EXHIBIT 10.46
SIXTH AMENDMENT TO EXIM GUARANTEED LOAN AGREEMENT
THIS SIXTH AMENDMENT TO EXIM GUARANTEED LOAN AGREEMENT (this
"Amendment"), dated as of March 11, 2004, is between HORIZON OFFSHORE
CONTRACTORS, INC., a Delaware corporation ("Contractors"), HORIZON SUBSEA
SERVICES, INC., a Delaware corporation ("Subsea"), HORIZON VESSELS, INC., a
Delaware corporation ("Vessels"), and HORIZEN, L.L.C., a Delaware limited
liability company ("LLC", and together with Contractors, Subsea and Vessels the
"Borrowers"), jointly and severally, each of the financial institutions which is
or may from time to time become a party to such Loan Agreement, as amended
(collectively, "Lenders", and each a "Lender"), and SOUTHWEST BANK OF TEXAS,
N.A., a national banking association, as agent (the "Agent").
RECITALS:
A. Borrowers, Lenders and Agent entered into that certain EXIM
Guaranteed Loan Agreement dated as of August 15, 2001, as amended by First
Amendment to EXIM Guaranteed Loan Agreement dated as of April 17, 2002, Second
Amendment to EXIM Guaranteed Loan Agreement dated as of August 28, 2002, Third
Amendment to EXIM Guaranteed Loan Agreement dated as of September 30, 0000,
Xxxxxx Xxxxxxxxx to EXIM Guaranteed Loan Agreement dated as of March 6, 2003 and
Fifth Amendment to EXIM Guaranteed Loan Agreement dated as of January 30, 2004
(the "Agreement").
A. Pursuant to the Agreement, each Borrower, Horizon Offshore, Inc., a
Delaware corporation ("Parent"), and Horizon Offshore Contractors, Ltd., a
company organized and existing under the laws of the Cayman Islands, each
executed a Guaranty dated as of August 15, 2001, and ECH Offshore, S. de X.X. de
C.V., a company organized and existing under the laws of Mexico, executed a
Guaranty dated as of August 15, 2001 (under Mexican law) and a Guaranty dated as
of May 30, 2002 (under Texas law), pursuant to which such Persons (as defined in
the Agreement) guaranteed to Agent the payment and performance of the
Obligations (as defined in the Agreement).
B. Pursuant to the Agreement all the other subsidiaries of Parent
executed guaranty agreements pursuant to which such subsidiaries guaranteed the
obligations of Borrowers under the Loan Agreement.
C. Borrowers, Lenders and Agent now desire to amend the Agreement as
herein set forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. ARTICLE
Definitions
1.1. Section Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the meanings given to such
terms in the Agreement, as amended hereby.
2. ARTICLE
Amendments
2.1. Section Amendment to Certain Definitions. (a) The definition of
each of the following terms contained in Section 1.1 of the Agreement is amended
to read in its respective entirety as follows:
"Applicable Rate" means the sum of the Prime Rate plus (a)
three-quarters of one percent (0.75%) from March 11, 2004 through June
29, 2004, (b) one and one-quarter percent (1.25%) from June 30, 2004
through September 29, 2004, (c) one and three-quarters percent (1.75%)
from September 30, 2004 through December 30, 2004, and (d) two and
one-quarter percent (2.25%) from December 31, 2004 through the
Termination Date; provided, however, that in no event shall the
Applicable Rate be less than four and three-quarters percent (4.75%).
"Borrowing Base" means, at any particular time, an amount equal to the
sum of (a) ninety percent (90%) of Eligible Accounts-Borrowers, plus
(b) the Designated Advance Percentage-Eligible Accounts-Qualified
Foreign Subsidiaries, plus (c) sixty percent (60%) of Eligible Costs in
Excess of Xxxxxxxx-Borrowers, plus (d) the Designated Advance
Percentage-Eligible Cost in Excess of Xxxxxxxx-Qualified Foreign
Subsidiaries; provided, however, that the sum of the amounts included
in the Borrowing Base pursuant to clauses (c) and (d) shall not at any
time exceed the lesser of (i) $18,000,000.00 or (ii) sixty percent
(60%) of the sum of (A) the outstanding Advances plus (B) the Letter of
Credit Liabilities. Notwithstanding anything to the contrary contained
herein, the accounts receivable arising from the Pemex Contract EPC-64
are not Eligible Accounts-Borrowers and the costs in excess of xxxxxxxx
arising from the Pemex Contract EPC-64 are not Eligible Costs in Excess
of Xxxxxxxx-Borrowers, and neither the accounts receivable nor the
costs in excess of xxxxxxxx arising from the Pemex Contract EPC-64 may
be included in the Borrowing Base.
"Current Liabilities" means all amounts which, in conformity with GAAP,
would be included as current liabilities on a consolidated balance
sheet of Parent and its Subsidiaries, excluding all revolving credit
facilities.
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"Current Maturities of Long Term Debt" means for Parent and its
Subsidiaries on a consolidated basis, the principal amount due and
payable during the next succeeding twelve month period on Total Funded
Debt of Parent and its Subsidiaries which has a final maturity more
than twelve months from the date of calculation, excluding all
revolving credit facilities.
"Domestic Loan Agreement" means that certain Loan Agreement dated March
26, 2001, among Borrowers other than LLC, the Domestic Agent and the
lenders referred to therein, as amended by First Amendment to Loan
Agreement dated April 17, 2002, Second Amendment to Loan Agreement
dated May 30, 2002, Third Amendment to Loan Agreement dated as of
August 28, 0000, Xxxxxx Xxxxxxxxx to Loan Agreement dated as of
September 30, 2002, Fifth Amendment to Loan Agreement dated as of March
6, 2003, Sixth Amendment to Loan Agreement dated as of January 30, 2004
and Seventh Amendment to Loan Agreement dated as of March 11, 2004, as
the same may be further amended, supplemented or modified from time to
time, and any loan agreement or credit agreement executed in
restatement and replacement therefor.
"EBITDA" means, for Parent and its Subsidiaries, on a consolidated
basis, for any period, the sum of (a) Net Income before gains and
losses on sales of assets (to the extent such gains and losses are
included in earnings), plus (b) Tax Expense, plus (c) depreciation and
amortization, plus (d) Interest Expense.
"Fixed Charge Coverage Ratio" means for Parent and its Subsidiaries, on
a consolidated basis, (a) as of September 30, 2004, (i) EBITDA for the
quarter ended as of September 30, 2004, divided by (ii) the sum of (A)
Current Maturities of Long Term Debt as of September 30, 2004 divided
by four (4), plus (B) Interest Expense for the quarter ended as of
September 30, 2004, plus (C) Tax Expense for the quarter ended as of
September 30, 2004, and (b) as of December 31, 2004, (i) EBITDA for the
quarters ended as of September 30, 2004 and December 31, 2004, divided
by (ii) the sum of (A) Current Maturities of Long Term Debt as of
December 31, 2004 divided by two (2), plus (B) Interest Expense for the
quarters ended as of September 30, 2004 and December 31, 2004, plus (C)
Tax Expense for the quarters ended as of September 30, 2004 and
December 31, 2004.
"Net Income" means, for any period, with respect to Parent and its
Subsidiaries, the consolidated net income (or loss) of Parent and its
Subsidiaries for such period, determined in accordance with GAAP
applied consistently, excluding any extraordinary items during such
period.
"Prime Rate" means, at any time, the rate of interest per annum then
most recently published in The Wall Street Journal (or any successor
publication if The Wall Street Journal is no longer published) in the
"Money Rates" section (or such successor section) as the "Prime Rate."
If a range of prime interest rates per annum is so published, "Prime
Rate" shall mean the highest rate per annum in such published range. If
the definition of "Prime Rate" is no longer published in
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Xxx Xxxx Xxxxxx Journal (or any successor publication), "Prime Rate"
shall mean, at any time, the rate of interest per annum then most
recently established by Lender as its prime rate.
"Tangible Net Worth" means, at any particular date, all amounts which,
in conformity with GAAP, would be included as stockholders' equity on a
consolidated balance sheet of Parent and its Subsidiaries; provided,
however, there shall be excluded therefrom (a) any amount at which
shares of capital stock of Parent or any Subsidiary appear as an asset
on Parent's or such Subsidiary's balance sheet, (b) goodwill, including
any amounts, however designated, that represent the excess of the
purchase price paid for assets or stock over the value assigned
thereto, (c) patents, trademarks, trade names, and copyrights, (d)
deferred expenses, (e) loans and advances to any stockholder, director,
officer, or employee of Parent or any Subsidiary or any Affiliate, (f)
all other assets which are properly classified as intangible assets,
and (g) paid-in-kind interest on the New Subordinated Debt.
"Termination Date" means 11:00 a.m., Houston, Texas time on January 21,
2005, or such earlier date on which the Commitment terminates as
provided in this Agreement.
(b) The following phrase shall be added to the end of the first
sentence of the definition of the term "Eligible Accounts-Borrowers":
"and (v) have not been determined to be ineligible or not to constitute
Eligible Accounts-Borrowers by the Majority Lenders, which
determination shall be made by the Majority Lenders in their sole
discretion."
(c) The following definitions shall be added to Section 1.1 of the
Agreement in proper alphabetical order:
"EBITDAR" means, for Parent and its Subsidiaries, on a consolidated
basis, for any period, the sum of (a) Net Income before gains and
losses on sales of assets (to the extent such gains and losses are
included in earnings), plus (b) Tax Expense, plus (c) depreciation and
amortization, plus (d) Interest Expense, plus (e) restructuring
charges, including costs of professional advisors to Borrowers (for the
professional advisors to the Borrowers, the Lenders or other creditors)
not to exceed $1,600,000.00 for the fiscal year ending December 31,
2004.
"Iroquois" means Iroquois Gas Transmission System, L.P., and its
successors and assigns.
"Iroquois Contract" means that certain contract No. 02-12 dated April
12, 2002 between Iroquois and Contractors.
"New Subordinated Debt" means Debt of Parent evidenced by its 16%
Subordinated Secured Notes due March 31, 2007, issued pursuant to the
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Purchase Agreement in an original principal amount not less than
$65,400,000.00, the payment of which is subordinate to the payment of
the Obligations in a manner satisfactory to Agent and all other terms
of which (including interest rate, maturity, payment terms to the
effect that no cash payments may be made thereon for principal,
interest or fees (except for payments of principal paid solely from (i)
proceeds of Pemex Contract EPC-64 or the Xxxxxxxx Contract, or (ii)
proceeds of any issuance of equity), financial covenants and
collateral) are acceptable to Agent and the Majority Lenders.
"Pemex Contract EPC-64" means that certain contract No. PEP-0-AD-317/00
(also known as EPC-64) between Pemex and ECH.
"Purchase Agreement" means that certain Purchase Agreement dated March
11, 2004, among Parent, the guarantors listed therein and the
purchasers listed therein, pursuant to which the New Subordinated Debt
was issued, as the same may be amended, supplemented or modified from
time to time.
"Tax Expense" means, for any period, for Parent and its Subsidiaries,
on a consolidated basis, the sum of all tax expense of Parent and its
Subsidiaries for such period determined in accordance with GAAP applied
consistently.
"Xxxxxxxx" means Xxxxxxxx Oil Gathering, L.L.C., and its successors
and assigns.
"Xxxxxxxx Contract" means that certain contract between Xxxxxxxx and
Contractors for Subsea Shallow Water Pipelay of the 20-inch Oil
Mountaineer Pipeline on Devil's Tower Project from Main Pass Block 313
to main Pass Block 22, effective as of October 1, 2002.
(d) The definition of the following terms shall be deleted from Section
1.1 of the Agreement:
"Adjusted Letter of Credit Liabilities"
"Applicable Margin"
"Cash Taxes"
"Continue", "Continuation" and "Continued"
"Convert", "Conversion", and "Converted"
"Interest Period"
"LIBOR Advances"
"LIBOR Margin"
"LIBOR Rate"
"London Business Day"
"Prime Rate Advances"
"Prime Rate Margin"
"Ratio of Funded Debt to Capitalization"
"Ratio of Funded Debt to EBITDA"
"Total Capitalization"
"Type"
"Working Capital"
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2.2. Section Amendment to Section 2.1(a). Clause (b) contained in
Section 2.1(a) is amended to read in its entirety as follows:
(b) the Borrowing Base minus the Letter of Credit Liabilities.
2.3. Section Amendment to Section 2.4. Section 2.4 of the Agreement is
amended to read in its entirety as follows:
Section 2.4. Interest. The unpaid principal amount of the Advances
shall bear interest prior to maturity at a varying rate per annum equal
from day to day to the lesser of (a) the Maximum Rate or (b) the
Applicable Rate, and each change in the rate of interest charged on the
Advances shall become effective, without notice to Borrowers, on the
effective date of each change in the Applicable Rate or the Maximum
Rate, as the case may be; provided, however, if at any time the rate of
interest specified in clause (b) preceding shall exceed the Maximum
Rate, thereby causing the interest on the Advances to be limited to the
Maximum Rate, then any subsequent reduction in the Applicable Rate
shall not reduce the rate of interest on the Advances below the Maximum
Rate until the aggregate amount of interest accrued on the Advances
equals the aggregate amount of interest which would have accrued on the
Advances if the interest rate specified in clause (b) preceding had at
all times been in effect. Accrued and unpaid interest on the Advances
shall be payable on the first day of each month commencing on April 1,
2004, and on the Termination Date
Notwithstanding the foregoing, if any Event of Default has occurred and
is continuing, the outstanding principal of the Advances shall bear
interest at the Default Rate. Interest payable at the Default Rate
shall be payable from time to time on demand.
2.4. Section Amendment to Section 2.5. Section 2.5 of the Agreement is
amended to read in its entirety as follows:
Section 2.5. Requests for Advances. Borrowers shall give Agent notice
of each requested Advance by delivery to Agent of an Advance Request
Form executed by an Authorized Representative at least one (1) Business
Day before the requested date of each Advance. Each Advance Request
Form shall be accompanied by the items required by Section 5.2. Advance
Request Forms may be delivered by fax. The Agent shall promptly notify
each Lender of the contents of each such notice. No later than 11:00
a.m. Houston, Texas time on the date specified for each Advance
hereunder, each Lender shall make available to Agent at its office
specified herein in immediately available funds, its Pro Rata Share of
each Advance. After Agent's receipt of such funds and subject to the
other terms and conditions of this Agreement, Agent shall make each
Advance available to the Borrowers by depositing the same, in
immediately available funds, in the operating account of Contractors
maintained at Agent's office specified herein. Advance Request Forms
submitted shall be irrevocable
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and shall be effective for the requested Advances on the following
Business Day if received by Agent by 11:00 a.m. Houston, Texas time on
a Business Day, and otherwise on the next following Business Day.
2.5. Section Amendment to Section 2.7. (a) The phrase "if at any time
the outstanding principal amount of the Advances plus the Adjusted Letter of
Credit Liabilities exceeds the Borrowing Base" contained in clause (a) of
Section 2.7 is amended to read "if at any time the outstanding principal amount
of the Advances plus the Letter of Credit Liabilities exceeds the Borrowing
Base".
(b) A new paragraph (d) shall be added to Section 2.7 of the Agreement
and shall read in its entirety as follows:
(d) On any date on which Borrowers receive payment of the Iroquois
Contract, if the obligations of the Borrowers under the Domestic Loan
Agreement (the "Domestic Obligations") are paid in full with the net
proceeds of such payment (excluding payments to subcontractors)
pursuant to Section 2.7(b) of the Domestic Loan Agreement, the Advances
shall be due and payable in a principal amount equal to one hundred
percent (100%) of the net proceeds of such payment or so much thereof
as remains after payment in full of the Domestic Obligations as
provided in Section 2.7(b) of the Domestic Loan Agreement.
2.6. Section Amendments to Section 2.10. (a) The phrase "(b) the
Borrowing Base minus the Adjusted Letters of Credit Liabilities" contained in
the first sentence of Section 2.10 is amended to read "(b) the Borrowing Base
minus the Letter of Credit Liabilities".
(b) Clause (a) contained in the second sentence of Section 2.10 of the
Agreement is amended to read in its entirety as follows:
(a) have an expiration date which is at least ten (10) days prior to
(i) the Termination Date, (ii) the Availability Date (as defined in the
EXIM Guaranty), (iii) the Final Disbursement Date (as defined in the
Loan Authorization Agreement entered into in connection with the EXIM
Guaranty as amended from time to time), and (iv) any other date on
which for any reason the EXIM Guaranty shall mature, expire or cease to
be in full force and effect or on or after which a claim may not be
made under the EXIM Guaranty, unless such Letter of Credit is
specifically secured by cash in an amount at least equal to one hundred
percent (100%) of the face amount of such Letter of Credit,
2.7. Section Amendment to Section 2.14. The first sentence contained in
Section 2.14 of the Agreement is amended to read in its entirety as follows:
Borrowers shall pay to Issuing Bank a letter of credit fee payable on
the date each Letter of Credit is issued in an amount equal to the
greater of (a) three percent (3.00%) per annum of the stated amount of
such Letter of Credit for the
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period during which such Letter of Credit will remain outstanding,
based on a 360 day year and the actual number of days elapsed, or
(b) $350.00.
2.8. Section Amendment to Section 2.18. The phrase "payable monthly,"
contained in the first sentence of Section 2.18 of the Agreement is amended to
read "payable monthly on the first (1st) day of each month,".
2.9. Section Amendments to Article III. (a) The phrase "Additional
Matters with Respect to LIBOR Loans" shall be deleted from the title of Article
III of the Agreement.
(b) The phrase "other than the amounts described in Section 3.9" shall
be deleted from Section 3.3 of the Agreement.
(c) Section 3.4 of the Agreement is amended to read in its entirety as
follows:
Section 3.4. Computation of Interest. Interest on the indebtedness
evidenced by the Notes shall be computed on the basis of a year of (a)
360 days and the actual number of days elapsed (including the first day
but excluding the last day) unless such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis
of a year of 365 or 366 days, as the case may be. (d) Sections 3.7, 3.8
and 3.9 shall be deleted from the Agreement in their entirety.
2.10. Section Addition of Section 4.5. Section 4.5 shall be added to
the Agreement and shall read in its entirety as follows:
Section 4.5. Pemex Contract EPC-64; Xxxxxxxx Contract. Agent shall, at
the option of the holders of the New Subordinated Debt, (a) assign its
Liens in the Xxxxxxxx Contract to the holders of the New Subordinated
Debt, (b) terminate its Liens in the Pemex Contract EPC-64, and,
concurrently therewith, the Pemex Contract EPC-64 shall be removed from
the Borrowing Base, and (c) assign or terminate its liens in the stock
of ECH.
2.11. Section Amendment to Section 7.1. The phrase "within forty-five
(45) days after the end of each quarter of each fiscal year" contained in clause
(b) of Section 7.1 of the Agreement is amended to read "within forty-five (45)
days after the end of the first three (3) quarters of each fiscal year".
2.12. Section Amendment to Section 8.1. Section 8.1 of the Agreement is
amended to read in its entirety as follows:
Section 8.1. Debt. No Borrower will incur, create, assume or permit to
exist, nor will any Borrower permit Guarantor or any Subsidiary to
incur, create, assume, or permit to exist, any Debt, except
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(a) indebtedness of Borrowers to Lenders under this Agreement and the
Loan Documents;
(b) Indebtedness of Borrowers under the Domestic Loan Agreement in an
aggregate principal amount such that the sum of the maximum permitted
Indebtedness of Borrowers under the Domestic Loan Agreement plus the
Combined Commitments does not exceed $50,000,000.00;
(c) accounts payable and accrued liabilities incurred in the ordinary
course of business;
(d) letter of credit, performance and bid bonds obtained by Borrowers
in the ordinary course of their business, other than the Letters of
Credit, up to an aggregate amount of $15,000,000.00 at any time;
(e) supersedeas bonds obtained by Borrowers in the ordinary course of
their business;
(f) secured term indebtedness existing on December 31, 2003;
(g) Committed indebtedness of Borrowers under the CIT Loan Agreement
and other committed indebtedness of Borrowers secured only by vessels,
in each case existing on December 31, 2003; and
(h) the New Subordinated Debt.
2.13. Section Amendment to Section 8.2. Section 8.2 of the Agreement is
amended to read in its entirety as follows:
Section 8.2 Limitation on Liens. No Borrower will incur, create, assume
or permit to exist, nor will any Borrower permit Parent, any
Subsidiary, any Qualified Foreign Subsidiary or any Related Entity to
incur, create, assume or permit to exist, any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired,
except for the liens and other encumbrances set forth below (the
"Permitted Liens"):
(a) Liens for Taxes (i) not at the time delinquent or (ii) being
contested in good faith and by appropriate proceedings and
with respect to which proper reserves have been taken by
Borrower, such Subsidiary or such Qualified Foreign
Subsidiary, provided that such Liens shall have no effect
upon the priority of the Liens in favor of Agent or the value
of the Collateral and a stay of enforcement if any such Lien
shall be in effect;
(b) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business with
respect to obligations which are not due;
(c) maritime Liens:
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(i) arising in the ordinary course of business by operation of
law that are being contested in good faith by appropriate
proceedings and for which reserves have been established to
the reasonable satisfaction of Lenders or
(ii) arising in connection with salvage and general average; or
(iii) arising in connection with crew wages claimed but not paid;
provided that such maritime Liens do not attach to the
Collateral with respect to which Agent is to have a first
priority Lien as provided in Section 4.1;
(d) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders
and statutory obligations entered into in the ordinary course of
business or to secure obligations on surety or appeal bonds in the
ordinary course of business or easements, rights of way and similar
encumbrances incurred in the ordinary course of business and not
interfering with the ordinary conduct of the business of any Borrower,
Parent, any Subsidiary, any Qualified Foreign Subsidiary or any Related
Entity;
(e) judgment Liens, the execution of which has been stayed or which are
bonded, provided that, if bonded, the payment of such judgment Liens is
fully covered by insurance and the insurance carrier has acknowledged
such coverage in writing;
(f) Liens required by the terms of this Loan Agreement;
(g) Liens in favor of the Foreign Agent pursuant to the Foreign Loan
Agreement, provided that such Liens also secure the Obligations; and
provided, further, that only the Liens covering the Domestic Accounts,
the Domestic Inventory and the Other Domestic Collateral shall be prior
to the Liens of Agent under this Agreement and the Loan Documents;
(h) Liens in connection with Debt referred to in Section 8.1(f),
provided that such Liens do not cover any of the Collateral;
(i) Liens on vessels created in accordance with the CIT Loan Agreement
securing the indebtedness of Borrowers under the CIT Loan Agreement and
Liens on vessels securing other Debt permitted pursuant Section 8.1(g);
(j) Permitted Liens as defined in the Borrower Agreement; and
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(k) Liens securing the New Subordinated Debt created as of the date of
the Sixth Amendment to EXIM Guaranteed Loan Agreement (amending this
Agreement), provided that such Liens do not attach to any of the
Collateral (as the Collateral exists after the assignments and
terminations executed by the Agent in connection with the incurrence of
the New Subordinated Debt).
2.14. Section Addition of Section 8.16. Section 8.16 shall be added to
the Agreement and shall read in its entirety as follows:
Section 8.16. No More Restrictive Covenants. No Borrower will, nor will
any Borrower permit Parent or any Subsidiary to, (a) enter into or
permit to exist any loan agreement, credit agreement, purchase
agreement or other agreement in connection with which Debt is or was
incurred (a "Debt Agreement") which contains covenants, agreements or
representations which are more restrictive than the covenants,
agreements and representations which are contained in this Agreement
and the Loan Documents, or (b) amend or modify any existing or future
Debt Agreement in a manner which would result in such Debt Agreement,
as amended or modified, containing covenants, agreements and
representations which are more restrictive than the covenants,
agreements and representations which are contained in this Agreement
and the Loan Documents.
2.15. Section Amendment to Article IX. Article IX contained in the
Agreement is amended to read in its entirety as follows:
ARTICLE IX.
Financial Covenants
Borrowers covenant and agree that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder
or Issuing Bank has any obligation to issue any Letter of Credit
hereunder or any Letter of Credit Liabilities exist, Borrowers will
observe and perform, and will cause Parent to observe and perform, the
financial covenants set forth below, unless Agent and Majority Lenders
shall otherwise consent in writing.
Section 9.1. Current Ratio . Parent and its Subsidiaries will at all
times maintain a Current Ratio of not less than (a) 0.90 to 1.00 for
the fiscal quarters ending as of Xxxxx 00, 0000 xxx Xxxx 00, 0000, (x)
1.05 to 1.00 for the fiscal quarter ending as of September 30, 2004,
and (c) 1.10 to 1.00 for the fiscal quarter ending as of December 31,
2004. The Current Ratio shall be calculated and tested quarterly as of
the last day of each fiscal quarter of Parent commencing with the
fiscal quarter ending March 31, 2004.
Section 9.2. Tangible Net Worth . Parent and its Subsidiaries will at
all times maintain Tangible Net Worth in an amount not less than the
sum of (a) $110,000,000.00, plus (b) seventy-five percent (75%) of Net
Income for each
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fiscal quarter of Parent and its Subsidiaries which has been completed
as of the date of calculation, commencing with the fiscal quarter
ending March 31, 2004, provided, however, that in the event that Net
Income of Parent and its Subsidiaries is not greater than zero for any
fiscal quarter, an amount equal to zero shall be added to the
calculation of Tangible Net Worth for such fiscal quarter, plus (c)
ninety percent (90%) of the net proceeds of any common stock or other
equity issued by Parent or any of its Subsidiaries after December31,
2003. Tangible Net Worth shall be calculated and tested quarterly as of
the last day of each fiscal quarter of Parent commencing with the
fiscal quarter ending March 31, 2004. Any audit adjustment for the
fiscal year ended December 31, 2003 that results in an adjustment to
the equity accounts in an amount in excess of $53,416,000.00 will
adjust the minimum Tangible Net Worth requirement on a dollar for
dollar basis.
Section 9.3. Fixed Charge Coverage Ratio . Parent and its Subsidiaries
will maintain a Fixed Charge Coverage Ratio of not less than (a) 1.50
to 1.00 for the fiscal quarter ending as of September 30, 2004 and (b)
1.40 to 1.00 for the fiscal quarter ending as of December 31, 2004.
Section 9.4. EBITDAR. Parent and its Subsidiaries will maintain EBITDAR
of not less than (a) negative $2,500,000.00 for the three (3) months
ended Xxxxx 00, 0000, (x) negative $4,500,000.00 for the six (6) months
ended June 30, 2004, (c) positive $8,000,000.00 for the nine (9) months
ended September 30, 2004, and (d) positive $20,000,000.00 for the
twelve (12) months ended December 31, 2004. The requirements contained
in clauses (a) and (b) are to the effect that EBITDAR shall not be less
than, or (otherwise stated) more negative than, the negative amounts
required therein.
Section 9.5. Capital Expenditures. Parent and its Subsidiaries will not
incur Capital Expenditures in an aggregate amount (for Parent and its
Subsidiaries) which exceeds $8,000,000.00; provided that Agent and
Majority Lenders shall review specific requests by Parent and its
Subsidiaries for additional project specific capital expenditures,
during any calendar year.
2.16. Section Amendment to Section 10.1. Clauses (q) and (r) shall be
added to Section 10.1 of the Agreement and shall read in their entirety as
follows:
(q) An Event of Default, as defined in the Purchase Agreement, shall
occur.
(r) Parent (or any Borrower or any Subsidiary) shall pay any principal,
interest or fees on the New Subordinated Debt in cash, except for cash
payments of principal of the New Subordinated Debt which are paid from
(i) the proceeds of Pemex Contract EPC-64 or the Xxxxxxxx Contract, or
(ii) the proceeds of the issuance of equity at any time after March 1,
2004.
2.17. Section Amendment to Exhibits. Exhibit "V" to the Agreement (No
Default Certificate) is amended to conform in its entirety to Annex "A" to this
Amendment.
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3. ARTICLE
Conditions Precedent
(a) Section Conditions. The effectiveness of this Amendment is subject
to the receipt by Agent of the following, each in form and substance
satisfactory to Agent and Lenders:
(i) Certificate-Each Corporate Borrower. A certificate of the Secretary
or another officer of each Corporate Borrower acceptable to Agent
certifying (A) resolutions of the board of directors of each Corporate
Borrower which authorize the execution, delivery and performance by
such Corporate Borrower of this Amendment and the other Loan Documents
to which such Corporate Borrower is or is to be a party, and (B) the
names of the officers of each Corporate Borrower authorized to sign
this Amendment and each of the other Loan Documents to which such
Corporate Borrower is or is to be a party together with specimen
signatures of such officers.
(ii) Certificate - LLC. A certificate of a Manager or another officer
of LLC acceptable to Agent certifying (A) resolutions of the Members of
LLC which authorize the execution, delivery and performance by LLC of
this Amendment and the other Loan Documents to which LLC is or is to be
a party, and (B) the names of the Managers or other officers of LLC
authorized to sign this Amendment and each of the other Loan Documents
to which LLC is or is to be a party together with specimen signatures
of such Persons.
(iii) Fees. An extension fee payable to Agent for the Pro-Rata benefit
of Lenders in the amount of $150,000.00, and an Agent fee payable to
the Agent in the amount of $15,000.00.
(iv) Eximbank Consent. The consent of Eximbank to the release of the
Liens on Pemex Contract EPC-64, the extension of the EXIM Guaranty
maturity date to July 31, 2004, and the issuance of Letters of Credit
past the EXIM Guaranty maturity date if the Letters of Credit are one
hundred percent (100%) secured by cash.
(v) Additional Information. Such additional documents, instruments and
information as Lenders, Agent or Eximbank may request.
(b) The effectiveness of this Amendment is subject to the occurrence of
the following events:
(i) New Subordinated Debt Documents. Agent shall have reviewed the New
Subordinated Debt and all promissory notes and other instruments and
documents delivered in connection with the New Subordinated Debt, and
all
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terms of the New Subordinated Debt and all such promissory notes and
other instruments (including interest rate, payment terms to the effect
that no cash payments may be made thereon, financial covenants and
collateral) shall be acceptable to Agent.
(ii) New Subordinated Debt Closing. The closing for the New
Subordinated Debt shall have occurred or shall occur simultaneously
with the closing of the transactions contemplated by this Amendment,
and the New Subordinated Debt shall be an effective obligation of
Parent or shall become an effective obligation of Parent simultaneously
with the closing of the transactions contemplated by this Amendment.
(iii) Approval of Other Debt. Agent and Majority Lenders shall have had
the opportunity to review, and shall be satisfied with, any and all
financial covenants to be contained in any documents evidencing or
related to Debt of Parent or any Subsidiary (other than Debt evidenced
by the Loan Documents or the Domestic Loan Agreement) and the documents
executed in connection therewith.
4. ARTICLE
Ratifications, Representations, and Warranties
4.1. Section Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement are ratified and confirmed
and shall continue in full force and effect. Borrowers and Lenders agree that
the Agreement as amended hereby shall continue to be the legal, valid and
binding obligation of such Persons enforceable against such Persons in
accordance with its terms.
(a) Section Representations, Warranties and Agreements. Each Borrower
hereby represents and warrants to Lenders that the execution, delivery, and
performance of this Amendment and any and all other Loan Documents executed or
delivered in connection herewith have been authorized by all requisite action on
the part of such Borrower and will not violate the Organizational Documents of
such Borrower, the representations and warranties contained in the Agreement as
amended hereby, and all other Loan Documents are true and correct on and as of
the date hereof as though made on and as of the date hereof, upon the
effectiveness of this Amendment no Event of Default or Unmatured Event of
Default will exist, upon the effectiveness of this Amendment Borrowers will be
in full compliance with all covenants and agreements contained in the Agreement
as amended hereby, Borrowers are indebted to Lenders pursuant to the terms of
the Notes, as the same may have been renewed, modified, extended and rearranged,
the liens, security interests, encumbrances and assignments created and
evidenced by the Loan Documents are, respectively, valid and subsisting liens,
security interests, encumbrances and assignments and secure the Notes as the
same may have been renewed, modified or rearranged, and no Borrower has any
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claims, credits, offsets, defenses or counterclaims arising from the Loan
Documents or any Lender's performance under the Loan Documents.
4.2. Section Additional Representations. Each Borrower hereby
represents and warrants to Lenders that no Borrower or any Subsidiary is a party
to any loan agreement, credit agreement, purchase agreement or other agreement
in connection with which Debt was incurred which contains covenants, agreements
or representations which are more restrictive than the covenants, agreements and
representations which are contained in the Loan Agreement, as amended by this
Amendment, and the Loan Documents.
5. ARTICLE
Miscellaneous
5.1. Section Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan
Documents including any Loan Document furnished in connection with this
Amendment shall fully survive the execution and delivery of this Amendment and
the other Loan Documents, and no investigation by any Lender or any closing
shall affect the representations and warranties or the right of any Lender to
rely on them.
5.2. Section Reference to Agreement. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Agreement, as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement, as amended hereby.
5.3. Section Expenses. As provided in the Agreement, Borrowers agree to
pay on demand all costs and expenses incurred by Agent in connection with the
preparation, negotiation and execution of this Amendment and the other documents
and instruments executed pursuant hereto and any and all amendments,
modifications and supplements thereto, including, without limitation, the costs
and fees of Agent's legal counsel, and all costs and expenses incurred by Agent
in connection with the enforcement or preservation of any rights under the
Agreement, as amended hereby, or any other Loan Document, including, without
limitation, the costs and fees of Agent's legal counsel.
5.4. Section Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
5.5. SECTION APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN
DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO
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HAVE BEEN MADE AND TO BE PERFORMABLE IN HOUSTON, XXXXXX COUNTY, TEXAS AND SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
5.6. Section Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Agent, Issuing Bank, each Lender and each Borrower
and their respective successors and assigns, except that no Borrower may assign
or transfer any of its rights or obligations hereunder without the prior written
consent of Agent.
5.7. Section Counterparts. This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.
5.8. Section Effect of Waiver. No consent or waiver, express or
implied, by Agent, Issuing Bank or any Lender to or for any breach of or
deviation from any covenant, condition or duty by any Borrower shall be deemed a
consent or waiver to or of any other breach of the same or any other covenant,
condition or duty.
5.9. Section Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
5.10. SECTION ECH CONFIRMATION OF GUARANTY. BY ITS EXECUTION OF THIS
AMENDMENT, ECH (A) RATIFIES AND CONFIRMS THE GUARANTY AGREEMENT DATED AS OF MAY
30, 2002, EXECUTED BY ECH IN FAVOR OF AGENT (THE "ECH US GUARANTY"), AND (B)
AGREES THAT, NOTWITHSTANDING THE TERMINATION OF THE GUARANTY EXECUTED BY ECH
UNDER MEXICAN LAW, (I) THE ECH US GUARANTY HAS NOT BEEN RESCINDED, REVOKED OR
TERMINATED, AND (II) THE ECH US GUARANTY REMAINS IN FULL FORCE AND EFFECT.
5.11. SECTION WAIVER OF FAILURE TO COMPLY WITH FINANCIAL COVENANTS. BY
THEIR EXECUTION OF THIS AMENDMENT AGENT AND LENDERS WAIVE COMPLIANCE BY
BORROWERS AND PARENT WITH THE PROVISIONS OF SECTIONS 9.1, 9.2, 9.3, 9.4, 9.5,
9.6 AND 9.7 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003, AND AGENT AND LENDERS
WAIVE ANY AND ALL EVENTS OF DEFAULT WHICH MAY ARISE UNDER THE AGREEMENT AS A
RESULT OF BORROWERS' AND PARENT'S FAILURE TO COMPLY WITH SECTIONS 9.1, 9.2, 9.3,
9.4, 9.5, 9.6 AND 9.7 OF THE AGREEMENT FOR THE FISCAL YEAR ENDED DECEMBER 31,
2003. THE WAIVER CONTAINED IN THIS SECTION 6.10 IS EFFECTIVE AS OF DECEMBER 31,
2003, BUT DOES NOT CONSTITUTE A WAIVER OF ANY OTHER PROVISION OF, OR REQUIREMENT
OF THE AGREEMENT NOR DOES IT CONSTITUTE A WAIVER OF COMPLIANCE WITH SECTIONS
9.1, 9.2, 9.3, 9.4, 9.5, 9.6 AND 9.7 AT ANY TIME AFTER DECEMBER 31, 2003. BY
THEIR EXECUTION OF THIS AMENDMENT, AGENT AND LENDERS ALSO WAIVE ANY EVENT OF
DEFAULT WHICH MAY HAVE ARISEN AS A
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RESULT OF THE EXECUTION, DELIVERY AND PERFORMANCE BY VESSELS OF THAT CERTAIN
ASSIGNMENT OF CHARTER DATED JUNE 29, 2001 EXECUTED BY VESSELS IN FAVOR OF
GENERAL ELECTRIC CAPITAL CORPORATION AND THAT CERTAIN ASSIGNMENT OF CHARTER HIRE
DATED JUNE 4, 2003 EXECUTED BY VESSELS IN FAVOR OF XXXXXXX ASSOCIATES, L.P.
5.12. SECTION ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THIS AMENDMENT AND THE OTHER INSTRUMENTS, DOCUMENTS AND
AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK.]
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Executed as of the date first written above.
BORROWERS:
HORIZON OFFSHORE CONTRACTORS, INC.
By:
----------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZEN, L.L.C.
By:
----------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZON SUBSEA SERVICES, INC.
By:
----------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZON VESSELS, INC.
By:
----------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
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AGENT:
SOUTHWEST BANK OF TEXAS, N.A., as Agent
By:
----------------------------------------
Xxxxxxx Xxxxx
Senior Vice President
LENDERS:
SOUTHWEST BANK OF TEXAS, N.A.
By:
----------------------------------------
Xxxxxxx Xxxxx
Senior Vice President
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
By:
----------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
BANK OF SCOTLAND
By:
----------------------------------------
Xxxxxx Xxxxxx
First Vice President
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HIBERNIA NATIONAL BANK
By:
----------------------------------------
Xxxxx Xxxx
Vice President
Each of the undersigned Guarantors (a) hereby consents and agrees to
this Amendment, (b) agrees that all references to the Loan Agreement contained
in the Guaranty Agreement executed by such Person shall constitute references to
such Loan Agreement as amended by this Amendment and as the same may be further
amended, and (c) agrees that the Guaranty Agreement executed by such Person
shall remain in full force and effect and shall continue to be the legal, valid
and binding obligations of such Guarantor, enforceable against such Guarantor in
accordance with its terms and shall evidence such Guarantor's guaranty of the
Notes as renewed, modified and extended from time to time.
HORIZON OFFSHORE, INC.
By:
----------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZON OFFSHORE CONTRACTORS, LTD.
By:
----------------------------------------
Xxxxx X. Xxxxx
Director
ECH OFFSHORE, S. DE X.X. DE C.V.
By:
----------------------------------------
Xxxx X. Xxx
Sole Manager
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Other Guarantors
PROGRESSIVE PIPELINE CONTRACTORS, INC.
AFFILIATED MARINE CONTRACTORS, INC.
TEXAS OFFSHORE CONTRACTORS CORP.
FLEET PIPELINE SERVICES, INC.
GULF OFFSHORE CONSTRUCTION, INC.
BAYOU MARINE CONTRACTORS, INC.
By:
----------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZON GROUP L.D.C.
By:
----------------------------------------
Xxxxx X. Xxxxx
Director
HORIZON OFFSHORE NIGERIA LTD.
By:
----------------------------------------
Xxxxx X. Xxxxx
Director
TIBURON INGENIERIA Y CONSTRUCCION, S. DE
X.X. DE C.V.
By:
----------------------------------------
Xxxxx X. Xxxxx
Secretary
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HORIZON VESSELS INTERNATIONAL LTD.
By:
----------------------------------------
Xxxxx X. Xxxxx
Vice President
PT HORIZON INDONESIA
By:
----------------------------------------
Xxxxx X. Xxxxx
Commissioner
HORIZON OFFSHORE INTERNATIONAL LTD.
By:
----------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HORIZON MARINE CONSTRUCTION LTD.
By:
----------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
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HORIZON OFFSHORE PTE. LTD.
By:
----------------------------------------
Xxxxx X. Xxxxx
Director
HORIZON OFFSHORE CONTRACTORS
(MAURITIUS) LTD.
By:
----------------------------------------
Xxxxx X. Xxxxx
Director
HORIZON MARINE CONSTRUCTION
(MAURITIUS) LTD.
By:
----------------------------------------
Xxxxx X. Xxxxx
Director
HORIZON C-BAY COSTA AFUERA, S. DE
X.X. DE C.V.
By:
----------------------------------------
Xxxxx X. Xxxxx
Member
HOC OFFSHORE, S. DE X.X. DE C.V.
By:
----------------------------------------
Xxxxx X. Xxxxx
Xxxxxxxx
-00-
XX XXXXXXX XXXXXXXXXX
Xx:
----------------------------------------
Xxxxx X. Xxxxx
Director
HORIZON MARINE CONTRACTORS
(MALAYSIA) SDN BHD
By:
----------------------------------------
Xxxxx X. Xxxxx
Director
HORIZON OFFSHORE SERVICES, LTD.
By:
----------------------------------------
Xxxxx X. Xxxxx
Executive Vice President and
Chief Financial Officer
MARINE LEASING (LABUAN) PTE LTD
By:
----------------------------------------
Xxxxx X. Xxxxx
Executive Vice President and
Chief Financial Officer
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LIST OF ANNEXES
Annex Document
A No Default Certificate
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