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 Karl Winter (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
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
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 Karl Winter, (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:
2
“(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
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 ”),
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