exv10w9



 





Exhibit 10.9




 





$110,000,000




CREDIT AGREEMENT




among




SUPERIOR OFFSHORE INTERNATIONAL, L.L.C.,




as Borrower,




WILMINGTON TRUST COMPANY,




as Collateral Agent,




The Several Lenders from Time to Time Parties Hereto,





and





JPMORGAN
CHASE BANK, N.A.,



as Administrative Agent




Dated as of February 27, 2007

 






J.P. MORGAN SECURITIES INC., as Lead Arranger and Bookrunner










 



 


TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Page

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SECTION 1.	 	 	 	DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.1  	 	 	 	 	Defined Terms
	 	 	1	 
	 

	 	 	1.2  	 	 	 	 	Other Definitional Provisions
	 	 	15	 
	 
	 	 	   	 	 	 	 	 	 	 	 	 
	SECTION 2.	 	 	 	AMOUNT AND TERMS OF COMMITMENTS	 	 	15	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.1  	 	 	 	 	Term Commitments
	 	 	15	 
	 

	 	 	2.2  	 	 	 	 	Procedure for Term Loan Borrowing
	 	 	15	 
	 

	 	 	2.3  	 	 	 	 	Repayment of Term Loans
	 	 	16	 
	 

	 	 	2.4  	 	 	 	 	Commitment Fees, etc.
	 	 	16	 
	 

	 	 	2.5  	 	 	 	 	Optional Prepayments
	 	 	16	 
	 

	 	 	2.6  	 	 	 	 	Mandatory Prepayments and Commitment Reductions
	 	 	17	 
	 

	 	 	2.7  	 	 	 	 	Conversion and Continuation Options
	 	 	17	 
	 

	 	 	2.8  	 	 	 	 	Limitations on Eurodollar Tranches
	 	 	18	 
	 

	 	 	2.9  	 	 	 	 	Interest Rates and Payment Dates
	 	 	18	 
	 

	 	 	2.10	 	 	 	 	Computation of Interest and Fees
	 	 	18	 
	 

	 	 	2.11	 	 	 	 	Inability to Determine Interest Rate
	 	 	19	 
	 

	 	 	2.12	 	 	 	 	Pro Rata Treatment and Payments
	 	 	19	 
	 

	 	 	2.13	 	 	 	 	Requirements of Law
	 	 	20	 
	 

	 	 	2.14	 	 	 	 	Taxes
	 	 	21	 
	 

	 	 	2.15	 	 	 	 	Indemnity
	 	 	23	 
	 

	 	 	2.16	 	 	 	 	Change of Lending Office
	 	 	23	 
	 

	 	 	2.17	 	 	 	 	Replacement of Lenders
	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SECTION 3.	 	 	 	REPRESENTATIONS AND WARRANTIES	 	 	24	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.1  	 	 	 	 	Financial Condition
	 	 	24	 
	 

	 	 	3.2  	 	 	 	 	No Change
	 	 	24	 
	 

	 	 	3.3  	 	 	 	 	Existence; Compliance with Law
	 	 	24	 
	 

	 	 	3.4  	 	 	 	 	Power; Authorization; Enforceable Obligations
	 	 	25	 
	 

	 	 	3.5  	 	 	 	 	No Legal Bar
	 	 	25	 
	 

	 	 	3.6  	 	 	 	 	Litigation
	 	 	25	 
	 

	 	 	3.7  	 	 	 	 	No Default
	 	 	25	 
	 

	 	 	3.8  	 	 	 	 	Ownership of Property; Liens
	 	 	25	 
	 

	 	 	3.9  	 	 	 	 	Intellectual Property
	 	 	25	 
	 

	 	 	3.10	 	 	 	 	Taxes
	 	 	26	 
	 

	 	 	3.11	 	 	 	 	Federal Regulations
	 	 	26	 
	 

	 	 	3.12	 	 	 	 	Labor Matters
	 	 	26	 
	 

	 	 	3.13	 	 	 	 	ERISA
	 	 	26	 
	 

	 	 	3.14	 	 	 	 	Investment Company Act; Other Regulations
	 	 	26	 
	 

	 	 	3.15	 	 	 	 	Subsidiaries
	 	 	26	 
	 

	 	 	3.16	 	 	 	 	Use of Proceeds
	 	 	27	 
	 

	 	 	3.17	 	 	 	 	Environmental Matters
	 	 	27	 
	 

	 	 	3.18	 	 	 	 	Accuracy of Information, etc
	 	 	27	 
	 

	 	 	3.19	 	 	 	 	Security Documents
	 	 	28	 
	 

	 	 	3.20	 	 	 	 	Solvency
	 	 	28	 




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	 	 	 	 	 	 	 	 	 	Page

	SECTION 4.	 	 	 	CONDITIONS PRECEDENT	 	 	28	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.1  	 	 	 	 	Conditions to Initial Extension of Credit
	 	 	28	 
	 

	 	 	4.2  	 	 	 	 	Conditions to Each Extension of Credit
	 	 	31	 
	 
	 	 	   	 	 	 	 	 	 	 	 	 
	SECTION 5.	 	 	 	AFFIRMATIVE COVENANTS	 	 	31	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.1  	 	 	 	 	Financial Statements
	 	 	31	 
	 

	 	 	5.2  	 	 	 	 	Certificates; Other Information
	 	 	31	 
	 

	 	 	5.3  	 	 	 	 	Payment of Obligations
	 	 	32	 
	 

	 	 	5.4  	 	 	 	 	Rating by Moody’s and S&P
	 	 	33	 
	 

	 	 	5.5  	 	 	 	 	Maintenance of Existence; Compliance
	 	 	33	 
	 

	 	 	5.6  	 	 	 	 	Maintenance of Property; Insurance
	 	 	33	 
	 

	 	 	5.7  	 	 	 	 	Inspection of Property; Books and Records; Discussions
	 	 	33	 
	 

	 	 	5.8  	 	 	 	 	Notices
	 	 	33	 
	 

	 	 	5.9  	 	 	 	 	Environmental Laws
	 	 	34	 
	 

	 	 	5.10	 	 	 	 	Additional Collateral, etc
	 	 	34	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SECTION 6.	 	 	 	NEGATIVE COVENANTS	 	 	36	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.1  	 	 	 	 	Financial Condition Covenants
	 	 	36	 
	 

	 	 	6.2  	 	 	 	 	Indebtedness
	 	 	36	 
	 

	 	 	6.3  	 	 	 	 	Liens
	 	 	37	 
	 

	 	 	6.4  	 	 	 	 	Fundamental Changes
	 	 	38	 
	 

	 	 	6.5  	 	 	 	 	Disposition of Property
	 	 	39	 
	 

	 	 	6.6  	 	 	 	 	Restricted Payments
	 	 	39	 
	 

	 	 	6.7  	 	 	 	 	Capital Expenditures
	 	 	40	 
	 

	 	 	6.8  	 	 	 	 	Investments
	 	 	40	 
	 

	 	 	6.9  	 	 	 	 	Transactions with Affiliates
	 	 	40	 
	 

	 	 	6.10	 	 	 	 	Sales and Leasebacks
	 	 	41	 
	 

	 	 	6.11	 	 	 	 	Swap Agreements
	 	 	41	 
	 

	 	 	6.12	 	 	 	 	Changes in Fiscal Periods
	 	 	41	 
	 

	 	 	6.13	 	 	 	 	Negative Pledge Clauses
	 	 	41	 
	 

	 	 	6.14	 	 	 	 	Clauses Restricting Subsidiary Distributions
	 	 	41	 
	 

	 	 	6.15	 	 	 	 	Lines of Business
	 	 	41	 
	 

	 	 	6.16	 	 	 	 	Coastwise Citizenship
	 	 	41	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SECTION 7.	 	 	 	EVENTS OF DEFAULT	 	 	42	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SECTION 8.	 	 	 	THE AGENTS	 	 	44	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	8.1  	 	 	 	 	Appointment
	 	 	44	 
	 

	 	 	8.2  	 	 	 	 	Delegation of Duties
	 	 	44	 
	 

	 	 	8.3  	 	 	 	 	Exculpatory Provisions
	 	 	45	 
	 

	 	 	8.4  	 	 	 	 	Reliance by Agents
	 	 	45	 
	 

	 	 	8.5  	 	 	 	 	Notice of Default
	 	 	45	 
	 

	 	 	8.6  	 	 	 	 	Non-Reliance on Agents and Other Lenders
	 	 	46	 
	 

	 	 	8.7  	 	 	 	 	Indemnification
	 	 	46	 
	 

	 	 	8.8  	 	 	 	 	Agent in Its Individual Capacity
	 	 	46	 
	 

	 	 	8.9  	 	 	 	 	Successor Agents
	 	 	46	 
	 

	 	 	8.10	 	 	 	 	Collateral Matters, Collateral Agent’s Duties
	 	 	47	 




-ii-









 



 


	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Page

	 

	 	 	8.11	 	 	 	 	Execution of Credit Documents
	 	 	47	 
	 
	 	 	   	 	 	 	 	 	 	 	 	 
	SECTION 9.	 	 	   	MISCELLANEOUS	 	 	48	 
	 
	 	 	   	 	 	 	 	 	 	 	 	 
	 

	 	 	9.1  	 	 	 	 	Amendments and Waivers
	 	 	48	 
	 

	 	 	9.2  	 	 	 	 	Notices
	 	 	48	 
	 

	 	 	9.3  	 	 	 	 	No Waiver; Cumulative Remedies
	 	 	49	 
	 

	 	 	9.4  	 	 	 	 	Survival of Representations and Warranties
	 	 	49	 
	 

	 	 	9.5  	 	 	 	 	Payment of Expenses and Taxes
	 	 	50	 
	 

	 	 	9.6  	 	 	 	 	Successors and Assigns; Participations and Assignments
	 	 	50	 
	 

	 	 	9.7  	 	 	 	 	Adjustments; Set-off
	 	 	53	 
	 

	 	 	9.8  	 	 	 	 	Counterparts
	 	 	54	 
	 

	 	 	9.9  	 	 	 	 	Severability
	 	 	54	 
	 

	 	 	9.10	 	 	 	 	Integration
	 	 	54	 
	 

	 	 	9.11	 	 	 	 	GOVERNING LAW
	 	 	54	 
	 

	 	 	9.12	 	 	 	 	Submission To Jurisdiction; Waivers
	 	 	54	 
	 

	 	 	9.13	 	 	 	 	Acknowledgements
	 	 	55	 
	 

	 	 	9.14	 	 	 	 	Releases of Guarantees and Liens
	 	 	55	 
	 

	 	 	9.15	 	 	 	 	Confidentiality
	 	 	55	 
	 

	 	 	9.16	 	 	 	 	WAIVERS OF JURY TRIAL
	 	 	56	 




-iii-









 



 


	 	 	 
	SCHEDULES:
	 
	 	 
	1.1A

	 	Commitments
	1.1B

	 	Mortgaged Vessels
	3.4

	 	Consents, Authorizations, Filings and Notices
	3.15

	 	Subsidiaries
	3.19(a)

	 	UCC Filing Jurisdictions
	3.19(b)

	 	Vessel Mortgage Filing Jurisdictions
	6.2(d)

	 	Existing Indebtedness
	6.3(f)

	 	Existing Liens
	 
	 	 
	EXHIBITS:
	 
	 	 
	A

	 	Form of Guarantee and Collateral Agreement
	B

	 	Form of Compliance Certificate
	C

	 	Form of Closing Certificate
	D

	 	Form of Vessel Mortgage
	E

	 	Form of Assignment and Assumption
	F-1

	 	Form of Legal Opinion of Bracewell & Giuliani LLP
	F-2

	 	Form of Legal Opinion of R. Joshua Koch
	G

	 	Form of Exemption Certificate
	H

	 	Form of Intercreditor Agreement
	I

	 	Form of Collateral Account Agreement




-iv-









 



 


          CREDIT AGREEMENT (this “Agreement”), dated as of February 27, 2007, among SUPERIOR
OFFSHORE INTERNATIONAL, L.L.C., a Louisiana limited liability company (the “Borrower”), the
several banks and other financial institutions or entities from time to time parties to this
Agreement (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as administrative agent, and
WILMINGTON TRUST COMPANY, as collateral agent.




          The parties hereto hereby agree as follows:




SECTION 1. DEFINITIONS




          1.1 Defined Terms. As used in this Agreement, the terms listed in this Section 1.1
shall have the respective meanings set forth in this Section 1.1.




          “ABL Revolving Credit Agreement”: the Credit Agreement, dated as of February 27, 2007,
among the Borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent.




          “ABL Revolving Credit Documentation”: collectively, the ABL Revolving Credit
Agreement and the other “Loan Documents” (as defined in the ABL Revolving Credit Agreement).




          “ABR”: for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16
of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.




          “ABR Loans”: Loans the rate of interest applicable to which is based upon the ABR.




          “Administrative Agent”: JPMorgan Chase Bank, N.A., together with its affiliates, as
the arranger of the Commitments and as the administrative agent for the Lenders under this
Agreement and the other Loan Documents, together with any of its successors.




          “Affiliate”: as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by, or is under common control with, such Person. For purposes of this
definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10%
or more of the securities having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.




          “Agents”: the collective reference to the Administrative Agent and the Collateral
Agent.




          “Aggregate Exposure”: with respect to any Lender at any time, an amount equal to (a)
until the Closing Date, the aggregate amount of such Lender’s Commitments at such time and (b)
thereafter, the aggregate then unpaid principal amount of such Lender’s Term Loans.




          “Aggregate Exposure Percentage”: with respect to any Lender at any time, the ratio
(expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate
Exposure of all Lenders at such time.




          “Agreement”: as defined in the preamble hereto.




Signature
Page to Term Loan Credit Agreement










 



2


          “Applicable Margin”: (a) 2.50% per annum for ABR Loans and (b) 3.50% per annum for
Eurodollar Loans.




          “Approved Fund”: as defined in Section 9.6(b).




          “Asset Sale”: any Disposition of property or series of related Dispositions of
property (excluding any such Disposition permitted by clause (a), (b), (c) (d) or (e) of Section
6.5) that yields Net Cash Proceeds to any Group Member (other than any Foreign Subsidiary) in
excess of $500,000.




          “Assignee”: as defined in Section 9.6(b).




          “Assignment and Assumption”: an Assignment and Assumption, substantially in the form
of Exhibit E.




          “Benefitted Lender”: as defined in Section 9.7(a).




          “Board”: the Board of Governors of the Federal Reserve System of the United States
(or any successor).




          “Borrower”: as defined in the preamble hereto.




          “Borrowing Date”: any Business Day specified by the Borrower as a date on which the
Borrower requests the relevant Lenders to make Loans hereunder.




          “Business”: as defined in Section 3.17(b).




          “Business Day”: a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close, provided, that with
respect to notices and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, such day is also a day for trading by and between banks in Dollar deposits in
the interbank eurodollar market.




          “Capital Expenditures”: for any period, with respect to any Person, the aggregate of
all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to a
capital lease) of fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.




          “Capital Lease Obligations”: as to any Person, the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes
of this Agreement, the amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.




          “Capital Stock”: any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation) and any and all warrants, rights or options to purchase any
of the foregoing.




          “Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith










 



3

and credit of the United States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank
deposits having maturities of six months or less from the date of acquisition issued by any Lender
or by any commercial bank organized under the laws of the United States or any state thereof having
combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor’s Ratings Services (“S&P”) or P-1 by Moody’s Investors
Service, Inc. (“Moody’s”), or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease publishing ratings of commercial
paper issuers generally, and maturing within six months from the date of acquisition; (d)
repurchase obligations of any Lender or of any commercial bank satisfying the requirements of
clause (b) of this definition, having a term of not more than 30 days, with respect to securities
issued or fully guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign government, the securities
of which state, commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with
maturities of six months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) money market mutual or similar funds that invest exclusively in assets satisfying
the requirements of clauses (a) through (f) of this definition; or (h) money market funds that (i)
comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as
amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least
$5,000,000,000.




          “Charter Obligations”: all obligations (other than obligations backed by a
cash-secured letter of credit) of the Borrower and its Domestic Subsidiaries with respect to
potential liquidated damages, fees or other liabilities incurred in connection with the termination
or breach of charters or similar contractual arrangements entered into with respect to the charter
or lease of vessels, in each case calculated on a probable loss basis in accordance with GAAP.




          “Closing Date”: the date on which the conditions precedent set forth in Section 4.1
shall have been satisfied, which date is February 27, 2007.




          “Code”: the Internal Revenue Code of 1986, as amended from time to time.




          “Collateral”: all property of the Loan Parties, now owned or hereafter acquired, upon
which a Lien is purported to be created by any Security Document.




          “Collateral Account Agreement”: the Collateral Account Agreement to be executed and
delivered by the Borrower and JPMorgan Chase Bank, N.A., substantially in the form of Exhibit I.




          “Collateral Agent”: Wilmington Trust Company or any other financial institution then
acting as Collateral Agent under the Loan Documents.




          “Commitment”: as to any Lender, the obligation of such Lender, if any, to make a Term
Loan to the Borrower in a principal amount not to exceed the amount set forth under the heading
“Commitment” opposite such Lender’s name on Schedule 1.1A. The original aggregate amount of the
Commitments is $110,000,000.




          “Commonly Controlled Entity”: an entity, whether or not incorporated, that is under
common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group
that includes the Borrower and that is treated as a single employer under Section 414 of the Code.










 



4


          “Compliance Certificate”: a certificate duly executed by a Responsible Officer
substantially in the form of Exhibit B.




          “Conduit Lender”: any special purpose corporation organized and administered by any
Lender for the purpose of making Loans otherwise required to be made by such Lender and designated
by such Lender in a written instrument; provided, that the designation by any Lender of a
Conduit Lender shall not relieve the designating Lender of any of its obligations to fund a Loan
under this Agreement if, for any reason, its Conduit Lender fails to fund any such Loan, and the
designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to
deliver all consents and waivers required or requested under this Agreement with respect to its
Conduit Lender, and provided, further, that no Conduit Lender shall (a) be entitled
to receive any greater amount pursuant to Section 2.13, 2.14, 2.15 or 9.5 than the designating
Lender would have been entitled to receive in respect of the extensions of credit made by such
Conduit Lender or (b) be deemed to have any Commitment.




          “Confidential Information Memorandum”: the Confidential Information Memorandum dated
December 1, 2006 and furnished to certain Lenders.




          “Consolidated Current Assets”: at any date, all amounts (other than cash and Cash
Equivalents) that would, in conformity with GAAP, be set forth opposite the caption “total current
assets” (or any like caption) on a consolidated balance sheet of the Borrower and its Domestic
Subsidiaries at such date.




          “Consolidated Current Liabilities”: at any date, all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like
caption) on a consolidated balance sheet of the Borrower and its Domestic Subsidiaries at such
date, but excluding the current portion of any Funded Debt of the Borrower and its Domestic
Subsidiaries.




          “Consolidated EBITDA”: for any period, Consolidated Net Income for such period
plus, without duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense, (b) interest expense,
amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and
organization costs and (e) any extraordinary non-cash expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such Consolidated Net Income for such
period, non-cash losses on sales of assets outside of the ordinary course of business), and minus, (a) to the extent included in the statement
of such Consolidated Net Income for such period, the sum of (i) interest income, (ii) any
extraordinary or non-recurring non-cash income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income for such period,
gains on the sales of assets outside of the ordinary course of business), (iii) income tax credits
(to the extent not netted from income tax expense) and (iv) any other non-cash income and (b) any
cash payments made during such period in respect of items described in clause (e) above subsequent
to the fiscal quarter in which the relevant non-cash expenses or losses were reflected as a charge
in the statement of Consolidated Net Income, all as determined on a consolidated basis.




          “Consolidated Interest Coverage Ratio”: for any period, the ratio of (a) Consolidated
EBITDA for such period to (b) Consolidated Interest Expense for such period.




          “Consolidated Interest Expense”: for any period, total cash interest expense
(including that attributable to Capital Lease Obligations) of the
Borrower and its Domestic Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrower and its
Domestic Subsidiaries










 



5

(including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers’ acceptance financing and net costs under Swap Agreements
in respect of interest rates to the extent such net costs are allocable to such period in
accordance with GAAP).




          “Consolidated Leverage Ratio”: as at the last day of any period, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA for such period.




          “Consolidated Net Income”: for any period, the consolidated net income (or loss) of
the Borrower and its Domestic Subsidiaries, determined on a consolidated basis in accordance with
GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person
accrued prior to the date it becomes a Domestic Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Domestic Subsidiaries, (b) the income (or deficit) of
any Person (other than a Domestic Subsidiary of the Borrower) in which the Borrower or any of its
Domestic Subsidiaries has an ownership interest, except to the extent that any such income is
actually received by the Borrower or such Domestic Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Domestic Subsidiary of the Borrower to the
extent that the declaration or payment of dividends or similar distributions by such Domestic
Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than
under any Loan Document) or Requirement of Law applicable to such Domestic Subsidiary.




          “Consolidated Total Debt”: at any date, the aggregate principal amount of all
Indebtedness of the Borrower and its Domestic Subsidiaries at such date, determined on a
consolidated basis in accordance with GAAP.




          “Consolidated Working Capital”: at any date, the excess of Consolidated Current
Assets on such date over Consolidated Current Liabilities on such date.




          “Continuing Directors”: the directors of the Borrower, if prior to the Qualified IPO,
on the Closing Date and, if after the Qualified IPO, on the date the Qualified IPO is consummated,
and each other director, if, in each case, such other director’s nomination for election to the
board of directors of the Borrower is recommended by at least a majority of the then Continuing
Directors.




          “Contractual Obligation”: as to any Person, any provision of any security issued by
such Person or of any agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its property is bound, including vessel charters, vessel management
agreements and vessel service contracts.




          “Default”: any of the events specified in Section 7, whether or not any requirement
for the giving of notice, the lapse of time, or both, has been satisfied.




          “Disposition”: with respect to any property, any sale, lease, sale and leaseback,
assignment, conveyance, transfer or other disposition thereof. The terms “Dispose” and
“Disposed of” shall have correlative meanings.




          “Dollars” and “$”: dollars in lawful currency of the United States.




          “Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws of any
jurisdiction within the United States.




          “Environmental Laws”: any and all foreign, Federal, state, local or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or










 



6

other Requirements of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the environment, as now
or may at any time hereafter be in effect.




          “ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to
time.




          “Escrowed Amount”: the portion of the Term Loans made on the Closing Date which shall
be held in a segregated account in accordance with the Collateral Account Agreement to fund a
portion of remaining vessel payments and related equipment purchases and released to the Borrower
when periodic terms of the construction contract are met and payments are due.




          “Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar Loan, the
aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including basic, supplemental, marginal and emergency reserves)
under any regulations of the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System.




          “Eurodollar Base Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the first day of such
Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period. In the event that such rate does not
appear on Page 3750 of the Telerate screen (or otherwise on such screen), the “Eurodollar Base
Rate” shall be determined by reference to such other comparable publicly available service for
displaying eurodollar rates as may be selected by the Administrative Agent or, in the absence of
such availability, by reference to the rate at which the Administrative Agent is offered Dollar
deposits at or about 11:00 A.M., New York City time, two Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.




          “Eurodollar Loans”: Loans the rate of interest applicable to which is based upon the
Eurodollar Rate.




          “Eurodollar Rate”: with respect to each day during each Interest Period pertaining to
a Eurodollar Loan, a rate per annum determined for such day in accordance with the following
formula (rounded upward to the nearest 1/100th of 1%):




	 	 	 	 	 
	 
	 	Eurodollar Base Rate

 

1.00 — Eurocurrency Reserve Requirements
	 	 






          “Eurodollar Tranche”: the collective reference to Eurodollar Loans the then current
Interest Periods with respect to all of which begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same day).




          “Event of Default”: any of the events specified in Section 7, provided that
any requirement for the giving of notice, the lapse of time, or both, has been satisfied.










 



7




          “Excess Cash Flow”: for any fiscal year of the Borrower, the difference, if positive,
of (a) the sum, without duplication, of (i) Consolidated Net Income for such fiscal year, (ii) the
amount of all non-cash charges (including depreciation and amortization) deducted in arriving at
such Consolidated Net Income, (iii) decreases in Consolidated Working Capital for such fiscal year,
and (iv) the aggregate net amount of non-cash loss on the Disposition of property by the Borrower
and its Domestic Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such Consolidated Net Income
minus (b) the sum, without duplication, of (i) the amount of all non-cash credits included
in arriving at such Consolidated Net Income, (ii) the aggregate amount actually (y) paid by the
Borrower and its Domestic Subsidiaries in cash during such fiscal year on account of Capital
Expenditures or Investments pursuant to Section 6.8(f) or Section 6.8(i) and (z) deposited by the
Borrower into a capital construction fund for the purpose of making Capital Expenditures, in an
aggregate amount not to exceed $10,000,000 since the Closing Date (excluding the principal amount
of Indebtedness incurred in connection with such expenditures or Investments and any such
expenditures financed with the proceeds of any Reinvestment Deferred Amount or with funds from such
capital construction fund, to the extent previously deducted above), (iii) all optional prepayments
of the Term Loans or other term Indebtedness not prohibited hereunder during such fiscal year, (iv)
the aggregate amount of all regularly scheduled principal payments of Indebtedness (including the
Term Loans) of the Borrower and its Domestic Subsidiaries made during such fiscal year (other than
in respect of any revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), (v) increases in Consolidated Working Capital for such fiscal
year, (vi) the aggregate net amount of non-cash gain on the Disposition of property by the Borrower
and its Domestic Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such Consolidated Net Income
and (viii) so long as the Borrower remains a limited liability company, all distributions and
dividends paid by the Borrower to its owners to enable such owners to pay state and federal income
taxes that are owed by such owners and that are attributable solely to or result solely from such
owners’ ownership of equity interests in the Borrower and (indirectly) the Borrower’s Subsidiaries,
in each case, which are paid during the respective fiscal year; provided that the payment
of such distributions and dividends is, in each case, expressly permitted pursuant to the
provisions of this Agreement.




          “Excess Cash Flow Application Date”: as defined in Section 2.6(c).




          “Excess Cash Flow Percentage”: 75%.




          “Federal Funds Effective Rate”: for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by JPMorgan Chase Bank, N.A. from three
federal funds brokers of recognized standing selected by it.




          “Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic
Subsidiary.




          “Funded Debt”: as to any Person, all Indebtedness of such Person that matures more
than one year from the date of its creation or matures within one year from such date but is
renewable or extendible, at the option of such Person, to a date more than one year from such date
or arises under a revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including all current
maturities and current sinking fund payments in respect of such Indebtedness whether or not
required to be paid within one year from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.










 



8




          “Funding Office”: the office of the Administrative Agent specified in Section 9.2 or
such other office as may be specified from time to time by the Administrative Agent as its funding
office by written notice to the Borrower and the Lenders.




          “GAAP”: generally accepted accounting principles in the United States as in effect
from time to time, except that for purposes of Section 6.1, GAAP shall be determined on the basis
of such principles in effect on the date hereof and consistent with those used in the preparation
of the most recent audited financial statements referred to in Section 3.1(b). In the event that
any “Accounting Change” (as defined below) shall occur and such change results in a change in the
method of calculation of financial covenants, standards or terms in this Agreement, then the
Borrower and the Administrative Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to reflect equitably such Accounting Changes with the desired
result that the criteria for evaluating the Borrower’s financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made. Until such time as such
an amendment shall have been executed and delivered by the Borrower, the Administrative Agent and
the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue
to be calculated or construed as if such Accounting Changes had not occurred. “Accounting Changes”
refers to changes in accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants or, if applicable, the SEC.




          “Governmental Authority”: any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative
functions of or pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).




          “Group Members”: the collective reference to the Borrower and its Subsidiaries.




          “Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to be
executed and delivered by the Borrower and each Subsidiary Guarantor, substantially in the form of
Exhibit A.




          “Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing
Person that guarantees or in effect guarantees, or which is given to induce the creation of a
separate obligation by another Person (including any bank under any letter of credit) that
guarantees or in effect guarantees, any Indebtedness, leases, dividends or other obligations (the
“primary obligations”) of any other third Person (the “primary obligor”) in any
manner, whether directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof; provided, however, that the term Guarantee
Obligation shall not include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the










 



9

maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability
in respect thereof as determined by the Borrower in good faith.




          “Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase
price of property or services (other than current trade payables incurred in the ordinary course of
such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures
or other similar instruments, (d) all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Capital Lease Obligations of such
Person, (f) all obligations of such Person, contingent or otherwise, as an account party or
applicant under or in respect of acceptances, letters of credit (except to the extent secured by
cash collateral), surety bonds or similar arrangements, (g) the liquidation value of all redeemable
preferred Capital Stock of such Person, (h) all Charter Obligations of such Person, (i) all
Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses
(a) through (h) above, (j) all obligations of the kind referred to in clauses (a) through (i) above
secured by (or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable for the payment of such
obligation, and (k) for the purposes of Section 7(e) only, the net obligations of such Person in
respect of Swap Agreements. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such entity, except to the extent the terms of such Indebtedness expressly
provide that such Person is not liable therefor.




          “Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is
insolvent within the meaning of Section 4245 of ERISA.




          “Insolvent”: pertaining to a condition of Insolvency.




          “Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes.




          “Intercreditor Agreement”: the Intercreditor Agreement, substantially in the form of
Exhibit H, among the Borrower, the Collateral Agent and the administrative agent under the ABL
Revolving Credit Agreement.




          “Interest Payment Date”: (a) as to any ABR Loan, the last day of each March, June,
September and December (or, if an Event of Default is in existence, the last day of each calendar
month) to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to
any Eurodollar Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months,
each day that is three months, or a whole multiple thereof, after the first day of such Interest
Period and the last day of such Interest Period and (d) as to any Loan, the date of any repayment
or prepayment made in respect thereof.




          “Interest Period”: as to any Eurodollar Loan, (a) initially, the period commencing on
the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the Borrower in its notice of
borrowing or notice of










 



10

conversion, as the case may be, given with respect thereto; and (b)
thereafter, each period commencing on the last day of the next preceding Interest Period applicable
to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not later than 11:00 A.M., New York City
time, on the date that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:





     (i) if any Interest Period would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding 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 Business Day;




     (ii) the Borrower may not select an Interest Period that would extend beyond the date
final payment is due on the Term Loans;




     (iii) any Interest Period that begins on the last 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 Business Day of a calendar month; and




     (iv) the Borrower shall select Interest Periods so as not to require a payment or
prepayment of any Eurodollar Loan during an Interest Period for such Loan.



          “Investments”: as defined in Section 6.8.




          “Lenders”: as defined in the preamble hereto; provided, that unless the
context otherwise requires, each reference herein to the Lenders shall be deemed to include any
Conduit Lender.




          “Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).




          “Loan”: any loan made by any Lender pursuant to this Agreement.




          “Loan Documents”: this Agreement, the Security Documents, the Intercreditor
Agreement, the Notes, the Collateral Account Agreement and any amendment, waiver, supplement or
other modification to any of the foregoing.




          “Loan Parties”: each Group Member that is a party to a Loan Document.




          “Material Adverse Effect”: a material adverse effect on (a) the business, property,
operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries
taken as a whole or (b) the validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.




          “Materials of Environmental Concern”: any gasoline or petroleum (including crude oil
or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or
wastes, defined or regulated as such in or under any Environmental Law, including asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.










 



11




          “Maturity Date”: February 27, 2012.




          “Mortgaged Vessels”: the vessels listed on Schedule 1.1B, as to which the Collateral
Agent for its benefit and the benefit of the Administrative Agent and the Lenders shall be granted
a Lien pursuant to the Vessel Mortgages.




          “Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section
4001(a)(3) of ERISA.




          “Net Cash Proceeds”: (a) in connection with any Asset Sale, any Recovery Event or any
sale of Subtech, the proceeds thereof in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise, but only as and when received),
net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be applied
to the repayment of Indebtedness secured by a Lien on any asset that is the subject of such Asset
Sale, Recovery Event or sale (other than any Lien pursuant to a Security Document) or otherwise
subject to mandatory prepayment as a result of such event and other customary fees and expenses actually incurred in connection therewith and net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any issuance or sale of
Capital Stock or any incurrence of Indebtedness, the cash proceeds received from such issuance or
incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting
discounts and commissions and other customary fees and expenses actually incurred in connection
therewith.




          “Non-Excluded Taxes”: as defined in Section 2.14(a).




          “Non-U.S. Lender”: as defined in Section 2.14(d).




          “Notes”: the collective reference to any promissory note evidencing Loans.




          “Obligations”: the unpaid principal of and interest on (including interest accruing
after the maturity of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and all other obligations and liabilities of the Borrower to the Agents or to
any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document or any other document made, delivered or given in connection
herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the
Agents or to any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise.




          “Other Taxes”: any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made hereunder or from
the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.




          “Participant”: as defined in Section 9.6(c).




          “PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A
of Title IV of ERISA (or any successor).










 



12




          “Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.




          “Plan”: at a particular time, any employee benefit plan that is covered by ERISA and
in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA.




          “Prime Rate”: the rate of interest per annum publicly announced from time to time by
JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest charged by JPMorgan Chase Bank,
N.A. in connection with extensions of credit to debtors).




          “Pro Forma Balance Sheet”: as defined in Section 3.1(a).




          “Projections”: as defined in Section 5.2(c).




          “Properties”: as defined in Section 3.17(a).




          “Qualified IPO”: an underwritten public offering of the Capital Stock of the Borrower.




          “Real Property Mortgages”: any real property mortgage or deed of trust made by any
Loan Party in favor of, or for the benefit of, the Collateral Agent for its benefit and the benefit
of the Administrative Agent and the Lenders, in form and substance satisfactory to the
Administrative Agent.




          “Recovery Event”: any settlement of or payment in respect of any property or casualty
insurance claim or any condemnation proceeding relating to any asset of any Group Member (other
than any Foreign Subsidiary) that yields Net Cash Proceeds in excess of $500,000.




          “Register”: as defined in Section 9.6(b).




          “Regulation U”: Regulation U of the Board as in effect from time to time.




          “Reinvestment Deferred Amount”: with respect to any Reinvestment Event, the aggregate
Net Cash Proceeds received by any Group Member (other than any Foreign Subsidiary) in connection
therewith that are not applied to prepay the Term Loans pursuant to Section 2.6(b) as a result of
the delivery of a Reinvestment Notice.




          “Reinvestment Event”: any Asset Sale or Recovery Event in respect of which the
Borrower has delivered a Reinvestment Notice.




          “Reinvestment Notice”: a written notice executed by a Responsible Officer stating
that no Event of Default has occurred and is continuing and that the Borrower (directly or
indirectly through a Subsidiary that is a Loan Party) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire or repair assets
useful in its business.




          “Reinvestment Prepayment Amount”: with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to the relevant
Reinvestment Prepayment Date to acquire or repair assets useful in the Borrower’s business.










 



13




          “Reinvestment Prepayment Date”: with respect to any Reinvestment Event, the earlier
of (a) the date occurring twelve months after such Reinvestment Event or, provided that the
Borrower or any Subsidiary has entered into a binding contract within twelve months after such
Reinvestment Event to acquire assets useful in its business and/or to repair the affected asset, as
applicable, the date occurring eighteen months after such Reinvestment Event and (b) the date on
which the Borrower shall have determined not to, or shall have otherwise ceased to, acquire or
repair assets useful in the Borrower’s business with all or any portion of the relevant
Reinvestment Deferred Amount.




          “Reorganization”: with respect to any Multiemployer Plan, the condition that such
plan is in reorganization within the meaning of Section 4241 of ERISA.




          “Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other
than those events as to which the thirty day notice period is waived under subsections .27, .28,
..29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.




          “Required Lenders”: at any time, the holders of more than 50% of (a) until the
Closing Date, the Commitments then in effect and (b) thereafter, the aggregate unpaid principal
amount of the Term Loans then outstanding.




          “Requirement of Law”: as to any Person, the Certificate of Incorporation and By-Laws
or other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.




          “Responsible Officer”: the chief executive officer, president or chief financial
officer of the Borrower, but in any event, with respect to financial matters, the chief financial
officer of the Borrower.




          “Restricted Payments”: as defined in Section 6.6.




          “Revolving Credit Facility”: the loan agreement, dated as of April 12, 2005, among
Superior Diving Company, Inc., Superior Offshore Services, Inc. and Louis E. Schaefer, Jr., and
JPMorgan Chase Bank, N.A.




          “SEC”: the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.




          “Security Documents”: the collective reference to the Guarantee and Collateral
Agreement, the Real Property Mortgages, if any, the Vessel Mortgages and all other security
documents hereafter delivered to the Administrative Agent or the Collateral Agent granting a Lien
on any property of any Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.




          “Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but that is
not a Multiemployer Plan.




          “Solvent”: when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the “present fair saleable value” of the assets of such Person
will, as of such date, exceed the amount of all “liabilities of such Person, contingent or
otherwise”, as of such date, as such quoted terms are determined in accordance with applicable
federal and state laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater than the amount that
will be required to pay the liability of such Person on










 



14

its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim”
means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.




          “Subsidiary”: as to any Person, a corporation, partnership, limited liability company
or other entity of which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.




          “Subsidiary Guarantor”: each Subsidiary of the Borrower other than any Foreign
Subsidiary.




          “Subtech”: Subtech Offshore Ltd.




          “Swap Agreement”: any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or any of its Subsidiaries
shall be a “Swap Agreement”.




          “Term Lenders”: each Lender that has a Commitment or that holds a Term Loan.




          “Term Loans”: as defined in Section 2.1.




          “Term Percentage”: as to any Lender at any time, the percentage which such Lender’s
Commitment then constitutes of the aggregate Commitments (or, at any time after the Closing Date,
the percentage which the aggregate principal amount of such Lender’s Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then outstanding).




          “Transferee”: any Assignee or Participant.




          “Type”: as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.




          “United States”: the United States of America.




          “Vessel Mortgages”: each of the first preferred ship mortgages made by any Loan Party
in favor of, or for the benefit of, the Collateral Agent for its benefit and the benefit of the
Administrative Agent and the Lenders, substantially in the form of Exhibit D, together with any
proceeds thereof (with such changes thereto as shall be advisable under the law of the jurisdiction
in which such mortgage or deed of trust is to be recorded).










 



15


          “Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital
Stock of which (other than directors’ qualifying shares required by law) is owned by such Person
directly and/or through other Wholly Owned Subsidiaries.




          “Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly Owned
Subsidiary of the Borrower.




          1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms
defined in this Agreement shall have the defined meanings when used in the other Loan Documents or
any certificate or other document made or delivered pursuant hereto or thereto.




          (b) As used herein and in the other Loan Documents, and any certificate or other document made
or delivered pursuant hereto or thereto, (i) accounting terms relating to any Group Member not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP, (ii) the words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii)
the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect
of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings),
(iv) the words “asset” and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including cash, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights, and (v) references to
agreements or other Contractual Obligations shall, unless otherwise specified, be deemed to refer
to such agreements or Contractual Obligations as amended, supplemented, restated or otherwise
modified from time to time.




          (c) The words “hereof”, “herein” and “hereunder” and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.




          (d) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.




SECTION 2. AMOUNT AND TERMS OF COMMITMENTS




          2.1 Term Commitments. Subject to the terms and conditions hereof, (a) each Term
Lender severally agrees to make a term loan (a “Term Loan”) to the Borrower on the Closing
Date in an amount not to exceed the amount of the Commitment of such Lender. The Term Loans may
from time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to
the Administrative Agent in accordance with Sections 2.2 and 2.7.




          2.2 Procedure for Term Loan Borrowing. The Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 10:00
A.M., New York City time, one Business Day prior to the anticipated Borrowing Date) requesting that
the Term Lenders make the Term Loans on the relevant Borrowing Date and specifying the amount to be
borrowed. Any Eurodollar Loans made on the Closing Date shall have an initial interest period of one
month. Upon receipt of such notice the Administrative Agent shall promptly notify each Term Lender
thereof. Not later than 12:00 Noon, New York City time, on the relevant Borrowing Date each Term
Lender shall make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Term Loan or Term Loans to be made by such Lender. The
Administrative Agent shall credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the Administrative Agent
by










 



16

the Term Lenders in immediately available funds, except with respect to the Escrowed Amount,
which shall be deposited in the applicable segregated account and disbursed in accordance with the
Collateral Account Agreement.




          2.3 Repayment of Term Loans. The Term Loan of each Lender shall mature in 19
consecutive quarterly installments, each of which shall be in an amount equal to such Lender’s Term
Percentage multiplied by the amount set forth below opposite such installment:




	 	 	 	 	 
	Installment	 	Principal Amount
	June 30, 2007
	 	$	275,000.00	 
	September 30, 2007
	 	$	275,000.00	 
	December 31, 2007
	 	$	275,000.00	 
	March 31, 2008
	 	$	275,000.00	 
	June 30, 2008
	 	$	275,000.00	 
	September 30, 2008
	 	$	3,750,000.00	 
	December 31, 2008
	 	$	3,750,000.00	 
	March 31, 2009
	 	$	3,750,000.00	 
	June 30, 2009
	 	$	3,750,000.00	 
	September 30, 2009
	 	$	3,750,000.00	 
	December 31, 2009
	 	$	3,750,000.00	 
	March 31, 2010
	 	$	3,750,000.00	 
	June 30, 2010
	 	$	3,750,000.00	 
	September 30, 2010
	 	$	3,750,000.00	 
	December 31, 2010
	 	$	3,750,000.00	 
	March 31, 2011
	 	$	3,750,000.00	 
	June 30, 2011
	 	$	3,750,000.00	 
	September 30, 2011
	 	$	3,750,000.00	 
	December 31, 2011
	 	$	3,750,000.00	 
	Maturity Date
	 	$	56,125,000.00	 






          2.4
Fees, etc. The Borrower agrees to pay to each Agent the fees in the amounts and
on the dates as set forth in any fee agreements with such Agent and to perform any other
obligations contained therein.




          2.5 Optional Prepayments(a) The Borrower may at any time and from time to time
prepay the Loans, without premium or penalty (except as set forth in clause (b) below), in
whole or in part, upon irrevocable notice delivered to the Administrative Agent no later
than 11:00 A.M., New York City time, three Business Days prior thereto, in the case of
Eurodollar Loans, and no later than 11:00 A.M., New York City time, one Business Day prior
thereto, in the case of ABR Loans, which notice shall specify the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans or ABR Loans;
provided, that if a Eurodollar Loan is prepaid on any day other than the last day
of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.15. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein, together
with accrued interest to such date on the amount prepaid. Partial prepayments of Term
Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple thereof.










 



17




          (b) Each optional prepayment of the Term Loans made on or prior to the first
anniversary of the Closing Date shall be accompanied by a prepayment premium equal to 1% of
the principal amount of such prepayment.




          2.6 Mandatory Prepayments. (a) If any Capital Stock shall be issued by the Borrower
(including, without limitation, in connection with a Qualified IPO) or any Indebtedness shall be
incurred by any Group Member (other than any Foreign Subsidiary) (excluding any Indebtedness
incurred in accordance with Section 6.2), an amount equal to 100% of the Net Cash Proceeds thereof
shall be applied on the date of receipt thereof toward the prepayment of the Term Loans as set
forth in Section 2.6(d).




          (b) (i) If on any date any Group Member (other than any Foreign Subsidiary) shall receive Net
Cash Proceeds from any Asset Sale (other than a sale of Subtech) or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be applied
on such date toward the prepayment of the Term Loans as set forth in Section 2.6(d);
provided, that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans as set forth in Section 2.6(d).




          (ii) If on any date any Group Member shall receive Net Cash Proceeds in excess of $8,000,000
from the sale of Subtech, then such excess Net Cash Proceeds shall be applied on such date toward
the prepayment of the Term Loans as set forth in Section 2.6(d); provided, that,
notwithstanding the foregoing, the aggregate Net Cash Proceeds that shall be required to be so
applied pursuant to this clause (ii) shall not exceed $3,000,000.




          (c) If, for any fiscal year of the Borrower commencing with the fiscal year ending December
31, 2007, there shall be Excess Cash Flow, the Borrower shall, on the relevant Excess Cash Flow
Application Date, apply the Excess Cash Flow Percentage of such Excess Cash Flow toward the
prepayment of the Term Loans as set forth in Section 2.6(d). Each such prepayment and commitment
reduction shall be made on a date (an “Excess Cash Flow Application Date”) no later than
five days after the earlier of (i) the date on which the financial statements of the Borrower
referred to in Section 5.1(a), for the fiscal year with respect to which such prepayment is made,
are required to be delivered to the Lenders and (ii) the date such financial statements are
actually delivered.




          (d) Amounts to be applied in connection with prepayments made pursuant to Section 2.6 shall be
applied to the prepayment of the Term Loans in accordance with Section
 2.12(b). The application of any prepayment pursuant to Section 2.6 shall be made,
first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Term
Loans under Section 2.6 shall be accompanied by accrued interest to the date of such prepayment on
the amount prepaid. Each prepayment of the Term Loans under Section 2.6 made on or prior to the
first anniversary of the Closing Date shall be accompanied by a prepayment premium equal to 1% of
the principal amount of such prepayment.




          2.7 Conversion and Continuation Options. (a) The Borrower may elect from time to
time to convert Eurodollar Loans to ABR Loans by giving the Administrative Agent prior irrevocable
notice of such election no later than 11:00 A.M., New York City time, on the Business Day preceding
the proposed conversion date, provided that any such conversion of Eurodollar Loans may
only be made on the last day of an Interest Period with respect thereto. The Borrower may elect
from time to time to convert ABR Loans to Eurodollar Loans by giving the Administrative Agent prior
irrevocable notice of such election no later than 11:00 A.M., New York City time, on the third
Business Day preceding the proposed conversion date (which notice shall specify the length of the
initial Interest Period therefor), provided that no ABR Loan may be converted into a
Eurodollar Loan when any Event of Default has










 



18

occurred and is continuing and the Administrative
Agent or the Required Lenders have determined in its or their sole discretion not to permit such
conversions. Upon receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.




          (b) Any Eurodollar Loan may be continued as such upon the expiration of the then current
Interest Period with respect thereto by the Borrower giving irrevocable notice to the
Administrative Agent, in accordance with the applicable provisions of the term “Interest Period”
set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan may be continued as such when any Event of Default has
occurred and is continuing and the Administrative Agent has or the Required Lenders have determined
in its or their sole discretion not to permit such continuations, and provided,
further, that if the Borrower shall fail to give any required notice as described above in
this paragraph or if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest
Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.




          2.8 Limitations on Eurodollar Tranches. Notwithstanding anything to the contrary in
this Agreement, all borrowings, conversions and continuations of Eurodollar Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to such elections so
that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000
in excess thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any one
time.




          2.9 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest
for each day during each Interest Period with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such day plus the Applicable Margin.




          (b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable
Margin.




          (c) (i) If all or a portion of the principal amount of any Loan shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), all outstanding Loans (whether or
not overdue) shall bear interest at a rate per annum equal to the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%, and (ii)
if all or a portion of any interest payable on any Loan or other amount payable hereunder shall not
be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate then applicable to ABR Loans
plus 2%, in each case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (as well after as before judgment).




          (d) Interest shall be payable in arrears on each Interest Payment Date, provided that
interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on
demand.




          2.10 Computation of Interest and Fees. (a) Interest and fees payable pursuant
hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that,
with respect to ABR Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify
the Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in
the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall










 



19

as soon as practicable notify the Borrower and
the relevant Lenders of the effective date and the amount of each such change in interest rate.




          (b) Each determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver
to the Borrower a statement showing the quotations used by the Administrative Agent in determining
any interest rate pursuant to Section 2.9(a).




          2.11 Inability to Determine Interest Rate. If prior to the first day of any Interest
Period:





     (a) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Interest Period, or




     (b) the Administrative Agent shall have received notice from the Required Lenders that
the Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such Interest Period,


the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the
relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar
Loans requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y)
any Loans that were to have been converted on the first day of such Interest Period to Eurodollar
Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be converted,
on the last day of the then-current Interest Period, to ABR Loans. Until such notice has been
withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to Eurodollar Loans.




          2.12 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from the
Lenders hereunder shall be made pro rata according to the respective Term
Percentages of the Lenders.




          (b) Each payment (including each prepayment) by the Borrower on account of principal of and
interest on the Term Loans shall be made pro rata according to the respective
outstanding principal amounts of the Term Loans then held by the Term Lenders. The amount of each
principal prepayment of the Term Loans shall be applied to reduce the then remaining installments
of the Term Loans pro rata based upon the then remaining principal amounts thereof.
Amounts prepaid on account of the Term Loans may not be reborrowed.




          (c) All payments (including prepayments) to be made by the Borrower hereunder, whether on
account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and
shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such payments to each
relevant Lender promptly upon receipt in like funds as received, net of any amounts owing by such
Lender pursuant to Section 8.7. If any payment hereunder (other than payments on the Eurodollar
Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable
on a day other than a Business Day, the maturity










 



20

thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during such extension.




          (d) Unless the Administrative Agent shall have been notified in writing by any Lender prior to
a borrowing that such Lender will not make the amount that would constitute its share of such
borrowing available to the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If
such amount is not made available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon, at a rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation, for the period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest
error. If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to ABR Loans, on demand, from the Borrower.




          (e) Unless the Administrative Agent shall have been notified in writing by the Borrower prior
to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make
such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required to, in reliance
upon such assumption, make available to the Lenders their respective pro rata
shares of a corresponding amount. If such payment is not made to the Administrative Agent by the
Borrower within three Business Days after such due date, the Administrative Agent shall be entitled
to recover, on demand, from each Lender to which any amount which was made available pursuant to
the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the
Administrative Agent or any Lender against the Borrower.




          2.13 Requirements of Law. (a) If the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof or compliance by any Lender with any request
or directive (whether or not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:





          (i) shall subject any Lender to any tax of any kind whatsoever with respect to this
Agreement or any Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Non-Excluded Taxes covered by Section 2.14 and
changes in the rate of tax on the overall net income of such Lender);




          (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory
loan or similar requirement against assets held by, deposits or other liabilities in or for
the account of, advances, loans or other extensions of credit by, or any other acquisition
of funds by, any office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate; or




          (iii) shall impose on such Lender any other condition;









 



21

and the result of any of the foregoing is to increase the cost to such Lender, by an amount that
such Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar
Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If any Lender becomes
entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so
entitled.




          (b) If any Lender shall have determined that the adoption of or any change in any Requirement
of Law regarding capital adequacy or in the interpretation or application thereof or compliance by
such Lender or any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental Authority made
subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its
obligations hereunder to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration such Lender’s or
such corporation’s policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the Borrower (with a copy
to the Administrative Agent) of a written request therefor, the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such corporation for such
reduction.




          (c) A certificate as to any additional amounts payable pursuant to this Section submitted by
any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the
absence of manifest error. Notwithstanding anything to the contrary in this Section, the Borrower
shall not be required to compensate a Lender pursuant to this Section for any amounts incurred more
than nine months prior to the date that such Lender notifies the Borrower of such Lender’s
intention to claim compensation therefor; provided that, if the circumstances giving rise
to such claim have a retroactive effect, then such nine-month period shall be extended to include
the period of such retroactive effect. The obligations of the Borrower pursuant to this Section
shall survive the termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.




          2.14 Taxes. (a) All payments made by the Borrower under this Agreement shall be made
free and clear of, and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this Agreement or any other
Loan Document). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are
attributable to such Lender’s failure to comply with the requirements of paragraph (d) or (e) of
this Section or (ii) that are United States withholding taxes imposed on amounts payable to such
Lender at the time such Lender becomes a party to this Agreement, except to the extent that such
Lender’s assignor (if










 



22

any) was entitled, at the time of assignment, to receive additional amounts
from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.




          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.




          (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for its own account or for
the account of the relevant Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to
the Administrative Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a result of any such
failure.




          (d) Each Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30)
of the Code (a “Non-U.S. Lender”) shall deliver to the Borrower and the Administrative
Agent (or, in the case of a Participant, to the Lender from which the related participation shall
have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement
substantially in the form of Exhibit G and a Form W-8BEN, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrower
under this Agreement and the other Loan Documents. Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall
promptly notify the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of
this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this
paragraph that such Non-U.S. Lender is not legally able to deliver.




          (e) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without withholding or at a
reduced rate, provided that such Lender is legally entitled to complete, execute and
deliver such documentation and in such Lender’s judgment such completion, execution or submission
would not materially prejudice the legal position of such Lender.




          (f) If the Administrative Agent or any Lender determines, in its sole discretion, that it has
received a refund of any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this
Section 2.14, it shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section 2.14 with respect to
the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other than any interest
paid by the relevant Governmental Authority










 



23

with respect to such refund); provided, that
the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require the Administrative Agent
or any Lender to make available its tax returns (or any other information relating to its taxes
which it deems confidential) to the Borrower or any other Person.




          (g) The agreements in this Section shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.




          2.15 Indemnity. The Borrower agrees to indemnify each Lender for, and to hold each
Lender harmless from, any loss or expense that such Lender may sustain or incur as a consequence of
(a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Borrower has given a notice requesting the same in accordance with the provisions
of this Agreement, (b) default by the Borrower in making any prepayment of or conversion from
Eurodollar Loans after the Borrower has given a notice thereof in accordance with the provisions of
this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day that is not the last
day of an Interest Period with respect thereto. Such indemnification may include an amount equal
to the excess, if any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of such Interest
Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) that would have
accrued to such Lender on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be conclusive in the absence
of manifest error. This covenant shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.




          2.16 Change of Lending Office. Each Lender agrees that, upon the occurrence of any
event giving rise to the operation of Section 2.17 or 2.18(a) with respect to such Lender, it will,
if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to
suffer no economic, legal or regulatory disadvantage, and provided, further, that
nothing in this Section shall affect or postpone any of the obligations of the Borrower or the
rights of any Lender pursuant to Section 2.13 or 2.14(a).




          2.17 Replacement of Lenders . The Borrower shall be permitted to replace any Lender
that (a) requests reimbursement for amounts owing pursuant to Section 2.13 or 2.14(a) or (b)
defaults in its obligation to make Loans hereunder, with a replacement financial institution;
provided that (i) such replacement does not conflict with any Requirement of Law, (ii) no
Event of Default shall have occurred and be continuing at the time of such replacement, (iii) prior to any such
replacement, such Lender shall have taken no action under Section 2.16 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.13 or 2.14(a), (iv) the
replacement financial institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall be liable to such
replaced Lender under Section 2.15 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto, (vi) the replacement
financial institution shall be reasonably satisfactory to the Administrative Agent, (vii) the













 







24

replaced Lender shall be obligated to make such replacement in accordance with the
provisions of Section 9.6 (provided that the Borrower shall be obligated to pay the registration
and processing fee referred to therein), (viii) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any) required pursuant to Section
2.13 or 2.14(a), as the case may be, and (ix) any such replacement shall not be deemed to be a
waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have
against the replaced Lender.




SECTION 3. REPRESENTATIONS AND WARRANTIES




          To induce the Agents and the Lenders to enter into this Agreement and the Lenders to make the
Loans, the Borrower hereby represents and warrants to the Agents and each Lender that:




          3.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at September 30, 2006 (including
the notes thereto) (the “Pro Forma Balance Sheet”), copies of which have heretofore been
furnished to each Lender, has been prepared giving effect (as if such events had occurred on such
date) to (i) the Loans to be made and the use of proceeds thereof and (ii) the payment of fees and
expenses in connection with the foregoing. The Pro Forma Balance Sheet has been prepared based on
the best information available to the Borrower as of the date of delivery
thereof, and presents fairly on a pro forma basis the estimated financial
position of Borrower and its consolidated Subsidiaries as at September 30, 2006, assuming that the
events specified in the preceding sentence had actually occurred at such date.




          (b) The audited consolidated balance sheets of the Borrower as at December 31, 2003, December
31, 2004 and December 31, 2005 and the related consolidated statements of income and of cash flows
for the fiscal years ended on such dates, reported on by and accompanied by an unqualified report
from KPMG LLP, present fairly the consolidated financial condition of the Borrower as at such date,
and the consolidated results of its operations and its consolidated cash flows for the respective
fiscal years then ended. The unaudited consolidated balance sheet of the Borrower as at September
30, 2006, and the related unaudited consolidated statements of income and cash flows for the
nine-month period ended on such date, present fairly the consolidated financial condition of the
Borrower as at such date, and the consolidated results of its operations and its consolidated cash
flows for the nine-month period then ended (subject to normal year-end audit adjustments). All
such financial statements, including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved (except as approved by
the aforementioned firm of accountants and disclosed therein). No Group Member has any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that are not reflected in the
most recent financial statements referred to in this paragraph. During the period from September
30, 2006 to and including the date hereof there has been no Disposition by any Group Member of any
material part of its business or property.




          3.2 No Change. Since December 31, 2005, there has been no development or event that
has had or could reasonably be expected to have a Material Adverse Effect.




          3.3 Existence; Compliance with Law. Each Group Member (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization, (b) has the
power and authority, and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified as a foreign corporation or other organization and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the conduct of its
business requires such qualification and (d) is in compliance with all Requirements of Law except,
in the case of clauses (b), (c) and (d), to the extent










 



25

that the failure to do so or comply
therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.




          3.4 Power; Authorization; Enforceable Obligations. Each Loan Party has the power and
authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a
party and, in the case of the Borrower, to obtain extensions of credit hereunder. Each Loan Party
has taken all necessary organizational action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the
extensions of credit on the terms and conditions of this Agreement. No consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the extensions of credit hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement or any of the Loan
Documents, except (i) consents, authorizations, filings and notices described in Schedule 3.4,
which consents, authorizations, filings and notices have been obtained or made and are in full
force and effect
and (ii) the filings referred to in Section 3.19. Each Loan Document has been duly executed
and delivered on behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding obligation of each
Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or at law).




          3.5 No Legal Bar. The execution, delivery and performance of this Agreement and the
other Loan Documents, the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any Contractual Obligation of any Group Member and will not result in, or
require, the creation or imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created
by the Security Documents). No Requirement of Law or Contractual Obligation applicable to the
Borrower or any of its Subsidiaries could reasonably be expected to have a Material Adverse Effect.




          3.6 Litigation. No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened by
or against any Group Member or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or
(b) that could reasonably be expected to have a Material Adverse Effect.




          3.7 No Default. No Group Member is in default under or with respect to any of its
Contractual Obligations in any respect that could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.




          3.8 Ownership of Property; Liens. Each Group Member has title in fee simple to, or a
valid leasehold interest in, all its real property, and good title to, or a valid leasehold
interest in, all its other property, and none of such property is subject to any Lien except as
permitted by Section 6.3.




          3.9 Intellectual Property. Each Group Member owns, or is licensed to use, all
Intellectual Property necessary for the conduct of its business as currently conducted. No
material claim has been asserted and is pending or, to the knowledge of the Borrower, is
threatened, by any Person challenging or questioning the use of any Intellectual Property or the
validity or effectiveness of any Intellectual Property. The use of Intellectual Property by each
Group Member does not infringe on the rights of any Person in any material respect.










 



26


          3.10 Taxes. Each Group Member has filed or caused to be filed all Federal, state and
other material tax returns that are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its property and all other
taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than any the amount
or validity of which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the books of the
relevant Group Member); no tax Lien has been filed, and, to the knowledge of the Borrower, no claim
is being asserted, with respect to any such tax, fee or other charge.




          3.11 Federal Regulations. No part of the proceeds of any Loans, and no other
extensions of credit hereunder, will be used (a) for “buying” or “carrying” any “margin stock”
within the respective meanings of each of the quoted terms under Regulation U as now and from time
to time hereafter in effect for any purpose that violates the provisions of the Regulations of the
Board or (b) for any purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.




          3.12 Labor Matters. Except as, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect: (a) there are no strikes or other labor disputes against any Group
Member pending or, to the knowledge of the Borrower, threatened; (b) hours worked by and payment
made to employees of each Group Member have not been in violation of the Fair Labor Standards Act
or any other applicable Requirement of Law dealing with such matters; and (c) all payments due from
any Group Member on account of employee health and welfare insurance have been paid or accrued as a
liability on the books of the relevant Group Member.




          3.13 ERISA. Neither a Reportable Event nor an “accumulated funding deficiency”
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or deemed made with respect
to any Plan, and each Plan has complied in all material respects with the applicable provisions of
ERISA and the Code. No termination of a Single Employer Plan has occurred, and no Lien in favor of
the PBGC or a Plan has arisen, during such five-year period. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on which this representation is made or
deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by a
material amount. Neither the Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to
result in a material liability under ERISA, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this representation is made or deemed made.
No such Multiemployer Plan is in Reorganization or Insolvent.




          3.14 Investment Company Act; Other Regulations. No Loan Party is an “investment
company”, or a company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended. No Loan Party is subject to regulation under any
Requirement of Law (other than Regulation X of the Board) that limits its ability to incur
Indebtedness.




          3.15 Subsidiaries. Except as disclosed to the Administrative Agent by the Borrower in
writing from time to time after the Closing Date, (a) Schedule 3.15 sets forth the name and
jurisdiction of incorporation of each Subsidiary and, as to each such Subsidiary, the percentage of
each class of Capital Stock owned by any Loan Party and (b) there are no outstanding subscriptions,
options, warrants,










 



27

calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors’ qualifying shares) of any nature relating to any
Capital Stock of the Borrower or any Subsidiary, except as created by the Loan Documents.




          3.16 Use of Proceeds. The proceeds of the Term Loans shall be used to refinance
existing debt, to finance asset acquisitions and to pay related fees and expenses.




          3.17 Environmental Matters. Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect:




          (a) the facilities and properties owned, leased or operated by any Group Member (the
“Properties”) do not contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could give rise to liability under, any Environmental Law;




          (b) no Group Member has received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the business operated by any Group
Member (the “Business”), nor does the Borrower have knowledge or reason to believe that any
such notice will be received or is being threatened;




          (c) Materials of Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location that could give rise to liability
under, any Environmental Law, nor have any Materials of Environmental Concern been generated,
treated, stored or disposed of at, on or under any of the Properties in violation of, or in a
manner that could give rise to liability under, any applicable Environmental Law;




          (d) no judicial proceeding or governmental or administrative action is pending or, to the
knowledge of the Borrower, threatened, under any Environmental Law to which any Group Member is or
will be named as a party with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law with respect to the
Properties or the Business;




          (e) there has been no release or threat of release of Materials of Environmental Concern at or
from the Properties, or arising from or related to the operations of any Group Member in connection
with the Properties or otherwise in connection with the Business, in violation of or in amounts or
in a manner that could give rise to liability under Environmental Laws;




          (f) the Properties and all operations at the Properties are in compliance, and have in the
last five years been in compliance, with all applicable Environmental Laws, and there is no
contamination
at, under or about the Properties or violation of any Environmental Law with respect to the
Properties or the Business; and




          (g) no Group Member has assumed any liability of any other Person under Environmental Laws.




          3.18 Accuracy of Information, etc. No statement or information contained in this
Agreement, any other Loan Document, the Confidential Information Memorandum or any other document,
certificate or statement furnished by or on behalf of any Loan Party to the Agents or the Lenders,
or any of them, for use in connection with the transactions contemplated by this Agreement or the
other Loan Documents, contained as of the date such statement, information, document or certificate










 



28

was so furnished (or, in the case of the Confidential Information Memorandum, as of the date of
this Agreement), any material misstatement of fact or omitted to state a material fact necessary to
make the statements contained herein or therein, in light of the circumstances under which they
were made, not misleading. The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made, it being recognized by
the Lenders that such financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such financial information may
differ from the projected results set forth therein by a material amount. There is no fact known
to any Loan Party that could reasonably be expected to have a Material Adverse Effect that has not
been expressly disclosed herein, in the other Loan Documents, in the Confidential Information
Memorandum or in any other documents, certificates and statements furnished to the Agents and the
Lenders for use in connection with the transactions contemplated hereby and by the other Loan
Documents.




          3.19 Security Documents. (a) The Guarantee and Collateral Agreement is effective to
create in favor of the Collateral Agent, for its benefit and the benefit of the Administrative
Agent and the Lenders, a legal, valid and enforceable security interest in the Collateral described
therein and proceeds thereof. In the case of the Pledged Stock described in the Guarantee and
Collateral Agreement, when stock certificates representing such Pledged Stock are delivered to the
Collateral Agent, and in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements and other filings specified on Schedule 3.19(a) in appropriate
form are filed in the offices specified on Schedule 3.19(a), the Guarantee and Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations
(as defined in the Guarantee and Collateral Agreement), in each case prior and superior in right to
any other Person (except, in the case of Collateral other than Pledged Stock, Liens permitted by
Section 6.3).




          (b) Each of the Vessel Mortgages is effective to create in favor of the Collateral Agent, for
its benefit and the benefit of the Administrative Agent and the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Vessels described therein and proceeds thereof, and when the
Vessel Mortgages are filed in the offices specified on Schedule 3.19(b), each such Vessel Mortgage
shall constitute a fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in the Mortgaged Vessels and the proceeds thereof, as security for the Secured
Obligations (as defined in the relevant Vessel Mortgage), in each case prior and superior in right
to any other Person. Schedule 1.1B lists, as of the Closing Date, each vessel owned by the
Borrower or any of its Subsidiaries.




          3.20 Solvency. Each Loan Party is, and after giving effect to the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be and will continue to be,
Solvent.




SECTION 4. CONDITIONS PRECEDENT




          4.1 Conditions to Initial Extension of Credit. The agreement of each Lender to make
the initial extension of credit requested to be made by it is subject to the satisfaction, prior to
or concurrently with the making of such extension of credit on the Closing Date, of the following
conditions precedent:





     (a) Credit Agreement; Guarantee and Collateral Agreement. The Administrative
Agent shall have received (i) this Agreement, executed and delivered by the Administrative
Agent, the Collateral Agent, the Borrower and each Person listed on Schedule 1.1A, (ii) the
Guarantee and Collateral Agreement, executed and delivered by the Borrower and each Subsidiary Guarantor,









 



29



(iii) an Acknowledgement and Consent in the form attached to the
Guarantee and Collateral Agreement, executed and delivered by each Issuer (as defined
therein), if any, that is not a Loan Party and (iv) the Intercreditor Agreement, executed
and delivered by the Borrower, the Collateral Agent and the administrative agent under the
ABL Revolving Credit Agreement.




     (b) (i) The Administrative Agent shall have received satisfactory evidence that the
Revolving Credit Facility shall have been terminated and all amounts thereunder shall have
been paid in full and (ii) satisfactory arrangements shall have been made for the
termination of all Liens granted in connection therewith.




     (c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall have
received (i) the Pro Forma Balance Sheet, (ii) audited consolidated financial statements of
the Borrower for the 2003, 2004 and 2005 fiscal years and (iii) unaudited interim
consolidated financial statements of the Borrower for each fiscal month and quarter ended
after the date of the latest applicable financial statements delivered pursuant to clause
(ii) of this paragraph as to which such financial statements are available, and such
financial statements shall not, in the reasonable judgment of the Lenders, reflect any
material adverse change in the consolidated financial condition of the Borrower, as
reflected in the financial statements or projections contained in the Confidential
Information Memorandum.




     (d) Projections. The Lenders shall have received satisfactory projections
through 2012.




     (e) Approvals. All governmental and third party approvals necessary in
connection with the continuing operations of the Group Members and the transactions
contemplated hereby shall have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action being taken or threatened
by any competent authority that would restrain, prevent or otherwise impose adverse
conditions on the financing contemplated hereby.




     (f) Lien Searches. The Administrative Agent shall have received the results of
a recent lien search in each of the jurisdictions where assets of the Loan Parties are
located, and such search shall reveal no liens on any of the assets of the Loan Parties
except for liens permitted by Section 6.3 or discharged on or prior to the Closing Date
pursuant to documentation satisfactory to the Administrative Agent.




     (g) Fees. The Lenders and each Agent shall have received all fees required to
be paid, and all expenses for which invoices have been presented (including the reasonable
fees and
expenses of legal counsel), on or before the Closing Date. All such amounts will be
paid with proceeds of Loans made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before the Closing
Date.




     (h) Closing Certificate; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of each
Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate
insertions and attachments, including the certificate of incorporation of each Loan Party
that is a corporation certified by the relevant authority of the jurisdiction of
organization of such Loan Party, and (ii) a long form good standing certificate for each
Loan Party from its jurisdiction of organization.




     (i) Legal Opinions. The Administrative Agent shall have received the following
executed legal opinions:









 



30



     (i) the legal opinion of Bracewell & Giuliani LLP, counsel to the Borrower and
its Subsidiaries, substantially in the form of
Exhibit F-1;




     (ii) the legal opinion of R. Joshua Koch, Jr., general counsel of the Borrower
and its Subsidiaries, substantially in the form of Exhibit F-2;




     (iii) the legal opinion of Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, a Law
Corporation.




Each such legal opinion shall cover such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may reasonably require.




     (j) Pledged Stock; Stock Powers; Pledged Notes. The Collateral Agent shall
have received (i) the certificates representing the shares of Capital Stock (if any) pledged
pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for
each such certificate executed in blank by a duly authorized officer of the pledgor thereof
and (ii) each promissory note (if any) pledged to the Collateral Agent pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied by
an executed transfer form in blank) by the pledgor thereof.




     (k) Filings, Registrations and Recordings. Each document (including any
Uniform Commercial Code financing statement) required by the Security Documents or under law
or reasonably requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Collateral Agent, for its benefit and the benefit of the
Administrative Agent and the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect to Liens expressly
permitted by Section 6.3), shall be in proper form to the satisfaction of the Administrative
Agent for filing, registration or recordation.




     (l) Vessel Mortgages. (i) The Administrative Agent and the Collateral Agent
shall have received a Vessel Mortgage in form and substance satisfactory to the
Administrative Agent with respect to each Mortgaged Vessel, executed and delivered by a duly
authorized officer of each party thereto.




     (ii) The Administrative Agent shall have received a copy of all recorded documents with
respect to the Mortgaged Vessels, including that each of such Mortgaged Vessels remains
eligible to operate in the coastwise trade of the United States and is covered by a valid
Certificate of
Documentation issued by the United States Coast Guard in the name of the Borrower and
endorsed for the coastwise trade.




     (m) Asset Appraisal. The Administrative Agent shall have received a
satisfactory appraisal with respect to all vessels and certain property, plant and equipment
of the Borrower and its Subsidiaries;




     (n) Solvency Certificate. The Administrative Agent shall have received a
solvency certificate from the chief financial officer of the Borrower.




     (o) Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 5.2(b) of the Guarantee and Collateral
Agreement.









 



31


          4.2 Conditions to Each Extension of Credit. The agreement of each Lender to make any
extension of credit requested to be made by it on any date (including its initial extension of
credit) is subject to the satisfaction of the following conditions precedent:





     (a) Representations and Warranties. Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all
material respects on and as of such date as if made on and as of such date.




     (b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit requested to be
made on such date.


Each borrowing by the Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such extension of credit that the conditions contained in this Section
4.2 have been satisfied.




SECTION 5. AFFIRMATIVE COVENANTS




          The Borrower hereby agrees that, so long as any Loan or other amount is owing to any Lender or
the Administrative Agent hereunder, the Borrower shall and shall cause each of its Subsidiaries to:





     5.1 Financial Statements. Furnish to the Administrative Agent and each Lender:




     (a) as soon as available, but in any event within 90 days after the end of each fiscal
year of the Borrower (or, if earlier, by such date as may be required by the SEC), a copy of
the audited consolidated balance sheet of the Borrower and its consolidated Domestic
Subsidiaries as at the end of such year and the related audited consolidated statements of
income and of cash flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a “going concern” or like qualification
or exception, or qualification arising out of the scope of the audit, by KPMG LLP or other
independent certified public accountants of nationally recognized standing; and




     (b) as soon as available, but in any event not later than 45 days after the end of each
of the first three quarterly periods of each fiscal year of the Borrower (or, if earlier, by
such date as may be required by the SEC), the unaudited consolidated balance sheet of the
Borrower and its consolidated Domestic Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of income and of cash flows for such quarter and
the portion of the fiscal year through the end of such quarter, setting forth in each case
in comparative form the figures for the previous year, certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal year-end audit adjustments).


All such financial statements shall be complete and correct in all material respects and shall be
prepared in reasonable detail and in accordance with GAAP applied (except as approved by such
accountants or officer, as the case may be, and disclosed in reasonable detail therein)
consistently throughout the periods reflected therein and with prior periods.




          5.2 Certificates; Other Information. Furnish to the Administrative Agent and each
Lender (or, in the case of clause (f), to the relevant Lender):





     (a) concurrently with the delivery of the financial statements referred to in Section
5.1(a), a certificate of the independent certified public accountants reporting on such
financial









 



32



statements stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default under Section 6.1, except as specified in
such certificate;




     (b) concurrently with the delivery of any financial statements pursuant to Section 5.1,
(i) a certificate of a Responsible Officer stating that, to the best of each such
Responsible Officer’s knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements, and satisfied every condition contained
in this Agreement and the other Loan Documents to which it is a party to be observed,
performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate and (ii) in the case
of quarterly or annual financial statements, (x) a Compliance Certificate containing all
information and calculations necessary for determining compliance by each Loan Party with
the provisions of this Agreement referred to therein as of the last day of the fiscal
quarter or fiscal year of the Borrower, as the case may be, and (y) to the extent not
previously disclosed to the Administrative Agent, (1) a description of any change in the
jurisdiction of organization of any Loan Party, (2) a list of any Intellectual Property
acquired by any Loan Party and (3) a description of any Person that has become a Group
Member, in each case since the date of the most recent report delivered pursuant to this
clause (y) (or, in the case of the first such report so delivered, since the Closing Date);




     (c) as soon as available, and in any event no later than 45 days after the end of each
fiscal year of the Borrower, a detailed consolidated budget for the current fiscal year
(including a projected consolidated balance sheet of the Borrower and its Domestic
Subsidiaries as of the end of the current fiscal year, the related consolidated statements
of projected cash flow, projected changes in financial position and projected income and a
description of the underlying assumptions applicable thereto), and, as soon as available,
significant revisions, if any, of such budget and projections with respect to such fiscal
year (collectively, the “Projections”), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions and that such Responsible Officer
has no reason to believe that such Projections are incorrect or misleading in any material
respect;




     (d) within 45 days after the end of each fiscal quarter of the Borrower, a narrative
discussion and analysis of the financial condition and results of operations of the Borrower
and its Domestic Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter, as compared to the
portion of the Projections covering such periods and to the comparable periods of the
previous year;




     (e) within five days after the same are sent, copies of all financial statements and
reports that the Borrower sends to the holders of any class of its debt securities or public
equity securities generally and, within five days after the same are filed, copies of all
financial statements and reports that the Borrower may make to, or file with, the SEC; and




     (f) promptly, such additional financial and other information as any Lender may from
time to time reasonably request.



          5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all its material obligations of whatever
nature, except where the amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the relevant Group Member.










 



33


          5.4 Rating by Moody’s and S&P. Maintain with Moody’s and S&P a corporate credit
rating for the Borrower and a rating of the Term Loans, which ratings shall, in the case of a
private rating, be updated or confirmed at least once per year.




          5.5 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and keep in full
force and effect its organizational existence and (ii) take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 6.4 and except, in the case of clause (ii)
above, to the extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (b) comply with all Contractual Obligations and Requirements of Law except to
the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect.




          5.6 Maintenance of Property; Insurance. (a) Keep all material property useful and
necessary in its business in good working order and condition, ordinary wear and tear excepted and
(b) maintain with financially sound and reputable insurance companies insurance on all its property
in at least such amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured against in the same
general area by companies engaged in the same or a similar business. Without limiting the
foregoing, the Borrower shall maintain the Mortgaged Vessels, and shall procure and maintain
insurance on the Mortgaged Vessels, as required in the Vessel Mortgages.




          5.7 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities and (b) in the case of the Borrower and its Domestic
Subsidiaries, permit representatives of the Agents or any Lender to visit and inspect any of its
properties (including the Mortgaged Vessels) and examine and make abstracts from any of its books
and records at any reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the Borrower and its Domestic
Subsidiaries with officers and employees of the Group Members and with their independent certified
public accountants.





     5.8 Notices. Promptly give notice to the Agents and each Lender of:




     (a) the occurrence of any Default or Event of Default;




     (b) any (i) default or event of default under any Contractual Obligation of any Group
Member or (ii) litigation, investigation or proceeding that may exist at any time between
any Group Member and any Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected to have a Material
Adverse Effect;




     (c) any litigation or proceeding affecting any Group Member (i) in which the amount
involved is $1,000,000 or more and not covered by insurance, (ii) in which injunctive or
similar relief is sought or (iii) which relates to any Loan Document;




     (d) the following events, as soon as possible and in any event within 30 days after the
Borrower knows or has reason to know thereof: (i) the occurrence of any Reportable Event
with respect to any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any









 



34



Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan; and




     (e) any development or event that has had or could reasonably be expected to have a
Material Adverse Effect.


Each notice pursuant to this Section 5.8 shall be accompanied by a statement of a Responsible
Officer setting forth details of the occurrence referred to therein and stating what action the
relevant Group Member proposes to take with respect thereto.




          5.9 Environmental Laws. (a) Comply in all material respects with, and ensure
compliance in all material respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply in all material respects with and maintain, and ensure
that all tenants and subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by applicable
Environmental Laws, in each case where failure to do so could reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect.




          (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws; provided that no Group Member shall be required to undertake
any such action to the extent that its obligation to do so is being contested in good faith and by
proper proceedings and adequate reserves are being maintained with respect to such circumstances in
accordance with GAAP.




          5.10 Additional Collateral, etc. (a) With respect to any property acquired after the
Closing Date by any Group Member (other than (w) any property excluded pursuant to Section 3 of the
Guarantee and Collateral Agreement, (x) any property described in paragraph (b), (c), (d) or (e)
below, (y) any property subject to a Lien expressly permitted by Section 6.3(g) and (z) property
acquired by any Foreign Subsidiary) as to which the Collateral Agent, for its benefit and the
benefit of the Administrative Agent and the Lenders, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent and the Collateral Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the Administrative Agent deems
necessary or advisable to grant to the Collateral Agent, for its benefit and the benefit of the
Administrative Agent and the Lenders, a security interest in such property and (ii) take all
actions reasonably requested by the Administrative Agent and necessary or advisable to grant to the
Collateral Agent, for its benefit and the benefit of the Administrative Agent and the Lenders, a
perfected first priority security interest in such property, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative Agent.




          (b) With respect to any fee interest in any real property having a value (together with
improvements thereof) of at least $500,000 acquired after the Closing Date by any Group Member
(other than (x) any such real property subject to a Lien expressly permitted by Section 6.3(g) and
(y) real property acquired by any Foreign Subsidiary), promptly (i) execute and deliver a first
priority Real Property Mortgage, in favor of the Collateral Agent, for its benefit and the benefit
of the Administrative Agent and the Lenders, covering such real property, (ii) if requested by the
Administrative Agent, provide the Collateral Agent, for its benefit and the benefit of the
Administrative Agent and the Lenders, with (x) title and extended coverage insurance covering such
real property in an amount at least equal to the purchase price of such real property (or such
other amount as shall be reasonably specified by the Administrative Agent) as well as a current
ALTA survey thereof, together with a surveyor’s certificate










 



35

and (y) any consents or estoppels
reasonably deemed necessary or advisable by the Administrative Agent in connection with such Real
Property Mortgage, in the case of third-party agreements, to the extent the Borrower is able to
obtain the same from the applicable third party, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent and the Collateral Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.




          (c) With respect to any interest in any vessel having a value of at least $500,000 acquired
after the Closing Date by any Group Member (other than (x) any such vessel subject to a Lien
expressly permitted by Section 6.3(g) and (y) any vessel acquired by any Foreign Subsidiary),
promptly (i) execute and deliver a first priority Vessel Mortgage, in favor of the Collateral
Agent, for its benefit and the benefit of the Administrative Agent and the Lenders, covering such
vessel and such other documentation related thereto as requested by the Administrative Agent and
(ii) if requested by the Administrative Agent, deliver to the Administrative Agent and the
Collateral Agent legal opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.




          (d) With respect to any new Subsidiary (other than a Foreign Subsidiary) created or acquired
after the Closing Date by any Group Member (which, for the purposes of this paragraph (d), shall
include any existing Subsidiary that ceases to be a Foreign Subsidiary), promptly (i) execute and
deliver to the Administrative Agent and the Collateral Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable to grant to the
Collateral Agent, for its benefit and the benefit of the Administrative Agent and the Lenders, a
perfected first priority security interest in the Capital Stock of such new Subsidiary that is
owned by any Group Member, (ii) deliver to the Collateral Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the relevant Group Member, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement, (B) to take such actions that the Administrative
Agent deems necessary or advisable to grant to the Collateral Agent for its benefit and the benefit
of the Administrative Agent and the Lenders a perfected first priority security interest in the
Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in such jurisdictions as may
be required by the Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent and (C) to deliver to the Administrative Agent and the Collateral Agent a
certificate of such Subsidiary, substantially in the form of Exhibit C, with appropriate insertions
and attachments, and (iv) if requested by the Administrative Agent, deliver to the Administrative
Agent and the Collateral Agent legal opinions relating to the matters described above, which
opinions shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.




          (e) With respect to any new Foreign Subsidiary created or acquired after the Closing Date by
any Group Member (other than by any Group Member that is a Foreign Subsidiary), promptly (i)
execute and deliver to the Administrative Agent and the Collateral Agent such amendments to the
Guarantee and Collateral Agreement as the Administrative Agent deems necessary or advisable to
grant to the Collateral Agent, for its benefit and the benefit of the Administrative Agent and the
Lenders, a perfected first priority security interest in the Capital Stock of such new Subsidiary
that is owned by any such Group Member (provided that in no event shall more than 66% of the total
outstanding voting Capital Stock of any such new Subsidiary be required to be so pledged), (ii)
deliver to the Collateral Agent the certificates, if any, representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized officer of the
relevant Group Member, and take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the










 



36

Collateral Agent’s security interest therein, and
(iii) if requested by the Administrative Agent, deliver to the Administrative Agent and the
Collateral Agent legal opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.




SECTION 6. NEGATIVE COVENANTS




          The Borrower hereby agrees that, so long as any Loan or other amount is owing to any Lender or
the Administrative Agent hereunder, the Borrower shall not, and shall not permit any of its
Domestic Subsidiaries to:




          6.1 Financial Condition Covenants.




          (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as at the
last day of any period of four consecutive fiscal quarters of the Borrower to exceed the ratio set
forth below for the applicable fiscal quarter:




	 	 	 
	 	 	 Consolidated Leverage 
	Fiscal Quarter	 	Ratio
	March 31, 2007 — December 31, 2008
	 	2.0 to 1.0
	 	 	 
	March 31, 2009 — December 31, 2009
	 	1.5 to 1.0
	 	 	 
	March 31, 2010 — Thereafter
	 	1.0 to 1.0






          (b) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage
Ratio for any period of four consecutive fiscal quarters of the Borrower to be less than 4.0 to
1.0.




          6.2 Indebtedness. Create, issue, incur, assume, become liable in respect of or suffer
to exist any Indebtedness, except:





     (a) Indebtedness of any Loan Party pursuant to any Loan Document;




     (b) Indebtedness of the Borrower to any Subsidiary and of any Wholly Owned Subsidiary
Guarantor to the Borrower or any other Subsidiary;




     (c) Guarantee Obligations incurred in the ordinary course of business by the Borrower
or any of its Domestic Subsidiaries of obligations of any Wholly Owned Subsidiary Guarantor;




     (d) Indebtedness outstanding on the date hereof and listed on Schedule 6.2(d) and any
refinancings, refundings, renewals or extensions thereof (without increasing, or shortening
the maturity of, the principal amount thereof);




     (e) Capital Lease Obligations in connection with a crane in an aggregate principal
amount not to exceed $875,000;




     (f) Indebtedness (including, without limitation, Capital Lease Obligations) secured by
Liens permitted by Section 6.3(g) in an aggregate principal amount not to exceed $500,000 in
any









 



37



fiscal year prior to the fiscal year in which a Vessel Mortgage is executed and
delivered with respect to the Superior Achiever in accordance with Section 5.10(c) and
$2,000,000 in any fiscal year of the Borrower thereafter at any one time outstanding;




     (g) Indebtedness in respect of the ABL Revolving Credit Agreement in an aggregate
principal amount not to exceed $20,000,000 (with an additional $20,000,000 for cash-secured
letters of credit) at any one time outstanding, provided that such amount may be
increased to $40,000,000 (with an additional $20,000,000 for cash-secured letters of credit)
upon the execution and delivery of a Vessel Mortgage with respect to the Superior Achiever
in accordance with Section 5.10(c);




     (h) Guarantee Obligations incurred by the Borrower of obligations of Subtech in an
aggregate amount not to exceed $500,000;




     (i) Charter Obligations of the Borrower and its Domestic Subsidiaries in an aggregate
amount not to exceed $5,000,000;




     (j) Indebtedness of the Borrower or any of its Domestic Subsidiaries in respect of
performance bonds, bid bonds, appeal bonds, surety bonds, and similar obligations, in each
case provided in the ordinary course of business; and




     (k) additional Indebtedness of the Borrower or any of its Domestic Subsidiaries in an
aggregate principal amount (for the Borrower and all such Subsidiaries) not to exceed
$1,000,000 at any one time outstanding.



          6.3 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, whether now owned or hereafter acquired, except:





     (a) Liens for taxes not yet due or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Domestic Subsidiaries, as the case may be, in
conformity with GAAP;




     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, vendors’,
landlords’ or other like Liens arising in the ordinary course of business, including common
law maritime Liens or Liens under the Federal Maritime Lien Act or similar state statutes,
in each case that are not overdue for a period of more than 30 days or that are being
contested in good faith by appropriate proceedings;




     (c) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation;




     (d) (i) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of business and (ii)
judgment liens in respect of judgments that do not constitute an Event of Default under
clause (i) of Section 7;




     (e) easements, rights-of-way, restrictions and other similar encumbrances incurred in
the ordinary course of business that, in the aggregate, are not substantial in amount and
that do not in any case materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the Borrower or any of its
Domestic Subsidiaries;









 



38



     (f) Liens in existence on the date hereof listed on Schedule 6.3(f), securing
Indebtedness permitted by Section 6.2(d), provided that no such Lien is spread to
cover any additional property after the Closing Date and that the amount of Indebtedness
secured thereby is not increased;




     (g) Liens securing Indebtedness of the Borrower or any other Domestic Subsdiary
incurred pursuant to Section 6.2(e) or Section 6.2(f) to finance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (ii) such Liens do not
at any time encumber any property other than the property financed by such Indebtedness and
(iii) the amount of Indebtedness secured thereby is not increased;




     (h) Liens created pursuant to the Security Documents;




     (i) Liens (i) created pursuant to the ABL Revolving Credit Documentation,
provided, that the Collateral Agent shall have a first priority Lien on all assets
subject to such Liens (other than the ABL Priority Collateral (as defined in the
Intercreditor Agreement), over which the Collateral Agent shall have a second priority Lien)
pursuant to the Security Documents and (ii) consisting of cash collateral securing letters
of credit permitted under Section 6.2(g);




     (j) any interest or title of a lessor under any lease entered into by the Borrower or
any Domestic Subsidiary in the ordinary course of its business and covering only the assets
so leased;




     (k) Liens (i) for salvage or general average, (ii) of a maritime nature incurred in the
ordinary course of business of the Borrower or any Domestic Subsidiary arising from vessel
chartering, operations, drydocking, maintenance, the furnishing of supplies or fuel to
vessels and crews wages, and (iii) arising under any vessel charter, in each case for
amounts that are not overdue by more than 30 days or that are being contested in good faith
by appropriate proceedings; and




     (l) Liens not otherwise permitted by this Section so long as neither (i) the aggregate
outstanding principal amount of the obligations secured thereby nor (ii) the aggregate fair
market value (determined as of the date such Lien is incurred) of the assets subject thereto
exceeds (as to the Borrower and all Domestic Subsidiaries) $250,000 at any one time.



          6.4 Fundamental Changes. Enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all
or substantially all of its property or business, except that:





     (a) any Domestic Subsidiary of the Borrower may be merged or consolidated with or into
the Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or with or into any Wholly Owned Subsidiary Guarantor (provided that
the Wholly Owned Subsidiary Guarantor shall be the continuing or surviving corporation);




     (b) the Borrower may be merged with and into Superior Offshore International, Inc. in
order to consummate the Qualified IPO, provided that Superior Offshore
International, Inc. shall execute and deliver such joinder agreements or other agreements in
respect hereof, and deliver such legal opinions, as the Administrative Agent shall request;




     (c) any Domestic Subsidiary of the Borrower may Dispose of any or all of its assets (i)
to the Borrower or any Wholly Owned Subsidiary Guarantor (upon voluntary liquidation or
otherwise) or (ii) pursuant to a Disposition permitted by Section 6.5;









 



39



     (d) any Investment expressly permitted by Section 6.8, which may be structured as a
merger, consolidation or amalgamation; and




     (e) any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the best interests of
the Borrower and is not materially disadvantageous to the Lenders.



          6.5 Disposition of Property. Dispose of any of its property, whether now owned or hereafter acquired, or, in the case of
any Domestic Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any Person,
except:





     (a) the Disposition of obsolete or worn out property in the ordinary course of
business;




     (b) the sale of inventory in the ordinary course of business;




     (c) Dispositions permitted by clause (i) of Section 6.4(c);




     (d) the sale or issuance of any Domestic Subsidiary’s Capital Stock to the Borrower or
any Wholly Owned Subsidiary Guarantor;




     (e) dispositions resulting from any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding of, any property or
asset of the Borrower or any Domestic Subsidiary; and




     (f) the Disposition of other property having a fair market value not to exceed
$3,000,000 in fiscal year 2007 and $1,500,000 in any fiscal year of the Borrower thereafter,
provided, that the consideration for any such Disposition shall be at least 80%
cash.



          6.6 Restricted Payments. Declare or pay any dividend (other than dividends payable
solely in common stock of the Person making such dividend) on, or make any payment on account of,
or set apart assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any Capital Stock of any Group Member, whether now
or hereafter outstanding, or make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of any Group Member (collectively,
“Restricted Payments”), except that:





     (a) any Domestic Subsidiary may make Restricted Payments to the Borrower or any Wholly
Owned Subsidiary Guarantor; and




     (b) so long as no Default or Event of Default shall have occurred and be continuing,
the Borrower may purchase its common stock or common stock options from present or former
officers or employees of any Group Member upon the death, disability or termination of
employment of such officer or employee, provided, that the aggregate amount of
payments under this clause (b) after the date hereof (net of any proceeds received by the
Borrower after the date hereof in connection with resales of any common stock or common
stock options so purchased) shall not exceed $250,000 in any fiscal year of the Borrower;




     (c) the Borrower may pay a dividend in connection with the Qualified IPO,
provided that such dividend is payable solely with proceeds from the Qualified IPO;
and




     (d) so long as no Event of Default exists or would result therefrom, and so long as
Borrower remains a limited liability company, the Borrower may pay dividends or make









 



40



distributions to its members in an aggregate amount not greater than the amount necessary
for such members to pay their actual state and United States federal income tax liabilities
solely in respect of income earned by the Borrower.



          6.7
Capital Expenditures. Commencing fiscal year 2007, make or commit to make any Capital Expenditure, except Capital
Expenditures of the Borrower and its Domestic Subsidiaries in the ordinary course of business not
exceeding in the aggregate $40,000,000 for fiscal year 2007, $40,000,000 for fiscal year 2008,
$25,000,000 for fiscal year 2009 and $20,000,000 for each fiscal year thereafter, in each case,
exclusive of any Reinvestment Deferred Amounts and all Capital Expenditures attributable to the
Superior Achiever and related equipment to the extent purchased with the proceeds of the Term
Loans.




          6.8 Investments. Make any advance, loan, extension of credit (by way of guaranty or
otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or
other debt securities of, or any assets constituting a business unit of, or make any other
investment in, any Person (all of the foregoing, “Investments”), except:





     (a) extensions of trade credit in the ordinary course of business;




     (b) investments in Cash Equivalents;




     (c) Guarantee Obligations permitted by Section 6.2;




     (d) loans and advances to employees of the Borrower or any Domestic Subsidiary in the
ordinary course of business (including for travel, entertainment and relocation expenses) in
an aggregate amount for the Borrower and all Domestic Subsidiaries not to exceed $250,000 at
any one time outstanding;




     (e) intercompany Investments by the Borrower or any Domestic Subsidiary in the Borrower
or any Person that, prior to such investment, is a Wholly Owned Subsidiary Guarantor; and




     (f) Investments in an aggregate amount (valued at cost) not to exceed $3,000,000
consisting of payments of cash or Capital Stock to Subtech (or to the sellers thereof) made
on or prior to the third anniversary of the Closing Date with respect to the acquisition of
Subtech;




     (g) Investments of any Person existing at the time such Person becomes a Domestic
Subsidiary of the Borrower or consolidates or merges with the Borrower or any of the
Domestic Subsidiaries (including in connection with a permitted acquisition) so long as such
investments were not made in contemplation of such Person becoming a Domestic Subsidiary or
of such merger;




     (h) Investments received in connection with the dispositions of assets permitted by
Section 6.5; and




     (i) in addition to Investments otherwise expressly permitted by this Section,
Investments by the Borrower or any of its Domestic Subsidiaries in an aggregate amount
(valued at cost) not to exceed $1,000,000 during the term of this Agreement.



          6.9 Transactions with Affiliates. Except with respect to Investments permitted
pursuant to Section 6.8(c), Section 6.8(d) and Section 6.8(f), enter into any transaction,
including any










 



41

purchase, sale, lease or exchange of property, the rendering of any service or the
payment of any management, advisory or similar fees, with any
Affiliate (other than the Borrower or any Wholly Owned Subsidiary Guarantor) unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary course of business
of the Borrower or relevant Domestic Subsidiary, and (c) upon fair and reasonable terms no less
favorable to the Borrower or relevant Domestic Subsidiary than it would obtain in a comparable
arm’s length transaction with a Person that is not an Affiliate.




          6.10 Sales and Leasebacks. Enter into any arrangement with any Person providing for
the leasing by any Group Member (other than any Foreign Subsidiary) of real or personal property
that has been or is to be sold or transferred by such Group Member to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the security of such
property or rental obligations of such Group Member.




          6.11 Swap Agreements. Enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which the Borrower or any Domestic Subsidiary has actual
exposure (other than those in respect of Capital Stock) and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any interest-bearing liability
or investment of the Borrower or any Domestic Subsidiary.




          6.12 Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on a
day other than December 31 or change the Borrower’s method of determining fiscal quarters.




          6.13 Negative Pledge Clauses. Enter into or suffer to exist or become effective any
agreement that prohibits or limits the ability of any Group Member (other than any Foreign
Subsidiary) to create, incur, assume or suffer to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired, other than (a) this Agreement and the other Loan
Documents, (b) the ABL Revolving Credit Documentation and (c) any agreements governing any purchase
money Liens or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition
or limitation shall only be effective against the assets financed thereby).




          6.14 Clauses Restricting Subsidiary Distributions. Enter into or suffer to exist or
become effective any consensual encumbrance or restriction on the ability of any Domestic
Subsidiary of the Borrower to (a) make Restricted Payments in respect of any Capital Stock of such
Domestic Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other Domestic
Subsidiary of the Borrower, (b) make loans or advances to, or other Investments in, the Borrower or
any other Domestic Subsidiary of the Borrower or (c) transfer any of its assets to the Borrower or
any other Domestic Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan Documents, (ii) any
restrictions existing under the ABL Revolving Credit Documentation and (iii) any restrictions with
respect to a Domestic Subsidiary imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the Capital Stock or assets of such
Domestic Subsidiary.




          6.15 Lines of Business. Enter into any business, either directly or through any
Subsidiary, except for those businesses in which the Borrower and its Subsidiaries are engaged on
the date of this Agreement or that are reasonably related thereto.




          6.16 Coastwise Citizenship. In no event the Borrower or any Loan Party take any
action, or acquiesce in the taking of any action, that might reasonably be expected to impair the
status of Borrower as a citizen of the United States within the meaning of 46 U.S.C. Section 50501.










 



42


SECTION 7. EVENTS OF DEFAULT





     If any of the following events shall occur and be continuing:




     (a) the Borrower shall fail to pay any principal of any Loan when due in accordance
with the terms hereof; or the Borrower shall fail to pay any interest on any Loan, or any
other amount payable hereunder or under any other Loan Document, within five days after any
such interest or other amount becomes due in accordance with the terms hereof; or




     (b) any representation or warranty made or deemed made by any Loan Party herein or in
any other Loan Document or that is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection with this Agreement or
any such other Loan Document shall prove to have been inaccurate in any material respect on
or as of the date made or deemed made; or




     (c) any Loan Party shall default in the observance or performance of any agreement
contained in clause (i) or (ii) of Section 5.5(a) (with respect to the Borrower only),
Section 5.8(a) or Section 6 of this Agreement or Sections 5.6 and 5.8(b) of the Guarantee
and Collateral Agreement; or




     (d) any Loan Party shall default in the observance or performance of any other
agreement contained in this Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall continue unremedied for
a period of 30 days after notice to the Borrower from the Administrative Agent or the
Required Lenders; or




     (e) (i) any Group Member shall (x) default in making any payment of any principal of
any Indebtedness (including any Guarantee Obligation, but excluding the Loans, any Charter
Obligations and any Swap Agreements) on the scheduled or original due date with respect
thereto; or (y) default in making any payment of any interest on any such Indebtedness
beyond the period of grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (z) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of
such holder or beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable; or (ii) there occurs
under any Swap Agreement an Early Termination Date (or similar
concept) (as defined in such Swap Agreement) resulting from (A) any event of default
under such Swap Agreement as to which the Borrower or any Subsidiary is the Defaulting Party
(or similar concept) (as defined in such Swap Agreement) or (B) any Termination Event (or
similar concept) (as so defined) under such Swap Agreement as to which the Borrower or any
Subsidiary is an Affected Party (or similar concept) (as so defined); provided, that
a default, event or condition described in clause (i)(x), (y) or (z) or clause (ii) of this
paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one
or more defaults, events or conditions of the type described in clauses (i)(x), (y) and (z)
and clause (ii) of this paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the aggregate $2,500,000;
or









 



43



     (f) any Event of Default (as defined in the ABL Revolving Credit Agreement) shall have
occurred and be continuing; or




     (g) (i) any Group Member shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any Group Member shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against any Group Member any
case, proceeding or other action of a nature referred to in clause (i) above that (A)
results in the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed or undischarged for a period of 60 days; or (iii) there shall be
commenced against any Group Member any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any such relief
that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) any Group Member shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii), or (iii) above; or (v) any Group Member shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as they become due;
or




     (h) (i) any Person shall engage in any “prohibited transaction” (as defined in Section
406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding
deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of
any Group Member or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) any Group Member or any Commonly Controlled Entity shall,
or in the reasonable opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect to a Plan; and
in each case in clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could, in the sole judgment of the Required
Lenders, reasonably be expected to have a Material Adverse Effect; or




     (i) one or more judgments or decrees shall be entered against any Group Member
involving in the aggregate a liability (not paid or fully covered by insurance as to which
the relevant insurance company has acknowledged coverage) of $2,500,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or




     (j) any of the Security Documents shall cease, for any reason, to be in full force and
effect, or any Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien
created by any of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby, except as permitted by the terms of
such Security Document; or









 



44



     (k) the guarantee contained in Section 2 of the Guarantee and Collateral Agreement
shall cease, for any reason, to be in full force and effect or any Loan Party or any
Affiliate of any Loan Party shall so assert; or




     (l) (i) at any time prior to the Qualified IPO, Louis E. Schaefer, Jr. and his
Affiliates shall cease to own of record and beneficially at least 60% of the outstanding
Capital Stock of the Borrower; (ii) at any time following the Qualified IPO, (x) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than Louis E. Schaefer, Jr.
and his Affiliates, shall become, or obtain rights (whether by means or warrants, options or
otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under
the Exchange Act), directly or indirectly, of more than 30% of the outstanding Capital Stock
of the Borrower or (y) Louis E. Schaefer, Jr. and his Affiliates shall cease to own of
record and beneficially at least 35% of the outstanding common stock of the Borrower; or
(iii) the board of directors of the Borrower shall cease to consist of a majority of
Continuing Directors; or




     (m) the Liens created under the ABL Revolving Credit Documentation (other than the
Liens on the ABL Priority Collateral (as defined in the Intercreditor Agreement)) shall
cease, for any reason, to be validly subordinated to the Liens securing the obligations
under the Loan Documents as provided in the Intercreditor Agreement or any Loan Party or any
Affiliate of a Loan Party shall so assert in writing;


then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or
(ii) of paragraph (g) above with respect to the Borrower, automatically the Loans (with accrued
interest thereon) and all other amounts owing under this Agreement and the other Loan Documents
shall immediately become due and payable, and (B) if such event is any other Event of Default, with
the consent of the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare the Loans
(with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan
Documents to be due and payable forthwith, whereupon the same shall immediately become due and
payable. Except as expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived by the Borrower.




SECTION 8. THE AGENTS




          8.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender and Wilmington Trust Company as Collateral Agent
of such Lender under this Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the
Administrative Agent and the Collateral Agent, in such capacity, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement,
neither the Administrative Agent nor the Collateral Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent or the Collateral Agent, as applicable.




          8.2 Delegation of Duties. Each of the Administrative Agent and the Collateral Agent
may execute any of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters
pertaining to such










 



45

duties. Neither the Administrative Agent nor the Collateral Agent shall be
responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.




          8.3 Exculpatory Provisions. Neither any Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact, controlling persons or affiliates (collectively,
the “Related Parties”) shall be (i) liable for any action lawfully taken or omitted to be taken by
it or such Person under or in connection with this Agreement or any other Loan Document (except to
the extent that any of the foregoing are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from its or such Person’s own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agents or any Related Parties under or in
connection with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its obligations hereunder
or thereunder. The Agents shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties, books or records of
any Loan Party. Each Loan Party will furnish such information about the Collateral, the Loan
Parties and any other information the Collateral Agent deems necessary to exercise any of the
rights and powers vested in it by the Loan Documents as the Collateral Agent may reasonably request
from time to time.




          8.4 Reliance by Agents. The Agents and their Related Parties shall be entitled to
rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy or email message, statement, order or other
document or conversation 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 (including
counsel to the Borrower), independent accountants and other experts selected by the Agents. The
Agents may deem and treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Agents and their Related Parties shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document unless it shall first
receive such written advice or concurrence of the Required Lenders (or, if so specified by this
Agreement, all Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. The Agents and their Related Parties shall
in all cases be fully protected in acting, or in refraining from acting, under this Agreement and
the other Loan Documents in accordance with a request of the Required Lenders (or, if so specified
by this Agreement, all Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the Loans.




          8.5 Notice of Default. No Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless such Agent has received notice from a Lender
or the Borrower referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that an Agent receives such a
notice, such Agent shall give notice thereof to the Lenders. The Agents shall take such action
with respect to such Default or Event of Default as shall be reasonably directed in writing by the
Required Lenders (or, if so specified by this Agreement, all Lenders) (or in the case of the
Collateral Agent, as may be directed in writing by the Administrative Agent); provided that
unless and until the Agents shall have received such directions, the Agents may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the Lenders.










 



46


          8.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that
neither the Agents nor any of their Related Parties have made any representations or warranties to
it and that no act by any Agent hereafter taken, including any review of the affairs of a Loan
Party or any affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and creditworthiness of the Loan
Parties and their affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and without reliance upon
any Agent or any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their affiliates.
Except for notices, reports and other documents expressly required to be furnished to the Lenders
by the Agents hereunder, the Agents shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a
Loan Party that may come into the possession of the Agents or any of their Related Parties.




          8.7 Indemnification. The Lenders agree to indemnify each Agent and its Related
Parties (each, an “Agent Indemnitee”) (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to their respective
Aggregate Exposure Percentages in effect on the date on which indemnification is sought under this
Section (or, if indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), from and against
any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or
after the payment of the Loans) be imposed on, incurred by or asserted against such Agent
Indemnitee in any way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by such Agent Indemnitee
under or in connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted from such Agent
Indemnitee’s gross negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder.




          8.8 Agent in Its Individual Capacity. Each Agent and its affiliates may make loans
to, accept deposits from and generally engage in any kind of business with any Loan Party as though
such Agent were not an Agent. With respect to its Loans made or renewed by it, each Agent shall
have the same rights and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.




          8.9 Successor Agents. The Administrative Agent or the Collateral Agent may resign as
Administrative Agent or Collateral Agent, as applicable, upon 10 days’ notice to the Lenders and
the Borrower. If either the Administrative Agent or the Collateral Agent shall resign in such
capacity under this Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent shall (unless an
Event of Default under










 



47

Section 7(a) or Section 7(f) with respect to the Borrower shall have
occurred and be continuing) be subject to approval by the Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights,
powers and duties of the Administrative Agent or the Collateral Agent as the case may be, and the
term “Administrative Agent” or “Collateral Agent” shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent’s or Collateral Agent’s rights,
powers and duties as Administrative Agent or Collateral Agent shall be terminated, without any
other or further act or deed on the part of such former Administrative Agent or Collateral Agent or
any of the parties to this Agreement or any holders of the Loans. If no successor agent has
accepted appointment as Administrative Agent or Collateral Agent, as applicable, by the date that
is 10 days following a retiring Administrative Agent’s or Collateral Agent’s notice of resignation,
the retiring Administrative Agent’s or Collateral Agent’s resignation shall nevertheless thereupon
become effective, and the Lenders shall assume and perform all of the duties of the Administrative
Agent or Collateral Agent, as applicable, hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above. After any retiring Administrative Agent’s
resignation as Administrative Agent or Collateral Agent’s resignation as Collateral Agent, the
provisions of this Section 8 and of Section 9.5 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent or Collateral Agent, as applicable,
under this Agreement and the other Loan Documents.




          8.10 Collateral Matters, Collateral Agent’s Duties. The Collateral Agent is authorized
on behalf of all the Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or the Security
Documents which may be necessary to perfect and maintain a perfected security interest in and Liens
upon the Collateral granted pursuant to the Loan Documents. Except for the safe
custody of any Collateral in its possession and the accounting for moneys actually received by
it hereunder or under any of the other Loan Documents, the Collateral Agent shall have no duty as
to any Collateral, as to ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, traders or other matters relative to any Collateral, whether or not the
Collateral Agent is deemed to have knowledge of such matters, or as to taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to any Collateral
(including the filing of UCC Financing or Continuation Statements). The Collateral Agent shall be
deemed to have exercised appropriate and due care in the custody and preservation of any Collateral
in its possession if such Collateral is accorded treatment substantially equal to that which other
collateral agents accord similar property. In addition, each of the Lenders and the Administrative
Agent irrevocably appoints the Collateral Agent to act as “Term Collateral Agent” under the
Intercreditor Agreement and authorizes the Collateral Agent, acting as “Term Collateral Agent”, to
execute the Intercreditor Agreement and each of the Lenders and the Administrative Agent agrees to
be bound by the terms thereof. Each Lender agrees that any action taken by the Collateral Agent or
the Required Lenders in accordance with the terms of this Agreement, the Intercreditor Agreement or
the other Loan Documents, and the exercise by the Collateral Agent or the Required Lenders of their
respective powers set forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.




          8.11 Execution of Credit Documents. The Lenders hereby empower and authorize each
Agent, on behalf of the Lenders, to execute and deliver to the Loan Parties the other Loan
Documents, the Intercreditor Agreement and all related agreements, certificates, documents, or
instruments as shall be necessary or appropriate to effect the purposes of the Credit Documents.
Each Lender agrees that any action taken by any Agent or the Required Lenders in accordance with
the terms of this Agreement, the Intercreditor Agreement or the other Loan Documents, and the
exercise by any Agent or the Required Lenders of their respective powers set forth therein or
herein, together with such other powers that are reasonably incidental thereto, shall he binding
upon all of the Lenders.










 



48


SECTION 9. MISCELLANEOUS




          9.1 Amendments and Waivers. Neither this Agreement, any other Loan Document, nor any
terms hereof or thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section 9.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be,
may specify in such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification shall (i)
forgive the principal amount or extend the final scheduled date of maturity of any Loan, extend the
scheduled date of any amortization payment in respect of any Loan, reduce the stated rate of any
interest or fee payable hereunder (except (x) in connection with the waiver of applicability of any
post-default increase in interest rates (which waiver shall be effective with the consent of the
Required Lenders) and (y) that any amendment or modification of defined terms used in the financial
covenants in this Agreement shall not constitute a reduction in the rate of interest or fees for
purposes of this clause (i)) or extend the scheduled date of any payment thereof, or increase the
amount or extend the expiration date of
any Lender’s Commitment, in each case without the written consent of each Lender directly
affected thereby; (ii) eliminate or reduce the voting rights of any Lender under this Section 9.1
without the written consent of such Lender; (iii) reduce any percentage specified in the definition
of Required Lenders, consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents, release all or substantially all of
the Collateral or release all or substantially all of the Subsidiary Guarantors from their
obligations under the Guarantee and Collateral Agreement, in each case without the written consent
of all Lenders; or (iv) amend, modify or waive any provision of Section 8 or any other provision of
any Loan Document that affects the Administrative Agent or the Collateral Agent without the written
consent of the Administrative Agent or the Collateral Agent, as the case may be. Any such waiver
and any such amendment, supplement or modification shall apply equally to each of the Lenders and
shall be binding upon the Loan Parties, the Lenders, the Administrative Agent and the Collateral
Agent and all future holders of the Loans. In the case of any waiver, the Loan Parties, the
Lenders, the Administrative Agent and the Collateral Agent shall be restored to their former
position and rights hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to
any subsequent or other Default or Event of Default, or impair any right consequent thereon.




          Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with
the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add
one or more additional credit facilities to this Agreement and to permit the extensions of credit
from time to time outstanding thereunder and the accrued interest and fees in respect thereof to
share ratably in the benefits of this Agreement and the other Loan Documents with the Loans and the
accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders.




          9.2 Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered, or three Business
Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower, the Administrative Agent and the
Collateral Agent, and as set forth










 



49

in an administrative questionnaire delivered to the
Administrative Agent in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto:




	 	 	 
	 

	 	Superior Offshore International, L.L.C.
	          Borrower:

	 	900 S. College Road, Suite 301
	 

	 	Lafayette, Louisiana 70503
	 

	 	Attention: Jim Mermis
	 

	 	Copy to: Joshua Koch
	 

	 	                Roger Burks
	 

	 	Telecopy: 337-233-8870
	 

	 	Telephone: 337-233-5933
	 
	 	 
	          Administrative Agent:

	 	JPMorgan Chase Bank, N.A.
	 

	 	201 St. Charles Avenue
	 

	 	28th Floor
	 

	 	New Orleans LA 70170
	 

	 	Attention: Bill Richard
	 

	 	Telecopy: 504-623-8379
	 

	 	Telephone: 504-623-8300
	 
	 	 
	          Collateral Agent:

	 	Wilmington Trust Company
	 

	 	1100 North Market Street
	 

	 	Rodney Square North
	 

	 	Wilmington, DE 19890
	 

	 	Attention: James A. Hanley
	 

	 	                Senior Financial Services Officer
	 

	 	Telecopy: 302-636-4145
	 

	 	Telephone: 302-636-6453





provided that any notice, request or demand to or upon the Administrative Agent, the
Collateral Agent or the Lenders shall not be effective until received.




          Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative Agent;
provided that the foregoing shall not apply to notices pursuant to Section 2 unless
otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or communications.




          9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent, the Collateral Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.




          9.4 Survival of Representations and Warranties. All representations and warranties
made hereunder, in the other Loan Documents and in any document, certificate or statement delivered










 



50

pursuant hereto or in connection herewith shall survive the execution and delivery of this
Agreement and the making of the Loans and other extensions of credit hereunder.




          9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse each
Agent for all its costs and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and thereby, including the
reasonable fees and disbursements of counsel to the Administrative Agent and the Collateral Agent
and filing and recording fees and expenses, with statements with respect to the foregoing to be
submitted to the Borrower prior to the Closing Date (in the case of amounts to be paid on the
Closing Date) and from time to time thereafter on a monthly basis or such other periodic basis as
such Agent shall deem appropriate, (b) to pay or reimburse each Lender and each Agent for all its
costs and expenses incurred in connection with the enforcement or preservation of
any rights under this Agreement, the other Loan Documents and any such other documents,
including the fees and disbursements of counsel (including the allocated fees and expenses of
in-house counsel) to each Lender and of counsel to the Administrative Agent and the Collateral
Agent, (c) to pay, indemnify, and hold each Lender and each Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or resulting from any delay
in paying, stamp, excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of, or any waiver or
consent under or in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and each Agent and their respective
Related Parties (each, an “Indemnitee”) harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan Documents and any
such other documents and instruments referred to therein, including any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of any Group Member or any of the Properties and the
reasonable fees and expenses of legal counsel in connection with claims, actions or proceedings by
any Indemnitee against any Loan Party under any Loan Document (all the foregoing in this clause
(d), collectively, the “Indemnified Liabilities”), provided, that the Borrower
shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful misconduct of such
Indemnitee. Without limiting the foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due under this Section
9.5 shall be payable not later than 10 days after written deman
d therefor. Statements payable by
the Borrower pursuant to this Section 9.5 shall be submitted to Roger Burks, Superior Offshore
International, L.L.C., 900 S. College Road, Suite 301, Lafayette, LA 70503 (Telephone No.
337-233-5933) (Telecopy No. 337-233-8870), at the address of the Borrower set forth in Section 9.2,
or to such other Person or address as may be hereafter designated by the Borrower in a written
notice to the Administrative Agent. The agreements in this Section 9.5 shall survive repayment of
the Loans and all other amounts payable hereunder.




          9.6 Successors and Assigns; Participations and Assignments. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that (i) the Borrower may not assign or
otherwise transfer










 



51

any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section.




          (b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign
to one or more assignees (each, an “Assignee”) all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments and the Loans at
the time owing to it) with the prior written consent of:





     (A) the Borrower (such consent not to be unreasonably withheld), provided that
no consent of the Borrower shall be required for an assignment to a Lender, an affiliate of
a Lender,
an Approved Fund (as defined below) or, if an Event of Default under Section 7(a) or
(f) has occurred and is continuing, any other Person; and




     (B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of all or any portion of a Term Loan to a Lender,
an affiliate of a Lender or an Approved Fund.




     (ii) Assignments shall be subject to the following additional conditions:




     (A) except in the case of an assignment to a Lender, an affiliate of a Lender or an
Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s
Commitments or Loans, the amount of the Commitments or Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent) shall not be less than
$1,000,000 unless each of the Borrower and the Administrative Agent otherwise consent,
provided that (1) no such consent of the Borrower shall be required if an Event of
Default has occurred and is continuing and (2) such amounts shall be aggregated in respect
of each Lender and its affiliates or Approved Funds, if any;




     (B) (1) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500
and (2) the assigning Lender shall have paid in full any amounts owing by it to the
Administrative Agent; and




     (C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an administrative questionnaire in which the Assignee designates one or more credit
contacts to whom all syndicate-level information (which may contain material non-public
information about the Borrower and its Affiliates and their related parties or their
respective securities) will be made available and who may receive such information in
accordance with the assignee’s compliance procedures and applicable laws, including Federal
and state securities laws.



          For the purposes of this Section 9.6, “Approved Fund” means any Person (other than a
natural person) that is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an affiliate of a Lender or (c) an entity or an affiliate of an entity
that administers or manages a Lender.




          (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from
and after the effective date specified in each Assignment and Assumption the Assignee
thereunder










 



52

shall be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.13, 2.14, 2.15 and 9.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.6 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.




          (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a
register for
the recordation of the names and addresses of the Lenders, and the Commitments of, and
principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”). The entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.




          (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an Assignee, the Assignee’s completed administrative questionnaire (unless the Assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption and record the
information contained therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in this paragraph.




          (c)(i) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell
participations to one or more banks or other entities (a “Participant”) in all or a portion
of such Lender’s rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Borrower, the Administrative
Agent and the Lenders shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement. Any agreement pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such agreement may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to the second sentence
of Section 9.1 and (2) directly affects such Participant. Subject to paragraph (c)(ii) of this
Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections
2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.7(b) as though it were a Lender,
provided such Participant shall be subject to Section 9.7(a) as though it were a Lender.




          (ii) A Participant shall not be entitled to receive any greater payment under Section 2.13 or
2.14 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is
made with the Borrower’s prior written consent. Any Participant that is a Non-U.S. Lender shall
not be entitled to the benefits of Section 2.14 unless such Participant complies with Section
2.14(d).










 



53


          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or Assignee for such Lender as a party hereto.




          (e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue
Notes to any Lender requiring Notes to facilitate transactions of the type described in paragraph
(d) above.




          (f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of the Loans it
may have funded hereunder to its designating Lender without the consent of the Borrower or the
Administrative Agent and without regard to the limitations set forth in Section 9.6(b). Each of
the Borrower, each Lender and the Administrative Agent hereby confirms that it will not institute
against a Conduit Lender or join any other Person in instituting against a Conduit Lender any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any state
bankruptcy or similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however, that each
Lender designating any Conduit Lender hereby agrees to indemnify, save and hold harmless each other
party hereto for any loss, cost, damage or expense arising out of its inability to institute such a
proceeding against such Conduit Lender during such period of forbearance.




          9.7 Adjustments; Set-off. (a) Except to the extent that this Agreement, any other
Loan Document or a court order expressly provides for payments to be allocated to a particular
Lender, if any Lender (a “Benefitted Lender”) shall receive any payment of all or part of
the Obligations owing to it (other than in connection with an assignment made pursuant to Section
9.6), or receive any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in Section 7(f), or
otherwise), in a greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such portion of the
Obligations owing to each such other Lender, or shall provide such other Lenders with the benefits
of any such collateral, as shall be necessary to cause such Benefitted Lender to share the excess
payment or benefits of such collateral ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.




          (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall
have the right, without prior notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any Obligations becoming due and payable
by the Borrower (whether at the stated maturity, by acceleration or otherwise), to apply to the
payment of such Obligations, by setoff or otherwise, any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits, indebtedness or claims,
in any currency, in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender, any affiliate thereof or any of their
respective branches or agencies to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and
application made by such Lender, provided that the failure to give such notice shall not
affect the validity of such setoff and application.










 



54


          9.8 Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of an executed signature page
of this Agreement by facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be
lodged with the Borrower and the Administrative Agent.




          9.9 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.




          9.10 Integration. This Agreement and the other Loan Documents represent the entire
agreement of the Borrower, the Administrative Agent, the Collateral Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Collateral Agent or any Lender
relative to the subject matter hereof not expressly set forth or referred to herein or in the other
Loan Documents. Notwithstanding anything to the contrary herein, in the case of any inconsistency
between this Agreement and the Intercreditor Agreement, the Intercreditor Agreement shall govern.




          9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.




          9.12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and
unconditionally:





     (a) submits for itself and its property in any legal action or proceeding relating to
this Agreement and the other Loan Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of
the courts of the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;




     (b) consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;




     (c) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to the Borrower, as the case may be at its address set forth in
Section 9.2 or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;




     (d) agrees that nothing herein shall affect the right to effect service of process in
any other manner permitted by law or shall limit the right to sue in any other jurisdiction;
and




     (e) waives, to the maximum extent not prohibited by law, any right it may have to claim
or recover in any legal action or proceeding referred to in this Section any special,
exemplary, punitive or consequential damages.









 



55



     9.13 Acknowledgements. The Borrower hereby acknowledges that:




     (a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents;




     (b) neither the Administrative Agent, the Collateral Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between the
Administrative Agent, the Collateral Agent and the Lenders, on one hand, and the Borrower,
on the other hand, in connection herewith or therewith is solely that of debtor and
creditor; and




     (c) no joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or between the
Borrower and the Lenders.



          9.14 Releases of Guarantees and Liens. (a) Notwithstanding anything to the contrary
contained herein or in any other Loan Document, the Administrative Agent and the Collateral Agent
are hereby irrevocably authorized by each Lender (without requirement of notice to or consent of
any Lender except as expressly required by Section 9.1) to take any action requested by the
Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the extent
necessary to permit consummation of any transaction not prohibited by any Loan Document or that has
been consented to in accordance with Section 9.1 (which shall be confirmed in writing to the
Collateral Agent by the Administrative Agent, and the Collateral Agent shall be entitled to
conclusively rely on) or (ii) under the circumstances described in paragraph (b) below.




          (b) At such time as the Loans and the other obligations under the Loan Documents shall have
been paid in full, the Commitments have been terminated, the Collateral shall be released from the
Liens created by the Security Documents, any remaining portion of the Escrowed Amount shall be
released, and the Security Documents and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent, the Collateral Agent and each Loan Party
under the Security Documents shall terminate, all without delivery of any instrument or performance
of any act by any Person.




          9.15 Confidentiality. Each of the Administrative Agent, the Collateral Agent and each
Lender agrees to keep confidential all non-public information provided to it by any Loan Party, the
Administrative Agent or any Lender pursuant to or in connection with this Agreement that is
designated by the provider thereof as confidential; provided that nothing herein shall
prevent the Administrative Agent, the Collateral Agent or any Lender from disclosing any such
information (a) to the Administrative Agent, any other Lender or any affiliate thereof, (b) subject
to an agreement to comply with the provisions of this Section, to any actual or prospective
Transferee or any direct or indirect counterparty to any Swap Agreement (or any professional
advisor to such counterparty), (c) to its employees, directors, agents, attorneys, accountants and
other professional advisors or those of any of its affiliates, (d) upon the request or demand of
any Governmental Authority, (e) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law, (f) if requested or
required to do so in connection with any litigation or similar proceeding, (g) that has been
publicly disclosed, (h) to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to information about a
Lender’s investment portfolio in connection with ratings issued with respect to such Lender, or (i)
in connection with the exercise of any remedy hereunder or under any other Loan Document.










 



56


          Each Lender acknowledges that information furnished to it pursuant to this Agreement or the
other Loan Documents may include material non-public information concerning the Borrower and its
Affiliates and their related parties or their respective securities, and confirms that it has
developed compliance procedures regarding the use of material non-public information and that it
will handle such material non-public information in accordance with those procedures and applicable
law, including Federal and state securities laws.




          All information, including requests for waivers and amendments, furnished by the Borrower or
the Administrative Agent pursuant to, or in the course of administering, this Agreement or the
other Loan Documents will be syndicate-level information, which may contain material non-public
information about the Borrower and its Affiliates and their related parties or their respective
securities. Accordingly, each Lender represents to the Borrower and the Administrative Agent that
it has identified in its administrative questionnaire a credit contact who may receive information
that may contain material non-public information in accordance with its compliance procedures and
applicable law, including Federal and state securities laws.




          9.16
WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.










 





          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year first above written.




	 	 	 	 	 
	 	SUPERIOR OFFSHORE INTERNATIONAL, L.L.C.

 	 
	 	By:  	/s/ Roger D. Burks
 	 
	 	 	Name:  	Roger D. Burks 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as Administrative Agent

and as a Lender

 	 
	 	By:  	/s/ William C. Richard 	 
	 	 	Name:  	William C. Richard 	 
	 	 	Title:  	Senior Vice President 	 
	 



	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, as Collateral Agent

 	 
	 	By:  	/s/ James A. Hanley 	 
	 	 	Name:  	James A. Hanley 	 
	 	 	Title:  	Assistant Vice President 	 






Signature
Page to Term Loan Credit Agreement