EXHIBIT 4.3
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AMENDED AND RESTATED LOAN AGREEMENT
DATED AS OF
JUNE 13, 1997
BY AND BETWEEN
OMNI GEOPHYSICAL, L.L.C.
AND
HIBERNIA NATIONAL BANK
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AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT dated as of June 13, 1997, by and
between OMNI GEOPHYSICAL, L.L.C., a Louisiana limited liability company
("Borrower"), and HIBERNIA NATIONAL BANK, a national banking association
("Bank").
W I T N E S S E T H:
WHEREAS, Bank has previously extended certain credit facilities to
Borrower, pursuant to that certain Loan Agreement dated as of July 19, 1996, by
and between Borrower and Bank, as heretofore amended by that certain First
Amendment to Loan Agreement dated as of December 4, 1996, by and between
Borrower and Bank, and by that certain Second Amendment to Loan Agreement dated
as of April 4, 1997 by and between Borrower and Bank (as so amended, the
"Original Agreement"); and,
WHEREAS, Borrower has applied to Bank for an amendment to the terms of its
existing credit facility, and for additional credit facilities; and,
WHEREAS, Bank has agreed to provide such amended and additional credit
facilities to Borrower pursuant to the terms of this Agreement, which shall
amend and restate the Original Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual covenants hereunder set
forth, Borrower and Bank do hereby amend and restate the Original Agreement in
its entirety with this Agreement, and do hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"ACKNOWLEDGMENT OF CONTRACTOR" shall mean the Acknowledgment of Assignment
executed by the Contractor.
"ACKNOWLEDGMENT OF ARCHITECT" shall mean the Acknowledgment of Assignment
executed by the Architect.
"AGREEMENT" shall mean this Amended and Restated Loan Agreement, as the
same may from time to time be amended, modified or supplemented and in
effect.
"APPLICABLE MARGIN" shall mean the following additional rate per annum:
Type of Loan LIBOR Applicable Margin Base Rate Applicable Margin
---------------- ----------------------- ---------------------------
Revolving Loans 3.5% .5%
Construction Loan 3.75% .75%
Term Loan 3.75% .75%
"ARCHITECT" shall mean The ▇▇▇▇▇-▇▇▇▇▇▇▇ Group, an architectural
corporation.
"ARCHITECT'S CONTRACT" shall mean that certain Standard Form of Agreement
between the Borrower and Architect, dated March 24, 1997.
"ASSIGNMENT OF ARCHITECT'S CONTRACT" shall mean that certain Assignment of
Architect's Contract by the Borrower in favor of the Bank.
"ASSIGNMENT OF CONSTRUCTION CONTRACT" shall mean that certain Assignment of
Construction Contracts, Plans and Specifications by the Borrower in favor
of the Bank.
"BANK" shall mean Hibernia National Bank, a national banking association.
"BANK'S INSPECTOR" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇ or another inspector designated
by Bank (including an officer or employee of Bank) to inspect and monitor
the progress of construction of the Improvements on behalf of the Bank.
"BASE RATE" shall mean the rate of interest established from time to time
by the Board of Directors or management of Citibank, N.A., New York, New
York, as its "prime" or "base" lending rate, whether or not that rate is
published, and which is not necessarily the lowest rate charged by
Citibank, N.A., or by Bank, such rate to be adjusted automatically on and
as of the effective date of any change in such Base Rate.
"BASE RATE LOAN" shall mean the portion of any of the Loans bearing
interest calculated on the basis of the Base Rate.
"BASE RATE TRANCHE" shall mean, with respect to any Loan, all or any
portion of such Loan that constitutes a Base Rate Loan
"BORROWER" shall mean Omni Geophysical, L.L.C., a Louisiana limited
liability company.
"BORROWING BASE AMOUNT" shall mean at any time, based upon the most recent
timely submitted borrowing base certificate submitted by or on behalf of
Borrower (but not less than on a weekly basis), as the same may be adjusted
by Bank on a daily basis upon review of Borrower's sales journals and cash
receipts and as a result of field examinations of such Borrower's
Collateral (using reasonable lending discretion), the lesser of (i)
$8,000,000.00, or (ii) the amount of Qualified Receivables at such time.
"BUSINESS DAY" means a day other than a Saturday, Sunday or legal holiday
for commercial banks under the laws of the State of Louisiana or a day on
which national banks are authorized to be closed in New Orleans, Louisiana,
and, if such day relates to a Conversion to, or Continuation of, a LIBOR
Rate Loan, also a day on which dealings in Dollar deposits are carried out
in the interbank market selected by Bank for purposes of setting the LIBOR
Rate.
"COLLATERAL" shall mean any interest in any kind of property or assets
pledged, mortgaged or otherwise subject to an Encumbrance in favor of Bank
pursuant to the Collateral Documents.
"COLLATERAL DOCUMENTS" shall collectively refer to the Security Agreement,
the Mortgage, the Security Agreement (Fixtures), the Assignment of
Construction Contract, the Assignment of Architect's Contract, the
Acknowledgment of Contractor, the Acknowledgment of Architect and any and
all other documents in which an Encumbrance is created on any property of
the Borrower or of any third person to secure payment of the Indebtedness
of Borrower or any part thereof.
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"COMMITMENTS" shall mean, collectively, the Revolving Loan Commitment, the
Construction Loan Commitment and the Term Loan Commitment
"CONSTRUCTION CONTRACT" shall mean that certain Standard Form of Agreement
between the Borrower and Contractor, dated June 16, 1997, as amended and
modified from time to time, and providing for the construction of the
Improvements contemplated by the Plans.
"CONSTRUCTION LOAN" shall have the meaning assigned to that term in Section
3.1 hereof.
"CONSTRUCTION LOAN COMMITMENT" shall have the meaning assigned to that term
in Section 3.1 hereof.
"CONSTRUCTION NOTE" shall have the meaning assigned to that term in Section
3.1 hereof.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall mean the continuation
pursuant to Section 5.3 hereof of a LIBOR Rate-based interest rate accruing
on the Notes from one Interest Period to the next Interest Period.
"CONTRACT RATE" shall mean, at any time, the rate of interest then borne by
the Notes after giving effect to any fluctuations in the Base Rate or LIBOR
Rate, but without giving any effect to the application of any default rate
of interest imposed by Bank under the terms of the Notes. The Contract
Rate shall be as follows:
a) With respect to Base Rate Loans, the Applicable Margin plus the Base
Rate from time to time in effect.
b) With respect to LIBOR Rate Loans, the Applicable Margin plus the LIBOR
Rate applicable during such Interest Period to such LIBOR Rate Loan or
LIBOR Rate Tranche.
"CONTRACTOR" shall mean The ▇▇▇▇▇▇▇ Company, Inc.
"CONVERT", "CONVERSION" and "CONVERTED" shall mean a conversion pursuant to
Section 5.3 hereof of the interest rate then accruing on any Note or any
Tranche thereof to a LIBOR Rate-based interest rate or to a Base Rate-based
interest rate.
"CREDITS" shall have the meaning assigned to that term in Section 2.1
hereof.
"CREDIT APPLICATION" shall have the meaning assigned to that term in
Section 2.3.1 hereof.
"CREDIT COMMISSION" shall have the meaning assigned to that term in Section
2.3.3 hereof.
"CREDIT OBLIGATION" shall have the meaning assigned to that term in Section
2.3.4 hereof.
"DEBT" shall mean any and all amounts and/or liabilities owing from time to
time by Borrower to any Person, including the Bank, direct or indirect,
liquidated or contingent, now existing or hereafter arising, including
without limitation (i) indebtedness for borrowed money; (ii) the amounts of
all standby and commercial letters of credit and bankers acceptances,
matured or unmatured, issued on behalf of Borrower; (iii) guaranties of the
obligations of any other Person, whether direct or indirect, whether by
agreement to purchase the indebtedness of any other Person or by agreement
for the furnishing of funds to any other Person through the purchase or
lease of goods, supplies or services (or by way of stock purchase, capital
contribution, advance or loan) for the purpose of paying or discharging the
indebtedness of any other Person, or otherwise; (iv) the present value of
all obligations for the payment of rent or hire of property of any kind
(real or personal) under leases or lease agreements required to be
capitalized under GAAP, and (v) trade payables and operating leases
incurred in the ordinary course of business or otherwise.
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"DEBT-TO-WORTH RATIO" shall mean, at any date, the ratio obtained by
dividing (1) the total liabilities of Borrower less the subordinated Debt
of Borrower as of such date, by (2) the Tangible Net Worth of Borrower as
of such date.
"DEFAULT" shall mean an event which with the giving of notice or the lapse
of time (or both) would constitute an Event of Default hereunder.
"DEFICIENCY" shall have the meaning assigned to that term in Section 3.3(b)
hereof.
"DEVELOPMENT EXPENSE SCHEDULE" shall mean the detailed line item cost
breakdown of land costs, construction costs (hard costs) and all other
related indirect development costs (soft costs) submitted to and approved
by Bank.
"DOLLARS" and "$" shall mean lawful money of the United States of America.
"DOMINION ACCOUNT" shall have the meaning ascribed to such term in Section
10.15 hereof.
"ENCUMBRANCES" shall mean individually, collectively and interchangeably
any and all presently existing and/or future mortgages, liens, privileges,
servitudes, rights-of-way and other contractual and/or statutory security
interests and rights of every nature and kind that, now and/or in the
future may affect the property of Borrowers or Guarantors or any part or
parts thereof.
"ENVIRONMENTAL LAWS" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section
9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act
of 1986, Pub. L. No. 99-499 ("▇▇▇▇"), the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., the
Louisiana Environmental Affairs Act, La. R.S. 30:2001 et seq., or other
applicable Governmental Requirements or regulations adopted pursuant to any
of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EVENT OF DEFAULT" shall mean individually, collectively and
interchangeably any of the Events of Default set forth below in Section
12.1 hereof.
"FUNDING LOSSES" shall mean, with respect to (a) any Borrower's payment or
prepayment of principal of a LIBOR Rate Loan or LIBOR Rate Tranche on a day
other than the last day of the applicable Interest Period; (b) any
Borrower's failure to borrow a LIBOR Rate Loan or a LIBOR Rate Tranche on
the date specified by such Borrower; (c) any Borrower's failure to make any
prepayment of any LIBOR Rate Loans or LIBOR Rate Tranches on the date
specified by Borrower, or (d) any cessation of a LIBOR Rate to apply to the
Loans or any Tranche thereof pursuant to Section 6.5 hereof`, in each case
whether voluntary or involuntary, any loss, expense, penalty, premium or
liability incurred by Bank (including but not limited to any loss or
expense incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by Bank to fund or maintain a Loan).
"GAAP" shall mean, at any time, accounting principles generally accepted in
the United States as then in effect.
"GENERAL INTANGIBLES" shall mean, all general intangibles as defined in
(S)9-106 of the UCC, of Borrower, whether now owned or hereafter acquired,
including without limitation (i) all contractual rights and obligations or
indebtedness owing to Borrower (other than Receivables) from whatever
source arising; (ii) all things and actions, rights represented by
judgments and claims arising out of tort and other claims related to the
Collateral, including the right to assert and otherwise be the proper party
of interest to commence and prosecute actions; (iii) all goodwill, patents,
patent licenses, trademarks, trademark
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licenses, trade names, service marks, trade secrets, rights and
intellectual property, copyrights, permits and licenses; (iv) all rights or
claims in respect of refunds for taxes paid; and (v) all deposit accounts
of Borrower, including the Dominion Account.
"GOVERNMENTAL REQUIREMENT" shall mean any applicable state, federal or
local law, statute, ordinance, code, rule, regulation, order or decree.
"GUARANTOR" shall mean any subsidiary of Borrower existing now or acquired
by Borrower in the future.
"IMPROVEMENTS" shall mean the 13,000 square foot administration building,
the approximately 40,000 square foot fabrication facility, and other
structures (including off-site and on-site constructions) which are to be
constructed on the Property with advances on the Construction Loan.
"INDEBTEDNESS" shall mean, at any time, the indebtedness of Borrower
evidenced by the Notes executed by Borrower pursuant to this Agreement, in
principal, interest, costs, expenses and reasonable attorneys' fees and all
other fees and charges, together with all Credit Obligations, Credit
Commissions, commitment fees and other indebtedness and costs and expenses
for which each Borrower is responsible under this Agreement or under any of
the Related Documents. In addition, the word "Indebtedness" also includes,
any and all other loans, extensions of credit, obligations, debts and
liabilities of Borrower, plus interest thereon, that may now and in the
future be owed to or incurred in favor of Bank, as well as all claims by
Bank against Borrower, whether existing now or later; whether they are
voluntary or involuntary, due or to become due, direct or indirect or by
way of assignment, determined or undetermined, absolute or contingent,
liquidated or unliquidated; whether Borrower may be liable individually or
jointly with others, of every nature and kind whatsoever, in principal,
interest, costs, expenses and reasonable attorneys' fees and all other fees
and charges; whether Borrower may be obligated as principal obligor,
guarantor, surety, accommodation party or otherwise.
"INTEREST PAYMENT DATE" shall have the meaning ascribed to such term in
Section 5.2 hereof.
"INTEREST PERIOD" shall mean with respect to a LIBOR Rate Loan or a LIBOR
Rate Tranche, each period commencing on (1) the date any such LIBOR Rate
Loan or LIBOR Rate Tranche of any new Loan is made, (2) the date the
interest rate on any Loan or Tranche thereof is Converted by a Borrower
from a Base Rate Loan to a LIBOR Rate Loan, or (3) the day following the
last day of the immediately preceding Interest Period for which a LIBOR
Rate-based rate for the LIBOR Rate Loan or LIBOR Rate Tranche is applicable
and is continued, and, in each case, ending on the numerically
corresponding day in the first, second, or third calendar month thereafter,
as a Borrower may select as provided in Article V hereof, except that each
Interest Period which commences on the last Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in
the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month. Notwithstanding the
foregoing: (i) if any Interest Period would otherwise commence before and
end after the final maturity date of the Loan to which it relates, such
Interest Period shall end on the final maturity date of such Loan; (ii)
each Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day, unless such
next succeeding Business Day falls in the next succeeding calendar month,
then on the next preceding Business Day.
"LIBOR RATE" shall mean, with respect to the applicable Interest Period in
effect, an interest rate per annum equal to the quotient (converted to a
percentage) of (i) the rate per annum of interest equal to the annual rate
of interest (rounded upward to the nearest whole multiple of 1/100 of 1%,
if such average is not such a multiple) determined by Bank, at or before
11:00 a.m. New Orleans, Louisiana time on the first day of such Interest
Period, to be the annual rate of interest at which deposits of Dollars are
offered by prime banks in whatever London interbank market may be selected
by Bank in its sole discretion, acting in good faith, at the time of
determination and in accordance with the then existing practice in such
market for delivery on the first day of such Interest Period in immediately
available funds and having a maturity equal to such Interest Period in an
amount equal (or as nearly equal as may be) to the applicable LIBOR Rate
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Loan, divided by (ii) 1.00 minus the LIBOR Reserve Requirement (as defined
below), expressed as a decimal, for such Interest Period. "LIBOR Reserve
Requirement" shall mean for any day during a Interest Period, that
percentage which is specified by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, but not limited to, any marginal reserve
requirement) for the Bank with respect to liabilities consisting of or
including "Eurocurrency liabilities" (as defined in Regulation D of the
Board of Governors of the Federal Reserve System) with a maturity equal to
such Interest Period. In determining the percentage, the Bank may use any
reasonable averaging and attribution methods. Each determination by Bank
of a LIBOR Rate or of the LIBOR Reserve Requirement used in determining
same shall be conclusive and binding, absent manifest error.
"LIBOR RATE LOAN" shall mean any of the Loans (or any portion thereof)
bearing interest calculated on the basis of the LIBOR Rate.
"LIBOR RATE TRANCHE" shall mean the amount of any Loan of Borrower that
constitutes a LIBOR Rate Loan for a specific Interest Period.
"LOANS" shall mean, collectively, the Revolving Loans, the Construction
Loan and the Term Loan.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Collateral
Documents and any other Related Documents.
"MATERIAL ADVERSE CHANGE" shall mean, with respect to Borrower, an event
which causes a material adverse effect on the business, assets, operations
or condition (financial or otherwise) of such Person, or which otherwise
changes in a materially adverse way any other facts, circumstances or
conditions which Bank has relied upon or utilized in making its Commitments
hereunder.
"MORTGAGE" shall mean that certain Multiple Indebtedness Mortgage by the
Borrower in favor of the Bank pursuant to which the Bank is granted a
mortgage lien on the Property as security for the Indebtedness.
"NOTES" shall mean, collectively, the Revolving Note, the Construction Note
and the Term Note, as each of them may be renewed or extended, together
with all other promissory note or notes given in renewal, substitution or
as a refinancing of any part of the indebtedness evidenced thereby.
"PERMITTED ENCUMBRANCES" shall have the meaning ascribed to such term in
Section 11.4 hereof.
"PERSON" shall mean an individual or a corporation, partnership, trust,
joint venture, incorporated or unincorporated association, joint stock
company, government, or an agency or political subdivision thereof, or
other entity of any kind.
"PLANS" shall mean the final architectural and engineering drawings and
specifications, including any revisions, amendments and addenda required to
complete the construction of the Improvements, including off-site and on-
site work.
"PROJECT" shall mean the Property and the Improvements.
"PROJECT COST" shall mean the cost of acquiring the Property and
constructing the Improvements, as modified, and as approved by Bank.
"PROPERTY" shall mean the immovable property (land and any existing
improvements) covered by the Collateral Documents and on which the
Improvements are or shall be located.
"QUALIFIED RECEIVABLES" shall mean eighty percent (80%) of the Receivables
of Borrower carried on its books of account, which, on the date as of which
the determination is made, (a) are subject to a first
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priority perfected Encumbrance in favor of Bank, (b) arose in the ordinary
course of Borrower's business, (c) arose from the sale of goods or
performance of services by Borrower, (d) are evidenced by an "invoice"
(i.e., an invoice, shipping order or similar writing), (e) are not subject
to setoff, counterclaim, defense, or a dispute of any kind or nature, (f)
are not more than 90 days old, (g) are payable by Persons other than any
Person who is an affiliate (as defined in accordance with GAAP) of Borrower
or an officer or director of Borrower or an officer or director of an
affiliate of Borrower (h) are not payable by the United States of America
or any agency or department thereof (unless such Receivable has been
assigned to Bank pursuant to a properly perfected assignment under the
Federal Assignment of Claims Act, 31 U.S.C. (S)3727), (i) do not by their
own terms prohibit the collateral assignment thereof or require the consent
of the obligor thereon to any collateral assignment thereof, (j) do not
arise out of a transaction with an account debtor outside the United States
of America (unless covered by a letter of credit acceptable to Bank), (k)
are not Receivables due by a Person from whom over 50% of its entire
accounts receivable balance with Borrower is unpaid for more than 90 days
past the invoice date(s) related thereto, (l) are not credit balances, (m)
are not Receivables which the Bank believes, in its sole credit judgment
reasonably applied, that collection of such Receivables is insecure or that
such Receivables may not be paid by reason of the account debtor's
financial inability to pay or that such Receivables are otherwise
unacceptable collateral, (n) are not proceeds of a Receivable, (o) are not
Receivables due by a Person by whom over 50% of the Receivables are owed
unless (x) such Receivables are due from a Company which is not rated
Investment Grade or better by a national rating agency or (y) the Bank, in
its sole discretion consents to their inclusion in Qualified Receivables,
and (p) commencing 90 days from the date hereof, are owed by a Person who
has either signed an acceptance of the work giving rise to the Receivable
or signed an acceptance of Borrower's proposal for work giving rise to the
Receivable. For purposes of this Agreement, a Receivable is 90 days old on
the 90th day after the date of the invoice evidencing such Receivable
(regardless of the due date of such invoice).
"RECEIVABLES" shall mean, with respect to such Person, all accounts (as
such term is defined in (S)9-106 of the UCC) of such Person, including all
indebtedness presently existing or hereafter owing to such Person in
connection with such Person's business, profession, occupation or
undertaking, including, but not limited to, the sale of goods or the
performance of services, together with all proceeds thereof; excluding,
however, any indebtedness due to or arising out of claims in tort and
indebtedness evidenced by a promissory note or a negotiable instrument.
"RELATED DOCUMENTS" shall mean and include individually, collectively,
interchangeably and without limitation all promissory notes, credit
agreements, loan agreements, guaranties, security agreements, mortgages,
collateral mortgages, deeds of trust, and all other instruments and
documents, whether now or hereafter existing, executed in connection with
the Indebtedness.
"REQUEST FOR ADVANCE" shall mean the Borrower's written request for an
advance.
"REVOLVING LOAN COMMITMENT" means the agreement by Bank to Borrower (other
than to Distribution) to make Revolving Loans and to issue Credits in
accordance with the provisions of Article II hereof.
"REVOLVING LOANS" shall mean loans made by Bank under the Revolving Notes
to Borrower in accordance with and subject to the terms of the Revolving
Loan Commitment.
"REVOLVING NOTE" shall mean that certain promissory note more fully
described in Section 2.2.1 hereof, together with any and all extensions,
renewals, modifications and substitutions therefor.
"SECURITY AGREEMENT" shall mean (i) that certain Commercial Security
Agreement dated July 19, 1996, by Borrower in favor of Bank, as amended by
First Amendment to Security Agreement, affecting all of the properties
described therein, (ii) all UCC-1 financing statements, and related
documents required by Bank in connection with the foregoing Commercial
Security Agreement, and (iii) all additional security agreements hereafter
granted by any Person as security for the Indebtedness, together with any
and all amendments or modifications to any of the foregoing.
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"SECURITY AGREEMENT (FIXTURES)" shall mean (i) that certain Security
Agreement (Fixtures) by Borrower dated as of June 13, 1997 in favor of Bank
and (ii) the related UCC-1 financing statement by Borrower.
"SOLVENT" shall mean, when used with respect to any Person on a particular
day, that on such date (i) the fair value of the property of such Person is
greater than the total amount of liabilities, including without limitation,
contingent liabilities, of such person, (ii) the present fair salable value
of the assets of such person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and
other commitments as they mature in the ordinary course of business, (iv)
such Person does not intend to, and does not believe that it will, incur
debts and liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (v) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry
in which such person is engaged. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all of the facts and
circumstances existing at such time, represents the amount that can be
reasonably expected to become an actual or matured liability.
"SUBSIDIARIES" shall mean at any date with respect to any Person all the
corporations of which such Person at such date, directly or indirectly,
owns 50% or more of the outstanding capital stock (excluding directors'
qualifying shares), and "SUBSIDIARY" means any one of the Subsidiaries.
"TANGIBLE NET WORTH" shall mean, at any time, Borrower's total assets
excluding intangible assets (i.e., patents, copyrights, trademarks, trade
names, franchises, goodwill, organizational expenses, and similar
intangible expenses, but including leaseholds and leasehold improvements),
less the total liabilities of Borrower.
"TERMINATION DATE" shall mean, with respect to Bank's Revolving Loan
Commitment the earlier to occur of (i) August 1, 1998, or (ii) the date of
termination of the Commitments pursuant to Article XII hereof.
"TERM LOAN" shall have the meaning assigned to that term in Section 4.1
hereof.
"TERM LOAN COMMITMENT" shall have the meaning assigned to that term in
Section 4.1 hereof.
"TERM NOTE" shall have the meaning assigned to that term in Section 4.2
hereof.
"TRANCHE" shall mean a portion of any of the Revolving Loans outstanding to
Borrower that bears interest at either a particular LIBOR Rate-based rate
or at the Base Rate.
"UCC" shall mean the Uniform Commercial Code, Commercial Laws-Secured
Transactions (La. R.S. 10-9-101 et seq.) in the State of Louisiana, as
amended from time to time, provided that if by reason of mandatory
provisions of law, the perfection or effect of perfection or non-perfection
of the Bank's Encumbrances against the Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State
of Louisiana "UCC" means the Uniform Commercial Code as in effect in such
other jurisdiction.
SECTION 1.2. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data submitted pursuant to this Agreement shall be prepared in accordance with
GAAP.
ARTICLE II
REVOLVING LOANS AND
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LETTERS OF CREDIT
SECTION 2.1. THE REVOLVING LOAN COMMITMENT. Subject to the terms and
conditions of this Agreement, Bank agrees to extend credit to Borrower during
the period from the date hereof until the Termination Date (a) by making
Revolving Loans to Borrower from time to time, and (b) by Bank issuing
irrevocable standby and commercial letters of credit (said irrevocable standby
and commercial letters of credit being referred to herein as the "Credits") for
the account of Borrower from time to time; provided, however, that at no time
shall the sum of (1) the aggregate principal amount of Revolving Loans to
Borrower at such time outstanding, plus (2) the aggregate unfunded amount of
Credits issued for the account of Borrower at such time outstanding, exceed the
Borrowing Base Amount then in effect. In the event, at any time, and from time
to time, the sum of all outstanding Revolving Loans and Credits issued and
outstanding to Borrower exceeds the Borrowing Base Amount then in effect,
Borrower shall prepay the Revolving Loans by such an amount to cause the sum of
the Revolving Loans and Credits outstanding to Borrower to equal the Borrowing
Base Amount (or, at the option of Bank, Borrower may post cash collateral to
secure such deficiency in the Borrowing Base Amount).
SECTION 2.2. REVOLVING LOANS.
SECTION 2.2.1. REVOLVING LOANS. Subject to the terms and conditions of
this Agreement, Bank agrees to make Revolving Loans to Borrower from time to
time during the period from the date hereof to and including the Termination
Date; provided, however, that (1) no such Revolving Loan shall exceed an amount
which, when added to (i) the aggregate principal amount of all Revolving Loans
to Borrower at such time outstanding, plus (ii) the aggregate undisbursed amount
of Credits issued for the account of Borrower at such time outstanding, exceeds
the Borrowing Base Amount then in effect. Within the limits set forth herein,
Borrower may borrow from Bank hereunder, repay any and all such Revolving Loans
as hereinafter provided and reborrow hereunder. Borrower's obligation to repay
the Revolving Loans made by Bank shall be evidenced by a master promissory note
of Borrower (said promissory note being herein referred to as the "Revolving
Note"), payable to the order of Bank in the principal sum of $8,000,000.00 or
such other or lesser amount as may be reflected from time to time on the on the
books and records of Bank as evidencing the aggregate unpaid principal balance
of loan advances made to Borrower, with a final maturity of August 1, 1998, and
bearing interest at the rate or rates from time to time in effect pursuant to
the terms of Article V hereof (it being understood and agreed that the Revolving
Note executed and delivered to Bank by Borrower has been given in renewal and
extension, but not in extinguishment of, the indebtedness of Borrower under the
promissory note of Borrower dated July 19, 1996, issued pursuant to the Original
Agreement, as modified by the Allonge to Promissory Note dated as of December 4,
1996 by Borrower and accepted by Bank). Interest on the Revolving Note shall be
payable in accordance with the terms of Section 5.2 hereof.
SECTION 2.2.2. MANNER AND NOTICE OF BORROWING UNDER THE REVOLVING LOAN
COMMITMENT. Requests for advances under the Revolving Loan Commitment may be
made by Borrower in person, in writing or through telephone calls to Bank and
such requests shall be fully authorized by Borrower if made by any one of the
persons designated by Borrower in writing to Bank. Bank shall have the right,
but not the obligation, to verify any telephone requests by calling the person
who made the request at the telephone number designated by Borrower in writing
to Bank. Requests for advances must be received by not later than 11:00 a.m.
(Central Time) on the date of the proposed advance. Not later than 2:00 p.m.
(Central Time) on the date of such request, assuming all conditions of this
Agreement for such advance has been satisfied, Bank will make such advance. The
amount thereof shall be credited by Bank to the checking account maintained in
the name of Borrower with Bank and the credit advice resulting therefrom shall
be mailed to Borrower. Bank's copy of such credit advice indicating such
deposit to the account of Borrower shall be deemed conclusive evidence of
Borrower's indebtedness to Bank in connection with such borrowing. The
aggregate outstanding amount of principal and interest due by Borrower at any
given time under the Revolving Loan Commitment shall be and constitute the
indebtedness of Borrower to Bank under the Revolving Note made by Borrower.
When each advance is made by Bank to Borrower hereunder, Borrower shall be
deemed to have renewed and reissued its Revolving Note for the amount of the
advance plus all amounts due by Borrower to Bank under the Revolving Loan
Commitment immediately prior to such advance.
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SECTION 2.2.3. BORROWINGS UNDER THE REVOLVING LOAN COMMITMENT. Within
the limits of the Revolving Loan Commitment to Borrower hereunder and subject to
the terms and conditions of this Agreement, Bank shall only be obligated to lend
Borrower an amount which will not cause its Borrowing Base Amount to be
exceeded. During the period of the Revolving Loan Commitment, Borrower may use
the Revolving Loan Commitment by borrowing, prepaying and reborrowing, all in
accordance with the terms and conditions of this Agreement.
SECTION 2.2.4. PAYMENT OF THE REVOLVING NOTE UNDER THE REVOLVING LOAN
COMMITMENT. Interest on the unpaid principal balance of the Revolving Note
shall be payable in accordance with the terms of Section 5.2 hereof. Principal
shall be payable on the Termination Date; provided, however, in the event at any
time the aggregate outstanding principal amounts of the Revolving Loans to
Borrower, when added to the aggregate unfunded amounts of Credits at such time
outstanding to Borrower, causes its Borrowing Base Amount to be exceeded, the
Borrower shall, within three (3) Business Days from the date of such excess,
prepay its Revolving Note in an amount necessary to cause the aggregate
principal amount of its unpaid Revolving Loans plus the aggregate unfunded
amount of its Credits to equal its Borrowing Base Amount (or, at the option of
Bank, Borrower may post cash collateral to secure such deficiency in its
Borrowing Base Amount). Borrower hereby authorizes Bank to debit its funding
account maintained with Bank (account no. 542024135) to pay interest due on its
Revolving Note on each payment date, and to credit all proceeds of its
Receivables received in the Dominion Account when collected (or earlier, if Bank
in its sole discretion allows such funds to be available to Borrower prior to
the date on which any checks or other instruments given in payment of
Receivables are actually collected) towards payment of the Revolving Loans
outstanding under its Revolving Note. Bank agrees to give notice to the
Borrower of any debits to its funding account used to pay interest within three
(3) Business Days following each such debit.
SECTION 2.2.5. FEES. In addition to the Credit fees and commissions
described in Section 2.3.3 hereof, the Borrower shall also pay Bank the
following fees:
(a) Borrower shall pay Bank a commitment fee in the amount of $35,000.00
for the Revolving Loan Commitment, payable upon execution of this Agreement by
Borrower; and
(b) Borrower shall pay Bank a fee equal to 0.38% per annum on the unused
portion of the Revolving Loan Commitment, payable quarterly in arrears,
commencing June 30, 1997, and quarterly thereafter, and on the Termination Date.
The unused portion of the Revolving Loan Commitment shall be determined on a
daily basis by subtracting from $8,000,000.00 the amount of all Revolving Loans
and Credit outstanding, and by averaging said daily amounts for the period for
which the fee is to be determined.
SECTION 2.2.6. PROCEEDS OF DOMINION ACCOUNT. Borrower has executed a
lockbox agreement with Bank, pursuant to which all checks, drafts and other
instruments evidencing payment of the Borrower's Receivables shall be delivered
to Bank and deposited into the Borrower's Dominion Account more fully described
in Section 10.15 hereof. Borrower hereby authorizes Bank to apply, on a daily
basis, the proceeds of all its accounts receivable actually collected (or, at
the sole discretion of Bank, amounts which have been received but not yet
collected) by the Bank from the Dominion Account to reduce the outstanding
principal balance of the Revolving Loans due. Such payments will adjust
availability immediately for purposes of loan availability and on the next day
for bookkeeping and interest purposes.
SECTION 2.2.7. USE OF PROCEEDS. Borrower shall use the proceeds of the
Revolving Loan Commitment solely to refinance and renew the amounts outstanding
under the working capital facility provided for in the Original Agreement, and
thereafter to finance general working capital requirements of Borrower.
SECTION 2.2.8. OVERLINES AND OVERADVANCES. Notwithstanding the
provisions of Section 2.2.1 hereof, in the event that at any time the aggregate
unpaid principal amount of the Revolving Loans ever exceeds $8,000,000 (the
maximum possible amount of the Borrowing Base Amount), Borrower agrees to pay
the excess amount (an "overline") immediately upon demand by Bank. In the event
the unpaid principal amount of the Revolving Loans ever exceeds the Borrowing
Base Amount then in effect, Borrower agrees to pay the excess amount (an
"overadvance") immediately upon demand by Lender. Overlines and overadvances
shall bear interest at the rate (or
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at the highest rate, if more than one rate is then in effect) borne by the
Revolving Note. Upon request of Bank, Borrower shall execute a promissory note,
payable to the order of Bank, to represent the amount of any overline or
overadvance; however, Borrower acknowledges and agrees that the records of Bank
and this Agreement shall constitute conclusive evidence of any overline or
overadvance and the obligation of Borrower to repay any overline or overadvance,
with interest. All overlines and overadvances for which Bank has not demanded
payment earlier, and all unpaid and accrued interest on overlines and
overadvances not due and payable earlier, shall be due and payable on the
Termination Date. Borrower acknowledges and agrees that Bank is not obligated to
Borrower to fund any advance which would create an overline or overadvance.
SECTION 2.3. THE CREDITS.
SECTION 2.3.1. THE CREDITS. Upon the written application of Borrower,
using the form of letter of credit application then normally required by Bank in
connection with the issuance of such Credits (the "Credit Application"),
executed by Borrower (or by any one of the persons designated by Borrower in
writing to Bank in accordance with the terms hereof), Bank agrees, subject to
the terms and conditions of this Agreement, that it will issue its Credit
substantially in accordance with the Credit Application. Credits may either be
commercial letters of credit, in which case they shall have an expiry date on a
Business Day not later than the earlier to occur of the Termination Date, or
standby letters of credit issued to secure workers' compensation obligations of
Borrower (or for other purposes deemed acceptable by Bank in its sole
discretion), in which case they shall have an expiry date not later than the
earlier to occur of the Termination Date or one year from the date of issuance.
In no event shall a Credit be issued by Bank for the account of Borrower (i) if
the sum of the face amount thereof when added to the aggregate unfunded amount
of Credits issued for the account of Borrower then outstanding exceeds
$1,000,000.00 or (ii) if the sum of the face amount thereof when added to the
aggregate unfunded amount of Credits issued for the account of Borrower then
outstanding plus the aggregate principal amount of the Revolving Loans to
Borrower at such time outstanding exceeds the Borrowing Base Amount then in
effect.
SECTION 2.3.2. ISSUANCE OF CREDITS. Each Credit shall be issued not
later than three (3) Business Days after receipt by Bank of the Credit
Application related thereto. No later than 12:00 noon (Central Time) on the
third Business Day following receipt of the Credit Application and upon
fulfillment of the applicable conditions set forth in this Agreement, Bank shall
issue its Credit. Bank may rely fully and completely upon the authority of the
signatory of the Credit Application and the contents thereof unless such
authority is terminated by written notice delivered to Bank, and any such
termination of authority shall be effective only prospectively.
SECTION 2.3.3. CREDIT COMMISSION. Borrower agrees to pay to Bank the
standard fees charged and established by Bank from time to time for the issuance
and processing of letters of credit (the "Credit Commission") with respect to
each Credit created by Bank hereunder. Payment of such Credit Commission with
respect to each Credit created by Bank shall be paid in advance on the date of
issuance of the Credit. With respect to standby Credits issued hereunder,
Borrower unconditionally agrees to pay to the Bank, in addition to Bank's
standard fees for the issuance and processing of such Credits, a commission,
payable in advance on or before the date of issuance of each Credit, calculated
at the rate of 1.50% per annum on the face amount of each Credit, based upon the
number of days of the term of each such Credit divided by 360, which commission
shall not be less than $300.00 per standby letter of credit.
SECTION 2.3.4. CREDIT OBLIGATIONS. Borrower agrees unconditionally to
pay Bank on demand in United States currency at Bank's principal office in New
Orleans, Louisiana, the amount required to pay (a) any and all drafts drawn and
any and all demands made or purported to be made under any Credit issued for its
account, (b) any and all costs, charges, fees and/or expenses incurred or paid
by Bank in connection with any Credit issued for its account, and (c) interest
on such amounts described above under (a) and (b) as hereinafter provided (the
"Credit Obligations"). In the event of any drafts drawn and any and all demands
made under any Credit are payable in foreign currency, Borrower agrees to make
the aforementioned payment to Bank in United States currency at Bank's selling
rate for cable transfers to the place of payment of such draft on the date of
such payment. Such obligation of Borrower shall be deemed a Credit Obligation
hereunder. Borrower further agrees to comply with any and all governmental
currency exchange regulations or requirements now or hereafter applicable to
such Credit or
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to any drafts related thereto. Borrower further authorizes Bank, at its option,
to compensate itself by applying any part or all of the balance of any deposit
account or certificate of deposit which Borrower may maintain with Bank, at any
time, whether or not the deposit is mature, and/or any and all monies or
property or interest of any kind now or hereafter in Bank's hands, or in transit
to or from Bank, and belonging to Borrower, to the payment, in whole or in part,
of the amount of any draft and all interest, costs and attorney's fees which
Borrower may owe Bank pursuant to this Agreement. In the event a Credit
Obligation is not paid when demanded by Bank, Borrower agrees to pay to Bank on
demand a sum equal to the amount of the Credit Obligation, plus interest thereon
from the date the Credit Obligation is demanded by Bank until paid at the Base
Rate then in effect. A payment shall not be deemed made until funds therefor
have been actually collected and made available to Bank. Upon the occurrence of
an Event of Default hereunder, Borrower agrees to pay to Bank on demand a sum
equal to the aggregate unfunded amounts of all Credits outstanding, together
with interest thereon at the Base Rate, or at any higher rate of interest which
Bank may impose as a default rate pursuant to the terms of Borrower's Revolving
Note issued pursuant to the terms hereof (such obligation of Borrower shall be
deemed a Credit Obligation as such term is used herein). Upon the occurrence of
such Event of Default, Bank may exercise its right of offset and compensation
set forth above in this Section 2.3.4. Any amount which Bank offsets or which
Borrower may pay to Bank in excess of drafts actually drawn on any outstanding
Credits, shall be held by Bank in pledge to secure the payment of future drafts
until the Commitment to Borrower has been terminated, all Indebtedness of
Borrower has been paid in full, and no further Credits issued for the account of
Borrower are outstanding.
SECTION 2.3.5. REVOLVING LOANS. In the event that Credit Obligations
owed Bank by Borrower are not paid when due for any reason including Credit
Obligations arising upon occurrence of an Event of Default hereunder,
notwithstanding the limitation contained in Section 2.2.1, such Credit
Obligations shall be immediately paid by Borrower pursuant to Revolving Loans in
the amount of such Credit Obligations. Such Credit Obligations shall be
immediately converted to Revolving Loans by Bank and evidenced by the Revolving
Note. If at any time any Event of Default occurs and any portion of any Credits
remains unfunded, the Borrower for whose account such Credits were issued shall
pay to Bank in cash for application to future drawings under the outstanding
Credits, an amount equal to the aggregate unfunded portion of the outstanding
Credits. If Borrower does not pay such amount on demand, notwithstanding the
limitation contained in Section 2.2.1, such amount shall be immediately paid by
Borrower by Revolving Loans to Borrower from Bank. Such amount shall be
immediately converted to a Revolving Loan by Bank and shall be evidenced by the
Revolving Note. The amount of such Revolving Loans shall be held by Bank in
pledge securing all of Borrower's obligations under this Agreement, with
Borrower hereby granting Bank a continuing security interest in such funds as
security for the Indebtedness of Borrower until the Commitments have all
terminated, all Indebtedness of Borrower has been paid in full, and no further
Credits issued for the account of Borrower are outstanding.
SECTION 2.3.6. HOLD HARMLESS. Bank shall have the right to deliver the
Credit through any correspondents or agents (the "Correspondents") that Bank in
its sole discretion may choose. Except in the case of Bank's gross negligence
or willful misconduct, Borrower shall hold Bank harmless from any actions that
arise out of the handling of such delivery by the Correspondents making the
delivery. Borrower further agrees that Bank and any Correspondent shall not in
any way be responsible for performance by any beneficiary of obligations to
Borrower nor for the form, validity, sufficiency, correctness, truthfulness or
genuineness of any documents delivered in connection with any Credit, even if
such documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; for failure of any Credit draft to bear any
reference or correct reference to the Credit; for errors, omissions, or delays
in transmission or delivery of any messages, whether by mail, cable,
teletransmission, or otherwise; or for any error, neglect or default of any
Correspondents. Borrower further agrees that, if any of the above events should
occur, such event will not affect, impair or prevent Borrower's liability or the
Bank's rights or powers hereunder. No liability shall attach to Bank or to the
Correspondents for any losses or damage, in consequence of present or future
laws, censorships, regulations, decrees, orders or restrictions, right or
wrongfully exercised by an de facto or de jure government or governmental
agency. Without limiting the foregoing, and in addition to any other provision
hereof, Bank is hereby expressly authorized and directed to honor any request
for payment which is made under and in compliance with the terms of the Credit
without regard to, and without any duty on Bank's part to inquire into, the
existence of any disputes or controversies between Borrower and the beneficiary
or any other person, firm, or corporation, or the respective rights, duties or
liabilities of any of them or whether any facts or occurrences represented in
any documents presented under the Credit are true and
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correct. Borrower fully understands and agrees that the sole obligation of Bank
to Borrower shall be limited to honoring requests for payment made under and in
compliance with the Credit and the obligation of Bank remains so limited even if
Bank may have assisted Borrower in the preparation of the wording of the Credit
or any documents required to be presented thereunder or if Bank may otherwise be
aware of the underlying transaction giving rise to the Credit. If Bank, in its
sole discretion and at the written request of Borrower, agrees to any change or
modification to the amount or terms of any Credit or any instrument or document
related thereto, Borrower agrees that this Agreement shall be binding upon it
with regard to any changes or modifications and with regard to any actions taken
by Bank or by any agents or Correspondents relative thereto.
ARTICLE III
CONSTRUCTION LOAN
SECTION 3.1 CONSTRUCTION LOAN COMMITMENT. Subject to the terms and
conditions contained in this Agreement, the Bank agrees to make a construction
loan (the "Construction Loan") available to the Borrower in the maximum
aggregate principal amount at any one time outstanding of the lesser of (1) 80%
of Project Cost, (2) 75% of the fair market value of the Property and completed
Improvements, based upon an MAI appraisal of the Plans, or (3) the sum of
$2,600,000.00 (the "Construction Loan Commitment"). Bank shall not be obligated
to make any advance under the Construction Loan Commitment with respect to the
first 20% of Project Costs incurred by Borrower. Borrower's obligation to repay
the Construction Loan made by Bank shall be evidenced by a master promissory
note of Borrower (said promissory note being herein referred to as the
"Construction Note"), payable to the order of Bank in the principal sum of
$2,600,000.00 or such other or lesser amount as may be reflected from time to
time on the books and records of Bank as evidencing the aggregate unpaid
principal balance of loan advances made to Borrower, with a final maturity of
April 13, 1998, and bearing interest at the rate or rates from time to time in
effect pursuant to the terms of Article V hereof. Interest on the Construction
Note shall be payable in accordance with the terms of Section 5.2 hereof
SECTION 3.2. CONSTRUCTION LOAN ADVANCES. The Bank agrees to make
advances to the Borrower from time to time on any Business Day in accordance
with the provisions of this Article III up to the Construction Loan Commitment.
The credit advice resulting from the deposit of the proceeds of any disbursement
in the Borrower's construction account with the Bank or the Bank's copy of any
cashier's check representing all or any part of the proceeds or a disbursement
shall be deemed prima facie evidence of the obligation of the Borrower to the
Bank on the Construction Loan.
SECTION 3.3. BORROWING PROCEDURE. (a) The proceeds of the Construction
Loan shall be advanced by the Bank to the Borrower's construction account for
further credit, as appropriate, to the account of the Contractor at Bank not
more than once per month as construction of the Improvements progresses;
provided, however, that (i) the Borrower shall submit a Request for Advance to
the Bank at least 10 Business Days prior to the proposed funding date specifying
the total amount of the proposed Advance and the proposed date on which said
Advance is to be made; (ii) each Request for Advance shall be in substantially
the form prescribed by the Bank, (iii) each advance shall be funded in strict
accordance with the Development Expense Schedule; and (iv) upon the occurrence
of a Deficiency (as defined below), the Borrower shall not be entitled to
request or receive any advances until such time as the Deficiency has been cured
to the satisfaction of the Bank. Notwithstanding the foregoing, Bank shall be
authorized to fund an advance to pay interest on the Construction Loan when due,
without the requirement of a Request for Advance.
(b) If at any time during the term of the Construction Loan, the costs
to complete the Improvements shall increase over the costs delineated on the
Development Expense Schedule such that the undisbursed portion of the
Construction Loan is insufficient to pay the remaining Project Costs and to
provide debt service on the Construction Loan and all other costs and expenses
necessary to make the Project operational (such difference between the
undisbursed portion of the Construction Loan and the costs of completion of the
Project being referred to as a "Deficiency"), then, in such event, upon demand
by the Bank to the Borrower, the Borrower shall deposit the amount
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of such Deficiency into a cash collateral account maintained by Bank and on
which the Bank shall have the sole right to draw. No additional advances on the
Loan shall be made until the full amount of such Deficiency shall be deposited
as aforesaid.
(c) Advances for construction costs shall be made only to the extent
that the work is actually completed in accordance with the Plans and in place
and approved by the Bank, including materials actually incorporated into the
Project or stored on-site, but excluding materials stored elsewhere.
SECTION 3.4. REQUESTS FOR ADVANCES. (a) Each Request for Advance shall
be submitted to the Bank in duplicate and shall be accompanied by the following:
(i) AIA Documents. Application and Certificate for Payment (AIA
Documents G-702 and G-703) signed by the Contractor and properly notarized.
(ii) Development Expense Schedule. An updated copy of the Development
Expense Schedule approved by the Bank showing all changes since the date of the
last advance, accompanied by supporting invoices for costs other than interest
and construction costs.
(iii) (Intentionally left blank).
(iv) Title. In the case of the initial Advance under the Construction
Loan, a mortgagee's title insurance policy (with a multiple indebtedness
mortgage endorsement) issued by or on behalf of First American Title Insurance
Company in the amount of the Construction Loan Commitment in form and substance
satisfactory to Bank. including but not limited to insuring that the lien of the
Mortgage is superior to all materialmen and other mechanics' liens affecting the
Property, and otherwise in form and substance satisfactory to Bank.
(v) Insurance. If required by the Bank, evidence satisfactory to the
Bank that the required insurance remains in full force and effect.
(vi) Lien Waivers. Waivers of liens and receipts for payment by the
Contractor, subcontractors and suppliers.
(vii) Other Documents. The documents listed in Section 8.2 or 8.3, as
the case may be, and such other instruments, documents, certificates,
endorsements, invoices and opinions as the Bank may reasonably require.
(b) In the case of each advance for costs (other than interest and
construction costs), the Borrower shall provide the Bank with copies of all
supporting invoices with respect to such costs.
(c) In the case of advances for construction costs, the Bank must
obtain the report of the Bank's Inspector, which report shall be in form and
substance satisfactory to the Bank and shall state (i) that the work completed
under the Construction Contract as of the date of the inspection has been
performed and constructed in accordance with the Plans, (ii) that the work is
progressing on schedule, and (iii) that the disbursements to date (including the
current Request for Advance) plus retainage correspond with the percentage of
work completed and/or in place as of the Request for Advance. If the Bank's
Inspector does not approve an item of work, the Bank, in the exercise of its
reasonable judgment, may hold back an amount which in the Bank's opinion shall
be sufficient to remedy the item of work until the noncomplying item of work is
remedied.
SECTION 3.5. MODIFIED ADVANCE PROCEDURE. The Bank reserves the right
to modify the foregoing procedures and to disburse construction advances as
follows:
Advances to the Contractor. At its option, the Bank may make any and
all construction advances when due under the Construction Contract directly to
the Contractor or to subcontractors and suppliers through the Contractor, in the
judgment of the Bank, to prevent a default under the Construction Contract For
these purposes,
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Borrower shall irrevocably make, nominate, constitute, and appoint the Bank, in
its place and stead acting through any of its directors or officers, as
Borrower's true and lawful agent and attorney-in-fact with full power of
substitution, to make such construction advances directly to the Contractor,
subcontractors and suppliers; the foregoing mandate or agency shall be an
irrevocable power of attorney, that is, a power coupled with an interest which
cannot be revoked, the Bank having direction and authorization to so make such
construction advances, and no further direction or authorization from the
Borrower shall be necessary to warrant such direct construction advances, and
all such construction advances shall satisfy pro tanto the obligations of the
Bank and shall constitute construction advances hereunder and shall be secured
by the Collateral Documents as fully as if made to Borrower, regardless of the
disposition thereof by the Contractor, subcontractors, or suppliers.
SECTION 3.6. PAYMENTS. The Borrower shall make each payment at the
time and place set forth in the Construction Note. The Borrower hereby
authorizes the Bank, if and to the extent payment is not made when due hereunder
or under the Construction Note, to charge from time to time against the
Borrower's accounts with the Bank any amount so due.
SECTION 3.7. USE OF PROCEEDS. The Borrower shall use the proceeds of
the Construction Loan solely to pay Project Costs.
SECTION 3.8. FEES. Borrower shall pay Bank a commitment fee in the
amount of $26,000.00 for the Construction Loan Commitment, payable by Borrower
to Bank upon Borrower's execution of this Agreement. Also, Borrower agrees to
reimburse Bank the sum of $350 plus expenses for each inspection of the Project
by Bank's Inspector during construction of the Project. In addition, Borrower
agrees to reimburse Bank for its costs (up to the amount of $1,600) associated
with Bank's review of the Plans and related construction documents.
ARTICLE IV
TERM LOAN
SECTION 4.1. THE TERM LOAN. Subject to the terms, conditions and
provisions of this Agreement, Bank agrees to make a term loan (the "Term Loan")
to Borrower in an amount not to exceed the lesser of (1) 80% of Project Cost,
(ii) 75% of the fair market value of the Property and completed Improvements,
based upon an MAI appraisal, (3) $2,600,000.00, or (4) the outstanding principal
balance of the Construction Loan ("Term Loan Commitment"); the proceeds of which
shall be used to repay the Construction Loan.
SECTION 4.2. THE TERM NOTE. Borrower's indebtedness to Bank pursuant to
the Term Loan shall be evidenced by a promissory note of Borrower (said
promissory note being herein referred to as the "Term Note"), payable to the
order of Bank in the principal sum of the amount of the Term Loan Commitment,
with a final maturity of five years after date, and bearing interest at the rate
or rates from time to time in effect pursuant to the terms of Article V hereof
the Term Note. The Term Note shall be due and payable in 60 monthly
installments, based on an eight year amortization.
SECTION 4.3. PREPAYMENTS OF THE TERM LOAN. Borrower shall have the right
to prepay the Term Loan in whole or in part at any time without payment of
premium or penalty, other than for Funding Losses incurred by Bank as a result
thereof.
SECTION 4.4. REQUEST FOR TERM LOAN ADVANCE. In the case of the Term Loan
Advance, the Request for Advance shall be submitted to the Bank in duplicate and
shall be accompanied by the following.
(a) Certificate of Occupancy. A certificate of occupancy issued by the
appropriate governmental authority consenting to the use and occupancy of the
Improvements.
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(b) Certificate of Substantial Completion. A Certificate of
Substantial Completion (AIA Form G-704) signed by the Borrower and the
Contractor.
(c) As-Built Survey. A survey of the Property and all Improvements,
including completed buildings, and pertinent grade and floor elevations,
together with an appropriate endorsement to the Bank's title policy.
(d) Lien and Privilege Certificate. A clear lien and privilege
certificate issued by the appropriate clerk of court or recorder of mortgages
dated after the expiration of the period for filing liens.
(e) Multi-Peril Hazard Insurance. Multi-peril hazard insurance policy
for all of the Improvements as required by the Mortgage.
(f) Inspection. A final report of the Bank's Inspector in form and
substance satisfactory to the Bank stating that the additional Improvements have
been completed under the Construction Contract in accordance with the Plans.
ARTICLE V
INTEREST PAYABLE ON THE LOANS
SECTION 5.1. INTEREST ON THE LOANS.
(a) Subject to the terms and conditions hereof, the Loans may from
time to time be split into (1) LIBOR Rate Tranches, (2) Base Rate Tranches, or
(3) any combination thereof subject to the limitation set forth in Section
5.3(c) of this Article, as determined pursuant to the terms of this Article V.
(b) The unpaid principal amounts of all Loans or Tranches thereof
shall bear interest at one or more of the following interest rates, at
Borrower's option: (i) the Base Rate from time to time in effect, adjusted
daily, plus the Applicable Margin, or (ii) the LIBOR Rate plus the Applicable
Margin then in effect for such Loans as determined by Bank at the time such
LIBOR Rate is determined for any of the Loans or Tranches thereof. Borrower
shall select the interest rate option applicable to each Loan or Tranche upon
the funding of each such Loan or Tranche thereof (and length of the desired
Interest Period if a LIBOR Rate Loan or Tranche is selected), and the selected
interest rate option shall continue as to said Loan or Tranche until changed in
accordance with the following provisions hereof. Borrower shall notify Bank of
their desire to change the interest rate on any of their respective Loans or
Tranches thereof not less than two (2) Business Days prior to the date on which
such change shall be effective. The Borrower may change a Loan or Tranche
thereof from a Base Rate Loan to a LIBOR Rate Loan at any time without payment
of premium or penalty, but the Borrower may change a Loan or Tranche thereof
from a LIBOR Rate Loan to a Base Rate Loan only as of the last day of an
Interest Period without payment of premium or penalty. In the absence of any
specific rate election by the Borrower, all and Tranches thereof shall bear
interest at the Base Rate plus the Applicable Margin for Base Rate Loans.
(c) Borrower shall notify Bank, such notice to be irrevocable, at
least two (2) Business Days prior to the last day of an Interest Period, of the
duration of the next succeeding Interest Period with respect to any LIBOR Rate
Loan or LIBOR Rate Tranche. If Borrower fails to provide such notice to Bank in
a timely manner, such Loan(s) or Tranche(s) shall bear interest at the Base Rate
plus the Applicable Margin for Base Rate Loans at the end of each current
Interest Period.
SECTION 5.2. PAYMENT OF INTEREST ON THE LOANS. Interest on all Base Rate
Loans and LIBOR Rate Loans shall be payable on the last Business Day of each
month and on the final maturity date of each such Loan (each such interest
payment date for any Loan, whether a Base Rate Loan or LIBOR Rate Loan, being
herein referred to as an "Interest Payment Date").
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SECTION 5.3. CONVERSIONS AND CONTINUATIONS; MAXIMUM AMOUNT OF TRANCHES.
(a) The Borrower may elect from time to time to convert a LIBOR Rate
Loan or Tranche to a Base Rate Loan, or a Base Rate Loan to a LIBOR Rate Loan,
by giving the Bank at least two (2) Business Days' prior irrevocable written
notice of such election, provided that any such conversion of a LIBOR Rate Loan
shall only be made on the last day of a Interest Period with respect thereto.
All or any part of an outstanding LIBOR Rate Loan and a Base Rate Loan may be
converted as provided herein, provided that (1) no Base Rate Loan may be
converted into a LIBOR Rate Loan when any Default or Event of Default has
occurred and is continuing, (2) no Loan may be converted into a LIBOR Rate Loan
after the date that is one month prior to the final maturity date of such Loan,
and (5) any such conversion may only be made if, after giving effect thereto,
the provisions of Section 5.3(c) hereof shall not have been contravened.
(b) Any LIBOR Rate Loan may be continued as such upon the expiration
of a Interest Period with respect thereto by the Borrower giving Bank at least
two (2) Business Days' prior irrevocable written notice of such continuance;
provided, that no LIBOR Rate Loan may be continued as such (1) when any Default
or Event of Default has occurred and is continuing and the Bank has determined
that such a continuation is not appropriate or (2) after the date that is one
month prior to the final maturity date of such Loan, and provided, further, that
if the Borrower shall fail to give such written notice or if such continuation
is not permitted, then the Borrower shall be deemed to have converted said LIBOR
Rate Loan to a Base Rate Loan upon the expiration of the then current Interest
Period. Any LIBOR Rate Loan which is continued by Borrower in accordance
herewith will be continued for the same LIBOR Interest Rate Period previously in
effect with respect thereto unless Borrower's notice to continue such LIBOR Rate
Loan provides otherwise or unless such LIBOR Interest Rate Period would extend
beyond the final maturity date of such Loan, in which case the next longest
available LIBOR Interest Rate Period terminating before such date shall apply.
(c) All borrowings, conversions and continuations of the Loans
hereunder and all selection of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto no more than four (4) LIBOR Rate Tranches shall be outstanding as to
Borrower under its Revolving Loans and no more than one (1) LIBOR Rate Tranche
shall be outstanding as to Borrower under its Term Loan.
ARTICLE VI
CERTAIN GENERAL PROVISIONS
SECTION 6.1. PAYMENTS TO BANK. All payments of principal, interest,
commitment fees and any other amounts due hereunder or under any of the other
Related Documents shall be made to the Bank at the Bank's office at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location that
the Bank may from time to time designate in writing to Borrower, in each case in
immediately available funds.
SECTION 6.2. NO OFFSET, ETC. All payments by Borrower hereunder and under
any of the other Related Documents shall be made without setoff or counterclaim
and free and clear of and without deduction for any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory loans, restrictions
or conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other authority
therein unless Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon Borrower with respect to
any amount payable by it hereunder or under any of the other Loan Documents,
Borrower will pay to the Bank, on the date on which such amount is due and
payable hereunder or under such other Related Document, such additional amount
in Dollars as shall be necessary to enable the Bank to receive the same net
amount which Bank would have received on such due date had no such obligation
been imposed upon Borrower. Borrower will deliver promptly to the Bank
certificates or other valid vouchers for all taxes or other charges deducted
from or paid with respect to payments made by Borrower hereunder or under such
other Loan Documents.
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SECTION 6.3. COMPUTATIONS. All computations of interest on the Loans and
of commitment or other fees shall be assessed utilizing a 360-day daily interest
factor over the number of days in an actual calendar year (365 days or 366 days
in a leap year). Bank shall determine each interest rate applicable to the
Loans in accordance with this Agreement, and Bank's determination of same shall
be conclusive in the absence of manifest error. Except as otherwise provided in
the definition of the term "Interest Period", whenever a payment hereunder or
under any of the other Related Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the Bank's books and records
from time to time shall be prima facie evidence of the amounts so outstanding.
SECTION 6.4. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to
the commencement of any Interest Period, the Bank shall determine or be notified
that adequate and reasonable methods do not exist for ascertaining the LIBOR
Rate that would otherwise determine the rate of interest to be applicable to the
Loans during any Interest Period, the Bank shall forthwith give notice of such
determination (which shall be conclusive and binding on Borrower) to Borrower.
In such event the Loans (or any Tranches thereof) will automatically, on the
last day of the then current Interest Period applicable to such Loans or
Tranches, become a Base Rate Loan until the Bank determines that the
circumstances giving rise to such suspension no longer exist, whereupon the Bank
shall so notify Borrower.
SECTION 6.5. ILLEGALITY. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or the interpretation
or application thereof shall make it unlawful for the Bank to make available, or
maintain in effect, the LIBOR Rate, the Bank shall forthwith give notice of such
circumstances to Borrower and thereupon any Loans bearing interest at a LIBOR
Rate shall be converted automatically to Base Rate Loans on the last day of the
then current Interest Period applicable to such Loans or within such earlier
period as may be required by law. Borrower hereby agree promptly to pay the
Bank, upon demand by Bank, any additional amounts necessary to compensate the
Bank for any costs incurred by the Bank in making any conversion in accordance
with this paragraph, including any interest or fees payable by the Bank to
lenders of funds obtained by it in order to make available, or maintain in
effect, the LIBOR Rate for the Loans.
SECTION 6.6. ADDITIONAL COSTS, ETC. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to the Bank by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:
(1) subject the Bank to any tax, levy, impost, duty, charge, fee, deduction
or withholding of any nature with respect to this Agreement, the other
Related Documents or the Indebtedness (other than taxes based upon or
measured by the revenue, income or profits of the Bank), or
(2) materially change the basis of taxation (except for changes in taxes on
revenue, income or profits) of payments to the Bank of the principal of or
the interest on the Indebtedness of any other amounts payable to the Bank
under this Agreement or the other Related Documents, or
(3) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or commitments of an
office of the Bank, or
(4) impose on the Bank any other conditions or requirements with respect to
this Loan Agreement, the other Related Documents, the Indebtedness, or any
class of loans of which the Indebtedness forms a part, and the result of
any of the foregoing is
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(i) to increase the cost to the Bank of making, funding, issuing,
renewing, extending or maintaining the Indebtedness or issuing
Credits, or
(ii) to reduce the amount of principal, interest or other amount
payable to the Bank hereunder on account of such the Indebtedness, or
(iii) to require the Bank to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by the Bank from
Borrower hereunder, then, and in each such case, Borrower will, upon
demand made by the Bank at any time and from time to time and as often
as the occasion therefor may arise, pay to the Bank such additional
amounts as will be sufficient to compensate the Bank for such
additional cost, reduction, payment or foregoing interest or others
sum.
SECTION 6.7. CAPITAL ADEQUACY. If after the date hereof the Bank
determines that (a) the adoption of or change in any law, governmental rule,
regulations, policy guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by the Bank or any
corporation controlling the Bank with any law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law) of any
such entity regarding capital adequacy, has the effect of reducing the return on
the Bank's Loans to a level below that which the Bank could have achieved but
for such adoption, change or compliance (taking into consideration the Bank's
then existing policies with respect to capital adequacy and assuming full
utilization of such entity's capital) by any amount deemed by the Bank to be
material, then the Bank may notify Borrower of such fact. Borrower agrees to
pay the Bank for the amount of such reduction in the return on capital as and
when such reduction is determined upon presentation by the Bank of a
certification in accordance with paragraph Section 6.8.
SECTION 6.8. CERTIFICATE; OPTIONAL RIGHT OF PREPAYMENT. Bank shall provide
Borrower with a certificate setting forth any additional amounts which it
declares to be payable pursuant to Sections 6.6 and 6.7 hereof, and a complete
explanation of such amounts which are due, and each such certificate shall be
conclusive, absent manifest error, that such amounts are due and owing.
Borrower shall have the right, at any time within 90 days of receipt of any such
certificate, to prepay all the Loans (subject to any and all prepayment
penalties and obligations to pay Funding Losses under the terms of this
Agreement) without being obligated to pay any such additional costs set forth in
such certificate, after which Bank shall promptly terminate, discharge and
release of record (at Borrowers' expense) all of its Encumbrances affecting the
Collateral and return all Collateral to Borrower.
SECTION 6.9. INDEMNITY. Borrower agrees to indemnify the Bank and to hold
the Bank harmless from and against any and all Funding Losses or any other loss,
cost or expense that the Bank may sustain or incur as a consequence of (a)
default by Borrower in payment of the principal amount of or any interest on any
Indebtedness as and when due and payable, including any such loss or expense
arising from interest or fees payable by the Bank to lenders of funds obtained
by it in order to maintain its LIBOR Rate in effect for the Loans, or (b) the
making of any payment of Indebtedness on a day that is not the last day of the
applicable Interest Period, including interest or fees payable by the Bank to
lenders of funds obtained by it in order to maintain its LIBOR Rate in effect
for the Loans.
ARTICLE VII
SECURITY FOR THE INDEBTEDNESS
SECTION 7.1. SECURITY. The Indebtedness shall be secured by the following:
(a) the Security Agreement, as amended, and related financing statement;
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(b) the Security Agreement (Fixtures) and related financing statement;
(c) the Mortgage;
(d) the Assignment of Construction Contract and related financing
statement;
(e) the Acknowledgment of Contractor;
(f) the Assignment of Architect's Contract and related financing
statement;
(g) the Acknowledgment of Architect; and
(h) Continuing Guaranty of Borrower's indebtedness to Bank by each
Guarantor.
The Borrower understands and acknowledges that items (a) through (f) constitute
a first priority mortgage lien or security interest, as the case may be, in
favor of Bank.
ARTICLE VIII
CONDITIONS PRECEDENT
SECTION 8.1. GENERAL CONDITIONS PRECEDENT TO ALL LOANS AND CREDITS. The
obligation of Bank to make any Loan or to issue any Credit hereunder shall be
subject to the satisfaction and the continued satisfaction of the following
conditions precedent:
(a) Borrower shall have executed and delivered to Bank this Agreement, the
Collateral Documents, the Notes and all other documents required by this
Agreement, all in form and substance and in such number of counterparts as may
be required by Bank;
(b) The representations and warranties of Borrower as set forth herein, or
in any Related Document furnished to Bank in connection herewith, shall be and
remain true and correct;
(c) Bank shall have received a favorable legal opinion of counsel to
Borrower, in form, scope and substance satisfactory to Bank;
(d) Bank shall have received certified resolutions of Borrower authorizing
the execution of all documents contemplated hereby;
(e) Bank shall have received all fees, charges and expenses which are due
and payable as specified in this Agreement or any Related Document;
(f) No Default or Event of Default shall exist or shall result from the
making of a Loan or the issuance of a Credit;
(g) Borrower shall have provided Bank with all financial statements,
reports and certificates required by this Agreement (including an initial
borrowing base certificate of Borrower in the form required by Section 10.1(e)
which is hereby required as a condition to the initial advance to Borrower
hereunder);
(h) Bank's counsel shall have reviewed the articles of organization and
Operating Agreement of Borrower, and shall be satisfied with the validity, due
authorization and enforceability thereof and of all Related Documents;
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(i) Bank shall have received evidence acceptable to Bank and its counsel
that its Encumbrances affecting the Collateral shall have a first priority
position, subject only to Permitted Encumbrances;
(j) Borrower shall have complied with the procedure set forth in this
Agreement for the making of the particular type of Loan then being applied for;
(k) There shall have occurred no Material Adverse Change;
(l) Bank's due diligence and review of all financial information provided
by Borrower, and Bank's field audit of Borrower's books and records, shall be
satisfactory to Bank; and
(m) Bank shall have received the following executed documents: Agreement
by The CIT Group/Equipment Financing, Inc. that the indebtedness of Borrower
under this Agreement is subject to the Subordination Agreement dated July 19,
1996 by Borrower, Omni Geophysical Corporation, and Bank, as amended; and Second
Amendment to Subordination Agreement by and among Borrower, Omni Geophysical
Corporation, and Bank.
SECTION 8.2. CONDITIONS PRECEDENT TO FUNDING THE INITIAL ADVANCES UNDER
THE CONSTRUCTION LOAN. In addition to the conditions of lending otherwise set
forth above, the obligation of Bank to make the initial advance under the
Construction Loan shall be subject to the satisfaction and the continued
satisfaction of the following conditions precedent:
(a) Appraisal. Delivery to Bank within ninety (90) days of June 13,
1997 of an appraisal of the Property and Improvements based on the Plans and
prepared by an MAI appraiser, addressed to Bank and approved by Bank in minimum
amount required by the Bank. The appraisal will be ordered by Bank at
Borrower's expense;
(b) Architect's Contract. Delivery to Bank of the Architect's
Contract signed by Borrower and Architect;
(c) Building Permit. Delivery to Bank of all building permits and such
other licenses and permits prerequisite to authorize construction of the
Improvements in accordance with the Plans;
(d) Construction Completion Schedules. Schedule of all construction
trades and delivery of materials from beginning of construction through
completion;
(e) Cost Take-Off. A certification by Bank's Inspector that the
Improvements can be completed for the costs set forth in the Development Expense
Schedule and the Schedule of Values;
(f) Inspection. A favorable inspection of the Property by Bank's
Inspector, at Borrower's expense;
(g) Development Expense Schedule. Delivery to Bank of the detailed
line item cost breakdown of land costs, construction costs (hard costs) and all
other related indirect development costs (soft costs);
(h) Disbursement Schedule. Delivery to Bank of the schedule of
Borrower's anticipated advances;
(i) Environmental Engineering Report (Phase 1). Delivery of a report
acceptable to Bank, conducted by an environmental engineer, to determine whether
hazardous substances are or could be present on the Property. The report shall
also indicate location and jurisdiction of the Property, historical ownership
and use of the Property, current use of the Property, any information available
in governmental records on previous investigations and litigation, any adjacent
properties which have been, are or could be potential hazards, locations of
equipment containing PCB's and a conclusion/recommendation statement. The
report will be ordered by Bank at Borrower's expense;
(j) (Intentionally left blank);
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(k) Insurance Policies. Delivery to Bank of the insurance policies or
certificates otherwise required by this Agreement or the Bank, including
builder's risk insurance;
(l) Construction Contract; Payment and Performance Bonds. Delivery to
Bank of the Construction Contract signed by Borrower and Contractor, which
Construction Contract shall have a guaranteed maximum price. Recordation of the
Construction Contract or a Notice of Contract in the mortgage records of
Lafayette Parish, together with statutory form of bond from surety company
approved by the Bank and naming Bank as a co-obligee, guaranteeing that the
Improvements will be completed according to the terms and conditions of the
Construction Contract and that subcontractors and suppliers will be paid;
(m) Plans. Delivery to Bank of the final architectural and engineering
drawings and specifications, including any revisions, amendments and addenda,
required to complete the construction of the Improvements;
(n) Schedule of Values (AIA Form G702-G703). Delivery to Bank of the
line item hard costs breakdown;
(o) Mortgage; No Work Affidavit. Execution by Borrower of the
Mortgage; recordation of the Mortgage and recordation of No Work Affidavit from
licensed architect, surveyor or civil engineer that no work has begun and no
materials have been delivered to the Property;
(p) Soil Test Report. Delivery to Bank of a report by firm acceptable
to Bank, reflecting conditions of the soil at the Property (or other
geotechnical matters), in form and substance satisfactory to the Bank;
(q) Survey. Delivery to Bank of three (3) copies of a survey performed
by a surveyor acceptable to Bank, in form and substance satisfactory to the
Bank;
(r) Utility Letters. Letter from all applicable utility companies that
all of the necessary utilities (water, sewer, gas, electricity and telephone)
for the operation of the Property are or will be available at completion;
(s) Zoning Certificate or Letter. Proof satisfactory to Bank that the
Property is zoned to permit construction of the Improvements in accordance with
the Plans and use of the Improvements for their intended purpose; and
(t) Other Documentation. Delivery to Bank of all documentation
relating to the Project requested by Bank.
SECTION 8.3. CONDITIONS PRECEDENT TO FUNDING ADDITIONAL ADVANCES UNDER THE
CONSTRUCTION LOAN. In addition to the conditions set forth in Section 8.2 above,
the obligation of Bank to make additional advances under the Construction Loan
shall be subject to the satisfaction and the continued satisfaction of the
following conditions precedent:
(a) Review. Review and approval by Bank and Bank's Inspector of the
Plans, the Construction Contract, and the Architect's Contract.
(b) Receipt of Acknowledgments. Receipt by Bank of the executed
Acknowledgment of Architect.
(c) Project Budget. Receipt by Bank of the budget for the Project.
(d) Disbursement Schedule. Receipt by Bank of a schedule detailing
disbursement projections for the Project.
(e) Subcontracts. Receipt by Bank of copies of all major subcontracts
and a listing of all subcontracts and a listing of all subcontractors and
suppliers of materials.
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(f) Lien Waivers. Receipt by Bank of conditional waiver of lien
rights by the Contractor for each advance.
(g) Final Budget. Receipt by Bank of the final construction and
development budget for the Project, containing adequate contingency reserve, all
subject to review and acceptance by Bank.
(h) Mortgagee's Title Policy. Receipt by Bank of a mortgagee's policy
of title insurance insuring the Mortgage as a first priority mortgage lien.
SECTION 8.4. CONDITIONS PRECEDENT TO THE TERM LOAN. In addition to the
conditions of lending otherwise set forth above in Section 8.1, the obligation
of Bank to make the Term Loan hereunder shall be subject to the satisfaction and
the continued satisfaction of the following conditions precedent:
(a) Certificates. A certificate of occupancy issued by the appropriate
governmental authority consenting to the use and occupancy of the Improvements,
and the issuance of all other certificates, inspections, and reports necessary
for occupancy and use of the Improvements;
(b) As-Built Survey. A survey of the Property and all Improvements,
including completed buildings, and pertinent grade and floor elevations;
(c) Lien and Privilege Certificate. A clear lien and privilege
certificate issued by the appropriate clerk of court or recorder of mortgages
dated after the expiration of the period for filing liens;
(d) Multi-Peril Hazard Insurance. Multi-peril hazard insurance policy
for all of the Improvements as required by the Mortgage.;
(e) Inspection. A final report of the Bank's Inspector in form and
substance satisfactory to the Bank stating that the Improvements have been
completed under the Construction Contract in accordance with the Plans, that
direct connection has been made to all utilities set forth in the Plans, and
that the Project is ready for occupancy; and
(f) The Project shall have been completed substantially in accordance
with the Plans, a notice of termination of the Construction Contract shall have
been filed in accordance with La. R.S. 9:4801 et seq., all statutory lien
periods shall have expired, no Encumbrances shall have been filed and not paid
or removed, and the Construction Contract shall have been cancelled from the
mortgage records of Lafayette Parish, Louisiana.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Bank as follows:
SECTION 9.1. CORPORATE AUTHORITY. Borrower is a limited liability
company duly created, validly existing and in good standing under the laws of
its state of organization, and is duly qualified and in good standing as a
foreign limited liability company in all other jurisdictions where the failure
to qualify would have an adverse effect upon its ability to perform its
obligations under this Agreement and all Related Documents. Borrower has the
power to enter into this Agreement, issue the Notes, mortgage and grant the
liens and security interests in the Collateral in the manner and for the purpose
contemplated by the Collateral Documents. Borrower has the corporate power to
perform its obligations hereunder and under the Related Documents. The making
and performance by Borrower of the Related Documents have all been duly
authorized by all necessary corporate action (including all necessary member
action), and do not and will not violate any provision of any law, rule,
regulation, order, writ, judgment, decree, determination or award presently in
effect having applicability to Borrower or the
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articles of organization of Borrower. The making and performance by Borrower of
the Related Documents to which it is a party do not and will not result in a
breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement or instrument to which Borrower is a party or
by which it may be bound or affected, or result in, or require, the creation or
imposition of any mortgage, deed of trust, pledge, lien, security interest or
other charge or encumbrance of any nature (other than as contemplated by the
Related Documents) upon or with respect to any of the properties now owned or
hereafter acquired by Borrower, and Borrower is not in default under or in
violation of any such order, writ, judgment, decree, determination, award,
indenture, agreement or instrument. Each of the Related Documents to which
Borrower is a party constitutes a legal, valid and binding obligations of
Borrower, enforceable in accordance with its terms
SECTION 9.2. FINANCIAL STATEMENTS. The balance sheet of Borrower at the
date thereof, and the related statements of income and retained earnings for the
year then ended, copies of which have been delivered to Bank, are complete and
correct and fairly present the financial condition of such entities as of the
date or dates thereof. Each of said financial statements were prepared in
conformity with GAAP applied on a basis consistent with the preceding year. No
Material Adverse Change has occurred since said dates in the financial position
or in the results of operations of Borrower in their businesses taken as a
whole.
SECTION 9.3. TITLE TO COLLATERAL. Borrower has good and marketable title
to the Collateral, free and clear of all Encumbrances other than Permitted
Encumbrances. The Collateral Documents constitute legal, valid and perfected
first Encumbrances on the property interests covered thereby, subject only to
Permitted Encumbrances.
SECTION 9.4. LITIGATION. Other than as has been disclosed previously to
Bank in writing, there are no legal actions, suits or proceedings pending or
threatened against or affecting Borrower or any of their properties before any
court or administrative agency (federal, state or local), which, if determined
adversely to any of the Borrower would constitute a Material Adverse Change to
any of them, and there are no judgments or decrees affecting Borrower or its
property (including, without limitation, the Collateral) which are or may become
an Encumbrance against such property.
SECTION 9.5. APPROVALS. No authorization, consent, approval or formal
exemption of, nor any filing or registration with, any governmental body or
regulatory authority (federal, state or local), and no vote, consent or approval
of the members of Borrower is or will be required in connection with the
execution and delivery by Borrower of the Related Documents or the performance
by Borrower of its obligations hereunder and under the other Related Documents.
SECTION 9.6. LICENSES. Borrower possesses adequate franchises, licenses
and permits to own its properties and to carry on its business as presently
conducted.
SECTION 9.7. ADVERSE AGREEMENTS. Borrower is not a party to any
agreement or instrument, nor subject to any charter or other restriction,
materially and adversely affecting the business, properties, assets, or
operations of Borrower or its condition (financial or otherwise), and Borrower
is not in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument to
which it is a party, which default would constitute a Material Adverse Change.
SECTION 9.8. DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
hereunder has occurred or is continuing or will occur as a result of the giving
effect hereto.
SECTION 9.9. EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to
which Borrower may have any liability complies in all material respects with all
applicable requirements of law and regulations, and (i) no Reportable Event (as
defined in ERISA) has occurred with respect to any such plan, (ii) Borrower has
not withdrawn from any such plan or initiated steps to do so, and (iii) no steps
have been taken to terminate any such plan.
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SECTION 9.10. INVESTMENT COMPANY ACT. Borrower is not an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
SECTION 9.11. PUBLIC UTILITY HOLDING COMPANY ACT. Borrower is not a
"holding company," or a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 9.12. REGULATIONS G, T AND U. Borrower is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, T and U of the Board of Governors of the Federal
Reserve System), and none of the proceeds of the Revolving Loans will be used
for the purpose of purchasing or carrying such margin stock.
SECTION 9.13. LOCATION OF BORROWERS' OFFICES, RECORDS, EQUIPMENT AND
INVENTORY. The chief places of business of Borrower, and the offices where
Borrower keep its respective records concerning the Collateral, is ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 9.14. INFORMATION. All information heretofore or
contemporaneously herewith furnished by Borrower to Bank for the purposes of or
in connection with this Agreement or any transaction contemplated hereby is, and
all information hereafter furnished by or on behalf of Borrower to Bank will be,
true and accurate in every material respect on the date as of which such
information is dated or certified; and none of such information is or will be
incomplete by omitting to state any material fact necessary to make such
information not misleading.
SECTION 9.15. ENVIRONMENTAL MATTERS. Except as may have been disclosed
in writing to Bank prior to the date hereof, no properties of Borrower has ever
been, nor will ever be so long as this Agreement remains in effect, used for the
generation, manufacture, storage, treatment, disposal, release or threatened
release of any hazardous waste or substance, as those terms are defined in the
Environmental Laws, except in compliance with such Environmental Laws. Except
as may have been disclosed in writing by Borrower to Bank, Borrower represents
and warrants that it is in material compliance with all Environmental Laws
affecting it and its properties.
No friable asbestos, or any substance containing asbestos deemed hazardous
by federal or state regulations on the date of this Agreement, has been
installed in the Property. The Property and the Borrower are not in violation of
or subject to any existing, pending, or threatened investigation or inquiry by
any governmental authority or to any remedial obligations under any applicable
laws pertaining to health or the environment (hereinafter sometimes collectively
called "Applicable Environmental Laws"), including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986 (as
amended, hereinafter called "CERCLA"), the Resource Conservation and Recovery
Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste
Disposal Act Amendments of 1980, and the Hazardous and Solid Waste Amendments of
1984 (as amended, hereinafter called "RCRA"), and this representation and
warranty would continue to be true and correct following disclosure to the
applicable governmental authorities of all relevant facts, conditions and
circumstances, if any, pertaining to the Property and known to the Borrower. The
Borrower has not obtained and is not required to obtain any permits, licenses or
similar authorizations to construct, occupy, operate or use any buildings,
improvements, fixtures and equipment forming a part of the Property by reason of
any Applicable Environmental Laws. No hazardous substances or solid wastes have
been disposed of or otherwise released on or to the Property. The use which the
Borrower makes and intends to make of the Property will not result in the
disposal or other release of any hazardous substance or solid waste on or to the
Property. The terms "hazardous substance" and "release" as used in this
Agreement shall have the meanings specified in CERCLA, and the terms "solid
waste" and "disposal" (or "disposed") shall have the meanings specified in RCRA,
provided, however, in the event that the laws of the State of Louisiana
establish a meaning for "hazardous substance," "release," "solid waste," or
"disposal" which is broader than that specified in either CERCLA or RCRA, such
broader meaning shall apply.
SECTION 9.16. SOLVENCY OF BORROWER. Borrower is, and after consummation
of the transactions contemplated by this Agreement (including the making of the
Loans and the issuance of the Credits), and after giving effect to all
obligations incurred by Borrower in connection herewith, will be, Solvent.
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SECTION 9.17. GOVERNMENTAL REQUIREMENTS. The Property is in compliance
with all current governmental requirements affecting the Property, including,
without limitation, all current coastal zone protection, zoning and land use
regulations, building codes and all restrictions and requirements imposed by
applicable governmental authorities with respect to the construction of any
improvements on the Property and the contemplated use of the Property.
SECTION 9.18. CONSTRUCTION. The Borrower hereby represents and warrants
to the Bank (i) that the Plans are in final form and are satisfactory to the
Borrower and the Contractor, and to the extent required by applicable law, to
all applicable governmental authorities; (ii) the Plans, together with the
anticipated use of the Property, do not violate any restrictive covenant
applicable to the Property, (iii) the Borrower has obtained all permits and
approvals necessary to construct the Improvements from all applicable
governmental authorities; (iv) the Borrower, as of June 16, 1997, had not begun
any work on the Improvements, delivered any materials to the Property or in any
way commenced the construction of the Improvements; and (v) the Development
Expense Schedule contains a true and accurate estimate of the cost of the
Improvements.
SECTION 9.19. EXISTING LEASE. Borrower represents and warrants that it
has a lease affecting Borrower's present business location located on I-49 North
in Lafayette Parish, Louisiana which extends through June of 1998.
SECTION 9.20. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower
understands and agrees that Bank is relying upon the above representations and
warranties in making the Loans to Borrower. Borrower further agrees that the
foregoing representations and warranties shall be continuing in nature and shall
remain in full force and effect until such time as the Indebtedness shall be
paid in full, or until this Agreement shall be terminated, whichever is the last
to occur.
ARTICLE X
AFFIRMATIVE COVENANTS
In addition to the covenants contained in the Collateral Documents, which
covenants are hereby ratified and confirmed by Borrower, Borrower covenants and
agrees as follows:
SECTION 10.1. FINANCIAL STATEMENTS. Borrower will furnish or cause
to be furnished to Bank:
(a) within thirty (30) days following the end of each calendar month,
financial statements consisting of the balance sheet of Borrower as of
the end of such month, and a statement of income and statement of cash
flow of Borrower for such month and for the fiscal year through such
month, all certified by the chief financial officer of Borrower as
having been prepared in accordance with GAAP consistently applied,
(b) as soon as available and in any event within ninety (90) days
following the close of fiscal year of Borrower, audited, consolidated
and consolidating financial statements of Borrower consisting of a
balance sheet as at the end of such fiscal year and statements of
income, and statement of cash flow for such fiscal year, setting forth
in each case in comparative form the corresponding figures for the
preceding fiscal year, certified by independent public accountants of
recognized standing acceptable to Bank,
(c) within thirty (30) days after the end of each calendar quarter, a
certificate signed by the chief financial officer of Borrower,
certifying that he has reviewed this Agreement and to the best of his
knowledge no Default or Event of Default has occurred, or if such
Default or Event of Default has occurred, specifying the nature and
extent thereof, and that all financial covenants in this Agreement
have been met, and providing a computation of all financial covenants
contained herein,
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(d) within fifteen (15) days following the end of each calendar month, an
aging of Borrower's Receivables and accounts payable, together with a
certificate executed by the chief financial officer of Borrower,
identifying the amount of Qualified Receivables of Borrower as of the
end of such month, in such form and containing such representations
and warranties regarding the Receivables as Bank may reasonably
require,
(e) on the last day of each month, and not less than weekly during each
calendar month, and at any time upon the request by Bank, a borrowing
base certificate showing Borrower's total Receivables, minus
ineligibles, total Qualified Receivables, in form and substance
acceptable to Bank, accompanied by such supporting documents as may be
required by Bank, with Borrower's borrowing base certificate to be
certified by the chief financial officer of Borrower,
(f) such other necessary financial information concerning the Borrowers as
Bank may reasonably request from time to time.
SECTION 10.2. NOTICE OF DEFAULT; LITIGATION; ERISA MATTERS. Borrower will
give written notice to Bank as soon as reasonably possible and in no event more
than five (5) Business Days of (i) the occurrence of any Default or Event of
Default hereunder of which it has knowledge or should have knowledge, (ii) the
filing of any actions, suits or proceedings against Borrower in any court or
before any governmental authority or tribunal of which they have knowledge or
should have knowledge which could cause a Material Adverse Change with respect
to Borrower, (iii) the occurrence of a reportable event under, or the
institution of steps by Borrower to withdraw from, or the institution of any
steps to terminate, any employee benefit plan as to which Borrower may have
liability, or (iv) the occurrence of any other action, event or condition of any
nature of which they have knowledge which may cause, or lead to, or result in,
any Material Adverse Change to Borrower.
SECTION 10.3. MAINTENANCE OF EXISTENCE, PROPERTIES AND LIENS. Borrower
will (i) continue to engage in the business presently being operated by it; (ii)
maintain its existence and good standing in each jurisdiction in which it is
required to be qualified; (iii) keep and maintain all franchises, licenses and
properties necessary in the conduct of its business in good order and condition;
(iv) duly observe and conform to all material requirements of any governmental
authorities relative to the conduct of its business or the operation of its
properties or assets; and (v) maintain in favor of Bank a first perfected lien
and security interest in the Collateral, subject only to other Permitted
Encumbrances.
SECTION 10.4. COLLATERAL SCHEDULES AND LOCATIONS. As often as Bank shall
reasonably require, Borrower shall deliver to Bank schedules of such Collateral,
including such information as Bank may require, including without limitation
names and addresses of account debtors and agings of Receivables and General
Intangibles.
SECTION 10.5. TAXES. Borrower shall pay or cause to be paid when due, all
taxes, local and special assessments, and governmental and other charges of
every type and description, that may from time to time be imposed, assessed and
levied against it or its properties. Borrower further agrees to furnish Bank
with evidence that such taxes, assessments, and governmental and other charges
due by Borrower has been paid in full and in a timely manner. Borrower may
withhold any such payment or elect to contest any lien if Borrower is in good
faith conducting an appropriate proceeding to contest the obligation to pay and
so long as Bank's interest in the Collateral is not jeopardized.
SECTION 10.6. REQUIRED INSURANCE. Borrower shall maintain insurance with
insurance companies in such amounts and against such risks as is usually carried
by owners of similar businesses and properties in the same general areas in
which each of them operates, and as shall be reasonably satisfactory to Bank.
With respect to the Project, Borrower agrees to provide Bank with the following
types of insurance coverages, in addition to any additional coverages required
by the Mortgage, in each case with Bank named as loss payee and/or additional
insured, as appropriate:
(i) During the course of any construction, renovation or repair
of the Improvements, builder's all risk insurance coverage against
"all risks of
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physical loss", including loss by fire, theft, vandalism, malicious
mischief, explosion, windstorm, collapse, sprinkler leakage and
extended coverage for one hundred percent (100%) of replacement cost.
(ii) Multi-peril hazard policies of insurance against loss or
damage by fire, theft, vandalism, malicious mischief, explosion,
windstorm, collapse and extended coverage for one hundred percent
(100%) of replacement cost.
(iii) To the extent required by Bank, policies of insurance
against loss by flood in an amount equal to one hundred percent (100%)
of replacement cost or the maximum amount of flood insurance
available, whichever is the lesser.
(iv) Policies of comprehensive general liability insurance,
insuring on an occurrence basis against claims for bodily injury,
including personal injury or death, occurring upon or in the
Improvements, or the elevators located on the Improvements, or on or
in the streets adjoining the Improvements, to afford protection to the
limit of not less than $5,000,000.00 in the event of bodily injury,
personal injury, or death of any number of persons or of damage to
property arising out of one occurrence.
(v) Business interruption insurance for a period of six (6)
months in such amounts as are satisfactory to Bank.
(vi) Worker's Compensation Insurance for all contractors,
subcontractors and the Borrower to the fullest extent required by law.
(vii) Such other insurance on or with respect to the Property
against other insurable hazards or casualties which at the time are
commonly insured against in the case of premises similarly situated,
due regard being given to the height and type of Improvements, their
construction, location, use and occupancy; and any replacements or
substitutions of such insurance, or additions to such insurance, and
in such amounts as may from time to time be required by Bank.
Borrower agrees to provide Bank with originals or certified copies of such
policies of insurance. Borrower further agrees to promptly furnish Bank with
copies of all renewal notices and, if requested by Bank, with copies of receipts
for paid premium. Borrower shall provide Bank with originals or certified
copies of all renewal or replacement policies of insurance no later than fifteen
(15) days before any such existing policy or policies should expire. If
Borrower's insurance policies required hereunder and renewals thereof are held
by another person, Borrower agrees to supply original or certified copies of the
same to Bank within the time periods required above.
SECTION 10.7. PERFORMANCE OF LOAN DOCUMENTS. Borrower shall duly and
punctually pay and perform each of its obligations under the Notes, under this
Agreement (as the same may at any time be amended or modified and in effect) and
under each of the Related Documents to which it is a party, in accordance with
the terms hereof and thereof.
SECTION 10.8. COMPLIANCE WITH ENVIRONMENTAL LAWS. Borrower shall comply
with and shall cause all of its employees, agents, invitees or sublessees to
comply with all Environmental Laws with respect to the disposal of industrial
refuse or waste, and/or the discharge, procession, treatment, removal,
transportation, storage and handling of hazardous or toxic wastes and
substances, and pay immediately when due the cost of removal of any such waste
or substances from, and keep their properties free of any lien imposed pursuant
to any such laws, rules, regulations or orders.
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Borrower shall give notice to Bank as soon as reasonably possible and in no
event more than five (5) days after it receives any compliance orders,
environmental citations, or other notices from any governmental entity relating
to any environmental condition relating to its properties or elsewhere for which
it may have legal responsibility with a full description thereof; Borrower
agrees to take any and all reasonable steps, and to perform any and all
reasonable actions necessary or appropriate to promptly comply with any such
citations, compliance orders or Environmental Laws requiring Borrower to remove,
treat or dispose of such hazardous materials, wastes or conditions at the sole
expense of Borrower, to provide Bank with satisfactory evidence of such
compliance; provided, however, that nothing contained herein shall preclude
Borrower from contesting any such compliance orders or citations if such contest
is made in good faith, appropriate reserves are established for the payment for
the cost of compliance therewith, and Bank's security interest in any such
property affected thereby (or the priority thereof) is not jeopardized.
Regardless of whether any Event of Default hereunder shall have occurred
and be continuing, Borrower (i) releases and waives any present or future claims
against Bank for indemnity or contribution in the event Borrower becomes liable
for remediation costs under and Environmental Laws, and (ii) agrees to defend,
indemnify and hold harmless Bank from any and all liabilities (including strict
liability), actions, demands, penalties, losses, costs or expenses (including,
without limitation, reasonable attorneys fees and remedial costs), suits,
administrative orders, agency demand letters, costs of any settlement or
judgment and claims of any and every kind whatsoever which may now or in the
future (whether before or after the termination of this Agreement) be paid,
incurred, or suffered by, or asserted against Bank by any person or entity or
governmental agency for, with respect to, or as a direct or indirect result of,
the presence on or under, or the escape, seepage, leakage, spillage, discharge,
emission, or release from or onto the property of Borrower of any hazardous
materials, wastes or conditions regulated by any Environmental Laws,
contamination resulting therefrom, or arising out of, or resulting from, the
environmental condition of such property or the applicability of any
Environmental Laws relating to hazardous materials (including, without
limitation, CERCLA or any so called federal, state or local "super fund" or
"super lien" laws, statute, ordinance, code, rule, regulation, order or decree)
regardless of whether or not caused by or within the control of Bank (the costs
and/or liabilities described in (i) and (ii) above being hereinafter referred to
as the "Liabilities"). The covenants and indemnities contained in this Section
10.8 shall survive termination of this Agreement.
SECTION 10.9. FURTHER ASSURANCES. Borrower will, at any time and from
time to time, execute and deliver such further instruments and take such further
action as may reasonably be requested by Bank, in order to cure any defects in
the execution and delivery of, or to comply with or accomplish the covenants and
agreements contained in this Agreement or the Collateral Documents.
SECTION 10.10. FINANCIAL COVENANTS. Borrower shall comply with the
following covenants and ratios:
(a) Borrower shall at all times maintain a Debt-to-Worth Ratio of not more
than 2.75 through December 31, 1997 and a Debt-to-Worth Ratio of 2.5
thereafter.
(b) Borrower shall at all times maintain working capital of greater than
$1,000,000.00. For the purposes hereof, "working capital" shall mean
current assets less current liabilities.
(c) Borrower shall maintain a ratio at the end of each calendar quarter of
(i) the excess of net income for the preceding four calendar quarters
(before interest expense, income taxes, depreciation and amortization)
after dividends for the preceding four calendar quarters to (ii) to
the sum of current maturities of long term debt plus total interest
expense for the preceding four calendar quarters, of not less than 1.5
to 1. For the calendar quarters ending prior to September 30, 1998,
net income for the complete calendar quarters after the date of this
Agreement (before interest expense, income taxes, depreciation and
amortization) shall be annualized to determine such net income.
SECTION 10.11. OPERATIONS. Borrower shall conduct its business affairs in
a reasonable and prudent manner and in compliance with all applicable federal,
state and municipal laws, ordinances, rules and regulations respecting its
properties, charters, businesses and operations, including compliance with all
minimum funding
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standards and other requirements of ERISA of 1974, and other laws applicable to
any employee benefit plans which they may have.
SECTION 10.12. CHANGE OF LOCATION. Borrower shall, within ten (10)
Business Days prior to any such addition or change, notify Bank in writing of
any proposed additions to or changes in the location of their business.
SECTION 10.13. EMPLOYEE BENEFIT PLANS. So long as this Agreement remains
in effect, Borrower will maintain each employee benefit plan as to which they
may have any liability, in compliance with all applicable requirements of law
and regulations
SECTION 10.14. DEPOSIT ACCOUNTS. Borrower will maintain all corporate
deposit, disbursement, construction, reserve and operating accounts (including
separate tenant deposit accounts) with the Bank.
SECTION 10.15. DOMINION ACCOUNT. Borrower has established a lockbox with
Bank into which all proceeds of Receivables of Borrower shall be remitted.
Borrower will promptly direct its customers to remit payments of all of their
accounts receivable to such lockbox. Remittances received under the lockbox
arrangement will be deposited by the Bank to the demand deposit account
maintained by Borrower with the Bank (the "Dominion", account number 812378635).
Bank shall have dominion over all funds in the Dominion Account. Borrower shall
deposit all payments of accounts receivable which are not remitted by customers
directly to the Dominion Account into the Dominion Account on the date such
remittance is received. Amounts deposited into the Dominion Account will be
used for daily loan payments towards the Revolving Note as described in Section
2.2.6. Borrower will have no access to any funds in the Dominion Account for so
long as this Agreement remains in effect, the Revolving Note has not been paid
in full, or any Credits or other Indebtedness of Borrower remains outstanding.
SECTION 10.16. FIELD AUDITS; OTHER INFORMATION. Borrower shall allow
during normal business hours to perform field audits from time to time.
Borrower shall pay all costs and expenses associated with such field audits.
Borrower will provide Bank with such other information as Bank may reasonably
request from time to time.
SECTION 10.17. CONSTRUCTION COVENANTS. In addition to the covenants of the
Borrower otherwise set forth in this Agreement, the Borrower hereby agrees that,
so long as any part of the Construction Loan is outstanding, unless compliance
shall have been waived in writing by the Bank, the Borrower shall at all times
comply with the following covenants.
(a) COMMENCEMENT AND COMPLETION OF IMPROVEMENTS. Prior to the
recordation of the Mortgage, no work of any kind (including the destruction or
removal of any existing improvements, site work, draining, or fencing of the
Property) shall have commenced or shall have been performed on the Property
(except for clearing, leveling, grading, test piling, cutting or removal of
trees and debris, placing of fill dirt, leveling of the land surf ace), no
equipment or material shall have been delivered to or upon the Property for any
purpose whatsoever, and no contract (or memorandum or affidavit thereof) for the
supplying of labor, materials, or services for the construction of the
Improvements shall have been recorded in the mechanic's lien or other
appropriate records in the parish where the Property is located. The Borrower
will (i) commence construction on or after June 16, 1997; (ii) cause the
construction of the Improvements to be prosecuted with diligence and continuity
in accordance with the Plans; (iii) promptly correct or cause to be corrected
any defect in the Improvements, any material departure in the construction of
the Improvements from the Plans, governmental requirements, or any encroachment
by any part of the Improvements or any other structure located on the Property
on any building line, easement, property line, or restricted area; (iv)
guarantee to the Bank that the Improvements will be completed in good and
workmanlike manner in accordance with the Plans; (v) promptly notify Bank of any
lien filed by the Contractor, any subcontractor, supplier or laborer or of
Borrower's knowledge that the Contractor or any subcontractor, has failed to pay
amounts due following the funding of any Advance for the payment of same; and
(vi) complete the construction of the Improvements in accordance with the Plans
on or before April 13, 1998. Notwithstanding anything to the contrary in this
Agreement, the Improvements shall not be deemed to have been completed until (y)
they shall contain all equipment, furnishings and fixtures required for the use
and operation of the additional Improvements and/or which may be required by
governmental authorities and/or
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by any law, regulation or rule of any governmental authority; and (z) permanent
certificates of occupancy and all other necessary certificates, licenses,
consents and other approvals of governmental authorities have been issued or
made with respect to the Improvements.
(b) SURVEY. In addition to any survey required by this Agreement, the
Borrower will furnish the Bank with three copies of each of the following
surveys.
(i) FOUNDATION SURVEY. Within ten days after completion of the
foundation of the additional Improvements, the Borrower shall furnish the Bank
with a survey showing all existing on-site Improvements, plus the location and
dimensions of perimeter foundations and high point relative elevation of
adjacent streets to ensure compliance with final working drawings and set-back
lines of each building and first floor elevations, together with an appropriate
endorsement to the Bank's title policy.
(ii) AS-BUILT SURVEY. Upon completion of the Improvements, the
Borrower shall furnish the Bank with a survey delineating all completed
Improvements on the Property and pertinent grade and floor elevations, together
with an appropriate endorsement to the Bank's title policy.
(c) CHANGE ORDERS. The Borrower will not (i) cause or permit any
changes in the Plans affecting the Improvements except pursuant to a change
order approved in writing by the Bank, the Bank's Inspector, the Contractor and
the Architect, or (ii) make any change in the Construction Contract or any
subcontract without the prior written approval of Bank.
(d) SUBCONTRACTOR VERIFICATIONS. Within ten days after request by the
Bank, the Borrower shall furnish a certificate, in form prescribed by the Bank,
signed by all subcontractors and material suppliers as to the existence, amount
and retainage of any subcontracts and materials supplies agreements.
(e) FEES AND EXPENSES OF BANK'S INSPECTOR. The Borrower shall pay the
fees and expenses of the Bank's Inspector. Also, Borrower agrees to reimburse
Bank the sum of $350 plus expenses for each annual inspection of the Property by
Bank or its designated inspector.
ARTICLE XI
NEGATIVE COVENANTS
In addition to the negative covenants contained in the Collateral
Documents, which covenants are hereby ratified and confirmed by Borrower,
covenants and agrees as follows:
SECTION 11.1. LIMITATIONS ON FUNDAMENTAL CHANGES. Borrower shall not
change the nature of its business, grant credit terms to its customers on terms
different than those presently granted to customers, or form any subsidiary
without the prior written consent of the Bank, nor shall Borrower enter into any
transaction of merger or consolidation, or liquidate or dissolve itself (or
suffer any liquidation or dissolution).
SECTION 11.2. DISPOSITION OF ASSETS. Borrower shall not convey, sell,
lease, assign, transfer or otherwise dispose of, any of its property, business
or assets whether now owned or hereafter acquired except property disposed of in
the ordinary course of business, provided that, if such property is to be
replaced, the net cash proceeds of each such transaction are applied to obtain a
replacement item or items within 30 days of the disposition thereof.
SECTION 11.3. RESTRICTED PAYMENTS. Borrower shall not declare or pay (or
set aside reserves for payment of) any dividends or distributions, make any
member, shareholder or affiliate loans in excess of amounts required to
reimburse members for the income taxes which they will incur on their share of
the income of Borrower, pay
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excessive member compensation or enter into any similar transactions with the
members of Borrower without the prior written consent of the Bank.
SECTION 11.4. ENCUMBRANCES. Borrower shall not create, incur, assume or
permit to exist any Encumbrances on any of its property now owned or hereafter
acquired, except for the following (hereinafter referred to as the "Permitted
Encumbrances"):
(a) Encumbrances for taxes, assessments, or other governmental charges not
yet due or which are being contested in good faith by appropriate
action promptly initiated and diligently conducted, if such reserves
as shall be required by GAAP shall have been made therefor;
(b) Encumbrances of landlords, vendors, carriers, warehousemen,
mechanics, laborers and materialmen arising by law in the ordinary
course of business for sums either not yet due or being contested in
good faith by appropriate action promptly initiated and diligently
conducted, if such reserve as shall be required by generally accepted
accounting principles shall have been made therefor (provided,
however, that no such Encumbrance of this nature shall constitute a
Permitted Encumbrance to the extent it affects the Project until it
has been bonded to the satisfaction of Bank);
(c) Inchoate liens arising under ERISA to secure the contingent
liabilities, if any, permitted by this Agreement; or
(d) The Collateral Documents and any other liens in favor of the Bank to
secure the Indebtedness of the Borrower to the Bank.
SECTION 11.5. DEBTS, GUARANTIES AND OTHER OBLIGATIONS. Borrower will not
incur, create, assume or in any manner become or be liable in respect of any
Debt direct or contingent, except for:
(a) The Indebtedness to the Bank under this Agreement;
(b) Trade payables or operating and facility leases from time to time
incurred in the ordinary course of business;
(c) Taxes, assessments or other government charges which are not yet due
or are being contested in good faith by appropriate action promptly
initiated and diligently conducted, if such reserve as shall be
required by generally accepted accounting principles shall have been
made therefor; or
(d) Additional Debt up to $10,000,000.00 the proceeds of which were used
to acquire capital assets.
SECTION 11.6. INVESTMENTS, LOANS AND ADVANCES. The Borrower will not make
or permit to remain outstanding any loans or advances to or investments in any
Person, except for:
(a) Investments in direct obligations of the United States of America or
any agency thereof;
(b) Investments in either certificates of deposit of maturities less than
one year, issued by the Bank, or if the Bank is not substantially
competitive (in terms of certificate of deposit interest rate for
comparable amounts) with other banks (having a credit rating
acceptable to the Bank) certificates of deposit of maturities less
than one year, issued by one or more of such other banks;
(c) Investments in commercial paper of maturities less than one year with
the best rating by Standard & Poors, ▇▇▇▇▇'▇ Investors Service, Inc.,
or any other rating agency satisfactory to the Bank;
(d) Routine advances to employees made in the ordinary course of business;
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(e) Investments in the stock of domestic corporations (who conduct their
business in the United States) up to the sum of $5,000,000.00 in the
aggregate; and
(f) Investment in the stock of American Aviation, Inc. or in a new
subsidiary formed to acquire the assets of American Aviation, Inc.
SECTION 11.7. CHANGES IN MANAGEMENT AND CONTROL. The identity of members,
the officers or the managers of Borrower will not change without the prior
written consent of Bank. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ will remain in a senior management
position until at least July 31, 2002.
SECTION 11.8. OTHER AGREEMENTS. Borrower will not enter into any
agreement containing any provision which would be violated or breached by the
performance of its obligations hereunder or under any instrument or document
delivered or to be delivered by it hereunder or in connection herewith.
SECTION 11.9. TRANSACTIONS WITH AFFILIATES. Borrower will not enter into
any agreement with any affiliate of Borrower except to the extent that such
agreements are commercially reasonable which provide for terms which would
normally be obtainable in an arm's length transaction with an unrelated third
party.
SECTION 11.10. FOREIGN PROJECTS. Borrower will not enter into any foreign
projects, without first obtaining Bank's prior written consent.
ARTICLE XII
EVENTS OF DEFAULT
SECTION 12.1. EVENTS OF DEFAULT. The occurrence of any one or more of
the following shall constitute an Event of Default:
DEFAULT UNDER THE INDEBTEDNESS. Should Borrower default in the payment of
principal or interest under the Indebtedness of Borrower.
DEFAULT UNDER THIS AGREEMENT. Should Borrower violate or fail to comply
fully with any of the terms and conditions of, or default under, this Agreement,
and such default not be cured within ten days of the occurrence thereof
(provided, however, that no cure period shall be available for a default in the
obligation to maintain insurance coverages required hereby).
DEFAULT UNDER OTHER AGREEMENTS. Should any event of default occur or
exist under any of the Related Documents or should Borrower violate, or fail to
comply fully with, any terms and conditions of any of the Collateral Documents
or Related Documents, and such default not be cured within ten days of the
occurrence thereof (provided, however, that no cure period shall be available
for a default in the obligation to maintain insurance coverages required
thereby).
OTHER DEFAULTS IN FAVOR OF BANK. Should Borrower default under any other
loan, extension of credit, security agreement, or other obligation in favor of
Bank and fail to cure same in accordance with any applicable cure periods.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower default under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person and fail to cure
same in accordance with any applicable cure periods.
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INSOLVENCY. The following occurrences, in addition to the failure or
suspension of Borrower, shall constitute an Event of Default hereunder:
(a) Filing by Borrower of a voluntary petition or any answer seeking
reorganization, arrangement, readjustment of its debts or for any
other relief under any applicable bankruptcy act or law, or under any
other insolvency act or law, now or hereafter existing, or any action
by Borrower consenting to, approving of, or acquiescing in, any such
petition or proceeding; the application by Borrower for, or the
appointment by consent or acquiescence of, a receiver or trustee of
any of the Borrower for all or a substantial part of the property of
any such person; the making by Borrower, of an assignment for the
benefit of creditors; the inability of Borrower or the admission by
Borrower in writing, of its inability to pay its debts as they mature
(the term "acquiescence" means the failure to file a petition or
motion in opposition to such petition or proceeding or to vacate or
discharge any order, judgment or decree providing for such appointment
within sixty (60) days after the appointment of a receiver or
trustee); or
(b) Filing of an involuntary petition against Borrower in bankruptcy or
seeking reorganization, arrangement, readjustment of its debts or for
any other relief under any applicable bankruptcy act or law, or under
any other insolvency act or law, now or hereafter existing and such
petition remains undismissed or unanswered for a period of sixty (60)
days from such filing; or the insolvency appointment of a receiver or
trustee of Borrower for all or a substantial part of the property of
Borrower and such appointment remains unvacated or unopposed for a
period of sixty (60) days from such appointment, execution or similar
process against any substantial part of the property of Borrower and
such warrant remains unbonded or undismissed for a period of sixty
(60) days from notice to Borrower of its issuance.
DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Borrower be commenced.
FALSE STATEMENTS. Should any representation or warranty of Borrower made
in connection with the Indebtedness prove to be incorrect or misleading in any
material respect when made or reaffirmed.
MATERIAL ADVERSE CHANGE. Should a Material Adverse Change with respect to
Borrower occur at any time and not be cured within ten days of the occurrence
thereof.
Upon the occurrence of an Event of Default, all Commitments of Bank under
this Agreement will terminate immediately (including any obligation to make any
further Revolving Loans, to issue any further Credits to or for the account of
any of Borrower, to make any further Construction Loans or to fund the Term
Loan), and, at Bank's option, the Notes and all Indebtedness of Borrower will
become immediately due and payable, all without notice of any kind to Borrower,
except that in the case of type described in the "Insolvency" subsection above,
such acceleration shall be automatic and not optional.
Upon the occurrence of an Event of Default, Bank may proceed to realize
upon the Collateral under the terms of the Collateral Documents and exercise
any other rights which it has by law or contract (which rights shall be
cumulative in nature).
SECTION 12.2. WAIVERS BY BORROWER. Except as otherwise provided for in
this Agreement and by applicable law, Borrower waives (i) presentment, demand
and protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Bank on which Borrower may in any way be liable and hereby
ratify and confirm whatever Bank may do in this regard, (ii) all rights to
notice and a hearing prior to Bank's taking possession or control of, or to
Bank's replevy, attachment or levy upon, the Collateral or any bond or security
which might be required by any court prior to allowing Bank to exercise any of
its remedies, and (iii) the benefit of all valuation, appraisal and exemption
laws. Borrower acknowledges that it has been advised by counsel of their choice
with
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respect to this Agreement, the other Collateral Documents, and the transactions
evidenced by this Agreement and other Collateral Documents.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. NO WAIVER; MODIFICATION IN WRITING. No failure or
delay on the part of Bank in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. No amendment,
modification or waiver of any provision of this Agreement or of the Notes, nor
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in writing signed by or on behalf of Bank and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on Borrower in any
case shall entitle Borrower to any other or further notice or demand in similar
or other circumstances.
SECTION 13.2. PAYMENT ON NON-BUSINESS DAY. Whenever any payment to
be made hereunder or on account of the Note shall be scheduled to become due on
a day which 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 computing interest and fees payable hereunder or on account of the
Notes.
SECTION 13.3. ADDRESSES FOR NOTICES. All notices and communications
provided for hereunder shall be in writing and, shall be mailed, by certified
mail, return receipt requested, or delivered as set forth below unless any
person named below shall notify the others in writing of another address, in
which case notices and communications shall be mailed, by certified mail, return
receipt requested, or delivered to such other address.
If to Bank:
Hibernia National Bank
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Energy and Maritime Department
If to Borrower:
Omni Geophysical, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Manager
SECTION 13.4. FEES AND EXPENSES. Borrower agrees to pay all fees, costs
and expenses of Bank in connection with the preparation, execution and delivery
of this Agreement, and all Related Documents to be executed in connection
herewith and subsequent modifications or amendments to any of the foregoing,
including without limitation, the reasonable fees and disbursements of counsel
to Bank, and to pay all costs and expenses of Bank in connection with the
enforcement of this Agreement, the Notes or the other Related Documents,
including reasonable legal fees and disbursements arising in connection
therewith. Borrower also agrees to pay, and to save Bank harmless from any
delay in paying stamp and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of this
Agreement, the Notes, the other Related Documents, or any modification thereof.
SECTION 13.5. SECURITY INTEREST AND RIGHT OF SET-OFF. Bank shall have a
continuing security interest in, as well as the right to set-off the obligations
of Borrower hereunder against, all funds which Borrower may maintain
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on deposit with Bank (with the exception of funds deposited in Borrower's
accounts in trust for third parties or funds deposited in pension accounts,
IRA's, ▇▇▇▇▇ accounts and All Saver Certificates), and Bank shall have a lien
upon and a security interest in all property of Borrower in Bank's possession or
control which shall secure the Indebtedness of Borrower.
SECTION 13.6. WAIVER OF MARSHALING. Borrower shall not at any time
hereafter assert any right under any law pertaining to marshaling (whether of
assets or liens) and Borrower expressly agrees that Bank may execute or
foreclose upon the Collateral in such order and manner as Bank, in its sole
discretion, deems appropriate.
SECTION 13.7. GOVERNING LAW. This Agreement and the Notes shall be
deemed to be contracts made under the laws of the State of Louisiana and for all
purposes shall be construed in accordance with the laws of said State.
SECTION 13.8. CONSENT TO LOAN PARTICIPATION. Borrower agrees and
consents to Bank's sale or transfer, whether now or later, of one or more
participation interests in the Indebtedness of the Borrower arising pursuant to
this Agreement to one or more purchasers, whether related or unrelated to Bank.
Bank may provide, without any limitation whatsoever, to any one or more
purchasers, or potential purchasers, any information or knowledge Bank may have
about Borrower or about any other matter relating to such Indebtedness, and
Borrower hereby waives any rights to privacy it may have with respect to such
matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of such
participation interests. Borrower also agrees that the purchasers of any such
participation interest will be considered as the absolute owners of such
interests in such Indebtedness.
SECTION 13.9. WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. (a)
BORROWER AND BANK HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
WHICH BORROWER AND BANK MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING
TO (i) THE NOTES, (ii) THIS AGREEMENT, (iii) THE COLLATERAL DOCUMENTS OR (iv)
THE COLLATERAL. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A
WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR
PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS
AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE
BORROWER AND THE BANK, AND THE BORROWER AND THE BANK HEREBY REPRESENT THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE
BORROWER AND THE BANK EACH FURTHER REPRESENT THAT IT HAS BEEN REPRESENTED IN THE
SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.
(b) THE BORROWER HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE
STATE COURTS OF LOUISIANA AND THE FEDERAL COURTS IN LOUISIANA AND AGREE THAT
ANY ACTION OR PROCEEDING ARISING OUT OF OR BROUGHT TO ENFORCE THE PROVISIONS OF
THE NOTES, THIS AGREEMENT AND/OR THE COLLATERAL DOCUMENTS MAY BE BROUGHT IN ANY
COURT HAVING SUBJECT MATTER JURISDICTION.
SECTION 13.10. SEVERABILITY. If a court of competent jurisdiction finds
any provision of this Agreement to be invalid or unenforceable as to any person
or circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Agreement in all
other respects shall remain valid and enforceable.
SECTION 13.11. HEADINGS. Article and Section headings used in this
Agreement are for convenience only and shall not affect the construction of this
Agreement.
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SECTION 13.12. PURPOSES OF INSPECTIONS. The sole purpose and function of
the provisions of this Agreement authorizing the Bank, the Bank's Inspector, or
any agent, officer, employee or representative of the Bank to enter upon the
Property to make inspections of the Improvements, materials, Plans, shop
drawings, workmanship and construction of the Improvements or to enter into
possession of the Property upon any Default and perform any work necessary or
desirable to complete the Improvements and to take all other action in
connection therewith, is to obtain information and to afford the Bank the
opportunity to
(a) verify whether any advances the Bank is obligated to make under
this Agreement are due, and the correct amount of such advances;
(b) determine whether there has been or may be any Default of the
Indebtedness of Borrower under this Agreement; and
(c) take any necessary or appropriate action to protect and preserve
the Bank's security for the Loan and all advances made hereunder.
None of the aforesaid actions by the Bank, the Bank's Inspector, or any agent,
officer, employee or representative of the Bank, shall be or may be construed in
such a manner as to impose any duty or obligation whatsoever on the Bank, the
Bank's Inspector, or any agent, officer, employee or representative of the Bank,
to protect or represent any owner, borrower, contractor, surety, or any other
person whatsoever and shall not be considered or construed as having made any
warranty whatsoever, whether express or implied, as to the adequacy, quality of
fitness or purpose of any physical conditions, materials, workmanship, Plans,
specifications, drawings or other requirements pertaining to the construction of
the Improvements, or whether any such physical conditions, materials or
workmanship comply with any Plans, specifications, drawings, ordinances,
statutes, or other governmental requirements pertaining to the Property. Bank
shall have no liability, obligation or responsibility whatsoever with respect to
the construction of the Improvements except to advance the Construction Loan
pursuant to this Agreement Bank shall not be obligated to inspect the Property
or the construction of the Property, nor be liable for the performance or
Default of Borrower, Contractor, any architect, subcontractor or materialmen, or
any other party, or for any failure to construct, complete, protect, or insure
the Improvements, or for the payment of costs of labor, materials, or services
supplied for the Improvements, or for the performance of any obligation of
Borrower whatsoever. Nothing, including without limitation, any advance or
acceptance of any document or instrument, shall be construed as a representation
or warranty, express or implied, to any party by Bank.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
OMNI GEOPHYSICAL, L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Manager
HIBERNIA NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Title: Assistant Vice President
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