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SIXTH AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT
AMONG
GULF ISLAND FABRICATION, INC.,
AS BORROWER,
FIRST NATIONAL BANK OF COMMERCE
AND
WHITNEY NATIONAL BANK,
AS BANKS,
AND
FIRST NATIONAL BANK OF COMMERCE,
AS AGENT
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DATED EFFECTIVE AS OF MAY 1, 1997
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TABLE OF CONTENTS
Section 1. Relation to Prior Credit Arrangements................................... 2
1.1 Revolving Credit Facility............................................... 3
1.2 Borrowing Procedure Under the Revolving Credit Facility................. 4
1.3 Terms and Conditions Governing Letters of Credit........................ 4
Section 2. Notes Evidencing Borrowings............................................. 5
2.1 Notes................................................................... 5
2.2 No Novation............................................................. 5
Section 3. Interest and Fees....................................................... 6
3.1 Interest -- Revolving Credit Facility................................... 6
3.2 Default Rate............................................................ 6
3.3 Prime Rate.............................................................. 6
3.4 Origination Fee......................................................... 7
3.5 Method of Calculating Interest and Fees................................. 7
3.6 Interest Rate Options................................................... 7
Section 4. Payments, Prepayments, and Reduction or Termination of
the Revolving Credit Facility........................................... 12
4.1 Method of Payment....................................................... 12
4.2 Sharing of Payments..................................................... 13
4.3 Payments Without Deduction.............................................. 13
4.4 Reduction of Credit..................................................... 14
Section 5. Representations and Warranties of Borrower.............................. 14
5.1 Corporate Existence..................................................... 14
5.2 Authorization; Validity................................................. 14
5.3 No Conflicts............................................................ 15
5.4 Financial Statements.................................................... 15
5.5 Litigation.............................................................. 15
5.6 Liens................................................................... 16
5.7 Subsidiaries............................................................ 16
5.8 Purpose................................................................. 16
5.9 Use of Proceeds; Margin Securities...................................... 16
5.10 Compliance with ERISA................................................... 16
5.11 Consents................................................................ 17
5.12 Tax Returns............................................................. 17
5.13 Operation of Business................................................... 17
5.14 Rights in Properties; Liens............................................. 17
5.15 Debt.................................................................... 17
5.16 Disclosure.............................................................. 18
5.17 Registered Office; Principal Place of Business; Location of Collateral.. 18
5.18 Investment Company Act.................................................. 19
5.19 Other Agreements........................................................ 19
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5.20 Compliance with Law..................................................... 19
5.21 Corporate Name.......................................................... 20
5.22 Collateral.............................................................. 21
5.23 Taxpayer I.D. Numbers................................................... 21
5.24 Effect of Dolphin Merger................................................ 21
Section 6. Borrower's Covenants.................................................... 21
6.1 Financial Statements.................................................... 21
6.2 Access.................................................................. 23
6.3 Insurance............................................................... 23
6.4 Repair.................................................................. 23
6.5 Taxes................................................................... 24
6.6 Corporate Existence..................................................... 24
6.7 Merger.................................................................. 24
6.8 Compliance.............................................................. 25
6.9 Use of Proceeds......................................................... 26
6.10 Financial Covenants..................................................... 26
6.11 Liens................................................................... 27
6.12 Debt.................................................................... 28
6.13 Shareholder or Employee Loans........................................... 28
6.14 Change in Business...................................................... 28
6.15 Accounts Receivable..................................................... 28
6.16 Compliance with Agreements.............................................. 29
6.17 Further Assurances...................................................... 29
6.18 Disposition of Assets................................................... 29
6.19 Change Tax I.D. Number.................................................. 29
6.20 Indemnity............................................................... 29
6.21 Real Property........................................................... 30
Section 7. Conditions Precedent to Extensions of Credit............................ 30
7.1 Borrower's Resolutions.................................................. 31
7.2 Dolphin Services' Resolutions........................................... 31
7.3 Notes................................................................... 31
7.5 Incumbency.............................................................. 31
7.6 Certification........................................................... 31
7.7 Opinion................................................................. 32
Section 8. Additional Conditions Precedent to Advances and/or Letters of Credit.... 32
8.1 Default................................................................. 32
8.2 Warranties.............................................................. 32
Section 9. Events of Default....................................................... 33
9.1 Payment................................................................. 33
9.2 Other Indebtedness...................................................... 33
9.3 Other Default........................................................... 33
9.4 Insolvency.............................................................. 33
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9.5 ERISA................................................................... 34
9.6 Agreements.............................................................. 34
9.7 Representation or Warranty.............................................. 35
9.8 Subsidiary Default...................................................... 35
Section 10. Agent................................................................... 36
10.1 Authorization and Action................................................ 36
10.2 Agent's Reliance, Etc................................................... 36
10.3 First NBC and Affiliates................................................ 37
10.4 Bank Credit Decision.................................................... 38
10.5 Indemnification......................................................... 38
10.6 Successor Agent......................................................... 39
10.7 Benefits of Section..................................................... 39
10.8 Change in Specified Percentage.......................................... 40
Section 11. General................................................................. 40
11.1 Definitions............................................................. 40
11.2 Financial Terms......................................................... 46
11.3 Delay................................................................... 46
11.4 Notices................................................................. 46
11.5 Expenses................................................................ 48
11.6 Severability............................................................ 48
11.7 Counterparts............................................................ 48
11.8 Law..................................................................... 48
11.9 Successors.............................................................. 49
11.10 Amendments.............................................................. 49
11.11 Entire Agreement........................................................ 49
11.12 Conflicts............................................................... 49
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SIXTH AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT
THIS SIXTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (the
"Agreement"), dated effective as of the 1st day of May, 1997, by and among GULF
ISLAND FABRICATION, INC., a Louisiana corporation ("Borrower") (formerly known
as GIFI, Inc., successor by merger to Gulf Island Fabrication, Inc., a Louisiana
corporation), WHITNEY NATIONAL BANK, a national banking association ("Whitney"),
FIRST NATIONAL BANK OF COMMERCE, a national banking association, in its
individual capacity ("First NBC") (each of Whitney and First NBC being sometimes
referred to individually as a "Bank" and collectively as the "Banks"), and FIRST
NATIONAL BANK OF COMMERCE, a national banking association, in its capacity as
agent for Banks as set forth hereinafter (the "Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower, Banks and Agent entered into that certain Fifth Amended
and Restated Revolving Credit and Term Loan Agreement, dated effective as of
October 24, 1996 (the "Credit Agreement") which amended and restated the then
existing credit arrangements among Borrower, Banks and Agent;
WHEREAS, Borrower, Banks and Agent entered into that certain First
Amendment to Fifth Amended and Restated Revolving Credit and Term Loan
Agreement dated effective as of January 2, 1997 (the "First Amendment"), whereby
the then existing Term Credit Facility (as defined in the Credit Agreement) was
increased by $5,000,000, Borrower was permitted to acquire Dolphin Services,
Inc. ("Dolphin Services"), Dolphin Steel Sales, Inc. ("Dolphin Steel"), and
Dolphin
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Sales & Rentals, Inc. ("Dolphin Sales"), and the maturity date of the then
existing Term Credit Facility (as defined in the Credit Agreement) was extended;
WHEREAS, Borrower, Banks and Agent entered into that certain Second
Amendment to Fifth Amended and Restated Revolving Credit and Term Loan Agreement
dated effective as of March 18, 1997 (the "Second Amendment") whereby the
Revolving Credit Facility (as defined in the Credit Agreement) was increased
from $12,000,000 to $20,000,000, the maturity of such Revolving Credit Facility
was extended from December 31, 1998 to December 31, 1999, and certain other
changes were made to enable Borrower to complete its contemplated initial public
offering (as amended by the First Amendment and the Second Amendment, the Credit
Agreement shall be referred to as the "Revised Credit Agreement"); and
WHEREAS, Borrower, Banks and Agent desire to amend and restate their
existing credit arrangements to facilitate administration of such credit
arrangements, to eliminate the Term Credit Facility which has been paid in full,
to modify certain other credit terms following Borrower's initial public
offering, and to reflect the merger of Dolphin Sales and Dolphin Steel into
Dolphin Services.
NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements and undertakings herein contained, Borrower, Banks and Agent hereby
agree as follows:
Section 1. Relation to Prior Credit Arrangements. Subject to the terms
and conditions hereof, each Bank severally agrees that Borrower's obligations as
evidenced by the Revised Credit Agreement and the Prior Notes shall be modified
and restated in their entirety on the terms and conditions set forth herein. To
the extent there is any conflict between the Revised Credit Agreement and this
Agreement or the Prior Notes and the Notes, the provisions of this Agreement and
the Notes shall govern. To the extent this Agreement or the Notes is or are
silent on any matter or provision contained in the Revised Credit Agreement or
the Prior Notes, such matter or provision
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of the Revised Credit Agreement or the Prior Notes shall be deemed to be
revoked. Borrower and Banks acknowledge and agree that (i) the modification and
restatement of the Obligations under the terms and conditions set forth herein
do not constitute a payment, prepayment or novation of the Obligations evidenced
by the Revised Credit Agreement and the Prior Notes and (ii) the Obligations
continue to be secured by the Existing Security with the original rank and
priority thereof.
1.1 Revolving Credit Facility. Banks shall make available to Borrower a
revolving line of credit (the "Revolving Credit Facility") in the maximum
principal amount of TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00) (as
modified pursuant to Section 4.4 below, the "Revolving Commitment"), which
Revolving Credit Facility may be drawn upon by Borrower on any Business Day of
Banks during the period from the date hereof until and including December 31,
1999, or such earlier date as may be fixed by Borrower on at least one (1)
Business Day's telephonic notice to Agent, to be confirmed in writing by
Borrower, in the form of the issuance by Banks on behalf of and for the account
of Borrower of irrevocable stand-by letters of credit in the form provided for
by, and containing such terms and conditions as are acceptable to Banks and in
such amounts as Borrower may from time to time request (each such letter of
credit, as well as any letters of credit issued pursuant to and in accordance
with the Revised Credit Agreement or any predecessor agreement which remain
outstanding on the date hereof, being hereinafter referred to individually as a
"Letter of Credit" and collectively as the "Letters of Credit") or in the form
of actual fundings to Borrower by Banks in such amounts as Borrower may from
time to time request (each such funding, as well as the aggregate amount of the
Prior Notes previously funded by Banks and outstanding on the date hereof, being
hereinafter referred to individually as an "Advance" and collectively as the
"Advances"), so long as (a) the aggregate principal amount of all Letters of
Credit outstanding at any one time does not exceed the LC Commitment and (b) the
aggregate principal
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amount of all Letters of Credit and of all Advances outstanding at any one time
does not exceed the Revolving Commitment. The Revolving Commitment available to
Borrower from time to time under the Revolving Credit Facility shall be reduced
by the aggregate of the face amount of any outstanding Letters of Credit and of
all unpaid Advances made by Banks to Borrower pursuant to this Agreement and the
remaining amount of the Revolving Commitment shall constitute the "Unused
Commitment". Any draws made under the Letters of Credit by the beneficiaries
thereof shall constitute Advances as defined in this Agreement. The Unused
Commitment available under the Revolving Credit Facility shall be restored but
simultaneously reduced by the amount of any Advances which are made to Borrower
to reimburse Banks for draws under the Letters of Credit.
1.2 Borrowing Procedure Under the Revolving Credit Facility. Agent shall
receive at least one (1) Business Day's prior telephonic notice from Borrower
(to be confirmed in writing by Borrower) of each proposed Letter of Credit and
of each Advance to be issued under the Revolving Credit Facility. If all
conditions precedent to the issuance of any such Letter of Credit or any such
Advance have been met, Agent will, without any further consent or approval from
Banks, or either one of them, on the date requested make each Letter of Credit
or Advance available to Borrower at Agent's office at 000 Xx. Xxxxxxx Xxxxxx,
Xxx Xxxxxxx, Xxxxxxxxx 00000, and each Letter of Credit or Advance shall be
shared equally by Banks.
1.3 Terms and Conditions Governing Letters of Credit. The terms and
conditions governing the issuance of Letters of Credit by Banks on behalf of and
for the account of Borrower shall be provided for by Agent in its standard form
of Application for Stand-By Letter of Credit, a copy of which is attached hereto
as Exhibit "A", with appropriate insertions and such additional terms and
conditions governing the issuance of specific Letters of Credit as may be agreed
upon by Borrower and Agent at the time of Borrower's request to Agent for the
issuance thereof. Upon
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Agent's issuance of a Letter of Credit, one-half (1/2) of the amount of such
Letter of Credit shall automatically be deemed to have been provided by Whitney,
and, without the necessity of further documentation transferring an interest in
the Letter of Credit to Xxxxxxx, Xxxxxxx shall possess a one-half (1/2) interest
in all rights and obligations accruing to and incurred by Agent with respect to
such Letter of Credit. Whitney shall record its one-half (1/2) share of any
draws on the Letter of Credit on the schedule attached to its Revolving Note as
provided in Section 2.1 below.
Section 2. Notes Evidencing Borrowings.
2.1 Notes. The Advances (including, without limitation, the outstanding
indebtedness of Borrower to Banks under the Prior Notes which, as provided in
Section 1.1, shall be deemed an "Advance" hereunder) shall be evidenced by two
(2) promissory notes of Borrower payable to the order of First NBC and Whitney,
respectively, each in the original principal amount of TEN MILLION AND NO/100
DOLLARS ($10,000,000.00) and in the forms set forth as Exhibits "B" and "C" to
this Agreement (each such note, together with any and all renewals,
modifications, extensions, amendments, supplements and/or substitutions
therefor, being sometimes referred to herein individually as a "Note" and
collectively as the "Notes"), with appropriate insertions, each of which shall
be dated the date hereof and shall be payable in full on December 31, 1999. All
Advances made by Banks to Borrower pursuant to this Agreement and all payments
of principal shall be recorded by Banks on the schedule attached to each Note,
but Banks' failure to record or to record correctly such Advances shall in no
way affect Borrower's obligation to repay same.
2.2 No Novation. The execution and delivery of the Notes shall not
constitute a payment, prepayment or novation of the obligations of Borrower
heretofore evidenced by the Prior Notes, but does constitute a renewal and
restatement of the Prior Notes in their entirety.
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Section 3. Interest and Fees.
3.1 Interest -- Revolving Credit Facility. In the absence of an Event of
Default, the unpaid principal of the Notes shall bear interest until paid at the
Prime Rate, adjusted daily, or the LIBO Rate, or some combination thereof, as
specified in Section 3.6 below. Interest prior to maturity shall be payable
quarterly in arrears on the last day of each March, June, September and December
commencing June 30, 1997, and continuing until maturity. Interest after
maturity of the Notes for any reason whatsoever shall be increased to the Prime
Rate plus three percent (3%) and shall be payable on demand. Upon the issuance
of a Letter of Credit by Agent on behalf of and for the account of Borrower, a
fee of one percent (1%) per annum on the principal amount of such Letter of
Credit shall be payable by Borrower for the number of days such Letter of Credit
is to remain outstanding. A fee on the Unused Commitment of three-eighths (3/8)
of one percent (1%) per annum shall be payable by Borrower quarterly in arrears
on the last day of each March, June, September and December commencing June 30,
1997, and continuing until maturity.
3.2 Default Rate. If an Event of Default shall occur in the payment on or
before the due date of any principal or interest due hereunder or under any of
the other Loan Documents, including, without limitation, the Notes, Borrower
will pay interest thereon (retroactively) from the date of the Event of Default
on such payment up to the date of the actual payment (as well after as before
judgment) at the Prime Rate plus three percent (3%) (the "Default Rate"),
without regard to whether there has been an acceleration of the payment of
principal. Such interest at the Default Rate shall be payable on demand.
3.3 Prime Rate. "Prime Rate" shall mean that index which shall be
established by Citibank, N.A. at New York, New York as its "prime rate". Each
change in the interest rate on each Note shall take effect on the effective date
of the change in the Prime Rate.
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3.4 Origination Fee. No origination fee shall be payable by Borrower.
3.5 Method of Calculating Interest and Fees. Interest at the Prime Rate
and any fee shall be computed on the basis of a year consisting of 365 days and
paid for actual days elapsed, and interest at the LIBO Rate shall be computed on
the basis of a year consisting of 360 days.
3.6 Interest Rate Options. Until an Event of Default occurs, Borrower
shall have the following interest rate options:
(a) Advances to Borrower under the Revolving Credit Facility may from
time to time be (i) LIBO Rate Advances, (ii) Prime Rate Advances, or (iii)
any combination thereof, as determined by Borrower with respect to its
Advances and noticed to Agent in accordance with paragraphs (b), (c), and
(d) below; provided that no Advance shall be made to Borrower as a LIBO
Rate Advance under the Revolving Credit Facility after the day that is one
month prior to the Termination Date. For purposes of this paragraph (a),
an Advance shall be deemed "made" upon an initial borrowing by Borrower
under paragraph (b) below, any conversion of such Advance under paragraph
(c) below, and upon any continuation of such Advance under paragraph (d)
below.
(b) With respect to any new Advance, Borrower shall provide Agent with
telephonic notice of its intended borrowing, which notice must be received
by Agent prior to 10:00 A.M., New Orleans time, at least one (1) Business
Day prior to the requested Borrowing Date, which notice shall specify (i)
the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether
the borrowing is to be of LIBO Rate Advances or Prime Rate Advances or a
combination thereof, (iv) the respective amounts of each such type of
Advance, and (v) if the borrowing is to be entirely or partly of LIBO Rate
Advances, the respective lengths of the Interest Periods therefor.
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(c) Borrower may elect from time to time to convert any of its LIBO
Rate Advances to Prime Rate Advances by giving Agent telephonic notice of
such election, which notice must be received by Agent prior to 10:00 A.M.,
New Orleans time, at least one (1) Business Day prior to the requested
conversion; provided that any such conversion, of LIBO Rate Advances shall
only be made on the last day of an Interest Period with respect thereto.
Borrower may elect from time to time to convert any of its Prime Rate
Advances to LIBO Rate Advances by giving Agent telephonic notice of such
election, which notice must be received by Agent prior to 10:00 A.M., New
Orleans time, at least one (1) Business Day prior to the requested
conversion. Any such notice of conversion to LIBO Rate Advances shall
specify the length of the initial Interest Period thereof and the amount of
the Prime Rate Advance to be converted. All or any part of Borrower's
outstanding LIBO Rate Advances and Prime Rate Advances may be converted as
provided herein; provided that (i) no Prime Rate Advance may be converted
into a LIBO Rate Advance when any Event of Default has occurred and is
continuing, (ii) partial conversions of Prime Rate Advances to LIBO Rate
Advances shall be in an aggregate principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof, (iii) partial conversions of LIBO
Rate Advances to Prime Rate Advances shall be in an aggregate principal
amount of $500,000 or a whole multiple of $100,000 in excess thereof, (iv)
no Prime Rate Advance under the Revolving Credit Facility may be converted
into a LIBO Rate Advance after the date that is one month prior to the
Termination Date, and (v) any such conversion may only be made if, after
giving effect thereto, paragraph (e) shall not have been contravened.
(d) Any LIBO Rate Advances may be continued as such upon the
expiration of an Interest Period with respect thereto by Borrower giving
Agent telephonic notice, which
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notice must be received by Agent prior to 10:00 A.M., New Orleans time, at
least one (1) Business Day prior to the requested continuation; provided,
that (i) no LIBO Rate Advance may be continued as such when any Event of
Default has occurred and is continuing, (ii) no LIBO Rate Advances under
the Revolving Credit Facility may be continued as such after the date which
is one month prior to the Termination Date, and (iii) any such continuation
shall be made only if, after giving effect thereto, paragraph (e) shall not
be contravened. If Borrower shall fail to give such notice or if such
continuation is not permitted, then Borrower shall be deemed to have
requested that the LIBO Rate Advance be converted automatically to a Prime
Rate Advance on the last day of the then current Interest Period with
respect thereto.
(e) All borrowings, conversions and continuations of Advances
hereunder by Borrower and all selections of Interest Periods hereunder by
Borrower shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the
Advances to Borrower constituting each LIBO Rate tranche (i.e., LIBO Rate
Advances made on the same day and having the same Interest Period) shall be
equal to $500,000 or a whole multiple of $100,000 in excess thereof. If
Borrower has no Prime Rate Advances outstanding, Borrower may have a
maximum of five (5) LIBO Rate tranches in aggregate in effect at any one
time, and, if Borrower has Prime Rate Advances outstanding, Borrower may
have a maximum of four (4) LIBO Rate tranches in aggregate in effect at any
one time.
(f) Each determination of an interest rate by Agent pursuant to any
provision of this Agreement shall be conclusive and binding on Borrower in
the absence of manifest error.
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Agent shall, at the request of Borrower, deliver to Borrower a statement
showing the quotations used by Agent in determining the LIBO Rate.
(g) If prior to the first day of any Interest Period, Agent shall have
determined (which determination shall be conclusive and binding upon
Borrower) that either:
(i) adequate and reasonable means do not exist for ascertaining the
LIBO Rate for such Interest Period; or
(ii) the interest rate determined for such Interest Period does not
adequately and fairly reflect the cost to Banks (as conclusively
certified by Agent) of making, maintaining or funding their LIBO
Rate Advances during such Interest Period, in either case with
respect to (i) proposed Advances that Borrower has requested be
made as LIBO Rate Advances, (ii) LIBO Rate Advances that will
result from the requested conversion of Prime Rate Advances into
LIBO Rate Advances, or (iii) the continuation of LIBO Rate
Advances beyond the expiration of the then current Interest
Period with respect thereto;
Agent shall give telephonic notice thereof to Borrower as soon as
practicable thereafter. Unless Borrower notifies Agent upon receipt of such
notice that it wishes to rescind or modify its request, Agent shall arrange
that (x) any affected LIBO Rate Advances requested by Borrower shall be
made as Prime Rate Advances, (y) any Prime Rate Advances to Borrower that
were to have been converted to LIBO Rate Advances shall be continued as, or
converted to, Prime Rate Advances, and (z) all outstanding LIBO Rate
Advances to Borrower shall be converted, on the last day of the then
current Interest Period with respect thereto, to Prime Rate Advances.
Until such notice has been withdrawn by Agent, no further LIBO Rate
Advances shall be made to Borrower, nor shall Borrower have the right to
convert Prime Rate Advances to LIBO Rate Advances.
(h) Notwithstanding any other provision in this Agreement, if the
adoption of or any change in any law or regulation or in the interpretation
or application thereof (whether or not having the force of law) shall make
it unlawful or impossible for Bank to make,
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maintain or fund LIBO Rate Advances as contemplated by this Agreement: (a)
the commitment of Banks hereunder to make LIBO Rate Advances, continue LIBO
Rate Advances as such and convert Prime Rate Advances to LIBO Rate Advances
shall forthwith be cancelled; (b) the Advances then outstanding as LIBO
Rate Advances, if any, shall be converted automatically to Prime Rate
Advances on the respective last days of the then current Interest Periods
with respect to such Advances or within such earlier period as required by
law; and (c) Borrower shall pay Banks such amounts, if any, as may be
required pursuant to paragraph (i) below.
(i) Borrower agrees to indemnify Banks and to hold Banks harmless from
any loss or expense which Banks may sustain or incur as a consequence of
(a) the making by Borrower of a prepayment (whether mandatory or optional)
or any other payment of a LIBO Rate Advance on a day which is not the last
day of the Interest Period with respect thereto, and/or (b) the conversion,
whether voluntary or involuntary, of a LIBO Rate Advance into a Prime Rate
Advance pursuant to this Section 3.6 or otherwise on a day which is not the
last day of an Interest Period with respect thereto, including, without
limitation, in each case any such loss or expense arising from the
reemployment of funds obtained by it to maintain its LIBO Rate Advances
hereunder or from fees payable to terminate the deposits from which such
funds were obtained. This covenant shall survive the termination of this
Agreement and the payment of the Advances and all other obligations
hereunder.
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Section 4. Payments, Prepayments, and Reduction or Termination of the
Revolving Credit Facility.
4.1 Method of Payment. All payments of principal, interest and other
amounts to be made by Borrower under this Agreement or any of the Notes or other
Loan Documents shall be made to Agent for the account of Banks at Agent's office
at 000 Xx. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000 (or at such other
address as Agent or either of Banks may notify Borrower in writing), in
immediately available funds, without setoff, deduction or counterclaim, not
later than 2:00 p.m. (New Orleans, Louisiana time) on the date on which such
payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day) and, in
the case of payments of principal under the Revolving Credit Facility, in an
amount of at least $100,000.00, or an integral multiple thereof. Borrower
shall, at the time of making each such payment, specify to Agent the sums
payable by Borrower under this Agreement, the Notes or other Loan Documents to
which such payment is to be applied. Notwithstanding the foregoing sentence,
unless and until an Event of Default shall have occurred and be continuing (in
which event such payments shall be applied by Agent as Banks in their sole
discretion shall determine), all payments received by Agent shall be applied
first to the payment of all amounts (except principal and interest) at the time
due and unpaid hereunder or under any of the other Loan Documents, then to
interest hereon or thereon accrued to the date of payment and finally to the
unpaid principal hereunder or thereunder. Whenever any payment under this
Agreement, the Notes or any other Loan Document shall be stated to be due on a
day that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest. Upon receipt of each such payment,
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Agent shall make prompt payment within three (3) Business Days to each Bank in
like funds of all amounts received by Agent for the account of such Bank.
4.2 Sharing of Payments. Banks shall share equally all payments made
pursuant to this Agreement and the benefits of and from the Collateral and all
proceeds from the sale thereof. If either Bank shall receive at any time any
payment hereunder, or interest thereon, or receive any Collateral (or proceeds
thereof) in respect thereof (whether voluntarily or involuntarily, by setoff or
otherwise), or interest in any of the foregoing, in a greater proportion than
the other Bank (such Bank receiving the greater proportion being referred to
herein as the "Benefitted Bank"), such Benefitted Bank shall purchase for cash
from the other Bank such portion of such other Bank's Notes or Letters of
Credit, or shall provide such other Bank with the benefit of any such Collateral
or the proceeds thereof, as the case may be, as shall be necessary to cause such
Benefitted Bank to share the excess payment or benefits of such Collateral or
proceeds equally with the other Bank; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefitted Bank, such purchases shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery. Borrower agrees that each
Bank so purchasing a portion of another Bank's Notes or Letters of Credit, as
the case may be, may exercise all rights of payment (including, without
limitation, rights of setoff) with respect to such portion as fully as if such
Bank were the direct holder of such portion.
4.3 Payments Without Deduction. Borrower shall pay principal, interest
and other amounts under, and in accordance with the terms of, this Agreement,
the Notes and the other Loan Documents free and clear of and without deduction
for any and all present and future taxes, levies, imposts, deductions, charges,
withholdings and all other liabilities whatsoever.
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4.4 Reduction of Credit. Subject to Section 3.6(i) above, Borrower may
from time to time, upon at least three (3) Business Day's prior telephonic
notice (confirmed in writing) to Agent, permanently reduce the amount of the
maximum Revolving Commitment available under the Revolving Credit Facility, but
only upon payment of the outstanding principal amount of each Note in excess of
one-half ( 1/2) of the then reduced amount of the maximum Revolving Commitment
available under the Revolving Credit Facility. Any such reduction of the
Revolving Commitment shall be in an amount of $100,000.00 or an integral
multiple thereof. Subject to Section 3.6(i) above, Borrower may at any time on
like notice terminate the entire Revolving Commitment available under the
Revolving Credit Facility upon payment in full of the Notes and other
liabilities of Borrower relating to the Revolving Credit Facility.
Section 5. Representations and Warranties of Borrower.
Borrower represents and warrants to Banks and Agent that:
5.1 Corporate Existence. Each of Borrower and its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Louisiana; and each of Borrower and its Subsidiaries has all
necessary corporate power and authority to acquire, own and hold the property
and all other properties it purports to own and hold and to carry on its
business as now conducted.
5.2 Authorization; Validity. Each of Borrower and its Subsidiaries is
and/or has been duly authorized to execute and deliver this Agreement and all
other Loan Documents to which such Borrower or Subsidiary is a party and to
perform its obligations under this Agreement and all other Loan Documents to
which such Borrower or Subsidiary is a party. Borrower is duly authorized and
will continue to be duly authorized to borrow money hereunder. Each of this
Agreement and the other Loan Documents to which Borrower or one of its
Subsidiaries is a party, as executed and
14
delivered, constitutes the legal, valid and binding obligation of Borrower
and/or such Subsidiary, enforceable in accordance with the respective terms
thereof.
5.3 No Conflicts. The execution and delivery of the Loan Documents and
the per formance by each of Borrower and its Subsidiaries of its obligations
thereunder do not and will not conflict with any provision of law or of the
charter or by-laws of Borrower or such Subsidiary or of any agreement binding
upon Borrower or such Subsidiary, as the case may be.
5.4 Financial Statements. Borrower's audited financial statement as of
December 31, 1996, a copy of which has been furnished to Banks, has been
prepared in conformity with GAAP applied on a basis consistent with that of the
preceding fiscal year and period, presents fairly the financial condition of
Borrower as of such date and the results of its operations for the periods then
ended. Borrower's unaudited financial statement as of March 31, 1997, a copy of
which has been previously furnished to Banks, except for the absence of
footnotes normally associated with financial statements prepared in accordance
with GAAP, has been prepared in conformity with GAAP and presents fairly the
financial condition of Borrower as of such date and the results of its
operations for the periods then ended. Since December 31, 1996, there has been
no material adverse change in Borrower's financial condition. Since December
31, 1996, there has been no material adverse change in the financial condition
of any of Borrower's Subsidiaries.
5.5 Litigation. To the best of Borrower's knowledge, after due inquiry,
no litigation or governmental proceedings are pending or threatened against
Borrower or any of its Subsidiaries, the results of which might materially
affect Borrower's or such Subsidiary's financial condition or operations,
except those referred to in a schedule furnished contemporaneously herewith and
attached hereto as Schedule 1. Other than any liability incident to such
litigation or proceedings or provided for or disclosed in the financial
statements referred to in Section 5.4, Borrower does not
15
have any material contingent liabilities. No Subsidiary has any material
contingent liability other than those imposed by the Collateral Documents.
5.6 Liens. None of the assets of Borrower or any of its Subsidiaries with
a net book value of greater than $25,000.00 is subject to any Lien, except for
the Liens created pursuant to the Collateral Documents and Permitted Liens.
5.7 Subsidiaries. Borrower has no Subsidiaries other than Dolphin
Services, and Dolphin Services has no Subsidiaries.
5.8 Purpose. The proceeds of the Revolving Credit Facility shall be used
by Borrower for general corporate purposes.
5.9 Use of Proceeds; Margin Securities. Borrower is not engaged in the
business of purchasing or selling margin stock (as defined in Regulation U of
the Board of Governors of the Federal Reserve System) or extending credit to
others for the purpose of purchasing or carrying margin stock and,
notwithstanding Section 5.8 hereof, no part of the proceeds of any borrowing
hereunder will be used to purchase or carry any margin stock or for any other
purpose which would violate any of the margin regulations of such Board of
Governors.
5.10 Compliance with ERISA. Each of Borrower and its Subsidiaries is in
compliance with all statutes and governmental rules and regulations applicable
to it, including, without limitation, the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). No condition exists or event or transaction
has occurred in connection with any plan, as defined in Sections 3(3) and 3(37)
of ERISA, maintained by Borrower or any of its Subsidiaries (any such plan being
hereinafter called the "Plan"), which could result in Borrower's or such
Subsidiary's incurring any material liability, fine or penalty. No Reportable
Event (as defined in ERISA) has occurred with
16
respect to any such Plan. Neither Borrower nor any of its Subsidiaries has
withdrawn from any such Plan or initiated steps to do so and no steps have been
taken to terminate any such Plan.
5.11 Consents. No consent, approval or authorization of, or registration
or declaration with, any federal or state governmental authority or other
regulatory agent for the validity of the execution and delivery or for the
performance by Borrower or any of its Subsidiaries of the Loan Documents is
required.
5.12 Tax Returns. Each of Borrower and its Subsidiaries has filed all tax
returns which are required to be filed by any jurisdiction, and has paid all
taxes which have become due pursuant to said returns or pursuant to any
assessments.
5.13 Operation of Business. Each of Borrower and its Subsidiaries
possesses all licenses, permits, franchises, patents, copyrights, trademarks and
trade names, or rights thereto, to conduct its business substantially as now
conducted and as presently proposed to be conducted, and neither Borrower nor
any of its Subsidiaries is in violation of any valid rights of others with
respect to any of the foregoing.
5.14 Rights in Properties; Liens. Each of Borrower and its Subsidiaries
has good and indefeasible title to its properties and assets, real and personal,
including the properties and assets reflected in the financial statements
described in Section 5.4 hereof, and none of the properties, assets or leasehold
interests of Borrower or any Subsidiary is subject to any Lien, except as
permitted by Section 6.11 hereof.
5.15 Debt. Borrower has no Debt, except as disclosed in the financial
statements described in Section 5.4 hereof and as otherwise permitted by this
Agreement. No Subsidiary of Borrower has any Debt except as owed to Borrower or
as otherwise permitted by this Agreement.
17
5.16 Disclosure. No statement, information, report, representation or
warranty made by Borrower or any of its Subsidiaries in this Agreement or in any
of the other Loan Documents or furnished by Borrower or any of its Subsidiaries
to Banks or Agent in connection with the negotiation or preparation of this
Agreement, or any amendment hereto, contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements herein
or therein not misleading. There is no fact known to Borrower or to any of its
Subsidiaries that has not been disclosed in writing to Banks which has a
material adverse effect, or which might in the future have a material adverse
effect, on the business, assets, financial condition or operations of Borrower,
any of its Subsidiaries or on the Collateral.
5.17 Registered Office; Principal Place of Business; Location of
Collateral. The principal place of business, chief executive office and
registered office of Borrower and the place where Borrower keeps its books and
records and all Collateral is located on the Real Property. The principal
place of business, chief executive office and registered office of Dolphin
Services and the place where Dolphin Services keeps its books and records and
all Collateral owned by Dolphin Services and encumbered by the Collateral
Documents is located in Terrebonne Parish, Louisiana (with the exception of
certain such Collateral which is, from time to time and in the ordinary course
of Dolphin Services' business, temporarily located at job sites outside of
Terrebonne Parish). Borrower has always maintained its registered office in
either Terrebonne or East Baton Rouge Parish, Louisiana, and Dolphin Services
has always maintained its registered office in Terrebonne Parish, Louisiana.
Neither Borrower nor any of its Subsidiaries does, or has ever done, any
business from any location other than as set forth in this Section. No Person
other than Borrower, Dolphin Services, Agent and Banks has possession of any of
the Collateral.
18
5.18 Investment Company Act. Neither Borrower nor any of its Subsidiaries
is an "Investment Company" within the meaning of the Investment Company Act of
1940, as amended.
5.19 Other Agreements. With the exception of construction contracts
entered into by Borrower or one of its Subsidiaries in the ordinary course of
Borrower's or such Subsidiary's business, neither Borrower nor any of its
Subsidiaries is a party to any indenture, loan or credit agreement, or to any
lease or other agreement or instrument, or subject to any charter of corporate
restriction which could have a material adverse effect on the business,
properties, assets, operations or conditions, financial or otherwise, of
Borrower or such Subsidiary, or the ability of Borrower or such Subsidiary to
pay and perform its obligations under the Loan Documents to which it is a party.
Neither Borrower nor any of its Subsidiaries is in default in any respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument material to its business to
which it is a party.
5.20 Compliance with Law. Each of Borrower and its Subsidiaries is in
compliance with all laws, rules, regulations, orders and decrees which are
applicable to Borrower, its Subsidiaries or any of their respective properties.
Without limiting the generality of the foregoing:
(a) Employment Matters. Each of Borrower and its Subsidiaries is in
full compliance with all applicable laws, rules, regulations and
governmental standards regarding employment, including, without limitation,
the minimum wage and overtime provisions of the Fair Labor Standards Act,
as amended (29 U.S.C. (S)(S) 201-219), and the regulations promulgated
thereunder.
(b) Environmental Matters.
(i) Each of Borrower and its Subsidiaries and all of their
respective properties, assets and operations are in full
compliance with all Environmental Laws. Neither Borrower nor any
of its Subsidiaries is aware of or has received notice of, any
past, present or future
19
conditions, events, activities, practices or incidents which may
interfere with or prevent the compliance or continued compliance
of Borrower or any of its Subsidiaries with all Environmental
Laws.
(ii) Each of Borrower and its Subsidiaries has obtained all permits,
licenses and authorizations and has filed all plans which are
required under Environmental Laws in order to conduct its
business and/or own its properties and assets including without
limitation all Louisiana air emission permits required under any
Environmental Law in order to conduct Borrower's or such
Subsidiary's business and/or own its assets or properties.
(iii) Each of Borrower and its Subsidiaries has on file an SPCC Plan
as required under applicable Environmental Laws in connection
with Borrower's or any Subsidiary's storage of petroleum on the
Real Property.
(iv) No Hazardous Substances or Solid Wastes exist on, about or
within or have been used, generated, stored, transported,
disposed of on, or released from any of the properties or assets
of Borrower or any of its Subsidiaries except in compliance with
Environmental Laws.
(v) There is no action, suit, proceeding, investigation or inquiry
before any court, administrative agency or other governmental
authority pending or, to the knowledge of Borrower or any of its
Subsidiaries, threatened against Borrower or any of its
Subsidiaries relating in any way to any Environmental Law.
Neither Borrower nor any of its Subsidiaries has (A) been
notified of any liability for remedial action under any
Environmental Law, (B) received any request for information by
any governmental authority with respect to the condition, use or
operation of any of its properties or assets, or (C) received
any notice from any governmental authority or other Person with
respect to any violation of or liability under any Environmental
Law.
5.21 Corporate Name. The exact corporate name of Borrower as it appears in
its articles of incorporation is as set forth in the introduction of this
Agreement and, with the exception of doing business under the name GIFI, Inc.,
Borrower has never done any business in any location under any other name. The
exact corporate name of Dolphin Services as it appears in its articles of
incorporation is as set forth in the recitals of this Agreement, and Dolphin
Services has never done any business in any location under any other name.
20
5.22 Collateral. The Collateral Documents create in favor of Banks, and/or
Agent for the benefit of Banks, valid, enforceable and perfected Liens on the
properties described therein, which Liens secure the payment and performance of
the obligations of Borrower and its Subsidiaries to Banks described in the
Collateral Documents, and which Liens are superior to the rights of all third
Persons, whether now existing or hereafter arising.
5.23 Taxpayer I.D. Numbers. Borrower's Federal Taxpayer Identification
Number is 00-0000000, and Dolphin Services' Federal Taxpayer Identification
Number is 00-0000000.
5.24 Effect of Dolphin Merger. Following the merger of Dolphin Sales and
Dolphin Steel into Dolphin Services pursuant to a certain Agreement of Merger
among Dolphin Sales, Dolphin Steel and Dolphin Services, dated April 30, 1997,
Dolphin Services acquired ownership of Dolphin Sales' immovable property subject
to the Liens previously created by the Collateral Documents on such immovable
property which continue in full force and effect and with the same ranking as
existed prior to said merger.
Section 6. Borrower's Covenants.
From the date of this Agreement and thereafter until the expiration or
termination of the Revolving Commitment, and until the Notes and other
liabilities of Borrower hereunder are paid in full and all other obligations and
liabilities under the Loan Documents are performed and paid in full, Borrower
agrees that it will:
6.1 Financial Statements. Furnish to Agent:
(a) promptly after the sending or filing thereof, copies of all
reports which Borrower sends to any of its public security holders, and
copies of all Forms 10-K, 10-Q and 8-K, Schedules 13E-4 (including all
exhibits filed therewith) and registration statements, and
21
any other filings or statements that Borrower files with the Securities and
Exchange Commission or any national securities exchange;
(b) within one hundred twenty (120) days after the end of each fiscal
year, a copy of Borrower's financial statements (describing assets,
liabilities, and results of operations for Borrower and its Subsidiaries on
a consolidated basis), audited by independent certified public accountants
of nationally recognized standing selected by Borrower and reasonably
satisfactory to Banks, prepared in conformity with GAAP;
(c) within forty-five (45) days after the end of each month, a copy of
Borrower's unaudited financial statements (describing assets, liabilities,
and results of operations for Borrower and its Subsidiaries on a
consolidated basis) prepared in conformity with GAAP, except for the
absence of footnotes normally associated with financial statements prepared
in accordance with GAAP;
(d) together with the financial statements furnished by Borrower under
preceding clause (a), a certificate of the president or chief financial
officer of Borrower to the effect that no Event of Default with respect to
Borrower, or event which might mature into an Event of Default with respect
to Borrower, has occurred and is continuing;
(e) forthwith upon the occurrence of an Event of Default, a
certificate of the president or chief financial officer of Borrower
specifying the nature and the period of existence thereof and what action
Borrower proposes to take with respect thereto;
(f) written notice of any and all litigation affecting Borrower or any
of its Subsidiaries, directly or indirectly; provided, however, this
requirement shall not apply to litigation involving Borrower or one of its
Subsidiaries and any other party if such litigation involves, in the
aggregate, less than $500,000.00;
22
(g) prompt notice of any change in the present officers, directors
and/or stockholders of Borrower or any of its Subsidiaries; and
(h) from time to time, such other information as Banks may reasonably
request.
6.2 Access. Permit access, and cause its Subsidiaries to permit access,
by Banks and Agent to the books and records and other property of Borrower and
its Subsidiaries during normal business hours and upon reasonable notice and
permit, and cause its Subsidiaries to permit, Banks to make copies of said books
and records.
6.3 Insurance. Maintain, and cause its Subsidiaries to maintain, with
financially sound and reputable insurance companies workmen's compensation
insurance, liability insurance and insurance on Borrower's and its Subsidiaries'
property, assets and business at least to such extent and against such hazards
and liabilities as is commonly maintained by similar companies and, in addition
to the foregoing insurance, such insurance as may be required in the Collateral
Documents. In the case of property (whether owned by Borrower or by one of its
Subsidiaries) on which Banks or Agent has a Lien, Borrower shall provide, and
shall cause its Subsidiaries to provide, Agent with duplicate originals or
certified copies of such policies of insurance naming Banks as additional loss
payees and as additional insureds as their interests may appear and providing
that such policies will not be canceled without thirty (30) days' prior written
notice to Banks.
6.4 Repair. Maintain, preserve and keep, and cause its Subsidiaries to
maintain, preserve, and keep, Borrower's and such Subsidiaries' properties in
good repair, working order and condition, and make, and cause its Subsidiaries
to make, necessary and proper repairs, renewals and replacements so that
Borrower's and its Subsidiaries' business carried on in connection therewith may
be properly conducted at all times.
23
6.5 Taxes. Pay or discharge, and cause its Subsidiaries to pay and
discharge, at or before maturity or before becoming delinquent (a) all taxes,
levies, assessments and governmental charges imposed on Borrower or any of its
Subsidiaries or its income or profits or any of its property, and (b) all lawful
claims for labor, materials and supplies which, if unpaid, might become a Lien
upon any of Borrower's property or the property of any of its Subsidiaries;
provided, however, that neither Borrower nor any Subsidiary shall be required to
pay or discharge any tax, levy, assessment or governmental charge which is being
contested in good faith by appropriate proceedings diligently pursued.
6.6 Corporate Existence. Maintain its corporate existence in good
standing and cause its Subsidiaries to maintain their respective corporate
existences in good standing.
6.7 Merger. Without the prior written consent of Banks, not, and cause
each of its Subsidiaries not to:
(a) be a party to any merger or consolidation (other than a merger of
one or more of the Subsidiaries into another Subsidiary or a merger of one
or more of the Subsidiaries into Borrower, in either event followed by
notice to Banks of the merger delivered within ten (10) days after the
merger becomes effective);
(b) except in the normal course of its business, sell, transfer,
convey, or lease all or any substantial part of Borrower's or a
Subsidiary's assets;
(c) sell or assign, except in the normal course of Borrower's business
or the business of one of its Subsidiaries, with or without recourse, any
accounts receivable or chattel paper.
6.8 Compliance. Comply, and cause its Subsidiaries to comply, with all
statutes, laws, ordinances, orders, rules and regulations applicable to Borrower
or such Subsidiary, including,
24
without limitation, all Environmental Laws and ERISA; provided, however,
Borrower and its Subsidiaries shall be deemed to be in compliance with this
requirement for such time as Borrower or one of its Subsidiaries may be
contesting, in good faith and with diligence by appropriate proceed ings, any
alleged violation of any statute, rule or regulation. Borrower shall not permit,
and shall cause each of its Subsidiaries not to permit, any condition to exist
in connection with any Plan which might constitute grounds for the PBGC to
institute proceedings to have such Plan terminated or a trustee appointed to
administer such Plan, and Borrower shall not engage in, or permit to exist or
occur, and shall cause its Subsidiaries not to engage in or permit to occur or
exist, any other condition, event or transaction with respect to, any such Plan
which could result in Borrower or one of its Subsidiaries incurring any material
liability, fine or penalty.
Without limiting the generality of the foregoing, Borrower shall comply,
and shall cause each of its Subsidiaries to comply, fully with and maintain in
effect any and all environmental permits and licenses required under any
Environmental Law in order to conduct Borrower's or such Subsidiary's business.
To the extent such permits are required but have not been obtained, or to the
extent such existing permits must be modified or renewed, Borrower shall make,
and shall cause its Subsidiaries to make, timely application for and obtain all
such permits, modifications or renewals thereof, as the case may be, including,
but not limited to, necessary federal and/or state water discharge, air emission
and waste management permits.
As often as Banks or Agent may require, Borrower shall submit to Agent
written progress reports addressing the status of environmental permits and
plans required of Borrower or any of its Subsidiaries, including pending permit
applications.
Anything contained herein to the contrary notwithstanding, Borrower shall
not use, or permit any of its Subsidiaries to use, any of the properties of
Borrower or of one of Borrower's Subsidiaries
25
or allow such properties to be used for the storage, treatment or disposal of
Solid Waste or Hazardous Substances except in the ordinary course of Borrower's
or such Subsidiary's business and in compliance with the terms of any applicable
Environmental Law or permit.
6.9 Use of Proceeds. Not use or permit any proceeds of the Advances to be
used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of "purchasing or carrying any margin stock" within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System,
as amended from time to time, and furnish to Banks, upon either of their
requests, a statement in conformity with the requirements of Federal Reserve
Form U-1 referred to in Regulation U of the Board of Governors of the Federal
Reserve System.
6.10 Financial Covenants. Maintain, on a consolidated basis with all of
its Subsidiaries,
(a) a ratio of current assets to current liabilities, as determined in
accordance with GAAP, in excess of 1.50 to 1.00;
(b) a minimum Net Worth of THIRTY-EIGHT MILLION AND NO/100 DOLLARS
($38,000,000.00) from the date of this Agreement until June 30, 1997 and a
minimum Net Worth thereafter equal to the sum of THIRTY-EIGHT MILLION AND
NO/100 DOLLARS ($38,000,000.00) plus (1) fifty percent (50%) of the
earnings of Borrower and its Subsidiaries, as determined in accordance with
GAAP, accruing after June 30, 1997 and (2) one hundred percent (100%) of
the proceeds of any future public equity offering by Borrower, net of any
fees, commissions, expenses and other costs incurred by Borrower in
connection with such public equity offering;
(c) a ratio of Debt to Net Worth no greater than .50 to 1.00; and
(d) a ratio of EBIT to Interest Expense of at least 4.00 to 1.00, such
ratio to be determined as of the end of each fiscal quarter by giving
effect to such fiscal quarter and the
26
three (3) immediately preceding fiscal quarters; provided that there shall
be no Event of Default under this Section 6.10(d) unless Borrower fails to
meet the ratio described in this Section 6.10(d) for three (3) successive
fiscal quarters.
6.11 Liens. Not create, incur, or suffer to exist, and not permit any of
Borrower's Subsidiaries to create, incur or suffer to exist, any Lien on any of
Borrower's property or on the property of Borrower's Subsidiaries except ((a)
through (g) of this Section being referred to collectively as the "Permitted
Liens"):
(a) those for taxes, assessments or governmental charges or levies if
the same shall not at the time be delinquent or thereafter can be paid
without penalty, or are being contested in good faith and by appropriate
proceedings;
(b) those imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than sixty (60) days
past due;
(c) those arising out of pledges or deposits under workmen's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
(d) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect the marketability of the same or interfere with
the use thereof in the business of Borrower or of any of Borrower's
Subsidiaries;
(e) lessors' interests under financing leases;
27
(f) liens on assets of Borrower and its Subsidiaries not covered by
the Loan Documents which liens secure obligations of Borrower or its
Subsidiaries in the ordinary course of business which in the aggregate for
all such obligations of Borrower and its Subsidiaries do not exceed
$250,000.00; and
(g) the Liens created pursuant to the Loan Documents.
6.12 Debt. Not create or permit to exist, and not allow any of Borrower's
Subsidiaries to create or permit to exist, any Debt without the prior written
consent of Banks, if, as a result thereof, exclusive of the indebtedness
contemplated by this Agreement, the aggregate amount of Debt of Borrower and its
Subsidiaries would exceed the sum of $1,000,000.00; provided, however, that any
Subsidiary may incur Debt owed to Borrower and such Debt owed to Borrower shall
not be included in the $1,000,000.00 limit.
6.13 Shareholder or Employee Loans. Not make, and not permit any
Subsidiary to make, advances or loans to employees of Borrower or any Subsidiary
or shareholders of Borrower which exceed the aggregate amount of $100,000.00.
6.14 Change in Business. Carry on and conduct, and cause its Subsidiaries
to carry on and conduct, the business of Borrower and each of its Subsidiaries
in substantially the same manner and in substantially the same fields of
enterprise as such businesses are presently conducted; provided, however, that
the foregoing shall not prevent Borrower or one of its Subsidiaries from
engaging in new and additional activities as long as said activities are in
substantially the same fields of enterprise as are currently being engaged in by
Borrower and Dolphin Services.
6.15 Accounts Receivable. Provide, and cause its Subsidiaries to provide,
Banks with aging reports of Borrower's and such Subsidiaries' accounts
receivable on a monthly basis.
28
6.16 Compliance with Agreements. Comply with, and cause each of its
Subsidiaries to comply with, all indentures, mortgages, deeds of trust and other
agreements binding on Borrower or any Subsidiary or affecting its properties or
business.
6.17 Further Assurances. Execute and deliver, and cause its Subsidiaries
to execute and deliver, such further documentation as may be requested by Banks
or Agent to carry out the provisions and purposes of this Agreement and the
other Loan Documents and to preserve and perfect the Liens of Banks or Agent for
the benefit of Banks, as the case may be, in the Collateral.
6.18 Disposition of Assets. Not sell, lease, assign, transfer or otherwise
dispose of, and shall cause each of its Subsidiaries not to sell, lease, assign,
transfer or otherwise dispose of, any of its assets, except dispositions of
inventory, equipment, and scrap in the ordinary course of business and as
otherwise provided in this Agreement.
6.19 Change Tax I.D. Number. Not change, and cause Dolphin Services not to
change, any of the Federal Taxpayer Identification Numbers set forth in Section
5.23 hereof without giving Agent at least sixty (60) days' prior written notice.
6.20 Indemnity. Indemnify, defend and hold Agent and Banks and their
respective directors, officers, agents, attorneys and employees harmless from
and against all claims, demands, causes of action, liabilities, losses, costs
and expenses (including, without limitation, costs of suit, reasonable legal
fees and fees of expert witnesses) arising from or in connection with (a) the
presence in, on or under any property of Borrower or of any Subsidiary of
Borrower (including, without limitation, the Real Property) of any Hazardous
Substance or Solid Waste, or any releases or discharges (as the terms "release"
and "discharge" are defined under any applicable Environmental Law) of any
Hazardous Substance or Solid Waste on, under or from such property, (b) any
activity carried on or undertaken on or off such property of Borrower or of any
of its Subsidiaries, whether prior to or during the term of this Agreement, and
whether by Borrower, any of its
29
Subsidiaries or any predecessor in title to Borrower's or such Subsidiary's
property or any officers, employees, agents, contractors or subcontractors of
Borrower, any Subsidiary of Borrower or any predecessor in title to the property
of Borrower or such Subsidiary, or any third persons at any time occupying or
present on such property, in connection with the handling, use, generation,
manufacture, treatment, removal, storage, decontamination, clean-up,
transportation or disposal of any Hazardous Substance or Solid Waste at any time
located or present on or under any of the aforedescribed property, or (c) any
breach of any representation, warranty or covenant under the terms of this
Agreement. The foregoing indemnity shall further apply to any residual
contamination on or under any or all of the aforedescribed property, or
affecting any natural resources, and to any contamination of any property or
natural resources arising in connection with the use, handling, storage,
transportation or disposal of any Hazardous Substance or Solid Waste, and
irrespective of whether any of such activities were or will be undertaken in
accordance with applicable laws, regulations, codes and ordinances. The
indemnity described in this Section shall survive the termination of this
Agreement for any reason whatsoever.
6.21 Real Property. Not create a Lien on any of the Real Property, or
permit any Subsidiary to create a Lien on any of the Real Property, in favor of,
or otherwise convey, or permit a Subsidiary to convey, any portion of the Real
Property to any Person without the prior written consent of Banks.
Section 7. Conditions Precedent to Extensions of Credit.
The obligation of Banks to extend credit to Borrower under this Agreement
is subject to the satisfaction of the conditions precedent, in addition to the
applicable conditions precedent set forth
30
in Section 8 below with respect to Advances and/or Letters of Credit, that
Borrower shall have delivered, or caused to be delivered, to Banks in form and
substance satisfactory to Banks:
7.1 Borrower's Resolutions. Copies, duly certified by the secretary or
assistant secretary of Borrower, of (a) the resolutions of Borrower's Board of
Directors authorizing the borrowings hereunder and the execution and delivery of
all of the Loan Documents to which Borrower is a party, (b) all documents
evidencing other necessary corporate action and (c) all approvals or consents,
if any, with respect to the Loan Documents.
7.2 Dolphin Services' Resolutions. Copies, duly certified by the
secretary or assistant secretary of Dolphin Services, of (a) the resolutions of
Dolphin Services' Board of Directors authorizing the borrowings hereunder and
the execution and delivery of all of the Loan Documents to which Dolphin
Services is a party, (b) all documents evidencing other necessary corporate
action and (c) all approvals or consents, if any, with respect to the Loan
Documents.
7.3 Notes. Borrower's duly executed Notes payable to the order of Banks.
7.4 New Collateral Documents. The duly authorized and executed new
Collateral Documents of Borrower and Dolphin Services annexed hereto as Exhibits
"D", "E", "F", "G", "H", "I", and "J" (the "New Collateral Documents").
7.5 Incumbency. Certificates of Borrower's and Dolphin Services'
secretary or assistant secretary, substantially in the form of Exhibit "K"
hereto, certifying the name of the officers of Borrower and Dolphin Services
authorized to execute the Loan Documents, and all other documents or
certificates to be delivered hereunder, together with the true signatures of
such officers.
7.6 Certification. A certificate, substantially in the form of Exhibit
"L" hereto, of the president or chief financial officer of Borrower as to the
matters set out in Sections 8.1 and 8.2 hereof.
31
7.7 Opinion. The opinion of Jones, Walker, Waechter, Poitevent, Carrere &
Xxxxxxx, L.L.P., counsel to Banks and Agent, addressed to Banks and Agent, to
the effect that (a) Borrower and Dolphin Services are corporations duly
organized, validly existing and in good standing under the laws of the State of
Louisiana; (b) Borrower has full power to execute, deliver and perform its
obligations under this Agreement, the Notes and the Collateral Documents to
which it is a party; (c) Dolphin Services has full power to execute, deliver and
perform its obligations under this Agreement and the Collateral Documents to
which it is a party; (d) such actions have been duly authorized by all
necessary corporate action, and are not in conflict with any provision of law or
of the charter or by-laws of Borrower or Dolphin Services, nor to the best of
counsel's knowledge, in conflict with any agreement binding upon Borrower or
Dolphin Services; and (e) this Agreement, the Notes, and the New Collateral
Documents are the legal and binding obligations of Borrower enforceable in
accordance with their respective terms, except as enforcement may be limited by
applicable bank ruptcy, reorganization, moratorium or similar laws.
Section 8. Additional Conditions Precedent to Advances and/or Letters of
Credit.
The obligation of Banks to make any Advance and/or issue any Letter of
Credit under the Revolving Credit Facility is subject to, in addition to the
satisfaction of all other conditions precedent applicable to the Revolving
Credit Facility and set forth in Section 7 above, the satisfaction of each of
the following conditions precedent:
8.1 Default. Before and after giving effect to such Advance and/or Letter
of Credit, no Event of Default shall have occurred and be continuing.
8.2 Warranties. Before and after giving effect to such Advance and/or
Letter of Credit, the representations and warranties in Section 5 hereof shall
be true and correct as though made on
32
the date of such Advance and/or Letter of Credit except for such changes as are
specifically permitted hereunder.
Section 9. Events of Default.
The following events shall constitute Events of Default hereunder and under
the Revolving Credit Facility, individually and collectively, and under all
other Loan Documents:
9.1 Payment. Default in the payment of principal on any one or more of
the Notes when due, or default in the payment of any interest on any one or more
of the Notes or any expense or fee hereunder or under any of the other Loan
Documents, which default shall continue for a period of five (5) days following
written notice thereof to Borrower from Banks or Agent;
9.2 Other Indebtedness. Any other indebtedness of Borrower is not paid at
maturity or becomes due and payable prior to its expressed maturity by reason of
any default by Borrower in the performance or observance of any obligation or
condition thereunder which default shall continue for a period of thirty (30)
days following written notice thereof to Borrower from Banks or Agent;
9.3 Other Default. Any default of any other obligation of Borrower under
the terms of any note or notes, mortgage, indenture, loan agreement or security
document of Borrower, including, without limitation, any of the Loan Documents,
which default shall continue for a period of thirty (30) days following written
notice thereof to Borrower from Banks or Agent, it being expressly understood
and agreed that a default under any note, mortgage, indenture, loan agreement or
security document of Borrower, including, without limitation, any of the Loan
Documents, shall constitute a default under all other notes, mortgages,
indentures, loan agreements and security documents held by Banks or Agent,
including, without limitation, the Loan Documents;
9.4 Insolvency. Borrower or any Subsidiary of Borrower becomes insolvent
or admits in writing its inability to pay its debts as they mature or applies
for, consents to, or acquiesces in the
33
appointment of a trustee or receiver for Borrower, such Subsidiary or any
property of Borrower or of such Subsidiary; or, in the absence of such
application, consent or acquiescence, a trustee or receiver is appointed for
Borrower, for any Subsidiary of Borrower or for a substantial part of any
property of either Borrower or of any of its Subsidiaries and is not discharged
within thirty (30) days; or any bankruptcy, reorganization, debt arrangement, or
other proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding is instituted by or against Borrower or any of Borrower's
Subsidiaries, and if instituted against Borrower or one of Borrower's
Subsidiaries, it is consented to or acquiesced in by Borrower or such
Subsidiary, or remains for thirty (30) days undismissed; or any warrant of
attachment is issued against any substantial portion of the property of Borrower
or of any Subsidiary of Borrower which is not released within thirty (30) days
of service;
9.5 ERISA. The PBGC applies to a United States District Court for the
appointment of a trustee to administer any Plan adopted, established or
maintained by Borrower, or for a decree adjudicating that any such Plan must be
terminated; a trustee is appointed pursuant to ERISA to administer any such
Plan; any action is taken to terminate any such Plan or any such Plan is
permitted or caused to be terminated if, at the time such action is taken or
such termination of such Plan occurs, the Plan's "vested liabilities," as
defined in Section 3(25) of ERISA, exceed the then value of its assets at the
time of such termination;
9.6 Agreements. Default in the performance of any of Borrower's covenants
and/or agreements set forth in this Agreement and/or any of the other Loan
Documents (and not constituting an Event of Default under any of the preceding
subsections of this Section 9), which default shall continue for a period of
thirty (30) days after written notice thereof to Borrower from Banks or Agent;
34
9.7 Representation or Warranty. Any representation or warranty made by
Borrower or by any Subsidiary of Borrower herein is untrue in any material
respect, or any schedule, statement, report, notice or writing furnished by
Borrower or any of the Owners to Banks is untrue in any material respect on the
date as of which the facts set forth are stated or certified which default shall
continue for a period of thirty (30) days after written notice thereof to
Borrower from Banks or Agent; and
9.8 Subsidiary Default. Any Subsidiary of Borrower defaults on the
payment of any amount due Banks under any Loan Document to which such Subsidiary
is a party, which default shall continue for a period of five (5) days following
written notice thereof to Borrower from Banks or Agent; any representation or
warranty made by a Subsidiary of Borrower under any Loan Document is untrue in
any material respect as of the date made, or any schedule, statement, report,
notice or writing furnished by a Subsidiary of Borrower to Banks is untrue in
any material respect on the date as of which the facts set forth are stated or
certified, which default shall continue for a period of thirty (30) days after
written notice thereof to Borrower from Banks or Agent; or any Subsidiary of
Borrower defaults in the performance of any other covenant and/or agreement set
forth in any Loan Document to which such Subsidiary is a party, which default
shall continue for a period of thirty (30) days after written notice thereof to
Borrower from Banks or Agent.
Upon the occurrence of any Event of Default, Banks, or Agent upon the
direction of Banks, in addition to all of the remedies conferred upon Agent
and/or Banks under law, in equity or under any of the Loan Documents, may
declare the Revolving Commitment to be terminated and the Notes to be due and
payable, whereupon the Revolving Commitment shall immediately terminate, and the
Notes shall become immediately due and payable, without notice of any kind,
except that if an event
35
described in Section 9.4 occurs, the Revolving Commitment shall immediately
terminate, and the Notes shall become immediately due and payable without
declaration or notice of any kind.
Section 10. Agent.
10.1 Authorization and Action. Each Bank hereby appoints and authorizes
Agent to execute the Collateral Documents on behalf of each such Bank and to
take such action as Agent on such Bank's behalf, and to exercise such powers
under the Loan Documents, as are delegated to Agent by the terms thereof,
together with such other powers as are reasonably incidental thereto, including,
without limitation, the enforcement of the Loan Documents in accordance with the
terms thereof (including, without limitation, the collection of the Notes), and
Agent hereby accepts such appointment. As to any matters not expressly provided
for by the Loan Documents (including, without limitation, enforcement or
collection of the Notes), Agent shall not be required to exercise any discretion
or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of Banks and such instructions shall be binding upon Banks;
provided, however, that Agent shall not be required to take any action which
exposes Agent to personal liability or which is contrary to any of the Loan
Documents or applicable law. Agent shall not consent to any amendment of this
Agreement or any of the other Loan Documents (and no amendment by Banks shall be
effective without consent of Agent), the effect of which would be to increase
the amount of the Obligations or extend the maturity of any obligation, reduce
the bases on which any interest is computed, release any Collateral, waive any
provision regarding covenants or obligations of Borrower or the Owners or Events
of Default, without the express written consent of all Banks.
10.2 Agent's Reliance, Etc. Neither Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in
36
connection with any of the Loan Documents except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, Agent: (i) may treat the payee of any Note as the holder thereof
until Agent receives written notice of the assignment or transfer thereof signed
by such payee and in form satisfactory to Agent; (ii) may consult with legal
counsel (including counsel for Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) makes no warranty or representation to
any Bank and shall not be responsible to any Bank for any statements, warranties
or representations made in or in connection with any of the Loan Documents; (iv)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of any of the Loan
Documents on the part of Borrower or to inspect the property (including the
books and records) of Borrower; (v) shall not be responsible to any Bank for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of any of the Loan Documents or any other instruments or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of any of the Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telegram, cable or telex) believed
by it to be genuine and signed by the proper party or parties.
10.3 First NBC and Affiliates. With respect to the Note payable to the
order of First NBC and the portion of the Revolving Commitment applicable to
First NBC, First NBC shall have the same rights and powers under the Loan
Documents as the other Bank and may exercise the same as though it were not
Agent; and the term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include First NBC in its individual capacity. Without limiting the
generality of the foregoing, First NBC and its affiliates may accept deposits
from, and generally engage in any kind
37
of business with, Borrower, and any person, firm or corporation who may do
business with or own securities of Borrower, all as if First NBC were not Agent
and without any duty to account therefor to Banks.
10.4 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon Agent or any other Bank and based on the
financial statements furnished by Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it
will, independently and without reliance upon Agent or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents. Each Bank acknowledges that a copy of this Agreement has
been made available to it and each Bank acknowledges that it is satisfied with
the form and substance of this Agreement.
10.5 Indemnification. Banks agree to indemnify and hold Agent harmless (to
the extent not reimbursed by Borrower), ratably according to the respective
principal amounts of the Notes then held by each of them (or if no Notes are at
the time outstanding, ratably according to the respective amounts of their
commitments hereunder), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against Agent in any way relating to or arising out of any of
the Loan Documents or any action taken or omitted by Agent under any of the Loan
Documents (including, without limitation, attorneys' fees and other costs
associated with defending Agent against any of the foregoing), provided that no
Bank shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or wilful misconduct.
38
Without limitation of the foregoing, each Bank agrees to reimburse Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including attorneys' fees) incurred by Agent in connection with the
preparation, execution, administration, or enforcement of, or the preservation
of any rights under, the Loan Documents, to the extent that Agent is not
reimbursed for such expenses by Borrower.
10.6 Successor Agent. Agent may resign at any time by giving written
notice thereof to Banks and Borrower and may be removed at any time with or
without cause by Banks by notice to Borrower. Upon any such resignation or
removal, Banks shall have the right to appoint a successor agent by notice to
Borrower. If no successor agent shall have been so appointed by Banks, and
shall have accepted such appointment, within thirty (30) days after Agent's
giving of notice of its resignation, then Agent may, on behalf of Banks, appoint
a successor agent, by notice to Borrower and Banks, which successor agent shall
be a commercial bank organized under the laws of the United States of America or
any state thereof having a combined capital and surplus of at least $5,000,000.
Upon the acceptance of any appointment as Agent by a successor agent, such
successor agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of Agent, and Agent shall be discharged
from its duties and obligations under the Loan Documents. After Agent's
resignation or removal hereunder as Agent, the provisions of this Section 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under the Loan Documents.
10.7 Benefits of Section. None of the provisions of this Section shall
inure to the benefit of Borrower or any Person other than Banks; consequently,
neither Borrower nor any other Person shall be entitled to rely upon, or to
raise as a defense, in any manner whatsoever, the failure of any Bank to comply
with such provisions.
39
10.8 Change in Specified Percentage. No Bank shall assign outright its
entire interest in the Revolving Credit Facility or the Revolving Commitment or
make any participation without the consent of the other Bank and Agent.
Section 11. General.
11.1 Definitions. As used in this Agreement, terms used herein with
initial capital letters shall have the following meanings, unless defined
elsewhere in this Agreement or unless the context clearly indicates otherwise:
"Advance" has the meaning ascribed to the term in Section 1.1 of this
Agreement.
"Agent" has the meaning ascribed to the term on the first page hereof.
"Agreement" means this Sixth Amended and Restated Revolving Credit
Agreement, as it may be further amended, restated, modified and/or
supplemented from time to time in the future.
"Bank" and "Banks" have the meanings ascribed to the terms on the
first page hereof.
"Benefitted Bank" has the meaning ascribed to the term in Section 4.2
hereof.
"Borrower" has the meaning ascribed to the term on the first page
hereof.
"Borrowing Date" means any Business Day specified in a notice pursuant
to Section 3.6 as a date on which Borrower requests Banks to make Advances
hereunder.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a legal holiday for commercial banks in the State of
Louisiana.
"Capitalized Leases" means capital leases and subleases, as defined in
the Financial Accounting Standards Board Statement of Financial Accounting
Standard No. 13, dated November 1976, as amended.
"Collateral" means all property described in and subject to the
Collateral Documents and any and all other property hereafter made subject
to a Lien to secure the payment and performance of the Obligations.
"Collateral Documents" means the documents listed on Exhibit "M"
annexed hereto and any and all other documents, instruments and agreements
delivered to Agent or Banks to secure the Obligations and/or any other
obligations described in this Agreement, as the foregoing may be amended,
modified or supplemented from time to time.
40
"Credit Agreement" has the meaning ascribed in the recital paragraphs
of this Agreement.
"Debt" means: (a) all obligations of Borrower or of any of
Borrower's Subsidiaries for borrowed money, (b) all obligations of Borrower
or of any of Borrower's Subsidiaries evidenced by bonds, notes, debentures
or other similar instruments, (c) all obligations of Borrower or of any of
Borrower's Subsidiaries to pay the deferred purchase price of property or
services, except trade accounts payable by Borrower or by any of Borrower's
Subsidiaries arising in the ordinary course of business which are not past
due by more than sixty (60) days unless such trade accounts payable are
being contested in good faith by appropriate proceedings, (d) all
obligations of Borrower or of any of Borrower's Subsidiaries under any
Capitalized Leases, (e) all obligations of Borrower or of any of
Borrower's Subsidiaries under guaranties, endorsements (other than for
collection or deposit in the ordinary course of business), assumptions or
other contingent obligations, in respect of, or to purchaser or otherwise
acquire, any obligation or indebtedness of Borrower or of any of
Borrower's Subsidiaries, or any other obligations, contingent or otherwise,
(f) all obligations secured by a Lien (except trade accounts payable by
Borrower or by any of Borrower's Subsidiaries arising in the ordinary
course of business which are not past due by more than sixty (60) days
unless such trade accounts payable are being contested in good faith by
appropriate proceedings secured by a vendor's lien) existing on property
owned by Borrower or by any of Borrower's Subsidiaries, whether or not the
obligations secured thereby have been assumed by Borrower or by any of
Borrower's Subsidiaries or are non-recourse to the credit of Borrower or of
any of Borrower's Subsidiaries, (g) all reimbursement obligations of
Borrower or of any of Borrower's Subsidiaries, other than performance
bonds of Borrower or of any of Borrower's Subsidiaries (whether contingent
or otherwise), relating to letters of credit, bankers' acceptances and
similar instruments, and (h) all liabilities of Borrower or of any of
Borrower's Subsidiaries in respect of unfunded vested benefits under any
Plan; provided, however, the term "Debt" shall not include money borrowed
by Borrower or by any of Borrower's Subsidiaries to pay premiums on
insurance policies obtained by Borrower or by any of Borrower's
Subsidiaries in the ordinary course of Borrower's or of any of Borrower's
Subsidiaries' business and shall further not include any type of obligation
of a Subsidiary to Borrower.
"Default Rate" has the meaning ascribed to the term in Section 3.2
hereof.
"EBIT" means, with respect to any Person for any period, consolidated
net income of such Person for such period, plus (i) interest expense for
such Person for such period, and (ii) tax expense for such period for taxes
which have been provided for by such Person for such period, to the extent
that any of the same are deducted from net revenues in determining such
Person's consolidated net income for such period.
"Environmental Laws" means any and all federal, state and local laws,
regulations, ordinances, orders and requirements pertaining to health,
safety or the environment, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
(S) 9601 et seq., the Resource Conservation and Recovery Act of 1976, 42
U.S.C. (S) 6901 et seq., the Clean Air Act, 42 U.S.C. (S) 7401 et seq., the
Clean
41
Water Act, 33 U.S.C. (S) 1251 et seq., the Toxic Substances Control Act, 15
U.S.C. (S) 2601 et seq., the Louisiana Environmental Quality Act, La. R.S.
30:2001, et seq., and all similar laws, regulations and requirements of any
governmental authority or agency having jurisdiction over Borrower, any of
its Subsidiaries or any of the property or assets of Borrower or of any of
its Subsidiaries, as such laws, regulations and requirements may be amended
or supplemented from time to time.
"Event of Default" means the occurrence of any event described in
Section 9 hereof or the occurrence of any other event which with the lapse
of time, or lapse of time and notice to Borrower would constitute an Event
of Default.
"Existing Security" means all security previously granted by Borrower
or by one of its Subsidiaries to Banks pursuant to the Collateral Documents
and other Loan Documents.
"First NBC" has the meaning ascribed to the term in the recitals to
this Agreement.
"FNBC LIBO Rate": with respect to each Interest Period pertaining to a
LIBO Rate Advance, the rate per annum equal to the rate quoted on page 16
of the Telerate screen (or such other page as may replace the LIBO page on
that service for displaying London interbank offered rates of major banks)
at approximately 11:00 a.m. New Orleans, Louisiana time (or as soon
thereafter as is practicable) on the day that is one Business Day prior to
the beginning of such Interest Period for Eurodollar deposit instruments
issued on the first day of such Interest Period for the number of months
comprised therein and in an amount comparable to the amount of the LIBO
Rate Advance to which such Interest Period applies. The FNBC LIBO Rate
determined by Agent with respect to a particular Interest Period shall be
fixed at such rate for the duration of such Interest Period.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or in
statements of the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of
the date in question. Accounting principles are applied on a "consistent
basis" when the accounting principles observed in a current period are
comparable in all material respects to those accounting principles applied
in a preceding period.
"Hazardous Substance" has the meaning specified in any applicable
Environmental Law and means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent or other material which is or
becomes listed, regulated or addressed under any Environmental Law,
including, without limitation, asbestos, petroleum and polychlorinated
biphenyls.
"Interest Expense" means with respect to any Person for any period,
interest expense for such Person for such period, determined in accordance
with GAAP.
"Interest Period" means with respect to any LIBO Rate Advance:
42
(i) initially, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such LIBO Rate Advance
and ending one, two, or three months thereafter, as selected by
Borrower in its notice to Agent of borrowing or notice of
conversion, as the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the day immediately
following the last day of the next preceding Interest Period
applicable to such LIBO Rate Advance and ending one, two or three
months thereafter, as selected by Borrower by notice to Agent not
less than one (1) Business Day prior to the last day of the then
current Interest Period with respect thereto; and
provided, that:
(x) if any Interest Period would otherwise end on a day which is
not a Business Day, that Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the
immediately preceding Business Day;
(y) any Interest Period which, with respect to a LIBO Rate
Advance under the Revolving Credit Facility, would otherwise
extend beyond the Termination Date shall end on the Termination
Date; and
(z) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar
month.
"LC Commitment" means the lesser of (a) FIVE MILLION AND NO/100
DOLLARS ($5,000,000.00) or (b) the Revolving Commitment at the time in
question.
"Letters of Credit" has the meaning ascribed to the term in Section
1.1 hereof.
"LIBO Rate" means with respect to each day during an Interest Period
for a LIBO Rate Advance, an interest rate per annum equal to the sum of (a)
one and one-half percent (1.50%) plus (b) the FNBC LIBO Rate.
"LIBO Rate Advance" means an Advance made under the Revolving Credit
Facility which bears interest at the LIBO Rate.
"Lien" means any lien, judgment, mortgage, deed of trust, security
interest, tax lien, financing statement, pledge, charge, hypothecation,
assignment, preference, priority or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law
43
or otherwise; provided, however, that the term "Lien" shall exclude any
statutory mechanic's or laborer's lien arising in the ordinary course of
the business of Borrower and its Subsidiaries which is cancelled or bonded
within sixty (60) days of its recordation.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Collateral Documents, and any and all other documents, instruments and
agreements executed in connection with the Advances, as the foregoing may
be modified, supplemented and/or amended from time to time.
"Net Worth" means the sum of the common stock, additional paid-in
capital and retained earnings accounts of Borrower and its Subsidiaries on
a consolidated basis, as shown in conformity with GAAP on its balance sheet
at the time of such determination, less the amount of any treasury stock
shown thereon and less the amount of any intangible assets (such as
patents, trademarks, copyrights or goodwill) shown thereon.
"New Collateral Documents" has the meaning ascribed to the term in
Section 7.4 of this Agreement.
"Notes" has the meaning ascribed to the term in Section 2.1 of this
Agreement.
"Obligations" means all obligations, indebtedness and liabilities of
Borrower to Agent and/or either or both of Banks, now existing or hereafter
arising, whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, including,
without limitation, the obligations, indebtedness, and liabilities of
Borrower under this Agreement, the Notes and the other Loan Documents, and
all interest accruing thereon and all attorneys' fees and other expenses
incurred in the enforcement or collection thereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Permitted Liens" has the meaning ascribed to the term in Section 6.11
hereof.
"Person" means any individual, corporation, business, trust,
association, company, partnership, joint venture, governmental authority or
other entity.
"Plan" has the meaning ascribed to the term in Section 5.10 hereof.
"Prime Rate" has the meaning ascribed to the term in Section 3.3
hereof.
"Prime Rate Advance" means an Advance made under the Revolving Credit
Facility which bears interest at the Prime Rate.
"Prior Notes" means, collectively, the Revolving Notes (as defined in
the Revised Credit Agreement) executed by Borrower in favor of Banks
pursuant to the Revised Credit Agreement or any other notes evidencing the
Revolving Credit Facility which were executed
44
by Borrower in favor of Banks pursuant to any predecessor agreement among
Borrower and Banks.
"Real Property" means the property described on Exhibit "N" hereto,
whether owned by Borrower or by one of its Subsidiaries.
"Revised Credit Agreement" has the meaning ascribed in the recital
paragraphs of this Agreement.
"Revolving Commitment" means TWENTY MILLION AND NO/100 DOLLARS
($20,000,000.00), as such amount may be reduced by Borrower in accordance
with Section 4.4 of this Agreement.
"Revolving Credit Facility" has the meaning ascribed to the term in
Section 1.1 of this Agreement.
"Solid Waste" has the meaning specified in any applicable
Environmental Law.
"Subsidiary" means, as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person.
"Termination Date" means December 31, 1999.
"UCC" means the Uniform Commercial Code, as in effect from time to
time in each state where any of the Collateral is located or otherwise has
a situs; provided, however, if the Uniform Commercial Code in no particular
state is ascertainable or applicable, UCC shall mean the Uniform Commercial
Code, as in effect from time to time in the State of Louisiana.
"Unused Commitment" has the meaning ascribed to the term in Section
1.1 hereof.
"Whitney" has the meaning ascribed to the term in the recitals to this
Agreement.
All definitions contained in this Agreement are equally applicable to the
singular and plural forms of the terms defined. The words "hereof," "herein"
and "hereunder" and words of similar import referring to this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise specified, all Section references pertain to this Agreement.
45
11.2 Financial Terms. Unless otherwise defined or the context otherwise
requires, all financial and accounting terms shall be defined under GAAP.
11.3 Delay. No delay on the part of Banks, Agent or any holder of any one
or more of the Notes, in the exercise of any power or right shall operate as a
waiver thereof, nor shall any single or partial exercise of any power or right
preclude other or further exercise thereof, or the exercise of any other power
or right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
11.4 Notices. All notices, statements, requests and demands given to or
made under any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given or made when deposited in the mail, postage
pre-paid, registered or certified mail return receipt requested addressed:
If to Banks:
First National Bank of Commerce
000 Xx. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Mr. J. Xxxxxxx Xxxxx, Xx.
Senior Vice President
and
46
Whitney National Bank
000 Xx. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx
Senior Vice President
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Jones, Walker, Waechter, Poitevent,
Carrere & Xxxxxxx
Place St. Xxxxxxx
000 Xx. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
If to Agent:
First National Bank of Commerce
000 Xx. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Mr. J. Xxxxxxx Xxxxx, Xx.
Senior Vice President
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Jones, Walker, Waechter, Poitevent,
Carrere & Xxxxxxx
Place St. Xxxxxxx
000 Xx. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
If to Borrower:
Gulf Island Fabrication, Inc.
000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, President
or
Gulf Island Fabrication, Inc.
X.X. Xxx 000
Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, President
47
With respect to notices to Borrower, such notices shall, if sent by
overnight courier or other means requiring a street address, be sent to the
first address provided above. If such notices are sent by means not requiring a
street address, such notices shall be sent to the second address provided above.
11.5 Expenses. Whether or not the Advances are made, Borrower agrees to
reimburse Banks and Agent, upon demand, for all expenses (including reasonable
attorneys' fees and legal expenses incurred by Banks and/or Agent) incurred by
Banks and/or Agent in the preparation, negotiation and/or execution of the Loan
Documents, and in enforcing the obligations of Borrower hereunder or under any
of the other Loan Documents, and to pay, and save Banks and Agent harm less
from all liability for, any stamp or other taxes which may be payable with
respect to the execution or delivery of this Agreement, the execution, delivery
or issuance of the Notes, and/or the execution, delivery and recordation of the
other Loan Documents, which obligations of Borrower shall survive any
termination of this Agreement.
11.6 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
11.7 Counterparts. This Agreement may be executed in as many counterparts
as may be deemed necessary or convenient, and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
instrument.
11.8 Law. The Loan Documents, and each of them, shall be contracts made
under and governed by the laws of the State of Louisiana.
48
11.9 Successors. This Agreement shall be binding upon Borrower, Banks,
Agent and their respective successors and assigns, and shall inure to the
benefit of Borrower, Banks and the succes sors and assigns of Banks and Agent.
Borrower shall not assign its rights, obligations or duties hereunder or under
any of the Loan Documents without the prior written consent of Banks. Banks
shall give Borrower written notice of any assignment of its interests hereunder
to any other Person, upon which assignment Borrower shall perform all of its
respective obligations under the Loan Documents in favor of Banks' assignee(s)
as though such assignee(s) were originally a party or parties to this Agreement.
11.10 Amendments. No amendment or waiver of any provision of this Agreement
or consent to any departure therefrom by Borrower, Banks or Agent shall be
effective unless the same shall be in writing and signed by Borrower, Banks and
Agent and, in the case of a waiver or consent, such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
11.11 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes any and all prior agreements with respect to
the transactions contemplated hereby.
11.12 Conflicts. This Agreement is in addition to and supplements the
provisions of the other Loan Documents. To the extent that the provisions of
this Agreement are in conflict with, and not merely in addition to, the
provisions of the other Collateral Documents, the provisions of this Agreement
shall govern.
49
IN WITNESS WHEREOF, the parties hereto and intervenors herein have caused
this Agreement to be executed by their respective officers thereunto duly
authorized effective as of the date first written above.
BORROWER:
GULF ISLAND FABRICATION, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx, President
BANKS:
FIRST NATIONAL BANK OF COMMERCE
By: /s/ J. Xxxxxxx Xxxxx, Xx.
-----------------------------------
J. Xxxxxxx Xxxxx, Xx.,
Senior Vice President
WHITNEY NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx,
Senior Vice President
AGENT:
FIRST NATIONAL BANK OF COMMERCE
By: /s/ J. Xxxxxxx Xxxxx, Xx.
-----------------------------------
J. Xxxxxxx Xxxxx, Xx.,
Senior Vice President
50
INTERVENTION
------------
NOW INTO THESE PRESENTS COMES Dolphin Services, Inc., which hereby
reaffirms and ratifies its obligations under those Collateral Documents (as
listed on Exhibit "M" hereto) to which it is a party, whether directly or as
successor by merger to Dolphin Sales & Rentals, Inc.
DOLPHIN SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Xxxxx X. Xxxxxxx, President
51
EXHIBITS
--------
A. First NBC's form of Application for Stand-By Letter of Credit
B. $10,000,000.00 Revolving Promissory Note made payable to the order of First
NBC
C. $10,000,000.00 Revolving Promissory Note made payable to the order of
Xxxxxxx
X. Third Amendment to Collateral Pledge Agreement and Receipt (Possessory
Collateral Security Agreement)(Borrower)
E. Third Amendment to Collateral Assignment of Leases and Rents (Borrower)
F. Third Amendment to Commercial Security Agreement (Borrower)
G. First Amendment to Pledge of Collateral Mortgage Note (Dolphin Services)
H. First Amendment to Pledge of Collateral Mortgage Note (Dolphin Services, as
successor by merger to Dolphin Sales)
I. First Amendment to Commercial Security Agreement (Dolphin Services)
J. First Amendment to Commercial Pledge and Security Agreement
K. Incumbency Certificates
L. Borrower's Default and Warranty Certificate
M. List of Collateral Documents
N. Description of Real Property
SCHEDULES
---------
1. List of Borrower's Litigation
52
*****************************
All exhibits and schedules have
been omitted and will be furnished
to the Commission's staff upon request
*****************************
53
