Exhibit 10.1


AMENDMENT NO. 4

TO

LOAN AND SECURITY AGREEMENT


AMENDMENT
NO. 4 (this “Amendment”),
dated as of December 28, 2006, by and among K-SEA
OPERATING PARTNERSHIP L.P. (the “Borrower”),
the several financial institutions party hereto (the “Lenders”),
KEYBANK NATIONAL ASSOCIATION, as
Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”) and as
collateral trustee for the Lenders, and LASALLE BANK, NATIONAL
ASSOCIATION, as syndication agent.


RECITALS


A.            Borrower, the Lenders and the
Administrative Agent are parties to a Loan and Security Agreement, dated as of
March 24, 2005 (as heretofore amended, and as it may be further amended,
restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  Unless otherwise defined herein, all
capitalized terms used herein or in the Acknowledgement and Consent annexed
hereto shall have the meanings ascribed to them in the Loan Agreement.


B.            Borrower has requested that the
Administrative Agent and the Lenders amend the Loan Agreement in certain
respects.


C.            The Administrative Agent has advised
Borrower that the Lenders are willing to agree to its requests to amend the
Loan Agreement on the terms and subject to the conditions set forth in this
Amendment.


Accordingly,
in consideration of the foregoing, the parties hereto hereby agree as follows:


1.             AMENDMENTS TO LOAN AGREEMENT.


(a)           Additional Definitions.  Section 1.01 of the Loan Agreement is hereby
amended by adding the following new definitions in the appropriate alphabetical
order:


“Amendment
No. 4” means Amendment No. 4 to Loan and Security Agreement,
dated as of December 28, 2006, among Borrower, the Lenders party thereto and
the Administrative Agent.


“Amendment
No. 4 Effective Date” means as of December 28, 2006.


“Fair
Market Value” means, with respect to any Pool Vessel, the fair
market value of such Pool Vessel as reasonably determined by the Administrative
Agent or by independent appraisers appointed by the Administrative Agent at the
expense of Borrower.


“Net Worth” means the excess of total
assets over total liabilities, total assets and total liabilities each to be
determined in accordance with









 



 


GAAP consistent with those applied in the preparation
of the Financial Statements referred to in Section 6.01 hereof.


“Total
Capitalization” means, as of any date, the sum of Net Worth at
such date plus Total Funded Debt at such date.


“Total
Funded Debt to Total Capitalization Ratio” means, at any date of determination, the ratio of
Total Funded Debt divided by Total Capitalization.


(b)           Amendments to Definitions.


(i)            Applicable Margin.  Section 1.01 of the Loan Agreement is hereby amended by deleting the
definition of “Applicable Margin” in its entirety and substituting the
following therefor:


 “Applicable Margin”
means, at all times during the applicable periods set forth below: (a) with
respect to Base Rate Loans, the percentage set forth below under the heading “Base
Rate Margin” and adjacent to such period, (b) with respect to LIBOR Loans, the
percentage set forth below under the heading “LIBOR Margin” and adjacent to
such period and (c) with respect to the Commitment Fees, the percentage set
forth below under the heading “Commitment Fee Margin” and adjacent to such
period:




	
  Period

  	
   

  	
  Applicable Margin

  	
   

  
	
  When the Total

  Funded Debt to

  EBITDA Ratio

  is greater than

  or equal to

  	
   

  	
  And less

  than

  	
   

  	
  Base Rate

  Margin

  	
   

  	
  LIBOR

  Margin

  	
   

  	
  Commitment

  Fee Margin

  	
   

  
	
   

  	
  3.50:1.00

  	
   

  	
   

  	
   

  	
   

  	
  0.250%

  	
   

  	
  1.600%

  	
   

  	
  0.300%

  	
   

  
	
   

  	
  3.00:1.00

  	
   

  	
   

  	
  3.50:1.00

  	
   

  	
  0.000%

  	
   

  	
  1.350%

  	
   

  	
  0.200%

  	
   

  
	
   

  	
  2.50:1.00

  	
   

  	
   

  	
  3.00:1.00

  	
   

  	
  0.000%

  	
   

  	
  1.200%

  	
   

  	
  0.200%

  	
   

  
	
   

  	
  2.00:1.00

  	
   

  	
   

  	
  2.50:1.00

  	
   

  	
  0.000%

  	
   

  	
  0.950%

  	
   

  	
  0.150%

  	
   

  
	
   

  	
   

  	
  2.00:1.00

  	
   

  	
  0.000%

  	
   

  	
  0.700%

  	
   

  	
  0.150%

  	
   

  






Changes in the Applicable Margin resulting from a
change in the Total Funded Debt to EBITDA Ratio shall be based upon the
certificate most recently delivered under Section 6.01(b) and shall become
effective on the first day of the month immediately succeeding the date such
certificate is required to be delivered to the Administrative Agent pursuant to
Section 6.01(b).  Notwithstanding anything
to the contrary in this definition, if Borrower shall fail to deliver to the
Administrative Agent such a certificate on or prior to any date required by
Section 6.01(b), the Total



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Funded Debt to EBITDA Ratio shall be deemed to be
greater than 3.50:1.00 from and
including such date to the first day of the month immediately succeeding the
date of delivery to the Administrative Agent of such certificate.


(ii)           Asset Coverage Ratio. 
Section 1.01 of the Loan
Agreement is hereby amended by deleting the definition of “Asset
Coverage Ratio” in its
entirety and substituting the following therefor:


“Asset
Coverage Ratio” means, as of any date of determination, the
ratio of the Fair Market Value of all Pool Vessels that are part of the
Collateral divided by the aggregate Revolving Credit Exposure of all Lenders.


(iii)          Borrowing Base.  Section 1.01 of the Loan Agreement is hereby
amended by deleting the definition of “Borrowing Base” in its entirety and substituting the
following therefor:


“Borrowing Base” means 80% of the Fair
Market Value of the Pool Vessels.


(iv)          Qualified Pool Vessels. 
Section 1.01 of the Loan
Agreement is hereby amended by deleting the definition of “Qualified
Pool Vessels” in its
entirety and substituting the following therefor:


“Qualified Pool Vessels” means Pool
Vessels that are documented, coastwise eligible tugs, AT/Bs and double-hulled
barges and are acceptable in age, construction, condition and trade employment
to the Administrative Agent; provided, that during the period from the
Effective Date to the third Anniversary Date, “Qualified Pool Vessels”
may also include single-hulled barges having a Fair Market Value not in excess
of five percent (5%) of the aggregate Fair Market Value of all Pool Vessels.


(v)           Tangible Capitalization.  Section 1.01 of the Loan Agreement is hereby amended by deleting the
definition of “Tangible Capitalization” in its entirety.


(vi)          Total Funded Debt to Tangible Capitalization Ratio.  Section 1.01 of the Loan Agreement is hereby amended by deleting the
definition of “Total Funded Debt to Tangible Capitalization
Ratio” in its entirety.


(c)           Prepayment of Loans.  Section 2.09(d) of the Loan Agreement is
hereby amended by deleting the phrase “Orderly Liquidation Value” in clause
(ii) thereof and substituting “Fair Market Value” therefor.


(d)           Prepayment of Loans.  Section 2.09(e) of the Loan Agreement is
hereby amended by deleting the phrase “Orderly Liquidation Value” in clause
(ii) thereof and substituting “Fair Market Value” therefor.


(e)           Payments Generally; Pro Rata Treatment; Sharing of
Setoffs.  Section
2.14(b)(ii) of the Loan Agreement is hereby amended by deleting the phrase 



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“Orderly
Liquidation Value” each time it appears therein and substituting “Fair Market
Value” therefor.


(f)            Substitute of Pool Vessel.  Section 3.02 of the Loan Agreement is hereby
amended by deleting the phrase “Orderly Liquidation Value” each time it appears
therein and substituting “Fair Market Value” therefor.


(g)           Fair Market Value.  Section 3.03 of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:


Section 3.03         Fair Market Value.


(a)  Based on the most recently completed
Appraisal of the Pool Vessels delivered to the Administrative Agent, the
aggregate Fair Market Value of the Pool Vessels shall at all times be not less
than the greater of (i) $62,500,000.00 and (ii) a Fair Market Value such that
an Asset Coverage Ratio of not less than 1.25 to 1.00 is maintained, provided,
that in no event through the third anniversary of the Effective Date shall more
than five percent (5%) of the aggregate Fair Market Value of the Pool Vessels
be attributable to Non-Qualified Pool Vessels and thereafter Non-Qualified Pool
Vessels shall not be included in Pool Vessels.


(b)  In the event any Appraisal delivered to the
Administrative Agent performed at any time after the Effective Date
demonstrates that the aggregate Fair Market Value of the Pool Vessels is less
than the greater of (i) $62,500,000.00 and (ii) a Fair Market Value such that
an Asset Coverage Ratio of not less than 1.25 to 1.00 is maintained, Borrower
shall promptly, and in any event within 10 Business Days, pledge additional
vessels acceptable to the Administrative Agent, and the Proceeds thereof, so
that, after giving effect to such pledge of additional vessels, the aggregate
Fair Market Value of the Pool Vessels is equal to the greater of (i)
$62,500,000.00 and (ii) a Fair Market Value such that an Asset Coverage Ratio
of not less than 1.25 to 1.00 is maintained.


(c)  In the event any Appraisal delivered to the
Administrative Agent performed at any time after the Effective Date
demonstrates that that the aggregate Fair Market Value of the Pool Vessels
exceeds the greater of (i) $62,500,000.00, and (ii) a Fair Market Value such
that an Asset Coverage Ratio of not less than 1.25 to 1.00 is maintained,
Borrower may, upon the delivery of a written request therefor delivered to the
Administrative Agent, request the consent of the Lenders (which shall not be
unreasonably withheld) to the release by the Collateral Trustee, at Borrower’s
expense, of its Lien on one or more Pool Vessels (and related Assignments)
described in such request, commencing with Non-Qualified Pool Vessels; provided that both before and after giving effect to such
release, (i) no Default or Event of Default shall have occurred and be
continuing or result therefrom, (ii) the aggregate Fair Market Value of the
Pool Vessels shall be not less than the greater of (i) $62,500,000.00 and (ii)
a Fair Market Value such that the Asset Coverage Ratio shall not be less than
1.25 to 1.00, and (iii) Borrower shall be in compliance with the financial
covenants under Sections 7.01, 7.02, 7.03 and 7.04, and 



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Borrower shall deliver to the Administrative Agent
prior to any such release a certificate in reasonable detail evidencing
compliance by Borrower with the foregoing conditions.  Notwithstanding the foregoing, the value of
any vessel acquired, retrofitted or rebuilt with any Loan shall not be included
for purposes of determining the aggregate Fair Market Value of the Pool Vessels
as collateral while such vessel is under construction but may be included upon
completion of work and redelivery to Borrower.


(h)           Total Funded Debt to Total Capitalization Ratio.  Section 7.02 of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:


Section
7.02         Total Funded Debt to Total
Capitalization Ratio. 
Borrower shall not permit the Total Funded Debt to Total Capitalization
Ratio as of the end of any fiscal quarter to be greater than 0.65 to 1.00.


(i)            General. 
All references to “this Agreement” in the Loan Agreement and to “the
Loan Agreement” in the other Loan Documents shall be deemed to refer to the
Loan Agreement as amended hereby.


2.             CONDITIONS TO EFFECTIVENESS.  This Amendment shall be effective upon the
satisfaction of each of the following conditions:


(a)           The Administrative
Agent (or its counsel) shall have received from each party hereto either
(x) a counterpart of this Amendment signed on behalf of such party or
(y) written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this
Amendment) that such party has signed a counterpart of this Amendment.


(b)           The Lenders shall be
reasonably satisfied that no material adverse change in the business, assets,
operations, properties, condition (financial or otherwise), liabilities
(including contingent liabilities) or material agreements of Borrower and its
Subsidiaries has occurred since June 30, 2006.


(c)           There shall be no
injunction, writ, preliminary restraining order or other order of any nature
issued by any Governmental Authority in any respect affecting the transactions
provided for in this Amendment and no action or proceeding by or before any
Governmental Authority shall have been commenced and be pending or, to the
knowledge of Borrower, threatened, seeking to prevent or delay the transactions
contemplated by this Amendment or challenging any other terms and provisions
hereof or thereof or seeking any damages in connection herewith or therewith.


(d)           The representations
and warranties contained in the Loan Agreement shall be true and correct in all
material respects, except
to the extent such representations and warranties relate to an earlier date
and, after giving effect to the amendments set forth in Section 1 hereof, no
Default or Event of Default shall exist.


(e)        The Administrative Agent shall have
received and accepted a desktop or visual Appraisal of each of the Pool
Vessels, which shall be in form and substance satisfactory to the
Administrative Agent, and which shall demonstrate that the



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Fair Market Value of the Pool Vessels as of the Amendment No. 4
Effective Date is not less than $93,750,000.00.


(f)            The Administrative
Agent shall have received (i) for the account of the Lenders party hereto pro
rata in accordance with their respective Commitments, payable on the Amendment
No. 4 Effective Date, an amendment fee equal to the product of 0.075%
multiplied by the Maximum Amount and (ii) all other amounts due and payable on
or prior to the Amendment No. 4 Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by Borrower hereunder.


(g)           All legal matters
with respect to and all legal documents (including, but not limited to, the
Loan Documents) executed in connection with the transactions contemplated by
this Amendment shall be satisfactory to counsel for the Administrative Agent.


(h)           Borrower shall have
paid the reasonable fees and disbursements of counsel to the Administrative
Agent and the Lenders in connection with this Amendment.


The
Administrative Agent shall notify Borrower and the Lenders of the Amendment No.
4 Effective Date, and such notice shall be conclusive and binding.


3.             REPRESENTATIONS AND WARRANTIES.  Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that:


(a)           The representations
and warranties set forth in the Loan Documents are true and correct in all
material respects as of the date hereof and with the same effect as though made
on and as of the date hereof, except to the extent such representations and warranties relate to an
earlier date.


(b)           No Default or Event
of Default and no event or condition which, with the giving of notice or lapse
of time or both, would constitute such a Default or Event of Default, now
exists or would exist.


(c)           (i)  The execution, delivery and performance by
Borrower of this Amendment is within its organizational powers and have been
duly authorized by all necessary action (corporate or otherwise) on the part of
Borrower, (ii) this Amendment is the legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms, and (iii)
neither this Amendment nor the execution, delivery and performance by Borrower
hereof: (A) contravenes the terms of Borrower’s organization documents, (B)
conflicts with or results in any breach or contravention of, or the creation of
any Lien under, any document evidencing any contractual obligation to which
Borrower is a party or any order, injunction, writ or decree to which Borrower
or its property is subject, or (C) violates any requirement of law.


4.             EFFECT; NO WAIVER.


(a)           Borrower hereby (i)
reaffirms and admits the validity and enforceability of the Loan Documents and
all of its obligations thereunder and (ii) agrees and admits that it has no
existing defenses to or offsets against any such obligation. Except as
specifically set forth herein, the Loan Agreement and the other Loan



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Documents
shall remain in full force and effect in accordance with their terms and are
hereby ratified and confirmed.  The
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any existing or future Default or Event of Default, whether known or
unknown or any right, power or remedy of the Administrative Agent or the
Lenders under the Loan Agreement, nor constitute a waiver of any provision of
the Loan Agreement, except as specifically set forth herein.


(b)           Borrower hereby (i)
reaffirms all of its agreements and obligations under the Loan Documents, (ii)
reaffirms that all Obligations of Borrower under or in connection with the Loan
Agreement as amended hereby are “Obligations”
as that term is defined in the Loan Documents and (iii) reaffirms that all such
Obligations continue to be secured by the Loan Documents, which remain in full
force and effect and are hereby ratified and confirmed.


5.             MISCELLANEOUS.


(a)           Borrower shall pay
the Administrative Agent upon demand for all reasonable expenses, including
reasonable attorneys’ fees and expenses of the Administrative Agent, incurred
by the Administrative Agent in connection with the preparation, negotiation and
execution of this Amendment.


(b)           THIS AMENDMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED
TO THE CONFLICTS OF LAW PROVISIONS, BUT INCLUDING SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) AND DECISIONS OF THE
STATE OF NEW YORK.


(c)           This Amendment shall
be binding upon Borrower, the Administrative Agent and the Lenders and their
respective successors and assigns, and shall inure to the benefit of Borrower,
the Administrative Agent and the Lenders and the respective successors and
assigns of the Administrative Agent and the Lenders.


(d)           This Amendment may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument.


[Signature pages follow.]



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AS EVIDENCE of the agreement by the parties hereto to
the terms and conditions herein contained, each such party has caused this
Amendment to be executed on its behalf.


 


	
   

  	
  K-SEA OPERATING PARTNERSHIP L.P.,

  by its general partner K-Sea OLP GP, LLC,

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John J. Nicola

  	
   

  
	
   

  	
  Name:
  John J. Nicola

  
	
   

  	
  Title: Chief
  Financial Officer

  



 


	
  

  	
  KEYBANK
  NATIONAL ASSOCIATION,

  for itself as Lender, and as Administrative Agent

  and as Collateral Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven B. Vitale

  	
   

  
	
   

  	
  Name: Steven B.
  Vitale

  
	
   

  	
  Title: Director

  



 


	
  

  	
  LASALLE
  BANK NATIONAL ASSOCIATION,

  as Syndication Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathleen L. Ross

  	
   

  
	
   

  	
  Name: Kathleen
  L. Ross

  
	
   

  	
  Title: Senior
  Vice President

  



 


	
  

  	
  CITIZENS BANK OF PENNSYLVANIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Devon Starks

  	
   

  
	
   

  	
  Name: Devon
  Starks

  
	
   

  	
  Title: Senior
  Vice President

  



 


	
  

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Karp

  	
   

  
	
   

  	
  Name: Stephen
  Karp

  
	
   

  	
  Title: Vice
  President

  



 



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