Exhibit
10
SECOND
AMENDMENT TO SECOND
AMENDED
AND RESTATED CREDIT AGREEMENT
THIS
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this “ Amendment ”) is effective as of the
11 th
day
of February, 2009 (the “ Amendment Effective Date
”).
RECITALS
WHEREAS,
MATRIX SERVICE COMPANY , a Delaware corporation (the “
Borrower ”), JPMORGAN CHASE BANK, N.A. , as
Administrative Agent (the “ Administrative Agent
”) and as a Lender and Issuing Bank, and the financial
institutions therein named as Lenders, are parties to that certain
Second Amended and Restated Credit Agreement dated as November 30,
2006, as it has been amended by that certain First Amendment to
Second Amended and Restated Credit Agreement dated July 6, 2007 (as
so amended, and as it may be amended, supplemented or restated from
time to time hereafter in accordance with its terms, the “
Credit Agreement ”);
WHEREAS,
all capitalized terms used but not defined in these Recitals shall
have the meanings assigned to them in the Credit
Agreement;
WHEREAS,
the Borrower has requested amendments to certain of the covenants
and other provisions of the Credit Agreement, and the Lenders have
agreed to such request on the terms and conditions and subject to
certain other amendments set forth in this Amendment.
NOW
THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto agree as
follows:
1.
Incorporation by Reference; Defined Terms .
Capitalized terms used but not defined in this
Amendment (including the Recitals) shall have the meanings given to
them in the Credit Agreement. All terms defined in the
foregoing Recitals are incorporated herein by reference.
The
term “Loan Documents” is hereby amended to include the
Credit Agreement, as amended by this Amendment, all as they may be
further amended from time to time with the consent of the
Administrative Agent and, to the extent required by the Credit
Agreement, the Lenders.
The
term “Agreement”, as used in the Credit Agreement, is
hereby amended to mean the Credit Agreement, as amended by this
Amendment and as it may be further amended from time to time with
the consent of the Administrative Agent and, to the extent required
by the Credit Agreement, the Lenders.
The
term “Credit Agreement” in all other Loan Documents is
hereby amended to mean the Credit Agreement, as amended by this
Amendment and as it may be further amended from time to time with
the consent of the Administrative Agent and, to the extent required
by the Credit Agreement, the Lenders.
2.
Amendments . The Credit Agreement is hereby
amended as follows:
(a) The
definition of “Adjusted LIBO Rate” is hereby amended to
read as follows:
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“
Adjusted LIBO Rate ” means, (i) with respect to any
Eurodollar Borrowing for the relevant Interest Period, the quotient
of (a) the LIBO Rate applicable to such Interest Period, divided by
(b) one minus the Reserve Requirement (expressed as a decimal)
applicable to such Interest Period, and (ii) with respect to any
ABR Borrowing for which the interest rate on any day is determined
with reference to the Adjusted LIBO Rate, the quotient of (a) the
LIBO Rate on such day applicable to a one-month interest period,
divided by (b) one minus the Reserve Requirement (expressed as a
decimal) applicable to a one-month interest period.
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(b) The
definition of “Alternate Base Rate” is hereby amended
to read as follows:
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“
Alternate Base Rate ” means, for any day, a rate per
annum equal to the greatest of (a) the Prime Rate in effect on such
day, (b) the Federal Funds Effective Rate in effect on such day
plus ½ of 1% and (c) the Adjusted LIBO Rate for a one month
Interest Period on such day (or if such day is not a Business Day,
the immediately preceding Business Day) plus 1%, provided that, for
the avoidance of doubt, for the purposes of calculating the
Alternate Base Rate, the Adjusted LIBO Rate for any day shall be
based on the rate appearing on the Reuters Screen LIBOR01 Page,
also referred to as Reuters BBA Libor Rates Page 3750 (or on any
successor or substitute page), at approximately 11:00 a.m. London
time on such day. Any change in the Alternate Base Rate
due to a change in the Prime Rate, the Federal Funds Effective Rate
or the Adjusted LIBO Rate shall be effective from and including the
effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate, respectively.
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(c) The
definition of “Consolidated EBIT” is hereby amended to
read as follows:
“
Consolidated EBIT ” means, with reference to any
period, Consolidated Net Income for such period (i) plus, to the
extent deducted in calculating Consolidated Net Income for such
period, (A) Consolidated Interest Expense, and (B) expense for
income taxes paid or accrued, all calculated for Borrower and its
Subsidiaries on a consolidated basis without duplication, and (ii)
minus, to the extent included in calculating Consolidated Net
Income for such period, any Joint Venture Non-Cash Income for such
period. Notwithstanding the foregoing, with respect to
any rolling four quarter period during which a Permitted
Acquisition has occurred, for purposes of determining compliance
with the Fixed Charge Coverage Ratio, Consolidated EBIT shall be
calculated pro forma (without duplication) as if the acquired
Entity or business had been owned during the entire four quarter
period, on the basis of (x) the historical financial statements of
any Entity or business so acquired and (y) the assumption that the
consolidated financial statements of the Borrower and its
Subsidiaries have been reformulated as if such Permitted
Acquisition, and any Indebtedness incurred or repaid in connection
therewith, had been consummated or incurred or repaid at the
beginning of the relevant four quarter period (and assuming that
such Indebtedness bears interest during any portion of the
applicable measurement period prior to the relevant Acquisition at
the weighted average of the interest rates applicable to such
Indebtedness) outstanding during such period.
(d) The
definition of “Consolidated EBITDA” is hereby amended
to read as follows:
“
Consolidated EBITDA ” means, with reference to any
period, Consolidated Net Income for such period (i) plus, to the
extent deducted in calculating Consolidated Net Income for such
period, (A) Consolidated Interest Expense, (B) expense for income
taxes paid or accrued, (C) depreciation, amortization and other
non-cash charges (including but not limited to non-cash
compensation expense recorded in accordance with FAS 123R), (D)
losses on sales of fixed assets, and (E) extraordinary losses
incurred other than in the ordinary course of business, (ii) minus,
to the extent included in Consolidated Net Income, (A) gains on
sales of fixed assets, and (B) extraordinary gains realized other
than in the ordinary course of business, all calculated for
Borrower and its Subsidiaries on a consolidated basis without
duplication and (iii) minus, to the extent included in calculating
Consolidated Net Income for such period, any Joint Venture Non-Cash
Income for such period. Notwithstanding the foregoing,
with respect to any rolling four quarter period during which a
Permitted Acquisition has occurred, for purposes of determining
compliance with the Senior Leverage Ratio, Consolidated EBITDA
shall be calculated pro forma (without duplication) as if the
acquired Entity or business had been owned during the entire four
quarter period, on the basis of (x) the historical financial
statements of any Entity or business so acquired, and (y) the
assumption that the consolidated financial statements of the
Borrower and its Subsidiaries have been reformulated as if such
Permitted Acquisition, and any Indebtedness incurred or repaid in
connection therewith, had been consummated or incurred or repaid at
the beginning of the relevant four quarter period (and assuming
that such Indebtedness bears interest during any portion of the
applicable measurement period prior to the relevant Acquisition at
the weighted average of the interest rates applicable to such
Indebtedness) outstanding during such period.
(e) The
definition of “LIBO Rate” is hereby amended to read as
follows:
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“
LIBO Rate ” means with respect to any Eurodollar
Borrowing for any Interest Period, the interest rate determined by
the Administrative Agent by reference to Reuters Screen
LIBOR01, also referred to as Reuters BBA Libor Rates
Page 3750 (or on any successor or substitute page), at
approximately 11:00 a.m. London time, two Business Days prior to
the commencement of the Interest Period for dollar deposits with a
maturity equal to such Interest Period. If no LIBO Rate
is available to the Administrative Agent, the applicable LIBO Rate
for the relevant Interest Period shall instead be the rate
determined by the Administrative Agent to be the rate at which
JPMorgan Chase offers to place U.S. dollar deposits having a
maturity equal to such Interest Period with first-class banks in
the London interbank market at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest
Period.
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(f) Subsection
(e) in the definition of “Permitted Investments” is
hereby deleted.
(g) The
definition of “Statutory Reserve Rate” in Section 1.01
of the Credit Agreement is hereby deleted.
(h) The
following definitions are hereby added to Section 1.01 of the
Credit Agreement:
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“
Acquisition ” means (i) the purchase or other
acquisition (including pursuant to any merger with any Person that
was not a wholly owned Subsidiary prior to such merger) of any
Equity Interests of any other Person (including without limitation
the acquisition of any Equity Interest in any Joint Venture) or
(ii) the purchase or other acquisition (in one transaction or a
series of transactions) of the assets of any other Person or
division thereof constituting a business unit or ongoing
business.
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“
Acquisition Documents ” means the agreements,
documents, and instruments executed in connection with an
Acquisition.
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“
Joint Venture ” means a Person (other than a natural
person or Governmental Authority) that is (i) formed to be or
represents a joint venture between Borrower or one of its
Subsidiaries and other Person(s) (regardless of the type of entity
used), and (ii) formed for the purpose of bidding for, undertaking
or handling specific projects or for the purpose of acquiring
Equity Interests of any other Person.
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“
Joint Venture Non-Cash Income ” means the non-cash
portion (as to Borrower or the applicable Subsidiary of Borrower)
of any income included in Borrower’s Consolidated Net Income
that is generated by a Joint Venture.
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“
Permitted Acquisition ” means an Acquisition as to
which all the requirements of Section 6.04(g) have either
been met or waived in accordance with the provisions of this
Agreement.
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“
Regulation D ” means Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve
System.
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“
Reserve Requirement ” means the maximum aggregate
reserve requirement (including all basic, supplemental, marginal
and other reserves) which is imposed under Regulation D.
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(i) The
chart included in the definition of “Applicable Rate”
in the Credit Agreement is hereby replaced with the
following:
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APPLICABLE
RATE – Revolving Loans
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Senior
Leverage
Ratio
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Eurodollar
Spread Applicable Rate (bps)
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ABR
Spread
Applicable
Rate (ABR + bps)
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³
2.00
to 1.00
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275
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175
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<
2.00 to 1.00, but ³ 1.50
to 1.00
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250
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150
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<
1.50 to 1.00, but ³ 1.00
to 1.00
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225
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125
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<
1.00 to 1.00
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200
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100
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(j) The
chart included in Section 2.12(a) of the Credit Agreement is hereby
replaced with the following:
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Senior
Leverage Ratio
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Unused
Revolving Credit Facility Fee (bps)
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³
2.00
to 1.00
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50
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<
2.00 to 1.00, but ³ 1.50
to 1.00
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50
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<
1.50 to 1.00, but ³ 1.00
to 1.00
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40
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<
1.00 to 1.00
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35
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(k) Section
6.03(c) of the Credit Agreement is hereby replaced with the
following:
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(c) The
Borrower will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses
of the type conducted by the Borrower and/or any one or more of its
Subsidiaries on the date of this Agreement and businesses
substantially related or incidental thereto (it being understood
that the Borrower and its Subsidiaries may expand their existing
construction services, fabrication services and/or repair and
maintenance services businesses into additional market segments or
industries and augment their existing technology and
expertise).
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(l) Section
6.03(d) of the Credit Agreement is hereby replaced with the
following:
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(d) The
Borrower will not change its fiscal year other than a change to a
fiscal year with a fiscal year end of June 30
th
or
December 31 st
.
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(m) The
opening paragraph of Section 6.04 of the Credit Agreement is hereby
replaced with the following:
SECTION
6.04. Investments, Loans, Advances, Guarantees and
Acquisitions . The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit any Acquisition,
make or permit to exist any loans or advances to any other Person,
Guarantee any obligations of any other Person, or make or permit to
exist any investment or any other interest in any other Person,
except:
(n) Section
6.04(g) of the Credit Agreement is hereby replaced with the
following:
(g) Acquisitions
so long as, as to each proposed Acquisition:
(i) no
Default or Event of Default is in existence at the time of the
consummation of such proposed Acquisition or would exist after
giving effect thereto,
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