION 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
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 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.
SECTION 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 and the Issuing
Bank.
SECTION 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 or any Letter of Credit
Applications 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, facsimile or
telex and confirmed by delivery via courier or postal service, addressed as
follows:
(a) if to the Parent or any of the Borrowers, at Trico Marine
Services, Inc., 2401 Fountainview, Suite 626, Houston, Texas 77057,
Attention: President, or at such other address for notice as the Parent and
the Borrowers 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 Administrative Agent, at 201 Third Street, 8{th}
Floor, San Francisco, California 94103, Attention: Athene Mims, Vice
President and Manager, or such other address for notice as the
Administrative Agent shall last have furnished in writing to the Person
giving the notice; and
(c) if to any Bank or the Issuing Bank, at such address set
forth on SCHEDULE 1.1 hereto, or such other address for notice as such Bank
or the Issuing 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.
SECTION 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 STATE OF TEXAS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF SAID
STATE (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 STATE OF TEXAS 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 SECTION 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.
SECTION 22. HEADINGS. The captions in this Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
SECTION 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.
SECTION 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 SECTION 26.
SECTION 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 Administrative Agent has represented,
expressly or otherwise, that such Bank or the Administrative Agent would
not, in the event of litigation, seek to enforce the foregoing waivers and
(b) acknowledges that each of the Administrative 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.
SECTION 26. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise
expressly provided in this Agreement, any term of this Agreement or of any
other instrument related hereto or mentioned herein may be amended with,
but only with, the written consent of the Parent, the Borrowers and the
Majority Banks, and 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
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 Majority Banks. Notwithstanding the
foregoing, (i) the amount of the respective Loans, the term of, and
scheduled payments on, the Notes, and the amount of the Commitments of the
Banks hereunder may not be changed, and the rate of interest on the Notes
(other than interest accruing pursuant to <section>5.8 following the
effective date of any waiver by the Majority Banks of the Default or Event
of Default relating thereto), the amount of Commitment Fee or Letter or
Credit fees hereunder and the minimum fair market value of the Mortgaged
Vessels required to be maintained by the Borrowers and the Parent pursuant
to SECTION 10.4 hereof may not be reduced, without the written consent of
the Parent, the Borrowers and the written consent of each Bank affected
thereby; (ii) the definitions of Majority Banks and of Commitment
Percentage and this SECTION 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
SECTION 10.4 hereof; (iv) the amount of the Letter of Credit Fees payable
for the Issuing Bank's account and SECTION 3 may not be amended without the
written consent of the Issuing Bank; and (v) SECTION 15 may not be amended
without written consent of the Administrative 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 Parent,
the Borrowers or any Guarantor shall entitle the Parent, the Borrowers or
any Guarantor to other or further notice or demand in similar or other
circumstances.
SECTION 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.
SECTION 28. PARI PASSU TREATMENT.
(a) Notwithstanding anything to the contrary set forth herein,
each payment or prepayment of principal and interest received after the
occurrence of an Event of Default hereunder shall be distributed pari passu
among the Banks and the Issuing Bank, in accordance with the aggregate
outstanding principal amount of the Obligations owing to each Bank and the
Issuing Bank (including its Letter of Credit Participations and any
Reimbursement Obligations owing to it) divided by the aggregate outstanding
principal amount of all Obligations (including any Obligations not then due
and payable).
(b) Following the occurrence and during the continuance of any
Event of Default, each Bank agrees that if it shall, through the exercise
of a right of banker's lien, setoff or counterclaim against the Borrowers
or the Parent (pursuant to SECTION 14 or otherwise), including a secured
claim under Section 506 of the Bankruptcy Code or other security or
interest arising from or in lieu of, such secured claim, received by such
Bank under any applicable bankruptcy, insolvency or other similar law or
otherwise, obtain payment (voluntary or involuntary) in respect of the
Notes, Loans and other Obligations held by it as a result of which the
unpaid principal portion of the Notes and the Obligations held by it shall
be proportionately less than the unpaid principal portion of the Notes and
Obligations held by any other Bank, it shall be deemed to have
simultaneously purchased from such other Bank a participation in the Notes
and Obligations held by such other Bank, so that the aggregate unpaid
principal amount of the Notes, Obligations and participations in Notes and
Obligations held by each Bank shall be in the same proportion to the
aggregate unpaid principal amount of the Notes and Obligations then
outstanding as the principal amount of the Notes and other Obligations held
by it prior to such exercise of banker's lien, setoff or counterclaim was
to the principal amount of all Notes and other Obligations outstanding
prior to such exercise of banker's lien, setoff or counterclaim; provided,
however, that if any such purchase or purchases or adjustments shall be
made pursuant to this SECTION 28 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices
or adjustments restored without interest.
(c) Following the occurrence and during the continuance of any
Event of Default, each Bank agrees that it shall be deemed to have,
automatically upon the occurrence of such Event of Default, purchased from
each other Bank a participation in the risk associated with the Notes and
Obligations held by such other Bank, so that the aggregate principal amount
of the Notes and Obligations held by each Bank shall be equivalent to such
Bank's Commitment Percentage as at the date of such Event of Default. Upon
demand by the Administrative Agent, made at the request of the Majority
Banks, each Bank that has purchased such participation shall pay the amount
of such participation to one or more Bank(s) whose outstanding Loans and
Letter of Credit Participations exceed their respective Commitment
Percentages as at such date.
(d) The Borrowers expressly consent to the foregoing
arrangements and agree that any Person holding such a participation in the
Notes and the Obligations deemed to have been so purchased may exercise any
and all rights of banker's lien, setoff or counterclaim with respect to any
and all moneys owing by the Borrowers to such Person as fully as if such
Person had made a Loan directly to the Borrowers in the amount of such
participation.
SECTION 29. INTENTIONALLY OMITTED.
SECTION 30. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
SECTION 30.1 SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The
Parent and the Borrowers acknowledge that from time to time financial
advisory, investment banking and other services may be offered or provided
to the Parent and/or the Borrowers or one or more of the Parent's other
Subsidiaries, in connection with this Agreement or otherwise, by a Section
20 Subsidiary. Each of the Parent and the Borrowers, for itself and each
of the Parent's other Subsidiaries, hereby authorizes (a) such Section 20
Subsidiary to share with the Administrative Agent and each Bank any
information delivered to such Section 20 Subsidiary by the Parent or the
Borrowers or any of the Parent's other Subsidiaries, and (b) the
Administrative Agent and each Bank to share with such Section 20 Subsidiary
any information delivered to the Administrative Agent or such Bank by the
Parent or the Borrowers or any of the Parent's other Subsidiaries pursuant
to this Agreement, or in connection with the decision of such Bank to enter
into this Agreement; it being understood, in each case, that any such
Section 20 Subsidiary receiving such information shall be bound by the
confidentiality provisions of this Agreement. Such authorization shall
survive the payment and satisfaction in full of all of Obligations.
SECTION 30.2 CONFIDENTIALITY. Each of the Issuing Bank, the Banks and
the Administrative Agent agrees, on behalf of itself and each of its
affiliates, directors, officers, employees and representatives, to use
reasonable precautions to keep confidential, in accordance with their
customary procedures for handling confidential information of the same
nature and in accordance with safe and sound banking practices, any non-
public information supplied to it by the Parent, the Borrowers or any of
the Parent's other Subsidiaries pursuant to this Agreement that is
identified by such Person as being confidential at the time the same is
delivered to the Issuing Bank, the Banks or the Administrative Agent,
provided that nothing herein shall limit the disclosure of any such
information (a) after such information shall have become public other than
through a violation of this SECTION 30, (b) to the extent required by
statute, rule, regulation or judicial process, (c) to counsel for any of
the Issuing Bank, the Banks or the Administrative Agent, (d) to bank
examiners or any other regulatory authority having jurisdiction over the
Issuing Bank, any Bank or the Administrative Agent, or to auditors or
accountants, (e) to the Administrative Agent, the Issuing Bank, any Bank or
any Section 20 Subsidiary, (f) in connection with any litigation to which
any one or more of the Banks, the Issuing Bank, the Administrative Agent or
any Section 20 Subsidiary is a party, or in connection with the enforcement
of rights or remedies hereunder or under any other Loan Document, (g) to a
Subsidiary or affiliate of such Bank as provided in SECTION 30.1 or (h) to
any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant agrees to be bound by the provisions
of SECTION 19.6 and this SECTION 30.2.
SECTION 30.3 PRIOR NOTIFICATION. Unless specifically prohibited by
applicable law or court order, each of the Banks, the Issuing Bank and the
Administrative Agent shall, prior to disclosure thereof, notify the Parent
and the Borrowers of any request for disclosure of any such non-public
information by any governmental agency or representative thereof (other
than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
SECTION 30.4 OTHER. In no event shall any Bank, the Issuing Bank or the
Administrative Agent be obligated or required to return any materials
furnished to it or any Section 20 Subsidiary by the Parent, the Borrower or
any of the Parent's other Subsidiaries. The obligations of each Bank under
this SECTION 30 shall be binding upon any assignee of, or purchaser of any
participation in, any interest in any of the Loans or Reimbursement
Obligations from any Bank.
SECTION 31. INTEREST.
(a) It is the intention of the parties hereto to comply with
applicable usury laws, if any; accordingly, notwithstanding any provision
to the contrary in this Agreement, the Notes or in any of the other Loan
Documents securing the payment hereof or otherwise relating hereto, in no
event shall this Agreement, the Notes or such other Loan Documents require
or permit the payment, taking, reserving, receiving, collection, or
charging of any sums constituting interest under applicable laws which
exceed the maximum amount permitted by such laws. If any such excess
interest is called for, contracted for, charged, taken, reserved, or
received in connection with the Loans evidenced by the Notes or in any of
the Loan Documents securing the payment thereof or otherwise relating
thereto, or in any communication by the Administrative Agent, Documentation
Agent, the Issuing Bank or the Banks or any other Person to the Borrowers
or any other Person, or in the event all or part of the principal or
interest thereof shall be prepaid or accelerated, so that under any of such
circumstances or under any other circumstance whatsoever the amount of
interest contracted for, charged, taken, reserved, or received on the
amount of principal actually outstanding from time to time under the Notes
or any other Loan Document shall exceed the maximum amount of interest
permitted by applicable usury laws, then in any such event it is agreed as
follows: (i) the provisions of this paragraph shall govern and control,
(ii) neither any Borrower nor any other Person now or hereafter liable for
the payment of the Notes or any Obligation shall be obligated to pay the
amount of such interest to the extent such interest is in excess of the
maximum amount of interest permitted by applicable usury laws, (iii) any
such excess which is or has been received notwithstanding this paragraph
shall be credited against the then unpaid principal balance of the Notes or
other Obligations, as applicable, or, if the Notes or other Obligations, as
applicable, have been or would be paid in full, refunded to the Borrowers,
and (iv) the provisions of this Agreement, the Notes and the other Loan
Documents securing the payment thereof and otherwise relating thereto, and
any communication to the Borrowers, shall immediately be deemed reformed
and such excess interest reduced, without the necessity of executing any
other document, to the maximum lawful rate allowed under applicable laws as
now or hereafter construed by courts having jurisdiction hereof or thereof.
Without limiting the foregoing, all calculations of the rate of the
interest contracted for, charged, collected, taken, reserved, or received
in connection with the Notes, this Agreement or any other Loan Document
which are made for the purpose of determining whether such rate exceeds the
maximum lawful rate shall be made to the extent permitted by applicable
laws by amortizing, prorating, allocating and spreading during the period
of the full term of the Loans or other Obligations, as applicable,
including all prior and subsequent renewals and extensions, all interest at
any time contracted for, charged, taken, collected, reserved, or received.
The terms of this paragraph shall be deemed to be incorporated in every
document and communication relating to the Notes, the Loans or any other
Loan Document.
(b) Texas Finance Code, Chapter 346 (formerly Tex. Rev. Civ.
Stat., Title 79, Chapter 15), which regulates certain revolving loan
accounts and revolving triparty accounts, shall not apply to any revolving
loan accounts created under the Notes, this Agreement or the other Loan
Documents or maintained in connection therewith.
(c) To the extent that the interest rate laws of the State of
Texas are applicable to the Loans or any other Obligations, the applicable
interest rate ceiling is the weekly ceiling (formerly the indicated rate
ceiling) determined in accordance with Tex. Rev. Civ. Stat., Title 79,
Article 5069-1D.003, also codified at Texas Finance Code, Section 303.301
(formerly Article 5069-1.01(a)(1)), and, to the extent that this Agreement,
the Notes or any other Loan Document is deemed an open end account as such
term is defined in Tex. Rev. Civ. Stat., Title 79, Article 5069-
1B.002(14), also codified at Texas Finance Code Section 3.01.001(3)
(formerly Article 5069-1.01(f)), the Payee retains the right to modify the
interest rate in accordance with applicable law.
SECTION 32. NO ORAL AGREEMENTS. THIS WRITTEN LOAN AGREEMENT, TOGETHER
WITH THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH,
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 33. ARBITRATION
(a) ARBITRATION. Upon the demand of any party, any Dispute
shall be resolved by binding arbitration (except as set forth in (e) below)
in accordance with the terms of this Agreement. A "Dispute" shall mean any
action, dispute, claim or controversy of any kind, whether in contract or
tort, statutory or common law, legal or equitable, now existing or
hereafter arising under or in connection with, or in any way pertaining to,
any of the Loan Documents, or any past, present or future extensions of
credit and other activities, transactions or obligations of any kind
related directly or indirectly to any of the Loan Documents, including
without limitation, any of the foregoing arising in connection with the
exercise of any self-help, ancillary or other remedies pursuant to any of
the Loan Documents. Any party may by summary proceedings bring an action
in court to compel arbitration of a Dispute. Any party who fails or
refuses to submit to arbitration following a lawful demand by any other
party shall bear all costs and expenses incurred by such other party in
compelling arbitration of any Dispute.
(b) GOVERNING RULES. Arbitration proceedings shall be
administered by the American Arbitration Association ("AAA") or such other
administrator as the parties shall mutually agree upon in accordance with
the AAA Commercial Arbitration Rules. All Disputes submitted to
arbitration shall be resolved in accordance with the Federal Arbitration
Act (Title 9 of the United States Code), notwithstanding any conflicting
choice of law provision in any of the Loan Documents. The arbitration
shall be conducted at a location in Texas selected by the AAA or other
administrator. If there is any inconsistency between the terms hereof and
any such rules, the terms and procedures set forth herein shall control.
All statutes of limitation applicable to any Dispute shall apply to any
arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated.
Judgment upon any award rendered in an arbitration may be entered in any
court having jurisdiction; provided however, that nothing contained herein
shall be deemed to be a waiver by any party that is a bank of the
protections afforded to it under 12 U.S.C. <section>91 or any similar
applicable state law.
(c) NO WAIVER; PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE.
No provision hereof shall limit the right of any party to exercise self-
help remedies such as setoff, foreclosure against or sale of any real or
personal property collateral or security, or to obtain provisional or
ancillary remedies, including without limitation injunctive relief,
sequestration, attachment, garnishment or the appointment of a receiver,
from a court of competent jurisdiction before, after or during the pendency
of any arbitration or other proceeding. The exercise of any such remedy
shall not waive the right of any party to compel arbitration hereunder.
(d) ARBITRATOR QUALIFICATIONS AND POWERS; AWARDS. Arbitrators
must be active members of the Texas State Bar with expertise in the
substantive laws applicable to the subject matter of the Dispute.
Arbitrators are empowered to resolve Disputes by summary rulings in
response to motions filed prior to the final arbitration hearing.
Arbitrators (i) shall resolve all Disputes in accordance with the
substantive law of the state of Texas, (ii) may grant any remedy or relief
that a court of the state of Texas could order or grant within the scope
hereof and such ancillary relief as is necessary to make effective any
award, and (iii) shall have the power to award recovery of all costs and
fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the Texas Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less
shall be decided by a single arbitrator who shall not render an award of
greater than $5,000,000 (including damages, costs, fees and expenses). By
submission to a single arbitrator, each party expressly waives any right or
claim to recover more than $5,000,000. Any Dispute in which the amount in
controversy exceeds $5,000,000 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must
actively participate in all hearings and deliberations.
(e) JUDICIAL REVIEW. Notwithstanding anything herein to the
contrary, in any arbitration in which the amount in controversy exceeds
$25,000,000, the arbitrators shall be required to make specific, written
findings of fact and conclusions of law. In such arbitrations (i) the
arbitrators shall not have the power to make any award which is not
supported by substantial evidence or which is based on legal error, (ii) an
award shall not be binding upon the parties unless the findings of fact are
supported by substantial evidence and the conclusions of law are not
erroneous under the substantive law of the state of Texas, and (iii) the
parties shall have in addition to the grounds referred to in the Federal
Arbitration Act for vacating, modifying or correcting an award the right to
judicial review of (A) whether the findings of fact rendered by the
arbitrators are supported by substantial evidence, and (B) whether the
conclusions of law are erroneous under the substantive law of the state of
Texas. Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence
and not based on legal error under the substantive law of the state of
Texas.
(f) MISCELLANEOUS. To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to conclude
any arbitration proceeding within 180 days of the filing of the Dispute
with the AAA. No arbitrator or other party to an arbitration proceeding
may disclose the existence, content or results thereof, except for
disclosures of information by a party required in the ordinary course of
its business, by applicable law or regulation, or to the extent necessary
to exercise any judicial review rights set forth herein. If more than one
agreement for arbitration by or between the parties potentially applies to
a Dispute, the arbitration provision most directly related to the Loan
Documents or the subject matter of the Dispute shall control. This
arbitration provision shall survive termination, amendment or expiration of
any of the Loan Documents or any relationship between the parties.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
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:
[THIS IS A SIGNATURE PAGE TO THE THIRD AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT]
<PAGE>
WELLS FARGO BANK (TEXAS), NATIONAL
ASSOCIATION individually and as
Administrative Agent
By______________________________
Name:
Title:
WELLS FARGO BANK, N.A., as Issuing
Bank
By______________________________
Name:
Title:
[THIS IS A SIGNATURE PAGE TO THE THIRD AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT]
<PAGE>
CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH individually and as
Documentation Agent
By______________________________
Name:
Title:
By______________________________
Name:
Title:
[THIS IS A SIGNATURE PAGE TO THE THIRD AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT]
<PAGE>
BANK ONE LOUISIANA, N.A.
individually and as Syndication
Agent
By______________________________
Name:
Title:
[THIS IS A SIGNATURE PAGE TO THE THIRD AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT]
<PAGE>
HIBERNIA NATIONAL BANK
By______________________________
Name:
Title:
[THIS IS A SIGNATURE PAGE TO THE THIRD AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT]
<PAGE>
EXHIBIT A
FORM OF
SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE
$________________ ______________ ___ , 199__
FOR VALUE RECEIVED, the undersigned TRICO MARINE OPERATORS, INC., a
Louisiana corporation, and TRICO MARINE ASSETS, INC., a Delaware
corporation, (collectively, the "Borrowers" and each, individually, a
"Borrower"), hereby absolutely and unconditionally, jointly and severally
and in solidarity (as provided in <section>5.9 of the Credit Agreement
referred to below) promise to pay to the order of [INSERT NAME OF PAYEE
BANK] (the "Bank") at the office of Wells Fargo Bank (Texas), National
Association, as Administrative Agent, 1000 Louisiana, 3{rd} Floor, Houston,
Texas 77002, or at such other location as the Administrative Agent may
designate from time to time:
a. on the Maturity Date, the principal amount of [INSERT BANK'S
COMMITMENT] DOLLARS ($___) or, if less, the aggregate unpaid principal
amount of Loans advanced by the Bank to the Borrowers pursuant to the
Third Amended and Restated Revolving Credit Agreement dated as of July
__, 1999 (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 Bank and such
other lending institutions which are or may become parties thereto
from time to time, and Wells Fargo Bank (Texas), National Association
as Administrative Agent for itself and such other lending institutions
(the "Administrative 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. This Note has been issued as an
amendment and restatement of, but does not evidence payment, satisfaction,
novation or discharge of, the Amended and Restated Revolving Credit Note
issued to the Bank under the Existing 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.
It is the intention of the parties hereto to comply with applicable
usury laws, if any; accordingly, notwithstanding any provision to the
contrary in this Note, the Credit Agreement or in any of the other Loan
Documents securing the payment hereof or otherwise relating hereto, in no
event shall this Note, the Credit Agreement or such other Loan Documents
require or permit the payment, taking, reserving, receiving, collection, or
charging of any sums constituting interest under applicable laws which
exceed the maximum amount permitted by such laws. If any such excess
interest is called for, contracted for, charged, taken, reserved, or
received in connection with the Loans evidenced by this Note or in any of
the Loan Documents securing the payment thereof or otherwise relating
thereto, or in any communication by the Administrative Agent, Documentation
Agent or the Banks or any other person to the Borrowers or any other
person, or in the event all or part of the principal or interest thereof
shall be prepaid or accelerated, so that under any of such circumstances or
under any other circumstance whatsoever the amount of interest contracted
for, charged, taken, reserved, or received on the amount of principal
actually outstanding from time to time under the Notes shall exceed the
maximum amount of interest permitted by applicable usury laws, then in any
such event it is agreed as follows: (i) the provisions of this paragraph
shall govern and control, (ii) neither any Borrower nor any other person or
entity now or hereafter liable for the payment of the Notes shall be
obligated to pay the amount of such interest to the extent such interest is
in excess of the maximum amount of interest permitted by applicable usury
laws, (iii) any such excess which is or has been received notwithstanding
this paragraph shall be credited against the then unpaid principal balance
of the Notes or, if the Notes have been or would be paid in full, refunded
to the Borrowers, and (iv) the provisions of this Note, the Credit
Agreement and the other Loan Documents securing the payment thereof and
otherwise relating thereto, and any communication to the Borrowers, shall
immediately be deemed reformed and such excess interest reduced, without
the necessity of executing any other document, to the maximum lawful rate
allowed under applicable laws as now or hereafter construed by courts
having jurisdiction hereof or thereof. Without limiting the foregoing, all
calculations of the rate of the interest contracted for, charged,
collected, taken, reserved, or received in connection with this Note or the
Credit Agreement which are made for the purpose of determining whether such
rate exceeds the maximum lawful rate shall be made to the extent permitted
by applicable laws by amortizing, prorating, allocating and spreading
during the period of the full term of the Loans, including all prior and
subsequent renewals and extensions, all interest at any time contracted
for, charged, taken, collected, reserved, or received. The terms of this
paragraph shall be deemed to be incorporated in every document and
communication relating to this Note, the Loans or any other Loan Document.
Texas Finance Code, Chapter 346 (formerly Tex. Rev. Civ. Stat.,
Title 79, Chapter 15), which regulates certain revolving loan accounts and
revolving triparty accounts, shall not apply to any revolving loan accounts
created under this Note, the Credit Agreement or the other Loan Documents
or maintained in connection therewith.
To the extent that the interest rate laws of the State of Texas are
applicable to the Loans, the applicable interest rate ceiling is the weekly
ceiling (formerly the indicated rate ceiling) determined in accordance with
Tex. Rev. Civ. Stat., Title 79, Article 5069-1D.003, also codified at
Texas Finance Code, Section 303.301 (formerly Article 5069-1.01(a)(1)),
and, to the extent that this Note, the Credit Agreement or any other Loan
Document is deemed an open end account as such term is defined in Tex.
Rev. Civ. Stat., Title 79, Article 5069-1B.002(14), also codified at
Texas Finance Code Section 3.01.001(3) (formerly Article 5069-1.01(f)), the
Payee retains the right to modify the interest rate in accordance with
applicable law.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWERS HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS. EACH OF THE BORROWERS AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS
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
<section>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.
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 by
its duly authorized officer as of the day and year first above written.
TRICO MARINE OPERATORS, INC.
By:_________________________
Name:
Title:
TRICO MARINE ASSETS, INC.
By:_________________________
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
Balance of
Amount Amount of Principal Principal Notation
Date of Loan Paid or Prepaid Unpaid Made By:
<S> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT B
FORM OF LOAN REQUEST
____________, 199__
Wells Fargo Bank (Texas), National Association,
as Administrative Agent
1000 Louisiana, Third Floor
Houston, Texas 77002
Attention: Joe Maxwell
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 Third
Amended and Restated Revolving Credit Agreement dated as of July __, 1999
(such agreement, as amended and in effect from time to time, the "Credit
Agreement"), among the Borrowers, Trico Marine Services, Inc., Wells Fargo
Bank (Texas), National Association and such other lending institutions
which are or may become parties thereto from time to time (the "Banks"),
and Wells Fargo Bank (Texas), National Association, as administrative agent
for itself and such other lending institutions (the "Administrative
Agent").
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 $__________] [Eurocurrency 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 Loan on the proposed Drawdown Date.
The Borrowers hereby represent, warrant and certify to you (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, (d) after giving
effect to the borrowing requested herein, the Borrowers shall be in
compliance with the covenant contained in <section>10.4 of the Credit
Agreement and with the borrowing limitations set forth in <section>2.1 of
the Credit Agreement, and (e) 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 Wells Fargo Bank (Texas),
National Association, as Administrative Agent
Attn:
Ladies and Gentlemen:
Reference is made to the Third Amended and Restated Revolving Credit
Agreement dated as of July __, 1999 (as amended and in effect from time to
time, the "Credit Agreement"), among Trico Marine Operators, Inc., Trico
Marine Assets, Inc., (each a "Borrower," and collectively, the
"Borrowers"), Trico Marine Services, Inc. (the "Parent"), Wells Fargo Bank
(Texas), National Association and such other lending institutions which are
or may become parties thereto from time to time (the "Banks"), Wells Fargo
Bank (Texas), National Association as administrative agent for itself and
such other lending institutions (the "Administrative Agent"), and
Christiania Bank og Kreditkasse as documentation agent for itself and such
other lending institutions (the "Documentation 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 and the
Parent, by the undersigned officers of the Borrowers and the Parent (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; (c) the Borrowers and the Parent are in compliance with
SECTION 8.6(C) of the Credit Agreement; (d) the representations and
warranties of each Borrower, the Parent and each Subsidiary contained in
SECTION 7 of the Credit Agreement, and in all material respects, in each of
the other Loan Documents to which any Borrower, the Parent or Subsidiary is
a party, are true and correct in all material respects on and as of the
date hereof as if made on and as of such date (or, if stated to have been
made solely as of an earlier date, were true and correct in all material
respects as of such earlier date) and (e) 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 the Parent and the Borrowers, has executed
this Compliance Certificate as of the date first written above.
TRICO MARINE SERVICES, INC.
By__________________________
Name:
Title:
TRICO MARINE OPERATORS, INC.
By__________________________
Name:
Title:
TRICO MARINE ASSETS, INC.
By__________________________
Name:
Title:
<PAGE>
EXHIBIT D
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated as of _______, ______
Reference is made to the Third Amended and Restated Revolving Credit
Agreement dated as of July __, 1999 (as amended and in effect from time to
time, the "Credit Agreement"), by and among Trico Marine Operators, Inc.
("Marine Operators"), a Louisiana corporation, Trico Marine Assets, Inc.
("Marine Assets"), a Delaware corporation (each of Marine Operators and
Marine Assets, a "Borrower," and collectively, the "Borrowers"), Trico
Marine Services, Inc. (the "Parent"), the lending institutions party to
the Credit Agreement, Wells Fargo Bank, N.A., as Issuing Bank (the "Issuing
Bank"), Wells Fargo Bank (Texas), National Association, as administrative
agent (in such capacity, the "Administrative Agent") for itself and such
financial institutions, and Christiania Bank og Kreditkasse ASA, New York
Branch, as documentation agent (in such capacity, the "Documentation
Agent") for itself and such financial institutions. 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 the rights, benefits, indemnities and obligations of the Assignor
under the Credit Agreement equal to [_____% of the Total Commitment, and
the risk relating to the outstanding Letters of Credit].
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 (and without giving effect to assignments thereof which have
not yet become effective), [its Commitment is $________ and its Percentage
and its participating interest in the risk relating to any outstanding
Letters of Credit is _______%] and (b) makes no representation or warranty,
express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any of the other Loan Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of
the Credit Agreement, any of the other Loan Documents or any other
instrument or document furnished pursuant thereto or the attachment,
perfection or priority of any security interest or mortgage, other than
that it is the legal and beneficial owner of the interest being assigned by
it hereunder free and clear of any claim or encumbrance; (c) makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Parent, any of the Borrowers, any of the
Guarantors, or any of the Parent's other Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations, or
the performance or observance by the Parent, any of the Borrowers, any of
the Guarantors, or any of the Parent's other Subsidiaries or any other
Person primarily or secondarily liable in respect of any of the Obligations
or any of its obligations under the Credit Agreement or any of the other
Loan Documents or any other instrument or document delivered or executed
pursuant thereto; and (d) attaches hereto the Notes delivered to it under
the Credit Agreement.
The Assignor requests that the Borrower(s) exchange the Assignor's
Notes for new Notes payable to the Assignor and the Assignee as follows:
<TABLE>
<CAPTION>
NOTES PAYABLE TO
THE ORDER OF: TYPE OF NOTE: AMOUNT OF NOTE:
<S> <C> <C>
[Assignor] [US Note] [$ ]
</TABLE>
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 <section><section>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 Administrative Agent or any of the
other Banks 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
Administrative 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 Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto;
(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 [; and (g) acknowledges that it has made
arrangements with the Assignor satisfactory to it with respect to its PRO
RATA share of Letter of Credit Fees in respect of outstanding Letters of
Credit].
4. The effective date for this Assignment and Acceptance shall be
__________, ______ (the "Effective Date"). Following the execution of this
Assignment and Acceptance and the consent of the Borrower(s) 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
Administrative Agent for consent by the Administrative Agent and recording
in the Register by the Administrative Agent. Upon the Administrative
Agent's acceptance and consent to this Assignment and Acceptance and the
Administrative Agent's receipt of the required registration fee in the
amount of $3500, the Administrative 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 <section>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
Administrative Agent and such recording, from and after the Effective Date,
the Administrative 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 Administrative Agent or with respect to the making of
this assignment directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO BE AND SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.
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:]
WELLS FARGO BANK (TEXAS),
NATIONAL ASSOCIATION, AS
ADMINISTRATIVE AGENT
By:__________________________
Name:
Title:
WELLS FARGO BANK, N.A., AS
ISSUING BANK
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
TRICO MARINE SERVICES, INC.
EXHIBIT 11.1
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended June 30, 1999 Six Months Ended June 30, 1999
-------------------------------- ------------------------------
Per- Per-
Loss Shares share Loss Shares share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- ------- ----------- ------------- ------
<S> <C> <C> <C> <C> <C> <C>
Loss before extraordinary item $ (9,006) $ (16,349)
------------ -----------
BASIC EARNINGS PER SHARE
Loss before extraordinary item
available to common shareholders (9,006) 22,975,339 ($0.39) (16,349) 21,684,051 ($0.75)
======= =======
Effect of Dilutive Securities
Stock option grants - - - -
----------- ------------- ----------- -------------
DILUTED EARNINGS PER SHARE
Loss before extraordinary item
available to common shareholders
plus assumed conversions $ (9,006) 22,975,339 ($0.39) $ (16,349) 21,684,051 ($0.75)
=========== ============ ======= =========== ============= =======
Extraordinary item $ (1,830) $ (1,830)
----------- -----------
BASIC EARNINGS PER SHARE
Extraordinary item available to
common shareholders (1,830) 22,975,339 ($0.08) (1,830) 21,684,051 ($0.09)
======= =======
EFFECT OF DILUTIVE SECURITIES
Stock option grants - - - -
----------- ------------- ----------- -------------
DILUTED EARNINGS PER SHARE
Extraordinary item available to
common shareholders plus assumed
conversions $ (1,830) 22,975,339 ($0.08) $ (1,830) 21,684,051 ($0.09)
=========== ============ ======= =========== ============= =======
Net loss $ (10,836) $ (18,179)
----------- -----------
BASIC EARNINGS PER SHARE
Net loss available to common
shareholders (10,836) 22,975,339 ($0.47) (18,179) 21,684,051 $0.84
======= =====
EFFECT OF DILUTIVE SECURITIES
Stock option grants - - - -
----------- ------------- ----------- -------------
DILUTED EARNINGS PER SHARE
Net loss available to common
shareholders plus assumed
conversions $ (10,836) 22,975,339 ($0.47) $ (18,179) 21,684,051 ($0.84)
=========== =========== ======= =========== ============= =======
</TABLE>
TRICO MARINE SERVICES, INC.
EXHIBIT 11.1
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended June 30, 1998 Six Months Ended June 30, 1998
-------------------------------- ------------------------------
Per- Per-
Income Shares share Income Shares share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- ------ ----------- ------------- ------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 11,724 $ 21,568
---------- ----------
BASIC EARNINGS PER SHARE
Net income available to common
shareholders 11,724 20,335,702 $0.58 21,568 20,317,926 $1.06
===== =====
EFFECT OF DILUTIVE SECURITIES
Stock option grants - 766,753 - 780,062
DILUTED EARNINGS PER SHARE
Net income available to common
shareholders plus assumed
conversions $ 11,724 21,102,455 $0.56 $ 21,568 21,097,988 $1.02
========== ========== ===== ========== ========== =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information from consolidated financial
statements for the period ending June 30, 1999 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 31675
<SECURITIES> 0
<RECEIVABLES> 27568
<ALLOWANCES> 691
<INVENTORY> 0
<CURRENT-ASSETS> 63128
<PP&E> 617882
<DEPRECIATION> 61788
<TOTAL-ASSETS> 771807
<CURRENT-LIABILITIES> 33343
<BONDS> 393112
<COMMON> 285
0
0
<OTHER-SE> 306770
<TOTAL-LIABILITY-AND-EQUITY> 771807
<SALES> 54982
<TOTAL-REVENUES> 54982
<CGS> 63438
<TOTAL-COSTS> 63438
<OTHER-EXPENSES> 969
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15513
<INCOME-PRETAX> (24643)
<INCOME-TAX> (8294)
<INCOME-CONTINUING> (16349)
<DISCONTINUED> 0
<EXTRAORDINARY> (1830)
<CHANGES> 0
<NET-INCOME> (18179)
<EPS-BASIC> (.84)
<EPS-DILUTED> (.84)
</TABLE>
