exv10w1



 







Exhibit 10.1




AMENDED AND RESTATED CREDIT AGREEMENT




By and Among




SESI, L.L.C.

(as Borrower),




SUPERIOR ENERGY SERVICES, INC.

(as Parent),




JPMORGAN CHASE BANK, N.A.,

Successor by Merger with Bank One, NA

(as Agent),




WELLS FARGO BANK, N.A.

Successor by Merger with Wells Fargo Bank Texas, N.A.

(as Syndication Agent)




WHITNEY NATIONAL BANK

(as Documentation Agent)




AND




THE LENDERS PARTY HERETO




 






As of October 31, 2005




 






JPMORGAN SECURITIES, INC.

(as Sole Lead Arranger and Sole Book Manager)





 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page No.
	 
	 	 	 	 	 	 
	ARTICLE I.     DEFINITIONS	 	 	2	 
	 
	 	 	 	 	 	 
	1.1.
	 	Definitions of Certain Terms Used Herein	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE II.     THE CREDITS	 	 	5	 
	 
	 	 	 	 	 	 
	2.1.
	 	Revolving Loans; Swing Line Loan	 	 	5	 
	2.2.
	 	Letters of Credit	 	 	5	 
	2.3.
	 	Types of Advances	 	 	5	 
	2.4.
	 	Commitment Fee; Reductions in Aggregate Revolving Loan Commitment	 	 	5	 
	2.5.
	 	Minimum Amount of Each Advance	 	 	5	 
	2.6.
	 	Prepayments	 	 	5	 
	2.7.
	 	Method of Selecting Types and Eurodollar Interest Periods for New Advances	 	 	5	 
	2.8.
	 	Conversion and Continuation of Outstanding Advances	 	 	5	 
	2.9.
	 	Changes in Interest Rate, etc.	 	 	5	 
	2.10.
	 	Rates Applicable After Default	 	 	5	 
	2.11.
	 	Method of Payment	 	 	5	 
	2.12.
	 	Noteless Agreement; Evidence of Obligations	 	 	5	 
	2.13.
	 	Telephonic Notices	 	 	5	 
	2.14.
	 	Interest Payment Dates; Interest and Fee Basis	 	 	5	 
	2.15.
	 	Notification of Advances, Interest Rates, Prepayments and Commitment Reductions	 	 	5	 
	2.16.
	 	Lending Installations	 	 	5	 
	2.17.
	 	Non-Receipt of Funds by the Agent	 	 	5	 
	2.18.
	 	Collateral	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE III.     YIELD PROTECTION; TAXES	 	 	5	 
	 
	 	 	 	 	 	 
	3.1.
	 	Yield Protection	 	 	5	 
	3.2.
	 	Changes in Capital Adequacy Regulations	 	 	5	 
	3.3.
	 	Availability of Types of Advances	 	 	5	 
	3.4.
	 	Funding Indemnification	 	 	5	 
	3.5.
	 	Taxes	 	 	5	 
	3.6.
	 	Lender Statements; Survival of Indemnity	 	 	5	 
	3.7.
	 	Replacement of Lender	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE IV.     CONDITIONS PRECEDENT	 	 	5	 
	 
	 	 	 	 	 	 
	4.1.
	 	Initial Advance	 	 	5	 
	4.2.
	 	Each Advance	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE V.     REPRESENTATIONS AND WARRANTIES	 	 	5	 
	 
	 	 	 	 	 	 
	5.1.
	 	Existence and Standing	 	 	5	 
	5.2.
	 	Authorization and Validity	 	 	5	 
	5.3.
	 	No Conflict; Government Consent	 	 	5	 
	5.4.
	 	Financial Statements	 	 	5	 
	5.5.
	 	Material Adverse Change	 	 	5	 
	5.6.
	 	Taxes	 	 	5	 
	5.7.
	 	Litigation and Contingent Obligations	 	 	5	 
	5.8.
	 	Subsidiaries	 	 	5	 
	5.9.
	 	ERISA	 	 	5	 
	5.10.
	 	Accuracy of Information	 	 	5	 
	5.11.
	 	Material Agreements	 	 	5	 
	5.12.
	 	Compliance With Laws	 	 	5	 






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	 	 	 	 	Page No.
	5.13.
	 	Ownership of Properties	 	 	5	 
	5.14.
	 	Environmental Matters	 	 	5	 
	5.15.
	 	Investment Company Act	 	 	5	 
	5.16.
	 	Public Utility Holding Company Act	 	 	5	 
	5.17.
	 	Solvency	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE VI.     COVENANTS	 	 	5	 
	 
	 	 	 	 	 	 
	6.1.
	 	Financial Reporting	 	 	5	 
	6.2.
	 	Use of Proceeds	 	 	5	 
	6.3.
	 	Notice of Default	 	 	5	 
	6.4.
	 	Conduct of Business	 	 	5	 
	6.5.
	 	Taxes	 	 	5	 
	6.6.
	 	Insurance	 	 	5	 
	6.7.
	 	Compliance with Laws; Environmental Matters	 	 	5	 
	6.8.
	 	Maintenance of Properties	 	 	5	 
	6.9.
	 	Inspection	 	 	5	 
	6.10.
	 	Restricted Payments	 	 	5	 
	6.11.
	 	Funded Indebtedness	 	 	5	 
	6.12.
	 	Merger	 	 	5	 
	6.13.
	 	Sale of Assets	 	 	5	 
	6.14.
	 	Liens	 	 	5	 
	6.15.
	 	Acquisitions	 	 	5	 
	6.16.
	 	Transactions with Affiliates	 	 	5	 
	6.17.
	 	Appraisals	 	 	5	 
	6.18.
	 	Financial Covenants	 	 	5	 
	6.19.
	 	Plug and Abandonment Liabilities	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE VII.     DEFAULTS	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE VIII.     ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES	 	 	5	 
	 
	 	 	 	 	 	 
	8.1.
	 	Acceleration	 	 	5	 
	8.2.
	 	Amendments	 	 	5	 
	8.3.
	 	Preservation of Rights	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE IX.     GENERAL PROVISIONS	 	 	5	 
	 
	 	 	 	 	 	 
	9.1.
	 	Survival of Representations	 	 	5	 
	9.2.
	 	Governmental Regulation.	 	 	5	 
	9.3.
	 	Headings	 	 	5	 
	9.4.
	 	Entire Agreement	 	 	5	 
	9.5.
	 	Several Obligations; Benefits of this Agreement	 	 	5	 
	9.6.
	 	Expenses; Indemnification	 	 	5	 
	9.7.
	 	Numbers of Documents	 	 	5	 
	9.8.
	 	Accounting	 	 	5	 
	9.9.
	 	Severability of Provisions	 	 	5	 
	9.10.
	 	Nonliability of Lenders	 	 	5	 
	9.11.
	 	Confidentiality	 	 	5	 
	9.12.
	 	Nonreliance	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE X.     THE AGENT	 	 	5	 
	 
	 	 	 	 	 	 
	10.1.
	 	Appointment; Nature of Relationship	 	 	5	 
	10.2.
	 	Powers	 	 	5	 
	10.3.
	 	General Immunity	 	 	5	 
	10.4.
	 	No Responsibility for Loans, Recitals, etc	 	 	5	 
	10.5.
	 	Action on Instructions of Lenders	 	 	5	 
	10.6.
	 	Employment of Agents and Counsel	 	 	5	 
	10.7.
	 	Reliance on Documents; Counsel	 	 	5	 






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	 	 	 	 	Page No.
	10.8.
	 	Agent's Reimbursement and Indemnification	 	 	5	 
	10.9.
	 	Notice of Default	 	 	5	 
	10.10.
	 	Rights as a Lender	 	 	5	 
	10.11.
	 	Lender Credit Decision	 	 	5	 
	10.12.
	 	Successor Agent	 	 	5	 
	10.13.
	 	Agent's Fee; Arranger's Fee	 	 	5	 
	10.14.
	 	Delegation to Affiliates	 	 	5	 
	10.15.
	 	Execution of Collateral Documents	 	 	5	 
	10.16.
	 	Collateral Releases	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE XI.     SETOFF; RATABLE PAYMENTS	 	 	5	 
	 
	 	 	 	 	 	 
	11.1.
	 	Setoff	 	 	5	 
	11.2.
	 	Ratable Payments	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE XII.     BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS	 	 	5	 
	 
	 	 	 	 	 	 
	12.1.
	 	Successors and Assigns	 	 	5	 
	12.2.
	 	Participations	 	 	5	 
	12.3.
	 	Assignments	 	 	5	 
	12.4.
	 	Dissemination of Information	 	 	5	 
	12.5.
	 	Tax Treatment	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE XIII.     NOTICES	 	 	5	 
	 
	 	 	 	 	 	 
	13.1.
	 	Notices	 	 	5	 
	13.2.
	 	Change of Address	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE XIV     COUNTERPARTS	 	 	5	 
	 
	 	 	 	 	 	 
	14.1
	 	Counterparts	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE XV.     CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	 	 	5	 
	 
	 	 	 	 	 	 
	15.1.
	 	CHOICE OF LAW	 	 	5	 
	15.2.
	 	CONSENT TO JURISDICTION	 	 	5	 
	15.3.
	 	WAIVER OF JURY TRIAL	 	 	5	 






SCHEDULES AND EXHIBITS




SCHEDULE 1 (Commitment Amounts of the Lenders)




SCHEDULE 2 (Pricing Schedule)




SCHEDULE 3 (List of Borrower’s Subsidiaries)




EXHIBIT A (Compliance Certificate)

SCHEDULE 1 TO COMPLIANCE CERTIFICATE




EXHIBIT B (Assignment Agreement)

SCHEDULE 1 TO ASSIGNMENT AGREEMENT

ATTACHMENT TO SCHEDULE 1 TO ASSIGNMENT AGREEMENT






iii









 








AMENDED AND RESTATED CREDIT AGREEMENT




     THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 31, 2005, is among SESI,
L.L.C., as Borrower, SUPERIOR ENERGY SERVICES, INC., as Parent, JPMORGAN CHASE BANK, N.A.,
successor by merger with Bank One, NA, as Agent, WELLS FARGO BANK, N.A., successor by merger with
Wells Fargo Bank Texas, N.A., as Syndication Agent, WHITNEY NATIONAL BANK, as Documentation Agent,
and the lenders party hereto, who agree as follows:



RECITALS




     A.      Superior Energy Services, Inc., (the “Parent”), SESI, L.L.C. (“Borrower”), Agent,
Syndication Agent, Documentation Agent and the Lenders party thereto have executed an Amended and
Restated Credit Agreement dated as of August 14, 2003 providing for a Term Loan One in the original
principal amount of $35,000,000 (with a current principal balance of $24,500,000), a Term Loan Two
in the original principal amount of $32,000,000 (with a current principal balance of $14,000,000)
and a Revolving Loan in the aggregate principal amount of $75,000,000 (all of the foregoing, as
amended, the “2003 Credit Agreement”).



     B.      The Borrower has requested (i) a $75,000,000 increase in the aggregate principal amount of
the Revolving Loan from $75,000,000 to $150,000,000 (with an option to further increase the
principal amount of the Revolving Loan from $150,000,000 to up to $250,000,000); (ii) a refinancing
and repayment in full of Term Loan One and Term Loan Two with advances under the Revolving Loan;
and (iii) certain other modifications to the Credit Agreement. The Agent and the Lenders have
accepted such requests on the terms and conditions set forth below.



     C.      The parties hereto wish to reflect the foregoing transactions through an amendment and
restatement of the 2003 Credit Agreement.



     NOW, THEREFORE, in consideration of their mutual covenants and undertakings, the Borrower,
Parent, Agent, Syndication Agent, Documentation Agent and the Lender hereby amend and restate the
2003 Credit Agreement in full to read as follows:



 









 





ARTICLE I




DEFINITIONS




     1.1.      Definitions of Certain Terms Used Herein. As used in this Agreement, the
following terms shall have the following meanings:



     “Acquisition” means any transaction, or series of related transactions, consummated on or
after the date of this Agreement, by which the Borrower or any of its Subsidiaries (i) acquires any
going business concern or all or substantially all of the assets of any firm, corporation or
limited liability company or division thereof that is a going business concern, whether through
purchase of assets, merger or otherwise, or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting power for the
election of directors (other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the outstanding ownership interest of
a partnership or limited liability company; “Acquisition” shall not include the formation of a
Wholly-Owned Subsidiary of the Borrower or any Wholly-Owned Subsidiary of any Wholly-Owned
Subsidiary of the Borrower.



     “Additional Contingent Consideration” means consideration payable by the Borrower or its
Subsidiaries to sellers subsequent to the closing of an Acquisition that is dependent on the
performance of the acquired company following the Acquisition. Notwithstanding the foregoing
definition, the amount of Additional Contingent Consideration to be included for the purposes of
determining the financial covenants in Section 6.18, shall be the amount of Additional Contingent
Consideration (excluding any accrued interest) which through the date of determination of such
covenant and based on the performance of the acquired company through the date of determination of
such covenant, the Borrower reasonably anticipates paying to the sellers within the 12 months
following the date of determination.



     “Adjusted Leverage Ratio” is defined in Section 6.18.3.



     “Advance” means a borrowing hereunder, (i) made by the Lenders on the same Borrowing Date,
(ii) converted or continued by the Lenders on the same date of conversion or continuation,
consisting, in either case, of the aggregate amount of the several Loans of the same Type and, in
the case of Eurodollar Loans, for the same Eurodollar Interest Period, or (iii) made by the Agent
on the Swing Line Loan.



     “Affected Lender” is defined in Section 3.7.



     “Affiliate” of any Person means any other Person directly or indirectly controlling,
controlled by or under common control with such Person. A Person shall be deemed to control
another Person if the controlling Person owns 20% or more of any class of voting securities (or
other ownership interests) of the controlled Person or possesses, directly or indirectly, the power
to direct or cause the direction of the management or policies of the controlled Person, whether
through ownership of stock, by contract or otherwise.



2









 





     “Agent” means JPMorgan Chase Bank, N.A., in its capacity as contractual representative of the
Lenders pursuant to Article X, and not in its individual capacity as a Lender, and any successor
Agent appointed pursuant to Article X. “Agents” means the Agent, Wells Fargo Bank, N.A., as
Syndication Agent and Whitney National Bank, as Documentation Agent.



     “Aggregate Revolving Loan Commitment” means the aggregate of the Revolving Loan Commitments of
all the Lenders, as reduced from time to time pursuant to the terms hereof.



     “Agreement” means this amended and restated credit agreement, as it may be amended or modified
and in effect from time to time.



     “Alternate Base Rate” means, for any day, a rate of interest per annum equal to the higher of
(i) the Prime Rate for such day or (ii) the Federal Funds Effective Rate for such day plus 1/2% per
annum. “Prime Rate” means a rate per annum equal to the prime rate of interest announced from time
to time by JPMorgan Chase Bank, N.A. (which is not necessarily the lowest rate charged to any
customer), changing when and as said prime rate changes. “Federal Funds Effective Rate” means, for
any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published for such day (or, if such day is not a Business Day, for the immediately
preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations at approximately 10:00
a.m. (Chicago time) on such day on such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by the Agent in its sole discretion.



     “Applicable Fee Rate” means, at any time, the percentage rate per annum at which commitment
fees are accruing on the unused portion of the Aggregate Revolving Loan Commitment at such time as
set forth in the Pricing Schedule.



     “Applicable Letter of Credit Fee Rate” means, at any time, with respect to Letters of Credit,
the percentage rate per annum which is applicable at such time as set forth in the Pricing
Schedule.



     “Applicable Margin” means, with respect to Advances of any Type at any time, the percentage
rate per annum which is applicable at such time with respect to Advances of such Type as set forth
in the Pricing Schedule.



     “Arranger” means JPMorgan Securities, Inc. and its successors.



     “Article” means an article of this Agreement unless another document is specifically
referenced.



     “Assignment Agreement” means any assignment agreement in the form of Exhibit B,
executed and delivered pursuant to Section 12.3.



     “Authorized Officer” means any of the President, any Vice President, Chief Financial Officer
or Treasurer of the Borrower, acting singly.



3









 





     “Borrower” means SESI, L.L.C., a Delaware limited liability company, and its successors and
assigns.



     “Borrowing Date” means a date on which an Advance is made hereunder.



     “Borrowing Notice” is defined in Section 2.7.



     “Business Day” means (i) with respect to any borrowing, payment or rate selection of
Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks generally are open in
New Orleans for the conduct of substantially all of their commercial lending activities, interbank
wire transfers can be made on the Fedwire system and dealings in United States dollars are carried
on in the London interbank market and (ii) for all other purposes, a day (other than a Saturday or
Sunday) on which banks generally are open in New Orleans for the conduct of substantially all of
their commercial lending activities and interbank wire transfers can be made on the Fedwire system.



     “Capital Expenditures” means, without duplication, any expenditures for any purchase or other
acquisition of any asset which would be classified as a fixed or capital asset on a consolidated
balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP,
excluding (i) expenditures of insurance proceeds to rebuild or replace any asset after a
casualty loss, (ii) leasehold improvement expenditures for which the Borrower or a Subsidiary is
reimbursed promptly by the lessor, (iii) expenditures constituting consideration for Permitted
Acquisition, and (iv) oil and gas properties acquired by Borrower or a Subsidiary.



     “Capitalized Lease” of a Person means any lease of Property by such Person as lessee which
would be capitalized on a balance sheet of such Person prepared in accordance with GAAP.



     “Capitalized Lease Expenses” means, with reference to any period, the lease expenses of the
Borrower and its Subsidiaries with respect to Capitalized Leases calculated on a consolidated basis
for such period.



     “Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person
under Capitalized Leases which would be shown as a liability on a balance sheet of such Person
prepared in accordance with GAAP.



     “Change” is defined in Section 3.2.



     “Change in Control” means the acquisition, after the date hereof, by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934) of 35% or more of the
outstanding shares of voting stock of the Parent.



     “Closing Date” means the date upon which the conditions precedent to the initial Advance have
been satisfied or waived by the Lenders and the initial Revolving Loans are made under this
Agreement.



4









 





     “Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified
from time to time.



     “Collateral” shall mean all of the types of property described in Section 2.18, or as
otherwise described as such in any Collateral Documents.



     “Collateral Documents” means, collectively, all guaranties and all security agreements,
financing statements, mortgages, deeds of trust, assignments creating and perfecting security
interests, liens, or encumbrances in the assets of the Borrower and its Subsidiaries in favor of
the Agent, for the benefit of the Lenders to secure the Secured Obligations.



     “Commitment” means, for each Lender, collectively, such Lender’s Revolving Loan Commitment.



     “Compliance Certificate” means the certificate required from the Borrower from time to time in
the form of Exhibit A, signed by an Authorized Officer of the Borrower.



     “Conversion/Continuation Notice” is defined in Section 2.8.



     “Default” means an event described in Article VII.



     “Domestic Subsidiaries” means Subsidiaries of the Borrower incorporated or organized under the
laws of any state of the United States of America.



     “EBITDA” means Net Income plus, to the extent deducted in determining Net Income, (i) Interest
Expense, (ii) Income Taxes, (iii) depreciation expense, (iv) amortization expense, (v) other
non-cash charges, and (vi) extraordinary losses, minus, to the extent included in determining Net
Income, extraordinary gains, all calculated for the Parent, Borrower and Borrower’s Subsidiaries on
a consolidated basis; provided, however, that following a Permitted Acquisition by the Borrower or
any of its Subsidiaries, calculation of EBITDA for the fiscal quarter in which such Permitted
Acquisition occurred and each of the three fiscal quarters immediately following such Permitted
Acquisition shall be made on a Pro Forma Basis.



     “Environmental Laws” means any and all federal, state, local and foreign statutes, laws,
judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions
relating to (i) the protection of the environment, (ii) the effect of the environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants, hazardous substances
or wastes into surface water, ground water or land, or (iv) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other remediation thereof.



     “Equity Issuance” means the issuance, sale or other disposition by the Parent of its capital
stock, any rights, warrants or options to purchase or acquire any shares of its capital stock or
any other security representing, convertible into or exchangeable for an equity interest in the
Parent.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and any rule or regulation issued thereunder.



5









 





     “Eurodollar Advance” means an Advance which, except as otherwise provided in Section 2.11,
bears interest at the applicable Eurodollar Rate.



     “Eurodollar Base Rate” means, with respect to a Eurodollar Advance for the relevant Eurodollar
Interest Period, the applicable British Bankers’ Association Interest Settlement Rate for deposits
in U.S. dollars as reported by any generally recognized information service as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Eurodollar Interest Period, and
having a maturity equal to such Eurodollar Interest Period, provided that, (i) if no such British
Bankers’ Association Interest Settlement Rate is available to the Agent, the applicable Eurodollar
Base Rate for the relevant Eurodollar Interest Period shall instead be the rate determined by the
Agent to be the rate at which JPMorgan Chase Bank, N.A. or one of its Affiliate banks offers to
place deposits in U.S. dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Eurodollar
Interest Period, in the approximate amount of JPMorgan Chase Bank, N.A.’s relevant Eurodollar Loan
and having a maturity equal to such Eurodollar Interest Period.



     “Eurodollar Interest Period” means, with respect to a Eurodollar Advance, a period of one,
two, three months or six months (or other period acceptable to all of the Lenders) commencing on a
Business Day selected by the Borrower pursuant to this Agreement. Such Eurodollar Interest Period
shall end on the day which corresponds numerically to such date one, two, three or six months (or
other period acceptable to all of the Lenders) thereafter, provided, however, that if there is no
such numerically corresponding day in such next, second or third succeeding month, such Eurodollar
Interest Period shall end on the last Business Day of such next, second or third succeeding month.
If an Eurodollar Interest Period would otherwise end on a day which is not a Business Day, such
Eurodollar Interest Period shall end on the next succeeding Business Day, provided, however, that
if said next succeeding Business Day falls in a new calendar month, such Eurodollar Interest Period
shall end on the immediately preceding Business Day. Notwithstanding the foregoing, from the
period from the Closing Date through the earlier of the completion of the syndication of the
Obligations or 90 days after the Closing Date, at the Agent’s option, the Eurodollar Interest
Period shall not exceed 14 days.



     “Eurodollar Loan” means a Loan which, except as otherwise provided in Section 2.10, bears
interest at the applicable Eurodollar Rate.



     “Eurodollar Rate” means, with respect to a Eurodollar Advance for the relevant Eurodollar
Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable to such
Eurodollar Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a
decimal) applicable to such Eurodollar Interest Period, plus (ii) the Applicable Margin.



     “Excluded Taxes” means, in the case of each Lender or applicable Lending Installation and the
Agent, taxes imposed on its overall net income, and franchise taxes imposed on it, by (i) the
jurisdiction under the laws of which such Lender or the Agent is incorporated or organized or (ii)
the jurisdiction in which the Agent’s or such Lender’s principal executive office or such Lender’s
applicable Lending Installation is located.



     “Exhibit” refers to an exhibit to this Agreement, unless another document is specifically
referenced.



6









 





     “Floating Rate” means, for any day, a rate per annum equal to (i) the Alternate Base Rate for
such day plus (ii) the Applicable Margin, in each case changing when and as the Alternate Base Rate
changes.



     “Floating Rate Advance” means an Advance which, except as otherwise provided in Section 2.10,
bears interest at the Floating Rate.



     “Floating Rate Loan” means a Loan which, except as otherwise provided in Section 2.10, bears
interest at the Floating Rate.



     “Funded Indebtedness” of a Person means, without duplication, such Person’s (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such Person’s business
payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by
Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired
by such Person, (iv) obligations which are evidenced by notes, bonds, debentures, acceptances, or
other instruments, (v) obligations to purchase securities or other Property arising out of or in
connection with the sale of the same or substantially similar securities or Property, (vi)
Capitalized Lease Obligations, (vii) any other obligation for borrowed money or other financial
accommodation which in accordance with GAAP would be shown as a liability on the consolidated
balance sheet of such Person; and (viii) all reimbursement obligations relating to letters of
credit, bankers’ acceptances and similar instruments (but excluding performance bonds).



     “GAAP” means generally accepted accounting principles as in effect from time to time in the
United States of America, applied in a manner consistent with that used in preparing the financial
statements referred to in Section 5.4.



     “Income Taxes” means, with reference to any period, all federal, state and local income taxes
paid or provided for (accrued) by the Parent, Borrower and Borrower’s Subsidiaries, calculated on a
consolidated basis for such period.



     “Interest Expense” means, with reference to any period, the interest expense of the Parent,
Borrower and Borrower’s Subsidiaries calculated on a consolidated basis for such period, and, in
the case of a Permitted Acquisition, imputed interest determined as set forth in the definition of
Pro Forma Basis.



     “Issuing Lender” is defined in Section 2.2.1.



     “Lenders” means the lending institutions listed on Schedule 1 hereto (as amended or
replaced from time to time) and their respective successors and assigns. Unless otherwise
specified herein, the term “Lenders” includes the Agent in its capacity as a lender.



     “Lending Installation” means, with respect to a Lender or the Agent, the office, branch,
subsidiary or affiliate of such Lender or the Agent listed on Schedule 1 hereto (or any
superseding Schedule 1) or otherwise selected by such Lender or the Agent pursuant to Section 2.16.



7









 





     “Letter of Credit” of a Person means a letter of credit or similar instrument which is issued
by a Lender upon the application of the Borrower or any of its Subsidiaries as set forth in Section
2.2.



     “Leverage Ratio” is defined in Section 6.18.2.



     “Lien” means any lien (statutory or other), mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).



     “Loan” means, with respect to a Lender, such Lender’s loan (including the Swing Line Loan)
made pursuant to Article II (or any conversion or continuation thereof), and all Revolving Loans,
whether made or continued as or converted to Floating Rate Loans or Eurodollar Loans.



     “Loan Documents” means this Agreement, any Notes issued pursuant to Section 2.12 and the
Collateral Documents.



     “Material Adverse Effect” means a material adverse effect on (i) the business, Property,
condition (financial or otherwise), results of operations, or prospects of the Parent, Borrower and
Borrower’s Subsidiaries taken as a whole, (ii) the ability of the Parent or Borrower to perform its
obligations under the Loan Documents or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent or the Lenders thereunder.



     “Material Indebtedness” is defined in Section 7.5.



     “Moody’s” means Moody’s Investors Service, Inc.



     “Net Equity Proceeds” means the aggregate cash proceeds received by the Parent in respect of
any Equity Issuance, net of (without duplication) the direct costs relating to such Equity Issuance
(including without limitation, legal, accounting and investment banking fees and underwriting
discounts and commissions).



     “Net Income” means, with reference to any period, the net income (or loss) of the Parent,
Borrower and Borrower’s Subsidiaries calculated on a consolidated basis for such period.



     “Net Worth” means, as of any time, total stockholders’ equity of the Parent, Borrower and
Borrower’s Subsidiaries calculated on a consolidated basis as of such time.



     “Non-U.S. Lender” is defined in Section 3.5(iv).



     “Note” means any Revolving Note or the Swing Line Note.



     “Obligations” means all obligations of the Borrower to the Lenders, from time to time, arising
under the Loan Documents, including without limitation, all unpaid principal of and accrued and
unpaid interest on the Loans, all commercial and standby letters of credit and bankers acceptances,
issued by any Lender, all accrued and unpaid fees and all expenses,



8









 







reimbursements, indemnities and other obligations of the Borrower to the Lenders or to any
Lender, the Agent or any indemnified party arising under the Loan Documents.



     “Operating Lease” of a Person means any lease of Property (other than a Capitalized Lease) by
such Person as lessee which has an original term (including any required renewals and any renewals
effective at the option of the lessor) of one year or more.



     “Other Taxes” is defined in Section 3.5(ii).



     “Participants” is defined in Section 12.2.1.



     “Parent” means Superior Energy Services, Inc., a Delaware corporation and the sole member of
the Borrower.



     “Payment Date” means the last day of each month.



     “PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.



     “Permitted Acquisition” means an Acquisition permitted by the terms of Section 6.15, or
otherwise consented to by the Agent and the Required Lenders.



     “Permitted Liens” is defined in Section 6.14.



     “Person” means any natural person, corporation, firm, joint venture, partnership, limited
liability company, association, enterprise, trust or other entity or organization, or any
government or political subdivision or any agency, department or instrumentality thereof.



     “Plan” means an employee pension benefit plan which is covered by Title IV of ERISA or subject
to the minimum funding standards under Section 412 of the Code as to which the Borrower may have
any liability.



     “Pricing Schedule” is the pricing schedule set forth on Schedule 2.



     “Pro Forma Basis” means, following a Permitted Acquisition, the calculation of the Funded
Indebtedness and EBITDA components of the Leverage Ratio and fixed charge coverage ratio for the
fiscal quarter in which such Permitted Acquisition occurred and each of the three fiscal quarters
immediately following such Permitted Acquisition with reference to the audited historical financial
results of the Person, business, division or group of assets acquired in such Permitted Acquisition
(or if such audited historical financial results are not available, such management prepared
financial statements as are acceptable to the Agent) and the Borrower and its Subsidiaries for the
applicable test period after giving effect on a pro forma basis to such Permitted Acquisition and
assuming that such Permitted Acquisition had been consummated at the beginning of such test period.
For purposes of calculating the EBITDA on a Pro Forma Basis, (i) the Borrower may exclude expenses
reasonably believed by the Borrower will be saved as a result of the Acquisition, but only to the
extent approved by the Agent in writing, and (ii) the Borrower shall include in such calculation,
as imputed interest expense, interest on the cash paid by the Borrower to the sellers in connection
with the Permitted Acquisition, during such test



9









 







period at the Eurodollar Rate (assuming a 3-month Eurodollar Interest Period) as of the last
day of such test period.



     “Pro Rata Share” means, with respect to any Lender making a Revolving Loan, at any time, the
percentage obtained by dividing (i) the Lender’s Revolving Loan Commitment at such time (in each
case, as adjusted from time to time in accordance with the provisions of this Agreement) by (ii)
the sum of the aggregate amount of the Aggregate Revolving Loan Commitment at such time, provided,
however, that if all of the Revolving Loan Commitments are terminated pursuant to the terms of this
Agreement, then “Pro Rata Share” means, with respect to any Lender at any time, the percentage
obtained by dividing (x) the Revolving Loans outstanding at such time (excluding the amounts
outstanding on the Swing Line Loan) by (y) the aggregate amount of Revolving Loans outstanding
hereunder at such time.



     “Property” of a Person means any and all property, whether real, personal, tangible,
intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.



     “Purchasers” is defined in Section 12.3.1.



     “Rate Management Transaction” means any transaction (including an agreement with respect
thereto) now existing or hereafter entered into between the Borrower and any Lender or Affiliate
thereof which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to any of these
transactions) or any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.



     “Rate Management Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions therefor), under
(i) any and all Rate Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.



     “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve requirements applicable to member
banks of the Federal Reserve System.



     “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor or other regulation or official interpretation of
said Board of Governors relating to the extension of credit by banks for the purpose of purchasing
or carrying margin stocks applicable to member banks of the Federal Reserve System.



     “Reportable Event” means a reportable event as defined in Section 4043 of ERISA and the
regulations issued under such section, with respect to a Plan, excluding, however, such events



10









 







as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that
it be notified within 30 days of the occurrence of such event, provided, however, that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice requirement in
accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.



     “Reports” is defined in Section 9.6.



     “Required Lenders” means Lenders whose Aggregate Pro Rata Shares, in the aggregate, are
greater than 50%, but in any event, at least two Lenders.



     “Reserve Requirement” means, with respect to an Eurodollar Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and other reserves)
which is imposed under Regulation D on Eurocurrency liabilities.



     “Revolving Loan” is defined in Section 2.1.1.



     “Revolving Loan Commitment” means, for each Lender, the obligation of such Lender to make
Revolving Loans not exceeding the amount set forth on Schedule 1 under the caption
“Revolving Loan Commitment” (as amended or replaced from time to time) or as set forth in any
Assignment Agreement relating to any assignment that has become effective pursuant to Section 12.3,
as such amount may be modified from time to time pursuant to the terms hereof.



     “Revolving Loan Termination Date” means October 31, 2008 or any earlier date upon which the
Aggregate Revolving Loan Commitment is reduced to zero or otherwise terminated pursuant to the
terms of Section 2.4.



     “Revolving Note” means any promissory note evidencing Revolving Loans issued at the request of
a Lender pursuant to Section 2.12.



     “Risk-Based Capital Guidelines” is defined in Section 3.2.



     “S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill Companies,
Inc.



     “Schedule” refers to a specific schedule to this Agreement, unless another document is
specifically referenced.



     “Section” means a numbered section of this Agreement, unless another document is specifically
referenced.



     “Secured Obligations” means, collectively, (i) the Obligations and (ii) all Rate Management
Obligations owing to one or more Lenders.



     “Subsidiary” means (i) any corporation, more than 50% of the outstanding securities having
ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by
the Borrower or by one or more of its Subsidiaries or by the Borrower and one or more of its
Subsidiaries, or (ii) any partnership, limited liability company, association, joint



11









 







venture or similar business organization, more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.



     “Substantial Portion” means, with respect to the Property of the Borrower and its
Subsidiaries, Property which (i) represents more than 10% of the consolidated assets of the
Borrower and its Subsidiaries as would be shown in the consolidated financial statements of the
Borrower and its Subsidiaries as at the beginning of the twelve-month period ending with the month
in which such determination is made, or (ii) is responsible for more than 10% of the consolidated
net sales or of the Net Income of the Borrower and its Subsidiaries as reflected in the financial
statements referred to in clause (i) above.



     “Swing Line Loan” is defined in Section 2.1.4.



     “Swing Line Note” means the promissory note evidencing the Swing Line Loan.



     “Taxes” means any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and any and all liabilities with respect to the foregoing, but excluding
Excluded Taxes.



     “Transferee” is defined in Section 12.4.



     “Type” means, with respect to any Advance, its nature as a Floating Rate Advance or a
Eurodollar Advance.



     “Unmatured Default” means an event which but for the lapse of time or the giving of notice, or
both, would constitute a Default.



     “Wholly-Owned Subsidiary” of a Person means (i) any Subsidiary all of the outstanding voting
securities of which shall at the time be owned or controlled, directly or indirectly, by such
Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.



     The foregoing definitions shall be equally applicable to both the singular and plural forms of
the defined terms.



12









 





ARTICLE II




THE CREDITS




     2.1.       Revolving Loans; Swing Line Loan.



     2.1.1.    Making the Revolving Loans. From and including the Closing Date and prior to
the Revolving Loan Termination Date, each Lender severally agrees, on the terms and conditions set
forth in this Agreement, to make revolving loans to the Borrower from time to time in amounts not
to exceed in the aggregate at any one time outstanding the amount of its Revolving Loan Commitment
(each individually a “Revolving Loan” and, collectively, the “Revolving Loans”). Subject to the
provisions of Section 2.1.3 below, the maximum aggregate amount of the Revolving Loan Commitments
shall be $150,000,000. Each Advance under this Section 2.1.1 shall consist of Revolving Loans made
by each Lender ratably in proportion to such Lender’s respective Pro Rata Share, it being
understood that no Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Revolving Loan hereunder nor shall the Revolving Loan Commitment of any
Lender be increased or decreased as a result of any such failure. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow Revolving Loans at any time prior to the
Revolving Loan Termination Date. The Revolving Loan Commitments of the Lenders shall expire on the
Revolving Loan Termination Date. On the Revolving Loan Termination Date, the Borrower shall repay
in full the outstanding principal balance of the Revolving Loans. To the extent that a Lender’s
Pro Rata Share as shown on Schedule 1 is different for such Lender’s Pro Rata Share under the 2003
Credit Agreement, such Lender hereby assigns or accepts the interests of the other Lenders’ Pro
Rata Shares in order to reflect such difference.



     2.1.2.    Foreign Currencies. At any time prior to the Revolving Loan Termination Date,
each Lender severally agrees, on terms and conditions to be set forth in an amendment to this
Agreement, to make revolving loans to the Borrower in one or more foreign currencies in amounts not
to exceed in the aggregate at any one time outstanding the equivalent amount of $50,000,000.
Following such request, the Borrower, Agent and Lenders shall negotiate an amendment to this
Agreement specifying (i) the applicable currency or currencies, (ii) setting forth the applicable
interest rates, maturity dates and repayment and prepayment terms, (iii) providing for the
calculation of all financial covenants and other monetary limitations in equivalent United States
Dollars, and (iv) setting forth such other provisions as the Agent and the Required Lenders shall
require.



     2.1.3    Increase of Revolving Loans. The Borrower and the Agent, without the consent of
any other Lenders, may increase the aggregate of the Revolving Loan Commitments up to the aggregate
amount of $250,000,000, by either or both of the following methods: (i) one or more existing
Lenders increases its Revolving Loan Commitment and/or (ii) one or more additional banks or other
entities issue Revolving Loan Commitments and become parties to and Lenders under this Agreement;
provided, that each of the Lenders shall have the first right to increase its Revolving
Loan Commitment in an amount equal to its Pro Rata Share of the total increase in the Revolving
Loan Commitments; and provided further that any new Lender shall be (A) a state or national
commercial bank located in the United States or (B) a bank organized under a jurisdiction other
than the United States, provided that such foreign bank has provided the Agent



13









 







and the Borrower with the tax forms prescribed in Section 6.5 hereof, and provided further
that such foreign bank shall not transfer its interests, rights or obligations under this Agreement
to any Affiliate of such foreign bank unless such Affiliate provides the Agent and the Borrower
with the aforesaid tax forms. No Lender shall be required to increase its Revolving Loan
Commitment. In the event of either or both of (i) and (ii) above, the Agent shall amend and
restate Schedule 1 hereto to reflect the revised Revolving Loan Commitments of all Lenders and
their adjusted Pro Rata Shares; the Agent shall promptly distribute the revised Schedule 1 to the
Borrower and to all Lenders. Any additional Lenders shall become a party to this Agreement by
delivering to the Agent an executed signature page of this Agreement. The Borrower shall execute
and deliver new Line of Credit Notes to existing Lenders for the increased amount of their
Revolving Loan Commitments and shall deliver new Line of Credit Notes to new Lenders for the amount
of their Revolving Loan Commitments.



     2.1.4.    Making the Swing Line Loan. From and including the Closing Date, and prior to
the Revolving Loan Termination Date, the Agent agrees, on the terms and conditions set forth in
this Agreement, to make a revolving loan to the Borrower from time to time in amounts not to exceed
in the aggregate at any one time outstanding $10,000,000 (the “Swing Line Loan”). Subject to the
terms of this Agreement, the Borrower may borrow, repay and reborrow amounts on the Swing Line Loan
at any time prior to the Revolving Loan Termination Date. The aggregate principal amount
outstanding on the Swing Line Loan shall constitute a portion of the Aggregate Revolving Loan
Commitments (thereby reducing the amounts available under the Aggregate Revolving Loan Commitments
for Revolving Loans and Letters of Credit on a dollar-for-dollar basis). The Swing Line Loan shall
bear interest at the Floating Rate. The Swing Line Loan shall be considered a part of the
Revolving Loans and any principal amounts outstanding on the Swing Line Loan for five (5) Business
Days shall be repaid through an Advance on the Revolving Loans, whether or not an Unmatured Default
or Default has occurred and is existing, except that the Borrower shall repay the Swing Line Loan
in whole or in part immediately upon demand by the Agent, and failure to do so shall constitute a
Default.



     2.2.      Letters of Credit.



     2.2.1    Issuance of Letters of Credit. From and including the Closing Date, the Agent
or, with the approval of the Borrower, any Lender (the “Issuing Lender”) shall issue one or more
Letters of Credit for the account of the Borrower or any of its Subsidiaries, pursuant to the
Issuing Lender’s standard form of application for letters of credit. The aggregate face amount of
all outstanding Letters of Credit (i) shall constitute a portion of the Aggregate Revolving Loan
Commitments (thereby reducing the Revolving Loan Commitments available for Revolving Loans on a
dollar-for-dollar basis), and (ii) shall not exceed $35,000,000. If the expiry date of a Letter of
Credit is initially after the Revolving Loan Termination Date, and if the Revolving Loan
Termination Date is not extended to a date after the expiry date of the Letter of Credit, then the
Borrower shall, not later than five Business Days prior to the Revolving Loan Termination Date,
either cause the Letter of Credit to be returned to the Issuing Lender, or secure the Letter of
Credit by delivering to the Issuing Lender, for the benefit of the Lenders, one of the following:
(i) cash in the face amount of the Letter of Credit which shall be held in pledge until the Letter
of Credit is paid or expires without being drawn upon; or (ii) a backup letter of credit issued by
a financial institution acceptable to the Agent and the Issuing Lender in their sole discretion,
for



14









 







the benefit of the Issuing Lender, in the face amount of the Letter of Credit and on terms
satisfactory to the Agent and the Issuing Lender.



     2.2.2    Risk Participation. Immediately upon the issuance of a Letter of Credit by the
Issuing Lender, each other Lender shall be deemed to have automatically, unconditionally and
irrevocably (except as provided for in Section 10.8) purchased from the Issuing Lender an undivided
interest and participation in such Letter of Credit, the obligations in respect thereof, and the
liability of the Issuing Lender, equal to the face amount of such Letter of Credit multiplied by
such Lender’s Pro Rata Share.



     2.2.3    Letter of Credit Fees. (a) The Borrower agrees to pay the Issuing Lender a
fronting fee in an amount agreed between the Borrower and the Issuing Lender (but not less than
0.125% per annum on the face amount of the Letter of Credit), payable quarterly in arrears on the
last day of each calendar quarter, for the term of the Letter of Credit, together with the Issuing
Lender’s customary letter of credit issuance and processing fees. The fronting fee and customary
letter of credit issuance and processing fees shall be retained by the Issuing Lender and shall not
be shared with the other Lenders;



     (b)      In addition, the Borrower agrees to pay the Agent a fee equal to the Applicable Letter of
Credit Fee Rate (on a per annum basis) shown on the Pricing Schedule times the aggregate face
amount of all outstanding Letters of Credit (as reduced from time to time), payable quarterly in
arrears on the last day of each calendar quarter, for the term of the Letter of Credit and shall be
shared by the Issuing Lender and the other Lenders on the basis of each Lender’s Pro Rata Share.



     2.2.4    Guaranty of Subsidiaries. The Borrower hereby absolutely and unconditionally
guarantees the prompt and punctual payment of all Obligations of all Subsidiaries to the Agent and
Lenders arising from the issuance of any Letters of Credit for the account of one or more
Subsidiaries.



     2.3.      Types of Advances. The Advances must be either Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in accordance with Sections
2.7 and 2.8.



     2.4.      Commitment Fee; Reductions in Aggregate Revolving Loan Commitment; Upfront Fee.
(a) The Borrower agrees to pay to the Agent, to be shared by the Lenders on the basis of each
Lender’s Pro Rata Share, a commitment fee at a per annum rate equal to the Applicable Fee Rate on
the daily unused portion of the Aggregate Revolving Loan Commitment from the date hereof to and
including the Revolving Loan Termination Date, payable quarterly in arrears on last day of each
calendar quarter hereafter and on the Revolving Loan Termination Date. For the purposes hereof,
“unused portion” shall mean the Aggregate Revolving Loan Commitment, minus the aggregate principal
amount outstanding on all Revolving Loans, minus the aggregate face amount of all outstanding
Letters of Credit. Swing Line Loans shall not count as usage of any Lender’s Revolving Loan
Commitment for purposes of calculating the commitment fee due hereunder.



15









 





     (b)      The Borrower may permanently reduce the Aggregate Revolving Loan Commitment in whole, or
in part ratably among the Lenders in integral multiples of $1,000,000, upon at least five Business
Days’ written notice to the Agent, which notice shall specify the amount of any such reduction,
provided, however, that the amount of the Aggregate Revolving Loan Commitment may not be reduced
below the aggregate principal amount of the outstanding Revolving Loans, the Swing Line Loan and
the aggregate face amount of all outstanding Letters of Credit. All accrued commitment fees shall
be payable on the effective date of any termination of the obligations of the Lenders to make
Revolving Loans hereunder.



     (c)      On the Closing Date, the Borrower shall pay the Agent, for the ratable benefit of the
Lenders, an upfront fee equal to 0.25% of the Aggregate Revolving Loan Commitment.



     2.5.      Minimum Amount of Each Advance. Each Eurodollar Advance shall be in the minimum
amount of $1,000,000 (and in multiples of $100,000 if in excess thereof), and each Floating Rate
Advance (other than an Advance to repay a Swing Line Loan) shall be in the minimum amount of
$200,000 (and in multiples of $100,000, if in excess thereof), provided, however, that any
Floating Rate Advance may be in the amount of the unused Aggregate Revolving Loan Commitment.



     2.6.      Prepayments.



     2.6.1.    Optional Prepayments. The Borrower may from time to time pay, without penalty
or premium, in a minimum aggregate amount of $1,000,000 or any integral multiple of $100,000 in
excess thereof, any portion of the outstanding Floating Rate Advances (or the full outstanding
balance of all Floating Rate Advances, if less than such minimum), upon one Business Days’ prior
notice to the Agent. The Borrower may from time to time pay, subject to the payment of any funding
indemnification amounts required by Section 3.4 but otherwise without penalty or premium, in a
minimum aggregate amount of $1,000,000 or any integral multiple of $100,000 in excess thereof, any
portion (or the full outstanding balance of all Eurodollar Advances, if less than such minimum) of
the outstanding Eurodollar Advances upon five Business Days’ prior notice to the Agent.



     2.7.      Method of Selecting Types and Eurodollar Interest Periods for New Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar Advance, the
Eurodollar Interest Period applicable thereto from time to time. The Borrower shall give the Agent
irrevocable notice (a “Borrowing Notice”) not later than 10:00 a.m. (New Orleans time) at least one
Business Day before the Borrowing Date of each Floating Rate Advance (other than a Swing Line Loan)
and three Business Days before the Borrowing Date for each Eurodollar Advance, specifying:




	 	(i)	 	the Borrowing Date, which shall be a Business Day, of such Advance;
	 
	 	(ii)	 	the aggregate amount of such Advance;
	 
	 	(iii)	 	the Type of Advance selected; and
	 
	 	(iv)	 	in the case of each Eurodollar Advance, the Eurodollar Interest Period
applicable thereto.





16









 




Not later than noon (Central time) on each Borrowing Date, each Lender shall make available its
Loan or Loans in funds immediately available in New Orleans to the Agent at its address specified
pursuant to Article XIII. The Agent will make the funds so received from the Lenders available to
the Borrower at the Agent’s aforesaid address.




     The Borrower shall not be entitled to more than six Eurodollar Rate tranches and one Floating
Rate tranche at any one time on the Revolving Loan.



     2.8.      Conversion and Continuation of Outstanding Advances. Floating Rate Advances
(other than Swing Line Loans) shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this Section 2.8 or are
repaid. Each Eurodollar Advance shall continue as a Eurodollar Advance until the end of the then
applicable Eurodollar Interest Period therefor, at which time such Eurodollar Advance shall be
automatically converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or was
repaid in accordance with Section 2.6 or (y) the Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of such Eurodollar
Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or another
Eurodollar Interest Period. Subject to the terms of Section 2.5, the Borrower may elect from time
to time to convert all or any part of a Floating Rate Advance into a Eurodollar Advance. The
Borrower shall give the Agent irrevocable notice (a “Conversion/Continuation Notice”) of each
conversion of a Floating Rate Advance into a Eurodollar Advance or continuation of a Eurodollar
Advance not later than 10:00 a.m. (New Orleans time) at least three Business Days prior to the date
of the requested conversion or continuation, specifying:




	 	(i)	 	the requested date, which shall be a Business Day, of such conversion or
continuation,
	 
	 	(ii)	 	the aggregate amount and Type of the Advance which is to be converted or
continued, and
	 
	 	(iii)	 	the amount of such Advance which is to be converted into or continued as a
Eurodollar Advance and the duration of the Eurodollar Interest Period applicable
thereto.





     2.9.      Changes in Interest Rate, etc.. Each Floating Rate Advance (other than a Swing
Line Loan) shall bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a Eurodollar Advance
into a Floating Rate Advance pursuant to Section 2.8, to but excluding the date it is paid or is
converted into a Eurodollar Advance pursuant to Section 2.8 hereof, at a rate per annum equal to
the Floating Rate for such day. Each Swing Line Loan shall bear interest on the outstanding
principal amount thereof, for each day from and including the day such Swing Line Loan is made but
excluding the date it is paid, at a rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained as a Floating Rate
Advance will take effect simultaneously with each change in the Alternate Base Rate. Each
Eurodollar Advance shall bear interest on the outstanding principal amount thereof from and
including the first day of the Eurodollar Interest Period applicable thereto to (but not



17









 







including) the last day of such Eurodollar Interest Period at the interest rate determined by
the Agent as applicable to such Eurodollar Advance based upon the Borrower’s selections under
Sections 2.7 and 2.8 and otherwise in accordance with the terms hereof. No Eurodollar Interest
Period with respect to any Revolving Loan may end after the Revolving Loan Termination Date. The
Borrower shall use commercially reasonable efforts to select Eurodollar Interest Periods so that it
is not necessary to repay any portion of a Eurodollar Advance prior to the last day of the
applicable Eurodollar Interest Period in order to make a mandatory repayment required by this
Agreement.



     2.10.     Rates Applicable After Default. Notwithstanding anything to the contrary
contained in Section 2.7 or 2.8, during the continuance of a Default or Unmatured Default the
Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 8.2 requiring unanimous
consent of the Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of a Default the
Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 8.2 requiring unanimous
consent of the Lenders to changes in interest rates), declare that (i) each Eurodollar Advance
shall bear interest for the remainder of the applicable Eurodollar Interest Period at the rate
otherwise applicable to such Eurodollar Interest Period plus 2% per annum and (ii) each Floating
Rate Advance shall bear interest at a rate per annum equal to the Floating Rate in effect from time
to time plus 2% per annum, provided that, during the continuance of a Default under Section 7.6 or
7.7, the interest rates set forth in clauses (i) and (ii) above shall be applicable to all Advances
without any election or action on the part of the Agent or any Lender.



     2.11.     Method of Payment. All payments of the Secured Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds to the Agent at
the Agent’s address specified pursuant to Article XIII, or at any other Lending Installation of the
Agent specified in writing by the Agent to the Borrower, by noon (Central time) on the date when
due and, shall (except with respect to repayment of the Swing Line Loan) be applied ratably by the
Agent among the Lenders. Each payment delivered to the Agent for the account of any Lender shall
be delivered promptly by the Agent to such Lender in the same type of funds that the Agent received
at its address specified pursuant to Article XIII or at any Lending Installation specified in a
notice received by the Agent from such Lender. The Agent is hereby authorized to charge the
account of the Borrower maintained with the Agent for each payment of principal, interest and bank
fees as they become due hereunder; all other fees due hereunder shall be paid by Borrower upon the
receipt of an invoice at Borrower’s address.



     2.12.     Noteless Agreement; Evidence of Obligations. (i) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the Obligations of the
Borrower to such Lender resulting from each Loan made by such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time to time hereunder.



     (ii)      The Agent shall also maintain accounts in which it will record (a) the amount of each
Loan made hereunder, the Type thereof and the Eurodollar Interest Period with respect thereto, (b)
the amount of any principal or interest due and payable or to become due and payable



18









 







from the Borrower to each Lender hereunder and (c) the amount of any sum received by the Agent
hereunder from the Borrower and each Lender’s share thereof.



     (iii)      The entries maintained in the accounts maintained pursuant to paragraphs (i) and (ii)
above shall be prima facie evidence of the existence and amounts of the Obligations therein
recorded; provided, however, that the failure of the Agent or any Lender to maintain such accounts
or any error therein shall not in any manner affect the obligation of the Borrower to repay the
Obligations in accordance with their terms.



     (iv)      Any Lender may request that its Revolving Loans, or the Agent may request that its Swing
Line Loan, be evidenced by a Note. In such event, the Borrower shall execute and deliver to such
Lender a Note for such Loans payable to the order of such Lender in a form supplied by the Agent
and acceptable to such Lender. Thereafter, the Loans evidenced by such Note and interest thereon
shall at all times (including after any assignment pursuant to Section 12.3) be represented by one
or more Notes payable to the order of the payee named therein or any assignee pursuant to Section
12.3, except to the extent that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced as described in paragraphs (i)
and (ii) above.



     2.13.     Telephonic Notices. The Borrower hereby authorizes the Lenders and the Agent to
extend, convert or continue Advances, effect selections of Types of Advances and to transfer funds
based on telephonic notices made by any person or persons the Agent or any Lender in good faith
believes to be acting on behalf of the Borrower, it being understood that the foregoing
authorization is specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent or any Lender, of each telephonic
notice signed by an Authorized Officer. If the written confirmation differs in any material
respect from the action taken by the Agent and the Lenders, the records of the Agent and the
Lenders shall govern absent manifest error.



     2.14.     Interest Payment Dates; Interest and Fee Basis. Interest accrued on each
Floating Rate Advance shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof and at maturity. Interest at the Floating Rate shall be calculated for
actual days elapsed on the basis of a 365-day (366-day in leap year) basis. Interest accrued on
each Eurodollar Advance shall be payable on the last day of its applicable Eurodollar Interest
Period (or if the applicable Eurodollar Interest Period is greater than three months, on the last
day of the third month of such Eurodollar Interest Period), on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity. Interest at the
Eurodollar Rate and commitment fees shall be calculated for actual days elapsed on the basis of a
360-day year. Interest shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time) at the place of
payment. If any payment of principal of or interest on an Advance shall become due on a day which
is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the
case of a principal payment, such extension of time shall be included in computing interest in
connection with such payment.



19









 





     2.15.      Notification of Advances, Interest Rates, Prepayments and Commitment Reductions.
Promptly after receipt thereof, the Agent will notify each Lender of the contents of each
Aggregate Revolving Loan Commitment reduction notice, Borrowing Notice, Conversion/Continuation
Notice, and repayment notice received by it hereunder. The Agent will notify each Lender of the
interest rate and Eurodollar Interest Period applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.



     2.16.      Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation from time to time.
All terms of this Agreement shall apply to any such Lending Installation and the Loans and any
Notes issued hereunder shall be deemed held by each Lender for the benefit of any such Lending
Installation. Each Lender may, by written notice to the Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through which Loans will be
made by it and for whose account Loan payments are to be made.



     2.17.      Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender, as the case
may be, notifies the Agent prior to the date on which it is scheduled to make payment to the Agent
of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a
payment of principal or interest to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been made. The Agent may,
but shall not be obligated to, make the amount of such payment available to the intended recipient
in reliance upon such assumption. If such Lender or the Borrower, as the case may be, has not in
fact made such payment to the Agent, the recipient of such payment shall, on demand by the Agent,
repay to the Agent the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available by the Agent until
the date the Agent recovers such amount at a rate per annum equal to (x) in the case of payment by
a Lender, the Federal Funds Effective Rate for such day for the first three days and, thereafter,
the interest rate applicable to the relevant Loan or (y) in the case of payment by the Borrower,
the interest rate applicable to the relevant Loan.



     2.18.      Collateral. (a) The Secured Obligations shall be secured by the following Liens
to the extent Collateral Documents have been executed as of or prior to the Closing Date by the
Parent, the Borrower and its Subsidiaries: (i) first priority perfected security interest in all
inventory, accounts, equipment, vessels, instruments, chattel paper, documents, general intangibles
(and proceeds thereof and in the case of inventory, all products thereof) of the Borrower or any
Domestic Subsidiary; (ii) first priority perfected security interest in all outstanding shares of
stock or partnership or membership interests, as the case may be, of each Subsidiary (except in the
case of any direct Subsidiary of the Borrower or any Domestic Subsidiary incorporated outside of
the United States, the security interest shall extend to 66% of the outstanding shares thereof);
(iii) solidary (joint and several) guaranties by each of the Domestic Subsidiaries; (iv) solidary
(joint and several) guaranty of the Secured Obligations by the Parent; and (v) first priority
perfected security interest in the Parent’s entire membership interest of the Borrower.



     (b)       In the case of any Subsidiary that is not previously subject to the collateral
requirements set forth in Section 2.18(a) but which has assets with a total book value exceeding



20









 







$25,000,000 at the end of any fiscal quarter after the Closing Date, the Borrower covenants
and agrees to execute or cause to be executed, within 60 days after the end of such fiscal quarter,
Collateral Documents reasonably required by the Agent in order to subject such Subsidiary to the
collateral requirements set forth in Section 2.18(a).



21









 





ARTICLE III




YIELD PROTECTION; TAXES




     3.1.      Yield Protection. If, on or after the date of this Agreement, the adoption of
any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any change in the interpretation or administration
thereof by any governmental or quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency:



     (i)       subjects any Lender or any applicable Lending Installation to any Taxes, or changes the
basis of taxation of payments (other than with respect to Excluded Taxes) to any Lender in respect
of its Eurodollar Loans, or



     (ii)       imposes or increases or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender or any applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest rate applicable to Eurodollar Advances),
or



     (iii)       imposes any other condition the result of which is to increase the cost to any Lender or
any applicable Lending Installation of making, funding or maintaining its Eurodollar Loans or
reduces any amount receivable by any Lender or any applicable Lending Installation in connection
with its Eurodollar Loans, or requires any Lender or any applicable Lending Installation to make
any payment calculated by reference to the amount of Eurodollar Loans held or interest received by
it, by an amount deemed material by such Lender, and the result of any of the foregoing is to
increase the cost to such Lender or applicable Lending Installation of making or maintaining its
Eurodollar Loans or Commitment or to reduce the return received by such Lender or applicable
Lending Installation in connection with such Eurodollar Loans or Commitment, then, within 15 days
of demand by such Lender, the Borrower shall pay such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction in amount received.



     3.2.      Changes in Capital Adequacy Regulations. If a Lender determines the amount of
capital required or expected to be maintained by such Lender, any Lending Installation of such
Lender or any corporation controlling such Lender is increased as a result of a Change, then,
within 15 days of demand by such Lender, the Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such increased capital which
such Lender determines is attributable to this Agreement, its Loans or its Commitment to make Loans
hereunder (after taking into account such Lender’s policies as to capital adequacy). “Change”
means (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines or (ii)
any adoption of or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital



22









 







required or expected to be maintained by any Lender or any Lending Installation or any
corporation controlling any Lender. “Risk-Based Capital Guidelines” means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement, including
transition rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices Entitled “International Convergence of Capital
Measurements and Capital Standards,” including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.



     3.3.      Availability of Types of Advances. If any Lender reasonably determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would violate any applicable
law, rule, regulation, or directive, whether or not having the force of law, or if the Required
Lenders determine that (i) deposits of a type and maturity appropriate to match fund Eurodollar
Advances are not available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then the Agent shall
suspend the availability of Eurodollar Advances and require any affected Eurodollar Advances to be
repaid or converted to Floating Rate Advances, subject to the payment of any funding
indemnification amounts required by Section 3.4.



     3.4.      Funding Indemnification. If any payment of a Eurodollar Advance occurs on a date
which is not the last day of the applicable Eurodollar Interest Period, whether because of
acceleration, prepayment or otherwise (but excluding a mandatory prepayment under Section 2.7.2),
or a Eurodollar Advance is not made on the date specified by the Borrower for any reason other than
default by the Lenders, the Borrower will indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.



     3.5.      Taxes. (i) All payments by the Borrower to or for the account of any Lender or
the Agent hereunder or under any Note shall be made free and clear of and without deduction for any
and all Taxes. If the Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Lender or the Agent, (a) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.5) such Lender or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such deductions been made, (b)
the Borrower shall make such deductions, (c) the Borrower shall pay the full amount deducted to the
relevant authority in accordance with applicable law and (d) the Borrower shall furnish to the
Agent the original copy of a receipt evidencing payment thereof within 30 days after such payment
is made.



     (ii)       In addition, the Borrower hereby agrees to pay any present or future stamp or documentary
taxes and any other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or under any Note or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note (“Other Taxes”).



     (iii)       The Borrower hereby agrees to indemnify the Agent and each Lender for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts
payable under this Section 3.5) paid by the Agent or such Lender and any



23









 







liability (including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of the date the
Agent or such Lender makes demand therefor pursuant to Section 3.6.



     (iv)       Each Lender that is not incorporated under the laws of the United States of America or a
state thereof (each a “Non-U.S. Lender”) agrees that it will, not less than ten Business Days after
becoming a party to this Agreement, (i) deliver to each of the Borrower and the Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224, certifying in either
case that such Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) deliver to each of the Borrower and
the Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and certify that it
is entitled to an exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the Agent (x) renewals or additional
copies of such form (or any successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the most recent forms so
delivered by it, such additional forms or amendments thereto as may be reasonably requested by the
Borrower or the Agent. All forms or amendments described in the preceding sentence shall certify
that such Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form or amendment with respect to
it and such Lender advises the Borrower and the Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.



     (v)       For any period during which a Non-U.S. Lender has failed to provide the Borrower with an
appropriate form pursuant to clause (iv), above (unless such failure is due to a change in treaty,
law or regulation, or any change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a form originally was required to
be provided), such Non-U.S. Lender shall not be entitled to indemnification under this Section 3.5
with respect to Taxes imposed by the United States; provided that, should a Non-U.S. Lender which
is otherwise exempt from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to
recover such Taxes.



     (vi)       Any Lender that is entitled to an exemption from or reduction of withholding tax with
respect to payments under this Agreement or any Note pursuant to the law of any relevant
jurisdiction or any treaty shall deliver to the Borrower (with a copy to the Agent), at the time or
times prescribed by applicable law, such properly completed and executed documentation prescribed
by applicable law as will permit such payments to be made without withholding or at a reduced rate.



     (vii)      If the U.S. Internal Revenue Service or any other governmental authority of the United
States or any other country or any political subdivision thereof asserts a claim that the Agent did
not properly withhold tax from amounts paid to or for the account of any Lender



24









 







(because the appropriate form was not delivered or properly completed, because such Lender
failed to notify the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify the Agent fully for
all amounts paid, directly or indirectly, by the Agent as tax, withholding therefor, or otherwise,
including penalties and interest, and including taxes imposed by any jurisdiction on amounts
payable to the Agent under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which attorneys may be
employees of the Agent). The obligations of the Lenders under this Section 3.5(vii) shall survive
the payment of the Obligations and termination of this Agreement.



     3.6.      Lender Statements; Survival of Indemnity. To the extent reasonably possible, each
Lender shall designate an alternate Lending Installation with respect to its Eurodollar Loans to
reduce any liability of the Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of Eurodollar Advances under Section 3.3, so long as such designation is not, in the
judgment of such Lender, disadvantageous to such Lender. Each Lender shall deliver a written
statement of such Lender to the Borrower (with a copy to the Agent) as to the amount due, if any,
under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable detail
the calculations upon which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of amounts payable under
such Sections in connection with a Eurodollar Loan shall be calculated as though each Lender funded
its Eurodollar Loan through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Eurodollar Rate applicable to such Loan, whether in
fact that is the case or not. Unless otherwise provided herein, the amount specified in the
written statement of any Lender shall be payable on demand after receipt by the Borrower of such
written statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall
survive payment of the Obligations and termination of this Agreement.



     3.7.      Replacement of Lender. If the Borrower is required pursuant to Section 3.1, 3.2
or 3.5 to make any additional payment to any Lender or if any Lender’s obligation to make or
continue, or to convert Floating Rate Advances into, Eurodollar Advances shall be suspended
pursuant to Section 3.3 (any Lender so affected an “Affected Lender”), the Borrower may elect, if
such amounts continue to be charged or such suspension is still effective, to replace such Affected
Lender as a Lender party to this Agreement, provided that no Default or Unmatured Default shall
have occurred and be continuing at the time of such replacement, and provided further that,
concurrently with such replacement, (i) another bank or other entity which is reasonably
satisfactory to the Borrower and the Agent shall agree, as of such date, to purchase for cash the
Advances and other Obligations due to the Affected Lender pursuant to an assignment substantially
in the form of Exhibit B and to become a Lender for all purposes under this Agreement and
to assume all obligations of the Affected Lender to be terminated as of such date and to comply
with the requirements of Section 12.3 applicable to assignments, and (ii) the Borrower shall pay to
such Affected Lender in same day funds on the day of such replacement (A) all interest, fees and
other amounts then accrued but unpaid to such Affected Lender by the Borrower hereunder to and
including the date of termination, including without limitation payments due to such Affected
Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the payment which would
have been due to such Lender on the day of such



25









 







replacement under Section 3.4 had the Loans of such Affected Lender been prepaid on such date
rather than sold to the replacement Lender.



26









 





ARTICLE IV




CONDITIONS PRECEDENT




     4.1.      Initial Advance. The Lenders shall not be required to make the initial Advance
hereunder unless the Borrower has furnished to the Agent and, if required by the Agent, with
sufficient copies for the Lenders (or has otherwise satisfied the Agent):




	 	(i)	 	Copies of the certificate of incorporation and bylaws of the Parent, articles
of organization (or certificate of formation) and operating agreement (or limited
liability company agreement) of Borrower, and the corresponding organization documents
of all of Borrower’s Domestic Subsidiaries, together with all amendments, each
certified by the Secretary or Assistant Secretary of Parent or Borrower, and a
certificate of good standing or existence for the Parent, Borrower and Borrower’s
Domestic Subsidiaries, each certified by the appropriate governmental officer in its
jurisdiction of incorporation, and copies of the articles of incorporation of any
foreign Subsidiary, together with all amendments certified by the secretary of said
Subsidiary, but only to the extent of any changes from the date of the 2003 Credit
Agreement.
	 
	 	(ii)	 	Copies, certified by the Secretary or Assistant Secretary of the Parent,
Borrower and the authorized person for each Subsidiary, of its Board of Directors’
resolutions or consent of members or partners, and of resolutions or actions of any
other body authorizing the execution of the Loan Documents to which the Parent,
Borrower or any of Borrower’s Subsidiaries is a party.
	 
	 	(iii)	 	An incumbency certificate, executed by the Secretary or Assistant Secretary of
the Borrower, which shall identify by name and title of the Authorized Officers and any
other officers of the Borrower authorized to sign the Loan Documents to which the
Borrower is a party, upon which certificate the Agent and the Lenders shall be entitled
to rely until informed of any change in writing by the Borrower.
	 
	 	(iv)	 	This Agreement executed by the Parent, Borrower, Agent and Lenders.
	 
	 	(v)	 	Any Notes requested by a Lender pursuant to Section 2.12 payable to the order
of each such requesting Lender.
	 
	 	(vi)	 	The Collateral Documents executed by the Parent, Borrower and all Domestic
Subsidiaries, together with the stock certificates affected by the security interests
described in Section 2.18.
	 
	 	(vii)	 	A written opinion of the Parent’s and Borrower’s counsel, addressed to the
Lenders, in form and substance satisfactory to the Agent.
	 
	 	(viii)	 	Certificate of an Authorized Officer of the Parent and the Borrower to the effect
that (a) there has been no Material Adverse Effect since June 30, 2005 and (b) on the
Closing Date no Unmatured Default or Default exists.





27









 






	 	(ix)	 	Such other documents as any Lender or its counsel may have reasonably
requested.
	 
	 	(x)	 	Payment of the upfront fee set forth in Section 2.4(c).
	 
	 	(xi)	 	There exists no Default or Unmatured Default under the 2003 Credit Agreement.
	 
	 	(xii)	 	No Material Adverse Effect relating to the Parent, Borrower and Borrower’s
Subsidiaries has occurred since June 30, 2005.
	 
	 	(xiii)	 	The repayment of all amounts outstanding on the 2003 Credit Agreement (through funds
under this Agreement).





     4.2.      Each Advance. The Lenders shall not (except as otherwise set forth in Section
2.1.4 with respect to Revolving Loans for the purpose of repaying Swing Line Loans) be required to
make any Advance unless on the applicable Borrowing Date:




	 	(i)	 	There exists no Default or Unmatured Default.
	 
	 	(ii)	 	The representations and warranties contained in Article V are true and correct
in all material respects as of such Borrowing Date except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in which case
such representation or warranty shall have been true and correct in all material
respects on and as of such earlier date.
	 
	 	(iii)	 	All matters incident to the making of such Advance shall be satisfactory to
the Lenders and their counsel.
	 
	 	(iv)	 	No Material Adverse Effect relating to the Parent, Borrower and Borrower’s
Subsidiaries has occurred since the Closing Date or the date of any financial
statements of the Parent submitted subsequent to the Closing Date.





     Each Borrowing Notice and each Conversion/Continuation Notice with respect to each such
Advance shall constitute a representation and warranty by the Parent and Borrower that the
conditions contained in Sections 4.2(i) and (ii) have been satisfied.



28









 





ARTICLE V




REPRESENTATIONS AND WARRANTIES




     The Parent and Borrower represent and warrant to the Lenders that:



     5.1.      Existence and Standing. The Parent is a corporation, the Borrower is a limited
liability company, and each of the Borrower’s Subsidiaries is a corporation, partnership or limited
liability company duly and properly incorporated or organized, as the case may be, validly existing
and (to the extent such concept applies to such entity) in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted, except where such failure could
not reasonably be expected to have a Material Adverse Effect.



     5.2.      Authorization and Validity. Each of the Parent, Borrower and Borrower’s
Subsidiaries has the power and authority and legal right to execute and deliver the Loan Documents
to which it is a party and to perform its obligations thereunder. The execution and delivery by
the Parent, Borrower and Borrower’s Subsidiaries of the Loan Documents to which it is a party and
the performance of its obligations thereunder have been duly authorized by proper corporate or
company proceedings, and the Loan Documents to which the Parent, Borrower and Borrower’s
Subsidiaries is a party constitute legal, valid and binding obligations of the Parent, Borrower and
Borrower’s Subsidiaries enforceable against the Parent, Borrower and Borrower’s Subsidiaries in
accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally.



     5.3.      No Conflict; Government Consent. Neither the execution and delivery by the
Parent, Borrower and Borrower’s Subsidiaries of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the provisions thereof
will violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Parent, Borrower or any of Borrower’s Subsidiaries or (ii) the Parent’s, Borrower’s
or any Subsidiary’s articles or certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating or other management
agreement, as the case may be, or (iii) the provisions of any indenture, instrument or agreement to
which the Parent, Borrower or any of Borrower’s Subsidiaries is a party or is subject, or by which
it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in,
or require, the creation or imposition of any Lien in, of or on the Property of the Parent,
Borrower or Borrower’s Subsidiaries pursuant to the terms of any such indenture, instrument or
agreement, except where such failure could not reasonably be expected to have a Material Adverse
Effect. No order, consent, adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in respect of any
governmental or public body or authority, or any subdivision thereof, which has not been obtained
by the Parent, Borrower or any of Borrower’s Subsidiaries, is required to be obtained by the
Parent, Borrower or any of Borrower’s Subsidiaries in connection with the execution and delivery of
the Loan Documents, the Advances under this Agreement, the payment and performance by the Borrower
of the Secured Obligations or the legality, validity, binding effect or enforceability of any of
the Loan Documents.



29









 





     5.4.      Financial Statements. The audited December 31, 2004 and the unaudited March 31,
2005 and June 30, 2005 financial statements of the Parent, Borrower and Borrower’s Subsidiaries
heretofore delivered to the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly present the consolidated
financial condition and operations of the Parent and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.



     5.5.      Material Adverse Change. Since June 30, 2005 there has been no change in the
business, Property, prospects, condition (financial or otherwise) or results of operations of the
Parent and its Subsidiaries, taken as a whole, which could reasonably be expected to have a
Material Adverse Effect.



     5.6.      Taxes. The Parent, Borrower and Borrower’s Subsidiaries have filed or caused to
be filed all United States federal tax returns or extensions relating thereto and all other tax
returns which are required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Parent, Borrower or any of Borrower’s Subsidiaries,
except such taxes, if any, as are being contested in good faith and as to which adequate reserves
have been provided in accordance with GAAP and as to which no Lien exists. The United States
income tax returns of the Borrower and its Subsidiaries have been closed by the Internal Revenue
Service through the fiscal year ended December 31, 2002. No tax liens have been filed with respect
to any such taxes. The charges, accruals and reserves on the books of the Parent, Borrower and
Borrower’s Subsidiaries in respect of any taxes or other governmental charges are adequate.



     5.7.      Litigation and Contingent Obligations. There is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to the knowledge of any of their
officers, threatened against or affecting the Parent, Borrower or Borrower’s Subsidiaries which
could reasonably be expected to have a Material Adverse Effect or which seeks to prevent, enjoin or
delay the making of any Loans. Other than any liability incident to any litigation, arbitration or
proceeding which could not reasonably be expected to have a Material Adverse Effect, neither the
Parent, the Borrower nor Borrower’s Subsidiaries has any material contingent obligations not
provided for or disclosed in the financial statements referred to in Section 5.4, except for
Additional Contingent Consideration that may be payable in connection with an Acquisition.



     5.8.      Subsidiaries. Schedule 3 contains an accurate list of all Subsidiaries
of the Parent and Borrower as of the Closing Date, setting forth their respective jurisdictions of
organization and the percentage of their respective capital stock or other ownership interests
owned by the Borrower or other Subsidiaries. All of the issued and outstanding shares of capital
stock or other ownership interests of such Subsidiaries have been (to the extent such concepts are
relevant with respect to such ownership interests) duly authorized and issued and are fully paid
and non-assessable.



     5.9.      ERISA. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with respect to any Plan, and
the Borrower has not withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorgani`ze or terminate any Plan. Neither the Parent nor the Borrower is an entity



30









 







deemed to hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 of an employee
benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan
(within the meaning of Section 4975 of the Code), and neither the execution of this Agreement nor
the making of Loans hereunder gives rise to a prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code.



     5.10.      Accuracy of Information. No information, exhibit or report furnished by the
Parent, Borrower or Borrower’s Subsidiaries in writing to the Agent or to any Lender in connection
with the negotiation of, or compliance with, the Loan Documents contained any material misstatement
of fact or omitted to state a material fact or any fact necessary to make the statements contained
therein not materially misleading.



     5.11.      Material Agreements. Neither the Parent, Borrower nor any of Borrower’s
Subsidiaries is a party to any agreement or instrument or subject to any charter or other corporate
restriction which could reasonably be expected to have a Material Adverse Effect if the Parent,
Borrower or Borrower’s Subsidiaries complies with the terms thereof. Neither the Parent, Borrower
nor any of Borrower’s Subsidiaries is in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in (i) any agreement to which it is a
party, which default could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Funded Indebtedness.



     5.12.      Compliance With Laws. To the best of the knowledge of the officers of the
Parent and Borrower, the Parent, Borrower and Borrower’s Subsidiaries have complied with all laws,
rules, regulations, orders and restrictions of any domestic or foreign government or any
instrumentality or agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, including, without limitation, Regulation
U, T and X of the Board of Governors of the Federal Reserve System, and all Environmental Laws,
except for any failure to comply with any of the foregoing which could not reasonably be expected
to have a Material Adverse Effect. Margin stock (as defined in Regulation U) constitutes less than
25% of the value of those assets of the Parent, Borrower and Borrower’s Subsidiaries which are
subject to any limitation on sale, pledge, or other restriction hereunder.



     5.13.      Ownership of Properties. On the date of this Agreement, the Parent, Borrower
and Borrower’s Subsidiaries will have good title, free of all Liens other than Permitted Liens, to
all of the Property and assets reflected in the Parent’s most recent consolidated financial
statements provided to the Agent as owned by the Parent, Borrower and Borrower’s Subsidiaries,
excluding sales in the ordinary course since that date.



     5.14.      Environmental Matters. In the ordinary course of its business, the officers of
the Borrower consider the effect of Environmental Laws on the business of the Parent, Borrower and
Borrower’s Subsidiaries, in the course of which they identify and evaluate potential risks and
liabilities accruing due to Environmental Laws. On the basis of this consideration, the Parent and
Borrower have concluded that they are aware of no non-compliance with the Environmental Laws that
could reasonably be expected to have a Material Adverse Effect. Neither the Parent, Borrower nor
any of Borrower’s Subsidiaries has received any notice to the effect that its operations are not in
material compliance with any of the requirements of applicable



31









 







Environmental Laws or are the subject of any federal or state investigation evaluating whether
any remedial action is needed to respond to a release of any toxic or hazardous waste or substance
into the environment, which non-compliance or remedial action could reasonably be expected to have
a Material Adverse Effect.



     5.15.      Investment Company Act. Neither the Parent, Borrower nor any of Borrower’s
Subsidiaries is an “investment company” or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended.



     5.16.      Public Utility Holding Company Act. Neither the Parent, Borrower nor any of
Borrower’s Subsidiaries is a “holding company” or a “subsidiary company” of a “holding company”, or
an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, within
the meaning of the Public Utility Holding Company Act of 1935, as amended.



     5.17.      Solvency. (i) Immediately after the consummation of the transactions to occur
on the date hereof and immediately following the making of each Loan, if any, made on the date
hereof and after giving effect to the application of the proceeds of such Loans, (a) the fair value
of the assets of the Borrower and its Subsidiaries on a consolidated basis, at a fair valuation,
will exceed the debts and liabilities, subordinated, contingent or otherwise, of the Borrower and
its Subsidiaries on a consolidated basis; (b) the present fair saleable value of the Property of
the Borrower and its Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of the Borrower and its Subsidiaries on a consolidated
basis on their debts and other liabilities, subordinated, contingent or otherwise, as such debts
and other liabilities become absolute and matured; (c) the Borrower and its Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d) the Borrower and its
Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct
the businesses in which they are engaged as such businesses are now conducted and are proposed to
be conducted after the date hereof. The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will, incur debts beyond
its ability to pay such debts as they mature, taking into account the timing of and amounts of cash
to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on
or in respect of its Funded Indebtedness or the Funded Indebtedness of any such Subsidiary.



32









 





ARTICLE VI




COVENANTS




     During the term of this Agreement, unless the Required Lenders shall otherwise consent in
writing:



     6.1.      Financial Reporting. The Parent and Borrower will maintain, for themselves and
for each Subsidiary, a system of accounting established and administered in accordance with GAAP,
and furnish to the Lenders:




	 	(i)	 	Within 90 days after the close of each of the Parent’s fiscal years, an
unqualified audit report certified by an independent certified public accounting firm
of national standing, prepared in accordance with GAAP on a consolidated basis for
Parent, Borrower and Borrower’s Subsidiaries, including balance sheets as of the end of
such period, related profit and loss statement, statement of changes in shareholders
equity and statement of cash flows (but excluding any work papers relating thereto),
accompanied by a certificate of said accountants that, in the course of their
examination necessary for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured Default shall exist, stating the nature and
status thereof.
	 
	 	(ii)	 	Within 45 days after the close of each of the first three fiscal quarters of
each fiscal year of the Parent, consolidated unaudited balance sheets of the Parent,
Borrower and Borrower’s Subsidiaries as at the close of each fiscal quarter and
consolidated profit and loss statements for the period from the beginning of such
fiscal year to the end of such quarter, all certified by its chief financial officer.
	 
	 	(iii)	 	Simultaneously with the furnishing of the financial statements required under
Sections 6.1(i) and (ii), a Compliance Certificate.
	 
	 	(iv)	 	As soon as possible and in any event within 10 days after receipt by the Parent
or Borrower, a copy of any notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the Parent, Borrower or any of
Borrower’s Subsidiaries, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
	 
	 	(v)	 	Such other information (including non-financial information) as the Agent or
any Lender may from time to time reasonably request.





     6.2.      Use of Proceeds. The Borrower will, and will cause each Subsidiary to use the
proceeds of the Loans for one or more of the following: (i) to refinance term loan indebtedness of
the Borrower existing on the Closing Date, (ii) for Capital Expenditures and Acquisitions permitted
by this Agreement, (iii) for general corporate purposes, and (iv) purchase of some or all of the
Borrower’s 8-7/8% senior notes due May 15, 2011.



33









 





     6.3.      Notice of Default. The Borrower will give prompt notice in writing to the Agent
of the occurrence of any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.



     6.4.      Conduct of Business. The Parent and Borrower will, and will cause each of
Borrower’s Subsidiaries to, carry on and conduct its business in substantially the same manner and
in the same general fields of enterprise as it is presently conducted and do all things necessary
to remain duly incorporated or organized, validly existing and (to the extent such concept applies
to such entity) in good standing as a corporation, partnership or limited liability company in its
jurisdiction of incorporation or organization, as the case may be, and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is conducted, where
the failure to do so could not reasonably be expected to have a Material Adverse Effect.



     6.5.      Taxes. The Parent and Borrower will, and will cause each of Borrower’s
Subsidiaries to, timely file complete and to the best of the Parent’s and Borrower’s knowledge,
correct United States federal and applicable foreign, state and local tax returns required by law
and pay when due all taxes, assessments and governmental charges and levies upon it or its income,
profits or Property, or extensions relating thereto, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.



     6.6.      Insurance. The Parent and Borrower will, and will cause each of Borrower’s
Subsidiaries to, maintain with financially sound and reputable insurance companies insurance on a
material portion of their Property in such amounts and covering such risks as is consistent with
sound business practice, or as otherwise provided in the Collateral Documents, and the Borrower
will furnish to any Lender upon request full information as to the insurance carried.



     6.7.      Compliance with Laws; Environmental Matters. The Parent and Borrower will, and
will cause each of Parent’s Subsidiaries to, comply in all material respects with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which it or its Property
may be subject including, without limitation, Regulations U, T, and X of the Board of Governors of
the Federal Reserve System, and also including, without limitation, ERISA and Environmental Laws.



     6.8.      Maintenance of Properties. The Parent and Borrower will, and will cause each of
Borrower’s Subsidiaries to, do all things reasonably necessary to maintain, preserve, protect and
keep its Property material to its business in good repair, working order and condition in light of
the uses for such Property, and make all necessary and proper repairs, renewals and replacements so
that its business carried on in connection therewith may be properly conducted at all times.



     6.9.      Inspection. The Parent and Borrower will, and will cause each of Borrower’s
Subsidiaries to, permit the Agent and the Lenders, by their respective representatives and agents,
to inspect any of the Property, books and financial records of the Parent, Borrower and each of
Borrower’s Subsidiaries, to examine and make copies of the books of accounts and other financial
records of the Parent, Borrower and each of Borrower’s Subsidiaries, and to discuss the affairs,
finances and accounts of the Parent, Borrower and each of Borrower’s Subsidiaries with, and to be
advised as to the same by, their respective officers at such reasonable times and



34









 







intervals, subject to prior reasonable notice and during business hours, as the Agent or any
Lender may designate.



     6.10.     Restricted Payments. The Parent will not declare or pay any dividends or make
any distributions on its capital stock (other than dividends payable in its own capital stock) or
redeem, repurchase or otherwise acquire or retire any of its capital stock at any time outstanding.
The Borrower’s Subsidiaries may declare and pay dividends or make distributions to the Borrower or
to a wholly-owned Subsidiary of the Borrower.



     6.11.     Funded Indebtedness. (a) The Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur or suffer to exist any Funded Indebtedness, except:




	 	(i)	 	The Loans.
	 
	 	(ii)	 	Obligations arising under Rate Management Transactions related to the Loans.
	 
	 	(iii)	 	Obligations from the Borrower in favor of one or more of its Subsidiaries or
from one or more of its Subsidiaries in favor of the Borrower or one or more of the
Subsidiaries in favor of one or more of the other Subsidiaries.
	 
	 	(iv)	 	Obligations guaranteed by the Maritime Administration under Title XI of the
Merchant Marine Act of 1946, as amended, for the construction of liftboats, up to the
aggregate principal amount of $45,000,000.
	 
	 	(v)	 	Obligations of Superior Energy Liftboats, L.L.C. guaranteed by the Maritime
Administration under Title XI of the Merchant Marine Act of 1946, as amended, for the
construction or refinancing of construction of liftboats, in the amount outstanding as
of the Closing Date.
	 
	 	(vi)	 	Obligations represented by the Borrower’s 8-7/8% senior notes due May 15, 2011,
up to the principal amount of $200,000,000.
	 
	 	(vii)	 	Other secured Funded Indebtedness not exceeding $25,000,000 in the aggregate
principal amount outstanding at any time.
	 
	 	(viii)	 	Other unsecured Funded Indebtedness not exceeding $35,000,000 in the aggregate
principal amount outstanding at any time.
	 
	 	(ix)	 	The refinancing of any Funded Indebtedness described in the foregoing Section
6.11(i) through (viii).





     (b)       The Parent will not create, incur or suffer to exist any Funded Indebtedness, except:




	 	(i)	 	The guaranty of the Loans.
	 
	 	(ii)	 	The guaranty of the Borrower’s Obligations arising under Rate Management
Transactions related to the Loans.





35









 






	 	(iii)	 	The guaranty of any other Funded Indebtedness of the Borrower or its
Subsidiaries permitted by Section 6.11(a).





     6.12.     Merger. The Borrower will not, nor will it permit any of its Subsidiaries to,
merge or consolidate with or into any other Person, except that a Subsidiary may merge into the
Borrower or a Wholly-Owned Subsidiary, and the Borrower or a Subsidiary may merge with another
Person to affect an Acquisition permitted by Section 6.15. The Parent will not merge or
consolidate with or into any other Person.



     6.13.     Sale of Assets. (a) The Borrower will not, nor will it permit any of its
Subsidiaries to, sell, lease, transfer or otherwise dispose of its Property to any other Person,
except:




	 	(i)	 	Sales of inventory, used or surplus equipment and investments in the ordinary
course of business.
	 
	 	(ii)	 	Leases of its Property in the ordinary course of business.
	 
	 	(iii)	 	Sales, transfers or other dispositions of its Property that, together with all
other Property of the Borrower and its Subsidiaries previously sold, transferred or
disposed of not otherwise permitted by this Section 6.13(a) during the twelve-month
period ending with the month in which any such sale, transfer or other disposition
occurs, do not constitute a Substantial Portion of the Property of the Borrower and its
Subsidiaries, taken as a whole.
	 
	 	(iv)	 	Transfers of Property among the Borrower and its Subsidiaries.
	 
	 	(v)	 	A sale of assets which are promptly replaced thereafter by assets of a similar
type and value, or otherwise useful in the business of the Borrower or one of the
Subsidiaries.
	 
	 	(vi)	 	Sales of oil, gas and other minerals in the ordinary course of business,
including the sale, transfer or other disposition of any oil and gas property or
interest therein.





     (b)       The Parent will not lease, sell, transfer or otherwise dispose of any of its membership
interest in the Borrower to any other Person.



     6.14.     Liens. (a) The Borrower will not, nor will it permit any of its Subsidiaries
to, create, incur, or suffer to exist any Lien in, of or on the Property of the Borrower or any of
its Subsidiaries, except for the following (collectively, the “Permitted Liens”):




	 	(i)	 	Liens for taxes, assessments or governmental charges or levies on its Property
if the same are being contested in good faith and by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its books.





36









 






	 	(ii)	 	Liens imposed by law, such as carriers’, warehousemen’s, mechanics’, maritime,
and oil and gas well liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 90 days past due or which
are being contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on its books.
	 
	 	(iii)	 	Inchoate contractual Liens arising in the ordinary course of the oil and gas
business under joint operating agreements, leases, farm outs, division orders and
similar agreements.
	 
	 	(iv)	 	Liens arising out of pledges or deposits (A) under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or retirement
benefits, or similar legislation; and (B) under bids, tenders and performance
agreements.
	 
	 	(v)	 	Utility easements, building restrictions and such other encumbrances or charges
against real property as are of a nature generally existing with respect to properties
of a similar character and which do not in any material way affect the marketability of
the same or interfere with the use thereof in the business of the Borrower or its
Subsidiaries.
	 
	 	(vi)	 	Liens in favor of the Agent, for the benefit of the Lenders, granted pursuant
to any Collateral Document.
	 
	 	(vii)	 	Attachment, judgment and other similar, non-tax Liens in connection with court
proceedings, but only if and for so long as the execution or other enforcement of such
Liens is and continues to be effectively stayed and bonded on appeal in a manner
reasonably satisfactory to Lenders for the full amount of such Liens, the validity and
amount of the claims secured thereby are being actively contested in good faith and by
appropriate lawful proceedings, such Liens do not, in the aggregate, materially detract
from the value of the Property of the Borrower or any of its Subsidiaries or materially
impair the use thereof in the operation of the Borrower’s or any of its Subsidiaries’
business and such Liens are and remain junior in priority to the Liens in favor of the
Lender.
	 
	 	(viii)	 	Liens on vessels, charters or related items securing Funded Indebtedness permitted
under Sections 6.11(a)(iv) and 6.11(a)(v).
	 
	 	(ix)	 	Liens securing Funded Indebtedness of the Borrower and its Subsidiaries
permitted under Section 6.11(a)(vii).





     (b)       The Parent will not create, incur, or suffer to exist any Lien in, of or on the Property
of the Borrower or any of its Subsidiaries, except for the following (collectively, the “Permitted
Liens”):




	 	(i)	 	Liens for taxes, assessments or governmental charges or levies on its Property
if the same are being contested in good faith and by appropriate proceedings and for




37









 






	 	 	 	which adequate reserves in accordance with GAAP shall have been set aside on its
books.






	 	(ii)	 	Liens arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or retirement
benefits, or similar legislation.
	 
	 	(iii)	 	Liens in favor of the Agent, for the benefit of the Lenders, granted pursuant
to any Collateral Document.
	 
	 	(iv)	 	Attachment, judgment and other similar, non-tax Liens in connection with court
proceedings, but only if and for so long as the execution or other enforcement of such
Liens is and continues to be effectively stayed and bonded on appeal in a manner
reasonably satisfactory to Lenders for the full amount of such Liens, the validity and
amount of the claims secured thereby are being actively contested in good faith and by
appropriate lawful proceedings, such Liens do not, in the aggregate, materially detract
from the value of the Property of the Borrower or any of its Subsidiaries or materially
impair the use thereof in the operation of the Borrower’s or any of its Subsidiaries’
business and such Liens are and remain junior in priority to the Liens in favor of the
Lender.





     6.15.     Acquisitions. (a) The Borrower will not, and will not permit any of its
Subsidiaries to, make any Acquisition of any Person, except as follows: (i) the Acquisition shall
be with the consent of the Person (non-hostile); (ii) the total consideration for the Acquisition
shall not exceed $50,000,000; (iii) the total consideration (including all Additional Contingent
Consideration) of all Acquisitions during any 12-month period shall not exceed $100,000,000 in the
aggregate; (iv) the business and assets subject to the Acquisition shall be in the same line of
business as the Borrower and its Subsidiaries; (v) at the time of the Acquisition, no Unmatured
Default and no Default shall exist; (vi) no Default shall exist as a result of the Acquisition;
(vii) in the case of a merger of the Borrower, the Borrower shall be the surviving entity; (viii)
the Borrower and the affected Subsidiaries shall grant a security interest in the stock or
membership interest or partnership interest in any new Subsidiary in favor of the Agent and the
Lenders if required by Section 2.18(b); (ix) if the Person subject to the Acquisition becomes a
Domestic Subsidiary, and if required by Section 2.18(b), the Domestic Subsidiary shall execute (A)
a security agreement in any securities of any Subsidiaries of the new Subsidiary, (B) one or more
security agreements in the assets of the Domestic Subsidiary, and (C) a solidary (joint and
several) guaranty of the Secured Obligations; (x) if required by the Agent, the Borrower shall
submit a legal opinion with respect to the Acquisition to the Agent, in form and substance
reasonably satisfactory to the agent; and (xi) based on pro forma financial statements, the
Borrower shall have at least $15,000,000 of availability under the Revolving Loan Commitment
immediately following the Acquisition.



     (b)       The Parent will not make any Acquisition of any Person, except for the Acquisition of all
of the membership interest of the Borrower.



     6.16.     Transactions with Affiliates. The Borrower and the Parent will not, and will
not permit any of the Borrower’s Subsidiaries to, enter into any transaction (including, without



38









 







limitation, the purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (a) in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower’s or Parent’s or such Subsidiary’s business and upon fair
and reasonable terms no less favorable to the Borrower, Parent or such Subsidiary then the
Borrower, Parent or such Subsidiary would obtain in a comparable arms height and length
transaction; and (b) transactions between or among the Borrower and/or the Parent and/or any
Wholly-Owned Domestic Subsidiary of the Borrower and/or Parent.



     6.17.      Appraisals. At any time following the Closing Date, the Agent shall have the
right to, or the Agent at the request of the Required Lenders shall, order and obtain appraisals
from a nationally recognized firm reasonably acceptable to the Agent, and in form and substance
satisfactory to the Agent, of the fair market value of all of the fixed assets (including property,
plant, vessels and equipment) of the Borrower and its Subsidiaries, at the Borrower’s expense, once
prior to the Revolving Loan Termination Date. The Borrower shall cooperate with the Agent and the
appraiser so as to facilitate the delivery of the appraisal within 60 days after the Agent’s
request therefor.



     6.18.      Financial Covenants.



     6.18.1    Minimum Net Worth. The Parent will not permit its Net Worth, determined as of
the end of each fiscal quarter, to be less than the sum of (i) $400,000,000, plus (ii) 50% of
positive Net Income for such fiscal quarter (with no deduction for net losses) beginning with the
fiscal quarter ending March 31, 2005, plus (iii) 75% of Net Equity Proceeds during such fiscal
quarter, beginning with the fiscal quarter ending March 31, 2005.



     6.18.2   Maximum Leverage Ratio. The Parent will not permit the ratio (the “Leverage
Ratio”), determined on a Pro Forma Basis, of (i) Funded Indebtedness plus Additional
Contingent Consideration as of the end of each fiscal quarter (the determination date) to (ii)
EBITDA for the four fiscal quarters ending with such determination date, to be greater than 3.00 to
1.00.



     6.18.3   Maximum Adjusted Leverage Ratio. The Parent will not permit the ratio (the
“Adjusted Leverage Ratio”), determined on a Pro Forma Basis, of (i) Funded Indebtedness
plus Additional Contingent Consideration, plus the present value of all obligations
to plug and abandon oil and gas wells (and modifications to structures and pipelines) as reflected
on the Borrower’s financial statements in accordance with GAAP, in each case, as of the end of each
fiscal quarter (the determination date) to (ii) EBITDA for the four fiscal quarters ending with
such determination date, to be greater than 3.65 to 1.00.



     6.18.4   Minimum Fixed Charge Coverage Ratio. The Parent will not permit the ratio,
determined on a Pro Forma Basis, of (i) EBITDA for the four fiscal quarters ending with each fiscal
quarter (the determination date), to (ii) Interest Expense plus scheduled payments of principal on
permitted Funded Indebtedness plus cash Income Taxes actually paid during such four fiscal quarter
periods ending with such determination date, to be less than 1.50 to 1.00.



     6.18.5   Maximum Capital Expenditures. The Parent and Borrower will not permit their
Capital Expenditures and their Subsidiaries’ Capital Expenditures (on a non-cumulative basis) to



39









 







be greater than $150,000,000 in the aggregate during any fiscal year. At the Borrower’s
request, the Agent and the Lenders shall review such monetary limitation annually, and with the
consent of the Agent and the Required Lenders, such monetary limitation may be increased.



     6.19.      Plug and Abandonment Liabilities. The Borrower will not, and will not permit
any of its Subsidiaries to, create or assume liabilities to plug and abandon offshore wells in
excess of the amount permitted by the Minerals Management Service without supplemental bonding.



40









 





ARTICLE VII




DEFAULTS




     The occurrence of any one or more of the following events shall constitute a Default:



     7.1.      Any representation or warranty made or deemed made by or on behalf of the Parent,
Borrower or any of Borrower’s Subsidiaries to the Lenders or the Agent under or in connection with
this Agreement, any Loan, or any certificate or information delivered in connection with this
Agreement or any other Loan Document shall be materially false on the date as of which made.



     7.2.      Nonpayment of any interest or principal on the Loan, or nonpayment of any commitment fee
or other obligations under any of the Loan Documents, or nonpayment of any Rate Management
Obligations to any Lender, or nonpayment of any reimbursement obligations to a Lender under any
Letter of Credit, in each case within five days after the same becomes due.



     7.3.      The breach by the Parent or Borrower of any of the terms or provisions of Section 6.2,
6.10, 6.11, 6.13, 6.15, or 6.18.



     7.4.      The breach by the Parent or Borrower (other than a breach which constitutes a Default
under another Section of this Article VII) of any of the terms or provisions of this Agreement or
any other Loan Document which is not remedied within 30 days after written notice from the Agent or
any Lender.



     7.5.      Failure of the Parent, Borrower or any of Borrower’s Subsidiaries to pay when due any
Funded Indebtedness to any Person other than the Lenders aggregating in excess of $5,000,000
(“Material Indebtedness”); or the default by the Parent, Borrower or any of Borrower’s Subsidiaries
in the performance (beyond the applicable grace period with respect thereto, if any) of any term,
provision or condition contained in any agreement under which any such Material Indebtedness was
created or is governed, or any other event shall occur or condition exist, the effect of which
default or event is to cause, or to permit the holder or holders of such Material Indebtedness to
cause, such Material Indebtedness to become due prior to its stated maturity; or any Material
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be due and payable or
required to be prepaid or repurchased (other than by a regularly scheduled payment) prior to the
stated maturity thereof; or the Parent, Borrower or any of Borrower’s Subsidiaries shall not pay,
or admit in writing its inability to pay, its debts generally as they become due. Notwithstanding
the foregoing, the default by Superior Energy Liftboats, L.L.C. (“Liftboats”) on any Funded
Indebtedness guaranteed by the Maritime Administration shall be excluded from the effect of this
Section 7.5, unless and until the Maritime Administration makes a formal demand for payment under
any guaranty issued by the Parent, Borrower or other Subsidiary in connection therewith.



     7.6.      The Parent, Borrower or any of Borrower’s Subsidiaries shall (i) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter in effect, (ii)
make an assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce
in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for
it



41









 







or any Substantial Portion of its Property, (iv) institute any proceeding seeking an order for
relief under the Federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate it
a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v) take any corporate or
partnership action to authorize or effect any of the foregoing actions set forth in this Section
7.6 or (vi) fail to contest in good faith any appointment or proceeding described in Section 7.7.



     7.7.      Without the application, approval or consent of the Parent, Borrower or any of Borrower’s
Subsidiaries, a receiver, trustee, examiner, liquidator or similar official shall be appointed for
the Parent, Borrower or any of Borrower’s Subsidiaries or any Substantial Portion of its Property,
or a proceeding described in Section 7.6(iv) shall be instituted against the Parent, Borrower or
any of Borrower’s Subsidiaries and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 30 consecutive days.



     7.8.      Any court, government or governmental agency shall condemn, seize or otherwise
appropriate, or take custody or control of, all or any portion of the Property of the Parent,
Borrower and Borrower’s Subsidiaries which, when taken together with all other Property of the
Parent, Borrower and Borrower’s Subsidiaries so condemned, seized, appropriated, or taken custody
or control of, during the twelve-month period ending with the month in which any such action
occurs, constitutes a Substantial Portion.



     7.9.      The Parent, Borrower or any of Borrower’s Subsidiaries shall fail within 60 days to pay,
bond or otherwise discharge one or more (i) judgments or orders for the payment of money in excess
of $25,000,000 (or the equivalent thereof in currencies other than U.S. Dollars) in the aggregate,
or (ii) nonmonetary judgments or orders which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, which judgment(s), in any such case, is/are not
stayed on appeal or otherwise being appropriately contested in good faith.



     7.10.     Any Change in Control shall occur.



     7.11.     Any Collateral Document shall for any reason fail to create a valid and perfected first
priority security interest in any Substantial Portion of the Collateral purported to be covered
thereby, except as permitted by the terms of this Agreement or any Collateral Document, or any
Collateral Document shall fail to remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any Collateral Document.



42









 





ARTICLE VIII




ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES




     8.1.      Acceleration. If any Default described in Section 7.6 or 7.7 occurs with respect
to the Parent or Borrower, the obligations of the Lenders to make Loans hereunder shall
automatically terminate and the Obligations shall immediately become due and payable without any
election or action on the part of the Agent or any Lender. If any other Default occurs, the
Required Lenders (or the Agent with the consent of the Required Lenders) may terminate or suspend
the obligations of the Lenders to make Loans hereunder, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Borrower hereby expressly
waives.



     If, within 30 days after acceleration of the maturity of the Obligations or termination of the
obligations of the Lenders to make Loans hereunder as a result of any Default (other than any
Default as described in Section 7.6 or 7.7 with respect to the Parent or Borrower) and before any
judgment or decree for the payment of the Obligations due shall have been obtained or entered, the
Required Lenders (in their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.



     8.2.      Amendments. Subject to the provisions of this Article VIII, the Required Lenders
(or the Agent with the consent in writing of the Required Lenders) and the Parent and Borrower may
enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to
the Loan Documents or changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:




	 	(i)	 	Extend the maturity of Loan, or extend or postpone any payment of principal
and/or interest due under any Loan, or forgive all or any portion of the principal
amount of any Loan, or reduce the rate or extend the time of payment of interest or
fees thereon, or forebear in the collection of any Loan, or grant a payment moratorium
on any Loan; or amend the definitions of “Alternate Base Rate,” “Applicable Margin”,
“Eurodollar Base Rate”, “Eurodollar Interest Period,” or “Eurodollar Rate” or amend the
Pricing Schedule.
	 
	 	(ii)	 	Reduce the percentage specified in the definition of Required Lenders or any
other percentage of Lenders specified to be the applicable percentage in this Agreement
to act on specified matters, or amend the definitions of “Required Lenders” or “Pro
Rata Share”.
	 
	 	(iii)	 	Extend the Revolving Loan Termination Date, or increase or reduce the amount
of the Aggregate Revolving Loan Commitment or of the Revolving Loan Commitment of any
Lender hereunder, or permit the Borrower to assign its rights under this Agreement.
	 
	 	(iv)	 	Amend this Section 8.2.





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	 	(v)	 	Except as provided in the Collateral Documents, release all or any Substantial
Portion of the Collateral (including any guarantor of the Secured Obligations);
provided, however, that the Agent may release any Collateral in order to give effect
to, or otherwise in connection with, any asset sale, lease or other disposition, or
secured financing or other financing transaction permitted by this Agreement, in which
case the Lenders authorize the Agent to execute and deliver any and all related release
documents without the further consent of any Lender.
	 
	 	(vi)	 	Waive any Default if the practical effect of such waiver allows the Agent
and/or Required Lenders to effectuate any of the items or matters listed in clauses (i)
through (v) of this Section 8.2 (except that any waiver or amendments of the financial
covenants set forth in Section 6.18 shall require the consent of the Required Lenders).





     No amendment of any provision of this Agreement relating to the Agent shall be effective
without the written consent of the Agent. The Agent may waive payment of the fee required under
Section 12.3.2 without obtaining the consent of any other party to this Agreement.



     8.3.      Preservation of Rights. No delay or omission of the Lenders or the Agent to
exercise any right under the Loan Documents shall impair such right or be construed to be a waiver
of any Default or an acquiescence therein, and the making of a Loan notwithstanding the existence
of a Default or the inability of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any other right, and no
waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required pursuant to Section 8.2,
and then only to the extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available to the Agent and
the Lenders until the Secured Obligations have been paid in full.



44









 





ARTICLE IX




GENERAL PROVISIONS




     9.1.      Survival of Representations. All representations and warranties of the Parent
and Borrower contained in this Agreement shall survive the making of the Loans herein contemplated.



     9.2.      Governmental Regulation. Anything contained in this Agreement to the contrary
notwithstanding, no Lender shall be obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or regulation.



     9.3.      Headings. Section headings in the Loan Documents are for convenience of
reference only, and shall not govern the interpretation of any of the provisions of the Loan
Documents.



     9.4.      Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Parent, Borrower, Borrower’s Subsidiaries, the Agent and the Lenders and
supersede all prior agreements and understandings among the Parent, Borrower, Borrower’s
Subsidiaries, the Agent and the Lenders relating to the subject matter thereof other than the fee
letter described in Section 10.13.



     9.5.      Several Obligations; Benefits of this Agreement. The respective obligations of
the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any
other (except to the extent to which the Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer any right or
benefit upon any Person other than the parties to this Agreement and their respective successors
and assigns, provided, however, that the parties hereto expressly agree that the Arranger shall
enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set
forth therein and shall have the right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.



     9.6.      Expenses; Indemnification. (i) The Borrower shall reimburse the Agent and the
Arranger for any costs and out-of-pocket expenses (including attorneys’ fees and time charges of
attorneys for the Agent, which attorneys may be employees of the Agent) paid or incurred by the
Agent or the Arranger in connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent, the Arranger and the Lenders for any costs and
out-of-pocket expenses (including attorneys’ fees and time charges of attorneys for the Agent, the
Arranger and the Lenders, which attorneys may be employees of the Agent, the Arranger or the
Lenders) paid or incurred by the Agent, the Arranger or any Lender in connection with the
collection and enforcement of the Loan Documents. The Borrower acknowledges that from time to time
the Agent may prepare and may distribute to the Lenders (but shall have no obligation or duty to
prepare or to distribute to the Lenders) certain audit reports (the “Reports”) pertaining to the
Borrower’s assets for internal use by the Agent from information furnished to it by or on



45









 







behalf of the Borrower, after the Agent has exercised its rights of inspection pursuant to
this Agreement.



     (ii)       The Borrower hereby further agrees to indemnify the Agent, the Arranger, each Lender,
their respective affiliates, and each of their directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or not the Agent, the
Arranger, any Lender or any affiliate is a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed application of the proceeds
of any Loan hereunder except to the extent that they are determined in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the party seeking indemnification. The obligations of the Borrower under this
Section 9.6 shall survive the termination of this Agreement.



     9.7.       Numbers of Documents. All statements, notices, closing documents, and requests
hereunder shall be furnished to the Agent with sufficient counterparts so that the Agent may
furnish one to each of the Lenders.



     9.8.       Accounting. Except as provided to the contrary herein, all accounting terms used
herein shall be interpreted and all accounting determinations hereunder shall be made in accordance
with GAAP.



     9.9.       Severability of Provisions. Any provision in any Loan Document that is held to
be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.



     9.10.     Nonliability of Lenders. The relationship between the Borrower on the one hand
and the Lenders and the Agent on the other hand shall be solely that of borrower and lenders.
Neither the Agents, the Arranger nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agents, the Arranger nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any phase of the
Borrower’s business or operations. The Borrower agrees that neither the Agents, the Arranger nor
any Lender shall have liability to the Borrower (whether sounding in tort, contract or otherwise)
for losses suffered by the Borrower in connection with, arising out of, or in any way related to,
the transactions contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses resulted from the
gross negligence or willful misconduct of the party from which recovery is sought. Neither the
Agents, the Arranger nor any Lender shall have any liability with respect to, and the Borrower
hereby waives, releases and agrees not to sue for, any special, indirect or consequential damages
suffered by the Borrower in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby.



46









 





     9.11.      Confidentiality. Each Lender agrees to hold any confidential information which
it may receive from the Parent or Borrower pursuant to this Agreement in confidence, except for
disclosure (i) to its Affiliates and to other Lenders and their respective Affiliates, (ii) to
legal counsel, accountants, and other professional advisors to such Lender or to a Transferee,
(iii) to regulatory officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal proceeding to which
such Lender is a party, (vi) to such Lender’s direct or indirect contractual counterparties in swap
agreements or to legal counsel, accountants and other professional advisors to such counterparties,
and (vii) permitted by Section 12.4.



     9.12.      Nonreliance. Each Lender hereby represents that it is not relying on or looking
to any margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve
System) for the repayment of the Loans provided for herein.



     9.13.      Disclosure. The Borrower and each Lender hereby (i) acknowledge and agree that
the Agent and/or its Affiliates from time to time may hold investments in, make other loans to or
have other relationships with the Borrower and its Affiliates, and (ii) waive any liability of the
Agent or such Affiliate of the Agent to the Borrower or any Lender, respectively, arising out of or
resulting from such investments, loans or relationships other than liabilities arising out of the
gross negligence or willful misconduct of the Agent or its Affiliates.



     9.14      The PATRIOT Act. Each Lender hereby notifies the Parent, Borrower and
Subsidiaries that pursuant to the requirements of the Uniting and Strengthening by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of P.L. No.
107-56) (known as “The PATRIOT Act”), each Lender is required to obtain, verify and record
information that identifies the Parent, Borrower and Subsidiaries, which information includes the
name and address of the Parent, Borrower and Subsidiaries and other information that will allow
such Lender to identify the Parent, Borrower and Subsidiaries in accordance with The PATRIOT Act.



47









 





ARTICLE X




THE AGENT




     10.1.      Appointment; Nature of Relationship. JPMorgan Chase Bank, N.A. is hereby
appointed by each of the Lenders as its contractual representative hereunder and under each other
Loan Document, and each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth herein and in the
other Loan Documents. The Agent agrees to act as such contractual representative upon the express
conditions contained in this Article X. Notwithstanding the use of the defined term “Agent,” it is
expressly understood and agreed that the Agents shall not have any fiduciary responsibilities to
any Lender by reason of this Agreement or any other Loan Document and that the Agent is merely
acting as the contractual representative of the Lenders with only those duties as are expressly set
forth in this Agreement and the other Loan Documents. In its capacity as the Lenders’ contractual
representative, the Agents (i) do not hereby assume any fiduciary duties to any of the Lenders,
(ii) are a “representative” of the Lenders within the meaning of Section 9-105 of the Uniform
Commercial Code and (iii) are acting as independent contractors, the rights and duties of which are
limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agents on any agency theory or any other
theory of liability for breach of fiduciary duty, all of which claims each Lender hereby waives.



     10.2.      Powers. The Agent shall have and may exercise such powers under the Loan
Documents as are specifically delegated to the Agent by the terms of each thereof, together with
such powers as are reasonably incidental thereto; provided, however in the event of
a conflict between the terms and provisions of any Loan Document (other than this Agreement) and
this Agreement, the terms and conditions of this Agreement shall control. The Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any action thereunder
except any action specifically provided by the Loan Documents, subject to any limitation contained
in this Agreement, to be taken by the Agent.



     10.3.      General Immunity. Neither the Agents nor any of their directors, officers,
agents or employees shall be liable to the Borrower, the Lenders or any Lender for any action taken
or omitted to be taken by them hereunder or under any other Loan Document or in connection herewith
or therewith except to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful
misconduct of such Person.



     10.4.      No Responsibility for Loans, Recitals, etc.  Neither the Agents nor any of their
directors, officers, agents or employees shall be responsible for or have any duty to ascertain,
inquire into, or verify (a) any statement, warranty or representation made in connection with any
Loan Document or any Advance hereunder; (b) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without limitation, any agreement
by an obligor to furnish information directly to each Lender; (c) the satisfaction of any condition
specified in Article IV, except receipt of items required to be delivered solely to the Agent; (d)
the existence or possible existence of any Default or Unmatured Default; (e) the



48









 







validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document or
any other instrument or writing furnished in connection therewith; (f) the value, sufficiency,
creation, perfection or priority of any Lien in the Collateral; or (g) the financial condition of
the Borrower or any guarantor of any of the Obligations or of any of the Borrower’s or any such
guarantor’s respective Subsidiaries. The Agents shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Borrower to the Agent at such time, but is
voluntarily furnished by the Borrower to the Agent (either in its capacity as Agent or in its
individual capacity).



     10.5.      Action on Instructions of Lenders. Except as may otherwise be provided in
Section 8.2, the Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder and under any other Loan Document in accordance with written instructions signed
by the Required Lenders, and such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders. The Lenders hereby acknowledge that the Agent
shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Loan Document unless it shall be requested in writing to
do so by the Required Lenders. The Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.



     10.6.      Employment of Agents and Counsel. Except as may otherwise be provided in
Section 8.2, the Agent may execute any of its duties as Agent hereunder and under any other Loan
Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized agents, for the default
or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The
Agent shall be entitled to advice of counsel concerning the contractual arrangement between the
Agent and the Lenders and all matters pertaining to the Agent’s duties hereunder and under any
other Loan Document.



     10.7.      Reliance on Documents; Counsel. The Agent shall be entitled to rely upon any
Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document
believed by it to be genuine and correct and to have been signed or sent by the proper person or
persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.



     10.8.      Agent’s Reimbursement and Indemnification. The Lenders agree to reimburse and
indemnify the Agent ratably in proportion to each Lender’s Pro Rata Share (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by the Borrower under
the Loan Documents, (ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses incurred by the Agent in connection with
any dispute between the Agent and any Lender or between two or more of the Lenders) and (iii) for
any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions



49









 







contemplated thereby (including, without limitation, for any such amounts incurred by or
asserted against the Agent in connection with any dispute between the Agent and any Lender or
between two or more of the Lenders), or the enforcement of any of the terms of the Loan Documents
or of any such other documents, provided that (a) no Lender shall be liable for any of the
foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court
of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the
Agent and (b) any indemnification required pursuant to Section 3.5(vii) shall, notwithstanding the
provisions of this Section 10.8, be paid by the relevant Lender in accordance with the provisions
thereof. The obligations of the Lenders under this Section 10.8 shall survive payment of the
Obligations and termination of this Agreement.



     10.9.      Notice of Default. The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Unmatured Default hereunder unless the Agent has received written
notice from a Lender or the Borrower referring to this Agreement describing such Default or
Unmatured Default and stating that such notice is a “notice of default”. In the event that the
Agent receives such a notice, the Agent shall give prompt notice thereof to the Lenders.



     10.10.      Rights as a Lender. In the event the Agent is a Lender, the Agent shall have
the same rights and powers hereunder and under any other Loan Document with respect to its
Revolving Loan Commitment and its Loans as any Lender and may exercise the same as though it were
not the Agent, and the term “Lender” or “Lenders” shall, at any time when the Agent is a Lender,
unless the context otherwise indicates, include the Agent in its individual capacity. The Agent
and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of
trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or
any other Loan Document, with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person.



     10.11.      Lender Credit Decision. Each Lender acknowledges that it has, independently
and without reliance upon the Agents, the Arranger or any other Lender and based on the financial
statements prepared by the Parent or Borrower and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agents, the Arranger or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.



     10.12.      Successor Agent. The Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrower, such resignation to be effective upon the appointment of a
successor Agent or, if no successor Agent has been appointed, forty-five days after the retiring
Agent gives notice of its intention to resign. The Agent may be removed at any time with or
without cause by written notice received by the Agent from the Required Lenders, such removal to be
effective on the date specified by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the Required Lenders within
thirty days after the resigning Agent’s giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the



50









 







Lenders, a successor Agent. Notwithstanding the previous sentence, the Agent may at any time
without the consent of the Borrower or any Lender, appoint any of its Affiliates which is a
commercial bank as a successor Agent hereunder. If the Agent has resigned or been removed and no
successor Agent has been appointed, the Lenders may perform all the duties of the Agent hereunder
and the Borrower shall make all payments in respect of the Obligations to the applicable Lender and
for all other purposes shall deal directly with the Lenders. No successor Agent shall be deemed to
be appointed hereunder until such successor Agent has accepted the appointment. Any such successor
Agent shall be a commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and
duties of the resigning or removed Agent. Upon the effectiveness of the resignation or removal of
the Agent, the resigning or removed Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the resignation or removal of
an Agent, the provisions of this Article X shall continue in effect for the benefit of such Agent
in respect of any actions taken or omitted to be taken by it while it was acting as the Agent
hereunder and under the other Loan Documents.



     10.13.      Agent’s Fee; Arranger’s Fee. The Borrower agrees to pay to the Agent and the
Arranger, for their own accounts, the fees agreed to by the Borrower, the Agent and the Arranger
pursuant to that certain letter agreement dated the date of this Agreement, or as otherwise agreed
from time to time.



     10.14.      Delegation to Affiliates. The Borrower and the Lenders agree that the Agent
may delegate any of its duties under this Agreement to any of its Affiliates. Any such Affiliate
(and such Affiliate’s directors, officers, agents and employees) which performs duties in
connection with this Agreement shall be entitled to the same benefits of the indemnification,
waiver and other protective provisions to which the Agent is entitled under Articles IX and X.



     10.15.      Execution of Collateral Documents. The Lenders hereby empower and authorize
the Agent to execute and deliver to the Borrower on their behalf the Collateral Documents and all
related financing statements and any financing statements, agreements, documents or instruments as
shall be necessary or appropriate to effect the purposes of the Collateral Documents.



     10.16.      Collateral Releases. The Lenders hereby empower and authorize the Agent to
execute and deliver to the Borrower on their behalf any agreements, documents or instruments as
shall be necessary or appropriate to effect any releases of Collateral which shall be permitted by
the terms hereof or of any other Loan Document or which shall otherwise have been approved by the
Required Lenders (or, if required by the terms of Section 8.2, all of the Lenders) in writing.



51









 





ARTICLE XI




SETOFF; RATABLE PAYMENTS




     11.1.      Setoff. In addition to, and without limitation of, any rights of the Lenders
under applicable law, if the Borrower becomes insolvent, however evidenced, or any Default occurs,
any and all deposits (including all account balances, whether provisional or final and whether or
not collected or available) and any other Funded Indebtedness at any time held or owing by any
Lender or any Affiliate of any Lender to or for the credit or account of the Borrower may be offset
and applied toward the payment of the Secured Obligations owing to such Lender, whether or not the
Obligations, or any part hereof, shall then be due.



     11.2.      Ratable Payments. If any Lender, whether by setoff or otherwise, has payment
made to it upon its Loans (other than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5)
in a greater proportion than that received by any other Lender, such Lender agrees, promptly upon
demand, to purchase a portion of the Loans held by the other Lenders so that after such purchase
each Lender will hold its Pro Rata Share of the Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives Collateral or other
protection for its Secured Obligations or such amounts which may be subject to setoff, such Lender
agrees, promptly upon demand, to take such action necessary such that all Lenders share in the
benefits of such Collateral ratably in proportion to their respective Pro Rata Shares. In case any
such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be
made.



     If an amount to be setoff is to be applied to permitted Funded Indebtedness of the Borrower to
a Lender other than Secured Obligations under this Agreement, such amount shall be applied ratably
to such other Funded Indebtedness and to the Secured Obligations.



52









 





ARTICLE XII




BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS




     12.1.       Successors and Assigns. The terms and provisions of the Loan Documents shall be
binding upon and inure to the benefit of the Parent, Borrower and the Lenders and their respective
successors and assigns, except that (i) the Borrower shall not have the right to assign its rights
or obligations under the Loan Documents and (ii) any assignment by any Lender must be made in
compliance with Section 12.3. The parties to this Agreement acknowledge that clause (ii) of this
Section 12.1 relates only to absolute assignments and does not prohibit assignments creating
security interests, including, without limitation, any pledge or assignment by any Lender of all or
any portion of its rights under this Agreement and any Note to a Federal Reserve Bank; provided,
however, that no such pledge or assignment creating a security interest shall release the
transferor Lender from its obligations hereunder unless and until the parties thereto have complied
with the provisions of Section 12.3. The Agent may treat the Person which made any Loan or which
holds any Note as the owner thereof for all purposes hereof unless and until such Person complies
with Section 12.3; provided, however, that the Agent may in its discretion (but shall not be
required to) follow instructions from the Person which made any Loan or which holds any Note to
direct payments relating to such Loan or Note to another Person. Any assignee of the rights to any
Loan or any Note agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time
of making such request or giving such authority or consent is the owner of the rights to any Loan
(whether or not a Note has been issued in evidence thereof), shall be conclusive and binding on any
subsequent holder or assignee of the rights to such Loan.



     12.2.       Participations



     12.2.1.     Permitted Participants; Effect. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time sell to one or more banks or other
entities (“Participants”) participating interests in any Obligations owing to such Lender, any Note
held by such Lender, any Revolving Loan Commitment of such Lender or any other interest of such
Lender under the Loan Documents, or any Letter of Credit issued by said Lender. In the event of
any such sale by a Lender of participating interests to a Participant, such Lender’s obligations
under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such Lender shall remain the owner of
its Loans and the holder of any Note issued to it in evidence thereof for all purposes under the
Loan Documents, all amounts payable by the Borrower under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under the Loan Documents.



     12.2.2.     Voting Rights. Each Lender shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with respect to any Loan or Commitment
in which such Participant has an interest which forgives principal, interest or fees



53









 







or reduces the interest rate or fees payable with respect to any such Loan or Commitment,
extends the Revolving Loan Termination Date, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or Revolving Loan Commitment,
releases any guarantor of any such Loan or releases all or a Substantial Portion of the Collateral,
if any, securing any such Loan.



     12.2.3.     Benefit of Setoff. The Borrower agrees that each Participant shall be deemed
to have the right of setoff provided in Section 11.1 in respect of its participating interest in
amounts owing under the Loan Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents, provided that each Lender
shall retain the right of setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in Section 11.1,
agrees to share with each Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if each Participant were a
Lender.



     12.3.       Assignments.



     12.3.1.     Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or more banks or other
entities (“Purchasers”) all or any part of its rights and obligations under the Loan Documents.
Such assignment shall be substantially in the form of Exhibit B or in such other form as
may be agreed to by the parties thereto. The consent of the Borrower and the Agent shall be
required prior to an assignment becoming effective with respect to a Purchaser which is not a
Lender or an Affiliate thereof; provided, however, that if a Default has occurred and is
continuing, the consent of the Borrower shall not be required. Any required consent of the Borrower
shall not be unreasonably withheld or delayed. Each such assignment with respect to a Purchaser
which is not a Lender or an Affiliate thereof shall (unless each of the Borrower and the Agent
otherwise consents) be in an amount not less than the lesser of (i) $5,000,000 or (ii) the
remaining amount of the assigning Lender’s Commitment (calculated as at the date of such
assignment) or outstanding Loans (if the applicable Commitment has been terminated). Furthermore,
the assigning Lender shall pay the Agent an assignment fee of $3,500 for each assignment.



     12.3.2.     Effect; Effective Date. Upon (i) delivery to the Agent of an assignment,
together with any consents required by Section 12.3.1, and (ii) payment of a $3,500 fee to the
Agent for processing such assignment (unless such fee is waived by the Agent), such assignment
shall become effective on the effective date specified in such assignment. The assignment shall
contain a representation by the Purchaser to the effect that none of the consideration used to make
the purchase of the Revolving Loan Commitment and Loans under the applicable assignment agreement
constitutes “plan assets” as defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be “plan assets” under ERISA. On and after the effective
date of such assignment, such Purchaser shall for all purposes be a Lender party to this Agreement
and any other Loan Document executed by or on behalf of the Lenders and shall have all the rights
and obligations of a Lender under the Loan Documents, to the same extent as if it were an original
party hereto, and no further consent or action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the percentage of the Aggregate Revolving
Loan Commitment and Loans assigned to



54









 







such Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to this
Section 12.3.2, the transferor Lender, the Agent and the Borrower shall, if the transferor Lender
or the Purchaser desires that its Loans be evidenced by Notes, make appropriate arrangements so
that new Notes or, as appropriate, replacement Notes are issued to such transferor Lender and new
Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Revolving Loan Commitments, as adjusted pursuant to
such assignment.



     12.4.       Dissemination of Information. The Borrower authorizes each Lender to disclose
to any Participant or Purchaser or any other Person acquiring an interest in the Loan Documents by
operation of law (each a “Transferee”) and any prospective Transferee any and all information in
such Lender’s possession concerning the creditworthiness of the Parent, Borrower and Borrower’s
Subsidiaries, including without limitation any information contained in any Reports; provided that
each Transferee and prospective Transferee agrees to be bound by Section 9.11 of this Agreement.



     12.5.       Tax Treatment. If any interest in any Loan Document is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the United States or
any State thereof, the transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section 3.5(iv).



55









 





ARTICLE XIII




NOTICES




     13.1.      Notices. Except as otherwise permitted by Section 2.13 with respect to
Borrowing Notices, all notices, requests and other communications to any party hereunder shall be
in writing (including electronic transmission, facsimile transmission or similar writing) and shall
be given to such party: (x) in the case of the Borrower, at 1105 Peters Road, Harvey, Louisiana
70058, Facsimile: (504) 362-1818 (Attention: President), (y) in the case of the Agent or any
Lender, at its address or facsimile number set forth on Schedule 1 hereto or (z) in the
case of any party, at such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the Agent and the Borrower in accordance with the provisions of this
Section 13.1. Each such notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid, or (iii) if given
by any other means, when delivered (or, in the case of electronic transmission, received) at the
address specified in this Section; provided that notices to the Agent under Article II shall not be
effective until received.



     13.2.      Change of Address. The Borrower, the Agent and any Lender may each change the
address for service of notice upon it by a notice in writing to the other parties hereto.



56









 





ARTICLE XIV




COUNTERPARTS




     14.1      Counterparts. This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one agreement, and any of the parties hereto may execute
this Agreement by signing any such counterpart. This Agreement shall be effective when it has been
executed by the Parent, the Borrower, the Agent and the Lenders and each party has notified the
Agent by facsimile transmission or telephone that it has taken such action.



57









 





ARTICLE XV




CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL




     15.1.      CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (BUT
OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF LOUISIANA, BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.



     15.2.      CONSENT TO JURISDICTION. THE BORROWER AND THE AGENT HEREBY IRREVOCABLY SUBMIT
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR LOUISIANA STATE COURT SITTING IN
NEW ORLEANS, LOUISIANA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS
AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR
THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT
OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW ORLEANS, LOUISIANA.



     15.3.      WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.



58









 





     IN WITNESS WHEREOF, the Parent, the Borrower, the Lenders and the Agent have executed this
Agreement as of the date first above written.



	 	 	 	 	 
	BORROWER: 	SESI, L.L.C.

 	 
	 	By:        	

Superior Energy Services, Inc.,
 	 
	 	 	Member Manager 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Robert S. Taylor 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	PARENT: 	SUPERIOR ENERGY SERVICES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Robert S. Taylor 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	AGENT AND LENDER: 	JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	Steven D. Nance 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	SYNDICATION AGENT AND LENDER: 	WELLS FARGO BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	DOCUMENTATION AGENT AND LENDER: 	WHITNEY NATIONAL BANK

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




59









 





	 	 	 	 	 
	LENDERS: 	PNC BANK, NATIONAL
ASSOCIATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	BANK OF SCOTLAND

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	NATEXIS BANQUES POPULAIRES

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	HIBERNIA NATIONAL BANK

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




60









 








SCHEDULE 1




COMMITMENT AMOUNTS OF THE LENDERS




	 	 	 	 	 	 	 	 	 
	 	 	Revolving	 	 
	 	 	Loan	 	Pro Rata
	Name and Address of Lender	 	Commitment	 	Share
	 
	 	 	 	 	 	 	 	 
	JPMorgan Chase Bank, N.A.

201 St. Charles Ave., 28th Floor

New Orleans, LA 70170


	 	$	24,000,000.00	 	 	 	16.0000000	%
	 
	 	 	 	 	 	 	 	 
	Attention: Steven Nance

Telephone: (504) 623-7676

Facsimile: (504) 623-1915

email: steven.nance@chase.com
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Wells Fargo Bank, N.A.

Energy Group

MAC T5002-090

1000 Louisiana, 9th Floor

Houston, TX 77002

	 	$	23,500,000.00	 	 	 	15.6666667	%
	 
	 	 	 	 	 	 	 	 
	Attention: Phil Lauinger

Telephone: (713) 319-1313

Facsimile: (713) 739-1087

email: lauingpc@wellsfargo.com
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Whitney National Bank

Corporate Banking

P.O. Box 61260

New Orleans, LA 70161

	 	$	22,500,000.00	 	 	 	15.0000000	%
	 
	 	 	 	 	 	 	 	 
	Attention: Hollie Ericksen

Telephone: (504) 552-4668

Facsimile: (504) 552-4622

email: hericksen@whitneybank.com
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PNC Bank, National Association

2121 San Jacinto, Suite 1850

Dallas, TX 75201

	 	$	22,500,000.00	 	 	 	15.0000000	%
	 
	 	 	 	 	 	 	 	 
	Attention: Vicki Leon

Telephone: (214) 871-1264

Facsimile: (214) 871-2015

email: vicki.leon@pncbusinesscredit.com
	 	 	 	 	 	 	 	 






Schedule 1 - Page 1









 






	 	 	 	 	 	 	 	 	 
	 	 	Revolving	 	 
	 	 	Loan	 	Pro Rata
	Name and Address of Lender	 	Commitment	 	Share
	 
	 	 	 	 	 	 	 	 
	Natexis Banques Populaires

333 Clay Street, Suite 4340

Houston, TX 77002

Attention: Tim Polvado

	 	$	22,500,000.00	 	 	 	15.0000000	%
	 
	 	 	 	 	 	 	 	 
	Telephone: (713) 571-8739

Facsimile: (713) 571-6167

email: timothy.polvado@nyc.nxbp.com
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Bank of Scotland

1021 Main Street, Suite 1370

Houston, TX 77002

	 	$	20,000,000.00	 	 	 	13.3333333	%
	 
	 	 	 	 	 	 	 	 
	Attention: Byron Cooley

Telephone: (713) 651-1870

Facsimile: (713) 651-9714

email: byron_cooley@bankofscotland.com
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Hibernia National Bank

313 Carondelet Street

New Orleans, LA 70130

	 	$	15,000,000.00	 	 	 	10.0000000	%
	 
	 	 	 	 	 	 	 	 
	Attention: John Castellano

Telephone: (504) 533-3484

Facsimile: (504) 533-5434

email: jcastell@hibernia.com
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Aggregate Commitments

	 	$	150,000,000*	 	 	 	100.0000000	%








 




			
	*	 	If the Revolving Loan Commitment is increased pursuant to Section 2.1.3, the Agent shall
provide each Lender with a superseding revised Schedule 1 showing the revised Commitments and
Pro Rata Shares.






Schedule 1 - Page 2









 








SCHEDULE 2




PRICING SCHEDULE





	I.	 	The following is the Pricing Schedule for the Revolving Loan:





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable	 	Level I	 	Level II	 	Level III	 	Level IV	 	Level V
	Margin (loan)	 	Status	 	Status	 	Status	 	Status	 	Status
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Eurodollar Rate

	 	 	1.25	%	 	 	1.50	%	 	 	1.75	%	 	 	2.00	%	 	 	2.25	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Floating Rate

	 	 	0.00	%	 	 	0.25	%	 	 	0.50	%	 	 	0.75	%	 	 	1.00	%






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable Fee	 	Level I	 	Level II	 	Level III	 	Level IV 	 	level v
	Rate	 	Status	 	Status	 	Status	 	Status	 	status
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Commitment Fee

	 	 	0.30	%	 	 	0.35	%	 	 	0.40	%	 	 	0.50	%	 	 	0.50	%






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable	 	 	 	 	 	 	 	 	 	 
	letter of	 	 	 	 	 	 	 	 	 	 
	credit fee	 	Level I	 	Level II	 	Level III	 	Level IV	 	Level V
	rate	 	Status	 	Status	 	Status	 	Status	 	Status
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Letter of Credit
Fee Rate

	 	 	1.25	%	 	 	1.50	%	 	 	1.75	%	 	 	2.00	%	 	 	2.25	%






     For the purposes of this Pricing Schedule, the following terms have the
following meanings, subject to the final paragraph of this Pricing Schedule:



     “Financials” means the annual or quarterly financial statements of the Borrower delivered
pursuant to Section 6.1(i) or (ii).



     “Level I Status” exists at any date if, as of the last day of the fiscal quarter of the
Borrower, the Adjusted Leverage Ratio is less than or equal to 2.25 to 1.00.



     “Level II Status” exists at any date if, as of the last day of the fiscal quarter of the
Borrower i) the Borrower has not qualified for Level I Status and (ii) the Adjusted Leverage Ratio
is less than or equal to 2.75 to 1.00.



Schedule 2 - Page 1









 





     “Level III Status” exists at any date if, as of the last day of the fiscal quarter of the
Borrower (i) the Borrower has not qualified for Level I Status or Level II Status and (ii) the
Adjusted Leverage Ratio is less than or equal to 3.00 to 1.00.



     “Level IV Status” exists at any date if, as of the last day of the fiscal quarter of the
Borrower (i) the Borrower has not qualified for Level I Status, Level II Status or Level III Status
and (ii) the Adjusted Leverage Ratio is less than or equal to 3.25 to 1.00.



     “Level V Status” exists at any date if, as of the last day of the fiscal quarter of the
Borrower (i) the Borrower has not qualified for Level I Status, Level II Status, Level III Status
or Level IV Status.



     “Status” means either Level I Status, Level II Status, Level III Status, Level IV Status or
Level V Status.



     The Applicable Margin, Applicable Fee Rate and Applicable Letter of Credit Fee Rates shall be
determined in accordance with the foregoing table based on the Borrower’s Status as reflected in
the then most recent Financials. Adjustments, if any, to the Applicable Margin, Applicable Fee
Rate, or Applicable Letter of Credit Fee Rate shall be effective five (5) Business Days after the
Agent has received the applicable Compliance Certificate, except that the Applicable Margin on a
Eurodollar Rate Advance shall be adjusted after the last day of the then current Eurodollar
Interest Period. If the Borrower fails to deliver the Compliance Certificate to the Agent at the
time required by Section 6.1, then the Applicable Margin, Applicable Fee Rate and Applicable Letter
of Credit Fee Rate shall be the highest Applicable Margin, Applicable Fee Rate and Applicable
Letter of Credit Fee Rate set forth in the foregoing table until five (5) days after such
Compliance Certificate is so delivered.




Schedule 2 - Page 2












 







SCHEDULE 3




LIST OF BORROWER’S SUBSIDIARIES




	 	 	 	 	 	 	 	 	 	 	 
	 	 	Jurisdiction of	 	Organization	 	 	 	Percent
	Subsidiary Name	 	Organization	 	Type	 	Owned By	 	Ownership
	 
	 	 	 	 	 	 	 	 	 	 
	Ace Rental Tools, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Blowout Tools, Inc.

	 	TX
	 	Corp.
	 	Wild Well 
Control,
Inc.
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Concentric Pipe and Tool
Rentals, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Connection Technology,
L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	CSI Technologies, LLC

	 	TX
	 	LLC
	 	Superior Energy
Services, L.L.C.
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Drilling Logistics, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Environmental Treatment
Team, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	F. & F. Wireline Service,
L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Fastorq, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	H.B. Rentals, L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	International Snubbing
Services, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	J.R.B. Consultants, Inc.

	 	TX
	 	Corp.
	 	Wild Well 
Control,
Inc.
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Non-Magnetic Rental
Tools, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Oil Stop, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Production Management
Industries, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	SE Finance LP

	 	DE
	 	LP
	 	SEGEN, LLC

SELIM, LLC
	 	.0025% (GP)

99.9975% (LP)







Schedule 3 - Page 1









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	Jurisdiction of	 	Organization	 	 	 	Percent
	Subsidiary Name	 	Organization	 	Type	 	Owned By	 	Ownership
	 
	 	 	 	 	 	 	 	 	 	 
	SEGEN, L.L.C.

	 	DE
	 	LLC
	 	SELIM, LLC
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	SELIM, L.L.C.

	 	DE
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	SEMO, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	SEMSE, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Snubbing Technology

Services, LLC

	 	GA
	 	LLC
	 	International

Snubbing 
Services,
L.L.C.
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	SPN Resources, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Stabil Drill Specialties,
L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Sub-Surface Tools, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Superior Canada Holdings,
Inc.

	 	DE
	 	Corp.
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Superior Energy
Liftboats, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Superior Energy Services,
L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Superior Inspection
Services, Inc.

	 	LA
	 	Corp.
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Universal Fishing and
Rental Tools, Inc.

	 	LA
	 	Corp.
	 	Workstrings, 
L.L.C.
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Wild Well Control, Inc.

	 	TX
	 	Corp.
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Workstrings, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	1105 Peters Road, L.L.C.

	 	LA
	 	LLC
	 	Borrower
	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 
	Imperial Snubbing
Services, Ltd.

	 	Trinidad and Tobago
	 	Corp.
	 	Borrower
	 	 	100	%*
	 
	 	 	 	 	 	 	 	 	 	 
	Premier Oilfield Rentals

Limited

	 	Scotland
	 	Corp.
	 	Superior Energy

Services 
(Holdings)

Limited
	 	 	100	%*






Schedule 3 - Page 2









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	Jurisdiction of	 	Organization	 	 	 	Percent
	Subsidiary Name	 	Organization	 	Type	 	Owned By	 	Ownership
	 
	 	 	 	 	 	 	 	 	 	 
	SES Canada, ULC

	 	Canada
	 	Corp.
	 	Superior Canada
Holdings, Inc.
	 	 	100	%*
	 
	 	 	 	 	 	 	 	 	 	 
	Southeast Australian
Services, Pty., Ltd.

	 	Australia
	 	Corp.
	 	Borrower
	 	 	100	%*
	 
	 	 	 	 	 	 	 	 	 	 
	Stabil Drill (U.K.)
Limited

	 	Scotland
	 	Corp.
	 	Borrower
	 	 	100	%*
	 
	 	 	 	 	 	 	 	 	 	 
	Superior Energy Staffing

De Mexico, S. de R.L. de
C.V.

	 	Mexico
	 	Corp.
	 	SEMSE, L.L.C.

SEMO, L.L.C.
	 	99.96% (SEMSE,
L.L.C.)*

0.04% (SEMO, L.L.C.)*

	 
	 	 	 	 	 	 	 	 	 	 
	Superior Energy Services

De Mexico, S. de R.L. de
C.V.

	 	Mexico
	 	Corp.
	 	SEMO, L.L.C.

SEMSE, L.L.C.
	 	99.96% (SEMO, L.L.C.)*

0.04% (SEMSE,
L.L.C.)*

	 
	 	 	 	 	 	 	 	 	 	 
	Superior Energy Services

de Venezuela, C.A.

	 	Venezuela
	 	Corp.
	 	Borrower
	 	 	100	%*
	 
	 	 	 	 	 	 	 	 	 	 
	Superior Energy Services

(Holdings) Limited

	 	Scotland
	 	Corp.
	 	Borrower
	 	 	100	%*
	 
	 	 	 	 	 	 	 	 	 	 
	Superior Energy Services Limited

	 	Scotland
	 	Corp.
	 	Superior Energy

Services (Holdings)

Limited
	 	 	100	%*








 




			
	*	 	Only 66% of the stock is pledged (See Section 2.18)






Schedule 3 - Page 3










 







EXHIBIT A




COMPLIANCE CERTIFICATE 





			
	To:	 	The Lenders parties to the
Credit Agreement Described Below








     This Compliance Certificate is furnished pursuant to that certain Amended and Restated Credit
Agreement dated as of October 31, 2005 (as amended, modified, renewed or extended from time to
time, the “Credit Agreement”) among SESI, L.L.C. (the “Borrower”), Superior Energy Services, Inc.
(the “Parent”), JPMorgan Chase Bank, N.A., as Agent, Wells Fargo Bank, N.A., as Syndication Agent,
Whitney National Bank, as Documentation Agent, and the Lenders party thereto. Unless otherwise
defined herein, capitalized terms used in this Compliance Certificate have the meanings defined in
the Credit Agreement.



     THE UNDERSIGNED HEREBY CERTIFIES THAT:



     1.     I am the duly elected Treasurer of the Borrower;



     2.    I have reviewed the terms of the Credit Agreement and I have made, or have caused to be
made under my supervision, a detailed review of the transactions and conditions of the Borrower and
each of its Subsidiaries during the accounting period covered by the attached financial statements;



     3.    The examinations described in Paragraph 2 did not disclose, and I have no knowledge of,
the existence of any condition or event which constitutes a Default or Unmatured Default during or
at the end of the accounting period covered by the attached financial statements or as of the date
of this Certificate, except as set forth below; and



     4.    Schedule I attached hereto sets forth financial data and computations evidencing
the Borrower’s compliance with certain covenants of the Credit Agreement, all of which data and
computations are true, complete and correct.



     5.    Schedule I, Item B hereto sets forth the determination of the Applicable Margin,
Applicable Fee Rate and Applicable Letter of Credit Fee Rate, commencing on the fifth Business Day
following the delivery hereof.



     Described below are the exceptions, if any, to Paragraph 3 by listing, in detail, the nature
of the condition or event, the period during which it has existed and the action which the Borrower
has taken, is taking, or proposes to take with respect to each such condition or event:



Exhibit A - Page 1









 




 



 



 



 



 



 




     The foregoing certifications, together with the computations set forth in Schedule I
hereto and the financial statements delivered with this Certificate in support hereof, are made and
delivered this __ day of ______, ____.



Exhibit A - Page 2









 





SCHEDULE I TO COMPLIANCE CERTIFICATE




PARENT’S FINANCIAL COVENANTS




(As of                      )




	 	 	 	 	 	 	 	 	 
	A.     Minimum Net Worth (Section 6.18.1)
	 
	 	 	 	 	 	 	 	 
	Net Worth as of December 31, 2004
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Plus Quarterly Positive Net Income
after January 1, 2005 (50%)
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Plus Net Equity Proceeds after January 1, 2005 (75%)
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Required Net Worth
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Actual Net Worth
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	B.     Maximum Leverage Ratio (Section 6.18.2)
	 
	 	 	 	 	 	 	 	 
	Total Funded Indebtedness(*)
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Plus Additional Contingent
Consideration
	 	$	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Net Income for Trailing 4 Quarters
	 	$	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Plus Interest Expense
	 	 	                    	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Plus Income Taxes
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Plus Depreciation
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Plus Amortization
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	EBITDA
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Ratio (actual)
	 	 	 	 	 	___ to 1.00
	Ratio (required)
	 	 	 	 	 	 	3.00 to 1.00	 
	 
	 	 	 	 	 	 	 	 
	C.     Maximum Adjusted Leverage Ratio (6.18.3)
	 
	 	 	 	 	 	 	 	 
	Total Funded Indebtedness(*)
	 	$	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 Plus Additional Contingent Consideration
	 	$	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	 EBITDA for Trailing 4 Quarters (see B above)
	 	$	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Plus Plug and Abandonment Liabilities
	 	$	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Ratio (actual)
	 	 	 	 	 	____ to 1.00
	Ratio (required)
	 	 	 	 	 	 	3.65 to 1.00	 






Exhibit A - Page 3









 






	 	 	 	 	 	 	 	 	 
	D.     Minimum Fixed Charge Coverage Ratio (Section 6.18.4)
	 
	 	 	 	 	 	 	 	 
	EBITDA for Trailing 4 Quarters
(see B above)
	 	$	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Interest Expense
	 	$	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Plus Scheduled Payments of Principal on 
Permitted
Funded Indebtedness
	 	$	                        	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Plus Cash Income Taxes actually paid
	 	$	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Total Fixed Charges
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Ratio (actual)
	 	 	 	 	 	___ to 1.00
	Ratio (required)
	 	 	 	 	 	 	1.50 to 1.00	 
	 
	 	 	 	 	 	 	 	 
	E.     Maximum Capital Expenditures (Section 6.18.5)
	 
	 	 	 	 	 	 	 	 
	Capital Expenditures since January 1, ____
	 	 	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 
	Maximum Capital Expenditures (YTD)
	 	 	 	 	 	$	150,000,000.00	 








 




			
	*	 	Includes face amount of all Letters of Credit outstanding.






Exhibit A - Page 4









 








EXHIBIT B




ASSIGNMENT AGREEMENT 




     This Assignment Agreement (this “Assignment Agreement”) between ______________ (the “Assignor”) and ______________ (the “Assignee”) is dated as of
____________, 20 ____. The parties hereto agree as follows:



     1.      PRELIMINARY STATEMENT. The Assignor is a party to an Amended and Restated Credit
Agreement (which, as it may be amended, modified, renewed or extended from time to time is herein
called the “Credit Agreement”) described in Item 1 of Schedule 1 attached hereto (“Schedule
1”). Capitalized terms used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.



     2.      ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the
Assignor’s rights and obligations under the Credit Agreement and the other Loan Documents, such
that after giving effect to such assignment the Assignee shall have purchased pursuant to this
Assignment Agreement the percentage interest specified in Item 3 of Schedule 1 of all outstanding
rights and obligations under the Credit Agreement and the other Loan Documents relating to the
facilities listed in Item 3 of Schedule 1. The aggregate Commitment (or Loans, if the
applicable Commitment has been terminated) purchased by the Assignee hereunder is set forth in Item
4 of Schedule 1.



     3.      EFFECTIVE DATE. The effective date of this Assignment Agreement (the “Effective
Date”) shall be the later of the date specified in Item 5 of Schedule 1 or two Business
Days (or such shorter period agreed to by the Agent) after this Assignment Agreement, together with
any consents required under the Credit Agreement, are delivered to the Agent. In no event will the
Effective Date occur if the payments required to be made by the Assignee to the Assignor on the
Effective Date are not made on the proposed Effective Date.



     4.      PAYMENT OBLIGATIONS. In consideration for the sale and assignment of Loans
hereunder, the Assignee shall pay the Assignor, on the Effective Date, the amount agreed to by the
Assignor and the Assignee. On and after the Effective Date, the Assignee shall be entitled to
receive from the Agent all payments of principal, interest and fees with respect to the interest
assigned hereby. The Assignee will promptly remit to the Assignor any interest on Loans and fees
received from the Agent which relate to the portion of the Commitment or Loans assigned to the
Assignee hereunder for periods prior to the Effective Date and not previously paid by the Assignee
to the Assignor. In the event that either party hereto receives any payment to which the other
party hereto is entitled under this Assignment Agreement, then the party receiving such amount
shall promptly remit it to the other party hereto.



     5.      RECORDATION FEE. The Assignor and Assignee each agree to pay one-half of the
recordation fee required to be paid to the Agent in connection with this Assignment Agreement
unless otherwise specified in Item 6 of Schedule 1.



Exhibit B - Page 1









 





     6.      REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR’S LIABILITY. The
Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest
being assigned by it hereunder, (ii) such interest is free and clear of any adverse claim created
by the Assignor and (iii) the execution and delivery of this Assignment Agreement by the Assignor
is duly authorized. It is understood and agreed that the assignment and assumption hereunder are
made without recourse to the Assignor and that the Assignor makes no other representation or
warranty of any kind to the Assignee. Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectibility of any Loan Document, including without
limitation, documents granting the Assignor and the other Lenders a security interest in assets of
the Borrower or any guarantor, (ii) any representation, warranty or statement made in or in
connection with any of the Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the terms or
provisions of any of the Loan Documents, (v) inspecting any of the property, books or records of
the Borrower, (vi) the validity, enforceability, perfection, priority, condition, value or
sufficiency of any collateral securing or purporting to secure the Loans or (vii) any mistake,
error of judgment, or action taken or omitted to be taken in connection with the Loans or the Loan
Documents.



     7.      REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i) confirms that
it has received a copy of the Credit Agreement, together with copies of the financial statements
requested by the Assignee and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment Agreement, (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or any other Lender and
based on such documents and information at it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the Loan Documents, (iii) appoints
and authorizes the Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto, (iv) confirms that the execution and delivery of this
Assignment Agreement by the Assignee is duly authorized, (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender, (vi) agrees that its payment instructions and notice
instructions are as set forth in the attachment to Schedule 1, (vii) confirms that none of
the funds, monies, assets or other consideration being used to make the purchase and assumption
hereunder are “plan assets” as defined under ERISA and that its rights, benefits and interests in
and under the Loan Documents will not be “plan assets” under ERISA, (viii) agrees to indemnify and
hold the Assignor harmless against all losses, costs and expenses (including, without limitation,
reasonable attorneys’ fees) and liabilities incurred by the Assignor in connection with or arising
in any manner from the Assignee’s non-performance of the obligations assumed under this Assignment
Agreement, and (ix) if applicable, attaches the forms prescribed by the Internal Revenue Service of
the United States certifying that the Assignee is entitled to receive payments under the Loan
Documents without deduction or withholding of any United States federal income taxes.



     8.      GOVERNING LAW. This Assignment Agreement shall be governed by the internal law,
and not the law of conflicts, of the State of Louisiana.



Exhibit B - Page 2









 





     9.       NOTICES. Notices shall be given under this Assignment Agreement in the manner set
forth in the Credit Agreement. For the purpose hereof, the addresses of the parties hereto (until
notice of a change is delivered) shall be the address set forth in the attachment to Schedule
1.



     10.     COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement may be executed in
counterparts. Transmission by facsimile of an executed counterpart of this Assignment Agreement
shall be deemed to constitute due and sufficient delivery of such counterpart and such facsimile
shall be deemed to be an original counterpart of this Assignment Agreement.



     IN WITNESS WHEREOF, the duly authorized officers of the parties hereto have executed this
Assignment Agreement by executing Schedule 1 hereto as of the date first above written.



Exhibit B - Page 3









 





SCHEDULE 1




TO ASSIGNMENT AGREEMENT




	 	 	 	 	 	 	 	 
	1.	 	Description and Date of Credit Agreement: Amended and Restated Credit Agreement dated as of
October 31, 2005 among SESI, L.L.C., as Borrower, Superior Energy Services, Inc., as Parent,
JPMorgan Chase Bank, N.A., as Agent, Wells Fargo Bank, N.A., as Syndication Agent, Whitney
National Bank, as Documentation Agent, and the Lenders party thereto.
	 
	 	 	 	 	 	 
	2.	 	Date of Assignment Agreement: ______, _________
	 
	 	 	 	 	 	 
	3.	 	Amounts Outstanding (As of Date of Item 2 above):
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Revolving Loan

Facility
	 
	 	 	 	 	 	 
	 

	 	a.
	 	Assignee’s percentage
of each Facility purchased
under the Assignment
Agreement
	 	________%
	 
	 	 	 	 	 	 
	 

	 	b.
	 	Amount of each Facility
purchased under the
Assignment Agreement
	 	$__________
	 
	 	 	 	 	 	 
	4.	 	Assignee’s Revolving Loan Commitment purchased hereunder:	 	$__________
	 
	 	 	 	 	 	 
	5.	 	Proposed Effective Date:	 	 
	 
	 	 	 	 	 	 
	6.	 	Non-standard Recordation Fee Arrangement	 	 






	 	 	 	 	 	 	 
	ACCEPTED AND CONSENTED TO/BY 
SESI, L.L.C	 	ACCEPTED AND CONSENTED TO/BY. 
JPMORGAN CHASE BANK, N.A.
	 
	 	 	 	 	 	 
	By:

	 	Superior Energy Services, Inc.,

Member Manager	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:






Exhibit B - Page 4









 






ATTACHMENT TO SCHEDULE 1 TO ASSIGNMENT AGREEMENT




ADMINISTRATIVE INFORMATION SHEET




Attach Assignor’s Administrative Information Sheet, which must

include notice addresses for the Assignor and the Assignee

(Sample form shown below)




ASSIGNOR INFORMATION

Contact:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name:	 	 	 	 	 	 	 	 	 	 	 	Telephone No.:	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fax No.:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Payment Information:	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name & ABA # of Destination Bank:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Account Name & Number for Wire Transfer:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other Instructions:	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Address for Notices for Assignor:	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ASSIGNEE INFORMATION
Credit Contact:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name:	 	 	 	 	 	 	 	 	 	 	 	Telephone No.:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fax No.:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Key Operations Contacts:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Booking Installation:	 	 	 	 	 	 	 	 	Booking Installation:	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	 	 	 	 	 	 	Name:	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Telephone No.:	 	 	 	 	 	 	 	 	 	Telephone No.:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fax No.:	 	 	 	 	 	 	 	 	 	 	Fax No.:	 	 	 	 	 	 	 
	 	 	 	 	 	 	 





Exhibit B - Page 5









 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Payment Information:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name & ABA # of Destination Bank:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Account Name & Number for Wire
Transfer:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other Instructions:	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Address for Notices for Assignee:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 





Exhibit B - Page 6









 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	AGENT INFORMATION	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Assignee will be called promptly upon receipt of the signed agreement.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Initial Funding Contact:	 	 	 	Subsequent Operations Contact:
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	 	 	 	 	 	 	Name:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Telephone No.:	 	 	 	 	 	 	 	 	Telephone No.:	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fax No.:	 	 	 	 	 	 	 	 	 	Fax No.:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 





Initial Funding Standards:




Cibor — Fund 2 days after rates are set.




Agent Wire Instructions:




Address for Notices for Agent:





Exhibit B - Page 7