Exhibit 10.48
WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT
This Waiver and Fourth Amendment to Credit Agreement is entered into as
of the 8th day of April, 2004, and is executed in connection with that certain
Credit Agreement effective as of April 23, 2003 (as the same has been and may
further be amended, restated, modified or supplemented from time to time, the
"Credit Agreement") among Torch Offshore, Inc. ("Borrower") and the Lenders,
including Regions Bank in its capacity as a Lender and as Agent for the Lenders.
WHEREAS, Borrower and the Lenders desire to amend the Credit Agreement.
NOW THEREFORE, for good and adequate consideration the receipt of which
is hereby acknowledged, the parties hereto do hereby agree as follows:
1. As used herein, capitalized terms not defined herein shall
have the meanings attributed to them in the Credit Agreement. The definitions of
"Commitment", "Consolidated Current Ratio", "Consolidated Net Income",
"Deficiency", "Line of Credit Period", "Loans", "Note", "Notes", "Pro Rata
Share", "Regions", and "Required Lenders" in Section 1.1 of the Credit Agreement
are hereby amended and restated to read as follows and Section 1.1 of the Credit
Agreement is hereby amended to add the following definitions of "Equity
Proceeds", "Minimum Net Equity Proceeds", "Minimum Recapture Proceeds",
"Recapture Proceeds", "Subordinate Indebtedness", "Tranche 2 Line of Credit
Commitment", "Tranche 2 Line of Credit Loan", "Tranche 2 Line of Credit Loans",
"Tranche 2 Line of Credit Notes", "Tranche 2 Notice of Borrowing", "Tranche 2
Term Loan", "Tranche 2 Term Loans", "Tranche 2 Term Loan Commitment", "Tranche 2
Term Loan Notice", and "Tranche 2 Unused Fee":
Commitment shall mean, with respect to each Lender, such Lenders's Line
of Credit Commitment, such Lender's Tranche 2 Line of Credit Commitment, such
Lender's Term Loan Commitment and such Lender's Tranche 2 Term Loan Commitment,
if any.
Consolidated Current Ratio shall mean:
(a) For each fiscal quarter ending on or prior to March 31, 2005,
as of any date for which it is being determined, the ratio of
(a) current assets of Borrower and its Subsidiaries as of such
date, as determined on a consolidated basis in accordance with
GAAP, to (b) current liabilities of Borrower and its
Subsidiaries as of such date, as determined on a consolidated
basis in accordance with GAAP but excluding from current
liabilities the current portion of long term debt; provided
that, for purposes of determining the Consolidated Current
Ratio, (v) during the Line of Credit Period, the principal
amount of the Line of Credit Loans and the Tranche 2 Line of
Credit Loans outstanding on such date shall be classified as a
long term liability, (w) any portion of the deposit described
in subparagraph (g) of the definition of "Permitted Liens"
outstanding on such date will be classified as a current
asset, (x) the tax allowance of $1,329,563.00 plus or minus
the additional deferred tax asset generated or utilized based
upon 2003 operating results will be classified as a current
asset to the extent that such allowance remains on the books
of Borrower and its Subsidiaries as of such date, and (y)
until December 31, 2004, the receivable due from Newfield
Exploration Company of $1,347,904.00 on the books of Borrower
and its Subsidiaries as of December 31, 2003, will be
classified as a current asset to the extent that, as of such
date (of determination), such receivable remains on the books
of Borrower and its Subsidiaries and Borrower and its
Subsidiaries have a reasonable chance of collecting same; and
(b) For each fiscal quarter ending after March 31, 2005, as of any
date for which its is being determined, the ratio of (a)
current assets of Borrower and its Subsidiaries as of such
date, as determined on a consolidated basis in accordance with
GAAP, to (b) current liabilities of Borrower and its
Subsidiaries as of such date, as determined on a consolidated
basis in accordance with GAAP but excluding from current
liabilities the current portion of long term debt.
Consolidated Net Income shall mean:
(a) For each fiscal quarter ending on or prior to September 30,
2004, for the period in question, the after-tax net income or
loss of Borrower and its Subsidiaries during such period, but
excluding in any event the following to the extent included in
the computation of net income: (i) any gains or losses from
any reappraisal, revaluation or write-up or write-down of
assets including the tax allowance of $1,329,593.00 incurred
in the fiscal quarter ending December 31, 2003; (ii) any
equity of Borrower or any Subsidiary in the undistributed
earnings of any corporation which is not a Subsidiary and is
accounted for
on the equity method; (iii) gains or losses from the
acquisition or disposition of Investments; (iv) gains from the
retirement or extinguishment of any Indebtedness except the
$884,517.00 gain on the extinguishment of debt incurred in the
fiscal quarter ending December 31, 2003; (v) gains on
collections from insurance policies or settlements (net of
premiums paid or other expenses incurred with respect to such
gains during the fiscal period in which the gain occurs, to
the extent such premiums or other expenses are not already
reflected in Consolidated Net Income for such period); (vi)
any gains or losses during such period from any change in
accounting principles, from any discontinued operations, or
the disposition thereof or from any prior period adjustments,
including any losses from the costs incurred for the
establishment, operation and disposition of the Torch Offshore
de Mexico incurred during the fiscal year 2003 to be treated
in its entirety as a cost incurred in the fiscal quarter
ending December 31, 2003; (vii) any extraordinary gains or
losses; and (viii) any losses from the following described
expenses, allowance or write offs: (A) allowance (or reserve)
made in the fiscal quarter ending on December 31, 2003, in the
aggregate amount of $1,365,802.00 against receivable(s) due
from Xxxxx Offshore, Inc.; (B) write off of receivable(s) due
from Newfield Exploration Company in the aggregate amount of
$1,347,904.00 made in the fiscal quarter ending on December
31, 2003; (C) write off of receivable(s) due from BP America
in the aggregate amount of $247,868.00 made in the fiscal
quarter ending on December 31, 2003; (D) write off of
receivable(s) due from Tarpon Operating and Development in the
amount of $325,000.00 to be treated as made in the fiscal
quarter ending on December 31, 2003; and (E) the legal costs
and operating costs incurred on the MIDNIGHT HUNTER
aggregating $3,070,967.00 to be treated as incurred in the
fiscal quarter ending on December 31, 2003; and
(b) For each fiscal quarter ending after September 30, 2004, for
the period in question, the after-tax net income or loss of
Borrower and its Subsidiaries during such period, but
excluding in any event the following to the extent included in
the computation of net income: (i) any gains or losses from
any reappraisal, revaluation or write-up or write-down of
assets; (ii) any equity of Borrower or any Subsidiary in the
undistributed earnings of any corporation which is not a
Subsidiary and is accounted for on the equity method; (iii)
gains or losses from the acquisition or disposition of
Investments; (iv) gains from the retirement or extinguishment
of any Indebtedness; (v) gains on collections from insurance
policies or settlements (net of premiums paid or other
expenses incurred with respect to such gains during the fiscal
period in which the gain occurs, to the extent such premiums
or other expenses are not already reflected in Consolidated
Net Income for such period); (vi) any gains or losses during
such period from any change in accounting principles, from any
discontinued operations or the disposition thereof or from any
prior period adjustments; and (vii) any extraordinary gains or
losses; all determined on a consolidated basis in accordance
with GAAP.
Deficiency shall mean at any time during the Line of Credit Period, the
deficiency arising from the costs to complete the Project exceeding the costs
delineated on the Project Expense Schedule such that the amount of Line of
Credit Loans and Tranche 2 Line of Credit Loans available to be drawn hereunder
is insufficient to pay the remaining costs to complete the Project.
Equity Proceeds shall mean all proceeds owed to or received by or on
behalf of Borrower or any Subsidiary, after April 8, 2004, from the issuance or
sale of its capital stock or Subordinate Indebtedness.
Line of Credit Period shall mean the period commencing on the Effective
Date and ending October 31, 2004.
Loans shall collectively mean the Line of Credit Loans, the Tranche 2
Line of Credit Loans, the Term Loans, the Tranche 2 Term Loans, and the Letter
of Credit Loans, with each being a Loan, and shall include all principal,
interest, attorneys' fees and costs owed thereon.
Minimum Net Equity Proceeds shall mean Equity Proceeds, net of all
reasonable costs incurred by Borrower relating thereto, in the amount of the
lesser of (a) $10,000,000.00 or (b) twenty (20%) percent of the market
capitalization of Borrower at the time of the issuance of, or the making or
filing of any offer or offering to issue, capital stock of Borrower in order to
raise such Equity Proceeds.
Minimum Recapture Proceeds shall mean: (a) the Minimum Net Equity
Proceeds and (b) the net proceeds owed to or received by or on behalf of
Borrower or any Subsidiary from the sale of any of the Vessels.
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Note shall mean each Line of Credit Note, each Tranche 2 Line of Credit
Note, each Term Note and each Tranche 2 Term Note, with all such notes being
collectively referred to as the Notes.
Pro Rata Share shall mean with respect to each Lender (i) with respect
to Line of Credit Loans or Letters of Credit, the percentage amount equal to
such Lender's Line of Credit Commitment divided by the sum of all of the
Lenders' Line of Credit Commitments, (ii) with respect to the Term Loans, the
percentage amount equal to such Lender's Term Loan Commitment divided by the sum
of all of the Lenders' Term Loan Commitments, (iii) with respect to Tranche 2
Line of Credit Loans, the percentage amount equal to such Lender's Tranche 2
Line of Credit Commitment divided by the sum of all of the Lenders' Tranche 2
Line of Credit Commitments, (iv) with respect to the Tranche 2 Term Loans, the
percentage amount equal to such Lender's Tranche 2 Term Loan Commitment divided
by the sum of all of the Lenders' Tranche 2 Term Loan Commitments.
Recapture Proceeds shall mean: (a) the Equity Proceeds and (b) the net
proceeds owed to or received by or on behalf of Borrower or any Subsidiary from
the sale of any of the Vessels.
Regions shall mean Regions Bank, an Alabama state bank, in its
individual corporate capacity as a Lender hereunder, including, without
limitation, its capacity as a Lender hereunder with respect to its Pro-Rata
Share of the Line of Credit Loans, the Tranche 2 Line of Credit Loans, the Term
Loans and the Tranche 2 Term Loans and with respect to its issuance of Letters
of Credit.
Required Lenders shall mean at any time Lenders having Fifty-One (51%)
Percent of the aggregate amount of the Line of Credit Loans, the Tranche 2 Line
of Credit Loans, the Term Loans, the Tranche 2 Term Loans, the Letter of Credit
Loans and the face amount (or participation interest in the face amount) of
Letters of Credit then outstanding or, if no such Loans or Letters of Credit are
then outstanding, Fifty-One (51%) Percent of the total Commitments of all of the
Lenders; provided further that the Required Lenders must in all instances be at
least two Lenders.
Subordinate Indebtedness shall mean all Indebtedness of Borrower which
is subordinate in rank, preference, payment and priority to the Obligations
pursuant to subordination agreements in form and substance satisfactory to the
Required Lenders.
Tranche 2 Line of Credit Commitment shall mean, for each Lender, the
principal amount of $9,500,000.00, which commitments in the aggregate equal the
principal amount of $19,000,000.00.
Tranche 2 Line of Credit Loan and Tranche 2 Line of Credit Loans shall
have the meanings ascribed thereto in Section 2.6.
Tranche 2 Line of Credit Notes shall have the meaning ascribed thereto
in Section 2.8.
Tranche 2 Notice of Borrowing shall have the meaning ascribed thereto
in Section 2.7.
Tranche 2 Term Loans and Tranche 2 Term Loan shall have the meanings
ascribed thereto in Section 3.4.
Tranche 2 Term Loan Commitment shall mean for each Lender
$9,500,000.00, which commitments in the aggregate equal the principal amount of
$19,000,000.00.
Tranche 2 Term Loan Notice shall have the meaning ascribed thereto in
Section 3.5.
Tranche 2 Term Notes shall have the meaning ascribed thereto in Section
3.6.
Tranche 2 Unused Fee shall have the meaning ascribed thereto in Section
5.02(e).
2. The Credit Agreement is hereby amended to add the following as
Sections 2.6 through 2.9 thereof:
2.6 Tranche 2 Line of Credit Commitments. Subject to the
terms and conditions set forth in this Agreement and so long as no
Default or Event of Default has occurred and is continuing, during the
Line of Credit Period, each Lender severally (and not jointly) agrees
to lend to Borrower from time to time on a non-revolving basis
(individually, a "Tranche 2 Line of Credit Loan" and collectively, the
"Tranche 2 Line of Credit Loans") amounts not to exceed, in the
aggregate at any one time outstanding, such Lender's Tranche 2 Line of
Credit Commitment. The amount of the Tranche 2 Line of Credit
Commitments shall be reduced by the aggregate amount of principal
payments
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made on the Tranche 2 Line of Credit Loans and the Tranche 2 Line of
Credit Commitments shall terminate upon the making of any Tranche 2
Term Loan. Loans under this Section 2.6 shall be made from the several
Lenders ratably in proportion to their respective Pro Rata Shares. The
failure of any Lender to make any Tranche 2 Line of Credit Loan
required under this Agreement shall not release any other Lender from
its obligation to make Tranche 2 Line of Credit Loans as provided
herein. Each Tranche 2 Line of Credit Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the
applicable LIBOR Base Rate plus 400 basis points (4.00%). Such interest
shall be payable on all such Tranche 2 Line of Credit Loans monthly in
arrears on the last day of each month (or the immediate subsequent
Business Day if any such last day is not a Business Day) and at
maturity. Any overdue principal of and, to the extent permitted by law,
overdue interest on, any Tranche 2 Line of Credit Loan shall bear
interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of three percent (3%) plus the rate otherwise in
effect for such day.
2.7 Method of Borrowing.
(a) With respect to each Tranche 2 Line of Credit
Loan, Borrower's Representative shall give notice (a "Tranche 2 Notice
of Borrowing") to the Agent by 10:30 a.m. (New Orleans time) at least
two (2) Business Days before each Tranche 2 Line of Credit Loan,
specifying:
(i) the date of such Tranche 2 Line of Credit Loan,
which shall be a Business Day,
(ii) the aggregate principal amount of such Tranche 2
Line of Credit Loan,
(iii) that on the date of, and after giving effect
to, such Tranche 2 Line of Credit Loan, no Default or Event of Default
has occurred and is continuing,
(iv) that on the date of, and after giving effect to,
such Tranche 2 Line of Credit Loan, all of the representations and
warranties of Borrower contained in Section 7 of this Agreement and of
Borrower and its Subsidiaries contained in the other Transaction
Documents are true and correct in all material respects as if made on
and as of the date of such Tranche 2 Line of Credit Loan (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 correct on and as of such earlier date)), and
(v) with respect to any new Tranche 2 Line of Credit
Loan requested in order to make a payment under the Davie Contract,
Agent has received a certificate from Borrower's Chief Financial
Officer, in form and substance satisfactory to Agent, that, as of such
date, based on the records of Davie made available or furnished to
Borrower or Torch Express, L.L.C., except as noted therein, Davie has
made full and timely payment for all labor, services, materials and
equipment provided by employees, suppliers, subcontractors, agents and
governments in connection with the work performed by Davie on the
MIDNIGHT EXPRESS.
(b) Upon receipt of a Tranche 2 Notice of Borrowing
given to it, the Agent shall notify each Lender by 2:00 p.m. (New
Orleans time) on the date of receipt of such Tranche 2 Notice of
Borrowing by the Agent (which must be a Business Day) of the contents
thereof and of such Lender's ratable share of such Tranche 2 Line of
Credit Loan. A Tranche 2 Notice of Borrowing shall not be revocable by
Borrower.
(c) Not later than 3:00 p.m. (New Orleans time) on
the date of each Tranche 2 Line of Credit Loan, each Lender shall make
available its Pro Rata Share of such Tranche 2 Line of Credit Loan, in
federal or other funds immediately available in New Orleans, Louisiana,
to the Agent at its address specified in or pursuant to Section 11.7.
Agent shall not be required to make any amount available to Borrower
hereunder except to the extent it shall have received such amounts from
the Lenders as set forth herein, provided, however, that unless the
Agent shall have been notified by a Lender prior to the date a Tranche
2 Line of Credit Loan is to be made hereunder that such Lender does not
intend to make its Pro Rata Share of such Tranche 2 Line of Credit Loan
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available to the Agent, the Agent may assume that such Lender has made
such Pro Rata Share available to the Agent on such date, and the Agent
may in reliance upon such assumption make available to Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Agent by such Lender and the Agent has made such
amount available to Borrower, the Agent shall be entitled to receive
such amount from such Lender forthwith upon its demand, together with
interest thereon in respect of each day during the period commencing on
the date such amount was advanced to Borrower and ending on but
excluding the date the Agent recovers such amount from the Lender at a
rate per annum equal to the Fed Funds Rate. Unless the Agent determines
that any applicable condition specified in Section 6 has not been
satisfied, the Agent will make the funds so received from the Lenders
available to Borrower thereafter as of 3:30 p.m. New Orleans time on
the date of such Tranche 2 Line of Credit Loan at the Agent's aforesaid
address by crediting such funds to a demand deposit account (or such
other account mutually agreed upon in writing between Agent and
Borrower) of Borrower with the Agent; provided that (i) any Tranche 2
Line of Credit Loans made to pay for services performed or materials
provided relating to a Conversion Contract shall be made directly by
Agent to the person to whom such amounts are due and (ii) Agent is not
obligated to send any proceeds via wire transfer after 2:00 p.m. (New
Orleans time).
(d) Lenders reserve the right to modify the
procedures set forth in this Section 2 and to disburse Tranche 2 Line
of Credit Loans as follows: At the option of Lenders, upon the
occurrence and during the continuance of any Event of Default, Lenders
may make Tranche 2 Line of Credit Loans and pay the proceeds thereof
when due under any Conversion Contract directly to the Shipyard or to
subcontractors and suppliers, in the reasonable judgment of Lenders, to
prevent a default under any Conversion Contract. For these purposes
only, upon the occurrence and during the continuance of any Event of
Default, Borrower hereby irrevocably makes, nominates, constitutes, and
appoints Lenders, in its place and stead, acting through any of its
directors or officers, as Borrower's true and lawful agent and attorney
in fact with full power of substitution, to make Tranche 2 Line of
Credit Loans and to pay the proceeds thereto directly to the Shipyard,
subcontractors and suppliers; this mandate or agency shall be an
irrevocable power of attorney, that is, a power coupled with an
interest which cannot be revoked, Lenders having direction and
authorization to so make such Tranche 2 Line of Credit Loans, and no
further direction or authorization from the Borrower shall be necessary
to warrant such Tranche 2 Line of Credit Loans, and all such Tranche 2
Line of Credit Loans shall satisfy pro tanto the obligations of Lenders
hereunder and shall constitute Tranche 2 Line of Credit Loans hereunder
and shall be secured by the Transaction Documents as fully as if made
upon the request of Borrower, regardless of the disposition thereof by
the Shipyard, subcontractors, or suppliers.
2.8 Tranche 2 Line of Credit Notes.
(a) The Tranche 2 Line of Credit Loans of each Lender
to Borrower shall be evidenced by a promissory note of Borrower dated
April 8, 2004, and payable to the order of such Lender in a principal
amount equal to its Tranche 2 Line of Credit Commitment in
substantially the form of Exhibit I (with appropriate insertions) (as
such promissory notes may from time to time be amended, modified
extended or renewed, the "Tranche 2 Line of Credit Notes").
(b) Each Lender shall record, and prior to any
transfer of its Tranche 2 Line of Credit Note may endorse on the
schedules forming a part thereof, appropriate notations to evidence the
date and amount of each Tranche 2 Line of Credit Loan made by it and
the date and amount of each payment of principal made by Borrower with
respect thereto. Each Lender is hereby irrevocably authorized by
Borrower so to endorse its Tranche 2 Line of Credit Note and to attach
to and make a part of any such Tranche 2 Line of Credit Note a
continuation of any such schedule as and when required; provided,
however that the obligation of Borrower to repay each Tranche 2 Line of
Credit Loan actually made hereunder shall be absolute and
unconditional, notwithstanding any failure of any Lender to endorse or
any mistake by any Lender in connection with endorsement on the
schedules attached to its respective Tranche 2 Line of Credit Note. The
internal records of each Lender shall constitute for all purposes prima
facie evidence of (i) the amount of principal and interest owing to
such Lender on its Tranche 2 Line of Credit Loans from time to time,
(ii) the amount of each Tranche 2 Line of Credit Loan made by such
Lender to Borrower and (iii) the amount of each principal and/or
interest payment received by such Lender on its Tranche 2 Line of
Credit Loans.
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2.9 Maturity. All Tranche 2 Line of Credit Loans not paid
prior to the last day of the Line of Credit Period, together with all
accrued and unpaid interest thereon and all fees and other amounts
owing by Borrower to the Lenders with respect thereto, shall be due and
payable by Borrower on the last day of the Line of Credit Period.
3. The Credit Agreement is hereby amended to add the following as
Sections 3.4 through 3.6 thereof:
3.4 Tranche 2 Term Loan Commitments. Subject to the terms
and conditions set forth in this Agreement and so long as no Default or
Event of Default has occurred and is continuing, on the last day of the
Line of Credit Period, each Lender with a Tranche 2 Term Loan
Commitment severally (and not jointly) agrees to lend to Borrower
(individually, a "Tranche 2 Term Loan" and collectively, the "Tranche 2
Term Loans") an amount not to exceed the lesser of (a) such Lender's
Tranche 2 Term Loan Commitment or (b) the aggregate outstanding
principal amount of the Tranche 2 Line of Credit Loans due and payable
to such Lender as of such date. Loans under this Section 3.4 shall be
made from the several Lenders ratably in proportion to their respective
Pro Rata Shares. The failure of any Lender to make any Tranche 2 Term
Loan under this Agreement shall not release any other Lender from its
obligation to make a Tranche 2 Term Loan as provided herein. Each
Tranche 2 Term Loan shall be payable as follows: each Tranche 2 Term
Loan shall bear interest on the outstanding principal balance thereof
at a rate per annum equal to the applicable LIBOR Base Rate plus 400
basis points (4.00%); provided that any overdue principal of and, to
the extent permitted by law, overdue interest on, any Tranche 2 Term
Loan shall bear interest, payable on demand, for each day until paid at
a rate per annum equal to the sum of three percent (3%) plus the rate
otherwise in effect for such day; interest shall be payable monthly in
arrears on the last day of each month (or the immediate subsequent
Business Day if any such last day is not a Business Day) and at
maturity; principal shall be payable on each Tranche 2 Term Loan as
follows: a principal payment in the amount of $1,850,000.00 within
thirty (30) days after the expiration of the Line of Credit Period, a
principal payment on June 30, 2005, equal to 31.57895% of the original
principal balance due on such Tranche 2 Term Loan, a principal payment
on December 30, 2005, equal to 31.57895% of the original principal
balance due on such Tranche 2 Term Loan, with the entire unpaid balance
of principal being payable on June 30, 2006; provided that, (a) if any
Recapture Proceeds are delivered to Agent prior to June 30, 2005, the
amount of the mandatory principal payments due on each Tranche 2 Term
Loan on June 30, 2005 and December 30, 2005 will be reduced by one
sixth (1/6) of the amount of such Recapture Proceeds and (b) if any
Recapture Proceeds are delivered to Agent after June 30, 2005, but
prior to December 30, 2005, the amount of the mandatory principal
payments due on each Tranche 2 Term Loan on December 30, 2005 will be
reduced by one fourth (1/4) of the amount of such Recapture Proceeds;
and interest on the outstanding principal owed on such Tranche 2 Term
Loan shall be computed and assessed on the basis of the actual number
of days elapsed over a year composed of 360 days.
3.5 Method of Borrowing.
(a) With respect to the Tranche 2 Term Loans,
Borrower's Representative shall give notice (the "Tranche 2 Term Loan
Notice") to the Agent by 10:30 a.m. (New Orleans time) at least thirty
(30) days before the Tranche 2 Term Loans, specifying:
(i) the date of the Tranche 2 Term Loans, which shall
be a Business Day,
(ii) the aggregate principal amount of the Tranche 2
Term Loans,
(iii) that on the date of, and after giving effect
to, the Tranche 2 Term Loans, no Default or Event of Default has
occurred and is continuing, and
(iv) that on the date of, and after giving effect to,
the Tranche 2 Term Loans, all of the representations and warranties of
Borrower contained in Section 7 of this Agreement and of Borrower and
its Subsidiaries contained in the other Transaction Documents are true
and correct in all material respects as if made on and as of the date
of the Tranche 2 Term Loans (except to the extent that such
representations and warranties
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expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and correct on and
as of such earlier date)).
(b) Upon receipt of the Tranche 2 Term Loan Notice
given to it, the Agent shall notify each Lender by 2:00 p.m. (New
Orleans time) on the date of receipt of the Tranche 2 Term Loan Notice
by the Agent (which must be a Business Day) of the contents thereof and
of such Lender's ratable share of such Tranche 2 Term Loans. The
Tranche 2 Term Loan Notice shall not be revocable by Borrower.
(c) Not later than 11:00 a.m. (New Orleans time) on
the date of the Tranche 2 Term Loans, each Lender shall make available
its Pro Rata Share of the Tranche 2 Term Loans, in federal or other
funds immediately available in New Orleans, Louisiana, to the Agent at
its address specified in or pursuant to Section 11.7. Agent shall not
be required to make any amount available to Borrower hereunder except
to the extent it shall have received such amounts from the Lenders as
set forth herein, provided, however, that unless the Agent shall have
been notified by a Lender prior to the date the Tranche 2 Term Loans
are to be made hereunder that such Lender does not intend to make its
Pro Rata Share of the Tranche 2 Term Loans available to the Agent, the
Agent may assume that such Lender has made such Pro Rata Share
available to the Agent on such date, and the Agent may in reliance upon
such assumption make available to Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by
such Lender and the Agent has made such amount available to Borrower,
the Agent shall be entitled to receive such amount from such Lender
forthwith upon its demand, together with interest thereon in respect of
each day during the period commencing on the date such amount was
advanced to Borrower and ending on but excluding the date the Agent
recovers such amount from the Lender at a rate per annum equal to the
Fed Funds Rate. Unless the Agent determines that any applicable
condition specified in Section 6 has not been satisfied, the Agent will
on the date of the Tranche 2 Term Loans send each Lender (to the extent
such Lender has made its Tranche 2 Term Loan) its Pro Rata Share of the
funds so received as payment on the Tranche 2 Line of Credit Loans.
3.6 Tranche 2 Term Notes.
(a) The Tranche 2 Term Loan of each Lender to
Borrower shall be evidenced by a promissory note of Borrower dated the
date of such Loan and payable to the order of such Lender in a
principal amount equal to its Tranche 2 Term Loan in substantially the
form of Exhibit J (with appropriate insertions) (as such promissory
notes may from time to time be amended, modified extended or renewed,
the "Tranche 2 Term Notes").
(b) The internal records of each Lender shall
constitute for all purposes prima facie evidence of (i) the amount of
principal and interest owing on its Tranche 2 Term Loan from time to
time, (ii) the amount of each Tranche 2 Term Loan made to Borrower and
(iii) the amount of each principal and/or interest payment received by
such Lender on its Tranche 2 Term Loan.
4. The Credit Agreement is hereby amended to add the following as
Section 5.2(e), (f) and (g) thereof:
(e) Borrower shall pay to Agent for the account of
the Lenders, an unused fee (the "Tranche 2 Unused Fee") calculated as
of the last day of March, June, September and December in each year and
on the last day of the Line of Credit Period equal to: (i) one fourth
(1/4) of the rate per annum set forth in the column labeled "Unused
Fee" in the definition of "Applicable Margin" that corresponds to the
Consolidated Leverage Ratio as of the end of the immediately preceding
fiscal quarter (but excluding any fiscal quarter ending on such
calculation date) multiplied by (ii) the unused Tranche 2 Line of
Credit Commitments of all of the Lenders during the fiscal quarter
ending on such calculation date, or portion thereof, which unused
Tranche 2 Line of Credit Commitments shall be arrived at by dividing
the sum of the unused Tranche 2 Line of Credit Commitments of the
Lenders for each day of that quarter as of the close of each day, by
the number of days in that quarter; provided that the Tranche 2 Unused
Fee will be prorated for any fiscal quarter for which the Tranche 2
Line of Credit Commitments were available for only a part of such
fiscal quarter. The Tranche 2 Unused Fee shall be payable by Borrower
on the following Business Day. Upon receipt,
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Agent shall promptly pay each Lender its Pro Rata Share of any such
Tranche 2 Unused Fee paid by Borrower. The unused Tranche 2 Line of
Credit Commitments shall be defined as (x) the total of the Tranche 2
Line of Credit Commitments of all of the Lenders minus (y) the sum of
the principal amount of all outstanding Tranche 2 Line of Credit Loans.
(f) Borrower shall pay to Agent, for the benefit of
Lenders, contemporaneous with Lenders making any Tranche 2 Term Loan,
an origination fee in the amount of one (1%) percent of the principal
amount of such Tranche 2 Term Loan.
(g) Borrower shall pay to Agent, for the benefit of
Lenders, an origination fee of $100,000.00 on March 1, 2005, and
semi-annually thereafter on March 1st and September 1st of each year;
provided that the fees provided for in this Section 5.2(g) shall cease
to accrue (on a prospective basis) when and if Agent receives the
Minimum Net Equity Proceeds (no fee will be due pursuant to this
Section 5.2(g) in the event that Agent receives the Minimum Net Equity
Proceeds by March 1, 2005).
5. Sections 5.3(a) and (b) of the Credit Agreement are hereby
amended and restated to read as follows:
(a) Borrower may, upon notice to the Agent, which notice shall
be irrevocable, specifying that it is paying its Line of Credit Loans
or Tranche 2 Line of Credit Loans, pay without penalty or premium such
Line of Credit Loans or Tranche 2 Line of Credit Loans in whole at any
time, or from time to time in part in amounts aggregating $50,000.00,
or any larger multiple of $10,000.00; provided, however, that in no
event may Borrower make a partial payment of Line of Credit Loans or
Tranche 2 Line of Credit Loans which results in the total outstanding
Line of Credit Loans or Tranche 2 Line of Credit Loans being greater
than zero but less than $100,000.00. Each such optional payment shall
be applied to pay the Line of Credit Loans or Tranche 2 Line of Credit
Loans of the several Lenders in proportion to their respective Pro-Rata
Shares.
(b) Borrower shall have the right to prepay, without premium
or penalty, the Term Loans or the Tranche 2 Term Loans in whole or in
part from time to time on the following terms and conditions: (i)
Borrower shall give the Agent written notice, which notice shall be
irrevocable, of its intent to prepay the Term Loans or the Tranche 2
Term Loans, at least thirty (30) days prior to a prepayment, which
notice shall specify the amount of such prepayment and which notice the
Agent shall promptly transmit to each of the Lenders, (ii) subject to
the provisions of Section 3.4, no prepayment is permitted until after
the first principal repayment date, and (iii) subject to the provisions
of Section 3.4, no prepayment will eliminate the requirement to make
regularly scheduled payments.
6. Lenders shall have no obligation to make any Tranche 2 Term
Loan unless all of the requirements set forth in Section 6.4 have been satisfied
as if such Tranche 2 Term Loan was a Term Loan.
7. In lieu of the provisions of Section 6.1(g) of the Credit
Agreement, the following requirement shall apply with respect to any
non-progress payments due under the Davie Contact:
Lenders have received with respect to any Line of Credit Loan or
Tranche 2 Line of Credit Loan requested in order to make a payment
under the Davie Contract, a certificate from an inspector selected by
Borrower that is reasonably acceptable to Lenders, in form and
substance satisfactory to Lenders, that, as of such date, all work on
the MIDNIGHT EXPRESS has been satisfactorily performed in accordance
with the Davie Contract and such payment is due in accordance with the
terms of the Davie Contract.
8. Section 6.3(c) of the Credit Agreement is hereby amended and
restated to read as follows:
(c) Borrower shall have complied with all of the
procedures and requirements set forth in Section 4.1 and Section 6.5
(whether or not such procedures and requirements are applicable to
Letters of Credit);
9. The Credit Agreement is hereby amended to add the following as
Section 6.5 thereof:
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6.5 Tranche 2 Line of Credit Loans. Notwithstanding any
provision contained herein to the contrary, none of the Lenders shall
have any obligation to make any Tranche 2 Line of Credit Loan hereunder
unless each of the following requirements is satisfied and Lenders have
received each of the following documents:
(a) Borrower shall have complied with all of the
procedures and requirements set forth in Section 6.1 (whether or not
such procedures and requirements are applicable to Tranche 2 Line of
Credit Loans);
(b) The Tranche 2 Line of Credit Notes, amendments to
the Preferred Ship Mortgages, the Continuing Guaranty of each
Subsidiary, that is not an Excluded Subsidiary, and the consent of each
Subsidiary, that is not an Excluded Subsidiary, to all amendments to
this Agreement through the date of such Loan, each duly authorized and
executed;
(c) A copy of resolutions of the Board of Directors
of Borrower, duly adopted, which authorize the execution, delivery and
performance of the Transaction Documents executed by Borrower and each
Subsidiary, certified by the Secretary or an Assistant Secretary of
Borrower;
(d) A copy of the unanimous consent of the sole
member of each Subsidiary, which authorizes the execution, delivery and
performance of the Transaction Documents executed by such Subsidiary;
(e) An incumbency certificate, executed by the
Secretary or an Assistant Secretary of Borrower, which shall identify
by name and title and bear the signatures of all of the officers of
Borrower executing any of the Transaction Documents delivered at or
prior to the closing;
(f) Opinions of counsel for Borrower and the
Subsidiaries satisfactory to Agent relating to the Transaction
Documents and such other matters as the Lenders may reasonably require;
(g) Payment of Agent's reasonable costs and expenses
as provided for in Section 11.3;
(h) an amendment to the Davie Contract substantially
in the form of Exhibit K annexed hereto;
(i) a funding schedule for the work remaining under
the Davie Contract;
(j) a projected cash flow statement for Davie through
the projected date of delivery of the MIDNIGHT EXPRESS pursuant to the
Davie Contract;
(k) a revised Project Expense Schedule;
(l) the consent of Investissement Quebec to the
amendment to the Davie Contract;
(m) Lenders have received (i) with respect to any
advance made to make a payment due under the Davie Contract for
progress payments and with respect to any advance made to make a
payment due under the Xxxxxxx Contract, (x) a certificate from Lenders'
Inspector, in form and substance satisfactory to Lenders, that, as of
such date, all work under a Conversion Contract that necessitates the
payment by Borrower under such Conversion Contract has been
satisfactorily performed in accordance with such Conversion Contract
and (y) a copy of each certificate or invoice provided to Borrower in
connection with any payment due under a Conversion Contract, (ii) with
respect to any advance made to make a payment due under the Davie
Contract for non-progress payments a certificate from an inspector
selected by Borrower that is reasonably acceptable to Lenders, in form
and substance satisfactory to Lenders, that, as of such date, all work
on the MIDNIGHT EXPRESS has been satisfactorily performed in accordance
with the Davie Contract and such payment is due in accordance with the
terms of the Davie Contract, and (iii) with respect to any owner
furnished equipment, a copy of the contract or invoice relating
thereto;
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(n) The Agent shall have received a Tranche 2 Notice
of Borrowing for such Tranche 2 Line of Credit Loan as required by
Section 2.7;
(o) All information, approvals, opinions, documents
or other instruments as the Required Lenders may reasonably request;
(p) On the date of and immediately after giving
effect to such Tranche 2 Line of Credit Loan, no Default or Event of
Default shall have occurred and be continuing;
(q) No material adverse change in the Properties,
assets, liabilities, business, operations, prospects, income or
condition (financial or otherwise) of Borrower and its Subsidiaries
taken as a whole shall have occurred since the Effective Date and be
continuing; and
(r) Except for subsequent changes consented to in
writing by the Required Lenders after the Effective Date, or as
permitted pursuant to this Agreement or the other Transaction
Documents, all of the representations and warranties of Borrower
contained in Section 7 of this Agreement and of Borrower and its
Subsidiaries contained in the other Transaction Documents shall be true
and correct in all material respects on and as of the date of such
Tranche 2 Line of Credit Loan, as if made on and as of the date of such
Tranche 2 Line of Credit Loan (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 correct on and as of such earlier date)).
A request for a Tranche 2 Line of Credit Loan hereunder shall
be deemed to be a representation and warranty by Borrower on the date
of such Tranche 2 Line of Credit Loan, as to the facts specified in
clauses (p), (q) and (r) of this Section 6.5.
All documents described above must be in form and substance
and upon terms and conditions satisfactory to the Required Lenders in
their reasonable discretion.
10. Lenders hereby waive compliance by Borrower with the minimum
Consolidated Current Ratio covenant contained in Section 8.1(k)(i) of the Credit
Agreement for the fiscal quarter ending on December 31, 2003. Borrower
acknowledges and agrees that this waiver of compliance with the financial
covenant contained in Section 8.1(k)(i) of the Credit Agreement shall apply only
to the fiscal quarter ending on December 31, 2003 and shall not constitute a
waiver of compliance for any other fiscal quarter.
11. Lenders hereby waive compliance by Borrower with the minimum
Consolidated Debt Service Coverage Ratio covenant contained in Section
8.1(k)(ii) of the Credit Agreement for the fiscal quarter ending on December 31,
2003. Borrower acknowledges and agrees that this waiver of compliance with the
financial covenant contained in Section 8.1(k)(ii) of the Credit Agreement shall
apply only to the fiscal quarter ending on December 31, 2003 and shall not
constitute a waiver of compliance for any other fiscal quarter.
12. Section 8.1(k)(i) of the Credit Agreement is amended and
restated to read as follows:
(i) Borrower will have and maintain, as of the end of
each fiscal quarter, a Consolidated Current Ratio of
at least:
Periods Ending Ratio
-------------- -----
On or before March 31, 2005 .70
After March 31, 2005 1.00.
13. The Credit Agreement is hereby amended to add the following as
Section 8.1(x) thereof:
(x) Borrower shall arrange for the Minimum Recapture
Proceeds to be delivered directly to Agent, for the benefit of Lenders,
to be applied by Lenders as a principal payment on the Tranche 2 Line
of Credit Loans or the Tranche 2 Term Loans (with any excess amounts to
be applied to interest, fees or other amounts due hereunder or under
any of the other Transaction Documents).
14. The Credit Agreement is hereby amended to add the following as
Section 8.1(y) thereof:
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(y) Minimum Net Equity Proceeds. By June 30, 2005, Borrower
will obtain the Minimum Net Equity Proceeds.
15. Clause (xi) of Section 8.2(a) of the Credit Agreement is
amended and restated to read as follows:
(xi) Indebtedness relating to the MIDNIGHT WRANGLER in a principal
amount not exceeding $15,000,000.00 in the aggregate at any one time
outstanding;
16. The Credit Agreement is hereby amended to add the following as
clause (xvii) of Section 8.2(a) thereof:
(xvii) any Subordinate Indebtedness.
17. Section 8.3 of the Credit Agreement is amended to require that
the proceeds of the Tranche 2 Line of Credit Loans will be used solely to cover
expenses relating to the Project, to pay the origination fee required by Section
5.2(f) of the Credit Agreement and to purchase option(s) to hedge against
foreign exchange risk on contracts for work on the MIDNIGHT EXPRESS and the
proceeds of the Tranche 2 Term Loans will be used solely to pay the Tranche 2
Line of Credit Loans.
18. The last sentence of Section 9 of the Credit Agreement is
hereby amended and restated to read as follows:
All sums expended by Agent and each of the Lenders for such purposes
shall be deemed to have been advanced to Borrower as Line of Credit
Loans or Tranche 2 Line of Credit Loans, shall satisfy pro tanto the
obligations of Lenders hereunder and shall be secured by the
Transaction Documents as fully as if made upon the request of Borrower.
19. In Section 11.16 of the Credit Agreement, "Line of Credit
Loans" is amended to be "Loans".
20. As clarification, any overdue principal of and, to the extent
permitted by law, overdue interest on, any Line of Credit Loan or Tranche 2 Line
of Credit Loan shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the LIBOR Rate plus three percent (3%).
21. BORROWER HEREBY RELEASES THE INDEMNITEES AND SOLIDARILY AGREES
TO HOLD THE INDEMNITEES HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS ARISING
PRIOR TO THE EXECUTION DATE OF THIS WAIVER AND FOURTH AMENDMENT TO CREDIT
AGREEMENT ARISING OUT OF, RESULTING FROM OR RELATING TO (A) ANY OBLIGATIONS OR
(B) ANY OF THE TRANSACTION DOCUMENTS.
22. In connection with the foregoing and only in connection with
the foregoing, the Credit Agreement is hereby amended, but in all other respects
all of the terms, conditions and provisions of the Credit Agreement remain
unaffected. All security agreements, financing statements, mortgages, pledges,
deeds, continuing guaranties and other security documents in favor of Agent, for
the benefit of the Secured Parties, shall remain in full force and effect.
23. Except as may be specifically set forth herein, this Waiver
and Fourth Amendment to Credit Agreement shall not constitute a waiver of any
Default(s) under the Credit Agreement or any documents executed in connection
therewith, all rights and remedies of the Lenders being preserved and
maintained.
24. This Waiver and Fourth Amendment to Credit Agreement may be
executed in two or more counterparts, and it shall not be necessary that the
signatures of all parties hereto be contained on any one counterpart hereof;
each counterpart shall be deemed an original, but all of which together shall
constitute one and the same instrument.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
TORCH OFFSHORE, INC.
By: _________________________________
Xxxxxx X. Xxxxxx
Its Chief Financial Officer
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxx 00000
Telecopy number: (000) 000-0000
REGIONS BANK
By: _________________________________
Xxxxx X. Xxxxx
Its Senior Vice President
000 Xx. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
EXPORT DEVELOPMENT CANADA
By: _________________________________
Xxxxx X. Xxxxxxxx
Financial Services Manager
By: _________________________________
Xxxxxxx Xxxxxxx
Financial Services Manager
000 X'Xxxxxx
Xxxxxx, Xxxxxx X0X0X0
(Telecopier: (000) 000-0000
12
