1
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U.S. $180,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
among
POOL ENERGY SERVICES CO.,
POOL ENERGY HOLDING, INC.,
POOL COMPANY,
VARIOUS BANKS,
SBC WARBURG DILLON READ INC., as ARRANGER
CREDIT LYONNAIS NEW YORK BRANCH, as ADMINISTRATIVE AGENT
and
SWISS BANK CORPORATION, STAMFORD BRANCH, as
DOCUMENTATION AGENT
Dated as of March 26, 1998
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01 The Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Minimum Amount of Each Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.06 Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.10 Increased Costs, Illegality, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.12 Replacement of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.13 Extension of Final Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.01 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.02 Maximum Letter of Credit Outstandings; Final Maturities . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.03 Letter of Credit Requests; Minimum Stated Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.04 Letter of Credit Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.05 Agreement to Repay Letter of Credit Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.06 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3. Commitment Commission; Fees; Reductions of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.02 Voluntary Termination of Unutilized Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.03 Mandatory Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4. Prepayments; Payments; Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.02 Mandatory Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.03 Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.04 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5. Conditions Precedent to the Restatement Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.01 Execution of Agreement; Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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5.02 Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.03 Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.04 Corporate Documents; Proceedings; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.05 Sea Mar Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.06 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.07 Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.08 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.09 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.10 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.11 Subsidiaries Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.12 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.13 Fees, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6. Conditions Precedent to All Credit Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.01 Restatement Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.02 No Default; Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.03 Notice of Borrowing; Letter of Credit Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.04 Absence of Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7. Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.02 Corporate and Other Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.04 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . 29
7.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.07 True and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.08 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.09 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.10 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.11 The Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.12 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.13 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.15 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.16 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.17 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.19 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.20 Patents, Licenses, Franchises and Formulas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.21 Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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7.22 Inactive Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.23 No Tax Sharing Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.01 Information Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(a) Quarterly Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(b) Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(c) Budgets and Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(d) Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(e) Notice of Default or Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(f) Other Reports and Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(g) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(h) Annual Meetings with Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(i) Acquisition Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(j) Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.02 Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.03 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.04 Corporate Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.05 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.06 Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.07 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.08 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.09 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.10 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.11 Foreign Subsidiaries Guaranty, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.12 Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.01 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.03 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.04 Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.05 Advances, Investments and Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.06 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.07 Consolidated Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.08 Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.09 Maximum Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.10 Maximum Debt-to-Total Capital Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.11 Minimum Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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9.12 Limitation on Modifications of Certificate of Incorporation and By-Laws; Limitation on Voluntary Payments and
Modifications of Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.13 Limitation on Certain Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.14 Limitation on Issuance of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.15 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.16 Limitation on Creation of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.17 Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.02 Representations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.04 Default Under Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.05 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.07 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.08 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.09 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.10 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 11. Definitions and Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
11.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 12. The Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.02 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.03 Lack of Reliance on the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.04 Certain Rights of the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
12.05 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
12.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
12.07 The Administrative Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
12.08 Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
12.09 Resignation by the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 13. The Arranger; The Documentation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
13.01 The Arranger; Documentation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
13.02 Liability of the Arranger and the Documentation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
13.03 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
13.04 Arranger and Documentation Agent in their Individual Capacities . . . . . . . . . . . . . . . . . . . . . . . 90
13.05 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
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SECTION 14. Parents Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
14.01 The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
14.02 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
14.03 Nature of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
14.04 Independent Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
14.05 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
14.06 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
14.07 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
14.08 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
14.09 Nature of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 15. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
15.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
15.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
15.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
15.04 Benefit of Agreement; Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
15.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
15.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
15.07 Calculations; Computations; Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
15.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . 101
15.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
15.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
15.11 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
15.12 Amendment or Waiver; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
15.13 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
15.14 Domicile of Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
15.15 Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
15.16 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
15.17 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
15.18 Credit Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
15.19 Inactive Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
(v)
7
SCHEDULE I Revolving Loan Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Subsidiaries
SCHEDULE IV Existing Funded Debt
SCHEDULE V Existing Liens
SCHEDULE VI Existing Investments; Existing Intercompany Loans
EXHIBIT A-1 Notice of Borrowing
EXHIBIT A-2 Notice of Conversion
EXHIBIT B Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Opinion of Gardere ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
Special Counsel to the Credit Parties
EXHIBIT E-2 Opinion of ▇▇▇▇▇▇▇▇ Arms, Esq, General Counsel to the
Borrower
EXHIBIT E-3 Opinion of Louisiana Counsel to Sea Mar
EXHIBIT F Officers' Certificate
EXHIBIT G Pledge Agreement
EXHIBIT H Reserved
EXHIBIT I Assignment and Assumption Agreement
EXHIBIT J Intercompany Note
EXHIBIT K Compliance Certificate
EXHIBIT L Permitted Acquisition Certificate
(vi)
8
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 26,
1998, among POOL ENERGY SERVICES CO., a Texas corporation ("PESCO"), POOL
ENERGY HOLDING, INC., a Delaware corporation ("Holding"), POOL COMPANY, a Texas
corporation (the "Borrower"), the Banks party hereto from time to time, SBC
WARBURG DILLON READ INC., as Arranger (the "Arranger"), CREDIT LYONNAIS NEW
YORK BRANCH, as Administrative Agent, SWISS BANK CORPORATION, STAMFORD BRANCH,
as Documentation Agent (the "Documentation Agent") and BANK ONE, TEXAS, N.A.,
and THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, as Co-Agents (all
capitalized terms used herein and defined in Section 11 are used herein as
therein defined).
W I T N E S S E T H :
WHEREAS, the parties hereto entered into a Credit Agreement
dated as of September 30, 1997 (the "Original Credit Agreement"); and
WHEREAS, the parties hereto desire to amend the Original
Credit Agreement and restate it in its entirety so as, inter alia, (i) to
increase the Total Revolving Loan Commitment to $180,000,000, (ii) to permit
PESCO and the Borrower to consummate the transactions contemplated by the Stock
Purchase Agreement, dated as of February 10, 1998 (as in effect on the date
hereof, the "Sea Mar Acquisition Agreement"), among PESCO, the Borrower, Sea
Mar, Inc. ("Sea Mar") and the stockholders of Sea Mar and (iii) to make certain
other changes to the Original Credit Agreement; and
WHEREAS, upon the occurrence of the Restatement Effective
Date, this Agreement shall replace and supersede in all respects, and
constitute a restatement of, the Original Credit Agreement; and
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Banks are willing to make available to the Borrower the
respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
9
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees to make, at any time
and from time to time on and after the Original Effective Date and prior to the
Final Maturity Date, a revolving loan or revolving loans (each a "Revolving
Loan" and, collectively, the "Revolving Loans") to the Borrower, which
Revolving Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that except as otherwise specifically provided in Section 1.10(b), all
Revolving Loans comprising the same Borrowing shall at all times be of the same
Type, (ii) may be repaid and reborrowed in accordance with the provisions
hereof, (iii) shall not exceed for any Bank at any time outstanding that
aggregate principal amount which, when added to the product of (x) such Bank's
RL Percentage and (y) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time, equals the Revolving Loan Commitment of such Bank at such
time and (iv) shall not exceed for all Banks at any time outstanding that
aggregate principal amount which, when added to the aggregate amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, equals the Total Revolving Loan
Commitment at such time.
1.02 Minimum Amount of Each Borrowing. The aggregate
principal amount of each Borrowing of Base Rate Loans or Eurodollar Loans shall
not be less than the Minimum Borrowing Amount applicable thereto. More than
one Borrowing may occur on the same date, but at no time shall there be
outstanding more than thirteen Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires
to incur (x) Eurodollar Loans hereunder, the Borrower shall give the
Administrative Agent at the Notice Office at least three Business Days' prior
notice of each Eurodollar Loan to be incurred hereunder and (y) Base Rate Loans
hereunder, the Borrower shall give the Administrative Agent at the Notice
Office at least one Business Day's prior notice of each Base Rate Loan to be
incurred hereunder, provided that (in each case) any such notice shall be
deemed to have been given on a certain day only if given before 11:30 A.M. (New
York time) on such day. Each such notice (each a "Notice of Borrowing"),
except as otherwise expressly provided in Section 1.10, shall be irrevocable
and shall be given by the Borrower in writing, or by telephone promptly
confirmed in writing, in the form of Exhibit A-1, appropriately completed to
specify the aggregate principal amount of the Revolving Loans to be incurred
pursuant to such Borrowing, the date of such Borrowing (which shall be a
Business Day), whether the Revolving Loans being incurred pursuant to such
Borrowing are to be initially maintained as Base Rate Loans or, to the extent
permitted hereunder,
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10
Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be
applicable thereto. The Administrative Agent shall promptly give each Bank
notice of such proposed Borrowing, of such Bank's proportionate share thereof
and of the other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b) Without in any way limiting the obligation of the
Borrower to confirm in writing any telephonic notice of any Borrowing or
prepayment of Revolving Loans, the Administrative Agent may act without
liability upon the basis of telephonic notice of such Borrowing or prepayment,
as the case may be, believed by the Administrative Agent in good faith to be
from the Chairman of the Board, the Chief Executive Officer, the President, the
Chief Financial Officer, the Treasurer or any Assistant Treasurer of the
Borrower, or from any other person designated in writing by any of the
foregoing officers of the Borrower to the Administrative Agent as being
authorized to give such notices, prior to receipt of written confirmation. In
each such case, the Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of such telephonic notice of such
Borrowing or prepayment of Revolving Loans, as the case may be, absent manifest
error.
1.04 Disbursement of Funds. No later than 12:00 Noon (New
York time) on the date specified in any relevant Notice of Borrowing, each
Bank will make available its pro rata portion (determined in accordance with
Section 1.07) of each such Borrowing requested to be made on such date. All
such amounts will be made available in Dollars and in immediately available
funds at the Payment Office of the Administrative Agent, and the Administrative
Agent will make available to the Borrower at the Payment Office the aggregate
of the amounts so made available by the Banks. Unless the Administrative Agent
shall have been notified by any Bank prior to the date of Borrowing that such
Bank does not intend to make available to the Administrative Agent such Bank's
portion of any Borrowing to be made on such date, the Administrative Agent may
assume that such Bank has made such amount available to the Administrative
Agent on such date of Borrowing and the Administrative Agent may (but shall not
be obligated to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Bank, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from
such Bank. If such Bank does not pay such corresponding amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
also shall be entitled to recover on demand from such Bank or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower until the date such corresponding amount
is recovered by the Administrative Agent, at a rate per annum equal to (i) if
recovered from such Bank, at the overnight Federal Funds Rate and (ii) if
recovered from the Borrower, the rate of interest applicable to the respective
Borrowing, as determined pursuant to Sec-
-3-
11
tion 1.08. Nothing in this Section 1.04 shall be deemed to relieve any Bank
from its obligation to make Revolving Loans hereunder or to prejudice any
rights which the Borrower may have against any Bank as a result of any failure
by such Bank to make Revolving Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, the Revolving Loans made by each Bank shall be
evidenced by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B, with blanks appropriately completed in
conformity herewith (each a "Note" and, collectively, the "Notes").
(b) The Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to such Bank or its registered assigns and be dated
the date of the issuance thereof, (iii) be in a stated principal amount equal
to the Revolving Loan Commitment of such Bank (or, if issued after the
termination thereof, be in a stated principal amount equal to the outstanding
Revolving Loans of such Bank at such time) and be payable in the outstanding
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Final Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02,
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(c) Each Bank will note on its internal records the amount of
each Revolving Loan made by it and each payment in respect thereof and will
prior to any transfer of any of its Notes endorse on the reverse side thereof
the outstanding principal amount of Revolving Loans evidenced thereby. Failure
to make any such notation or any error in such notation shall not affect the
Borrower's obligations in respect of such Revolving Loans.
1.06 Conversions. The Borrower shall have the option to
convert all or a portion equal to at least the Minimum Borrowing Amount of the
outstanding principal amount of Revolving Loans made pursuant to one or more
Borrowings of one or more Types of Revolving Loans into a Borrowing of another
Type of Revolving Loan, provided that, (i) except as otherwise provided in
Section 1.10(b), Eurodollar Loans may be converted into Base Rate Loans only on
the last day of an Interest Period applicable to the Revolving Loans being
converted and no such partial conversion of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii)
Base Rate Loans may only be converted into Eurodollar Loans if no Default or
Event of Default is in existence on the date of such conversion, and (iii) no
conversion pursuant to this Section 1.06 shall result in a greater number of
Borrowings of Eurodollar Loans than is permitted
-4-
12
under Section 1.02. Each such conversion shall be effected by the Borrower by
giving the Administrative Agent at its Notice Office prior to 11:30 A.M. (New
York time) at least three Business Days' prior notice (each a "Notice of
Conversion") in the form of Exhibit A-2, appropriately completed to specify the
Revolving Loans to be so converted, the Borrowing or Borrowings pursuant to
which such Revolving Loans were made and, if to be converted into Eurodollar
Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Revolving Loans. Upon any such conversion the
proceeds thereof will be deemed to be applied directly on the day of such
conversion to prepay the outstanding principal amount of the Revolving Loans
being converted.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans
under this Agreement shall be incurred from the Banks pro rata on the basis of
their Revolving Loan Commitments. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make
Revolving Loans hereunder and that each Bank shall be obligated to make the
Revolving Loans provided to be made by it hereunder, regardless of the failure
of any other Bank to make its Revolving Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date of
Borrowing thereof until the maturity thereof (whether by acceleration or
otherwise) at a rate per annum which shall be equal to the sum of the Base Rate
plus the Applicable Base Rate Margin, each as in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date of Borrowing
thereof until the maturity thereof (whether by acceleration or otherwise) at a
rate per annum which shall, during each Interest Period applicable thereto, be
equal to the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Eurodollar Rate Margin as in effect on the first day of such
Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Revolving Loan and any other overdue amount
payable hereunder shall, in each case, bear interest at a rate per annum equal
to the rate which is 2% in excess of the rate otherwise applicable to Base Rate
Loans from time to time. Interest which accrues under this Section 1.08(c)
shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Revolving
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13
Loan, on any repayment or prepayment (on the amount repaid or prepaid), at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(e) Upon each Interest Determination Date, the Administrative
Agent shall determine the Eurodollar Rate for each Interest Period applicable
to Eurodollar Loans and shall promptly notify the Borrower and the Banks
thereof. Each such determination shall, absent manifest error, be final and
conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives any
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, any Eurodollar Loan (in the case of the initial Interest
Period applicable thereto) or on the third Business Day prior to the expiration
of an Interest Period applicable to such Eurodollar Loan (in the case of any
subsequent Interest Period), the Borrower shall have the right to elect, by
giving the Administrative Agent notice thereof, the interest period (each an
"Interest Period") applicable to such Eurodollar Loan, which Interest Period
shall, at the option of the Borrower, be a one, two, three or six-month period,
provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan
shall commence on the date of Borrowing of such Eurodollar Loan
(including the date of any conversion thereto from a Base Rate) and
each Interest Period occurring thereafter in respect of such
Eurodollar Loan shall commence on the day on which the next preceding
Interest Period applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day; provided,
however, that if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period may be selected at any time when a
Default or an Event of Default is then in existence; and
-6-
14
(vi) no Interest Period in respect of any Borrowing of
Eurodollar Loans shall be selected which extends beyond the Final
Maturity Date.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event
that any Bank shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of
any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Loan because of (x) any change since
the date of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payment to any
Bank of the principal of or interest on the Notes or any other amounts
payable hereunder (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of such Bank
pursuant to the laws of the jurisdiction in which it is organized or
in which its principal office or applicable lending office is located
or any subdivision thereof or therein) or (B) a change in official
reserve requirements, but, in all events, excluding reserves required
under Regulation D to the extent included in the computation of the
Eurodollar Rate and/or (y) other circumstances since the date of this
Agreement affecting the position of such Bank in the interbank
Eurodollar market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having force
of law) or (z) impracticable as a result of a contingency occurring
after the date of this Agreement which materially and adversely
affects the position of such Bank in the interbank Eurodollar market;
-7-
15
then, and in any such event, such Bank (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the Borrower and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Administrative Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have
not yet been incurred (including by way of conversion) shall be deemed
rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower
shall pay to such Bank, upon such Bank's written request therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Bank, showing in reasonable
detail the basis for the calculation thereof, submitted to the Borrower by such
Bank shall, absent manifest error, be final and conclusive and binding on all
the parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in Section 1.10(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) the Borrower shall) either (x) if the affected Eurodollar
Loan is then being made initially or pursuant to a conversion, cancel such
Borrowing by giving the Administrative Agent telephonic notice (confirmed in
writing) prior to the time of funding of such Eurodollar Loan or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business
Days' written notice to the Administrative Agent, require the affected Bank to
convert such Eurodollar Loan into a Base Rate Loan, provided that, if more than
one Bank is affected at any time, then all affected Banks must be treated the
same pursuant to this Section 1.10(b).
(c) If any Bank determines that after the date of this
Agreement the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by the NAIC or any governmental
authority, central bank or comparable agency, will have the effect of
increasing the amount of capital required or expected to be maintained by such
Bank or any corporation controlling such Bank based on the existence of such
Bank's Revolving Loan Commitment hereunder or its obligations hereunder, then
the Borrower shall pay to such Bank, upon its written demand therefor, such
additional amounts as shall be required to compensate such Bank or such other
corporation for the increased cost to such Bank or such
-8-
16
other corporation or the reduction in the rate of return to such Bank or such
other corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Bank's determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Bank, upon determining that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrower, which notice shall show in reasonable detail the basis
for calculation of such additional amounts.
1.11 Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth in reasonable detail
the basis for requesting such compensation (including the calculation
thereof)), for all losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans but excluding loss of anticipated profits) which such
Bank may actually incur: (i) if for any reason (other than a default by such
Bank or the Administrative Agent) a Borrowing of, or conversion from or into,
Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment (including
any repayment made pursuant to Section 4.01, Section 4.02 or as a result of an
acceleration of the Revolving Loans pursuant to Section 10) or conversion of
any of its Eurodollar Loans occurs on a date which is not the last day of an
Interest Period with respect thereto; (iii) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Eurodollar Loans when required by the terms of this
Agreement or any Note held by such Bank or (y) any election made pursuant to
Section 1.10(b).
1.12 Replacement of Banks. (x) If any Bank becomes a
Defaulting Bank or otherwise defaults in its obligations to make Revolving
Loans, or (y) upon the occurrence of an event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04
with respect to any Bank which results in such Bank charging, or giving notice
that it is entitled to charge, to the Borrower increased costs in excess of
those being generally charged by the other Banks, the Borrower shall have the
right, if no Default or Event of Default then exists to replace such Bank (the
"Replaced Bank") with one or more other Eligible Transferees, none of whom
shall constitute a Defaulting Bank at the time of such replacement
(collectively, the "Replacement Bank") and each of whom shall be required to be
reasonably acceptable to the Administrative Agent, provided that (i) at the
time of any replacement pursuant to this Section 1.12, the Replacement Bank
shall enter into one or more Assignment and Assumption Agreements pursuant to
Section 15.04(b) (and with all fees payable pursuant to said Section 15.04(b)
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(other than fees incurred by or for the account of the Defaulting Bank in any
capacity hereunder) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire the entire Revolving Loan Commitment and
outstanding Revolving Loans of, and participations in Letters of Credit by, the
Replaced Bank and, in connection therewith, shall pay to (x) the Replaced Bank
in respect thereof an amount equal to the sum of (I) an amount equal to the
principal of, and all accrued interest on, all outstanding Revolving Loans of
the Replaced Bank, (II) an amount equal to all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time and (III) an amount equal to
all accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant
to Section 3.01, and (y) each Issuing Bank an amount equal to such Replaced
Bank's RL Percentage of any Unpaid Drawing (which at such time remains an
Unpaid Drawing) to the extent such amount was not theretofore funded by such
Replaced Bank to such Issuing Bank and (ii) all obligations of the Borrower due
and owing to the Replaced Bank at such time (other than those specifically
described in clause (i) above in respect of which the assignment purchase price
has been, or is concurrently being, paid) shall be paid in full to such
Replaced Bank concurrently with such replacement. Upon the execution of the
respective Assignment and Assumption Agreement, the payment of amounts referred
to in clauses (i) and (ii) above and, if so requested by the Replacement Bank,
delivery to the Replacement Bank of the appropriate Note executed by the
Borrower, the Replacement Bank shall become a Bank hereunder and the Replaced
Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.06, 4.04, 12.06, 13.03 and 15.01), which shall survive
as to such Replaced Bank.
1.13 Extension of Final Maturity Date. At any time prior to
the 90th day preceding any anniversary of the Original Effective Date, the
Borrower may make a written request to the Administrative Agent, who shall
forward a copy of such request to each of the Banks, that the Final Maturity
Date be extended by one year. The Banks may, but shall not be obligated to,
agree to extend the Final Maturity Date. In any event, the Administrative
Agent shall be obligated to respond in writing, affirmatively or negatively, to
such request within sixty (60) days after the date of such request of extension
of the Final Maturity Date made by the Borrower.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms
and conditions set forth herein, the Borrower may request that an Issuing Bank
issue, at any time and from time to time on and after the Original Effective
Date and prior to the 30th day prior to the Final Maturity Date, (x) for the
account of the Borrower and for the benefit of any holder (or any trustee,
agent or other similar representative for any such holders) of L/C Support-
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able Obligations of PESCO or any of its Subsidiaries, an irrevocable standby
letter of credit, in a form customarily used by such Issuing Bank or in such
other form as has been approved by such Issuing Bank and (y) for the account of
the Borrower and for the benefit of sellers of goods to PESCO or any of its
Subsidiaries, an irrevocable trade letter of credit, in a form customarily used
by such Issuing Bank or in such other form as has been approved by such Issuing
Bank (each such letter of credit issued pursuant to this Section 2.01, a
"Letter of Credit"). All Letters of Credit shall be denominated in Dollars.
(b) Subject to and upon the terms and conditions set forth
herein, each Issuing Bank agrees that it will, at any time and from time to
time on and after the Original Effective Date and prior to the 30th day prior
to the Final Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for the account of the Borrower, one or more Letters of
Credit as are permitted to remain outstanding without giving rise to a Default
or an Event of Default, provided that no Issuing Bank shall be under any
obligation to issue any Letter of Credit of the types described above if at the
time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain such Issuing Bank from issuing such Letter of Credit or any
requirement of law applicable to such Issuing Bank or any request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over such Issuing Bank shall
prohibit, or request that such Issuing Bank refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose upon such Issuing Bank with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which
such Issuing Bank is not otherwise compensated) not in effect on the
date hereof, or any unreimbursed loss, cost or expense which was not
applicable or in effect with respect to such Issuing Bank as of the
date hereof and which such Issuing Bank reasonably and in good ▇▇▇▇▇
▇▇▇▇▇ material to it; or
(ii) such Issuing Bank shall have received notice from the
Borrower or the Required Banks prior to the issuance of such Letter of
Credit of the type described in the second sentence of Section
2.03(b).
(c) Each Issuing Bank agrees to provide to the Administrative
Agent (who shall promptly forward a copy to each Bank) by facsimile promptly on
the first Business Day of each quarter the daily aggregate Stated Amount of all
Letters of Credit issued by such Issuing Bank for the immediately preceding
quarter.
(d) The Borrower agrees (i) that its request for a Letter of
Credit shall be governed by the Uniform Customs and Practice for Documentary
Credits (1993 revision), International Chamber of Commerce Publication No. 500,
or any subsequent revision
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thereof and (ii) to promptly examine and advise the Issuing Bank if it notices
any irregularity or non-conformance with its instructions in any Letter of
Credit or related document issued by an Issuing Bank.
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, as of the
effective date of such Letter of Credit, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such effective
date would exceed either (x) $15,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans then outstanding, an amount equal to
the Total Revolving Loan Commitment at such time and (ii) each Letter of Credit
shall by its terms terminate on or before the date that is four Business Days
(or 30 days in the case of a trade Letter of Credit) prior to the Final
Maturity Date.
2.03 Letter of Credit Requests; Minimum Stated Amount. (a)
Whenever the Borrower desires that a Letter of Credit be issued for its
account, the Borrower shall give the Administrative Agent and the respective
Issuing Bank at least five Business Days' (or such shorter period as is
acceptable to such Issuing Bank) written notice thereof. Each notice shall be
in the form of Exhibit C (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 2.02. Unless the respective Issuing Bank has received notice from
the Borrower or the Required Banks before it issues a Letter of Credit that one
or more of the conditions specified in Section 5 or 6 are not then satisfied,
or that the issuance of such Letter of Credit would violate Section 2.02, then
such Issuing Bank shall, subject to the terms and conditions of this Agreement,
issue the requested Letter of Credit for the account of the Borrower in
accordance with such Issuing Bank's usual and customary practices. Upon its
issuance of or amendment to any standby Letter of Credit, the respective
Issuing Bank shall promptly notify the Borrower, each Participant and the
Administrative Agent of such issuance or amendment and such notification shall
be accompanied by a copy of the issued standby Letter of Credit or amendment.
Notwithstanding anything to the contrary contained in this Agreement, in the
event that a Bank Default exists, no Issuing Bank shall be required to issue
any Letter of Credit unless such Issuing Bank has entered into an arrangement
satisfactory to it and the Borrower to eliminate such Issuing Bank's risk with
respect to the participation in Letters of Credit by the Defaulting Bank or
Banks, including by cash collateralizing such Defaulting Bank's or Banks' RL
Percentage of the Letter of Credit Outstandings.
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2.04 Letter of Credit Participations. (a) Immediately upon
the issuance by each Issuing Bank of any Letter of Credit, such Issuing Bank
shall be deemed to have sold and transferred to each Bank, other than such
Issuing Bank (each such Bank, in its capacity under this Section 2.04, a
"Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant's RL Percentage, in such Letter of Credit, each drawing or
payment made thereunder and the obligations of the Borrower under this
Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments or RL
Percentages of the Banks pursuant to Section 1.12 or 15.04, it is hereby agreed
that, with respect to all outstanding Letters of Credit and Unpaid Drawings,
there shall be an automatic adjustment to the participations pursuant to this
Section 2.04 to reflect the new RL Percentages of the assignor and assignee
Bank, as the case may be.
(b) In determining whether to pay under any Letter of Credit
issued by it, no Issuing Bank shall have an obligation relative to the other
Banks other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or
in connection with any Letter of Credit issued by it if taken or omitted in
accordance with the relevant standards of care mandated by the law governing
the applicable Letter of Credit and in the absence of gross negligence or
willful misconduct, shall not create for such Issuing Bank any resulting
liability to the Borrower, any other Credit Party, any Bank or any other
Person.
(c) In the event that any Issuing Bank makes any payment
under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to such Issuing Bank pursuant to Section
2.05(a), such Issuing Bank shall promptly notify the Administrative Agent,
which shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to such Issuing Bank the
amount of such Participant's RL Percentage of such unreimbursed payment in
Dollars and in same day funds. If the Administrative Agent so notifies, prior
to 11:00 A.M. (New York time) on any Business Day, any Participant required to
fund a payment under a Letter of Credit, such Participant shall make available
to the respective Issuing Bank in Dollars such Participant's RL Percentage of
the amount of such payment on such Business Day in same day funds. If and to
the extent such Participant shall not have so made its RL Percentage of the
amount of such payment available to the respective Issuing Bank, such
Participant agrees to pay to such Issuing Bank, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to such Issuing Bank at the overnight Federal Funds
Rate for the first three days and at the interest rate applicable to Base Rate
Loans for each day thereafter. The failure of any Participant
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to make available to the respective Issuing Bank its RL Percentage of any
payment under any Letter of Credit shall not relieve any other Participant of
its obligation hereunder to make available to such Issuing Bank its RL
Percentage of any Letter of Credit on the date required, as specified above,
but no Participant shall be responsible for the failure of any other
Participant to make available to such Issuing Bank such other Participant's RL
Percentage of any such payment.
(d) Whenever an Issuing Bank receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, such Issuing Bank shall pay to each
Participant which has paid its RL Percentage thereof, in Dollars and in same
day funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of
the respective participations.
(e) Upon the request of any Participant, each Issuing Bank
shall furnish to such Participant copies of any standby Letter of Credit issued
by it and such other documentation as may reasonably be requested by such
Participant.
(f) The obligations of the Participants to make payments to
each Issuing Bank with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any of its Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee
may be acting), the Administrative Agent, any Issuing Bank, any
Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction
between the Borrower or any Subsidiary of the Borrower and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
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(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower agrees to reimburse each Issuing Bank, by making payment to the
Administrative Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by such Issuing Bank under any Letter of
Credit issued by it (each such amount, so paid until reimbursed, an "Unpaid
Drawing"), not later than one Business Day following receipt by the Borrower of
notice of such payment or disbursement (provided that no such notice shall be
required to be given if an Event of Default under Section 10.05 shall have
occurred and be continuing, in which case the Unpaid Drawing shall be due and
payable immediately without presentment, demand, protest or notice of any kind
(all of which are hereby waived by the Borrower)), with interest on the amount
so paid or disbursed by such Issuing Bank, to the extent not reimbursed prior
to 1:00 P.M. (New York time) on the date of such payment or disbursement, from
and including the date paid or disbursed to but excluding the date such Issuing
Bank was reimbursed by the Borrower therefor at a rate per annum which shall be
the Base Rate in effect from time to time; provided, however, to the extent
such amounts are not reimbursed prior to 12:00 Noon (New York time) on the
third Business Day following the receipt by the Borrower of notice of such
payment or disbursement or during the continuance of an Event of Default under
Section 10.05, interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Bank (and until reimbursed by the Borrower) at a rate
per annum which shall be the Base Rate in effect from time to time plus 2%, in
each such case, with interest to be payable on demand. Each Issuing Bank shall
use its best efforts to give the Borrower notice of the date and amount of any
draft presented under any Letter of Credit prior to payment thereof and shall
give the Borrower prompt written notice of each Drawing under any Letter of
Credit issued by it, provided that the failure to give any such notice shall in
no way affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05
to reimburse each Issuing Bank with respect to Unpaid Drawings (including, in
each case, interest thereon) shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against any Bank (including in
its capacity as issuer of the Letter of Credit or as Participant), including,
without limitation, any defense based upon the failure of any drawing or
payment under a Letter of Credit (each a "Drawing") to conform to the terms of
the Letter of Credit or any nonapplication or misapplication by the beneficiary
of the proceeds of such Drawing; provided, however, that the Borrower shall not
be obligated to reimburse the respective Issuing Bank for any wrongful payment
made by such Issuing Bank under a Letter of Credit issued by it as a result of
acts or omissions taken in
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contravention of the standards of care mandated by the law governing the
applicable Letter of Credit or constituting willful misconduct or gross
negligence on the part of such Issuing Bank.
2.06 Increased Costs. If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by the NAIC or any governmental authority charged with
the interpretation or administration thereof, or compliance by any Issuing Bank
or any Participant with any request or directive by the NAIC or by any such
authority (whether or not having the force of law), shall either (i) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued by any Issuing Bank or
participated in by any Participant, or (ii) impose on any Issuing Bank or any
Participant any other conditions relating, directly or indirectly, to this
Agreement; and the result of any of the foregoing is to increase the cost to
any Issuing Bank or any Participant of issuing, maintaining or participating in
any Letter of Credit, or reduce the amount of any sum received or receivable by
any Issuing Bank or any Participant hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except for changes in the rate
of tax on, or determined by reference to, the net income or profits of such
Issuing Bank or such Participant pursuant to the laws of the jurisdiction in
which it is organized or in which its principal office or applicable lending
office is located or any subdivision thereof or therein), then, upon the
delivery of the certificate referred to below to the Borrower by such Issuing
Bank or such Participant (a copy of which certificate shall be sent by such
Issuing Bank or such Participant to the Administrative Agent), the Borrower
shall pay to such Issuing Bank or such Participant such additional amount or
amounts as will compensate such Issuing Bank or such Participant for such
increased cost or reduction in the amount receivable or reduction on the rate
of return on its capital. Each Issuing Bank or Participant, upon determining
that any additional amounts will be payable to it pursuant to this Section
2.06, will give prompt written notice thereof to the Borrower, which notice
shall include a certificate submitted to the Borrower by such Issuing Bank or
such Participant (a copy of which certificate shall be sent by such Issuing
Bank or such Participant to the Administrative Agent), setting forth in
reasonable detail the basis for the calculation of such additional amount or
amounts necessary to compensate such Issuing Bank or such Participant. The
certificate required to be delivered pursuant to this Section 2.06 shall,
absent manifest error, be final and conclusive and binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent for distribution to each Non-Defaulting Bank, a commitment
commission (the "Commitment Commission") for the period from and including the
Original Effective Date to but
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excluding the Final Maturity Date (or such earlier date on which the Total
Revolving Loan Commitment shall have been terminated), computed at a rate for
each day equal to 1/2 of 1% per annum on the daily average Unutilized Revolving
Loan Commitment of such Non-Defaulting Bank. Accrued Commitment Commission
shall be due and payable quarterly in arrears on each Quarterly Payment Date
and on the Final Maturity Date (or such earlier date on which the Total
Revolving Loan Commitment shall have been terminated).
(b) The Borrower agrees to pay to the Administrative Agent
for distribution to each Bank (based on each such Bank's respective RL
Percentage) a fee in respect of each Letter of Credit issued hereunder (the
"Letter of Credit Fee") for the period from and including the date of issuance
of such Letter of Credit to and including the date of termination or expiration
of such Letter of Credit, computed at a rate per annum equal to the Applicable
Eurodollar Rate Margin in effect from time to time on the daily Stated Amount
of such Letter of Credit. Letter of Credit Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the first day after
the termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding. In the event any Letter of Credit is paid, returned
or otherwise retired prior to the stated date of termination or expiration
thereof, any unearned Letter of Credit Fee shall be promptly repaid by the
Banks to the Administrative Agent for distribution to the Borrower.
(c) The Borrower agrees to pay to each Issuing Bank, for its
own account, a facing or fronting fee in respect of each Letter of Credit
issued by such Issuing Bank hereunder upon such terms and conditions as are
separately agreed to between such Issuing Bank and the Borrower.
(d) The Borrower agrees to pay to each of the Administrative
Agent and the Documentation Agent, for their respective accounts, such other
fees as have been agreed to in writing by the Borrower and the Administrative
Agent or the Documentation Agent, as the case may be.
3.02 Voluntary Termination of Unutilized Commitments. Upon
at least five Business Day's prior written notice to the Administrative Agent
at the Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Banks), the Borrower shall have the right, at any time
or from time to time, without premium or penalty, to terminate the Total
Unutilized Revolving Loan Commitment, in whole or in part, pursuant to this
Section 3.02, in an integral multiple of $5,000,000, in the case of partial
reductions to the Total Unutilized Revolving Loan Commitment, provided that
each such reduction shall apply proportionately to permanently reduce the
Revolving Loan Commitment of each Bank.
3.03 Mandatory Reduction of Commitments. (a) In addition to
any other mandatory commitment reductions pursuant to this Section 3.03, on
each date upon which
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a mandatory prepayment of Revolving Loans is required pursuant to Section
4.02(d), the Total Revolving Loan Commitment shall be permanently reduced on
such date by an amount equal to 50% of the amount required to be applied to
prepay Revolving Loans pursuant to Section 4.02(d).
(b) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, on each date upon which a mandatory
prepayment of Revolving Loans is required pursuant to Section 4.02(e) or
4.02(f), the Total Revolving Loan Commitment shall be permanently reduced on
such date by an amount equal to 100% of the amount required to be applied to
prepay Revolving Loans pursuant to Section 4.02(e) or 4.02(f), as the case may
be; provided that (i) so long as no Default or Event of Default then exists, if
the Borrower shall have delivered a certificate to the Administrative Agent on
or prior to such date stating that PESCO or its Subsidiaries intends to use all
or any portion of such proceeds, or intends to enter into contractual
arrangements to use all or any portion of such proceeds, within 90 days of such
Material Asset Sale, to purchase or construct assets to be used in the business
of PESCO or any of its Subsidiaries, then the Total Revolving Loan Commitment
shall not be reduced on such date by the amount that the Borrower so certifies
it intends to use, or contractually commit to use, and provided further, that
(1) if, within such 90 day period, all or such portion of such Net Sale
Proceeds are not so used (or contractually committed to be used, with a copy of
any contracts or agreements evidencing such commitments to be provided to the
Administrative Agent) or PESCO or its Subsidiaries have not commenced
construction (or contractually committed to acquire assets to be used in such
construction) (such commencement or contractual commitment to be evidenced (x)
in the case of a Permitted Acquisition, by a certificate in the form of Exhibit
L hereto and (y) in any other case, by a certificate of the Borrower, together
with copies of such agreements or documents as the Administrative Agent may
reasonably request in connection therewith), then the Total Revolving Loan
Commitment shall be reduced by such remaining portion on the last day of such
period and (2) if the Total Revolving Loan Commitment is not reduced by all or
any portion of such Net Sale Proceeds on the 90th day referred to in clause (1)
above because such amount is contractually committed to be used or because
PESCO or its Subsidiaries have commenced construction (or contractually
committed to acquire assets to be used in such construction), and subsequent to
such date such construction ceases or such contract is terminated or expires
without such portion being so used, then the Total Revolving Loan Commitment
shall be reduced by such remaining portion on the fifth Business Day following
the date of such termination, expiration or cessation and (ii) to the extent
the Borrower shall have consummated a Permitted Acquisition and any asset
acquired or constructed pursuant to such Permitted Acquisition is subsequently
transferred, sold or otherwise disposed of by PESCO or any of its Subsidiaries
in a transaction which constitutes a Material Asset Sale, so long as no Default
or Event of Default then exists, the Total Revolving Loan Commitment shall not
be required to be reduced by the Net Sale Proceeds received from such Material
Asset Sale, and provided further, that in the event the asset sold pursuant to
such Material Asset Sale
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was an existing asset which was renovated or refurbished pursuant to such
Permitted Acquisition, unless clause (i) applies, the Total Revolving Loan
Commitment shall be reduced by an amount equal to the excess, if any, of the
Net Sale Proceeds received over the amount expended in connection with such
renovation or refurbishment.
(c) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, the Total Revolving Loan Commitment
(and the Revolving Loan Commitment of each Bank) shall terminate in its
entirety on the Final Maturity Date.
(d) Each reduction to the Total Revolving Loan Commitment
pursuant to this Section 3.03 shall apply proportionately to reduce the
Revolving Loan Commitment of each Bank.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. The Borrower shall have the
right to prepay the Revolving Loans, without premium or penalty, in whole or in
part at any time and from time to time on the following terms and conditions:
(i) the Borrower shall give the Administrative Agent prior to 12:00 Noon (New
York time) at the Notice Office at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay Revolving Loans, the amount of such prepayment and the Types of
Revolving Loans to be prepaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which made, which notice the
Administrative Agent shall promptly transmit to each of the Banks; (ii) each
prepayment of Revolving Loans pursuant to this Section 4.01 shall be in an
aggregate principal amount of at least $2,000,000, provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding principal amount of Eurodollar Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, then such Borrowing may not be continued as a Borrowing of Eurodollar
Loans and any election of an Interest Period with respect thereto given by the
Borrower shall have no force or effect; and (iii) each prepayment pursuant to
this Section 4.01 in respect of any Revolving Loans made pursuant to a
Borrowing shall be applied pro rata among such Revolving Loans.
4.02 Mandatory Repayments. (a) On any day on which the sum
of (I) the aggregate outstanding principal amount of all Revolving Loans (after
giving effect to all other repayments thereof on such date), and (II) the
aggregate amount of all Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall prepay on the
Business Day immediately following such day the principal of Revolving Loans in
an amount equal to such excess. If, after giving effect to the prepayment of
all outstanding Revolving Loans, the aggregate amount of the Letter of Credit
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Outstandings exceeds the Total Revolving Loan Commitment as then in effect, the
Borrower shall deposit with the Administrative Agent at the Payment Office on
such day an amount of cash and/or Cash Equivalents equal to the amount of such
excess (up to a maximum amount equal to the Letter of Credit Outstandings at
such time), such cash and/or Cash Equivalents to be held as security for all
obligations of the Borrower to the Issuing Banks and the Banks hereunder in an
interest bearing cash collateral account to be established at such time with
the Administrative Agent.
(b) In addition to any other mandatory repayments required
pursuant to this Section 4.02, on the Business Day immediately following each
date on or after the Restatement Effective Date of the receipt thereof by PESCO
and/or any of its Subsidiaries, an amount equal to 100% of the cash proceeds
(net of underwriting discounts and commissions and other reasonable transaction
costs associated therewith) received by the issuer thereof from any sale or
issuance of preferred or common equity pursuant to any public offering thereof
by PESCO and/or any of its Subsidiaries shall be applied to prepay outstanding
Revolving Loans.
(c) In addition to any other mandatory repayments required
pursuant to this Section 4.02, on the Business Day immediately following each
date on or after the Restatement Effective Date on which PESCO, Holding and/or
the Borrower receives any Net Debt Proceeds from any incurrence of Permitted
Subordinated Indebtedness (other than the 1998 Senior Subordinated Notes), an
amount equal to 100% of the Net Debt Proceeds of the incurrence of such
Permitted Subordinated Indebtedness shall be applied to prepay outstanding
Revolving Loans.
(d) In addition to any other mandatory repayments required
pursuant to this Section 4.02, on the Business Day immediately following each
date on or after the Restatement Effective Date on which PESCO and/or any of
its Subsidiaries receives any Net Debt Proceeds from any incurrence of Funded
Debt for borrowed money (other than Permitted Subordinated Indebtedness and
other than Funded Debt permitted pursuant to Section 9.04) by PESCO and/or any
of its Subsidiaries, an amount equal to 100% of the Net Debt Proceeds of the
respective incurrence of Funded Debt shall be applied to prepay outstanding
Revolving Loans.
(e) In addition to any other mandatory repayments required
pursuant to this Section 4.02, within 10 days following each date on or after
the Restatement Effective Date on which PESCO and/or any of its Subsidiaries
receives any Net Insurance Proceeds from any Recovery Event, an amount equal to
100% of the Net Insurance Proceeds of such Recovery Event shall be applied to
prepay outstanding Revolving Loans, provided that (i) so long as no Default or
Event of Default then exists, to the extent that the Borrower has delivered a
certificate to the Administrative Agent on or prior to such date stating that
such proceeds have been used, or shall be used, to replace or restore any
properties or assets in
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respect of which such proceeds were paid (which certificate shall set forth the
proceeds so expended or the estimates of the proceeds to be so expended, as the
case may be), the amount of such proceeds which were used, or to be used, to
replace or restore such property or assets shall not be applied to prepay
Revolving Loans, (ii) upon completion of such replacement or restoration, the
Borrower shall deliver a certificate to the Administrative Agent stating that
such replacement or restoration has been completed, the costs therefor and
whether there are any cash proceeds in excess of such costs and, if so, the
Revolving Loans shall be repaid in an amount equal to such excess, and (iii) if
the Borrower has not so used, or committed to so use, all of such proceeds
within 180 days following the date of its receipt of such proceeds, the
Revolving Loans shall be repaid on the last day of such period by an amount
equal to such remaining portion.
(f) In addition to any other mandatory repayments pursuant to
this Section 4.02, on the Business Day immediately following each date on or
after the Restatement Effective Date on which PESCO and/or any of its
Subsidiaries receives Net Sale Proceeds from any Material Asset Sale, an amount
equal to 100% of the Net Sale Proceeds therefrom shall be applied to prepay
outstanding Revolving Loans.
(g) With respect to each repayment of Revolving Loans
required by this Section 4.02, the Borrower may designate the Types of
Revolving Loans which are to be repaid and, in the case of Eurodollar Loans,
the specific Borrowing or Borrowings pursuant to which made, provided that:
(i) repayments of Eurodollar Loans pursuant to this Section 4.02 may only be
made on the last day of an Interest Period applicable thereto unless all
Eurodollar Loans with Interest Periods ending on such date of required
repayment and all Base Rate Loans have been paid in full; (ii) if any repayment
of Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable thereto, such Borrowing shall be
converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans; and (iii) each repayment of any Revolving Loans made pursuant
to a Borrowing shall be applied pro rata among such Revolving Loans. In the
absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its sole discretion.
(h) If, after repaying all Base Rate Loans then outstanding,
the Borrower is still obligated to make a further mandatory repayment pursuant
to Section 4.02(b) through (f), the remaining amount to be repaid shall be due
and payable on the last day of the Interest Period or Interest Periods next
expiring, until all such amounts required to be prepaid pursuant to such
Sections have been paid in full.
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(i) Notwithstanding anything to the contrary contained in
this Agreement or in any other Credit Document, all then outstanding Revolving
Loans shall be repaid in full on the Final Maturity Date.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or under any
Note shall be made to the Administrative Agent for the account of the Bank or
Banks entitled thereto not later than 12:00 Noon (New York time) on the date
when due and shall be made in Dollars in immediately available funds at the
Payment Office of the Administrative Agent. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of a
Bank pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or
on account of any Taxes, will not be less than the amount provided for herein
or in such Note. If any amounts are payable in respect of Taxes pursuant to
the preceding sentence, the Borrower agrees to reimburse each Bank, upon the
written request of such Bank, for taxes imposed on or measured by the net
income or net profits of such Bank pursuant to the laws of the jurisdiction in
which such Bank is organized or in which the principal office or applicable
lending office of such Bank is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Bank is
organized or in which the principal office or applicable lending office of such
Bank is located and for any withholding of taxes as such Bank shall determine
are payable by, or withheld from, such Bank, in respect of such amounts so paid
to or on behalf of such Bank pursuant to the preceding sentence and in respect
of any amounts paid to or on behalf of such Bank pursuant to this sentence.
The Borrower will furnish to the Administrative
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Agent within 45 days after the date the payment of any Taxes is due pursuant to
applicable law evidence of such payment by the Borrower. The Borrower agrees
to indemnify and hold harmless each Bank, and reimburse such Bank upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Bank.
(b) Each Bank that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Administrative Agent on or
prior to the Restatement Effective Date, or in the case of a Bank that is an
assignee or transferee of an interest under this Agreement pursuant to Section
1.12 or 15.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor
forms) certifying to such Bank's entitlement to a complete exemption from
United States withholding tax with respect to payments to be made under this
Agreement and under any Note, or (ii) if the Bank is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. In addition, each Bank agrees that from
time to time after the Restatement Effective Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, such Bank will deliver to the Borrower and
the Administrative Agent two new accurate and complete original signed copies
of Internal Revenue Service Form 4224 or 1001 (or successor forms), or Form W-8
(or successor form) and a Section 4.04(b)(ii) Certificate, as the case may be,
and such other forms as may be required in order to confirm or establish the
entitlement of such Bank to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Note, or such Bank shall immediately notify the Borrower and the Administrative
Agent of its inability to deliver any such Form or Certificate, in which case
such Bank shall not be required to deliver any such Form or Certificate
pursuant to this Section 4.04(b). Notwithstanding anything to the contrary
contained in Section 4.04(a), but subject to Section 15.04(b) and the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, Fees or other amounts payable
hereunder for the account of any Bank which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes to the extent that such Bank has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not be
obligated
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pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Bank in
respect of income or similar taxes imposed by the United States if (I) such
Bank has not provided to the Borrower the Internal Revenue Service Forms
required to be provided to the Borrower pursuant to this Section 4.04(b) or
(II) in the case of a payment, other than interest, to a Bank described in
clause (ii) above, to the extent that such Forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding anything to the
contrary contained in the preceding sentence or elsewhere in this Section 4.04
and except as set forth in Section 15.04(b), the Borrower agrees to pay any
additional amounts and to indemnify each Bank in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any Taxes deducted or withheld by
it as described in the immediately preceding sentence as a result of any
changes after the Restatement Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of such Taxes.
(c) If the Borrower pays any additional amount under this
Section 4.04 to a Bank and such Bank determines in its sole discretion that it
has actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Banks shall pay to
the Borrower an amount that the Bank shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by the Bank in such
year as a consequence of such refund, reduction or credit.
SECTION 5. Conditions Precedent to the Restatement Effective
Date. The occurrence of the Restatement Effective Date pursuant to Section
15.10 is subject to the satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the
Restatement Effective Date, (i) this Agreement shall have been executed and
delivered as provided in Section 15.10 and (ii) there shall have been delivered
to the Administrative Agent for the account of each of the Banks the
appropriate Note executed by the Borrower in the amount, maturity and as
otherwise provided herein.
5.02 Officers' Certificate. On the Restatement Effective
Date, the Administrative Agent shall have received a certificate, dated the
Restatement Effective Date and signed on behalf of the Borrower by its Chairman
of the Board, Chief Executive Officer, President or any of its Vice Presidents,
to the effect that (i) the conditions precedent set forth in Sections 5.05,
5.07, 5.08 and 5.09 have been satisfied in all material respects and (ii) no
Default or Event of Default has occurred and is continuing, or will result from
the consummation of the Sea Mar Acquisition.
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5.03 Opinions of Counsel. On the Restatement Effective Date,
the Administrative Agent shall have received from each of (a) Gardere ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., special counsel to the Credit Parties, (b) ▇▇▇▇▇▇▇▇
Arms, Esq., general counsel of the Borrower, and (c) Louisiana counsel to Sea
Mar, an opinion addressed to the Agents and each of the Banks and dated the
Restatement Effective Date covering the matters set forth in Exhibits E-1, E-2
and E-3, respectively, and such other matters incident to the transaction
contemplated herein as the Administrative Agent may reasonably request.
5.04 Corporate Documents; Proceedings; etc. (a) On the
Restatement Effective Date, the Administrative Agent shall have received a
certificate from each Person becoming a Credit Party as a result of the Sea Mar
Acquisition, dated the Restatement Effective Date, signed by the Chairman of
the Board, the Chief Executive Officer, the President or any Vice President of
such Credit Party, and attested to by the Secretary or any Assistant Secretary
of such Credit Party, in the form of Exhibit F with appropriate insertions,
together with copies of the certificate or articles of incorporation (or
equivalent organizational document) and by-laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be in form and substance reasonably acceptable to the
Administrative Agent.
(b) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Credit Documents shall be reasonably satisfactory in
form and substance to each Agent and the Administrative Agent shall have
received all information and copies of all documents and papers, including
records of corporate proceedings, governmental approvals, good standing
certificates and bring-down telegrams or facsimiles, if any, which such Agent
reasonably may have requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate or governmental
authorities.
5.05 Sea Mar Acquisition. On the Restatement Effective Date,
the Sea Mar Acquisition shall have been consummated.
5.06 Reserved.
5.07 Adverse Change. Nothing shall have occurred (and
neither the Administrative Agent, the Documentation Agent nor the Banks shall
have become aware of any facts or conditions not previously known) which the
Administrative Agent, the Documentation Agent or the Required Banks shall
reasonably determine (a) has had, or could reasonably be expected to have, a
material adverse effect on the rights or remedies of the Banks, the
Documentation Agent or the Administrative Agent, or on the ability of any
Credit Party to perform its obligations to the Banks, the Documentation Agent
or the Administrative Agent hereunder or under any other Credit Document or (b)
has had, or could reasonably be expected to have, a material adverse effect on
the business, operations,
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property, assets, liabilities, condition (financial or otherwise) or prospects
of PESCO or of the Borrower and its Subsidiaries, taken as a whole.
5.08 Approvals. On or prior to the Restatement Effective
Date, all necessary governmental (domestic and foreign) and third party
approvals and/or consents in connection with the Sea Mar Acquisition and the
transactions contemplated by this Agreement and the other Credit Documents and
otherwise referred to herein or therein shall have been obtained and remain in
effect. Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the Sea Mar Acquisition or the other transactions contemplated
by this Agreement and the other Credit Documents or otherwise referred to
herein or therein.
5.09 Litigation. On the Restatement Effective Date, there
shall be no actions, suits or proceedings pending or threatened (i) with
respect to this Agreement or any other Credit Document or (ii) which the
Administrative Agent, the Documentation Agent or the Required Banks shall
reasonably determine could reasonably be expected to have a material adverse
effect on (a) the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of PESCO or of the Borrower and
its Subsidiaries taken as a whole, (b) the rights or remedies of the Banks, the
Documentation Agent or the Administrative Agent hereunder or under any other
Credit Document or (c) the ability of any Credit Party to perform its
respective obligations to the Banks, the Documentation Agent or the
Administrative Agent hereunder or under any other Credit Document.
5.10 Pledge Agreement. On or prior to the Restatement
Effective Date, each Pledgor shall have duly authorized, executed and delivered
the Pledge Agreement in the form of Exhibit G (as amended, modified or
supplemented from time to time, the "Pledge Agreement") and shall have
delivered to the Administrative Agent, as Pledgee thereunder, all of the
Pledged Securities, if any, referred to therein and owned by the Borrower
together with executed and undated stock powers in the case of capital stock
constituting Pledged Securities. Notwithstanding anything to the contrary
contained herein, Pool International Ltd. shall not be required to pledge the
stock of Pool International (Malaysia) Sdn. Bhd.
5.11 Subsidiaries Guaranty. On or prior to the Restatement
Effective Date, Sea Mar and each of its Subsidiaries that subsequent to the Sea
Mar Acquisition will be a Domestic Subsidiary shall have become a party to the
Subsidiaries Guaranty.
5.12 Reserved.
5.13 Fees, etc. On or prior to the Restatement Effective
Date, the Borrower shall have paid to the Administrative Agent, the
Documentation Agent, the
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Arranger, the Issuing Bank and each Bank all costs, fees and expenses
(including, without limitation, reasonable legal fees and expenses) payable to
such Persons to the extent then due.
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Bank to make Revolving Loans (including Revolving Loans made
on the Restatement Effective Date), and the obligation of each Issuing Bank to
issue Letters of Credit, is subject, at the time of each such Credit Event
(except as hereinafter indicated), to the satisfaction of the following
conditions:
6.01 Restatement Effective Date. The Restatement Effective
Date shall have occurred.
6.02 No Default; Representations and Warranties. At the time
of each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date of such Credit Event
(it being understood and agreed that any representation or warranty which by
its terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date).
6.03 Notice of Borrowing; Letter of Credit Request. (a)
Prior to the making of each Revolving Loan, the Administrative Agent shall have
received a Notice of Borrowing meeting the requirements of Section 1.03(a).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Bank shall have received a
Letter of Credit Request meeting the requirements of Section 2.03.
6.04 Absence of Material Adverse Change. Since the date of
the most recent financial statements delivered pursuant to Section 8.01, the
Required Banks shall not have concluded, in their reasonable good faith
judgment, that there has been a material adverse change in the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of PESCO or of the Borrower and its Subsidiaries taken as a whole.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by each Credit Party to the Agents and
each of the Banks that all the conditions specified in Section 5 (with respect
to Credit Events on the Restatement Effective Date) and in this Section 6 (with
respect to Credit Events on or after the
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Restatement Effective Date) and applicable to such Credit Event exist as of
that time. All of the Notes, certificates, legal opinions and other documents
and papers referred to in Section 5 and in this Section 6, unless otherwise
specified, shall be delivered to the Administrative Agent at the Notice Office
for the account of each of the Banks and, except for the Notes, in sufficient
counterparts or copies for each of the Banks.
SECTION 7. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the
Revolving Loans, and issue (or participate in) the Letters of Credit as
provided herein, each of PESCO, Holding and the Borrower makes the following
representations, warranties and agreements, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Revolving Loans and issuance of the Letters of Credit, with the occurrence of
the Restatement Effective Date and the occurrence of each Credit Event on or
after the Restatement Effective Date being deemed to constitute a
representation and warranty that the matters specified in this Section 7 are
true and correct on and as of the Restatement Effective Date and on the date of
each such Credit Event (it being understood and agreed that (i) any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct only as of such specified date and
(ii) for purposes of such representations and warranties Sea Mar and its
Subsidiaries shall be deemed Credit Parties and Subsidiaries of the Borrower as
of, but not prior to, the Restatement Effective Date.)
7.01 Corporate Status. Except as disclosed in writing to the
Administrative Agent on or prior to the Restatement Effective Date, each of
PESCO and each of its Subsidiaries (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate power and authority to own its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the ownership, leasing or
operation of its property or the conduct of its business requires such
qualifications except for failures to be so qualified which, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of PESCO or of the Borrower and its
Subsidiaries taken as a whole.
7.02 Corporate and Other Power and Authority. Each Credit
Party has the corporate power and authority to execute, deliver and perform the
terms and provisions of each of the Credit Documents to which it is party and
has taken all necessary corporate action to authorize the execution, delivery
and performance by it of each of such Credit Documents. Each Credit Party has
duly executed and delivered each of the Credit Documents to which it is party,
and each of such Credit Documents constitutes its legal,
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valid and binding obligation enforceable in accordance with its terms, except
to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Credit Documents to which it is a party,
nor compliance by it with the terms and provisions thereof, (i) will contravene
any provision of any law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Pledge Agreement) upon any of the property or assets of
PESCO or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement or loan agreement, or any other
material agreement, contract or instrument, to which PESCO or any of its
Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of the
certificate or articles of incorporation or by-laws (or equivalent
organizational documents) of PESCO or any of its Subsidiaries.
7.04 Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except for those that have otherwise been obtained or made and which remain in
full force and effect), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required by any Credit Party to
authorize, or is required in connection with, (i) the execution, delivery and
performance of any Credit Document by any Credit Party or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document against
any Credit Party.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities. (a) The consolidated audited balance sheets of PESCO and its
Subsidiaries for the fiscal year ended on December 31, 1997 and the related
consolidated statements of income, cash flows and shareholders' equity of PESCO
and its Subsidiaries for the fiscal year ended on such date, copies of which
have been furnished to the Banks on or prior to the Restatement Effective Date,
present fairly in all material respects the consolidated financial position of
PESCO and its Subsidiaries at the dates of such balance sheets and the
consolidated results of the operations of PESCO and its Subsidiaries for the
periods covered thereby. All of the foregoing financial statements have been
prepared in accordance with GAAP consistently applied.
(b) On and as of the Restatement Effective Date and after
giving effect to any Revolving Loans being incurred on the Restatement
Effective Date, (a) the sum of the assets, at a fair valuation, of each of the
Borrower on a stand-alone basis and of the
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Borrower and its Subsidiaries taken as a whole will exceed its debts; (b) each
of the Borrower on a stand-alone basis and the Borrower and its Subsidiaries
taken as a whole (without duplication of indebtedness for which the Borrower
and/or one or more of its Subsidiaries may be liable) has not incurred and does
not intend to incur, and does not believe that it will incur, debts beyond its
ability to pay such debts as such debts mature; and (c) each of the Borrower on
a stand alone basis and the Borrower and its Subsidiaries taken as a whole will
have sufficient capital with which to conduct its business. For purposes of
this Section 7.05(b), "debt" means any liability on a claim, and "claim" means
(i) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
(c) Except for liabilities and obligations incurred in the
ordinary course of business or otherwise fully disclosed in the financial
statements delivered pursuant to Section 7.05(a), there were as of the
Restatement Effective Date no liabilities or obligations with respect to PESCO
or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which would reasonably be
expected to have a material adverse effect on the financial condition of PESCO
and its Subsidiaries, taken as a whole. As of the Restatement Effective Date,
neither PESCO nor the Borrower know of any basis for the assertion against
PESCO or any of its Subsidiaries of any liability or obligation of any nature
whatsoever that is not fully disclosed in the financial statements delivered
pursuant to Section 7.05(a) which, either individually or in the aggregate,
could reasonably be expected to be material to PESCO and its Subsidiaries taken
as a whole.
7.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of PESCO or any of its Subsidiaries,
threatened (i) with respect to this Agreement or any other Credit Document,
(ii) with respect to any material Funded Debt of PESCO or any of its
Subsidiaries or (iii) that are reasonably likely to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of PESCO or of the Borrower and its
Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information
(taken as a whole) furnished by PESCO or any of its Subsidiaries in writing to
the Administrative Agent, the Documentation Agent, the Arranger or any Bank
(including, without limitation, all information contained in the Credit
Documents) for purposes of or in connection with
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this Agreement, the other Credit Documents or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by any such Persons in writing to the Administrative Agent,
the Documentation Agent, the Arranger or any Bank will be, true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds
of the Revolving Loans shall be used for the working capital, letters of credit
and general corporate purposes for PESCO and its Subsidiaries (including,
without limitation, for Capital Expenditures, the Sea Mar Acquisition,
Identified Acquisitions and Permitted Acquisitions).
(b) No part of any Credit Event (or the proceeds thereof)
will be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Revolving Loan nor the use of the proceeds thereof nor the occurrence of any
other Credit Event will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System.
7.09 Tax Returns and Payments. (a) Each of PESCO and each of
its Subsidiaries has filed all federal and state income tax returns and all
other material tax returns, domestic and foreign, required to be filed by it
and has paid all taxes and assessments payable by it which have become due,
except for those contested in good faith and adequately disclosed and fully
provided for on the financial statements of PESCO and its Subsidiaries in
accordance with GAAP. PESCO and each of its Subsidiaries have paid, or have
provided reserves in accordance with GAAP (specifically under FAS 109) for the
payment of, all federal, state, local and foreign income taxes applicable for
all prior fiscal years and for the current fiscal year to date. There is no
material action, suit, proceeding, investigation, audit, or claim now pending
or, to the knowledge of PESCO or any of its Subsidiaries threatened, by any
authority regarding any taxes relating to PESCO or any of its Subsidiaries. As
of the Restatement Effective Date, neither PESCO nor any of its Subsidiaries
has entered into an agreement or waiver or been requested to enter into an
agreement or waiver extending any statute of limitations relating to the
payment or collection of any material amount of taxes of PESCO or any of its
Subsidiaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of PESCO or any of its Subsidiaries not to be
subject to the normally applicable statute of limitations.
(b) Notwithstanding anything to the contrary in Section
7.09(a), the representations made in Section 7.09(a) shall not be untrue as to
any Credit Party within
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45 days of such Person becoming a Credit Party unless the falsity of any such
representation (i) is actually known by an officer of PESCO or a chief
financial officer of any other Credit Party and (ii) could reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of PESCO or the Borrower and its Subsidiaries taken as a whole.
7.10 Compliance with ERISA. (a) Each Plan (and each related
trust, insurance contract or fund) is in substantial compliance with its terms
and with all applicable laws, including without limitation ERISA and the Code;
each Plan (and each related trust, if any) which is intended to be qualified
under Section 401(a) of the Code has received a determination letter from the
Internal Revenue Service to the effect that it meets the requirements of
Sections 401(a) and 501(a) of the Code; no Reportable Event has occurred and is
continuing; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization
period, within the meaning of Section 412 of the Code or Section 303 or 304 of
ERISA; all contributions required to be made with respect to a Plan have been
made and no material liability has occurred as a result of any failure to make
any such contribution in a timely manner; neither PESCO nor any Subsidiary of
PESCO nor any ERISA Affiliate has incurred any material liability (including
any indirect, contingent or secondary liability) to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or
expects to incur any such material liability under any of the foregoing
sections with respect to any Plan; no condition exists which presents a
material risk to PESCO or any Subsidiary of PESCO or any ERISA Affiliate of
incurring a material liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; no proceedings have been instituted
to terminate or appoint a trustee to administer any Plan which is subject to
Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of
any Plan (other than routine claims for benefits) is pending, expected or, to
the best knowledge of PESCO, threatened; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of PESCO and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan ended prior to the date
of the most recent Credit Event, would not exceed $500,000; each group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
which covers or has covered employees or former employees of PESCO, any
Subsidiary of PESCO, or any ERISA Affiliate has at all times been operated in
substantial compliance with the provisions of Part 6 of subtitle B of Title I
of ERISA and Section 4980B of the
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Code and any failure to so comply would not result in a material liability; no
lien imposed under the Code or ERISA on the assets of PESCO or any Subsidiary
of PESCO or any ERISA Affiliate exists or, to the best knowledge of PESCO, is
likely to arise on account of any Plan; and PESCO and its Subsidiaries may
cease contributions to or terminate any employee benefit plan maintained by any
of them without incurring any material liability.
(b) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. All contributions required to be made with respect to a Foreign
Pension Plan have been made and no material liability has occurred as a result
of any failure to make any such contribution in a timely manner. Neither PESCO
nor any of its Subsidiaries has incurred any obligation in connection with the
termination of or withdrawal from any Foreign Pension Plan. The present value
of the accrued benefit liabilities (whether or not vested) under each Foreign
Pension Plan, determined as of the end of PESCO's most recently ended fiscal
year on the basis of actuarial assumptions, each of which is reasonable, did
not exceed the current value of the assets of such Foreign Pension Plan
allocable to such benefit liabilities.
(c) Notwithstanding anything to the contrary in Section
7.10(a) or 7.10(b), the representations made in Sections 7.10(a) and 7.10(b)
shall not be untrue as to any Credit Party within 45 days of such Person
becoming a Credit Party unless the falsity of any such representation (i) is
actually known by an officer of PESCO or a chief financial officer of any other
Credit Party and (ii) could reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of PESCO or the Borrower and its
Subsidiaries taken as a whole.
7.11 The Pledge Agreement. The Pledged Securities described
in Pledge Agreement are subject to no security interests in favor of any Person
other than the Administrative Agent, as Pledgee under the Pledge Agreement.
7.12 Properties. PESCO and each of its Subsidiaries have
good and indefeasible title to all material properties owned by them, including
all property shown as assets in the balance sheets referred to in Section
7.05(a) (except as sold or otherwise disposed of since the date of such balance
sheet in the ordinary course of business or as permitted by the terms of this
Agreement), free and clear of all Liens, other than Permitted Liens.
7.13 Capitalization. (a) On the Restatement Effective Date,
the authorized capital stock of PESCO shall consist of (i) 40,000,000 shares of
common stock, no par value per share and (ii) 1,000 shares of preferred stock,
no par value per share. All outstanding shares of capital stock of PESCO have
been duly and validly issued and are fully
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paid and non-assessable. Except for the Shareholders Rights Plan described in
the notes to the consolidated financial statements of PESCO delivered pursuant
to Section 7.05(a), PESCO does not have outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock,
except for options or warrants to purchase shares of PESCO's common stock which
may be issued from time to time.
(b) On the Restatement Effective Date, the authorized
capital stock of Holding shall consist of 100 shares of common stock, $100.00
par value per share. All outstanding shares of capital stock of Holding have
been duly and validly issued and are fully paid and non-assessable. Holding
does not have outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock, except for options or warrants to
purchase shares of Holdings' common stock which may be issued from time to
time.
(c) On the Restatement Effective Date, the authorized
capital stock of the Borrower shall consist of 200,000 shares of common stock,
$100.00 par value per share. All outstanding shares of capital stock of the
Borrower have been duly and validly issued and are fully paid and
non-assessable. The Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock,
except for options or warrants to purchase shares of the Borrowers' common
stock which may be issued from time to time.
7.14 Subsidiaries. As of the Restatement Effective Date,
PESCO has no Subsidiaries other than Holding and its Subsidiaries, Holding has
no Subsidiaries other than the Borrower and its Subsidiaries and the Borrower
has no Subsidiaries other than those Subsidiaries listed on Schedule III.
Schedule III correctly sets forth, as of the Restatement Effective Date, the
percentage ownership (direct or indirect) of PESCO in each class of capital
stock or other equity of each of its Subsidiaries and also identifies the
direct owner thereof.
7.15 Compliance with Statutes, etc. Each of PESCO and each
of its Subsidiaries is in compliance with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and
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controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of PESCO or of the Borrower and its Subsidiaries taken
as a whole.
7.16 Investment Company Act. Neither PESCO nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.17 Public Utility Holding Company Act. Neither PESCO nor
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.18 Environmental Matters. (a) Each of PESCO and each of
its Subsidiaries have complied with, and on the date of each Credit Event are
in compliance with, all applicable Environmental Laws and the requirements of
any permits issued under such Environmental Laws. There are no pending or, to
the best knowledge of PESCO, threatened Environmental Claims against PESCO or
any of its Subsidiaries (including any such claim arising out of the ownership
or operation by PESCO or any of its Subsidiaries of any Real Property no longer
owned or operated by PESCO or any of its Subsidiaries) or any Real Property
owned or operated by PESCO or any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences with respect to the business or
operations of PESCO or any of its Subsidiaries, or any Real Property owned or
operated by PESCO or any of its Subsidiaries (including any Real Property
formerly owned or operated by PESCO or any of its Subsidiaries but no longer
owned or operated by PESCO or any of its Subsidiaries) or any property
adjoining or adjacent to any such Real Property that could be expected (i) to
form the basis of an Environmental Claim against PESCO or any of its
Subsidiaries or any Real Property owned or operated by PESCO or any of its
Subsidiaries or (ii) to cause any Real Property owned or operated by PESCO or
any of its Subsidiaries to be subject to any restrictions on the ownership,
occupancy or transferability of such Real Property by PESCO or any of its
Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property owned
or operated by PESCO or any of its Subsidiaries where such generation, use,
treatment or storage has violated or could be expected to violate any
Environmental Law. Hazardous Materials have not at any time been Released on
or from any Real Property owned or operated by PESCO or any of its Subsidiaries
where such Release has violated or could be expected to violate any applicable
Environmental Law.
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(c) Notwithstanding anything to the contrary in this Section
7.18, the representations made in this Section 7.18 shall not be untrue unless
an officer of PESCO or a chief financial officer of any other Credit Party has
actual knowledge of the falsity of any such representation and the aggregate
effect of all uninsured and unindemnified violations, claims, restrictions,
failures and noncompliances of the types described above could reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of PESCO or the Borrower and its Subsidiaries taken as a whole.
7.19 Labor Relations. Neither PESCO nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a material adverse effect on PESCO or the Borrower and its
Subsidiaries taken as a whole. There is (i) no unfair labor practice complaint
pending against PESCO or any of its Subsidiaries or threatened against any of
them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against PESCO or any of its Subsidiaries or, to the
best knowledge of PESCO, threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against PESCO or any of its Subsidiaries
or, to the best knowledge of PESCO, threatened against PESCO or any of its
Subsidiaries and (iii) no union representation question exists with respect to
the employees of PESCO or any of its Subsidiaries, except (with respect to any
matter specified in clause (i), (ii) or (iii) above, either individually or in
the aggregate) such as could not reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of PESCO or the Borrower and
its Subsidiaries taken as a whole.
7.20 Patents, Licenses, Franchises and Formulas. Each of
PESCO and each of its Subsidiaries owns or has the right to use all the
patents, trademarks, permits, service marks, trade names, copyrights, licenses,
franchises, proprietary information (including but not limited to rights in
computer programs and databases) and formulas, or rights with respect to the
foregoing, and has obtained assignments of all leases and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, could reasonably be expected to result in a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of PESCO or the Borrower and
its Subsidiaries taken as a whole.
7.21 Funded Debt. Schedule IV sets forth a true and complete
list of all Funded Debt (including Contingent Obligations) of PESCO and its
Subsidiaries as of the Restatement Effective Date (excluding the Sea Mar
Assumed Debt, the Revolving Loans and any Letters of Credit, but including the
1998 Senior Subordinated Notes, such outstanding Funded Debt the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof,
the name of the respective borrower and any Credit Party or any
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of its Subsidiaries which directly or indirectly guarantees such debt and
describing any assets pledged to secure such Funded Debt.
7.22 Inactive Subsidiaries. Each Inactive Subsidiary
conducts no business and has no material amount of assets or liabilities except
as disclosed in the financial statements delivered pursuant to Section 7.05(a).
7.23 No Tax Sharing Agreements. There are no tax sharing,
tax allocation or other similar agreements entered into by PESCO or any of its
Subsidiaries.
SECTION 8. Affirmative Covenants. PESCO, Holding and the
Borrower hereby covenant and agree that on and after the Restatement Effective
Date and until the Total Revolving Loan Commitment and all Letters of Credit
have terminated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder and thereunder, are
paid in full:
8.01 Information Covenants. PESCO and the Borrower will
furnish to the Administrative Agent (with sufficient copies for each Bank):
(a) Quarterly Financial Statements. (i) Within 60 days after
the close of the first three quarterly accounting periods in each
fiscal year of PESCO, the consolidated balance sheet of PESCO and its
Subsidiaries, as at the end of such quarterly accounting period and
the related statements of income and retained earnings and statement
of cash flows for such quarterly accounting period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly
accounting period, all as filed with PESCO's Form 10-Q for such
quarter, and in each case setting forth comparative figures for the
related periods in the prior fiscal year, all of which shall be
certified by a principal financial officer of PESCO, subject to normal
year-end audit adjustments and the absence of footnotes.
(ii) Within seventy-five (75) days after the close of the
first three quarterly accounting periods in each fiscal year of PESCO,
the unconsolidated balance sheet for each of PESCO and the Borrower,
as of the end of such quarterly accounting period, and the related
statements of income, retained earnings and cash flow for such
quarterly accounting period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly accounting period, in
each case setting forth comparative figures for the related periods in
the prior fiscal year, all of which shall be certified by a principal
financial officer of PESCO, subject to normal year-end audit
adjustments and the absence of footnotes.
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(b) Annual Financial Statements. (i) Within 120 days after
the close of each fiscal year of PESCO, the consolidated and
consolidating balance sheets of PESCO and its Subsidiaries as at the
end of such fiscal year, the related consolidated and consolidating
statements of income, and the related consolidated statements of
retained earnings and cash flow for such fiscal year, setting forth
comparative figures for the preceding fiscal year and in the case of
the consolidated financial statements, certified by Deloitte & Touche
or such other independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent,
all as filed with PESCO's Form 10-K for such year, together with a
report of such accounting firm stating that in the course of its
regular audit of the financial statements of PESCO and its
Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, such consolidated financial statements
present fairly, in all material respects, the financial position of
PESCO and its Subsidiaries for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years. Such
opinion shall not be qualified or limited because of a restricted or
limited examination by such accountant of any material portion of
PESCO's or any of its Subsidiary's records. All consolidating
financial statements shall be certified by a principal financial
officer of PESCO.
(ii) Within 120 days after the close of each fiscal year of
PESCO, the unaudited consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and statement
of cash flows for such fiscal year setting forth comparative figures
for the preceding fiscal year, certified by a principal financial
officer of the Borrower, subject to normal year-end audit adjustments
and the absence of footnotes.
(c) Budgets and Projections. (i) No later than 15 days
following approval by the Board of Directors of PESCO, the annual
consolidated budget (substantially in the form of its annual
consolidated budgets for prior fiscal years) (including budgeted
statements of income and sources and uses of cash and balance sheets)
prepared by PESCO for each of the twelve months of such fiscal year
prepared in detail setting forth, with appropriate discussion, the
principal assumptions upon which such budgets are based; and (ii)
budgets and projections of PESCO, Holding and the Borrower, and,
promptly upon request, such additional information as may from time to
time be reasonably requested by the Administrative Agent.
(d) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Sections 8.01(a)(i) and
8.01(b), a certificate of a principal financial officer of PESCO to
the effect that, to the best of such officer's knowledge, no Default
or Event of Default has occurred and is continuing or, if any
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Default or Event of Default has occurred and is continuing, specifying
the nature and extent thereof, which certificate shall be in
substantially the form of Exhibit K hereto and shall set forth in
reasonable detail the calculations required to establish whether PESCO
and its Subsidiaries were in compliance with the provisions of
Sections 4.02, 9.04 and 9.07 through 9.11, inclusive, at the end of
such fiscal quarter or year, as the case may be.
(e) Notice of Default or Litigation. Promptly upon, and in
any event within three Business Days after, an officer of PESCO or a
chief financial officer of any other Credit Party obtains actual
knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or an Event of Default and/or (ii) any
litigation or governmental investigation or proceeding pending (x)
against PESCO or any of its Subsidiaries which could reasonably be
expected to materially and adversely affect the business, operations,
property, assets, liabilities, condition (financial or otherwise) or
prospects of PESCO or the Borrower and its Subsidiaries taken as a
whole, (y) with respect to any material Funded Debt of PESCO or any of
its Subsidiaries or (z) with respect to any Credit Document.
(f) Other Reports and Filings. Within 10 Business Days after
the filing or delivery thereof, copies of all reports on Forms 10-K,
10-Q and 8-K, all proxy materials, if any, and any other material
documents which PESCO or any of its Subsidiaries shall publicly file
with the Securities and Exchange Commission or any successor thereto
(the "SEC").
(g) Environmental Matters. Promptly after an officer of
PESCO or a senior operating officer of any other Credit Party obtains
knowledge thereof, notice of one or more of the following
environmental matters, unless such environmental matters could not,
individually or when aggregated with all other such environmental
matters, be reasonably expected to materially and adversely affect the
business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of PESCO and its Subsidiaries
taken as a whole:
(i) any pending or threatened Environmental Claim
against PESCO or any of its Subsidiaries or any Real Property
owned or operated by PESCO or any of its Subsidiaries;
(ii) any condition or occurrence on or arising
from any Real Property owned or operated by PESCO or any of
its Subsidiaries that (a) results in noncompliance by PESCO
or any of its Subsidiaries with any applicable Environmental
Law or (b) could be expected to form the basis of an
Environmental Claim against PESCO or any of its Subsidiaries
or any such Real Property;
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(iii) any condition or occurrence on any Real
Property owned or operated by PESCO or any of its
Subsidiaries that could be expected to cause such Real
Property to be subject to any restrictions on the ownership,
occupancy, use or transferability by PESCO or any of its
Subsidiaries of such Real Property under any Environmental
Law; and
(iv) the taking of any removal or remedial action
in response to the actual or alleged presence of any
Hazardous Material on any Real Property owned or operated by
PESCO or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative
agency; provided, that in any event PESCO shall deliver to
each Bank all notices received by PESCO or any of its
Subsidiaries from any government or governmental agency
under, or pursuant to, CERCLA which identify PESCO or any of
its Subsidiaries as potentially responsible parties for
remediation costs or which otherwise notify PESCO or any of
its Subsidiaries of potential liability under CERCLA.
All such notices shall describe in reasonable detail the
nature of the claim, investigation, condition, occurrence or removal
or remedial action and PESCO's or such Subsidiary's response thereto.
(h) Annual Meetings with Banks. At a date to be mutually
agreed upon between the Administrative Agent and the Borrower
occurring on or prior to the 150th day after the close of each fiscal
year of the Borrower, the Borrower shall, at the request of the
Administrative Agent, hold a meeting with all of the Banks at which
meeting shall be reviewed the financial results of the Borrower and
its Subsidiaries for the previous fiscal year and the budgets
presented for the current fiscal year of the Borrower.
(i) Acquisition Certificate. At the time of the delivery of
the officer's certificate pursuant to Section 8.01(d), a certificate
of a principal financial officer of the Borrower substantially in the
form of Exhibit L with respect to all Permitted Acquisitions
consummated during such quarterly period for which a certificate in
the form of Exhibit L has not been previously delivered.
(j) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to
PESCO or any of its Subsidiaries as either Agent may reasonably
request.
8.02 Books, Records and Inspections. PESCO will, and will
cause each of its Subsidiaries to, keep proper books of record and accounts in
which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all
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dealings and transactions in relation to its business and activities. Subject
to such limitations or restrictions as may be imposed by governmental bodies,
domestic or foreign, or applicable health and safety regulations or
requirements or any of PESCO's or its Subsidiary's customers, PESCO will, and
will cause each of its Subsidiaries to, permit officers and designated
representatives of either Agent or any Bank (who shall comply with such
Person's safety rules and regulations applicable in the ordinary course of
business to each specific location and at their own cost) to visit and inspect,
under guidance of officers of PESCO or such Subsidiary, any of the properties
of PESCO or such Subsidiary, and to examine the books of account of PESCO or
such Subsidiary and discuss the affairs, finances and accounts of the Borrower
or such Subsidiary with, and be advised as to the same by, its and their
officers, all at such reasonable times and intervals and to such reasonable
extent as such Agent or Bank may reasonably request.
8.03 Maintenance of Property; Insurance. PESCO will, and
will cause each of its Subsidiaries to, (i) keep all property necessary to the
business of PESCO and its Subsidiaries in reasonably good working order and
condition, ordinary wear and tear excepted, (ii) maintain insurance with
responsible insurance companies on all such property in at least such amounts
and against at least such risks as is consistent and in accordance with
industry practice for companies similarly situated owning similar properties in
the same general areas in which PESCO or any of its Subsidiaries operates and
naming the Administrative Agent as an additional insured and (iii) furnish to
the Administrative Agent or any Bank, upon written request, all reasonably
requested information as to the insurance carried. If, after the occurrence of
any Default or Event of Default, PESCO or any of its Subsidiaries shall fail to
insure its property in accordance with this Section 8.03, the Administrative
Agent shall have the right (but shall be under no obligation), upon prior
written notice to the Borrower, to procure such insurance and the Borrower
agrees to reimburse the Administrative Agent for all costs and expenses of
procuring such insurance.
8.04 Corporate Franchises. PESCO will, and will cause each
of its Subsidiaries to, do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises, licenses and patents; provided, however, that nothing in
this Section 8.04 shall prevent (i) sales of assets and other transactions by
PESCO or any of its Subsidiaries in accordance with Section 9.02 or (ii) the
withdrawal by PESCO or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of PESCO and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. PESCO will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect
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of the conduct of its business and the ownership of its property (including
applicable statutes, regulations, orders and restrictions relating to
environmental standards and controls), except such noncompliances (x) as could
not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of PESCO or the
Borrower and its Subsidiaries taken as a whole or (y) as are being contested in
good faith by PESCO or such Subsidiary through appropriate proceedings which
are being diligently prosecuted.
8.06 Compliance with Environmental Laws. PESCO will, and
will cause each of its Subsidiaries to, comply with all Environmental Laws
applicable to the ownership or use of its Real Property now or hereafter owned
or operated by PESCO or any of its Subsidiaries, will promptly pay or cause to
be paid all costs and expenses incurred in connection with such compliance, and
will keep or cause to be kept all such Real Property free and clear of any
Liens imposed pursuant to such Environmental Laws. Neither PESCO nor any of
its Subsidiaries will generate, use, treat, store, Release or dispose of, or
permit the generation, use, treatment, storage, Release or disposal of
Hazardous Materials on any Real Property now or hereafter owned or operated by
PESCO or any of its Subsidiaries, or transport or permit the transportation of
Hazardous Materials to or from any such Real Property, except for Hazardous
Materials generated, used, treated, stored, Released or disposed of at any such
Real Properties in compliance in all material respects with all applicable
Environmental Laws and reasonably required in connection with the operation,
use and maintenance of the business or operations of PESCO or any of its
Subsidiaries. Notwithstanding anything to the contrary contained herein, it
will not be a violation of this covenant if any noncompliance (x) would not,
individually or in the aggregate, reasonably be expected to have a material
adverse affect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of PESCO or the Borrower and
its Subsidiaries taken as a whole or (y) is being contested in good faith by
PESCO or such Subsidiary through appropriate proceedings which are being
diligently prosecuted.
8.07 ERISA. As soon as possible and, in any event, within
ten (10) days after PESCO, any Subsidiary of PESCO or any ERISA Affiliate knows
of the occurrence of any of the following, PESCO will deliver to each of the
Banks a certificate of the Chief Financial Officer of PESCO setting forth the
full details as to such occurrence and the action, if any, that PESCO, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by PESCO,
the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred
(except to the extent that PESCO has previously delivered to the Banks a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is
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subject to the advance reporting requirement of PBGC Regulation Section 4043.61
(without regard to subparagraph (b)(1) thereof), and an event described in
subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043
is reasonably expected to occur with respect to such Plan within the following
30 days; that an accumulated funding deficiency, within the meaning of Section
412 of the Code or Section 302 of ERISA, has been incurred or an application
may be reasonably expected to be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments)
or an extension of any amortization period under Section 412 of the Code or
Section 303 or 304 of ERISA with respect to a Plan; that any contribution
required to be made with respect to a Plan or Foreign Pension Plan has not been
timely made; that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan has an
Unfunded Current Liability; that proceedings may be reasonably expected to be
or have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a
Plan; that PESCO, any Subsidiary of PESCO or any ERISA Affiliate will or may
incur any material liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
under Section 4980B of the Code; or that PESCO or any Subsidiary of PESCO may
be reasonably expected to incur any material liability pursuant to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) that provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any Plan or any Foreign Pension Plan. Upon the
request of the Administrative Agent, PESCO will deliver to each of the Banks
(i) a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed
with the Internal Revenue Service and (ii) copies of any records, documents or
other information that must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA. In addition to any certificates or notices
delivered to the Banks pursuant to the first sentence hereof, copies of any
records, documents or other information that must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA, and any notices that
could reasonably be expected to result in any material liability received by
PESCO, any Subsidiary of PESCO or any ERISA Affiliate with respect to any Plan
or Foreign Pension Plan shall be delivered to the Banks no later than ten (10)
days after the date or such records, documents and/or information has been
furnished to the PBGC or such notice has been received by PESCO, the Subsidiary
or the ERISA Affiliate, as applicable.
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8.08 End of Fiscal Years; Fiscal Quarters. PESCO will cause
(i) its fiscal year to end on December 31 and (ii) its fiscal quarters to end
on March 31, June 30, September 30 and December 31.
8.09 Performance of Obligations. PESCO will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement, loan agreement or credit
agreement and each other material agreement, contract or instrument by which it
is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of PESCO or the Borrower and its Subsidiaries taken as
a whole.
8.10 Payment of Taxes. PESCO will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims for sums that have become
due and payable which, if unpaid, might become a Lien not otherwise permitted
under Section 9.01(i); provided, that neither PESCO nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
8.11 Foreign Subsidiaries Guaranty, etc. If following a
change in the relevant sections of the Code or the regulations, rules, rulings,
notices or other official pronouncements issued or promulgated thereunder,
counsel for PESCO reasonably acceptable to the Administrative Agent does not
within 30 days after a request from either Agent deliver evidence, in form and
substance mutually satisfactory to the Administrative Agent and PESCO, with
respect to any Foreign Subsidiary of PESCO which has not already had all of its
stock pledged pursuant to the Pledge Agreement that (i) a pledge of 66-2/3% or
more of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote, and (ii) the entering into by such Foreign
Subsidiary of a guaranty in substantially the form of the Subsidiaries
Guaranty, in any such case could reasonably be expected to cause (I) the
undistributed earnings of such Foreign Subsidiary as determined for federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for federal income tax purposes or (II) other
material adverse federal income tax consequences to the Credit Parties, then in
the case of a failure to deliver the evidence described in clause (i) above,
that portion of such Foreign Subsidiary's outstanding capital stock owned by
any Credit Party and not theretofore pledged pursuant to the Pledge Agreement
shall be pledged to the Administrative Agent for the benefit of the Secured
Creditors pursuant to the Pledge Agreement and in the case of a failure to
deliver the evidence described in clause (ii) above, such Foreign Subsidiary
shall execute and deliver (x) the Subsidiaries Guaranty (or another guaranty in
substantially
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similar form if needed), guaranteeing the Obligations of the Borrower under the
Credit Documents and under any Interest Rate Protection Agreement or Other
Hedging Agreement and (y) the Pledge Agreement (or another pledge agreement in
substantially similar form if needed) securing such Foreign Subsidiaries'
obligations under the Subsidiaries Guaranty, in each case to the extent that
the entering into the Subsidiaries Guaranty and Pledge Agreement is permitted
by the laws of the respective foreign jurisdiction and with all documents
delivered pursuant to this Section 8.11 to be in form and substance reasonably
satisfactory to the Administrative Agent.
8.12 Margin Stock. PESCO will, and will cause each of the
Pledgors to, take any and all actions as may be required to ensure that no
capital stock pledged, or required to be pledged, pursuant to the Pledge
Agreement shall constitute Margin Stock.
SECTION 9. Negative Covenants. PESCO, Holding and the
Borrower hereby covenant and agree that on and after the Restatement Effective
Date and until the Total Revolving Loan Commitment and all Letters of Credit
have terminated and the Revolving Loans, Notes and Unpaid Drawings, together
with interest, Fees and all other Obligations incurred hereunder and
thereunder, are paid in full:
9.01 Liens. PESCO will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
PESCO or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to PESCO or any of its Subsidiaries), or
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided that the provisions of this Section 9.01
shall not prevent the creation, incurrence, assumption or existence of the
following (Liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or not yet delinquent and payable
without any penalty of any kind or character or Liens for taxes,
assessments or governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves have
been established in accordance with GAAP;
(ii) Liens in respect of property or assets of PESCO or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Funded Debt for borrowed
money, such as carriers', warehousemen's, materialmen's and mechanics'
liens and other similar Liens arising in
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the ordinary course of business, and (x) which do not in the aggregate
materially detract from the value of PESCO's or such Subsidiary's
property or assets or materially impair the use thereof in the
operation of the business of PESCO or such Subsidiary or (y) which are
being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of
the property or assets subject to any such Lien;
(iii) Liens in existence on the Original Effective Date
which are listed, and the property subject thereto described, in
Schedule V, but only to the respective date, if any, set forth in such
Schedule V for the removal, replacement and termination of any such
Liens, without giving effect to any extension or renewal thereof;
(iv) Liens created pursuant to the Pledge Agreement;
(v) Liens upon assets of PESCO or any of its Subsidiaries
subject to Capitalized Lease Obligations to the extent such
Capitalized Lease Obligations are permitted by Section 9.04(iii),
provided that (x) such Liens only serve to secure the payment of
Funded Debt arising under such Capitalized Lease Obligation and (y)
the Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of PESCO or any
Subsidiary of PESCO;
(vi) Liens placed upon assets used in the ordinary course
of business of PESCO or any of its Subsidiaries at the time of the
acquisition thereof by PESCO or any such Subsidiary or within 90 days
thereafter to secure Funded Debt incurred to pay all or a portion of
the purchase price thereof or to secure Funded Debt incurred solely
for the purpose of financing the acquisition of any such assets or
extensions, renewals or replacements of any of the foregoing for the
same or a lesser amount of Funded Debt, provided that (x) such Funded
Debt is permitted in Section 9.04 and (y) in all events, the Lien
encumbering the assets so acquired does not encumber any other asset
of PESCO or such Subsidiary;
(vii) easements, rights-of-way, zoning and other
restrictions, encroachments and other similar charges or encumbrances,
and minor title deficiencies, in each case not securing Funded Debt
and not materially interfering with the conduct of the business of
PESCO or any of its Subsidiaries;
(viii) Liens arising from precautionary UCC financing
statement filings regarding operating leases;
(ix) Liens arising out of the existence of judgments or
awards in respect of which PESCO or any of its Subsidiaries shall in
good faith be prosecuting an appeal or proceedings for review in
respect of which there shall have been secured
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a subsisting stay of execution pending such appeal or proceedings,
provided that the aggregate amount of any cash and the fair market
value of any property subject to such Liens do not exceed $500,000 at
any time outstanding;
(x) statutory and common law landlords' liens under
leases to which PESCO or any of its Subsidiaries is a party;
(xi) Liens (other than Liens imposed under ERISA) incurred
in the ordinary course of business in connection with workers
compensation claims, unemployment insurance and social security
benefits;
(xii) Liens securing the performance of bids, tenders,
leases and contracts in the ordinary course of business, statutory
obligations, surety bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business (exclusive
of obligations in respect of the payment for borrowed money), provided
that the aggregate outstanding amount of obligations secured by Liens
permitted by this clause (xii) (and the value of all cash and property
encumbered by Liens permitted pursuant to this clause (xii)) shall not
at any time exceed $2,000,000;
(xiii) Liens on property or assets acquired pursuant to a
Permitted Acquisition, an Identified Acquisition or the Sea Mar
Acquisition, or on property or assets of a Subsidiary of the Borrower
in existence at the time such Subsidiary is acquired pursuant to a
Permitted Acquisition, an Identified Acquisition or the Sea Mar
Acquisition, to the extent permitted pursuant to Section 9.02(viii),
9.02(ix) or 9.02(xv);
(xiv) Liens in favor of any Credit Party; and
(xv) Liens placed upon assets of any Subsidiary which is a
Foreign Subsidiary to secure Funded Debt incurred by such Subsidiary,
provided that the aggregate amount of any Funded Debt secured by such
Liens shall not exceed $2,500,000 in the aggregate at any one time.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
PESCO will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part
of its property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person (or agree to do any of the foregoing at any future time), except that:
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(i) PESCO and its Subsidiaries may make sales of
inventory in the ordinary course of business;
(ii) PESCO and its Subsidiaries may sell obsolete or
worn-out equipment or materials, in the ordinary course of business;
(iii) PESCO and its Subsidiaries may sell or discount, in
each case without recourse and in the ordinary course of business,
accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof;
(iv) PESCO and its Subsidiaries may sell other assets
which do not constitute Material Asset Sales in the ordinary course of
business so long as the gross proceeds generated from all such asset
sales in any fiscal year of PESCO do not to exceed $3,000,000;
(v) PESCO and its Subsidiaries may make Material Asset
Sales, so long as (i) no Default or no Event of Default then exists or
would result therefrom, (ii) each such sale is in an arm's-length
transaction and PESCO or the respective Subsidiary receives at least
fair market value (as determined in good faith by PESCO or such
Subsidiary, as the case may be), (iii) the total consideration
received by PESCO or such Subsidiary is at least 90% cash and is paid
at the time of the closing of such sale and (iv) the Net Sale Proceeds
from any Material Asset Sales are applied as (and to the extent)
required by Section 3.03(b) and 4.02(f), provided, however, that if,
following the sale of equipment, a replacement is necessary for the
operation of the business of PESCO or such Subsidiary, PESCO or such
Subsidiary shall promptly replace the sold equipment with adequate
replacement equipment;
(vi) Investments may be made to the extent permitted by
Section 9.05;
(vii) PESCO and its Subsidiaries may lease (as lessee) real
or personal property (so long as any such lease does not create a
Capitalized Lease Obligation except to the extent permitted by Section
9.04(iii));
(viii) the Borrower and its Wholly-Owned Subsidiaries may
consummate the Identified Acquisitions so long as (i) no Default or
Event of Default then exists or would result therefrom, (ii) each of
the representations and warranties contained in Section 7 shall be
true and correct in all material respects both before and after giving
effect to such Identified Acquisition, and (iii) any Liens or Funded
Debt assumed or issued in connection with such acquisition shall be
issued or assumed only by the Borrower;
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(ix) the Borrower and its Wholly-Owned Subsidiaries may
consummate a Permitted Acquisition, so long as (i) the Person acquired
(or whose assets were acquired) was, immediately prior to such
acquisition, engaged primarily in the Business or such assets
constitute Equipment, (ii) no Default or Event of Default then exists
or would result therefrom, (iii) each of the representations and
warranties contained in Section 7 shall be true and correct in all
material respects both before and after giving effect to such
Permitted Acquisition, (iv) any Liens or Funded Debt assumed or issued
in connection with such acquisition shall be issued or assumed only by
the Borrower and shall otherwise be on terms and conditions
satisfactory to the Administrative Agent, (v) the Pro Forma Leverage
Ratio, after giving effect to such Permitted Acquisition, shall not
exceed the Applicable Pro Forma Leverage Ratio and, if such Permitted
Acquisition is of the type described in clause (a) or (b) of the
definition of Permitted Acquisition, the anticipated cash flow from
such Permitted Acquisition is positive, (vi) on or prior to the
Applicable Notice Time with respect to any Permitted Acquisition in
excess of $10,000,000, the Borrower shall deliver to the
Administrative Agent and each of the Banks a certificate of a
principal financial officer of the Borrower substantially in the form
of Exhibit L hereto certifying (and showing the calculations therefor
in reasonable detail) that the Pro Forma Leverage Ratio shall not
exceed the Applicable Pro Forma Leverage Ratio at such time and (vii)
on or prior to the Applicable Notice Time with respect to any
Permitted Acquisition which results in aggregate Permitted
Acquisitions in excess of $25,000,000 during any quarterly accounting
period of PESCO, and on or prior to the Applicable Notice Time with
respect to each subsequent Permitted Acquisition which results in
aggregate Permitted Acquisitions in excess of an additional
$25,000,000 during such quarterly accounting period, the Borrower
shall deliver to the Administrative Agent and each of the Banks a
certificate of a principal financial officer of the Borrower
substantially in the form of Exhibit L hereto certifying (and showing
the calculations therefor in reasonable detail) that the Pro Forma
Leverage Ratio shall not exceed the Applicable Pro Forma Leverage
Ratio at such time;
(x) PESCO or its Subsidiaries may grant leases or
subleases to other Persons not materially interfering with the conduct
of the business of PESCO or any of its Subsidiaries;
(xi) PESCO, Holding and any Subsidiary of the Borrower may
be merged or consolidated with or into the Borrower so long as the
Borrower is the surviving corporation of such merger or consolidation;
(xii) any Subsidiary of the Borrower may be merged or
consolidated with or into any other Subsidiary of the Borrower so long
as (i) in the case of any such merger or consolidation involving a
Subsidiary Guarantor, the Subsidiary Guarantor
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is the surviving corporation of such merger or consolidation and (ii)
in the case of any such merger consolidation involving a Wholly-Owned
Subsidiary of the Borrower, the Wholly-Owned Subsidiary is the
surviving corporation of such merger or consolidation;
(xiii) PESCO and any of its Subsidiaries may transfer
assets between or among themselves in the ordinary course of business;
(xiv) Holding may dissolve and liquidate, so long as all
of its assets and liabilities are distributed to and assumed by PESCO,
and any Wholly-Owned Subsidiary of the Borrower may dissolve and
liquidate, so long as all of the assets and liabilities of such
Wholly-Owned Subsidiary are distributed to and assumed by the
Borrower;
(xv) PESCO and the Borrower may consummate the Sea Mar
Acquisition, provided, however, that the acquisition of any vessels
pursuant to the Vessel Construction Contract shall be subject to
compliance with the provisions of Section 9.02(ix) at the time of
delivery of each relevant vessel;
(xvi) PESCO and any of its Subsidiaries may charter, lease
or rent vessels and other equipment in the ordinary course of their
respective businesses; and
(xvii) the Borrower may be merged into Holding.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Pledge Agreement Collateral, or any Pledge Agreement
Collateral is sold as permitted by this Section 9.02 (other than to PESCO or a
Subsidiary thereof), such Pledge Agreement Collateral shall be sold free and
clear of the Liens created by the Pledge Agreement and the Administrative Agent
and the Pledgee shall be authorized to take any actions deemed appropriate in
order to effect the foregoing.
9.03 Dividends. PESCO will not, and will not permit any of
its Subsidiaries to, authorize, declare or pay any Dividends with respect to
PESCO or any of its Subsidiaries, except that:
(i) any Subsidiary (including any Excluded Subsidiary) of
the Borrower may pay cash Dividends to the Borrower or to any
Subsidiary of the Borrower;
(ii) any non-Wholly-Owned Subsidiary of PESCO may pay cash
Dividends to its shareholders generally so long as PESCO or its
respective Subsidiary which owns the equity interest in the Subsidiary
paying such Dividends receives at least its proportionate share
thereof (based upon its relative holding of
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the equity interest in the Subsidiary paying such Dividends and taking
into account the relative preferences, if any, of the various classes
of equity interests of such Subsidiary);
(iii) Holding may pay cash Dividends to PESCO so long as
the proceeds thereof are promptly used by PESCO to pay the currently
due state and local taxes payable by PESCO and the reasonable expenses
of preparing returns reflecting such taxes; and
(iv) the Borrower may pay cash Dividends to Holding to
permit Holding to pay, and to pay amounts to PESCO to permit PESCO to
pay, then currently due state and local taxes payable by Holding
and/or PESCO and the reasonable expenses of preparing returns
reflecting such taxes.
9.04 Funded Debt. PESCO will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Funded Debt, except:
(i) Funded Debt incurred pursuant to this Agreement and
the other Credit Documents;
(ii) Existing Indebtedness outstanding on the Original
Effective Date and listed on Schedule IV, without giving effect to any
subsequent extension, renewal or refinancing thereof;
(iii) Funded Debt of the Borrower and its Subsidiaries
evidenced by Capitalized Lease Obligations and purchase money Funded
Debt subject to Liens permitted under Section 9.01(vi), provided that
in no event shall the sum of (I) the aggregate principal amount of all
Capitalized Lease Obligations and (II) the aggregate principal amount
of all purchase money Funded Debt exceed $2,000,000 at any time
outstanding;
(iv) intercompany Funded Debt among PESCO and its
Subsidiaries to the extent permitted by Sections 9.05(viii) and
(xiii);
(v) Funded Debt consisting of guaranties by PESCO and its
Subsidiaries of (x) Funded Debt of Excluded Subsidiaries in an
aggregate principal amount not to exceed $5,000,000 outstanding at any
one time and (y) other Funded Debt of the Borrower and its
Subsidiaries otherwise permitted to be incurred under this Section
9.04;
(vi) Funded Debt under Interest Rate Protection Agreements
and Other Hedging Agreements providing protection against fluctuations
in currency values
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in connection with PESCO's or any of its Subsidiaries' operations so
long as management of PESCO or such Subsidiary, as the case may be,
has determined that the entering into of such Interest Rate Protection
Agreements or Other Hedging Agreements are bona fide hedging
activities and are not for speculative purposes;
(vii) additional unsecured Funded Debt of PESCO, Holding or
the Borrower issued on a subordinated basis (together with the 1998
Senior Subordinated Notes, "Permitted Subordinated Indebtedness") so
long as all of the terms and conditions (and the documentation) in
connection therewith (including, without limitation, the amortization,
maturity, interest rates, limitations on cash interest payable,
covenants, defaults, remedies, sinking fund provisions, subordination
provisions and other terms) and the purchasers or lenders thereof
shall be satisfactory to the Required Banks;
(viii) the Borrower may assume Funded Debt of a Subsidiary
pursuant to a Permitted Acquisition or Identified Acquisition (or the
Borrower may assume Funded Debt at the time of a Permitted Acquisition
or Identified Acquisition of an asset securing such Funded Debt), to
the extent permitted in connection with a Permitted Acquisition;
(ix) additional Funded Debt constituting overdraft lines
of PESCO and its Subsidiaries in an aggregate principal amount not to
exceed $5,000,000.00 at any one time outstanding (calculated so as to
not include both the overdraft line and any related guaranty);
(x) up to $150,000,000 principal amount of 1998 Senior
Subordinated Notes;
(xi) the Assumed Sea Mar Debt; and
(xii) in addition to all other Funded Debt permitted
pursuant to this Section 9.04, additional unsecured Funded Debt
incurred by PESCO and its Subsidiaries in an aggregate principal
amount not to exceed $2,000,000.00 at any one time outstanding.
9.05 Advances, Investments and Loans. PESCO will not, and
will not permit any of its Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, (each of the
foregoing
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an "Investment" and, collectively, "Investments"), except that the following
shall be permitted:
(i) PESCO and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in
the ordinary course of their business and payable or dischargeable in
accordance with customary trade terms of the Borrower or such
Subsidiary;
(ii) PESCO and its Subsidiaries may acquire and hold cash
and Cash Equivalents;
(iii) PESCO and its Subsidiaries may hold the Investments
held by them, and maintain the Intercompany Loans outstanding, on the
Original Effective Date and described on Schedule VI, provided that
any additional Investments made with respect thereto or any extensions
or renewals of any Intercompany Loans shall be permitted only if
independently justified under the other provisions of this Section
9.05;
(iv) PESCO and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in
good faith settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of
business;
(v) PESCO and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
officers, directors and employees so long as the principal amount
thereof at any time outstanding (determined without regard to any
write-downs or write-offs of such loans and advances) shall not exceed
$25,000 for any one officer, director or employee and shall not exceed
in the aggregate $500,000 at any one time;
(vi) PESCO may acquire and hold obligations of one or more
officers or other employees of PESCO or any of its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
common stock of PESCO so long as no cash is paid by PESCO or any of
its Subsidiaries to such officers or employees in connection with the
acquisition of any such obligations;
(vii) PESCO and its Subsidiaries may enter into Interest
Rate Protection Agreements and Other Hedging Agreements to the extent
permitted by Section 9.04(vi);
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(viii) in addition to the accounts that may be held, paid,
created, acquired or discharged pursuant to Section 9.05(i), PESCO and
its Subsidiaries may make intercompany loans and advances between or
among one another (collectively, "Intercompany Loans"), so long as (i)
each Intercompany Loan made to a Foreign Subsidiary shall only be made
by the Borrower and shall be evidenced by an Intercompany Note that is
pledged to the Collateral Agent pursuant to the Pledge Agreement,
provided that (x) Intercompany Loans to Foreign Subsidiaries (other
than Pool International (Malaysia) Sdn. Bhd.) which are outstanding
on the Original Effective Date as set forth in Schedule VI shall not
be subject to this requirement and (y) any advances which represent
charges to a Subsidiary for Trade Advances shall not be subject to
this requirement, so long as the aggregate amount of all such Trade
Advances not evidenced by an Intercompany Note at any one time
outstanding shall not exceed $2,000,000, and (ii) the aggregate
outstanding principal amount of all Intercompany Loans made by the
Credit Parties to Foreign Subsidiaries, in addition to those described
on Schedule VI and in addition to those described in Section
9.05(xiii), shall not exceed $15,000,000 at any time outstanding
(determined without regard to any write-downs or write-offs of such
Intercompany Loans);
(ix) PESCO may make equity contributions to the capital of
Holding, Holding may make equity contributions to the capital of the
Borrower, the Borrower may make equity contributions to the capital of
the Subsidiary Guarantors and the Subsidiary Guarantors may make
equity contributions to the capital of their respective Subsidiaries
which are Subsidiary Guarantors;
(x) PESCO, Holding, the Borrower and the Subsidiary
Guarantors may make equity contributions to the capital of
Subsidiaries of PESCO which are not Subsidiary Guarantors and to
Excluded Subsidiaries (i) for the purpose of enabling Wholly-Owned
Subsidiaries to consummate Permitted Acquisitions or (ii) for any
other purpose, so long as the aggregate outstanding amount of all such
equity contributions for such other purposes, in addition to the
amounts described as "shareholder advances (treated as equity for
accounting purposes)" on Schedule VI, does not exceed the sum of
$5,000,000 and the aggregate sum of all cash distributions received by
PESCO, Holding, the Borrower and the Subsidiary Guarantors after the
Original Effective Date from Excluded Subsidiaries and Subsidiaries of
PESCO which are not Subsidiary Guarantors;
(xi) Permitted Acquisitions, Identified Acquisitions and
the Sea Mar Acquisition shall be permitted pursuant to Section
9.02(viii), Section 9.02(ix) and Section 9.02(xv), respectively;
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(xii) PESCO and its Subsidiaries may acquire and hold
promissory notes issued by the purchaser of assets in connection with
a sale of such assets to the extent permitted by Sections 9.02(v);
(xiii) in addition to the accounts that may be held, paid,
created, acquired or discharged pursuant to Section 9.05(i), PESCO and
the Subsidiary Guarantors may make additional Intercompany Loans (A)
to other Subsidiary Guarantors for the purpose of enabling such
Subsidiary Guarantor to consummate Permitted Acquisitions or
Identified Acquisitions and (B) to Foreign Subsidiaries for the
purpose of enabling such Foreign Subsidiary to consummate Permitted
Acquisitions or Identified Acquisitions so long as each such
Intercompany Loan to a Foreign Subsidiary shall be made only by the
Borrower and shall be evidenced by an Intercompany Note that is
pledged to the Collateral Agent pursuant to the Pledge Agreement;
(xiv) PESCO and its Subsidiaries may hold receivables owing
to any of them in the ordinary course of business with respect to
insurance claims; and
(xv) in addition to all other Investments and advances
permitted by this Section 9.05, PESCO and its Subsidiaries may make
additional Investments in an aggregate amount outstanding at any time
not to exceed $2,000,000.00.
9.06 Transactions with Affiliates. PESCO will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions with any Affiliate of PESCO or any of its Subsidiaries,
other than in the ordinary course of business and on terms and conditions
substantially as favorable to PESCO or such Subsidiary as would reasonably be
obtained by PESCO or such Subsidiary at that time in a comparable arm's-length
transaction with a Person other than an Affiliate, except that the following in
any event shall be permitted:
(i) Dividends may be paid to the extent provided in
Section 9.03;
(ii) loans may be made and other transactions may be
entered into by PESCO and its Subsidiaries to the extent permitted by
Sections 9.04 and 9.05;
(iii) customary fees may be paid to non-officer directors
of PESCO and its Subsidiaries; and
(iv) transactions between or among PESCO and its
Subsidiaries (including Excluded Subsidiaries) to the extent that such
transactions are otherwise permitted under this Agreement.
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9.07 Consolidated Interest Coverage Ratio. None of the
Parties will permit the Consolidated Interest Coverage Ratio for any Test
Period to be less than 3.00:1.00.
9.08 Fixed Charge Coverage Ratio. None of the Parties will
permit the Fixed Charge Coverage Ratio for any Test Period up to and ending on
the last day of a fiscal quarter of PESCO set forth below to be less than the
ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 1998 1.25:1.00
September 30, 1998 1.40:1.00
March 31, 1999 1.55:1.00
June 30, 1999 and 1.75:1.00
the last day of each
fiscal quarter
thereafter
9.09 Maximum Leverage Ratio. None of the Parties will permit
the Leverage Ratio at any time to be greater than 3.25:1.00.
9.10 Maximum Debt-to-Total Capital Ratio. None of the
Parties will permit the ratio of Consolidated Funded Debt to Total Capital at
the end of any fiscal quarter of PESCO to be greater than 0.45:1.00.
9.11 Minimum Consolidated Net Worth. None of the Parties
will permit the Consolidated Net Worth of PESCO and its Subsidiaries (plus net
income of Excluded Subsidiaries (after giving effect to deductions for
interests held by Persons other than PESCO and its Subsidiaries)) at any time
to be less than $175,000,000, plus (x) 50% of the cumulative Consolidated Net
Income for the period from July 1, 1997 until December 31, 1997 and for each
fiscal year thereafter (without reduction to the extent Consolidated Net Income
for any such fiscal year is negative), (y) 50% of the cash proceeds (net of
underwriting discounts and commissions and other reasonable transaction costs
associated therewith) received by PESCO or any of its Subsidiaries for of any
sale of equity on or after July 1, 1997 and (z) 100% of the increase of the
Consolidated Net Worth of PESCO and its Subsidiaries attributable to the
consummation of the Sea Mar Acquisition, such amount to be determined in good
faith by PESCO and reported to the Administrative Agent in writing no later
than 60 days after the Restatement Effective Date, less any decrease as a
result of any return of Pool Stock to PESCO pursuant to the Escrow Agreement.
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9.12 Limitation on Modifications of Certificate of
Incorporation and By-Laws; Limitation on Voluntary Payments and Modifications
of Funded Debt. (a) PESCO will not, and will not permit any of its
Subsidiaries to, amend, modify or change its certificate or articles of
incorporation (including, without limitation, by the filing or modification of
any certificate of designation) or by-laws (or the equivalent organizational
documents) unless such amendment, modification or change could not be adverse
to the interests of the Banks.
(b) PESCO will not, and will not permit any of its
Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary
or optional payment or prepayment on or redemption or acquisition for
value of (including, without limitation, by way of depositing with the
trustee with respect thereto or any other Person money or securities
before due for the purpose of paying when due) any Existing
Indebtedness (it being understood and agreed that the provisions of
this Section 9.12(b) shall not apply to the Assumed Sea Mar Debt);
provided that, to the extent the Borrower and the holders of the DA&S
Subordinated Notes enter into arrangements for the defeasance of the
DA&S Subordinated Notes, the Borrower may deposit money or securities
with an escrow agent or other Person prior to the date payment is due
under the DA&S Subordinated Notes in accordance with such arrangements
so long as (x) no Default or Event of Default is then in existence,
and (y) concurrently with the making of such deposit, (1) the Borrower
is unconditionally released from its obligations with respect to the
DA&S Subordinated Notes, and (2) any and all Liens held by the holders
of the DA&S Subordinated Notes (or their representative) are
unconditionally released, in each case in a manner satisfactory to the
Administrative Agent;
(ii) amend or modify, or permit the amendment or
modification of, any provision of any ▇▇▇▇▇▇▇ Subordinated Debt
Document, DA&S Subordinated Debt Document or 1998 Senior Subordinated
Notes Document unless such amendment or modification could not be
adverse to the interests of the Banks; or
(iii) amend or modify, or permit the amendment or
modification of, any provision of Section 2 of the Sea Mar Acquisition
Agreement unless such amendment or modification could not be adverse
to the interests of the Banks.
9.13 Limitation on Certain Restrictions on Subsidiaries.
PESCO will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by PESCO or any Subsidiary of
PESCO, or pay any Funded Debt owed to PESCO or any Subsidiary of PESCO, (b)
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make loans or advances to PESCO or any Subsidiary of PESCO or (c) transfer any
of its properties or assets to PESCO or any Subsidiary of PESCO, except for
such encumbrances or restrictions existing under or by reason of (i) applicable
law, (ii) this Agreement and the other Credit Documents, (iii) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of PESCO or any Subsidiary of PESCO, (v) customary
provisions restricting assignment of any licensing agreement entered into by
PESCO or any Subsidiary of PESCO in the ordinary course of business and (vi)
restrictions on the transfer of any asset subject to a Lien permitted by
Sections 9.01 (vi).
9.14 Limitation on Issuance of Capital Stock. PESCO will not
permit any of its Subsidiaries to issue any capital stock (including by way of
sales of treasury stock) or any options or warrants to purchase, or securities
convertible into, capital stock, except (i) for transfers and replacements of
then outstanding shares of capital stock, (ii) for stock splits, stock
dividends and issuances which do not decrease the percentage ownership of PESCO
or any of its Subsidiaries in any class of the capital stock of such
Subsidiary, (iii) to qualify directors to the extent required by applicable law
or (iv) for issuances by newly created or acquired Subsidiaries in accordance
with the terms of this Agreement, provided that if the stock of the respective
Subsidiary is pledged pursuant to the Pledge Agreement, then any shares issued
pursuant to the proceeding clauses shall be delivered directly to the
Collateral Agent for pledge pursuant to the Pledge Agreement.
9.15 Business. (a) PESCO and its Subsidiaries will not
engage in any businesses other than the businesses engaged in by PESCO and its
Subsidiaries as of the Original Effective Date and activities directly related
thereto, the offshore supply vessel business and similar or related businesses.
(b) No Inactive Subsidiary shall conduct any business or
possess any material amount of assets or liabilities, except as disclosed in
the financial statements delivered pursuant to Section 7.05(a).
9.16 Limitation on Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, PESCO will not, and will
not permit any of its Subsidiaries to, establish, create or acquire after the
Original Effective Date any Subsidiary, provided that the Borrower and its
Wholly-Owned Subsidiaries shall be permitted to establish or create by
acquisition or otherwise Wholly-Owned Subsidiaries so long as within 10 days of
such Wholly-Owned Subsidiary being established or created (i) the capital stock
or other equity interests of each such new Wholly-Owned Subsidiary (to the
extent owned by a Credit Party) is pledged pursuant to, and to the extent
required by, the Pledge Agreement, (ii) each such new Wholly-Owned Subsidiary
(other than a Foreign Subsidiary except to the extent required pursuant to
Section 8.11) executes a counterpart of the Subsidiaries Guaranty and, if
applicable, the Pledge Agreement and (iii) copies of the certificate of
incorporation (or comparable document), by-laws and relevant board resolutions
of such
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new Wholly-Owned Subsidiary, certified by the Secretary or an Assistant
Secretary of such Wholly-Owned Subsidiary, are delivered to the Administrative
Agent.
9.17 Senior Debt. PESCO will not, and will not permit any of
its Subsidiaries to, designate any Funded Debt (other than the Obligations) as
"Senior Debt" for purposes of, and as defined in, each of the ▇▇▇▇▇▇▇ Deferred
Payment Agreements and the ▇▇▇▇▇▇▇ Subordinated Notes and the DA&S Stock
Purchase Agreement and the DA&S Subordinated Notes.
SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the
payment when due of any principal of any Revolving Loan or any Note or (ii)
default, and such default shall continue unremedied for two or more Business
Days, in the payment when due of any interest on any Revolving Loan or Note,
any Unpaid Drawing or any Fees or any other amounts owing hereunder or
thereunder; or
10.02 Representations, etc. Any representation, warranty or
statement made (or deemed made) by any Credit Party herein or in any other
Credit Document or in any certificate delivered to either Agent or any Bank
pursuant hereto or thereto shall prove to be untrue in any material respect on
the date as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the
due performance or observance by it of any term, covenant or agreement
contained in Section 8.01(e)(i) or Section 9 (other than any default under
clause (vi) of Section 9.01, clause (iv) of Section 9.02 and clause (iii) of
Section 9.04 which occurs solely as a result of a permitted transaction or
transactions exceeding the dollar limitations set forth therein and other than
a default under Section 9.17) or (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained in this
Agreement or any other Credit Document (other than those set forth in Sections
10.01 and 10.02) and such default shall continue unremedied for a period of 30
days after written notice thereof to the defaulting party by the Agents or the
Required Banks; or
10.04 Default Under Other Agreements. (i) PESCO or any of
its Subsidiaries shall (x) default in any payment of any Funded Debt (other
than the Notes) beyond the period of grace, if any, provided in the instrument
or agreement under which such Funded Debt was created or (y) default in the
observance or performance of any agreement or condition relating to any Funded
Debt (other than the Notes) or contained in any instrument or agreement
evidencing, securing or relating thereto, beyond the applicable grace period or
any other event shall occur or condition exist, the effect of which default or
other
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event or condition is to cause, or to permit the holder or holders of such
Funded Debt (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any such
Funded Debt to become due prior to its stated maturity, or (ii) any Funded Debt
(other than the Notes) of PESCO or any of its Subsidiaries shall be declared to
be (or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided that it shall not be a Default or an Event of Default under this
Section 10.04 unless the aggregate principal amount of all Funded Debt as
described in preceding clauses (i) and (ii) is at least $5,000,000; or
10.05 Bankruptcy, etc. PESCO or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against PESCO or any of its Subsidiaries, and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of PESCO or any of
its Subsidiaries, or PESCO or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to PESCO or any of its
Subsidiaries, or there is commenced against PESCO or any of its Subsidiaries
any such proceeding which remains undismissed for a period of 60 days, or PESCO
or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is entered; or
PESCO or any of its Subsidiaries suffers any appointment of any custodian or
the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or PESCO or any of its
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by PESCO or any of its Subsidiaries for the purpose
of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412
of the Code or Section 302 of ERISA or a waiver of such standard or extension
of any amortization period is sought or granted under Section 412 of the Code
or Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to
occur with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or
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to be the subject of termination proceedings under ERISA, any Plan shall have
an Unfunded Current Liability, a contribution required to be made with respect
to a Plan or a Foreign Pension Plan has not been timely made, PESCO or any
Subsidiary of PESCO or any ERISA Affiliate has incurred or is likely to incur
any liability to or on account of a Plan under Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971 or 4975 of the Code or on account of a group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B
of the Code, or PESCO or any Subsidiary of PESCO has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
Plans or Foreign Pension Plans; (b) there shall result from any such event or
events the imposition of a lien, the granting of a security interest, or a
liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, has had,
or could reasonably be expected to have, a material adverse effect on the
business, operations, properties, assets, liabilities, condition (financial or
otherwise) or prospects of PESCO and its Subsidiaries taken as a whole; or
10.07 Pledge Agreement. At any time after the execution and
delivery thereof, the Pledge Agreement shall cease to be in full force and
effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby and in each such case the Pledgors shall fail to promptly take
any and all steps requested by the Agents to remedy such situation; or
10.08 Guaranties. The Guaranties or any material provision
thereof shall cease to be in full force or effect as to any Guarantor, or any
Guarantor or any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under any Guaranty or any Guarantor
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any Guaranty and
such Guarantor shall fail to promptly take any and all steps requested by the
Agents to remedy such default; or
10.09 Judgments. One or more judgments or decrees shall be
entered against PESCO or any Subsidiary of PESCO involving in the aggregate for
PESCO and its Subsidiaries a liability (not paid or fully covered (other than
the deductible maintained with respect thereto) by a reputable and solvent
insurance company) and such judgments and decrees either shall be final and
non-appealable or shall not be vacated, discharged or stayed or bonded pending
appeal for any period of 60 consecutive days, and the aggregate amount of all
such judgments equals or exceeds $1,000,000; or
10.10 Change of Control. A Change of Control shall occur;
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then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent, upon the written
request of the Required Banks, shall by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent, any Bank or the holder of any Note to enforce its claims
against any Credit Party (provided, that, if an Event of Default specified in
Section 10.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Revolving Loan Commitment
terminated, whereupon the Revolving Loan Commitment of each Bank shall
forthwith terminate immediately and any Commitment Commission shall forthwith
become due and payable without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Revolving Loans and the
Notes and all Obligations owing hereunder and thereunder to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Credit Party; (iii) terminate any Letter of Credit which may be terminated in
accordance with its terms; (iv) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Section 10.05 with respect to the Borrower, it will pay)
to the Administrative Agent at the Payment Office such additional amount of
cash or Cash Equivalents, to be held as security by the Administrative Agent,
as is equal to the aggregate Stated Amount of all Letters of Credit issued for
the account of the Borrower and then outstanding; (v) enforce, as
Administrative Agent, all Liens, rights and remedies created pursuant to the
Pledge Agreement; and (vi) apply any cash collateral held by the Administrative
Agent pursuant to Section 4.02 to the repayment of the Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Administrative Agent" shall mean Credit Lyonnais, in its
capacity as Administrative Agent for the Banks hereunder, and shall include any
successor to the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power (i)
to vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (ii) to direct or cause the direc-
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tion of the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" shall mean and include the Administrative Agent and
the Documentation Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Applicable Base Rate Margin" shall mean the percentage per
annum determined by reference to the Leverage Ratio in effect from time to
time, all as set forth below, it being understood and agreed that for purposes
of determining Applicable Base Rate Margin (i) the Leverage Ratio for a
particular Test Period shall be effective from the first day of the calendar
quarter immediately succeeding the day on which the financial statements
relating to such Test Period are delivered pursuant to Section 5.12, 8.01(a) or
8.01(b), as the case may be, until the first day of the calendar quarter
immediately succeeding the day on which the financial statements relating to
the immediately succeeding Test Period are so delivered and (ii) in the event
financial statements for a particular Test Period are not delivered on or prior
to the date required pursuant to Section 5.12, 8.01(a) or 8.01(b), as the case
may be, the Leverage Ratio for such Test Period shall be deemed to be 3.00:
Leverage Ratio Applicable Base Rate Margin
-------------- ---------------------------
greater than or equal to 3.00 0.50%
less than 3.00 0
"Applicable Eurodollar Rate Margin" shall mean the percentage
per annum determined by reference to the Leverage Ratio in effect from time to
time, all as set forth below, it being understood and agreed (i) that at no
time prior to the first anniversary of the Original Effective Date shall the
Applicable Eurodollar Rate Margin be less than 1.50%, (ii) that for purposes of
determining Applicable Eurodollar Rate Margin (a) the Leverage Ratio for a
particular Test Period shall be effective from the first day of the calendar
quarter immediately succeeding the day on which the financial statements
relating to such Test Period are delivered pursuant to Section 5.12, 8.01(a) or
8.01(b), as the case may be, until the first day of the calendar quarter
immediately succeeding the day on which the financial statements relating to
the immediately succeeding Test Period are so delivered, and (b) in the event
financial statements are not delivered on or prior to the date required
pursuant to Section 5.12, 8.01(a) or 8.01(b), as the case may be, the Leverage
Ratio for such Test Period shall be deemed to be 3.00, and (iii) that for
purposes of determining the interest payable with respect to a Eurodollar Loan,
the Applicable Eurodollar Rate Margin
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for the Interest Period for such Eurodollar Loan shall be the Applicable
Eurodollar Rate Margin in effect on the first day of such Interest Period,
notwithstanding whether the Applicable Eurodollar Rate Margin changes during
such Interest Period:
Leverage Ratio Applicable Eurodollar Rate Margin
-------------- ---------------------------------
greater than or equal to 3.00 1.75%
greater than or equal to 2.50 1.50
less than 2.50 1.00
"Applicable Notice Time" shall mean (i) in the case of a
Permitted Acquisition which consists of an acquisition of all or substantially
all of the assets of any Person, an acquisition of the capital stock of any
Person or the acquisition of any Equipment of any Person, at least 10 Business
Days prior to the consummation of such Permitted Acquisition, (ii) in the case
of a Permitted Acquisition which consists of the construction, renovation or
refurbishment of Equipment pursuant to a contract, agreement or undertaking
with a Person other than PESCO or its Subsidiaries, the date which is the
earlier of (x) 10 Business Days following the entering into of such contract,
agreement or undertaking and (y) at least ten Business Days prior to the first
payment by PESCO or its Subsidiaries under such contract, agreement or
undertaking and (iii) in the case of a Permitted Acquisition which consists of
the construction, renovation or refurbishment of Equipment by PESCO or its
Subsidiaries, the date which is the earlier of (x) 10 Business Days following
the commencement of a substantial portion of such construction, renovation or
refurbishment and (y) at least 10 Business Days prior to the incurrence,
issuance or assumption of any Funded Debt in connection therewith.
"Applicable Pro Forma Leverage Ratio" shall mean 2.50:1.00.
"Arranger" shall have the meaning provided in the first
paragraph hereof.
"Asset Sale" shall mean any sale, transfer or other
disposition by the Borrower or any of its Subsidiaries to any Person (including
by-way-of redemption by such Person) other than to the Borrower or a
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of, or equity interests in,
another Person) other than sales of assets pursuant to Sections 9.02(i), (ii),
(iii), (iv), (x) and (xiii).
"Assignment and Assumption Agreement" shall mean an Assignment
and Assumption Agreement substantially in the form of Exhibit I (appropriately
completed).
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"Assumed Sea Mar Debt" shall mean indebtedness of Sea Mar
outstanding at the time of the consummation of the Sea Mar Acquisition in the
approximate aggregate principal amount of $17,000,000.
"Bank" shall mean each financial institution listed on
Schedule I, as well as any Person which becomes a "Bank" hereunder pursuant to
Section 1.12 or 15.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Bank to make available its portion of any
Borrowing or to fund its portion of any unreimbursed payment under Section
2.04(c) or (ii) a Bank having notified in writing the Borrower and/or the
Administrative Agent that such Bank does not intend to comply with its
obligations under Section 1.01 or 2, in the case of either clause (i) or (ii)
as a result of any takeover or control (including, without limitation, as a
result of the occurrence of any event of the type described in Section 10.05
with respect to such Bank) of such Bank by any regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Base Rate" shall mean, at any time, the higher of (i) the
Prime Lending Rate and (ii) 1/2 of 1% in excess of the Federal Funds Rate.
"Base Rate Loan" shall mean each Revolving Loan designated or
deemed designated as such by the Borrower at the time of the incurrence thereof
or conversion thereto.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Revolving
Loan from all the Banks on a given date (or resulting from a conversion or
conversions on such date) having in the case of Eurodollar Loans the same
Interest Period, provided that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of the related Borrowing of Eurodollar Loans.
"Business" shall mean the provision of well-servicing,
workover, drilling and/or other energy production services, whether on land or
offshore, including, without limitation, the offshore supply vessel business.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City, New York or Houston, Texas, a legal holiday or a day
on which banking institutions are authorized or required by law or other
government action to close and (ii)
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with respect to all notices and determinations in connection with, and payments
of principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and
between banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person,
all maintenance expenditures by such Person which should be capitalized in
accordance with GAAP, plus rig modifications and enhancements where the
individual project cost is not in excess of $750,000 (excluding top drives) but
excluding (i) the amount of Capitalized Lease Obligations incurred by such
Person and (ii) the amount of any Permitted Acquisitions and Identified
Acquisitions.
"Capitalized Lease Obligations" shall mean, with respect to
any Person, all rental obligations of such Person which, under GAAP, are or
will be required to be capitalized on the books of such Person, in each case
taken at the amount thereof accounted for as indebtedness in accordance with
such principles.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (ii)
Dollar denominated time deposits and certificates of deposit of either Agent or
any commercial bank having, or which is the principal banking subsidiary of a
bank holding company having, a long-term unsecured debt rating of at least
"BBB-" or the equivalent thereof from Standard & Poor's Ratings Services or
"Baa1" or the equivalent thereof from ▇▇▇▇▇'▇ Investors Service, Inc. with
maturities of not more than six months from the date of acquisition by such
Person, (iii) Dollar denominated time deposits and certificates of deposit of
any commercial bank organized under the laws of the United States which are
insured by the Federal Deposit Insurance Corporation, (iv) Eurodollar
investments with financial institutions (A) having combined capital, surplus
and undivided profits of not less than U.S. $100,000,000.00 and (B) with
commercial paper rated at least "P-1" or "A" by ▇▇▇▇▇'▇ Investor Service, Inc.
or Standard & Poor's Ratings Services, respectively, or, if any institution
does not have a commercial paper rating, a comparable bond rating of at least
"A" or "Baa1" by ▇▇▇▇▇'▇ Investor Service, Inc. or Standard & Poor's Ratings
Services, respectively, (v) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (ii)
above, (vi) commercial paper issued by any Person incorporated in the United
States rated at least A-1 or the equivalent thereof by Standard & Poor's
Ratings Services or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Service, Inc. and in each case maturing not more than six months after the date
of acquisition by such Person, (vii) marketable direct obligations issued by
the District of Columbia or any State of the United States or any political
subdivision of any such State
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or any public instrumentality thereof maturing within six months from the date
of acquisition and, at the time of acquisition, having one of the two highest
ratings obtainable from either Standard & Poor's Ratings Services or ▇▇▇▇▇'▇
Investors Service, Inc. and (viii) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (v) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Asset Sale
or pursuant to a receivable or otherwise, other than (in each case) the portion
of such deferred payment constituting interest, but only as and when so
received) received by PESCO and/or any of its Subsidiaries from such Asset
Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time
to time, 42 U.S.C. Section 9601 et seq.
"Change of Control" shall mean, except as permitted by Section
9.02, (i) PESCO shall cease to own directly 100% on a fully diluted basis of
the economic and voting interest in Holding's capital stock, (ii) Holding shall
cease to own directly 100% on a fully diluted basis of the economic and voting
interest in the Borrower's capital stock, (iii) any Person or "group" (within
the meaning of Section 13(d) and 14(d) under the Securities Exchange Act, as in
effect on the Original Effective Date), shall (A) have acquired beneficial
ownership of 25% or more on a fully diluted basis of the voting and/or economic
interest in PESCO's capital stock or (B) obtained the power (whether or not
exercised) to elect a majority of the directors of PESCO, Holding or the
Borrower or (iv) the Board of Directors of PESCO shall cease to consist of a
majority of Continuing Directors.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the "Code" are to the Code, as in effect at
the date of this Agreement and any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean the Pledge Agreement Collateral and
all cash and Cash Equivalents delivered as collateral pursuant to Section 4.02
or 10.
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Secured Creditors pursuant to the Pledge Agreement.
"Commitment Commission" shall have the meaning set forth in
Section 3.01.
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"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income for such period, before Consolidated Interest Expense and provision
for income taxes for such period and without giving effect (x) to any
extraordinary gains or losses and (y) to any gains or losses from sales of
assets other than from sales of assets in the ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT for such period, adjusted by adding thereto the amount of all amortization
of intangibles and depreciation that were deducted in arriving at Consolidated
EBIT for such period (it being understood and agreed that with respect to any
Test Period that includes a quarterly financial period commencing prior to the
Restatement Effective Date, there shall be added to Consolidated EBIT (to
account for the Sea Mar Acquisition) an amount equal to the product of $79,500
and the number of days in such Test Period occurring prior to the Restatement
Effective Date), provided that there shall be excluded from the calculation of
Consolidated EBITDA lease payments in respect of the San ▇▇▇▇▇▇ Lease (net of
sublease payments received with respect thereto to the extent not included in
Consolidated Net Income) and, provided further, that (i) the net income of any
other Person which is not a Subsidiary of PESCO or is accounted for by the
equity method of accounting shall be included only to the extent of the payment
of dividends or distributions by such other Person to PESCO or a Subsidiary
thereof during such period, (ii) Consolidated EBITDA shall be reduced by the
amount of equity contributions made after the Original Effective Date to
Excluded Subsidiaries or Subsidiaries of PESCO which are not Subsidiary
Guarantors and (iii) the net income of any Subsidiary of PESCO or any Excluded
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Person of its income is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument or law applicable to such Person.
"Consolidated Funded Debt" shall mean, at any time, the
principal amount of all Funded Debt of PESCO and its Subsidiaries at such time
as determined on a consolidated basis.
"Consolidated Interest Coverage Ratio" shall mean, for any
period, the ratio of Consolidated EBITDA to Consolidated Interest Expense for
such period.
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated cash interest expense (including any interest which is
capitalized in accordance with FASB 34) of PESCO and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, (x) that portion of Capitalized Lease Obligations of
PESCO and its Subsidiaries representing the interest factor for such period,
(y) Letter of Credit Fees payable during such period and (z) for any Test
Period that includes a quarterly financial period commencing prior to the
Restatement Effective Date, an amount equal to the product of $18,500 and the
number of days in such Test
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Period occurring prior to the Restatement Effective Date; provided that the
amortization of deferred financing costs with respect to this Agreement shall
be excluded from Consolidated Interest Expense to the extent same would
otherwise have been included therein.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of PESCO and its Subsidiaries for such period, determined on a
consolidated basis (and without giving effect to the net income (or loss) of
any of the Excluded Subsidiaries).
"Consolidated Net Worth" shall mean, at any time, the Net
Worth of PESCO, its Subsidiaries and the Excluded Subsidiaries (without
duplication of any investments held by PESCO or its Subsidiaries in such
Excluded Subsidiaries) determined on a consolidated basis after appropriate
deduction for any minority interests in Subsidiaries and Excluded Subsidiaries,
all in accordance with GAAP.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person as a result of such Person being a general partner of
the other Person, unless the underlying obligation is expressly made
non-recourse as to such general partner, and any obligation of such Person
guaranteeing or intended to guarantee any Funded Debt, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include (A) endorsements
of instruments for deposit or collection in the ordinary course of business,
(B) guarantees by Pool California Energy Services, Inc. of up to $400,000 (in
the aggregate outstanding at any time) with respect to vehicle lease
obligations of its employees, (C) obligations of Pool Alaska, Inc., as a
general partner in Kuupik/Pool Arctic Alaska, an Alaska general partnership,
(D) guarantees relating to bid bonds and surety bonds (or other similar
instruments) issued in the ordinary course of business with respect to
performance obligations of PESCO or any of its Subsidiaries, (E) performance
guarantees for contractual performance obligations of PESCO or any of its
Subsidiaries made in the ordinary course of business, (F) contractual
indemnities made in the ordinary course of business with respect to claims for
personal injuries and property damages, (G) PESCO's guarantee of the Borrower's
obligations relating to the Ranger Rigs sale/leaseback, (H) PESCO's obligation
to repay ENSERCH Corporation for any costs incurred under its guarantee of
Borrower's obligations under the San ▇▇▇▇▇▇ Lease, (I) any obligations to repay
ENSERCH
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corporation for any costs it incurs with respect to claims covered by its
pre-1990 insurance program, (J) any obligations of PESCO to the United States
Coast Guard with respect to any financial responsibility guarantees for water
pollution with respect to rigs (only to the extent fully covered (other than
the deductible maintained with respect thereto) by insurance maintained with a
reputable and solvent insurance company), (K) any guarantees of operating
leases of the Borrower or its Subsidiaries entered into in the ordinary course
of business and (L) any guarantees relating to the obligations of PESCO or its
Subsidiaries under Interest Rate Protection Agreements or Other Hedging
Agreements which are permitted hereunder. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the directors of PESCO on
the Original Effective Date and each other director if (a) such director's
nomination for election to the Board of Directors of PESCO is recommended by a
majority of the then Continuing Directors or (b) such director is elected by
the vote of the shareholders of PESCO prior to the occurrence of a Change of
Control.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, the Subsidiaries Guaranty and the Pledge Agreement.
"Credit Event" shall mean the making of any Revolving Loan or
the issuance of any Letter of Credit.
"Credit Lyonnais" shall mean Credit Lyonnais New York Branch,
in its individual capacity, and any successor corporation thereto by merger,
consolidation or otherwise.
"Credit Party" shall mean and include each Parent Guarantor,
the Borrower and each Subsidiary Guarantor and any successor entity permitted
by Section 9.02.
"DA&S Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, dated June 19, 1997, among the Sellers named therein, DA&S Oil Well
Servicing, Incorporated, a New Mexico corporation, and the Borrower, providing
for the issuance by the Borrower of $10,050,000 principal amount of 9%
subordinated notes due January 15, 2003.
"DA&S Subordinated Debt Documents" shall mean and include the
DA&S Stock Purchase Agreement, each DA&S Subordinated Note, each amendment,
modification
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or supplement thereto, together with all other agreements, instruments and
documents executed or delivered pursuant thereto or in connection therewith
(including, without limitation, any promissory notes, guaranties and security
documents).
"DA&S Subordinated Notes" shall mean each of the subordinated
promissory notes issued pursuant to the DA&S Stock Purchase Agreement.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Dividend" shall mean, with respect to any Person, that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than common stock of such Person) or cash to its
stockholders or partners as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for a consideration any shares of any class
of its capital stock or any partnership interests outstanding on or after the
Original Effective Date (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock or any partnership interests of such Person outstanding on or after the
Original Effective Date (or any options or warrants issued by such Person with
respect to its capital stock). Without limiting the foregoing, "Dividends"
with respect to any Person shall also include all payments made or required to
be made by such Person with respect to any stock appreciation rights plans,
equity incentive or achievement plans or any similar plans or setting aside of
any funds for the foregoing purposes.
"Documentation Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the
Borrower that is incorporated under the laws of the United States or any State
or territory thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
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"Eligible Transferee" shall mean and include a commercial
bank, financial institution, any fund that invests in bank loans or any other
"accredited investor" (as defined in Regulation D of the Securities Act).
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment
due to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, written
policy and rule of common law now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
the environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the
Safe Drinking Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act
of 1990, 33 U.S.C. Section 2701 et seq.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C. Section 1801 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; and any
state and local or foreign counterparts or equivalents, in each case as amended
from time to time.
"Equipment" shall mean and include rigs, other well-servicing
equipment and any other related equipment utilized in the Business.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with PESCO or a Subsidiary of PESCO would
be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or
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(ii) as a result of PESCO or a Subsidiary of PESCO being or having been a
general partner of such person.
"Escrow Agreement" shall have the meaning provided such term
in the Sea Mar Acquisition Agreement.
"Eurodollar Loan" shall mean each Revolving Loan designated as
such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Eurodollar Rate" shall mean (a) the offered rate (rounded
upwards, if necessary, to the next higher 1/100th of 1%) which appears on the
Telerate Page 3750, British Bankers Association Interest Settlement Rates (or
such other system for the purpose of displaying rates of leading reference
banks in the London interbank market that replaces such system) as of 11:00
a.m. (London time) for deposits in Dollars on the day two (2) Business Days
prior to the first day of such Interest Period in an amount approximately equal
to the principal amount of the Eurodollar Rate Loan to which such Interest
Period is to apply and for a period of time comparable to such Interest Period,
divided (and rounded upward to the nearest 1/16 of 1%) by (b) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves required by applicable law) applicable to any member bank of
the Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section
10.
"Excluded Subsidiary" shall mean and include Pool Arabia Ltd.,
Intairdril Oman, L.L.C. and PIASA.
"Existing Indebtedness" shall have the meaning provided in
Section 7.21.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
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"Final Maturity Date" shall mean October 2, 2000, as such date
may be extended pursuant to Section 1.13.
"Fixed Charge Coverage Ratio" shall mean the ratio of
Consolidated EBITDA (minus the amount of all cash taxes paid, net of cash tax
refunds, for the period for which Consolidated EBITDA is calculated) to Fixed
Charges.
"Fixed Charges" for any period shall mean the sum of (i)
Consolidated Interest Expense for such period, (ii) the amount of Capital
Expenditures made by PESCO and its Subsidiaries on a consolidated basis during
such period and (iii) the amount of scheduled repayments of Consolidated Funded
Debt required to be made during such period.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by PESCO or any
one or more of its Subsidiaries primarily for the benefit of employees of PESCO
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the
Borrower which is not a Domestic Subsidiary.
"Funded Debt" shall mean, as to any Person, without
duplication, (i) the principal portion of all indebtedness of such Person for
borrowed money (which, for the avoidance of doubt, is funded and outstanding)
or for the deferred purchase price of property or services other than current
trade liabilities incurred in the ordinary course of business and payable in
accordance with customary practices, including all obligations evidenced by
bonds, debentures, notes or similar instruments, or any other obligations
which, in accordance with GAAP, should be classified upon such Person's balance
sheet as liabilities, (ii) the maximum amount available to be drawn under all
letters of credit issued for the account of such Person and all unpaid drawings
in respect of such letters of credit, (iii) all indebtedness secured by any
Lien on any property owned by such Person, whether or not such indebtedness has
been assumed by such Person, (iv) the aggregate amount required in accordance
with GAAP to be capitalized under leases under which such Person is the lessee,
(v) all obligations of such person to pay a specified purchase price for goods
or services, whether or not delivered or accepted, i.e., take-or-pay and
similar obligations and (vi) all Contingent Obligations of such Person;
provided, however, that Funded Debt shall not include (a) any additional
consideration payable pursuant to Section 2.3 or 2.4 of the Sea Mar Acquisition
Agreement until such time as the payment obligation of the Borrower with
respect thereto is no longer contingent and has been definitively
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determined in accordance with the provisions of the Sea Mar Acquisition
Agreement, (b) any amounts due, directly or as a Contingent Obligation, under
the Vessel Construction Contract with respect to vessels that have not been
delivered or (c) any indebtedness assumed in connection with any Permitted
Acquisition, any Identified Acquisition or the Sea Mar Acquisition, to the
extent of the aggregate amount of any cash and cash equivalents on the
consolidated balance sheet of PESCO and its Subsidiaries immediately following
the relevant acquisition, for a period of 45 days following such acquisition.
"GAAP" shall mean generally accepted accounting principles in
the United States as in effect from time to time applied on a consistent basis
(i) as set forth in Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants ("AICPA") and in statements of the
Financial Accounting Standards Board which are applicable in the circumstances
as of the date in question, and (ii) where not inconsistent with such opinions
and statements, as set forth in other AICPA publications and guidelines or
which otherwise arise by custom for the particular industry; and the requisite
that such principles be applied on a consistent basis means that the accounting
principles in a current period are comparable in all material respects to those
applied in a preceding period.
"Guaranteed Creditors" shall mean and include each of the
Administrative Agent, the Arranger, the Documentation Agent, the Collateral
Agent, the Banks and each party (other than any Credit Party) party to an
Interest Rate Protection Agreement or Other Hedging Agreement to the extent
that such party constitutes a Secured Creditor under the Pledge Agreement.
"Guaranteed Obligations" shall mean (i) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the principal and interest on each Note issued by the Borrower to each Bank,
and Revolving Loans made, under this Agreement and all reimbursement
obligations and Unpaid Drawings with respect to Letters of Credit, together
with all the other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities (including, without limitation, indemnities, fees and interest
thereon) of the Borrower to such Bank, the Administrative Agent, the Arranger,
the Documentation Agent, and the Collateral Agent now existing or hereafter
incurred under, arising out of or in connection with this Agreement or any
other Credit Document and the due performance and compliance with all the
terms, conditions and agreements contained in the Credit Documents by the
Borrower and (ii) the full and prompt payment when due (whether by acceleration
or otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities of the Borrower or any of its Subsidiaries owing under any
Interest Rate Protection Agreement or Other Hedging Agreement entered into by
the Borrower or any of its Subsidiaries with any Bank or any affiliate thereof
(even if such Bank subsequently
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ceases to by a Bank under this Agreement for any reason) so long as such Bank
or affiliate participate in such Interest Rate Protection Agreement or Other
Hedging Agreement, and their subsequent assigns, if any, whether now in
existence or hereafter arising, and the due performance and compliance with all
terms, conditions and agreements contained therein.
"Guarantor" shall mean each Parent Guarantor and each
Subsidiary Guarantor.
"Guaranty" shall mean and include each of the Parents Guaranty
and the Subsidiaries Guaranty.
"Hazardous Materials" shall mean (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form that is
friable, urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated biphenyls,
and radon gas; (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous substances," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, the Release of which is
prohibited, limited or regulated by any governmental authority.
"▇▇▇▇▇▇▇ Deferred Payment Agreement" shall mean the Agreement
regarding Deferred Payment of Purchase Price, dated June 13, 1995 among ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and
the Borrower providing for the issuance by the Borrower of $11,500,000
principal amount of 10% subordinated notes due June 13, 2005.
"▇▇▇▇▇▇▇ Subordinated Debt Documents" shall mean and include
the ▇▇▇▇▇▇▇ Deferred Payment Agreement, each ▇▇▇▇▇▇▇ Subordinated Note, each
amendment, modification or supplement thereto, together with all other
agreements, instruments and documents executed or delivered pursuant thereto or
in connection therewith (including, without limitation, any promissory notes,
guaranties and security documents).
"▇▇▇▇▇▇▇ Subordinated Notes" shall mean each of the
subordinated promissory notes issued pursuant to the ▇▇▇▇▇▇▇ Deferred Payment
Agreement.
"Holding" shall have the meaning provided in the first
paragraph of this Agreement.
"Identified Acquisitions" shall mean and include the R&H
Acquisition and the Rig #16.
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"Inactive Subsidiary" shall mean and include each of The
International Air Drilling Company, a Texas corporation, Pool Australia, Inc.,
a Texas corporation, Pool Americas, Inc., a Texas corporation and ENS Equipment
Leasing, B.V.
"Intercompany Loan" shall have the meaning provided in Section
9.05(viii).
"Intercompany Note" shall mean a promissory note, in the form
of Exhibit J or such other form as may be reasonably acceptable to the
Administrative Agent, in either case evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement or other similar agreement or
arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean Credit Lyonnais New York Branch,
Bank One, Texas, N.A., The Hongkong & Shanghai Banking Corporation Limited, the
other Agent, and any other Bank which at the request of the Borrower and with
the consent of the Administrative Agent agrees, in such Bank's sole discretion,
to become an Issuing Bank for the purpose of issuing Letters of Credit pursuant
to Section 2.
"L/C Supportable Obligations" shall mean (i) obligations of
PESCO or any of its Subsidiaries with respect to liability insurance, all-risk
insurance, workers compensation, surety bonds and other similar statutory
obligations and (ii) such other obligations of PESCO or any of its Subsidiaries
as are reasonably acceptable to the respective Issuing Bank and otherwise
permitted to exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
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"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate Stated Amount of all effective and outstanding Letters
of Credit at such time and (ii) the amount of all Unpaid Drawings at such time.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Funded Debt at such time to Consolidated EBITDA for the Test
Period then most recently ended, provided that, for purposes of calculating
either the Applicable Base Rate Margin or the Applicable Eurodollar Rate
Margin, the foregoing numerator shall instead be the sum of (i) Consolidated
Funded Debt (excluding Revolving Outstandings) at such time plus (ii) the
average Revolving Outstandings for the then most recently ended fiscal quarter
of PESCO.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Asset Sale" shall mean any Asset Sale of assets
generating gross cash sale proceeds to PESCO and/or its Subsidiaries in excess
of $3,000,000.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans,
$5,000,000 and (ii) for Eurodollar Loans, $10,000,000.
"NAIC" shall mean the National Association of Insurance
Commissioners.
"Net Debt Proceeds" shall mean, with respect to any incurrence
of Funded Debt for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such Funded
Debt for borrowed money, but shall not include proceeds deemed received
pursuant to a refinancing of Funded Debt to the extent permitted pursuant to
Section 9.04.
"Net Insurance Proceeds" shall mean, with respect to any
Recovery Event, the cash proceeds (net of reasonable costs and any incremental
taxes paid or payable in connection with such Recovery Event) received by the
respective Person in connection with the respective Recovery Event.
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"Net Sale Proceeds" shall mean, for any Material Asset Sale,
the gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received) received from such Material Asset Sale, net of the reasonable costs
of such sale (including fees and commissions, payments of unassumed liabilities
relating to the assets sold and required payments of any Funded Debt which is
secured by the respective assets which were sold), and any incremental taxes
paid or payable as a result of such Material Asset Sale.
"Net Worth" shall mean, as to any Person, the sum of its
capital stock (including, without limitation, any preferred stock, but
excluding any such capital stock subject to mandatory redemption), capital in
excess of par or stated value of shares of its capital stock, retained
earnings, currency translation adjustments and any other account which, in
accordance with GAAP constitutes stockholders equity, excluding any treasury
stock.
"1998 Indenture" shall mean __________________.
"1998 Senior Subordinated Notes" shall mean PESCO's Senior
Subordinated Notes due 2008 issued in the original aggregate principal amount
of $150,000,000 and any notes issued in exchange therefor pursuant to the
provisions of the 1998 Indenture.
"1998 Senior Subordinated Notes Documents" shall mean and
include the 1998 Indenture, each 1998 Senior Subordinated Note and each other
agreement, instrument and document executed or delivered pursuant thereto or in
connection therewith.
"Non-Defaulting Bank" shall mean and include each Bank other
than a Defaulting Bank.
"Note" shall have the meaning provided in Section 1.05.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Administrative
Agent located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: C.
Page Dillehunt or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the
Administrative Agent, the Arranger, the Documentation Agent, the Collateral
Agent, any Issuing Bank or any Bank pursuant to the terms of this Agreement or
any other Credit Document.
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"Original Credit Agreement" shall have the meaning provided in
the first recital of this Agreement.
"Original Effective Date" shall mean September 30, 1997.
"Other Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values.
"Parent Guarantor" shall mean and include each of PESCO and
Holding.
"Parents Guaranty" shall have the meaning provided in Section
14.
"Participant" shall have the meaning provided in Section
2.04(a).
"Parties" shall mean PESCO, Holding and the Borrower.
"Payment Office" shall mean the office of the Administrative
Agent located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other
office as the Administrative Agent may hereafter designate in writing as such
to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean (a) an acquisition of all
or substantially all of the assets of any Person (or all or substantially all
of the assets of a product line or division of any Person), (b) an acquisition
of 100% of the capital stock of any Person or (c) any acquisition,
construction, renovation or refurbishment of Equipment (including (i) rig
modifications and enhancements where the individual project cost is equal to or
in excess of $750,000 and (ii) top drives) or other property or assets used in
the Business, in any case, which satisfies the conditions set forth in Section
9.02(ix).
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Permitted Subordinated Indebtedness" shall have the meaning
provided in Section 9.04(vii).
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, limited liability company, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
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"PESCO" shall have the meaning provided in the first paragraph
of this Agreement.
"PIASA" shall mean Pool International Argentina S.A.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) PESCO or a Subsidiary of PESCO or an ERISA
Affiliate, and each such plan for the five year period immediately following
the latest date on which PESCO, or a Subsidiary of PESCO or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section
5.10.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall mean all "Pledged Securities" as
defined in the Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge
Agreement.
"Pledgor" shall mean and include each "Pledgor" party to the
Pledge Agreement, which, as of the Restatement Effective Date, shall mean the
Borrower and/or each Subsidiary of the Borrower which owns any capital stock,
Partnership Interest (as defined in the Pledge Agreement) or Membership
Interest (as defined in the Pledge Agreement) of any Wholly-Owned Foreign
Subsidiary.
"Pool Stock" shall have the meaning provided such term in the
Sea Mar Acquisition Agreement.
"Prime Lending Rate" shall mean the rate which the
Administrative Agent establishes from time to time as its base lending rate,
the Prime Lending Rate to change when and as such base lending rate changes.
The Prime Lending Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer. The Administrative
Agent may make commercial loans or other loans at rates of interest at, above
or below the Prime Lending Rate.
"Prior Permitted Acquisition Certificate" shall have the
meaning provided in Exhibit L.
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"Pro Forma Leverage Ratio" shall mean, at any time prior to a
particular Permitted Acquisition, the ratio of Consolidated Funded Debt (to be
determined on a pro forma basis at such time as if such Permitted Acquisition
had been consummated at such time (and assuming that (x) the entire purchase
price for such Permitted Acquisition (or cost of construction, renovation or
refurbishment) (other than such portion of such purchase price paid in common
stock of PESCO) had been borrowed at such time and (y) any Funded Debt (without
duplication) incurred, issued or assumed in connection with such Permitted
Acquisition had been outstanding at such time)) to Consolidated EBITDA for the
Test Period then most recently ended (and for which financial statements have
been delivered) prior to the date of consummation of such Permitted Acquisition
(with such Consolidated EBITDA to be determined on a pro forma basis as if such
Permitted Acquisition had been consummated on the first day of such Test
Period).
"Quarterly Payment Date" shall mean the last Business Day of
each September, December, March and June occurring after the Original Effective
Date.
"R&H Acquisition" shall mean the acquisition of R&H Well
Service, Inc. by the Borrower for a purchase price not to exceed $38.0 million,
provided that all existing Funded Debt, relating to R&H Well Services shall
have been paid with proceeds of Loans.
"RCRA" shall mean the Resource Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Recovery Event" shall mean the receipt by PESCO or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable (i)
by reason of theft, loss, physical destruction, damage, taking or any other
similar event occurring on or after the Original Effective Date with respect to
any property or assets of PESCO or any of its Subsidiaries and (ii) under any
policy of insurance required to be maintained under Section 8.03.
"Register" shall have the meaning provided in Section 15.15.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
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"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Release" shall mean the disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying,
pouring or migrating, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section
1.12.
"Replacement Bank" shall have the meaning provided in Section
1.12.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of
whose Revolving Loan Commitments (or after the termination thereof, outstanding
Revolving Loans and RL Percentages of Letter of Credit Outstandings) represent
an amount at least 66 2/3% of the sum of the Total Revolving Loan Commitment
less the Revolving Loan Commitments of all Defaulting Banks (or after the
termination thereof, the sum of the then total outstanding Revolving Loans of
Non-Defaulting Banks and the aggregate RL Percentages of Non-Defaulting Banks
of the total Letter of Credit Outstandings at such time).
"Restatement Effective Date" shall have the meaning provided
in Section 15.10.
"Revolving Loan" shall have the meaning provided in Section
1.01.
"Revolving Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced from
time to time pursuant
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to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to time as a result
of assignments to or from such Bank pursuant to Section 1.12 or 15.04(b).
"Revolving Outstandings" shall mean, at any time, the sum of
the aggregate principal amount of all Revolving Loans then outstanding plus the
aggregate amount of all Letter of Credit Outstandings at such time.
"Rig #16" shall mean the construction of "Rig #16".
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the RL Percentage of
any Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the RL Percentages of the Banks shall be determined
immediately prior (and without giving effect) to such termination.
"San ▇▇▇▇▇▇ Lease" shall mean the Sublease Agreement, dated
March 15, 1983, between the Borrower and Olo Associates Limited Partnership.
"Sea Mar" shall have the meaning provided in the second
recital of this Agreement.
"Sea Mar Acquisition" shall mean the acquisition of all of the
issued and outstanding capital stock of Sea Mar by the Borrower pursuant to,
and the related transactions contemplated by, the Sea Mar Acquisition
Agreement.
"Sea Mar Acquisition Agreement" shall have the meaning
provided in the second recital of this Agreement.
"SEC" shall have the meaning provided in Section 8.01(f).
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term
in the Pledge Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
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"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Stated Amount" of each Letter of Credit shall mean, at any
time, the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Subsidiaries Guaranty" shall mean the Subsidiaries Guaranty,
dated as of September 30, 1997, as in effect from time to time, made by the
Subsidiary Guarantors and substantially in the form of Exhibit H to the
Original Credit Agreement.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or
one or more Subsidiaries of such Person and (ii) any partnership, limited
liability company, association, joint venture or other entity in which such
Person and/or one or more Subsidiaries of such Person has more than a 50%
equity interest at the time, excluding each Excluded Subsidiary.
"Subsidiary Guarantor" shall mean each Domestic Subsidiary of
the Borrower and, to the extent provided in Section 8.11, each Foreign
Subsidiary of the Borrower.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean the four consecutive fiscal quarters
of PESCO then last ended (in each case taken as one accounting period). The
first Test Period of PESCO shall be for the four consecutive fiscal quarters
ending June 30, 1997.
"Total Capital" shall mean, at any time, an amount equal to
the sum of (x) the Consolidated Funded Debt at such time and (y) the
Consolidated Net Worth at such time.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect less (y) the sum of the aggregate principal amount of
all Revolving Loans then outstanding plus the then aggregate amount of all
Letter of Credit Outstandings.
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"Trade Advances" shall mean any advances which represent
charges to a Subsidiary for (w) PESCO's insurance program, (x) allocation of
overhead, (y) services rendered for the benefit of such Subsidiary (including,
without limitation, those rendered by financial, legal or engineering
professionals), or (z) assets purchased by such Subsidiary in the ordinary
course of its business.
"Type" shall mean the type of Revolving Loan determined with
regard to the interest option applicable thereto, i.e., whether a Base Rate
Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under the Plan as of the close of its most recent plan year,
determined in accordance with actuarial assumptions at such time consistent
with Statement of Financial Accounting Standards No. 87, exceeds the market
value of the assets allocable thereto.
"United States" and "U.S." shall each mean the United States
of America.
"Unpaid Drawing" shall have the meaning provided for in
Section 2.05(a).
"Unutilized Revolving Loan Commitment" shall mean, with
respect to any Bank at any time, such Bank's Revolving Loan Commitment at such
time less the sum of (i) the aggregate outstanding principal amount of all
Revolving Loans made by such Bank at such time and (ii) such Bank's RL
Percentage of the Letter of Credit Outstandings at such time.
"Vessel Construction Contract" shall mean the Vessel
Construction Contract dated August 1, 1997 between Sea Mar Equipment, Inc. and
Halter Marine, Inc. in the form assigned to Sea Mar or the Borrower and as in
effect from time to time.
"Wholly-Owned Foreign Subsidiary" shall mean each Foreign
Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of the
Borrower.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest
at such time, excluding each Excluded Subsidiary.
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SECTION 12. The Administrative Agent.
12.01 Appointment. The Banks hereby irrevocably designate
Credit Lyonnais as Administrative Agent to act as specified herein and in the
other Credit Documents. Each Bank hereby irrevocably authorizes, and each
holder of any Note by the acceptance of such Note shall be deemed irrevocably
to authorize, the Administrative Agent to take such action on their behalf
under the provisions of this Agreement, the other Credit Documents and any
other instruments and agreements referred to herein or therein and to exercise
such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto.
The Administrative Agent may perform any of its duties hereunder by or through
its officers, directors, agents, employees or affiliates.
12.02 Nature of Duties. The Administrative Agent shall not
have any duties or responsibilities except those expressly set forth in this
Agreement and in the other Credit Documents. Neither the Administrative Agent
nor any of its officers, directors, agents, employees or affiliates shall be
liable for any action taken or omitted to be taken by it or any such Person
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful
misconduct. The duties of the Administrative Agent shall be mechanical and
administrative in nature; the Administrative Agent shall not have by reason of
this Agreement or any other Credit Document a fiduciary relationship in respect
of any Bank or the holder of any Note; and nothing in this Agreement or any
other Credit Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Administrative Agent any obligations in respect
of this Agreement or any other Credit Document except as expressly set forth
herein or therein.
12.03 Lack of Reliance on the Administrative Agent. Each
Bank represents to the Administrative Agent that it has made and will continue
to make, independently and without reliance upon the Administrative Agent, to
the extent it deemed or deems appropriate (i) its own independent investigation
of the business, prospects, operations, property, financial condition and other
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Revolving Loans and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the
creditworthiness of the Borrower and its Subsidiaries and, except as expressly
provided in this Agreement, the Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Revolving
Loans or at any time or times thereafter. The Administrative Agent shall not
be responsible to any Bank or the holder of any Note for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other
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writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or any of its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrower or any of its Subsidiaries or the existence
or possible existence of any Default or Event of Default.
12.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks;
and the Administrative Agent shall not incur liability to any Bank by reason of
so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against the Administrative Agent
as a result of the Administrative Agent acting or refraining from acting
hereunder or under any other Credit Document in accordance with the
instructions of the Required Banks.
12.05 Reliance. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed to be
the proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and
thereunder, upon advice of counsel selected by the Administrative Agent.
12.06 Indemnification. The Banks agree to indemnify upon
demand the Administrative Agent (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so), ratably
according to the respective amounts of their RL Percentages in effect on the
date indemnification is sought under this Section 12.06 (or, if indemnification
is sought after the date upon which the Commitments have terminated and the
Obligations have been paid in full, ratably in accordance with their respective
RL Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including at any time following the payment of the Obligations) be
imposed on, incurred by or asserted against the Administrative Agent in
connection with this Agreement or any other Credit Document; provided, however,
that no Bank shall be liable for (a) the payment of any arrangement fees or (b)
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent it
results from the Administrative Agent's gross negligence or willful misconduct.
The agreements in this
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Section 12.06 shall survive the payment of the Obligations and the resignation
or replacement of the Administrative Agent.
12.07 The Administrative Agent in its Individual Capacity.
With respect to its obligation to make Revolving Loans, or issue or participate
in Letters of Credit, under this Agreement, the Administrative Agent shall have
the rights and powers specified herein for a "Bank" and may exercise the same
rights and powers as though it were not performing the duties specified herein;
and the term "Banks," "Required Banks," "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its respective individual capacities. The
Administrative Agent and its affiliates may accept deposits from, lend money
to, and generally engage in any kind of banking, investment banking, trust or
other business with, or provide debt financing, equity capital or other
services (including financial advisory services) to, any Credit Party or any
Affiliate of any Credit Party (or any Person engaged in a similar business with
any Credit Party or any Affiliate thereof) as if they were not performing the
duties specified herein, and may accept fees and other consideration from any
Credit Party or any Affiliate of any Credit Party for services in connection
with this Agreement and otherwise without having to account for the same to the
Banks.
12.08 Holders. The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof, as
the case may be, shall have been filed with the Administrative Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee, assignee or
indorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
12.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its respective
functions and duties hereunder and/or under the other Credit Documents at any
time by giving 15 Business Days' prior written notice to the Banks. Such
resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation by the Administrative
Agent, the Required Banks shall appoint a successor Administrative Agent
hereunder or thereunder who shall be a commercial bank or trust company
reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been
so appointed within such 15 Business Day period, the Administrative Agent with
the consent of the Borrower (which consent shall not be unreasonably withheld
or delayed), shall then appoint
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a successor Administrative Agent who shall serve as Administrative Agent
hereunder or thereunder until such time, if any, as the Required Banks appoint
a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Required
Banks shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any, as
the Required Banks appoint a successor Administrative Agent as provided above.
SECTION 13. The Arranger; The Documentation Agent.
13.01 The Arranger; Documentation Agent. The Borrower hereby
confirms the designation of SBC Warburg Dillon Read Inc. as Arranger and Swiss
Bank Corporation, Stamford Branch, as Documentation Agent. Neither the
Arranger nor the Documentation Agent assumes any responsibility or obligation
hereunder for servicing, enforcement or collection of the Obligations, or any
duties as agent for the Banks. Neither the title "Arranger" nor the title
"Documentation Agent" implies any fiduciary responsibility on the part of the
Arranger or the Documentation Agent to the Administrative Agent, any Issuing
Bank or the Banks and the use of such title does not impose on the Arranger or
the Documentation Agent any duties or obligations under this Agreement or any
other Credit Document except as may be expressly set forth herein and therein.
13.02 Liability of the Arranger and the Documentation Agent.
Neither the Arranger nor the Documentation Agent nor any of their officers,
directors, employees, agents, attorneys-in-fact or affiliates shall (a) be
liable for any action lawfully taken or omitted to be taken by it or any such
Person under or in connection with this Agreement or any other Credit Document
(except for its or such Person's own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Borrower or any officer
thereof, contained in this Agreement or in any other Credit Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Arranger or the Documentation Agent under or in
connection with, this Agreement or any other Credit Document or for the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other credit document or for any failure of the Issuer or any
other party to any other Credit Document to perform its obligations hereunder
or thereunder. Except as otherwise expressly stated herein, neither the
Arranger nor the Documentation Agent shall be under any obligation to any Bank
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this
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Agreement or any other Credit Document, or to inspect the properties, books or
records of the Borrower.
13.03 Indemnification. The Banks agree to indemnify upon
demand the Arranger and the Documentation Agent (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to the respective amounts of their RL Percentages in effect
on the date indemnification is sought under this Section 13.03 (or, if
indemnification is sought after the date upon which the Commitments have
terminated and the Obligations have been paid in full, ratably in accordance
with their respective RL Percentages immediately prior to such date), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including at any time following the payment
of the Obligations) be imposed on, incurred by or asserted against the Arranger
or the Documentation Agent in connection with this Agreement or any other
Credit Document; provided, however, that no Bank shall be liable for (a) the
payment of any arrangement fees or (b) any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent it results from the Arranger's or the
Documentation Agent's gross negligence or willful misconduct. The agreements
in this Section 13.03 shall survive the payment of the Obligations and the
resignation or replacement of the Arranger or the Documentation Agent.
13.04 Arranger and Documentation Agent in their Individual
Capacities. Each of the Arranger and the Documentation Agent and their
respective Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with PESCO or any of its Affiliates as though it
were not the Arranger or the Documentation Agent hereunder.
13.05 Credit Decision. Each Bank expressly acknowledges that
neither the Arranger nor the Documentation Agent nor any of their respective
Affiliates, officers, directors, employees, agents or attorneys-in-fact has
made any representation or warranty to it, and that no act by the Arranger or
the Documentation Agent hereafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Arranger or the Documentation Agent to any Bank. Each Bank represents to
the Arranger and the Documentation Agent that it has, independently and without
reliance upon the Arranger or the Documentation Agent, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial condition, creditworthiness and other affairs of the Borrower and its
affiliates and made its own decision to enter into this Agreement. Each Bank
also represents that it will, independently and without reliance upon the
Arranger or the Documentation Agent, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this
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Agreement and the other Credit Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial condition, creditworthiness and other affairs of the
Borrower. Neither the Arranger nor the Documentation Agent shall have any duty
or responsibility to provide any Bank with any information concerning the
business, prospects, operations, property, financial condition,
creditworthiness or other affairs of the Borrower which may come into the
possession of the Arranger or the Documentation Agent or any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates.
SECTION 14. Parents Guaranty.
14.01 The Guaranty. In order to induce the Banks to enter
into this Agreement and to extend credit hereunder and in recognition of the
direct benefits to be received by each Parent Guarantor from the proceeds of
the Revolving Loans and the issuance of the Letters of Credit, each Parent
Guarantor hereby agrees with the Banks as follows. Each Parent Guarantor
hereby unconditionally and irrevocably, jointly and severally, guarantees, as
primary obligor and not merely as surety, the full and prompt payment when due,
whether upon maturity, acceleration or otherwise, of any and all of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors. If any or
all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors
becomes due and payable hereunder, each Parent Guarantor, jointly and
severally, and unconditionally promises to pay such indebtedness to the
Guaranteed Creditors, on demand, together with any and all expenses which may
be incurred by the Guaranteed Creditors in collecting any of the Guaranteed
Obligations. If claim is ever made upon any Guaranteed Creditor for repayment
or recovery of any amount or amounts received in payment or on account of any
of the Guaranteed Obligations and any of the aforesaid payees repays all or
part of said amount by reason of (i) any judgment, decree or order of any court
or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected by
such payee with any such claimant (including the Borrower), then and in such
event each Parent Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon such Parent Guarantor,
notwithstanding any revocation of this Guaranty or any other instrument
evidencing any liability of the Borrower, and each Parent Guarantor shall be
and remain jointly and severally liable to the aforesaid payees hereunder for
the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.
14.02 Bankruptcy. Additionally, each Parent Guarantor
unconditionally and irrevocably, jointly and severally, guarantees the payment
of any and all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors whether or not due or payable by the Borrower upon the occurrence of
any of the events specified in Section 10.05, and
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unconditionally, and jointly and severally, promises to pay such indebtedness
to the Guaranteed Creditors, or order, on demand, in lawful money of the United
States.
14.03 Nature of Liability. The liability of each Parent
Guarantor hereunder is joint and several and exclusive and independent of any
security for or other guaranty of the Guaranteed Obligations of the Borrower
whether executed by such Parent Guarantor, any other Parent Guarantor, any
other guarantor or by any other party, and the liability of each Parent
Guarantor hereunder is not affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, or (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor
or of any other party as to the Guaranteed Obligations of the Borrower, or (c)
any payment on or in reduction of any such other guaranty or undertaking, or
(d) any dissolution, termination or increase, decrease or change in personnel
by the Borrower, or (e) any payment made to the Guaranteed Creditors on the
Guaranteed Obligations which any such Guaranteed Creditor repays to the
Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each Parent
Guarantor waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.
14.04 Independent Obligation. The obligations of each Parent
Guarantor hereunder are independent of the obligations of any other Parent
Guarantor, any other guarantor, any other party or the Borrower, and a separate
action or actions may be brought and prosecuted against each Parent Guarantor
whether or not action is brought against any other Parent Guarantor, any other
guarantor, any other party or the Borrower and whether or not any other
guarantor, any other party or the Borrower be joined in any such action or
actions. Any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to any Parent Guarantor.
14.05 Authorization. Each Parent Guarantor authorizes the
Guaranteed Creditors without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing
its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate
or alter, any of the Guaranteed Obligations (including any increase or
decrease in the rate of interest thereon), any security therefor, or
any liability incurred directly or indirectly in respect thereof, and
the Guaranty herein made shall apply to the Guaranteed Obligations as
so changed, extended, renewed or altered;
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(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against
the Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrower to
its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized
to any liability or liabilities of the Borrower to the Guaranteed
Creditors regardless of what liability or liabilities of the Borrower
remain unpaid;
(g) consent to or waive any breach of, or any act, omission
or default under, this Agreement, any other Credit Document or any of
the instruments or agreements referred to herein or therein, or
otherwise amend, modify or supplement this Agreement, any other Credit
Document or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of any Parent Guarantor from its liabilities under this
Guaranty.
14.06 Reliance. It is not necessary for the Guaranteed
Creditors to inquire into the capacity or powers of the Borrower or the
officers, directors, partners or agents acting or purporting to act on their
behalf, and any Guaranteed Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
14.07 Subordination. Any of the indebtedness of the Borrower
now or hereafter owing to any Parent Guarantor is hereby subordinated to the
Guaranteed Obligations of the Borrower owing to the Guaranteed Creditors; and
if the Administrative Agent so requests at a time when an Event of Default
exists, all such indebtedness of the
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Borrower to any Parent Guarantor shall be collected, enforced and received by
such Parent Guarantor for the benefit of the Guaranteed Creditors and be paid
over to the Administrative Agent on behalf of the Guaranteed Creditors on
account of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors, but without affecting or impairing in any manner the liability of
any Parent Guarantor under the other provisions of this Guaranty. Prior to the
transfer by any Parent Guarantor of any note or negotiable instrument
evidencing any of the indebtedness of the Borrower to such Parent Guarantor,
such Parent Guarantor shall ▇▇▇▇ such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, each Parent Guarantor hereby agrees with the
Guaranteed Creditors that it will not exercise any right of subrogation which
it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code or otherwise) until all
Guaranteed Obligations have been irrevocably paid in full in cash.
14.08 Waiver. (a) Each Parent Guarantor waives any right
(except as shall be required by applicable statute and cannot be waived) to
require any Guaranteed Creditor to (i) proceed against the Borrower, any other
Parent Guarantor, any other guarantor or any other party, (ii) proceed against
or exhaust any security held from the Borrower, any other Parent Guarantor, any
other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power whatsoever. Each Parent Guarantor waives any
defense based on or arising out of any defense of the Borrower, any other
Parent Guarantor, any other guarantor or any other party, other than payment in
full of the Guaranteed Obligations, based on or arising out of the disability
of the Borrower, any other Parent Guarantor, any other guarantor or any other
party, or the unenforceability of the Guaranteed Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of the
Borrower other than payment in full of the Guaranteed Obligations. Each Parent
Guarantor waives any defense arising out of any such election by the Guaranteed
Creditors, even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of such Parent
Guarantor against the Borrower or any other party or any security.
(b) Each Parent Guarantor waives all presentments, demands
for performance, protests and notices, including, without limitation, notices
of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional Guaranteed Obligations. Each Parent Guarantor
assumes all responsibility for being and keeping itself informed of the
Borrower's financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations and the
nature, scope and extent of the risks which each Parent Guarantor assumes and
incurs hereunder, and agrees that the Guaranteed Creditors shall have no duty
to advise any Parent Guarantor of information known to them regarding such
circumstances or risks.
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14.09 Nature of Liability. It is the desire and intent of
each Parent Guarantor and the Guaranteed Creditors that this Guaranty shall be
enforced against each Parent Guarantor to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which enforcement
is sought. If, however, and to the extent that, the obligations of any Parent
Guarantor under this Guaranty shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of the Guaranteed Obligations of such Parent
Guarantor shall be deemed to be reduced and such Parent Guarantor shall pay the
maximum amount of the Guaranteed Obligations which would be permissible under
applicable law.
SECTION 15. Miscellaneous.
15.01 Payment of Expenses, etc. The Borrower shall: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agents (including, without
limitation, the reasonable fees and disbursements of White & Case LLP) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
the Administrative Agent and the Arranger in connection with its syndication
efforts with respect to this Agreement and of the Administrative Agent and,
after the occurrence of an Event of Default, each of the Banks in connection
with the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein (including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent and, after the occurrence of an Event of Default, for each
of the Banks); (ii) pay and hold each of the Banks harmless from and against
any and all present and future stamp, excise and other similar documentary
taxes with respect to the foregoing matters and save each of the Banks harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to pay
such taxes; and (iii) indemnify the Administrative Agent, the Arranger, the
Documentation Agent and each Bank, and each of their respective officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed
against any of them as a result of, or arising out of, or in any way related
to, or by reason of, (a) any investigation, litigation or other proceeding
(whether or not the Administrative Agent, the Arranger or the Documentation
Agent or any Bank is a party thereto and whether or not such investigation,
litigation or other proceeding is brought by or on behalf of any Credit Party)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any
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Letter of Credit or the proceeds of any Revolving Loans hereunder or the
consummation of any of the transactions contemplated herein or in any other
Credit Document or the exercise of any of their rights or remedies provided
herein or in the other Credit Documents, or (b) the actual or alleged presence
of Hazardous Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property owned or at any time operated by the
Borrower or any of its Subsidiaries, the generation, storage, transportation,
handling or disposal of Hazardous Materials by the Borrower or any of its
Subsidiaries at any location, whether or not owned or operated by the Borrower
or any of its Subsidiaries, the non-compliance of any Real Property with
foreign, federal, state and local laws, regulations, and ordinances (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the Borrower, any of its Subsidiaries or
any Real Property owned or at any time operated by the Borrower or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence, bad faith or willful misconduct of the Person
to be indemnified or incurred by reason of the breach by the Person to be
indemnified of any provision of this Agreement). To the extent that the
undertaking to indemnify, pay or hold harmless the Agents or any Bank set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
15.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance
of an Event of Default, each Bank is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to
any Credit Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general
or special) and any other Funded Debt at any time held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of any Credit Party against and on
account of the Obligations and liabilities of the Credit Parties to such Bank
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Bank
pursuant to Section 15.06(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
15.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, telecopier or cable communication) and
mailed, telegraphed, telexed, telecopied,
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cabled or delivered: if to any Credit Party, at the address specified opposite
its signature below or in the other relevant Credit Documents or at such other
address as shall be designated by such party in written notice to the other
parties hereto; if to any Bank, at its address specified on Schedule II; and if
to the Administrative Agent, at its Notice Office; or, as to any Credit Party
or Agent, at such other address as shall be designated by such party in a
written notice to the other parties hereto and, as to each Bank, at such other
address as shall be designated by such Bank in a written notice to the Borrower
and each Administrative Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrower shall not be effective until received by
the Administrative Agent or the Borrower, as the case may be.
15.04 Benefit of Agreement; Assignments; Participations. (a)
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto;
provided, however, the Borrower may not assign or transfer any of its rights,
obligations or interest hereunder without the prior written consent of each of
the Banks and, provided further, that, although any Bank may transfer, assign
or grant participations in its rights hereunder, such Bank shall remain a
"Bank" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitments hereunder except as provided in Sections 1.12 and
15.04(b)) and the transferee, assignee or participant, as the case may be,
shall not constitute a "Bank" hereunder and, provided further, that no Bank
shall transfer, assign or grant any participation to any Person which is
engaged in the Business or any other business competitive with the business
conducted by PESCO and its Subsidiaries or under which the participant shall
have rights to approve any amendment to or waiver of this Agreement or any
other Credit Document except to the extent such amendment or waiver would (i)
extend the final scheduled maturity of any Revolving Loan, Note or Letter of
Credit (unless such Letter of Credit is not extended beyond the Final Maturity
Date) in which such participant is participating, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Revolving Loan Commitment, shall not constitute a change
in the terms of such participation, and that an increase in any Revolving Loan
Commitment or Revolving Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (iii) release all or
substantially all of the Pledge Agreement Collateral (except as expressly
provided in the Credit Documents) supporting the Revolving Loans hereunder in
which such participant is participating. In the case of any such
participation, the
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participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of its
Revolving Loan Commitment and related outstanding Obligations hereunder to (i)
its parent company and/or any affiliate of such Bank which is at least 50%
owned by such Bank or its parent company or to one or more Banks or (ii) in the
case of any Bank that is a fund that invests in bank loans, any other fund that
invests in bank loans and is managed by the same investment advisor of such
Bank or by an Affiliate of such investment advisor or (y) assign all, or if
less than all, a portion equal to at least $5,000,000 in the aggregate for the
assigning Bank or assigning Banks, of such Revolving Loan Commitment and
related outstanding Obligations hereunder to one or more Eligible Transferees
(treating any fund that invests in bank loans and any other fund that invests
in bank loans and is managed by the same investment advisor of such fund or by
an Affiliate of such investment advisor as a single Eligible Transferee), each
of which assignees shall become a party to this Agreement as a Bank by
execution of an Assignment and Assumption Agreement, provided that, (i) at such
time Schedule I shall be deemed modified to reflect the Revolving Loan
Commitments of such new Bank and of the existing Banks, (ii) upon the surrender
of the relevant Note by the assigning Bank (or, upon such assigning Bank's
indemnifying the Borrower for any lost Note pursuant to a customary
indemnification agreement) a new Note will be issued, at the Borrower's
expense, to such new Bank and to the assigning Bank upon the request of such
new Bank or assigning Bank, such new Note to be in conformity with the
requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Revolving Loan Commitments and/or outstanding
Revolving Loans, as the case may be, (iii) the consent of the Administrative
Agent and, to the extent no Default or Event of Default is then in existence,
the Borrower shall be required in connection with any assignment to an Eligible
Transferee pursuant to clause (y) above (which consent shall not be
unreasonably withheld or delayed), (iv) the Administrative Agent shall receive
at the time of each such assignment, from the assigning or assignee Bank, the
payment of a non-refundable assignment fee of $3,500, (v) no such transfer or
assignment will be effective until recorded by the Administrative Agent on the
Register pursuant to Section 15.15 and (vi) no such transfer or assignment will
be effective if, after giving effect thereto, there would be fifteen (15) or
more Banks provided that, to the extent a Default or Event of Default is then
in existence, this requirement shall not be applicable. To the extent of any
assignment pursuant to this Section 15.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Revolving
Loan Commitment and outstanding Revolving Loans. At the time of each
assignment pursuant to this Section 15.04(b) to a Person which is not already a
Bank hereunder and which is not a United
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States person (as such term is defined in Section 7701(a)(30) of the Code) for
Federal income tax purposes, the respective assignee Bank shall, to the extent
legally entitled to do so, provide to the Borrower the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 4.04(b)(ii) Certificate)
described in Section 4.04(b). To the extent that an assignment of all or any
portion of a Bank's Revolving Loan Commitment and related outstanding
Obligations pursuant to Section 1.12 or this Section 15.04(b) would, at the
time of such assignment, result in increased costs under Section 1.10, 2.06 or
4.04 from those being charged by the respective assigning Bank prior to such
assignment, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Revolving Loans and Note hereunder to a Federal Reserve
Bank in support of borrowings made by such Bank from such Federal Reserve Bank
and, with the consent of the Administrative Agent, any Bank which is a fund may
pledge all or any portion of its Revolving Loans and Note to its trustee in
support of its obligations to its trustee. No pledge pursuant to this clause
(c) shall release the transferor Bank from any of its obligations hereunder.
15.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent, the Documentation Agent, any Issuing Bank
or any Bank in exercising any right, power or privilege hereunder or under any
other Credit Document and no course of dealing between the Borrower or any
other Credit Party and the Administrative Agent, the Documentation Agent, any
Issuing Bank or any Bank shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Administrative Agent, the Documentation Agent, any Issuing Bank or
any Bank would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights
of the Administrative Agent, the Documentation Agent, any Issuing Bank or any
Bank to any other or further action in any circumstances without notice or
demand.
15.06 Payments Pro Rata. (a) Except as otherwise provided
in this Agreement, the Administrative Agent agrees that promptly after its
receipt of each payment from or on behalf of the Borrower in respect of any
Obligations hereunder, it shall distribute such payment to the Banks (other
than any Bank that has consented in writing to
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waive its pro rata share of any such payment) pro rata based upon their
respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Revolving Loans, Unpaid Drawings, Commitment Commission or Letter of
Credit Fees, of a sum which with respect to the related sum or sums received by
other Banks is in a greater proportion than the total of such Obligation then
owed and due to such Bank bears to the total of such Obligation then owed and
due to all of the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of the respective
Credit Party to such Banks in such amount as shall result in a proportional
participation by all the Banks in such amount; provided that if all or any
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained
herein, the provisions of the preceding Sections 15.06(a) and (b) shall be
subject to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Banks as opposed to Defaulting
Banks.
15.07 Calculations; Computations; Accounting Terms. (a) The
financial statements to be furnished to the Banks pursuant hereto shall be made
and prepared in accordance with GAAP consistently applied throughout the
periods involved (except as set forth in the notes thereto or as otherwise
disclosed in writing by PESCO or the Borrower to the Banks). If any change or
proposed change after the Restatement Effective Date in GAAP as in effect on
the Restatement Effective Date shall result in a change in any calculation
required to determine compliance with any provision contained in this
Agreement, the Borrower and the Required Banks will negotiate in good faith to
amend such provision in a manner to reflect such change such that the
determination of compliance with such provision shall yield the same
substantive result as would have obtained prior to such change in GAAP. Until
such an amendment is entered into, covenants shall be calculated in accordance
with GAAP as in effect immediately preceding such change.
(b) All computations of interest, Commitment Commission and
other Fees hereunder shall be made on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the last day;
except that in the case of Letter of Credit Fees, the last day shall be
included) occurring in the period for which such interest, Commitment
Commission or Fees are payable.
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15.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, EACH CREDIT PARTY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH CREDIT PARTY
HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
JURISDICTION OVER IT, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT
IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL
JURISDICTION OVER IT. EACH CREDIT PARTY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION
OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT ITS ADDRESS FOR NOTICES HEREUNDER, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH CREDIT PARTY HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH METHOD OF SECURING SERVICE OF PROCESS
AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION
OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH
METHOD OF SECURING SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY BANK OR
THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN
ANY OTHER JURISDICTION TO WHICH SUCH CREDIT PARTY IS SUBJECT.
(b) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
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CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(c) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
15.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Administrative Agent.
15.10 Effectiveness. This Agreement shall become effective
on the date (the "Restatement Effective Date") on which (i) the Borrower,
PESCO, Holding, the Documentation Agent, the Arranger, the Administrative Agent
and each of the Banks shall have signed a counterpart hereof (whether the same
or different counterparts) and shall have delivered the same to the
Administrative Agent at its Notice Office or, in the case of the Banks, shall
have given to the Administrative Agent telephonic (confirmed in writing),
written or telex notice (actually received) at such office that the same has
been signed and mailed to it and (ii) the conditions set forth in Section 5 are
met to the satisfaction of each Agent and the Required Banks. Unless the
Administrative Agent has received actual notice from any Bank that the
conditions contained in Section 5 have not been met to its satisfaction, upon
the satisfaction of the condition described in clause (i) of the immediately
preceding sentence and upon each Agent's good faith determination that the
conditions described in clause (ii) of the immediately preceding sentence have
been met, then the Restatement Effective Date shall have been deemed to have
occurred, regardless of any subsequent determination that one or more of the
conditions thereto had not been met (although the occurrence of the Restatement
Effective Date shall not release the Borrower from any liability for failure to
satisfy one or more of the applicable conditions contained in Section 5). The
Administrative Agent will give the Borrower and each Bank prompt written notice
of the occurrence of the Restatement Effective Date. Anything in this
Agreement to the contrary notwithstanding, if the Restatement Effective Date
does not occur on or prior to May 31, 1998 this Agreement shall never become
effective.
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15.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
15.12 Amendment or Waiver; etc. (a) Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Banks, provided that no such change, waiver, discharge or
termination shall, without the consent of each Bank (other than a Defaulting
Bank), (i) extend the final scheduled maturity of any Revolving Loan or Note or
extend the stated expiration date of any Letter of Credit beyond the Final
Maturity Date, or reduce the rate or extend the time of payment of interest or
Fees thereon, or reduce the principal amount thereof (except to the extent
repaid in cash) (it being understood that any amendment or modification to the
financial definitions in this Agreement or to Section 15.07(a) shall not
constitute a reduction in the rate of interest or Fees for the purposes of this
clause (i)), (ii) release all or substantially all of the Pledge Agreement
Collateral (except as expressly provided in the Credit Documents), (iii) amend,
modify or waive any provision of this Section 15.12, (iv) release any Guarantor
from its obligations under its respective Guaranty except in accordance with
the terms thereof, (v) reduce the percentage specified in the definition of
Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the same
basis as the Revolving Loan Commitments are included on the Restatement
Effective Date) or (vi) consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement; provided further,
that no such change, waiver, discharge or termination shall (v) increase the
Revolving Loan Commitment of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Revolving Loan Commitment shall not
constitute an increase of the Revolving Loan Commitment of any Bank, and that
an increase in the available portion of any Revolving Loan Commitment of any
Bank shall not constitute an increase of the Revolving Loan Commitment of such
Bank), (w) without the consent of any Issuing Bank, amend, modify or waive any
provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (x) without the consent of the Administrative Agent, amend,
modify or waive any provision of Section 12 or any other provision as same
relates to the rights or obligations of the Administrative Agent, (y) without
the consent of the Arranger and the Documentation Agent, amend, modify or waive
any provision of Section 13 or any provision as same relates to the rights or
obligations of the Arranger or the Documentation Agent or (z) without the
consent of the Collateral Agent, amend, modify or waive any provision relating
to the rights or obligations of the Collateral Agent.
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(b) Any request by a Credit Party for a consent or waiver
with respect to this Agreement or any other Credit Document shall be made in
writing to each of the Agents, and the Administrative Agent shall provide a
copy of such request to the Banks promptly following receipt thereof. The
Agents and each of the Banks agree to use their best efforts to respond to any
such request promptly.
15.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06, 13.03 and 15.01
shall survive the execution, delivery and termination of this Agreement and the
Notes and the making and repayment of the Obligations with respect to matters
occurring prior to the termination of this Agreement and the repayment of the
Obligations.
15.14 Domicile of Revolving Loans. Each Bank may transfer
and carry its Revolving Loans at, to or for the account of any office,
Subsidiary or Affiliate of such Bank.
15.15 Register. The Borrower hereby authorizes the
Administrative Agent to maintain a register (the "Register") on which it will
record the Revolving Loan Commitments from time to time of each of the Banks,
the Revolving Loans made by each of the Banks and each repayment in respect of
the principal amount of the Revolving Loans of each Bank. Failure to make any
such recordation, or any error in such recordation shall not affect the
Borrower's obligations in respect of such Revolving Loans. With respect to any
Bank, the transfer of the Revolving Loan Commitment of such Bank and the rights
to the principal of, and interest on, any Revolving Loan made pursuant to such
Revolving Loan Commitment shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Revolving Loan Commitment and Revolving Loans and prior to
such recordation all amounts owing to the transferor with respect to such
Revolving Loan Commitment and Revolving Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Revolving Loan Commitments and Revolving Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 15.04(b). Coincident with the
delivery of such an Assignment and Assumption Agreement to the Administrative
Agent for acceptance and registration of assignment or transfer of all or part
of a Revolving Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Revolving Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Bank and/or the new Bank. The Borrower
agrees to indemnify the Administrative Agent from and against any and all
losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this Section 15.15 (but excluding
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any losses, claims, damages or liabilities to the extent incurred by reason of
the gross negligence or willful misconduct of the Administrative Agent).
15.16 Confidentiality. (a) Subject to the provisions of
clause (b) of this Section 15.16, each Bank agrees that it will not disclose
without the prior consent of the Borrower (other than to its employees,
auditors, advisors or counsel who need to know such information in connection
with the transactions contemplated by this Agreement or to another Bank,
provided such Persons shall be subject to the provisions of this Section 15.16
to the same extent as such Bank) any information with respect to PESCO,
Holding, the Borrower or any of its Subsidiaries which is now or in the future
furnished pursuant to this Agreement or any other Credit Document; provided
that any Bank may disclose any such information (i) as has become generally
available to the public other than by virtue of a breach of this Section
15.16(a) by the respective Bank, (ii) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Bank or to
the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors, (iii) as may be required or appropriate in respect to any summons
or subpoena or in connection with any litigation, (iv) in order to comply with
any law, order, regulation or ruling applicable to such Bank, (v) to the
Administrative Agent or the Collateral Agent and (vi) to any prospective or
actual transferee or participant in connection with any contemplated transfer
or participation of any of the Notes or Revolving Loan Commitments or any
interest therein by such Bank, provided that such prospective transferee or
participant agrees in writing with the Borrower to be bound by the
confidentiality provisions contained in this Section 15.16.
(b) Each of PESCO, Holding and the Borrower hereby
acknowledges and agrees that, if necessary in connection with the transactions
contemplated by this Agreement, each Bank may share with any of its affiliates
any information related to PESCO or any of its Subsidiaries (including, without
limitation, any nonpublic customer information regarding the creditworthiness
of PESCO and its Subsidiaries), provided such Persons shall agree in writing
with the Borrower to be subject to the provisions of this Section 15.16 to the
same extent as such Bank.
15.17 Knowledge. Whenever the words "to the knowledge of
PESCO", "to the knowledge of the Borrower", or words of similar import are
used, the reference shall be to matters of which the Chief Financial Officer,
the Chief Accounting Officer or any principal financial officer are currently
aware (when referring to matters of a financial nature) and to matters of which
the President, the Group Vice President of U.S. Operations, the Group Vice
President of International Operations or the Vice President of Operations for
any of the Gulf Offshore, U.S. California or Alaska divisions are currently
aware (when referring to matters of an operational or environmental nature).
In no event shall any constructive or imputed knowledge or notice be implied.
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15.18 Credit Documents. To the extent that any term,
provision or agreement contained in any Credit Document (other than this
Agreement) is inconsistent with any term, provision or agreement contained in
this Agreement, the terms, provisions and agreements of this Agreement shall
control.
15.19 Inactive Subsidiaries. Notwithstanding anything to the
contrary contained herein, except for Section 7.22 and Section 9.15(b),
Inactive Subsidiaries shall not be subject to, or bound by, the representations
set forth in Section 7 or the covenants set forth in Sections 8 and 9 hereof.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
-------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ POOL ENERGY SERVICES CO.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ By
Attn: Treasurer ----------------------
Name:
Title:
By
----------------------
Name:
Title:
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ POOL ENERGY HOLDING, INC.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ By
Attn: Treasurer -----------------------
Name:
Title:
By
-----------------------
Name:
Title:
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ POOL COMPANY
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ By
Attn: Treasurer ------------------------
Name:
Title:
By
------------------------
Name:
Title:
-109-
117
SBC WARBURG DILLON READ INC.,
as Arranger
By
----------------------------
Name:
Title:
By
----------------------------
Name:
Title:
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CREDIT LYONNAIS NEW YORK
BRANCH, Individually and as
Administrative Agent
By
----------------------------
Name:
Title:
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119
SWISS BANK CORPORATION,
STAMFORD BRANCH,
Individually and as Documentation Agent
By
----------------------------------------
Name:
Title:
By
----------------------------------------
Name:
Title:
-112-
▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A.,
Individually and as Co-Agent
By
-----------------------------
Name:
Title:
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THE HONGKONG & SHANGHAI
BANKING CORPORATION
LIMITED, Individually and
as Co-Agent
By
--------------------------
Name:
Title:
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122
ARAB BANKING CORPORATION
(B.S.C.)
By
----------------------
Name:
Title:
-115-
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
By
---------------------
Name:
Title:
-116-
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ AGENCY
By
------------------------
Name:
Title:
-117-
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DEN NORSKE BANK ASA
By
-----------------------
Name:
Title:
By
-----------------------
Name:
Title:
-118-
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ AGENCY
By
-----------------------
Name:
Title:
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GULF INTERNATIONAL BANK B.S.C.
By
-----------------------------
Name:
Title:
By
-----------------------------
Name:
Title:
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HIBERNIA NATIONAL BANK
By
----------------------
Name:
Title:
-121-
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NATEXIS BANQUE BFCE
By
------------------------
Name:
Title:
By
------------------------
Name:
Title:
-122-
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By
-------------------------
Name:
Title:
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THE SUMITOMO BANK, LIMITED
By
-------------------------
Name:
Title:
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SCHEDULE I
REVOLVING LOAN COMMITMENTS
Bank
---- Revolving Loan
Commitment
------------------
Credit Lyonnais New York Branch $22,000,000
Bank One, Texas, N.A. 20,000,000
The Hongkong & Shanghai Banking
Corporation Limited 20,000,000
Hibernia National Bank 18,000,000
Swiss Bank Corporation, Stamford Branch 15,000,000
Den Norske Bank ASA 13,800,000
The Fuji Bank, Limited, Houston Agency 11,500,000
The Sumitomo Bank, Limited 11,500,000
Arab Banking Corporation (B.S.C.) 10,000,000
National Bank of Alaska 10,000,000
Gulf International Bank B.S.C. 7,500,000
Banque Nationale de Paris, Houston Agency 6,900,000
NATEXIS Banque 6,900,000
The Bank of Nova Scotia 6,900,000
133
SCHEDULE II
BANK ADDRESSES
Bank Address
---- -------
Arab Banking Corporation (B.S.C.) ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Loan Manager
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Bank of Nova Scotia ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Bank One, Texas, N.A. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Banque Nationale de Paris, Houston Agency
Houston Agency ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
134
SCHEDULE II
Page 2
Credit Lyonnais New York Branch ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C. Page Dillehunt
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Den Norske Bank ASA ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Fuji Bank, Limited ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Gulf International Bank B.S.C. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
135
SCHEDULE II
Page 3
Hibernia National Bank ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Hongkong and Shanghai Banking
Corporation Limited ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
NATEXIS Banque ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Phone:
Fax: ▇▇▇-▇▇▇-▇▇▇▇
NATEXIS Banque ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
136
SCHEDULE II
Page 4
National Bank of Alaska ▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Participation Desk
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Swiss Bank Corporation, Stamford Branch ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Sumitomo Bank, Limited ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
137
SCHEDULE III
SUBSIDIARIES
138
SCHEDULE IV
EXISTING FUNDED DEBT
139
SCHEDULE V
EXISTING LIENS
Filing File Original Description Permitted
Location Debtor Secured Party Number File Date of Collateral Refinancing
-------- ------ ------------- ------ --------- ------------- -----------
140
SCHEDULE VI
EXISTING INVESTMENTS; EXISTING INTERCOMPANY LOANS
141
EXHIBIT A-1
FORM OF NOTICE OF BORROWING
[Date]
Credit Lyonnais New York Branch,
as Administrative Agent for the
Banks party to the Credit Agreement
referred to below
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: C. Page Dillehunt
Ladies and Gentlemen:
The undersigned, Pool Company (the "Borrower"), refers to the Amended
and Restated Credit Agreement, dated as of March 26, 1998 (as amended from time
to time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among Pool Energy Services Co., Pool Energy Holding, Inc.,
the Borrower, the lenders from time to time party thereto (the "Banks"), SBC
Warburg Dillon Read Inc., as Arranger, Swiss Bank Corporation, Stamford Branch,
as Documentation Agent, and you, as Administrative Agent and as Collateral
Agent for such Banks, and hereby gives you notice, irrevocably, pursuant to
Section 1.03(a) of the Credit Agreement, that the undersigned hereby requests a
Borrowing of Revolving Loans under the Credit Agreement, and in that connection
sets forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 1.03(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ____________. 1/
---------------------
1/ Shall be a Business Day at least one Business Day after the delivery of this
notice with respect to Base Rate Loans and at least three Business Days after
the delivery of this notice with respect to Eurodollar Loans.
142
EXHIBIT A-1
Page 2
(ii) The aggregate principal amount of the Proposed Borrowing is
$____________.
(iii) The Revolving Loans to be made pursuant to the Proposed
Borrowing shall be initially maintained as [Base Rate Loans] [Eurodollar
Loans].
[(iv) The initial Interest Period for the Proposed Borrowing is
[one] [two] [three] [six] month(s).] 2/
The Borrower hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect to
the Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is continuing,
or would result from such Proposed Borrowing or from the application of
the proceeds thereof.
Very truly yours,
POOL COMPANY
By
------------------------
Name:
Title:
---------------------
2/ To be included for a Proposed Borrowing of Eurodollar Loans.
143
EXHIBIT A-2
FORM OF NOTICE OF CONVERSION/CONTINUATION
[Date]
Credit Lyonnais New York Branch,
as Administrative Agent for the
Banks party to the Credit Agreement
referred to below
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: C. Page Dillehunt
Ladies and Gentlemen:
The undersigned, Pool Company (the "Borrower"), refers to the Amended
and Restated Credit Agreement, dated as of March 26, 1998 (as amended from time
to time, the "Credit Agreement," the terms defined therein being used herein as
therein defined), among Pool Energy Services Co., Pool Energy Holding, Inc.,
the Borrower, the lenders from time to time party thereto (the "Banks"), SBC
Warburg Dillon Read Inc., as Arranger, Swiss Bank Corporation, Stamford Branch,
as Documentation Agent, and you, as Administrative Agent and as Collateral
Agent for such Banks, and hereby gives you notice, irrevocably, pursuant to
Section 1.06 of the Credit Agreement, that the undersigned hereby requests a
[conversion] [continuation] of a Loan or Loans under the Credit Agreement, and
in that connection sets forth below the information relating to such
[Conversion (the "Proposed Conversion")] [Continuation (the "Proposed
Continuation"] as required by Section 1.06 of the Credit Agreement:
(i) The Business Day of the Proposed [Conversion] [Continuation] is
____________. 1/
---------------------
1/ Shall be a Business Day at least one Business Day after the delivery of this
notice with respect to Base Rate Loans and at least three Business Days after
the delivery of this notice with respect to Eurodollar Loans.
144
EXHIBIT A-2
Page 2
(ii) The aggregate principal amount of the Proposed [Conversion]
[Continuation] is $____________.
(iii) The Borrowing[s] pursuant to which the Loan[s] in clause (ii)
[was] [were] made [is] [are] currently outstanding as [Base Rate]
[Eurodollar] Loan[s], [is] [are] hereby requested to be converted into
[Eurodollar] [Base Rate] Loan[s] and [was] [were] made on [date].
[(iv) The duration of the Interest Period for the Proposed
[Conversion] [Continuation] is [one] [two] [three] [six] month(s).]2/
The Borrower hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed
[Conversion] [Continuation]:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect to
the Proposed [Conversion] [Continuation] and to the application of the
proceeds thereof, as though made on such date, unless stated to relate to
a specific earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier
date; and
(B) no Default or Event of Default has occurred and is continuing,
or would result from such Proposed [Conversion] [Continuation] or from the
application of the proceeds thereof.
Very truly yours,
POOL COMPANY
By
------------------------
Name:
Title:
---------------------
2/ To be included in the event the Loan[s] [is] [are] to be [converted into]
[continued as] [a] Eurodollar Loan[s].
145
EXHIBIT B
FORM OF NOTE
$__________ New York, New York
[Date]
FOR VALUE RECEIVED, POOL COMPANY, a Delaware corporation and
successor in interest to Pool Company, a Texas corporation (the "Borrower"),
hereby promises to pay to _______________ or its permitted assigns (the
"Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Credit Lyonnais New York Branch (the
"Administrative Agent") located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, on the Final Maturity Date (as defined in the Agreement referred to
below) the principal sum of _____________ DOLLARS ($________) or, if less, the
unpaid principal amount of all Revolving Loans (as defined in the Credit
Agreement) made by the Bank pursuant to the Credit Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Credit Agreement.
This Note is one of the Notes referred to in the Amended and Restated
Credit Agreement, dated as of March 26, 1998, among Pool Energy Services Co.,
Pool Energy Holding, Inc., Pool Company, the lenders from time to time party
thereto (including the Bank), SBC Warburg Dillon Read Inc. as Arranger, Swiss
Bank Corporation, Stamford Branch, as Documentation Agent, and Credit Lyonnais
New York Branch, as Administrative Agent and as Collateral Agent (as amended,
restated, modified or supplemented from time to time, the "Credit Agreement")
and is entitled to the benefits thereof and of the other Credit Documents (as
defined in the Credit Agreement). This Note is secured by the Pledge Agreement
(as defined in the Credit Agreement) and is entitled to the benefits of the
Subsidiaries Guaranty (as defined in the Credit Agreement). This Note is
subject to voluntary prepayment and mandatory repayment prior to the Final
Maturity Date, in whole or in part, as provided in the Credit Agreement.
In case an Event of Default (as defined in the Credit Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may become or be declared to be due and payable in the manner and with the
effect provided in the Credit Agreement.
146
EXHIBIT B
Page 2
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note except as set forth in the Credit
Agreement or in any other Credit Document.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW
PROVISIONS THEREOF.
POOL COMPANY
By
------------------------------------
Name:
Title:
By
------------------------------------
Name:
Title:
147
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
No. 1/ Dated 2/
-------- ---------
Credit Lyonnais, as Administrative Agent under the
Amended and Restated Credit Agreement (as in effect from
time to time, the "Credit Agreement"), dated as of March 26,
1998, among Pool Energy Services Co., Pool Energy Holding,
Inc., Pool Company, the lenders from time to time party
thereto, SBC Warburg Dillon Read Inc. as Arranger, Swiss
Bank Corporation, Stamford Branch, as Documentation Agent,
and Credit Lyonnais New York Branch, as Administrative Agent
and as Collateral Agent
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: C. Page Dillehunt
[Name and Address of Issuing Bank]
Attention:
Ladies and Gentlemen:
The Borrower hereby requests that _________________, in its
individual capacity, issue a __________________ Letter of Credit for the
account of the undersigned
-----------------------
1/ Letter of Credit Request number.
2/ Date of Letter of Credit Request.
148
EXHIBIT C
Page 2
on ______3/________ (the "Date of Issuance") in the aggregate stated amount of
__________. The requested Letter of Credit shall be denominated in Dollars.
For purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the respective meaning provided therein.
The beneficiary of the requested Letter of Credit will be
______4/____, and such Letter of Credit will be in support of ______5/________
and will have a stated expiration date of ______6/________.
The Borrower hereby certifies that:
(1) The representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect to
the issuance of the Letter of Credit requested hereby, on the Date of
Issuance (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be
required to be true and correct in all material respects only as of such
specified date).
(2) No Default or Event of Default has occurred and is continuing
nor, after giving effect to the issuance of the Letter of Credit requested
hereby, would such a Default or an Event of Default occur and be
continuing.
--------------------------
3/ Date of issuance, which shall be at least five Business Days from the date
hereof (or such shorter period as is acceptable to the Issuing Bank).
4/ Insert name and address of beneficiary.
5/ Insert description of L/C Supportable Obligations in the case of standby
letters of credit and insert description of commercial transaction in the case
of trade letters of credit.
6/ Insert the last date upon which drafts may be presented which may not be
later than the date that is the fourth Business Day prior to the Final Maturity
Date in the case of standby Letters of Credit or the 30th day prior to the Final
Maturity Date in the case of trade Letters of Credit.
149
EXHIBIT C
Page 3
Copies of all documentation with respect to the supported transaction
are attached hereto.
POOL COMPANY
By
--------------------------
Name:
Title:
150
EXHIBIT D
FORM OF SECTION 4.04(b)(ii) CERTIFICATE
Reference is hereby made to the Amended and Restated Credit
Agreement, dated as March 26, 1998, among Pool Energy Services Co., Pool Energy
Holding, Inc., Pool Company, the lenders from time to time party thereto, SBC
Warburg Dillon Read Inc., as Arranger, Swiss Bank Corporation, Stamford Branch,
as Documentation Agent, and Credit Lyonnais New York Branch, as Administrative
Agent and as Collateral Agent (as amended from time to time, the "Credit
Agreement"). Pursuant to the provisions of Section 4.04(b)(ii) of the Credit
Agreement, the undersigned hereby certifies that it is not a "bank" as such
term is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended.
[NAME OF BANK]
By
----------------------------
Name:
Title:
Date:
--------------------
151
EXHIBIT F
FORM OF OFFICERS' CERTIFICATE
[Name of Credit Party], a corporation organized and existing under
the laws of the ____________________ (the "Company"), does hereby certify that:
1. This Certificate is furnished pursuant to Section 5.04(a) of the
Amended and Restated Credit Agreement, dated as of March 26, 1998, among Pool
Energy Services Co., Pool Energy Holding, Inc., Pool Company, the lenders from
time to time party thereto, SBC Warburg Dillon Read Inc., as Arranger, Swiss
Bank Corporation, Stamford Branch, as Documentation Agent, and Credit Lyonnais
New York Branch, as Administrative Agent and as Collateral Agent (such Credit
Agreement, as in effect on the date of this Certificate, being herein called
the "Credit Agreement"). Unless otherwise defined herein, capitalized terms
used in this Certificate shall have the meanings set forth in the Credit
Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his or her
name and has held such office since prior to _________ __, 19__. 1/ The
signature written opposite the name and title of each such officer is his or
her genuine signature.
Name 2/ Office Signature
------- ------ ---------
-------------- ----------- -------------
-------------- ----------- -------------
-------------- ----------- -------------
-----------------
1/ Insert a date prior to the time of any corporate action relating to the
Credit Documents or related documentation.
2/ Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end of
this Certificate or related documentation.
152
EXHIBIT F
Page 2
3. Attached hereto as Exhibit A is a certified copy of the
[Certificate of Incorporation] [Articles of Incorporation] of the Company, as
filed in the Office of ________ on ___________, 19__, together with all
amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws of the Company which were duly adopted, are in full force and effect on
the date hereof, and have been in effect since _____________, 19__.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, 19__ [by unanimous written
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Credit Documents to which the Company is party.
6. On the date hereof, the representations and warranties contained
in the Credit Agreement and in the other Credit Documents are true and correct
in all material respects with the same effect as though such representations
and warranties had been made on the date hereof, both before and after giving
effect to the incurrence of Revolving Loans on the date hereof and the
application of the proceeds thereof, unless stated to relate to a specific
earlier date, in which case such representations and warranties were true and
correct in all material respects as of such earlier date.
7. On the date hereof, no Default or Event of Default has occurred
and is continuing or would result from the Borrowing to occur on the date
hereof or from the application of the proceeds thereof.
153
EXHIBIT F
Page 3
8. There is no proceeding for the dissolution or liquidation of the
Company pending.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
[month], [year].
[NAME OF CREDIT PARTY]
By
-----------------------------------------
Name:
Title: [Chairman of the Board/
Chief Executive Officer/
President/Vice President]
154
EXHIBIT F
Page 4
I, the undersigned, [Secretary/Assistant Secretary] of the Company,
do hereby certify on behalf of the Company that:
1. [Name of Person making above certifications] is the duly elected
and qualified [Chairman of the Board/Chief Executive Officer/President/Vice
President] of the Company and the signature above is his genuine signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Company in Items 2, 3, 4 and 5 above are true
and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
[month], [year].
[NAME OF CREDIT PARTY]
By
-----------------------
Name:
Title:
155
EXHIBIT I
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Date: ___________________
Reference is made to the Credit Agreement described in Item 1 of
Annex I annexed hereto (as such Credit Agreement may hereafter be amended,
modified or supplemented from time to time, the "Credit Agreement"). Unless
defined in Annex I attached hereto, terms defined in the Credit Agreement are
used herein as therein defined. _____________ (the "Assignor") and
______________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the
percentage interest specified in Item 2 of Annex I (the "Assigned Share") of
all of the outstanding rights and obligations with respect to the Assigned
Share of the Total Revolving Loan Commitment and all outstanding Revolving
Loans and Letters of Credit.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claims; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or
the other Credit Documents or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of PESCO or any of its
Subsidiaries or the performance or observance by PESCO or any of its
Subsidiaries of any of their respective obligations under the Credit Agreement
or the other Credit Documents or any other instrument or document furnished
pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon either Agent,
156
EXHIBIT I
Page 2
the Arranger, the Assignor or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) appoints and authorizes each Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Credit Documents as are delegated to each Agent and the
Collateral Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; [and] (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank[; and (v)
attaches the Forms and/or Certificate set forth in the penultimate sentence of
Section 15.04(b) of the Credit Agreement.] 1/
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
The effective date of this Assignment and Assumption Agreement shall be the
date of execution hereof by the Assignor and the Assignee, to the extent
required by the Credit Agreement, the receipt of the consent of the Arranger,
the Documentation Agent and the Administrative Agent, receipt by the
Administrative Agent of the assignment fee referred to in Section 15.04(b) of
the Credit Agreement, and the recordation by the Administrative Agent of the
assignment effected hereby in the Register, unless otherwise specified in Item
3 of Annex I (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
and Assumption Agreement, have the rights and obligations of a Bank thereunder
and under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights and
be released from its obligations under the Credit Agreement and the other
Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee
shall be entitled to (i) all interest on the Assigned Share of the Revolving
Loans at the rates specified in Item 4 of Annex I, (ii) all Commitment
Commission on the Assigned Share of the Total Revolving Loan Commitment at the
rate specified in Item 5 of Annex I hereto and (iii) all Letter of Credit Fees
on the Assignee's participation in all Letters of Credit at the rate
--------------------
1/ If the Assignee is not already a Bank under the Credit Agreement and is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for Federal income tax purposes.
157
EXHIBIT I
Page 3
specified in Item 6 of Annex I hereto, which, in each case, accrue on and after
the Settlement Date, such interest, Commitment Commission and Letter of Credit
Fees to be paid by the Administrative Agent directly to the Assignee. It is
further agreed that all payments of principal made on the Assigned Share of the
Revolving Loans which occur on and after the Settlement Date will be paid
directly by the Administrative Agent to the Assignee. Upon the Settlement
Date, the Assignee shall pay to the Assignor an amount specified by the
Assignor in writing which represents the Assigned Share of the principal amount
of the respective Revolving Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of any closing
costs, and which are being assigned hereunder. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Assumption Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written, such execution also being
made on Annex I hereto.
[NAME OF ASSIGNOR],
as Assignor
By
--------------------------------
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By
--------------------------------
Name:
Title:
158
EXHIBIT I
Page 4
[Acknowledged and Agreed:
CREDIT LYONNAIS NEW YORK BRANCH, as Administrative Agent
By
----------------------------
Name:
Title:
POOL COMPANY, as Borrower
By
----------------------------
Name:
Title: ]
159
ANNEX I
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
1. Name and Date of Credit Agreement:
Amended and Restated Credit Agreement, dated as of March 26, 1998 among
Pool Energy Services Co., Pool Energy Holding, Inc., Pool Company, the
lenders from time to time party thereto, SBC Warburg Dillon Read Inc., as
Arranger, Swiss Bank Corporation, Stamford Branch, as Documentation Agent,
and Credit Lyonnais New York Branch, as Administrative Agent and as
Collateral Agent.
2. Revolving Loan Commitment (as of date of assignment and assumption):
a. Aggregate
Amount for
all Banks $
-------
b. Assigned Share %
-------
c. Amount of
Assigned Share $ 1/
-------
3. Settlement Date:
4. Rate of Interest
to the Assignee: As set forth in Section 1.08 of the Credit Agreement
(unless otherwise agreed to by the Assignor and the
Assignee).2/
----------------
1/ Which amount may not be less than $5,000,000, or result in the Assignor's
holding less than $5,000,000.
2/ The Borrower and the Agent shall, following recordation of such assignment by
the Agent on the Register, direct the entire amount of interest to the Assignee
at the rate set forth in Section 1.08 of the Credit Agreement, with the Assignor
and Assignee effecting any agreed upon sharing of interest through payments by
the Assignee to the Assignor.
160
ANNEX I
Page 2
5. Commitment
Commission to
the Assignee: As set forth in Section 3.01(a) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee).3/
6. Letter of Credit
Fee to the Assignee: As set forth in Section 3.01(b) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee).4/
7. Notice: ASSIGNEE:
----------------------
----------------------
----------------------
----------------------
Attention:
Telephone:
Telecopier:
Reference:
-----------------
3/ The Borrower and the Agent shall, following recordation of such assignment by
the Agent on the Register, direct the entire amount of the Commitment Commission
to the Assignee at the rate set forth in Section 3.01(a) of the Credit
Agreement, with the Assignor and the Assignee effecting any agreed upon sharing
of the Commitment Commission through payment by the Assignee to the Assignor.
4/ The Borrower and the Agent shall, following recordation of such assignment by
the Agent on the Register, direct the entire amount of the Letter of Credit Fee
to the Assignee at the rate set forth in Section 3.01(b) of the Credit
Agreement, with the Assignor and the Assignee effecting any agreed upon sharing
of the Letter of Credit Fee through payment by the Assignee to the Assignor.
161
ANNEX I
Page 3
Payment Instructions: ASSIGNEE:
----------------------
----------------------
----------------------
----------------------
Attention:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE]
By
-----------------------
Name:
Title:
[NAME OF ASSIGNOR]
By
-----------------------
Name:
Title:
162
EXHIBIT J
FORM OF INTERCOMPANY NOTE
New York, New York
[Date]
FOR VALUE RECEIVED, [NAME OF PAYOR] (the "Payor"), hereby promises to
pay on demand to the order of _____________ or its assigns (the "Payee"), in
lawful money of the United States of America in immediately available funds, at
such location in the United States of America as the Payee shall from time to
time designate, the unpaid principal amount of all loans and advances made by
the Payee to the Payor after the date hereof, in excess of $_______.
The Payor promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rate of ___% per annum.
Upon the commencement of any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar proceeding of any jurisdiction relating to the Payor, the unpaid
principal amount hereof shall become immediately due the payable without
presentment, demand, protest or notice of any kind in connection with this
Note.
This Note evidences certain permitted Intercompany Loans referred to
in the Amended and Restated Credit Agreement, dated as of March 26, 1998, among
Pool Energy Services Co., Pool Energy Holding, Inc., Pool Company, the lenders
party thereto from time to time, SBC Warburg Dillon Read Inc., as Arranger,
Swiss Bank Corporation, Stamford Branch, as Documentation Agent, and Credit
Lyonnais New York Branch, as Administrative Agent and as Collateral Agent (as
amended, restated, modified or supplemented from time to time, the "Credit
Agreement"), and is subject to the terms thereof, and shall be pledged by the
Payee pursuant to the Pledge Agreement (as defined in the Credit Agreement).
The Payor hereby acknowledges and agrees that the Collateral Agent pursuant to
and as defined in the Pledge Agreement, as in effect from time to time, may
exercise all rights provided therein with respect to this Note.
The Payee is hereby authorized to record all loans and advances made
by it to the Payor (all of which shall be evidenced by this Note), and all
repayments or
163
EXHIBIT J
Page 2
prepayments thereof, in its books and records, such books and records
constituting prima facie evidence of the accuracy of the information contained
therein.
All payments under this Note shall be made without offset,
counterclaim or deduction of any kind.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS
THEREOF.
[NAME OF PAYOR]
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
[NAME OF PAYEE]
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
Pay to the order of:
-----------------------------------
164
EXHIBIT K
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate (the "Certificate") is delivered to you
pursuant to Section 8.01(d) of the Amended and Restated Credit Agreement, dated
as of March 26, 1998 (as amended, restated, modified or supplemented from time
to time, the "Credit Agreement"), among Pool Energy Services Co., Pool Energy
Holding, Inc., Pool Company ("the Borrower"), the lenders from time to time
party thereto (the "Banks"), SBC Warburg Dillon Read Inc., as Arranger, Swiss
Bank Corporation, Stamford Branch, as Documentation Agent, and Credit Lyonnais
New York Branch, as Administrative Agent and as Collateral Agent for such
Banks. Terms defined in the Credit Agreement and not otherwise defined herein
are used herein as therein defined.
9. I am a duly elected, qualified and acting principal financial
officer of Pool Energy Services Co.
10. I have reviewed and am familiar with the contents of this
Certificate. I am providing this Certificate solely in my capacity as officer
of Pool Energy Services Co. The matters set forth herein are true to the best
of my knowledge, but I express no personal opinion as to any conclusions of law
or other legal matters.
11. I have reviewed the terms of the Credit Agreement and the other
Credit Documents and have made or caused to be made under my supervision, a
review in reasonable detail of the transactions and condition of the Borrower
during the accounting period covered by the financial statements attached
hereto as Annex I. Such financial statements have been prepared in accordance
with the requirements of the Credit Agreement.
12. Attached hereto as Annex II are the computations showing
compliance with the covenants specified in Sections 9.07 through 9.11 of the
Credit Agreement. All such computations are true and correct, absent manifest
error.
5. At the end of [INSERT FISCAL QUARTER OR YEAR, AS THE CASE MAY
BE], PESCO and its Subsidiaries were in compliance with the provisions of
Section 9.04 relating to Funded Debt. With regard to Section 9.04(iii), at the
end of [INSERT FISCAL QUARTER OR YEAR, AS THE CASE MAY BE], the sum of (I) the
aggregate principal amount of all Capitalized Lease Obligations and (II) the
165
EXHIBIT K
Page 2
aggregate principal amount of all purchase money Funded Debt amounts to
$______________. With regard to Section 9.04(v), at the end of [INSERT FISCAL
QUARTER OR YEAR, AS THE CASE MAY BE], Funded Debt consisting of guarantees by
PESCO or its Subsidiaries of Funded Debt of Excluded Subsidiaries amounts to
$_______________. With regard to Section 9.04(ix), at the end of [INSERT
FISCAL QUARTER OR YEAR, AS THE CASE MAY BE], additional Funded Debt
constituting overdraft lines of PESCO or its Subsidiaries amounts to
$________________. With regard to Section 9.04(x), at the end of [INSERT
FISCAL QUARTER OR YEAR, AS THE CASE MAY BE], additional unsecured Funded Debt
incurred by PESCO and its Subsidiaries amounts to $______________. With regard
to Sections 9.04(iv) and 9.05(viii), at the end of [INSERT FISCAL QUARTER OR
YEAR, AS THE CASE MAY BE], the aggregate outstanding principal amount of all
Intercompany Loans, excluding existing Intercompany Loans described on Schedule
VI to the Credit Agreement and excluding Intercompany Loans for the purpose of
consummating the Refinancing, Identified Acquisitions or Permitted Acquisitions
as provided in Section 9.05(xiii) of the Credit Agreement, made by the Credit
Parties to Foreign Subsidiaries amounts to $______________.
6. To the best of my knowledge, on the date hereof, no Default or
Event of Default has occurred and is continuing [, except as set forth below].
IN WITNESS WHEREOF, 1/ this Certificate has been executed on and as of
this ___ day of ___________, ____.
POOL ENERGY SERVICES CO.
By
--------------------------------
Name:
Title:
--------------------
1/ TO BE DELIVERED PERIODICALLY, WITHIN 60 DAYS AFTER THE CLOSE OF THE FIRST
THREE QUARTERLY ACCOUNTING PERIODS OF PESCO AND 120 DAYS AFTER THE CLOSE OF EACH
FISCAL YEAR OF PESCO, IN EACH CASE IN ACCORDANCE WITH SECTION 8.01(d) OF THE
CREDIT AGREEMENT.
166
ANNEX I to
COMPLIANCE CERTIFICATE
CONSOLIDATED FINANCIAL STATEMENTS
167
ANNEX II to
COMPLIANCE CERTIFICATE
COMPLIANCE WORKSHEET
Test Period most recently ended on __________.
Part I.
Consolidated Interest Coverage Ratio
1. Consolidated Net Income for the Test Period most $______________
recently ended
2. Provision for taxes based on income for the Test Period $______________
most recently ended
3. Consolidated Interest Expense for the Test Period most $______________
recently ended
4. Losses on sales of assets (excluding sales in the $______________
ordinary course of business) and other extraordinary
losses for the Test Period most recently ended
5. Gains on sales of assets (excluding sales in the $______________
ordinary course of business) and other extraordinary
gains for the Test Period most recently ended
6. Consolidated EBIT (sum of Items 1 through 4 minus Item $______________
5)
7. Depreciation and amortization expense for the Test $______________
Period most recently ended
168
ANNEX II
Page 2
8. Dividends or distributions received from Excluded $______________
Subsidiaries during the Test Period most recently ended
(sum of (a), (b) and (c) below)
$______________
(a) dividends or distributions received from PIASA
$______________
(b) dividends or distributions received from Pool
Arabia Ltd. $______________
(c) dividends or distributions received from
Intairdril Oman, L.L.C.
9. Lease payments in respect of the San ▇▇▇▇▇▇ Lease for $______________
the Test Period most recently ended (net of sublease
payments received with respect thereto to the extent
not included in Consolidated Net Income)
10. Consolidated EBITDA (sum of Items 6, 7 and 8 minus Item $______________
9)
11. Consolidated Interest Expense for the Test Period most $______________
recently ended
12. Consolidated Interest Coverage Ratio (Item 10:Item 11) _________:1.00
13. Minimum Consolidated Interest Coverage Ratio pursuant 3.00:1.00
to Section 9.07
169
ANNEX II
Page 3
Part II.
Leverage Ratio
A. LEVERAGE RATIO FOR PURPOSES OF SECTION 9.09
1. Consolidated Funded Debt at [INSERT FISCAL QUARTER OR $______________
YEAR]
2. Consolidated EBITDA for the Test Period most recently $______________
ended, from Part I, Item 10
3. Leverage Ratio for purposes of calculations made :1.00
pursuant to Section 9.09 (Item 1:Item 2)
4. Maximum permitted Leverage Ratio pursuant to Section 3.25:1:00
9.09
170
ANNEX II
Page 4
B. LEVERAGE RATIO FOR PURPOSES OF CALCULATING EITHER THE APPLICABLE BASE
RATE MARGIN OR THE APPLICABLE EURODOLLAR RATE MARGIN
1. Consolidated Funded Debt at [INSERT FISCAL QUARTER OR $______________
YEAR]
2. Revolving Outstandings at [INSERT FISCAL QUARTER OR $______________
YEAR]
3. Average Revolving Outstandings for the most recently $______________
ended fiscal quarter of PESCO
4. Consolidated EBITDA for the Test Period most recently $______________
ended, from Part I, Item 10
5. Leverage Ratio for purposes of calculating either the ________:1.00
Applicable Base Rate Margin or the Applicable
Eurodollar Rate Margin ([Item B.1 minus Item B.2 plus
Item B.3]:Item B.4)
171
ANNEX II
Page 5
Part III.
Debt-to-Total Capital Ratio
1. Consolidated Funded Debt at end of [Fiscal Quarter or $______________
Fiscal Year]
2. Consolidated Net Worth at end of [Fiscal Quarter or $______________
Fiscal Year]
3. Total Capital (Item 1 plus Item 2) $______________
4. Debt-to-Total Capital Ratio (Item 1:Item 3) _________:1.00
5. Maximum Debt-to-Total Capital Ratio permitted pursuant
to Section 9.10 0.45:1.00
172
ANNEX II
Page 6
Part I.
Fixed Charge Coverage Ratio
1. Consolidated EBITDA for the Test Period most recently $______________
ended, from Part I, Item 10
2. Amount of cash income taxes paid, net of cash tax $______________
refunds, during the Test Period most recently ended
3. Item 1 less Item 2 $______________
4. Consolidated Interest Expense for the Test Period most $______________
recently ended
5. Capital Expenditures made by PESCO and its Subsidiaries $______________
during the Test Period most recently ended
6. Scheduled repayments of Funded Debt required to be made $______________
during the Test Period most recently ended
7. Fixed Charges (Item 4 plus Item 5 plus Item 6) $______________
8. Fixed Charge Coverage Ratio (Item 3:Item 7) _________:1.00
9. Minimum Fixed Charge Coverage Ratio pursuant to Section
9.08
a. If calculated for any Test Period up to and 1.25:1.00
ending on the last day of the fiscal quarter
ending March 31, 1998
b. If calculated for any Test Period up to and 1.40:1.00
ending on the last day of the fiscal quarter
ending September 30, 1998
173
ANNEX II
Page 7
c. If calculated for any Test Period up to and 1.55:1.00
ending on the last day of the fiscal quarter
ending March 31, 1999
d. If calculated for any Test Period ending on the 1.75:1.00
last day of the fiscal quarter ending June 30,
1999 or the last day of any fiscal quarter
thereafter
174
ANNEX II
Page 8
Part V.
Minimum Consolidated Net Worth
1. Cumulative Consolidated Net Income (plus net income of
Excluded Subsidiaries (after giving effect to
deductions for interests held by Persons other than
PESCO and its Subsidiaries)) for the period from July
1, 1997 through December 31, 1997 $______________
2. The greater of Item 1 or $0.00 $______________
3. Cumulative Consolidated Net Income (plus net income of
Excluded Subsidiaries (after giving effect to
deductions for interests held by Persons other than
PESCO and its Subsidiaries)) for the fiscal year of
PESCO ending December 31, 1998 $______________
4. The greater of Item 3 or $0.00 $______________
5. Cumulative Consolidated Net Income (plus net income of
Excluded Subsidiaries (after giving effect to
deductions for interests held by Persons other than
PESCO and its Subsidiaries)) for the fiscal year of
PESCO ending December 31, 1999 $______________
6. The greater of Item 5 or $0.00 $______________
7. Cumulative Consolidated Net Income (plus net income of
Excluded Subsidiaries (after giving effect to
deductions for interests held by Persons other than
PESCO and its Subsidiaries)) for the fiscal year of
PESCO ending December 31, 2000 $______________
8. The greater of Item 7 or $0.00 $______________
175
ANNEX II
Page 9
9. Net cash proceeds (net of underwriting discounts and
commissions and other reasonable transaction costs
associated therewith), received by PESCO or any of its
Subsidiaries for any sale of equity on or after July 1,
1997 $______________
10. 50% of the sum of Item 2, Item 4, Item 6, Item 8 and
Item 9 $______________
11. 100% of the increase of Consolidated Net Worth of PESCO
and its Subsidiaries attributable to the consummation
of the Sea Mar Acquisition as determined in accordance
with the provisions of Section 9.11(z) $______________
12. Minimum permitted Consolidated Net Worth pursuant to
Section 9.11 ($175,000,000 plus Items 10 and 11) $______________
13. Consolidated Net Worth at end of [Fiscal Quarter or
Fiscal Year] $______________
176
EXHIBIT L
[FORM OF OFFICER'S CERTIFICATE
FOR PERMITTED ACQUISITIONS]
OFFICER'S CERTIFICATE
This Officer's Certificate (this "Certificate") is delivered to you
(i) in connection with [DESCRIBE PROPOSED ACQUISITION OR CONSTRUCTION,
RENOVATION OR REFURBISHMENT] 1/ (the "Permitted Acquisition") and (ii) pursuant
to Section [8.01(i)] [9.02(ix)(v)] [9.02(ix)(vi)] of the Amended and Restated
Credit Agreement, dated as of March __, 1998 (as amended, supplemented or
restated from time to time, the "Credit Agreement"), among Pool Energy Services
Co., Pool Energy Holding, Inc., Pool Company (the "Borrower"), the lenders from
time to time party thereto (the "Banks"), SBC Warburg Dillon Read Inc., as
Arranger, Swiss Bank Corporation, Stamford Branch, as Documentation Agent, and
Credit Lyonnais New York Branch, as Administrative Agent and as Collateral
Agent for the Banks. Capitalized terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.
1. I am a duly elected, qualified and acting principal financial
officer of the Borrower.
2. The Borrower hereby certifies to each Agent and each of the
Banks that the Pro Forma Leverage Ratio does not exceed the Applicable Pro
Forma Leverage Ratio, as demonstrated in the Annex I attached hereto.
3. The Person to be acquired (or whose assets are to be acquired)
pursuant to the Permitted Acquisition is, immediately prior to such
acquisition, engaged primarily in the Business or such assets constitute
Equipment.
4. To the best of my knowledge, no Default or Event of Default
exists on the date hereof or will exist immediately after giving effect to the
Permitted Acquisition.
5. To the best of my knowledge, all representations and warranties
contained in Section 7 of the Credit Agreement are true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the date hereof (both before and after
giving effect to the Permitted Acquisition),
--------------------
1/ If this Certificate applies to multiple Permitted Acquisitions, describe all
such Permitted Acquisitions and calculate all relevant amounts on an aggregate
basis. In addition, the tense of certain statements should be modified as
appropriate.
177
EXHIBIT L
Page 2
unless such representation or warranty is stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date.
6. Any Liens or Funded Debt assumed or issued in connection with
the Permitted Acquisition are issued or assumed only by the Borrower.
For purposes of this Certificate, the term "consummation" or
"consummated" shall mean (i) in the case of a Permitted Acquisition which
consists of an acquisition of all or substantially all the assets of any
Person, an acquisition of the capital stock of any Person or the acquisition of
any Equipment of any Person, the date on which such purchase and sale is
completed, (ii) in the case of a Permitted Acquisition which consists of the
construction, renovation or refurbishment of Equipment pursuant to a contract,
agreement or undertaking with a Person other than PESCO or its Subsidiaries,
the date such construction, renovation or refurbishment is completed and, if
applicable, such Equipment has been delivered to PESCO or its Subsidiaries and
(iii) in the case of a Permitted Acquisition which consists of the
construction, renovation or refurbishment of Equipment by PESCO or its
Subsidiaries, the date such construction, renovation or refurbishment is
completed.
IN WITNESS WHEREOF, this Certificate has been executed this ___ day
of ___________, ____. 2/
POOL COMPANY
By
-----------------------
Name:
Title:
--------------------
2/ To be delivered at each Applicable Notice Time or within 30 days after the
close of the relevant quarterly accounting period, as appropriate.
178
ANNEX I TO EXHIBIT L
PERMITTED ACQUISITION WORKSHEET
Test Period most recently ended for which financial statements have been
delivered to the Agents: ___________.
Part I.
Consolidated EBITDA
1. Consolidated Net Income for the Test Period most
recently ended for which financial statements have
been delivered to the Agents $____________
2. Provision for taxes based on income for the Test
Period most recently ended for which financial
statements have been delivered to the Agents $____________
3. Consolidated Interest Expense for the Test Period most
recently ended for which financial statements have
been delivered to the Agents $____________
4. Losses on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary
losses for the Test Period most recently ended for
which financial statements have been delivered to the $____________
Agents
5. Gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary
gains for the Test Period most recently ended for
which financial statements have been delivered to the $____________
Agents
6. Consolidated EBIT (sum of Items 1 through 4 minus Item 5) $____________
7. Depreciation and amortization expense for the Test
Period most recently ended for which financial
statements have been delivered to the Agents $____________
179
ANNEX I TO EXHIBIT L
Page 2
8. Dividends or distributions received from Excluded
Subsidiaries (sum of (a), (b) and (c) below) for such
period $____________
(a) dividends or distributions received from PIASA $____________
(b) dividends or distributions received from Pool
Arabia Ltd. $____________
(c) dividends or distributions received from
Intairdril Oman, L.L.C. $____________
9. (a) Lease payments in respect of the San ▇▇▇▇▇▇
Lease for the Test Period most recently ended
for which financial statements have been
delivered to the Agents (net of sublease
payments received with respect thereto to the
extent not included in Consolidated Net Income) $____________
(b) Equity contributions made after the Effective
Date during such period to Excluded
Subsidiaries or Subsidiaries which are not $____________
Subsidiary Guarantors
10. Consolidated EBITDA (sum of Items 6, 7 and 8 minus
Items 9(a) and (b)) $____________
180
ANNEX I TO EXHIBIT L
Page 3
Part II.
Pro Forma Leverage Ratio
1. Pro Forma Consolidated Funded Debt
a. Consolidated Funded Debt as of the date hereof. $____________
b. Aggregate amount of Funded Debt (including
Revolving Loans) incurred, issued or assumed in
connection with the proposed Permitted Acquisition;
plus, to the extent not included in the amount of
Funded Debt described above, the purchase price (or
cost of construction, renovation or refurbishment) for
the proposed Permitted Acquisition (such purchase price
to exclude any portion thereof paid in common stock of
PESCO). $___________
c. The aggregate amount determined pursuant to clause
1.b. to Part II of Annex I on all previous Officer's
Certificates delivered to the Agents and the Banks with
respect to Permitted Acquisitions and Identified
Acquisitions (the "Prior Permitted Acquisition
Certificates") or with respect to Permitted
Acquisitions for which no Officer's Certificate is
required to be delivered, and in any event (i) which
have not been consummated as of the date hereof or (ii)
to the extent not included in the amount set forth in
clause 1.a. of this Part II above, which have been
consummated as of the date hereof; minus the amount
determined pursuant to clause 1.b. to Part II of Annex
I on all Prior Permitted Acquisition Certificates with
respect to (A) any non-consummated Permitted
Acquisition or Identified Acquisition which has been
abandoned or (B) any consummated Permitted Acquisition
or Identified Acquisition that the Borrower in good
faith does not anticipate funding with Revolving Loans. $___________
d. Pro Forma Consolidated Funded Debt (Item 1(a) plus
1(b), plus 1(c)) $___________
181
ANNEX I TO EXHIBIT L
Page 4
2. Pro Forma Consolidated EBITDA
a. Consolidated EBITDA from Part I, Item 10 $___________
[b. (i) EBITDA of the Person to be acquired pursuant
to the proposed Permitted Acquisition for the most
recently ended 12 month period for which financial
statements of such Person are available or, if such
financial statements are not available, a reasonable
estimate thereof; $___________
(ii) private company expenses of the Person to be
acquired for the most recently ended 12 month period
for which financial statements of such Person are
available; $___________
(iii) aggregate effect of any changes in
accounting which differ from those of PESCO [DESCRIBE]; $___________
(iv) sum of (i), (ii) and (iii)] 1/ $___________
[b. Amount of anticipated EBITDA to be obtained from
operation of the asset to be acquired, based upon a
written contract or such other agreements or
understandings (whether oral or written) which would
give rise to a reasonable expectation of such asset
generating revenue (the "Anticipated Agreement"), in
each case, for the 12 month period following
consummation of the proposed Permitted Acquisition.] 2/ $___________
c. Aggregate amount of EBITDA with respect to
Identified Acquisitions and Permitted Acquisitions
consummated prior to the date hereof from Part II, Item
2(b) on Prior Permitted Acquisition Certificates or
with respect to Permitted Acquisitions for which no
Officer's Certificate is required to be delivered;
minus (i) the
--------------------
1/ Insert this alternative clause 2.b. in the case of a Permitted Acquisition of
a business.
2/ Insert this alternative clause 2.b. in the case of a Permitted Acquisition of
Equipment. If there is no associated written contract, or other agreement or
understanding giving rise to expectations of revenue, the amount for this item
2.b. shall be zero.
182
ANNEX I TO EXHIBIT L
Page 5
anticipated EBITDA for a Permitted Acquisition or
Identified Acquisition if (x) the construction,
renovation or refurbishment of such Permitted
Acquisition or Identified Acquisition has been
abandoned or (y) in the case of anticipated EBITDA
based on an Anticipated Agreement, the negotiations
with respect to definitive agreements evidencing the
Anticipated Agreement with respect to such Permitted
Acquisition or Identified Acquisition are terminated
and (ii) the excess, if any, of the anticipated EBITDA
based upon the Anticipated Agreement with respect to
any such Permitted Acquisition or Identified
Acquisition over the anticipated EBITDA based upon the
definitive agreement entered into with respect to such $___________
Anticipated Agreement.
d. Pro rata portion of amount in Item 2(c) above
determined by multiplying the amount from Part II, Item
2(b) of each Prior Permitted Acquisition Certificate by
a fraction (not greater than 1), the numerator of which
is the number of months elapsed from the date of
consummation of each Identified Acquisition and
Permitted Acquisition consummated prior to the date
that is the last day of the Test Period most recently
ended for which financial statements have been
delivered to the Agents, rounded to the nearest whole
month, and the denominator of which is 12. $___________
e. Item 2(c) minus item 2(d). $___________
f. Amount of anticipated EBITDA to be obtained for the
12-month period following consummation of the proposed
Permitted Acquisition with respect to Identified
Acquisitions and Permitted Acquisitions as to which
Prior Permitted Acquisition Certificates have been
submitted or with respect to Permitted Acquisitions for
which no Officer's Certificate is required to be
delivered, but in any event which have not been
consummated prior to the date hereof from Part II, Item
2(b) of such Prior Permitted Acquisition Certificates;
minus the anticipated EBITDA for a Permitted
Acquisition if (x) the construction, renovation or
refurbishment of such Permitted Acquisition or
Identified Acquisition has been abandoned or (y) in the
case of anticipated EBITDA based on an Anticipated
183
ANNEX I TO EXHIBIT L
Page 6
Agreement, the negotiations with respect to definitive
agreements evidencing the Anticipated Agreement with
respect to such Permitted Acquisition or Identified
Acquisition are terminated; and plus or minus, as the
case may be, the difference, if any, of the anticipated
EBITDA based upon the Anticipated Agreement with
respect to any such Permitted Acquisition or Identified
Acquisition and the anticipated EBITDA based upon the
definitive agreement entered into with respect to such
Anticipated Agreement. $___________
g. Pro Forma consolidated EBITDA (sum of items 2(a),
2(b), 2(e) and 2(f). $___________
3. Pro Forma Leverage Ratio (Item 1(d):Item 2(g)) _______:1.00
184
ANNEX II TO EXHIBIT L
LIST OF PERMITTED ACQUISITIONS
Purchase Price/Cost of Revolving Loans Associated Date of
Permitted Acquisitions Construction or Renovation Incurred EBITDA Consummation
---------------------- -------------------------- -------- ------ ------------
