Execution Version
AMENDMENT NO. 1 TO CREDIT, SECURITY AND GUARANTY AGREEMENT
This AMENDMENT NO. 1 TO CREDIT, SECURITY AND GUARANTY AGREEMENT (this “Agreement”) is made as of this 25th day of September, 2024 (the “First Amendment Effective Date”), by and among SHIMMICK CONSTRUCTION COMPANY, INC., a California corporation (“Shimmick”), RUST CONSTRUCTORS INC., a Delaware corporation, THE LEASING CORPORATION, a Nevada corporation, (collectively, the “Borrowers” and each individually, a “Borrower”), SHIMMICK CORPORATION (f/k/a SCCI National Holdings, Inc.), a Delaware corporation (“Holdings”), ALTER DOMUS (US) LLC, a Delaware limited liability company, as Agent, and the financial institutions or other entities parties hereto, each as a Lender.
RECITALS
A. Agent, Lenders, Borrowers and Holdings have entered into that certain Credit, Security and Guaranty Agreement, dated as of May 20, 2024 (the “Existing Credit Agreement” and as amended hereby and as it may be further amended, modified, supplemented and restated from time to time, the “Credit Agreement”), pursuant to which the Lenders have agreed to make certain advances of money and to extend certain financial accommodations to Borrowers in the amounts and manner set forth in the Credit Agreement.
B. As of the date hereof, the Events of Default identified on Exhibit A hereto (collectively, the “Specified Events of Default”) have occurred and are continuing.
C. Borrowers and Holdings have requested, and Agent and all Lenders have agreed, to (i) consent to that certain Amendment No. 5 to MidCap Credit Facility, dated as of the First Amendment Effective Date, and (ii) amend certain provisions of the Existing Credit Agreement, in each case, in accordance with the terms and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the terms and conditions set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Agent, Lenders, Borrowers and Holdings hereby agree as follows:
MidCap / Shimmick / Amendment No. 1 to Credit, Security and Guaranty Agreement
“Excess Cash” means the amount by which (A) Credit Party Unrestricted Cash exceeds (B) $10,000,000.
“First Amendment” means that certain Amendment No. 1 to Credit, Security and Guaranty Agreement, dated as of the First Amendment Effective Date, by and among the Borrowers, Holdings, Agent and the Lenders.
“First Amendment Effective Date” means September 25, 2024.
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“Financing Documents” means this Agreement, the First Amendment, the Intercreditor Agreement, any Notes, the Agent Fee Letter, the Security Documents, each Subordination Agreement and any other subordination or intercreditor agreement pursuant to which any Debt and/or any Liens securing such Debt is subordinated to all or any portion of the Obligations and all other documents, instruments and agreements related to the Obligations and heretofore executed, executed concurrently herewith or executed at any time and from time to time hereafter, as any or all of the same may be amended, supplemented, restated or otherwise modified from time to time.
“First Lien Credit Facility” means (a) that certain Credit Security and Guaranty Agreement, dated as March 27, 2023 (as amended, restated, amended and restated, supplemented, waived, or otherwise modified from time to time), by and among the Borrowers, as the borrower, certain guarantors party thereto from time to time, and the MidCap Agent, as agent, and the lenders from time to time party thereto (the “MidCap Credit Facility”) and (b) each other revolving credit facility that refunds, refinances or replaces such MidCap Credit Facility; provided, that, in each case of clauses (a) and (b), (i) the aggregate principal amount of commitments and other availability thereunder does not exceed $15,000,000 (the “First Lien Cap”), (ii) at no time shall any Person other than the Credit Parties provide guarantees or security (other than any guarantees or security granted under the MidCap Guaranty) for or otherwise be obligated in respect of the Debt and other obligations arising thereunder, (iii) such facility shall not differentiate among the lenders thereunder with respect to right of payment or priority of lien, (iv) the provisions of such facility shall not restrict any payments in respect of the Obligations under the Financing Documents in any manner or to any extent more burdensome than the restrictions contained in the MidCap Credit Facility as in effect on the date hereof, (v) the agent thereunder, on behalf of itself and each lender or other secured party thereunder, shall have executed and delivered the Intercreditor Agreement or a joinder to the Intercreditor Agreement and such other documents required pursuant to the terms hereof, (vi) the use of proceeds for such revolving credit facility shall be limited to general working capital in the ordinary course of business and (vii) to the extent any such facility contains any financial maintenance covenants, affirmative covenants, negative covenants or events of default that are not contained in the Financing Documents or that are more restrictive on the Credit Parties than the corresponding provisions in the Financing Documents, the Borrowers shall have offered to amend the Financing Documents to incorporate such more restrictive provisions (and shall have executed an amendment giving effect to such terms if so accepted by the Required Lenders) (this clause (vii), the “MFN Provision” and the amendment to the Financing Documents described herein, an “MFN Amendment”)).
“First Lien Loan” means the “Loans” as defined in the First Lien Credit Facility.
“Initial Interest Period” means the period beginning on the Closing Date to May 31, 2024. For the avoidance of doubt, interest due on May 31, 2024, will be all interest accrued on Revolving Loans outstanding during the period commencing on the Closing Date to May 31, 2024.
“MidCap 1L Loans” means any First Lien Loans borrowed under the MidCap Credit Facility after the First Amendment Effective Date.
“MidCap Amendment” means Amendment No. 3 to the First Lien Credit Facility, dated as of the Closing Date.
“MidCap Guaranty” means that certain Guaranty Agreement, dated as of the Closing Date, as amended by that certain Amendment No. 1 to Guaranty Agreement, dated as of the First Amendment Effective Date, by AECOM in favor of the MidCap Agent.
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“MidCap Subordination Agreement” means that certain Subordination Agreement, dated as of the Closing Date, as amended by that certain Amendment No. 1 to Subordination Agreement, dated as of the First Amendment Effective Date, by and among the Agent, AECOM and MidCap Agent.
(i) Borrowers shall deliver to Agent a Notice of Borrowing with respect to each proposed Revolving Loan Borrowing, such Notice of Borrowing to be delivered before 1:00 p.m. (Eastern time) three (3) Business Days prior to the date of such proposed borrowing.
(v) If, in the case of any outstanding MidCap 1L Loans, on the fifth (5th) Business Day immediately succeeding any drawing in respect of such MidCap 1L Loans, (i) there are outstanding MidCap 1L Loans and (ii) the Credit Parties have not used such MidCap 1L Loans as specified in the most recent Approved Budget delivered in connection with the issuance of such MidCap 1L Loans, then, as of the end of such Business Day, the Borrowers shall, within two (2) Business Days, prepay such MidCap 1L Loans, which prepayment shall be in an amount equal to the lesser of (A) the amount of such MidCap 1L Loans that were not used as specified in the such Approved Budget and (B) the amount of outstanding MidCap 1L Loans; provided that if the date of such prepayment falls on the last Business Day of any fiscal quarter, then required date for such prepayment shall be moved to the next succeeding Business Day; provided however, if the Credit Parties failed to comply with Section 5.24 of this Agreement in connection with such drawing of MidCap 1L Loans, the Borrower shall immediately prepay such MidCap 1L Loans in an amount equal to the total amount of the applicable drawing of MidCap 1L Loans.
Section 5.24 Borrowing of MidCap 1L Loans. No Credit Party shall make any request to the MidCap Agent or First Lien Lenders to (i) make a borrowing of MidCap 1L Loans unless and until all conditions contained in Section 7.2 of the MidCap Credit Facility have been satisfied in respect of such drawing or (ii) that the conditions contained in Section 7.2(j) of the MidCap Credit Facility be waived in connection with any request for a borrowing of MidCap 1L Loans under the MidCap Credit Facility.
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MidCap / Shimmick / Amendment No. 1 to Credit, Security and Guaranty Agreement
[SIGNATURES APPEAR ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, intending to be legally bound, each of the parties have caused this Agreement to be executed the day and year first above mentioned.
AGENT: ALTER DOMUS (US) LLC,
as Agent
By: ___________________________________
Name:
Title:
LENDERS: AECOM,
as Lender
By: __________________________________
Name:
Title:
BERKSHIRE HATHAWAY SPECIALITY INSURANCE COMPANY,
as Lender
By: __________________________________
Name:
Title:
[Signatures Continue on Following Page]
[Signature Page to Amendment No. 1 to Credit, Security and Guaranty Agreement]
BORROWERS: SHIMMICK CONSTRUCTION COMPANY, INC.
By: __________________________________
Name:
Title: __________________________________
RUST CONSTRUCTORS INC.
By: __________________________________
Name: __________________________________
Title: __________________________________
THE LEASING CORPORATION
By: __________________________________
Name: __________________________________
Title: __________________________________
[Signature Page to Amendment No. 1 to Credit, Security and Guaranty Agreement]
GUARANTORS: SHIMMICK CORPORATION
By: __________________________________
Name: __________________________________
Title: __________________________________
[Signature Page to Amendment No. 1 to Credit, Security and Guaranty Agreement]
EXHIBIT A
1. an Event of Default under Section 10.1(p) of the Credit Agreement as a result of a material breach or “Event of Default” under the First Lien Credit Facility due to any advances of First Lien Loans to the Credit Parties when the Credit Parties’ Leverage Ratio (as defined in the First Lien Credit Facility) constituted a breach of Section 7.2(i) of the First Lien Credit Facility.
2. the failure of any representation or warranty made following the date of the first Event of Default described above through but excluding the date hereof to be true and correct as a result of the occurrence of the foregoing.