Exhibit 10.2

 

SEVENTH AMENDMENT

TO

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

This Seventh Amendment to Third Amended and Restated Loan Agreement (the
“Seventh Amendment”) is dated August 11, 2004 and is made by and among Whitney
National Bank (“Lender”), Conrad Shipyard, L.L.C. (“Borrower”), Orange
Shipbuilding Company, Inc. (“Orange”) and Conrad Industries, Inc. (“Conrad”).

 

WHEREAS, Borrower and Guarantor have requested that Lender modify the Debt
Service Coverage Ratio, the ratio of Current Assets to Current Liabilities and
the Tangible Net Worth requirement in the Third Amended and Restated Loan
Agreement, as amended, so that Borrower will not violate its terms and
conditions;

 

WHEREAS, Lender is agreeable provided that the margin on the Libor Rate
increases from 225 basis points to 275 basis points and the Base Rate increases
from JPMorgan Chase Prime Rate to JPMorgan Chase Prime Rate plus 50 basis points
and a covenant covering EBITDA is added; and

 

WHEREAS, the parties wish to amend that certain Third Amended and Restated Loan
Agreement by and among Lender, Borrower, Orange and Conrad, dated July 18, 2002,
as amended by the First Amendment to the Third Amended and Restated Loan
Agreement, dated March 21, 2003, the Second Amendment to Third Amended and
Restated Loan Agreement, dated as of May 9, 2003, the Third Amendment to Third
Amended and Restated Loan Agreement, dated July 11, 2003, the Fourth Amendment
to Third Amended and Restated Loan Agreement, dated November 10, 2003, the Fifth
Amendment to Third Amended and Restated Loan Agreement, dated February 13, 2004,
and the Sixth Amendment to Third Amended and Restated Loan Agreement, dated
March 26, 2004 (collectively the “Loan Agreement”) as set forth below.

 

NOW THEREFORE, the parties hereby agree as follows:

 

1. As used herein, capitalized terms not defined herein shall have the meanings
attributed to them in the Loan Agreement. The Loan Agreement is hereby amended
by amending and restating the definitions of “Base Rate” and “Libor Rate”and
adding a definition of EBITDA in Section 1.01 as follows:

 

“Base Rate” shall mean JPMorgan Chase Prime Rate plus fifty basis points (.50%).
JPMorgan Chase Prime Rate shall mean that rate of interest as recorded by
JPMorgan Chase Bank from time to time as its prime lending rate with the rate of
interest to change when and as said prime lending rate changes. Each change in
any interest rate provided for herein based upon the Base Rate resulting from a
change in JPMorgan Chase Prime Rate shall take effect at the time of such change
in JPMorgan Chase Prime Rate.

 

“EBITDA” shall mean shall mean, for any period, the sum of the following: (a)
Consolidated net income during such period plus (b) to the extent deducted in
determining Consolidated net income, the sum of (i) Consolidated interest
expense during such period, plus (ii) all provisions for any federal, state,
local and/or foreign income taxes made by Borrower, Guarantor or any Subsidiary
during such period (whether paid or deferred) plus (iii) all depreciation and
amortization expenses and all other non-cash items of Borrower Guarantor and any
Subsidiary during such period, all determined on a Consolidated basis as
determined in accordance with GAAP.

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“Libor Rate” shall mean, effective as of the date of this Seventh Amendment, an
interest rate per annum (rounded upward to the nearest hundredth of a percent
(1/100 of 1%)) which is the offered quotation to Lender of the London interbank
offered rate for U.S. Dollar deposits of amounts in immediately available funds
in the London market for one month, two months, three months or six months as
recorded by Bloomberg, L.P. or such other service used by Lender as an
information vendor for the purpose of displaying British Bankers’ Association
interest settlement rates for U.S. Dollar Deposits, as determined by Lender as
of the opening of business of Lender or as soon thereafter as practicable, plus
the applicable margin of 275 basis points (2.75%). The Libor Rate shall be
determined by Lender on the first Business Day of each Interest Period with the
change in the Libor Rate to be effective as of such Business Day.

 

2. Section 5.01 of the Loan Agreement is hereby amended by amending and
restating subsections (b), (c) and (d) and adding a subsection (e) as follows:

 

Section 5.01. Financial Covenants. Borrower shall comply with the following
Financial Covenants until the Loan has been paid in full:

 

* * *

 

(b) Debt Service Coverage Ratio. Borrower on a Consolidated basis with Guarantor
and each Subsidiary shall maintain during the existence of the Loan a Debt
Service Coverage Ratio commencing as follows:

 

  (i) As of December 31, 2005, a Debt Service Coverage Ratio of 1.10 calculated
using the cumulative financial statements for the first, second, third and
fourth quarters of 2005.

 

  (ii) After December 31, 2005, a Debt Service Coverage Ratio of 1.25 calculated
each quarter using the cumulative financial statements for the four previous
quarters on a rolling basis.

 

(c) Current Ratio. Borrower on a Consolidated basis with Guarantor and each
Subsidiary shall maintain at all times during the existence of the Loan a ratio
of Current Assets (minus any prepaid expenses) to Current Liabilities as
follows:

 

(i) As of September 30, 2004, December 31, 2004, March 31, 2005, June 30, 2005
and September 30, 2005, a ratio of Current Assets (minus any prepaid expenses)
to Current Liabilities of 1.0 to 1.0 or greater.

 

(ii) As of December 31, 2005 and as of the end of each quarter thereafter, a
ratio of Current Assets (minus any prepaid expenses) to Current Liabilities of
1.1 to 1.0 or greater.

 

(d) Tangible Net Worth. Borrower on a Consolidated basis with Guarantor and each
Subsidiary shall maintain at all times during the existence of the Loan a

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Tangible Net Worth of at least $19,250,000.00 as of September 30, 2004, December
31, 2004, March 31, 2005, June 30, 2005 and September 30, 2005 and each quarter
thereafter.

 

(e) EBITDA. Borrower on a Consolidated basis with Guarantor and each Subsidiary
shall maintain during the existence of the Loan an EBITDA as follows:

 

(i) as of March 31, 2005, the sum of $500,000.00 calculated using the financial
statements for the first quarter of 2005,

 

(ii) as of June 30, 2005, the sum of $1,250,000.00, calculated using the
cumulative financial statements for the first and second quarters of 2005, and

 

(iii) as of September 30, 2005 the sum of $2,250,000.00 calculated using the
cumulative financial statements for the first, second and third quarter of 2005.

 

After September 30, 2005, this covenant is replaced with the Debt Service
Coverage Ratio.

 

3. Lender does hereby waive any event which may be a Default as the result of
Borrower on a consolidated basis with Guarantor and each Subsidiary not
complying with the Debt Service Coverage Ratio, the ratio of Current Assets to
Current Liabilities and the Tangible Net Worth requirement in force prior to the
effective date of this Seventh Amendment. In connection with the foregoing and
only in connection with the foregoing, the Loan Agreement is hereby amended, but
in all other respects all of the terms and conditions of the Loan Agreement
remain unaffected.

 

4. Except as provided above in paragraph 3, Borrower, Orange and Conrad
acknowledge and agree that this Seventh Amendment shall not constitute a waiver
of any Default(s) under the Loan Agreement or any documents executed in
connection therewith, all of Lender’s rights and remedies being preserved and
maintained. Borrowers, Orange and Conrad hereby represent and warrant to Lender
that no Default has occurred under the Loan Agreement and there has not occurred
any condition, event or act which constitutes, or with notice or lapse of time
(or both) would constitute, a Default under the Loan Agreement. Borrower, Orange
and Conrad further acknowledge that the Collateral Documents and the continuing
guaranties of Orange and Conrad remain in full force and effect and that the
Collateral Documents and the continuing guaranties of Orange and Conrad continue
to secure the payment and performance of the Obligations, as hereby amended, in
accordance with their terms.

 

5. This Seventh Amendment 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.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Seventh Amendment to be
duly executed.

 

LENDER:   BORROWER: WHITNEY NATIONAL BANK   CONRAD SHIPYARD, L.L.C. By:  

/S/ ROBERT L. BROWNING

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  By:  

/S/ LEWIS J. DERBES, JR.

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    Robert L. Browning       Lewis J. Derbes, Jr.     Its: Senior Vice President
      Its: Treasurer/Secretary and Manager         GUARANTORS:         ORANGE
SHIPBUILDING COMPANY, INC.         By:  

/S/ LEWIS J. DERBES, JR.

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            Lewis J. Derbes, Jr.             Its: Secretary and Treasurer      
  CONRAD INDUSTRIES, INC.         By:  

/S/ LEWIS J. DERBES, JR.

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            Lewis J. Derbes, Jr.             Its: Vice President and            
Chief Financial Officer