Exhibit
10.11


 


AMENDMENT
NO. 2

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


AMENDMENT NO. 2 (this “Amendment”), dated as of June 30, 2008,
by and among K-SEA OPERATING PARTNERSHIP L.P.
(“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, LASALLE
BANK, NATIONAL ASSOCIATION and CITIBANK,
N.A., as Co-Syndication Agents, and CITIZENS BANK OF PENNSYLVANIA and HSBC BANK USA, NATIONAL ASSOCIATION, as Co-Documentation
Agents.


 


RECITALS


 


A.            Borrower, the
Lenders, the Co-Syndication Agents, the Co-Documentation Agents and the
Administrative Agent are parties to an Amended and Restated Loan and Security
Agreement, dated as of August 14, 2007 (as heretofore amended and
supplemented, 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 party hereto 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. 2” means
Amendment No. 2 to Amended and Restated Loan and Security Agreement, dated
as of June 30, 2008, among Borrower, the Lenders party thereto and the
Administrative Agent.


 


“Amendment No. 2 Effective Date” means as of
June 30, 2008.


 


(b)           Amendments to Definitions.


 


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


 

















 


“Change in Control” means the
occurrence of any of the following events: (a) Continuing Directors cease
for any reason to constitute, collectively, a majority of the members of the
board of directors of K-Sea General Partner GP LLC; (b) any person or
group of persons (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended), other than (i) Jefferies Capital
Partners or its Affiliates and (ii) K-Sea GP Holdings LP, from and after
the date of its initial public offering, becomes the beneficial owner of 50% or
more of the equity securities of K-Sea General Partner GP LLC; (c) from
and after the date of the initial public offering of K-Sea GP Holdings LP, any
person or group of persons (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) other than Jefferies Capital
Partners and its Affiliates becomes the beneficial owner of 66-2/3% or more of
the equity securities of K-Sea GP Holdings LP; (d) any person or group of
persons (within the meaning of Rule 13d-3 of the Securities Exchange Act
of 1934, as amended) other than any director or officer of K-Sea GP LLC or its
Affiliates becomes the beneficial owner of 50% or more of the equity securities
of K-Sea GP LLC; (e) the adoption of a plan relating to the liquidation or
dissolution of any of (i) the Borrower, (ii) K-Sea or (iii) K-Sea
General Partner GP LLC, unless, in the case of K-Sea General Partner GP LLC,
K-Sea General Partner GP LLC is replaced by a person reasonably acceptable to
the Lenders; or (f) K-Sea shall cease to own, directly or indirectly, all
of the equity interests of the Borrower. For purposes of this definition, “Continuing
Directors” means any member of the board of directors of
K-Sea General Partner GP LLC who (i) is a member of such board of
directors as of the Amendment No. 2 Effective Date or (ii) was
nominated for election or elected to such board of directors with the approval
of a majority of the Continuing Directors who were members of such board at the
time of such nomination or election.


 


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


 


“Maintenance CAPEX” means all
Capital Expenditures made for the purpose of maintaining the operating capacity
of all vessels owned by K-Sea and its consolidated Affiliates during the twelve
(12) calendar months immediately preceding any date of determination thereof.


 


(c)             No Disposition of Assets. Section 7.07
to the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:


 


Section 7.07          No Disposition of Assets.


 


Without the prior written
consent of Lenders (which shall not be unreasonably withheld), Borrower shall
not, and shall not permit any Subsidiary Guarantor to, directly or indirectly
sell, lease (other than a charter of a Pool Vessel permitted under the
Mortgage), transfer, assign, abandon, exchange or otherwise relinquish
possession or dispose of any part of the Collateral or any material portion of
its other assets (including, without limitation, any of the Capital Stock of
any of the Subsidiary Guarantors, but excluding (i) Collateral or other
assets that are obsolete or worn out, or


 


2

















 


equipment disposed of, if worn out, and replaced
with equipment of the same or better quality and value, in the ordinary course
of business, (ii) sales, leases, transfers, assignments, abandonments,
exchanges, relinquishments of possession or dispossessions of Collateral or
other assets having an aggregate value not to exceed $1,000,000 during the term
hereof), (iii) the Phase Two Transactions and (iv) after the
consummation of the Phase Two Transactions, in connection with the dissolution
by Borrower of Diving, Interisland, Tow Boat and Marine Logistics, Inc.
(as each such Subsidiary shall have been converted to a limited liability
company)).


 


(d)             Capital Expenditures. Section 7.17
to the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:


 


Section 7.17          Capital Expenditures.


 


Borrower shall not make or
become obligated to make, and shall not permit any of its Subsidiaries to make
or become obligated to make, Capital Expenditures in respect of (i) the
fiscal year ending June 30, 2008 in excess of $130,000,000 in the
aggregate and (ii) the fiscal year ending June 30, 2009 and any
subsequent fiscal year in excess of $100,000,000.


 


(e)             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 Borrower, each Guarantor and the Required
Lenders either (i) a counterpart of this Amendment signed on behalf of
such party or (ii) 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 K-Sea and its
consolidated Affiliates taken as a whole and its Subsidiaries has occurred
since June 30, 2007.


 


(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.


 


3

















 


(e)           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.


 


(f)            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. 2 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 after
giving effect to this Amendment.


 


(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 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


 


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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.]


 


5

















 


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., as Borrower 

  
	
   

  	
   

  
	
   

  	
  By: K-Sea OLP GP, LLC, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John J. Nicola

  
	
   

  	
  Name: John J. Nicola

  
	
   

  	
  Title: Chief Financial Officer

  






 


 


K-SEA
OPERATING PARTNERSHIP AMENDMENT NO. 2 SIGNATURE PAGE


 

















 




	
   

  	
   

  	
  KEYBANK NATIONAL ASSOCIATION, for itself as Lender, and as Administrative Agent and as Collateral Trustee 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven Vitale

  
	
   

  	
   

  	
  Name: Steven Vitale

  
	
   

  	
   

  	
  Title: Director

  






 


 


K-SEA
OPERATING PARTNERSHIP AMENDMENT NO. 2 SIGNATURE PAGE


 














 


	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION, as
  Co-Syndication Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert W. Hart

  
	
   

  	
  Name: Robert W. Hart

  
	
   

  	
  Title: Senior Vice President

  



 


 


K-SEA
OPERATING PARTNERSHIP AMENDMENT NO. 2 SIGNATURE PAGE


 

















 


	
   

  	
  CITIBANK, N.A., as Co-Syndication Agent
  and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles J. Margiotti
  III

  
	
   

  	
  Name: Charles J. Margiotti III

  
	
   

  	
  Title: Vice President

  



 


 


K-SEA
OPERATING PARTNERSHIP AMENDMENT NO. 2 SIGNATURE PAGE


 

















 


	
   

  	
  CITIZENS BANK OF PENNSYLVANIA, as
  Co-Documentation Agent and Lender 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Devon Starks

  
	
   

  	
  Name: Devon Starks

  
	
   

  	
  Title: Senior Vice President

  



 


 


K-SEA OPERATING PARTNERSHIP
AMENDMENT NO. 2 SIGNATURE PAGE


 

















 


	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION, as Co-Documentation Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


 


K-SEA OPERATING PARTNERSHIP
AMENDMENT NO. 2 SIGNATURE PAGE


 

















 


	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


 


K-SEA OPERATING PARTNERSHIP
AMENDMENT NO. 2 SIGNATURE PAGE


 

















 


ACKNOWLEDGEMENT AND
CONSENT


 


Each of the undersigned Guarantors hereby (1) consents
to the execution and delivery by Borrower of the foregoing Amendment No. 2;
(2) agrees that the definition of “Obligations”
(and any other term referring to the indebtedness, liabilities and obligations
of Borrower to the Administrative Agent or any of the Lenders) in the Parent
Guaranty or its Subsidiary Guaranty, as the case may be, and the other Loan
Documents shall include the Indebtedness of Borrower under the foregoing
Amendment No. 2; (3) agrees that the definition of “Loan Agreement” in the Parent
Guaranty or its Subsidiary Guaranty, as the case may be, and the other Loan
Documents to which it is a party is hereby amended to mean the Loan Agreement
as amended by the foregoing Amendment No. 2; (4) reaffirms its
continuing liability under the Parent Guaranty or its Subsidiary Guaranty, as
the case may be (as modified hereby); (5) reaffirms all of its agreements
and obligations under the Loan Documents to which it is a party; (6) reaffirms
that all Obligations of Borrower under or in connection with the Loan Agreement
as amended by the foregoing Amendment No. 2 are “Obligations”
as that term is defined in the Parent Guaranty or its Subsidiary Guaranty, as
the case may be; (7) reaffirms that all such Obligations continue to be
secured by the Loan Documents to which it is a party, which remain in full
force and effect and are hereby ratified and confirmed; and (8) confirms
and agrees that it is a Guarantor and that the Parent Guaranty or its
Subsidiary Guaranty, as the case may be, and the other Loan Documents to which
it is a party are, and shall continue to be, in full force and effect in
accordance with their respective terms.


 




	
   

  	
  K-SEA TRANSPORTATION PARTNERS L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  K-Sea General Partner L.P., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  K-Sea General Partner GP LLC, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ John J. Nicola

  
	
   

  	
   

  	
   

  	
  Name: John J. Nicola

  
	
   

  	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  K-SEA TRANSPORTATION INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John J. Nicola

  
	
   

  	
  Name: John J. Nicola

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  K-SEA TRANSPORTATION LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John J. Nicola

  
	
   

  	
  Name: John J. Nicola

  
	
   

  	
  Title: Chief Financial
  Officer

  






 

















 




	
   

  	
  SMITH MARITIME LLC 

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John J. Nicola

  
	
   

  	
  Name: John J. Nicola

  
	
   

  	
  Title: Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  K-SEA HAWAII INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John J. Nicola

  
	
   

  	
  Name: John J. Nicola

  
	
   

  	
  Title: Chief Financial
  Officer

  






 


 


K-Sea
Amendment No. 2 Acknowledgement and Consent Signature Page