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EXHIBIT 10.2
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
BETWEEN
UNIFAB INTERNATIONAL, INC.
UNIVERSAL FABRICATORS, L.L.C.
AND
PIM, L.L.C.
AS "BORROWERS"
AND
HIBERNIA NATIONAL BANK,
AS "BANK"
DATED APRIL 1, 1998
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ARTICLE I
DEFINITIONS............................................................................................................. 1
Section 1.1 Terms Defined Above............................................................................... 1
Section 1.2 Defined Terms..................................................................................... 1
Section 1.3 Other Definitional Provisions..................................................................... 7
ARTICLE II
AMOUNT AND TERMS OF CREDIT.............................................................................................. 8
Section 2.1 Loans............................................................................................. 8
Section 2.2 Revolving Credit Facility......................................................................... 8
(a) Revolving Credit Facility Terms................................................................... 8
(b) Borrowing Procedure Under the Revolving Credit Facility........................................... 8
(c) Terms and Conditions Governing Letters of Credit.................................................. 8
(d) Note Evidencing Borrowings........................................................................ 9
(e) Revolving Credit Facility Maturity Date........................................................... 9
Section 2.3 Non-Revolving LC Facility......................................................................... 9
(a) Non-Revolving LC Facility Terms................................................................... 9
(b) Non-Revolving LC Facility Maturity Date........................................................... 9
Section 2.4 Interest and Fees................................................................................. 9
(a) Interest.......................................................................................... 9
(b) Letter of Credit Fee.............................................................................. 9
(c) Undisbursed Commitment Fee........................................................................ 9
(d) Default Rate...................................................................................... 10
(e) Method of Calculating Interest and Fees........................................................... 10
(f) Interest Rate Options............................................................................. 10
(g) Conversion of LIBO Rate due to change of laws or impossibility. .................................. 11
(h) LIBO Rate indemnity............................................................................... 11
Section 2.5 Payments, Prepayments, and Reduction or Termination of the Revolving Credit Facility.............. 12
(a) Method of Payment................................................................................. 12
(b) Payments Without Deduction........................................................................ 12
(c) Reduction of Credit............................................................................... 12
Section 2.6 Indemnity......................................................................................... 12
Section 2.7 Access............................................................................................ 12
ARTICLE III
CONDITIONS PRECEDENT.................................................................................................... 12
Section 3.1 Conditions to Loans............................................................................... 12
(a) Completion of Initial Public Offering of UNIFAB International..................................... 12
(b) Loan Documentation................................................................................ 13
(c) Note.............................................................................................. 13
(d) Resolutions....................................................................................... 13
(e) Governmental Certificates......................................................................... 13
(f) Financial Statement Certification................................................................. 13
(g) Certification of Chief Financial Officer.......................................................... 13
(h) Certificate of Chief Executive Officer............................................................ 13
(i) Certificate of Incumbency and Signatures.......................................................... 13
(j) Attorney Opinion.................................................................................. 13
(k) Payment of Fees and Expenses...................................................................... 13
(l) Additional Information............................................................................ 13
Section 3.2 Conditions to Each Advance and/or Letter of Credit................................................ 14
(a) Continuation of Representations and Warranties.................................................... 14
(b) No Event of Default............................................................................... 14
(c) Maximum Advances.................................................................................. 14
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BORROWERS............................................................................. 14
Section 4.1 Corporate Existence; Compliance With Law.......................................................... 14
Section 4.2 Executive Offices................................................................................. 14
Section 4.3 Subsidiaries...................................................................................... 14
Section 4.4 Corporate Power; Authorization; Enforceable Obligations........................................... 14
Section 4.5 Financials and Projections........................................................................ 15
(a) Borrowers' Financials............................................................................. 15
(b) UNIFAB International's Financials................................................................. 15
Section 4.6 Litigation........................................................................................ 15
Section 4.7 Liens............................................................................................. 15
Section 4.8 Purpose........................................................................................... 15
Section 4.9 Use of Proceeds; Margin Securities................................................................ 15
Section 4.10 Compliance with ERISA............................................................................. 15
Section 4.11 Consents.......................................................................................... 15
Section 4.12 Taxes............................................................................................. 15
Section 4.13 Operation of Business............................................................................. 16
Section 4.14 Rights in Properties; Liens....................................................................... 16
Section 4.15 Debt.............................................................................................. 16
Section 4.16 Disclosure........................................................................................ 16
Section 4.17 Registered Office; Principal Place of Business;................................................... 16
Section 4.18 Investment Company Act............................................................................ 16
Section 4.19 Other Agreements.................................................................................. 16
Section 4.20 Compliance with Law............................................................................... 16
(a) Employment Matters................................................................................ 16
(b) Environmental Matters............................................................................. 16
Section 4.21 Corporate Name.................................................................................... 17
Section 4.22 Taxpayer I.D. Numbers............................................................................. 17
Section 4.23 Continuing Representations and Warranties......................................................... 17
ARTICLE V
AFFIRMATIVE COVENANTS................................................................................................... 17
Section 5.1 Financial Statements and Records.................................................................. 17
Section 5.2 Maintenance of, Existence and Conduct of Business................................................. 18
Section 5.3 Payment of Obligations............................................................................ 18
Section 5.4 Financial Covenants............................................................................... 18
Section 5.5 Fees.............................................................................................. 19
Section 5.6 Books and Records................................................................................. 19
Section 5.7 Litigation........................................................................................ 19
Section 5.8 Insurance......................................................................................... 19
Section 5.9 Compliance with Law............................................................................... 19
Section 5.10 Agreements........................................................................................ 19
Section 5.11 Supplemental Disclosure........................................................................... 19
Section 5.12 Employee Plans.................................................................................... 19
Section 5.13 SEC Filings; Certain Other Notices................................................................ 19
Section 5.14 Compliance with Leases; Additional Mortgages...................................................... 19
Section 5.15 Borrowers Funding................................................................................. 19
Section 5.16 Deposit Accounts.................................................................................. 19
ARTICLE VI
NEGATIVE COVENANTS...................................................................................................... 20
Section 6.1 Mergers, Etc...................................................................................... 20
Section 6.2 Investments; Loans and Advances................................................................... 20
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Section 6.3 Indebtedness...................................................................................... 20
Section 6.4 Employee Loans.................................................................................... 20
Section 6.5 Capital Structure................................................................................. 20
Section 6.6 Maintenance of Business........................................................................... 20
Section 6.7 Transactions with Affiliates...................................................................... 20
Section 6.8 Guaranties........................................................................................ 20
Section 6.9 Liens............................................................................................. 20
Section 6.10 Sales of Assets................................................................................... 21
Section 6.11 Cancellation of Indebtedness...................................................................... 21
Section 6.12 Hedging Transactions.............................................................................. 21
Section 6.13 Restricted Payments............................................................................... 21
Section 6.14 Ownership of Borrowers............................................................................ 21
ARTICLE VII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES.................................................................................. 21
Section 7.1 Payment........................................................................................... 21
Section 7.2 Other Indebtedness................................................................................ 21
Section 7.3 Other Default..................................................................................... 21
Section 7.4 Insolvency........................................................................................ 21
Section 7.5 ERISA............................................................................................. 21
Section 7.6 Agreements........................................................................................ 22
Section 7.7 Representation or Warranty........................................................................ 22
ARTICLE VIII
MISCELLANEOUS........................................................................................................... 22
Section 8.1 Bank's Reliance, Etc.............................................................................. 22
Section 8.2 Financial Terms................................................................................... 22
Section 8.3 Delay............................................................................................. 22
Section 8.4 Notices........................................................................................... 22
Section 8.5 Expenses.......................................................................................... 23
Section 8.6 Severability...................................................................................... 23
Section 8.7 Counterparts...................................................................................... 23
Section 8.8 Law............................................................................................... 23
Section 8.9 Successors........................................................................................ 23
Section 8.10 Amendments........................................................................................ 24
Section 8.11 Execution in Counterparts......................................................................... 24
Section 8.12 Entire Agreement.................................................................................. 24
Section 8.13 Conflicts......................................................................................... 24
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FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT ("FIRST RESTATED
AGREEMENT"), is dated effective as of April 1, 1998, between UNIFAB
INTERNATIONAL, INC., a Louisiana corporation ("UNIFAB INTERNATIONAL"),
UNIVERSAL FABRICATORS, L.L.C., a Louisiana limited liability company
("UNIFAB"), and PIM, L.L.C., a Louisiana limited liability company ("PIM"),
(collectively "BORROWERS"), and HIBERNIA NATIONAL BANK, a national banking
association ("BANK").
W I T N E S E T H:
WHEREAS, Pursuant to a Credit Agreement dated September 22, 1997 by and
between UNIVERSAL FABRICATORS INCORPORATED, a Delaware corporation, UNIFAB
International, as a guarantor, and Bank ("Agreement"), Bank extended credit to
UNIVERSAL FABRICATORS INCORPORATED as Borrower in the form of a revolving
credit facility in the maximum principal amount of Twenty Million and no/100
($20,000,000.00) Dollars to provide for (i) Ten Million and no/100
($10,000,000.00) Dollars for general corporate purposes, and (ii) Ten Million
and no/100 ($10,000,000.00) Dollars for the issuance of certain standby letters
of credit, including performance and retainage letters of credit ("Revolving
Credit Facility"), and
WHEREAS, Bank issued certain performance and retainage letters of credit
for the benefit of Universal Fabricators Incorporated in the form of a
non-revolving letter of credit facility, not to exceed the aggregate principal
amount of Seven Million Twenty Four Thousand Four Hundred Twenty Eight and
50/100 ($7,024,428.50) Dollars ("Non-Revolving LC Facility"), and
WHEREAS, UNIFAB International formed UNIFAB. UNIVERSAL FABRICATORS
INCORPORATED, as a wholly owned subsidiary of UNIFAB International, was
thereafter merged into UNIFAB with UNIVERSAL FABRICATORS INCORPORATED
transferring its assets to UNIFAB, and
WHEREAS, UNIFAB International acquired PIM as a wholly owned subsidiary
and in connection therewith desires to restructure the Agreement to add PIM as
a borrower, convert UNIFAB International from a guarantor to a borrower, and
substitute UNIFAB as a borrower in lieu of UNIVERSAL FABRICATORS INCORPORATED.
WHEREAS, Borrowers and Bank desire to amend and supplement the Agreement
in order to revise various financial reporting and compliance requirements and
to reflect the changes in the identity of Borrower.
NOW THEREFORE, for and in consideration of the premises and the mutual
undertakings herein expressed, and upon the mutual promises and benefits
received or to be received by each of them, Borrowers and Bank do consent and
agree that the respective obligations of Bank and Borrowers pursuant to this
First Restated Agreement and any commitments previously issued are set forth
herein in their entirety and any obligations by Bank to extend funds to
Borrowers are set forth in their entirety herein, and Borrowers and Bank hereby
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 TERMS DEFINED ABOVE. As used in this First Restated
Agreement, the terms "First Restated Agreement", "Agreement", "Borrowers",
"Bank", "Revolving Credit Facility" and "Non-Revolving LC Facility" shall have
the meanings indicated above.
SECTION 1.2 DEFINED TERMS. As used in this First Restated Agreement,
the following terms shall have the following meanings, unless the context
otherwise requires:
"ACQUISITION" means any transaction or series of transactions by which a
Person acquires, either directly or through an Affiliate, subsidiary or
otherwise, (a) any or all of the stock or other securities of any class, or
ownership interest, of any other Person other than Affiliates of Borrowers or
(b) a substantial portion of the assets, or a division or line of business of
any other Person other than Affiliates of Borrowers.
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"ADVANCE(S)" shall mean any disbursement to Borrowers of the loan proceeds
under the Note, any disbursement by Bank to any beneficiary under any Letter of
Credit, as a result of any draw by such beneficiary under such Letter of
Credit, and all or any portion of such disbursement so long as same remains
outstanding and unpaid.
"AFFILIATE" means, as to any Person, any other Person (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with such Person; (b) that directly or indirectly
beneficially owns or holds twenty percent (20%) or more of any class of voting
stock of or of partnership interests of such person. The term "control" means
the possession, directly or indirectly, of the power to direct or cause
direction of the management and policies of a Person, whether through the
ownership of voting securities, of partnership interests, by contract, or
otherwise.
"AVAILABLE COMMITMENT" shall mean, at any particular time, an amount equal
to the excess, if any, of (a) the amount of the Commitment over (b) the sum of
(i) the aggregate unpaid principal amount at such time of the Advances plus
(ii) the aggregate undrawn, available amount at such time of all Letters of
Credit then outstanding, plus (iii) the then aggregate amount of all unpaid
outstanding obligations of Borrowers to reimburse Bank with respect to any
drawing under a Letter of Credit.
"AVAILABLE NON-REVOLVING LC FUNDS" means, at any particular time, the
remaining undrawn aggregate principal amount available for draw or draft by
beneficiaries on all Letters of Credit issued by Bank.
"BORROWING DATE" means any Business Day specified in a notice pursuant to
Section 2.2(b) as a date on which Borrowers request Bank to make Advances
hereunder.
"BUSINESS DAY" means any day other than a Saturday or Sunday or other day
when national banks located in the City of New Orleans are required or
permitted to be closed.
"CAPITALIZED LEASES" means capital leases and subleases, as defined in the
Financial Accounting Standards Board Statement of Financial Accounting Standard
No. 13, dated November 1976, as amended.
"CAPITAL EXPENDITURES" has the definition attributed to it under GAAP.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than one year from the
date of acquisition, (ii) time deposits and certificates of deposits, having
maturities of not more than one years from the date of acquisition, of Bank or
any other domestic commercial bank which has, or the holding company of which
has, a commercial paper rating meeting the requirements specified in clause
(iv) below, (iii) repurchase obligations with a term of not more than 270 days
for underlying securities of the types described in clauses (i) and (ii)
entered into with any bank meeting the qualifications specified in clause (ii)
above, (iv) commercial paper rated at least A-1 or the equivalent thereof by
Standard Poor's Corporation or P-1 or the equivalent thereof by Moody's
Investors Service, Inc. and in either case maturing within one year after the
date of acquisition and (v) investments in money market funds registered under
the Investment Company Act of 1940, as amended, which have net assets of at
least $200,000,000 and at least eighty-five percent (85%) of whose assets
consist of securities and other obligations of the type described in clauses
(i) through (iv) above.
"CHARGES" shall mean all Federal, state, county, city, municipal, local,
foreign or other governmental (including, without limitation, PBGC) taxes at
the time due and payable or levies, assessments, charges, liens, claims or
encumbrances upon or relating to (i) the Loan Documents, (ii) the Obligations,
(iii) Borrowers' employees, payroll, income or gross receipts, (iv) Borrowers'
ownership or use of any of their assets, or (v) any other aspect of Borrowers'
business.
"CLOSING DATE" means the date as of which this First Restated Agreement is
executed by the parties hereto.
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"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"CODE AFFILIATE" means each trade or business (whether or not
incorporated) which together with any Borrower is treated as a "single
employer" under subsection (b), (c), (m) or (o) of Section 414 of the Code.
"COMMITMENT" means, for the period from the Effective Date hereof to and
including the Termination Date, Bank's commitment to extend Loans to Borrowers
pursuant to the terms of this First Restated Agreement.
"DEBT" means: (a) all obligations of Borrowers for borrowed money, (b) all
obligations of Borrowers evidenced by bonds, notes, debentures or other similar
instruments, (c) all obligations of Borrowers to pay the deferred purchase
price of property or services, except trade accounts payable by Borrowers
arising in the ordinary course of business which are not past due by more than
sixty (60) days unless such trade accounts payable are being contested in good
faith by appropriate proceedings, (d) all obligations of Borrowers under any
Capitalized Leases, (e) all obligations of Borrowers under guaranties,
endorsements (other than for collection or deposit in the ordinary course of
business), assumptions or other contingent obligations, in respect of, or to
purchase or otherwise acquire, any obligation or indebtedness of Borrowers or
any other obligations, contingent or otherwise, (f) all obligations secured by
a Lien (except trade accounts payable by Borrowers arising in the ordinary
course of business which are not past due by more than sixty (60) days unless
such trade accounts payable are being contested in good faith by appropriate
proceedings secured by a vendor's lien) existing on property owned by Borrowers
whether or not the obligations secured thereby have been assumed by Borrowers
or are non-recourse to the credit of Borrowers, (g) all reimbursement
obligations of Borrowers relating to letters of credit, bankers' acceptances
and similar instruments but excluding performance bonds, and (h) all
liabilities of Borrowers in respect of unfunded vested benefits under any Plan;
provided, however, the term "Debt" shall not include money borrowed by
Borrowers to pay premiums on insurance policies obtained by Borrowers in the
ordinary course of Borrowers' business.
"DEFAULT" means any of the events specified in Article VII of this First
Restated Agreement, provided that any requirement for the giving of notice, the
lapse of time, or both, or any other condition, has been satisfied.
"DEFAULT RATE" means the per annum rate of interest equal to three percent
(3%) in excess of the LIBO Rate or the Prime Rate in effect on the date an
Event of Default occurs.
"EBIT" means, with respect to any Person for any period, consolidated net
income of such Person for such period, plus (i) Interest Expense for such
Person for such period, and (ii) tax expense for such period for taxes which
have been provided for by such Person for such period, to the extent that any
of the same are deducted from net revenues in determining such Person's
consolidated net income for such period.
"EFFECTIVE DATE OF AGREEMENT" shall mean September 24, 1997, the day of
the completion of the Initial Public Offering ("IPO") of UNIFAB International,
at which time a minimum net proceeds to UNIFAB International of $12,000,000.00
was contributed to Universal Fabricators Incorporated.
"ENVIRONMENTAL LAWS" means any and all federal, state and local laws,
regulations, ordinances, orders and requirements pertaining to health, safety
or the environment, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6901 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq.,
the Clean Water ct. 33 U.S.C. Section 1251 et seq., the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., the Louisiana Environmental
Quality Act, La. R.S. 30:2001, et seq., and all similar laws, regulations and
requirements of any governmental authority or agency having jurisdiction over
Borrowers, or any of the property or assets of Borrowers, as such laws,
regulations and requirements may be amended or supplemented from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings, and
interpretations adopted by the Internal Revenue Service or the Department of
Labor thereunder.
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"ERISA AFFILIATE" means each trade or business (whether or not
incorporated) which together with any Borrower would be deemed to be a "single
employer" within the meaning of Section 4001 of ERISA.
"EVENT OF DEFAULT" means the occurrence of any event described in Article
VII hereof or the occurrence of any other event which with the lapse of time,
or lapse of time and notice to Borrowers would constitute an Event of Default.
"FUNDED INDEBTEDNESS" means principal plus accrued but unpaid interest for
borrowed money.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants and/or in statements
of the Financial Accounting Standards Board and/or their respective successors
and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles observed in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
"GOVERNMENTAL AUTHORITY" means any state, nation or government or any
political subdivision thereof or any agency, department or branch thereof.
"HAZARDOUS SUBSTANCE" has the meaning specified in any applicable
Environmental Law and means any substance, product, waste, pollutant, material,
chemical, contaminant, constituent or other material which is or becomes
listed, regulated or addressed under any Environmental Law, including, without
limitation, asbestos, petroleum and polychlorinated biphenyls.
"INDEBTEDNESS" shall mean as to Borrowers all liabilities, obligations and
indebtedness of any and every kind and nature, including, without limitation,
all liabilities and all obligations to trade creditors, whether now or
hereafter owing, arising, due or payable, and howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct, contingent,
fixed or otherwise excluding any minority interest in Borrowers and deferred
taxes of Borrowers. Without in any way limiting the generality of the
foregoing, Indebtedness shall specifically include the following without
duplication:
(a) amounts outstanding under this First Restated Agreement,
including, without limitation, amounts outstanding under the Note, any
Letter of Credit Agreement, and/or the Non-Revolving LC Facility;
(b) all obligations or liabilities of any Person that are secured
by any Lien upon property owned by Borrowers or any of their Subsidiaries,
even though Borrowers shall not have assumed or become liable for the
payment thereof;
(c) all obligations or liabilities created or arising under any
lease or conditional sale or other title retention agreement with respect
to property used or acquired by Borrowers, even though the rights and
remedies of the lessor, seller or Bank thereunder are limited to
repossession of such property;
(d) all Charges.
"INITIAL CLOSING DATE" means the date as of which the Agreement was
executed by the parties thereto.
"INTEREST COVERAGE" means the ratio of EBIT to Interest Expense.
"INTEREST EXPENSE" means with respect to any Person for any period,
interest expense for such Person for such period, determined in accordance with
GAAP.
"INTEREST PERIOD" means with respect to any LIBO Rate Advance:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with
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respect to such LIBO Rate Advance and ending one, two, or
three months thereafter, as selected by Borrowers in its
notice to Bank of borrowing or notice of conversion, as
the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the day immediately
following the last day of the preceding interest Period
applicable to such LIBO Rate Advance and ending one, two
or three months thereafter, as selected by Borrowers by
notice to Bank not less than two (2) Business Days prior
to the last day of the then current Interest Period with
respect thereto; and provided, that:
(x) if any Interest Period would otherwise end on a day which
is not a Business Day, that Interest Period shall be
extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest
Period into another calendar month in which event such
Interest Period shall end on the immediately preceding
Business Day;
(y) any Interest Period which, with respect to a LIBO Rate
Advance under the Revolving Credit Facility, would
otherwise extend beyond the Termination Date shall end on
the Termination Date; and
(z) any Interest Period that begins on the last Business Day
of a calendar month (or on day for which there is no
numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month.
"LETTERS OF CREDIT" shall mean the irrevocable stand-by letters of credit,
including performance and retainage letters of credit issued by Bank under
either the Revolving Credit Facility or the Non-Revolving LC Facility, to
support payment and performance obligations of Borrowers incurred by Borrowers
in the ordinary course of business, each in such form as may be approved by
Bank.
"LIBOR" means with respect to each Interest Period pertaining to a LIBO
Rate Advance, the rate per annum at which Dollar deposits are offered to prime
banks in the London interbank market on telerate, at approximately 11:00 a.m.,
London time, two (2) Business Days before the first day of such Interest
Period, in an amount comparable to the principal amount of the Advance which
shall be made by Bank during such Interest Period, for a period equal to such
Interest Period.
"LIBO RATE" means with respect to each day during an Interest Period for a
LIBO Rate Advance, an interest rate per annum equal to the sum of (a) two
percent (2%) plus (b) LIBOR.
"LIBO RATE ADVANCE" means an Advance which bears interest at the LIBO
Rate.
"LIEN" means any lien, judgment, mortgage, deed of trust, security
interest, tax lien, financing statement, pledge, charge, hypothecation,
assignment, preference, priority or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law or
otherwise; provided, however, that the term "Lien" shall exclude any statutory
mechanic's or laborer's lien arising in the ordinary course of the business of
Borrowers and its Subsidiaries which is cancelled or bonded within sixty (60)
days of its recordation.
"LOANS" mean collectively the Revolving Credit Facility and the
Non-Revolving LC Facility.
"LOAN DOCUMENTS" means, collectively, the Agreement, the First Restated
Agreement, the Note and any and all other documents, instruments and agreements
executed in connection with the Advances, and the Non-Revolving LC Facility as
the foregoing may be modified, supplemented and/or amended from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
operations, property or financial or
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other condition of Borrowers, or on the ability of Borrowers to perform its
obligations under the Loan Documents.
"MAXIMUM NON-REVOLVING LC FACILITY LOAN AMOUNT" shall mean, at any
particular time, an amount equal to $7,024,428.50.
"MAXIMUM REVOLVING CREDIT FACILITY LOAN AMOUNT" shall mean, at any
particular time, an amount equal to $20,000,000.00.
"NET WORTH" means the sum of the common stock, additional paid-in capital
and retained earnings accounts of Borrowers as shown, in conformity with GAAP,
on its balance sheet at the time of such determination, less the amount of any
treasury stock shown thereon, less any dividends paid, and less the amount of
any intangible assets (such as patents, trademarks, copyrights or goodwill)
shown thereon.
"NON-REVOLVING LC FACILITY TERMINATION DATE" shall be January 3, 2000.
"NOTE(S)" has the meaning ascribed to the term in Section 2.2(d) of this
First Restated Agreement.
"OBLIGATIONS" means all obligations, indebtedness and liabilities of
Borrowers to Bank, now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several, or joint and several, including, without limitation, the obligations,
indebtedness, and liabilities of Borrowers under this First Restated Agreement,
the Agreement, the Note and the other Loan Documents, and all interest accruing
thereon and all attorneys' fees and other expenses incurred in the enforcement
or collection thereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"PERMITTED INVESTMENT" means:
(a) Acquisitions;
(b) Capital Expenditures;
(c) the acquisition of current assets or liabilities arising from the
sale or lease of goods, the rendition of services or the extension of
credit in the ordinary course of business of the Borrowers including,
without limitation, investments in accounts, contract rights, chattel
paper (as defined in the UCC) and notes receivable;
(d) Cash Equivalent Investments;
(e) advances to officers, shareholders, and employees of Borrowers;
provided that such advances shall not exceed the aggregate amount of
$100,000 at any one time outstanding for all such officers, shareholders
and employees;
(f) Investments, loans, or advances by each Borrower to another
Borrower,
(g) joint ventures; and
(h) other investments, loans or advances permitted by the Loan
Documents.
"PERMITTED LIENS" shall mean (a) Liens for taxes, assessments or
governmental charges or levies of the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in good faith
and by appropriate proceedings; (b) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of obligations not more than
sixty (60) days past due; (c) Liens arising out of pledges or deposits under
workmen's compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation; (d) utility
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easements, building restrictions and such other encumbrances or charges against
real property as are of a nature generally existing with respect to properties
of a similar character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in the business of
Borrowers; (e) lessors' interests under financing leases; (f) Liens on assets
of Borrowers not covered by the Loan Documents which liens secure obligations
of Borrowers in the ordinary course of business which in the aggregate for all
such obligations of Borrowers do not exceed $250,000; and (g) the Liens created
pursuant to the Loan Documents or other Liens in favor of Bank.
"PERSON" means an individual, partnership, limited liability company,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN" shall mean an employee pension benefit plan as defined in Section
3(2) and 3(37) of ERISA, maintained by Borrowers maintained by, or to which
contributions are made by, Borrowers, or for Borrowers' employees.
"PRIME RATE" means that rate of interest announced publicly by Chase
Manhattan Bank, N.A., in New York, New York from time to time as its prime or
base rate. Each change in the interest rate shall take effect on the effective
date of the change in the Prime Rate.
"PRIME RATE ADVANCES" shall mean an Advance which has interest at Prime
Rate.
"RESTRICTED PAYMENT" shall mean any payment on account of the purchase,
redemption or other retirement of a Borrower's Stock.
"REVOLVING CREDIT ADVANCE" shall have the meaning ascribed to it in Section
2.2(a).
"REVOLVING CREDIT FACILITY TERMINATION DATE" shall be August 31, 2000.
"SOLID WASTE" has the meaning specified in any applicable Environmental
Law.
"SUBSIDIARY" means, as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
"TANGIBLE NET WORTH" means, at a particular time, the amount, if any, by
which (a) the sum of all amounts which would be included under shareholders' or
members' equity on a consolidated basis of any Person, determined in accordance
with GAAP as of such date, less receivables of loans made to Affiliates,
exceeds (b) intangibles.
"TERMINATION DATE" means (i) with respect to the Revolving Credit Facility
August 31, 2000, (ii) with respect to the Non-Revolving LC Facility January 3,
2000.
"TOTAL DEBT" means the sum of Funded Indebtedness of Borrowers plus all
obligations of Borrowers under any Capital Leases.
"UNUSED COMMITMENT" shall be have the meaning ascribed to it in
Section 2.2(a).
"UNUSED COMMITMENT FEE" shall be 3/8% of one (1%) percent per annum of the
Unused Commitment.
SECTION 1.3 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this First Restated Agreement shall have the
defined meanings set forth in Section 1.2 hereof or the preamble of this First
Restated Agreement when used in any certificate or other documents made or
delivered pursuant hereto, unless otherwise specified therein.
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(b) As used herein and in any certificate or other documents made or
delivered pursuant hereto, accounting terms not defined in Section 1.1 and
accounting terms partly defined in Section 1.2 relating to Borrowers or their
Subsidiaries, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this First Restated Agreement shall refer to this First
Restated Agreement as a whole and not to any particular provision of this First
Restated Agreement, and "section," "Section," "Exhibit" and "Schedule"
references are to this First Restated Agreement and the Sections, Exhibits and
Schedules to this Agreement unless otherwise specified.
(d) The terms "Accounts," "Chattel Paper," "Contract Rights,"
"Deposit Accounts," "Documents," "General Intangibles," "Instruments,"
"Inventory," "Equipment," and "Fixtures" shall have the meanings as defined in
Article 9 of the Louisiana Commercial Laws (La. R.S. 10:9-101, et seq.).
ARTICLE II
AMOUNT AND TERMS OF CREDIT
SECTION 2.1 LOANS. Subject to the terms and conditions of this First
Restated Agreement, and relying on the representations and warranties contained
in this First Restated Agreement, and provided no Event of Default exists, Bank
agrees to make, and Borrowers agree to accept the Revolving Credit Facility and
the Non-Revolving LC Facility, (collectively the "Loans"), in the aggregate
principal amount at any one time outstanding not to exceed Twenty Million and
no/100 ($20,000,000.00) with respect to the Revolving Credit Facility, and Seven
Million Twenty Four Thousand Four Hundred Twenty Eight and 50/100
($7,024,428.50) Dollars with respect to the Non-Revolving LC Facility. Prior to
the Termination Date, Borrowers may utilize the Revolving Credit Facility by
borrowing, repaying or prepaying, and re-borrowing such Revolving Credit
Facility in whole or in part, all in accordance with the terms and conditions
hereof.
SECTION 2.2 REVOLVING CREDIT FACILITY.
(a) REVOLVING CREDIT FACILITY TERMS. Upon and subject to the terms and
conditions hereof, Bank agrees to make available, at any time from time to time,
on any Business Day until the Revolving Credit Facility Termination Date, and
upon the request of Borrowers therefor, advances (each, a "Revolving Credit
Advance"), and Letters of Credit in an aggregate principal amount which shall
not at any given time exceed the Maximum Revolving Credit Facility Loan Amount.
Borrowers may (i) borrow, repay and reborrow under the Revolving Credit
Facility, a principal amount not to exceed Ten Million and No/100
($10,000,000.00) Dollars for general corporate purposes, and (ii) may request
the issuance of up to Ten Million and No/100 ($10,000,000.00) Dollars of Letters
of Credit, including performance and retainage letters of credit. Borrowers may
only use a maximum of $5,000,000 of the Available Commitment under the Revolving
Credit Facility for acquisitions and capital expenditures. Each Revolving Credit
Advance may be drawn upon by Borrowers on any Business Day during the period
from the Effective Date until August 31, 2000, or such earlier date as may be
fixed by Borrowers. The amount of the Revolving Credit Facility available to
Borrowers from time to time under the Revolving Credit Facility shall be reduced
by the aggregate of the face amount of any outstanding undrawn Letters of Credit
issued under the Revolving Credit Facility and by all unpaid Advances made by
Bank to Borrowers pursuant to this First Restated Agreement and the remaining
amount of the Revolving Credit Facility shall constitute the "Unused
Commitment." Any draws made under the Letters of Credit by the beneficiaries
thereof shall constitute Advances as defined in this First Restated Agreement.
The Unused Commitment available under the Revolving Credit Facility shall be
restored but simultaneously reduced by the amount of any Advances which are made
to Borrowers to reimburse Bank for draws under the Letters of Credit.
(b) BORROWING PROCEDURE UNDER THE REVOLVING CREDIT FACILITY. Borrowers
shall give at least two (2) Business Day's prior telephonic notice (to be
confirmed in writing) of each proposed Letter of Credit and of each Advance to
be issued under the Revolving Credit Facility. If all conditions precedent to
the issuance of any such Letter of Credit or any such Advance have been met,
Bank will on the date requested ("Borrowing Date") make each Letter of Credit or
Advance available to Borrowers at Bank's office at 313 Carondelet Street, New
Orleans, Louisiana 70130.
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(c) TERMS AND CONDITIONS GOVERNING LETTERS OF CREDIT. The terms and
conditions governing the issuance of Letters of Credit by Bank on behalf of and
for the account of Borrowers shall be provided for by Bank in its standard form
of Application for Stand-By Letter of Credit, a copy of which is attached hereto
as Exhibit "A", with appropriate insertions and such additional terms and
conditions governing the issuance of specific Letters of Credit as may be agreed
upon by Borrowers and Bank at the time of a Borrower's request to Bank for the
issuance thereof. Letters of Credit may be issued at any time prior to the
Revolving Credit Facility Termination Date. Each such Letter of Credit shall
have a term not to exceed a period of four years from Effective Date of this
Agreement.
(d) NOTE EVIDENCING BORROWINGS. The Revolving Credit Facility shall be
evidenced by a promissory note of Borrowers payable to the order of Bank in the
original principal amount of TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00)
in the form set forth as Exhibit "B" to this First Restated Agreement (the note,
together with any and all renewals, modifications, extensions, amendments,
supplements and/or substitutions therefor being referred to as the "Note"), with
appropriate insertions, shall be dated the date hereof and shall be payable in
full on August 31, 2000. All Advances made by Bank to Borrowers pursuant to this
First Restated Agreement and all payments of principal shall be recorded by Bank
on the schedule attached to the Note, and shall constitute prime facie evidence
of the accuracy of the information therein recorded. Bank's failure to record or
to record correctly such Advances shall in no way affect Borrowers' obligation
to repay same.
(e) REVOLVING CREDIT FACILITY MATURITY DATE. The Revolving Credit
Facility Maturity Date shall be August 31, 2000 at which time the entire
principal balance and all accrued interest owed under the Revolving Credit
Facility shall be due and payable in full.
SECTION 2.3 NON-REVOLVING LC FACILITY.
(a) NON-REVOLVING LC FACILITY TERMS. Upon and subject to the terms and
conditions hereof, and upon completion of the Stand-by Letter of Credit
Application containing the same terms and conditions as the McDermott
International, Inc. Letters of Credit, Bank issued for the account of Universal
Fabricators Incorporated, performance and retainage Letters of Credit to
substitute and replace Letters of Credit which were issued for the account of
McDermott International, Inc. on behalf of Universal Fabricators Incorporated
(the "MII Letters of Credit"), not to exceed the Maximum Non-Revolving LC
Facility Loan Amount. The amount of the Non-Revolving LC Facility shall be
permanently reduced by the amount of each of the Letters of Credit upon the
existing maturity of each such Letter of Credit as set forth below:
(i) Letters of Credit maturing July 31, 1998 shall reduce the
Non-Revolving LC Facility by $1,655,383.60,
(ii) Letter of Credit maturing November 20, 1998 shall reduce the
Non-Revolving LC Facility by $532,164.00,
(iii) Letter of Credit maturing January 3, 2000 shall reduce the
non-revolving LC Facility by $2,415,704.00.
(b) NON-REVOLVING LC FACILITY MATURITY DATE. The Non-Revolving LC
Facility Maturity Date shall be January 3, 2000 at which time Borrowers shall
reimburse Bank for all principal amounts drawn under each outstanding Letter of
Credit, including interest thereon, owed under the Non-Revolving LC Facility,
shall be due and payable in full.
SECTION 2.4 INTEREST AND FEES.
(a) INTEREST. In the absence of an Event of Default, the unpaid
principal of the Loans shall bear interest on all funds advanced from the date
of disbursement by Bank to the date repaid by Borrowers, at a floating rate
equal to either the Prime Rate, adjusted daily, or the LIBO Rate, or some
combination thereof, as specified in Section 2.4(f) below. Accrued interest
under Prime Rate Advances will be due and payable quarterly in arrears on the
last day of each March, June, September and December commencing September 30,
1997. Accrued interest under the LIBO Rate Advances will be due and payable at
the end of each Interest Period. Interest after the Termination Date of the
Loans, for any reason whatsoever, shall be increased to the Default Rate and
shall be payable on demand.
(b) LETTER OF CREDIT FEE. Upon the issuance of a Letter of Credit by
Bank on behalf of and for the account of Borrowers, a fee of seven-eighths (7/8)
of one percent (1%) per annum on the principal amount of such Letter
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of Credit shall be payable annually by Borrowers for the number of days such
Letter of Credit is to remain outstanding. The first payment shall be due on the
date of issuance and subsequent payments shall be due on the anniversary date of
the issuance of the Letter of Credit for as long as the Letter of Credit remains
outstanding.
(c) UNDISBURSED COMMITMENT FEE. A fee on the average daily amount of
the Unused Commitment, during the period for which payment is made, of
three-eighths (3/8) of one percent (1%) per annum shall be payable by Borrowers
quarterly in arrears on the last day of each March, June, September and December
commencing December 31, 1997, and continuing until maturity.
(d) DEFAULT RATE. If an Event of Default shall occur in the payment on
or before the due date of any principal or interest due hereunder or under any
of the other Loan Documents, including, without limitation, the Note, Borrowers
will pay interest then (retroactively) from the date of the Event of Default on
such payment up to the date of the actual payment (as well after as before
judgment) at the Default Rate, without regard to whether there has been an
acceleration of the payment of principal. Such interest at the Default Rate
shall be payable on demand.
(e) METHOD OF CALCULATING INTEREST AND FEES. Interest at the Prime
Rate and any fee shall be computed on the basis of a year consisting of 365 days
and paid for actual days elapsed, and interest at the LIBO Rate shall be
computed on the basis of a year consisting of 360 days.
(f) INTEREST RATE OPTIONS. Until an Event of Default occurs, Borrowers
shall have the following interest rate options:
(i) Revolving Credit Advances to Borrowers may from time to time be
(i) LIBO Rate Advances, (ii) Prime Rate Advances, or (iii) any
combination thereof, as requested by Borrowers, with respect to
Advances and notices to Bank in accordance with paragraphs (ii),
(iii), and (iv) below; provided that no Advance shall be made to
Borrowers as a LIBO Rate Advance under the Revolving Credit
Facility after the day that is one month prior to the Revolving
Credit Facility Termination Date. For purposes of this paragraph,
(i), an Advance shall be deemed "made" upon an initial borrowing
by Borrowers under paragraph (ii) below, any conversion of such
Advance under paragraph (iii) below, and upon any continuation of
such Advance under paragraph (iv) below.
(ii) With respect to any new Advance, Borrowers shall provide Bank
with telephonic notice of its intended borrowing, which notice
must be received by Bank prior to 10:00 a.m., New Orleans time,
at least two (2) Business Days prior to the requested Borrowing
Date, which notice shall specify (x) the amount to be borrowed,
(y) the requested Borrowing Date, (z) whether the borrowing is to
be of LIBO Rate Advances or Prime Rate Advances or a combination
thereof, (aa) the respective amounts of each such type of
Advance, and (bb) if the borrowing is to be entirely or partly of
LIBO Rate Advances, the respective lengths of the Interest
Periods therefor.
(iii) Borrowers may elect from time to time to convert any of its LIBO
Rate Advances to Prime Rate Advances by giving Bank telephonic
notice of such election, which notice must be received by Bank
prior to 10:00 a.m., New Orleans time, at least two (2) Business
Days prior to the requested conversion; provided that any such
conversion, of LIBO Rate Advances shall only be made on the last
day of an Interest Period with respect thereto. Borrowers may
elect from time to time to convert any of its Prime Rate Advances
to LIBO Rate Advances by giving Bank telephonic notice of such
election, which notice must be received by Bank prior to 10:00
a.m., New Orleans time, at least two (2) Business Days prior to
the requested conversion. Any such notice of conversion to LIBO
Rate Advances shall specify the length of the initial Interest
Period thereof and the amount of the Prime Rate Advance to be
converted. All or any part of Borrowers' outstanding LIBO Rate
Advances or Prime Rate Advances may be converted as provided
herein; provided that (i) no Prime Rate Advance may be converted
into a LIBO Rate Advance when any Event of Default has occurred
and is continuing, (ii) partial conversions of Prime Rate
Advances to LIBO Rate Advances shall be in an aggregate principal
amount of $500,000 or a whole multiple of $100,00 in excess
thereof, (iii) partial conversions of LIBO Rate Advances to Prime
Rate Advances shall be in an aggregate principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof, and
(iv) no Prime Rate Advance under the Revolving Credit Facility
may be converted into a LIBO Rate Advance after the date that is
one month prior to the Revolving Credit Facility Termination
Date.
(iv) Any LIBO Rate Advances may be continued as such upon the
expiration of an Interest Period with respect thereto by
Borrowers giving Bank telephonic notice, which notice must be
received by Bank
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prior to 10:00 a.m., New Orleans time, at least two (2) Business
Days prior to the requested continuation; provided, that (a) no
LIBO Rate Advance may be continued as such when any Event of
Default has occurred and is continuing, (b) no LIBO Rate Advances
under the Revolving Credit Facility may be continued as such
after the date which is one month prior to the Revolving Credit
Facility Termination Date, and (c) any such continuation shall be
made only if, after giving effect thereto, paragraph (v) shall
not be contravened. If Borrowers shall fail to give such notice
or if such continuation is not permitted, then Borrowers shall be
deemed to have requested that the LIBO Rate Advance be converted
automatically to a Prime Rate Advance on the last day of the then
current Interest Period with respect thereto.
(v) All borrowings, conversions and continuations of Advances
thereunder by Borrowers and all selections of Interest Periods
hereunder by Borrowers shall be in such amounts and be made
pursuant to such elections so that, after giving effect thereto,
the aggregate principal amount of the Advances to Borrowers
constituting each LIBO Rate tranche (i.e., LIBO Rate Advances
made on the same day and having the same Interest Period) shall
be equal to $500,000 or a whole multiple of $100,000 in excess
thereof. If Borrowers have no Prime Rate Advances outstanding,
Borrowers may have a maximum of five (5) LIBO Rate tranches in
aggregate in effect at any one time, and, if Borrowers have Prime
Rate Advances outstanding, Borrowers may have a maximum of four
(4) LIBO Rate tranches in aggregate in effect at any one time.
(vi) Each determination of an interest rate by Bank pursuant to any
provision of this First Restated Agreement shall be conclusive
and binding on Borrowers in the absence of manifest error. Bank
shall, at the request of Borrowers, deliver to Borrowers a
statement showing the quotations used by Bank in determining the
LIBO Rate.
(vii) If prior to the first day of any Interest Period, Bank shall have
determined (which determination shall be conclusive and binding
upon Borrowers) that either:
(a) adequate and reasonable means do not exist for
ascertaining the LIBO Rate for such Interest Period; or
(b) the interest rate determined for such Interest Period does
not adequately and fairly reflect the cost to Bank of making,
maintaining or funding its LIBO Rate Advances during such
Interest Period, in either case with respect to (i) proposed
Advances that Borrowers have requested be made as LIBO Rate
Advances, (ii) LIBO Rate Advances that will result from the
requested conversion of Prime Rate Advances into LIBO Rate
Advances, or (iii) the continuation of LIBO Rate Advances beyond
the expiration of the then current Interest Period with respect
thereto; then Bank shall give telephonic notice thereof to
Borrowers as soon as practicable thereafter. Unless Borrowers
notify Bank upon receipt of such notice that it wishes to rescind
or modify its request, Bank shall arrange that (x) any affected
LIBO Rate Advances requested by Borrowers shall be made as Prime
Rate Advances, (y) any Prime Rate Advances to Borrowers that were
to have been converted to LIBO Rate Advances shall be continued
as, or converted to, Prime Rate Advances, and (z) all outstanding
LIBO Rate Advances to Borrowers shall be converted, on the last
day of the then current Interest Period with respect thereto, to
Prime Rate Advances. Until such notice has been withdrawn by
Bank, no further LIBO Rate Advances shall be made to Borrowers,
nor shall Borrowers have the right to convert Prime Rate Advances
to LIBO Rate Advances.
(g) CONVERSION OF LIBO RATE DUE TO CHANGE OF LWAS OR IMPOSSIBILITY.
Notwithstanding any other provision in this First Restated Agreement, if the
adoption of or any change in any law or regulation or in the interpretation or
application thereof (whether or not having the force of law) shall make it
unlawful or impossible for Bank to make, maintain or fund LIBO Rate Advances as
contemplated by this First Restated Agreement: (a) the commitment of Bank
hereunder to make LIBO Rate Advances, continue LIBO Rate Advances as such and
convert Prime Rate Advances to LIBO Rate Advances shall forthwith be canceled;
(b) the Advances then outstanding as LIBO Rate Advances, if any, shall be
converted automatically to Prime Rate Advances on the respective last days of
the then current Interest Periods with respect to such Advances or within such
earlier period as required by law; and (c) Borrowers shall pay Bank such
amounts, if any, as may be required pursuant to paragraph (h) below.
(h) LIBO RATE INDEMNITY. Borrowers agree to indemnify Bank and to hold
Bank harmless from any loss or expense which Bank may sustain or incur as a
consequence of (a) the making by Borrowers of a prepayment (whether mandatory or
optional) or any other payment of a LIBO Rate Advance on a day which is not the
last day of
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the Interest Period with respect thereto, and/or (b) the conversion, whether
voluntary or involuntary, of a LIBO Rate Advance into a Prime Rate Advance
pursuant to this Section, 2.4(f), or otherwise on a day which is not the last
day of an Interest Period with respect thereto, including, without limitation,
in each case any such loss or expense arising from the reemployment of funds
obtained by it to maintain its LIBO Rate Advances hereunder or from fees payable
to terminate the deposits from which such funds were obtained. This covenant
shall survive the termination of this First Restated Agreement and the payment
of the Advances and all other obligations hereunder.
SECTION 2.5 PAYMENTS, PREPAYMENTS, AND REDUCTION OR TERMINATION OF THE
REVOLVING CREDIT FACILITY.
(a) METHOD OF PAYMENT. All payments of principal, interest and other
amounts to be made by Borrowers under the this First Restated Agreement, or the
Note or other Loan Documents shall be made to Bank, for the account of Bank, at
313 Carondelet Street, New Orleans, Louisiana 70130 (or at such other address as
Bank may notify Borrowers in writing), in immediately available funds, without
setoff, deduction or counterclaim, not later than 2:00 p.m. (New Orleans,
Louisiana time) on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day) and, in the case of payments of principal
under the Revolving Credit Facility, in an amount of at least $100,000.00, or an
integral multiple thereof. Borrowers shall, at the time of making each such
payment, specify to Bank the sums payable by Borrowers under this First Restated
Agreement, the Notes or other Loan Documents to which such payment is to be
applied. Notwithstanding the foregoing sentence, unless and until an Event of
Default shall have occurred and be continuing (in which event such payments
shall be applied by Bank in their sole discretion), all payments received by
Bank shall be applied first to the payment of all amounts (except principal and
interest) at the time due and unpaid hereunder or under any of the other Loan
Documents, then to interest hereon or thereon accrued to the date of payment and
finally to the unpaid principal hereunder or thereunder. Whenever any payment
under this First Restated Agreement, the Notes or any other Loan Document shall
be stated to be due on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of the payment of interest.
(b) PAYMENTS WITHOUT DEDUCTION. Borrowers shall pay principal,
interest and other amounts under, and in accordance with the terms of, this
First Restated Agreement, the Note and the other Loan Documents free and clear
of and without deduction for any and all present and future taxes, levies,
imposts, deductions, charges, withholdings and all other liabilities whatsoever.
(c) REDUCTION OF CREDIT. Borrowers may from time to time, upon at least
three (3) Business Day's prior telephonic notice (confirmed in writing) to Bank,
permanently reduce the amount of the Commitment, provided that at no time may
the Commitment be reduced by Borrowers to an amount less than the sum of the
outstanding principal of all Advances and the undrawn amount of Letters of
Credit. Any such reduction of the Commitment shall be in an amount of
$100,000.00 or an integral multiple thereof.
SECTION 2.6 INDEMNITY. Borrowers shall indemnify and hold Bank harmless
from and against any and all suits, actions, proceedings, claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable
attorneys' fees and disbursements, including those incurred upon any appeal)
which may be instituted or asserted against or incurred by Bank as the result of
its having entered into any of the Loan Documents or extended credit hereunder;
provided, however, that Borrowers shall not be liable for such indemnification
to such indemnified Person to the extent that any such suit, action, proceeding,
claim, damage, loss, liability or expense results from such indemnified Person's
gross negligence or willful misconduct.
SECTION 2.7 ACCESS. Bank and any of its officers, employees and/or agents
shall have the right, exercisable as frequently as Bank reasonably determines to
be appropriate, during normal business hours (or at such other times as may
reasonably be requested by Bank), to inspect the properties and facilities of
Borrowers and to inspect, audit and make extracts from all of Borrowers'
records, files and books of account. Borrowers shall deliver any document or
instrument reasonably necessary for Bank to obtain records from any service
bureau maintaining records for Borrowers, and shall maintain duplicate records
or supporting documentation on media, including, without limitation, computer
tapes and discs owned by Borrowers. Borrowers shall instruct their banking and
other financial institutions to make available to Bank such information and
records as Bank may reasonably request.
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ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS TO LOANS. Notwithstanding any other provision of
this First Restated Agreement and without affecting in any manner the rights of
Bank hereunder, unless and until the hereinbelow set forth conditions are
satisfied and there shall have been delivered to Bank, evidence in form and
substance satisfactory to Bank, Borrowers shall have no rights to obtain any
Advances or Letters of Credit pursuant to this First Restated Agreement, and
Bank shall not be obligated to make the funding of the Loans hereunder, the
conditions being the receipt by Bank of the following:
(a) COMPLETION OF INITIAL PUBLIC OFFERING OF UNIFAB INTERNATIONAL. The
Effective Date of the Agreement was September 24, 1997 which was the day of the
completion of the Initial Public Offering ("IPO") of UNIFAB International, and
the receipt by UNIFAB International of the of minimum net proceeds of
$12,000,000.00 by UNIFAB International.
(b) LOAN DOCUMENTS. The Loan Documents (and all documents related
thereto), each prepared to the satisfaction of counsel for Bank, duly executed
by authorized officers of Borrowers;
(c) NOTE. Borrowers' duly executed Note payable to the order of Bank.
(d) RESOLUTIONS. Resolutions of the boards of directors of Borrowers,
certified by the Secretaries or Assistant Secretaries of Borrowers, as of the
Initial Closing Date and the Closing Date, to be duly adopted and in full force
and effect on such date, authorizing (i) the consummation of each of the
transactions contemplated by the Loan Documents and (ii) specific officers to
execute and deliver this First Restated Agreement and the other Loan Documents.
(e) GOVERNMENTAL CERTIFICATES. Governmental certificates, dated the
most recent practicable date prior to the date hereof, showing that each
Borrower is organized and in good standing in the jurisdiction of their
organization and are qualified as a foreign corporation and in good standing in
all other jurisdictions in which they are qualified to transact business.
(f) FINANCIAL STATEMENT CERTIFICATION. The financial statements
referred to in Section 4.5, each certified by the chief financial officer of
each Borrower.
(g) CERTIFICATION OF CHIEF FINANCIAL OFFICER. Certificates of either
the chief financial officer or the chief executive officer of each Borrower,
satisfactory in form and substance to Bank, stating that, as of the Closing Date
and the date hereof, to the best of their knowledge, no Material Adverse Effect
has occurred to the business, operations, prospects, properties or financial or
other condition of Borrowers taken as a whole since June 30, 1997.
(h) CERTIFICATE OF CHIEF EXECUTIVE OFFICER. A certificate of either the
chief executive officer or chief financial officer of each Borrower,
satisfactory in form and substance to Bank, stating (i) that all of the
representations and warranties contained herein or in any of the Loan Documents
are correct on and as of the Closing Date and the date hereof, as though made on
and-as of such date, and no event has occurred and is continuing, or would
result from the Revolving Credit Advance if made on the Closing Date to date
hereof, which constitutes or would constitute a Default or an Event of Default,
(ii) that Bank has a copy of each agreement or plan or, if not available, a
summary thereof, providing for employment, severance, deferred payments, bonus
payments or accruals, profit sharing arrangements, stock option or stock
appreciation rights, incentive payments, pension or employment benefit
contributions or similar payments or arrangements for the benefit of Borrowers'
management personnel, which has been approved by Bank.
(i) CERTIFICATE OF INCUMBENCY AND SIGNATURES. Certificates of the
Secretary or an Assistant Secretary of each Borrower, dated the Closing Date and
the date hereof, as to the incumbency and signatures of the officers of each
Borrower executing this First Restated Agreement, the Note, any of the Loan
Documents and other ancillary agreements and any other certificate or other
document to be delivered pursuant hereto or thereto, together with evidence of
the incumbency of such Secretary or Assistant Secretary.
(j) ATTORNEY OPINION. The opinion of Jones, Walker, Waechter,
Poitevent, Carrere & Denegre, L.L.P., counsel to Borrowers, addressed to Bank,
that (a) the status of each Borrower is as set forth in the preamble and that
they are duly organized, validly existing and in good standing under the laws of
the State of their creation and qualified and in good standing in the State of
Louisiana; (b) Borrowers have full power to execute, deliver and
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perform its obligations under this First Restated Agreement, the Note and the
Loan Documents to which it is a party; (c) such actions have been duly
authorized by all necessary required action, and are not in conflict with any
provision of law or of the charter, by-laws or operating agreement of each
Borrower, as may be the case, nor to the best of counsel's knowledge, in
conflict with any agreement binding upon Borrowers; and (e) this First Restated
Agreement, the Notes, and the Loan Documents are the legal and binding
obligations of Borrowers enforceable in accordance with their respective terms,
except as enforcement may be limited by applicable bankruptcy, reorganization,
moratorium or similar laws.
(k) PAYMENT OF FEES AND EXPENSES. Payment by Borrowers of all
reasonable fees and expenses of Bank's counsel.
(l) ADDITIONAL INFORMATION. Such additional information and materials
as Bank may reasonably request, including, without limitation, copies of any
debt agreements, security agreements and other material contracts.
SECTION 3.2 CONDITIONS TO EACH ADVANCE AND/OR LETTER OF CREDIT. It shall be
a further condition to and funding of an Advance and/or issuance of a Letter of
Credit that the following statements shall be true on the date of each such
funding or issuance:
(a) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of Borrowers contained herein or in any of the
Loan Documents shall be correct on and as of the date of each such Advance
and/or issuance of a Letter of Credit as though made on and as of such date,
except to the extent that any such representation or warranty expressly relates
to an earlier date and for changes therein permitted and contemplated by this
First Restated Agreement.
(b) NO EVENT OF DEFAULT. No event shall have occurred and be
continuing, or would result from the funding of any Advance and/or issuance of a
Letter of Credit, which constitutes or would constitute a Default or an Event of
Default.
(c) MAXIMUM ADVANCES. The aggregate unpaid principal amount of the
Revolving Credit Facility after giving effect to funding such Advance or the
issuance of such Letter of Credit, shall not exceed the Maximum Revolving Credit
Facility Loan Amount.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BORROWERS
Borrowers represents and warrants to Bank that:
SECTION 4.1 CORPORATE EXISTENCE: COMPLIANCE WITH LAW. Each Borrower (i) is
duly organized, validly existing and in good standing under the laws of the
state of their creation; (ii) if organized in corporate form (x) are duly
qualified as foreign corporations and in good standing under the laws of each
jurisdiction where the failure to be so qualified would have a Material Adverse
Effect, (y) have the requisite corporate power and authority and the legal right
to own, pledge, mortgage or otherwise encumber and operate their properties, to
lease the property they operate under lease, and to conduct their business as
now, heretofore and proposed to be conducted, (z) are in compliance with their
certificate or articles of incorporation and by-laws, (z) are in compliance with
their certificate or articles of incorporation and by-laws ; (iii) if organized
as a limited liability company, (x) have the requisite corporate power and
authority and the legal right to own, pledge, mortgage or otherwise encumber and
operate their properties, to lease the property they operate under lease, and to
conduct their business as now, heretofore and proposed to be conducted, (z) are
in compliance with their certificate or articles of incorporation and operating
agreements; (iv) have all licenses, permits, consents or approvals from or by,
and have made all filings with, and have given all notices to, all governmental
authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (v) are in compliance with all applicable provisions of
law where the failure to comply would have a Materially Adverse Effect on the
business, operations, prospects, assets or financial or other condition of
Borrowers, and each Borrower's ability to pay the obligations in accordance with
the terms thereof.
SECTION 4.2 EXECUTIVE OFFICES. The current locations of Borrowers'
executive offices and principal place of business are set forth on Schedule 4.2
hereto.
SECTION 4.3 SUBSIDIARIES. No Borrower has Subsidiaries other than UNIFAB
International, which has as its only subsidiaries, UNIFAB and PIM.
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SECTION 4.4 CORPORATE POWER: AUTHORIZATION: ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by Borrowers of the Loan Documents, and all
instruments and documents to be delivered by Borrowers, to the extent they are
parties thereto, hereunder and thereunder: (i) are within Borrowers' powers;
(ii) have been duly authorized by all necessary or proper corporate action;
(iii) are not in contravention of any provision of Borrowers' respective
certificates or articles of incorporation, by-Laws, or operating agreement; (iv)
will not violate any material law or regulation, or any order or decree of any
court or governmental instrumentality; (v) will not conflict with or result in
the breach or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which Borrowers are a party or by which
Borrowers or any of their property are bound which conflict, breach,
termination, default or acceleration would have a Material Adverse Effect; (vi)
will not result in the creation or imposition of any Lien upon any of the
property of Borrowers, and (vii) do not require the consent or approval of any
governmental body, agency, authority or any other Person. At or prior to the
Closing Date, and as of even date hereof, and the date hereof as the case may
require, each of the Loan Documents shall have been duly executed and delivered
for the benefit of or on behalf of each Borrower, as the case may be, and upon
the Effective Date each shall then constitute a legal, valid and binding
obligation of each Borrower, to the extent they are parties thereto, enforceable
against them in accordance with its terms except as may be limited by applicable
bankruptcy laws and general principles of equity.
SECTION 4.5 FINANCIALS AND PROJECTIONS.
(a) BORROWERS' FINANCIALS Universal Fabricators Incorporated audited
financial statement as of March 31, 1997, a copy of which was furnished to Bank,
was prepared in conformity with GAAP applied on a basis consistent with that of
the preceding fiscal year and period, presented fairly the financial condition
of Universal Fabricators Incorporated as of such date and the results of its
operations for the periods then ended. Universal Fabricators Incorporated's
unaudited financial statement as of June 30, 1997, a copy of which was furnished
to Bank, except for the absence of footnotes normally associated with financial
statements prepared in accordance with GAAP, was prepared in conformity with
GAAP and presented fairly the financial condition of Universal Fabricators
Incorporated as of such date and the results of its operations for the periods
then ended. Since March 31, 1997 to the date hereof, there has been no material
adverse change in Universal Fabricators Incorporated's financial condition.
(b) UNIFAB INTERNATIONAL'S FINANCIALS Audited financials of UNIFAB
International as of March 31, 1997, a copy of which has been furnished to Bank
prior to the date of this Agreement, have been prepared in accordance with GAAP.
SECTION 4.6 LITIGATION. To the best of Borrowers' knowledge, after due
inquiry, no litigation or governmental proceedings are pending or threatened
against Borrowers, the results of which might materially affect Borrowers'
financial condition or operations, except those referred to in a schedule
furnished contemporaneously herewith and attached hereto as Schedule 4.6.
SECTION 4.7 LIENS. None of the assets of Borrowers are subject to any Lien
except the Permitted Liens.
SECTION 4.8 PURPOSE. (a) The proceeds of the Revolving Credit Facility
shall be used by Borrowers for general corporate purposes including acquisitions
and capital expenditures and for the issuance of certain Standby Letters of
Credit, including performance and retainage letters of credit, and (b) the
proceeds of Non-Revolving LC Facility were used for the reissuance for the
account of Universal Fabricators Incorporated of certain performance and
retainage Letters of Credit issued for the account of McDermott International,
Inc. on behalf of Universal Fabricators Incorporated.
SECTION 4.9 USE OF PROCEEDS: MARGIN SECURITIES. Borrowers are not engaged
in the business of purchasing or selling margin stock (as defined in Regulation
U of the Board of Governors of the Federal Reserve System) or extending credit
to others for the purpose of purchasing or carrying margin stock and no part of
the proceeds of any borrowing hereunder will be used to purchase or carry any
margin stock or for any other purpose which would violate any of the margin
regulations of such Board of Governors.
SECTION 4.10 COMPLIANCE THE ERISA. Borrowers are in compliance with all
statutes and governmental rules and regulations applicable to it, including,
without limitation, ERISA. No condition exists or event or transaction has
occurred in connection with any Plan, which could result in Borrowers' incurring
any material liability, fine or penalty. No Reportable Event (as defined in
ERISA) has occurred with respect to any such Plan. Borrowers has not withdrawn
from any such Plan or initiated steps to do so and no steps have been taken to
terminate any such Plan.
SECTION 4.11 CONSENTS. No consent, approval or authorization of, or
registration or declaration with, any
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federal or state governmental authority or other regulatory agent for the
validity of the execution and delivery or for the performance by Borrowers of
the Loan Documents is required.
SECTION 4.12 TAXES. All Federal, state, local, foreign, and franchise tax
returns, reports and statements required to be filed by each Borrower have been
filed with the appropriate governmental agencies in all jurisdictions in which
such returns, reports and statements are required to be filed, and all Charges
and other impositions shown thereon to be due and payable have been timely paid
prior to the date on which any fine, penalty, interest, late charge or loss may
be added thereto for nonpayment thereof, or any such fine, penalty, interest,
late charge or loss has been paid, or has reserved reasonable amounts for such
Charges, fines, interest, loss, late charges and/or interest upon the books of
such company as the case may be. Each Borrower has paid when due and payable all
requisite Charges on its income, business, property or operations, including
income taxes, franchise taxes, real and personal property taxes, inventory and
merchandise taxes, capital stock taxes, sales and use taxes, value added taxes,
excise taxes, transfer taxes, employee income withholding, social security and
unemployment taxes, and interest and penalties thereon, or has reserved
reasonable amounts for such taxes, interest and/or penalties upon the books of
such company, as the case may be. Proper and accurate amounts have been withheld
by each Borrower from its employees for all periods in full and complete
compliance with the tax, social security and unemployment withholding provisions
of applicable Federal, state, local and foreign law and such withholdings have
been paid to the respective governmental agencies.
SECTION 4.13 OPERATION OF BUSINESS. Each Borrower possesses all licenses,
permits, franchises, patents, copyrights, trademarks and trade names, or rights
thereto, to conduct its business substantially as now conducted and as presently
proposed to be conducted, and each Borrower is not in violation of any valid
rights of others with respect to any of the foregoing.
SECTION 4.14 RIGHTS IN PROPERTIES: LIENS. Borrowers have good and
indefeasible title to its properties and assets, real and personal, including
the properties and assets reflected in the financial statements, and none of the
properties, assets or leasehold interests of Borrowers are subject to any Lien,
except for Permitted Liens.
SECTION 4.15 DEBT. Borrowers have no Debt, except as disclosed in the
financial statements described in Section 4.5 hereof and as otherwise permitted
by this First Restated Agreement.
SECTION 4.16 DISCLOSURE No statement, information, report, representation
or warranty made by Borrowers in this First Restated Agreement or in any of the
other Loan Documents or furnished by Borrowers to Bank in connection with the
negotiation or preparation of this First Restated Agreement, or any amendment
hereto, contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements herein or therein not misleading.
There is no fact known to Borrowers that has not been disclosed in writing to
Bank which has a Material Adverse Effect, or which might in the future have a
Material Adverse Effect, on the business, assets, financial condition or
operations of Borrowers.
SECTION 4.17 REGISTERED OFFICE: PRINCIPAL PLAC OF BUSINESS. The principal
place of business, chief executive office and registered office of each Borrower
and the place where each Borrower keeps its books and records are set forth on
Schedule 4.17. Borrowers have never done any business from any location other
than as set forth on Schedule 4.17.
SECTION 4.18 INVESTMENT COMPANY ACT. Borrowers are not an "Investment
Company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4.19 OTHER AGREEMENTS. Borrowers are not parties to any indenture,
loan or credit agreement, or to any lease or other agreement or instrument, or
subject to any charter of corporate restriction which would violate the terms of
this First Restated Agreement. Borrowers are not in default in any respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument which would reasonably
have a Material Adverse Effect.
SECTION 4.20 COMPLIANCE WITH LAW. Borrowers are in compliance with all
laws, rules, regulations, orders and decrees which are applicable to Borrowers,
or any of their respective properties. Without limiting the generality of the
foregoing:
(a) EMPLOYMENT MATTERS Borrowers are in full compliance with all
applicable laws, rules, regulations and governmental standards regarding
employment, including, without limitation, the minimum wage and overtime
provisions of the Fair Labor Standards Act, as amended (29 U.S.C. Sections
201-219), and the regulations
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promulgated thereunder, the non-compliance of which would reasonably have had a
Material Adverse Effect.
(a) ENVIRONMENTAL MATTERS.
(i) Borrowers and all of their respective properties, assets
and operations are in compliance with all Environmental Laws, the non-compliance
of which would reasonably have had a Material Adverse Effect. Borrowers are not
aware of or has not received notice of, any past, present or future conditions,
events, activities, practices or incidents which may interfere with or prevent
the compliance or continued compliance of Borrowers with all Environmental Laws.
(ii) Borrowers have obtained, or are in the process of
obtaining, all permits, licenses and authorizations and have filed all plans
which are required under Environmental Laws in order to conduct their business
and/or own their properties and assets including, without limitation, all
Louisiana air emission permits required under any Environmental Law in order to
conduct Borrowers' business and/or own their assets or properties.
(iii) No Hazardous Substances or Solid Wastes exist on, about or
within or have been used, generated, stored, transported, disposed of on, or
released from any of the properties or assets of Borrowers except in substantial
compliance with Environmental Laws.
SECTION 4.21 CORPORATE NAME. The exact corporate name of each Borrower as
it appears in its articles of incorporation is as set forth in the introduction
of this First Restated Agreement.
SECTION 4.22 TAXPAYER I.D. NUMBERS. The Federal Taxpayer Identification
Number of each Borrower is: (x) UNIFAB International, Inc., 72-1382998,(y)
Universal Fabricators, L.L.C., ___________________, and (z) PIM, L.L.C.,
72-1411461.
SECTION 4.23 CONTINUING REPRESENTATIONS AND RECORDS. Each request by
Borrowers for an Advance shall constitute a representation and warranty by
Borrowers as of the date of such request for an Advance that all representations
and warranties made herein are correct on and as of such Borrowing Date as if
made on and as of such date, except to the extent that any such representation
or warranty expressly relates to an earlier date and for changes therein
permitted and contemplated by this First Restated Agreement.
ARTICLE V
AFFIRMATIVE COVENANTS
From the Effective Date of the Agreement and thereafter until the
Termination Date, and until the Note and other liabilities of Borrowers
hereunder are paid in full and all other obligations and liabilities under the
Loan Documents are performed and paid in full, Borrowers agree that they will:
SECTION 5.1 FINANCIAL STATEMENTS AND RECORDS. Borrowers shall furnish to
Bank:
(a) promptly after the sending or filing thereof, copies of all reports
which each Borrower, as the case may require, sends to any of its public
security holders, and copies of all Forms 10-K, 10-Q and 8-K, Schedules 13E-4
(including all exhibits filed therewith) and registration statements, and any
other filings or statements that a Borrower files with the Securities and
Exchange Commission or any national securities exchange;
(b) within ninety-five (95) days after the end of each fiscal year, a
copy of UNIFAB International's annual audited consolidated financial statements,
audited by independent certified public accountants of nationally recognized
standing selected by the Borrowers and reasonably satisfactory to Bank, prepared
in conformity with GAAP, and unaudited consolidating financial statements, to
include financial statements of each Borrower (describing assets, liabilities,
and results of operations for each Borrower);
(c) as soon as available, but in any event within fifty (50) days after
the end of each fiscal quarter, a copy of the unaudited consolidated and
consolidating quarterly financial statements of UNIFAB International to include
each Borrower's financial statements, prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the period reflected
therein;
(d) as soon as available, but in any event within thirty (30) days after
the end of each month a monthly aging of accounts receivable certified by the
chief executive officer or the chief financial officer of UNIFAB
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International, reflecting accounts receivable according to payor mix in the
following categories: 0-30 days; 31-60 days; 61-90 days; 91 days and over of
Borrowers' accounts receivable;
(e) as soon as available, but in any event within fifty (50) days after
the end of each fiscal quarter for the first three quarterly periods of each
fiscal year, a compliance certificate, in form acceptable to Bank, setting
forth the calculations of all financial covenants and certifying as to the
accuracy of all calculations and each Borrower's compliance with all financial
covenants, which certificate is to be submitted with copies of any 10-Q filing
of a Borrower, and within ninety-five (95) days after the end of each fiscal
year, a compliance certificate with the 10-K filing of UNIFAB International, as
required;
(f) Borrowers shall provide to Bank, within 14 Business Days after
request, such other information respecting Borrowers' business, financial
condition or prospects as Bank may, from time to time, reasonably request.
(g) Each Borrower authorizes Bank to communicate directly with its
independent certified public accountants, with notice to such Borrower, and
authorize those accountants to disclose to Bank any and all financial
statements and other supporting financial documents and schedules including
copies of any management letter with respect to the business, financial
condition and other affairs of such Borrower.
(h) Each Borrower shall permit access by Bank to the books and records
and other property of such Borrower during normal business hours and upon
reasonable notice and permit Bank to make copies of said books and records.
SECTION 5.3 MAINTENANCE OF, EXISTENCE AND CONDUCT OF BUSINESS. Borrowers
shall:
(a) do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights and franchises; Borrowers
shall notify Bank immediately if there is a change in any Borrowers' structure;
(b) continue to conduct its business substantially as now conducted or
as otherwise permitted hereunder,
(c) at all times maintain, preserve and protect all of its trademarks
and trade names, and preserve all the remainder of its property in use or useful
in the conduct of its business and keep the same in good repair, working order
and condition (taking into consideration ordinary wear and tear) and from time
to time make or cause to be made, all needful and proper repairs, renewals and
replacements, betterments and improvements thereto consistent with industry
practices, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; and
(d) transact business and invoice all accounts in such names as Borrowers
may from time use in conducting its businesses.
SECTION 5.3 PAYMENT OF OBLIGATIONS.
(a) Borrowers shall (i) pay and discharge or cause to be paid and
discharged all its Indebtedness, including, without limitation, all the
Obligations, as and when due and payable, subject to the restrictions set forth
in this First Restated Agreement, and (ii) pay and discharge or cause to be
paid and discharged promptly all (x) Charges imposed upon it, its income and
profits, or any of its property (real, personal or mixed), and (y) lawful
claims for labor, materials, supplies and services or otherwise before any
thereof shall become in default.
(b) Borrowers may in good faith contest, by proper legal actions or
proceedings, the validity or amount of any contested Indebtedness, Charges or
claims, provided that at the time of commencement of any such action or
proceeding, and during the pendency thereof (i) no Default or Event of Default
shall have occurred; (ii) adequate reserves with respect thereto are maintained
on the books of Borrowers, in accordance with GAAP; (iii) such contest operates
to suspend collection of the contested Charges or claims and is maintained and
prosecuted with diligence;(iv) Borrowers shall promptly pay or discharge such
contested Charges and all additional charges, interest, penalties and expenses,
if any, and shall deliver to Bank evidence acceptable to Bank of such
compliance, payment or discharge, if such contest is terminated or discontinued
adversely to Borrowers; and (v) Bank has not advised Borrowers in writing that
Bank reasonably believes that nonpayment or non-discharge thereof would have a
Material Adverse Effect.
(c) Notwithstanding anything to the contrary contained in Section 5.3(b)
above, Borrowers shall have the
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right to pay the Charges or claims described in Section 5.3(a)(ii) and in good
faith contest by proper legal actions or proceedings, the validity or amount of
such Charges or claims.
SECTION 5.4 FINANCIAL COVENANTS. Borrowers agree as follows:
(a) Borrowers on a consolidated basis shall maintain at all times, such
maintenance to be evidenced at the end of any fiscal quarter of Borrowers;
(i) a ratio of current assets to current liabilities of
no less than 1.5 to 1.0.
(ii) a Tangible Net Worth of not less than $24,500,000.00
plus (x) 70% of the cumulative net income of Borrowers for all
quarters ending after December 31, 1997 in which net income for such
quarter was positive, and (y) 100% of the proceeds to any Borrower of
any future public equity offering by the Borrower, net of any related
fees, commissions, expenses and other costs.
(iii) a ratio of Total Debt to Tangible Net Worth no greater
than 0.5 to 1.0.
(iv) an Interest Coverage ratio of no less than 4.0 to
1.0, such ratio to be determined at the end of each fiscal quarter
based on such fiscal quarter and the three immediately preceding
fiscal quarters.
(b) Notwithstanding that Borrowers will be filing and reporting financial
statements on a consolidated basis, each Borrower shall separately maintain a
positive Net Worth which positive Net Worth shall be set forth in the Compliance
Certificate required in Section 5.1 (e).
SECTION 5.5 FEES. Borrowers shall pay to Bank, on demand, any and all fees,
costs or expenses arising out of or in connection with the forwarding to
Borrowers or any other Person on behalf of Borrowers by Bank of proceeds of the
Advances.
SECTION 5.6 BOOKS AND RECORDS. Borrowers shall keep adequate records and
books of account with respect to its business activities, in which proper
entries, reflecting all of their financial transactions, are made in accordance
with GAAP and on a basis consistent with the Financials referred to in Section 4
hereof.
SECTION 5.7 LITIGATION. Borrowers shall notify Bank in writing, promptly
upon learning thereof, of any litigation commenced against Borrowers, and of the
institution against either of them of any suit or administrative proceeding that
could be expected to have a Material Adverse Effect.
SECTION 5.8 INSURANCE. Schedule 5.8 lists all insurance of any nature
maintained by Borrowers as well as a summary of the terms of such insurance.
Borrowers shall maintain insurance coverages, without limitation, fire, theft,
burglary, public liability, property damage, product liability, workers'
compensation, and insurance on all property and assets, all in amounts customary
for the industry and under policies issued by insurers reasonably satisfactory
to Bank. Borrowers shall pay all insurance premiums payable by it.
SECTION 5.9 COMPLIANCE WITH LAW. Borrowers shall comply with all federal,
state and local laws and regulations applicable to it, including, without
limitation, ERISA, those regarding the collection, payment and deposit of
employees, income, unemployment and Social Security Taxes and those relating to
environmental matters where the failure to comply could be expected to have a
Material Adverse Effect.
SECTION 5.10 AGREEMENTS. Borrowers shall perform, within all required time
periods (after giving effect to any applicable grace periods), all of their
obligations and enforce all of their rights under each agreement to which they
are a party, including, without limitation, any leases to which any such company
is a party, where the failure to perform and enforce would have a Material
Adverse Effect. Borrowers shall not terminate or modify, in any manner adverse
to any such company any provision of any agreement to which it is a party which
termination or modification could have a Material Adverse Effect.
SECTION 5.11 SUPPLEMENTAL DISCLOSURE. From time to time as may be necessary
(in the event that such information is not otherwise delivered by Borrowers to
Bank pursuant to this First Restated Agreement), so long as there are
obligations outstanding hereunder, Borrowers will supplement or amend each
Schedule with respect to any matter hereafter arising which, if existing or
occurring at the date of this First Restated Agreement, would have been required
to be set forth or described in such Schedule or which is necessary to correct
any information in such Schedule which has been rendered inaccurate thereby.
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SECTION 5.12 EMPLOYEE PLANS. Borrowers shall fulfill its obligations under
the minimum funding standards of ERISA and the Code, with respect to each Plan,
and Borrowers shall not take any action that would result in the termination of
a Plan by the PBGC.
SECTION 5.13 SEC FILINGS: CERTAIN OTHER NOTICES. Borrowers shall furnish to
Bank (i) promptly after the filing thereof with the Securities and Exchange
Commission, a copy of each report, notice or other filing, if any, by Borrowers
with the Securities and Exchange Commission, and (ii) a copy of each written
communication received by Borrowers from or delivered by Borrowers to the
Securities and Exchange Commission.
SECTION 5.14 COMPLIANCE WITH LEASES: ADDITIONAL MORTGAGES. Borrowers shall
comply with all of their obligations under all leases for, or hereafter entered
into by it with respect to, real property.
SECTION 5.15 BORROWERS FUNDING. In the event a Borrower receives notice
from Bank that there are insufficient funds in a Borrower's account to (i) make
required principal and interest payments due under the Loans, or (ii) pay checks
presented for payment, one of the other Borrowers shall immediately advance on
the date of said notice, sufficient funds to Bank to remedy each and every
shortage or reduce the Revolving Credit Facility to the Maximum Revolving Credit
Facility Loan Amount. Funds advanced by a Borrower to another Borrower shall be
considered a contribution of capital to that Borrower.
SECTION 5.16 DEPOSIT ACCOUNTS. Borrowers shall maintain all of its deposit
accounts with Bank. Borrowers shall direct their account debtors to make their
payments to deposit accounts with Bank, and shall deposit the proceeds of all of
their accounts receivables and all funds advanced in connection with the
Agreement in accordance with this First Restated Agreement. Commencing with or
on the Effective Date, Borrowers will immediately, upon receipt, deposit all
monies, checks, notes, drafts and all other payments which come into the
possession or under the control of Borrowers (or any of its shareholders,
directors, officers, employees, agents or those Persons acting for or in concert
with Borrowers), (a) to Bank or (b) in the account designated by Bank.
ARTICLE VI
NEGATIVE COVENANTS
Borrowers covenant and agree that, without the Bank's prior written
consent, from and after the date hereof and until the Termination Date:
SECTION 6.1 MERGERS, ETC. Borrowers shall not directly or indirectly, by
operation of law or otherwise, merge with, consolidate with, or otherwise
combine with, any Person nor form any Subsidiary.
SECTION 6.2 INVESTMENTS: LOANS AND ADVANCES. Except for Permitted
Investments and as otherwise permitted by Section 6.3 or 6.4 hereof, Borrowers
shall not make any investment in, or make or accrue loans or advances of money
to any Person, through the direct or indirect holding of securities or
otherwise.
SECTION 6.3 INDEBTEDNESS. Except as otherwise expressly permitted by this
First Restated Agreement, Borrowers shall not create, incur, assume or permit to
exist any Debt, whether recourse or nonrecourse, and whether superior or junior,
resulting from borrowings, loans, advances or the granting of credit, whether
secured or unsecured, except (a) Indebtedness secured by Liens permitted under
Section 6.9 hereof, (b) trade credit or other contractual obligations incurred
to acquire goods, supplies, services, including, without limitation, obligations
incurred to employees for compensation for services rendered in the ordinary
course of business, or merchandise on terms similar to those granted to
purchasers in similar lines of business as Borrowers as of the date hereof and
incurred in the ordinary and normal course of business, (d) lease payment
obligations under leases which Borrowers is not prohibited from entering into
under the Loan Documents, (e) all deferred taxes, (f) all unfunded, pension fund
and other employee benefit plan obligations and liabilities but only to the
extent they are permitted to remain unfunded under applicable law, and (g)
indebtedness existing on the date hereof listed on Schedule 6.3 hereof or
consented to by Bank. Notwithstanding the above, Borrowers shall not incur any
additional Debt subsequent to the Closing Date, other than (i) the Obligations
and (ii) Debt not to exceed $1,000,000.
SECTION 6.4 EMPLOYEE LOANS. Borrowers shall not make or accrue any loans or
other advances of money to any employee of Borrowers in excess at any time of
$100,000 in the aggregate for all such loans.
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SECTION 6.5 CAPITAL STRUCTURE. Borrowers, exclusive of UNIFAB
International, shall not issue or agree to issue any of their respective
authorized but not outstanding shares of Stock (including treasury shares).
SECTION 6.6 MAINTENANCE OF BUSINESS. Borrowers shall not engage in any
business other than the business currently engaged in by Borrowers or a business
incidental thereto or reasonably related thereto.
SECTION 6.7 TRANSACTIONS WITH AFFILIATES.
(a) Borrowers shall not enter into or be a party to any transaction with
any Affiliate of Borrowers, except as otherwise provided herein or in the
ordinary course of and pursuant to the reasonable requirements of Borrowers' or
Affiliate's business and upon fair and reasonable terms that are fully
disclosed to Bank and are no less favorable to Borrowers than would obtain in a
comparable arm's length transaction with a Person not an Affiliate of
Borrowers.
SECTION 6.8 GUARANTIES. Borrowers shall not make, issue, or become liable
on any guaranty, except (a) guaranties in favor of Bank, (b) endorsements of
instruments for deposit, and (c) other guaranties of Debt, incurred in the
ordinary course of business, not exceeding $1,000,000 at any time in the
aggregate for Borrowers.
SECTION 6.9 LIENS. Borrowers shall not create or permit any Lien on any of
its properties or assets except:
(a) presently existing or hereinafter created Liens which have been
disclosed to Bank on Schedule 6.9; and
(b) Permitted Liens.
SECTION 6.10 SALES OF ASSETS. Borrowers shall not sell, transfer, convey or
otherwise dispose of any assets or properties or engage in any sale-leaseback or
similar transaction involving any of such assets; provided, however, that the
foregoing shall not prohibit:
(a) the sale of surplus or obsolete equipment and fixtures;
(b) transfers resulting from any casualty or condemnation of assets or
properties; and
(c) sales in the ordinary course of business not to exceed $250,000.00 in
any 12 month period.
SECTION 6.11 CANCELLATION OF INDEBTEDNESS. Borrowers shall not cancel any
claim or debt owing to it, except for reasonable consideration or in the
ordinary course of business.
SECTION 6.12 HEDGING TRANSACTIONS. Borrowers shall not engage in any
speculative transactions involving commodity options or futures contracts,
including, without limitation, any speculative interest rate hedging or similar
transaction.
SECTION 6.13 RESTRICTED PAYMENTS. Borrowers shall not make any Restricted
Payments during the existence of the Loans without the consent of the Bank.
SECTION 6.14 OWNERSHIP OF BORROWERS. No Borrower shall not sell, transfer,
convey or assign any of its interest in another Borrower, without prior written
consent of Bank.
ARTICLE VII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
The following events shall constitute Events of Default hereunder and
under the Loans, individually and collectively, and under all other Loan
Documents:
SECTION 7.1 PAYMENT. Default in the payment of principal on the Note when
due, or default in the payment of any interest on the Note or any expense or fee
hereunder or under any of the other Loan Documents, which default shall continue
for a period of five (5) days following written notice thereof to Borrowers from
Bank;
SECTION 7.2 OTHER INDEBTEDNESS. Any other Indebtedness of Borrowers is not
paid at maturity or becomes due and payable prior to its expressed maturity by
reason of any default by Borrowers in the performance or observance of any
Obligation or condition thereunder which default shall continue for a period of
thirty (30) days following written notice thereof to Borrowers from Bank;
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SECTION 7.3 OTHER DEFAULT. Any default of any other obligation of Borrowers
under the terms of any note or notes, mortgage, indenture, loan agreement or
security document of Borrowers, including, without limitation, any of the Loan
Documents, which default shall continue for a period of thirty (30) days
following written notice thereof to Borrowers from Bank, it being expressly
understood and agreed that a default under any note, mortgage, indenture, loan
agreement or security document of Borrowers, including, without limitation, any
of the Loan Documents, shall constitute a default under all other notes,
mortgages, indentures, loan agreements and security documents held by Bank,
including, without limitation, the Loan Documents;
SECTION 7.4 INSOLVENCY. Borrowers become insolvent or admits in writing its
inability to pay its debts as they mature or applies for, consents to, or
acquiesces in the appointment of a trustee or receiver for Borrowers, or any
property of Borrowers or, in the absence of such application, consent or
acquiescence, a trustee or receiver is appointed for Borrowers, or for a
substantial part of any property of any Borrower and is not discharged within
thirty (30) days; or any bankruptcy, reorganization, debt arrangement, or other
proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding is instituted by or against a Borrower and if instituted
against a Borrower, it is consented to or acquiesced in by Borrowers, or remains
for thirty (30) days undismissed; or any warrant of attachment is issued against
any substantial portion of the property of Borrowers which is not released
within thirty (30) days of service;
SECTION 7.5 ERISA. The PBGC applies to a United States District Court for
the appointment of a trustee to administer any Plan adopted, established or
maintained by Borrowers, or for a decree adjudicating that any such Plan must be
terminated; a trustee is appointed pursuant to ERISA to administer any such
Plan; any action is taken to terminate any such Plan or any such Plan is
permitted or caused to be terminated if, at the time such action is taken or
such termination of such Plan occurs, the Plan's "vested liabilities," as
defined in Section 3 (25) of ERISA, exceed the then value of its assets at the
time of such termination;
SECTION 7.6 AGREEMENTS. Default in the performance of any of Borrowers'
covenants and/or agreements set forth in this First Restated Agreement and/or
any of the other Loan Documents (and not constituting an Event of Default under
any of the preceding subsections of this Section 7, which default shall continue
for a period of thirty (30) days after written notice thereof to Borrowers from
Bank;
SECTION 7.7 REPRESENTATION OR WARRANTY. Any representation or warranty made
by Borrowers is untrue in any material respect, or any schedule, statement,
report, notice or writing furnished by Borrowers to Bank is untrue in any
material respect on the date as of which the facts set forth are stated or
certified which default shall continue for a period of thirty (30) days after
written notice thereof to Borrowers from Bank.
Upon the occurrence of any Event of Default, Bank, in addition to all of
the remedies conferred upon Bank under law, in equity or under any of the Loan
Documents, may declare the First Restated Agreement and the Loans to be
terminated and the Note to be due and payable, whereupon the Revolving Credit
Facility and the Non-Revolving LC Facility shall immediately terminate, and the
Notes shall become immediately due and payable, without notice of any kind,
except that if an event described in Section 7.4 occurs, the Revolving Credit
Facility shall immediately terminate, and the Notes shall become immediately
due and payable without declaration or notice of any kind.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 BANK'S RELIANCE, ETC. Neither Bank nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with any of the Loan Documents
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, Bank: (i) may treat the payee of
any Note as the holder thereof until Bank receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
Bank; (ii) may consult with legal counsel (including counsel for Borrowers),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Bank and shall not be responsible to any
Bank for any statements, warranties or representations made in or in connection
with any of the Loan Documents; (iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of any of the Loan Documents on the part of Borrowers or to inspect
the property (including the books and records) of Borrowers; (v) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any of the Loan Documents
or any other instruments or document furnished pursuant hereto; and (vi) shall
incur no liability under or in respect of any of the Loan Documents by acting
upon any notice, consent, certificate or other instrument or writing (which may
be by telegram, cable or telex) believed by it to be genuine and signed by the
proper party or parties.
SECTION 8.2 FINANCIAL TERMS. Unless otherwise defined or the context
otherwise requires, all financial and accounting terms shall be defined under
GAAP.
SECTION 8.3 DELAY. No delay on the part of Bank in the exercise of any
power or right shall operate as a waiver thereof, nor shall any single or
partial exercise of any power or right preclude other or further exercise
thereof, or the exercise of any other power or right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.4 NOTICES. All notices, statements, requests and demands given to
or made under any party hereto in accordance with the provisions of this First
Restated Agreement shall be deemed to have been given or made when deposited in
the mail, postage prepaid, registered or certified mail return receipt requested
addressed:
If to Bank:
Hibernia National Bank
313 Carondelet Street, Suite 1300
New Orleans, LA 70130
Attention: Byron Kives or Bruce Ross
with a copy to
Chaffe, McCall, Phillips, Toler & Sarpy, L.L.P.
1100 Poydras Street, Suite 2300
New Orleans, LA 70163-2300
Attention: Kathleen S. Plemer, Esq.
If to Borrowers:
Universal Fabricators, L.L.C.
P.O. Box 11308
New Iberia, LA 70562
Attention: Pete Roman, Chief Financial Officer
UNIFAB International, Inc.
5007 Port Road
New Iberia, LA 70562
Attention: Dailey J. Berard
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PIM, L.L.C.
5007 Port Road
New Iberia, LA 70562
Attention: Dailey J. Berard
with a copy to:
Jones, Walker, Waechter, Poitevent, Carrere & Denegre
201 St. Charles Ave.
New Orleans, Louisiana 70170-5100
Attention: Carl C. Hanemann, Esq.
SECTION 8.5 EXPENSES. Whether or not Advances are made, Borrowers agrees to
reimburse Bank upon demand, for all expenses (including reasonable attorneys'
fees and legal expenses incurred by Bank) incurred by Bank in the preparation,
negotiation and /or execution of the Loan Documents, and in enforcing the
obligations of Borrowers hereunder or under any of the other Loan Documents, and
to pay, and save Bank harmless from all liability for, any stamp or other taxes
which may be payable with respect to the execution or delivery of this First
Restated Agreement, the execution, delivery or issuance of the Notes, and/or the
execution, delivery and recordation of the other Loan Documents, which
obligations of Borrowers shall survive any termination of this First Restated
Agreement.
SECTION 8.6 SEVERABILITY. Any provision of this First Restated Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.
SECTION 8.7 COUNTERPARTS. This First Restated Agreement may be executed in
an many counterparts as may be deemed necessary or convenient, and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed an original but all such counterparts shall constitute
but one and the same instrument.
SECTION 8.8 LAW. The Loan Documents, and each of them, shall be contracts
made under and governed by the laws of the State of Louisiana.
SECTION 8.9 SUCCESSORS. This First Restated Agreement shall be binding upon
Borrowers, Bank, and their respective successors and assigns, and shall inure to
the benefit of Borrowers, Bank and their successors and assigns. Borrowers shall
not assign its rights, obligations or duties hereunder or under any of the Loan
Documents without the prior written consent of Bank. Bank shall give Borrowers
written notice of any assignment of its interests hereunder to any other Person,
upon which assignment Borrowers shall perform all of its respective obligations
under the Loan Documents in favor of Bank' assignee(s) as though such
assignee(s) were originally a party or parties to this First Restated Agreement.
SECTION 8.10 AMENDMENTS. No amendment or waiver of any provision of this
First Restated Agreement or consent to any departure therefrom by Borrowers or
Bank shall be effective unless the same shall be in writing and signed by
Borrowers or Bank, and, in the case of a waiver or consent, such waiver or
consent shall be effective only in the specific instance and or the specific
purpose for which given.
SECTION 8.11 EXECUTION IN COUNTERPARTS. This Credit First Restated
Agreement may be executed in any number of counterparts with the same effect as
if the signatures thereto and hereto were upon the same instrument.
SECTION 8.12 ENTIRE AGREEMENT. This First Restated Agreement constitutes
the entire agreement between the parties and supersedes any and all prior
agreements with respect to the transactions contemplated hereby.
SECTION 8.13 CONFLICTS This First Restated Agreement is in addition to and
supplements the provisions of the other Loan Documents. To the extent that the
provisions of this First Restated Agreement are in conflict with, and not merely
in addition to, the provisions of the other Loan Documents, the provisions of
this First Restated Agreements shall govern.
Except as hereinabove stated, the terms and conditions of the First
Restated Agreement shall remain unchanged and in full force and effect and be
binding upon the Borrowers and Bank as though set forth herein at
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length, and nothing herein contained shall be construed as a novation of the
debt.
IN WITNESS WHEREOF, the parties hereto and intervenors herein have caused
this First Restated Agreement to be executed by their respective officers
thereunto duly authorized effective as of the date first written above.
BORROWERS:
UNIFAB INTERNATIONAL, INC.
BY: PETER J. ROMAN
ITS: CHIEF FINANCIAL OFFICER
DATE: APRIL 1, 1998
UNIVERSAL FABRICATORS, L.L.C
BY: UNIFAB INTERNATIONAL, INC.,
BY: /s/ PETER J. ROMAN
------------------------------------
PETER J. ROMAN
ITS: CHIEF FINANCIAL OFFICER
DATE: APRIL 1, 1998
PIM, L.L.C.
BY: UNIFAB INTERNATIONAL, INC.,
BY: /s/ PETER J. ROMAN
------------------------------------
PETER J. ROMAN
ITS: CHIEF FINANCIAL OFFICER
DATE:APRIL 1, 1998
BANK:
HIBERNIA NATIONAL BANK
BY: BYRON KIVES
ITS:
------------------------------------
DATE: APRIL 1, 1998
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