EXHIBIT 10.6
SECOND AMENDMENT TO
FIFTH AMENDED AND RESTATED REVOLVING
CREDIT AND TERM LOAN AGREEMENT
THIS SECOND AMENDMENT TO FIFTH AMENDED AND RESTATED REVOLVING CREDIT AND
TERM LOAN AGREEMENT (this "Second Amendment"), dated effective as of the 18th
day of March, 1997, by and among GULF ISLAND FABRICATION, INC., a Louisiana
corporation ("Borrower"), WHITNEY NATIONAL BANK, a national banking association
("Whitney"), FIRST NATIONAL BANK OF COMMERCE, a national banking association, in
its individual capacity ("First NBC") (each of Whitney and First NBC being
sometimes referred to individually as a "Bank" and collectively as the "Banks"),
and FIRST NATIONAL BANK OF COMMERCE, a national banking association, in its
capacity as agent for the Banks as set forth hereinafter (the "Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower, Banks and Agent entered into that certain Fifth Amended
and Restated Revolving Credit and Term Loan Agreement, dated effective as of
October 24, 1996 (the "Fifth Amended and Restated Credit Agreement");
WHEREAS, Borrower, Banks and Agent entered into that certain First
Amendment to Fifth Amended and Restated Revolving Credit and Term Loan
Agreement dated effective as of January 2, 1997 (the "First Amendment to the
Fifth Amended and Restated Credit Agreement"), whereby the Term Credit Facility
(as defined in the Fifth Amended and Restated Credit Agreement) was increased by
$5,000,000, Borrower was permitted to acquire Dolphin Services, Inc., Dolphin
Steel Sales, Inc., and Dolphin Sales & Rentals, Inc., and the maturity date of
the Term Credit Facility under the Fifth Amended and Restated Credit Agreement
was extended (the Fifth Amended and Restated Credit Agreement as amended by the
First Amendment to the Fifth Amended and Restated Credit Agreement, the "Revised
Credit Agreement");
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WHEREAS, Borrower, Banks and Agent desire to amend the Revised Credit
Agreement (i) to increase the Revolving Credit Facility (as defined in the
Revised Credit Agreement) from $12,000,000 to $20,000,000, (ii) to extend the
maturity date of the Revolving Credit Facility from December 31, 1998 to
December 31, 1999, (iii) to allow Borrower to declare and pay a special dividend
to its shareholders in the aggregate amount of no more than $16,000,000 and (iv)
to allow an initial public offering of Borrower's common stock;
NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements and undertakings herein contained, Banks, Agent and Borrower hereby
agree as follows:
ARTICLE I
AMENDMENTS TO REVISED CREDIT AGREEMENT
1. Section 1. Section 1 of the Revised Credit Agreement is hereby amended
by deleting the amount "TWENTY-SEVEN MILLION AND NO/100 DOLLARS
($27,000,000.00)" from the final sentence thereof and inserting in its place the
amount "THIRTY-FIVE MILLION AND NO/100 DOLLARS ($35,000,000.00)".
2. Section 1.2. Section 1.2 of the Revised Credit Agreement is hereby
amended by deleting the date "December 31, 1998" in the first sentence thereof
and replacing such date with "December 31, 1999".
3. Section 2.2. Section 2.2 of the Revised Credit Agreement is hereby
amended (a) by deleting the phrase "SIX MILLION AND NO/100 DOLLARS
($6,000,000.00)" from the first sentence thereof and replacing such phrase with
the phrase "TEN MILLION AND NO/100 DOLLARS ($10,000,000.00)" and (b) by deleting
the date "December 31, 1998" from the first sentence thereof and replacing such
date with the date "December 31, 1999".
4. Section 6.8. The first sentence of Section 6.8 of the Revised Credit
Agreement is hereby amended in its entirety to state:
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6.8 Purpose. The proceeds of the Revolving Credit Facility shall be
used by Borrower only for the support of working capital and for other
general corporate purposes; provided, however, that Borrower may use the
proceeds of the Revolving Credit Facility to fund an extraordinary dividend
(the "Special Dividend") to its shareholders, payable on or before May 15,
1997, and in an aggregate amount not to exceed $16,000,000.
5. Section 6.13. Section 6.13 of the Revised Credit Agreement shall be
deleted in its entirety upon completion of Borrower's initial public offering of
its common stock (the "IPO").
6. Section 7.13. Section 7.13 of the Revised Credit Agreement shall be
deleted in its entirety upon completion of the IPO.
7. Section 7.15. A new final clause is hereby added to Section 7.15 of
the Revised Credit Agreement to state:
(provided, however, that notwithstanding the foregoing dividend
limitations, Borrower is permitted to declare and to pay the Special
Dividend, and the amount of the Special Dividend shall not be considered in
the calculation of the dividends otherwise payable under this Section
7.15).
8. Section 9.2. The final sentence of Section 9.2 of the Credit
Agreement is hereby deleted.
9. Section 10.8. Section 10.8 of the Revised Credit Agreement shall be
deleted in its entirety upon completion of the IPO.
10. Section 12.1. Section 12.1 of the Revised Credit Agreement is hereby
amended to include the following substituted or additional definitions:
"Revolving Commitment" means the lesser of (a) TWENTY MILLION AND
NO/100 DOLLARS ($20,000,000.00) or (b) TWELVE MILLION AND NO/100 DOLLARS
($12,000,000.00) plus the Borrowing Base at the time in question.
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"Second Amendment" means that certain Second Amendment to Fifth
Amended and Restated Term Loan and Revolving Credit Facility entered into
by and among Borrower, Banks and Agent as of March 18, 1997.
"Special Dividend" has the meaning ascribed in Section 6.8 above.
"Termination Date" means December 31, 1999.
ARTICLE II
SPECIAL REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO THIS SECOND AMENDMENT
In order to induce Banks and Agent to enter into this Second Amendment,
Borrower represents and warrants to Banks that:
1. Borrower Authorization. Borrower is duly authorized to execute,
deliver and perform its obligations under this Second Amendment and is and will
continue to be duly authorized to borrow monies under and to perform its
obligations under the Revised Credit Agreement, as amended by this Second
Amendment and as it may be further amended from time to time.
2. Enforceability Against Borrower. This Second Amendment shall, upon
execution and delivery, constitute the legal, valid and binding obligation of
Borrower, enforceable in accordance with its terms.
ARTICLE III
CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS
SECOND AMENDMENT
This Second Amendment shall become effective as of the date first above
written when and only when (i) Agent shall have received at the offices of
Agent, a counterpart of this Second Amendment executed and delivered by Borrower
and Banks and (ii) Agent shall have additionally
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received all of the following documents, each document (unless otherwise
indicated) being dated the date of receipt thereof by Agent, duly authorized,
executed and delivered, and in form and substance satisfactory to Agent and each
of the Banks:
1. Borrower's Resolutions. Copies, duly certified by the Secretary or
Assistant Secretary of Borrower, of the resolutions of Borrower's Board of
Directors authorizing the borrowings under the Revised Credit Agreement, as
amended hereby, and the execution and delivery of this Second Amendment and the
new Revolving Notes contemplated hereby;
2. Revolving Notes. Borrower's duly executed Revolving Notes payable to
the order of Banks, in the form attached as Exhibits "D" and "E" hereto, with
appropriate insertions;
3. Borrower Incumbency Certificate. Certificates of Borrower's Secretary
or Assistant Secretary certifying the names of the officers of Borrower
authorized to execute the all documents or certificates to be delivered
hereunder by Borrower, together with the true signatures of such officers; and
4. Security Agreements. Security agreements (the "Shareholder Security
Agreements") executed by ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ in the forms
attached hereto as Exhibits "A" and "B", together with the delivery to Agent by
such parties of their respective shares of the Special Dividend for pledge to
the Banks pursuant to the Shareholder Security Agreements.
ARTICLE IV
LIMITED WAIVERS
Sections 7.10(a)-(c) of the Revised Credit Agreement are hereby waived
until the earlier of (a) the date on which either of the Shareholder Security
Agreements terminates or either of the security interests contemplated thereby
otherwise terminates or becomes unperfected or (b) June 30, 1997 (the "Waiver
Expiration Date"). The waivers granted herein shall expire on the Waiver
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Expiration Date, after which date Borrower must be in full compliance with all
Sections of the Revised Credit Agreement, as amended hereby.
ARTICLE V
MISCELLANEOUS
1. Definitions. All terms used herein with initial capital letters and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Revised Credit Agreement.
2. Substitution of Exhibits. Exhibits "D" and "E" of the Revised Credit
Agreement are hereby deleted, and Exhibits "D" and "E" attached hereto are
hereby substituted in place thereof.
3. Ratification of Notes and Liens. Borrower does hereby ratify,
reaffirm and acknowledge its obligations under the Term Notes, and Borrower does
hereby further ratify, reaffirm and acknowledge its mortgage, pledge and/or
assignment of, and/or grant of a security interest in, all Collateral heretofore
provided by Borrower as security for the Notes and the other Obligations under
the Revised Credit Agreement. Borrower does hereby further ratify, confirm and
acknowledge to Agent and Banks that: (a) the mortgage, pledge and/or
assignment of, and/or grant of a security interest in, all such Collateral is
and shall remain in full force and effect; (b) the Collateral Documents to which
Borrower is a party are and shall continue to be valid, binding and enforceable
obligations of Borrower; and (c) the Collateral Documents and the Collateral
shall continue to secure, with retroactive priority to the extent permitted by
law, the Notes and the other Obligations of Borrower as continued pursuant to
the Term Notes and as renewed, rearranged, extended and now evidenced by, and as
the amount thereof has been increased by, the Revolving Notes executed of even
date herewith in the forms attached hereto as Exhibits "D" and "E".
4. No Other Changes. The Revised Credit Agreement as hereby amended is
hereby ratified and confirmed in all respects. Any reference to the Revised
Credit Agreement in any Loan Document shall be deemed to refer to the Revised
Credit Agreement as amended hereby. The
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execution, delivery and effectiveness of this Second Amendment shall not, except
as expressly provided herein, operate as a waiver of any right, power or remedy
of Banks under the Revised Credit Agreement or any other Loan Document. Except
as amended by this Second Amendment, the Revised Credit Agreement shall remain
in full force and effect. Nothing contained herein or in any other documents
contemplated hereby shall be considered a novation or discharge of the debt of
Borrower to Banks under the Revised Credit Agreement.
5. Counterparts. This Second Amendment may be executed in as many
counterparts as may be deemed necessary or convenient, and by the different
parties hereto in separate counterparts, each of which, when so executed, shall
be deemed an original, but all of which counterparts shall constitute but one
and the same instrument.
6. Termination of the Shareholder Security Agreements. Upon Borrower's
receipt of the proceeds of the IPO, Banks shall terminate the Shareholder
Security Agreements and release the collateral encumbered thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be executed by their respective officers thereunto duly authorized, effective as
of the date first written above.
BORROWER:
GULF ISLAND FABRICATION, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
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BANKS:
FIRST NATIONAL BANK OF COMMERCE
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
______________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.,
Vice President
WHITNEY NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President
AGENT:
FIRST NATIONAL BANK OF COMMERCE
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
______________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.,
Vice President
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ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BE IT KNOWN, that on this 18th day of March, 1997, before me, the
undersigned authority, duly commissioned, qualified and sworn within and for the
State and Parish aforesaid, personally came and appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
appearing herein in his capacity as President of Gulf Island Fabrication, Inc.,
to me personally known to be the identical person whose name is subscribed to
the foregoing Second Amendment to Fifth Amended and Restated Revolving Credit
and Term Loan Agreement, who declared and acknowledged to me, Notary, in the
presence of the undersigned competent witnesses, that he executed the same on
behalf of said corporation with full authority of its Board of Directors, and
that the same instrument is the free act and deed of the said corporation and
was executed for the uses, purposes and benefits therein expressed.
WITNESSES:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________ _______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
_______________________________
/s/ ▇. ▇▇▇▇▇▇ Lelong, Jr.
____________________________________
NOTARY PUBLIC
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ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BE IT KNOWN, that on this 18th day of March, 1997, before me, the
undersigned authority, duly commissioned, qualified and sworn within and for the
State and Parish aforesaid, personally came and appeared J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.,
appearing herein in his capacity as Vice President of First National Bank of
Commerce, to me personally known to be the identical person whose name is
subscribed to the foregoing Second Amendment to Fifth Amended and Restated
Revolving Credit and Term Loan Agreement, who declared and acknowledged to me,
Notary, in the presence of the undersigned competent witnesses, that he executed
the same on behalf of said national banking association, appearing in said
agreement in its individual capacity and its capacity as Agent, with full
authority of its Board of Directors, and that the same instrument is the free
act and deed of the said national bank association and was executed for the
uses, purposes and benefits therein expressed.
WITNESSES:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
_______________________________ _______________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III
_______________________________
/s/ ▇. ▇▇▇▇▇▇ Lelong, Jr.
____________________________________
NOTARY PUBLIC
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ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BE IT KNOWN, that on this 18th day of March, 1997, before me, the
undersigned authority, duly commissioned, qualified and sworn within and for the
State and Parish aforesaid, personally came and appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
appearing herein in his capacity as Senior Vice President of Whitney National
Bank, to me personally known to be the identical person whose name is sub
scribed to the foregoing Second Amendment to Fifth Amended and Restated
Revolving Credit and Term Loan Agreement, who declared and acknowledged to me,
Notary, in the presence of the undersigned competent witnesses, that he executed
the same on behalf of said national banking association, appearing in said
agreement in its individual capacity, with full authority of its Board of
Directors, and that the same instrument is the free act and deed of the said
national bank association and was executed for the uses, purposes and benefits
therein expressed.
WITNESSES:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________ _________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III
_______________________________
/s/ ▇. ▇▇▇▇▇▇ Lelong, Jr.
________________________________
NOTARY PUBLIC
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