WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.2
WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and
entered into as of November 14, 2007 (the “Effective Date”) among SUPERIOR OFFSHORE
INTERNATIONAL, INC., a Delaware corporation as successor by merger to Superior Offshore
International, L.L.C. (“Borrower”) and JPMORGAN CHASE BANK, N.A., for itself, as
Lender and as Administrative Agent for the Lenders (in such capacity, the “Agent”).
WHEREAS, Borrower, Agent and Lenders are parties to that certain Credit Agreement, dated as of
February 27, 2007, as amended by that certain First Amendment to Credit Agreement, dated June 18,
2007 (“First Amendment”), as further amended by that certain Second Amendment to Credit
Agreement dated as of August 14, 2007 (the “Second Amendment”), as further amended by that
certain Third Amendment to Credit Agreement dated as of August 24, 2007 (the “Third
Amendment”) (as further amended, restated or modified from time to time, the “Credit
Agreement”);
WHEREAS, Borrower entered into a Merger Agreement, dated as of October 18, 2007, among
Superior Offshore International, Inc., OFI Acquisition LLC, Ocean Flow International, L.L.C., a
Texas limited liability company (“New Subsidiary”) and Xxxx Xxxxxx (the true and correct
copy of such merger agreement is attached hereto as Exhibit A, the “Merger Agreement”),
whereby Borrower has agreed to acquire New Subsidiary through a merger where the New Subsidiary
will be the surviving merger party (the “Oceanflow Acquisition”) pursuant to the Merger
Agreement and upon effectiveness thereof New Subsidiary shall promptly enter into a Joinder
Agreement among Agent, Borrower and New Subsidiary whereby New Subsidiary will join the Credit
Agreement and the other Loan Documents as a guarantor, grantor and obligor (as applicable) as set
forth therein;
WHEREAS, Borrower has delivered a compliance certificate of its financial officer pursuant to
Section 5.01(d) of the Credit Agreement certifying that certain Defaults have occurred (the
“Certificate of Default”) as of the fiscal quarter ending September 2007, as more
specifically set forth therein (such defaults, together with any defaults under Article VII(g) as a
result of defaults existing under the Term Loan Agreement to the extent waived on or before the
date hereof, the “Existing Defaults”) and requested that the Agent and Lenders consent
pursuant to Section 9.02 of the Credit Agreement to a waiver thereof. Specifically, the Borrower
has requested that the Lender consent to waive compliance with (A) Section 6.16 of the Credit
Agreement, which requires that Borrower not have expenditures in excess of a maximum amount each
fiscal year and (B) Section 6.17 of the Credit Agreement, which requires that Borrower maintain a
certain minimum Fixed Charge Coverage Ratio and a certain maximum Consolidated Leverage Ratio as of
such date;
WHEREAS, Borrower, Agent and Lenders desire to amend the Credit Agreement to allow and provide
for such matters contained herein, all as hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
Definitions
Section 1.01 Definitions. Capitalized terms used in this Amendment, to the extent not
otherwise defined herein, shall have the same meaning as in the Credit Agreement, as amended
hereby.
ARTICLE II
Amendments
Amendments
Section 2.01 Amendment to Article V. Effective as of the Effective Date, Article V is
hereby amended by adding a new section at the end thereof by adding the following covenant:
“Landlord Waiver. Upon the consummation of transactions contemplated
in that certain Merger Agreement (the “Oceanflow Merger Agreement”), dated
as of October 18, 2007, among Superior Offshore International, Inc., OFI Acquisition
LLC, Ocean Flow International, L.L.C. and Xxxx Xxxxxx, (a) Borrower shall use its
commercially reasonable efforts to provide Agent a duly, validly and fully executed
landlord waiver, in favor of Agent and Lenders, for each of the real estate
leaseholds it acquires as a consequence of the Oceanflow Merger Agreement (such
leaseholds, the “Oceanflow Leaseholds”) and (b) Agent may exercise its right
to impose a reserve on the Borrowing Base equal to three (3) months rent for the
Oceanflow Leaseholds not subject to duly, validly and fully executed landlord
waivers in favor of Agent and Lenders; provided, that, the parties
hereto hereby agree that such reserves for each Oceanflow Leasehold shall be removed
upon delivery to Agent of a duly, validly and fully executed landlord waiver in
favor of Agent and Lenders for such Oceanflow Leasehold.”
Section 2.02 Amendment to Section 6.16. Effective as of the Effective Date,
Section 6.16 of the Credit Agreement is hereby amended and restated in its entirety as
follows:
“‘SECTION 6.16. Capital Expenditures.’ No Loan Party will, nor will it
permit any domestic Subsidiary to, commencing with fiscal year 2007 and for each
fiscal year thereafter, make or commit to make any Capital Expenditure, except
Capital Expenditures of the Borrower and its domestic Subsidiaries in the ordinary
course of business not exceeding in the aggregate $75,000,000 for the fiscal year
2007 and $40,000,000 each fiscal year thereafter, in each case, exclusive of (i) any
Net Proceeds of any Asset Sale or Recovery Event applied in accordance with Section
2.11(c) to acquire, replace, or repair assets and (ii) all Capital Expenditures
attributable to the Superior Achiever and related equipment to the extent purchased
or refinanced with proceeds of Indebtedness permitted under Section 6.01(l) hereof
or under the Term Loan Agreement.”
Section 2.03 Amendment to Section 6.17. Effective as of the Effective Date,
Section 6.17 of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
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“(a) “Fixed Charge Coverage Ratio. The Borrower will not permit the
Fixed Charge Coverage Ratio, determined for any period of four consecutive
fiscal quarters to be less than 1.2 to 1.0 as of the end of each fiscal
quarter; provided, however, notwithstanding anything to the
contrary in the foregoing, that the Fixed Charge Coverage Ratio for the
fiscal quarter ending on (i) December 2007, the calculation of such Fixed
Charge Coverage Ratio shall be for the fiscal quarter beginning October 1,
2007, (ii) March 2008, the calculation of such Fixed Charge Coverage Ratio
shall be for the two (2) immediately preceding fiscal quarters ending as of
such date and (iii) June 2008, the calculation of such Fixed Charge Coverage
Ratio shall be for the three (3) immediately preceding fiscal quarters
ending as of such date.
(b) Consolidated Leverage Ratio. The Borrower will not permit
the Consolidated Leverage Ratio as of the last day of any period of four (4)
consecutive fiscal quarters to exceed 2.75 to 1.0; provided,
however, notwithstanding anything to the contrary in the foregoing,
the Borrower will not permit the Consolidated Leverage Ratio as of the last
day of the period of four (4) consecutive fiscal quarters ending on March
31, 2008 to exceed 3.0 to 1.0.”
Section 2.04 Amendment to Article VII. Effective as of the Effective Date, Article VII is
hereby amended by adding a new subsection at the end thereof in alphabetical order that reads as
follows:
“(r) on or before December 31, 2007, the Borrower shall fail to
have a Consolidated Leverage Ratio Covenant in the Term Loan
Agreement, as may be amended from time to time (or any replacement
agreement thereof) with levels for corresponding periods that are no
more onerous than those set forth herein.”
ARTICLE III
Conditions Precedent
Conditions Precedent
Section 3.01 Conditions. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent (such date on which such conditions are
satisfied being the “Effective Date”), unless specifically waived by Agent and Lenders.
(a) Agent shall have received all of the following documents, each
document (unless otherwise indicated) being dated the date hereof, duly
authorized, executed and delivered by the parties thereto, and in form and
substance reasonably satisfactory to Agent and Lenders:
(i) this Amendment; and
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(ii) such additional documents, instruments and
information as Agent or Lenders or their legal counsel may
reasonably request.
(b) Agent shall have received in a fee for the benefit of the Lenders
in the amount of $100,000.00 which shall be fully earned, nonrefundable and
payable on or prior to the Effective Date;
(c) The representations and warranties contained in the Credit
Agreement and/or in the other Loan Documents in each case, as Modified
hereby (herein defined) and as contained herein shall be true and correct as
of the Effective Date as if made on such date, except to the extent such
representations and warranties (i) relate to any matter with respect to
which written notice has been given to Agent and/or Lenders by Loan Parties
pursuant to and in accordance with the Credit Agreement or (ii) which by
their terms expressly speak as of an earlier date;
(d) After giving effect to the waiver contained herein, no Default or
Event of Default shall have occurred and be continuing; and
(e) All corporate proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and other
legal matters incident thereto shall be reasonably satisfactory to Agent,
Lenders and their legal counsel.
Section 3.02 The term “Modified” as used herein shall mean and include expressly
amended or modified, as the case may be, and shall include correlative meanings thereof; provided
however, for the avoidance of doubt, the term “Modified” shall not include any waivers that are
subsequently terminated and of no longer of any force and effect pursuant to the terms hereof.
ARTICLE IV
Ratifications, Representations, Warranties and Limited Waiver
Ratifications, Representations, Warranties and Limited Waiver
Section 4.01 Ratifications. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement
and except as Modified and superseded by this Amendment, the terms and provisions of the Credit
Agreement are each ratified and confirmed and shall continue in full force and effect.
Additionally, Borrower hereby ratifies and confirms its agreements under the Credit Agreement and
the other Loan Documents, in each case as Modified hereby, as of each of the date hereof, the
Effective Date. Borrower hereby agrees that all Liens and security interests securing payment of
the Obligations are hereby collectively renewed, ratified and brought forward as security for the
payment and performance of the Obligations, as the same may have been Modified by this Amendment
and the documents executed in connection herewith, in each case as of each of the Effective Date.
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Section 4.02 Representations and Warranties. Borrower hereby represents and warrants
to Agent and Lenders as of the date hereof and the Effective Date that (i) the execution, delivery
and performance of this Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on the part of the
Borrower and will not violate the certificate/articles of incorporation or other analogous
formation documents of the Borrower (ii) the representations and warranties contained in the Credit
Agreement, and any other Loan Document, in each case as Modified hereby, are true and correct on
and as of the date hereof and as of the Effective Date as though made on and as of such date,
except to the extent any such representations and warranties (A) relate to any matter with respect
to which written notice has been provided by the Borrower pursuant to and in accordance with the
Credit Agreement or (B) which by their terms expressly speak as of an earlier date, (iii) no
Default or Event of Default has occurred and is continuing under the Credit Agreement or the Loan
Documents, each as Modified hereby, (iv) Borrower has not amended its certificate/articles of
incorporation or other analogous formation document or bylaws or other analogous charter or
organizational documents after April 18, 2007.
Section 4.03 Limited Waiver and Consent. Subject to the satisfaction of the
conditions precedent contained herein, as of the Effective Date Agent and Lenders hereby agree (a)
not to declare or enforce an Event of Default under the Credit Agreement as a consequence of the
Existing Defaults, and waive the right to do so and also waive the occurrence thereof as a
consequence of the Existing Defaults for all purposes (including, without limitation, the
imposition of a default rate of interest), in each case, with respect to the facts outlined in the
Certificate of Default and (b) consents to the Oceanflow Acquisition in accordance with the Merger
Agreement (subject to the repricing of the exchange ratio for stock thereunder). Except as set
forth in the preceding sentence in this Section, nothing contained herein shall be construed as a
waiver by Agent or Borrower of any covenant or provision of the Credit Agreement, Security
Agreement, the other Loan Documents, or of any other contract or instrument between Borrower and
Agent, and the failure of Agent at any time or times hereafter to require strict performance by the
Borrower of any provision thereof shall not waive, affect or diminish any right Agent has to
thereafter demand strict compliance therewith. Agent hereby reserves all rights granted under the
Credit Agreement, Security Agreement, other Loan Documents, and any other contract or instrument
between the Borrower and Agent.
ARTICLE V
Miscellaneous
Miscellaneous
Section 5.01 Survival of Representations and Warranties. All representations and
warranties made in the Credit Agreement or any other document or documents relating thereto,
including, without limitation, any Loan Document furnished in connection with this Amendment, shall
survive the execution and delivery of this Amendment and the other Loan Documents, in each case, as
Modified hereby, and no investigation by Agent or any Lender or any closing shall affect the
representations and warranties or the right of Agent or Lenders to rely upon them.
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Section 5.02 Reference to Credit Agreement; Obligations. Each of the Loan Documents,
including the Credit Agreement and any and all other agreements, documents or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the
Credit Agreement, are hereby amended so that any reference in such Loan Documents to the Credit
Agreement or any other Loan Documents shall mean a reference to the Credit Agreement or such other
Loan Document, in each case as Modified hereby. Borrower acknowledges and agrees that its
obligations under this Amendment and the Credit Agreement, as amended hereby, constitute
“Obligations” as defined in the Credit Agreement and as used in the Loan Documents.
Section 5.03 Expenses. As provided in the Credit Agreement, Borrower agrees to pay on
demand all reasonable costs and expenses incurred by Agent in connection with the preparation,
negotiation and execution of this Amendment and the other Loan Documents executed pursuant hereto
and any and all amendments, modifications, and supplements thereto, including, without limitation,
the reasonable costs and fees of Agent’s legal counsel, and all reasonable costs and expenses
incurred by Agent in connection with the enforcement or preservation of any rights under the Credit
Agreement or any other Loan Document, in each case as Modified hereby.
Section 5.04 Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder
of this Amendment and the effect thereof shall be confined to the provision so held to be invalid
or unenforceable. Furthermore, in lieu of each such invalid or unenforceable provision there shall
be added automatically as a part of this Amendment a valid and enforceable provision that comes
closest to expressing the intention of such invalid unenforceable provision.
Section 5.05 APPLICABLE LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
THIS AMENDMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF TEXAS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
Section 5.06 Successors and Assigns. This Amendment is binding upon and shall inure
to the benefit of Agent, Lenders, the Borrower and their respective successors and assigns, except
that the Borrower may not assign or transfer any of its rights or obligations hereunder without the
prior written consent of each Lender.
Section 5.07 Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original, but all of which
when taken together shall constitute one and the same instrument.
Section 5.08 Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of this Amendment.
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Section 5.09 Release. BORROWER ACKNOWLEDGES THAT, BASED ON THE FACTS AND
CIRCUMSTANCES KNOWN TO BORROWER AS OF THE DATE HEREOF, IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET,
CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER RESULTING FROM THE CREDIT
AGREEMENT, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE
ALL OR ANY PART OF ITS LIABILITY TO REPAY THE “OBLIGATIONS” OR TO SEEK AFFIRMATIVE RELIEF OR
DAMAGES OF ANY KIND OR NATURE FROM AGENT OR LENDERS. BORROWER HEREBY VOLUNTARILY AND KNOWINGLY
RELEASE AND FOREVER DISCHARGE AGENT AND LENDER, THEIR RESPECTIVE PREDECESSORS, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF
ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, IN EACH CASE, TO THE EXTENT (A)
KNOWN, ANTICIPATED OR SUSPECTED BY BORROWER AS OF THE DATE HEREOF AND (B) RESULTING FROM THE
CREDIT AGREEMENT, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, WHETHER FIXED, CONTINGENT, OR
CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
AMENDMENT IS EXECUTED, WHICH BORROWER MAY NOW HAVE AGAINST AGENT AND ANY LENDER, THEIR
PREDECESSORS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, IF ANY, AND
IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR
REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY LOANS, INCLUDING, WITHOUT LIMITATION, ANY
CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE
HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT
OR OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.
Section 5.10 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow.]
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IN WITNESS WHEREOF, this Amendment has been executed on the Effective Date.
| BORROWER: | ||||
| SUPERIOR OFFSHORE INTERNATIONAL, INC. | ||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Executive Vice President, Chief Financial and Administrative Officer | |||
| AGENT: | ||||
| JPMORGAN CHASE BANK, N.A. | ||||
| Individually, as Administrative Agent and Lender | ||||
| By: | /s/ Xxxxxxx Xxxx | |||
| Name: | Xxxxxxx Xxxx | |||
| Title: | Vice President | |||
| Acknowledged by: | JPMORGAN CHASE BANK, N.A. (Global Trade Services) | |||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Vice President | |||
EXHIBIT A
TO THE
FOURTH AMENDMENT TO CREDIT AGREEMENT
TO THE
FOURTH AMENDMENT TO CREDIT AGREEMENT
