EXHIBIT 10.21




 




THIRD AMENDMENT TO CREDIT

AGREEMENT




 




 




                THIS THIRD

AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of

September 30, 2002, by and between Northwest Pipe Company, an Oregon

corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).




 




 




RECITALS




 




                WHEREAS, Borrower

is currently indebted to Bank pursuant to the terms and conditions of that

certain Credit Agreement between Borrower and Bank dated as of May 30, 2001, as

amended from time to time (“Credit Agreement”).




 




                WHEREAS, Bank and

Borrower have agreed to certain changes in the terms and conditions set forth

in the Credit Agreement and have agreed to amend the Credit Agreement to

reflect said changes.




 




                NOW, THEREFORE,

for valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, the parties hereto agree that the Credit Agreement shall be

amended as follows:




 




                1.  Section 1.1 (a) is hereby amended (a)

by deleting “September 30, 2003” as the last day on which Bank will make

advances under the Line of Credit, and by substituting for said date “June 30,

2004,” and (b) by deleting “Thirty Million Dollars ($30,000,000.00)” as the

maximum principal amount available under the Line of Credit, and by

substituting for said amount “Forty Million Dollars ($40,000,000.00),” with

such changes to be effective upon the execution and delivery to Bank of a

promissory note substantially in the form of Exhibit A attached hereto

(which promissory note shall replace and be deemed the Line of Credit Note defined

in and made pursuant to the Credit Agreement) and all other contracts,

instruments and documents required by Bank to evidence such change.




 




                2.             Section 1.2. (c) is hereby

deleted in its entirety, and the following substituted therefor:




 




                                                                         “Commitment

Fee.  Borrower shall pay to Bank an

annual non-refundable commitment fee for the Line of Credit equal to Fifteen

Thousand Dollars ($15,000.00).”




 




                3.             Section 1.4. is hereby deleted

in its entirety, without substitution.




 




 




4.             Section 4.9

(b) is hereby deleted in its entirety, and the following substituted therefor:




 




“(b)         EBITDA

Coverage Ratio not less than 1.30 to 1.0, determined as of each fiscal quarter

end on a trailing four (4) fiscal quarter basis, increasing to 1.35 to 1.0 at

December 31, 2002; increasing to 1.40 to 1.0 at March 31, 2003; increasing to

1.45 to 1.0 at June 30, 2003; increasing to 1.50 to 1.0 at September 30, 2003

thereafter; with “EBITDA” defined as net profit before tax plus interest

expense (net of capitalized interest expense), depreciation expense and

amortization expense, and with “EBITDA Coverage Ratio” defined as EBITDA

divided by the aggregate of total interest expense plus the prior period

current maturity of long-term debt, the prior period current maturity of

capital leases and the prior period current maturity of subordinated debt.

Prior period current maturity of long-term debt (“CMLTD”), defined to include

the $10.7MM in annual senior debt payments as scheduled (whether classified

long term or short term).”




 




                5.             Section 4.9 (c) is hereby

deleted in its entirety, and the following substituted therefor:




 




“(c)         Ratio

of Funded debt to EBITDA, determined as of each fiscal quarter end on a

trailing four (4) fiscal quarter basis, not greater than 3.35 to 1.00 to and

including September 30, 2002, and 3.30 to 




 





























 




1.00 thereafter, with “Funded Debt” defined as the aggregate of

all interest bearing obligations, inclusive of (without duplication) letters of

credit excluding undrawn letters of credit, capital leases and guaranteed indebtedness,

and with “EBITDA” as defined above.”




 




                6.             Except as specifically provided

herein, all terms and conditions of the Credit Agreement remain in full force

and effect, without waiver or modification. 

All terms defined in the Credit Agreement shall have the same meaning

when used in this Amendment.  This

Amendment and the Credit Agreement shall be read together, as one document.




 




                7.             Except as provided in Schedule I

attached hereto, Borrower hereby remakes all representations and warranties

contained in the Credit Agreement (provided, however, as to the representations

contained in Section 2.5 of the Credit Agreement, Borrower represents only that

those representations were true as of the date of the Credit Agreement) and

reaffirms all covenants set forth therein as previously modified and modified

herein.




 




UNDER

OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK AFTER

OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR

PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S

RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE

ENFORCEABLE.




 




                IN

WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed

as of the day and year first written above.




 




	

   


  	

  WELLS

  FARGO BANK,


  	

   


  
	

  Northwest

  Pipe Company


  	

   


  	

  NATIONAL

  ASSOCIATION


  
	

   


  	

   


  
	

  By: /s/ John D Murakami______________________


  	

  By: /s/ S Myers_________________


  
	

   


  	

  John D. Murakami, Vice President/CFO


  	

  Stanton Myers, Relationship Manager


  	

   


  
							





 




 





























 




REVOLVING LINE OF CREDIT NOTE




 




 




$40,000,000.00                                                                                                                                                         Portland,

Oregon




September 30, 2002




 




                FOR VALUE

RECEIVED, the undersigned NORTHWEST PIPE COMPANY (“Borrower”) promises to pay

to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office

at Portland RCBO, 1300 S.W. Fifth Avenue T-13, Portland, Oregon, or at such

other place as the holder hereof may designate, in lawful money of the United

States of America and in immediately available funds, the principal sum of

Forty Million Dollars ($40,000,000.00), or so much thereof as may be advanced

and be outstanding, with interest thereon, to be computed on each advance from

the date of its disbursement as set forth herein.




 




DEFINITIONS:




 




                As used herein,

the following terms shall have the meanings set forth after each, and any other

term defined in this Note shall have the meaning set forth at the place

defined:




 




                (a)           “Business Day” means any day except a

Saturday, Sunday or any other day on which commercial banks in Oregon are

authorized or required by law to close.




 




                (b)           “Fixed Rate Term” means a period

commencing on a Business Day and continuing for 1, 2, 3 or 6 months, as

designated by Borrower, during which all or a portion of the outstanding

principal balance of this Note bears interest determined in relation to LIBOR;

provided however, that no Fixed Rate Term may be selected for a principal

amount less than Two Hundred and Fifty Thousand Dollars ($250,000.00); and

provided further, that no Fixed Rate Term shall extend beyond the scheduled

maturity date hereof.  If any Fixed Rate

Term would end on a day which is not a Business Day, then such Fixed Rate Term

shall be extended to the next succeeding Business Day.




 




                (c)           “LIBOR” means the rate per annum

(rounded upward, if necessary, to the nearest whole 1/8 of 1%) and determined

pursuant to the following formula:




 




	

  LIBOR =


  	

  Base LIBOR


  	

   


  
	

   


  	

  100% - LIBOR Reserve Percentage


  	

   


  





 




                (i)            “Base LIBOR” means the rate per

annum for United States dollar deposits quoted by Bank as the Inter-Bank Market

Offered Rate, with the understanding that such rate is quoted by Bank for the

purpose of calculating effective rates of interest for loans making reference

thereto, on the first day of a Fixed Rate Term for delivery of funds on said

date for a period of time approximately equal to the number of days in such

Fixed Rate Term and in an amount approximately equal to the principal amount to

which such Fixed Rate Term applies. 

Borrower understands and agrees that Bank may base its quotation of the

Inter-Bank Market Offered Rate upon such offers or other market indicators of

the Inter-Bank Market as Bank in its discretion deems appropriate including,

but not limited to, the rate offered for U.S. dollar deposits on the London

Inter-Bank Market.




 




(ii)           “LIBOR

Reserve Percentage” means the reserve percentage prescribed by the Board of

Governors of the Federal Reserve System (or any successor) for “Eurocurrency

Liabilities” (as defined in Regulation D of the Federal Reserve Board, as

amended), adjusted by Bank for expected changes in such reserve percentage during

the applicable Fixed Rate Term.




 




                (d)           “Prime Rate” means at any time the

rate of interest most recently announced within Bank at its principal office as

its Prime Rate, with the understanding that the Prime Rate is one of Bank’s

base rates and serves as the basis upon which effective rates of interest are

calculated for those loans making reference thereto, and is evidenced by the

recording thereof after its announcement in such internal publication or

publications as Bank may designate.




 





























 




INTEREST:




 




                (a)           Interest.  The outstanding principal balance of this

Note shall bear interest (computed on the basis of a 360–day year, actual

days elapsed) either (i) at a fluctuating rate per annum one quarter of one

percent (.25%) below the Prime Rate in effect from time to time, or (ii) at a

fixed rate per annum determined by Bank to be two percent above LIBOR in effect

of the first day of each Fixed Rate Term. 

When interest is determined in relation to the Prime Rate, each change

in the rate of interest hereunder shall become effective on the date each Prime

Rate change is announced within Bank. 

With respect to each LIBOR selection hereunder, Bank is hereby

authorized to note the date, principal amount, interest rate and Fixed Rate

Term applicable thereto and any payments made thereon on Bank’s books and

records (either manually or by electronic entry) and/or on any schedule

attached to this Note, which notations shall be prima facie evidence of the

accuracy of the information noted.




 




                (b)           Selection of Interest Rate

Options.  At any time any portion of

this Note bears interest determined in relation to LIBOR, it may be continued

by Borrower at the end of the Fixed Rate Term applicable thereto so that all or

a portion thereof bears interest determined in relation to the Prime Rate or to

LIBOR for a new Fixed Rate Term designated by Borrower.  At any time any portion of this Note bears

interest determined in relation to the Prime Rate, Borrower may convert all or

a portion thereof so that it bears interest determined in relation to LIBOR for

a Fixed Rate Term designated by Borrower. 

At such time as Borrower requests an advance hereunder or wishes to

select a LIBOR option for all or a portion of the outstanding principal balance

hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank notice

specifying: (i) the interest rate option selected by Borrower; (ii) the

principal amount subject thereto; and (iii) for each LIBOR selection, the

length of the applicable Fixed Rate Term. Any such notice may be given by

telephone (or such other electronic method as Bank may permit) so long as, with

respect to each LIBOR selection, (A) if requested by Bank, Borrower provides to

Bank written confirmation thereof not later than three (3) Business Days after

such notice is given, and (B) such notice is given to Bank prior to 10:00 a.m.

on the first day of the Fixed Rate Term, or at a later time during any Business

Day if Bank, at it’s sole option but without obligation to do so, accepts

Borrower’s notice and quotes a fixed rate to Borrower.  If Borrower does not immediately accept a

fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent

LIBOR request from Borrower shall be subject to a redetermination by Bank of

the applicable fixed rate.  If no specific

designation of interest is made at the time any advance is requested hereunder

or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a

Prime Rate interest selection for such advance or the principal amount to which

such Fixed Rate Term applied.




 




                 (c)          Taxes

and Regulatory Costs.  Borrower

shall pay to Bank immediately upon demand, in addition to any other amounts due

or to become due hereunder, any and all (i) withholdings, interest equalization

taxes, stamp taxes or other taxes (except income and franchise taxes) imposed

by any domestic or foreign governmental authority and related in any manner to

LIBOR, and (ii) future, supplemental, emergency or other changes in the LIBOR

Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance

Corporation, or similar requirements or costs imposed by any domestic or

foreign governmental authority or resulting from compliance by Bank with any

request or directive (whether or not having the force of law) from any central

bank or other governmental authority and related in any manner to LIBOR to the

extent they are not included in the calculation of LIBOR.  In determining which of the foregoing are

attributable to any LIBOR option available to Borrower hereunder, any

reasonable allocation made by Bank among its operations shall be conclusive and

binding upon Borrower.




 




                (d)           Payment of Interest.  Interest accrued on this Note shall be

payable on the last day of each Month, commencing October 31, 2002.




 




(e)           Default Interest. 

From and after the maturity date of this Note, or such earlier date as

all principal owing hereunder becomes due and payable by acceleration or

otherwise, the outstanding principal balance of this Note shall bear interest

until paid in full at an increased rate per annum (computed on the basis of a

360-day year, actual days elapsed) equal to three percent (3%) above the rate

of interest from time to time applicable to the credit agreement dated May 30,

2001.




 





























 




BORROWING AND REPAYMENT:




 




                (a)           Borrowing and Repayment.  Borrower may from time to time during the

term of this Note borrow, partially or wholly repay its outstanding borrowings,

and reborrow, subject to all of the limitations, terms and conditions of this

Note and of any document executed in connection with or governing this Note;

provided however, that the total outstanding borrowings under this Note shall

not at any time exceed the principal amount stated above.  The unpaid principal balance of this

obligation at any time shall be the total amounts advanced hereunder by the

holder hereof less the amount of principal payments made hereon by or for any

Borrower, which balance may be endorsed hereon from time to time by the

holder.  The outstanding principal

balance of this Note shall be due and payable in full on June 30, 2004.




 




                (b)           Advances.  Advances hereunder, to the total amount of

the principal sum stated above, may be made by the holder at the oral or

written request of (i) Paul Parsons, Mike Van Note, Al Rose or John Murakami,

any one acting alone, who are authorized to request advances and direct the

disposition of any advances until written notice of the revocation of such

authority is received by the holder at the office designated above, or (ii) any

person, with respect to advances deposited to the credit of any deposit account

of any Borrower, which advances, when so deposited, shall be conclusively

presumed to have been made to or for the benefit of each Borrower regardless of

the fact that persons other than those authorized to request advances may have

authority to draw against such account. 

The holder shall have no obligation to determine whether any person

requesting an advance is or has been authorized by any Borrower.




 




                (c)           Application of Payments.  Each payment made on this Note shall be credited

first, to any interest then due and second, to the outstanding principal

balance hereof.  All payments credited

to principal shall be applied first, to the outstanding principal balance of

this Note which bears interest determined in relation to the Prime Rate, if

any, and second, to the outstanding principal balance of this Note which bears

interest determined in relation to LIBOR, with such payments applied to the

oldest Fixed Rate Term first.




 




PREPAYMENT:




 




                (a)           Prime Rate.  Borrower may prepay principal on any portion

of this Note which bears interest determined in relation to the Prime Rate at

any time, in any amount and without penalty.




 




                (b)           LIBOR.  Borrower may prepay principal on any portion

of this Note which bears interest determined in relation to LIBOR at any time

and in the minimum amount of One Hundred Thousand Dollars ($100,000.00);

provided however, that if the outstanding principal balance of such portion of

this Note is less than said amount, the minimum prepayment amount shall be the

entire outstanding principal balance thereof. 

In consideration of Bank providing this prepayment option to Borrower,

or if any such portion of this Note shall become due and payable at any time

prior to the last day of the Fixed Rate Term applicable thereto by acceleration

or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is

the sum of the discounted monthly differences for each month from the month of

prepayment through the month in which such Fixed Rate Term matures, calculated

as follows for each such month:




 




                                                                         (i)            Determine

the amount of interest which would have accrued each month on the amount

prepaid at the interest rate applicable to such amount had it remained

outstanding until the last day of the Fixed Rate Term applicable thereto.




 




                                                                      (ii)            Subtract

from the amount determined in (i) above the amount of interest which would have

accrued for the same month on the amount prepaid for the remaining term of such

Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made

for such term and in a principal amount equal to the amount prepaid.




 




                                                                   (iii)            If

the result obtained in (ii) for any month is greater than zero, discount that

difference by LIBOR used in (ii) above.




 





























 




Each Borrower acknowledges that prepayment of such amount may result in

Bank incurring additional costs, expenses and/or liabilities, and that it is

difficult to ascertain the full extent of such costs, expenses and/or

liabilities.  Each Borrower, therefore,

agrees to pay the above–described prepayment fee and agrees that said

amount represents a reasonable estimate of the prepayment costs, expenses

and/or liabilities of Bank.  If Borrower

fails to pay any prepayment fee when due, the amount of such prepayment fee

shall thereafter bear interest until paid at a rate per annum two percent

(2.00%) above the Prime Rate in effect from time to time (computed on the basis

of a 360–day year, actual days elapsed). 

Each change in the rate of interest on any such past due prepayment fee

shall become effective on the date each Prime Rate change is announced within

Bank.




 




EVENTS OF DEFAULT:




 




                This

Note is made pursuant to and is subject to the terms and conditions of that

certain Credit Agreement between Borrower and Bank dated as of May 30th, 2001,

as amended from time to time (the “Credit Agreement”).  Any default in the payment or performance of

any obligation under this Note, after the expiration of any applicable notice

or cure periods as may be provided in the Credit Agreement, or any defined

event of default under the Credit Agreement, shall constitute an “Event of

Default” under this Note.




 




MISCELLANEOUS:




 




                (a)           Remedies.  Upon the occurrence of any Event of Default,

the holder of this Note, at the holder’s option, may declare all sums of

principal and interest outstanding hereunder to be immediately due and payable

without presentment, demand, notice of nonperformance, notice of protest,

protest or notice of dishonor, all of which are expressly waived by each

Borrower, and the obligation, if any, of the holder to extend any further

credit hereunder shall immediately cease and terminate.  Each Borrower shall pay to the holder

immediately upon demand the full amount of all payments, advances, charges,

costs and expenses, including reasonable attorneys’ fees (to include outside

counsel fees and all allocated costs of the holder’s in–house counsel),

expended or incurred by the holder in connection with the enforcement of the

holder’s rights and/or the collection of any amounts which become due to the

holder under this Note, and the prosecution or defense of any action in any way

related to this Note, including without limitation, any action for declaratory

relief, whether incurred at the trial or appellate level, in an arbitration

proceeding or otherwise, and including any of the foregoing incurred in

connection with any bankruptcy proceeding (including without limitation, any

adversary proceeding, contested matter or motion brought by Bank or any other

person) relating to any Borrower or any other person or entity.




 




                (b)           Obligations Joint and Several.  Should more than one person or entity sign

this Note as a Borrower, the obligations of each such Borrower shall be joint

and several.




 




                (c)           Governing Law.  This Note shall be governed by and construed

in accordance with the laws of the State of Oregon.




 




UNDER

OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK AFTER

OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR

PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S

RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE

ENFORCEABLE.




 




                IN WITNESS

WHEREOF, the undersigned has executed this Note as of the date first written

above.




 




NORTHWEST PIPE COMPANY




 




	

  By: /s/ John D Murakami___________________


  	

   


  
	

   


  	

  John D. Murakami, Vice President/CFO


  
			





 





























 




ADDENDUM TO PROMISSORY

NOTE




(LIBOR PRICING

ADJUSTMENTS)




 




 




                THIS ADDENDUM is

attached to and made a part of that certain promissory note executed by

NORTHWEST PIPE COMPANY (“Borrower”) and payable to WELLS FARGO BANK, NATIONAL

ASSOCIATION (“Bank”), or order, dated as of September 30, 2002, in the

principal amount of Forty Million Dollars ($40,000,000.00) (the “Note”).




 




                The following

provisions are hereby incorporated into the Note to reflect the interest rate

adjustments agreed to by Bank and Borrower:




 




INTEREST RATE ADJUSTMENTS:




 




                (a)           Initial LIBOR Margin.  The initial LIBOR margin applicable to this

Note shall be as set forth in the “Interest” paragraph herein.




 




                (b)           LIBOR Rate Adjustments.  Bank shall adjust the LIBOR margin used to

determine the rate of interest applicable to LIBOR options selected by Borrower

under this Note on a quarterly basis, commencing with Borrower’s fiscal quarter

ending June 30, 2002, if required to reflect a change in Borrower’s ratio of

Ratio of Funded debt to EBITDA (as defined in the Credit Agreement referenced

herein), in accordance with the following grid:




	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Applicable


  
	

  Funded Debt to


  	

   


  	

  LIBOR


  
	

  EBITDA


  	

   


  	

  Margin


  
	

   


  	

   


  	

   


  
	

  3.00 to 1.0 or greater


  	

   


  	

  3.25%


  
	

   


  	

   


  	

   


  
	

  at least 2.75 to 1.0 but


  	

   


  	

   


  
	

  equal to or less than 3.00 to 1.0


  	

   


  	

  3.00%


  
	

   


  	

   


  	

   


  
	

  at least 2.50 to 1.0 but


  	

   


  	

   


  
	

  equal to or less than 2.75 to 1.0


  	

   


  	

  2.75%


  
	

   


  	

   


  	

   


  
	

  at least 2.00 to 1.0 but


  	

   


  	

   


  
	

  equal to or less than 2.50 to 1.0


  	

   


  	

  1.75%


  
	

   


  	

   


  	

   


  
	

  at least 1.50 to 1.0 but


  	

   


  	

   


  
	

  equal to or less than 2.00 to 1.0


  	

   


  	

  1.50%


  
	

   


  	

   


  	

   


  
	

  Equal to or less than

  1.50 to 1.0


  	

   


  	

  1.25%


  





 




Each such adjustment shall be effective on the first Business Day of

Borrower’s fiscal quarter following the quarter during which Bank receives and

reviews Borrower’s most current quarter-end financial statements in accordance

with any requirements established by Bank for the preparation and delivery

thereof.




 




                IN

WITNESS WHEREOF, this Addendum has been executed as of the same date as the

Note.




 




NORTHWEST PIPE COMPANY




 




	

  By :/s/ John D Murakami____________


  	

   


  
	

   


  	

  John D. Murakami, Vice President/CFO