Amended and Restated
REVOLVING CREDIT AGREEMENT
dated as of January 28, 1997
among
AVONDALE INDUSTRIES, INC.,
as the Company
VARIOUS FINANCIAL INSTITUTIONS,
as the Banks
and
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
as the Agent for the Banks
- - - - - - - - - - - - - - - - - - -
Arranged by
BANCAMERICA SECURITIES, INC.
TABLE OF CONTENTS
Page
Section 1.1 Defined Terms
Section 1.2 Other Definitional Provisions
Section 1.3 Accounting Terms and Determinations
SECTION II REVOLVING LOANS
Section 2.1 Revolving Loan Commitment
Section 2.2 Revolving Note
Section 2.3 Mandatory Reduction and Prepayment
Section 2.4 Procedure for Borrowing
Section 2.5 Voluntary Reduction of Commitments
Section 2.6 Optional Prepayments
Section 2.7 Continuation and Conversion Elections
Section 2.8 Interest Rate and Payment Dates
Section 2.9 Fees
Section 2.10 Computation of Interest
Section 2.11 Payments
Section 2.12 Inability to Determine Interest Rate
Section 2.13 Illegality
Section 2.14 Requirements of Law
Section 2.15 Funding Losses
Section 2.16 Use of Proceeds
Section 2.17 Certain Pricing Terms
Section 2.18 Certain Provisions Regarding Release and Re-Pledge
of
Certain Collateral
Section 2.19 Extensions of Expiration Date
Section 2.20 Additional Banks; Optional Increase of Total
Commitments
SECTION III LETTERS OF CREDIT
Section 3.1 Requests
Section 3.2 Issuance
Section 3.3 Fees and Expenses
Section 3.4 Existing Letters of Credit; Banks' Participation
Section 3.5 Disbursements
Section 3.6 Reimbursement
Section 3.7 Deemed Disbursements; Other Cash Collateral
Requirements
Section 3.8 Nature of Reimbursement Obligations
Section 3.9 Indemnity
SECTION IV REPRESENTATIONS AND WARRANTIES
Section 4.1 Financial Condition
Section 4.2 No Change
Section 4.3 Corporate Existence: Compliance with Law
Section 4.4 Corporate Power: Authorization: Enforceable
Obligations
Section 4.5 No Bar
Section 4.6 No Material Litigation
Section 4.7 No Default
Section 4.8 Ownership of Property: Liens
Section 4.9 No Burdensome Restrictions
Section 4.10 Taxes
Section 4.11 Regulations G, T, U and X
Section 4.12 ERISA
Section 4.13 Subsidiaries
Section 4.14 Government Regulation
Section 4.15 Environmental Matters
Section 4.16 Judgments or Litigation
Section 4.17 Government Contracts
Section 4.18 Modular Construction
Section 4.19 Licenses, Permits
Section 4.20 Navy Contracts
Section 4.21 Loan Documents, etc.
Section 4.22 No Federal Tax or ERISA Liens
Section 4.23 No Bonds
Section 4.24 Labor Controversies
Section 4.25 Capitalization; Existing Indebtedness
Section 4.26 Patents, Trademarks, etc.
Section 4.27 Collateral Documents
Section 4.28 Accuracy of Information
Section 4.29 Solvency
Section 4.30 The LPD-17 Contract
Section 4.31 Qualification for MARAD Refinancing of LPD-17
Expenditures
SECTION V CONDITIONS PRECEDENT TO EFFECTIVE DATE AND EACH
EXTENSION OF CREDIT
Section 5.1 Effective Date; Initial Credit Extensions
Section 5.2 Conditions to Initial Letter of Credit Issuance
Section 5.3 Conditions to Each Extension of Credit
SECTION VI AFFIRMATIVE COVENANTS
Section 6.1 Financial Statements
Section 6.2 Certificates: Other Information
Section 6.3 Payment of Obligations
Section 6.4 Maintenance of Property: Insurance
Section 6.5 Conduct of Business and Maintenance of Existence
Section 6.6 Inspection of Property: Books and Records;
Discussions
Section 6.7 Notices
Section 6.8 ERISA
Section 6.9 Delivery; Further Assurances
Section 6.10 Cash Management Letters
Section 6.11 Delivery of Assignment of Claims Notices
Section 6.12 Refinancing of LPD-17 Expenditures
SECTION VII NEGATIVE COVENANTS
Section 7.1 Financial Condition Covenants
Section 7.2 Limitation on Liens
Section 7.3 Limitation on Investments and Intercompany Activity
Section 7.4 Limitation on Fundamental Changes
Section 7.5 Limitation on Sale of Assets
Section 7.6 Limitation on Dividends
Section 7.7 Limitation on Capital Expenditures
Section 7.8 Sale and Leaseback
Section 7.9 Acquisitions
Section 7.10 Environmental Liabilities
Section 7.11 Compliance with ERISA
Section 7.12 Prepayments
Section 7.13 Indebtedness
Section 7.14 No Additional Subsidiaries
Section 7.15 Change of Location or Name
Section 7.16 Additional Negative Pledges and Other Payment
Restrictions
Affecting Subsidiaries
Section 7.17 Additional Restrictions on Avondale Properties,
Inc. and the
Shipyard Partnership
Section 7.18 Amendment to Other Financing Documents
SECTION VIII EVENTS OF DEFAULT
SECTION IX THE AGENT
Section 9.1 Actions
Section 9.2 Exculpation
Section 9.3 Successor
Section 9.4 Credit Decisions
Section 9.5 Notices, etc. from Agent
Section 9.6 Collateral Documents
Section 9.7 Loans by the Agent
Section 9.8 Other Collateral Matters
Section 9.9 Arranger.
SECTION X MISCELLANEOUS
Section 10.1 Notices
Section 10.2 Amendments and Waivers
Section 10.3 No Waiver: Cumulative Remedies
Section 10.4 Survival of Representations and Warranties
Section 10.5 Payment of Expenses and Taxes; Indemnity and
Release
Section 10.6 Headings; Table of Contents
Section 10.7 Successors and Assigns
Section 10.8 Tax Forms
Section 10.9 Setoff
Section 10.10 Sharing
Section 10.11 Counterparts
Section 10.12 Severability
Section 10.13 Governing Law
Section 10.14 Marshalling; Recapture
Section 10.15 Jurisdiction
Section 10.16 Waiver of Jury Trial
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT dated as of
January 28, 1997, by and among AVONDALE INDUSTRIES, INC., a
Louisiana corporation (the "Company"), the various financial
institutions signatory hereto (collectively, the "Banks," and,
individually, a "Bank"), and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as agent for the Banks (the "Agent").
W I T N E S S E T H:
WHEREAS, the Company wishes to amend, extend and increase
its Line of Credit pursuant to and as defined in that certain
Revolving Credit Agreement dated as of May 10, 1994, as amended,
among the Company, various financial institutions party thereto
and Bank of America National Trust and Savings Association, as
agent (the "Existing Credit Agreement");
WHEREAS, subject to the conditions to effectiveness set
forth in Section 5.1 hereof, this Revolving Credit Agreement is a
renewal, extension, increase and restatement of the Existing
Credit Agreement, and pursuant to this Amended and Restated
Revolving Credit Agreement, the Company wishes to obtain a
revolving credit facility to provide financing for general
corporate purposes, including the Company's and its Subsidiaries'
ongoing working capital requirements, and for obligations to be
supported by Letters of Credit; and
WHEREAS, upon the terms and subject to the conditions set
forth herein, including without limitation the conditions to
effectiveness set forth in Section 5.1 hereof, the LC Issuer is
willing to issue letters of credit for the account of the Company
and the Banks are willing to (i) make loans and advances to the
Company and (ii) purchase participations in Letters of Credit
issued by the LC Issuer for the account of the Company;
NOW, THEREFORE, the Company, the Banks and the Agent hereby
agree, and the Existing Credit Agreement is hereby amended and
restated, in each case subject to Section 5.1 hereof, as follows:
SECTION I
DEFINITIONS
Section 1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such
definitions, and the definitions of all other terms defined
herein, to be equally applicable to both their singular and
plural forms):
"Accounts" shall mean (i) any right to payment for
goods sold, delivered or leased or for services rendered which is
not evidenced by an instrument or chattel paper, whether or not
it has been earned by performance and (ii) any right to payment
due under any and all contracts for the construction of ships or
other vessels.
"Acquisition" shall mean any transaction or series of
transactions by which the Company acquires, either directly or
through an Affiliate or Subsidiary or otherwise, (x) any or all
of the stock or other securities of any class of any Person or
(y) a substantial portion of the assets, or a division or line of
business of any Person.
"Additional Bank" shall have the meaning given to said
term in Section 2.20.
"Adjusted Consolidated Net Income - Cash Flow Coverage"
shall mean, for any period, the sum of:
(a) Consolidated Net Income for such period;
plus
(b) depreciation and amortization of the
Company and its Subsidiaries for such period;
plus
(c) extraordinary losses (or minus
extraordinary gains) on the sale or other transfer
of assets or adjustment of the carrying value of
any assets, in each case, of the Company or its
Subsidiaries for such period;
less
(d) Capital Expenditures of the Company or its
Subsidiaries for such period (other than those
Capital Expenditures that are (i) incurred in
connection with the Design Center and (ii)
permitted by Section 7.7); and
less
(e) cash dividends paid with respect to the
capital stock of the Company for such period.
"Adjusted Consolidated Net Income - Interest Coverage"
shall mean, for any period the sum of:
(a) Consolidated Net Income for such period;
plus
(b) depreciation and amortization of the
Company and its Subsidiaries for such period;
plus
(c) extraordinary losses (or minus
extraordinary gains) on the sale or other transfer
of assets or adjustment of the carrying value of
any assets, in each case, of the Company or its
Subsidiaries for such period;
plus
(d) Consolidated Cash Interest Expense of the
Company and its Subsidiaries for such period; and
plus
(e) income tax expense of the Company and its
Subsidiaries during such period.
"Affiliate" of any Person shall mean any other Person
who, directly or indirectly, controls or is controlled by or is
under common control with such Person. A Person shall be deemed
to be "controlled by" any other Person who possesses, directly or
indirectly, power: (a) to vote 10% or more of the securities
having ordinary voting power for the election of directors of
such Person, or (b) to direct or cause the direction of the
management and policies of such Person, whether by contract or
otherwise.
"Agent" shall mean Bank of America National Trust and
Savings Association and its successors, or such other Bank or
financial institution as shall have been subsequently appointed
as successor Agent pursuant to Section 9.3 of this Agreement.
"Agreement" shall mean this Amended and Restated
Revolving Credit Agreement, as amended, amended and restated,
supplemented or otherwise modified from time to time.
"Alternate Base Rate" shall mean, for any day, a
fluctuating rate of interest per annum equal to the greater of
(i) the Base Rate in effect on such day or (ii) the Federal Funds
Effective Rate in effect on such day plus .50%. For purposes of
this Agreement, any change in the Alternate Base Rate due to a
change in the Base Rate shall be effective on the date such
change in the Base Rate is announced and any change in the
Alternate Base Rate due to a change in the Federal Funds
Effective Rate shall be effective on the effective date of such
change in the Federal Funds Effective Rate. If for any reason
the Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Agent to obtain
sufficient bids or publications in accordance with the terms
hereof, the Alternate Base Rate shall be a fluctuating rate per
annum equal to the Base Rate in effect from time to time until
the circumstances giving rise to such inability no longer exist.
"Applicable Margin" shall mean, for any day, the
specified number of Basis Points set forth on Schedule III
attached hereto, determined in accordance with Section 2.17
hereof.
"Arranger" shall have the meaning assigned to said term
in Section 9.9.
"Articles of Incorporation" shall mean the Articles of
Incorporation of the Company dated March 16, 1990 and October 26,
1990, as filed with the Louisiana Secretary of State as the same
may be amended or supplemented from time to time.
"Assessed Value" shall mean the fair market value as
determined from time to time by an independent appraiser
acceptable to the Agent, of a piece of property or equipment,
less the amount of any Indebtedness secured by the property or
equipment.
"Assignment and Assumption Agreement" shall mean an
assignment and assumption agreement entered into by an assigning
Bank and an assignee Bank, and accepted by the Agent, in
accordance with Section 10.7, substantially in the form of
Exhibit A.
"Assignment of Claims Notice" shall mean, collectively,
the Notices of Assignment with respect to the Navy Contracts of
the Company and/or its Subsidiaries, as applicable, sent to the
United States government by the Agent, pursuant to the Assignment
of Claims Act of 1940 as amended (31 U.S.C. 3727, 41 U.S.C. 15)
and acknowledged by the appropriate administrative contracting
officer, and disbursing officer, and if applicable, any surety on
any bond applicable to the Navy Contracts.
"Available Commitment" shall mean, at any particular
time, for each Bank, an amount equal to the excess, if any, of
(a) the amount of such Bank's Commitment at such time over (b)
the sum of the aggregate unpaid principal amount at such time of
all Loans made by such Bank pursuant to this Agreement plus the
amount of such Bank's Percentage of the Letter of Credit
Outstandings at such time.
"Avondale Drydock" shall mean that certain floating
drydock named AVONDALE DRYDOCK, Official Number 568190.
"BAI" shall mean Bank of America Illinois, its
successors and assigns.
"Bank Party" shall have the meaning given to said term
in Section 10.5.
"Base Rate" shall mean, at any time and from time to
time, the rate per annum then most recently announced by the
Agent at its head office as its base or reference rate. The
Base Rate is not necessarily intended to be the lowest rate
of interest determined by the Agent in connection with
extensions of credit. The Agent shall give notice promptly
to the Company and the Banks of changes in the Base Rate.
"Base Rate Loan" shall mean a Loan bearing interest at
a fluctuating rate of interest determined by reference to
the Alternate Base Rate.
"Basis Point" shall mean one one-hundredth of one
percent (1/100 of 1%) per annum.
"BofA" shall mean Bank of America National Trust and
Savings Association, a national banking association.
"Borrowing Date" shall mean any Business Day specified
in a notice pursuant to Sections 2.4 or 3.1 as a date on
which the Company requests the Banks to make Loans hereunder
or the LC Issuer to issue a Letter of Credit.
"Borrowing Request" means a loan request and
certificate duly executed by a Responsible Officer of the
Company on behalf of the Company and substantially in the
form of Exhibit B.
"Business Day" shall mean:
(a) a day other than a Saturday, Sunday or
other day on which commercial banks in San Francisco,
California, are authorized or required by law to close;
and
(b) relative to the date of:
(i) making or continuing any Loans
as, or converting any Loans from or into,
Offshore Rate Loans,
(ii) making any payment or prepayment
of principal of or payment of interest on any
portion of the principal amount of any Loans
being maintained as Offshore Rate Loans, or
(iii) the Company's giving notice (or
the number of Business Days to elapse prior
to the effectiveness thereof) in connection
with any matter referred to in clause (b)(i)
or (b)(ii),
any day on which dealings in Dollars are carried
on in the interbank market of the Agent's Offshore
Lending Office.
"Capital Expenditures" shall mean, as to any Person,
without duplication and for any period, the cost attributed in
accordance with GAAP consistent with those applied in preparation
of the financial statements referred to in Section 4.1 to
acquisitions during such period by such Person of any asset,
tangible or intangible, or replacements or substitutes therefor
or additions thereto which such Person treated as a noncurrent
asset on such Person's financial statements, including, without
limitation, the acquisition or construction of assets having a
useful life of more than one year.
"Cash Equivalent Investments" shall mean (i) securities
issued, guaranteed or insured by the United States or any of its
agencies with maturities of not more than one year from the date
acquired; (ii) certificates of deposit or other deposit
arrangements with maturities of not more than one year from the
date acquired issued by a U.S. federal or state chartered
commercial bank of recognized standing, which has capital and
unimpaired surplus in excess of $200,000,000 and which bank or
its holding company has a short-term commercial paper rating of
at least A-1 or the equivalent by Standard & Poor's Corporation
and at least P-1 or the equivalent by ▇▇▇▇▇'▇ Investors Services,
Inc.; (iii) repurchase agreements or reverse repurchase
agreements with terms of not more than thirty (30) days from the
date acquired, for securities of the type described in clause (i)
above and entered into only with commercial banks having the
qualifications described in clause (ii) above; (iv) commercial
paper, master notes, or corporate debt obligations other than
those issued by the Company or any of its Affiliates, issued by
any Person incorporated under the laws of the United States or
any state thereof and rated at least A-1 or the equivalent
thereof by Standard & Poor's Corporation, at least P-1 or the
equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc., or at
least D-1 or the equivalent thereof by Duff & ▇▇▇▇▇▇ Credit
Rating Company, in each case with maturities of not more than one
year from the date acquired; and (v) investments in money market
funds registered under the Investment Company Act of 1940, as
amended, which have net assets of at least $200,000,000 and at
least eighty-five percent (85%) of whose assets consist of
securities and other obligations of the type described in clauses
(i) through (iv) above.
"Cash Flow Coverage Ratio" shall mean, for any period,
the ratio of (i) Adjusted Consolidated Net Income - Cash Flow
Coverage during such period to (ii) Total Funded Debt as of the
last day of such period (subject to adjustment as provided
below). The Cash Flow Coverage Ratio shall be calculated as of
the last day of each fiscal quarter of the Company for the four
quarter period ending on such date and no adjustment shall be
made thereto.
"Cash Management Letter" shall mean a letter
substantially in the form of Exhibit C.
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.
"CERCLIS" shall mean the Comprehensive Environmental
Compensation Liability Information System List.
"Change of Control" shall mean any of the following
events:
(i) less than a majority of the members of the
Company's Board of Directors shall be persons who
either (A) were serving as directors on the date of
this Agreement or (B) were nominated as directors and
approved by the vote of the majority of the directors
who are directors referred to in clause (A) above or
this clause (B);
(ii) the failure of the Company to own 100% of
the capital stock of any Subsidiary Guarantor; or
(iii) the stockholders of the Company shall
approve any plan or proposal for the liquidation
or dissolution of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Code Affiliate" shall mean each trade or business
(whether or not incorporated) which together with the Company is
treated as a "single employer" under subsection (b), (c), (m) or
(o) of Section 414 of the Code.
"Collateral" shall mean all of the property in respect
of which a Lien has been granted by the Company or any Subsidiary
Guarantor in favor of the Agent for the benefit of the Banks and
the LC Issuer under the terms of the Collateral Documents.
"Collateral Access Agreement" shall mean any landlord
waivers, mortgagee waivers, bailee letters or similar
acknowledgment agreements of any warehouseman or processor in
possession of any Inventory, in each case, in form and substance
acceptable to the Agent and the Required Banks.
"Collateral Documents" shall mean all of the contracts,
instruments and other documents now or hereafter executed and
delivered in connection with this Agreement, pursuant to which
Liens are granted to the Agent in the Collateral for the benefit
of the Banks and the LC Issuer, including, without limitation the
900 Foot Floating Drydock Mortgage, the Mortgage Amendment, the
Security Agreement (Company), the Subsidiary Guarantees, the
Subsidiary Security Agreements and each Assignment of Claims
Notice.
"Commitment" shall mean, for each Bank, for the period
from and including the Effective Date to but excluding the
Expiration Date the amount set forth in Schedule I under the
heading "Commitment" as such amount may be adjusted pursuant to
Section 2.3, Section 2.5, Section 2.20, Section VIII or Section
10.7.
"Commitment Agreement" shall have the meaning given to
said term in Section 2.20.
"Commitment Date" shall have the meaning given to said
term in Section 2.20.
"Consent Notice" shall have the meaning given to said
term in Section 2.19.
"Consolidated Cash Interest Expense" shall mean, for
any period, the amount of any cash interest paid by the
Company and its Subsidiaries during such period, determined
in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period,
the consolidated net income (or net loss) of the Company and
its Subsidiaries for such period, determined in accordance
with GAAP.
"Consolidated Net Worth" shall mean, at a particular
date, all amounts which would be included under
shareholders' equity (except amounts relating to the then
outstanding principal balance of any Preferred Stock which
is, at the option of the holder thereof, convertible prior
to the Expiration Date into Indebtedness, or has, or is
convertible into any security that has, mandatory redemption
or repurchase requirements prior to the Expiration Date) on
a consolidated balance sheet of the Company and its
Subsidiaries determined in accordance with GAAP as at such
date.
"Contingent Obligation" shall mean, as to any Person,
any obligation of such Person guaranteeing or in effect
guaranteeing any Indebtedness, lease, dividend or other
obligation (the "primary obligations") of any other Person
(the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of
such Person, whether or not contingent (a) to purchase any
such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor or to permit
the primary obligor to meet financial covenants, (c) to
purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against
loss in respect thereof, including, without limitation
contingent obligations with respect to performance and other
similar bonds and instruments whether secured or unsecured;
provided, however, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount
of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is
made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as
determined by the Company in good faith.
"Continuation/Conversion Notice" means a notice of
continuation or conversion and certificate duly executed by
a Responsible Officer of the Company and substantially in
the form of Exhibit D.
"Contractual Obligation" shall mean, as to any Person,
any provision of any security issued by such Person or of
any agreement, instrument or undertaking to which such
Person is a party or by which it or any of its property is
bound.
"Credit Extension" shall mean (i) the making of any
Loan hereunder; or (ii) the incorporation herein, issuance,
renewal, modification or extension of any Letter of Credit.
"Customary Permitted Liens" shall mean (i) Liens for
taxes not yet due or which are being contested in good faith
and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company
or the appropriate Subsidiary, as the case may be, in
accordance with GAAP, (ii) carriers', warehousemen's,
mechanics', materialmen's, repairmen's, vendor's, lessor's,
workmen's, refurbisher's, bunkerer's, employee's, crew's,
stevedore's or other like Liens or Liens for salvage, in
each case, arising in the ordinary course of business by
operation of law which are not overdue for a period of more
than ninety days or which are being contested in good faith
and by appropriate proceedings and for which adequate
reserves have been made and (iii) Liens for salvage and
general average which are either unclaimed or fully covered
by insurance.
"Default" shall mean any of the events specified in
Section VIII of this Agreement, whether or not any
requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Design Center" shall mean the building, facilities and
related improvements to be constructed at or adjacent to the
Company's premises in Avondale, Louisiana to be used in the
design and construction of amphibious assault ships (known
as LPD-17 ships), pursuant to the LPD-17 Contract, together
with computers and equipment used in connection with such
facility.
"Disbursement Date" shall have the meaning given to
said term in Section 3.5.
"Dividend Calculation Period" shall have the meaning
given to said term in Section 7.6.
"Dollars" and "$" shall mean dollars in lawful currency
of the United States of America.
"Domestic Office" means, relative to any Bank, the
office of such Bank designated as such below its signature
hereto or such other office of such Bank (or any successor
or permitted assign of such Bank) within the United States
as may be designated from time to time by notice from such
Bank to the Agent and the Company.
"EBITDA" shall mean, for any period, Adjusted
Consolidated Net Income - Interest Coverage for such period.
"Effective Date" shall mean the date on which all of
the conditions set forth in Section 5.1 hereof are satisfied
by the Company or waived by the Required Banks, as confirmed
in a written confirmation of the Agent issued pursuant to
Section V hereof.
"Environmental Laws" means:
(a) CERCLA;
(b) the Resource Conservation and Recovery
Act, as amended by the Hazardous and Solid
Waste Amendment Act of 1984, 42 U.S.C.A.
Section 6901 et seq.;
(c) the Clean Air Act, 42 U.S.C.A. Section
7401 et seq.;
(d) the Clean Water Act of 1977, 33 U.S.C.A.
Section 1251 et seq.;
(e) the Toxic Substances Control Act, 15
U.S.C.A. Section 2601 et seq.; and
(f) all other Federal, state and local laws,
rules and regulations relating to air
pollution, water pollution, noise control
and/or the handling, discharge, existence,
disposal or recovery of on-site or off-site
hazardous, toxic or dangerous waste,
substances or materials, as each of the
foregoing may be amended from time to time.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean each trade or business
(whether or not incorporated) which together with the Company
would be deemed to be a "single employer" within the meaning of
Section 4001 of ERISA.
"ESOP" shall have the meaning given to said term in
Section 4.12.
Eurodollar Reserve Percentage" shall mean, relative to
any Interest Period, the reserve percentage (expressed as a
decimal) equal to the maximum aggregate reserve requirements
(including all basic, emergency, supplemental, marginal and other
reserves and taking into account any transitional adjustments or
other scheduled changes in reserve requirements) specified under
regulations issued from time to time by the F.R.S. Board and then
applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities", as currently defined in Regulation D
of the F.R.S. Board, having a term approximately equal or
comparable to such Interest Period.
"Event of Default" shall mean any of the events
specified in Section VIII of this Agreement, provided that any
requirement for the giving of notice, the lapse of time, or both,
or any other condition has been satisfied.
"Existing Credit Agreement" shall have the meaning
given to such term in the preamble hereto.
"Existing Letters of Credit" shall mean Letters of
Credit as defined in, and issued by Bank of America Illinois (or,
if applicable, BofA), pursuant to, the Existing Credit Agreement
which are outstanding on the Effective Date.
"Expiration Date" shall mean the earlier to occur of
(i) the date which is three (3) years after the Effective Date,
or (ii) the earliest date on which all of the following shall
have occurred: (x) the Letter of Credit Outstandings is zero, (y)
all Obligations (including, without limitation, all Reimbursement
Obligations) have been indefeasibly paid in full in cash and have
otherwise been satisfied and discharged in full and (z) all
Commitments have been reduced to zero.
"Extension Date" shall mean the date which is one year
prior to the then current Expiration Date.
"Extension Notice" shall mean a notice to the Agent
from the Company substantially in the form of Exhibit E.
"Federal Funds Effective Rate" means, for any day, an
interest rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it. In the case of a
day which is not a Business Day, the Federal Funds Effective Rate
for such day shall be the Federal Funds Effective Rate for the
next preceding Business Day.
"Fee Letter" shall mean that certain letter dated
January 2, 1997, among the Agent, the Arranger and the Company
providing for, among other things, the payment of certain fees in
connection with this Agreement.
"Financial Letter of Credit" shall have the meaning
given to such term in Section 3.1(a).
"Financing Lease" shall mean any lease obligation which
is capitalized on a balance sheet of a Person prepared in
accordance with GAAP.
"First Preferred Ship Mortgage" shall mean that certain
First Preferred Ship Mortgage dated October 21, 1975, granted on
the Avondale Drydock by Avondale Shipyards, Inc., a Louisiana
corporation and predecessor-in-interest to the Company, in favor
of the United States of America, represented by the Secretary of
Transportation, acting by and through the Maritime Administrator,
and recorded in the office of the Vessel Documentation Officer,
U.S. Coast Guard (the "Documentation Officer") in New Orleans,
Louisiana, in Preferred Mortgage Book ▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇,
on October 21, 1975, at 10:30 a.m., as amended and supplemented
by that certain Assumption Agreement and Supplement No. 1 to
First Preferred Ship Mortgage dated September 27, 1985, made and
executed by Avondale Industries, Inc., a Delaware corporation and
predecessor-in-interest to the Company, and recorded in the
office of the Documentation Officer in New Orleans, Louisiana, in
Preferred Mortgage Book 177, Instrument 71, on September 27,
1985, at 10:50 a.m., and as further assumed and supplemented by
that certain Assumption Agreement and Supplement No. 2 to First
Preferred Ship Mortgage dated March 13, 1991, made and executed
by Company, and recorded in the office of the Documentation
Officer in New Orleans, Louisiana, in Preferred Mortgage Book ▇▇.
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇, on March 13, 1991, at 10:39 a.m., and as
further amended and supplemented by that certain Supplement No. 3
to First Preferred Ship Mortgage dated February 9, 1995, made and
executed by the Company and recorded in the office of the
Documentation Officer in New Orleans, Louisiana in Preferred
Mortgage Book No. PM-9502, Instrument No. 91, on February 9, 1995
at 11:01 a.m.
"Fixed Asset Property" shall mean property, plant and
equipment listed on the Company's consolidated balance sheet at
any time and which does not constitute Collateral.
"F.R.S. Board" shall mean the Board of Governors of the
Federal Reserve System.
"GAAP" shall mean generally accepted accounting
principles in the United States of America in effect from time to
time.
"Government Contract" shall have the meaning given to
said term in Section 4.17.
"Governmental Authority" shall mean any sovereign state
or nation or government, any state or other political subdivision
thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, the United States
Department of Defense and the United States Navy.
"Gulfport" means Avondale Gulfport Marine, Inc., a
Delaware corporation.
"Hazardous Material" shall mean and includes (a) any
asbestos, PCBs, or dioxins, or insulation or other material
composed of or containing asbestos, PCBs or dioxins, (b) any
petroleum product, and (c) any hazardous, toxic, or dangerous
waste, substance, or material defined as such in (or for purposes
of) CERCLA, any so-called "Superfund" or "Superlien" law, or any
other applicable federal, state, local, or other statute, law,
ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct
concerning, any hazardous, toxic, or dangerous waste, substance,
or material, as now or at any time hereafter in effect.
"Impermissible Qualification" shall mean, relative to
the opinion or certification of any independent public accountant
as to any financial statement of any Person, any qualification or
exception to such opinion or certification which:
(a) is of a "going concern" or similar nature;
or
(b) relates to the limited scope of
examination or matters relevant to such financial
statement.
"Indebtedness" of a Person, shall mean, at a particular
date, the sum (without duplication and in conformity with GAAP)
at such date of (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property or services
(including, without limitation, all notes payable and all
obligations evidenced by bonds, debentures, notes or other
similar instruments but excluding trade payables incurred in the
ordinary course of business), (b) obligations with respect to any
installment sale or conditional sale agreement or title retention
agreement, (c) indebtedness arising under acceptance facilities,
(d) unpaid reimbursement obligations arising in connection with
surety, performance or other similar bonds and in connection with
standby letters of credit issued in lieu of such bonds, (e) the
outstanding amount of all other letters of credit (other than
those referred to in clause (d)) issued for the account of such
Person and, without duplication, all unpaid reimbursement
obligations thereunder, (f) Financing Leases, (g) payment
obligations with respect to interest rate swap, cap, collar,
floating rate or similar agreements, (h) any withdrawal liability
obligation of such Person or an ERISA Affiliate to a
Multiemployer Plan, (i) any Preferred Stock of such Person to the
extent that such Preferred Stock is convertible at the option of
the holder thereof into Indebtedness of a type described in
another clause of this definition or has, or is convertible into
any security that has, mandatory redemption or repurchase
requirements, and (j) Contingent Obligations of such Person,
including, without limitation Contingent Obligations with respect
to performance and other similar bonds and instruments whether
secured or unsecured.
"Indemnified Liabilities" shall have the meaning given
to such term in Section 10.5.
"Initial Credit Event" shall mean the initial Credit
Extension hereunder.
"Interest Coverage Ratio" shall mean, for any period,
the ratio of (i) Adjusted Consolidated Net Income - Interest
Coverage during such period to (ii) Consolidated Cash Interest
Expense during such period. The Interest Coverage Ratio shall be
calculated as of the last day of each fiscal quarter of the
Company for the four quarter period ending on such date.
"Interest Period" shall mean the period from the date
on which such Offshore Rate Loan is made or continued as, or
converted into, an Offshore Rate Loan pursuant to Section 2.4 or
2.7, and, unless the maturity of such Offshore Rate Loan is
accelerated, to the day which numerically corresponds to such
date one, two or three months thereafter as the Company may
select in its irrevocable notice of borrowing to the Agent as
provided in Section 2.4 or in its notice of continuation or
conversion as provided in Section 2.7 of this Agreement as the
case may be; provided that, the foregoing provisions relating to
Interest Periods are subject to the following:
(a) the Company shall not be permitted to
select Interest Periods to be in effect at any one time
which have expiration dates occurring on more than 4
different dates;
(b) if there exists no numerically
corresponding day in such month, such Interest Period
shall end on the last Business Day of such month;
(c) if such Interest Period would otherwise
end on a day which is not a Business Day, such Interest
Period shall end on the next following Business Day
(unless such next following Business Day is a Business
Day falling in a new calendar month, in which case such
Interest Period shall end on the Business Day next
preceding such numerically corresponding day); and
(d) the Company shall not be permitted to
select, and there shall not be applicable, any Interest
Period that would end later than the Expiration Date.
"Inventory" shall mean all of the Company's "inventory"
as that term is defined in Section 9-109(4) of the UCC, and shall
include, without limitation: (i) all raw materials, work in
process, parts, components, assemblies, supplies and materials
used or consumed in the Company's business; (ii) all goods, wares
and merchandise, finished or unfinished, held for sale or lease
or leased or furnished or to be furnished under contracts of
service; and (iii) all goods returned or repossessed by the
Company.
"Investment" means, relative to any Person:
(a) any loan or advance made by such Person to
any other Person (excluding commission, travel and
similar advances to officers and employees made in the
ordinary course of business);
(b) any Contingent Obligation of such Person;
and
(c) any ownership or similar interest held by
such Person in any other Person.
"Issuance Fee" shall have the meaning given to said
term in Section 3.3.
"Issuance Request" shall mean a certificate duly
executed by a Responsible Officer of the Company in substantially
the form of Exhibit F, and delivered to the LC Issuer (with a
copy to the Agent) requesting its issuance of the Letter of
Credit described therein.
"Jo ▇▇▇ Agreements" shall mean, collectively, (i) the
Trust Indenture dated April 1, 1994, between Board of
Commissioners of the Port of New Orleans (the "Port") and First
National Bank of Commerce as Trustee (the "Bond Trustee"), and
the Series 1994 Industrial Revenue Bonds outstanding and issued
pursuant to the terms thereof (the "Jo ▇▇▇ ▇▇▇▇▇"), and (ii) the
Refunding Agreement dated as of April 1, 1994 between the Port
and the Company, in the case of each of the agreements and
documents referenced in the foregoing clauses, as the same may be
amended, supplemented or otherwise modified from time to time.
"Jo ▇▇▇ Drydock" shall mean that certain floating
drydock named JO ▇▇▇ DRYDOCK, Official Number 982958.
"Jo ▇▇▇ Drydock Assets" shall mean the Jo ▇▇▇ Drydock
and the other property and assets of the Company which were
purchased and/or constructed with the proceeds of the Jo ▇▇▇
▇▇▇▇▇.
"LC Issuer" shall mean Bank of America Illinois and
BofA (solely with respect to such of the Existing Letters of
Credit as have been issued by it) and, with the consent of the
Agent, the Company and Bank of America Illinois, any Bank. With
respect to Letters of Credit issued by the LC Issuer, the LC
Issuer shall have the benefits of each provision of this
Agreement as if it were a Bank, and provisions of this Agreement
and the other Loan Documents which are for "the benefit of the
Banks" shall also be for the benefit of the LC Issuer. If there
shall be more than one LC Issuer at any time, to the extent
relevant, the term "LC Issuer" shall mean both LC Issuers.
"Letter of Credit" shall have the meaning given to said
term in Section 3.1. The term "Letter of Credit" shall include
the Existing Letters of Credit, and from and after the Effective
Date such letters of credit shall be considered Letters of Credit
and shall be governed by all of the terms of this Agreement which
apply to Letters of Credit.
"Letter of Credit Availability" shall mean, at any
time, the lesser of (a) $35,000,000 minus any Letter of Credit
Outstanding(s) and (b) the aggregate amount of then Available
Commitments.
"Letter of Credit Commission" shall mean the applicable
Letter of Credit Commission specified in Schedule III attached
hereto, determined in accordance with Section 2.17 hereof.
"Letter of Credit Fee" shall have the meaning given to
said term in Section 3.3.
"Letter of Credit Outstandings" shall mean, at any
time, an amount equal to the sum of (a) the aggregate undrawn,
available amount at such time of all Letters of Credit then
outstanding plus (b) the then aggregate amount of all unpaid and
outstanding Reimbursement Obligations.
"Lien" shall mean any security interest, mortgage,
pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), or preference, priority
or other security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any
Financing Lease, and the filing of any financing statement (but
only to the extent any such financing statement purports to
record the grant of a security interest and not including any
financing statements filed for notice purposes only) under the
UCC or comparable law of any jurisdiction in respect of any of
the foregoing).
"Line of Credit" shall mean the aggregate revolving
credit line extended by the Banks to the Company for Loans and
Letters of Credit pursuant to and in accordance with the terms of
this Agreement, initially in the amount of $75,000,000.00, as
such amount may be adjusted from time to time in accordance with
Section 2.3, Section 2.5, Section 2.20 or Section VIII.
"Loan Documents" shall mean this Agreement, the
Revolving Notes, the Letters of Credit, the Collateral Documents,
and all instruments, agreements and documents now or hereafter
executed and delivered in connection herewith or therewith.
"Loans" shall have the meaning given to said term in
Section 2.1.
"LPD-17 Contract" shall mean Contract No. N00024-97-C-
2202, dated December 17, 1996, between the Company and The United
States of America acting through the United States Navy, Naval
Sea Systems Command, for the construction of 25,000 ton
amphibious assault ships designed to carry troops, landing craft
and helicopters, more particularly described in Schedule 4.30
attached hereto.
"LPD-17 Expenditures" shall mean expenditures incurred
or anticipated to be incurred by the Company in connection with
the construction and equipping of the Design Center.
"LPD-17 Refinancing Documents" shall mean the documents
and instruments evidencing or otherwise executed in connection
with the incurrence of LPD-17 Refinancing Indebtedness and/or
LPD-17 Refinancing Liens.
"LPD-17 Refinancing Indebtedness" and "refinancing of
the LPD-17 Expenditures" shall mean Indebtedness (excluding
borrowings under the Line of Credit) incurred by the Company in
connection with the financing or refinancing of LPD-17
Expenditures.
"LPD-17 Refinancing Liens" shall mean Liens on the
Design Center, related construction contracts and related
equipment incurred by the Company in connection with the
financing or refinancing of LPD-17 Expenditures.
"MARAD" shall mean the United States Department of
Transportation Maritime Administration and its successors.
"MARAD Financing Documents" shall mean the documents,
instruments and agreements entered into by the Company and its
Subsidiaries in connection with the United States Government
Guaranteed Ship Financing Bonds, 2000 Series issued February 9,
1995, relating to the Shipyard Project, as amended through the
date of this Agreement and as may be further amended with the
consent of the Required Banks.
"MARAD Financing Liens" shall mean those Liens granted
by the Company or the Subsidiaries to MARAD or its designee in
connection with the Shipyard Project pursuant to the MARAD
Financing Documents, which Liens shall, in no event, extend to or
otherwise attach to any of the Collateral or secure Indebtedness
in an aggregate principal amount in excess of $17,800,000 at any
time.
"Material Adverse Effect" shall mean, a material
adverse effect on the business, operations, property or financial
or other condition of the Company or the Company and its
Subsidiaries, taken as a whole, or on the ability of the Company
or any Subsidiary to perform its obligations under this
Agreement, the Revolving Notes or the other Loan Documents.
"Mortgage Amendment" means a mortgage amendment in
substantially the form attached hereto as Exhibit G, amending the
900 Foot Floating Drydock Mortgage to secure the increased amount
of the Line of Credit and otherwise in substance satisfactory to
the Agent.
"Multiemployer Plan" shall mean any multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Navy Contracts" shall mean any and all contracts
between the Company and/or any Subsidiary Guarantor and the
United States Navy, including, but not limited to (i) the LPD-17
Contract and (ii) those listed on Schedule II, which Schedule
lists each Navy Contract in excess of $5,000,000 in effect as of
the date of this Agreement, and all contracts entered into after
the date hereof between the Company (and/or any Subsidiary
Guarantor) and the United States Navy.
"900 Foot Floating Drydock Mortgage" shall mean the
Second Preferred Ship Mortgage dated as of June 14, 1994, made by
the Company in favor of Continental Bank N.A., as Agent, for the
benefit of the Agent and the Banks, covering the Avondale
Drydock, recorded in the office of the Vessel Documentation
Officer, U.S. Coast Guard in New Orleans, Louisiana, in Preferred
Mortgage Book 9406, Instrument 156, on June 14, 1994 at 1:29
p.m., assigned and amended pursuant to Assignment and First
Amendment to Second Preferred Ship Mortgage, dated May 10, 1995,
recorded in the office of the Vessel Documentation Officer, U.S.
Coast Guard, in New Orleans, Louisiana, in Preferred Mortgage
Book 9505, Instrument 169, on May 16, 1995 at 10:54 a.m., as
further amended by the Mortgage Amendment, as the same may be
amended, supplemented or otherwise modified from time to time.
"Non-Financial Letter of Credit" shall have the meaning
given to such term in Section 3.1(a).
"Non-United States Person" shall mean a Person who is
not a citizen or resident of the United States, a corporation,
partnership or other entity created or organized under the laws
of the United States, or an estate or trust the income of which
is subject to United States Federal income taxation regardless of
its source.
"Obligations" shall mean all obligations (monetary or
otherwise) of the Company to the Agent and/or the Banks arising
under or in connection with this Agreement, the Revolving Notes
(including, without limitation, the Reimbursement Obligations and
the Letters of Credit) and the other Loan Documents, whether
direct or indirect, absolute or contingent, due or to become due
or now existing or hereafter incurred.
"Offshore Lending Office" shall mean (i) relative to
any Bank, the office of such Bank designated as such below its
signature hereto (or, in the case of an assignee pursuant to
Section 10.7, in the assignment executed by it) or such other
office of such Bank as designated from time to time by notice
from such Bank to the Company and the Agent, whether or not
outside the United States, which shall be making or maintaining
Offshore Rate Loans of such Bank hereunder and (ii) relative to
the Agent, the office specified pursuant to the definition of the
term "Offshore Rate" contained herein.
"Offshore Rate" shall mean, relative to the Interest
Period for each Offshore Rate Loan comprising all or any part of
the same borrowing, the rate of interest per annum determined by
the Agent to be the rate at which Dollar deposits in immediately
available funds are offered by BofA's Grand Cayman Branch, Grand
Cayman B.W.I. (or other such offices as may be designated for
such purpose by BofA) to major banks in the offshore U.S. dollar
interbank market at their request at approximately 11:00 a.m.,
New York City time, two Business Days prior to the beginning of
such Interest Period, for delivery on the first day of such
Interest Period, in an amount approximately equal or comparable
to the amount of BAI's Offshore Rate Loan comprising part of such
borrowing and for a period equal to such Interest Period.
"Offshore Rate (Adjusted)" means, relative to any
portion of a Loan to be made, continued or maintained as, or
converted into, an Offshore Rate Loan for any Interest Period, a
rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) determined pursuant to the following formula:
Offshore Rate Offshore Rate/
(Adjusted) = 1 - the Eurodollar
Reserve Percentage
Offshore Rate Loan" shall mean a Loan bearing interest,
at all times during the Interest Period applicable to such Loan,
at a rate of interest determined by reference to the Offshore
Rate (Adjusted).
"Payment Office" shall have the meaning given to said
term in Section 2.11.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV
of ERISA, and any successor to PBGC.
"Percentage" of any Bank shall mean, at any time, the
percentage set forth opposite such Bank's name on Schedule I
as the same may be adjusted pursuant to Section 2.20 or
Section 10.7.
"Permitted Liens" shall have the meaning given to said
term in Section 7.2.
"Person" shall mean an individual, partnership,
corporation, limited liability company, business trust,
joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of
whatever nature.
"Plan" shall mean any employee benefit plan which is
covered by ERISA and in respect of which the Company or an
ERISA Affiliate is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Preferred Stock" shall mean any shares of stock of the
Company designated as Preferred Stock in the Articles of
Incorporation of the Company.
"Pricing Level" shall mean the Pricing Levels I, II and
III, as applicable, set forth on Schedule III attached
hereto.
"Quarterly Payment Date" shall mean the last Business
Day of each March, June, September and December.
"Reference Ratio" shall mean, for any period, the ratio
of (i) all Total Funded Debt of the Company and each of its
Subsidiaries as of the last day of such period to (ii)
EBITDA for such period. The Reference Ratio shall be
calculated as of the last day of each fiscal quarter of the
Company for the four quarter period ending on such date.
"Register" shall have the meaning given to said term in
Section 10.7(e).
"Reimbursement Obligation" shall have the meaning given
to said term in Section 3.6.
"Related Parties" shall have the meaning given to said
term in Section 9.2.
"Release" means a "release" as such term is defined in
CERCLA.
"Reportable Event" shall mean any of the events set
forth in Section 4043(b) of ERISA or the regulations
thereunder.
"Required Banks" shall mean Banks holding 51% of the
aggregate Commitments, if no Loans are outstanding and there
are no Letter of Credit Outstandings, and, otherwise, Banks
holding 51% of outstanding Loans and Letter of Credit
Outstandings.
"Requirement of Law" shall mean as to any Person, the
certificate or articles of incorporation and bylaws or other
organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its
property is subject.
"Responsible Officer" shall mean the chief executive
officer or the chief financial offer of the Company and/or
any Subsidiary Guarantor, or any other officer of any such
Person designated as a "Responsible Officer" for purposes of
this Agreement and the other Loan Documents and for whom the
Agent has received a certificate of incumbency in form
satisfactory to the Agent and the Required Banks.
"Revolving Note" shall have the meaning given to said
term in Section 2.2.
"Security Agreement (Company)" shall mean the Security
Agreement dated as of May 10, 1994 made by the Company in
favor of the Agent, for the benefit of the Banks, covering
certain of the personal property of the Company, as amended,
supplemented or otherwise modified from time to time.
"Shipyard Partnership" shall mean Avondale Land
Management Company, a general partnership organized under
the laws of the State of Louisiana.
"Shipyard Project" shall mean the advanced and modern
shipyard technology project of the Company intended to
modernize the Company's shipyard located in Avondale,
Louisiana and financed, in part, through Title ▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇, as amended.
"Shipyard Real Property Assets" shall mean that portion
of the real property underlying the Company's shipyard
located in Avondale, Louisiana which is contributed by the
Company to the Shipyard Partnership in connection with the
Shipyard Project and leased back to the Company.
"Single Employer Plan" shall mean any Plan which is
covered by Title IV of ERISA, but which is not a
Multiemployer Plan.
"Solvent" means, with respect to any Person at any
time, a condition under which:
(a) the fair saleable value of such Person's
assets on the date of determination is greater than the
present value of the total amount of such Person's
liabilities (including contingent and unliquidated
liabilities) at such time;
(b) such Person is able to pay all of its
liabilities as such liabilities mature; and
(c) such Person does not have unreasonably
small capital with which to conduct its business.
For purposes of this definition:
(d) the amount of a Person's contingent or
unliquidated liabilities at any time shall be that
amount which, in light of all the facts and
circumstances then existing, represents the amount
which can reasonably be expected to become an actual or
matured liability;
(e) the "fair saleable value" of an asset
shall be the amount which may be realized within a
reasonable time either through collection or sale of
such asset at its regular market value; and
(f) the "regular market value" of an asset
shall be the amount which a capable and diligent
business person could obtain for such asset from an
interested buyer who is willing to purchase such asset
under ordinary selling conditions.
"Stated Expiry Date" shall have the meaning given to
said term in Section 3.1(b).
"Stock Pledge Agreement (Company)" shall mean a Stock
Pledge Agreement substantially in the form of Exhibit H, executed
by the Company in favor of the Agent for the benefit of the
Banks, as the same may be amended, supplemented or modified from
time to time.
"Stock Pledge Agreement (Subsidiary)" shall mean a
Stock Pledge Agreement substantially in the form of Exhibit I,
executed by each Subsidiary Guarantor that owns stock of a
Subsidiary, in favor of the Agent for the benefit of the Banks,
as the same may be amended, supplemented or modified from time to
time.
"Subsidiary" shall mean any Person (including each
Subsidiary Guarantor) as to which the Company shall at the time,
directly or indirectly through a Subsidiary, (i) have sufficient
voting power to entitle it to elect immediately or to have had
elected a majority of the board of directors or similar governing
body of such Person, or (ii) own 50% or more of the equity
interests issued by such Person.
"Subsidiary Guarantee" shall mean a Guarantee
substantially in the form of Exhibit J executed by each
Subsidiary Guarantor of the Company and each Subsidiary of the
Company created or acquired after the date of this Agreement in
favor of the Agent for the benefit of the Banks, as the same may
be amended, supplemented or otherwise modified from time to time.
"Subsidiary Guarantor" shall mean the following
Subsidiaries of the Company: (i) Gulfport, (ii) Avondale
Technical Services, Inc., a Louisiana corporation, (iii) ▇▇▇▇▇▇▇▇
Technical Services, Inc., a Louisiana corporation, (iv) Genco
Industries, Inc., a Texas corporation, (v) Avondale Properties,
Inc., a Louisiana corporation, and (vi) the Shipyard Partnership.
"Subsidiary Security Agreement" shall mean a Security
Agreement substantially in the form of Exhibit K executed by each
Subsidiary Guarantor in favor of the Agent for the benefit of the
Banks, covering certain of the personal property of the
Subsidiary Guarantor party thereto, as amended, supplemented or
otherwise modified from time to time.
"Taxes" shall have the meaning given to said term in
Section 2.14.
"Total Funded Debt" shall mean, at any time, the sum of
(i) all Indebtedness of the Company and each of its Subsidiaries
(including any reimbursement obligations with respect to any
letters of credit, including the Letters of Credit, but exclusive
of the undrawn face amount of any such letters of credit) at such
time plus (ii) the greater of (A) $0 or (B) the difference
between (1) the aggregate undrawn face amount of all letters of
credit issued for the account of or guaranteed by the Company or
any of its Subsidiaries and (2) cash balances of the Company and
its Subsidiaries in excess of $5,000,000, in each case at such
time.
"UCC" shall mean the Uniform Commercial Code as in
effect from time to time in the State of Illinois.
Section 1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms
defined in this Agreement shall have the defined meanings
given to said terms in Section 1.1 or the preamble of this
Agreement when used in the Loan Documents or any certificate
or other documents made or delivered pursuant hereto.
(b) Terms not otherwise defined herein which are defined
in the UCC shall have the meanings given them in the UCC.
The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular
provision of this Agreement, and references to Section,
Schedule, Exhibit and like references are references to this
Agreement, and references in any Section or definition to
any clause means such clause of such Section or definition,
in each case, unless otherwise specified. An Event of
Default shall "continue" or be "continuing" until such Event
of Default has been waived in accordance with Section 10.2.
References in this Agreement to any Person shall include
such Person's successors and permitted assigns.
Section . Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except
for changes concurred in by the Company's auditors and
except that unaudited interim financial statements are
subject to audit and normal year-end adjustments (including
absence of footnote disclosure)) with the most recent
audited financial statements of the Company delivered to the
Banks; provided that, if the Company notifies the Agent and
the Banks that the Company wishes to amend any covenant in
Section VII or any related definition to eliminate the
effect of any change in GAAP on the operation of such
covenant (or if the Agent notifies the Company that the
Agent or the Required Banks wish to amend Section VII or any
related definition for such purpose), then the Company's
compliance with such covenant shall be determined on the
basis of GAAP in effect immediately before the relevant
change in GAAP became effective (and without giving effect
to any previous change in GAAP subject to a notice
contemplated by this sentence), until either such notice is
withdrawn or such covenant is amended in a manner
satisfactory to the Company and the Required Banks.
SECTION II
REVOLVING LOANS
Section 2.1 Revolving Loan Commitment.
Subject to the terms and conditions set forth in this
Agreement, on and after the Effective Date and to and
excluding the Expiration Date, each of the Banks severally
agrees to make revolving loans and advances to the Company
(the "Loans") in an aggregate amount not to exceed at any
time outstanding the amount equal to such Bank's Commitment
as then in effect; provided, however, that, after giving
effect to any Loan hereunder, the sum of the aggregate
amount of Loans outstanding at such time plus the aggregate
amount of Letter of Credit Outstandings shall not exceed the
Line of Credit then in effect; and provided further, that
the aggregate amount of Loans by any Bank outstanding at
such time plus such Bank's Percentage of Letter of Credit
Outstandings shall not at any time exceed such Bank's
Commitment as then in effect.
Section 2.2 Revolving Note.
(a) The Loans made by each Bank pursuant hereto shall be
evidenced by a promissory note of the Company substantially
in the form of Exhibit L (as amended, supplemented, amended
and restated, or otherwise modified, each a "Revolving Note"
and collectively the "Revolving Notes"), made payable to the
order of such Bank in a principal amount equal to such
Bank's Commitment as of the Effective Date (or such other
amount as may otherwise be relevant as a result of any
assignments permitted by this Agreement).
(b) The Company hereby irrevocably authorizes each Bank
to make (or cause to be made) appropriate notations on such
Bank's books and records (including its computer records),
which notations, if made, shall evidence, inter alia, the
date of, the outstanding principal of, the interest rate on
and Interest Period, if any, applicable from time to time
to, the Loans evidenced thereby. Any such notations
indicating the outstanding principal amount of such Bank's
Loans shall (absent manifest error) be rebuttably
presumptive evidence of the principal amount thereof owing
and unpaid, but the failure to record any such amount shall
not, however, limit or otherwise affect the obligations of
the Company hereunder or under such Revolving Note to make
payments of principal of or interest on such Loans when due.
Section 2.3 Mandatory Reduction and Prepayment. Upon the
earlier to occur of (i) the date that is two years after the
Effective Date or (ii) the financing or refinancing of all
or substantially all of the LPD-17 Expenditures in
accordance with Section 6.12 and the other provisions
hereof, the amount of the Commitments shall reduce
automatically to an aggregate amount equal to the lesser of
(x) $50,000,000 or (y) the Line of Credit as then in effect,
and, in the event that, as a result of the corresponding
reduction in the Line of Credit, the aggregate amount of
Loans then outstanding plus the aggregate amount of Letter
of Credit Outstandings exceeds the Line of Credit (after
giving effect thereto), the Company shall immediately, and
without notice or demand, prepay the outstanding principal
amount of the Loans by an amount equal to such excess. Said
reduction in the Commitments shall be permanent and shall be
made pro rata to the Commitments of the Banks.
Section 2.4 Procedure for Borrowing.
(a) A Loan may be made on any Business Day; provided
that the Company shall give the Agent an irrevocable
Borrowing Request (i) at or before 9:00 a.m. San Francisco
time at least three Business Days prior to the requested
Borrowing Date, in the case of Offshore Rate Loans, and (ii)
at or before 9:00 a.m. San Francisco time on the requested
Borrowing Date, in the case of Base Rate Loans, specifying
(A) the amount to be borrowed, (B) the requested Borrowing
Date, (C) whether the borrowing is to be an Offshore Rate
Loan or a Base Rate Loan, (D) in the case of Offshore Rate
Loans, the requested Interest Period applicable thereto and
(E) the bank and account number of the Company to which the
Agent should wire the proceeds of such Loan. The Agent
shall promptly notify the Banks of its receipt of any such
irrevocable notice of borrowing from the Company. Each Loan
shall be in an aggregate principal amount equal to the
lesser of (x) $1,000,000 or an integral multiple of $250,000
in excess thereof or (y) the sum of the then Available
Commitments.
(b) On or before 11:00 a.m. San Francisco time on the
Business Day specified in the Company's Borrowing Request,
each Bank shall provide the Agent with funds at the Payment
Office in an amount equal to such Bank's Percentage of the
requested borrowing. The proceeds of each borrowing shall
be made available by the Agent to the Company by wire
transferring such funds to such account as shall be
designated by the Company to the Agent in the notice of
borrowing. No Bank's obligation to make any Loan shall be
affected by any other Bank's failure to make any Loan.
Neither the Agent nor any Bank shall have any liability for
the failure of any Bank (other than itself) to fund a Loan.
(c) With respect to any Loan, unless the Agent shall
have been notified in writing by any Bank prior to the date
of making such Loan that such Bank does not intend to make
available to the Agent such Bank's portion of the Loan to be
made on such date, the Agent may (but shall not be obligated
to) assume that such Bank has made such amount available to
the Agent on that date and, in reliance on such assumption,
the Agent may make available to the Company a corresponding
amount. If such amount is not made available by such Bank
to the Agent on the date of making such Loan, such Bank
shall be obligated to pay such amount to the Agent and shall
pay to the Agent on demand interest on such amount at the
Federal Funds Effective Rate for the number of days from and
including the date of making such Loan to the date on which
such Bank's portion of the Loan becomes immediately
available to the Agent, together with such other
compensatory amounts (including, but not limited to,
administrative fees) as may be required to be paid by such
Bank to the Agent pursuant to the Rules for Interbank
Compensation of the Council of International Banking or of
the New York Clearing House Compensation Committee, as the
case may be, as in effect from time to time. The Agent (but
not the defaulting Bank) shall also be entitled to recover
such amount, with interest thereon at the rate per annum
then applicable to the Loans comprising such borrowing, upon
demand, from the Company. A statement of the Agent
submitted to any Bank with respect to any amounts owing
under this Section 2.4(c) shall be conclusive and binding in
the absence of manifest error. Nothing in this Section
2.4(c) shall be deemed to relieve any Bank from its
obligation to fulfill its Commitments hereunder. If any
Loan shall not be funded on the applicable borrowing date
because any condition precedent herein specified shall not
have been met, the Agent shall return the amounts so
received to the respective Bank as soon as practicable.
Section 2.5 Voluntary Reduction of Commitments.
(a) The Company shall have the right from time to time,
upon not less than five Business Days' irrevocable notice to
the Agent, to reduce the amount of the Commitments, provided
that at no time may the Commitments be reduced by the
Company to an amount less than the sum of the outstanding
principal amount of Loans and the Letter of Credit
Outstandings. Any such voluntary reduction shall be in an
amount of $1,000,000, or an integral multiple thereof.
(b) Each reduction in the Commitments shall be permanent
and irrevocable. All reductions in Commitments shall be
made pro rata to the Commitments of the Banks. The Agent
shall promptly notify each Bank of the amount of any
reduction of its Commitment.
Section 2.6 Optional Prepayments.
(a) Base Rate Loans. The Company may, from time to
time, on any Business Day, prepay the Base Rate Loans, in
whole or in part, without premium or penalty, upon
irrevocable written notice to the Agent by the Company no
later than 9:00 a.m. San Francisco time on the date of such
prepayment which notice shall specify the date and amount of
the prepayment. If such notice is given, the Company shall
make such prepayment to the Agent at the Payment Office for
the account of and pro rata disbursement to the Banks, and
the principal payment amount specified in such notice shall
be due and payable on the date specified therein with
accrued interest to such date on such amount being due on
the next succeeding Quarterly Payment Date. Partial
prepayments of the Base Rate Loans shall be in an aggregate
principal amount of $250,000 or integral multiples thereof.
(b) Offshore Rate Loans. The Company may, from time to
time, on the last Business Day of the relevant Interest
Period, prepay the Offshore Rate Loans, in whole or in part,
without premium or penalty, upon irrevocable notice to the
Agent by the Company of at least three Business Days,
specifying the date and amount of prepayment. The Company
may, from time to time, on any Business Day prior to the
last Business Day of the relevant Interest Period, prepay
the entire amount (and not less than the entire amount) of
an Offshore Rate Loan, upon irrevocable notice to the Agent
by the Company of at least three Business Days, specifying
the date and amount of prepayment; provided, however, that
the Company shall pay to the Agent for the account of the
Banks in addition to the prepayment amount the sum of the
amounts required to be paid in accordance with Section 2.15.
If either such notice is given, the Company shall make such
prepayment and payment of such other amounts to the Agent at
the Payment Office for the account of and disbursement to
the Banks, and the payment amount specified in such notice
shall be due and payable on the date specified therein
together with accrued interest to such date on the amount
prepaid. With respect only to the prepayment of Offshore
Rate Loans on the last Business Day of the relevant Interest
Period, partial prepayments shall be in an aggregate
principal amount of $250,000, or integral multiples thereof.
Section 2.7 Continuation and Conversion Elections. At
the election of the Company pursuant to a
Continuation/Conversion Notice delivered by telephone and
confirmed by either delivering or faxing to the Agent a duly
completed and executed Continuation/Conversion Notice, at or
before 9:00 a.m., San Francisco time, on any Business Day,
the Company may elect from time to time on not less than
three Business Days' prior notice:
(a) that all, or any portion in a minimum aggregate
principal amount of $1,000,000 and an integral multiple of
$250,000 in excess thereof, of any Base Rate Loans be
converted into Offshore Rate Loans or, all or any portion in
a minimum aggregate amount of $1,000,000 and an integral
multiple of $250,000 in excess thereof, of any Offshore Rate
Loan be converted into Base Rate Loans;
(b) on the expiration of the Interest Period
applicable to any Offshore Rate Loans, that all, or any portion
in an aggregate minimum principal amount of $1,000,000 and an
integral multiple of $250,000 in excess thereof, of such Offshore
Rate Loans be continued as Offshore Rate Loans (in the absence of
delivery of such notice under this clause prior to the expiration
of any Interest Period, the Company will be deemed to have
elected that such Offshore Rate Loans be converted to Base Rate
Loans),
provided that:
(x) no portion of the outstanding principal amount
of any Loans may be continued as, or be converted into,
Offshore Rate Loans when any Default or Event of
Default has occurred and is continuing; and
(y) no portion of the outstanding principal amount
of any Loans may be made or continued as, or converted
into, Offshore Rate Loans if, after giving effect to
such action, the aggregate principal amount of any
Offshore Rate Loans having a particular Interest Period
is less than $1,000,000 or an integral multiple of
$250,000 in excess thereof.
Section 2.8 Interest Rate and Payment Dates. Interest
on Loans shall be payable in accordance with this Section 2.8.
(a) From the date any Loan is made to the date the
principal amount of such Loan is repaid in full, interest
shall accrue on the outstanding principal amount of such
Loan at a rate per annum:
(i) on that portion of the outstanding
principal amount thereof maintained from time to time
as a Base Rate Loan, equal to the Alternate Base Rate;
and
(ii) on that portion of the outstanding
principal amount thereof maintained from time to
time as an Offshore Rate Loan, during each
Interest Period applicable thereto, equal to the
Offshore Rate (Adjusted) for such Interest Period
plus the Applicable Margin.
(b) Notwithstanding the provisions of Section 2.8(a),
after the occurrence of any Event of Default until such time when
such Event of Default shall have been waived, the Company shall
pay interest on the principal amount of all Loans outstanding, to
the fullest extent permitted by applicable law, at a per annum
rate equal to the rates set forth in Section 2.8(a) plus 2% per
annum.
(c) Interest accrued on each Loan shall be payable,
without duplication:
(i) on the maturity date of such Loan
(including the maturity date resulting from a reduction
of the Commitments hereunder or the acceleration of the
Loans in accordance with Section VIII),
(ii) with respect to any portion of any Loan
prepaid pursuant to Section 2.6, on the date
specified in Section 2.6,
(iii) (A) on that portion of the outstanding
principal amount thereof maintained as a Base Rate
Loan, on each Quarterly Payment Date, commencing
with the first such Quarterly Payment Date
following the date of the initial Loan hereunder,
and (B) on that portion of the outstanding
principal amount thereof maintained as an Offshore
Rate Loan, on the last day of each applicable
Interest Period.
Section 2.9 Fees.
(a) Commitment Fee. The Company agrees to pay to the
Agent for the account of and disbursement to the Banks a
commitment fee from and including the Effective Date to but
excluding the Expiration Date, equal to the applicable per
annum percentage designated as the "Commitment Fee" in
Schedule III attached hereto and determined in accordance
with the provisions of Section 2.17 hereof, based upon the
average daily amount of the aggregate Available Commitments
of the Banks during the period for which payment is made,
payable in arrears on each Quarterly Payment Date,
commencing on the first Quarterly Payment Date to occur
after the date of this Agreement and on the Expiration Date
or such earlier date as the Commitments shall terminate as
provided herein (such fee to be calculated on the basis of a
360-day year for the actual number of days elapsed).
(b) Participation Fee. The Company agrees to pay to the
Agent for the account of and disbursement to each of
the Banks, respectively, a participation fee in an
amount equal to the product of (i) 20 Basis Points
(.20%) times (ii) the Commitment of such Bank as set
forth on Schedule I attached hereto, such fee to be due
and payable at the time of execution hereof by the
parties hereto.
(c) Other Fees. The Company agrees to pay to the Agent,
for its own account and, as applicable, for the account
of the Arranger, such other fees in the amounts and at
the times specified in the Fee Letter.
Section 2.10 Computation of Interest.
(a) Interest in respect of all Loans shall be calculated
on the basis of a 360 day year for the actual number of days
elapsed. Any change in the interest rate on a Base Rate
Loan resulting from a change in the Alternate Base Rate
shall become effective as of the opening of business on the
day on which such change in the Alternate Base Rate is
established. The Agent shall notify the Company and the
Banks as soon as practicable of the effective date and the
amount of each such change.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be
conclusive and binding on the Company and the Banks in the
absence of manifest error.
(c) It is the intention of the parties hereto to comply
strictly with applicable usury laws; accordingly,
notwithstanding any provision to the contrary in this
Agreement, any of the Revolving Notes or any other Loan
Document, in no event shall this agreement, any Revolving
Note or any other Loan Document require or permit the
payment, charging, taking, reserving, or receiving of any
sums constituting interest under applicable laws which
exceed the maximum amount permitted by such laws. If any
such excess interest is contracted for, charged, taken,
reserved, or received in documents securing the payment of
the Obligations or otherwise relating hereto, or in any
communication by the Agent, any Bank or any other Person to
the Company or any other Person, or in the event all or part
of the principal or interest hereunder shall be prepaid or
accelerated, so that under any of such circumstances or
under any other circumstance whatsoever the amount of
interest contracted for, charged, taken, reserved, or
received on the amount of principal actually outstanding
from time to time under this Agreement, the Revolving Notes
or any Loan Document shall exceed the maximum amount of
interest permitted by applicable usury laws, then in any
such event it is agreed as follows: (i) the provisions of
this Section shall govern and control, (ii) any such excess
shall be deemed an accidental and bona fide error and
canceled automatically to the extent of such excess, and
shall not be collected or collectible, (iii) any such excess
which is or has been paid or received notwithstanding this
paragraph shall be credited against the then unpaid
principal balance of the Obligations, and (iv) the effective
rate of interest shall be automatically reduced to the
maximum lawful rate allowed under applicable laws as
construed by courts having jurisdiction hereof or thereof.
Without limiting the foregoing, all calculations of the rate
of interest contracted for, charged, taken, reserved, or
received in connection herewith which are made for the
purpose of determining whether such rate exceeds the maximum
lawful rate shall be made to the extent permitted by
applicable laws by amortizing, prorating, allocating and
spreading during the period of the full term of the Loans,
including all prior and subsequent renewals and extensions,
all interest at any time contracted for, charged, taken,
reserved, or received. The terms of this Section shall be
deemed to be incorporated in every Loan Document and every
communication relating thereto.
Section 2.11 Payments. All payments (including prepayments)
to be made by the Company on account of principal,
Reimbursement Obligations, interest and fees, or by the
Banks, shall be made without set off or counterclaim in
Dollars and in immediately available funds no later than
11:00 a.m. San Francisco time on the date due hereunder and
shall be made to the Agent to its account at such address as
the Agent shall give notice to the Company and the Banks
(the "Payment Office"). Any payment received by the Agent
later than 11:00 a.m. San Francisco time shall be deemed to
have been received on the following Business Day and any
applicable interest or fee shall continue to accrue. If any
payment hereunder (other than payments on the Offshore Rate
Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of
principal, interest thereon shall be payable at the then
applicable rate during such extension. Except as otherwise
provided in this Agreement, payments due hereunder with
respect to Offshore Rate Loans shall be made on the final
Business Day of an Interest Period as determined by
reference to the definition of "Interest Period". Except
for payments received by the Agent for the account of the
Agent in its capacity as such, or for the account of a
specific Bank in accordance with the provisions of this
Agreement, the Agent shall forthwith distribute like funds
relating to the payment of principal, interest or fees or
Reimbursement Obligations pro rata to the Banks (based on
their Percentages) to which such payment is due and payable
for their accounts and at the addresses as each such Bank
shall specify in its notice to the Agent made in accordance
with Section 10.1 of this Agreement.
Unless the Agent shall have received notice from the Company
prior to the date on which any payment is due to the Banks
hereunder that the Company will not make such payment in
full, the Agent may (but shall not be obligated to) assume
that the Company has made such payment in full to the Agent
on such date, and the Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due to such Bank.
If and to the extent the Company shall not have so made such
payment in full to the Agent, each Bank shall repay to the
Agent forthwith on demand the amount distributed to such
Bank together with interest thereon, at the rate equal to
the Federal Funds Effective Rate, for each day from the date
such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent.
Section 2.12 Inability to Determine Interest Rate. In
the event that the Agent shall have determined (which
determination shall be conclusive and binding upon the
Company and the Banks) that, (i) Dollar deposits are not
available to the Agent in the offshore U.S. dollar interbank
market or (ii) by reason of circumstances affecting the
offshore U.S. dollar interbank market, adequate and
reasonable means do not exist for ascertaining the Offshore
Rate for any requested Interest Period, in either case, with
respect to (a) proposed Loans that the Company has requested
be made as Offshore Rate Loans, (b) Offshore Rate Loans that
will result from the requested conversion of Base Rate Loans
into Offshore Rate Loans or (c) the continuation of Offshore
Rate Loans beyond the expiration of the then current
Interest Period with respect thereto, the Agent shall
forthwith give notice of such determination to the Company
and the Banks at least one Business Day prior to, as the
case may be, the requested Borrowing Date for such Offshore
Rate Loans, the conversion date of such Base Rate Loans or
the last day of such Interest Period. If such notice is
given (x) any requested Offshore Rate Loans shall be made as
Base Rate Loans, unless the Company has provided notice to
the Agent that, based upon such unavailability, the Company
elects not to make the borrowing, (y) any Base Rate Loans
that were to have been converted to Offshore Rate Loans
shall be continued as Base Rate Loans and (z) any
outstanding Offshore Rate Loans shall be converted, on the
last day of the then current Interest Period with respect
thereto, to Base Rate Loans. Until such notice has been
withdrawn by the Agent, no further Offshore Rate Loans shall
be made or continued as such nor shall the Company have the
right to convert Base Rate Loans to Offshore Rate Loans.
Section 2.13 Illegality. Notwithstanding any other provisions
herein, if any Requirement of Law or any change therein or
in the interpretation or application thereof shall make it
unlawful for any Bank to make or maintain Offshore Rate
Loans as contemplated by this Agreement, (a) the obligation
of such Bank hereunder to make Offshore Rate Loans or
convert Base Rate Loans to Offshore Rate Loans shall
forthwith be cancelled, (b) all requests to make or continue
Offshore Rate Loans shall in the case of such Bank, be
deemed to be requests to make Base Rate Loans and (c) the
Loans made by such Bank then outstanding as Offshore Rate
Loans, if any, shall be converted automatically to Base Rate
Loans on the respective next succeeding date(s) on which
interest is due with respect to such Loans or within such
earlier period as is required by law. If any such
prepayment of an Offshore Rate Loan is made on a day which
is not the last day of the Interest Period therefor, the
Company shall pay to the Agent for the account of and
disbursement to such Bank such amounts as may be required
pursuant to Section 2.15.
Section 2.14 Requirements of Law.
(a) In the event that by reason of any change in any
Requirement of Law (including, without limitation, the lapse
or termination of any treaty) or in the interpretation
thereof, or the adoption of any new law, regulation or
requirement by any Governmental Authority, or the imposition
of any requirement of any central bank whether or not having
the force of law, (i) the Agent or any Bank shall, with
respect to this Agreement, the Loans, the Letters of Credit
(or risk participations therein), the Reimbursement
Obligations (or risk participations therein), the Revolving
Notes or its obligation to make Loans or issue and/or own
risk participations in Letters of Credit under this
Agreement, be subjected to any withholding or other tax,
levy, impost, charge, fee, duty or deduction of any kind
whatsoever (other than franchise taxes imposed by the
jurisdiction in which the Agent or such Bank is domiciled
and other than any tax generally imposed or based upon the
net income or branch profits of the Agent or such Bank)
(collectively, "Taxes") or (ii) any change shall occur in
the taxation of the Agent or such Bank with respect to any
Loan, any Reimbursement Obligation (or any risk
participation therein), the interest payable thereon or any
fees payable hereunder or referred to herein (other than
franchise taxes imposed by the jurisdiction in which the
Agent or such Bank is domiciled and other than any change
which affects, and to the extent that it affects, the
taxation of the net income or branch profits of the Agent or
such Bank), and if any such measures or any other similar
measure shall result in an increase in the cost to the Agent
or such Bank of making or maintaining any Loan or any Letter
of Credit or a reduction in the amount of principal,
interest or fees receivable by the Agent or such Bank in
respect thereof, the Agent or such Bank promptly after
learning of the imposition of such cost or reduction in any
amount shall notify the Company and the Agent (if
applicable) stating the reasons therefor. The Company shall
thereafter pay to the Agent or such Bank, upon demand from
time to time, as additional consideration hereunder, such
additional amounts as will fully compensate the Agent or
such Bank for such increased costs or reduced amounts and
shall promptly provide the Agent or such Banks, as the case
may be, with official tax receipts or other evidence of the
payment of any taxes paid by the Company. A certificate as
to the increased costs or reduced amounts setting forth the
calculations therefor, shall be submitted promptly by the
Agent or such Bank to the Company and the Agent (if
applicable) and, in the absence of manifest error, shall be
conclusive and binding as to the amount thereof. If the
Agent or Bank receives any additional amounts from the
Company pursuant to this subsection (a) the Agent or such
Bank shall use its best efforts to obtain a refund,
reduction, deduction or credit for any Taxes with respect to
the additional amounts paid under this subsection (a). If
the Agent or such Bank actually receives or enjoys the
benefit of any such refund, reduction, deduction or credit
for any such Taxes, the Agent or such Bank shall reimburse
the Company if and to the extent, but only the extent, that
the Agent or such Bank determines that it has actually
received (i) a refund of taxes or other amounts (together
with any interest actually received thereon from the
respective Governmental Authority) which refund is
attributable to the Taxes with respect to which such
additional amounts were paid; or (ii) an effective net
reduction (through a reduction, deduction, credit or
otherwise) in any taxes or other amounts otherwise payable
by the Agent or such Bank (including any taxes imposed on or
measured by the net income of the Agent or such Bank), which
reduction is attributable to the Taxes with respect to such
additional amounts were paid. If, at any time after the
Agent or such Bank makes a payment to the Company pursuant
to the preceding sentence, the Agent or such Bank determines
that it was not entitled to the full amount of any refund
(together with the interest thereon) reimbursed to the
Company as aforesaid or that its taxes are not reduced by a
credit or deduction for the full amount of Taxes reimbursed
to the Company as aforesaid, the Company upon the demand of
the Agent or such Bank will promptly pay to the Agent or
such Bank the amounts so refunded to which the Agent or such
Bank was not so entitled, or the amount by which the taxes
of the Agent or such Bank were not so reduced, as the case
may be.
(b) In the event that any Bank (including any Bank in
its capacity as LC Issuer) shall have determined that any
Requirement of Law regarding capital adequacy, or any change
therein or in the interpretation or application thereof or
compliance by such Bank or any parent of such Bank with any
request or directive regarding capital adequacy (whether or
not having the force of law, so long as such Bank reasonably
believes that compliance therewith is necessary) from any
central bank or Governmental Authority, does or shall have
the effect of reducing the rate of return on such Bank's
capital or the capital of its parent as a consequence of its
obligations hereunder to a level below that which such Bank
or any parent of such Bank could have achieved but for such
law or change or compliance (taking into consideration such
Bank's policies or the policies of any parent of such Bank,
as the case may be, with respect to capital adequacy) by an
amount deemed by such Bank or any parent of such Bank to be
material, then from time to time, upon submission by such
Bank to the Agent and the Company of a written request
therefor, the Company shall pay to such Bank such additional
amount or amounts as will compensate such Bank or any parent
of such Bank for such reduction.
(c) To the extent any reserve and/or special deposit
requirement imposed by the adoption of any new law, treaty
or regulation or any change therein or in any existing law,
treaty or regulation (including, without limitation,
Regulation D of the F.R.S. Board) or the interpretation
thereof by any Governmental Authority charged with the
administration thereof, or by any central bank or other
fiscal, monetary or other authority against assets held by,
or deposited in or for the amount of any Loans by, any Bank,
imposes a cost (whether by incurring a cost or adding to a
cost) on a Bank in making or maintaining hereunder an
Offshore Rate Loan or reduces the amount of principal or
interest received by such Bank with respect to such Loans,
then upon demand by such Bank to the Company, which demand
shall be made promptly after the Bank learns of the
imposition of such cost or reduction in amount, the Company
shall (to the extent compensation is not made therefor
pursuant to the calculation of the Offshore Rate) pay to the
Bank from time to time at the end of each Interest Period
with respect to such Offshore Rate Loans, as additional
consideration hereunder, additional amounts sufficient to
fully compensate such Bank for such increased cost or
reduced amount. A certificate as to the increased cost or
reduced amount setting forth the calculations therefor shall
be promptly submitted by such Bank to the Company and the
Agent and, in the absence of manifest error, shall be
conclusive and binding as to the amount thereof.
(d) In the event that a Bank makes a demand for
additional compensation pursuant to this Section 2.14, such
Bank agrees to designate a different lending office of said
Bank if such designation will avoid the need for, or reduce
the amount of, such additional consideration and will not,
(i) in the judgment of the Agent and such Bank, be otherwise
disadvantageous to the Agent and the Banks or such Bank, as
the case may be, and (ii) in the judgment of the Company, be
otherwise disadvantageous to the Company.
Section 2.15 Funding Losses. In the event any Bank shall incur
any loss or expense (including any loss or expense incurred
by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to make, continue or
maintain any portion of the principal amount of any Loan as,
or to convert any portion of the principal amount of any
Loan into, an Offshore Rate Loan) as a result of:
(a) repayment or prepayment of the principal amount of
any Offshore Rate Loans on a date other than the scheduled
last day of the Interest Period applicable thereto
(including without limitation mandatory prepayments pursuant
to Section 2.3 hereof, as well as voluntary prepayments
pursuant to Section 2.5 hereof);
(b) any conversion of all or any portion of the
outstanding principal amount of any Offshore Rate Loans to Base
Rate Loans pursuant to Section 2.7 prior to the expiration of the
Interest Period applicable thereto;
(c) any Loans not being made as Offshore Rate Loans in
accordance with a request therefor;
(d) any Loans not being continued as, or converted
into, Offshore Rate Loans in accordance with a notice applicable
thereto; or
(e) any Offshore Rate Loans not being prepaid in
accordance with any notice given pursuant to Section 2.5,
then, upon the request of such Bank to the Company (with a
copy to the Agent), the Company shall pay directly to such
Bank such amount as will (in the reasonable determination of
such Bank) reimburse such Bank for such loss or expense. A
statement as to any such loss or expense (including
calculations thereof in reasonable detail) shall be
submitted by such Bank to the Agent and the Company and
shall, in the absence of manifest error, be binding on the
Company as to the matters set forth therein.
Section 2.16 Use of Proceeds. The Company shall apply
the proceeds of each Loan to general corporate purposes
including, without limitation, payment of any unpaid
Reimbursement Obligations.
Section 2.17 Certain Pricing Terms. From and after the
Effective Date, the Applicable Margin, Commitment Fee and
Letter of Credit Commission applicable at any time shall be
the respective number of Basis Points specified in Schedule
III attached hereto in the column identified by the Pricing
Level corresponding to the Reference Ratio as of the last
day of the fiscal quarter most recently ended. The
Applicable Margin, Commitment Fee and Letter of Credit
Commission shall be calculated in reliance on the most
recent financial reports delivered pursuant to Sections
6.1(a) and 6.1(b) hereof; except that for the period from
the Effective Date to the time of delivery of financial
reports for the quarter in which the Effective Date occurs,
said calculation shall be made based on the most recent
financial reports delivered pursuant to Sections 6.1(a) and
6.1(b) of the Existing Credit Agreement. Each adjustment of
the Applicable Margin, Commitment Fee and Letter of Credit
Commission shall be made by the Agent as of the first day
following the date of delivery of the financial statements
pursuant to Sections 6.1(a) and 6.1(b) (the "Adjustment
Date"). Such adjusted Applicable Margin, Commitment Fee and
Letter of Credit Commission shall be effective as of the
Adjustment Date. Notwithstanding the foregoing, in the
event the Company shall fail for any reason to deliver any
of the requisite financial statements within five (5) days
of the applicable date specified in Section 6.1(a) or
6.1(b), the Applicable Margin, Commitment Fee and Letter of
Credit Commission shall be determined, from the first day
after the date such financial statements were required to
have been delivered pursuant to Section 6.1(a) or 6.1(b)
(without regard to any grace or cure period applicable
thereto pursuant to Article VIII) until the same are
delivered in accordance therewith, on the assumption that
the Reference Ratio is an amount classified in Schedule III
as "Level III."
Section 2.18 Certain Provisions Regarding Release and
Re-Pledge of Certain Collateral.
(a) At any time after the refinancing of all or
substantially all of the LPD-17 Expenditures in accordance
with Section 6.12 and the other provisions hereof and the
mandatory reduction of the Commitments and related
prepayments (if any) required pursuant to Section 2.3
hereof, and without any further consent of the Banks (such
consent to be deemed to be hereby given), the Company may
request that the Agent, and the Agent shall (upon written
request made by the Company and at the Company's expense,
within 30 days of the Agent's receipt of such request
accompanied by all necessary documents in form and substance
acceptable to the Agent), release the liens and other
security (but not the Subsidiary Guarantees) securing the
Obligations, other than the liens created by the 900 Foot
Floating Drydock Mortgage, provided that at the time of the
requested release no Default or Event of Default shall have
occurred and be continuing. Upon the release of the Liens
and other security securing the Obligations under this
subsection 2.18(a), unless and until such Liens and other
security interests are required to be re-granted pursuant to
subsection 2.18(b) hereof, the Company shall no longer be
required to comply with Section 6.4 (but only with respect
to the second sentence thereof), Section 6.9, Section 6.10,
Section 6.11, Section 7.15 or any other provisions the
Agent, the Required Banks and the Company agree are no
longer applicable due to the release of Liens contemplated
by this subsection 2.18(a).
(b) In the event liens are released pursuant to
subsection (a) of this Section 2.18, if at any time
thereafter a Default or an Event of Default shall occur
and be continuing (regardless of whether such Default
or Event of Default is subsequently cured), the Company
and each Subsidiary shall, at the Company's expense and
promptly upon request made by the Required Banks or the
Agent, grant liens and security interests in all
Collateral of the type which was released pursuant to
subsection (a) above, as well as all capital stock of
all then Subsidiaries. In such event the Company and
each Subsidiary, promptly upon request made by the
Agent, at the Company's expense shall (i) execute and
deliver Security Agreements (substantially in the form
of the Security Agreement (Company) and the Subsidiary
Security Agreement with such revisions as may be
requested by the Agent or the Required Banks), Stock
Pledge Agreement(s) to cover stock of all Subsidiaries
(substantially in the form of the Stock Pledge
Agreement (Company) and the Stock Pledge Agreement
(Subsidiary), with such changes as may be requested by
the Agent or the Banks), financing statements, stock
powers, Assignment of Claims Notices with respect to
Navy Contracts of the Company and each Subsidiary
properly executed by the appropriate administrative
contracting officer and disbursing officer and if
applicable any surety on any bond applicable to the
Navy Contracts, Cash Management Letters properly
executed by the depository institution(s) holding
deposit accounts into which proceeds of collateral are
deposited, and such Collateral Access Agreements as may
be required by the Agent or the Required Banks, (ii)
deliver stock certificates and executed stock powers in
connection with stock being pledged, (iii) establish
and maintain cash collateral accounts of the type
described in the Security Agreement (Company) and
Subsidiary Security Agreements, (iv) deliver legal
opinions covering such matters as the Required Banks
shall reasonably request, and (v) execute, deliver and
obtain such other agreements and documents as the Agent
or the Required Banks shall request in order to create
and perfect the security interests and liens and
otherwise effectuate the terms of this Section. Any
request made by the Agent or the Required Banks
pursuant to this Section 2.18(b), shall not be deemed a
waiver of any Default or Event of Default, and the
Agent and the Banks shall retain all of their rights
and remedies pursuant hereto and pursuant to the other
Loan Documents and applicable law.
(c) In the event the Company and its Subsidiaries are
required to grant liens pursuant to Subsection (b) of
this Section 2.18, neither the Company nor any
Subsidiary shall thereafter be entitled to request a
release of such liens pursuant to subsection (a) of
this Section 2.18.
Section 2.19 Extensions of Expiration Date. The Company may,
by giving the Agent an Extension Notice not more than
90 days, but not less than 60 days, prior to the then
current Extension Date, request that the Banks consent
to an extension of the then current Expiration Date for
a period of one year. Each Bank may, by an irrevocable
notice (a "Consent Notice") to the Company and the
Agent given within 30 days after receipt of such
request by the Agent, consent to such request of the
Company, which consent may be given or withheld by each
Bank in its absolute and sole discretion. Failure by
any Bank to give its consent in writing within such 30
day period shall be deemed a refusal by such Bank of
such request. If less than all of the Banks consent to
the request for extension, the Company's request shall
be denied and the Expiration Date shall remain
unchanged. However, if a Consent Notice is
subsequently obtained from all of the Banks party to
this Agreement prior to the then current Extension Date
(even if not within the time period specified above),
the Expiration Date shall be so extended and all
references in the Loan Documents to "Expiration Date"
shall refer to the Expiration Date, as so extended.
Section 2.20 Additional Banks; Optional Increase of Total
Commitments.
(a) The Company shall have the right, at any one time prior
to March 31, 1997, with the consent of the Agent (which
consent shall not be unreasonably withheld), but without the
need for the consent of any Bank, to add one or two
additional banks or other financial institutions selected by
the Company and acceptable to the Agent (each, an
"Additional Bank") as parties to this Credit Agreement and
as "Banks" hereunder, and, correspondingly, to increase the
aggregate amount of the Commitments up to an amount not to
exceed the lesser of (i) $85,000,000 or (ii) the amount
equal to (A) the aggregate amount of the Commitments
immediately prior to such increase plus (B) $10,000,000.
The Commitment of each such Additional Bank shall be an
amount not less than $10,000,000, and the aggregate
Commitments of all Additional Banks shall be an amount not
to exceed $20,000,000.
(b) As a condition to the addition of any Additional Bank as
a party hereto and to any corresponding increase in the
aggregate amount of the Commitments, the Company and each
Additional Bank shall execute and deliver to the Agent, for
its acceptance and recording in the Register, a letter
agreement ("Commitment Agreement") in substantially the form
of Exhibit Q attached hereto together with a processing and
recordation fee of $3,000. Upon the acceptance of such
agreement by the Agent, from and after the date specified as
the "Commitment Date" in such agreement (the "Commitment
Date"):
(i) the Additional Bank party thereto shall be and
become a party hereto and shall have the rights
and obligations of a "Bank" hereunder;
(ii) the "Commitments" of BAI and of Whitney National
Bank shall be reduced automatically, in equal
dollar amounts, respectively, in an aggregate
amount equal to the amount, if any, by which the
aggregate Commitments of the Additional Banks
exceed $10,000,000, provided, however, that, if
said Commitments exceed $10,000,000 by more than
$8,000,000, the amount of such excess over
$8,000,000 shall be applied wholly in reduction of
the Commitment of BAI, such that the reduction in
the Commitment of Whitney National Bank pursuant
hereto shall not exceed $4,000,000;
(iii) the "Percentage" of each Bank shall adjust
automatically to the amount equal to the result
obtained by dividing (A) the then effective Commitment
of such Bank (after giving effect to any adjustment of
the individual Commitment of such Bank effected
pursuant hereto) by (B) the total Commitments of all
Banks (after giving effect to the increase in the
aggregate Commitments and adjustments of individual
Commitments effected pursuant hereto);
(iv) the Company shall pay to the Agent for the account
of and disbursement to the Additional Banks,
respectively, a participation fee in an amount equal to
the product of (i) 20 Basis Points (.20%) times (ii)
the aggregate Commitment of such Banks up to the first
$10,000,000 thereof, as if such fee had been payable
pursuant to Section 2.9 hereof and not in addition
thereto, and, in the event that the aggregate amount of
the Commitments of the Additional Banks exceeds
$10,000,000, BAI and Whitney National Bank shall each
remit to the Agent, for the account of and disbursement
to the Additional Banks, a pro rata portion of the
"participation fee" paid to BAI and Whitney National
Bank pursuant to Section 2.9(b) hereof equal to the
product of (A) 20 Basis Points (.20%) times (B) the
amount by which such Bank's Commitment is decreased
pursuant to clause (ii) above, for payment over to the
Additional Banks pro rata in relation to their
respective Commitments; and
(v) the "Line of Credit" correspondingly shall increase
by the amount of such increase in the aggregate
Commitments.
The Agent shall promptly notify each Bank of the amount of any
such adjustment to its "Commitment" and/or "Percentage" pursuant
hereto.
(c) In the event that there are any Loans outstanding at
the time of the addition of an Additional Bank as a party hereto,
said Additional Bank shall fund a portion of the Loans
outstanding on the Effective Date by wire transfer to the Agent
of immediately available funds in an amount equal to its
Percentage (after giving effect to the adjustment of the
Percentages in accordance with clause (b) above) of the Loans
outstanding. Upon receipt of such funds, the Agent shall remit
to each of the Banks (other than the Additional Banks) the
portion thereof equal to the excess of (i) the amount equal to
such Bank's Percentage (before giving effect to the adjustment of
the Percentages in accordance with clause (b) above) of the Loans
outstanding over (ii) the amount equal to such Bank's new
Percentage (after giving effect to the adjustment of the
Percentages in accordance with clause (b) above) of the Loans
outstanding, in reduction of the principal balance of the Loans
of each such Bank then outstanding. Notwithstanding the
foregoing, such Banks shall remain entitled to all interest and
fees accrued with respect to the portion of the Loans funded by
any Additional Bank up to, but not including, the Effective Date,
and, conversely, the Additional Banks shall be entitled to all
interest and fees that shall accrue with respect to the portion
of the Loans funded by any Additional Bank on and after the
Effective Date.
(d) By executing and delivering a Commitment Agreement, an
Additional Bank confirms and agrees as follows: (i) such
Additional Bank appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto,
and (ii) such Additional Bank agrees that it will perform in
accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a
Bank.
(e) Upon its receipt of a Commitment Letter executed by the
Company and an Additional Bank, the Agent shall, if such
Commitment Letter has been completed and is in the form required
hereby, (i) accept such agreement and (ii) record the information
contained therein in the Register. Within five (5) Business Days
after its receipt of such Commitment Letter, the Company shall
execute and deliver to the Agent (x) a new Revolving Note to the
order of the Additional Bank in an amount equal to the Commitment
of such Additional Bank, and (y) in exchange for the Revolving
Note of any Bank whose Commitment is reduced pursuant to this
Section 2.20 (which shall be delivered to the Agent by such Bank
in exchange for such replacement Note), a new Revolving Note to
the order of such Bank in an amount equal to the adjusted
Commitment of such Bank. Any such Revolving Notes so issued
shall re-evidence the Indebtedness outstanding under the old
Revolving Notes.
SECTION III
LETTERS OF CREDIT
Section 3.1 Requests.
(a) By delivering to the Agent and the LC Issuer an
Issuance Request on a Business Day prior to the Expiration
Date and not less than three Business Days prior to the
requested date of issuance, the Company may request that the
LC Issuer issue an irrevocable standby letter of credit or a
documentary letter of credit to support non-financial
performance obligations of the Company or a Subsidiary
incurred by the Company or such Subsidiary in the ordinary
course of business and which are described in the Issuance
Request (a "Non-Financial Letter of Credit") or an
irrevocable standby letter of credit or a documentary letter
of credit to support payment obligations of the Company or a
Subsidiary incurred by the Company or such Subsidiary in the
ordinary course of business and which are described in the
Issuance Request (a "Financial Letter of Credit"), each in
such form as may be approved by the LC Issuer and the Agent
(each, a "Letter of Credit"). Upon receipt of each Issuance
Request, the Agent shall promptly notify the Banks thereof.
The stated amount of any Letter of Credit requested to be
issued pursuant to an Issuance Request shall be denominated
in Dollars.
(b) Each Letter of Credit shall by its terms: (i) be
issued in a stated amount which (A) is at least $100,000,
and (B) does not exceed (or would not exceed) the then
Letter of Credit Availability; (ii) initially be stated to
expire on a date (its "Stated Expiry Date") no later than
the earlier of 12 months from its date of issuance or the
Expiration Date, whichever occurs first; and (iii) prior to
its Stated Expiry Date (A) terminate immediately upon notice
to the LC Issuer thereof from the beneficiary thereunder
that all obligations covered thereby have been terminated,
paid, or otherwise satisfied in full and delivery of the
original Letter of Credit to the LC Issuer or (B) reduce in
part immediately and to the extent the beneficiary
thereunder has notified the LC Issuer thereof that the
obligations covered thereby have been paid or otherwise
satisfied in part.
Section 3.2 Issuance. Subject to the terms and conditions
of this Agreement, the LC Issuer shall issue Letters of
Credit in accordance with the Issuance Requests made therefor.
Prior to the issuance of any Letter of Credit, the Company
shall have properly completed all of the LC Issuer's
required standard letter of credit documentation. The LC
Issuer will make available the original of each Letter of
Credit which it issues in accordance with the Issuance
Request therefor to the beneficiary thereof (and will
promptly provide the Agent with a copy of such Letter of
Credit and the Agent shall promptly provide a copy thereof
to each of the Banks).
Section 3.3 Fees and Expenses.
(a) Letter of Credit Fee. The Company agrees to pay to
the Agent for the account of the Banks, with respect to each
Letter of Credit a per annum fee (the "Letter of Credit
Fee") equal to the product of (i) the average daily undrawn
amount of the Letters of Credit and (ii) the Letter of
Credit Commission. Such Letter of Credit Fee shall be
payable in arrears with respect to each Letter of Credit on
each Quarterly Payment Date during the term of each
respective Letter of Credit and on the termination thereof
(whether at its Stated Expiry Date or earlier). The Company
further agrees to pay to the Agent for the account of the LC
Issuer all reasonable administrative expenses of the LC
Issuer in connection with the issuance, maintenance,
modification (if any) and administration of each Letter of
Credit and standard negotiation charges upon demand from
time to time. After the occurrence of an Event of Default
until such time as such Event of Default shall be waived,
the Letter of Credit Fee described in this Section 3.3 shall
be calculated by increasing the Letter of Credit Commission
by two percent (2%).
(b) Issuance Fee. The Company agrees to pay to the
Agent for the account of the LC Issuer with respect to each
Letter of Credit a per annum "Issuance Fee" equal to the
product of (i) the average daily undrawn amount of the
Letters of Credit and (ii) one-eighth of one percent
(0.125%). Such Issuance Fee shall be due and payable in
arrears with respect to each Letter of Credit on each
Quarterly Payment Date during the term of each respective
Letter of Credit and on the termination thereof (whether at
its Stated Expiry Date or earlier).
Section 3.4 Existing Letters of Credit; Banks' Participation.
(a) (i) On and after the Effective Date, the Existing
Letters of Credit shall be deemed for all purposes,
including for purposes of the fees to be collected pursuant
to Section 3.3(a) of this Agreement, and reimbursement of
costs and expenses to the extent provided herein, Letters of
Credit outstanding under this Agreement and entitled to the
benefits of this Agreement and the other Loan Documents.
Each Bank shall be deemed to and hereby irrevocably and
unconditionally agrees to purchase from the LC Issuer on the
Effective Date a participation in each Existing Letter of
Credit and shall make available to the LC Issuer, regardless
of whether any Default or Event of Default shall have
occurred and is continuing, an amount equal to its
respective Percentage of each drawing on each Existing
Letter of Credit in same day or immediately available funds
not later than the times specified in Section 3.4(a)(ii)
hereof.
(ii) To the extent of its Percentage, each Bank
agrees to and shall be deemed to have irrevocably purchased
a participation in each Letter of Credit on the date of
issuance thereof and shall be entitled to receive from the
Agent a ratable portion of the Letter of Credit Fees
received by the Agent pursuant to Section 3.3(a) hereof.
Each Bank shall make available to the LC Issuer, regardless
of whether any Default or Event of Default shall have
occurred and is continuing, an amount equal to its
respective Percentage of each drawing on each Letter of
Credit in same day or immediately available funds not later
than 11:00 a.m. San Francisco time on each Disbursement Date
(as hereinafter defined) for each such drawing.
(iii) In the event that any Bank fails to make
available to the LC Issuer the amount of such
Bank's Percentage of any drawing on a Letter of
Credit as provided herein, the LC Issuer shall be
entitled to recover such amount on demand from
such Bank together with interest at the daily
average Federal Funds Effective Rate for the first
three Business Days after the Disbursement Date
(together with such other compensatory amounts,
including, but not limited to, administrative
fees, as may be required to be paid by such Bank
to the Agent pursuant to the Rules for Interbank
Compensation of the Council on International
Banking or of the New York Clearing House
Compensation Committee, as the case may be, as in
effect from time to time) and thereafter at the
Base Rate.
(b) The Agent shall distribute to each Bank that has
paid all amounts payable by it under Section
3.4(a) with respect to any Letter of Credit issued
by the LC Issuer such Bank's Percentage of all
payments received by the Agent from the Company in
reimbursement of drawings honored by the LC Issuer
under such Letter of Credit when such payments are
received.
Section 3.5 Disbursements. The LC Issuer will notify the
Company and the Agent promptly of the presentment
for payment of any Letter of Credit (on the date
of presentment, if possible, and otherwise on the
next Business Day, it being agreed that such
notice may be made by phone), together with notice
of the date (the "Disbursement Date") such payment
shall be made, and the Agent promptly will notify
the Banks of such matters. Subject to the terms
and provisions of such Letter of Credit, the LC
Issuer shall make such payment to the beneficiary
(or its designee) of such Letter of Credit. Prior
to 11:00 a.m. San Francisco time on the
Disbursement Date the Company shall (by payment to
the Payment Office for distribution by the Agent)
reimburse the LC Issuer and the Banks for all
amounts which have been disbursed under such
Letter of Credit. To the extent the LC Issuer and
the Banks are not reimbursed in full in accordance
with this Section 3.5, the Reimbursement
Obligation shall accrue interest at the Alternate
Base Rate plus a margin of 2% per annum, payable
on demand.
Section 3.6 Reimbursement. The Company's obligation (a
"Reimbursement Obligation") under Section 3.5 to
reimburse the LC Issuer and the Banks with respect
to each drawing under each Letter of Credit
(including interest thereon), and each Bank's
obligation to fund each drawing shall be absolute
and unconditional under any and all circumstances
and irrespective of any set off, counterclaim, or
defense to payment which the Company or any Bank
may have or have had against any Bank, the LC
Issuer, the Company or any beneficiary of a Letter
of Credit, including, without limitation, any
defense based upon the occurrence of any Default
or Event of Default, any draft, demand or
certificate or other document presented under a
Letter of Credit proving to be forged, fraudulent,
invalid or insufficient, or any failure to apply
or misapplication by the beneficiary of the
proceeds of any disbursement, or the legality,
validity, form, regularity, or enforceability of
such Letter of Credit.
Section 3.7 Deemed Disbursements; Other Cash Collateral
Requirements.
(a) Upon the occurrence and during the continuation of
an Event of Default, then:
(i) automatically in the case of any Event of
Default described in Section VIII(h), and at the
election of the Required Banks in the case of any other
Event of Default, an amount equal to that portion of
the Letter of Credit Outstandings attributable to the
then aggregate amount which is undrawn and available
under all outstanding Letters of Credit shall, without
demand upon or notice to the Company, be deemed to have
been paid or disbursed by the LC Issuer
(notwithstanding that such amount may not in fact have
been so paid or disbursed); and
(ii) upon notification by the Agent to the
Company of its obligations under this Section, the Company
shall be immediately obligated to reimburse the LC Issuer
for the amount deemed to have been so paid or disbursed by
the LC Issuer; provided, that to the extent the LC Issuer is
not reimbursed for the amounts deemed to have been paid or
disbursed by the LC Issuer under this Section 3.7, such
Reimbursement Obligation shall not accrue interest until
such time as the LC Issuer makes actual payment to the
beneficiary (or its designee) of the Letter of Credit and
until the Letter of Credit is actually drawn, the fees
payable under Section 3.3 with respect thereto shall
continue to accrue.
(b) Any amounts so payable by the Company pursuant to
this Section shall be deposited in cash with the Agent (or, upon
the direction of the Agent, with the LC Issuer) and held as
collateral security for the Obligations in connection with any
Letter of Credit and shall be invested by the Agent (or, if
applicable, the LC Issuer) in Cash Equivalent Investments the
interest on which shall be held as collateral security for such
Obligations and applied to pay such Obligations then due and
unpaid. At such time when all Events of Default shall have been
waived, the Agent (or, if applicable, the LC Issuer) shall return
to the Company all amounts then on deposit with the Agent (or, if
applicable, the LC Issuer) pursuant to this Section (including
any income from Cash Equivalent Investments), net of any amounts
applied to the payment any of such Obligations and net of any
account set-up expenses.
Section 3.8 Nature of Reimbursement Obligations. The Company
shall assume all risks of the acts, omissions, or misuse of any
Letter of Credit by the beneficiary thereof. Except to the
extent of its own gross negligence or willful misconduct, the LC
Issuer shall not be responsible for:
(a) the form, validity, sufficiency, accuracy,
genuineness, or legal effect of any Letter of Credit or any
document submitted by any party in connection with the
application for and issuance of a Letter of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged;
(b) the form, validity, sufficiency, accuracy,
genuineness, or legal effect of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof in whole
or in part;
(c) failure of the beneficiary to comply fully with
conditions required in order to demand payment under a Letter of
Credit;
(d) errors, omissions, interruptions, or delays in
transmission or delivery of any information or messages, by mail,
cable, facsimile, telegraph, telex, or otherwise;
(e) any loss or delay in the transmission or otherwise
of any document or draft required in order to make a disbursement
under a Letter of Credit or of the proceeds thereof;
(f) errors in interpretation of technical terms;
(g) any misapplication by a beneficiary of the proceeds
of any disbursement under any Letter of Credit; or
(h) any consequences arising from causes beyond the
control of the LC Issuer including, without limitation,
acts of any Governmental Agency.
None of the foregoing shall affect, impair, or prevent the
vesting of any of the rights or powers granted to the
LC Issuer hereunder.
Section 3.9 Indemnity. In addition to amounts payable as
elsewhere provided in this Section III, the Company
hereby agrees to protect, indemnify, pay and save LC
Issuer harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges
and expenses (including reasonable attorneys' fees)
which LC Issuer may incur or be subject to as a
consequence, direct or indirect, of the issuance of the
Letters of Credit, other than as a result of the gross
negligence or willful misconduct of the LC Issuer as
determined by a court of proper jurisdiction.
SECTION IV
REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Banks to enter into this
Agreement and to make each Loan and the LC Issuer to
issue the Letters of Credit herein provided for, the
Company hereby represents and warrants to the Agent,
the Banks and the LC Issuer that:
Section 4.1 Financial Condition. The consolidated balance
sheet of the Company and its consolidated Subsidiaries
as of December 31, 1995, and the related consolidated
statements of operations and the related consolidated
statement of shareholders' equity for the fiscal year
ended on such date (certified by Deloitte & Touche),
and the unaudited consolidated balance sheet of the
Company and its consolidated Subsidiaries as of
September 30, 1996, and the related consolidated
statements of operations and statement of stockholders'
equity for the period ended on such date, copies of
which have heretofore been furnished to the Agent,
present fairly the consolidated financial condition of
the Company and its consolidated Subsidiaries as at
such dates, and the consolidated results of their
operations for the fiscal year and the interim period
then ended. All such audited financial statements,
including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as
approved by such accountants and as disclosed therein).
All unaudited financial statements, including the
related schedules and notes thereto, have been prepared
on a basis consistent with those financial statements
prepared as of December 31, 1995. Neither the Company
nor any of its consolidated Subsidiaries had, at the
date of the balance sheet for the period ended
September 30, 1996, referred to above, any material
Contingent Obligation, contingent liability or
liability for taxes, long term leases or unusual
forward or long term commitment, which is not reflected
in the foregoing statements or in the notes thereto.
Section 4.2 No Change. Since December 31, 1995, there has
been no material adverse change in the business,
operations, business prospects, property or financial
or other condition of the Company and its Subsidiaries,
taken as a whole, as such business, operations,
property, or financial or other condition of the
Company and its Subsidiaries existed on such date.
Section 4.3 Corporate Existence: Compliance with Law. Each of
the Company and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of
the jurisdiction of its incorporation, (b) has the
corporate power and authority to own and operate its
property, to lease the property it operates as lessee
and to conduct the business in which it is currently
engaged, (c) is duly qualified as a foreign corporation
and is in good standing under the laws of each
jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such
qualification, except to the extent that the failure to
so qualify could not reasonably be expected to have a
Material Adverse Effect, and (d) is in material
compliance with all Requirements of Law, except to the
extent that the failure to so qualify could not
reasonably be expected to have a Material Adverse
Effect.
Section 4.4 Corporate Power: Authorization: Enforceable
Obligations. The Company has the corporate power and
authority to make, deliver and perform this Agreement
and the other Loan Documents, to borrow and cause the
issuance of Letters of Credit hereunder and to grant
the Liens or make the pledges provided in the
Collateral documents and has taken all necessary
corporate action to authorize the borrowings on the
terms and conditions of this Agreement and the other
Loan Documents and to authorize the execution, delivery
and performance of this Agreement and the other Loan
Documents and to authorize the grant of the Liens or
the pledge of stock provided in the Collateral
Documents. No shareholder vote is necessary to
authorize the execution, delivery and performance of
this Agreement and the other Loan Documents. No
consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is
required in connection with the borrowings hereunder or
with the execution, delivery, performance, validity or
enforceability of this Agreement and the other Loan
Documents or to authorize the grant of the Liens or the
pledge of stock provided in the Collateral Documents,
except for (i) the filing of the UCC financing
statements, (ii) notices or filings required with
respect to the Government Contracts (including, without
limitation, the Navy Contracts) and (iii) certain
consents, notices or filings in connection with the 900
Foot Floating Drydock Mortgage and the Mortgage
Amendment, all of which filings, notices and consents
referred to in the foregoing clauses have been made,
obtained or given, as appropriate, and all of which are
in full force and effect. Each of the Loan Documents
has been duly executed and delivered on behalf of the
Company. This Agreement constitutes, and each of the
other Loan Documents constitutes, a legal, valid and
binding obligation of the Company enforceable against
the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights
generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at
law).
Section 4.5 No Bar. The execution, delivery and performance
of this Agreement and the other Loan Documents, the
borrowings and issuance of Letters of Credit hereunder
and the use of the proceeds thereof, will not violate
any Requirement of Law or any Contractual Obligation of
the Company or of any of its Subsidiaries, and will not
result in, or require, the creation or imposition of
any Lien on any of its or their respective properties
or assets pursuant to any Requirement of Law or
Contractual Obligation except for the Liens granted
pursuant to the Collateral Documents.
Section 4.6 No Material Litigation. Except as set forth on
Schedule 4.6, no litigation, investigation, or
proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of the
Company, threatened by or against the Company or any of
its Subsidiaries or against any of its or their
respective properties or revenues (a) with respect to
this Agreement or the other Loan Documents or any of
the transactions contemplated hereby, or (b) which
could reasonably be expected to have a Material Adverse
Effect.
Section 4.7 No Default. Neither the Company nor any of it
Subsidiaries is in default under or with respect to any
Contractual Obligation in any respect which could
reasonably be expected to have a Material Adverse
Effect.
Section 4.8 Ownership of Property: Liens. Each of the
Company and its Subsidiaries has good recordable and
marketable title in fee simple to or valid leasehold
interests in all its real property, and good title to
or valid leasehold interests in all its other property
(other than property held under Financing Leases)
material to its business, and none of such property is
subject to any Lien, except as permitted in Section 7.2
of this Agreement.
Section 4.9 No Burdensome Restrictions. No Contractual
Obligation of the Company or any of its Subsidiaries
and no Requirement of Law to which the Company or any
of its Subsidiaries is subject could reasonably be
expected to have a Material Adverse Effect.
Section 4.10 Taxes. Each of the Company and its Subsidiaries
has filed or caused to be filed all tax returns which
to the knowledge of the Company are required to be
filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made
against it or any of its property and all other taxes,
fees or other charges imposed on it and any of its
property by any Governmental Authority (other than
those the amount or validity of which is currently
being contested in good faith by appropriate
proceedings and, if applicable, with respect to which
reserves in conformity with GAAP have been provided on
the books of the Company or its Subsidiaries, as the
case may be); and no tax Liens have been filed and, to
the knowledge of the Company, no claims are being
asserted with respect to any such taxes, fees or other
charges other than with respect to Customary Permitted
Liens.
Section 4.11 Regulations G, T, U and X. Neither the Company
nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of
extending credit for the purpose of purchasing or
carrying margin stock, and less than 25% of the assets
of the Company, individually and on a consolidated
basis with its Subsidiaries, consists of margin stock.
The proceeds of any Loans made hereunder will not be
used for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulations G, T, U or
X. Terms for which meanings are provided in F.R.S.
Board Regulations G, T, U and X have such meanings when
such terms are used in this Section 4.11.
Section 4.12 ERISA.
(a) Prohibited Transactions. Neither the Company nor
any Subsidiary has engaged in a transaction in connection
with which the Company or any Subsidiary could be subject to
a material liability for either a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Code.
(b) Plan Termination; Material Liabilities. There has
been no termination of a Plan or trust created under any
Plan that would give rise to a material liability to the
PBGC on the part of the Company or an ERISA Affiliate. No
material liability to the PBGC has been or is expected to be
incurred with respect to any Plan by the Company or an ERISA
Affiliate. The PBGC has not instituted proceedings to
terminate any Plan which is maintained or is to be
maintained by the Company or an ERISA Affiliate. There
exists no condition or set of circumstances which presents a
material risk of termination or partial termination of any
Plan by the PBGC. The Company and each Code Affiliate have
paid all premiums to the PBGC when due.
(c) Accumulated Funding Deficiency. Full payment has
been made of all amounts which are required under the terms
of each Plan to have been paid as contributions to such Plan
as of the last day of the most recent fiscal year of such
Plan ended on or before the date of this Agreement, and no
accumulated funding deficiency (as defined in Section 302 of
ERISA and Section 412 of the Code), whether or not waived,
exists with respect to any Plan or any employee pension
benefit plan (as defined in ERISA) maintained by a Code
Affiliate. The aggregate contributions the Company must pay
to the Plans under the minimum funding rules of Section 412
of the Code will not exceed $5,000,000 in 1996 and
$10,000,000 in 1997. Neither the Company nor any Code
Affiliate has failed to make a required installment under
Section 412(m) of the Code or any other payment required
under Section 412 of the Code on or before the due date.
(d) Relationship of Benefits to Pension Plan Assets. As
of January 1, 1996, the current value of the benefit
liabilities of each Single Employer Plan does not exceed the
fair market value of the assets of such Plan based on
valuing the liabilities using a 7.25% discount rate.
Neither the Company nor a Code Affiliate is required to
provide security to a Plan or an employee pension benefit
plan (as defined in ERISA) maintained by a Code Affiliate
under Section 401(a)(29) of the Code.
(e) Withdrawal Liability. Neither the Company nor any
ERISA Affiliate has incurred withdrawal liability with
respect to any Multiemployer Plan. To the best knowledge of
the Company, the liability to which the Company and any
ERISA Affiliate would become subject under ERISA if the
Company and any ERISA Affiliate were to withdraw completely
from all Plans which are Multiemployer Plans as of the most
recent valuation date, together with any secondary liability
for withdrawal liability the Company and any ERISA Affiliate
may have as of the date hereof with respect to any
Multiemployer Plan, could not reasonably be expected to have
a Material Adverse Effect. To the best knowledge of the
Company, no such Multiemployer Plan is in reorganization (as
such term is defined in Section 4241 of ERISA) or is
insolvent (as such term is defined in Section 4245 of
ERISA). Neither the Company nor any ERISA Affiliate
contributes to or has any liability with respect to any
Multiemployer Plan.
(f) Retiree Welfare Benefits. The excess of the present
value of the projected liability in respect of post-
retirement health, medical and other welfare benefits for
retired employees of the Company and its Subsidiaries
determined using assumptions which are reasonable in the
aggregate over the fair market value of any fund, reserve or
other asset segregated for the purpose of satisfying such
liability, does not exceed $2,500,000 as of December 31,
1996 based on the valuation performed as of January 1, 1996.
(g) ESOP. The stock of the Company held in the Avondale
Industries, Inc. Employee Stock Ownership Plan (the "ESOP")
is "readily tradeable on an established market" within the
meaning of Section 409(h) of the Code; therefore,
participants in the ESOP do not have the right to require
that the Company repurchase such shares when distributed
from the ESOP.
Section 4.13 Subsidiaries. At the date of this Agreement the
Company has no Subsidiaries except those listed on Schedule
4.13, and the Company owns the percentage of outstanding
voting shares of each such Subsidiary indicated on such
Schedule.
Section 4.14 Government Regulation. Neither the Company nor
any of its Subsidiaries is an "investment company" within
the meaning of the Investment Company Act of 1940, as
amended, or a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding
company", or of a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 4.15 Environmental Matters. Except as set forth in
Schedule 4.15:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Company or any of its
Subsidiaries are in material compliance with all
Environmental Laws the non-compliance with which could
reasonably be expected to have a Material Adverse Effect;
(b) there have been no Releases of Hazardous Materials
at, on or under any property now or previously owned or
leased by the Company or any of its Subsidiaries that,
singly or in the aggregate, have, or could reasonably be
expected to have, a Material Adverse Effect;
(c) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under
any property now or previously owned or leased by the
Company or any of its Subsidiaries that, singly or in the
aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect;
(d) there are no polychlorinated biphenyls or friable
asbestos present at any property now owned or leased by the
Company or any of its Subsidiaries that, singly or in the
aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect; and
(e) as of the date of this Agreement, to the knowledge
of the Company, no conditions exist at, on or under any
property now or previously owned or leased by the Company or
any of its Subsidiaries which, with the passage of time or
the giving of notice or both, would give rise to liability
under any Environmental Law which could reasonably be
expected to have a Material Adverse Effect.
Section 4.16 Judgments or Litigation. Except as set forth on
Schedule 4.6, no judgments, orders, writs or decrees are
outstanding against the Company or any of the Subsidiaries
nor is there now pending or, to the best of the Company's
knowledge, threatened any litigation, protest, challenge,
action, contested claim, investigation, arbitration, or
governmental proceeding (i) by or against the Company or any
of the Subsidiaries in which there is a reasonable
possibility of an adverse decision which (taking into
account insurance coverage) could reasonably be expected to
have a Material Adverse Effect or (ii) whether or not the
Company or any Subsidiary is a party thereto, seeking any
determination or ruling that might materially affect
adversely the rights of the Company under the LPD-17
Contract.
Section 4.17 Government Contracts. Neither the Company nor
any Subsidiary has ever been debarred or suspended from
contracting (as a first tier or any other level of
subcontractor) for or bidding on any Government Contract (as
such term is defined below) or had a Government Contract
cancelled or terminated for default by the Company or a
Subsidiary, as the case may be. Neither the Company nor any
of its Subsidiaries is currently debarred or suspended from
(or has received notice that it is under investigation with
respect to a possible debarment or suspension from) bidding
on or entering into any contract with or for any
Governmental Authority (together with each Navy Contract, a
"Government Contract"). Neither the Company nor any of its
Subsidiaries has been given notice (i) that any Government
Contract may be or will be terminated for the convenience of
a Governmental Authority or by virtue of a default by the
Company or any of its Subsidiaries, as the case may be, (ii)
other than the contracting officer's order to suspend
performance under the LPD-17 Contract referenced in Schedule
4.6, that a major program or Contract of the Company or any
Subsidiary will be eliminated or substantially reduced or
suspended, (iii) requiring or resulting in, loss of use or
substantial impairment or interference of use by the Company
or any of its Subsidiaries, as the case may be, of any
facilities owned by a Governmental Authority, or (iv) that
any relevant budget authority or contract authority has been
exceeded with respect to any Government Contract which in
any such case could reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its
subsidiaries anticipates incurring cost overruns on any
Government Contracts which could reasonably be expected to
have a Material Adverse Effect.
Section 4.18 Modular Construction. The Company has full right
to use the modular construction technology used (or needed
to be used) in the completion of its Government Contracts
subject to no patent, technology or other license from any
Person. No Person has made a written claim against the
Company that such use is in violation of any patent rights
or proprietary information and there is no pending or, to
the best knowledge of the Company, threatened litigation, or
arbitration in which it is alleged that the Company's use of
such technology violates any patent or proprietary right.
Section 4.19 Licenses, Permits. The Company and each of its
Subsidiaries have all permits, certificates, licenses
(including patent and copyright licenses), approvals and
other authorizations required in connection with the
operation of their businesses, except those which could not
reasonably be expected to have a Material Adverse Effect.
Section 4.20 Navy Contracts. Except as set forth on Schedule
4.20, the Company has the right under the Navy Contracts to
assign the Company's right, title and interest to the
proceeds thereof to the Agent for the benefit of the Banks,
in each case, free of any contractual right of set-off. The
Company has not released any Governmental Authority from any
liability or claim of entitlement under any Navy Contract
except in the ordinary course of business in respect of
change orders. There are no offsets, and there are not
currently threatened or pending any claims of offsets
against the Company or any of its Subsidiaries by any
Governmental Authority which claims of offsets may be used
to reduce amounts owing by any Governmental Authority under
the Navy Contracts, which claims of offsets could reasonably
be expected to have a Material Adverse Effect.
Section 4.21 Loan Documents, etc. All of the representations
and warranties made by the Company in the other Loan
Documents are true and correct.
Section 4.22 No Federal Tax or ERISA Liens. No notice of
or any other document or instrument creating any federal tax
Lien or Lien under Section 412 of the Code or Section 4068
of ERISA has been issued, recorded or filed with respect to
the assets of the Company or any of its Subsidiaries.
Section 4.23 No Bonds. There are no payment or performance
bonds applicable to the Navy Contracts.
Section 4.24 Labor Controversies.
(a) Except as disclosed on Schedule 4.24, there are no
controversies pending or, to the best of the Company's
knowledge after diligent inquiry, threatened between the
Company or any of the Subsidiaries and any of their
respective employees which could reasonably be expected to
have a Material Adverse Effect.
(b) Neither the Company nor any of the Subsidiaries is
engaged in any unfair labor practice. Except as set forth
on Schedule 4.24, there is (i) no unfair labor practice
complaint pending against the Company or any of the
Subsidiaries or, to the best knowledge of the Company,
threatened against any of them, before the National Labor
Relations Board, and no grievance or significant arbitration
proceeding arising out of or under collective bargaining
agreements is so pending against the Company or any of the
Subsidiaries or, to the best knowledge of the Company,
threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against either of the
Company or any of the Subsidiaries or, to the best knowledge
of the Company, threatened against any of them, and (iii) no
union representation question with respect to the employees
of the Company or any Subsidiaries and no union organizing
activities.
Section 4.25 Capitalization; Existing Indebtedness. Schedule
4.25 ("Ownership of the Company") sets forth, as of the date
of this Agreement, each record and, to the knowledge of the
Company, beneficial owner of 5% or more of the outstanding
shares of each class of outstanding equity securities of the
Company. As of the date of this Agreement, Schedule 7.13
sets forth all outstanding Indebtedness of the Company and
its Subsidiaries.
Section 4.26 Patents, Trademarks, etc. Each of the Company
and each of its Subsidiaries owns and possesses all such
patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, service marks, service ▇▇▇▇ rights
and copyrights required in connection with the conduct of
their business as now conducted without, to the best of its
knowledge, any material infringement upon rights of other
Persons.
Section 4.27 Collateral Documents. The provisions of
the Collateral Documents executed or to be executed by the
Company and its Subsidiaries in favor of the Agent will be,
on and after the due execution and delivery thereof in
accordance herewith (and after giving effect to the Initial
Credit Event), effective to create, in favor of the Agent
for the benefit of the Agent and the Banks, legal, valid and
enforceable Liens in all right, title and interest of the
Company and its Subsidiaries in any and all of the
Collateral described therein, securing the Revolving Notes,
Reimbursement Obligations and all other Obligations from
time to time outstanding, and upon all filings and
recordings being duly made in the locations referred to in
the applicable Collateral Documents or the taking of
possession of the Collateral by the Agent in accordance with
the provisions of such Collateral Documents or the taking of
such other action by the Agent as is contemplated by the
Collateral Documents, each of such Collateral Documents
shall constitute, as of and after the Effective Date (and
after giving effect to the Initial Credit Event), a fully
perfected first priority Lien in all right, title and
interest of the Company and its Subsidiaries in such
Collateral superior in right to any Liens, existing or
future, which the Company or any creditors thereof or
purchasers therefrom, or any other Person, may have against
such Collateral or interest therein, other than interests of
Persons with respect to Customary Permitted Liens.
Section 4.28 Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of
the Company in writing to the Agent or any Bank for purposes
of or in connection with this Agreement or any transaction
contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of the
Company to the Agent or any Bank in connection with this
Agreement or any transaction contemplated hereby will be,
true and accurate in every material respect on the date as
of which such information is dated or certified and such
information is not or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary
to make such information not misleading; provided that in
the case of any projections hereafter so furnished by or on
behalf of the Company, such projections shall represent the
reasonable expectations of the management of the Company of
future performance, based upon historical financial
information and reasonable assumptions.
Section 4.29 Solvency. Each of the Company and each
Subsidiary is Solvent.
Section 4.30 The LPD-17 Contract. Schedule 4.30 contains
a true and correct description of the material terms of the
LPD-17 Contract.
Section 4.31 Qualification for MARAD Refinancing of LPD-17
Expenditures. (i) The Company is fully qualified to apply
for, and is eligible for, MARAD Title XI guaranteed
financing for the Design Center under 46 CFR Part 298 in an
amount not less than $35,000,000, (ii) the Company is a
qualified General Shipyard Facility as defined therein, and
(iii) the Design Center and related improvements are
eligible Advanced or Modern Shipbuilding Technology as
defined therein.
SECTION V
CONDITIONS PRECEDENT TO EFFECTIVE DATE
AND EACH EXTENSION OF CREDIT
THIS AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT IS
BEING EXECUTED AND DELIVERED BY THE PARTIES HERETO
CONDITIONALLY, AND THE OBLIGATION OF THE BANKS TO EXTEND
CREDIT ACCORDING TO THE TERMS HEREOF IS TO BECOME EFFECTIVE
ONLY UPON AND SUBJECT TO THE OCCURRENCE BY THE SPECIFIED
DATE OF THE CONDITIONS TO EFFECTIVENESS SET FORTH IN SECTION
5.1 HEREOF. SATISFACTION OF THE CONDITIONS TO EFFECTIVENESS
SET FORTH IN SECTION 5.1 HEREOF SHALL BE SUBJECT TO WRITTEN
CONFIRMATION BY THE AGENT, AND, UNLESS AND UNTIL SUCH
CONFIRMATION SHALL HAVE BEEN ISSUED BY THE AGENT, THE BANKS
SHALL HAVE NO OBLIGATION TO EXTEND CREDIT HEREUNDER AND THE
EXISTING CREDIT AGREEMENT SHALL REMAIN IN FULL FORCE AND
EFFECT IN ACCORDANCE WITH ITS TERMS. THE COMPANY CONFIRMS
THAT (1) ALL COLLATERAL DOCUMENTS EXECUTED AND DELIVERED IN
CONNECTION WITH THE EXISTING CREDIT AGREEMENT ARE AND REMAIN
IN FULL FORCE AND EFFECT, AND, UPON THE EFFECTIVENESS OF
THIS AGREEMENT, SHALL REMAIN IN FULL FORCE AND EFFECT AS
SECURITY FOR, AMONG OTHER THINGS, THE OBLIGATIONS, AND (2)
THE PROMISSORY NOTES ISSUED PURSUANT HERETO ARE AND SHALL BE
GIVEN IN RENEWAL, INCREASE AND REARRANGEMENT, AND NOT IN
NOVATION OR DISCHARGE, OF THE PROMISSORY NOTES ISSUED AND
OUTSTANDING PURSUANT TO THE EXISTING CREDIT AGREEMENT.
Section 5.1 Effective Date; Initial Credit Extensions.
Notwithstanding any other provision of this Agreement, the
effectiveness of this Agreement and, correspondingly, the
obligations of the Banks to make the initial Credit
Extension hereunder shall be subject to the prior or
concurrent satisfaction on or before April 30, 1997 of each
of the following conditions precedent set forth in this
Section 5.1:
(a) Documents.
(i) Each of the Banks shall have executed and
delivered a counterpart of this Agreement to the Agent
and the Agent shall have received a counterpart of this
Agreement conforming to the requirements hereof and
executed by a Responsible Officer of the Company.
(ii) The Agent shall have received the Loan
Documents to be executed by the Company (and all
documents related thereto) duly executed by a
Responsible Officer of the Company except as otherwise
specifically provided herein.
(iii) Each of the Banks shall have received
a Revolving Note and a counterpart of this Agreement
conforming to the requirements hereof and executed by a
Responsible Officer of the Company.
(iv) The Agent shall have received an
Assignment of Claims Notice acknowledged by the
appropriate administrative contracting officer,
disbursing officer and, if applicable, any surety or
bonding company applicable to the Government Contracts
providing for aggregate payments to the Company and the
Subsidiary Guarantors of $1,000,000 or more (other than
the contracts specified in the last sentence of Section
6.11), including, without limitation, the Contracts
listed on Schedule II hereto.
(v) The Agent shall have received
confirmations, in the form attached hereto as Exhibit
M, of the Subsidiary Guarantees and Subsidiary Security
Agreements executed by the respective Subsidiary
Guarantors, executed by a Responsible Officer of each
Subsidiary party thereto.
(vi) The Agent shall have received confirmation
satisfactory to the Agent and the Required Banks that
proper financing statements (Form UCC-1) have been duly
filed under Uniform Commercial Code of all
jurisdictions as may be necessary or, in the opinion of
the Agent and the Required Banks, desirable to perfect
the Liens and security interests created by the
Collateral Documents.
(vii) The Agent shall have received certified
copies of Requests for Information or Copies (Form UCC-
11) or equivalent reports, which certified copies or
reports shall list all effective financing statements
which name each grantor under the Collateral Documents
as debtor and which are filed in the jurisdictions
referred to in clause (vi) above, together with copies
of such financing statements (none of which shall cover
the Collateral purported to be covered by any of the
Collateral Documents, except with respect to Liens with
respect to which the Company shall have delivered to
the Agent a duly executed Uniform Commercial Code
termination statement).
(viii) The Agent shall have received evidence
that all other actions that, in the opinion of the
Agent and the Required Banks, are advisable to perfect
and protect the Liens in the Collateral created or
purported to be created by the Collateral Documents
have been taken.
(ix) The Agent shall have received evidence
that all insurance policies, coverages and riders
(including loss payable endorsements in favor of and in
form and substance satisfactory to the Agent and the
Required Banks) required pursuant to the requirements
of this Agreement and the other Loan Documents are in
full force and effect.
(b) Fees and Expenses. The Agent and each of the
Banks shall have received payment in full of those fees and
expenses referred to in the Fee Letter which are due on or prior
to the Effective Date (or an irrevocable authorization to pay
such fees or expenses out of the proceeds of the Loans).
(c) Corporate Action of the Company. The Agent shall
have received (i) certified copies of all corporate action taken
by the Company to authorize the execution, delivery and
performance, in accordance with their respective terms, of this
Agreement and the other Loan Documents and any other documents
required or contemplated hereunder or thereunder; (ii) a
certificate of incumbency with respect to the officers of the
Company authorized and directed to execute and deliver this
Agreement and the other Loan Documents, and other documents
required or contemplated thereunder; (iii) certified copies of
the Articles of Incorporation and by-laws of the Company, amended
to the date hereof; and (iv) certificate(s) of good standing for
the Company from the appropriate authority in its jurisdiction of
incorporation and in each other jurisdiction in which it is
required to qualify to do business.
(d) Corporate Action of the Subsidiary Guarantors.
The Agent shall have received in respect of each of the
Subsidiary Guarantors party to any Loan Documents (i) certified
copies of all corporate action taken by such Subsidiary Guarantor
to authorize the execution, delivery and performance, in
accordance with their respective terms, of the Loan Documents to
which it is a party and any other documents required or
contemplated thereunder; (ii) a certificate of incumbency with
respect to the officers of such Subsidiary Guarantor authorized
and directed to execute and deliver the Loan Documents to which
it is a party, and other documents required or contemplated
thereunder; (iii) certified copies of the articles of
incorporation and by-laws of such Subsidiary Guarantor, amended
to the date hereof; and (iv) certificate(s) of good standing for
such Subsidiary Guarantor from the appropriate authority in its
jurisdiction of incorporation and in each other jurisdiction in
which it is required to qualify to do business.
(e) Consents. The Agent shall have received all of
the consents necessary, in the opinion of the Agent and the
Required Banks, to accomplish the transactions contemplated
hereby, including without limitation the consent of MARAD to the
Mortgage Amendment.
(f) Officer's Certificate. The Agent shall have
received, as an inducement to the Agent and the Banks to enter
into this Agreement, a certificate of the Company executed by a
Responsible Officer of the Company and dated the Effective Date
certifying that as of such date:
(i) no "Default" or "Event of Default" (as
such terms are defined in the Existing Credit
Agreement) has occurred and is continuing;
(ii) no Default or Event of Default has
occurred and is continuing (after giving effect to any Loans
to be made, and Letters of Credit outstanding or to be
issued, on the date thereof);
(iii) the representations and warranties of
the Company contained in this Agreement and the other Loan
Documents and in any certificate, document or financial or
other statement furnished by the Company are true and
correct; and
(iv) without limiting the foregoing, no event
or events which, individually or in the aggregate has had,
or could reasonably be expected to have, a Material Adverse
Effect has occurred since December 31, 1995, and no
litigation is pending or threatened against the Company or
any Subsidiary in which there is a reasonable possibility of
an adverse decision which would result in a Material Adverse
Effect.
(g) Documentation and Proceedings. All corporate and
legal proceedings and all instruments in connection with the
transactions contemplated by this Agreement shall be satisfactory
in form and substance to the Agent and its counsel and the
Required Banks, and the Agent and each of the Banks shall have
received all information and copies of all documents, including
records of corporate proceedings, governmental approvals and
incumbency certificates which it may have reasonably requested in
connection with the transactions contemplated by this Agreement
such documents where appropriate to be certified by proper
officers.
(h) Opinions. Each of the Banks shall have received
the favorable opinions of (i) Jones, Walker, Waechter, Poitevent,
Carrere & ▇▇▇▇▇▇▇, Louisiana counsel to the Company, in form and
substance as attached hereto as Exhibit O, (ii) Sonnenschein,
Nath & ▇▇▇▇▇▇▇▇▇, Government Contracts counsel to the Company, in
form and substance as attached hereto as Exhibit P, and (iii)
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., special counsel to the Agent, in each
case, addressed to the Agent, the LC Issuer and the Banks, and
such other opinions of counsel as the Agent or the Required Banks
may reasonably request, in each case in form and substance
satisfactory to the Agent and its counsel and the Required Banks.
(i) Solvency. The Agent shall have received for the
benefit of each Bank and the LC Issuer a certificate of the
Company executed on its behalf by the chief financial officer of
the Company, in form and substance satisfactory to the Agent and
the Required Banks, relying upon such projections and financial
information as may be referred to therein and containing such
other information as may be required by, and be acceptable to,
the Agent and the Required Banks, to the effect that the Company
is and will be Solvent after giving effect to the transactions
contemplated hereby.
(j) LPD-17 Contract. The Agent shall have received
the following, in form and substance satisfactory to the Agent
and the Required Banks: (i) a certificate of the Company
executed by a Responsible Officer of the Company and dated the
Effective Date certifying that as of such date (A) the LPD-17
Contract has been duly executed by the Company, the United States
Navy, and the other parties thereto, (B) the award of the LPD-17
Contract to the Company is not the subject of any pending
protest, challenge, action or proceeding before any Governmental
Authority, the time period for the filing of any such protest,
challenge, action or proceeding with the Government Accounting
Office, the United States Navy or any other Governmental
Authority exercising administrative (as opposed to judicial)
authority has expired pursuant to applicable law and regulations,
and there is no currently effective order to suspend performance,
automatic stay of performance, injunction or restraining order
relating to the LPD-17 Contract, (C) Schedule 4.30 of this
Agreement contains a true and correct description of the material
terms of the LPD-17 Contract, and (D) the representations and
warranties contained herein and in the Security Agreement with
respect to Navy Contracts are true and correct with respect to
the LPD-17 Contract, along with (ii) certified copies of (X) the
GAO's written determination denying or dismissing the protest of
the award of the LPD-17 Contract referenced in Schedule 4.6 and
(Y) the Navy's letter notifying Avondale of the corresponding
termination of the related suspension of performance and
automatic stay and authorizing performance under the LPD-17
Contract.
(k) Repayment of Indebtedness Under Existing Credit
Agreement. The Company shall have repaid all amounts owing under
the Existing Credit Agreement, including without limitation (i)
the principal of and accrued interest on all Loans, (ii) funding
losses owed by reason of repayment of such Loans on the Effective
Date hereunder (if the Effective Date is on a day which is other
than the last day of an "Interest Period" under the Existing
Credit Agreement), and (iii) commitment fees, letter of credit
fees and other fees pursuant to Sections 2.9 and 3.3 of the
Existing Credit Agreement accrued through the Effective Date.
(l) Additional Matters. The Agent shall have received
such other documents as may reasonably be required by the
Required Banks and all documents and legal matters in connection
with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Agent and
the Required Banks.
Section 5.2 Conditions to Initial Letter of Credit Issuance.
In the event that the first Loan has not been made, the
obligation of the LC Issuer to issue the initial Letter of Credit
shall be subject to its receipt of an Issuance Request (other
than in the case of the Existing Letters of Credit) and the
satisfaction of the conditions precedent set forth in Section
5.1.
Section 5.3 Conditions to Each Extension of Credit. The
obligation of the Banks to make any Loan and of the LC Issuer to
issue any Letter of Credit is subject to the satisfaction of the
following conditions precedent on the relevant Borrowing Date:
(a) Representations and Warranties. The
representations and warranties made by the Company herein or
which are contained in any certificate, document or financial or
other statement furnished by the Company at any time under or in
connection herewith shall be correct in all material respects on
and as of such Borrowing Date as if made on and as of such date,
except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate
on and as of such earlier date).
(b) No Default or Event of Default. No Default or
Event of Default shall have occurred and be continuing on such
Borrowing Date or after giving effect to the Loan to be made or
issuance of the Letter of Credit to be issued on such Borrowing
Date.
(c) Borrowing Certificate. The Agent shall have
received a Borrowing Request in accordance with Section 2.4 or an
Issuance Request in accordance with Section 3.2, as the case may
be.
(d) Fees. The Agent and the Banks shall have received
all fees due and owing pursuant to Section 2.9 and Section 3.3.
(e) No Federal Tax or ERISA Liens. No notice of or
any other document or instrument creating any federal tax Lien or
Lien under Section 412 of the Code or Section 4068 of ERISA shall
have been issued, recorded or filed with respect to the assets of
the Company or any of its Subsidiaries and no Bank shall have
informed the Agent or the Company that such Bank has processed
any such Lien or has notice thereof.
Each Credit Extension hereunder shall constitute a
representation and warranty by the Company as of the date of such
Credit Extension that the conditions set forth in this Section
5.3 have been satisfied.
SECTION VI
AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments
remain in effect, any Revolving Note remains unpaid, Letter of
Credit Outstandings exist, or any other amount is owing to the
Agent, the Banks or the LC Issuer hereunder, the Company shall
and shall cause each of its Subsidiaries to:
Section 6.1 Financial Statements. Furnish to the Agent with
sufficient copies for each of the Banks:
(a) as soon as available, but in any event within 95
days after the end of each fiscal year of the Company, a copy of
the audited consolidated balance sheet of the Company and its
consolidated Subsidiaries as at the end of such year and the
related consolidated statement of operations, statement of cash
flows and statement of stockholders' equity reported on by
Deloitte & Touche, or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later
than 50 days after the end of each of the first three quarterly
periods of each fiscal year of the Company the unaudited
consolidated balance sheet of the Company and its consolidated
Subsidiaries as at the end of each such quarter and the related
unaudited consolidated statement of operations and statement of
shareholders' equity and its consolidated Subsidiaries for such
quarter and the portion of the fiscal year through such date,
each certified by a Responsible Officer as fairly presenting the
financial condition of the Company and its consolidated
Subsidiaries as at such date;
(c) as soon as available, but in any event within 45
days after the end of each fiscal quarter of the Company, (i) the
information described on Schedule 6.1 with respect to the Company
and the Subsidiary Guarantors, prepared in a form acceptable to
the Required Banks and the Agent, (ii) a calculation of the
Company's "Working Capital", "Long-Term Debt" and "Net Worth" as
defined in that certain Title XI Reserve Fund and Financial
Agreement dated as of February 9, 1995 between the Company and
the United States of America (relating to the Shipyard Project),
a comparison of such amounts to the amounts set forth in Section
13(b) of such Agreement, a statement as to whether the provisions
of Section 13(b) of such Agreement are applicable to the Company
as a result of the Company's failure to meet the thresholds set
forth in Section 13(b)(i) of such Agreement, and a statement by
the Company that no default or Event of Default exists under such
Agreement, or, if such default or Event of Default does exist, a
description thereof and an explanation of the steps being taken
by the Company to cure the same, (iii) a calculation of the
Company's "Working Capital", "Long-Term Debt" and "Net Worth" as
defined in that certain Title XI Reserve Fund and Financial
Agreement dated as of October 21, 1975 between the Company and
the United States of America as amended by amendments numbered 1
through 5 thereof (relating to the Avondale Drydock), a
comparison of such amounts to the amounts set forth in Section
13(b) of such Agreement, a statement as to whether the provisions
of Section 13(b) of such agreement are applicable to the Company
as a result of the Company's failure to meet the thresholds set
forth in Section 13(b)(i) of such Agreement and a statement by
the Company that no default or Event of Default exists under such
Agreement, or, if such default or Event of Default does exist, a
description thereof and an explanation of the steps being taken
by the Company to cure the same; and (iv) a calculation of the
Company's "Consolidated Tangible Net Worth", "Consolidated Senior
Indebtedness Ratio", and "Consolidated Senior Debt Service
Ratio", as defined in the Refunding Agreement dated as of April
4, 1994 as amended by the First Amendment dated as of June 28,
1994 between the Company and the Board of Commissioners of the
Port of New Orleans (relating to the Jo ▇▇▇ Drydock), a
comparison of such amounts (or ratios) to the amounts (or ratios)
set forth in the first sentence of Sections 6.13, 6.14 and 6.15,
respectively, of such agreement, a statement as to whether the
more restrictive covenant provisions of Sections 6.13, 6.14 and
6.15, respectively, of such agreement are applicable to the
Company as a result of the Company's failure to meet the
thresholds set forth in the first sentence of Sections 6.13, 6.14
and 6.15, respectively, of such agreement, and a statement by the
Company that no default or Event of Default exists under such
Agreement, or, if a default or Event of Default does exist, a
description thereof and an explanation of the steps being taken
by the Company to cure the same; and
(d) as soon as available, but in any event within 30
days after the end of each fiscal year of the Company, the
Company's profit plan for the then current fiscal year, including
without limitation, projections of the Company's financial
performance for such year on a quarterly basis, and the
assumptions underlying such projections.
All such financial statements required by this Section 6.1
are to be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected
therein (except as approved by such accountants or Responsible
Officer, as the case may be, and disclosed therein).
Section 6.2 Certificates: Other Information. Furnish to the
Agent (with sufficient copies for the Banks):
(a) concurrently with the delivery of the financial
statements referred to in Section 6.1(a) above, a certificate of
the independent certified public accountants reporting on such
financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in Sections 6.1(a) and 6.1 (b) above, a
certificate of a Responsible Officer stating that, to his
knowledge, the representations and warranties set forth herein
and in the other Loan Documents are true and correct in all
material respects on and as of the date of such certificate
(except to the extent that the same relate solely to an earlier
date), that such Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate, and
showing in detail the calculations supporting such statement in
respect of Sections 7.1, 7.2, 7.3, 7.5, 7.6, 7.7, 7.8, 7.9 and
7.13;
(c) within 10 Business Days after the same are sent,
copies of all financial statements and reports which the Company
sends to its public stockholders, if any, and within 10 Business
Days after the same are filed, copies of all financial statements
and reports which the Company may make to, or file with, the
Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(d) within 10 days after the end of each calendar
year, a certificate of insurance that evidences the existence of
each policy of insurance required to be maintained by the Company
and its Subsidiaries in accordance with the requirements of this
Agreement or any other Loan Document, and the payment of all
premiums therefor;
(e) promptly upon receipt thereof notice of any
proposed suspension or debarment of the Company or any Subsidiary
Guarantor from contracting (as a first tier or any other level of
subcontractor) for, bidding on, or entering into any Government
Contract;
(f) promptly following request by the Required Banks
or the Agent, an updated appraisal or valuation of the Avondale
Drydock in form and substance, and prepared by a firm, reasonably
satisfactory to the Agent or Required Banks; provided, however,
that the Company shall not be required to provide an updated
appraisal of the Avondale Drydock more frequently than once every
twelve months;
(g) promptly upon the execution thereof, copies of any
and all LPD-17 Refinancing Documents; and
(h) promptly, such additional financial and other
information as the Agent or any Bank may from time to time
reasonably request; the Agent and the Banks severally agreeing to
take appropriate measures to protect any proprietary information
of the Company and its Subsidiaries.
Section 6.3 Payment of Obligations. Pay, discharge or
otherwise satisfy at or, to the extent permitted by this
Agreement, before maturity or before they become delinquent, as
the case may be, all its material obligations of whatever nature,
except when the amount or validity thereof is currently being
contested in good faith and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Company or
its Subsidiaries.
Section 6.4 Maintenance of Property: Insurance. Keep all
property useful and necessary in its business in good working
order and condition and maintain insurance on all its material
property in at least such amounts and against at least such risks
as are currently insured against by the Company and Subsidiaries.
All policies covering the Collateral are to name the Agent as an
additional insured and the loss payee (pursuant to an endorsement
in form and substance satisfactory to the Agent) in case of loss,
and are to contain such other provisions as the Agent may
reasonably require to fully protect the Agent's interest in the
Collateral and to any payments to be made under such policies.
The Company will furnish to the Agent, upon written request, full
information as to the insurance carried by it.
Section 6.5 Conduct of Business and Maintenance of Existence.
Continue to engage principally in the businesses of the same
general type now conducted by it and preserve, renew and keep in
full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its
business and comply in all material respects with all Contractual
Obligations and Requirements of Law (including, without
limitation, the Federal Acquisition Regulations (48 CFR Chapters
1 through 63)) except where the failure to comply with this
Section 6.5 could not reasonably be expected to have a Material
Adverse Effect.
Section 6.6 Inspection of Property: Books and Records;
Discussions. Keep proper books of records and account in which
full, true and correct entries in conformity in all material
respects with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and
activities; and permit representatives of the Agent or the Banks,
including, without limitation, any consulting/accounting firm,
auditors, appraisers or other professionals engaged by the Agent
or any of the Banks to visit and inspect any of its properties
and examine and make abstracts from any of its books and records
at any reasonable time during normal business hours and as often
as may reasonably be desired, and to discuss the business,
operations, properties and financial and other condition of the
Company and its Subsidiaries with officers and employees of the
Company and its Subsidiaries and with its independent certified
public accountants; it being understood that the Company will not
be obligated to reveal the details of its final bid decisions.
The Agent and the Banks severally agree to take appropriate
measures to protect any proprietary information of the Company
and its Subsidiaries. The Agent and the Banks may, from time to
time, engage a consulting/accounting firm, auditors, appraisers
and/or other professionals to conduct a review of the operations
of the Company and Subsidiaries or to assist the Agent and/or the
Banks in connection with the exercise or enforcement of any
right, power, privilege or remedy under this Agreement, the Loan
Documents and/or applicable law. The reasonable costs of any
such reviews shall be paid by the Company upon demand.
Section 6.7 Notices. Promptly give notice to the Agent of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any other
Contractual Obligation of the Company or any of its
Subsidiaries, (ii) litigation, investigation or
proceeding which may exist at any time between the
Company or any of its Subsidiaries and any Governmental
Authority (including, without limitation, the Board of
Contract Appeals and the General Accounting Office),
and (iii) any other litigation or proceeding affecting
the Company or any of its Subsidiaries, in which, in
the case of clauses (i), (ii) or (iii), the amount(s)
claimed from the Company or any Subsidiary exceeds or
is likely to exceed $1,000,000, singularly, or
$3,000,000 in the aggregate, or where the Company or
any Subsidiary is likely to be debarred or suspended
from bidding on or entering into Government Contracts
generally, or any Government Contracts of the Company
or any Subsidiary may be forfeited or cancelled for
cause or the convenience of a Governmental Authority,
and in addition, will furnish to the Agent within
ninety days after the end of each fiscal year of the
Company, a summary of all such litigation,
investigations or proceedings;
(c) the following events, as soon as possible and in any
event within thirty days after the Company knows or has
reason to know thereof: (i) the occurrence of any
Reportable Event with respect to any Plan; (ii) the
occurrence of a prohibited transaction (as defined in
Section 406 of ERISA or Section 4975 of the Code) with
respect to any Plan, (iii) the institution of
proceedings or the taking or expected taking of any
other action by PBGC or the Company or any ERISA
Affiliate to terminate or withdraw or partially
withdraw from any Plan and, with respect to a
Multiemployer Plan, the "Reorganization" or
"Insolvency" of such Plan (as such terms are defined in
ERISA), (iv) the failure of the Company or a Code
Affiliate to make a required installment under Section
412(m) of the Code or any other payment required under
Section 412 of the Code on or before the due date or
(v) the adoption of an amendment with respect to a Plan
so that the Company or a Code Affiliate is required to
provide security to the Plan under Section 401(a)(29)
of the Code, and in addition to such notice, delivery
to the Agent of a certificate of a Responsible Officer
setting forth details relating thereto, and the action
that the Company, ERISA Affiliate or Code Affiliate
proposes to take with respect thereto and when known,
any action taken or threatened by the Internal Revenue
Service or the PBGC, together with a copy of any notice
to the PBGC or IRS or any notice delivered by the PBGC
or IRS; and
(d) a material adverse change in the business,
operations, property or financial or other condition of
the Company and Subsidiaries as such business,
operations, property or financial or other condition of
the Company and Subsidiaries existed on December 31,
1995. Each notice pursuant to this Section shall be
accompanied by a statement of a Responsible Officer
setting forth details of the occurrence referred to
therein and stating what action the Company and/or
Subsidiary proposes to take with respect thereto.
Section 6.8 ERISA. Fulfill its, and cause each Subsidiary
to fulfill its, obligations under the minimum funding
standards of ERISA and the Code with respect to each
Plan, and neither the Company nor any Subsidiary shall
take any action that would result in the termination of
a Plan by the PBGC.
Section 6.9 Delivery; Further Assurances. Except as otherwise
provided in Section 2.18, the Company will, and will
cause each of the Subsidiary Guarantors to, at their
joint and several expense:
(a) execute and deliver any and all instruments
necessary or as the Agent may request to grant and
perfect a first priority Lien on all of its Accounts
and Inventory, subject to no other Liens other than
Customary Permitted Liens, and, without any request by
the Agent, immediately delivery or cause to be
delivered to the Agent, in due form for transfer (duly
endorsed in blank or, if appropriate, accompanied by
duly executed blank stock or bond powers), all
securities, chattel paper, instruments and documents of
title, if any, at any time representing all or any of
the Collateral;
(b) upon the reasonable request of the Agent, furnish
or cause to be furnished to the Agent such opinions of
counsel in connection with the execution and document
delivery contemplated by this Section 6.9;
(c) upon request of the Agent, forthwith execute and
deliver or cause to be executed and delivered to the
Agent, in due form for filing or recording (and pay the
cost of filing or recording the same in all public
offices deemed necessary by the Agent), such
assignments, security agreements, pledge agreements,
consents, waivers, financing statements, stock or bond
powers, and other documents, and do such other acts and
things, all as the Agent may from time to time
reasonably request, to establish and maintain to the
satisfaction of the Agent valid perfected Liens in all
Collateral (free of all other Liens, claims, and rights
of third parties other than Customary Permitted Liens);
and
(d) such other agreements, instruments and documents
which the Agent may request from time to time in
connection with the foregoing.
Section 6.10 Cash Management Letters. On or prior to the
Effective Date, the Company will obtain for the benefit
of the Agent Cash Management Letters with respect to
each of its collection accounts set forth on Schedule
6.10. From and after such date, the Company will not
open any new depositary account into which proceeds of
any Accounts or Inventory are deposited in any month,
unless it causes to be delivered to the Agent a Cash
Management Letter, with such changes as shall be
reasonably acceptable to the Agent. In the event a
Cash Management Letter is not forthcoming or given for
each account, at the option and discretion of the
Agent, the account shall be closed, with the balance or
proceeds transferred to an existing or new depository
account with respect to which a Cash Management Letter
has been obtained. All proceeds of the Collateral
shall be deposited solely into accounts with respect to
which a Cash Management Letter in favor of the Agent
has been obtained.
Section 6.11 Delivery of Assignment of Claims Notices. Except
as provided in the next sentence of this Section 6.11,
within 30 days after executing any contract with any
Governmental Authority of the United States, including,
without limitation the Department of Navy, providing
for aggregate payments to the Company or any Subsidiary
Guarantor of $1,000,000 or more, the Company shall, and
shall cause each Subsidiary Guarantor party thereto, to
assign such contract to the Agent and deliver a Notice
of Assignment with respect to such contract which has
been sent to the United States government pursuant to
the Assignment of Claims Act of 1940 as amended (31
U.S.C. 3727, 41 U.S.C. 15) and acknowledged by the
appropriate administrative contracting officer, and
disbursing officer, and if applicable, any surety on
any bond applicable to such contract. Within 60 days
after the execution date of the LPD-17 Contract (and
within 30 days after the execution date of any other
contract described in the preceding sentence that was
executed less than 30 days prior to the Effective
Date), the Company shall assign the LPD-17 Contract
(or, as applicable, such other contract) to the Agent
and deliver a Notice of Assignment with respect to the
LPD-17 Contract (or, as applicable, such other
contract) which has been sent to the United States
government pursuant to the Assignment of Claims Act of
1940 as amended (31 U.S.C. 3727, 41 U.S.C. 15) and
acknowledged by the appropriate administrative
contracting officer, and disbursing officer, and, if
applicable, any surety on any bond applicable to the
LPD-17 Contract (or, as applicable, such other
contract).
Section 6.12 Refinancing of LPD-17 Expenditures. On or prior
to the date which is two years from the Effective Date,
the Company shall have refinanced a sufficient amount
of the LPD-17 Expenditures directly funded with the
Line of Credit to reduce the Line of Credit to an
amount not to exceed $50,000,000, with the terms of
such financing to be reasonably satisfactory to the
Agent and the Required Banks.
SECTION VII
NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments
remain in effect, any Loan, Revolving Note or
Reimbursement Obligation remains unpaid, or any other
amount is owing to the Agent, the Banks or the LC
Issuer hereunder, the Company shall not, nor shall it
permit any of its Subsidiaries (and in the case of
Section 7.11, any ERISA Affiliate (or with respect to
clauses (c) and (e) of Section 7.11, any Code
Affiliate)) to, directly or indirectly:
Section 7.1 Financial Condition Covenants.
(a) Maintenance of Consolidated Net Worth. Permit
Consolidated Net Worth at any time to be less than the sum
of (i) $122,000,000 plus (ii) 50% of the cumulative
Consolidated Net Income of the Company and its Subsidiaries
for all quarters ending after December 31, 1995 in which
Consolidated Net Income for such quarter was positive.
(b) Maintenance of Debt to Equity Ratio. Permit at any
time the ratio of (i) Total Funded Debt at such time to (ii)
Total Funded Debt plus Consolidated Net Worth at such time
to be greater than .45 to 1.
(c) Maintenance of Minimum Government Contract Backlog.
Permit the backlog of firm Government Contracts of the
Company to be less than $600 million at any time.
(d) Maintenance of Debt Coverage Ratio. Permit the Cash
Flow Coverage Ratio as of the last day of any of its fiscal
quarters to be less than .20 to 1.
(e) Maintenance of Interest Coverage Ratio. Permit
the Interest Coverage Ratio as of the last day of any of its
fiscal quarters to be less than 3.5 to 1.
Section 7.2 Limitation on Liens. Create, incur, assume or
suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, except:
(a) Customary Permitted Liens;
(b) pledges or deposits in connection with worker's
compensation, unemployment insurance and other social
security legislation;
(c) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(d) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial
in amount, and which do not in any case materially
detract from the value of the property subject thereto
or interfere with the ordinary course of the business
of the Company or any of its Subsidiaries;
(e) Liens on the assets of Subsidiaries securing
Indebtedness owing to the Company so long as such
Indebtedness and Liens are assigned to the Agent for
the benefit of the Banks pursuant to the Security
Agreement (Company);
(f) Liens (other than the MARAD Financing Liens) granted
with respect to real and/or tangible or intangible
personal property, which property is acquired after the
date hereof (by purchase, construction or otherwise) by
the Company or any Subsidiary, each of which Liens were
incurred to finance, refinance or refund, the cost
(including the cost of construction) of the respective
property; provided that no such Lien shall (i) extend
to or cover any other property of the Company or any
such Subsidiary other than the respective property so
acquired and improvements thereon or (ii) extend to or
cover any Collateral, or, if any item or type of
property constituting Collateral has been released as
Collateral pursuant to Section 2.18 hereof, any such
item or type of property;
(g) customer's Liens on work in progress incurred in
the ordinary course of business;
(h) Liens granted pursuant to the terms of the
Collateral Documents;
(i) Liens evidenced by the First Preferred Ship
Mortgage;
(j) in addition to and without duplication of the Liens
permitted under clause (f) above, Liens securing
Indebtedness and other obligations of the Company or
any of its Subsidiaries permitted by this Agreement
which encumber Fixed Asset Property having a net book
value (or if greater, a fair market value) which, in
the aggregate, is less than or equal to $10,000,000;
(k) (i) Liens granted on the Jo ▇▇▇ Drydock to secure
Indebtedness of the Company pursuant to the Jo ▇▇▇
Agreements as in effect as of the date of this
Agreement, and (ii) deposits made pursuant to the
requirements of the documents governing said
Indebtedness as originally in effect to secure such
Indebtedness in an aggregate amount not to exceed
$3,625,000 at any one time;
(l) to the extent not otherwise covered in clauses (a)
through (k) above, those Liens which are described on
Schedule 7.2 and any extension, renewal or substitution
thereof or therefor; provided that (i) the Indebtedness
or other obligation or liability secured by the
applicable Lien shall not exceed the Indebtedness or
other obligation or liability existing immediately
prior to such extension, renewal or substitution and
(ii) the Lien securing such Indebtedness or other
obligation or liability shall be limited to the
property which, immediately prior to such extension,
renewal or substitution, secured such Indebtedness or
other obligation or liability; and
(m) the MARAD Financing Liens and LPD-17 Refinancing
Liens.
Clauses (a) through (m) of this Section 7.2 are
referred to as the "Permitted Liens."
Section 7.3 Limitation on Investments and Intercompany
Activity. Other than Contingent Obligations incurred
by the Company or the transfer of the Design Center to
a Subsidiary or Affiliate of the Company, in each case
solely in connection with the refinancing of the LPD-17
Expenditures as contemplated by and in accordance with
this Agreement:
(a) Make, incur, assume or suffer to exist any
Investment in any other Person, except: (i) Investments
in any Person existing on the date hereof and set forth
on Schedule 7.3, (ii) Cash Equivalent Investments,
(iii) loans to (w) employees of the Company not in
excess of $1,500,000 in the aggregate, and (x)
participants in the Company's Performance Share Plan in
an amount not in excess of the tax liabilities of such
participants in connection with the distribution of
shares pursuant to such plan, the calculation of such
amount to be made available in writing to the Agent in
reasonable detail and in form and substance
satisfactory to the Agent, (iv) contributions to the
Avondale Industries, Inc. Employee Stock Ownership Plan
in accordance with the terms thereof, (v) contributions
to the Avondale Pension Plan in accordance with the
terms of such plan, and (vi) intercompany accounts
between the Company and the Subsidiary Guarantors
arising as a result of and in connection with the cash
management systems of such Persons operated in
accordance with their past practice.
(b) Sell, lease, assign, transfer or otherwise dispose
of any of its assets to any Subsidiary or Affiliate, or
lease any assets, render or receive services or
purchase assets from any Subsidiaries or Affiliates,
provided that the Company may enter into any such
transaction with any Subsidiary or Affiliate in the
ordinary course of business consistent with past
practices.
Section 7.4 Limitation on Fundamental Changes. Enter into any
transaction of merger or consolidation or amalgamation;
or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution).
Section 7.5 Limitation on Sale of Assets. Other than the sale
of those assets set forth on Schedule 7.5 for their
respective fair market value and the sale of Inventory
in the ordinary course of business, or a sale of the
Design Center solely in connection with the refinancing
of the LPD-17 Expenditures as contemplated by and in
accordance with this Agreement, sell, lease, assign,
transfer or otherwise dispose of, or give options to
purchase (x) any stock or other equity interests in any
of the Subsidiaries or (y) any of its other assets
(including, without limitation, receivables and
leasehold interests but excluding obsolete or worn out
property) whether now owned or hereafter acquired, and
whether or not leased back in the case of this clause
(y) in an amount in excess of $1,000,000 in any fiscal
year of the Company.
Section 7.6 Limitation on Dividends. Declare any dividends
(other than dividends payable solely in stock of the
Company) on, or make any payment on account of, any
shares of any class of stock of the Company, whether
now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or
indirectly, whether in cash or property or in
obligations of the Company, or make any payment on
account of, or purchase, redeem or otherwise acquire,
any securities of the Company from any Person, except
(i) Subsidiaries may pay dividends and make other
distributions to the Company and (ii) so long as no
Default or Event of Default shall have occurred and be
continuing, the Company may pay cash dividends on its
capital stock during any Dividend Calculation Period in
an amount not to exceed (A) 40% of Consolidated Net
Income for such Dividend Calculation Period minus (B)
the amount of all cash dividends paid by the Company
pursuant to this clause (ii) during such Dividend
Calculation Period. "Dividend Calculation Period"
shall mean, as of the last day of each of the Company's
fiscal quarters ending thereafter, the four fiscal
quarter period ending on such day.
Section 7.7 Limitation on Capital Expenditures. Incur Capital
Expenditures (excluding up to $40,000,000 in LPD-17
Expenditures) which, in the aggregate for the Company
and its Subsidiaries taken as a whole, exceed for any
fiscal year the sum of (a) $13,000,000 plus (b) the
excess of $13,000,000 over the sum of all such
expenditures of the Company and its Subsidiaries, taken
as a whole, for the preceding fiscal year.
Section 7.8 Sale and Leaseback. Other than a sale and
leaseback of the Design Center solely in connection
with the refinancing of the LPD-17 Expenditures as
contemplated by and in accordance with this Agreement,
enter into any agreement, directly or indirectly, for
the sale or transfer of any of its property now owned,
or hereafter acquired, with a concurrent or subsequent
acquisition by lease or rental of such property or like
property if the aggregate rentals paid by the Company
and its Subsidiaries, taken as a whole, with respect
thereto in any fiscal year would exceed $3,000,000.
Section 7.9 Acquisitions. Other than the Acquisition of the
Design Center solely in connection with the refinancing
of the LPD-17 Expenditures as contemplated by and in
accordance with this Agreement, make any Acquisition
unless the following conditions are met at or prior to
the time such Acquisition is made: (i) both prior to
and after giving effect thereto (and any Loans incurred
in connection therewith) no Default or Event of Default
shall have occurred and be continuing, (ii) after
giving effect thereto the Company would be able to
obtain Credit Extensions under, and in accordance with
the terms and conditions of, this Agreement in an
amount equal to at least $5,000,000 and (iii) the
amount of consideration paid (including assumed
liabilities) by the Company and its Subsidiaries is
less than or equal to $5,000,000 in the aggregate for
all such Acquisitions.
Section 7.10 Environmental Liabilities. Violate any
requirement of law, rule or regulation regarding
Hazardous Material; and, without limiting the
foregoing, dispose of (or permit any Person to dispose
of) any Hazardous Material into or onto, or (except in
accordance with applicable law) from, any real property
owned or operated by the Company or any of its
Subsidiaries, nor allow any Lien imposed pursuant to
any Requirement of Law relating to Hazardous Materials
or the disposal thereof to be imposed or to remain on
such real property, which violation or Lien could
reasonably be expected to have a Material Adverse
Effect.
Section 7.11 Compliance with ERISA.
(a) Knowingly engage in any transaction in connection
with which the Company or a Subsidiary could be subject to
either a material civil penalty assessed pursuant to Section
502(i) of ERISA or a material tax imposed by Section 4975 of
the Code;
(b) terminate any Plan maintained by the Company or an
ERISA Affiliate in a manner, or take any other action, which
in any case could reasonably be expected to have a Material
Adverse Effect;
(c) fail to make full payment when due of any amounts
which, under the provisions of any Plan or any employee
pension benefit plan (as defined in ERISA) maintained by a
Code Affiliate, the Company or Code Affiliate is required to
pay as contributions thereto under Section 302 of ERISA and
Section 412 of the Code, or permit to exist any accumulated
funding deficiency, whether or not waived, with respect to
any such Plan or any such employee pension benefit plan
where such failure to pay could reasonably be expected to
have a Material Adverse Effect;
(d) fail to make any payments when due to any
Multiemployer Plan which the Company or any ERISA Affiliate
may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto where such
failure to pay could reasonably be expected to have a
Material Adverse Effect. The Company agrees (x) upon the
request of the Agent to obtain a current statement of
withdrawal liability from each Multiemployer Plan to which
the Company or an ERISA Affiliate contributes or to which
the Company or an ERISA Affiliate has an obligation to
contribute and (y) to transmit a copy of such statement to
the Agent with sufficient copies for the Banks; or
(e) amend a Plan or an employee pension benefit plan
(as defined in ERISA) maintained by a Code Affiliate where
such amendment would result in an increase in current
liability for the plan year such that either the Company or
the Code Affiliate is required to provide security to such
plan under Section 401(a)(29) of the Code.
Section 7.12 Prepayments. Make any voluntary prepayments or
redemption of any Indebtedness (other than the Obligations);
provided that the Company shall be permitted to prepay prior
to their stated maturity its obligations with respect to
that certain $3,000,000 General Obligation Bond Financing
between ▇▇▇▇▇▇▇▇ County, Mississippi and the Company.
Section 7.13 Indebtedness. Incur or permit to exist any
Indebtedness except (i) Indebtedness of the Company secured
by Permitted Liens; provided, however, that the aggregate
principal amount of Indebtedness secured by the Liens
permitted pursuant to Section 7.2(j), together with any and
all Indebtedness secured by LPD-17 Refinancing Liens not
otherwise permitted under clause (v) below, shall not exceed
$10,000,000 in the aggregate, (ii) unsecured Indebtedness of
the Company in an aggregate principal amount not to exceed
$10,000,000 in the aggregate less the aggregate amount of
(A) Indebtedness secured by Liens permitted by Section
7.2(j) and (B) Indebtedness secured by LPD-17 Refinancing
Liens not otherwise permitted in clause (v) below, (iii)
Indebtedness constituting an Investment which is permitted
pursuant to Section 7.3(a)(vi), (iv) Indebtedness existing
on the date hereof and listed on Schedule 7.13 and any
extension, renewal or replacement of the Indebtedness listed
on Schedule 7.13, and (v) LPD-17 Refinancing Indebtedness
the terms of which are reasonably satisfactory to the Agent
and the Required Banks and any extension, renewal or
replacement thereof; provided, in the case of items (iv) and
(v) above, that (A) the aggregate principal amount of
Indebtedness issued (or, if such Indebtedness is issued at a
price less than the principal amount thereof, the original
issue price) to extend, renew or replace such Indebtedness
shall not exceed the aggregate principal amount of the
Indebtedness being so extended, renewed or replaced (plus
accrued interest thereon), (B) any such Indebtedness so
issued shall not mature prior to the stated maturity of the
Indebtedness being extended, renewed or replaced and shall,
after giving effect to all of the economic terms thereof,
not impact the cash flow of the Company or such Subsidiary
any more unfavorably than the terms of the Indebtedness
being refinanced and (C) such Indebtedness being so issued
shall contain terms no more restrictive vis a vis the
Company or such Subsidiary than the Indebtedness being so
refinanced.
Section 7.14 No Additional Subsidiaries. Form or acquire
any new Subsidiaries after the date hereof.
Section 7.15 Change of Location or Name. Change (a) the
location of its principal place of business, chief executive
office or major executive office, or its records concerning
the Collateral, or (b) its name or the name under or by
which it conducts its business, in each case, without first
giving the Agent not less than 30 days' prior written notice
thereof and taking any all actions which may be necessary or
desirable, or which the Agent may reasonably request, to
maintain and preserve all Liens in favor of the Agent
granted pursuant to the Collateral Documents, provided that,
notwithstanding the foregoing, the Company will not, and
will not permit any of its Subsidiaries to, change the
location of its principal place of business or chief
executive office of its records concerning the Collateral
from the contiguous continental United States of America to
any place outside the contiguous continental United States
of America.
Section 7.16 Additional Negative Pledges and Other Payment
Restrictions Affecting Subsidiaries. Create or otherwise
cause or suffer to exist or become effective (i) any
prohibition or restriction (including any agreement to
provide equal and ratable security to any other Person in
the event a Lien is granted to or for the benefit of the
Agent and the Banks) on the creation or existence of any
Lien upon the assets of the Company or any of its
Subsidiaries, (ii) any contractual obligation which may
restrict or inhibit the Agent's rights or ability to sell or
otherwise dispose of the Collateral or any part thereof
after the occurrence of an Event of Default or (iii) any
encumbrance or restriction on the ability of any of the
Subsidiaries of the Company to (A) pay dividends or make any
other distributions on such Subsidiary's capital stock or
pay any Indebtedness owed to the Company or a Subsidiary of
the Company, (B) make loans or advances to the Company or a
Subsidiary of the Company or (C) transfer any of its
properties or assets to the Company; provided that the
foregoing shall not prohibit (i) restrictions contained in
any agreement evidencing a Lien permitted by Section 7.2
which may restrict the transfer of the property subject to
such Liens, (ii) customary non-assignment provisions of any
lease governing a leasehold interest of the Company or any
of its Subsidiaries and (iii) the restrictions contained in
Section 6.17 of the Refunding Agreement dated as of April 1,
1994 between the Company and the Board of Commissioners of
the Port of New Orleans (relating to the financing of the Jo
▇▇▇ Drydock) as amended by First Amendment dated as of June
28, 1994.
Section 7.17 Additional Restrictions on Avondale Properties,
Inc. and the Shipyard Partnership. (i) Permit Avondale
Properties, Inc. to engage in any business activity other
than the ownership of the 1% general partnership interest in
the Shipyard Partnership or (ii) Permit the Shipyard
Partnership to engage in any business activity other than
the ownership of the Shipyard Real Property Assets which are
contributed to it by the Company in connection with the
transactions contemplated by the MARAD Financing Documents
and the leasing back to the Company of such property.
Section 7.18 Amendment to Other Financing Documents. Alter,
amend, modify, rescind, terminate or waive any provision of the
MARAD Financing Documents, or any of its rights thereunder.
SECTION VIII
EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) The Company shall fail to pay any principal of the
Loans or any Revolving Notes when due in accordance with the
terms thereof or hereof, or the Company shall fail to make
any payment to the Agent as required pursuant to Section
2.5; or the Company shall fail to pay any interest on any
Loans or Revolving Notes, or any other amount payable
hereunder (including, without limitation, any Reimbursement
Obligations or any amount owing under any of the Loan
Documents) and such failure shall continue for five (5)
days; or
(b) Any representation or warranty made or deemed made
(pursuant to Section 5.3 hereof) by the Company herein or in
any of the other Loan Documents or which is contained in any
exhibit, schedule, certificate, document or financial or
other statement furnished at any time under or in connection
with this Agreement or any of the other Loan Documents shall
prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) The Company shall default in the observance or
performance of any agreement contained in Section VII or an
"Event of Default" under and as defined in any other Loan
Document shall occur; or
(d) The Company shall default in the observance or
performance of any other agreement contained in this
Agreement (other than defaults described in other
subparagraphs of this Section VIII) or any of the other Loan
Documents, and such default shall continue unremedied for a
period of thirty days; or
(e) Any Subsidiary shall take any action set forth in
Section VII which action the Company has undertaken not to
permit; or
(f) Any Subsidiary shall fail to take any action set
forth in Section VI which action the Company has undertaken
to cause and such failure shall not be remedied for a period
of thirty days after notice thereof is given to the Company
by the Agent; or
(g) The Company or any Subsidiary shall (i) default in
any payment of principal of or interest on any Indebtedness
(other than the Revolving Notes and Reimbursement
Obligations) or in the payment of any Contingent Obligation,
in either case in the aggregate principal amount of more
than $3,000,000, in each instance, beyond the period of
grace, if any, provided in the instrument or agreement under
which such Indebtedness or Contingent Obligation was
created; or (ii) default in the observance or performance of
any other agreement or condition relating to any such
Indebtedness or Contingent Obligation or contained in any
instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such
Contingent Obligation (or a trustee, agent or other Person
acting on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice or lapse
of time if required, such Indebtedness to become due prior
to its stated maturity or such Contingent Obligation to
become payable; or
(h) (i) The Company or any Subsidiary shall commence a
case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any
substantial part of its assets, or the Company or any
Subsidiary shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against
the Company or any Subsidiary any case, proceeding or other
action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed or
undischarged for a period of sixty days; or (iii) there
shall be commenced against the Company or any Subsidiary any
case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets
which results in the entry of an order for any such relief
which shall not have been vacated, discharged or stayed
pending appeal within sixty days from the entry thereof; or
(iv) the Company or any Subsidiary shall take any action in
furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Company or any Subsidiary
shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become
due; or
(i) (i) If any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan, (ii) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan
or any employee pension benefit plan (as defined in ERISA)
maintained by a Code Affiliate, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence
to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or institution of
proceedings or appointment of a trustee is likely to result
in termination of such Plan for purposes of Title IV of
ERISA, and, in the case of a Reportable Event, the
continuance of such Reportable Event unremedied for ten days
after notice of such Reportable Event pursuant to Section
4043(a), (c) or (d) of ERISA is given and, in the case of
the institution of proceedings, the continuance of such
proceedings for ten days after commencement thereof, (iv)
any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) the Company or an ERISA Affiliate
shall partially or completely withdraw from, or incur
withdrawal liability with respect to, any Multiemployer Plan
or (vi) any other event or condition shall occur or exist,
with respect to any Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with
all other such events or conditions, if any, could subject
the Company or any of the Subsidiaries to any tax, penalty
or other liabilities in excess of $1,000,000; or
(j) One or more judgments, decrees, arbitration awards,
rulings or decisions (including, without limitation, rulings
of the Board of Contract Appeals), shall be entered against
the Company or any of the Subsidiaries involving in the
aggregate a liability (not paid or fully covered by
insurance) of $1,000,000 or more and all such judgments,
decrees, awards and rulings shall not have been vacated,
paid, discharged, stayed or bonded pending appeal within 60
days from the entry thereof; or the Company or any
Subsidiary fails to timely appeal any final decision of a
contracting officer against the Company or any Subsidiary,
as the case may be, involving an aggregate liability of at
least $1,000,000 or more to the Armed Services Board of
Contract Appeals (the "ASBCA") or the U.S. Claims Court
and/or the ASBCA or the U.S. Claims Court confirms any such
final report or decision; or
(k) At any time, the backlog of firm contracts
(excluding intercompany contracts and excluding unexercised
options or unexercised rights under contracts) of the
Company and the Subsidiary Guarantors shall be less than
$600,000,000; or
(l) If (i) the Company or any of the Subsidiaries is
debarred or suspended from contracting (as first tier or any
other level of subcontractor) for, bidding on, or entering
into any Government Contract; or (ii) if a material current
or material backlogged Government Contract is forfeited or
terminated for cause; or
(m) The Company or any Subsidiary shall default in the
performance of any term or condition contained or applicable
to any Preferred Stock of such Person; or
(n) The Company or any Governmental Authority challenges
the efficacy of the assignments noticed in the Assignment of
Claims Notices or fails to comply with the terms thereof; or
(o) Work on any Navy Contract is interrupted for the
lesser of (i) 90 days or (ii) the period of time permitted
for interruption in such contract, unless in the case of
this clause (ii) such interruption is at the direction of
the United States Navy; or
(p) The Company or any Subsidiary shall contest the
validity or enforceability of, or otherwise disaffirm, or
fail to honor, any of its covenants, agreements or
obligations under any Loan Document to which it is a party,
or any Lien granted or purported to be granted to the Agent
pursuant to the terms of the Collateral Documents with
respect to property, individually or in the aggregate,
having a fair market value in excess of $1,000,000, shall
cease to be or shall not be a valid and perfected Lien
having the priority contemplated by this Agreement and the
Collateral Documents; or
(q) The occurrence of a Change of Control;
then, and in any such event, (A) if such event is an
Event of Default specified in subsection (h) above with
respect to the Company or Subsidiary, automatically the
Commitments shall immediately terminate and the Loans
and any Reimbursement Obligations hereunder (with
accrued interest thereon) and all other Obligations
owing under this Agreement, the Revolving Notes and the
other Loan Documents shall immediately become and be
due and payable without the giving of any notice of any
kind, and (B) if such event is any other Event of
Default, either or both of the following actions may be
taken: (i) the Agent may (with the consent of the
Required Banks) and shall (upon the request of the
Required Banks), by notice to the Company declare the
Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) the
Agent may (with the consent of the Required Banks), by
notice to the Company, declare the Loans and any
Reimbursement Obligations hereunder (with accrued
interest thereon) and all other Obligations owing under
this Agreement, the Revolving Notes and the other Loan
Documents to be due and payable forthwith, whereupon
the same shall immediately become and be due and
payable. Except as expressly provided above in this
Section VIII, presentment, demand, protest and all
other notices of any kind are hereby expressly waived
by the Company. If the maturity of the loans is
accelerated, the LC Issuer shall give notice of
termination under each Letter of Credit which permits
the LC Issuer to cause its termination.
SECTION IX
THE AGENT
Section 9.1 Actions. Each Bank authorizes the Agent to act
on behalf of such Bank under this Agreement, the other
Loan Documents and any other related instruments and,
in the absence of other written instructions from the
Banks received from time to time by the Agent (with
respect to which the Agent agrees that it will, subject
to the last two sentences of this Section 9.1, comply
in good faith except as otherwise advised by counsel),
to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Agent by
the terms hereof and thereof, together with such powers
as may be reasonably incidental thereto. Each Bank
agrees (which agreement shall survive any termination
of this Agreement) to indemnify the Agent, pro rata
according to such Bank's Percentage, from and against
any and all liabilities, obligations, damages,
penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever which
may at any time be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out
of this Agreement, the Revolving Notes, the Letters of
Credit, any of the other Loan Documents and any other
related instruments, including, without limitation, the
reimbursement of the Agent for all reasonable out-of-
pocket expenses (including, without limitation,
syndication costs and attorneys' fees) incurred by the
Agent hereunder or in connection herewith or in
enforcing the obligations of the Company under this
Agreement, under any of the other Loan Documents or any
other related instruments, in all cases as to which the
Agent is not reimbursed by the Company; provided that
no Bank shall be liable for the payment of any portion
of such liabilities, obligations, damages, penalties,
actions, judgments, suits, costs, expenses or
disbursements determined by a court of proper
jurisdiction in a final proceeding to have resulted
solely from the Agent's gross negligence or willful
misconduct. The Agent shall not be required to take
any action hereunder or under any other related
instruments, or to prosecute or defend any suit in
respect of this Agreement or any such instrument,
unless indemnified to its satisfaction by the Banks
against costs, liability, and expense. Each Bank's
obligation to indemnify the Agent as set forth above
shall be unconditional under any and all circumstances
and irrespective of any set off, counterclaim or
defense to payment which such Bank may have or have had
against the Agent, the Company, any Subsidiary or any
other Person. If any indemnity in favor of the Agent
shall become impaired, the Agent may call for
additional indemnity and cease to do the acts
indemnified against until such additional indemnity is
given. The Agent may delegate its duties hereunder to
affiliates, agents or attorneys-in-fact selected in
good faith by the Agent.
Section 9.2 Exculpation. The Agent shall have no duties or
responsibilities except those expressly set forth in
this Agreement. Neither the Agent nor any of its
directors, officers, employees, or agents
(collectively, the "Related Parties") shall be liable
to any Bank for any action taken or omitted to be taken
by it under this Agreement, the other Loan Documents or
any other related instrument, or in connection herewith
or therewith, except for its own willful misconduct or
gross negligence, nor shall the Agent or any Related
Parties be responsible for any recitals or
representations or warranties herein or therein, or for
the effectiveness, enforceability, validity or due
execution of this Agreement, the other Loan Documents
or any other related instruments, nor shall the Agent
or any Related Parties be obligated to make any inquiry
respecting the performance by the Company of its
obligations hereunder or thereunder. The Agent shall
be entitled to rely upon advice of counsel concerning
legal matters and upon any notice, consent,
certificate, statement or writing which it believes to
be genuine and to have been presented by a proper
Person. The Agent may at any time request instructions
from the Banks with respect to any actions or approvals
which, by the terms of this Agreement, the Agent is
permitted or required to take or grant, and the Agent
shall be absolutely entitled to refrain from taking any
action or to withhold any approval and shall not be
under any liability whatsoever to any Person for
refraining from taking any action or withholding any
approval under this Agreement or any of the other Loan
Documents until it has received instructions from the
Required Banks. No Bank shall have any right of action
whatsoever against the Agent as a result of the Agent
acting or refraining from acting hereunder or under any
of the other Loan Documents in accordance with
instructions from the (i) Required Banks, or (ii) all
of the Banks to the extent required hereunder.
Section 9.3 Successor. The Agent may resign as such at any
time upon at least ten days' prior notice to the
Company and all Banks. If the Agent at any time shall
resign or be removed, the Required Banks may appoint
another Bank as a successor Agent. If the Required
Banks do not make such appointment within thirty days,
the resigning or removed Agent shall appoint a new
Agent from among the Banks or, if no Bank accepts such
appointment, from among commercial banking institutions
or trust institutions generally. Upon the acceptance
of any appointment as Agent by a successor Agent, such
successor Agent shall thereupon become the Agent
hereunder and shall be entitled to receive from the
prior Agent such documents of transfer and assignment
as such successor Agent may reasonably request, and the
resigning or removed Agent shall (i) be discharged from
its duties and obligations under this Agreement and the
other related instruments and (ii) entitled to the
continued benefit of this Section IX with respect to
all actions taken by it prior to its removal or
resignation.
Section 9.4 Credit Decisions. Each Bank represents and
acknowledges to the Agent and each other Bank that is
has, independently of the Agent and each other Bank,
and based on the financial information referred to in
this Agreement and the other Loan Documents and such
other documents, information and investigations as it
has deemed appropriate, made its own credit decision to
enter into this Agreement. Each Bank also acknowledges
that it will, independently of the Agent and each Bank,
and based on such documents, information and
investigations as it shall deem appropriate at any
time, continue to make its own credit decisions as to
exercising or not exercising from time to time any
rights and privileges available to it under this
Agreement, the Loan Documents or any other related
instruments.
Section 9.5 Notices, etc. from Agent. The Agent shall give
prompt notice to each Bank of each notice or request
given to the Agent by the Company pursuant to the terms
of this Agreement. The Agent will distribute to each
Bank each instrument received for such Bank's account
and copies of all other communications received by the
Agent from the Company for distribution to the Banks by
the Agent in accordance with the terms of this
Agreement.
Section 9.6 Collateral Documents. Each Bank and the Agent
hereby (i) authorizes the Agent to enter into the
Collateral Documents and to take all action
contemplated thereby and (ii) confirms its appointment
of Bank of America National Trust and Savings
Association as Agent under the terms and conditions of
the Collateral Documents. Each Bank hereby confirms
its agreement to be bound by the terms and conditions
of the Collateral Documents. Each Bank and the Agent
agrees that no Bank shall have any right individually
to seek to realize upon the collateral granted for the
benefit of the Banks pursuant to any of the Collateral
Documents, it being understood and agreed that such
rights and remedies may be exercised by the Agent as
Agent for the benefit of the Agent and the Banks upon
the terms of the Collateral Documents.
Section 9.7 Loans by the Agent. The Agent shall have the same
rights and powers with respect to the Loans made by it
or any of its Affiliates as any Bank and may exercise
the same as if it were not the Agent hereunder.
Section 9.8 Other Collateral Matters. Each Bank hereby
agrees, and each holder of any Obligations by the
acceptance thereof will be deemed to agree, that,
except as otherwise set forth herein, any action taken
by the Agent or the Required Banks in accordance with
the provisions of this Agreement or the Loan Documents,
and the exercise by the Agent or the Required Banks of
the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Banks.
The Agent is hereby authorized on behalf of all of the
Banks, without the necessity of any notice to or
further consent from any Bank, from time to time prior
to an Event of Default, to take any action with respect
to any Collateral or Loan Documents which may be
necessary to perfect and maintain perfected the
security interest in and Liens on the Collateral
granted pursuant to the Loan Documents. Without
limiting the foregoing, the Banks irrevocably authorize
the Agent at its option and in its discretion, to
release any Lien granted to or held by the Agent upon
any Collateral (i) upon termination of the Commitments
and payment in full of all other Obligations payable
under this Agreement and under any other Credit
Document; (ii) constituting property sold or to be sold
or disposed of as part of or in connection with any
disposition permitted hereunder; (iii) constituting
property in which the Company owned no interest at the
time the Lien was granted or at any time thereafter;
(iv) constituting property leased to the Company under
a lease which has expired or been terminated in a
transaction permitted under this Agreement or is about
to expire and which has not been, and is not intended
by the Company to be, renewed or extended; (v)
consisting of an instrument evidencing Indebtedness if
the Indebtedness evidenced thereby has been paid in
full; (vi) in accordance with the provisions of Section
2.18 hereof; or (vii) subject to Section 10.2(g), if
approved, authorized or ratified in writing by the
Required Banks. Upon request by the Agent at any time,
the Banks will confirm in writing the Agent's authority
to release particular types or items of Collateral
pursuant to this Section 9.8.
Section 9.9 Arranger. BancAmerica Securities, Inc. (the
"Arranger") shall not have any obligations,
liabilities, responsibilities or duties under this
Agreement or the other Loan Documents. The Arranger
shall not have or be deemed to have any fiduciary
relationship with any Bank. Each Bank acknowledges
that it has not relied, and will not rely, on the
Arranger in deciding to enter into this Agreement or in
taking or not taking action hereunder.
SECTION X
MISCELLANEOUS
Section 10.1 Notices. All notices by the Company to the Agent
on behalf of the Banks (including, but not limited to,
notices relating to borrowings), and by the Agent on
behalf of the Banks to the Company shall be sent by
telegram, telecopier, telex or letter, or by telephone,
which telephoned communication shall be confirmed by
telegram, telecopier, telex or letter, and shall be
effective (i) when telephoned or, in the case of a
telegram, telecopy message, telex or letter when
received, if telephoned or received before 9:00 a.m.
San Francisco time or (ii) on the next Business Day
following such telephonic message or receipt of a
telegram, telecopy message, telex or letter, if
telephoned or received after 9:00 a.m. San Francisco
time, and all other notices, requests, demands,
directions and other communications (collectively,
"notices") given to or made upon any party hereto under
the provision of this Agreement shall be in writing
(including telexed, telecopied or telegraphed
communication) unless otherwise expressly permitted
hereunder and shall be delivered or sent by first class
mail, certified mail, return receipt requested, or
overnight mail, or by telex or telegram with
confirmation in writing mailed first class, in all
cases with postage or charges prepaid, to the
applicable party addressed, if to the Agent, at such
address and telephone, telex and telecopy numbers as
the Agent shall specify to the Company and the Banks in
accordance with the provisions of this Section 10.1.
Notwithstanding the provisions of the immediately
preceding sentence, any notice sent via certified mail,
return receipt requested, certified fee and normal
postage prepaid, shall be deemed to have been received
on the earlier of actual receipt thereof or the fifth
(5th) day after the postmarked date indicated on the
Receipt for Certified Mail (PS Form 3800, June 1985, or
any successor form). Notices given to the Company
shall be delivered at its offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇.
Kitchen, Telephone: ▇▇▇-▇▇▇-▇▇▇▇, telecopier: 504-
436-5304, and if notice is given to any Bank, to its
address and telephone, telex and telecopy numbers as
such Bank shall specify to the Agent, the Company and
the other Banks in accordance with the provisions of
this Section 10.1. Except as otherwise expressly
provided herein, any properly given notice hereunder
shall be effective when received.
Section 10.2 Amendments and Waivers. No amendment or waiver
of any provision of this Agreement, or any of the other
Loan Documents, nor consent to any departure by the
Company therefrom, shall in any event be effective
unless the same shall be in writing and signed by the
Required Banks, and then such waiver or consent shall
be effective only in the specific instance and for the
specific purpose for which given; provided, however,
that no amendment, waiver or consent, unless in writing
and signed by all the Banks, shall do any of the
following: (a) waive any of the conditions specified
in Section V (though the Agent alone may defer the
fulfillment of such conditions until the date of the
applicable borrowing), (b) increase the amount or
extend the term of the Commitments of the Banks or
subject the Banks to any additional obligations, (c)
reduce the principal of, or interest on, the Loans or
any of the Revolving Notes or Reimbursement
Obligations, or reduce any fees payable hereunder, (d)
postpone any date fixed for any payment in respect of
principal of, or interest on, the Loans, the
Reimbursement Obligations or any of the Revolving
Notes, as the case may be, or fees payable hereunder,
(e) change any of the components which shall be
required for the Banks or any Bank to take any action
hereunder (i.e., the percentage of the Commitments, or
the aggregate unpaid principal amount of the Loans, or
the number of Banks), (f) amend this Section 10.2 or
(g) release all or any substantial portion of the
Collateral (other than any Collateral which is
permitted to be released or disposed of pursuant to the
terms of this Agreement or the terms of the Collateral
Documents), or release any Subsidiary Guarantor from
the Subsidiary Guaranty executed by it; and provided,
further, that no amendment, waiver or consent shall,
unless in writing and signed by the Agent or the LC
Issuer, as applicable, in addition to the Banks
hereinabove required to take such action, affect the
rights or duties of the Agent or the LC Issuer,
respectively, under this Agreement. Without derogating
from the foregoing, except as set forth below, no
amendment to this Agreement shall be effective unless
signed by the Company. Notwithstanding anything in
this Agreement to the contrary, the consent of the
Company shall not be required for any amendment,
modification or waiver of the provisions of Section IX.
Notwithstanding the foregoing, without the consent of any
Bank or the LC Issuer, the Agent, upon the request of
the Company, shall release its Lien, or enter into
intercreditor and/or subordination agreements with
lenders to the Company's and any Subsidiary Guarantor's
customers subordinating the Agent's Lien, on certain
Inventory which shall constitute or form a part of
work-in-process with respect to which both title
thereto has passed to customers of the Company or any
Subsidiary Guarantor pursuant to the terms of the
applicable contract with such customers and for which
an Account has arisen (whether or not such Account has
been billed). It is intended and such releases (or
such agreements) would only be executed by the Agent in
the event any such customer is financing its purchase
of a vessel with a third party lender and the related
construction agreement contemplates that title will
pass from the Company or the applicable Subsidiary
Guarantor to such customer with respect to all or a
portion of the vessel so financed. Prior to the
occurrence of an Event of Default nothing set forth in
this Agreement shall limit the right of the Company to
release any claim or lien it may have to work in
process with respect to which title thereto has been
passed to its customers pursuant to the terms of the
applicable contract with such customers.
Section 10.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the
Agent or any Bank, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.
Section 10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in
any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the
other Loan Documents.
Section 10.5 Payment of Expenses and Taxes; Indemnity and
Release. (a) The Company agrees (a) to promptly pay or
reimburse the Agent for all its reasonable out-of-
pocket costs and expenses incurred in connection with
the structuring, negotiation, preparation, execution,
delivery, implementation and administration of, and any
amendment, supplement or modification (including,
without limitation, proposed amendments, supplements,
or modifications whether or not effective) to, this
Agreement, and the other Loan Documents and any other
documents prepared in connection herewith, and the
consummation of the transactions contemplated hereby
and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the
Agent (including without limitation, but without
duplication, the allocated cost of internal counsel and
disbursements of internal counsel), including, without
limitation, the reasonable fees of any auditors
(including in-house auditors), consultants, appraisers
or other professionals retained by the Agent or its
counsel, (b) to promptly pay or reimburse the Agent,
the Banks and the LC Issuer for all their costs and
expenses incurred in connection with the monitoring and
inspection of the Collateral and the collection of any
Obligations or the enforcement or preservation of any
rights under this Agreement, the Letters of Credit and
any of the other Loan Documents and any such other
documents (whether such collection, enforcement or
preservation is undertaken in connection with any
proceeding described in Section VIII(h) or any
refinancing or restructuring of the credit arrangements
provided for in this Agreement in the nature of a
workout or otherwise), including, without limitation,
the reasonable fees and disbursements of counsel
(including without limitation, but without duplication,
the allocated cost of internal counsel and
disbursements of internal counsel) to the Agent, the
Banks and the LC Issuer including, without limitation,
the reasonable fees of any auditors (including in-house
auditors), consultants, appraisers or other
professionals retained by the Agent or its counsel, and
(c) to promptly pay, indemnify, and hold the Agent and
the Banks harmless from any and all recording and
filing fees and any and all liabilities payable in
connection with the execution and delivery of, or
consummation of any of the transactions contemplated
by, or any amendment, supplement or modification of, or
any waiver of consent under or in respect of, this
Agreement, any of the other Loan Documents and any such
other documents.
(b) In consideration of the execution and delivery of
this Agreement by the Agent and the Banks, and the
Banks' extension of their respective Commitments, the
Company hereby indemnifies, exonerates and holds the
Agent, each Bank, the LC Issuer, each Affiliate of the
Agent, each Affiliate of each Bank, each Affiliate of
the LC Issuer and each of their respective officers,
directors, employees, and agents (herein collectively
called the "Bank Parties" and individually called a
"Bank Party") free and harmless from and against any
and all actions, causes of action, suits, losses,
costs, liabilities and damages, and expenses actually
incurred in connection therewith (irrespective of
whether such Bank Party is a party to the action for
which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements including
allocated costs and disbursements of staff counsel but
only to the extent not duplicative (collectively, the
"Indemnified Liabilities"), incurred by the Bank
Parties or any of them as a result of, or arising out
of, or relating to
(i) this Agreement, the Existing Credit
Agreement, any Letter of Credit, any Loan or any
transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any
Loan;
(ii) any investigation, litigation, or
proceeding related to any acquisition (or Acquisition)
or proposed acquisition (or proposed Acquisition) by
the Company or any of its Subsidiaries of all or any
portion of the stock or all or substantially all of the
assets of any Person, regardless of whether any Bank
Party is a party thereto; or
(iii) the presence on or under, or the escape,
seepage, leakage, spillage, discharge, emission,
discharging or releases from, any real property owned
or operated by the Company or any of its Subsidiaries
of any Hazardous Material (including, without
limitation, any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under
CERCLA, any so-called "Superfund" or "Superlien" law,
or any other federal, state, local or other statute,
law, ordinance, code, rule, regulation, order or decree
regulating, relating to or imposing liability or
standards on conduct concerning, any Hazardous
Material), regardless of whether caused by, or within
the control of, the Company or any of its Subsidiaries;
except for any such Indemnified Liabilities arising for the
account of a particular Bank party which a court of competent
jurisdiction shall have determined in a final proceeding to have
arisen by reason of the relevant Bank Party's gross negligence or
willful misconduct, and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law (the foregoing shall not
derogate from any greater requirements contained in any of the
Collateral Documents in favor of the Agent and the Banks).
The agreements in this Section shall survive repayment of
the Revolving Notes and the Obligations and all other amounts
payable hereunder and under the other Loan Documents.
Section 10.6 Headings; Table of Contents. The Section and
other headings contained in this Agreement and the Table of
Contents which precedes this Agreement are for reference purposes
only and shall not control or affect the construction of this
Agreement or the interpretation hereof in any respect.
Section 10.7 Successors and Assigns. (a) This Agreement shall
be binding upon and shall inure to the benefit of the Agent, the
Banks, the Company and their respective successors and assigns,
except that the Company may not assign or delegate its rights or
obligations hereunder or any interest herein without the consent
of each Bank.
(b) The Banks may grant participations in any part of
the Loans, Revolving Notes or their obligations with respect to
Letters of Credit and the other Loan Documents to any of their
affiliates or to any other commercial bank, insurance company,
savings and loan, savings bank or other financial institution;
provided, however, that (1) such selling Bank's obligations under
this Agreement and the other Loan Documents shall remain
unchanged, (2) such selling Bank shall remain solely responsible
for the performance of such obligations and (3) the Company, the
Agent and the other Banks shall continue to deal solely and
directly with such selling Bank in connection with all rights and
obligations under this Agreement. Any agreement pursuant to
which a selling Bank may grant a participation may provide that
such Bank will not agree to any amendment or waiver expressed in
subsections (b), (c), (d), (f) or (g) of Section 10.2 of this
Agreement without the consent of the participant, but shall not
require any Bank to take or omit to take any other action
hereunder.
(c) Each Bank may, with the consent of the Agent and
the Company (which consent shall not be unreasonably withheld),
but without the consent of any other Bank, assign to one or more
banks or other financial institutions all or a portion of its
rights and obligations under this Agreement and the Revolving
Notes; provided that (i) for each such assignment, the parties
thereto shall execute and deliver to the Agent, for its
acceptance and recording in the Register (as defined below), an
Assignment and Assumption Agreement, together with any Revolving
Note or Revolving Notes subject to such assignment and a
processing and recordation fee of $3,000 and (ii) no such
assignment shall be for less than $5,000,000 of the Commitments,
unless such assignment is to a then-current holder of a Revolving
Note or otherwise consented to by the Agent in writing. Upon
such execution and delivery of the Assignment and Assumption
Agreement to the Agent, from and after the date specified as the
effective date in the Assignment and Assumption Agreement (the
"Acceptance Date"), (x) the assignee thereunder shall be a party
hereto, and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and
Assumption Agreement, such assignee shall have the rights and
obligations of a Bank hereunder and (y) the assignor thereunder
shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Assumption
Agreement, relinquish its rights (other than any rights it may
have pursuant to Section 10.5 which will survive) and be released
from its obligations under this Agreement (and, in the case of an
Assignment and Assumption Agreement covering all or the remaining
portion of an assigning Bank's rights and obligations under this
Agreement, such Bank shall cease to be a party hereto).
(d) By executing and delivering an Assignment and
Assumption Agreement, the assignee thereunder confirms and agrees
as follows: (i) other than as provided in such Assignment and
Assumption Agreement, the assigning Bank makes no representation
or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement, the Revolving Notes or any other instrument or
document furnished pursuant hereto, (ii) such assigning Bank
makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Company or any of
its Subsidiaries or the performance or observance by the Company
or any of its Subsidiaries of any of its obligations under this
Agreement or any other instrument or document furnished pursuant
hereto, (iii) such assignee confirms that it has received a copy
of this Agreement, together with copies of the financial
statements referred to in Section 4.1 and such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Assumption Agreement, (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Bank or any other
Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement,
(v) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto
and (vi) such assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of
this Agreement are required to be performed by it as a Bank.
(e) The Agent shall maintain at its address referred
to in Section 10.1 a copy of each Assignment and Assumption
Agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of the Banks and the
Commitments of, and principal amount of the Loans owing to, each
Bank from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent
manifest error, and the Company, the Agent and the Banks may
treat each Person whose name is recorded in the Register as a
Bank hereunder for all purposes of this Agreement. The Register
and copies of each Assignment and Assumption shall be available
for inspection by the Company or any Bank at any reasonable time
and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Assumption
Agreement executed by an assigning Bank, together with the
Revolving Note or Revolving Notes subject to such assignment, the
Agent shall, if such Assignment and Assumption Agreement has been
completed and is in substantially the form of Exhibit A, (i)
accept such Assignment and Assumption Agreement, (ii) record the
information contained therein in the Register and (iii) give
prompt notice thereof to the Company. Within five (5) Business
Days after its receipt of such notice, the Company shall execute
and deliver to the Agent in exchange for the surrendered
Revolving Note or Revolving Notes a new Revolving Note or
Revolving Notes to the order of the assignee in an amount equal
to the Commitment or Commitments assumed by it pursuant to such
Assignment and Assumption Agreement and, if the assigning Bank
has retained a Commitment or Commitments hereunder, a new
Revolving Note or Revolving Notes to the order of the assigning
Bank in an amount equal to the Commitment or Commitments retained
by it hereunder. Such new Revolving Note or Revolving Notes
shall re-evidence the Indebtedness outstanding under the old
Revolving Note or Revolving Notes and shall be in an aggregate
principal amount equal to the aggregate principal amount of such
surrendered Revolving Note or Revolving Notes, shall be dated the
date of the Initial Credit Event and shall otherwise be in
substantially the form of the Revolving Note or Revolving Notes
subject to such assignments.
Section 10.8 Tax Forms. Each Bank which is a Non-United States
Person agrees (to the extent it is permitted to do so under the
laws and any applicable double taxation treaties of the United
States, the jurisdiction of its incorporation and the
jurisdictions in which its Domestic Office and its Offshore
Lending Office are located) to execute and deliver to the Agent
for delivery to the Company, before the first scheduled payment
date in each taxable year of such Bank, two copies of either (1)
a United States Internal Revenue Service Form 1001, (2) a United
States Internal Revenue Service Form 4224 together with a United
States Internal Revenue Service Form W-9, or (3) a United States
Internal Revenue Service Form W-8 together with a certificate
substantially in the form of Exhibit N and containing any
additional certifications as the Agent may require to establish
such Bank's exemption from United States Federal Taxes pursuant
to section 881(c) or 871(h) of the Code (or any successor Forms,
as appropriate), and such other and further Forms which the
Company may reasonably request, in each case properly completed
and properly claiming complete or partial, as the case may be,
exemption from withholding and deduction of United States Federal
Taxes.
Section 10.9 Setoff. In addition to any rights now or
hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default, the Agent and each Bank and
each participant of each Bank is hereby authorized by the Company
at any time or from time to time, without notice to the Company,
or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether
matured or unmatured but not including trust accounts) and any
other Indebtedness at any time held or owing by the Bank to or
for the credit or the account of the Company against and on
account of the Obligations and liabilities of the Company to the
Agent or such Bank under this Agreement and the other Loan
Documents, including, but not limited to, all claims of any
nature or description arising out of or connected with this
Agreement or the other Loan Documents.
Section 10.10 Sharing.
(a) Each of the Banks agree among themselves that with
respect to all amounts received by them which are applicable
to the payment or satisfaction of all or part of the Loans
or Reimbursement Obligations, interest thereon, any fees or
any other amount payable hereunder or under the other Loan
Documents, equitable adjustment will be made so that, in
effect, all such amounts will be shared among the Banks in
proportion to their respective Percentage, whether received
by voluntary payment, by the exercise of the right of set
off or banker's lien, by counterclaim or by the enforcement
of their rights hereunder or under the other Loan Documents.
(b) If any Bank shall, through the exercise of any right
of counterclaim, set off, banker's lien or otherwise,
receive payment or reduction of a proportion of the
aggregate amount of the Loans or Reimbursement Obligations
or interest thereon due to such Bank, or any other amount
payable hereunder, as the case may be, which is greater than
the proportion received by any other Bank or Banks in
respect to the aggregate amount of any Loan or Reimbursement
Obligation and interest thereon due such Bank, or with
respect to any other amount payable hereunder, that Bank
receiving such proportionately greater payment shall notify
the other Banks and the Agent of such receipt and purchase
participations (which it shall be deemed to have done
simultaneously upon the receipt of such excess payment) in
the Loans and Reimbursement Obligations held by the other
Bank or Banks so that all such recoveries of principal and
interest with respect to the Loans and Reimbursement
Obligations shall be proportionate to each Bank's respective
Percentage; provided that if all or part of such
proportionately greater payment received by such purchasing
Bank is thereafter recovered from such Bank, those purchases
shall be rescinded and the purchase prices paid for such
participations shall be returned to the purchasing Bank to
the extent of such recovery, but without interest. Each
participant of any Bank shall have the same rights of set
off against the Company set forth in Section 10.9 as if it
were a Bank and agrees that, with respect to any setoff made
by such participant, the provisions of this Section 10.10
shall similarly apply as if it were a Bank.
(c) The Company expressly consents to the arrangement
described in this Section 10.10.
Section 10.11 Counterparts. This Agreement may be executed by
one or more of the parties to this Agreement on any number
of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument.
Section 10.12 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other
jurisdiction.
Section 10.13 Governing Law. This Agreement and the Revolving
Notes and the rights and obligations of the parties under
this Agreement and the Revolving Notes shall be governed by,
and construed and interpreted in accordance with, the
internal laws (as opposed to conflict of laws provisions) of
the State of Illinois; provided that the Agent and the Banks
shall retain all rights arising under federal law.
Section 10.14 Marshalling; Recapture. Neither the Agent nor
any Bank shall be under an obligation to ▇▇▇▇▇▇▇▇ any assets
in favor of the Company, any Subsidiary of the Company or
any other party or against or in payment of any or all of
the Obligations. To the extent any Bank receives any
payment by or on behalf of the Company, which payment or any
part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be
repaid to the Company, its estate, trustee, receiver,
custodian or any other party under any bankruptcy law, state
or Federal law, common law or equitable cause, then to the
extent of such payment or repayment, the obligation or part
thereof which has been paid, reduced or satisfied by the
amount so repaid shall be reinstated by the amount so repaid
and shall be included within the liabilities of the Company
to such Bank as of the date such initial payment, reduction
or satisfaction occurred.
Section 10.15 Jurisdiction. The Company hereby irrevocably
submits to the jurisdiction of any Illinois State or Federal
court sitting in ▇▇▇▇ County, Illinois in any action or
proceeding arising out of or relating to this Agreement
and/or the other Loan Documents and the Company hereby
irrevocably agrees that all claims in respect of such action
or proceeding may be heard and determined in such Illinois
State court, or to the extent permitted by law, in such
Federal court. The Company hereby irrevocably waives to the
fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or
proceeding. The Company also irrevocably consents to the
service of any and all process in any such action or
proceeding by the mailing of copies of such process to the
Company at its address specified in Section 10.1 hereof.
The Company agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other
manner provided by law.
Section 10.16 Waiver of Jury Trial. EACH OF THE BANKS, THE
AGENT AND THE COMPANY MUTUALLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING (INCLUDING, ANY COUNTERCLAIM) IN ANY
COURT ARISING ON, OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, THE RELATED
AGREEMENTS OR ANY AMENDMENT OR SUPPLEMENT HERETO OR THERETO
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
[The Remainder Of This Page Is Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper
and duly authorized officers as of year first above written.
AVONDALE INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. KITCHEN
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Name: ▇▇▇▇▇▇ ▇. Kitchen
Title: Vice President and
Chief Financial Officer
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION, as Agent
By: /s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
THE BANKS:
BANK OF AMERICA ILLINOIS, as
a Bank and as an LC Issuer
By: /s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Domestic and Offshore Lending
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WHITNEY NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
Domestic and Offshore Lending
Office
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FIRST NATIONAL BANK OF
COMMERCE
By: /s/ A. ▇▇▇▇▇ ▇▇▇▇▇
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Name: A. ▇▇▇▇▇ ▇▇▇▇▇
Title: Banking Officer
Domestic and Offshore Lending
▇▇▇▇▇▇
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇