EXHIBIT 10.3
THIRD AMENDMENT TO CREDIT
AGREEMENT
THIS THIRD AMENDMENT TO CREDIT
AGREEMENT (this “ Amendment ”) is entered
into as of May 29, 2009, between DEEP DOWN, INC., a Nevada
corporation (“ Borrower ”), and WHITNEY
NATIONAL BANK, a national banking association (the “
Lender ”). Capitalized terms used
but not defined in this Amendment have the meanings given them in
the Credit Agreement (defined below).
RECITALS
A. Borrower
and Lender entered into that certain Credit Agreement dated as of
November 11, 2008 (as amended by that certain First Amendment
to Credit Agreement dated December 18, 2008, that certain Second
Amendment to Credit Agreement dated February 13, 2009, and as
further amended, restated, or supplemented, the “
Credit Agreement ”).
B. Borrower
and Lender have agreed to amend the Credit Agreement, subject to
the terms and conditions of this Amendment.
NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are
acknowledged, the undersigned hereby agree as follows:
1.
Amendments to Credit Agreement .
(a) The Recitals
to the Credit Agreement are deleted and are replaced with the
following:
A. Borrower has
requested that Lender extend credit to it in the form of a
revolving credit facility in the maximum principal amount of up to
$2,000,000 to be used for working capital and general corporate
purposes.
B. Borrower has
requested that Lender extend credit in the form of a single advance
term loan to purchase a new Super Mohawk 21 remote operated
vehicle.
C. Borrower has
requested that Lender extend credit in the form of a single advance
term loan in the principal amount of up to $2,100,000 to be used to
acquire the Properties.
D. Lender has
agreed to extend to Borrower the requested credit on the terms and
conditions set out in this Agreement:
(b)
Section 1.1 of the Credit Agreement is amended to
delete the defined terms “ Notes ” and
“ Term Facility ” in their entirety and
replace them with the following:
“ Notes means the Term Note,
the Revolving Note, and the RE Term Note.”
“ Term Facility is defined
in Section 2.1(a) .”
(c)
Section 1.1 of the Credit Agreement is further
amended to add the following new defined terms in the appropriate
alphabetical order:
“ RE Term Facility is
defined in Section 2.1(b) .
RE Term Loan Closing Date
means May 29, 2009.
RE Term
Loan Committed Amount means $2,100,000.
RE Term Loan Maturity Date
means the earlier of (a) May
29, 2014, and (b) the acceleration of maturity of RE Term Loan in
accordance with Section 12 of this
Agreement.
RE Term Note means a promissory note substantially in the
form of Exhibit A-3 , executed
by Borrower and made payable to Lender in the original principal
amount of the RE Term Loan Committed Amount, together with all
renewals, extensions, modifications, amendments, supplements,
restatements and replacements of, or substitutions for, each such
promissory note.
RE Term Principal Amount
means, when determined, the
outstanding principal balance of the RE Term
Note.”
(d)
Section 2.1 of the Credit Agreement is deleted in its
entirety and replaced with the following:
“2.1
Term Facility and RE Term Facility .
(a) Subject
to the terms and conditions of this Agreement, Lender agrees to
make a term loan to Borrower in an amount equal to the Term
Committed Amount in a single Loan on the Term Loan Closing Date
which, when paid or prepaid, may not be reborrowed (the “
Term Facility ”).
(b) Subject
to the terms and conditions of this Agreement, Lender agrees to
make a term loan to Borrower in an amount equal to the RE Term Loan
Committed Amount in a single Loan on the RE Term Loan Closing Date
which, when paid or prepaid, may not be reborrowed (“
RE Term Facility ”).”
(e)
Section 2.3(a) of the Credit Agreement is amended to
delete the first sentence thereof in its entirety and to replace it
with the following:
“Subject to compliance with
Section 5 , Borrower may request a Loan under
the Revolving Credit Facility, the Term Facility, or the RE Term
Facility by submitting a Loan Request to Lender.”
(f)
Section 2.5(a) of the Credit Agreement is
deleted in its entirety and replaced with the following:
“(a) Subject
to Section 2.5(b) , Borrower may voluntarily pay or
prepay all or any part of the Revolving Principal Amount, the Term
Principal Amount, or the RE Term Principal Amount, without premium
or penalty, at any time, and while no Cash Management Agreement is
in place, subject to the following conditions:
(i) Lender must
receive Borrower’s written or telephonic prepayment notice by
10:00 a.m. on the prepayment date;
(ii) Borrower’s
prepayment notice shall (A) specify the prepayment date, (B)
specify the amount of the Loan to be prepaid, and (C) indicate
whether the RE Term Principal Amount, the Revolving Principal
Amount, or the Term Principal Amount is to be repaid;
(iii) each partial
prepayment must be in a minimum amount of not less than
(A) $100,000 or a greater integral multiple of
$10,000 or (B) if less than the minimum amount, the
outstanding balance of the RE Term Principal Amount, the Revolving
Principal Amount, or the Term Principal Amount, as
applicable;
(iv) all accrued and
unpaid interest on the portion of the RE Term Principal Amount, the
Revolving Principal Amount, or the Term Principal Amount prepaid
must also be paid in full on the prepayment date;
(v) each partial
prepayment of the RE Term Facility shall be applied to the
scheduled principal payments in the inverse order of their
maturity; and
(vi) each partial
prepayment of the Term Facility shall be applied to the scheduled
principal payments in the inverse order of their
maturity.”
(g)
Section 2.5(e) of the Credit Agreement is deleted in
its entirety and replaced with the following:
“(e) On
the date such amounts are received by, or for the account of,
Borrower, the following amounts shall be paid to Lender in the form
received with any endorsement or assignment and shall be applied
first, to the RE Term Principal Amount, and second, to the Term
Principal Amount, in each case in accordance with this
Section 2.5 : (i) 100% of the
Net Proceeds from the issuance of any Subordinated Debt; and (ii)
100% of the Net Proceeds from the Disposition of any asset not
permitted by Section 9.9
. The non-cash portion of all Net Proceeds Lender is
entitled to receive under this Section 2.5 ,
shall be pledged to Lender concurrently with the applicable
Disposition.”
(h)
Section 2.5(f) of the Credit Agreement is deleted in
its entirety and replaced with the following:
“(f) Unless
otherwise specified in this Agreement, prepayments under this
Section 2.5 shall be applied (i) first, to the
prepayment of the outstanding RE Term Principal Amount, and shall
be applied to the scheduled principal payments in the inverse order
of their maturity until the RE Term Principal Amount is paid in
full, and (ii) second, to the prepayment of the outstanding Term
Principal Amount, and shall be applied to the scheduled principal
payments in the inverse order of their maturity until the Term
Principal Amount is paid in full.”
(i)
The Credit Agreement is further amended to add the following
new Section 2.5(h) in the appropriate alphanumerical
order:
“(h) If
the RE Term Principal Amount ever exceeds the RE Term Loan
Committed Amount, then Borrower shall promptly prepay the RE Term
Principal Amount in an amount equal to the excess, together with
all accrued and unpaid interest on the principal amount
prepaid.”
(j)
Section 3.1(a) of the Credit Agreement is
deleted in its entirety and replaced with the following:
“(a) The
Loan under the Term Facility shall be evidenced by the Term
Note. The Loans under the Revolving Credit Facility
shall be evidenced by the Revolving Note. The Loans
under the RE Term Facility shall be evidenced by the RE Term
Note.”
(k)
Section 3.2 of the Credit Agreement is deleted
in its entirety and replaced with the following:
“3.2
Term Facility and RE Term Facility .
(a) Payments of
principal and accrued and unpaid interest on the Loan made under
the Term Facility in the amount of $35,246.35 are due and payable
monthly in arrears beginning on the first day of February 1, 2009,
and continuing on the first day of each month
thereafter.
(b) All
outstanding principal and all accrued and unpaid interest in
respect of the Term Facility is due and payable on the Term
Maturity Date.
(c) Payments of
principal and accrued and unpaid interest on the RE Term Facility
in the amount of $18,293.25 are due and payable monthly in arrears
beginning on the first day of June 1, 2009, and continuing on the
first day of each month thereafter.
(d) All
outstanding principal and all accrued and unpaid interest in
respect of the RE Term Facility is due and payable on the RE Term
Loan Maturity Date.”
(l)
Section 3.5 of the Credit Agreement is amended to
renumber subsection (c) thereof as a new subsection
(d) , and to add the following new subsection (c) in the
appropriate alphabetical order:
“(c) The
RE Term Principal Amount shall accrue interest at an annual rate
equal to the lesser of (i) 6.50% and (ii) the Maximum
Rate.”
(m)
Section 7.13 of the Credit Agreement is amended to
add the following new subsection (d) in the appropriate
alphabetical order:
“(d) Borrower
will use th
