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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): OCTOBER 31, 1997
HALTER MARINE GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-12159 75-2656828
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
13085 INDUSTRIAL SEAWAY ROAD,
GULFPORT, MISSISSIPPI 39503
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 601/896-0029
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ITEM 5. OTHER EVENTS
NEW CREDIT FACILITY
The Halter Marine Group, Inc. (the "Company") replaced its existing
senior credit facility with a new senior credit facility (the "New Credit
Facility") effective as of October 31, 1997. The Company is a party to the
New Credit Facility with a group of banks for whom Whitney National Bank,
BankBoston, N.A. and The First National Bank of Chicago will act as co-
agents. This summary does not purport to be complete and is subject to the
detailed provisions of the loan agreements and various related documents
entered into in connection with the New Credit Facility. The loan
agreement is attached hereto as an exhibit.
The New Credit Facility provides for a revolving credit facility of
$150 million, with a $60 million sublimit for letters of credit.
Borrowings under the New Credit Facility are unsecured but are guaranteed
by the Company's subsidiaries. Borrowings under the New Credit Facility
are available for working capital and general corporate purposes, including
permitted acquisitions. All amounts outstanding under the New Credit
Facility are due on September 30, 2002.
Borrowings under the New Credit Facility bear interest, at the option
of the Company, at either (i) LIBOR plus 0.75% to 1.75% or (ii) the Base
Rate (as defined therein). The range of rates over LIBOR is set quarterly
based on the Company's ratio of funded debt (as defined therein) to EBITDA
(as defined therein). The Company is required to pay certain fees in
connection with the New Credit Facility, including a commitment fee ranging
from 0.2% to 0.5% per year (depending on the Company's ratio of funded debt
to EBITDA) on the unused portion of the revolving credit facility.
The New Credit Facility requires that the Company meet certain
consolidated net worth requirements. In addition, the Company is required
to maintain certain financial ratios, including an interest coverage ratio
(as defined therein), a minimum fixed charge coverage ratio (as defined
therein) and a maximum consolidated funded debt to EBITDA ratio (as defined
therein).
The New Credit Facility contains customary representations and
warranties and requires compliance by the Company with certain other
covenants, including, among other things, covenants limiting (i) payment of
dividends and other distributions, (ii) consolidations and mergers, (iii)
acquisitions and capital expenditures and (iv) transactions with
affiliates. The New Credit Facility contains customary events of default,
including, among other things, (a) the failure to pay interest, principal
or fees when due, (b) the material inaccuracy of representations or
warranties, (c) insolvency, bankruptcy events or certain material judgments
and (d) a change of control of the Company.
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COMPLETION OF ACQUISITIONS
On November 11, 1997 the Company issued a press release (the "Press
Release") announcing the completion of its acquisition of three companies that
have formed the basis of its new Engineered Products Group. For additional
information, reference is made to the Press Release, a copy of which is attached
as an exhibit hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit 10.1 - Revolving Credit Agreement effective October 31, 1997
by and among Halter Marine Group, Inc., as Borrower, Whitney National
Bank, as Administrative Agent, BankBoston, N.A., as Syndication Agent,
The First National Bank of Chicago, as Documentation Agent and the
Banks named therein, as Banks.
Exhibit 10.2 - Press Release of Registrant dated November 11, 1997.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HALTER MARINE GROUP, INC.
Date: November 12, 1997 By: /s/ Keith L. Voigts
------------------------------------
Keith L. Voigts
Senior Vice President
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EXHIBIT 10.1
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REVOLVING CREDIT AGREEMENT
Effective October 31, 1997
BY AND AMONG
HALTER MARINE GROUP, INC.
as Borrower,
WHITNEY NATIONAL BANK,
as Administrative Agent
BANKBOSTON, N.A.,
as Syndication Agent
THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent
and
THE BANKS NAMED HEREIN,
as Banks,
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TABLE OF CONTENTS
Page
SECTION 1. TERM............................................................ 1
SECTION 2. DEFINITIONS..................................................... 1
2.1 Definitions..................................................... 1
2.2 Accounting Terms and Determinations............................. 23
SECTION 3. THE REVOLVING CREDIT LOANS...................................... 23
3.1 Revolving Credit Commitments.................................... 23
3.2 The Swing Line.................................................. 24
3.3 Method of Borrowing............................................. 24
3.4 Revolving Credit Notes.......................................... 26
3.5 Termination or Reduction of Commitments......................... 26
3.6 Maturity........................................................ 26
3.7 Special Swing Loan Provisions................................... 27
SECTION 4. LETTERS OF CREDIT............................................... 28
4.1 Letter of Credit Commitment..................................... 28
4.2 Participation by Other Banks.................................... 30
4.3 Disbursements................................................... 31
4.4 Reimbursement................................................... 31
4.5 Replacement or Collateralization of Letters of Credit........... 31
4.6 Nature of Reimbursement Obligations............................. 32
4.7 Indemnity....................................................... 33
SECTION 5. GENERAL PROVISIONS FOR ALL LOANS................................ 33
5.1 Duration of Interest Periods and Selection of
Interest Rates.................................................. 33
5.2 Interest Rates; Interest Payments............................... 34
5.3 Fees............................................................ 35
5.4 Early Payments.................................................. 35
5.5 General Provisions as to Payments............................... 36
5.6 Funding Losses.................................................. 36
5.7 Basis for Determining Interest Rate Inadequate or
Unfair..........................................................
5.8 Illegality...................................................... 37
5.9 Increased Cost.................................................. 38
5.10 Base Rate Loans Substituted for Affected LIBOR Loans............ 39
5.11 Capital Adequacy................................................ 39
5.12 Survival of Provisions.......................................... 39
5.13 Discretion of Bank as to Manner of Funding...................... 39
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5.14 Computation of Interest......................................... 40
SECTION 6. PRECONDITIONS TO LOANS AND LETTERS OF CREDIT.................... 40
6.1 Initial Revolving Credit Loan, Initial Swing Loan or
Letter of Credit................................................ 40
6.2 All Loans....................................................... 41
6.3 Letters of Credit............................................... 42
SECTION 7. REPRESENTATIONS AND WARRANTIES.................................. 43
7.1 Corporate Existence and Power................................... 43
7.2 Corporate Authorization......................................... 43
7.3 Binding Effect.................................................. 43
7.4 Financial Statements............................................ 44
7.5 Litigation...................................................... 44
7.6 ERISA........................................................... 44
7.7 Tax Payment..................................................... 45
7.8 Subsidiaries.................................................... 45
7.9 Compliance With Other Instruments; None Burdensome.............. 45
7.10 Other Debt, Guarantees, Capitalized Leases...................... 46
7.11 Labor Matters................................................... 46
7.12 Title to Property............................................... 46
7.13 Regulation U.................................................... 46
7.14 Investment Company Act of 1940: Public Utility
Holding Company Act of 1935..................................... 47
7.15 Patents, Licenses, Trademarks, Etc.............................. 47
7.16 Environmental and Safety and Health Matters..................... 47
7.17 Investments..................................................... 47
7.18 No Default...................................................... 48
7.19 No Burdensome Restrictions...................................... 48
7.20 Government Contracts............................................ 48
7.21 Disclosure...................................................... 48
SECTION 8. COVENANTS........................................................ 49
8.1 Affirmative Covenants of Borrower................................ 49
(a) Information................................................ 49
(b) Payment of Indebtedness.................................... 51
(c) Maintenance of Books and Records; Consultations
and Inspections............................................ 51
(d) Payment of Taxes........................................... 51
(e) Payment of Claims.......................................... 52
(f) Corporate Existence........................................ 52
(g) Maintenance of Property.................................... 52
(h) Compliance with Laws, Regulations, Etc..................... 52
(i) Environmental Matters...................................... 52
(j) ERISA Compliance........................................... 53
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(k) Notices.................................................... 54
(l) Insurance.................................................. 55
(m) Financial Covenants........................................ 55
(i) Minimum Consolidated Interest Coverage................ 55
(ii) Minimum Consolidated Debt Service Coverage............ 55
(iii)Maximum Consolidated Funded Debt to
Consolidated EBITDA................................... 55
(iv) Maximum Consolidated Funded Senior Debt to EBITDA..... 56
(v) Minimum Consolidated Net Worth........................ 56
(n) Further Assurances......................................... 56
(o) Accountant................................................. 56
(p) Subsidiaries............................................... 56
(q) Agreements................................................. 57
(r) Offshore Marine Indemnity Company.......................... 57
(s) Bonding Capacity........................................... 57
8.2 Negative Covenants of Borrower.................................. 57
(a) Limitation on Indebtedness................................. 57
(b) Limitation on Liens, No Negative Pledge in favor of
any other Person........................................... 59
(c) Consolidation, Merger, Sale of Assets, Dissolution,
Etc........................................................ 59
(d) Sale and Leaseback Transactions............................ 59
(e) Sale or Discount of Accounts............................... 59
(f) Transactions with Affiliates............................... 59
(g) Changes in Nature of Business.............................. 60
(h) Fiscal Year................................................ 60
(i) Distributions.............................................. 60
(j) Pension Plans.............................................. 60
(k) Restricted Investments..................................... 60
(l) Ownership of Subsidiaries.................................. 60
(m) Capital Expenditures....................................... 60
(n) Change in Control.......................................... 60
(o) Operating Lease Obligations................................ 61
(p) Payment of Subordinated Notes.............................. 61
(q) Modification of Subordinated Notes......................... 61
8.3 Use of Proceeds................................................. 61
SECTION 9. EVENTS OF DEFAULT............................................... 61
SECTION 10. AGENT........................................................... 64
10.1 Appointment..................................................... 64
10.2 Powers.......................................................... 65
10.3 General Immunity................................................ 65
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10.4 No Responsibility for Loans, Recitals, etc...................... 65
10.5 Right to Indemnity.............................................. 65
10.6 Action Upon Instructions of Required Banks...................... 66
10.7 Reliance on Documents; Employment of Agents and
Counsel......................................................... 66
10.8 May Treat Payee as Owner........................................ 66
10.9 Agent's Reimbursement........................................... 67
10.10 Rights as a Bank................................................ 67
10.11 Independent Credit Decision..................................... 67
10.12 Resignation of Agent............................................ 67
10.13 Removal of Agent................................................ 67
10.14 Duration of Agency.............................................. 68
10.15 Documentation Agent............................................. 68
10.16 Syndication Agent............................................... 68
SECTION 11. GENERAL......................................................... 68
11.1 No Waiver....................................................... 68
11.2 Right of Setoff................................................. 68
11.3 Cost and Expenses............................................... 69
11.4 Environmental Indemnity......................................... 69
11.5 General Indemnity............................................... 70
11.6 Authority to Act................................................ 70
11.7 Notices......................................................... 71
11.8 Consent to Jurisdiction......................................... 71
11.9 Sharing of Payments............................................. 71
11.10 Governing Law................................................... 72
11.11 Amendments and Waivers.......................................... 72
11.12 References; Headings for Convenience............................ 72
11.13 Successors and Assigns, Participations.......................... 73
11.14 Assignment Agreements........................................... 73
11.15 Binding Agreement............................................... 74
11.16 No Oral Agreements, Entire Agreement............................ 74
11.17 Severability.................................................... 75
11.18 Counterparts.................................................... 75
11.19 Resurrection of Borrower's Obligations.......................... 75
11.20 Independence of Covenants....................................... 75
11.21 Confidentiality................................................. 75
11.22 Certain Indemnification Procedures.............................. 76
11.23 Conflicting Provisions.......................................... 76
iv
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SCHEDULES
2.1(a) Liens in Existence as of the Effective Date
4.1(a) List of Existing Letters of Credit
7.8 List of Subsidiaries
7.10 Debts and Guarantees of Borrower or any Subsidiary
7.11 Wage Claims Unpaid and Unaccrued
7.12 List of Shipyards
7.16 Environmental and OSHA Matters
7.17 Restricted Investments Currently Owned by Borrower or any Subsidiary
EXHIBITS
A Revolving Credit Note
B Swing Line Note
C Continuing Guarantee
D Form of Standby Letter of Credit Application
E Letter of Credit Request
G Letter of Warranty and Representation
H Assignment and Assumption Agreement
I Form of Stock Pledge Agreement
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "Agreement") is effective the 31st
day of October, 1997, and is made and entered into by and among HALTER MARINE
GROUP, INC., a Delaware corporation ("Borrower") and the undersigned Banks,
including Whitney National Bank in its capacity as a Bank hereunder and as Agent
for the Banks under this Agreement, BankBoston, N.A. in its capacity as a Bank
hereunder and as Syndication Agent for the Banks under this Agreement and The
First National Bank of Chicago in its capacity as a Bank hereunder and as
Documentation Agent for the Banks under this Agreement.
WITNESSETH:
WHEREAS, the Borrower has requested the Banks (as hereinafter defined) to
make revolving loans to the Borrower in an aggregate principal amount not
exceeding One Hundred Fifty Million Dollars ($150,000,000.00) and a swing line
available thereunder from Whitney in the maximum principal amount of Five
Million Dollars ($5,000,000.00);
WHEREAS, the Borrower has requested that the Banks issue letters of credit
for the account of the Borrower and its Subsidiaries from time to time during
the Letter of Credit Period as part of the aggregate principal amount of the
commitment of the Banks to Borrower hereunder, but such letters of credit shall
not in any event exceed in the aggregate an available amount of Sixty Million
Dollars ($60,000,000.00) at any one time outstanding; and
WHEREAS, the Banks have severally agreed, upon the terms, provisions and
conditions set forth herein, to lend such amounts to, and take participations in
such letters of credit for the account of Borrower.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby mutually promise and agree as follows:
SECTION l. TERM.
The "Term" of this Agreement shall commence on the effective date hereof
and shall end on September 30, 2002, unless extended from time to time with the
unanimous consent of the Banks as provided in Section 3.6 hereof and unless
earlier terminated pursuant to the terms hereof.
SECTION 2. DEFINITIONS.
2.1 Definitions. In addition to the terms defined elsewhere in this
Agreement or in any Exhibit or Schedule hereto, when used in this Agreement, the
following terms shall have
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the following meanings (such meanings shall be equally applicable to the
singular and plural forms of the terms used, as the context requires):
Acquisition shall mean the purchase, merger with or other acquisition by
Borrower or any Subsidiary, after the date hereof, of (i) the stock or other
equity interest (in whole or in part) in any entity, which, after such
Acquisition will be a Subsidiary and will be primarily engaged in the Company
Business, (ii) all or substantially all of the assets of any entity which will
be used in the Company Business, or (iii) a shipyard, ship building facility or
any other facility consistent with the Company Business.
Affiliate shall mean any Person (a) which directly or indirectly through
one or more intermediaries controls, is controlled by or is under common control
of or with Borrower or any Subsidiary, (b) which beneficially owns or holds or
has the power to direct the voting power of twenty percent (20%) or more of any
class of capital stock of Borrower or any Subsidiary, (c) which has twenty
percent (20%) or more of any class of its capital stock (or, in the case of a
Person which is not a corporation, twenty percent (20%) or more of its equity
interest) beneficially owned or held, directly or indirectly, by Borrower or any
Subsidiary, or (d) who is a director, officer or employee of Borrower or any
Subsidiary. For purposes of this definition, "control" shall mean the power to
direct the management and policies of a Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
Agent shall mean Whitney National Bank in its capacity as administrative
agent for the Banks hereunder and its successors in such capacity.
Applicable Margin shall mean, the rate of interest per annum shown in the
applicable column below:
<TABLE>
<CAPTION>
Level I Level II Level III Level IV Level V
<S> <C> <C> <C> <C> <C>
If Ratio of Consolidated greater than 4.25 less than 4.25 less than 3.75 less than 3.25 less than 2.75
Total Debt as of the end greater than 3.75 less than 3.25 greater than 2.75
of the immediately
preceding fiscal quarter
to Consolidated EBITDA
for the immediately
preceding four (4) fiscal
quarters is
Applicable Margin 1.750% 1.500% 1.250% 1.000% 0.750%
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Commitment Fee .500% .375% .250% .250% .200%
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</TABLE>
The Applicable Margin shall commence at Level IV and shall be adjusted on the
first day of each March, June, September and December (or, if such day is not a
Business Day, on the next succeeding Business Day), based on the ratio of
Consolidated Total Debt as of the end of the immediately preceding fiscal
quarter to Consolidated EBITDA for the immediately preceding four (4) fiscal
quarters. If Borrower should fail to deliver the certificate required by
Section 8.1(a)(vi)
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hereof within the time period set forth in Section 8.1(a)(vi), then, until
Borrower shall have provided such certificate, it shall be presumed that the
ratio of Consolidated Total Debt as of the end of the immediately preceding
fiscal quarter to Consolidated EBITDA for the immediately preceding four (4)
fiscal quarters was greater than 4.25 (and, from the date of the delivery of
such certificate, the Applicable Margin shall be determined by reference to such
certificate).
Assignment Agreement shall mean any of those certain Assignment Agreements
described in Section 11.14 herein.
Bank(s) shall mean each bank listed on the signature pages hereof, and its
successors and assigns.
Base Rate shall mean the interest rate per annum, determined on any day,
equal to the greater of: (i) the Prime Rate then in effect or (ii) the sum of
the Fed Funds Rate then in effect, plus One-Half of One Percent (.50%).
Base Rate Loan shall mean any Loan bearing interest at the Base Rate.
Board of Directors shall mean, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such Person.
Borrower's Obligations shall mean, without duplication, any and all present
and future indebtedness (including, without limitation, principal, interest,
fees, collection costs and expenses, attorneys' fees and other amounts),
liabilities and obligations (including, without limitation, reimbursement
obligations with respect to Letters of Credit issued by any one or more Banks
under this Agreement for the account of Borrower or any Subsidiary) of Borrower
to the Agent and/or any one or more of the Banks evidenced by or arising under
this Agreement, the Notes, the Letter of Credit Application(s), and/or any of
the other Transaction Documents.
Business Day shall mean (a) any day except a Saturday, Sunday or legal
holiday observed by the Agent or by commercial banks in New Orleans, Louisiana;
and (b) relative to the making, continuing, prepaying or repaying of any LIBOR
Loans, any day on which dealings in U.S. Dollars are carried on in the London
interbank market.
Capital Expenditure shall mean any expenditure which, as determined in
accordance with GAAP, is required to be capitalized on the balance sheet of the
Person making the same, but excluding (i) expenditures for the restoration or
replacement of fixed assets to the extent funded out of the proceeds of an
insurance policy and (ii) Permitted Acquisitions.
Capitalized Lease shall mean any lease of Property, whether real and/or
personal, by a Person as lessee which as determined in accordance with GAAP is
required to be capitalized on the balance sheet of such Person.
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Capitalized Lease Obligations of any Person shall mean, as of the date of
any determination thereof, the amount at which the aggregate rental obligations
due and to become due under all Capitalized Leases under which such Person is a
lessee would be reflected as a liability on a balance sheet of such Person as
determined in accordance with GAAP.
CERCLA shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. (S)(S)9601 et seq., and as the same may
from time to time be further amended, and shall include any and all regulations
issued pursuant thereto.
Change in Control shall mean (i) an event or series of events as a result
of which any "person" or "group" (as such terms are used in Sections 13(d)(3)
and 14(d) of the Exchange Act) (excluding Borrower or any wholly owned
subsidiary thereof) is or becomes, directly or indirectly, the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, whether or
not applicable) of more than 50% of the combined voting power of the then
outstanding securities entitled to vote generally in elections of directors,
managers or trustees, as applicable, of Borrower or any successor entity
("Voting Stock"), (ii) the completion of any consolidation with or merger of
Borrower into any other Person, or sale, conveyance, transfer or lease by
Borrower of all or substantially all of its assets to any Person, or any merger
of any other Person into Borrower in a single transaction or series of related
transactions, and, in the case of any such transaction or series of related
transactions, the outstanding common stock of Borrower is changed or exchanged
as a result, unless the stockholders of the Borrower immediately before such
transaction own, directly or indirectly, immediately following such transaction,
at least a majority of the combined voting power of the outstanding voting
securities of the Person resulting from such transaction in substantially the
same proportion as their ownership of the Voting Stock immediately before such
transaction, (iii) such time as the Continuing Directors (as defined) do not
constitute a majority of the Board of Directors of Borrower (or, if applicable,
a successor corporation to Borrower) or (iv) a Change of Control as such term is
defined in the Subordinated Note Indenture.
Code shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time. References to sections of the Code
shall be construed to also refer to any successor sections.
Commitment shall mean, with respect to each Bank, the sum of such Bank's
Revolving Credit Commitment, and its Swing Line Commitment, if any.
Company Business shall mean (i) the design, construction, repair,
conversion and sale of ocean-going and inland vessels, (ii) the design,
construction, repair, conversion and sale of drilling rigs, barges and vessels,
(iii) the design, production and sale of any component of or accessory to any
such ocean-going or inland vessel or drilling rig, barge or vessel, (iv) any
other similar type of design, production, construction, conversion,
manufacturing or sale, (v) any financing related to the sale of any of the
Borrower's or any Subsidiary's products, and (vi) any other activities ancillary
to the foregoing.
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Consolidated Debt Service Coverage Ratio shall mean:
(a) as of any date for which it is being determined on or before March 31,
1999, the ratio of (a) Consolidated EBITDA for the immediately preceding four
(4) fiscal quarters (including any fiscal quarter ending on such date) minus
Capital Expenditures of Borrower or any Subsidiary during the immediately
preceding four (4) fiscal quarters (including any fiscal quarter ending on such
date) plus Non-Maintenance Capital Expenditures of Borrower or any Subsidiary
during the immediately preceding four (4) fiscal quarters (including any fiscal
quarter ending on such date) minus all federal, state, local and/or foreign
income taxes paid by Borrower or any Subsidiary payable with respect of the
immediately preceding four (4) fiscal quarters (including any fiscal quarter
ending on such date), to (b) Consolidated Interest Expense for the immediately
preceding four (4) fiscal quarters (including any fiscal quarter ending on such
date) plus Consolidated Scheduled Principal Payments for the immediately
preceding four (4) fiscal quarters (including any fiscal quarter ending on such
date)plus the principal portion of Capitalized Lease Obligations payable by
Borrower or any Subsidiary in respect of the immediately preceding four (4)
fiscal quarters (including any fiscal quarter ending on such date) or
(b) as of any date for which it is being determined after March 31, 1999,
the ratio of (a) Consolidated EBITDA for the immediately preceding four (4)
fiscal quarters (including any fiscal quarter ending on such date) minus Capital
Expenditures of Borrower or any Subsidiary during the immediately preceding four
(4) fiscal quarters (including any fiscal quarter ending on such date) minus all
federal, state, local and/or foreign income taxes paid by Borrower or any
Subsidiary payable with respect of the immediately preceding four (4) fiscal
quarters (including any fiscal quarter ending on such date), to (b) Consolidated
Interest Expense for the immediately preceding four (4) fiscal quarters
(including any fiscal quarter ending on such date) plus Consolidated Scheduled
Principal Payments for the immediately preceding four (4) fiscal quarters
(including any fiscal quarter ending on such date) plus the principal portion of
Capitalized Lease Obligations payable by Borrower or any Subsidiary in respect
of the immediately preceding four (4) fiscal quarters (including any fiscal
quarter ending on such date).
Consolidated EBIT shall mean, for the period in question, the sum of (a)
Consolidated Net Income during such period plus (b) to the extent deducted in
determining Consolidated Net Income, the sum of (i) Consolidated Interest
Expense during such period, plus (ii) all provisions for any federal, state,
local and/or foreign income taxes made by Borrower or any Subsidiary during such
period (whether paid or deferred), all determined on a consolidated basis as
determined in accordance with GAAP plus (c) to the extent not already included
in Consolidated Net Income, the sum of (i) the earnings before interest expense,
extraordinary items and taxes during such period of any Subsidiaries acquired
during such period as determined in accordance with GAAP plus (ii) any
additional amount requested by Borrower and approved by the Required Banks
appropriate to reflect any additional earnings any Subsidiaries acquired during
such period would have recognized if they had been a Subsidiary for such period
minus to the extent not already included in Consolidated Interest Expense, the
estimated interest expense, in an amount approved by the Required Banks, that
Borrower or any Subsidiary would have incurred during such period had any
Indebtedness that
5
<PAGE>
Borrower or any Subsidiary incurred in connection with the acquisition of any
Subsidiaries during such period been in existence for such period.
Consolidated EBITDA shall mean, for any period, the sum of the following:
(a) Consolidated Net Income during such period plus (b) to the extent deducted
in determining Consolidated Net Income, the sum of (i) Consolidated Interest
Expense during such period, plus (ii) all provisions for any federal, state,
local and/or foreign income taxes made by Borrower or any Subsidiary during such
period (whether paid or deferred) plus (iii) all depreciation and amortization
expenses and all other non-cash items of Borrower or any Subsidiary during such
period, all determined on a consolidated basis as determined in accordance with
GAAP plus (c) to the extent not already included in Consolidated Net Income, the
sum of (i) the earnings before depreciation, amortization, interest expense,
extraordinary items and taxes during such period of any Subsidiaries acquired
during such period as determined in accordance with GAAP plus (ii) any
additional amount requested by Borrower and approved by the Required Banks
appropriate to reflect any additional earnings any Subsidiaries acquired during
such period would have recognized if they had been a Subsidiary for such period
minus to the extent not already included in Consolidated Interest Expense, the
estimated interest expense, in an amount approved by the Required Banks, that
Borrower or any Subsidiary would have incurred during such period had any
Indebtedness that Borrower or any Subsidiary incurred in connection with the
acquisition of any Subsidiaries during such period been in existence for such
period.
Consolidated Funded Debt shall mean, as of any date of determination
thereof, (a) the sum of the following, without duplication: (i) all Indebtedness
of Borrower or any Subsidiary, other than Borrower's Obligations, which matures
in not less than twelve months from the date of incurrence, whether or not
represented by bonds, debentures, notes or other securities, for the repayment
of money borrowed or for the payment of the purchase price of property or assets
purchased, unless secured by a Letter of Credit issued by an Issuer pursuant to
this Agreement plus (ii) all Borrower's Obligations plus (iii) all Indebtedness
of Borrower or any Subsidiary, which matures in not less than twelve months from
the date of incurrence, secured by any mortgage, pledge, security interest or
lien existing on property owned by Borrower or any Subsidiary, whether or not
the Indebtedness secured thereby shall have been assumed by the owner thereof
plus (iv) all Capitalized Lease Obligations of Borrower or any Subsidiary plus
(v) all obligations of Borrower or any Subsidiary, contingent or otherwise,
relative to the face amount of all letters of credit (as may be reduced pursuant
to their terms), whether or not drawn minus (b) if (and only if) Borrower does
not have any Loan (other than a Swing Loan) outstanding, all Excess Cash and
Cash Equivalents of Borrower or any Subsidiary.
Consolidated Funded Senior Debt shall mean, as of any date of determination
thereof, all Consolidated Funded Debt other than the Subordinated Notes.
Consolidated Interest Coverage Ratio shall mean, as of any date for which
it is being determined, the ratio of Consolidated EBIT for the immediately
preceding four (4) fiscal quarters (including any fiscal quarter ending on such
date) to Consolidated Interest Expense for the immediately preceding four (4)
fiscal quarters (including any fiscal quarter ending on such date).
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Consolidated Interest Expense shall mean, for the period in question,
without duplication, all gross interest expense of Borrower and its Subsidiaries
(including, without limitation, all commissions, discounts and/or related
amortization and other fees and charges owed by Borrower and its Subsidiaries
with respect to letters of credit and bankers' acceptance financing, the net
costs associated with interest swap obligations of Borrower and its
Subsidiaries, capitalized interest expense, the interest portion of Capitalized
Lease Obligations and the interest portion of any deferred payment obligation)
during such period, all determined on a consolidated basis as determined in
accordance with GAAP.
Consolidated Net Income and Consolidated Net Loss shall mean, for the
period in question, the after-tax net income or loss of Borrower and its
Subsidiaries during such period, determined on a consolidated basis as
determined in accordance with GAAP, but excluding in any event the following:
(i) any net gain or net loss (net of expenses and taxes applicable
thereto) for such period resulting from the sale, transfer or other
disposition of fixed or capital assets as determined by GAAP;
(ii) any gains or losses resulting from any reappraisal, revaluation
or write-up or write-down of assets;
(iii) any equity of Borrower or any Subsidiary in the undistributed
earnings of any corporation which is not a Subsidiary and is accounted for
on the equity method as determined in accordance with GAAP;
(iv) any undistributed earnings of any Subsidiary to the extent that
the declaration or payment of dividends or other distributions by such
Subsidiary is not at the time permitted by the terms of its charter
documents or any agreement, document, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary
(other than this Agreement);
(v) any gains or losses from the acquisition or disposition of
Investments;
(vi) any gains from the retirement or extinguishment of Debt;
(vii) any gains on collections from insurance policies or settlements
to the extent that such gains exceed premiums paid or other expenses
incurred during the fiscal period in which the gain occurs with respect to
such insurance policies;
(viii) any gains or losses during such period from any change in
accounting principles, from any discontinued operations or the disposition
thereof or from any prior period adjustments; and
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(ix) any extraordinary gains and/or losses;
all determined in accordance with GAAP. If the preceding calculation results in
a number less than zero such amount shall be considered a Consolidated Net Loss.
Consolidated Net Worth shall mean, at a particular date, all amounts which
would be included under shareholders' equity on a consolidated balance sheet of
Borrower and its Subsidiaries determined in accordance with GAAP (including,
without limitation, capital stock, additional paid-in-capital and retained
earnings) at such date.
Consolidated Scheduled Principal Payments shall mean, for the period in
question, without duplication, all scheduled principal payments of Borrower and
its Subsidiaries on Indebtedness for the applicable period, all determined on a
consolidated basis as determined in accordance with GAAP.
Consolidated Total Debt shall mean, as of the date of any determination
thereof, all Debt of Borrower and its Subsidiaries as of such date, determined
on a consolidated basis as determined in accordance with GAAP.
Continuing Director shall mean at any date a member of Borrower's Board of
Directors (i) who was a member of such board on the effective date hereof or
(ii) who was nominated or elected by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to Borrower's Board of Directors was recommended or endorsed by at
least a majority of the directors who were Continuing Directors at the time of
such nomination or election.
Continuing Guarantee shall mean the unlimited continuing guarantee of all
of Borrower's Obligations executed now or at any time hereafter by each
Subsidiary other than Offshore and delivered to Agent, in the form of Exhibit C
attached hereto and incorporated herein by reference.
Default shall mean any event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default as defined in Section 9 hereof.
Debt of any Person shall mean, as of the date of determination thereof, the
sum of (a) all Indebtedness of such Person for borrowed money or which has been
incurred to acquire Property plus (b) all Capitalized Lease Obligations of such
Person.
Disbursement Date shall have the meaning ascribed thereto in Section 4.3.
Distribution in respect of any corporation shall mean:
(a) dividends or other distributions of cash, stock, assets or other
property on or in respect of any shares of any class of stock of such
corporation; and
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(b) the redemption, repurchase or other acquisition of any shares of
any class of any stock of such corporation or of any warrants, rights or
other options to purchase any such stock (except when solely in exchange
for such stock).
Documentation Agent shall mean The First National Bank of Chicago.
Environmental Claim shall mean any administrative, regulatory or judicial
action, judgment, order, consent decree, suit, demand, demand letter, claim,
Lien, notice of noncompliance or violation, investigation or other proceeding
arising (a) pursuant to any Environmental Law or governmental or regulatory
approval issued under any such Environmental Law, (b) from the presence, use,
generation, storage, treatment, Release, threatened Release, disposal,
remediation or other existence of any Hazardous Substance, (c) from any removal,
remedial, corrective or other response action pursuant to an Environmental Law
or the order of any Governmental Authority, (d) from any third party seeking
damages, contribution, indemnification, cost recovery, compensation, injunctive
or other relief in connection with a Hazardous Substance or arising from alleged
injury or threat of injury to health, safety, natural resources or the
environment or (e) from any Lien against any Property owned, leased or operated
by Borrower or any Subsidiary in favor of any governmental or regulatory
authority or agency in connection with a Release, threatened Release or disposal
of a Hazardous Substance.
Environmental Law shall mean any federal, state or local statute, law,
rule, regulation, order, consent decree, judgment, permit, license, code, deed
restriction, common law, treaty, convention, ordinance or other governmental
requirement relating to public health, safety or the environment, including,
without limitation, those relating to Releases, discharges or emissions to air,
water, land or groundwater, to the use of groundwater, to the use and handling
of polychlorinated biphenyls or asbestos, to the disposal, treatment, storage or
management of hazardous or solid waste, Hazardous Substances or crude oil, or
any fraction thereof, to exposure to toxic or hazardous materials, to the
handling, transportation, discharge or release of gaseous or liquid Hazardous
Substances, in each case applicable to any of the Property owned, leased or
operated by Borrower or any Subsidiary or the operation, construction or
modification of any such Property, including, without limitation, the following:
CERCLA, the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984,
the Hazardous Materials Transportation Act, as amended, the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1976, the Safe
Drinking Water Control Act, the Clean Air Act of 1966, as amended, the Toxic
Substances Control Act of 1976, the Occupational Safety and Health Act of 1977,
as amended, the Emergency Planning and Community Right-to-Know Act of 1986, the
National Environmental Policy Act of 1975, the Oil Pollution Act of 1990 and any
similar or implementing state or local law, and any state or local statute and
any further amendments to these laws providing for financial responsibility for
cleanup or other actions with respect to the Release or threatened Release of
Hazardous Substances or crude oil, or any fraction thereof and all rules and
regulations promulgated thereunder.
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ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.
ERISA Affiliate shall mean any corporation, trade or business that is,
along with Borrower and any Subsidiary, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
Sections 414(b) and 414(c), respectively, of the Code or Section 4001 of ERISA.
Event of Default shall have the meaning ascribed thereto in Section 9.
Excess Cash and Cash Equivalents of any Person shall mean, as of the date
of determination thereof, (a) the sum of the following: (i) all cash of such
Person on hand or on deposit with any Bank or any other financial institution
rated B or better by Thompson Bank Watch Service or on deposit with any
financial institution approved by Agent plus (ii) all Investments of such Person
described in subparagraphs (c), (d), (e), (f) or (g) of the definition of
Restricted Investment minus (b) Five Million Dollars ($5,000,000.00).
Exchange Act shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Securities Exchange Commission.
Fed Funds Rate shall mean, for any day, the rate per annum (rounded
upwards, if necessary to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate charged to the
Agent on such day on such transactions.
GAAP shall mean generally accepted accounting principles at the time in the
United States.
Governmental Authority shall mean any sovereign state or nation or
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
Governmental Contract shall have the meaning ascribed thereto in Section
7.20.
Guarantee by any Person shall mean any obligation (other than endorsements
of negotiable instruments for deposit or collection in the ordinary course of
business), contingent
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or otherwise, of such Person guaranteeing, or in effect guaranteeing, any
Indebtedness, liability, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any Property or assets constituting security therefor, (b) to advance or supply
funds (i) for the purchase or payment of such Indebtedness or obligation, (ii)
to maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (iii) to lease property or to purchase securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guarantee in respect of any Indebtedness for borrowed money shall be deemed to
be Indebtedness equal to the then outstanding principal amount of such
Indebtedness for borrowed money which has been guaranteed or such lesser amount
to which the maximum exposure of the guarantor shall have been specifically
limited, and a Guarantee in respect of any other obligation or liability or any
dividend shall be deemed to be Indebtedness equal to the maximum aggregate
amount of such obligation, liability or dividend or such lesser amount to which
the maximum exposure of the guarantor shall have been specifically limited.
Guarantee when used as a verb shall have a correlative meaning.
Hazardous Substance shall mean any hazardous or toxic material, substance
or waste, pollutant or contaminant which is regulated under any Environmental
Law, including, without limitation, any material, substance or waste which is:
(a) defined as a hazardous substance under Section 311 of the Federal Water
Pollution Control Act (33 U.S.C. (S)(S)1317), as amended; (b) regulated as a
hazardous waste under Section 1004 or Section 3001 of the Federal Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act (42
U.S.C. (S)(S)6901 et seq.), as amended; (c) defined as a hazardous substance
under Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. (S)(S)9601 et seq.), as amended; or (d) defined or
regulated as a hazardous substance or hazardous waste under any rules or
regulations promulgated under any of the foregoing statutes.
Indebtedness shall mean, with respect to any Person, without duplication,
all indebtedness, liabilities and obligations of such Person, and in any event
shall include all (i) obligations of such Person for borrowed money or which
have been incurred to acquire Property, (ii) obligations secured by any Lien on,
or payable out of the proceeds of production from, any Property or assets owned
by such Person, whether or not such Person has assumed or become liable for the
payment of such obligations, (iii) indebtedness, liabilities and obligations of
third parties, including joint ventures and partnerships of which such Person is
a venturer or general partner, recourse to which may be had against such Person,
(iv) obligations created or arising under any conditional sale or other title
retention agreement with respect to Property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of such Property, (v) Capitalized Lease Obligations of such Person, (vi)
indebtedness, liabilities and obligations of such Person under Guarantees and
(vii) all
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obligations of such Person, contingent or otherwise, relative to the face amount
of all letters of credit (as may be reduced pursuant to their terms), whether or
not drawn.
Indemnitees shall have the meaning ascribed thereto in Section 11.4.
Interest Period shall mean with respect to each LIBOR Loan:
(i) initially, the period commencing on the date of such Loan and
ending 1, 2, 3 or 6 months thereafter (or such other period agreed upon in
writing by Borrower and all of the Banks), as the Borrower may elect in the
applicable Notice of Borrowing; and
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Loan and ending 1, 2, 3 or 6
months thereafter (or such other period agreed upon in writing by Borrower
and all of the Banks), as Borrower may elect pursuant to Section 5.1;
provided that:
(iii) subject to clause (iv) below, if any Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period
shall end on the immediately next preceding Business Day; and
(iv) no Interest Period for a LIBOR Loan shall extend beyond the last
day of the Revolving Credit Period.
Investment shall mean any investment by Borrower or any Subsidiary in any
Person, whether payment therefor is made in cash or capital stock of Borrower or
any Subsidiary, and whether such investment is by acquisition of stock or
Indebtedness, or by loan, advance, transfer of property out of the ordinary
course of business, capital contribution, equity or profit sharing interest,
extension of credit on terms other than those normal in the ordinary course of
business, Guarantee or otherwise becoming liable (contingently or otherwise) in
respect of the Indebtedness of any Person, or otherwise.
Issuer shall have the meaning ascribed thereto in Section 4.
Letter of Credit and Letters of Credit shall have the meanings ascribed
thereto in Section 4.1(a).
Letter of Credit Application shall mean an application and agreement for
standby letter of credit in substantially the form of Exhibit D attached hereto
and incorporated herein by reference executed by Borrower and any Subsidiary (if
the Letter of Credit is to be for the account of a
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Subsidiary) and delivered to a Bank pursuant to Section 4.1(a), as the same may
from time to time be amended modified, extended or renewed.
Letter of Credit Commitment shall have the meaning ascribed thereto in
Section 4.1 (a).
Letter of Credit Commitment Fee shall have the meaning ascribed thereto in
Section 4.1(c).
Letter of Credit Loan and Letter of Credit Loans shall have the meaning
ascribed thereto in Section 4.3.
Letter of Credit Period shall mean the period commencing on the effective
date hereof and ending September 30, 2002.
Letter of Credit Request shall have the meaning ascribed thereto in Section
4.1 (a).
LIBOR Base Rate means, for an Interest Period, (a) the LIBOR Index Rate for
such Interest Period, if such rate is available, and (b) if the LIBOR Index Rate
cannot be determined, the arithmetic average of the rates of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in
U.S. dollars in immediately available funds are offered to the Agent at 11:00
a.m. (New Orleans time), or as soon thereafter as practicable, two (2) Business
Days before the beginning of such Interest Period by two (2) or more major banks
in the London interbank market selected by the Agent for a period equal to such
Interest Period and in an amount equal or comparable to the principal amount of
the LIBOR Loan scheduled to be made available by the Banks. As used herein,
"LIBOR Index Rate" means, for any Interest Period, the London interbank offered
rate per annum (rounded upwards, if necessary, to the next higher one hundred-
thousandth of a percentage point) for deposits in U.S. Dollars for a period
equal to such Interest Period, which appears on the Telerate Page 3875 as of
9:00 a.m. (New Orleans time) on the day two Business Days before the
commencement of such Interest Period.
LIBOR Loan shall mean a loan bearing interest at the LIBOR Rate.
LIBOR Rate shall mean (a) the quotient of the (i) LIBOR Base Rate divided
by (ii) one minus the applicable LIBOR Reserve Percentage plus (b) the
Applicable Margin. The LIBOR Rate shall be adjusted automatically on and as of
the effective date of any change in the LIBOR Reserve Percentage and Agent shall
notify Borrower and Banks of any such change.
LIBOR Reserve Percentage shall mean for any day the percentage (including
any supplemental percentage applied on a marginal basis or any other reserve
requirement having a similar effect), expressed as a decimal, which is in effect
on the first day of the applicable Interest Period, as prescribed by the Board
of Governors of the Federal Reserve System (or any successor) under Regulation D
(or any other then applicable regulation of the Board of Governors (or any
successor)) with respect to "Eurocurrency Liabilities".
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Lien shall mean any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property, whether such interest
is based on common law, statute or contract, including, without limitation, any
security interest, mortgage, deed of trust, pledge, assignment, judgment lien or
other lien or encumbrance of any kind or nature whatsoever, any conditional sale
or trust receipt, and any consignment or bailment for security purposes. The
term "Lien" shall include reservations, exceptions, encroachments, easements,
servitudes, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting Property.
Loans shall collectively mean the Revolving Credit Loans, the Swing Loans,
and the Letter of Credit Loans, with each being a Loan, and shall include all
principal, interest, attorneys' fees and costs owed thereon.
Material Adverse Effect shall mean a material adverse effect on the
Properties, assets, liabilities, business, operations, prospects, income or
condition (financial or otherwise) of Borrower and its Subsidiaries taken as a
whole.
Moody's shall mean Moody's Investors Service, Inc.
Multi-Employer Plan shall mean a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is maintained for employees of Borrower, any
Subsidiary or any ERISA Affiliate or to which Borrower, any Subsidiary or any
ERISA Affiliate has contributed in the past or currently contributes.
Non-Maintenance Capital Expenditure shall mean any Capital Expenditure
unless made to fulfill the current construction backlog of Borrower or any
Subsidiary.
Notes shall mean all of the Revolving Credit Notes and the Swing Line Note.
Notice of Borrowing shall have the meaning ascribed thereto in Section 3.3.
Obligor shall mean Borrower, each Subsidiary and each other Person who is
or shall at any time hereafter become primarily or secondarily liable on any of
Borrower's Obligations.
Occupational Safety and Health Laws shall mean the Occupational Safety and
Health Act of 1970, as amended, and any other federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating to
or imposing liability or standards of conduct concerning employee health and/or
safety, as now or at any time hereafter in effect.
Offshore shall mean Offshore Marine Indemnity Company, with Taxpayer
Identification Number 75-2674011.
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Operating Lease shall mean any lease of Property, whether real and/or
personal, by a Person as lessee which is not a Capitalized Lease.
Operating Lease Obligations of any Person shall mean, as of any date for
which it is being determined, all of the rental obligations due and to become
due in less than twelve months from the date of determination thereof under all
Operating Leases under which such Person is a lessee.
PBGC shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan shall mean a "pension plan," as such term is defined in
Section 3(2) of ERISA, which is established or maintained by Borrower, any
Subsidiary or any ERISA Affiliate, and includes, without limitation, a Multi-
Employer Plan.
Permitted Acquisition shall mean an Acquisition:
(a) acquired with the consent of the Required Banks;
(b) (x) acquired (and only to the extent acquired) through the
issuance of stock (or the use of the proceeds from the issuance of stock)
of Borrower after the effective date hereof or acquired prior to the making
of the initial Revolving Credit Loan and (y) complying with each of the
following requirements:
(i) the earnings before depreciation, amortization, interest expense,
extraordinary items and taxes of the acquired operation for the four (4)
fiscal quarters immediately preceding the date of such Acquisition
(including any fiscal quarter ending on such date) were positive;
(ii) such Acquisition will not cause a Default or an Event of Default;
and
(iii) the ratio of (A) Consolidated Funded Debt as of the end of the
fiscal quarter immediately preceding the date of such Acquisition
(including any fiscal quarter ending on such date) plus the Indebtedness to
be incurred or assumed by Borrower or its Subsidiaries in connection with
such Acquisition plus all Debt of any Subsidiary to be acquired as of the
date of such Acquisition (to the extent not already included and to the
extent not paid on the date of such Acquisition) to (B) Consolidated
EBITDA, determined as if such Acquisition was completed, for the four (4)
fiscal quarters immediately preceding the date of such Acquisition
(including any fiscal quarter ending on such date) will not exceed:
Periods Ending Ratio
On or before March 31, 1998 4.50 to 1
From April 1, 1998 to September 30, 1998 4.25 to 1
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After September 30, 1998 4.00 to 1; or
(c) acquired after the making of the initial Revolving Credit Loan
(and to the extent not acquired through the issuance of stock (or the use
of the proceeds from the issuance of stock) of Borrower after the effective
date hereof) and complying with each of the following requirements:
(i) the Purchase Price for such Acquisition does not exceed $30,000,000.00;
(ii) the Purchase Price for all Acquisitions falling within the
provisions of subparagraph (a) or subparagraph (c) of this definition of
Permitted Acquisitions for the period (A) commencing twelve (12) months
prior to the date of such Acquisition and ending on (and including) the
date of such Acquisition or (B) commencing on the date of the initial
Revolving Credit Loan and ending on (and including) the date of such
Acquisition, whichever is shorter, does not in the aggregate exceed
$75,000,000.00;
(iii) such Acquisition will not cause a Default or an Event of
Default;
(iv) the ratio of (A) Consolidated Funded Debt as of the end of the
fiscal quarter immediately preceding the date of such Acquisition
(including any fiscal quarter ending on such date) plus the Indebtedness to
be incurred or assumed by Borrower or its Subsidiaries in connection with
such Acquisition plus all Debt of any Subsidiary to be acquired as of the
date of such Acquisition (to the extent not already included and to the
extent not paid on the date of such Acquisition) to (B) Consolidated
EBITDA, determined as if such Acquisition was completed, for the four (4)
fiscal quarters immediately preceding the date of such Acquisition
(including any fiscal quarter ending on such date) will not exceed:
Periods Ending Ratio
On or before March 31, 1998 4.50 to 1
From April 1, 1998 to September 30, 1998 4.25 to 1
After September 30, 1998 4.00 to 1; and
(v) after the Acquisition, the Total Revolver Outstandings will not
exceed $145,000,000.00 and Borrower will still have the ability to obtain a
Revolving Credit Loan in the amount of $5,000,000.00.
Permitted Liens shall mean any of the following:
(a) Liens for property taxes and assessments or governmental charges
or levies, provided that payment thereof is not at the time required by
Section 8.1(d);
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(b) (i) Deposits to secure the performance of bids, tenders or trade
contracts, or to secure statutory obligations, surety or appeal bonds or
other Liens of like general nature incurred in the ordinary course of
business and not in connection with the borrowing of money or the
acquisition of inventory or other Property and (ii) Liens (other than any
Liens imposed by ERISA) arising in the ordinary course of business or
incidental to the ownership of Properties and assets (including Liens in
connection with worker's compensation, unemployment insurance and other
like laws, carrier's, mechanic's, materialmen's, repairmen's, vendor's,
warehousemen's and attorneys' liens and statutory landlords' liens);
provided in each case (x) the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate actions or
proceedings being diligently conducted and for which adequate provision as
determined in accordance with GAAP has been made, (y) payment thereof is
not at the time required by Section 8.1(d) or 8.1(e), and (z) if the
obligations secured thereby are in excess of $50,000.00, Agent is provided
written notice of such Lien within twenty days after the date on which the
Lien becomes overdue;
(c) Survey exceptions, issues with regard to the merchantability of
title, easements or reservations, or rights of others for rights-of-way,
servitudes, utilities and other similar purposes, or zoning or other
restrictions as to the use of real properties, which could not reasonably
be expected to have a Material Adverse Effect;
(d) Liens permitted by the Required Banks in writing;
(e) Liens granted in the ordinary course of business on vessels under
construction in favor of the purchaser or owner of such vessels (or lenders
to such purchasers or owners);
(f) Liens reflected on Schedule 2.1(a) attached hereto in existence as
of the effective date hereof, and any extensions, renewals and refinancings
thereof (provided that any such refinancing shall not increase the
principal indebtedness secured thereby without the prior written consent of
the Required Banks);
(g) Liens on Properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by Section 8.2(a)(vi);
(h) non-perfected Liens in favor of Fireman's Fund Insurance Company
or other bonding company(ies) rated A-VII or better by A.M. Best Company
pursuant to a bonding company indemnity agreement(s) in customary form;
(i) non-perfected Liens in favor of Trinity in existence on October 1,
1996, to secure its contingent liability under parent guarantees, letters
of credit, bank guarantees or other similar obligations related to existing
construction contracts or outstanding bid proposals of Borrower or any
Subsidiary to the extent such Liens would customarily be required by a
bonding company in like circumstances;
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(j) any Liens on the right, title or interest of Borrower or any
Subsidiary in or to any right, benefit or proceeds (including, without
limitation, rights to payment) arising from, or related to, Navy Prime
Contract #N62471-82-C-1455 for Model NP6D Clyde Crane; and
(k) Liens encumbering the assets of any Subsidiary acquired after the
effective date hereof which were in existence at the time of the
acquisition of such Subsidiary securing Indebtedness of Borrower or any
Subsidiaries which does not exceed $15,000,000.00 in the aggregate at any
one time outstanding.
Person shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, entity or government (whether national, federal, state, county,
city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
Prime Rate shall mean the interest rate per annum equal to the arithmetic
average of the following: (a) the interest rate announced from time to time by
Whitney National Bank as its "prime rate" on commercial loans, (b) the interest
rate announced from time to time by The First National Bank of Chicago as its
"prime rate" on commercial loans, and (c) the interest rate announced from time
to time by BankBoston, N.A. as its "base rate" on commercial loans, (which rate
shall fluctuate as and when said prime or base rate(s) shall change).
Property shall mean any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible. Properties shall mean the
plural of Property. For purposes of this Agreement, Borrower and each
Subsidiary shall be deemed to be the owner of any Property which it has acquired
or holds subject to a conditional sale agreement, financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes.
Pro Rata Share shall mean with respect to each Bank, the percentage amount
equal to the sum of such Bank's Revolving Credit Commitment, divided by the sum
of all of the Banks' Revolving Credit Commitments.
Purchase Price shall mean any cash provided by Borrower or any Subsidiary
plus any Indebtedness assumed by Borrower or any Subsidiary in consideration for
an Acquisition.
RCRA shall mean the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 U.S.C. (S)(S)6901 et seq., and any future amendments, and shall
include any and all regulations issued pursuant thereto.
Regulation D shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as amended.
Regulatory Change shall have the meaning ascribed thereto in Section 5.9.
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Release shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment, including, without limitation, the abandonment or discarding of
barrels, drums, containers, tanks and/or other receptacles containing or
previously containing any Hazardous Substance.
Reportable Event shall have the meaning given to such term in ERISA.
Reserves Loan shall have the meaning ascribed to such term in 6.3(g).
Required Banks shall mean at any time Banks having Fifty-One Percent (51%)
of the aggregate amount of Loans and the face amount of Letters of Credit then
outstanding or, if no Loans or Letters of Credit are then outstanding, Fifty-One
Percent (51%) of the total Commitments of all of the Banks.
Responsible Officer shall mean the chief executive officer, president,
chief operating officer, chief financial officer or chief accounting officer of
Borrower or any other officer of Borrower involved in the financial
administration or controllership function of Borrower.
Restricted Investment shall mean any Investment, or any expenditure or any
incurrence of any liability to make any expenditure for an Investment, other
than:
(a) Guarantees, loans and/or advances by Borrower or a Subsidiary to
any Subsidiary; provided that, neither Borrower nor any Subsidiary will
make any Guarantee, loan and/or advance to Offshore other than (i) in
connection with Letters of Credit issued for the account of Offshore
pursuant to this Agreement and (ii) repayment of the Reserves Loan;
(b) Guarantees, loans and/or advances by (i) any Subsidiary other than
Offshore to Borrower which are subordinated in writing to the payment of
the Borrower's Obligations in form and substance satisfactory to the
Required Banks or (ii) Offshore to Borrower relating to the Reserves Loan;
(c) Direct obligations of the United States of America or any
instrumentality or agency thereof, the payment of which is unconditionally
guaranteed by the United States of America or any instrumentality or agency
thereof (all of which Investments must mature within twelve (12) months
from the time of acquisition thereof);
(d) Investments in readily marketable commercial paper which, at the
time of acquisition thereof by Borrower or any Subsidiary, is rated
investment grade or better by S&P or Moody's and which matures within 270
days from the date of acquisition thereof, provided that the issuer of such
commercial paper shall, at the time of acquisition of such commercial
paper, have a senior long-term debt rating of at least A by S&P and
Moody's;
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(e) Negotiable certificates of deposit or negotiable bankers
acceptances issued by (i) any of the Banks or (ii) any other bank or trust
company organized under the laws of the United States of America or any
state thereof, which bank or trust company (other than the Banks to which
such restrictions shall not apply) is a member of both the Federal Deposit
Insurance Corporation and the Federal Reserve System and is rated B or
better by Thompson Bank Watch Service (all of which Investments must mature
within twelve (12) months from the time of acquisition thereof);
(f) Repurchase agreements, which shall be collateralized for at least
100% of face value, issued by (i) any of the Banks or (ii) any other bank
or trust company organized under the laws of the United States or any state
thereof, which bank or trust company (other than the Banks to which such
restrictions shall not apply) is a member of both the Federal Deposit
Insurance Corporation and the Federal Reserve System and is rated B or
better by Thompson Bank Watch Service (all of which Investments must mature
within twelve (12) months from the time of acquisition thereof);
(g) Investments in mutual funds the investments of which are limited
to direct obligations of the United States of America or any
instrumentality or agency thereof, the payment of which is unconditionally
guaranteed by the United States of America or any instrumentality or agency
thereof;
(h) Investments existing as of the effective date hereof as described
in Schedule 7.17, and any future retained earnings in respect thereof;
(i) Guarantees, loans or advances other than in the ordinary course of
business to officers or employees of Borrower or a Subsidiary in the
aggregate principal amount of up to $500,000.00 at any one time
outstanding;
(j) Permitted Acquisitions;
(k) The Subsidiaries of Borrower as of the effective date hereof;
(l) Investments representing all or a portion of the sales price for
property sold to another Person in the ordinary course of business;
(m) Investment in the amount of $2,000,000.00 to acquire a twenty
percent (20%) interest in Zentech, Inc., a Texas Corporation; and
(n) Investments by Borrower and/or any one or more Subsidiaries in TDI
Nass International, made after June 30, 1996, which do not in the aggregate
exceed Five Million Dollars ($5,000,000.00).
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Revolving Credit Commitment shall mean for each Bank, subject to
termination or reduction as set forth in Section 3.5, the principal amount set
forth as the Revolving Credit Commitment for such Bank next to its name on the
signature pages hereof, which commitments in the aggregate equal the principal
amount of $150,000,000.00.
Revolving Credit Loan and Revolving Credit Loans shall have the meanings
ascribed thereto in Section 3.1.
Revolving Credit Notes shall have the meaning ascribed thereto in Section
3.4(a).
Revolving Credit Period shall mean the period commencing on the effective
date of this Agreement and ending September 30, 2002, unless extended from time
to time with the unanimous consent of the Banks as provided in Section 3.6
hereof.
S&P shall mean Standard and Poor's Ratings Group.
Separation and Related Agreements shall mean the Separation Agreement,
Barge Agreement, Insurance Agreement, Tax Allocation Agreement and the Trademark
License Agreement between Borrower and Trinity dated as of October 1, 1996.
Stock Pledge Documents shall mean, with respect to any Subsidiary, the
following documents: (a) a stock pledge agreement in the form of Exhibit I
annexed hereto and incorporated herein by reference granting Agent for the
benefit of all of the Banks a pledge of and a security interest in all of the
common stock of such Subsidiary owned by Borrower and/or any one or more
Subsidiaries subject to no other Lien, (b) executed stock powers covering all of
the common stock of such Subsidiary owned by Borrower and/or any one or more
Subsidiaries, (c) such opinions of counsel for Borrower and/or any Subsidiaries
that own an interest in such Subsidiary as Agent may reasonably require, and (d)
such resolutions, certificates, approvals, documents or instruments as Agent may
reasonably require.
Subsidiary shall mean (a) any corporation of which more than fifty percent
(50%) of the issued and outstanding capital stock entitled to vote for the
election of directors (other than by reason of default in the payment of
dividends) is at the time owned directly or indirectly by Borrower and/or any
one or more Subsidiary of Borrower, or (b) any partnership, limited liability
company, business trust, or any other similar entity of which more than fifty
percent (50%) of the voting interests is at the time owned directly or
indirectly by Borrower and/or any one or more Subsidiary of Borrower, and
specifically including, but not limited to, each of the entities described on
Schedule 7.8 hereto.
Subordinated Notes shall mean the convertible subordinated notes in the
aggregate principal amount of $185,000,000.00 issued by Borrower on September
15, 1997, bearing interest at 4.5% per annum, due 2004, which are contractually
subordinated to Borrower's Obligations and to certain other Indebtedness of
Borrower and its Subsidiaries.
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Subordinated Notes Indenture shall mean the Indenture, dated September 15,
1997, between Borrower and U.S. Trust Company of Texas, N.A., as trustee,
pertaining to the Subordinated Notes.
Swing Loans and Swing Loan shall have the meanings ascribed thereto in
Section 3.2.
Swing Line Note shall have the meaning ascribed thereto in Section 3.2.
Swing Line Commitment shall mean the aggregate principal amount of
$5,000,000.00 at any one time outstanding.
Syndication Agent shall mean BankBoston, N.A.
TDI Nass International shall mean TDI Nass International, W.L.L., a limited
liability company organized under the laws of Bahrain.
Telerate Page 3875 means the display designated as "Page 3875" of the Dow
Jones Telerate Service (or such other page as may replace Page 3875 on that
service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar Deposits).
Term shall have the meaning ascribed thereto in Section 1.
Total Revolver Outstandings shall mean the sum of (i) the aggregate
principal amount of all outstanding Revolving Credit Loans, plus (ii) the
aggregate principal amount of all outstanding Swing Loans plus (iii) the
aggregate principal amount of all outstanding Letter of Credit Loans plus (iv)
the aggregate undrawn face amount of all outstanding Letters of Credit.
Transaction Documents shall mean this Agreement, the Notes, the Letter of
Credit Application(s), the Continuing Guarantees, and all other agreements,
documents and instruments heretofore, now or hereafter delivered to the Agent or
any of the Banks with respect to or in connection with or pursuant to this
Agreement, any Loans made hereunder or thereunder, any Letters of Credit issued
hereunder or thereunder, or any other of Borrower's Obligations, and executed by
or on behalf of Borrower or any Subsidiary, all as the same may from time to
time be amended, modified, extended or renewed.
Trinity shall mean Trinity Industries, Inc., a Delaware corporation, with
Taxpayer Identification Number 75-0225040, and any subsidiaries thereof.
U. S. Governmental Authority shall mean the United States of America, any
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to the United
States of America.
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Whitney shall mean Whitney National Bank, a national banking association,
in its individual corporate capacity as a Bank hereunder and the lender of the
Swing Loans.
2.2 Accounting Terms and Determinations. Except as otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made and all financial statements required to
be delivered hereunder shall be prepared as determined in accordance with GAAP
as in effect from time to time, applied on a basis consistent (except for
changes accompanied by a concurrence from Borrower's independent certified
public accountants) with the most recent audited financial statements of
Borrower delivered to the Banks.
SECTION 3. THE REVOLVING CREDIT LOANS.
3.1 Revolving Credit Commitments. Subject to the terms and conditions set
forth in this Agreement and so long as no Default or Event of Default under this
Agreement has occurred and is continuing, during the Revolving Credit Period,
each Bank severally agrees to lend to Borrower from time to time (individually,
a "Revolving Credit Loan" and collectively, the "Revolving Credit Loans")
amounts not to exceed, in the aggregate at any one time outstanding, the lesser
of: (a) such Bank's Revolving Credit Commitment, or (b) such Bank's Pro Rata
Share of the sum of the total Revolving Credit Commitments of all of the Banks
minus the aggregate principal amount of all outstanding Letter of Credit Loans
minus the aggregate undrawn face amount of all outstanding Letters of Credit
minus the principal amount of any outstanding Swing Loans. Each Revolving
Credit Loan under this Section 3.1 shall be made from the several Banks ratably
in proportion to their respective Pro Rata Shares, and may be made as either (x)
a Base Rate Loan, (y) a LIBOR Loan, or (z) any combination thereof, as
determined by Borrower with notice thereof to Agent pursuant to Section 3.3.
Each Revolving Credit Loan under this Section 3.1 which is a Base Rate Loan
shall be for an aggregate principal amount of at least $1,000,000.00 or any
larger multiple of $100,000.00. Each Revolving Credit Loan under this Section
3.1 which is a LIBOR Loan shall be for an aggregate principal amount of at least
$5,000,000.00 or any larger multiple of $500,000.00. Within the foregoing
limits, Borrower may borrow under this Section 3.1, prepay under Section 5.4(a)
or 5.4(b) and reborrow at any time during the Revolving Credit Period under this
Section 3.1. The failure of any Bank to make any Revolving Credit Loan required
under this Agreement shall not release any other Bank from its obligation to
make Revolving Credit Loans as provided herein.
3.2 The Swing Line. Subject to all of the terms and conditions hereof and
so long as no Default or Event of Default under this Agreement has occurred and
is continuing, Whitney agrees to make loans to Borrower (individually, a "Swing
Loan" and collectively, the "Swing Loans") which shall not in the aggregate at
any time outstanding exceed the lesser of (i) the Swing Line Commitment, or (ii)
the sum of the total Revolving Credit Commitments of all of the Banks minus the
aggregate principal amount of all outstanding Revolving Credit Loans minus the
aggregate principal amount of all outstanding Letter of Credit Loans minus the
aggregate undrawn face amount of all outstanding Letters of Credit. The Swing
Loans shall be available to Borrower and may be availed of by Borrower from time
to time, and borrowings thereunder may be repaid and used again during the
period ending on the last day of the Revolving Credit Period. All Swing Loans
shall be
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made hereunder only as Base Rate Loans. The Swing Loans shall be evidenced by
the Swing Line Note of Borrower dated as of the effective date hereof (the
"Swing Line Note") payable to the order of Whitney in the amount of the Swing
Line Commitment and being in the form attached hereto as Exhibit B.
3.3 Method of Borrowing.
(a) With respect to each Revolving Credit Loan, Borrower shall give
notice (a "Notice of Borrowing") to the Agent by 11:00 a.m. (New Orleans
time) on the day of each Base Rate Loan, and by 11:00 a.m. (New Orleans
Time) at least three (3) Business Days before each LIBOR Loan, specifying:
(i) the date of such Revolving Credit Loan, which shall be a Business
Day,
(ii) the aggregate principal amount of such Revolving Credit Loan,
(iii) whether such Loan is to be a Base Rate Loan or a LIBOR Loan, or
a combination thereof,
(iv) in the case of a LIBOR Loan, the duration of the initial Interest
Period applicable thereto, subject to the provisions of the definition of
Interest Period,
(v) that on the date of, and after giving effect to, such Revolving
Credit Loan, no Default or Event of Default under this Agreement has
occurred and is continuing, and
(vi) that on the date of, and after giving effect to, such Revolving
Credit Loan, all of the representations and warranties of Borrower
contained in Section 7 of this Agreement and in the other Transaction
Documents are true and correct in all material respects as if made on and
as of the date of such Revolving Credit Loan.
A Notice of Borrowing shall not be required in connection with a Base Rate Loan
pursuant to Section 5.7 or 5.8.
(b) Upon receipt of a Notice of Borrowing given to it, the Agent shall
notify each Bank by 1:00 p.m. (New Orleans time) on the date of receipt of
such Notice of Borrowing by the Agent (which must be a Business Day) of the
contents thereof and of such Bank's ratable share of such Revolving Credit
Loan. A Notice of Borrowing shall not be revocable by Borrower.
(c) Not later than 3:00 p.m. (New Orleans time) on the date of each
Revolving Credit Loan, each Bank shall make available its Pro Rata Share of
such Revolving Credit Loan, in federal or other funds immediately available
in New Orleans, Louisiana, to the Agent at its address specified in or
pursuant to Section 11.7. Agent shall not be required to
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make any amount available to Borrower hereunder except to the extent it
shall have received such amounts from the Banks as set forth herein,
provided, however, that unless the Agent shall have been notified by a Bank
prior to the date a Revolving Credit Loan is to be made hereunder that such
Bank does not intend to make its Pro Rata Share of such Revolving Credit
Loan available to the Agent, the Agent may assume that such Bank has made
such Pro Rata Share available to the Agent on such date, and the Agent may
in reliance upon such assumption make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Agent by such Bank and the Agent has made such amount
available to the Borrower, the Agent shall be entitled to receive such
amount from such Bank forthwith upon its demand, together with interest
thereon in respect of each day during the period commencing on the date
such amount was made available to the Borrower and ending on but excluding
the date the Agent recovers such amount from the Bank at a rate per annum
equal to the Fed Funds Rate. Unless the Agent determines that any
applicable condition specified in Section 6 has not been satisfied, the
Agent will make the funds so received from the Banks available to Borrower
thereafter as of 3:30 p.m. New Orleans time at the Agent's aforesaid
address by crediting such funds to a demand deposit account (or such other
account mutually agreed upon in writing between Agent and Borrower) of
Borrower with the Agent.
(d) With respect to each Swing Loan, Borrower shall give Whitney prior
notice (which may be written or oral but which must be given prior to 2:00
p.m. New Orleans time on the date of the Swing Loan) of the amount and date
of each Swing Loan and, subject to all of the terms and conditions hereof,
the proceeds of such Swing Loan shall be made available to Borrower on the
date of request at the offices of the Agent in New Orleans, Louisiana.
Anything contained in the foregoing to the contrary notwithstanding, (i)
the obligation of Whitney to make Swing Loans shall be subject to all of
the terms and conditions of this Agreement, and (ii) Whitney shall not be
obligated to make more than one Swing Loan to Borrower during any day.
3.4 Revolving Credit Notes.
(a) The Revolving Credit Loans of each Bank to Borrower during the
Revolving Credit Period shall be evidenced by Revolving Credit Note of
Borrower dated the effective date hereof and payable to the order of such
Bank in a principal amount equal to its Revolving Credit Commitment in
substantially the form of Exhibit A attached hereto (with appropriate
insertions) (as the same may from time to time be amended, modified
extended or renewed, the "Revolving Credit Notes").
(b) Upon receipt of each Bank's Revolving Credit Note pursuant to
Section 3.4(a), the Agent shall mail such Revolving Credit Note by
overnight express delivery to such Bank. Each Bank shall record, and prior
to any transfer of its Revolving Credit Note may endorse on the schedules
forming a part thereof, appropriate notations to evidence the date and
amount of each Revolving Credit Loan made by it during the Revolving Credit
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Period and the date and amount of each payment of principal made by
Borrower with respect thereto. Each Bank is hereby irrevocably authorized
by Borrower so to endorse its Revolving Credit Note and to attach to and
make a part of any such Revolving Credit Note a continuation of any such
schedule as and when required; provided, however that the obligation of
Borrower to repay each Revolving Credit Loan actually made hereunder shall
be absolute and unconditional, notwithstanding any failure of any Bank to
endorse or any mistake by any Bank in connection with endorsement on the
schedules attached to its respective Revolving Credit Note. The internal
records of each Bank shall constitute for all purposes prima facie evidence
of (i) the amount of principal and interest owing on the Revolving Credit
Loans from time to time, (ii) the amount of each Revolving Credit Loan made
to the Borrower and (iii) the amount of each principal and/or interest
payment received by the Banks on the Revolving Credit Loans.
3.5 Termination or Reduction of Commitments. Borrower may, upon three (3)
Business Days' prior written notice to the Agent, terminate entirely at any
time, or proportionately reduce from time to time on a pro rata basis among the
Banks based on their respective Revolving Credit Commitments by an aggregate
amount of $1,000,000.00 or any larger multiple of $500,000.00 the unused
portions of the Revolving Credit Commitments; provided, however, that (i) at no
time shall any Revolving Credit Commitment be reduced to a figure less than the
Total Revolver Outstandings, (ii) at no time shall the Revolving Credit
Commitments be reduced to a figure greater than zero but less than $5,000,000.00
and (iii) any such termination or reduction shall be permanent and Borrower
shall have no right to thereafter reinstate or increase, as the case may be, the
Revolving Credit Commitment of any Bank.
3.6 Maturity. All Revolving Credit Loans and all Swing Loans not paid
prior to the last day of the Revolving Credit Period, together with all accrued
and unpaid interest thereon and all fees and other amounts owing by Borrower to
the Banks with respect thereto, shall be due and payable on the last day of the
Revolving Credit Period. Each year of the Revolving Credit Period, during the
period commencing on October 1st and ending on December 1st, Borrower may
request that the Revolving Credit Period be extended for up to one year from the
end of the then applicable Revolving Credit Period. Upon the unanimous consent
of the Banks, which consent may be withheld in the discretion of any of the
Banks, the Revolving Credit Period (and the Term of this Agreement) shall be so
extended, provided that Borrower and the Subsidiaries shall execute such
documentation as Banks shall require to evidence such extension. The Banks
agree to provide Borrower with a response to any such request for an extension
of the Revolving Credit Period within 60 days following receipt thereof;
provided that, the failure of the Banks, or any one or more of them, to provide
a response within such 60 day period shall not be construed to constitute
consent to such an extension on the part of any of the Banks.
3.7 Special Swing Loan Provisions.
(a) All Swing Loans shall be payable with accrued interest thereon
solely to Whitney for its own account. Upon the earlier to occur of (i)
seven days after the making of
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any Swing Loan or (ii) at any time at the discretion of Whitney, Borrower
shall repay all of such Swing Loans in cash by 1:00 p.m., New Orleans time
the following Business Day, or make a Revolving Credit Loan in an amount at
least equal to the aggregate outstanding principal amount of all Swing
Loans, together with all accrued interest thereon, and shall apply the
proceeds of such Revolving Credit Loans to repay in its entirety the
aggregate outstanding principal amount of all Swing Loans, together with
accrued interest thereon to the date of such repayment.
(b) In the event that any portion of any Swing Loan is not repaid as
set forth above, Whitney shall promptly notify Agent and Agent shall
promptly, and in no event later than 5:00 p.m., New Orleans time, two
Business Days thereafter, notify each Bank in writing of the unreimbursed
amount of such Swing Loan and of such Bank's Pro-Rata Share of such
unreimbursed amount. Each of the Banks shall make a Revolving Credit Loan
in an amount equal to such Bank's Pro-Rata Share of the unreimbursed amount
of such Swing Loan, together with accrued unpaid interest thereon (to the
extent that there is availability under the Revolving Credit Commitments),
and pay the proceeds thereof, in immediately available funds, directly to
Whitney, not later than 1:00 p.m., New Orleans time, on the next Business
Day after the date such Bank is notified by the Agent. Revolving Credit
Loans made by the Banks to repay unreimbursed Swing Loans pursuant to this
subsection shall constitute Revolving Credit Loans hereunder, initially
shall be Base Rate Loans and shall be subject to all of the provisions of
this Agreement concerning Revolving Credit Loans, except that such
Revolving Credit Loans shall be made upon demand by the Agent as set forth
above rather than upon notice by Borrower and shall be made,
notwithstanding anything in this Agreement to the contrary, without regard
to satisfaction of conditions precedent to the making of Revolving Credit
Loans set forth in Section 3 hereof or any other Section of this Agreement.
(c) Each Bank's obligation to make Revolving Credit Loans in the
amount of its Pro-Rata Share of any unreimbursed Swing Loan pursuant hereto
is several, and not joint or joint and several. The failure of any Bank to
perform its obligation to make a Revolving Credit Loan in the amount of
such Bank's Pro-Rata Share of any unreimbursed Swing Loan will not relieve
any other Bank of its obligation hereunder to make a Revolving Credit Loan
in the amount of such other Bank's Pro-Rata Share of such unreimbursed
Swing Loan. Any Bank may but shall have no obligation to any Person to
assume all or any portion of any non-performing Bank's obligation to make a
Revolving Credit Loan in the amount of such Bank's Pro-Rata Share of such
unreimbursed Swing Loan. The Borrower agrees to accept the Revolving
Credit Loans hereinabove provided, whether or not such Loans could have
been made pursuant to the terms of Section 3 hereof or any other Section of
this Agreement.
(d) In the event, for whatever reason, the Agent determines that the
Banks are not able to, or that it could be disadvantageous for the Banks
to, advance their respective Pro-Rata Share of Revolving Credit Loans for
the purpose of refunding Swing Loans as required hereunder, then each of
the Banks (subject to the provisions of this Section 3.7)
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absolutely and unconditionally agrees to purchase and take from Whitney on
demand an undivided participation interest in Swing Loans outstanding in an
amount equal to their respective Pro-Rata Share of such Swing Loans.
SECTION 4. LETTERS OF CREDIT.
4.1 Letter of Credit Commitment.
(a) Subject to the terms and conditions of this Agreement, during the
Letter of Credit Period of this Agreement, and so long as no Default or
Event of Default under this Agreement has occurred and is continuing
(provided, however, that Issuer shall have no liability to any of the other
Banks for issuing a Letter of Credit after the occurrence of any Default or
Event of Default under this Agreement unless Issuer has previously received
notice in writing to Issuer by Borrower, the Agent or any of the other
Banks of the occurrence of such Default or Event of Default), each Bank,
except The Sumitomo Bank Limited and The Bank of Nova Scotia, hereby
agrees, upon the request of and as determined by Agent, to issue
irrevocable standby letters of credit for the account of Borrower or for
the account of Borrower and any Subsidiary (individually, a "Letter of
Credit" and collectively, the "Letters of Credit") (the "Letter of Credit
Commitment") in an amount and for the term specifically requested by
Borrower by notice in writing to such Bank in the form of Exhibit E
attached hereto and incorporated herein by reference (a "Letter of Credit
Request") at least three (3) Business Days prior to the requested issuance
thereof; provided, however, that:
(i) Borrower, and if the Letter of Credit is to be issued for the
account of Borrower and a Subsidiary, such Subsidiary, shall have executed
and delivered to Issuer a Letter of Credit Application with respect to such
Letter of Credit, with Borrower and any Subsidiary executing same to be
jointly, severally and solidarily liable thereunder;
(ii) the term of any such Letter of Credit shall not extend beyond the
last day of the Letter of Credit Period;
(iii) any Letter of Credit may only be utilized to guaranty or
support the payment of obligations of Borrower or any Subsidiary to third
parties incurred in the ordinary course of business;
(iv) the Total Revolver Outstandings shall not at any one time exceed
the sum of the total Revolving Credit Commitments of all of the Banks;
(v) the sum of (A) the aggregate undrawn face amount of all
outstanding Letter(s) of Credit plus (B) the aggregate principal amount of
all outstanding Letter of Credit Loans arising out of Letter(s) of Credit
shall not at any one time exceed the sum of Sixty Million Dollars
($60,000,000.00);
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(vi) the text of any such Letter of Credit is provided to Issuer no
less than three (3) Business Days prior to the requested issuance date, the
terms and conditions of which must be acceptable to Issuer;
(vii) the sum of (A) the aggregate undrawn face amount of all
outstanding Letter(s) of Credit securing or guaranteeing obligations of or
performance by Offshore plus (B) the aggregate principal amount of all
outstanding Letter of Credit Loans arising out of Letter(s) of Credit
securing or guaranteeing obligations of or performance by Offshore shall
not at any one time exceed Ten Million and 00/100 Dollars ($10,000,000.00);
and
(viii) No Letter of Credit shall be issued securing or guaranteeing
obligations of or performance by TDI Nass International.
("Issuer" shall mean the Bank that issues a Letter of Credit.)
Banks and Borrower acknowledge and agree that the letter(s) of credit
described on Schedule 4.1(a) shall be deemed outstanding Letters of Credit under
this Agreement and shall be governed by the terms and provisions of this
Agreement.
(b) The Issuer will make available the original of each Letter of
Credit to the beneficiary thereof (and will promptly provide each of the
Banks and the Agent with a copy of such Letter of Credit).
(c) For each Letter of Credit, Borrower (and any Subsidiary that
executed the Letter of Credit Application) hereby further agrees to pay to
the Agent for the account of the Issuer and the Banks an annual
nonrefundable commitment fee payable quarterly in an amount equal to the
rate per annum equal to the then current Applicable Margin for LIBOR Loans
(calculated on an actual day, 360 day year basis) times the face amount
(taking into account any increases or decreases therein during the period
in question) of each such Letter of Credit issued hereunder ("Letter of
Credit Commitment Fee"), which Letter of Credit Commitment Fee shall be due
and payable in arrears with respect to each Letter of Credit on the last
Business Day of each calendar quarter during the term of each respective
Letter of Credit and on the termination thereof (whether at its stated
maturity or earlier). Borrower further agrees to pay (or cause any
Subsidiary for which the Letter of Credit was issued to pay) to Issuer all
reasonable administrative fees of Issuer in connection with the issuance,
maintenance, modification (if any) and administration of each Letter of
Credit and standard negotiation charges upon demand from time to time.
Each of the Banks shall be entitled to its Pro Rata Share of any Letter of
Credit Commitment Fees, but the Banks shall have no right to share in any
administrative fees paid by Borrower (or any Subsidiary) to Issuer in
connection with any of the Letters of Credit. In addition to the Letter of
Credit Commitment Fee, for each Letter of Credit, Borrower hereby further
agrees to pay (or arrange for any Subsidiary that executed the Letter of
Credit Application to pay) to the Agent, solely for the account of the
Issuer, an annual nonrefundable commitment fee in an amount equal to 1/8
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of 1% of the undrawn face amount of each such Letter of Credit issued
hereunder, which such fee shall be due and payable upon issuance of such
Letter of Credit and annually thereafter.
(d) If the proposed beneficiary of a Letter of Credit will not accept
any Bank as the Issuer of such Letter of Credit, Agent will request a
financial institution selected by such beneficiary and acceptable to the
Agent and the Issuer to confirm such Letter of Credit, with Borrower to be
responsible for any and all fees incurred as a result of such confirmation.
4.2 Participation by Other Banks.
(a) Upon the issuance of a Letter of Credit, each Bank shall share the
obligation represented by each such Letter of Credit so issued, in an
amount equal to such Bank's Pro Rata Share. The participation of each Bank
in each Letter of Credit shall be automatic. Each Bank shall make
available to the Issuer, regardless of whether any Default or Event of
Default shall have occurred and is continuing, an amount equal to its
respective Pro Rata Share of each drawing on each Letter of Credit in same
day or immediately available funds not later than 11:00 a.m. New Orleans
time on each Disbursement Date (as hereinafter defined) for each such
drawing. In the event that any Bank fails to make available to the Issuer
the amount of such Bank's Pro Rata Share of any drawing on a Letter of
Credit as provided herein, the Issuer shall be entitled to recover such
amount on demand from such Bank together with interest at the daily average
Federal Funds Rate for the first two Business Days after the Disbursement
Date and thereafter at the Base Rate.
(b) The Issuer shall distribute to each Bank that has paid all amounts
payable by it under this Section 4.2 with respect to any Letter of Credit
issued by the Issuer such Bank's Pro Rata Share of all payments received by
the Issuer from the Borrower in reimbursement of drawings honored by Issuer
under such Letter of Credit when such payments are received (to the extent
that such Bank has not already received such amounts).
4.3 Disbursements. The Issuer shall notify the Borrower and the Agent
promptly of the presentment for payment of any Letter of Credit (on the date of
presentment, if possible, and otherwise on the next Business Day, it being
agreed that such notice may be made by phone), together with notice of the date
(the "Disbursement Date") such payment shall be made, and the Agent will
promptly notify the Banks of such matters. Subject to the terms and provisions
of such Letter of Credit, the Issuer shall make such payment to the beneficiary
(or its designee) of such Letter of Credit. On the Disbursement Date, Borrower
shall, contemporaneous with a payment on such Letter of Credit, reimburse (or
cause any Subsidiary for which the Letter of Credit was issued to reimburse)
Issuer and the Banks (to the
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extent each Bank has paid its Pro Rata Share of such drawing) for all amounts
which will be or have been disbursed under such Letter of Credit. In the event a
payment under a Letter of Credit is made without contemporaneous receipt of
payment from Borrower in accordance with this Section 4.3, such payment shall
constitute a loan (individually a "Letter of Credit Loan" and collectively, the
"Letter of Credit Loans") by Issuer and/or Banks (to the extent each Bank has
paid its Pro Rata Share of such drawing) to Borrower. All Letter of Credit Loans
shall accrue interest at the Base Rate and shall be payable on demand. The
Issuer shall distribute to each Bank that has paid all amounts payable by it
under Section 4.2 with respect to a Letter of Credit such Bank's Pro Rata share
of all interest and other amounts received by Issuer from Borrower (or any
Subsidiary) under the Letter of Credit Loan relating to such Letter of Credit
(to the extent that such Bank has not already received such amounts).
4.4 Reimbursement. Borrower's obligation under Section 4.3 to reimburse
the Issuer and the Banks with respect to each drawing under each Letter of
Credit (including interest thereon) (to the extent each Bank has paid its Pro
Rata Share of such drawing), and each Bank's obligation to fund each drawing
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim, or defense to payment which Borrower
or any Bank may have or have had against any Bank, the Borrower or any
beneficiary of a Letter of Credit, including, without limitation, any defense
based upon the occurrence of any Default or Event of Default, any draft, demand
or certificate or other document presented under a Letter of Credit proving to
be forged, fraudulent, invalid or insufficient, or any failure to apply or
misapplication by the beneficiary of the proceeds of any disbursement, or the
legality, validity, form, regularity, or enforceability of such Letter of
Credit.
4.5 Replacement or Collateralization of Letters of Credit.
Notwithstanding any provision contained in this Agreement or any of the Letter
of Credit Applications to the contrary, upon the occurrence of any Event of
Default under this Agreement, at Agent's option, Borrower shall, upon Agent's
demand, deliver to Issuer cash or other collateral acceptable to Issuer, in its
sole and absolute discretion, having a value, as determined by Issuer, at least
equal to the aggregate undrawn face amount of all outstanding Letters of Credit
issued by Issuer. Any such collateral and/or any amounts received by Issuer
pursuant to this Section 4.5 shall be held by Issuer in a separate account at
Issuer appropriately designated as a cash collateral account in relation to this
Agreement and the Letter of Credit and retained by Issuer as collateral security
for the payment of the Borrower's Obligations. Cash amounts delivered to Issuer
pursuant to the foregoing requirements of this Section 4.5 shall be invested, at
the request and for the account of Borrower, in investments of a type and nature
and with a term acceptable to Issuer. Such amounts, including in the case of
cash amounts invested in the manner set forth above, any investment realized
thereon, shall not be used by Issuer to pay any amounts drawn or paid under or
pursuant to any Letter of Credit, but may be applied to reimburse Issuer for
drawings or payments under or pursuant to the Letters of Credit which Issuer has
paid, or if no such reimbursement is required shall be delivered to the Agent
for application to such other of Borrower's Obligations as Agent shall
determine. Any amounts remaining in any cash collateral account established
pursuant to this Section 4.5 after the payment in full of all of the Borrower's
Obligations and the expiration or cancellation of all of the Letters of Credit
shall be returned to Borrower (after deduction of Issuer's expenses, if any).
4.6 Nature of Reimbursement Obligations. Borrower shall assume all risks
of the acts, omissions, or misuse of any Letter of Credit by the beneficiary
thereof. Except to the extent of its own gross negligence or wilful misconduct,
the Issuer shall not be responsible for:
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(a) the form, validity, sufficiency, accuracy, genuineness, or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged;
(b) the form, validity, sufficiency, accuracy, genuineness, or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or proceeds thereof in whole or in part;
(c) failure of the beneficiary to comply fully with conditions
required (except the presentment of any required documents, as set forth in
the applicable Letter of Credit, to the Issuer) in order to demand payment
under a Letter of Credit;
(d) errors, omissions, interruptions, or delays in transmission or
delivery of any information or messages, by mail, cable, telegraph, telex,
or otherwise;
(e) any loss or delay in the transmission or otherwise of any document
or draft required in order to make a disbursement under a Letter of Credit
or of the proceeds thereof;
(f) errors in interpretation of technical terms;
(g) any misapplication by a beneficiary of the proceeds of any
disbursement under any Letter of Credit; or
(h) any consequences arising from causes beyond the control of the
Issuer including, without limitation, acts of any Governmental Authority.
None of the foregoing shall affect, impair, or prevent the vesting of any
of the rights or powers granted to the Issuer hereunder.
4.7 Indemnity.
In addition to amounts payable as elsewhere provided in this Section 4,
Borrower hereby agrees to protect, indemnify, pay and save Issuer harmless from
and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees) which Issuer may
incur or be subject to as a consequence, direct or indirect, of (i) the issuance
of the Letters of Credit, other than as a result of (y) the gross negligence or
wilful misconduct of the Issuer or (z) the Issuer's failure to pay under any
Letter of Credit after the presentation to it of a request complying with the
terms and conditions of the Letter of Credit, or (ii) the failure of the Issuer
to honor a drawing under any Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto Governmental Authority.
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SECTION 5. GENERAL PROVISIONS FOR ALL LOANS.
5.1 Duration of Interest Periods and Selection of Interest Rates.
(a) The commencement date and duration of the initial Interest Period
for each LIBOR Loan shall be as specified in the applicable Notice of
Borrowing. Borrower shall elect the duration of each subsequent Interest
Period applicable to such LIBOR Loan, and the interest rate to be
applicable during such subsequent Interest Period (and, Borrower shall have
the option (x) in the case of any Base Rate Loan, to elect that such Loan
become a LIBOR Loan and the Interest Period to be applicable thereto or (y)
in the case of any LIBOR Loan, to elect that such Loan become a Base Rate
Loan), by giving notice of such election to the Agent by 11:00 a.m. (New
Orleans time) on the day of, in the case of the election of the Base Rate,
by 11:00 a.m. (New Orleans time) at least three (3) Business Days before,
in the case of the election of the LIBOR Rate, the end of the immediately
preceding Interest Period applicable thereto, if any; provided, however,
that notwithstanding the foregoing, in addition to and without limiting the
rights and remedies of the Agent and the Banks under Section 9 hereof, so
long as any Default or Event of Default under this Agreement has occurred
and is continuing, Borrower shall not be permitted to renew any LIBOR Loan
as a LIBOR Loan or to convert any Base Rate Loan into a LIBOR Loan. By
1:00 p.m. (New Orleans time) on the date of receipt of each such notice of
conversion or continuation of a Loan from Borrower, Agent shall notify each
Bank of the contents thereof and of such Bank's ratable share of such Loan.
A notice by Borrower under this Section 5.1(a) shall not be revocable by
Borrower. All LIBOR Loans, whether by conversion or by an advance, shall
be in a principal amount of at least $5,000,000.00 or multiples of
$500,000.00 in excess thereof. All Loans which bear interest at a
particular LIBOR Rate for a particular Interest Period shall constitute a
single LIBOR Loan. Borrower shall not have more than ten (10) LIBOR Loans
outstanding at any one time.
(b) If the Agent does not receive a notice of election for the
continuation of a LIBOR Loan for a subsequent Interest Period pursuant to
subsection (a) above within the applicable time limits specified therein,
Borrower shall be deemed to have elected to convert such LIBOR Loan on the
last day of the current Interest Period with respect thereto to a Base Rate
Loan in the principal amount of such expiring LIBOR Loan on such date.
(c) Notwithstanding the foregoing, the duration of each Interest
Period shall be subject to the provisions of the definition of Interest
Period.
(d) Borrower hereby authorizes the Agent to rely on telephonic,
telegraphic, telecopy, telex or written instructions believed by the Agent
in good faith to have been sent or delivered by any person identifying
himself or herself as John Dane III, Keith L. Voigts, Rick S. Rees or John
J. Siben II (or any other person from time to time authorized to act on
behalf of Borrower pursuant to a resolution adopted by the Board of
Directors of Borrower and certified by the Secretary of Borrower and
delivered to the Agent) with respect to any
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request to make a Loan or a repayment hereunder, or to convert any Base
Rate Loan or LIBOR Loan to any other type of Loan available hereunder, and
on any signature which the Agent in good faith believes to be genuine.
Borrower shall be bound thereby in the same manner as if such person was
actually authorized or such signature was genuine. Borrower also hereby
agrees to indemnify the Agent and each of the Banks and to hold the Agent
and each of the Banks harmless from and against any and all claims,
demands, damages, liabilities, losses, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) relating to or
arising out of or in connection with the acceptance of instructions for
making or converting Loans or making repayments hereunder.
5.2 Interest Rates; Interest Payments.
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made
until it becomes due, at a rate per annum equal to the Base Rate. Such
interest shall be payable on all such Loans quarterly in arrears on the
last day of each quarter (or the immediate subsequent Business Day if any
such last day is not a Business Day), commencing on the first day after
such Base Rate Loan is made, and at maturity. Any overdue principal of
and, to the extent permitted by law, overdue interest on, any Base Rate
Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of two percent (2%) plus the rate otherwise
in effect for such day.
(b) Each LIBOR Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period applicable thereto at a rate per
annum equal to the applicable LIBOR Rate; provided that if any LIBOR Loan
or any portion thereof shall, as a result of clause (iv) of the definition
of Interest Period, have an Interest Period of less than 30 days, such
portion shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Interest shall be
payable for each Interest Period on the last day thereof, unless the
duration of the applicable Interest Period exceeds three (3) months, in
which case such interest shall be payable at the end of the first three (3)
months of such Interest Period and on the last day of such Interest Period.
Any overdue principal of and, to the extent permitted by law, overdue
interest on, any LIBOR Loan shall bear interest, payable on demand, for
each day until paid, at a rate per annum equal to the sum of two percent
(2%) plus the higher of (i) the LIBOR Rate for the immediately preceding
Interest Period applicable to such LIBOR Loan or (ii) the rate applicable
to Base Rate Loans for such day; provided that, the rate of interest shall
not exceed the maximum rate of interest permitted under La. R.S. 9:3509.
(c) The Agent shall (in accordance with this Agreement) determine each
interest rate applicable to the Loans hereunder. The Agent shall give
prompt notice to Borrower and the Banks by telecopy, telex or cable of each
rate of interest so determined, and its determination thereof shall be
conclusive in the absence of manifest error. Any change in
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the Base Rate shall become effective as of the opening of business on the
day on which such change in the Base Rate shall occur.
5.3 Fees.
(a) Borrower shall pay to Agent for the account of the Banks, in
arrears, on the last day of March, June, September and December in each
year (or, if such day is not a Business Day, on the next succeeding
Business Day) and on the last day of the Revolving Credit Period, a
commitment fee (the "Commitment Fee") equal to: (i) one fourth (1/4) of the
rate per annum set forth in the column labeled "Commitment Fee" in the
definition of "Applicable Margin" that corresponds to Borrower's Ratio of
Consolidated Total Debt as of the end of the immediately preceding fiscal
quarter to Consolidated EBITDA for the immediately preceding four (4)
fiscal quarters multiplied by (ii) the unused Revolving Credit Commitments
of all of the Banks during the preceding fiscal quarter, or portion
thereof, which unused Revolving Credit Commitments shall be arrived at by
dividing the sum of the unused Revolving Credit Commitments of the Banks
for each day of that quarter as of the close of each day, by 90. Upon,
receipt, Agent shall promptly pay each Bank its Pro Rata Share of any such
Commitment Fee paid by Borrower. The unused Revolving Credit Commitments
shall be defined as (x) the total of the Revolving Credit Commitments of
all of the Banks minus (y) the sum of (1) all outstanding Revolving Credit
Loans, (2) all outstanding Letter of Credit Loans, and (3) the aggregate
undrawn face amount of all outstanding Letters of Credit.
(b) Borrower shall pay to Agent an agreed upon annual fee. Borrower
shall pay an origination fee to the Banks equal to 1/4 of 1% of the total
Revolving Credit Commitments.
5.4 Early Payments.
(a) Borrower may, upon notice to the Agent specifying that it is
paying its Revolving Credit Loans which are Base Rate Loans, pay without
penalty or premium such Base Rate Loans in whole at any time, or from time
to time in part in amounts aggregating $1,000,000.00, or any larger
multiple of $100,000.00; provided, however, that in no event may Borrower
make a partial payment of Base Rate Loans which results in the total
outstanding Revolving Credit Loans which are Base Rate Loans being greater
than zero but less than $1,000,000.00. Each such optional payment shall be
applied to pay the Base Rate Loans of the several Banks in proportion to
their respective Revolving Credit Commitments.
(b) Borrower may, upon at least one (1) Business Day's notice to the
Agent specifying that it is paying its Revolving Credit Loans which are
LIBOR Loans, pay without penalty or premium on the last day of any Interest
Period its LIBOR Loans to which such Interest Period applies, in whole, or
in part in amounts aggregating $1,000,000.00 or any larger multiple of
$100,000.00, by paying the principal amount to be paid together with all
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accrued and unpaid interest thereon to and including the date of payment;
provided, however, that (i) in no event may Borrower pay any Loan with
respect to which Borrower has given a notice of conversion to or
continuation of a LIBOR Loan pursuant to Section 5.1(a) and (ii) in no
event may Borrower make a partial payment of LIBOR Loans which results in
the total outstanding Revolving Credit Loans which are LIBOR Loans with
respect to which a given Interest Period applies being greater than zero
but less than $1,000,000.00. Each such optional payment shall, subject to
Section 5.6, be applied to pay such LIBOR Loans of the several Banks in
proportion to their respective Revolving Credit Commitments.
(c) Upon receipt of a notice of payment pursuant to any of Sections
5.4(a) through (b) above, the Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share of such payment and such
notice shall not thereafter be revocable by Borrower.
(d) Borrower may, upon notice to the Whitney specifying that it is
paying its Swing Loan, pay without penalty or premium such Swing Loan in
whole at any time, or in part from time to time.
5.5 General Provisions as to Payments. Borrower shall make each payment
of principal of, and interest on, the Loans and of fees and all other amounts
payable hereunder, not later than 12:00 noon (New Orleans time) on the date when
due (2:00 p.m. New Orleans Time in the case of payments on the Swing Loans), in
federal or other funds immediately available in New Orleans, Louisiana, to the
Agent at its address referred to in Section 11.7. The Agent will promptly
distribute to each Bank in immediately available funds its ratable share of each
such payment received by the Agent for the account of the Banks, provided,
however, that payments of principal, interest and fees with respect to the Swing
Line Note and the Swing Loans shall be retained by Whitney for its own account.
Whenever any payment of principal of, or interest on, the Loans or of fees shall
be due on a day which is not a Business Day, the date for payment thereof shall
be extended to the next succeeding Business Day, except that in the case of
LIBOR Loans such payment dates shall be subject to the definition of Interest
Period. If the date for any payment of principal is extended by operation of
law or otherwise, interest thereon, at the then applicable rate, shall be
payable for such extended time.
5.6 Funding Losses. Notwithstanding any provision contained herein to the
contrary, if Borrower makes any payment of principal with respect to any LIBOR
Loan (pursuant to Sections 3.1, 5.4, 9 or otherwise) on any day other than the
last day of the Interest Period applicable thereto, or if Borrower fails to
borrow or pay any LIBOR Loan after notice has been given to the Agent in
accordance with Section 3.3, 5.1 or 5.4(b), Borrower shall reimburse each Bank
on demand for any resulting losses and expenses incurred by it, including,
without limitation, any losses incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of margin for the period after
any such payment, provided that such Bank shall have delivered to Borrower a
certificate as to the amount of such losses and expenses.
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5.7 Basis for Determining Interest Rate Inadequate or Unfair. If with
respect to any Interest Period, the Agent determines that either adequate and
reasonable means do not exist for ascertaining the LIBOR Rate for any Interest
Period, or it becomes impractical for Agent or any Bank to obtain funds to make
or maintain any borrowing bearing interest at the LIBOR Rate, or Agent or any
Bank shall have determined that the LIBOR Rate will not adequately and fairly
reflect the cost to Agent or any Bank of making, maintaining, or funding a
proposed borrowing that Borrower has requested to bear interest at the LIBOR
Rate, then the Agent shall forthwith give notice thereof to Borrower and the
Banks, whereupon until the Agent notifies Borrower that the circumstances giving
rise to such suspension no longer exist, (a) the obligations of the Banks to
make LIBOR Loans shall be suspended, and (b) Borrower shall repay in full the
then outstanding principal amount of each of its LIBOR Loans together with all
accrued and unpaid interest thereon, on the last day of the then current
Interest Period applicable to such Loan, or convert the then outstanding
principal amount of each of its LIBOR Loans to a Base Rate Loan on the last day
of the then current Interest Period applicable to each such LIBOR Loan.
5.8 Illegality. If, after the effective date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
or regulatory authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank with any
request or directive (whether or not having the force of law) of any such
governmental or regulatory authority, central bank or comparable agency shall
make it unlawful or impossible for any Bank to make, maintain or fund its LIBOR
Loans to Borrower and such Bank shall so notify the Agent, the Agent shall
forthwith give written notice thereof to the other Banks and Borrower. If Agent
provides Borrower with such written notice, Borrower shall repay in full the
then outstanding principal amount of each of its LIBOR Loans from such Bank,
together with all accrued and unpaid interest thereon, on either (a) the last
day of the then current Interest Period applicable to such LIBOR Loan if such
Bank may lawfully continue to maintain and fund such LIBOR Loan to such day or
(b) within fifteen (15) days of the receipt of such notice if such Bank may not
lawfully continue to fund and maintain such LIBOR Loan to such day, provided
that Borrower shall not be obligated to reimburse any such Bank for any losses
or expenses as provided in Section 5.6. Concurrently with repaying each LIBOR
Loan of such Bank, Borrower may borrow a Base Rate Loan in an equal principal
amount from such Bank, and, if Borrower so elects, such Bank shall make such a
Base Rate Loan to Borrower.
5.9 Increased Cost.
(a) If after the effective date hereof, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any request or
directive (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency (a "Regulatory Change"):
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(A) shall subject any Bank to any tax, duty or other charge with
respect to its LIBOR Loans, its Revolving Credit Notes or its obligation to
make LIBOR Loans hereunder, or shall change the basis of taxation of
payments to any Bank of the principal of or interest on its LIBOR Loans or
any other amounts due under this Agreement in respect of its LIBOR Loans or
its obligation to make LIBOR Loans (except for taxes on or changes in the
rate of tax on the overall net income of such Bank); or
(B) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of the
Federal Reserve System), special deposit, capital or similar requirement
against assets of, deposits with or for the account of, or credit extended
or committed to be extended by, any Bank or shall, with respect to any Bank
or the Interbank Eurodollar market, impose, modify or deem applicable any
other condition affecting its LIBOR Loans, its Revolving Credit Notes or
its obligation to make LIBOR Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D, to impose a cost on or increase the cost to) such Bank of
making or maintaining any LIBOR Loan, or to reduce the amount of any sum
received or receivable by such Bank under this Agreement or under its Notes with
respect thereto, by an amount deemed by such Bank, in its good faith judgment,
to be material, and if such Bank is not otherwise fully compensated for such
increase in cost or reduction in amount received or receivable by virtue of the
inclusion of the reference to LIBOR Reserve Percentage in the calculation of the
interest rate applicable to LIBOR Loans, then, within fifteen (15) days after
notice by such Bank to Borrower together with a copy of the official notice of
the applicable change in law (if applicable) and a work sheet showing how the
change in cost or reduction or increase in amount received or receivable was
calculated (with a copy to the Agent and all of the other Banks), Borrower shall
pay for the account of such Bank as additional interest, such additional amount
or amounts as will compensate such Bank for such increased cost or reduction.
Each Bank will promptly notify Borrower, the Agent and all of the other Banks of
any event of which it has knowledge, occurring after the effective date hereof,
which will entitle such Bank to compensation pursuant to this Section. In
determining such amount or amounts, such Bank may use any reasonable averaging
and attribution methods.
(b) If any Bank demands compensation under this Section, Borrower may
at any time, upon at least three (3) Business Days' prior notice to such
Bank and the Agent, repay in full its then outstanding LIBOR Loans, as the
case may be, of such Bank, together with all accrued and unpaid interest
thereon to the date of prepayment and any funding losses and other amounts
due under Section 5.6. Concurrently with repaying such LIBOR Loans of such
Bank, Borrower may borrow from such Bank a Base Rate Loan in an amount
equal to the aggregate principal amount of such LIBOR Loans, and, if
Borrower so elects, such Bank shall make such a Base Rate Loan to Borrower.
5.10 Base Rate Loans Substituted for Affected LIBOR Loans. If notice has
been given by a Bank pursuant to Section 5.7 or 5.8 or by Borrower pursuant to
Section 5.9(b) requiring LIBOR
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Loans of any Bank to be repaid, then, unless and until such Bank notifies
Borrower that the circumstances giving rise to such repayment no longer apply,
all Loans which would otherwise be made by such Bank to Borrower as LIBOR Loans
shall be made instead as Base Rate Loans. Such Bank shall notify Borrower if and
when the circumstances giving rise to such repayment no longer apply.
5.11 Capital Adequacy. If, after the effective date of this Agreement, any
Bank shall have determined that the adoption of any applicable law, rule,
regulation or treaty regarding capital adequacy, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or will have the effect of
reducing the rate of return on such Bank's capital in respect of any Letter of
Credit or its obligations hereunder to a level below that which such Bank could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy), then from
time to time Borrower shall pay to such Bank within fifteen (15) days of a
written demand such additional amount or amounts as will compensate such Bank
for such reduction. In determining such amount or amounts, such Bank may use
any reasonable averaging and attribution methods. Each Bank will promptly
notify the Borrower of any event occurring after the effective date hereof of
which it has knowledge which will entitle such Bank to compensation pursuant to
this section 5.11.
5.12 Survival of Provisions. All provisions relating to reimbursement to
any Bank of amounts sufficient to protect the yield to such Bank with respect to
the Loans, including, without limitation, Sections 5.7, 5.8 and 5.9 hereof,
shall survive the payment of the Notes and the termination of this Agreement.
5.13 Discretion of Bank as to Manner of Funding. Notwithstanding any
provision contained in this Agreement to the contrary, each of the Banks shall
be entitled to fund and maintain its funding of all or any part of its LIBOR
Loans in any manner it elects, it being understood, however, that for purposes
of this Agreement all determinations hereunder (including, without limitation,
the determination of each Bank's funding losses and expenses under Section 5.6)
shall be made as if such Bank had actually funded and maintained each LIBOR Loan
through the purchase of deposits having a maturity corresponding to the maturity
of the applicable Interest Period relating to the applicable LIBOR Loan and
bearing an interest rate equal to the applicable LIBOR Rate.
5.14 Computation of Interest. Interest on Base Rate Loans hereunder shall
be computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day). Interest on
LIBOR Loans shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed, calculated as to each Interest Period from
and including the first day thereof but excluding the last day thereof.
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SECTION 6. PRECONDITIONS TO LOANS AND LETTERS OF CREDIT.
6.1 Initial Revolving Credit Loan, Initial Swing Loan or Letter of Credit.
Notwithstanding any provision contained herein to the contrary, none of the
Banks shall have any obligation to make the initial Revolving Credit Loan
hereunder, Whitney shall have no obligation to make the initial Swing Loan
hereunder, and the Banks shall have no obligation to issue a Letter of Credit
hereunder unless the Agent shall have received on the effective date hereof:
(a) This Agreement and the Notes, each executed by a duly authorized
officer or Borrower;
(b) The Continuing Guarantee by each Subsidiary (other than Offshore),
each executed by a duly authorized officer of such Subsidiary;
(c) A copy of resolutions of the Board of Directors of Borrower, duly
adopted, which authorize the execution, delivery and performance of this
Agreement, the Notes, the Letter of Credit Application(s) and the other
Transaction Documents delivered at or prior to the closing, certified by
the Chief Executive Officer and the Secretary or an Assistant Secretary of
Borrower;
(d) A copy of resolutions of the Board of Directors of each
Subsidiary, duly adopted, which authorize the execution, delivery and
performance of the Continuing Guarantee and the Letter of Credit
Application(s) executed by such Subsidiary (other than Offshore), certified
by the Chief Executive Officer and the Secretary or an Assistant Secretary
of such Subsidiary;
(e) An incumbency certificate, executed by the Secretary or an
Assistant Secretary of Borrower, which shall identify by name and title and
bear the signatures of all of the officers of Borrower executing any of the
Transaction Documents delivered at or prior to the closing;
(f) An incumbency certificate, executed by the Secretary or an
Assistant Secretary of each Subsidiary (other than Offshore), which shall
identify by name and title and bear the signatures of the officer of such
Subsidiary executing the Continuing Guarantee of such Subsidiary delivered
at or prior to the closing;
(g) Opinions of counsel for Borrower and the Subsidiaries satisfactory
to Agent relating to the Transaction Documents and such other matters as
the Banks may reasonably require and satisfactory in form and substance to
the Agent;
(h) Payment of Agent's costs and expenses as provided for in Section
11.3 and payment to Agent of the fees required under Sections 5.3(a) and
(b) herein; and
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(i) All documents executed or submitted pursuant hereto by or on
behalf of Borrower of any of its Subsidiaries shall be satisfactory in form
and substance to the Agent and its counsel; and the Agent and its counsel
shall have received all information, approvals, opinions, documents or
other instruments as the Agent or its counsel may reasonably request.
Any one or more of the conditions set forth above which have not been
satisfied by Borrower on or prior to the effective date hereof shall not be
deemed permanently waived unless Agent and the Banks shall waive the same in a
writing which expressly states that the waiver is permanent, and, in all cases
in which the waiver is not stated to be permanent, Agent and the Banks may at
any time subsequent thereto insist upon compliance and satisfaction of any such
condition as a condition to any new Loan advance and/or to the requested
conversion of any interest rate on any outstanding Loan hereunder, and Banks
shall have no obligation to make any such advance or to convert any such
interest rate until all such conditions have been satisfied.
6.2 All Loans. Notwithstanding any provision contained herein to the
contrary, none of the Banks shall have any obligation to make any further
Revolving Credit Loan hereunder or to convert any Loan to a LIBOR Loan or to
extend any LIBOR Loan for a new Interest Period, and Whitney shall have no
obligation to make any further Swing Loan hereunder, unless:
(a) With respect to any new Revolving Credit Loan advance, the Agent
shall have received a Borrowing Notice for such Revolving Credit Loan as
required by Section 3.3;
(b) With respect to any conversion of a Loan to or continuation of any
Loan as a LIBOR Loan, the Agent shall have received the notice for such
conversion or continuation as required by Section 5.1;
(c) On the date of and immediately after giving effect to such
Revolving Credit Loan, such Swing Loan or such interest rate conversion or
extension, no Default or Event of Default under this Agreement shall have
occurred and be continuing;
(d) No change in the Properties, assets, liabilities, business,
operations, prospects, income or condition (financial or otherwise) of
Borrower and its Subsidiaries taken as a whole and having a Material
Adverse Effect shall have occurred since the effective date of this
Agreement and be continuing; and
(e) Except for subsequent changes consented to by the Required Banks
after the effective date hereof, or as allowed pursuant to this Agreement,
all of the representations and warranties of Borrower contained in Section
7 of this Agreement and in the other Transaction Documents shall be true
and correct in all material respects on and as of the date of such
Revolving Credit Loan, such Swing Loan or such interest rate conversion or
continuation as if made on and as of the date of such Revolving Credit
Loan, such Swing Loan or such interest rate conversion or continuation.
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Each request for a Revolving Credit Loan by Borrower hereunder, each
request for a Swing Loan by Borrower hereunder and each request by Borrower to
convert any Loan to or continue any Loan as a LIBOR Loan shall be deemed to be a
representation and warranty by Borrower on the date of such Revolving Credit
Loan, such Swing Loan or such conversion or continuation, as the case may be, as
to the facts specified in clauses (c), (d) and (e) of this Section 6.2.
6.3 Letters of Credit. Notwithstanding any provision contained herein to
the contrary, Issuer shall have no obligation to issue any Letter of Credit
after the effective date hereof unless:
(a) Issuer shall have received a Letter of Credit Request for such
Letter of Credit as required by Section 4.1(a);
(b) Issuer shall have received a Letter of Credit Application for such
Letter of Credit as required by Section 4.1(a), duly executed by an
authorized officer of Borrower and of a Subsidiary (if such Letter of
Credit is for the account of such Subsidiary) as account party;
(c) Borrower shall have complied with all of the procedures and
requirements set forth in Section 4.1;
(d) On the date of and immediately after the issuance of such Letter
of Credit, no Default or Event of Default under this Agreement shall have
occurred and be continuing;
(e) No change in the Properties, assets, liabilities, business,
operations, prospects, income or condition (financial or otherwise) of
Borrower and its Subsidiaries taken as a whole and having a Material
Adverse Effect shall have occurred since the effective date of this
Agreement and be continuing;
(f) Except for subsequent changes consented to by the Required Banks
after the effective date hereof, all of the representations and warranties
of Borrower contained in Section 7 of this Agreement and in the other
Transaction Documents shall be true and correct in all material respects on
and as of the date of the issuance of such Letter of Credit as if made on
and as of the date of the issuance of such Letter of Credit;
(g) Issuer shall have no obligation to issue any Letter of Credit for
the account of Offshore unless (i) Offshore shall have funded one or more
loans to Borrower which in the aggregate are equal to no less than the face
amount of all Letters of Credit issued for the account of Offshore
(collectively, the "Reserves Loan") pursuant to documents satisfactory to
Agent and (ii) Agent shall have received an opinion of counsel for Offshore
acceptable to Agent relating to such loan and such loan documents
satisfactory in form and substance to Agent; and
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(h) Issuer shall have received such other documents, certificates and
agreements as it may reasonably request.
Each request for the issuance of a Letter of Credit by Borrower hereunder shall
be deemed to be a representation and warranty by Borrower on the date of the
issuance of such Letter of Credit as to the facts specified in clauses (d), (e)
and (f) of this Section 6.3.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants to each of the Banks that:
7.1 Corporate Existence and Power. Borrower and each Subsidiary: (a) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite powers and all
governmental and regulatory licenses, authorizations, consents and approvals
required to carry on its business as now conducted; and (c) is qualified to
transact business as a foreign entity in, and is in good standing under the laws
of, all states in which it is required by applicable law to maintain such
qualification and good standing except for those states in which the failure to
qualify or maintain good standing could not reasonably be expected to have a
Material Adverse Effect.
7.2 Corporate Authorization. The execution, delivery and performance by
Borrower of this Agreement, the Notes, the Letter of Credit Application(s) and
the other Transaction Documents are within the corporate powers of Borrower and
have been duly authorized by all necessary corporate action. The execution,
delivery and performance by each Subsidiary of any Continuing Guarantee, Letter
of Credit Application(s) and other Transaction Documents executed by such
Subsidiary are within the corporate powers of such Subsidiary and have been duly
authorized by all necessary corporate action.
7.3 Binding Effect. This Agreement, the Notes and the other Transaction
Documents executed contemporaneously with the execution of this Agreement have
been duly executed and delivered by Borrower and constitute the legal, valid and
binding obligations of Borrower enforceable in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and the Letter of Credit Application(s) and
any future Transaction Documents not executed contemporaneously with the
execution of this Agreement, when executed and delivered in accordance with this
Agreement, will constitute the legal, valid and binding obligations of Borrower
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
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7.4 Financial Statements. Borrower has furnished each of the Banks with
the following financial statements: (1) the consolidated balance sheets and
statements of income, retained earnings and cash flows of Borrower and its
Subsidiaries as of March 31, 1997, all certified by Borrower's independent
certified public accountants, which financial statements have been prepared as
determined in accordance with GAAP consistently applied; and (2) unaudited
consolidated balance sheets and statements of income, retained earnings and cash
flows of Borrower and its Subsidiaries as of June 30, 1997, certified by the
Vice President of Borrower as being true and correct to the best of his
knowledge and as being prepared in accordance with standard accounting practices
of the Borrower and its Subsidiaries consistently applied. Borrower further
represents and warrants to each of the Banks that: (1) said balance sheets and
their accompanying notes fairly present the condition, respectively, of Borrower
and its Subsidiaries as of the dates thereof; (2) there has been no material
adverse change in the condition or operation, financial or otherwise, of
Borrower or any of its Subsidiaries since June 30, 1997; and (3) neither
Borrower nor any Subsidiaries had, as of the respective dates of such financial
statements, any material direct or contingent liabilities which are not
disclosed on said financial statements or the notes thereto (to the extent such
disclosure is required by GAAP).
7.5 Litigation. There is no action, proceeding or claim pending or, to
the knowledge of Borrower, threatened against Borrower or any Subsidiary before
any court, arbitrator or any governmental, regulatory or administrative body,
agency or official (including, but not limited to, any ERISA plan administrator)
which, if adversely determined against Borrower or any Subsidiary, could
reasonably be expected to have a Material Adverse Effect or which would need to
be disclosed, as determined in accordance with GAAP, in Borrower's or any
Subsidiary's financial statements. Neither Borrower nor any Subsidiary is in
default with respect to any order, writ, injunction, decision or decree of any
court, arbitrator or any governmental, regulatory or administrative body, agency
or official, a default under which could reasonably be expected to have a
Material Adverse Effect. As of the effective date hereof, there are no
outstanding judgments against Borrower or any Subsidiary.
7.6 ERISA. Borrower and each Subsidiary are in compliance in all material
respects with the applicable provisions of ERISA and the Code (pertaining to any
Pension Plan), and have not engaged in, or permitted to exist or occur, any
condition, event or transaction which could result in the incurrence by Borrower
or any Subsidiary or ERISA Affiliate of any liability, fine or penalty which
would have a Material Adverse Effect.
7.7 Tax Payment. There is no proposed, asserted or assessed tax
deficiency against Borrower or any of its Subsidiaries which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
7.8 Subsidiaries. There are no Subsidiaries other than as identified on
Schedule 7.8 attached hereto, as the same may from time to time be amended,
modified or supplemented as provided herein. The capital stock of each
Subsidiary is duly authorized, validly issued and fully paid and nonassessable
and is owned solely by Borrower and/or any one or more Subsidiaries.
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Except as disclosed on Schedule 7.8 attached hereto and the interest of Borrower
and its Subsidiaries in TDI Nass International and Zentech, Inc., a Texas
Corporation, neither Borrower nor any of its Subsidiaries, individually or
collectively, owns or holds, directly or indirectly, any capital stock or equity
security of, or any equity interest in, any corporation or business. Borrower or
a Subsidiary of Borrower owns a Forty-Nine (49%) Percent ownership interest in
TDI Nass International and a twenty (20%) percent interest in Zentech, Inc., a
Texas Corporation. Borrower may at any time amend, modify or supplement Schedule
7.8 by notifying the Agent in writing of any changes thereto, including any
formation, acquisition, merger or liquidation of Subsidiaries or any change in
the capitalization of any Subsidiary, in each case, in accordance with the terms
of this Agreement and provided that any such new Subsidiary shall, within thirty
(30) days of the creation or acquisition of such Subsidiary, execute and deliver
to Agent for the benefit of all the Banks a Continuing Guarantee in form of
Exhibit C annexed hereto and made a part hereof; provided further that, so long
as any Subsidiary acquired after the effective date hereof is not solely owned
by Borrower and/or any one or more Subsidiaries, Borrower may deliver Stock
Pledge Documents with respect to such Subsidiary to Agent in lieu of a
Continuing Guarantee of such Subsidiary. Upon the receipt of a Continuing
Guarantee by a Subsidiary, Agent will release any Stock Pledge Documents held by
Agent with respect to such Subsidiary.
7.9 Compliance With Other Instruments; None Burdensome. Neither Borrower
nor any Subsidiary is a party to any contract or agreement or subject to any
charter or other corporate or other restriction which could have a Material
Adverse Effect and which is not disclosed on Borrower's or any Subsidiary's
financial statements heretofore submitted to the Banks; neither the execution
and delivery by Borrower and the Subsidiaries of the Transaction Documents nor
the consummation of the transactions therein contemplated has violated or will
violate any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on Borrower or any Subsidiary, or any of the provisions of
Borrower's or any Subsidiary's Certificate of Incorporation or Bylaws or any of
the provisions of any indenture, agreement, document, instrument or undertaking
to which Borrower or any Subsidiary is a party or subject, or by which it or its
Property is bound, or conflict with or constitute a default thereunder or result
in the creation or imposition of any Lien pursuant to the terms of any such
indenture, agreement, document, instrument or undertaking (other than in favor
of the Agent and/or the Banks pursuant to the Transaction Documents). No order,
consent, approval, license, authorization or validation of, or filing, recording
or registration with, or exemption by, any Governmental Authority, or any other
Person is required to authorize, or is required in connection with, the
execution, delivery or performance of, or the legality, validity, binding effect
or enforceability of, any of the Transaction Documents that has not already been
obtained.
7.10 Other Debt, Guarantees, Capitalized Leases. Except as disclosed on
Schedule 7.10 attached hereto as of the effective date of this Agreement, and
except for Debt incurred or made on or after the effective date hereof as
permitted under Section 8.2(a) and the other provisions of this Agreement,
neither Borrower nor any Subsidiary of Borrower is a borrower, guarantor or
obligor with respect to any Debt or Guarantees.
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7.11 Labor Matters. Neither Borrower nor any Subsidiary is a party to any
labor dispute which could reasonably be expected to have a Material Adverse
Effect. There are no strikes or walkouts relating to any labor contract to
which Borrower or any Subsidiary is subject which could reasonably be expected
to have a Material Adverse Effect. Hours worked and payments made to the
employees of Borrower and its Subsidiaries have not been in violation of the
Fair Labor Standards Act or any other applicable law dealing with such matters
which could reasonably be expected to have a Material Adverse Effect. Except as
described on Schedule 7.11 attached hereto, all payments due from Borrower or
any Subsidiary, or for which any claim may be made against any of them, in
respect of wages, employee health and welfare insurance and/or other benefits
have been paid or accrued as a liability on their respective books as determined
in accordance with GAAP.
7.12 Title to Property. Borrower and each Subsidiary has good recordable
and marketable title in fee simple to or valid leasehold interests in all of the
shipyards and other property listed on Schedule 7.12 attached hereto, has good
recordable and marketable title in fee simple to or valid leasehold interests in
all its other real (immovable) property, and has good title to or valid
leasehold interests in all its other property (other than property held under
Capital Leases) material to its business and none of such property is subject to
any Lien other than Permitted Liens.
7.13 Regulation U. Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of The
Board of Governors of the Federal Reserve System, as amended) and no part of the
proceeds of any Loan will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately (i) to purchase or carry margin stock or
to extend credit to others for the purpose of purchasing or carrying margin
stock, or to refund or repay indebtedness originally incurred for such purpose
or (ii) for any purpose which entails a violation of, or which is inconsistent
with, the provisions of any of the Regulations of The Board of Governors of the
Federal Reserve System, including, without limitation, Regulations G, U, T or X
thereof, as amended. If requested by any of the Banks, Borrower shall furnish
to the Agent a statement in conformity with the requirements of Federal Reserve
Form U-1 referred to in Regulation U.
7.14 Investment Company Act of 1940: Public Utility Holding Company Act of
1935. Borrower is not an "investment company" as that term is defined in, and is
not otherwise subject to regulation under, the Investment Company Act of 1940,
as amended. Borrower is not a "holding company" as that term is defined in, and
is not otherwise subject to regulation under, the Public Utility Holding Company
Act of 1935, as amended.
7.15 Patents, Licenses, Trademarks, Etc. Borrower and each of its
Subsidiaries have all permits, certificates, licenses (including patent and
copyright licenses), approvals and other authorizations required in connection
with the operation of their businesses, except those which the failure to have
could not reasonably be expected to have a Material Adverse Effect. There is no
pending or, to Borrower's actual knowledge, threatened litigation, or
arbitration in which it is alleged that Borrower or any Subsidiary has violated
or breached any patents, licenses, trademarks, trademark rights, trade names,
trade name rights and copyrights which could reasonably be expected to have a
Material Adverse Effect.
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7.16 Environmental and Safety and Health Matters. Except as disclosed on
Schedule 7.16 attached hereto: (i) the operations of Borrower and each
Subsidiary comply in all respects with (A) all applicable lawfully promulgated,
enacted, entered or finalized Environmental Laws and (B) all applicable lawfully
promulgated, enacted, entered or finalized Occupational Safety and Health Laws,
which the failure to comply with could reasonably be expected to have a Material
Adverse Effect; (ii) none of the operations of Borrower or any Subsidiary are
subject to any Environmental Claim or any judicial, governmental, regulatory or
administrative proceeding alleging the violation of any Occupational Safety and
Health Law, which, if adversely determined, could reasonably be expected to have
a Material Adverse Effect; (iii) to Borrower's actual knowledge, none of the
operations of Borrower or any Subsidiary is the subject of any material federal
or state investigation evaluating whether any remedial action is needed to
respond to any unsafe or unhealthful condition at any premises of Borrower or
such Subsidiary; (iv) neither Borrower nor any Subsidiary has filed any notice
under any Environmental Law or Occupational Safety and Health Law (pertaining to
a matter which has not been resolved) reporting (A) any past or present
spillage, disposal or Release into the environment of, or treatment, storage or
disposal of, any Hazardous Substance or any other hazardous, toxic or dangerous
waste, substance or constituent or other substance which could reasonably be
expected to have a Material Adverse Effect, or (B) any unsafe or unhealthful
condition at any premises of Borrower or such Subsidiary which could reasonably
be expected to have a Material Adverse Effect; and (v) neither Borrower nor any
Subsidiary has to its actual knowledge any contingent liability which could
reasonably be expected to have a Material Adverse Effect in connection with (A)
any spillage, disposal or Release into the environment of, or otherwise with
respect to, any Hazardous Substances or any other hazardous, toxic or dangerous
waste, substance or constituent or other substance or (B) any unsafe or
unhealthful environmental condition at any premises of Borrower or such
Subsidiary.
7.17 Investments. Except as disclosed on Schedule 7.17 attached hereto
neither Borrower nor any Subsidiary has any Restricted Investments.
7.18 No Default. No Default or Event of Default under this Agreement has
occurred and is continuing and no event has occurred which with the giving of
notice or the passage of time would constitute a Default or an Event of Default.
There is no existing default or event of default (and no event has occurred
which with the giving of notice or the passage of time would constitute a
default or an event of default) under or with respect to any indenture,
contract, agreement, lease or other instrument to which Borrower or any
Subsidiary is a party or by which Borrower, any Subsidiary or any Property of
Borrower or any Subsidiary is bound or affected, a default under which could
reasonably be expected to have a Material Adverse Effect. Neither Borrower nor
any Subsidiary of Borrower is in violation of any applicable statute, law, rule,
regulation or ordinance of the United States of America, of any state, city,
town, municipality, county or of any other jurisdiction, or of any agency
thereof, a violation of which could reasonably be expected to have a Material
Adverse Effect.
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7.19 No Burdensome Restrictions. No agreement or obligation of Borrower or
any of its Subsidiaries in effect on the effective date hereof and no statute,
law, rule, regulation or ordinance of the United States of America, of any
state, city, town, municipality, county or of any other jurisdiction, or of any
agency thereof, on the effective date hereof materially adversely affects
Borrower or any Subsidiary, or insofar as Borrower may reasonably foresee may
have an Material Adverse Effect.
7.20 Government Contracts. Neither Borrower nor any Subsidiary has ever
been barred from contracting (as a first tier or any level of subcontractor) for
or bidding on any contract with or for any U. S. Governmental Authority (each a
"Government Contract" and collectively, the "Government Contracts") or had a
Government Contract canceled or terminated for default by Borrower or any
Subsidiary, as the case may be. Neither Borrower nor any Subsidiary is
currently barred from (or has received notice that it is under investigation
with respect to a possible bar or may be barred from) bidding on or entering
into any Government Contract. None of Borrower's or any Subsidiary's current or
backlogged Government Contracts have been forfeited or canceled for the
convenience of any Governmental Authority or for the default of the Borrower or
any Subsidiary, as the case may be. Neither the Borrower nor any Subsidiary has
been given notice (i) that any such contract may be or will be canceled for the
convenience of any Governmental Authority or a default by Borrower or any
Subsidiary, as the case may be, (ii) that a major Borrower or any Subsidiary
program or contract will be eliminated or substantially reduced or suspended,
(iii) requiring or resulting in, loss of use or substantial impairment or
interference of use by Borrower or any Subsidiary, as the case may be, of any
facilities owned by any Governmental Authority, or (iv) that any relevant budget
authority or contract authority has been exceeded with respect to any material
Government Contract which in any such case is likely to have a Material Adverse
Effect.
7.21 Disclosure. Neither this Agreement nor any of the Exhibits or
Schedules hereto nor any certificate or other data furnished to the Agent or any
of the Banks in writing by or on behalf of Borrower or any Subsidiary in
connection with the transactions contemplated by this Agreement contains any
untrue or incorrect statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading.
SECTION 8. COVENANTS.
8.1 Affirmative Covenants of Borrower. Borrower covenants and agrees
that, so long as (i) any of the Banks has any obligation to make any Loan
hereunder or to issue any Letter of Credit hereunder, (ii) any Letter of Credit
remains outstanding or (iii) any of Borrower's Obligations (excluding any
continuing indemnity obligations beyond the Term of this Agreement or any
earlier termination hereof) remain unpaid:
(a) Information. Borrower will deliver to each of the Banks:
(i) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of Borrower, consolidated balance sheets
of Borrower and its Subsidiaries
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as of the end of such fiscal year and the related consolidated statements
of income, stockholders equity and cash flows for such fiscal year, setting
forth in each case, in comparative form, the figures for the previous
fiscal year, all such financial statements to be prepared as determined in
accordance with GAAP and reported on by and accompanied by the unqualified
opinion of independent certified public accountants of nationally
recognized standing selected by Borrower, together with (1) a certificate
from such accountants to the effect that, in making the examination
necessary for the signing of such annual audit report, such accountants
have not become aware of any Default or Event of Default that has occurred
and is continuing, or, if such accountants have become aware of any such
event, describing it and the steps, if any, being taken to cure it (such
accountants, however, shall not be liable to anyone by reason of their
failure to obtain knowledge of any Default or Event of Default which would
not be disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards) and (2) computations evidencing
Borrower's compliance with the financial covenants contained in Sections
8.1(m)(i) through (v) of this Agreement as calculated on a consolidated
basis for Borrower and its Subsidiaries;
(ii) as soon as available and in any event within forty-five (45) days
after the end of each of the first three (3) fiscal quarters of each fiscal
year of Borrower, consolidated balance sheets of Borrower and its
Subsidiaries as of the end of such fiscal quarter and the related
consolidated statements of income, retained earnings and cash flows for
such fiscal quarter and for the portion of Borrower's fiscal year ended at
the end of such fiscal quarter, setting forth in each case in comparative
form, the figures for the corresponding fiscal quarter and the
corresponding portion of Borrower's previous fiscal year, all in reasonable
detail;
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as Borrower or
any Subsidiary shall send to its stockholders and copies of all
registration statements (without exhibits) and all reports which Borrower
or any Subsidiary files with the Securities and Exchange Commission (or any
governmental body or agency succeeding to the functions of the Securities
and Exchange Commission);
(iv) simultaneously with the delivery of each set of financial
statements referred to in clauses (i) and (ii) above, a certificate of the
principal financial officer of Borrower in the form attached hereto as
Exhibit G and incorporated herein by reference, accompanied by supporting
financial work sheets where appropriate, (A) evidencing Borrower's
compliance with the financial covenants contained in Sections 8.l(m)(i)
through (v) of this Agreement as calculated on a consolidated basis for
Borrower and its Subsidiaries, (B) stating whether there exists on the date
of such certificate any Default or Event of Default and, if any Default or
Event of Default then exists, setting forth the details thereof and the
action which Borrower is taking or proposes to take with respect thereto,
and (C) certifying that all of the representations and warranties of
Borrower contained in this Agreement, as the same shall have been from time
to time updated by Borrower in writing to Agent (provided such updating
shall not relieve Borrower from its obligation to comply with all covenants
contained herein), are true and correct in all material respects on and as
of the date of such certificate as if made on the date of such certificate;
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(v) promptly upon receipt thereof, any reports submitted to Borrower
or any Subsidiary (other than reports previously delivered pursuant to
Sections 8.l(a)(i) and (ii) above) by independent accountants in connection
with any annual, interim or special audit made by them of the books of
Borrower or any Subsidiary;
(vi) as soon as possible and in any event within 45 days after the end
of each fiscal quarter (including fiscal year end) and simultaneously with
delivering the audited financial statements described in Section 8.1(a)(i),
a certificate of the principal financial officer of Borrower, accompanied
by supporting computations, setting forth the ratio of Consolidated Total
Debt as of the end of the immediately preceding fiscal quarter to
Consolidated EBITDA for the immediately preceding four (4) fiscal quarters;
(vii) Prior to any Acquisition, a certificate of the principal
financial officer of Borrower, accompanied by supporting financial work
sheets where appropriate, evidencing that such Acquisition is a Permitted
Acquisition; and
(viii) with reasonable promptness, such further information regarding
the business, affairs and financial condition of Borrower or any Subsidiary
as Agent may from time to time reasonably request.
Each of the Banks is hereby authorized to deliver a copy of any financial
statement or other information made available by Borrower or any Subsidiary to
any regulatory authority having jurisdiction over such Bank, pursuant to any
request therefor.
(b) Payment of Indebtedness. Borrower will, and it will cause each of
its Subsidiaries to pay and discharge any and all Indebtedness payable or
Guaranteed by Borrower or such Subsidiary, as the case may be, and any
interest or premium thereon, when due in accordance with the agreement,
document or instrument relating to such Indebtedness or Guarantee,
provided, however, that neither Borrower nor any Subsidiary shall be
required to pay any such Indebtedness or Guarantee (excluding Borrower' s
Obligations) which is being contested in good faith and by appropriate
proceedings being diligently conducted and for which provision in
accordance with GAAP has been made, except that Borrower or such
Subsidiary, as the case may be, shall pay or cause to be paid any such
Indebtedness or Guarantee forthwith upon the commencement of proceedings to
foreclose any Lien which is attached as security therefor, unless such
foreclosure is stayed by the filing of an appropriate bond.
(c) Maintenance of Books and Records, Consultations and Inspections.
Borrower will, and it will cause each of its Subsidiaries to, maintain
books and records as determined in accordance with GAAP and in which full,
true and correct entries shall be made of all
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dealings and transactions in relation to its business and activities.
Borrower will, and it will cause each of its Subsidiaries to, permit the
Agent and each of the Banks (and any Person appointed by the Agent or any
of the Banks to whom the Borrower does not reasonably object) to discuss
the affairs, finances and accounts of Borrower and each Subsidiary with the
officers of Borrower and each Subsidiary and their independent public
accountants, all at such reasonable times and as often as the Agent or any
of the Banks may from time to time reasonably request. Subject to any
confidentiality and/or security clearance restrictions applicable to
Borrower's or any Subsidiary's records, Borrower will also permit, and will
cause each Subsidiary to permit, inspection of its Properties, books and
records by the Agent during normal business hours and at other reasonable
times. Agent may be accompanied by representatives of any of the Banks
during any such inspections. Borrower will reimburse the Agent upon demand
for all costs and expenses incurred by the Agent in connection with any
such inspection conducted by the Agent while any Default or Event of
Default under this Agreement has occurred and is continuing. A
representative of Borrower may be present during any such inspection,
provided that a particular representative's availability or unavailability
shall not inhibit or delay such inspection. Borrower shall permit the Agent
to communicate directly with Borrower's independent public accountants and
to discuss the affairs, finances and accounts of the Borrower and the
Subsidiaries at such reasonable times and intervals and to such reasonable
extent as the Agent may request. A representative of Borrower may be
present and/or participate in any such communication with Borrower's
accountants, provided that a particular representative's availability or
unavailability shall not inhibit or delay such communication.
(d) Payment of Taxes. Borrower will, and it will cause each of its
Subsidiaries to, duly file all federal, state and local income tax returns
and all other tax returns and reports of Borrower or such Subsidiary, as
the case may be, which are required to be filed and duly pay and discharge
promptly all taxes, assessments and other governmental charges imposed upon
it or any of its Property; provided, however, that neither Borrower nor any
Subsidiary shall be required to pay any such tax, assessment or other
governmental charge the payment of which is being contested in good faith
and by appropriate proceedings being diligently conducted and for which
adequate provision as determined in accordance with GAAP has been made,
except that Borrower or such Subsidiary, as the case may be, shall pay or
cause to be paid all such taxes, assessments and governmental charges
forthwith upon the commencement of proceedings to foreclose any Lien which
is attached as security therefor, unless such foreclosure is stayed by the
filing of an appropriate bond.
(e) Payment of Claims. Borrower will, and it will cause each of its
Subsidiaries to, promptly pay and discharge (i) all trade accounts payable
in accordance with usual and customary business practices and (ii) all
claims for work, labor or materials which if unpaid might become a Lien
upon any of its Property or assets; provided, however, that neither
Borrower nor any Subsidiary shall be required to pay any such account
payable or claim the payment of which is being contested in good faith and
by appropriate proceedings being diligently conducted and for which
adequate provision as determined in accordance with
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GAAP has been made, except that Borrower or such Subsidiary, as the case
may be, shall pay or cause to be paid all such accounts payable and claims
forthwith upon the commencement of proceedings to foreclose any Lien which
is attached as security therefor, unless such foreclosure is stayed by the
filing of an appropriate bond.
(f) Corporate Existence. Borrower will, and it will cause each of
its Subsidiaries to, do all things necessary to (i) preserve and keep in
full force and effect at all times its corporate or other existence and all
permits, licenses, franchises and other rights material to its business,
and (ii) be duly qualified to do business in all jurisdictions where the
nature of its business or its ownership of Property requires such
qualification except for those states in which the failure to qualify could
not reasonably be expected to have a Material Adverse Effect.
(g) Maintenance of Property. Borrower will, and it will cause each of
its Subsidiaries to, at all times, preserve and maintain all of the
Property useful and necessary in the conduct of its business in adequate
working order (taking into consideration the condition of any such Property
in existence on the effective date hereof), ordinary wear and tear
excepted.
(h) Compliance with Laws, Regulations, Etc. Borrower will, and it
will cause each of its Subsidiaries to, comply with any and all laws,
ordinances and governmental and regulatory rules and regulations to which
Borrower or such Subsidiary, as the case may be, is subject (including,
without limitation, the Federal Acquisition Regulations, 48 C.F.R. Chapters
1 through 68) except where noncompliance would not have a Material Adverse
Effect, and maintain any and all licenses, permits, franchises and other
governmental and regulatory authorizations necessary to the ownership of
its Properties or to the conduct of its business, which violation or
failure to obtain could reasonably be expected to have a Material Adverse
Effect.
(i) Environmental Matters. Borrower will, and it will cause each of
its Subsidiaries to, at all times comply with all requirements and
agreements contained in Section 11.4 hereof. Borrower will, and will cause
each of its Subsidiaries to, at all times comply with all Environmental
Laws which the failure to comply with could reasonably be expected to have
a Material Adverse Effect. Borrower shall give the Agent and each of the
Banks prompt written notice of (i) any Environmental Claim or any other
action or investigation with respect to the existence or potential
existence of any Hazardous Substances instituted or threatened with respect
to Borrower or any Subsidiary or any of the Properties or facilities owned,
leased or operated by Borrower or any Subsidiary that could result in
liability in excess of $250,000.00 and (ii) any condition or occurrence on
any of the Properties or facilities owned, leased or operated by Borrower
or any Subsidiary which constitutes a material violation by Borrower or any
Subsidiary of any lawfully promulgated, enacted, entered or finalized
Environmental Laws or which gives rise to a reporting obligation or
requires pursuant to an order of a Governmental Authority (the "Order")
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removal or remediation and Borrower agrees to take all action which is
required by the Order or any lawfully promulgated, enacted, entered or
finalized Environmental Law in connection with such action, investigation,
condition or occurrence in accordance with such plan with due diligence and
to fulfill the requirements of any Order or lawfully promulgated, enacted,
entered or finalized Environmental Law as promptly as possible and in all
events within the time required by any Order. Borrower shall promptly
provide the Agent and each of the Banks with copies of all material
documentation relating thereto, and such other material information with
respect to environmental matters as the Agent or any of the Banks may
reasonably request from time to time.
(j) ERISA Compliance. If Borrower, any Subsidiary or any ERISA
Affiliate shall have any Pension Plan, Borrower, such Subsidiary or such
ERISA Affiliate, as the case may be, shall comply in all respects with all
requirements of ERISA and the Code relating to such Pension Plan, with
which the failure to comply could have a Material Adverse Effect. Without
limiting the generality of the foregoing, unless Borrower shall have
received the prior written consent of the Required Banks to the contrary
(which consent shall not be unreasonably withheld), Borrower will not, and
it will not cause or permit any Subsidiary or any ERISA Affiliate to:
(i) permit any Pension Plan maintained by Borrower, any Subsidiary or
any ERISA Affiliate to engage in any nonexempt "prohibited transaction," as
such term is defined in Section 4975 of the Code which could have a
Material Adverse Effect;
(ii) permit any Pension Plan maintained by Borrower, any Subsidiary or
any ERISA Affiliate to incur any "accumulated funding deficiency", as such
term is defined in Section 302 of ERISA, 29 U.S.C. (S) 1082, whether or not
waived, which could have a Material Adverse Effect;
(iii) allow the termination of any Pension Plan in a manner which
could result in the imposition of a Lien on any Property of Borrower, any
Subsidiary or any ERISA Affiliate pursuant to Section 4068 of ERISA, 29
U.S.C. (S) 1368; or
(iv) take any action which would constitute a complete or partial
withdrawal from a Multi-Employer Plan within the meaning of Sections 4203
or 4205 of Title IV of ERISA, which could have a Material Adverse Effect.
(k) Notices. Borrower will notify the Agent in writing of any of the
following within three (3) Business Days after learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken by
the Person(s) affected with respect thereto:
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(i) the occurrence of any Default or Event of Default under this
Agreement:
(ii) the occurrence of any default or event of default by Borrower,
any Subsidiary or any other Obligor under any note, indenture, loan
agreement, mortgage, deed of trust, security agreement, lease or other
similar agreement, document or instrument to which Borrower, any Subsidiary
or any other Obligor, as the case may be, is a party or by which it is
bound or to which it is subject which evidences or secures Indebtedness in
an outstanding principal amount of $1,000,000.00 or more in the aggregate
for all such defaulted agreements;
(iii) the institution of any litigation, arbitration proceeding or
governmental or regulatory proceeding affecting Borrower, any other Obligor
or any Subsidiary, whether or not considered to be covered by insurance, in
which the prayer or claim for relief seeks recovery of an amount in excess
of $1,000,000.00 (or, if no dollar amount is specified in the prayer or
claim for relief, in which there is a reasonable likelihood of recovery of
an amount in excess of $1,000,000.00) or any form of equitable relief;
(iv) the entry of any judgment or decree against Borrower, any other
Obligor or any Subsidiary which, when aggregated with any other such
judgments or decrees then entered and unsatisfied, exceed $1,000,000.00 in
the aggregate;
(v) the occurrence of a Reportable Event with respect to any Pension
Plan; the filing of a notice of intent to terminate a Pension Plan by
Borrower, any ERISA Affiliate or any Subsidiary; the institution of
proceedings to terminate a Pension Plan by the PBGC or any other Person;
the withdrawal in a "complete withdrawal" or a "partial withdrawal" as
defined in Sections 4203 and 4205, respectively, of ERISA by Borrower, any
ERISA Affiliate or any Subsidiary from any Multi-Employer Plan; or the
incurrence of any material increase in the contingent liability of Borrower
or any Subsidiary with respect to any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA which covers retired employees and their
beneficiaries;
(vi) the occurrence of any event that is reasonably likely to have a
Material Adverse Effect: and
(vii) any notices required to be provided pursuant to other
provisions of this Agreement that do not otherwise provide a time frame in
which such notice is to be provided and notice of the occurrence of such
other events as the Agent may from time to time reasonably specify.
(l) Insurance. Borrower will, and it will cause each of its
Subsidiaries to, insure all of its Property of the character usually
insured by corporations engaged in the same or similar businesses with
properties in similar geographic areas, against loss or damage of the kind
customarily insured against by such corporations, and carry adequate
liability insurance
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and other insurance of a kind and in amount(s) generally carried by such
corporations. All insurance required by this Section 8.1(1) shall be with
insurers rated A-VII or better by A.M. Best Company (or accorded a similar
rating by another nationally or internationally recognized insurance rating
agency of similar standing if A.M. Best Company is not then in the business
of rating insurers or rating foreign insurers) or such other insurers as
may from time to time be reasonably acceptable to the Required Banks,
except to the extent that Borrower may obtain insurance from its
Subsidiary, Offshore Marine Indemnity Company, for (i) workers compensation
insurance and (ii) property and casualty insurance so long as Reliance
National Insurance Company or any other insurance company rated A-VII or
better by A.M. Best Company assumes any coverage written above $250,000.00
on each policy written by Offshore Marine Indemnity Company. All such
insurance may be subject to reasonable deductible amounts. Borrower shall
deliver to the Agent a certificate of insurance upon the annual renewal of
such policies specifying the details of all insurance then in effect;
together with a certificate of an officer of Borrower that all premiums
then due have been paid.
(m) Financial Covenants.
(i) Minimum Consolidated Interest Coverage. Borrower will have a
Consolidated Interest Coverage Ratio as of the end of each fiscal quarter
of at least 4.00 to 1.
(ii) Minimum Consolidated Debt Service Coverage. Borrower will have a
Consolidated Debt Service Coverage Ratio as of the end of each fiscal
quarter of at least 1.25 to 1.
(iii) Maximum Consolidated Funded Debt to Consolidated EBITDA. As of
the end of each fiscal quarter, Borrower will have a ratio of Consolidated
Funded Debt as of such date to Consolidated EBITDA for the immediately
preceding four (4) fiscal quarters (including the fiscal quarter ending on
such date) of less than or equal to:
Periods Ending Ratio
On or before March 31, 1998 4.75 to 1
From April 1, 1998 to September 30, 1998 4.50 to 1
After September 30, 1998 4.25 to 1
(iv) Maximum Consolidated Funded Senior Debt to EBITDA. As of the end
of each fiscal quarter, Borrower shall have a ratio of Consolidated Funded
Senior Debt as of such date to Consolidated EBITDA for the immediately
preceding four (4) fiscal quarters (including the fiscal quarter ending on
such date) of less than or equal to:
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Periods Ending Ratio
On or before September 30, 1999 2.50 to 1
After September 30, 1999 3.00 to 1
(v) Minimum Consolidated Net Worth. Borrower will not permit
Consolidated Net Worth at the end of any fiscal quarter to be less than
$90,000,000.00 plus 50% of Consolidated Net Income (without giving any
effect to any losses), excluding any Consolidated Net Income due to non-
cash accounting adjustments, for each fiscal quarter ending on or after
June 30, 1997 plus 50% of the net cash proceeds received by Borrower from
any future sale of stock of Borrower or any Subsidiary through any public
offering within the meaning of the Securities Act of 1933.
(n) Further Assurances. Borrower and each Subsidiary will execute and
deliver to the Agent, at any time and from time to time, any and all
further agreements, documents and instruments, and take any and all further
actions which may be required under applicable law, or which the Agent may
from time to time reasonably request, in order to effectuate the
transactions contemplated by this Agreement and the other Transaction
Documents.
(o) Accountant. Borrower shall give each of the Banks prompt notice
of any change of Borrower's independent certified public accountants and a
copy of the Form 8-K relating thereto filed with the Securities and
Exchange Commission. Borrower shall at all times utilize independent
certified public accountants of nationally recognized standing reasonably
acceptable to the Required Banks.
(p) Subsidiaries. Borrower shall not create any Subsidiaries without
the prior written consent of Agent; provided that, the provisions of this
Section 8.1(p) shall not require the Agent's consent for the formation of
wholly-owned direct Subsidiaries of Borrower or any Subsidiary. Borrower
covenants and agrees that in the event Borrower or any Subsidiary shall
create or acquire any new Subsidiary or Subsidiaries at any time after the
effective date hereof, that Borrower shall promptly (i) cause each such
Subsidiary to execute a Continuing Guarantee or (ii) deliver the Stock
Pledge Documents pursuant to Section 7.8 of this Agreement.
(q) Agreements. Neither Borrower nor any Subsidiary will default
under any indenture, contract, agreement, lease or other instrument to
which Borrower or any Subsidiary is a party or by which Borrower, any
Subsidiary or any Property of Borrower or any Subsidiary is bound or
affected, a default under which could reasonably be expected to have a
Material Adverse Effect.
(r) Offshore Marine Indemnity Company. Offshore shall maintain a
relationship with Reliance National Insurance Company or any other
insurance company(ies) rated A-VII or better by A.M. Best Company whereby
such insurance company(ies) will reinsure
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Offshore for all liability underwritten by Offshore in excess of
$250,000.00 per occurrence and $7,000,000.00 in the annual aggregate.
(s) Bonding Capacity. Borrower and its Subsidiaries shall have the
ability to obtain any performance bonds necessary for new vessel
construction contracts which the failure to obtain could reasonably be
expected to have a Material Adverse Effect.
8.2 Negative Covenants of Borrower. Borrower covenants and agrees
that, so long as (i) any of the Banks has any obligation to make any Loan
hereunder or to issue any Letter of Credit hereunder, (ii) any Letter of Credit
remains outstanding or (iii) any of Borrower's Obligations remain unpaid, unless
the prior written consent of the Required Banks is obtained:
(a) Limitation on Indebtedness. Borrower will not, and it will not
cause or permit any of its Subsidiaries to, incur or be obligated on any
Indebtedness, either directly or indirectly, by way of Guarantee,
suretyship or otherwise, other than:
(i) the Borrower's Obligations to the Agent and the Banks;
(ii) the Swing Loans from Whitney;
(iii) Indebtedness existing as of the effective date hereof and
listed on Schedule 7.10 attached hereto and Indebtedness relating to the
employee benefit plans;
(iv) Indebtedness described in clause (a) or (b) of the defined term
Restricted Investment of this Agreement;
(v) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the
extent that payment therefor shall not at the time be required to be made
in accordance with the provisions of Section 8.1(d) or Section 8.1(e);
(vi) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal and for
which adequate provision as determined in accordance with GAAP has been
made so long as execution is not levied thereunder and in respect of which
Borrower or any Subsidiary shall at the time in good faith be prosecuting
an appeal or proceedings for review and a suspensive appeal bond in the
full amount of such judgment or award shall have been obtained by Borrower
or such Subsidiary with respect thereto;
(vii) current liabilities of Borrower or any Subsidiary of Borrower
incurred in the ordinary course of business not incurred through (A) the
borrowing of money, or (B) the
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obtaining of credit except for credit on an open account basis customarily
extended and in fact extended in connection with normal purchases of goods
and services;
(viii) endorsements for collection, deposits or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(ix) Indebtedness in respect of performance, surety or appeal bonds
obtained in the ordinary course of Borrower's or any Subsidiary's business
and in connection with transactions in the ordinary course of Borrower's or
any Subsidiary's business;
(x) Indebtedness under commodity price swaps, commodity price caps and
commodity price collar and floor agreements, and similar agreements or
arrangements designed to protect against or manage fluctuations in
commodity prices with respect to any steel commodities bought and consumed
in the ordinary course of business of Borrower and its Subsidiaries in
amounts and on terms consistent with industry standard practices for
hedging such future commodities requirements of Borrower and its
Subsidiaries;
(xi) Indebtedness for any permitted declared and unpaid Distributions
on Borrower's stock;
(xii) Indebtedness in respect of the Separation and Related
Agreements;
(xiii) Indebtedness not otherwise permitted by this Section 8.2(a) in
an amount not to exceed $45,000,000.00 in the aggregate at any one time
outstanding for Borrower and all Subsidiaries so long as not more than
$25,000,000.00 of such Indebtedness is incurred in any one fiscal year;
(xiv) Indebtedness, in an amount not to exceed $30,000,000.00 in the
aggregate at any one time outstanding for Borrower and all its
Subsidiaries, in respect of guarantees issued in support of customer
financing of down payments and other similar amounts relating to Exim Bank
or other similar construction financing, which guarantees do not exceed 20%
of the purchase price of the subject vessel;
(xv) Indebtedness due in connection with the issuance of industrial
revenue bonds by the Mississippi Economic Development Corporation not to
exceed the aggregate principal amount of $30,000,000.00; and
(xvi) the Subordinated Notes.
(b) Limitation on Liens, No Negative Pledge in favor of any other
Person. Borrower will not, and will not cause or permit any of its
Subsidiaries to, create, incur or assume, or suffer to be incurred or to
exist, any Lien on any Property or assets of Borrower or any Subsidiary,
whether now owned or hereafter acquired, or upon any income or profits
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therefrom, except for Permitted Liens. Borrower will not, and will not
cause or permit any of its Subsidiaries to, covenant or agree in favor of
any Person (other than the Banks) not to grant any Liens in favor of the
Banks.
(c) Consolidation, Merger, Sale of Assets, Dissolution, Etc. Borrower
will not, and will not cause or permit any of its Subsidiaries to, (i)
directly or indirectly, merge into or with or consolidate with any other
Person or permit any other Person to merge into or with or consolidate with
it provided that Borrower may cause two or more wholly owned Subsidiaries
to merge or consolidate into Borrower, one another, or any other wholly
owned Subsidiary, or (ii) sell, assign, lease, transfer, abandon or
otherwise dispose of any of its Property (including, without limitation,
any shares of capital stock of a Subsidiary owned by Borrower or another
Subsidiary), except for (A) sales of inventory or vessels in the ordinary
course of business, (B) sales in the ordinary course of business of those
items excluded from the definition of Restricted Investments, (C) sales of
fixed assets having a book value in an aggregate amount not to exceed ten
percent (10%) of the book value of Borrower's total assets as of the end of
the fiscal quarter immediately preceding any such sale, so long as such
asset sales shall be sold to third party buyers in arms-length transactions
on reasonable terms and so long as the net proceeds thereof are used solely
to purchase other fixed assets which are either replacements for those
assets sold or are otherwise consistent with the Company Business within a
reasonable time or to pay any principal due on the Loans, or (D) other
sales of fixed assets having a book value not to exceed $3,500,000.00 in
the aggregate in any fiscal year.
(d) Sale and Leaseback Transactions. Borrower will not, and it will
not cause or permit any of its Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby Borrower or any Subsidiary of Borrower
shall in one or more related transactions sell, transfer or otherwise
dispose of any Property owned by Borrower or any Subsidiary of Borrower and
then rent or lease, as lessee, such Property or any part thereof for a
period or periods which in the aggregate would exceed twelve (12) months
from the date of commencement of the lease term.
(e) Sale or Discount of Accounts. Borrower will not, and it will not
cause or permit any of its Subsidiaries to, sell or discount any of its
receivables (whether represented by a note, account, general intangible or
chattel paper) other than in the ordinary course of its business.
(f) Transactions with Affiliates. Borrower will not, and it will not
cause or permit any of its Subsidiaries to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of Property with, or the
rendering of any service by or for, any Affiliate), except in the ordinary
course of business and pursuant to the reasonable requirements of
Borrower's or such Subsidiary's business and upon fair and reasonable terms
no less favorable to Borrower or
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such Subsidiary than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate.
(g) Changes in Nature of Business. Borrower will not, and it will not
cause or permit any of its Subsidiaries to, engage in any business if, as a
result, the general nature of the business which would then be engaged in
by Borrower and its Subsidiaries, considered as a whole, would be
substantially changed from the Company Business.
(h) Fiscal Year. Borrower will not, and it will not cause or permit
any of its Subsidiaries to, change its fiscal year; provided that, the
fiscal year of any Subsidiary may be changed to coincide with the fiscal
year of Borrower.
(i) Distributions. Borrower will not, and it will not cause or permit
any of its Subsidiaries to, declare or incur any liability to make any
Distribution, except Distributions by any Subsidiary to Borrower.
(j) Pension Plans. Borrower will not, and it will not cause or permit
any of its Subsidiaries to, (a) permit any condition to exist in connection
with any Pension Plan which might constitute grounds for the PBGC to
institute proceedings to have such Pension Plan terminated or a trustee
appointed to administer such Pension Plan or (b) engage in, or permit to
exist or occur, any other condition, event or transaction with respect to
any Pension Plan which could result in the incurrence by Borrower, any
Subsidiary or any ERISA Affiliate of any liability, fine or penalty which
could reasonably be expected to have a Material Adverse Effect.
(k) Restricted Investments. Borrower will not, and it will not cause
or permit any of its Subsidiaries to, directly or indirectly, make any
Restricted Investments.
(l) Ownership of Subsidiaries. Borrower will not cause or permit any
of its Subsidiaries to (i) authorize or issue any new types, varieties or
classes of capital stock or any bonds or debentures, subordinated or
otherwise, or any stock warrants or options, (ii) authorize or issue any
additional shares of any existing class of capital stock, (iii) declare any
stock dividends or stock splits or (iv) take any other action which could,
directly or indirectly, decrease Borrower's ownership interest in any of
its Subsidiaries.
(m) Capital Expenditures. Borrower and its Subsidiaries will not
incur Capital Expenditures in excess of (i) $41,000,000.00 in the aggregate
for Borrower and its Subsidiaries taken as a whole for the fiscal year
ending March 31, 1998 or (ii) $41,000,000.00 in the aggregate for Borrower
and its Subsidiaries taken as a whole for the fiscal year ending March 31,
1999.
(n) Change in Control. Borrower shall not allow any Change in Control
to occur.
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(o) Operating Lease Obligations . Borrower and its Subsidiaries shall
not at any one time have Operating Lease Obligations in excess of
$20,000,000.00 in the aggregate for Borrower and its Subsidiaries taken as
a whole.
(p) Payment of Subordinated Notes. Neither Borrower nor any
Subsidiary shall (i) pre-pay, redeem or purchase any Subordinated Notes or
(ii) make any offer to pre-pay, redeem or purchase any Subordinated Notes;
provided that this Section 8.2(p) shall not prohibit the conversion of the
Subordinated Notes into common stock of Borrower or payment of the
Subordinated Notes through the use of proceeds from the issuance, after the
effective date hereof, of common stock of Borrower.
(q) Modification of Subordinated Notes. Neither Borrower nor any
Subsidiary of Borrower shall amend or modify any material terms, conditions
or provisions applicable to the payment, redemption or purchase of any
Subordinated Notes.
8.3 Use of Proceeds. Borrower covenants and agrees that (i) the proceeds
of the Revolving Credit Loans and Swing Loans will be used solely for working
capital purposes, Permitted Acquisitions, any specific purposes permitted under
this Agreement, and other general corporate purposes of Borrower; (ii) no part
of the proceeds of any Loan will be used in violation of any applicable law or
regulation; and (iii) no part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately (A)
to purchase or carry margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock, or to refund or repay indebtedness
originally incurred for such purpose or (B) for any purpose which entails a
violation of, or which is inconsistent with, the provisions of any of the
Regulations of The Board of Governors of the Federal Reserve System, including,
without limitation, Regulations G, U, T or X thereof, as amended.
SECTION 9. EVENTS OF DEFAULT.
If any of the following (each of the following herein sometimes called an
"Event of Default") shall occur and be continuing:
9.1 Borrower shall fail to pay any of Borrower's Obligations other than
principal or interest within five (5) Business Days after the date the same
shall first become due and payable, whether by reason of demand, maturity,
acceleration or otherwise;
9.2 (a) Borrower shall fail to pay any of Borrower's Obligations for the
repayment of interest three (3) Business Days after the date the same shall
become due and payable, whether by reason of demand, maturity, acceleration or
otherwise;
(b) Borrower shall fail to pay any of Borrower's Obligations for the
repayment of principal as and when the same shall become due and payable,
whether by reason of demand, maturity, acceleration or otherwise;
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9.3 Any representation or warranty of Borrower or any Subsidiary made in
this Agreement, in any other Transaction Document to which Borrower or any
Subsidiary is a party or in any certificate, agreement, instrument or statement
furnished or made or delivered pursuant hereto or thereto or in connection
herewith or therewith, shall prove to have been untrue or incorrect in any
material respect when made or effected;
9.4 Borrower shall fail to perform or observe any term, covenant or
provision contained in Section 8.1(l), Section 8.1(m), Section 8.2 or Section
8.3;
9.5 Borrower shall fail to perform or observe any term, covenant or
provision contained in Section 8.1(a) and any such failure shall remain
unremedied for five (5) Business Days after the earlier of (i) notice of such
default is given to Borrower by the Agent or (ii) a Responsible Officer of
Borrower obtaining knowledge of such default;
9.6 Borrower shall fail to perform or observe any other term, covenant or
provision contained in this Agreement (other than those specified in Sections
9.1, 9.2, 9.3, 9.4 or 9.5 above or elsewhere in this Section 9) and any such
failure shall remain unremedied for thirty (30) days after the earlier of (i)
written notice of default is given to Borrower by the Agent or any of the Banks
or (ii) a Responsible Officer of Borrower obtaining knowledge of such default;
9.7 This Agreement or any of the other Transaction Documents shall at any
time for any reason cease to be in full force and effect or shall be declared to
be null and void by a court of competent jurisdiction, or if the validity or
enforceability thereof shall be contested or denied by Borrower or any
Subsidiary, or if the transactions completed hereunder or thereunder shall be
contested by Borrower or any Subsidiary or if Borrower or any Subsidiary shall
deny that it has any or further liability or obligation hereunder or thereunder.
9.8 Borrower, any Subsidiary or any other Obligor shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code or any other federal, state or foreign bankruptcy,
insolvency, receivership, liquidation or similar law, (ii) consent to the
institution of, or fail to contravene in a timely and appropriate manner, any
such proceeding or the filing of any such petition, (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator or similar
official of itself, himself or herself or of a substantial part of its Property
or assets, (iv) file an answer admitting the material allegations of a petition
filed against itself in any such proceeding, (v) make a general assignment for
the benefit of creditors, (vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due or (vii) take any corporate
or other action for the purpose of effecting any of the foregoing;
9.9 An involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of Borrower, any Subsidiary or any other Obligor, or of a substantial
part of the Property or assets of Borrower, any Subsidiary or any other Obligor,
under Title 11 of the United States Code or any other federal, state or foreign
bankruptcy, insolvency, receivership, liquidation or similar law, (ii) the
appointment of a receiver,
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trustee, custodian, sequestrator or similar official of Borrower, any Subsidiary
or any other Obligor or of a substantial part of the Property or assets of
Borrower, any Subsidiary or any other Obligor or (iii) the winding-up or
liquidation of Borrower, any Subsidiary or any other Obligor; and such
proceeding or petition shall continue undismissed for sixty (60) consecutive
days or an order or decree approving or ordering any of the foregoing shall be
entered;
9.10 Any of the Letter of Credit Applications shall be declared to be null
and void by a court of competent jurisdiction, or if the validity or
enforceability of any of the Letter of Credit Applications shall be contested or
denied by Borrower or any Subsidiary, or if Borrower or any Subsidiary shall
deny that it has any further liability or obligation under any of the Letter of
Credit Applications or if Borrower or any Subsidiary shall fail to comply with
or observe any of the terms, provisions or conditions contained in any of the
Letter of Credit Applications;
9.11 Borrower, any Subsidiary or any other Obligor shall be declared by any
of the Banks to be in default on, or pursuant to the terms of, (1) any other
present or future obligation to such Bank(s), including, without limitation, any
other loan, line of credit, revolving credit, guaranty or letter of credit
reimbursement obligation, or (2) any other present or future agreement
purporting to convey to such Bank(s) a Lien upon any Property or assets of
Borrower, such Subsidiary, or such other Obligor, as the case may be;
9.12 The occurrence of any default or event of default under or within the
meaning of any agreement, document or instrument evidencing, securing,
guaranteeing the payment of or otherwise relating to any Indebtedness of
Borrower or any Subsidiary for borrowed money (other than the Borrower's
Obligations) having an aggregate outstanding principal balance in excess of Five
Million Dollars ($5,000,000.00);
9.13 One or more judgments, decrees, arbitration awards or rulings
(including without limitation, rulings of the Board of Contract Appeals, the
General Accounting Office, the Defense Contract Audit Agency or the appropriate
Contracting Office of the United States Navy) shall be entered against the
Borrower or any Subsidiary involving in the aggregate a liability (not paid or
fully covered by insurance) of $5,000,000.00 or more and all such judgments,
decrees, awards, and rulings shall not have been vacated, paid, discharged,
stayed or suspensively appealed within thirty days from the entry thereof;
9.14 Any of the following events shall occur with respect to any Pension
Plan (a) the institution by Borrower, any ERISA Affiliate or any Subsidiary of
steps to terminate any Pension Plan if, as a result of such termination,
Borrower, such ERISA Affiliate or such Subsidiary, as the case may be, could be
required to make a contribution to such Pension Plan, or could incur a liability
or obligation to such Pension Plan or any of its participants or beneficiaries,
in the aggregate in excess of Five Million Dollars ($5,000,000.00), (b) the
institution by the PBGC of steps to terminate any Pension Plan, or (c) a
contribution failure occurs with respect to any Pension Plan sufficient to give
rise to a Lien under Section 302 (f) of ERISA;
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9.15 The occurrence of any Change in Control; or
9.16 If (i) Borrower or any of its Subsidiaries is debarred or suspended
from contracting (as a first tier or any level of subcontractor) for, bidding
on, or entering into a Government Contract, or receives notice of a proposed
suspension of or disbarment from acquiring or performing a Government Contract,
or (ii) if a current or backlogged Government Contract is forfeited or
terminated for the default by Borrower or any Subsidiary, as the case may be;
THEN, and in each such event (other than an event described in Sections
9.1, 9.2, 9.8 or 9.9), the Agent shall, if requested in writing by the Required
Banks, and may, in its sole and absolute discretion, upon the oral request of
the Required Banks, declare that the obligation of the Banks to make Loans under
this Agreement and to issue Letters of Credit under this Agreement have
terminated, whereupon such obligations of the Banks shall be immediately and
forthwith terminated, and the Agent shall, if requested in writing by the
Required Banks, and may, in its sole and absolute discretion, upon the oral
request of the Required Banks, declare the entire outstanding principal balance
of and all accrued and unpaid interest on the Notes and all of the other Loans
under this Agreement and all of the other Borrower's Obligations to be forthwith
due and payable, whereupon all of the unpaid principal balance of and all
accrued and unpaid interest on the Notes and all of the other Loans under this
Agreement and all such other Borrower's Obligations shall become and be
immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by Borrower, and
the Agent and each of the Banks may exercise any and all other rights and
remedies which they may have under any of the other Transaction Documents or
under applicable law; provided, however, that upon the occurrence of any event
described in Sections 9.1, 9.2, 9.8 or 9.9, the obligation of the Banks to make
Loans under this Agreement and to issue Letters of Credit under this Agreement
shall automatically terminate and the entire outstanding principal balance of
and all accrued and unpaid interest on the Notes and all of the other Loans
under this Agreement and all of the other Borrower's Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by Borrower, and the Agent and each of the Banks may exercise any and all other
rights and remedies which they may have under any of the other Transaction
Documents or under applicable law.
SECTION 10. AGENT.
10.1 Appointment. Whitney is hereby appointed by the Banks as Agent under
this Agreement, the Notes and the other Transaction Documents. The Agent agrees
to act as such upon the express conditions contained in this Agreement.
10.2 Powers. The Agent shall have and may exercise such powers hereunder
as are specifically delegated to the Agent by the terms of this Agreement and
the other Transaction Documents, together with such powers as are reasonably
incidental thereto. The Agent shall have no implied duties to the Banks, nor
any obligation to the Banks to take any action under this Agreement or any of
the other Transaction Documents, except any action specifically provided by
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this Agreement or any of the other Transaction Documents to be taken by the
Agent. Without limiting the generality of the foregoing, the Agent shall not be
required to take any action with respect to any Default or Event of Default,
except as expressly provided in Section 9.
10.3 General Immunity. Neither the Agent nor any of its directors,
officers, employees, agents or advisors shall be liable to any of the Banks for
any action taken or not taken by it (i) with the consent or at the request of
the Required Banks or (ii) in the absence of its own gross negligence or willful
misconduct.
10.4 No Responsibility for Loans, Recitals, Etc. Neither the Agent nor any
of its directors, officers, employees, agents or advisors shall (i) be
responsible for or have any duty to ascertain, inquire into or verify any
recitals, reports, statements, representations, warranties or representations
contained in this Agreement or any of the other Transaction Documents or
furnished pursuant hereto or thereto; (ii) be responsible for any Loans or
Letters of Credit hereunder (except in Agent's capacity as a Bank hereunder with
respect to its Pro Rata Share thereof pursuant to the terms of this Agreement
and except for the Swing Loans), (iii) be bound to ascertain or inquire as to
the performance or observance of any of the terms of this Agreement or any of
the other Transaction Documents; (iv) be responsible for the satisfaction of any
condition specified in Section 6, except receipt of items required to be
delivered to the Agent; or (v) be responsible for the validity, effectiveness,
genuineness or enforceability of this Agreement or any of the other Transaction
Documents; or (vi) be responsible for the creation, attachment or perfection of
any security interests or liens purported to be granted to the Agent or any of
the Banks pursuant to this Agreement or any of the other Transaction Documents.
The Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement or other writing (which may be a bank wire,
telex, telecopy or similar writing) believed by it to be genuine or to be signed
by the proper party or parties.
10.5 Right to Indemnity. Notwithstanding any other provision contained in
this Agreement to the contrary, to the extent Borrower fails to reimburse the
Agent pursuant to Section 11.3, Section 11.4 or Section 11.5, or if any Default
or Event of Default shall occur under this Agreement, the Banks shall ratably in
accordance with their respective Pro Rata Shares of the aggregate amount of
Loans and Letters of Credit then outstanding, or if no Loans or Letters of
Credit are then outstanding, their respective Pro Rata Shares of the total
Commitments of all of the Banks, indemnify the Agent and hold it harmless from
and against any and all liabilities, losses (except losses occasioned solely by
failure of Borrower to make any payments or to perform any obligations required
by this Agreement (other than those described in Sections 11.3, 11.4 and 11.5),
the Notes, the Letter of Credit Applications or any of the other Transaction
Documents), costs and/or expenses, including, without limitation, any
liabilities, losses, costs and/or expenses arising from the failure of any Bank
to perform its obligations hereunder or in respect of this Agreement and also
including, without limitation, reasonable attorneys' fees and expenses, which
the Agent may incur, directly or indirectly, in connection with this Agreement,
the Notes or any of the other Transaction Documents, or any action or
transaction related hereto or thereto; provided only that the Agent shall not be
entitled to such indemnification for any losses, liabilities, costs and/or
expenses directly and solely
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resulting from its own gross negligence or willful misconduct. This indemnity
shall be a continuing indemnity, contemplates all liabilities, losses, costs and
expenses related to the execution, delivery and performance of this Agreement,
the Notes and the other Transaction Documents, and shall survive the
satisfaction and payment of the Loans, the expiration or other termination of
the Letters of Credit and the termination of this Agreement.
10.6 Action Upon Instructions of Required Banks. The Agent agrees, upon
the written request of the Required Banks, to take any action of the type
specified in this Agreement or any of the other Transaction documents as being
within the Agent's rights, duties, powers or discretion. Notwithstanding the
foregoing, the Agent shall be fully justified in failing or refusing to take any
action hereunder, unless it shall first be indemnified to its satisfaction by
the Banks pro rata against any and all liabilities, losses, costs and expenses
(including, without limitation, attorneys' fees and expenses) which may be
incurred by it by reason of taking or continuing to take any such action, other
than any liability which may arise out of Agent's gross negligence or willful
misconduct. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with written instructions signed
by the Required Banks, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Banks and on all holders of
the Notes. In the absence of a request by the Required Banks, the Agent shall
have authority, in its sole discretion, to take or not to take any action,
unless this Agreement or any of the other Transaction Documents specifically
requires the consent of the Required Banks or of all of the Banks.
10.7 Reliance on Documents; Employment of Agents and Counsel. The Agent
shall be entitled to rely upon any note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons. The Agent may execute any of its duties as Agent hereunder by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Banks for the default or misconduct of any such agents or attorneys-in-fact
selected by it in good faith and with reasonable care, except as to money or
securities received by it or its authorized agents. The Agent shall be entitled
to advice and opinion of legal counsel concerning all legal matters and all
matters pertaining to the duties of the Agent.
10.8 May Treat Payee as Owner. The Agent may deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with the
Agent pursuant to Section 11.14. Any request, authority or consent of any
person, firm or corporation who at the time of making such request or giving
such authority or consent is the holder of any such Note shall be conclusive and
binding on any subsequent holder, transferee or assignee of such Note or of any
Note issued in exchange therefor.
10.9 Agent's Reimbursement. Each Bank agrees to reimburse the Agent pro
rata in accordance with its Pro Rata Share for any out-of-pocket expenses not
reimbursed by Borrower (a) for which the Agent is entitled to reimbursement by
the Borrower under this Agreement or any of
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the other Transaction Documents and (b) for any other out-of-pocket expenses
incurred by the Agent on behalf of the Banks, in connection with the
preparation, execution, delivery, amendment, modification, extension, renewal,
administration and/or enforcement of this Agreement and/or any of the other
Transaction Documents.
10.10 Rights as a Bank. With respect to its commitment, the Loans made
by it and the Notes issued to it, the Agent shall have the same rights and
powers hereunder as any Bank and may exercise the same as though it were not the
Agent, and the terms "Bank" and "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. The Agent may accept
deposits from, lend money to and generally engage in any kind of banking or
trust business with the Borrower as if it were not the Agent.
10.11 Independent Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the financial statements referred to in Section 7.4 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Transaction Documents. Each
Bank also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Transaction
Documents.
10.12 Resignation of Agent. Subject to the appointment of a successor
Agent, the Agent may resign as Agent for the Banks under this Agreement and the
other Transaction Documents at any time by thirty (30) days notice in writing to
the Banks. Such resignation shall take effect upon appointment of such
successor Agent. The Required Banks shall have the right to appoint a successor
Agent (and if no Default or Event of Default then exists hereunder, such
appointment shall be with the consent of the Borrower, which consent shall not
be unreasonably withheld), and the successor Agent shall be entitled to all of
the rights of, and vested with the same powers as, the original Agent under this
Agreement and the other Transaction Documents. Resignation by the Agent shall
not affect or impair the rights of the Agent under Sections 10.5 and 10.9 hereof
with respect to all matters preceding such resignation. Any successor Agent
must be a national banking association or a bank chartered in any State of the
United States and having at least $200,000,000.00 in capital and surplus.
10.13 Removal of Agent. Subject to the appointment of a successor
Agent, the Banks (by a unanimous vote of all Banks other than the Bank then
acting as the Agent hereunder), may remove the Agent for the Banks under this
Agreement and the other Transaction Documents at any time by thirty (30) days'
notice in writing to the Agent. Such removal shall take effect upon appointment
of such successor Agent. The Required Banks shall have the right to appoint a
successor Agent who shall be entitled to all of the rights of, and vested with
the same powers as, the original Agent under this Agreement and the other
Transaction Documents. If no Default or Event of Default then exists hereunder,
then the decision to remove the Agent and the subsequent appointment of a
successor Agent shall both be made only with the consent of the Borrower (which
consent will not be
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unreasonably withheld). The removal of the Agent shall not affect or impair the
rights of the Agent under Sections 10.5 and 10.9 hereof with respect to all
matters preceding such removal. Any successor Agent must be a national banking
association or a bank chartered in any State of the United States and having at
least $200,000,000.00 in capital and surplus.
10.14 Duration of Agency. The agency established by Section 10.1 hereof
shall continue, and Sections 10.1 through and including this Section 10.14 shall
remain in full force and effect, until all of the Borrowers' Obligations shall
have been paid in full and the Banks' commitments to make Loans, issue Letters
of Credit and/or extend credit to or for the benefit of the Borrower shall have
terminated or expired.
10.15 Documentation Agent. The Documentation Agent, in its capacity as
such, shall have no rights, powers, duties or obligations under this Agreement
or any of the other Transaction Documents.
10.16 Syndication Agent. The Syndication Agent, in its capacity as such,
shall have no rights, powers, duties or obligations under this Agreement or any
of the other Transaction Documents.
SECTION 11. GENERAL.
11.1 No Waiver. No failure or delay by the Agent or any of the Banks in
exercising any right, remedy, power or privilege hereunder or under any other
Transaction Document shall operate as a waiver thereof; nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The remedies provided
herein and in the other Transaction Documents are cumulative and not exclusive
of any remedies provided by law. Nothing herein contained shall in any way
affect the right of any of the Banks to exercise any statutory or common law
right of banker's lien or setoff.
11.2 Right of Setoff. Upon the occurrence and during the continuance of
any Event of Default, each of the Banks is hereby authorized at any time and
from time to time, without notice to Borrower (any such notice being expressly
waived by Borrower) and to the fullest extent permitted by law, to setoff and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by such Bank(s) and any and all other indebtedness at
any time owing by such Bank(s) to or for the credit or account of Borrower
against any and all of Borrower's Obligations irrespective of whether or not
such Bank(s) shall have made any demand hereunder or under any of the other
Transaction Documents and although such obligations may be contingent or
unmatured. Each of the Banks agrees to promptly notify Borrower after any such
setoff and application made by such Bank(s), provided, however, that the failure
to give such notice shall not affect the validity of such setoff and
application. The rights of the Banks under this Section 11.2 are in addition to
any other rights and remedies (including, without limitation, other rights of
setoff) which the Banks may have. Nothing contained in this Agreement or any
other Transaction Document shall impair the right of any of the Banks to
exercise any right of setoff or counterclaim
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it may have against Borrower and to apply the amount subject to such exercise to
the payment of indebtedness of Borrower unrelated to this Agreement or the other
Transaction Documents.
11.3 Cost and Expenses. Borrower agrees, whether or not any Loan is made
hereunder or any Letter of Credit is issued hereunder, to pay the Agent upon
demand (i) all out-of-pocket costs and expenses and all reasonable attorneys'
fees of the Agent in connection with the preparation, documentation,
negotiation, execution, amendment, modification, extension and/or renewal of
this Agreement, the Notes, the Letter of Credit Application(s) and the other
Transaction Documents, (ii) all out-of-pocket costs and expenses and all
reasonable attorneys' fees of the Agent in connection with the preparation of
any waiver or consent hereunder or under any other Transaction Documents, (iii)
if an Event of Default occurs, all out-of-pocket costs and expenses and all
reasonable attorneys' fees incurred by the Agent and each of the Banks in
connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom, (iv) all out-of-pocket costs and expenses and
all reasonable attorneys' fees incurred by the Agent and each of the Banks in
connection with the enforcement of any rights and/or remedies of the Agent or
any of the Banks to collect any of the Borrower's Obligations, and (v) all other
reasonable attorneys' fees and out-of-pocket costs and expenses incurred by the
Agent relating to or arising out of or in connection with this Agreement or any
of the other Transaction Documents. Borrower further agrees to pay or reimburse
the Agent and each of the Banks for any stamp or other taxes which may be
payable with respect to the execution, delivery, recording and/or filing of this
Agreement, the Notes, the Letter of Credit Application(s) or any of the other
Transaction Documents. All of the obligations of Borrower under this Section
11.3 shall survive the satisfaction and payment of Borrower's Obligations and
the termination of this Agreement.
11.4 Environmental Indemnity. Borrower hereby agrees to indemnify the Agent
and each of the Banks and hold the Agent and each of the Banks and any holder(s)
of the Notes, and the officers, directors, employees, agents and affiliates of
the Agent, each of the Banks and such holder(s) (collectively, the
"Indemnitees") harmless from and against any and all losses, liabilities,
damages, injuries, costs, expenses and claims of any and every kind whatsoever
(including, without limitation, reasonable court costs and attorneys' fees and
expenses) which at any time or from time to time may be paid, incurred or
suffered by the Indemnitees, with respect to or as a direct or indirect result
of the violation by Borrower or any Subsidiary of any Environmental Laws; or
with respect to, or as a direct or indirect result of the presence on or under,
or the escape, seepage, leakage, spillage, discharge, emission or Release from,
properties owned or operated by Borrower and/or any Subsidiary of any Hazardous
Substances or any other hazardous or toxic waste, substance or constituent or
other substance (including, without limitation, any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or arising under the
Environmental Laws); and the provisions of and undertakings and indemnification
set out in this Section 11.4 shall survive the satisfaction and payment of
Borrower's Obligations and the termination of this Agreement; provided that
Borrower shall have no obligation to an Indemnitee hereunder with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of that Indemnitee.
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11.5 General Indemnity. In addition to the payment of expenses pursuant to
Section 11.3, whether or not the transactions contemplated hereby shall be
consummated, Borrower hereby agrees to indemnify, pay and hold Indemnitees
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitees shall be designated a
party thereto), that may be imposed on, incurred by or asserted against the
Indemnitees, in any manner relating to or arising out of this Agreement, any of
the other Transaction Documents or any other agreement, document or instrument
executed and delivered by Borrower or any other Obligor in connection herewith
or therewith, the statements contained in any commitment letters delivered by
the Agent or any of the Banks, the agreement of any of the Banks to make the
Loans hereunder, the agreement of Banks to issue the Letters of Credit hereunder
or the use or intended use of the proceeds of any Loan hereunder (collectively,
the "Indemnified Liabilities"); provided that Borrower shall have no obligation
to an Indemnitee hereunder with respect to indemnified liabilities arising from
the gross negligence or willful misconduct of that Indemnitee. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Borrower shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by the Indemnitees or any
of them. The provisions of the undertakings and indemnification set out in this
Section 11.5 shall survive satisfaction and payment of Borrower's Obligations
and the termination of this Agreement. No provision contained in this Section
11.5 shall affect any rights the Borrower may have against any Bank which
defaults under this Agreement or is intended to indemnify any such Agent or Bank
which defaults under this Agreement (but only such Agent or Bank that defaults
under this Agreement) for any such Indemnified Liabilities arising from such
defaulting Bank's action.
11.6 Authority to Act. The Agent shall be entitled to act on any notices
and instructions (telephonic or written) believed by the Agent in good faith to
have been sent or delivered by any person identifying himself or herself as John
Dane III, John J. Siben II or Keith L. Voigts (or any other person from time to
time authorized to act on behalf of Borrower pursuant to a resolution adopted by
the Board of Directors of Borrower and certified by the Secretary of Borrower
and delivered to the Agent), regardless of whether such notice or instruction
was in fact delivered by such person, and Borrower hereby agrees to indemnify
the Agent and hold the Agent harmless from and against any and all losses and
expenses, if any, ensuing from any such action.
11.7 Notices. Any notice, request, demand, consent, confirmation or other
communication hereunder shall be in writing and delivered in person or sent by
telecopy or registered or certified mail, return receipt requested and postage
prepaid, to the applicable party at its address or telecopy number set forth on
the signature pages hereof, or at such other address or telecopy number as any
party hereto may designate as its address for communications hereunder by notice
so given. Such notices shall be deemed effective on the day on which delivered
or sent if delivered in person or sent
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by telecopy, or on the third (3rd) Business Day after the day on which mailed,
if sent by registered or certified mail; provided, however, that notices to the
Agent under Section 3 shall not be effective until actually received by the
Agent.
11.8 CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL. BORROWER IRREVOCABLY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY LOUISIANA STATE COURT OR ANY
UNITED STATES OF AMERICA COURT SITTING IN THE EASTERN DISTRICT OF LOUISIANA, AS
THE AGENT MAY ELECT, IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY OF SUCH COURTS. BORROWER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH BORROWER MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT, AND BORROWER FURTHER IRREVOCABLY WAIVES
ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. BORROWER AUTHORIZES THE SERVICE OF
PROCESS UPON BORROWER BY REGISTERED MAIL SENT TO BORROWER AT ITS ADDRESS SET
FORTH IN SECTION 11.7. BORROWER, THE AGENT AND THE BANKS IRREVOCABLY WAIVE THE
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH BORROWER AND THE
AGENT AND/OR ANY OF THE BANKS ARE PARTIES RELATING TO OR ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS.
11.9 Sharing of Payments. The Banks agree among themselves that except as
otherwise expressly set forth herein, in the event that any of the Banks shall
directly or indirectly obtain any payment (whether voluntary, involuntary,
through the exercise of any right of setoff, banker's lien or counterclaim,
through the realization, collection, sale or liquidation of any collateral or
otherwise) on account of or in respect of any of the Loans or other Borrower's
Obligations in excess of its Pro Rata Share of all such payments, such Bank(s)
shall immediately purchase from the other Bank(s) participations in the Loans or
other Borrower's Obligations owed to such other Bank(s) in such amounts, and
make such other adjustments from time to time, as shall be equitable to the end
that the Banks share such payment ratably in accordance with their respective
Pro Rata Shares of the outstanding Loans and other Borrower's Obligations. The
Banks further agree among themselves that if any such excess payment to a Bank
shall be rescinded or must otherwise be restored, the other Bank(s) which shall
have shared the benefit of such payment shall, by repurchase of participation
theretofore sold, or otherwise, return its share of that benefit to the Bank
whose payment shall have been rescinded or otherwise restored. Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in any of the Borrower's Obligations, whether
or not acquired pursuant to the foregoing arrangements, may exercise rights of
setoff, banker's lien or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of Borrower in the amount of such participation. If
71
<PAGE>
under any applicable bankruptcy, insolvency or other similar law any of the
Banks receives a secured claim in lieu of a setoff to which this Section 11.9
would apply, such Bank(s) shall, to the extent practicable, exercise their
rights in respect of such secured claim in a manner consistent with the rights
of the Bank(s) entitled under this Section 11.9 to share in the benefits of any
recovery of such secured claim.
11.10 Governing Law. This Agreement, the Notes, the Letter of Credit
Application(s) and all of the other Transaction Documents shall be governed by
and construed in accordance with the internal laws of the State of Louisiana.
11.11 Amendments and Waivers. Any provision of this Agreement, the
Notes, the Letter of Credit Application(s) or any of the other Transaction
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by Borrower and the Required Banks (and, if the rights
or duties of the Agent in its capacity as Agent are affected thereby, by the
Agent); provided that no such amendment or waiver shall, unless signed by all of
the Banks, (i) increase the Commitment of any Bank, (ii) reduce the principal
amount of or rate of interest on any Loan or any fees hereunder, (iii) postpone
the date fixed for any payment of principal of or interest on any Loan or any
fees hereunder, (iv) change the Pro Rata Share of the Commitments or of the
aggregate principal amount of Loans or Letters of Credit of any Bank, (v)
release any collateral (including, without limitation, release of any Continuing
Guarantee) other than pursuant to Section 7.8, or (vi) change the number of
Banks which shall be required for the Banks or any of them to take any action or
obligations under this Section or under any other provision of this Agreement.
11.12 References: Headings for Convenience. Unless otherwise specified
herein, all references herein to Section numbers refer to Section numbers of
this Agreement, all references herein to Exhibits A, B, C, D, E, F. G and H
refer to annexed Exhibits A, B, C, D, E, F, G and H which are hereby
incorporated herein by reference and all references herein to Schedules 2.1(a),
4.1(a), 7.8, 7.10, 7.11, 7.12, 7.16, and 7.17 refer to annexed Schedules 2.1(a),
4.1(a), 7.8, 7.10, 7.11, 7.12, 7.16, and 7.17 which are hereby incorporated
herein by reference. The Section headings are furnished for the convenience of
the parties and are not to be considered in the construction or interpretation
of this Agreement.
11.13 Successors and Assigns, Participations.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that Borrower may not assign or otherwise transfer any of
its rights or delegate any of its obligations under this Agreement. Any
Bank may sell participations in its Notes and its rights under this
Agreement in whole or in part to any commercial bank organized under the
laws of the United States or any state thereof that is a member of both the
Federal Deposit Insurance Corporation and the Federal Reserve System
without the consent of Borrower or the Agent so long as each agreement
pursuant to which any such participation is granted provides that no such
participant shall have any rights under this Agreement or any other
Transaction
72
<PAGE>
Document (the participants' rights against the Bank granting its
participation to be those set forth in the Participation Agreement between
the participant and such Bank), and such selling Bank shall retain the sole
right to approve or disapprove any amendment, modification or waiver of any
provision of this Agreement or any of the other Transaction Documents other
than any amendment, modification or waiver (i) reducing the principal
amount of or rate of interest on any Loan or any fees hereunder, (ii)
postponing the date fixed for any payment of principal of or interest on
any Loan or any fees hereunder, or (iii) releasing any substantial portion
of any collateral (including, without limitation, release of any Continuing
Guarantee) other than pursuant to Section 7.8. Each such participant shall
be entitled to the benefits of the yield protection provisions hereof to
the extent such Bank would have been so entitled had no such participation
been sold.
(b) Any Bank which, in accordance with Section 11.13(a), grants a
participation in any of its rights under this Agreement or its Notes shall
give prompt notice thereof to the Agent and Borrower.
(c) Unless otherwise agreed to by Borrower in writing, no Bank
shall, as between Borrower and that Bank, be relieved of any of its
obligations under this Agreement as a result of such Bank's granting of a
participation in all or any part of such Bank's Notes or all or any part of
such Bank's rights under this Agreement.
11.14 Assignment Agreements. Each Bank may, from time to time, with
the consent of the Borrower and Agent (which will not in any instance be
unreasonably withheld), sell or assign a pro rata part of all of the
indebtedness evidenced by the Notes then owed by it together with an equivalent
proportion of its obligation to make Loans hereunder and the credit risk
incidental to the Letters of Credit pursuant to an Assignment Agreement
substantially in the form of Exhibit H attached hereto, executed by the
assignor, the assignee and the Borrower, which agreements shall specify in each
instance the portion of the indebtedness evidenced by the Notes which is to be
assigned to each such assignee and the portion of the Commitments of the
assignor and the credit risk incidental to the Letters of Credit (which portions
shall be equivalent) to be assumed by it (the "Assignment Agreements"), provided
that (i) the Borrower may in its sole discretion withhold its consent to any
assignment by a Bank of less than all of its Commitments if as a result thereof
the assignor will have Commitments hereunder of less than one half of its
assigned Commitments or the assignee will have Commitments hereunder of less
than $5,000,000.00 or, after giving effect thereto, there would be more than 12
Banks, further provided that nothing herein contained shall restrict, or be
deemed to require any consent as a condition to, or require payment of any fee
in connection with, any sale, discount or pledge by any Bank of any Note or
other obligation hereunder to a Federal reserve bank and (ii) the consent of the
Borrower shall not be required for assignments or sales to a Bank, unless after
giving effect to such assignment or sale there are fewer than 5 Banks or any
Bank would have Commitments hereunder equal to or greater than 50% of the
aggregate Commitments hereunder, in which case the consent of Borrower may be
withheld in Borrower's sole discretion, and (iii) the consent of Borrower shall
not be required so long as any Default has occurred and has continued for at
least 90 days. Upon the execution of each Assignment Agreement by the
73
<PAGE>
assignor, the assignee and the Borrower and consent thereto by the Agent (i)
such assignee shall thereupon become a "Bank" for all purposes of this Agreement
with a Commitment in the amount set forth in such Assignment Agreement and with
all the rights, powers and obligations afforded a Bank hereunder, (ii) the
assignor shall have no further liability for funding the portion of its
Commitments assumed by such other Bank and (iii) the address for notices to such
Bank shall be as specified in the Assignment Agreement, and the Borrower shall
execute and deliver Notes to the assignee Bank in the amount of its Commitments
and new Notes to the assignor Bank in the amount of its Commitments after giving
effect to the reduction occasioned by such assignment, all such Notes to
constitute "Notes" for all purposes of this Agreement, and there shall be paid
to the Agent, as a condition to such assignment, an administration fee of $2,500
plus any out-of-pocket costs and expenses incurred by it in effecting such
assignment, such fee to be paid by the assignor or the assignee as they may
mutually agree, but under no circumstances shall any portion of such fee be
payable by or charged to the Borrower.
11.15 Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that Borrower may not assign or delegate any of its rights or
obligations under this Agreement.
11.16 NO ORAL AGREEMENTS, ENTIRE AGREEMENT. ORAL AGREEMENTS OR COMMITMENTS
TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT,
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT
BORROWER, THE AGENT AND THE BANKS FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENT REACHED BY BORROWER, THE AGENT AND THE BANKS COVERING SUCH MATTERS ARE
CONTAINED IN THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, WHICH AGREEMENT
AND OTHER TRANSACTION DOCUMENTS ARE A COMPLETE AND EXCLUSIVE STATEMENT OF THE
AGREEMENT AMONG BORROWER, THE AGENT AND THE BANKS, EXCEPT AS BORROWER, THE AGENT
AND THE BANKS MAY LATER AGREE IN WRITING TO MODIFY THEM. THIS AGREEMENT EMBODIES
THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND SUPERSEDES
ALL PRIOR AGREEMENTS AND UNDERSTANDINGS (ORAL OR WRITTEN) RELATING TO THE
SUBJECT MATTER HEREOF. Without limiting the generality of the foregoing, this
Agreement supersedes and replaces that certain Amended and Restated Revolving
Credit Agreement, effective December 31, 1996, among Borrower and the Banks that
are signatories thereto, as amended.
11.17 Severability. In the event any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
74
<PAGE>
11.18 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.19 Resurrection of Borrower's Obligations. To the extent that any of
the Banks receives any payment on account of any of Borrower's Obligations, and
any such payment(s) or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, subordinated and/or required to be
repaid to a trustee, receiver or any other Person under any bankruptcy act,
state or federal law, common law or equitable cause, then, to the extent of such
payment(s) received, Borrower's Obligations or part thereof intended to be
satisfied and any and all Liens upon or pertaining to any Property or assets of
Borrower and theretofore created and/or existing in favor of such Bank(s) as
security for the payment of such Borrower's Obligations shall be revived and
continue in full force and effect, as if such payment(s) had not been received
by such Bank(s) and applied on account of Borrower's Obligations.
11.20 Independence of Covenants. All of the covenants contained in this
Agreement and the other Transaction Documents shall be given independent effect
so that if a particular action, event or condition is prohibited by any one of
such covenants, the fact that it would be permitted by an exception to, or
otherwise be in compliance within the provisions of, another covenant shall not
avoid the occurrence of a Default or Event of Default if such action is taken,
such event occurs or such condition exists.
11.21 Confidentiality. The Agent and each of the Banks shall keep
confidential any information delivered, made available or otherwise conveyed by
the Borrower or any of its Subsidiaries in connection with this Agreement and
the transactions contemplated hereby; provided that, the provisions of this
Section 11.21 shall not be construed to prohibit Agent or any Bank from
disclosing any information to (i) Agent or any Bank (or any attorneys, agents or
consultants of Agent or any Bank), (ii) any participant or assignee or
prospective participant or assignee of any Bank (so long as such participant or
assignee or prospective participant or assignee agrees to be bound by the
provisions of this Section 11.21), (iii) any affiliate of Agent or any Bank or
(iv) any Person as required by law, regulation or court order.
11.22 Certain Indemnification Procedures. Notwithstanding any provision to
the contrary contained in this Agreement, in the event Borrower is obligated to
defend the Agent or any of the Banks under the terms of this Agreement, Borrower
shall be entitled, at is option, to assume the defense of such action on behalf
of such indemnified party or parties with counsel which is selected by Borrower
and reasonably acceptable to such indemnified parties. In no event shall
Borrower: (i) be required to employ more than one (1) firm of attorneys in
defense of any matter where Borrower is required to defend the Agent or any of
the Banks, but nothing contained herein shall prevent Borrower from employing
multiple firms of attorneys, at its option; or (ii) be liable for any legal fees
and expenses in excess of the reasonable fees and expenses of the one (1) firm
of attorneys whether or not selected by Borrower pursuant to clause (i) of this
Section 11.22 and the fees and expenses of any additional firms employed by
Borrower pursuant to said clause (i) (provided that Borrower
75
<PAGE>
shall not have the right to challenge the reasonableness of the fees of any firm
of attorneys selected by Borrower).
11.23. Conflicting Provisions. In the event any of the terms and provisions
of this Agreement conflict with any terms and provisions contained in any other
Transaction Document, the terms and provisions of this Agreement shall govern.
TO END OF PAGE INTENTIONALLY LEFT BLANK
76
<PAGE>
IN WITNESS WHEREOF, Borrower, the Agent and the Banks have executed this
Amended and Restated Revolving Credit Agreement effective as of the 31st day of
October, 1997.
HALTER MARINE GROUP, INC.
BY: /s/ Keith L. Voigts
-----------------------------------------
ITS: Senior Vice President & Chief Financial
---------------------------------------
Officer
-------
13085 Seaway Road
Gulfport, MS 39503
Telecopy number: (601) 897-4888
Revolving Credit Commitment: WHITNEY NATIONAL BANK
$25,500,000.00
BY: /s/ Robert L. Browning
-----------------------------------------
ITS: Senior Vice President
----------------------------------------
228 St. Charles Avenue
New Orleans, LA 70130
Telecopy number: (504) 552-4622
Revolving Credit Commitment: THE FIRST NATIONAL BANK OF
$25,500,000.00 CHICAGO
BY: /s/ Brian J. Zimmer
-----------------------------------------
ITS: Authorized Agent
----------------------------------------
One First National Plaza
Suite 0324
10th Floor
Chicago, IL 60670
Telecopy number: (312) 732-3055
77
<PAGE>
Revolving Credit Commitment: BANKBOSTON, N.A.
$25,500,000.00
BY: /s/ Lisa Pattinson
-----------------------------------------
ITS: Vice President
----------------------------------------
MS. 01-08-01
100 Federal Street
Boston, MA 02110
Telecopier number (617) 434-1955
Revolving Credit Commitment: FIRST NATIONAL BANK OF COMMERCE
$10,000,000.00
BY: /s/ Joseph P. Maxwell
-----------------------------------------
ITS: Assistant Vice President
----------------------------------------
FNBC Center
201 St. Charles Avenue, 28th Floor
New Orleans, LA 70170
Telecopier number (504) 623-1316
Revolving Credit Commitment: HIBERNIA NATIONAL BANK
$17,000,000.00
BY: /s/ Bruce Ross
-----------------------------------------
ITS: Vice President
----------------------------------------
313 Carondelet Street
New Orleans, LA 70130
Telecopy number: (504) 533-5434
Revolving Credit Commitment: THE BANK OF NOVA SCOTIA
$12,000,000.00
BY: /s/ F.C.H. Ashby
-----------------------------------------
ITS: Senior Manager Loan Operations
----------------------------------------
600 Peachtree Street NE
Suite 2700
Atlanta, GA 30308
Telecopy number: (404) 888-8998
78
<PAGE>
Revolving Credit Commitment: BANK ONE, LOUISIANA, N.A.
$10,000,000.00
BY: /s/ Lynn Richard
-----------------------------------------
ITS: Vice President
----------------------------------------
201 St. Charles Avenue
Suite 1410
New Orleans, LA 70170
Telecopy number: (504) 558-1279
Revolving Credit Commitment: THE BANK OF TOKYO-MITSUBISHI, LTD.
$17,000,000.00
BY: /s/ Christopher Holder
-----------------------------------------
ITS: Vice President
----------------------------------------
2001 Ross Avenue, LB118
3150 Trammel Crow Center
Dallas, TX 75201
Telecopy number: (214) 954-1007
Revolving Credit Commitment: THE SUMITOMO BANK LIMITED
$7,500,000.00
BY: /s/ Richard Menchaca
-----------------------------------------
ITS: Vice President
----------------------------------------
BY: /s/ Bruce Pabtlo
-----------------------------------------
ITS: VP & Mgr.
----------------------------------------
909 Fannin, Suite 3750
Houston, TX 77010
Telecopy number: (713) 759-1419
79
<PAGE>
SCHEDULE 2.1(a)
LIENS IN EXISTENCE AS OF THE EFFECTIVE DATE
<TABLE>
<CAPTION>
GRANTOR Date Original Amount Type
---------------------------------- ---------------- --------------- --------------
<S> <C> <C> <C>
(1) Offshore Parts-Full Services, Inc. 11/1/90 $2,200,000. Vendor's Lien
PO Box 35 Deed of Trust
Burnside, LA 70738
(2) Saline Offshore Services, Inc. 3/7/95 $1,200,000. Real Est. Lien
PO Box 405
Sabine Pass, TX 77655
(3) A. Bayou Dock, Inc. 2/23/95
320 Houston Avenue
Port Arthur, TX 77640
1. Wrap Note No. 1 $ 925,884.31 Wrap around
2. Wrap Note No. 2 $ 709,307.52 Real Estate
3. Wrap Note No. 3 $ 206,091.99 Lien
B. Gulf Copper Group, Inc. 2/23/95 $ 158,716.15 Real Estate
320 Houston Avenue Lien
Port Arthur, TX 77640
</TABLE>
<PAGE>
SCHEDULE 4.1(a)
<TABLE>
<CAPTION>
ISSUING BANK L/C# LC AMOUNT %WNB BENEFICIARY L/C EXPIRE DATE ISSUED
- ---------------- ------ ------------- ------------ --------------- ------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
FIRST CHICAGO, FJ4485 $5,750,000.00 25.9259255 RELIANCE April 17, 1998 April 22, 1997
CHICAGO, IL NATIONAL
INDEMNITY
COMPANY, A
WISCONSIN
CORPORATION
WHITNEY P34734 $ 287,887.45 25.9259255 AUSTRALIA & February 3, 1998 August 4, 1997
NATIONAL BK NEW
ZEALAND
BANKING GROUP
LTD.
WHITNEY P34305 $ 11,870.85 25.9259255 STANDARD November 24, 1997 January 23, 1997
NATIONAL BK CHARTERED BANK
WHITNEY P34735 $1,151,549.40 25.9259255 AUSTRALIA & December 4, 1997 August 4, 1997
NATIONAL BK NEW
ZEALAND
BANKING GROUP
LTD
WHITNEY P34747 $ 67,031.20 25.925941949 AUSTRALIA & December 31, 1997 August 6, 1997
NATIONAL BK NEW
ZEALAND
BANKING GROUP
LTD
================ ====== ============= ============ =============== ================== ================
Total: $8,268,338.90
Count: 5
</TABLE>
<PAGE>
SCHEDULE 7.8
List of Subsidiaries
1. Halter Marine, Inc. (a Nevada corporation)
2. Equitable Shipyards, Inc.
3. Gretna Machine and Iron Works, Inc.
4. Gulf Coast Fabrication, Inc.
5. Halter Marine Louisiana, Inc.
6. Halter Marine Services, Inc.
7. Halter Gulf Repair, Inc.
8. Halter Marine Gulfport, Inc.
9. Halter Marine Panama City, Inc.
10. Halter Marine Pascagoula, Inc.
11. Trinity Yachts, Inc.
12. Washington Marine Fabricators, Inc.
13. Offshore Marine Indemnity Company
14. Maritime Holdings, Inc.
15. TDI-Halter, Inc.
16. TDI International, Ltd.
17. Bludworth Bond Shipyard, Inc.
<PAGE>
SCHEDULE 7.10
DEBTS AND GUARANTEES OF BORROWER OR ANY SUBSIDIARY
As of 10/29/97
<TABLE>
<CAPTION>
Guarantor Date Purchaser Contract Amount
- -------------- -------- ----------------------------------- ---------------
<S> <C> <C> <C>
(Trinity) Penn ATB c. $21,000,000
(Trinity)??? Imperial Operations $8,261,426.00
(d/k)
(Halter) 09/26/97 Eastern Long Island $5,075,739.00
d/b/a Star Island Yacht Club
(Halter) 12/30/96 Coastal (3) $5,768,806.00
(Halter Marine is incorporated
into
contract as Guarantor and signs as
such)
(Halter) 10/20/97 Transocean Offshore $4,232,812.00
(Halter) 07/29/97 Cod-Cor, LDC $5,788,100.00
</TABLE>
<PAGE>
SCHEDULE 7.11
WAGE CLAIMS UNPAID AND UNACCRUED
NONE
<PAGE>
SCHEDULE 7.12
LIST OF SHIPYARDS AND OTHER PROPERTY
1. Equitable New Orleans Shipyard
The Equitable shipyard is located on the Industrial Canal in New Orleans,
Louisiana. The yard has the capacity to build vessels up to the following
dimensions: 350 foot length; 90 foot beam; 25 foot water depth; and 110 foot
height. The shipyard has over 225,000 square feet of under-cover production
facilities divided between a fabrication shop, mold loft, pipe shop, carpentry
shop, electrical shop and a machine shop. The facility has two crawler cranes,
one barge mounted crane and 12 track mounted overhead cranes. The shipyard is
served by direct rail access.
2. Gretna Machine & Iron Words Shipyard
The Gretna shipyard is located in Harvey, Louisiana. The yard has the
capacity to build vessels up to the following dimensions: 600 foot length; 95
foot beam; 5.5 foot water depth; and 70 foot height. The shipyard contains over
15,500 square feet of under-cover production facilities divided between a
fabrication shop, mold loft, carpentry shop and electrical shop. The facility
has two graving docks, one with a length of 700 feet and the other with a length
of 300 feet, and has three crawler cranes, two track mounted gantry cranes and
two tower cranes.
3. Halter Moss Point Shipyard
The Halter Moss Point shipyard is located in Moss Point, Mississippi.
The yard has the capacity to build vessels up to the following dimensions: 400
foot length; 85 foot beam; 18 foot water depth; and 85 foot height. The
facility consists of approximately 58 acres of property with 61,500 square feet
of shops, offices and warehouses and 60,165 square feet of outside concrete
construction platforms. The facility has six crawler cranes and six track
mounted gantry cranes.
4. Lockport Shipyard
The Lockport shipyard is located in Lockport, Louisiana. The yard has
the capacity to build vessels up to the following dimensions: 310 foot length;
80 foot beam; 10 foot water depth; and 68 foot height. This facility contains
over 35,000 square feet of under-cover production facilities divided between a
fabrication shop, mold loft, pipe shop, carpentry shop, electrical shop and a
machine shop and has 46,000 square feet of outside concrete construction
platforms and a 16,000 square foot warehouse. The yard has four crawler cranes
and six track mounted gantry cranes.
5. Moss Point Marine Shipyard
The Moss Point Marine shipyard is located in Escatawpa, Mississippi. The
yard has the capacity to build vessels up to the following dimensions: 420 foot
length; 85 foot beam; 14 foot water depth; and 44 foot height. The yard
contains over 35,000 square feet of under-cover production facilities divided
between a fabrication shop, mold loft, carpentry shop, electrical shop
<PAGE>
SCHEDULE 7.12
(Continued)
and warehouse, and has 40,000 square feet of outside construction platforms. The
yard has four crawler cranes and nine track mounted gantry cranes.
6. Gulfport Shipyard
The Gulfport shipyard is located in Gulfport, Mississippi and has the
capacity to build vessels up to the following dimensions: 360 foot length; 80
foot beam; 12 foot water depth; and 90 foot height. The facility consists of
113 acres on Bernard Bayou Industrial Park and includes and environmentally
controlled 38,000 square foot sandblasting and painting facility and 400,000
square feet of under-cover production facilities. The yard has 16,500 square
feet of outside concrete erection ways, two crawler cranes, 15 track mounted
overhead cranes and two truck mounted gantry cranes. The shipyard is served by
direct rail access.
7. Panama City Shipyard
The Panama City shipyard is located in Panama City, Florida and contains
over 35,000 square feet of under-cover production facilities divided between a
fabrication shop, mold loft, carpentry shop, electrical shop and warehouse. The
yard has the capacity to build vessels up to the following dimensions: 420 foot
length; 75 foot beam; 14 foot water depth; and 44 foot height. The facility has
not been operational since its acquisition by the Company in 1992.
8. Gulf Coast Fabrication Shipyard
The Gulf Coast Fabrication shipyard is located in Pearlington,
Mississippi. The facility contains over 15,000 square feet of under-cover
production facilities divided between a shear shop, mechanical shop, electrical
shop and warehouse. The facility has a 460 foot graving dock. The yard has the
capacity to build vessels up to the following dimensions: 460 foot length; 140
foot beam; 10 foot water depth; and unlimited height. The yard has two crawler
cranes, two track mounted gantry cranes and one tower crane.
9. Gulf Repair Shipyard
The Gulf Repair shipyard is located on the Industrial Canal across from
the Company's Equitable New Orleans shipyard. The facility contains 72,000
square feet of under-cover production facilities divided between a fabrication
shop, pipe shop, carpentry shop, electrical shop and a machine shop. The
facility has a 586 foot dry dock with 20,000 ton capacity, a 200 foot dry dock
with 3,750 ton capacity, a 285 foot drydock with 3,700 ton capacity, a 162 foot
drydock with 1,500 ton capacity, and a 240 foot drydock with 5,000 ton capacity.
The yard has the capacity to build vessels up to the following dimensions: 325
foot length; 120 foot beam; 21 foot water depth; and 137 foot height. The yard
has one crawler crane, seven track mounted gantry cranes and two barge mounted
cranes.
<PAGE>
SCHEDULE 7.12
(Continued)
10. Pascagoula Shipyard
The Pascagoula shipyard was acquired by the Company in 1995 and is
located in Pascagoula, Mississippi. The yard consists of approximately 88 acres
of property and has the capacity to build vessels up to the following
dimensions: 800 foot length; 115 foot beam; 20 foot water depth; and unlimited
height. The yard has over 42,000 square feet of under-cover production
facilities divided between a fabrication shop, paint shop, maintenance shop, and
warehouse. The yard has a 900 foot slip for wet dock work and a 300 ton shore
mounted crane. The yard has three crawler cranes and two track mounted gantry
cranes.
<PAGE>
SCHEDULE 7.12
(Continued)
SHIPYARDS AND OTHER PROPERTY ACQUIRED AFTER OCTOBER 1996
1. Bludworth Bond Shipyard, Inc.
8114 Hockley
Houston, TX 77012
(713) 923-2001
New Vessel Construction (Boats)
Vessel Repair
2. Bludworth Bond Shipyard, Inc.
2201 Duck Road, Dock #14
Texas City, TX 77590
New Vessel Construction (Boats)
Vessel Repair
3. TDI-Halter, Inc./TDI Orange
1601 S. Childers Road
Orange, TX 77630
(409) 883-0954
New Construction: Drill Barges, package units and drill boats
Fabrication: Jack-up legs, substructures and mooring structures
4. TDI-Halter, Inc./TDI North
2350 S. Gulfway Drive
Port Arthur, TX 776450
(409) 985-3982
Repair and conversions: Drill ships and drill rigs
5. TDI-Halter, Inc./TDI Central
S. Highway 87
Sabine Pass, TX 77655
(409) 971-2126
Repair, retrofit, modifications, conversions:
All types of jack-up, drilling rig designs
6. TDI-Halter, Inc./TDI South Yard
6839 S. First Avenue
Sabine Pass, TX 77655
(409) 971-2927
Repairs, modifications and conversions:
Semi-submersible drill rigs, large jack-ups and storage/production units
<PAGE>
SCHEDULE 7.12
(Continued)
7. TDI-Halter, Inc./TDI Dock Yard
2500 M. L. King Blvd.
Port Arthur, TX 77640
(409) 983-3353
Modifications, repairs, conversions and drydocking:
Semi-submersibles, jack-up and drill rigs,
8. TDI-Halter, Inc./TDI Pier One
Pier 1, Pier Road
Orange, TX 77630
(409) 886-5318
Drydocking and repairs: Derrick barges, pipeline barges
9. Halter Gulfport Central/Central Yard
13039 Industrial Seaway Road
Gulfport, MS 39503
Fabrication: Assemblies and subassemblies
10. Halter Marine/Three Rivers Yard
10220 Three Rivers Road
Gulfport, MS 39503
Fabrication: Assemblies and subassemblies
11. TDI-Halter Sabine Yard
7366 South First Avenue
Sabine Pass, TX 77655
(409) 971-2000
<PAGE>
SCHEDULE 7.16
ENVIRONMENTAL AND OSHA MATTERS
None that would have a material adverse effect.
<PAGE>
SCHEDULE 7.17
RESTRICTED INVESTMENTS CURRENTLY OWNED BY BORROWER OR ANY SUBSIDIARY
None
<PAGE>
EXHIBIT A
---------
REVOLVING CREDIT NOTE
---------------------
$ _________________________ New Orleans, Louisiana
October 31, 1997
FOR VALUE RECEIVED, the undersigned, HALTER MARINE GROUP, INC., a Delaware
corporation ("Borrower"), hereby promises to pay to the order of
_________________________ ("Bank," which term includes its transfers and assigns
which any transfer or assignment shall be governed by the Revolving Credit
Agreement referred to below), on the last day of the Revolving Credit Period, or
such earlier date as may be determined pursuant to the Revolving Credit
Agreement referred to below, in lawful money of the United States of America and
in immediately available funds, the principal sum of ____________________
Dollars ($___________), or such lesser sum as may then constitute the aggregate
unpaid principal amount of all Revolving Credit Loans made by Bank to Borrower
pursuant to the Revolving Credit Agreement referred to below. The aggregate
principal amount of Revolving Credit Loans which Bank shall be committed to have
outstanding hereunder at any time shall not exceed ____________________ Dollars
($_________), which amount may be borrowed, paid, reborrowed and repaid, in
whole or in part, subject to the terms and conditions hereof and of the
Revolving Credit Agreement referred to below. Borrower further promises to pay
to the order of Bank interest on the aggregate unpaid principal amount of such
Revolving Credit Loans on the dates and at the rate or rates provided for in the
Revolving Credit Agreement, until paid in full (both before and after judgment).
The amount of interest accruing hereunder shall be computed based on the actual
days elapsed over a year composed of 360 days. All such payments of principal
and interest shall be made at the office of Whitney National Bank (the "Agent"),
228 St. Charles Avenue, New Orleans, Louisiana 70130.
All Revolving Credit Loans made by Bank and all repayments of the principal
thereof may be recorded by Bank and, prior to any transfer hereof, endorsed by
Bank on the schedule attached hereto, or on a continuation of such schedule
attached to and made a part hereof; provided, however, that the obligation of
Borrower to repay each Revolving Credit Loan made hereunder shall be absolute
and unconditional, notwithstanding any failure of Bank to record or endorse or
any mistake by Bank in connection with recordation or endorsement on the
schedules attached to this Note. The internal records of Bank shall constitute
for all purposes prima facie evidence of (i) the amount of principal and
interest owing on this Note from time to time, (ii) the amount of each Revolving
Credit Loan made to Borrower and (iii) the amount of each principal and/or
interest payment received by Bank on this Note.
This Note is one of the Revolving Credit Notes referred to in the Revolving
Credit Agreement effective as of the date hereof by and among the Borrower,
Agent and the Banks
1
<PAGE>
listed on the signature pages thereof (as the same may from time to time be
amended, modified, extended or renewed, the "Revolving Credit Agreement"). The
Revolving Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the occurrence of certain stated events
and also for prepayments on account of principal hereof and interest hereon
prior to the maturity hereof upon the terms and conditions specified therein.
Notwithstanding anything to the contrary contained herein, the obligation of
Bank to make a Revolving Credit Loan shall be governed by the terms and
provisions of the Revolving Credit Agreement. All capitalized terms used and not
otherwise defined in this Note shall have the respective meanings ascribed to
them in the Revolving Credit Agreement.
Upon the occurrence of any Event of Default under the Revolving Credit
Agreement, the entire outstanding principal balance of this Note and all accrued
and unpaid interest hereon may be declared to be immediately due and payable in
the manner and with the effect as provided in the Revolving Credit Agreement.
In the event that any payment due hereunder shall not be paid when due,
whether by reason of acceleration or otherwise, and this Note shall be placed in
the hands of an attorney or attorneys for collection or if this Note shall be
placed in the hands of an attorney or attorneys for representation of Bank in
connection with bankruptcy or insolvency proceedings relating hereto, Borrower
hereby agrees to pay to the order of Bank, in addition to all other amounts
otherwise due hereon, the reasonable costs and expenses of such collection and
representation, including, without limitation, reasonable attorneys' fees and
expenses incurred by Bank (whether or not litigation shall be commenced in aid
thereof). Borrower hereby waives presentment for payment, demand, protest,
notice of protest and notice of dishonor.
This Note shall be governed by and construed in accordance with the
substantive laws of the State of Louisiana (without reference to conflict of law
principles).
HALTER MARINE GROUP, INC.
By:
-----------------------------------
Its:
-----------------------------------
2
<PAGE>
Revolving Credit Note (cont'd)
------------------------------
LOANS AND PAYMENTS OF PRINCIPAL
- -----------------------------------------------------------------
Date Base Rate Amount Amount of Unpaid Notation
or of Principal Principal Made By
LIBOR Loan Loan Repaid Balance
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
3
<PAGE>
EXHIBIT B
---------
SWING LINE NOTE
---------------
$5,000,000.00 New Orleans, Louisiana
October 31, 1997
FOR VALUE RECEIVED, the undersigned, HALTER MARINE GROUP, INC., a Delaware
corporation ("Borrower"), hereby promises to pay to the order of WHITNEY
NATIONAL BANK ("Bank," which term includes its transfers and assigns which any
transfer or assignment shall be governed by the Revolving Credit Agreement
referred to below), on the last day of the Revolving Credit Period, or such
earlier date as may be determined pursuant to the Revolving Credit Agreement
referred to below, in lawful money of the United States of America and in
immediately available funds, the principal sum of Five Million Dollars
($5,000,000.00), or such lesser sum as may then constitute the aggregate unpaid
principal amount of all Swing Loans made by Bank to Borrower pursuant to the
Revolving Credit Agreement referred to below. The aggregate principal amount of
Swing Loans which Bank shall be committed to have outstanding hereunder at any
time shall not exceed the lesser of (i) Five Million Dollars ($5,000,000.00), or
(ii) the difference between the Revolving Credit Commitments of all of the Banks
and the amount of the Revolving Credit Loans, the aggregate principal amount of
all Letter of Credit Loans and the undrawn face amount of Letters of Credit then
outstanding hereunder at the time of computation, which amount may be borrowed,
paid, reborrowed and repaid, in whole or in part, subject to the terms and
conditions hereof and of the Revolving Credit Agreement referred to below.
Borrower further promises to pay to the order of Bank interest on the aggregate
unpaid principal amount of such Swing Loans on the dates and at the rate
provided for in the Revolving Credit Agreement, until paid in full (both before
and after judgment). The amount of interest accruing hereunder shall be
computed based on the actual days elapsed over a year composed of 360 days. All
such payments of principal and interest shall be made at the office of Whitney
National Bank (the "Agent"), 228 St. Charles Avenue, New Orleans, Louisiana
70130.
All Swing Loans made by Bank and all repayments of the principal thereof
may be recorded by Bank and, prior to any transfer hereof, endorsed by Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided, however, that the obligation of Borrower to
repay each Swing Loan made hereunder shall be absolute and unconditional,
notwithstanding any failure of Bank to record or endorse or any mistake by Bank
in connection with recordation or endorsement on the schedules attached to this
Note. The internal records of Bank shall constitute for all purposes prima
facie evidence of (i) the amount of principal and interest owing on this Note
from time to time, (ii) the amount of each Swing Loan made to Borrower and (iii)
the amount of each principal and/or interest payment received by Bank on this
Note.
This Note is the Swing Line Note referred to in the Revolving Credit
Agreement effective
1
<PAGE>
as of the date hereof by and among Borrower, Agent and the Banks listed on the
signature pages thereof (as the same may from time to time be amended, modified,
extended or renewed, the "Revolving Credit Agreement"). The Revolving Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the occurrence of certain stated events and also for
prepayments on account of principal hereof and interest hereon prior to the
maturity hereof upon the terms and conditions specified therein. Notwithstanding
anything to the contrary contained herein, the obligation of Bank to make a
Swing Loan shall be governed by the terms and provisions of the Revolving Credit
Agreement. All capitalized terms used and not otherwise defined in this Note
shall have the respective meanings ascribed to them in the Revolving Credit
Agreement.
Upon the occurrence of any Event of Default under the Revolving Credit
Agreement, the entire outstanding principal balance of this Note and all accrued
and unpaid interest hereon may be declared to be immediately due and payable in
the manner and with the effect as provided in the Revolving Credit Agreement.
In the event that any payment due hereunder shall not be paid when due,
whether by reason of acceleration or otherwise, and this Note shall be placed in
the hands of an attorney or attorneys for collection or if this Note shall be
placed in the hands of an attorney or attorneys for representation of Bank in
connection with bankruptcy or insolvency proceedings relating hereto, Borrower
hereby agrees to pay to the order of Bank, in addition to all other amounts
otherwise due hereon, the reasonable costs and expenses of such collection and
representation, including, without limitation, reasonable attorneys' fees and
expenses incurred by Bank (whether or not litigation shall be commenced in aid
thereof). Borrower hereby waives presentment for payment, demand, protest,
notice of protest and notice of dishonor.
This Note shall be governed by and construed in accordance with the
substantive laws of the State of Louisiana (without reference to conflict of law
principles).
HALTER MARINE GROUP, INC.
By:
--------------------------------
Its:
--------------------------------
2
<PAGE>
SWING LINE NOTE (CONT'D)
------------------------
LOANS AND PAYMENTS OF PRINCIPAL
Date Amount of Loan Amount of Unpaid Notation
Principal Repaid Principal Made By
Balance
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
3
<PAGE>
EXHIBIT C
CONTINUING GUARANTEE
This Continuing Guarantee, dated as of _________________, 19___, is made by
___________________________, a ___________ corporation (the "Guarantor"), in
favor of WHITNEY NATIONAL BANK, as Agent for the benefit of the Banks (as such
term is defined in the Revolving Credit Agreement effective as of October 31,
1997 (as the same may be amended, modified or supplemented from time to time,
the "Revolving Credit Agreement") by and among Halter Marine Group, Inc. (the
"Company"), Whitney National Bank, in its capacity as Agent for the Banks and
the Banks).
WHEREAS, the Guarantor is a wholly-owned subsidiary of the Company; and
WHEREAS, the Guarantor acknowledges that it has and will receive
substantial direct and indirect benefit from the execution and delivery of the
Revolving Credit Agreement by the Company and the extension of credit provided
for therein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration (the receipt and adequacy of which are hereby
acknowledged), the Guarantor hereby agrees with the Agent, as follows:
1. Definitions. Capitalized terms used in this Continuing Guarantee and not
-----------
otherwise defined herein shall have the meanings ascribed to them in the
Revolving Credit Agreement.
2. Guarantee. Guarantor hereby unconditionally, irrevocably, jointly,
---------
severally and solidarily guarantees the due and punctual payment to the Agent
for the benefit of the Banks when stated to be due of all present and future
amounts (including amounts that, but for the initiation of any proceeding under
any insolvency or bankruptcy law, would become due) now or at any time or from
time to time hereafter due or owing to the Banks or any of them whether at
maturity or earlier by reason of acceleration or otherwise by or from the
Company arising under the Notes, the Letter of Credit Applications or any other
Transaction Documents, together with interest accrued thereon (including
interest that, but for the initiation of any proceeding under any insolvency or
bankruptcy law, would accrue), and any and all fees, expenses and costs payable
to the Banks in connection therewith (all such amounts and obligations being
hereinafter collectively referred to as "Obligations"). The Guarantor also
agrees to pay any and all expenses (including, without limitation, all
reasonable attorneys' fees and costs) which may be paid or incurred by the Agent
and/or the Banks in administering, amending or enforcing any of its respective
rights in connection with, or collecting against Guarantor under, this
Continuing Guarantee.
3. Guarantee Absolute. Guarantor guarantees that the Obligations will be
------------------
paid strictly in accordance with the terms of the Notes and the Revolving Credit
Agreement regardless of any
<PAGE>
laws in effect in any jurisdiction affecting any of such terms or the rights of
the Banks. The liability of the Guarantor hereunder shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of any of the Revolving Credit
Agreement, the Notes or any other agreement relating to the advance of monies or
other extensions of credit by the Banks to the Company;
(b) any change in the time, manner, or place of payment or in any other
term of, or any other amendment or waiver of, or any consent to departure from
any of the Transaction Documents or any Obligations;
(c) any change in the name, capital stock, Articles of Incorporation,
Certificate of Incorporation or by-laws, as the case may be, of the Guarantor or
the Company;
(d) the insolvency of, or the voluntary or involuntary bankruptcy,
assignment for the benefit of creditors, reorganization or other similar
proceedings affecting the Company or the Guarantor or any of its or their
respective assets; or
(e) any other circumstance or claim which might otherwise constitute a
defense available to, or a discharge of, the Company in respect of the
Obligations or of the Guarantor in respect of this Continuing Guarantee.
No payment made by the Guarantor, any other guarantor or any other Person,
or received or collected by the Agent or any of the Banks, from the Guarantor,
any other guarantor or any other Person by virtue of any action or proceeding or
set-off or application at any time in reduction of or in payment of the
Obligations shall be deemed to modify, release or otherwise affect the liability
of Guarantor under this Continuing Guarantee. Notwithstanding any such payments
received or collected by the Agent or any of the Banks in connection with the
Obligations, Guarantor shall remain liable for the Obligations until all
Obligations are paid in full. This Continuing Guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Obligations is rescinded or must otherwise be returned by the Banks
upon the insolvency, bankruptcy or reorganization of the Company or otherwise,
all as though such payment had not been made.
Neither the Agent nor any of the Banks shall be required to see or inquire
into the powers of the Company or any of its partners, directors, officers,
managers or other agents, acting or purporting to act on behalf of the Company;
and monies or credit in fact obtained from the Banks in professed exercise of
such power, shall be deemed to form part of the Obligations hereby guaranteed,
notwithstanding that such borrowing shall be in excess of the powers of the
Company or of its respective partners, directors, officers, managers or other
agents aforesaid, or be in any way irregular, defective or informal.
-2-
<PAGE>
4. Dealing with the Company and Others.
-----------------------------------
(a) The obligations and liabilities of Guarantor hereunder shall not be
released, discharged, limited or in any way affected by anything done, suffered
or permitted by the Banks in connection with any monies or credit advanced by
the Banks to the Company or any security therefor, including, without
limitation, any loss of, or in respect of, any security received by the Agent or
any of the Banks from the Company, the Guarantor or others. It is agreed that
the Banks, without releasing, discharging, limiting or otherwise affecting in
whole or in part Guarantor's obligations and liabilities hereunder, may, without
limiting the generality of the foregoing:
(i) grant time, renewals, extensions, indulgences, releases and
discharges to the Company;
(ii) take or abstain from taking security or collateral for the
Obligations or from perfecting security or collateral for the Obligations;
(iii) release, discharge, compromise or otherwise deal with (with or
without consideration) any and all collateral, mortgages, indemnities,
guaranties or other security given by the Guarantor, the Company or any
other Person with respect to the Obligations;
(iv) accept compromises from the Company;
(v) apply all monies at any time received from the Company or from
any guaranties, indemnities or any collateral upon such part of the
Obligations as the Banks may see fit or change any such application in
whole or in part from time to time as the Agent may see fit; or
(vi) otherwise deal with the Company and all other Persons and any
collateral as the Agent may see fit.
(b) Neither the Agent nor any of the Banks shall be bound or obliged to
exhaust recourse against the Company or other Persons or any security,
guarantee, indemnity, mortgage or collateral it may hold or take any other
action (other than make demand pursuant to Section 7 of this Continuing
Guarantee) before being entitled to payment from the Guarantor hereunder; and
(c) any amount settled by or between the Banks and the Company shall be
accepted by the Guarantor as conclusive evidence that the balance or amount
thereby appearing due to the Banks is so due.
5. Right of Set-Off. Upon the occurrence and during the continuation of any
----------------
Event of Default, Guarantor hereby irrevocably authorizes each of the Banks, at
any time and without notice to Guarantor (any such notice being expressly waived
by Guarantor) to compensate,
-3-
<PAGE>
set-off and apply any deposits of any kind, in any currency, and any other
credits, in such amounts as the Agent may in its sole discretion elect, against
the obligations and liabilities of Guarantor to the Banks under this Continuing
Guarantee then due, regardless of whether the Agent has made any demand for
payment.
6. Subrogation. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS OF
-----------
SUBROGATION (WHETHER CONTRACTUAL, UNDER SECTION 509 OF THE UNITED STATES
BANKRUPTCY CODE, UNDER LOUISIANA LAW, COMMON LAW OR OTHERWISE) TO THE CLAIMS OF
THE BANKS AGAINST THE COMPANY AND ALL CONTRACTUAL, STATUTORY OR COMMON LAW
RIGHTS OF CONTRIBUTION, REIMBURSEMENT, INDEMNIFICATION AND SIMILAR RIGHTS AND
"CLAIMS" (AS SUCH TERM IS DEFINED IN THE UNITED STATES BANKRUPTCY CODE) AGAINST
THE COMPANY WHICH ARISE IN CONNECTION WITH, OR AS A RESULT OF, THIS CONTINUING
GUARANTEE.
7. Demand for Payment. Guarantor shall make payment to the Banks of the
------------------
then amount of the liability of Guarantor hereunder forthwith after each demand
therefor is made by the Agent to Guarantor in writing. All payments by the
Guarantor hereunder shall be made without any set-off, deduction or withholding.
In the event the Guarantor is obligated by law to withhold taxes or other
amounts for or on account of levies, imposts, duties, deductions, withholdings
or other charges of whatsoever nature, imposed, levied, collected, withheld or
assessed by any Governmental Authority from payments by the Guarantor made
hereunder, the obligations of the Guarantor under this Continuing Guarantee
shall be, and be deemed to be, increased by the amount necessary so that the
amounts actually received by the Agent for the benefit of the Banks shall be the
amounts they would have received had no such withholding been imposed or
withheld. The Guarantor will promptly provide the Agent with official tax
receipts or other evidence of payment of such withholding tax. In the event the
Guarantor shall not pay any amount due under this Continuing Guarantee upon
demand, such unpaid amount shall bear interest from the date so demanded until
paid in full at the default rate of interest specified in the Revolving Credit
Agreement.
8. Representations and Warranties. Guarantor hereby represents and warrants
------------------------------
to the Agent and each of the Banks that:
(a) Guarantor (i) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, (ii) has the corporate
power and authority to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
and (iii) is duly qualified as a foreign corporation and is in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification;
(b) Guarantor has the corporate power and authority to make, deliver and
perform this Continuing Guarantee and has taken all necessary corporate action
to authorize the execution,
-4-
<PAGE>
delivery and performance of this Continuing Guarantee. No shareholder vote is
necessary to authorize the execution, delivery and performance of this
Continuing Guarantee. No consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is required in connection with
the execution, delivery, performance, validity or enforceability of this
Continuing Guarantee. This Continuing Guarantee has been duly executed and
delivered on behalf of Guarantor. This Continuing Guarantee constitutes a legal,
valid and binding obligation of the Guarantor enforceable against the Guarantor
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law);
(c) the execution, delivery and performance of this Continuing Guarantee
will not violate any law, rule or regulation or any indenture, contract,
agreement, lease or other instrument to which Guarantor is a party and will not
result in, or require, the creation or imposition of any Lien on any of its
properties or assets;
(d) all of the representations, warranties and covenants made by the
Company in the Revolving Credit Agreement which pertain or are applicable to
Guarantor are true, correct and complete; and
(e) as defined under applicable law, Guarantor is not insolvent and will
not be made insolvent by entering into this Continuing Guarantee.
9. Covenants of the Guarantor. So long as any of the Transaction Documents
--------------------------
are in full force and effect or any of the Obligations remain unpaid and except
as otherwise permitted by the prior written consent of the Banks, the Guarantor
hereby covenants that:
(a) the Guarantor shall forthwith notify the Agent of the occurrence of any
Default or Event of Default; and
(b) any loan, guarantee and/or advance made by Guarantor to Borrower shall
be subordinate in rank, payment, preference and priority to Borrower's
Obligations and Guarantor agrees to execute any documents and agreements which
the Required Banks deem necessary to further evidence this subordination.
10. Waiver of Guarantor. Guarantor hereby waives acceptance and notice of
-------------------
acceptance of this Continuing Guarantee. Guarantor hereby also waives
presentment or notice or protest with respect to the Obligations, and demand for
payment and notice of default or nonpayment or any other notice of any kind to
or upon the Guarantor with respect to the Obligations except for demand pursuant
to Section 7 hereof. No amendment or waiver of any provision of the Continuing
Guarantee nor consent to any departure by the Guarantor therefrom, shall be
effective unless the same shall be in writing and signed by the Agent on behalf
of the Banks.
-5-
<PAGE>
11. Additional Guarantees. This Continuing Guarantee is in addition and
---------------------
without prejudice to any guaranties, indemnities or security of any kind
(including, without limitation, indemnities and guaranties whether or not in the
same form as this instrument) now or hereafter held by the Agent for the benefit
of the Banks. The Agent shall not be obligated to proceed under any other
indemnity, guarantee or security relating to any or all of the Obligations
before being entitled to payment under this Continuing Guarantee.
12. Severability. Any provision of this Continuing Guarantee 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 provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13. GOVERNING LAW AND JURISDICTION. THIS CONTINUING GUARANTEE SHALL BE
------------------------------
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF LOUISIANA.
14. Notices. All notices, demands, and other communications provided for
-------
hereunder shall be in writing and shall be provided in the manner specified in
the Revolving Credit Agreement addressed to Guarantor at the address set forth
under the signature of Guarantor herein or such other address as Guarantor may
specify in writing to Agent.
15. No Waiver Remedies. No failure on the part of the Banks to exercise,
------------------
and no delay in exercising, any right hereunder shall operate as a waiver
thereof nor shall any single or partial exercise of any right hereunder preclude
any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
16. Benefit and Binding Nature. This Continuing Guarantee is a continuing
--------------------------
guarantee and shall (a) remain in full force and effect until the irrevocable
payment in full of the Obligations and all other amounts payable hereunder; (b)
be binding upon Guarantor, its successors and assigns, and (c) enure to the
benefit of the Agent and the other Banks and their respective successors and
assigns and be enforceable by the Agent and its respective successors and
assigns.
17. Jurisdiction. The Guarantor hereby irrevocably submits to the
------------
jurisdiction of any court of the State of Louisiana or any court of the United
States of America sitting in the Eastern District of Louisiana, as the Agent may
elect, in any suit, action or proceeding arising out of or relating to this
Continuing Guarantee or any other Transaction Document. Guarantor irrevocably
agrees that all claims in respect of such suit, action or proceeding may be
heard and determined in any such courts. Guarantor irrevocably waives, to the
fullest extent permitted by law, any objection which Guarantor may now or
hereafter have to the laying of venue of any such suit, action or proceeding
brought in any such court, and Guarantor further irrevocably waives any claim
that such suit, action or proceeding brought in any such court has been brought
in an
-6-
<PAGE>
inconvenient forum. Guarantor authorizes the service of process upon Guarantor
by registered mail sent to Guarantor at the address set forth under the
signature of Guarantor herein or such other address as Guarantor may specify in
writing to Agent and in the manner specified in Section 14 hereof. THE GUARANTOR
HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING ANY
COUNTERCLAIM) IN ANY COURT ARISING ON, OUT OF, OR IN ANY WAY RELATING TO THIS
CONTINUING GUARANTEE AND THE OTHER TRANSACTION DOCUMENTS OR ANY AMENDMENT OR
SUPPLEMENT HERETO OR THERETO OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF, Guarantor has caused this Continuing Guarantee to be
executed by its duly authorized officer as the day and year first written above.
------------------------------------
By:
------------------------------
Name:
Title:
Address:
----------------------------
------------------------------------
------------------------------------
-7-
<PAGE>
EXHIBIT D
FORM OF STANDBY LETTER OF CREDIT APPLICATION
--------------------------------------------
<PAGE>
APPLICATION AND AGREEMENT FOR IRREVOCABLE STANDBY LETTER OF CREDIT
____________________, 199_______
(Place and date)
THE UNDERSIGNED HEREBY REQUESTS YOU TO ISSUE YOUR IRREVOCABLE STANDBY
LETTER OF CREDIT AS FOLLOWS:
IN FAVOR OF_____________________________________________________________________
(Name)
________________________________________________________________________________
(Address)
NOT EXCEEDING IN THE AGGREGATE _________________________________________________
(Amount of the Letter of Credit)
AVAILABLE BY DRAFTS AT SIGHT DRAWN, AT YOUR OPTION, ON YOU OR ANY OF YOUR
CORRESPONDENTS FOR ACCOUNT OF HALTER MARINE GROUP, INC. AND ___________________
________________________________________________________________________________
(Name and address of applicant)
PARTIAL DRAWINGS ARE ( ) PERMITTED ( ) NOT PERMITTED
DRAFTS MUST BE NEGOTIATED OR PRESENTED ON OR PRIOR TO _______________________
DRAFTS ARE TO BE ACCOMPANIED BY THE FOLLOWING DOCUMENTS:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
( ) THIS STANDBY LETTER OF CREDIT IS TRANSFERABLE
__________________________________________________________________________
THIS CREDIT IS SUBJECT TO THE RULES OF THE "UNIFORM CUSTOMS AND PRACTICE
FOR DOCUMENTARY CREDITS, INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION"
CURRENTLY IN FORCE ON THE DATE OF ISSUANCE
__________________________________________________________________________
================================================================================
UPON ISSUING THIS LETTER OF CREDIT PLEASE BE GUIDED BY WHICHEVER OF THE
FOLLOWING IS CHECKED:
( ) ORIGINAL OF THE LETTER OF CREDIT TO BE FORWARDED BY ( ) COURIER
SERVICE, ( ) AIR MAIL, DIRECTLY TO THE BENEFICIARY OR THROUGH YOUR
CORRESPONDENT, AT YOUR OPTION.
( ) NOTIFY THE BENEFICIARY BY BRIEF CABLE, DIRECTLY OR THROUGH YOUR
CORRESPONDENT, AT YOUR OPTION, THAT THIS LETTER OF CREDIT HAS BEEN
ISSUED AND THE ORIGINAL WITH COMPLETE DETAILS IS BEING SENT BY AIR
MAIL.
( ) CABLE ALL THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT TO YOUR
CORRESPONDENTS REQUESTING THEY NOTIFY THE BENEFICIARY.
===============================================================================
IN CONSIDERATION OF YOUR ISSUING, AT THE REQUEST OF THE UNDERSIGNED, YOUR
LETTER OF CREDIT (HEREINAFTER SOMETIMES REFERRED TO AS THE "CREDIT"),
SUBSTANTIALLY IN ACCORDANCE WITH THE FOREGOING APPLICATION, THE UNDERSIGNED, IF
THE CREDIT IS ISSUED, HEREBY AGREES TO ALL OF THE TERMS AND CONDITIONS OF THE
CREDIT AND PROMISES AND AGREES WITH YOU AS FOLLOWS:
<PAGE>
1. DEFINITIONS.
(i) "Agreement" means the Applications, the terms and conditions set out
below, and the Credits, together with any and all amendments and modifications
of any thereof.
(ii) "Applicant" means, singularly or collectively, and if more than one,
jointly, severally, and solidarily, each person or entity who has executed or
joined in the Agreement as Applicant or Co-Applicant as set forth below or
pursuant to an Application, and the heirs, executors, administrators, successors
and assigns thereof, including any Risk Participation Bank.
(iii) "Application" means each application of Applicant relating to a Credit as
any such application may be amended or modified from time to time in accordance
herewith.
(iv) "Credit" means any one or more letters of credit, as the same may be
amended or modified with the consent of the Applicant, issued by Issuer, at its
option, upon application by Applicant from time to time.
(v) "Issuer" means _________________________________________________________.
(vi) "Office" means _________________________________________________________.
(vii) "Revolving Credit Agreement" means that certain Revolving Credit
Agreement dated October 31, 1997 by and among Halter Marine Group, Inc., Whitney
National Bank, as Agent, and the Banks listed on the signature pages thereof, as
the same may from time to time be amended, modified, extended or renewed.
(viii) "Property", as used in this Agreement, includes goods, merchandise, all
documents relating thereto, securities, funds, choses in action and any and all
other forms of property, whether real (immovable), personal (movable) or mixed,
and any right or interest therein.
(ix) "Uniform Commercial Code" as used in this Agreement, means the Louisiana
Uniform Commercial Code, as amended from time to time.
(x) The words "party (or parties) hereto", as used in this Agreement, include
any individual, any firm, corporation, partnership or other entity and any
association of individuals or entities, who sign this document or become
obligated hereunder by reason of any other document.
(xi) Any capitalized term used and not otherwise defined herein shall have the
meaning ascribed to it in the Revolving Credit Agreement.
2. PROMISE TO PAY. Applicant shall pay to Issuer all amounts disbursed under
any Credit on demand. The Issuer shall notify Applicant promptly of the
presentment for payment of any Credit (on the date of presentment, if possible,
and otherwise on the next business day, it being agreed that such notice may be
made by phone), together with notice of the date (the "Disbursement Date") such
payment shall be made. Prior to 1:00 p.m. New Orleans time on the Disbursement
Date, Applicant shall reimburse Issuer all amounts which have been disbursed
under the Credit. In the event a payment under the Credit is made by Issuer
without same day receipt of payment from Applicant, such payment shall
constitute a loan by Issuer to Applicant and such loan shall accrue interest at
the Base Rate and shall be payable on demand. In addition to the foregoing,
Issuer shall have such further rights, and Applicant shall have such further
obligations, as set forth in the Revolving Credit Agreement.
If payments or drafts under a Credit are payable by Issuer in other than
United States currency, Applicant shall reimburse Issuer, in accordance with
this Agreement, in United States currency (at its then selling rate for cable
transfer to the place of payment in the currency in which the payment is made or
such draft is drawn) the equivalent of the amount disbursed under the Credit.
If, for any cause whatsoever at the time in question, there is no rate of
exchange current in the location of the Office for cable transfers of the sort
above provided for, Applicant shall pay to Issuer, in accordance with this
Agreement, an amount in United States currency equivalent to the actual cost to
Issuer of settlement of its obligation to the payor of the draft or any holder
thereof, as the case may be. Applicant shall comply with any and all
governmental exchange regulations now or hereafter applicable to the purchase of
foreign exchange relating to payments or drafts under or purporting to be under
a Credit and to pay to Issuer, in accordance with this Agreement, in United
States currency such amounts as Issuer may be required to expend on account of
such regulations.
Issuer or any of Issuer's correspondents may receive, pay, accept, or honor as
complying with the terms of the Credit, any drafts or other documents otherwise
in order signed by or issued to any person who is, or is in good faith, without
independent investigation or inquiry believed by Issuer to be, an administrator,
executor, trustee in bankruptcy, debtor in possession, conservator, assignee for
the benefit of creditors, liquidator, receiver or other legal representative or
successor by operation of law of the party authorized under such Credit to draw
or issue such instruments or other documents. Issuer or any of Issuer's
correspondents may accept or pay any draft dated on or before the expiration of
any time limit expressed in the Credit, regardless of when drawn and when or
whether negotiated, provided the other required documents are dated prior to the
expiration of the Credit.
3. PROMISE TO EXAMINE DOCUMENTS. Applicant shall examine immediately upon
receipt (a) any copies of the Credit and any amendments thereto that Issuer
sends to the Applicant and (b) all instruments and documents that Issuer may
deliver to the Applicant from time to time and agrees to notify Issuer within
twenty-four (24) hours of the receipt of any such Credits,
<PAGE>
amendments, instruments or documents of any irregularity or claim of non-
compliance with the Applicant's instructions. The Applicant hereby waives any
irregularity or claim of non-compliance unless Issuer is notified of the
irregularity or claim within twenty-four (24) hours after receipt of the Credit,
amendment, instrument or document.
4. PROMISE TO PAY ATTORNEYS FEES, COSTS, EXPENSES AND COMMISSIONS. Applicant
shall pay (i) subject to the limitation on attorneys' fees contained in Section
11.22 of the Revolving Credit Agreement, the reasonable fee of any attorney-at-
law who may be employed to protect any of Issuer's rights or interests hereunder
or to compromise or take other action with regard hereto, (ii) on demand all
charges and expenses incurred or paid by Issuer in connection with the Credit,
together with interest at the Base Rate, and (iii) all fees provided in Section
4 of the Revolving Credit Agreement.
5. EXTENSION OF TIME FOR PAYMENT. If the time for payment of any
obligation, indebtedness or liability of the Applicant to Issuer shall be
extended by any law relating to obligations payable on Sundays or holidays, such
extended time shall be included in the computation of interest or discount.
6. MODIFICATIONS OF CREDIT. In the event, at the written request of the
Applicant, (i) of any extension of the maturity or the time for payment or
presentation of any draft or document or (ii) of any other modification of the
terms of any Credit or (iii) of any increase in the amount of any Credit, this
Agreement shall be binding upon the Applicant with regard (a) to the Credit, as
so increased or otherwise modified, (b) to payments, drafts, documents and
property covered thereby, and (c) to any action taken by Issuer or any of
Issuer's correspondents in accordance with such extension, increase or other
modification.
7. EFFECT OF WAIVERS. No delay, extension of time, renewal, compromise or
other indulgence which may occur or be granted by Issuer shall impair Issuer's
rights or powers hereunder. Issuer shall not be deemed to have waived any of its
rights hereunder, unless Issuer or its authorized agent shall have signed such
waiver in writing.
8. UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue of any Credit by the
International Chamber of Commerce (the "UCP") shall in all respects be deemed a
part hereof as fully as if incorporated herein and shall apply to each Credit.
Unless expressly provided otherwise in any Credit, in the event any provision of
the UCP is or is construed to vary from or be in conflict with the laws of the
United States of America, any State thereof, as from time to time amended and in
force, the UCP shall prevail.
9. PRESENTATION WITHOUT DRAFTS. If, at the request of the Applicant, the
Credit provides that it will be available by presentation to Issuer or to any of
Issuer's correspondents of the documents described in the Credit, unaccompanied
by drafts, all reference herein to drafts, documents relative to drafts and the
presentation or payment of drafts shall refer to documents presented for payment
without drafts, the presentation thereof and the payment upon such presentation,
and the obligations of the Applicant and Issuer's rights, privileges and
remedies hereunder shall be the same as though payments had been made upon
presentation of drafts drawn under the Credit accompanied by the documents.
10. AUTOMATIC RENEWAL. If any Credit provides for automatic renewal without
amendment, Applicant agrees that it will notify Issuer in writing at least sixty
(60) days prior to the last day specified in such Credit by which Issuer must
give notice of nonrenewal as to whether or not it wishes such Credit to be
renewed. Any decision to renew or not renew such Credit shall be in Issuer's
sole discretion. Applicant hereby acknowledges that in the event Issuer notifies
the beneficiary of such Credit that it has elected not to renew such Credit,
such Credit may be drawn on if permitted by the terms of such Credit and further
acknowledges and agrees that Applicant shall have no claim or cause of action
against Issuer or defense against payment under the Agreement for Issuer's
renewal or non-renewal of such Credit in the exercise of Issuer's discretion as
set forth above.
11. JOINT AND SEVERAL LIABILITY. The Applicant, if more than one, shall be
liable hereunder jointly, severally, and solidarily, and the Applicant waives
all pleas of division and discussion and agrees that the payment of any amount
due hereunder at any time may be extended from time to time, one or more times,
without notice.
12. LIABILITY FOR TAXES. With regard to the Credit, the Applicant assumes
all risk, liability and responsibility for (a) all present and future taxes,
levies or embargoes of any governmental authority of any country, state, city or
other political subdivision, wherein any payment is to be made or any draft may
be drawn, negotiated or paid, and (b) any law, custom or regulation which may be
effective in any such place. The laws of any such country, state, city or other
political subdivision, for the purpose of the Credit, shall be deemed to include
all acts, decrees and regulations promulgated or enforced by a governmental
authority asserting governmental powers, whether or not such governmental
authority is recognized as a de facto or as a de jure government.
13. ASSUMPTION OF RISK AND LIMITATION OF LIABILITY. Any person acting on
behalf of Applicant with respect to the Credit shall be deemed to be the agent
of the Applicant, and the Applicant assumes all risks of any acts or omissions
of any such user. Should the beneficiary under the Credit, upon receipt of
advice by cable or otherwise of the issuance of the Credit, negotiate any drafts
by virtue of such advice prior to actual receipt of the Credit, such negotiation
shall be considered a proper one and shall be included under the terms and
subject to all conditions hereof, and in addition thereto, the Applicant assumes
all the risk of the misuse of the Credit. Except to the extent of its own gross
negligence or wilful misconduct, Issuer, Issuer's correspondents and affiliates
shall not be liable or responsible in any respect for, nor shall the obligation
of the Applicant to place Issuer in funds be affected or impaired by, (a) the
validity, sufficiency or genuineness of any document, draft, signature, or
endorsement thereon,
<PAGE>
even if such document, draft, signature, or endorsement should in fact prove to
be in any or all respects invalid, insufficient, fraudulent or forged, (b) any
breach of contract between any shipper or vendor and the Applicant, (c) failure
of any draft to bear any reference or adequate reference to the Credit, (d)
failure of any document to accompany any draft at negotiation, (e) failure of
any person to note the amount of any draft on the reverse of the Credit, to
surrender or take up the Credit or to send forward any document apart from any
draft, as required by the terms of the Credit, (f) any error, omission,
interruption, loss or delay in transmission, dispatch or delivery of any one or
more messages, advises or other documents in connection with the Credit whether
transmitted by mail, cable, telegraph, wireless, teletransmission or otherwise,
and despite any cipher or code which may be employed, (g) any error, neglect or
default of any of Issuer's correspondents, (h) any action, inaction or omission,
which may be taken or suffered by it or them in good faith or through
inadvertence in identifying or failing to identify any beneficiary(ies) or
otherwise in connection with the Credit, (i) any deviation from instructions,
breach, failure, delay, default, fraud, error or omission by any person or
entity in connection with any transaction in which the Credit may be used, or
any non-documentary requirements, in the event the Credit is considered to
impose on you any non-documentary requirements, and (j) any of the provisions in
Section 4.6 (a) through (h) of the Revolving Credit Agreement. None of the above
shall affect, impair or prevent the vesting of any of Issuer's rights or powers
hereunder. If Applicant includes any language describing events or conditions in
any Application that would not be possible for Issuer to verify from the
documents required to be presented under the Credit relating to such
Application, Applicant acknowledges and agrees that Issuer has no obligation to
verify compliance with such requirements. Any condition in the Credit or any
related draft or document shall be binding on the Applicant and shall not impose
on Issuer or any of Issuer's correspondents any liability. The Applicant agrees
to protect, indemnify, pay and save Issuer and any of Issuer's correspondents or
affiliates and their respective officers, directors, and agents, harmless from
and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees) which Issuer may
incur or be subject to as a consequence, direct or indirect, of (i) the issuance
of the Credit, other than as a result of (y) the gross negligence or wilful
misconduct of the Issuer or (z) the Issuer's failure to pay under any Credit
after the presentation to it of a request complying with the terms and
conditions of the Credit, or (ii) the failure of the Issuer to honor a draft
under any Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto governmental authority of
any country, state, city or other political subdivision.
14. REPRESENTATIONS AND WARRANTIES OF APPLICANT. The Applicant represents,
warrants and covenants to Issuer that (a) it is duly organized, validly existing
and in good standing; (b) it has the power to execute, and deliver and perform
this Agreement; (c) the execution, delivery and performance of this Agreement
has been duly authorized by all requisite action; (d) the execution, delivery
and performance of this Agreement will not violate any provision of law, or of
any court or other agency of government, the articles of incorporation of the
Applicant, or any indenture, agreement or other instrument to which it is a
party, or by which it is bound, or be in conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the property of the Applicant (other than in Issuer's favor) or the
acceleration of any of the Obligations; (e) the Applicant has heretofore
furnished to Issuer such financial information as required in Section 8.1 of the
Revolving Credit Agreement; and (f) there has been no material adverse change in
the condition, financial or otherwise, of the Applicant since the date of the
most recent financial statement.
15. BINDING ON SUCCESSORS AND ASSIGNS. The obligations hereunder shall
continue in force and be applicable to all transactions hereunder,
notwithstanding any change in the composition of any firm, corporation,
partnership, or other entity, any association, the parties hereto or the user of
the Credit, whether such change shall arise from the addition of one or more new
partners from the death, withdrawal, termination or expulsion of one or more
partners. No such changes shall prejudice Issuer's rights under law against
such entity or any heir, successor, or assignee of any entity or any
shareholder, partner or member thereof.
16. MISCELLANEOUS. (a) Except as may otherwise be expressly provided
herein, any demand or notice to be made or given in connection with this
Agreement shall be sufficiently made upon, or given to, the Applicant, if left
at, or mailed to, the last address of the Applicant known to Issuer, or if made
or given in any other manner reasonably calculated to come to the attention of
the Applicant, whether or not in fact received by the Applicant.
(b) If, at the Applicant's special request, Issuer has issued the Credit
in transferable form, it is understood and agreed that Issuer shall have no duty
to determine the proper identity of anyone appearing in the draft or documents
as transferee, that Issuer shall not be charged with responsibility or liability
of any nature or character for the validity or correctness of any transfer or
successive transfers, and that Issuer's payment to any purported transferee or
transferees as determined by Issuer is hereby authorized and approved. Further,
the Applicant agrees to hold Issuer harmless and to indemnify Issuer against any
liability or claim in connection with, or arising out of, the foregoing.
(c) This Agreement and the Revolving Credit Agreement constitute the
entire agreement between Issuer and the Applicant and all rights, duties and
obligations arising hereunder shall be determined according to the laws of the
State of Louisiana, U.S.A., and the Applicant understands all the terms and
conditions hereof, and agrees that no modifications hereof shall be binding
unless
<PAGE>
executed in writing and signed by Issuer and the Applicant. Any conflict between
this Agreement and the Revolving Credit Agreement shall be resolved in favor of
the Revolving Credit Agreement.
(d) In the event of an implementation of, or a subsequent increase in, a
reserve requirement on the Credit, the Applicant shall, at Issuer's request,
reimburse Issuer on demand for lost earnings on such required reserves. For this
purpose such lost earnings shall be deemed to accrue at the Base Rate.
(e) If any provision or provisions of this Agreement are found to be void
and unenforceable, the remaining provisions and any instruments or agreements
delivered pursuant hereto shall, nevertheless, be binding, and this Agreement
and such instruments or agreements shall be enforceable as if the void or
unenforceable provision hereof had not been included herein.
17. JURISDICTION AND WAIVER. The Applicant consents to the jurisdiction and
venue of any state and federal court located within the Parish of Orleans,
Louisiana, at Issuer's option, with the respect to any proceedings arising out
of this Agreement and further waives personal service of all process upon it and
hereby consents that such service may be made by registered or certified mail
directed to it at the address indicated herein or such subsequent address
provided by it to Issuer in writing.
NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES
Date:
- -------------------------------------
HALTER MARINE GROUP, INC.
- ------------------------------------- -------------------------------------
Print or Type Applicant's Name Print or Type Co-Applicant's Name
By: By:
---------------------------------- ----------------------------------
Its: Its:
---------------------------------- ----------------------------------
===================================================================
For Issuers Use Only
Issuer Date:
----------
By:
----------------------------------
Title:
-------------------------------
Ext.:
--------------------------------
Type of Letter of Credit: ( ) Financial ( ) Performance
===================================================================
<PAGE>
EXHIBIT E
---------
LETTER OF CREDIT REQUEST
------------------------
__________________, 19____
Gentlemen:
Reference is hereby made to that certain Revolving Credit Agreement
effective as of October 31, 1997 by and among the undersigned, the Banks listed
therein and you as agent for the Banks (as from time to time amended, modified,
extended or renewed, the "Agreement"). All capitalized terms used and not
otherwise defined herein shall have the respective meanings ascribed to them in
the Agreement.
Pursuant to Section 4.1 of the Agreement, the undersigned hereby requests
that you issue an irrevocable standby Letter of Credit in the amount of
$_______________ for the account of Halter Marine Group, Inc. and
______________________ and for the benefit of ___________________ upon the terms
and conditions set forth in the attached Letter of Credit Application. The
obligation to be supported by the Letter of Credit is described as follows:
The undersigned hereby represents and warrants to you that as of the date
hereof all of the representations and warranties of the undersigned contained in
Section 7 of the Agreement are true and correct in all material respects as if
made on and as of the date hereof and no Default or Event of Default has
occurred and is continuing and that no such Default or Event of Default will
result from the issue of the Letter of Credit requested hereby.
Very truly yours,
HALTER MARINE GROUP, INC.
By:
----------------------------
Its:
----------------------------
<PAGE>
EXHIBIT G
---------
________________, 19__
Gentlemen:
Reference is hereby made to that certain Revolving Credit Agreement
effective as of October 31, 1997, by and among the undersigned, the Banks listed
therein and you as agent for the Banks (as from time to time amended, modified,
extended or renewed, the "Agreement"). All capitalized terms used and not
otherwise defined herein shall have the respective meanings ascribed to them in
the Agreement.
The undersigned hereby certifies to the Agent and each of the Banks that as
of the date hereof:
(a) all of the representations and warranties set forth in Section 7 of the
Agreement, as subsequently updated in writing to the Agent pursuant to Section
8.1(k) or otherwise, are true and correct in all material respects as if made on
and as of the date hereof;
(b) no violation or breach of any of the affirmative covenants set forth in
Sections 8.1 or 8.3 of the Agreement has occurred and is continuing;
(c) no violation or breach of any of the negative covenants set forth in
Sections 8.2 or 8.3 of the Agreement has occurred and is continuing;
(d) no Default or Event of Default under or within the meaning of the
Agreement has occurred and is continuing;
(e) the financial statements of Borrower and its consolidated Subsidiaries
delivered to you with this letter are true, correct and complete, present fairly
the financial information of the Borrower and (i) if such statements are as of
Borrower's fiscal year end, have been prepared in accordance with GAAP and
certified by the Company's independent certified public accountants and (ii) if
such statements are as of a fiscal quarter other than the fiscal year end, have
been, to the best of knowledge prepared in accordance with the standard
accounting practices of Borrower;
(f) the financial covenant information set forth in Schedule 1 to this
----------
letter is true and correct for Borrower and its consolidated Subsidiaries; and
(g) the calculation of the Applicable Margin in Schedule 2 to this letter
----------
is true and correct.
Very truly yours,
HALTER MARINE GROUP, INC.
By:
-------------------------------
Title:
-------------------------------
<PAGE>
EXHIBIT H
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
AGREEMENT dated as of _______________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), HALTER MARINE GROUP, INC. (the
"Borrower"), and WHITNEY NATIONAL BANK, as Agent (the "Agent").
WITNESSETH:
WHEREAS, this Assignment and Assumption Agreement (this "Agreement")
relates to the Revolving Credit Agreement effective as of October 31, 1997 among
the Borrower, the Assignor and the other Banks party thereto, as Banks, and the
Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Revolving Credit Commitment to make Revolving Credit Loans to the Borrower, in
an aggregate principal amount at any time outstanding not to exceed $__________
(the "Revolving Credit Commitment");
WHEREAS, Revolving Credit Loans made to the Borrower by the Assignor under
the Credit Agreement in the aggregate principal amount of $__________ are
outstanding as of the date hereof;
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Credit Agreement in respect of a ____________ percent
(____%) portion of its Revolving Credit Commitment in the amount of
$_______________ (the "Assigned Commitment"), together with a corresponding
portion of its outstanding Revolving Credit Loans and its interest in all
Continuing Guarantees therefor, and the Assignee proposes to accept assignment
of such rights and assume the corresponding obligations from the Assignor on
such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
-----------
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
----------
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Commitment, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the Assignor
under the Credit Agreement to the extent of the Assigned Commitment, including
the purchase from the Assignor of the corresponding portion of the principal
amount of the Revolving Credit Loans made by the Assignor outstanding at the
date hereof. Upon the execution and delivery hereof by the Assignor, the
Assignee, the Borrower and the Agent and the payment of the amounts specified in
Section 3 required to be paid on the date
<PAGE>
hereof (i) the Assignee shall, as of the date hereof, succeed to the rights and
be obligated to perform the obligations of a Bank under the Credit Agreement
with a Revolving Credit Commitment of $______________ and (ii) the Revolving
Credit Commitment of the Assignor shall, as of the date hereof, be reduced by a
like amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
--------
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them./1/ It
is understood that any Commitment Fees, Letter of Credit Commitment Fees and any
other commitment and/or facility fees accrued to the date hereof with respect to
the Assigned Commitment, are for the account of the Assignor and such fees
accruing from and including the date hereof are for the account of the Assignee.
Each of the Assignor and the Assignee hereby agrees that if it receives any
amount under the Credit Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such other party to the
extent of such other party's interest therein and shall promptly pay the same to
such other party.
SECTION 4. Consent of the Borrower and the Agent. To the extent the
-------------------------------------
consent of the Agent and the Borrower is required by Section 11.15 of the Credit
Agreement, this Agreement is conditioned upon the receiving such consent. The
execution of this Agreement by the Borrower and the Agent is evidence of this
consent. Pursuant to Section 11.15 the Borrower agrees to execute and deliver a
Note payable to the order of the Assignee to evidence the assignment and
assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
-------------------------
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower or any Subsidiary, or the validity and enforceability of the
obligations of the Borrower or any Subsidiary in respect of the Credit
Agreement, any Continuing Guarantee and/or any Note. The Assignee acknowledges
that it has, independently and without reliance on the Assignor, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Louisiana.
SECTION 7. Counterparts. This Agreement may be signed in any number of
------------
- -------------------------
/1/ Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable in
an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
<PAGE>
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By:
------------------------------
Title:
------------------------------
[ASSIGNEE]
By:
------------------------------
Title:
------------------------------
HALTER MARINE GROUP, INC.
By:
------------------------------
Title:
------------------------------
WHITNEY NATIONAL BANK, as Agent
By:
------------------------------
Title:
------------------------------
<PAGE>
EXHIBIT I
---------
STOCK PLEDGE AGREEMENT
This STOCK PLEDGE AGREEMENT (the "Agreement"), dated as of
__________________, is made by _____________________, a ______________
corporation (the "Pledgor"), in favor of WHITNEY NATIONAL BANK, as Agent for the
benefit of Banks (as such term is defined in the Revolving Credit Agreement
effective as of October 31, 1997 by and among Halter Marine Group, Inc. (the
"Borrower"), Whitney National Bank, in its capacity as Agent for the Banks and
the Banks, as same may be amended, modified or supplemented from time to time,
the "Revolving Credit Agreement").
W I T N E S S E T H :
- - - - - - - - - -
[WHEREAS, the Pledgor is a wholly-owned subsidiary of the Borrower;]
WHEREAS, the Pledgor acknowledges that it has and will receive substantial
direct and indirect benefit from the extension of credit provided for in the
Revolving Credit Agreement;
WHEREAS, this Agreement is granted pursuant to Section 7.8 of the Revolving
Credit Agreement; and
WHEREAS, the Pledgor is the legal and beneficial owner of
___________________ (______) shares of capital stock of
_________________________ (the "Company") represented by Certificate No. ______
issued in the name of ___________________ dated _____________ (such shares of
stock, together with any shares, stock options or rights received pursuant to
Section 3 of this Agreement, being hereinafter called the "Pledged Stock"); and
WHEREAS, the certificate(s) representing the Pledged Stock shall be
delivered to the Agent simultaneously with the delivery of this Agreement to be
held by the Agent for the benefit of the Banks;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and adequacy of which is hereby acknowledged,
the Pledgor hereby agrees with the Agent as follows:
Section 1. Capitalized Terms. Unless otherwise defined herein,
-----------------
capitalized terms utilized in this Agreement shall have the meanings given them
in the Revolving Credit Agreement.
Section 2. Pledge. The Pledgor hereby delivers to the Agent for the
------
benefit of the Banks, and pledges, assigns, and transfers to the Agent for the
benefit of the Banks, all the Pledged Stock and hereby grants to the Agent for
the benefit of the Banks a first Lien on, and security interest in, the Pledged
Stock and in all income thereon and proceeds thereof including, without
<PAGE>
limitation, all dividends or other income from the Pledged Stock, stock splits,
options, issues, collections or distributions with respect thereto
(collectively, the "Pledged Collateral"), together with appropriate undated
stock powers duly executed in blank, as collateral security for (i) the prompt
and complete payment to the Agent for the benefit of the Banks when stated to be
due of all present and future amounts (including amounts that, but for the
initiation of any proceeding under any insolvency or bankruptcy law, would
become due) now or at any time or from time to time hereafter due or owing to
the Banks or any of them whether at maturity or earlier by reason of
acceleration or otherwise by or from the Pledgor and/or the Borrower, arising
under the Notes, the Letter of Credit Applications or any other Transaction
Documents, together with interest accrued thereon (including interest that, but
for the initiation of any proceeding under any insolvency or bankruptcy law,
would accrue), and any and all fees, expenses and costs payable by the Pledgor
and/or the Borrower to the Banks in connection therewith and (ii) the due and
punctual payment and performance by the Pledgor of Pledgor's obligations under
this Agreement (all of the foregoing being hereinafter collectively called the
"Obligations").
Concurrently with the delivery to the Agent of each certificate
representing one or more shares of the Pledged Stock, the Pledgor shall deliver
an undated stock power covering such certificate, duly executed in blank.
Section 3. Stock Purchases, Dividends, Distributions, etc. Subject to the
----------------------------------------------
provisions of Section 6 hereof, if, while this Agreement is in effect, the
Pledgor shall become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital, or issued in connection with any reorganization), option or rights,
whether as an addition to, in substitution of, or in exchange for any shares of
any Pledged Stock, or by transfer, or otherwise, the Pledgor agrees to accept
the same as the agent for and to hold the same in trust on behalf of and for the
benefit of the Banks and to deliver the same forthwith to the Agent in the exact
form received, with the endorsement of the Pledgor when necessary and/or
appropriate, together with undated stock powers duly executed in blank, to be
held by the Agent for the benefit of the Banks, subject to the terms hereof, as
additional collateral security for the Obligations. Any sums paid upon or in
connection with the Pledged Stock upon the liquidation or dissolution of the
issuer thereof shall be paid over to the Agent for the benefit of the Banks to
be held by the Agent as additional collateral security for the Obligations; and
in case any distribution of capital shall be made on or in connection with the
Pledged Stock or any property shall be distributed upon or with respect to the
Pledged Stock pursuant to the recapitalization or reclassification of the
capital of the issuer thereof or pursuant to the reorganization thereof, the
property so distributed shall be delivered to the Agent for the benefit of the
Banks to be held by the Agent as additional collateral security for the
Obligations. All sums of money and property so paid or distributed in respect
of the Pledged Stock which are received by the Pledgor shall, until paid or
delivered to the Agent, be held by the Pledgor in trust as additional collateral
security for the Obligations.
Section 4. Voting Rights.
-------------
2
<PAGE>
(a) Unless an Event of Default shall have occurred and be continuing, the
Pledgor shall be entitled to vote the Pledged Stock and to give consents,
waivers and ratifications in respect of the Pledged Stock; provided, however,
that the Pledgor shall not give any proxies to vote the Pledged Stock or enter
into any shareholder agreements, voting trusts or similar arrangements with
respect thereto, and no vote shall be cast or consent, waiver or ratification
given or action taken which would impair the Pledged Collateral or be
inconsistent with or violate any provision of this Agreement, the Revolving
Credit Agreement, or any other Transaction Documents.
(b) Upon the occurrence and during the continuance of an Event of Default
after notice from the Agent to the Pledgor, all rights of the Pledgor to
exercise the voting and other rights which the Pledgor would otherwise be
entitled to exercise pursuant hereto shall cease upon notice from the Agent to
the Pledgor, and all such rights shall thereupon become vested in the Agent (or
its nominee or trustee pursuant to Section 6 hereof) which shall thereupon have
the sole right to exercise such voting and other rights on behalf of the Banks.
Section 5. Dividends.
---------
(a) So long as no Event of Default shall have occurred and be continuing,
the Pledgor shall be entitled to receive and retain or otherwise deal with any
and all dividends paid in respect of the Pledged Collateral, provided, however,
that any and all:
(i) dividends paid or payable other than in cash in connection with,
and instruments and other property received, receivable or otherwise distributed
in connection with, or in exchange for, any Pledged Collateral,
(ii) dividends and other distributions paid or payable in cash in
respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution of such Pledged Collateral or in connection with a
reduction of capital of the issuer, and
(iii) cash paid, payable or otherwise distributed in redemption of, or
in exchange for, any Pledged Collateral,
shall be forthwith delivered to the Agent to hold as Pledged Collateral for the
benefit of the Banks and shall, if received by the Pledgor, be received in trust
for the benefit of the Banks and be segregated from the other property or funds
of the Pledgor, and be forthwith delivered to the Agent as Pledged Collateral in
the same form as so received (with any necessary endorsement). Cash which is
held by the Agent and which the Agent is entitled to retain hereunder shall be
applied under the Revolving Credit Agreement to the prepayment or payment of the
outstanding Obligations.
(b) Upon the occurrence and during the continuance of an Event of Default:
3
<PAGE>
(i) all rights of the Pledgor to receive the dividends and other
payments which it would otherwise be authorized to receive and retain pursuant
to this Section 5 shall cease, and all such rights shall thereupon become vested
in the Agent which shall thereupon have the sole right to apply such dividends
and other payments pursuant to the Revolving Credit Agreement to the payment of
the outstanding Obligations; and
(ii) all dividends and other payments which are received by the
Pledgor contrary to the provisions of paragraph (i) of this Section 5(b) shall
be received by the Pledgor in trust for the Banks, shall be segregated from
other funds of the Pledgor and shall be forthwith paid over to the Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement).
(c) Nothing in this Section 5 shall be construed to alter the limitations
on the permissibility of Distributions as set forth in the Revolving Credit
Agreement.
Section 6. Rights of the Agent. Any or all shares of the Pledged Stock
-------------------
held by the Agent hereunder may, if an Event of Default has occurred and is
continuing, without notice, be registered in the name of the Agent as agent for
and for the benefit of the Banks, or their nominee or trustee, and the Agent or
such nominee or trustee may thereafter exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or options
pertaining to any shares of the Pledged Stock as if it were the absolute owner
thereof, including without limitation, the right to exchange at its discretion
any and all of the Pledged Stock upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof or upon the
exercise by the issuer thereof of any right, privilege or option pertaining to
any shares of the Pledged Stock, and in connection therewith, to deposit and
deliver any and all of the Pledged Stock with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as it may determine, all without liability except to account for
property actually received by it, but the Agent or such aforesaid nominee or
trustee shall have no duty to exercise any of the aforesaid rights, privileges
or options and shall not be responsible for any failure to do so or delay in so
doing.
Section 7. Remedies. If an Event of Default shall have occurred and be
--------
continuing, the Agent, without demand of performance or other demand,
appraisement, advertisement or notice of any kind (except the notice specified
below in this Section 7 of the time and place of public or private sale) to or
upon the Pledgor, the Borrower or any other Person (all and each of which
demands, appraisements, advertisements and/or notices are hereby expressly
waived), may forthwith collect, receive, appropriate and realize upon the
Pledged Collateral, or any part thereof, and/or may forthwith sell, assign, give
option or options to purchase, contract to sell or otherwise dispose of and
deliver said Pledged Collateral, or any part thereof, in one or more parcels at
public or private sale or sales, at any exchange, broker's board or at any of
the Agent's offices or elsewhere upon such terms and conditions as the Agent may
deem advisable and at such prices as the Agent may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The Agent
shall apply the net proceeds of any such collection,
4
<PAGE>
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care, safekeeping or otherwise of any and all of the Pledged Collateral or
in any way relating to the rights of the Agent and the Banks, including, without
limitation, reasonable attorneys' fees and legal expenses, to the payment in
whole or in part, of the Obligations, but only after the payment by the Agent of
any other amount required by any provision of law. For purposes of executory
process, the Pledgor acknowledges the indebtedness owed under the Obligations,
confesses judgment in favor of the Agent and the Banks for the full amount of
the Obligations, and agrees to enforcement by executory process. The Pledgor
waives (a) the benefit of appraisal provided in Art. 2723 of the Louisiana Code
of Civil Procedure and (b) the demand and three (3) days delay provided by
Articles 2639 and 2721, Louisiana Code of Civil Procedure. The Pledgor agrees
that the Agent need not give more than ten (10) days' notice of the time and
place of any public sale or of the time after which a private sale or other
intended disposition is to take place and that such notice is reasonable
notification of such matters. No notification need be given to the Pledgor if it
has signed after an Event of Default a statement renouncing or modifying any
right to notification of sale or other intended disposition. In addition to the
rights and remedies granted to the Agent in this Agreement and in any other
instrument or agreement securing, evidencing or relating to any of the
Obligations, the Agent for the benefit of the Banks shall have all the rights
and remedies of a secured party under the Louisiana Commercial Laws and any
other applicable law.
Section 8. Representations. Warranties and Covenants of the Pledgor. The
---------------
Pledgor represents and warrants to the Agent and each of the Banks that:
(a) the Pledgor is the legal record and beneficial owner of, and has
good title to, the Pledged Stock and the Pledged Stock is subject to no other
pledge, Lien, mortgage, hypothecation, security interest, charge, shareholders
agreement, voting trust or similar arrangement, proxy, option or other
encumbrance whatsoever, except the Lien and security interest created by this
Agreement;
(b) the shares of Pledged Stock described on page 1 of this Agreement
constitute all of the shares of capital stock of the Company owned by the
Pledgor;
(c) all of the shares of Pledged Stock have been duly and validly
issued, are fully paid and non-assessable;
(d) the Pledgor has full power, authority and legal right to pledge
all the Pledged Stock pursuant to this Agreement;
(e) this Agreement has been duly executed and delivered by the Pledgor
and constitutes a legal, valid and binding obligation of the Pledgor enforceable
in accordance with its terms;
5
<PAGE>
(f) no consent of any other party (including, without limitation,
creditors of the Pledgor) and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any Governmental Authority or any other Person is required to
be obtained by the Pledgor in connection with the execution, delivery or
performance of this Agreement;
(g) the execution, delivery and performance of this Agreement by
Pledgor are within Pledgor's corporate powers, have been duly authorized by all
necessary corporate action, and will not violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on the Pledgor, or
any of the provisions of the Pledgor's Certificate of Incorporation or Bylaws or
any of the provisions of any indenture, agreement, document, instrument or
undertaking to which the Pledgor is a party or subject, or by which it or its
Property is bound, or conflict with or constitute a default thereunder or result
in the creation or imposition of any Lien pursuant to the terms of any such
indenture, agreement, document, instrument or undertaking (other than in favor
of the Agent and the Banks pursuant hereto); and
(h) the pledge, assignment and delivery of such Pledged Stock pursuant
to this Agreement creates a valid first priority Lien on and a first perfected
security interest in such shares of the Pledged Stock, and the proceeds thereof,
subject to no prior pledge, Lien, mortgage, hypothecation, security interest,
charge, option or encumbrance or to any agreement purporting to grant to any
third party a security interest in the property or assets of the Pledgor which
would include the Pledged Stock.
The Pledgor covenants and agrees that it will defend the respective rights,
titles and security interests of the Agent and the Banks in and to the Pledged
Stock and the proceeds thereof against the claims and demands of all Persons
whomsoever; and covenants and agrees that it will have like title to and right
to pledge any other property, if any, at any time hereafter pledged to the Agent
hereunder and will upon demand of the Agent and at Pledgor's own expense
likewise defend Agent's respective rights thereto and security interests
therein.
Section 9. No Disposition, etc. The Pledgor agrees that, without the
--------------------
prior written consent of the Agent, Pledgor will not sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Pledged Collateral, nor will it create, incur, enter into or permit to exist any
pledge, Lien, mortgage, hypothecation, security interest, charge, shareholders
agreement, voting trust or similar arrangement, proxy, option, or any other
encumbrance with respect to any of the Pledged Collateral, or any interest
therein, or any proceeds thereof, except for the Lien and security interest
provided for by this Agreement. Without the prior written consent of the Agent,
the Pledgor agrees that it will not vote to enable the Company to issue, and
will use its best efforts to prevent the Company from issuing, any stock or
other securities of any nature in addition to or in exchange or substitution for
the Pledged Stock except as may be expressly permitted herein.
Section 10. Resale.
------
6
<PAGE>
(a) The Pledgor recognizes that the Agent may be unable to effect a
public sale of any or all of the Pledged Stock by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws but may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall not be deemed to have been made in a commercially unreasonable manner
solely by reason of its being a private sale. The Agent shall not be under an
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Company to register such securities for public sale
under the Securities Act, or under applicable state securities laws, even if the
Pledgor and the Company would agree to do so.
(b) The Pledgor further agrees to do or cause to be done all such
other acts and things as may be necessary to make such sale or sales of any
portion or all of the Pledged Stock valid and binding and in compliance with any
and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or Governmental Authorities having
jurisdiction over any such sale or sales, all at the Pledgor's expense. The
Pledgor further agrees that a breach of any of the covenants contained in this
Section 10 will cause irreparable injury to the Banks and the Agent, that the
Banks and the Agent have no adequate remedy at law in respect of such breach
and, as a consequence, agrees that each and every covenant contained in this
Section shall be specifically enforceable against the Pledgor and the Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default of
the covenants, terms or conditions of any of the Transaction Documents has
occurred.
Section 11. Further Assurances; Further Documentation. The Pledgor agrees
-----------------------------------------
that at any time and from time to time upon the written request of the Agent,
the Pledgor will promptly execute and deliver such further documents and do such
further acts and things as the Agent may reasonably request in order to effect
the purposes of this Agreement.
Section 12. Limitation on Duties Regarding Pledged Collateral. The
-------------------------------------------------
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Pledged Collateral shall be to use reasonable care in the
physical preservation of the Pledged Collateral that is in the actual possession
of the Agent. Neither the Agent nor any of the Banks, nor any of their
respective directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Pledged Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Pledged Collateral upon the request of the Pledgor or otherwise.
Section 13. Payment of Taxes. The Pledgor agrees to pay, and to save the
----------------
Agent and the Banks harmless from, any and all liabilities with respect to, or
resulting from, any delay in
7
<PAGE>
paying any and all stamp, excise, sales or other taxes that may be payable or
determined to be payable with respect to any of the Pledged Collateral or in
connection with any of the transactions contemplated by this Agreement.
Section 14. 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 provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 15. No Waiver; Cumulative Remedies. The Agent shall not by any
------------------------------
act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies or those of the Banks, and no waiver shall be valid unless in writing
and signed by the Agent and then only to the extent therein set forth. A waiver
by the Agent of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Agent would otherwise have
on any future occasion on its own behalf and on behalf of the Banks. No failure
to exercise nor any delay in exercising on the part of the Agent, any right,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
Section 16. Modifications; Amendments; Applicable Law. None of the terms
-----------------------------------------
or provisions of this Agreement may be altered, modified or amended except by an
instrument in writing, duly executed by the Agent and the Pledgor. This
Agreement and all obligations of the Pledgor hereunder shall be binding upon the
Pledgor and Pledgor's successors and assigns, and shall, together with the
respective rights and remedies exercisable by the Agent on its own behalf and on
behalf of the Banks, inure to the benefit of the Agent and the Banks and their
respective successors and assigns.
Section 17. Notice. All notices hereunder shall be in writing and shall
------
be given in the manner set forth in the Revolving Credit Agreement addressed to
the Pledgor at the following address or at such other address as the Pledgor may
hereafter specify in writing to the Agent:
13085 Seaway Road
Gulfport, MS 39503
Telecopy number: (601) 897-4888
Section 18. Lost Certificates. Upon the receipt of evidence reasonably
-----------------
satisfactory to the Pledgor of the loss, theft, destruction or mutilation of the
certificate(s) representing the Pledged Stock, and, in the case of any such
mutilation of any stock certificate, upon surrender to the Pledgor of such
certificate and upon execution by the Agent of a lost stock certificate
agreement in reasonable form, the Pledgor will cause to be issued and delivered
to the Agent a new
8
<PAGE>
certificate for the number of shares represented by the certificate(s) so lost,
stolen, destroyed or mutilated, in lieu of or in exchange for such lost, stolen,
destroyed or mutilated certificate(s).
Section 19. Power of Attorney. To effect the terms and provisions hereof,
-----------------
the Pledgor hereby designates and appoints the Agent as attorney-in-fact of the
Pledgor, irrevocably and with power of substitution, with authority to endorse
the name of the Pledgor on any notes, acceptances, checks, drafts, money orders,
instruments or other evidences of payment or proceeds of the Pledged Collateral
that may come into the Agent's possession; to execute any endorsements,
assignments, or other instruments of conveyance or transfer; and to do all other
acts and things necessary and advisable in the sole discretion of the Agent to
carry out and enforce this Agreement. All acts of said attorney are hereby
ratified and approved and said attorney shall not be liable for any acts of
commission or omission, nor for any error of judgment or mistake of fact or law,
except for acts by said attorney constituting gross negligence or willful
misconduct. This power of attorney being coupled with an interest is
irrevocable for so long as any of the Obligations whatsoever shall remain
unpaid.
Section 20. Irrevocable Authorization and Instructions. The Pledgor
------------------------------------------
hereby authorizes and instructs the Company to comply with any instruction
received by it from the Agent in writing that (a) states that an Event of
Default has occurred and (b) is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from the Pledgor, and the
Pledgor agrees that the Company shall be fully protected in so complying.
Section 21. Pledge and Assignment Absolute. All rights of the Agent and
------------------------------
the Banks, the pledge and assignment hereunder and all obligations of the
Pledgor hereunder, shall be absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of the Revolving Credit
Agreement or any other Transaction Documents;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations;
(iii) any exchange, release or amendment or waiver of or consent to
departure from this Agreement or any other Transaction Documents; or
(iv) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Pledgor.
Section 22. Indemnity and Expenses. (a) The Pledgor agrees to indemnify
----------------------
the Agent and the Banks from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or willful misconduct.
9
<PAGE>
(b) The Pledgor will upon demand pay to the Agent the amount of any
and all reasonable expenses, including the reasonable fees and disbursements of
its counsel and of any experts and agents, which the Agent or the Banks may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, or use of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Agent or the Banks hereunder, or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.
Section 23. Governing Law. In the event any of the terms and provisions
-------------
of this Agreement conflict with any terms and provisions contained in the
Revolving Credit Agreement, the terms and provisions of the Revolving Credit
Agreement shall govern. This Agreement shall, except to the extent that the
laws of another state apply to the Pledged Collateral or any part thereof, be
governed by and construed in accordance with the laws of the State of Louisiana.
Section 24. Jurisdiction. The Pledgor hereby irrevocably submits to the
------------
jurisdiction of any court of the State of Louisiana or any court of the United
States of America sitting in the Eastern District of Louisiana, as the Agent may
elect, in any suit, action or proceeding arising out of or relating to this
Agreement or any other Transaction Document. The Pledgor irrevocably agrees
that all claims in respect of such suit, action or proceeding may be heard and
determined in any such courts. The Pledgor irrevocably waives, to the fullest
extent permitted by law, any objection which the Pledgor may now or hereafter
have to the laying of venue of any such suit, action or proceeding brought in
any such court, and the Pledgor further irrevocably waives any claim that such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. The Pledgor authorizes the service of process upon the
Pledgor by registered mail sent to the Pledgor at the address set forth in
Section 17 hereof. THE PLEDGOR HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING (INCLUDING ANY COUNTERCLAIM) IN ANY COURT ARISING ON, OUT OF, OR IN
ANY WAY RELATING TO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS OR ANY
AMENDMENT OR SUPPLEMENT HERETO OR THERETO OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the date first above written.
WHITNEY NATIONAL BANK, as Agent
for the benefit of the Banks
By:
------------------------------------
Its:
------------------------------------
[PLEDGOR]
By:
------------------------------------
Its:
------------------------------------
10
<PAGE>
ACKNOWLEDGMENT AND CONSENT
The undersigned ("Pledged Stock Issuer") hereby acknowledges receipt of a
--------------------
copy of the foregoing Stock Pledge Agreement and agrees to be bound thereby and
to comply with the terms thereof insofar as such terms are applicable to it.
The undersigned agrees to notify the Agent promptly in writing of the occurrence
of any of the events described in Section 3 of the Stock Pledge Agreement. The
undersigned further agrees that the terms of subsection 10(b) of the Stock
Pledge Agreement shall apply to it, mutatis mutandis, with respect to all
------- --------
actions that may be required of it under or pursuant to or arising out of
Section 10 of the Stock Pledge Agreement.
[THE COMPANY]
By:
------------------------------------
Its:
------------------------------------
11
<PAGE>
EXHIBIT 10.2
PRESS RELEASE
For release: 11/11/1997
Contact: Rick S. Rees, Executive Vice-President
Tel: 601-896-0029
HALTER MARINE GROUP COMPLETES ACQUISITION OF LEADING
DESIGNERS
AND MANUFACTURERS OF CRANES, WINCHES AND MOORING SYSTEMS
GULFPORT, Miss...Halter Marine Group, Inc. (AMEX:HLX) announced today the
completion of the acquisition of three companies that have formed the basis of
its new Engineered Products Group. The companies, AmClyde Engineered Products,
Inc. of St. Paul, Minnesota; Utility Steel Fabrication, Inc. of Slidell,
Louisiana; and Fritz Culver, Inc. of Covington, Louisiana manufacture and market
winches, cranes, mooring systems, jacks, locking devices, windlasses, capstans,
tuggers and other related equipment used in the construction and modification of
vessels and drilling rigs.
The combined purchase price for the companies is $60 million, of which
approximately $30 million was paid in cash and the balance in Halter stock.
In making the announcement, Halter's chairman, president and CEO, John Dane
III, said, "We are pleased that we were able to close these acquisitions
quickly, and to begin the integration of them into Halter Marine Group. We have
already seen opportunities to cross market many of the products now offered by
our Engineered Products Group to our existing base of rig and vessel customers."
As previously announced, Dick Juelich, former president of AmClyde
Engineered Products will become the president of the Engineered Products Group.
Halter also announced that in order to respond to challenges presented by
Halter's continuing growth and to ensure that sufficient resources are devoted
to the effective integration by Halter of its newly acquired businesses, it had
separated its internal accounting and banking functions from its external
finance functions. In this regard, Keith L. Voigts, Halter's principal
accounting officer will assume the additional title of Treasurer, and Rick S.
Rees, the company's executive vice president will assume the title of Chief
Financial Officer.
Halter Marine Group, Inc. includes 20 shipyards in Texas, Louisiana,
Mississippi and Florida. The company specializes in the design, construction,
conversion and repair of a wide variety of vessels, mobile offshore rigs, and
engineered products for energy, commercial, government/military and pleasure
boat markets. Shipyards of Halter Marine Group have built more than 2,000
vessels in the past 40 years.
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