Document:

Exhibit 10.2

 

FIRST AMENDMENT TO

THIRD
AMENDED AND RESTATED

UNDERWRITING AND CONTINUING INDEMNITY AGREEMENT

 

THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED
UNDERWRITING AND CONTINUING INDEMNITY AGREEMENT, dated as of September 30, 2004
(the “Amendment”), is entered into by and among (i) GREAT LAKES DREDGE
& DOCK CORPORATION, a Delaware corporation (“HOLDINGS”), and the
SUBSIDIARIES of HOLDINGS signatories hereto (collectively with HOLDINGS, the “INDEMNITORS”),
(ii) TRAVELERS CASUALTY AND SURETY COMPANY, a Connecticut corporation (as
assignee of Reliance Insurance Company, a Pennsylvania corporation, United
Pacific Insurance Company, a Pennsylvania corporation, Reliance National
Insurance Company, a Delaware corporation, and Reliance Surety Company, a Delaware
corporation) (“TCASC”), and (iii) TRAVELERS CASUALTY AND SURETY COMPANY
OF AMERICA, a Connecticut corporation (“TRAVELERS AMERICA” and together
with TCASC, “TRAVELERS”).

 

W I T N E S S E T H:

 

WHEREAS, the INDEMNITORS and TRAVELERS are parties
to a certain Third Amended and Restated Underwriting and Continuing Indemnity
Agreement dated as of December 22, 2003, as amended, supplemented or otherwise
modified from time to time (as amended, supplemented and modified, the “Agreement”);

 

WHEREAS, the INDEMNITORS have requested TRAVELERS
to amend the Agreement and the INTERCREDITOR AGREEMENT;

 

WHEREAS, GLDDC intends to merge (the “GLDDC
Merger”) with and into Great Lakes Dredge & Dock Company, LLC, a
Delaware limited liability company and a wholly-owned subsidiary of HOLDINGS (“Great
Lakes LLC”), with Great Lakes LLC being the entity surviving the GLDDC
Merger;

 

WHEREAS, the GLDDC Merger is permitted under the
Agreement as long as (a) HOLDINGS will be in compliance with Sections 6.19
and 6.20 of the Agreement after giving effect to the GLDDC Merger and
(b) each party to the GLDDC Merger is an INDEMNITOR; and

 

WHEREAS, TRAVELERS is willing to amend the
Agreement and the INTERCREDITOR AGREEMENT as provided herein and, among other
things, to confirm the validity of all outstanding BONDS upon the consummation
of the GLDDC Merger, subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises,
and intending to be legally bound hereby, the INDEMNITORS and TRAVELERS hereby
agree as follows:

 

 

SECTION 1. DEFINED
TERMS.

 

Capitalized terms used herein shall, unless
otherwise defined herein, have the meanings provided in the Agreement.

 

SECTION 2. AMENDMENTS
TO AGREEMENT.

 

Subject to satisfaction of the conditions set
forth in Section 4 of this Amendment, the Agreement is hereby amended as
follows:

 

(a)           Section
1.1 of the Agreement is hereby amended to delete the definition of “GLDDC”
in its entirety and to replace such definition with the following:

 

“GLDDC” means Great Lakes Dredge & Dock
Company, a New Jersey corporation, and, upon the effectiveness of the GLDDC
MERGER, thereafter means Great Lakes Dredge & Dock Company, LLC, a Delaware
limited liability company.”

 

(b)           Section
1.1 of the Agreement is hereby further amended by inserting the following
new definitions in the appropriate alphabetical order:

 

“GLDDC MERGER” means the merger of Great Lakes
Dredge & Dock Company, a New Jersey corporation, with and into Great Lakes
Dredge & Dock Company, LLC, a Delaware limited liability company and the
survivor of such merger.

 

“NET WORTH” means, at any date of determination,
total stockholder’s equity as set forth on the most recently available annual
consolidated balance sheet of HOLDINGS and its consolidated SUBSIDIARIES
(excluding from the determination thereof the effects of any non-cash goodwill
or other intangible asset impairment charges resulting from the application of
SFAS No. 142).

 

(c)           Section
6.19 of the Agreement is hereby amended by deleting the reference therein
to “$90,000,000” and in its place substituting “$82,500,000”.

 

SECTION 3.  ACKNOWLEDGEMENT WITH RESPECT TO THE GLDDC
MERGER.

 

TRAVELERS hereby acknowledges and agrees, for the
benefit of GLDDC, Great Lakes LLC, their respective AFFILIATES and each
OBLIGEE, that, upon effectiveness of the GLDDC Merger, (a) each outstanding
BOND shall continue to be valid, enforceable and in full force and effect and
(b) any reference in any BOND to Great Lakes Dredge & Dock Company shall be
deemed to be a reference to Great Lakes Dredge & Dock Company, LLC (as
successor by merger to Great Lakes Dredge & Dock Company).

 

SECTION 4. CONDITIONS
PRECEDENT.

 

This Amendment
shall be effective upon receipt by TRAVELERS of the documents listed below:

 

2

 

(a)           this Amendment duly executed by all
parties hereto;

 

(b)           a supplement to the Second Preferred
Fleet Mortgage duly executed by GLDDC in favor of TRAVELERS substantially in
the form of Exhibit A attached hereto; and

 

(c)           the First Amendment to Intercreditor
Agreement duly executed by all parties thereto other than TRAVELERS
substantially in the form of Exhibit B attached hereto.

 

SECTION 5. REPRESENTATIONS
AND WARRANTIES.

 

To induce
TRAVELERS to enter into this Amendment, the INDEMNITORS represent and warrant
to TRAVELERS as of the date hereof and after giving effect to this Amendment
that:

 

(a)           The
representations and warranties contained in Article V of the Agreement,
in Section 4 of each SECURITY AGREEMENT (A/R), in Section 4 of
each SECURITY AGREEMENT (EQUIPMENT), in Section 4 of the PLEDGE
AGREEMENT and in Article I of each of the VESSEL MORTGAGES, are correct in all
material respects on and as of the date hereof as though made on and as of such
date except to the extent stated to relate to an earlier date, in which case
such representation and warranty shall be correct as of such earlier date; and

 

(b)           No
EVENT OF DEFAULT has occurred and is continuing.

 

SECTION 6. GENERAL.

 

(a)           As
hereby modified, the Agreement shall remain in full force and effect and is
hereby ratified, approved and confirmed in all respects.

 

(b)           This
Amendment shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.

 

(c)           This
Amendment may be executed in any number of counterparts and by the different
parties on separate counterparts, and each such counterpart shall be deemed to
be an original, but all such counterparts shall together constitute but one and
the same Amendment.

 

(d)           HOLDINGS
acknowledges and agrees that any expense incurred by TRAVELERS in connection
herewith and any other documents referenced herein (if any) and the
transactions contemplated hereby, including reasonable legal fees and out-of-
pocket costs and expenses of outside counsel, shall be fully paid or reimbursed
by HOLDINGS.

 

[the remainder of this page intentionally
left blank]

 

3

 

IN WITNESS WHEREOF, this Amendment is executed by
the parties on the day and date first set forth above.

 

	
   

  	
  GREAT LAKES DREDGE & DOCK

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Deborah A. Wensel

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Chief Financial

  Officer and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GREAT
  LAKES DREDGE & DOCK COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Deborah A. Wensel

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Chief Financial

  Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  LYDON DREDGING & CONSTRUCTION

  COMPANY, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Deborah A. Wensel

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  FIFTY-THREE
  DREDGING CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William H. Hanson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William
  H. Hanson

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  DAWSON
  MARINE SERVICES COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Deborah A. Wensel

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Chief Financial

  Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  GREAT
  LAKES CARIBBEAN DREDGING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Deborah A. Wensel

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Chief Financial

  Officer and Treasurer

  
					

 

[SIGNATURE PAGE TO FIRST AMENDMENT]

 

 

	
   

  	
  NORTH
  AMERICAN SITE DEVELOPERS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Deborah A. Wensel

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  JDC SOIL MANAGEMENT & DEVELOPMENT

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Deborah A. Wensel

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief

  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  GREAT LAKES DREDGE & DOCK COMPANY,

  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Deborah A. Wensel

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Chief Financial

  Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
  TRAVELERS CASUALTY AND SURETY

  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRAVELERS CASUALTY AND SURETY

  COMPANY OF AMERICA

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

 

	
   

  	
  NORTH
  AMERICAN SITE DEVELOPERS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  JDC
  SOIL MANAGEMENT & DEVELOPMENT INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  GREAT LAKES DREDGE & DOCK COMPANY,

  LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Deborah
  A. Wensel

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Chief Financial

  Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  TRAVELERS CASUALTY AND SURETY

  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  Damewood

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael Damewood

  	
   

  
	
   

  	
   

  	
  Title:

  	
  ATTORNEY-IN-FACT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRAVELERS CASUALTY AND SURETY

  COMPANY OF AMERICA

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Damewood

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael Damewood

  	
   

  
	
   

  	
   

  	
  Title:

  	
  ATTORNEY-IN-FACTEXECUTION
COPY

 

Exhibit
10.3

 

FIRST AMENDMENT

TO CREDIT AGREEMENT AND GUARANTY

 

THIS
FIRST AMENDMENT TO CREDIT AGREEMENT AND GUARANTY (this “Agreement”),
dated as of September 30, 2004, is by and among GREAT LAKES DREDGE & DOCK
COMPANY, a New Jersey corporation (the “Borrower”), GREAT LAKES DREDGE
& DOCK CORPORATION, a Delaware corporation (the “Guarantor”), and
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (the “Lender”).

 

W I T N E S S E T H:

 

WHEREAS,
the Borrower and the Lender are parties to that certain Credit Agreement dated
as of December 17, 2003 (as amended, restated, supplemented or otherwise
modified and in effect from time to time, the “Credit Agreement”),
pursuant to which the Lender has extended the Loan to the Borrower;

 

WHEREAS,
the Guarantor has entered into that certain Guaranty Agreement dated as of
December 17, 2003 (as amended, restated, supplemented or otherwise modified and
in effect from time to time, the “Guaranty”); and

 

WHEREAS,
the Borrower and the Guarantor have requested that the Lender amend the Credit
Agreement and the Guaranty in certain respects as set forth herein, and the
Lender is agreeable to the same, subject to the terms and conditions hereof.

 

NOW,
THEREFORE, in consideration of the premises and of the mutual covenants
contained herein, and other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

1.             Defined Terms.   Terms capitalized herein and not otherwise
defined herein are used with the meanings ascribed to such terms in the Credit
Agreement.

 

2.             Amendments to
Credit Agreement.   Subject to
satisfaction of the conditions set forth in Section 4 of this Agreement,
the Credit Agreement is hereby amended as follows:

 

(a)           The definition of “EBITDA”
appearing in Section 1.1 of the Credit Agreement is hereby amended by
inserting a new clause (c) at the end of the first sentence as follows:

 

and (c) plus,
without duplication, cash dividends received by the Guarantor or any of its
Subsidiaries from Amboy Aggregates, a New Jersey joint venture, and any other
equity joint ventures.

 

(b)           The definition of “Interest
Expense” appearing in Section 1.1 of the Credit Agreement is hereby
amended by inserting the following new parenthetical clause at the end of
clause (iii) of such definition (immediately following the word “transaction”):

 

 

(excluding
any gain or loss recognized under GAAP resulting from the mark to market
valuation of any interest rate hedging transaction)

 

(c)           Section 1.1  of the Credit Agreement is hereby further
amended by inserting the following new definition in the appropriate
alphabetical order therein:

 

“Financial
Covenant Restoration Date” means the first date upon which the Lender
receives a compliance certificate pursuant to Section 5.2(a) for any
fiscal quarter ending on or after December 31, 2004 from the Guarantor
evidencing that the Guarantor’s Adjusted Consolidated EBITDA for the four (4)
consecutive fiscal quarter period most recently ended prior to such date
exceeds $50,000,000.

 

(d)           Section 5.2(r) of the Credit
Agreement is hereby amended by deleting such Section in its entirety and
substituting therefor the following:

 

(r)            Financial Covenants. The
Borrower covenants and agrees that so long as any of the Obligations (other
than contingent obligations hereunder for which no claim has been, or is
reasonably expected to be, made) remain outstanding:

 

(i)            Capital Expenditures.

 

(i)             Before the occurrence of a
Financial Covenant Restoration Date, the Guarantor and its consolidated
Subsidiaries shall not make or permit Capital Expenditures (other than
Permitted Business Acquisitions) for any Fiscal Year in an aggregate amount in
excess of the corresponding amount set forth below opposite such Fiscal Year
(with respect to any such Fiscal Year, the “Base Capital Expenditure Amount”):

 

	
  Fiscal
  Year

  	
   

  	
  Amount

  	
   

  
	
  Fiscal
  Year 2004

  	
   

  	
  $

  	
  10,500,000

  	
   

  
	
  Fiscal
  Year 2005

  	
   

  	
  $

  	
  12,500,000

  	
   

  
	
  Fiscal
  Year 2006

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  Fiscal
  Year 2007

  	
   

  	
  $

  	
  18,000,000

  	
   

  
	
  Fiscal
  Year 2008 and thereafter

  	
   

  	
  $

  	
  22,000,000

  	
   

  

 

provided, however, that the Base Capital
Expenditure Amount for any Fiscal Year after Fiscal Year 2004 may be increased
by an amount equal to the excess, if any, of (i) the Base Capital Expenditure
Amount for the immediately preceding Fiscal Year, over (ii) the actual amount
of Capital Expenditures made by the Guarantor and its Subsidiaries during such
immediately preceding Fiscal Year; and provided, further, that in
no event shall the amount of Capital Expenditures made by the Guarantor and its
consolidated Subsidiaries in any Fiscal Year exceed the corresponding amount
set forth below opposite such Fiscal Year:

 

2

 

	
  Fiscal Year

  	
   

  	
  Amount

  	
   

  
	
  Fiscal Year 2004

  	
   

  	
  $

  	
  10,500,000

  	
   

  
	
  Fiscal Year 2005

  	
   

  	
  $

  	
  13,500,000

  	
   

  
	
  Fiscal Year 2006

  	
   

  	
  $

  	
  17,000,000

  	
   

  
	
  Fiscal Year 2007

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  Fiscal Year 2008
  and thereafter

  	
   

  	
  $

  	
  24,000,000

  	
   

  

 

(ii)            From and after the occurrence of a
Financial Covenant Restoration Date, the Guarantor and its consolidated Subsidiaries
shall not make or permit Capital Expenditures (other than Permitted Business
Acquisitions) in an aggregate amount in excess of $22,000,000 during any Fiscal
Year (with respect to any such Fiscal Year, the “Alternate Base Capital
Expenditure Amount”); provided, however, that the Alternate
Base Capital Expenditure Amount for any Fiscal Year after Fiscal Year 2004 may
be increased by (A) an amount equal to the excess, if any, of (i) the Alternate
Base Capital Expenditure Amount for the immediately preceding Fiscal Year, over
(ii) the actual amount of Capital Expenditures made by the Guarantor and its
Subsidiaries during such immediately preceding Fiscal Year; plus (B) the amount
of Capital Expenditures permitted in the immediately succeeding Fiscal Year (provided
that the Alternate Base Capital Expenditure Amount for such succeeding Fiscal
Year shall be reduced by the amount of any increase pursuant to this Clause
(B); and provided, further, that in no event shall the amount of
Capital Expenditures made by the Guarantor and its consolidated Subsidiaries in
any Fiscal Year exceed $26,000,000).

 

(iii)           The Guarantor and its consolidated
Subsidiaries shall not permit Permitted Business Acquisitions except to the
extent that the aggregate consideration paid (including the assumption of Debt
and the fair market value of any non-cash consideration) to make all Permitted
Business Acquisitions consummated after the Closing Date does not exceed
$20,000,000.

 

(ii)            Maximum Total Leverage.

 

(i)             Before the occurrence of a
Financial Covenant Restoration Date, the Guarantor and its consolidated
Subsidiaries shall not permit the ratio (the “Total Leverage Ratio”) of
(i) the aggregate unpaid principal amount of Total Funded Debt as of the last
day of any Fiscal Quarter ending during the periods described below to (ii)
Adjusted Consolidated EBITDA for the four (4) consecutive Fiscal Quarter period
ending as of such date, to exceed the corresponding ratio set forth below
opposite such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  January 1, 2006
  through and including March 31, 2006

  	
   

  	
  5.75 to 1.00

  	
   

  
	
  April 1, 2006
  through and including September 30, 2006

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  October 1, 2006
  through and including March 31, 2007

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  April 1, 2007
  through and including September 30, 2007

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  October 1, 2007
  through and including December 31, 2007

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  January 1, 2008
  through and including December 31, 2008

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  January 1, 2009
  through and including December 31, 2009

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  January 1, 2010
  and thereafter

  	
   

  	
  3.50 to 1.00

  	
   

  

 

3

 

(ii)            From and after the occurrence of a
Financial Covenant Restoration Date, the Guarantor and its consolidated
Subsidiaries shall not permit the Total Leverage Ratio for the four (4) consecutive
Fiscal Quarter period ending during the periods described below, to exceed the
corresponding ratio set forth below opposite such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  January 1, 2004
  through and including December 31, 2004

  	
   

  	
  5.75 to 1.00

  	
   

  
	
  January 1, 2005
  through and including December 31, 2005

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  January 1, 2006
  through and including December 31, 2006

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  January 1, 2007
  through and including December 31, 2007

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  January 1, 2008
  through and including December 31, 2008

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  January 1, 2009
  through and including December 31, 2009

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  January 1, 2010
  and thereafter

  	
   

  	
  3.50 to 1.00

  	
   

  

 

(iii)           Maximum Senior Leverage.

 

(i)             Before the occurrence of a
Financial Covenant Restoration Date, the Guarantor and its consolidated
Subsidiaries shall not permit the ratio (the “Senior Leverage Ratio”) of
(i) the aggregate unpaid principal amount of Senior Debt as of last day of any
Fiscal Quarter ending during the periods described below to (ii) Adjusted
Consolidated EBITDA for the four (4) consecutive Fiscal Quarter period ending
as of such date, to exceed the corresponding ratio set forth below opposite
such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  October 1, 2004
  through and including December 31, 2004

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  January 1, 2005
  through and including March 31, 2005

  	
   

  	
  3.50 to 1.00

  	
   

  
	
  April 1, 2005
  through and including June 30, 2005

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  July 1, 2005
  through and including September 30, 2005

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  October 1, 2005
  through and including March 31, 2006

  	
   

  	
  2.25 to 1.00

  	
   

  
	
  April 1, 2006
  through and including December 31, 2006

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  January 1, 2007
  through and including December 31, 2007

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  January 1, 2008
  through and including December 31, 2008

  	
   

  	
  1.50 to 1.00

  	
   

  
	
  January 1, 2009
  through and thereafter

  	
   

  	
  1.25 to 1.00

  	
   

  

 

(ii)            From and after the occurrence of a
Financial Covenant Restoration Date, the Guarantor and its consolidated
Subsidiaries shall not permit the Senior Leverage Ratio for the four (4)
consecutive Fiscal Quarter period

 

4

 

ending
during the periods described below, to exceed the corresponding ratio set forth
below opposite such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  December 31,
  2003 through and including December 31, 2004

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  January 1, 2005
  through and including December 31, 2005

  	
   

  	
  2.25 to 1.00

  	
   

  
	
  January 1, 2006
  through and including December 31, 2006

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  January 1, 2007
  through and including December 31, 2007

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  January 1, 2008
  through and including December 31, 2008

  	
   

  	
  1.50 to 1.00

  	
   

  
	
  January 1, 2009
  through and thereafter

  	
   

  	
  1.25 to 1.00

  	
   

  

 

(iv)          Interest Coverage Ratio.

 

(i)             Before the occurrence of a
Financial Covenant Restoration Date, the Guarantor and its consolidated
Subsidiaries shall not permit the ratio (the “Interest Coverage Ratio”)
of (i) Adjusted Consolidated EBITDA for any four (4) consecutive Fiscal Quarter
period ending as of the last day of any Fiscal Quarter ending during the
periods described below to (ii) Interest Expense, in each case for the four (4)
consecutive Fiscal Quarter period ending as of such date, to be less than the
corresponding ratio set forth below opposite such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  October 1, 2004
  through and including December 31, 2004

  	
   

  	
  1.50 to 1.00

  	
   

  
	
  January 1, 2005
  through and including March 31, 2005

  	
   

  	
  1.20 to 1.00

  	
   

  
	
  April 1, 2005
  through and including June 30, 2005

  	
   

  	
  1.35 to 1.00

  	
   

  
	
  July 1, 2005
  through and including September 30, 2005

  	
   

  	
  1.60 to 1.00

  	
   

  
	
  October 1, 2005
  through and including December 31, 2005

  	
   

  	
  1.80 to 1.00

  	
   

  
	
  January 1, 2006
  through and including December 31, 2006

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  January 1, 2007
  through and including December 31, 2008

  	
   

  	
  2.25 to 1.00

  	
   

  
	
  January 1, 2009
  through and thereafter

  	
   

  	
  2.50 to 1.00

  	
   

  

 

(ii)            From and after the occurrence of a Financial
Covenant Restoration Date, the Guarantor and its consolidated Subsidiaries
shall not permit the Interest Coverage Ratio for the four (4) consecutive
Fiscal Quarter periods ending during the periods described below to be less
than the corresponding ratio set forth below opposite such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  December 31,
  2003 through and including December 31, 2004

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  January 1, 2005
  through and including December 31, 2005

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  January 1, 2006
  through and including December 31, 2006

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  January 1, 2007
  through and including December 31, 2008

  	
   

  	
  2.25 to 1.00

  	
   

  
	
  January 1, 2009
  through and thereafter

  	
   

  	
  2.50 to 1.00

  	
   

  

 

(iii)           Minimum Adjusted Consolidated
EBITDA. Before the occurrence of a Financial Covenant Restoration, the
Guarantor and its consolidated Subsidiaries shall not permit the Adjusted
Consolidated EBITDA for any

 

5

 

four (4)
consecutive Fiscal Quarter period ending as of the last day of any Fiscal
Quarter ending during the periods described below to be less than the
corresponding amount set forth below opposite such period:

 

	
  Period

  	
   

  	
  Amount

  	
   

  
	
  July 1, 2004
  through and including September 30, 2004

  	
   

  	
  $

  	
  41,000,000

  	
   

  
	
  October 1, 2004
  through and including December 31, 2004

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
  January 1, 2004
  through and including March 31, 2005

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  April 1, 2005
  through and including June 30, 2005

  	
   

  	
  $

  	
  29,000,000

  	
   

  
	
  July 1, 2005
  through and including September 30, 2005

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
  October 1, 2005
  through and including December 31, 2005

  	
   

  	
  $

  	
  38,000,000

  	
   

  

 

(e)           Section 6.1(e) of the Credit
Agreement is hereby amended by inserting a new clause (iii) thereto and the end
of such section as follows:

 

(iii) any
breach, default or event of default shall occur under any instrument, agreement
or indenture pertaining to any Debt owing by the Borrower or the Guarantor to
the Lender or pertaining to any charter or lease of equipment or other property
between the Borrower or the Guarantor, on the one hand, and the Lender or one
of its affiliates, on the other hand, whether or not the Lender or such
affiliate was the original lender under such instrument, agreement or indenture
or an original party to any such charter or lease, if the effect thereof, after
giving effect to any applicable grace or cure period, and whether or not the
Lender or such affiliate has exercised any of its remedies with respect
thereto, is (a) to accelerate, or permit the Lender or such affiliate to
accelerate, the maturity of such Debt or other obligations of the Borrower or
the Guarantor, as applicable, or (b) to cause, or permit the Lender or such
affiliate to declare, any such Debt or other obligation due and payable, or (c)
to require, or permit the Lender or such affiliate to require, any such Debt or
other obligation to be prepaid (other than by a regularly scheduled
prepayment), repurchased or redeemed prior to the originally stated maturity
thereof, or (d) to permit the Lender or such affiliate to exercise its rights
and remedies under such charter or lease; or

 

3.             Amendments to
Guaranty. Subject to the satisfaction of the conditions set forth in Section
4 of this Agreement, the Guaranty is hereby amended as follows:

 

(a)           Section 8 of
the Guaranty is hereby amended by adding the following sentence at the end of
such section:

 

The
Guarantor further covenants and agrees with the Lender that until the earlier
of (i) a Financial Covenant Restoration Date or (ii) December 31, 2006, the
Guarantor will not amend the covenants set forth in the Senior Credit Facility
or in the indenture governing the Guarantor’s 73/4% Senior Subordinated Notes due 2013 which prohibit
or limit the incurrence of

 

6

 

Debt if the
effect of such amendment would be to permit the Borrower or the Guarantor to
incur additional Debt.

 

4.             Conditions Precedent.   The amendments to the Credit Agreement set
forth in Section 2 of this Agreement and the amendments to the Guaranty
set forth in Section 3 of this Agreement shall be effective upon the
satisfaction of each of the following conditions precedent:

 

(a)           this Agreement shall
have been duly executed by all parties hereto; and

 

(b)           the Borrower shall have paid to the
Lender an amendment fee in the amount of $219,000.00 and all reasonable
out-of-pocket legal fees and disbursements (evidenced by invoices in reasonable
detail) incurred by the Lender in connection with the preparation, execution
and delivery of this Agreement.

 

5.             Representations and Warranties.  In order
to induce the Lender to enter into this Agreement, the Borrower and the
Guarantor hereby represent and warrant to the Lender, in each case after giving
effect to this Agreement, as follows:

 

(a)           Each of the Borrower
and the Guarantor has the right, power and capacity and has been duly
authorized and empowered by all requisite corporate and shareholder action to
enter into, execute, deliver and perform this Agreement and all agreements,
documents and instruments executed and delivered pursuant to this Agreement.

 

(b)           This Agreement
constitutes each of the Borrower’s and the Guarantor’s legal, valid and binding
obligation, enforceable against it, except as enforcement thereof may be
subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law or otherwise).

 

(c)           The execution,
delivery and performance of this Agreement by the Borrower and the Guarantor
does not and will not violate such party’s certificate or articles of
incorporation (as applicable) or by-laws, any law, rule, regulation, order,
writ, judgment, decree or award applicable to the Borrower or the Guarantor or
any contractual provision to which the Borrower or the Guarantor is a party or
to which the Borrower or the Guarantor or any of their respective properties is
subject.

 

(d)           No authorization or
approval or other action by, and no notice to or filing or registration with,
any governmental authority or regulatory body (other than those which have been
obtained and are in force and effect) is required in connection with the
execution, delivery and performance by the Borrower or the Guarantor of this
Agreement and all agreements, documents and instruments executed and delivered
pursuant to this Agreement.

 

(e)           No Event of Default
or Default exists under the Credit Agreement or would exist after giving effect
to this Agreement.

 

7

 

6.             Miscellaneous.
The parties hereto hereby further agree as follows:

 

(a)           Payment of Costs.  The Borrower hereby agrees to pay all
reasonable out-of-pocket costs and expenses (evidenced by invoices in
reasonable detail) incurred by the Lender (including the reasonable fees and
expenses of its counsel) in connection with the preparation, execution and
delivery of this Agreement.

 

(b)           Counterparts.  This Agreement may be executed in one or
more counterparts, each of which, when executed and delivered, shall be deemed
to be an original and all of which counterparts, taken together, shall
constitute but one and the same document with the same force and effect as if
the signatures of all of the parties were on a single counterpart, and it shall
not be necessary in making proof of this Agreement to produce more than one (1)
such counterpart.

 

(c)           Headings.  Headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.

 

(d)           Integration.  This Agreement, the other agreements and
documents executed and delivered pursuant to this Agreement, the Credit
Agreement and the other Loan Documents constitute the entire agreement among
the parties hereto with respect to the subject matter hereof.

 

(e)           Governing Law.  THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF SAID STATE,
INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAWS RULES.

 

(f)            Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the Borrower, the Guarantor and
the Lender and their respective successors and assigns.   Except as expressly set forth to the
contrary herein, this Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the Borrower, the Guarantor and the
Lender and their respective successors and permitted assigns.

 

(g)           Amendment: Waiver.  The parties hereto agree and acknowledge
that nothing contained in this Agreement in any manner or respect limits or
terminates any of the provisions of the Credit Agreement or any of the other
Loan Documents other than as expressly set forth herein and further agree and
acknowledge that the Credit Agreement (as amended hereby) and each of the other
Loan Documents remain and continue in full force and effect and are hereby
ratified and confirmed. Except to the extent expressly set forth herein, the
execution, delivery and effectiveness of this Agreement shall not operate as an
amendment of any rights, power or remedy of the Lender under the Credit
Agreement or any other Loan Document, nor constitute an amendment of any
provision of the Credit Agreement or any other Loan Document. No delay on the
part of the Lender in exercising any of its rights, remedies, powers and
privileges under the Credit Agreement or any of the Loan Documents or partial
or single exercise

 

8

 

thereof,
shall constitute an amendment thereof. On and after the Effective Date each
reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,”
“herein” or words of like import, and each reference to the Credit Agreement in
the Loan Documents and all other documents delivered in connection with the
Credit Agreement shall mean and be a reference to the Credit Agreement as
amended hereby. None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner, whatsoever, except in
accordance with Section 7.1 of the Credit Agreement.

 

(h)           Reaffirmation of
Guaranty.  The Guarantor
acknowledges receipt of a copy of this Agreement, consents to this Agreement
and each of the transactions referenced in this Agreement and hereby reaffirms
its obligations under the Guaranty.

 

[signature pages follow]

 

9

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
written above.

 

	
   

  	
  GREAT
  LAKES DREDGE & DOCK COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Deborah A. Wensel

  	
   

  
	
   

  	
  Name:

  	
  Deborah A. Wensel

  	
   

  
	
   

  	
  Title:

  	
  Sr. Vice President and CFO

  	
   

  
	
   

  	
   

  
	
   

  	
  GREAT
  LAKES DREDGE AND DOCK

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Deborah A. Wensel

  	
   

  
	
   

  	
  Name:

  	
  Deborah A. Wensel

  	
   

  
	
   

  	
  Title:

  	
  Sr. Vice President and CFO

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL
  ELECTRIC CAPITAL

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Eric A. Schaefer

  	
   

  
	
   

  	
  Name:

  	
  Eric A. Schaefer

  	
   

  
	
   

  	
  Title:

  	
  Duly Authorized Signatory

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