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Exhibit 10.40
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AMENDMENT NO. 2 and WAIVER
Dated as of August 12, 1997
to
REVOLVING CREDIT AGREEMENT
Dated as of May 31, 1995
THIS AMENDMENT NO. 2 and WAIVER dated as of August 12, 1997
(this "Amendment") is entered into by and among OHM Corporation ("OHM"), OHM
Remediation Services Corp. ("Remediation", and together with OHM, the
"Borrowers"), the financial institutions listed on the signature pages hereto
(collectively, the "Banks"), Citicorp USA, Inc., as administrative agent (in
such capacity, the "Administrative Agent") and Bank of America National Trust
and Savings Association (successor by merger to Bank of America Illinois), as
issuing and paying agent and as co-agent (in such capacity, the "Issuing and
Paying Agent").
PRELIMINARY STATEMENT
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A. The Borrowers, the Banks, the Administrative Agent and the
Issuing and Paying Agent have entered into that certain Revolving Credit
Agreement dated as of May 31, 1995 (as amended, the "Credit Agreement";
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to them in the Credit Agreement as amended by this Amendment No. 2),
pursuant to which, among other things, the Banks have agreed to make certain
loans, issue certain letters of credit and make certain other financial
accommodations to the Borrowers upon the terms and conditions set forth therein.
B. Subject to the terms and conditions set forth below, the
Borrowers, the Banks, the Administrative Agent and the Issuing and Paying Agent
have, among other things, agreed to amend the Credit Agreement as hereinafter
set forth.
NOW, THEREFORE, in consideration of the premises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENT TO THE CREDIT AGREEMENT. Subject to the
satisfaction of the conditions precedent set forth in SECTION 2 below, the
Credit Agreement shall be amended as follows:
1.01. The following definitions are added to SECTION 1.01 of
the Credit Agreement, to be inserted therein in alphabetical order:
"BENECO" means Beneco Enterprises Inc., a Utah corporation.
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"BENECO ACQUISITION" means the acquisition by OHM of all of
the capital stock of Beneco on or about June 18, 1997 for an aggregate
consideration of $15,000,000.
"JUNE 1997 CHARGE" means the charges taken by the Borrowers in
the fiscal quarter ending June 30, 1997 in the aggregate amount of
$37,877,000, in connection with (a) the settlement of certain
litigation between the Borrowers and Citgo Petroleum Company, discussed
in OHM's Form 10-K for its fiscal year ended December 31, 1996 filed
with the Securities Exchange Commission (the "1997 10-K"), (b) the
write-down of certain receivables, including the receivables from
Separation and Recovery Systems, Inc. and Occidental Chemical
Corporation, also discussed in the 1997 10-K, (c) the write-down of
certain laboratory facilities and consolidation of regional offices,
and (d) to the extent included in selling, general and administrative
expense, the charge in the amount of $14,949,000 taken with respect to
OHM's investment in the NSC Companies.
"PERMITTED ACQUISITIONS" means the acquisition by either
Borrower of all of the capital stock or other equity interests of any
Person, or the acquisition of assets on an ongoing concern basis from
any Person, provided that:
(a) both immediately prior and after giving effect to
such acquisition, no Default or Event of Default is or would
be outstanding;
(b) after giving effect to such acquisition, the
Borrowers would satisfy the covenants set forth in SECTIONS
5.02(e) and 5.02(m) through 5.02(o), determined as of the end
of the most recently ended quarter on a pro forma basis after
giving effect to such acquisition; and with respect to any
acquisition or series of related acquisitions for which the
aggregate consideration to be paid will be greater than
$5,000,000, audited financial statements (or unaudited
financial statements reasonably acceptable to the
Administrative Agent) for the most recently ended fiscal year
with respect to the acquired Person or assets shall be
available so that determination of such pro forma compliance
can be made on the basis of such audited financial statements,
and subsequent unaudited quarterly financial statements, if
applicable;
(c) as of the date of such acquisition, (i) such
acquired Person or assets are in compliance in all material
respects with all Environmental Laws and health and safety
statutes and regulations, (ii) there are no material
governmental investigations of the environmental matters of
such Person or assets, (iii) there are no contingent
liabilities or pending or threatened litigation with respect
to such Person or assets which could reasonably be expected to
have a material adverse effect on the financial condition or
operations of the Borrowers taken as a whole, and (iv) the
proposed acquisition shall not subject the Administrative
Agent, the Issuing and Paying Agent, the Banks, any Issuing
Bank or any of their respective Affiliates or properties to
any Environmental Law (including without limitation, any
clean-up responsibility law or restrictive transfer law or
regulation);
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(d) after giving effect to the acquisition of such
Person or assets, such Person or assets would constitute
either a division or a wholly owned Subsidiary of a Borrower
or of a wholly owned Subsidiary of a Borrower;
(e) such acquisition is consensual and shall have
been approved by the board of directors, shareholders, members
or partners, as applicable, of the Person whose stock or
assets are being acquired prior to the consummation of such
acquisition;
(f) the Borrowers shall have delivered to the
Administrative Agent and the Issuing and Paying Agent an
officer's certificate certifying that the conditions set forth
in clauses (1) through (5) above are satisfied with respect to
such acquisition, and that such acquisition is being made for
consideration which in the opinion of management of the
Borrowers is not in excess of fair value for the business,
property and/or assets acquired in such acquisition.
"PERMITTED OTHER INDEBTEDNESS" means purchase money
Indebtedness (or refinancings thereof secured by the same assets) and
Long Term Lease Obligations of a Borrower or a Subsidiary, other than
Indebtedness described in SECTIONS 5.02(j)(iv) or (vii), which at the
time of incurrence of any such purchase money Indebtedness (or the
refinancings thereof) or Long Term Lease Obligations (and after giving
effect to such incurrence), would not in the aggregate exceed (a)
$30,000,000 during any Facility B Level 5 Period, Facility B Level 4
Period or Facility B Level 3 Period, (b) twenty-five percent (25%) of
Net Worth during any Facility B Level 2 Period, or (c) thirty percent
(30%) of Net Worth during any Facility B Level 1 Period. "Permitted
Other Indebtedness" includes any such purchase money Indebtedness or
Long Term Lease Obligations of a Subsidiary acquired as part of a
Permitted Acquisition, or any such purchase money Indebtedness or Long
Term Lease Obligations assumed by a Borrower or a wholly owned
Subsidiary of a Borrower in a Permitted Acquisition, and the date of
the initial incurrence of such purchase money Indebtedness or Long Term
Lease Obligation for the purposes of this Agreement shall be the date
of such Permitted Acquisition.
1.02. The definition of "EBITDA" is amended by adding the
following immediately preceding the period at the end of that definition:
"PLUS, in the case of any period which includes the fiscal
quarter ending June 30, 1997, the amount of the June 1997
Charge."
1.03. The definition of "Indebtedness" is amended by striking
"or" before clause (c) thereof, and inserting the following after the end of
clause (c);
"or (d) obligations to make earn out payments with respect to
the Beneco Acquisition or any Permitted Acquisition"
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1.04. SECTION 2.03 is amended by deleting the reference
therein to "11:00 A.M." (with respect to the time for requesting a Borrowing)
and substituting "1:00 P.M." therefor, and by deleting the existing reference
therein to "1:00 P.M." (with respect to the time for each Bank's making
available its Contractual Percentage of a Requested Borrowing) and substituting
"3:00 P.M." therefor.
1.05. SECTION 2.11 is amended by deleting the reference
therein to "11:00 A.M." (with respect to the time for making payments under the
Credit Agreement) and substituting "1:00 P.M." therefor.
1.06. SECTION 5.02(a)(xiii) is deleted and replaced by the
phrase "This Section Intentionally Left Blank".
1.07. SECTION 5.02(b) is amended by deleting clause (ii) (but
not the proviso in SECTION 5.02(b)), and substituting the following therefor:
"(ii) as part of a Permitted Acquisition, any Person may merge
with or into or so transfer its assets to OHM or a wholly
owned Subsidiary thereof;"
1.08. SECTION 5.02(c)(v) is amended and restated as follows:
"(v) the sale by OHM of shares of the common stock of NSC
Corporation currently owned by OHM; PROVIDED, HOWEVER, that
prior to the date of any such proposed sale, an Authorized
Officer of OHM shall have delivered a certificate to the
Administrative Agent and the Issuing and Paying Agent
certifying that the sale price was at or above the fair value
of the stock being sold in the reasonable determination of
OHM's management and that the board of directors of OHM has
approved such sale;"
1.09. SECTION 5.02(e) is amended and restated as follows:
"(e) Materially change the nature of its business from
providing (i) environmental remediation services, including
comprehensive on-site treatment of toxic materials and
hazardous wastes for the government and private sector, as
well as site assessment, engineering, remedial design and
analytical testing for such remediation services and projects
and (ii) operations, management, testing, training,
maintenance, engineering, construction and related outsourcing
services for the government and private sector."
1.10. SECTION 5.02(h)(iii) is amended and restated as follows:
"(iii) Remediation may make loans to OHM, and either
Remediation or OHM may make loans to a wholly owned
Subsidiary, which loans are evidenced in the books and records
of each such Person, provided that any such loan to a wholly
owned Subsidiary shall be on terms and subject to
documentation reasonably acceptable to the Administrative
Agent and the Issuing and Paying Agent, and
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shall be assigned to the Issuing and Paying Agent, for the
benefit of the Banks, as security for the Obligations;"
1.11. SECTION 5.02 (i)(iv) is amended and restated as follows:
"(iv) Investments in wholly owned Subsidiaries of either
Borrower, each which Investment shall be specifically related
to a project directly related to the Borrowers' general line
of business as set forth in SECTION 5.02(e), undertaken or to
be undertaken by the applicable wholly owned Subsidiary;"
1.12. SECTION 5.02(i)(vii) is amended and restated as follows:
"(vii) loans to OHM or a wholly owned Subsidiary of OHM or
Remediation permitted by SECTION 5.02(h)(iii);"
1.13. The word "and" is stricken at the end of SECTION
5.02(i)(viii), the period is stricken at the end of SECTION 5.02(i)(ix), and
replaced by "; and ", and the following is added as SECTION 5.02(i)(x):
"(x) Permitted Acquisitions."
1.14. SECTION 5.02(j)(ix) is amended and restated as follows:
"(ix) Permitted Other Indebtedness; and"
1.15. SECTION 5.02(1) is amended by inserting "(other than
Permitted Acquisitions, to the extent any Permitted Acquisition might constitute
a capital expenditure)" after the first reference to "capital expenditures" in
such Section.
1.16. SECTION 5.02(O) is amended and restated as follows:
"(o) MAXIMUM FUNDED DEBT TO EBITDA RATIO. Permit the Funded
Debt to EBITDA Ratio to exceed 3.0 to 1.0 as of the last day
of any fiscal quarter of the Borrowers."
SECTION 2. WAIVER. On or about June 18, 1997, OHM acquired the
stock of Beneco Enterprises Inc. ("Beneco") for an aggregate consideration of
$15,000,000. the Administrative Agent, the Issuing and Paying Agent and the
Banks waive the violation of SECTION 5.02(i) which resulted from such
acquisition, and agree that such acquisition will be treated as a Permitted
Acquisition.
SECTION 3. CONDITIONS PRECEDENT. This Amendment shall become
effective upon the first Business Day upon which the Administrative Agent shall
have received, on or before such date:
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(i) 12 original counterparts of this Amendment, executed by
each of the Borrowers, each of the Banks, the Issuing and Paying Agent
and the Administrative Agent;
(ii) 12 original counterparts of an amendment to the Security
Agreement executed by each of the Borrowers, adding Beneco as a party
to the Security Agreement and including the grant of a security
interest by Beneco in substantially all of its personal property;
(iii) 12 original counterparts of a guaranty of the
Obligations, executed by Beneco in favor of the Issuing and Paying
Agent for the benefit of the Banks;
(iv) 12 original counterparts of an amendment to the Pledge
Agreement previously executed by OHM, adding the stock of Beneco to the
stock previously pledged thereunder, together with stock certificates
representing all outstanding shares of stock of Beneco and undated
stock powers executed in blank covering such certificates;
(v) A certificate of the Secretary or an Assistant Secretary
of each Borrower certifying (a) the names and true signatures of the
officers of such Person authorized to sign this Amendment and the other
documents or certificates to be delivered pursuant to this Amendment
and (b) copies attached thereto of the by-laws of such Person, or, to
the extent applicable, that such by-laws of such Person have not been
amended, supplemented or otherwise since May 11, 1993;
(vi) Articles/Certificate of Incorporation for Beneco,
certified by the Secretary of State of the State in which Beneco is
incorporated;
(vii) Requests for Information (form UCC-11) and such other
search reports (including, without limitation, tax lien and judgment
searches) regarding Beneco from such jurisdictions as the
Administrative Agent deems appropriate; and
(viii) Such other agreements, documents and instruments as shall be
reasonably requested by the Administrative Agent or the Issuing and
Paying Agent.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BORROWER;
REAFFIRMATION OF COVENANTS. Each of the Borrowers hereby represents and warrants
that this Amendment has been duly authorized by all necessary corporate action
on the part of such Borrower and constitutes a legal, valid and binding
obligation of such Borrower, enforceable against it in accordance with its
terms.
Each of the Borrowers hereby reaffirms all representations,
warranties and covenants made by it in the Credit Agreement, as amended hereby,
except to the extent any of such representations or warranties expressly speak
as of a prior date, and hereby agrees that, subject to the terms hereof, all
such representations, warranties and covenants shall be deemed to have been
re-made as of the effective date of this Amendment.
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SECTION 5. EFFECT ON THE CREDIT AGREEMENT.
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5.1. Upon the effectiveness of this Amendment, each reference
in the Credit Agreement and in each of the other Transaction Documents to "this
Agreement," "hereunder," "hereof," "herein," or words of like import shall mean
and be a reference to the Credit Agreement as amended hereby, and each reference
to the Credit Agreement in any other document, instrument or agreement executed
and/or delivered in connection with the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended hereby.
5.2. Except as specifically set forth herein, the Credit
Agreement, each of the other Transaction Documents and all other documents,
amendments, instruments and agreements executed and/or delivered in connection
therewith shall remain in full force and effect and are hereby ratified and
confirmed.
5.3. The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of any of
the Banks, the Issuing and Paying Agent or the Administrative Agent under the
Credit Agreement or any other document, instrument or agreement executed in
connection therewith, nor constitute a waiver of any provision contained
therein, except as specifically set forth herein.
SECTION 6. COST, EXPENSES, FEES. Each of the Borrowers hereby
jointly and severally agrees to pay, on demand, all costs, fees and expenses
(including, without limitation, attorneys' fees, court costs, filing charges and
taxes) incurred by, or required to be paid by the Administrative Agent in
connection with the preparation, negotiation, execution, delivery and
administration of this Amendment and all other instruments, documents and
agreements executed and/or delivered pursuant to or in connection herewith.
SECTION 7. EXECUTION IN COUNTERPARTS. This Amendment may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT
OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
SECTION 9. SECTION TITLES. Section titles in this Amendment
are included herein for convenience of reference only and shall not affect in
any way the interpretation of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the day and year first written above.
BORROWERS:
OHM Corporation
Attest: By /s/ Pamela K.M. Beall
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Title:
/s/ Steven E. Harbour
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Secretary
OHM Remediation Services Corp.
By /s/ Pamela K.M. Beall
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Title:
BANKS:
Citicorp USA, Inc., Individually and as
Administrative Agent
By /s/ Majorie Futornick
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Title: Senior Vice President
Bank of America National Trust and Savings
Association (successor by merger to Bank of
America Illinois), Individually
By /s/ Jay McKeown
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Title: Assistant Vice President
Bank of America National Trust and Savings
Association (successor by merger to Bank of
America Illinois), as Issuing and Paying
Agent
By /s/ Timothy Tepowski
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Title:
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NBD Bank
By /s/ Janet Cerca
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Title: Vice President
BankBoston, N.A.
By /s/ Lindsey McSweeney
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Title: Vice President
National City Bank
By /s/ Terri Cable
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Title: Vice President
Comerica Bank
By /s/ Lee Santiona
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Title: First Vice President
BHF Bank
By /s/ John Sykes
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Title: Assistant Vice President
BHF Bank
By /s/ Thomas Scifo
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Title:
Bank One, N.A.
By /s/ Ty Koing
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Title: Vice President
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