Exhibit 10.3.2
AMENDMENT NO. 3 TO
REVOLVING CREDIT AGREEMENT
This AMENDMENT NO. 3 ("Amendment") dated as of February 14, 2003 is by
and between WACHOVIA BANK, NATIONAL ASSOCIATION (formerly known as First Union
National Bank), as an individual Lender and as Sole Lead Arranger and
Administrative Agent ("Wachovia"), Wachovia in its capacity as the Lead Arranger
and Administrative Agent is hereinafter the "Agent", MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC., as an individual Lender ("Merrill"), BANKNORTH, N.A.,
as an individual Lender ("Banknorth") and TRC COMPANIES, INC., a Delaware
corporation ("TRC") and the subsidiaries of TRC listed herein, (each a
"Borrower" and collectively the "Borrowers").
W I T N E S S E T H:
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WHEREAS, the Borrowers, Agent and Lenders are parties to a certain
Revolving Credit Agreement dated as of March 25, 2002, as amended by an
Amendment No. 1 thereto dated as of August 30, 2002 and as further amended by an
Amendment No. 2 thereto dated as of September 16, 2002 (said agreement, as so
amended, and as further as amended and modified from time to time, the "Credit
Agreement") and certain other Credit Documents executed and delivered in
connection therewith;
WHEREAS, the Borrowers, the Agent and the Lenders desire to amend the
Credit Agreement for the purpose of increasing the Commitments to an aggregate
amount not to exceed $50,000,000, said increase to be accomplished by the
increase of the Commitments of Wachovia and Banknorth to $25,000,000 and
$17,000,000 respectively;
WHEREAS, the Borrowers, the Agent and the Lenders further desire to
amend the Credit Agreement to modify and/or supplement certain of the financial
covenants and financial reporting requirements set forth therein;
WHEREAS, the Borrowers have also requested that the following companies
be joined to the Credit Agreement and the Security Agreement as additional
Borrowers as Grantors (as the case may be): Cubix Corporation, Essex
Environmental, Inc., Novak Engineering, Inc. and SGS Witter, Inc. (together, the
"Additional Borrowers"); and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto hereby agree as follows:
1. DEFINED TERMS; EFFECT OF AMENDMENT.
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(a) Unless otherwise modified hereby, all capitalized terms used herein
which are defined in the Credit Agreement, and not otherwise defined herein, are
used herein as defined in the Credit Agreement. All capitalized terms used
herein which are defined in the Credit
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Agreement and modified herein shall have the meaning assigned to such terms in
the Credit Agreement as so modified.
(b) This Amendment is an amendment to the Credit Agreement. Unless the
context of this Amendment otherwise requires, the Credit Agreement and this
Amendment shall be read together and shall have effect as if the provisions of
the Credit Agreement and this Amendment were contained in one agreement. After
the effective date of this Amendment, all references in the Credit Agreement to
the "Credit Agreement", "this Agreement", "hereto", "hereof", "hereunder" or
words of like import referring to the Credit Agreement shall mean the Credit
Agreement as amended by this Amendment, and all references in the Notes and the
other Credit Documents to the Credit Agreement shall mean the Credit Agreement
as amended by this Amendment.
2. AMENDMENT TO CREDIT AGREEMENT.
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(a) For the purpose of establishing the increased commitments of
Wachovia and Banknorth under the Credit Agreement and increasing the aggregate
Commitments of all of the Lenders to $50,000,000, SCHEDULE "A" to the Credit
Agreement is hereby deleted in its entirety and SCHEDULE "A" attached hereto is
hereby substituted into, and made a part of, the Credit Agreement, in its place.
(b) The definition of "Maximum Available Revolving Credit Amount" set
forth in Section 1.01 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
""Maximum Available Revolving Credit Amount" shall mean Fifty
Million Dollars ($50,000,000), LESS any reductions to said
Maximum Revolving Credit Amount pursuant to Section 2.04, but
subject to the limitations set forth in Section 8.17 hereof."
(c) The following new defined terms shall be inserted into Section 1.01
in their respective appropriate alphabetical order:
""Consolidated CPLTD" shall mean, with respect to the
Borrowers, the current maturities (whether by scheduled
principal payment, amortization, mandatory prepayment, sinking
fund obligations or otherwise) due on all of the Borrowers'
Consolidated Funded Debt that by the terms of such debt has a
term (whether by stated maturity, termination date or renewal
or extension features exercisable at the option of the
applicable Borrower) in excess of one year, or otherwise
characterized as long term debt in accordance with GAAP."
""Earnout Payments" shall mean any payments in cash actually
paid by a Borrower that is (i) in respect of obligations owing
to certain equity holders or other principals of a Borrower
prior to the acquisition of said Borrower by TRC as additional
consideration to said holders and/or principal for the
agreement to sell their respective interest in said Borrower
to TRC and (ii) based upon the
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objectively determined positive earnings of said Borrower
subsequent to said acquisition."
""Eligible Billed Accounts" shall mean all of Accounts
Receivable (as defined in the Security Agreement) that (i) has
been actually billed for services rendered by a Borrower, (ii)
is not aged more than ninety (90) days from the date of
invoice, and (iii) otherwise comports with the representations
and warranties set forth in Section 8(a) of the Security
Agreement."
(d) There shall be added to Section 4.02 of the Credit Agreement the
following additional provisions at the end of said Section.
"Without limiting the generality of the foregoing, promptly
upon receipt of the reports required pursuant to Section
7.02(c), the Agent shall determine the amount, if any, by
which the sum of (A) the Revolving Credit Obligations PLUS (B)
the Swingline Obligations exceed the amount of the Eligible
Billed Accounts (an "Excess") in accordance with Section 8.17
hereto. If an Excess shall exist, the Agent shall immediately
notify the Borrower of the amount of such Excess, and upon
immediate receipt of such notice, the Borrower shall make, or
cause to be made, a mandatory prepayment of the Revolving
Credit Obligations and/or the Swingline Obligations in an
amount equal to such Excess, together with accrued but unpaid
interest thereon."
(e) Clause (c) of Section 7.02 of the Credit Agreement shall be amended
and restated to read as follows:
"(c) as soon as practicable, but in any event not later than
twenty (20) days after the end of each fiscal quarter of each
fiscal year of the Borrower, an accounts receivable aging
summary report substantially in the form historically
furnished by the Borrowers to the Agent and otherwise
reasonably acceptable to the Agent;"
(f) The clause "signed by TRC's chief financial officer" set forth in
Section 7.03 of the Credit Agreement shall be amended and restated to read as
follows:
"signed by TRC's chief financial officer or any other
appropriate executive officer of TRC reasonably acceptable
to the Agent"
(g) Section 8.07 of the Credit Agreement shall be amended and restated
to read as follows:
"8.07. DEBT SERVICE COVERAGE RATIO. The Borrowers will not
permit the ratio of (A) Consolidated EBITDA MINUS the sum of
(i) Capital Expenditure and (ii) Earnout Payments to (B) the
sum of (i) Consolidated Total Interest Expense PLUS
Consolidated CPLTD, to be less than 4.50 to 1:00 for any Test
Period."
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(h) There shall be added to the Credit Agreement a new Section 8.17
(immediately following Section 8.16) that shall read as follows:
"Section 8.17. REVOLVING CREDIT AMOUNT TO ELIGIBLE BILLED
ACCOUNTS. The Borrowers will not permit the sum of (A)
Revolving Credit Obligations PLUS (B) the Swingline
Obligations to exceed the gross amount of the Eligible Billed
Accounts as of the end of any fiscal quarter of the Borrower,
said amount to be determined by the Agent based on the reports
required pursuant to Section 7.02(c) hereof."
4. ADJUSTMENT TO EXPOSURES; NEW NOTES. (a) Upon satisfaction of the
condition precedent set forth in Section 10 hereof, Banknorth shall be deemed to
have taken by assignment and purchased from the Merrill, without recourse to, or
representation or warranty, by any of Merrill of any kind or description, an
interest in the Revolving Credit Loans and L/C Participations owing to Merrill
as of the Effective Date (as defined in Section 10 below) (but excluding accrued
interest and fees to and including the Effective Date) equal to its Pro Rata
Share of said outstanding obligations. In connection with said assignment and
purchase, on the Effective Date Banknorth shall pay to Merrill such amounts as
may be necessary such that after given effect to such payment, Merrill and
Banknorth shall be owed from the Borrowers outstanding Revolving Credit
Obligation equal to their respective Pro Rata Shares therein as of the Effective
Date.
(b) To evidence the obligations of the Borrowers (including, without
limitation, the Additional Borrowers) owing to the Lenders, the Borrowers shall
(i) issue to each Lender new Revolving Credit Notes substantially in the form of
EXHIBIT A hereto and (ii) issue to Wachovia, a new Swingline Note substantially
in the form of EXHIBIT B hereto. Each such note shall be dated the Effective
Date and shall be in an original principal amount of up to the Commitment of the
Lender to which such note is being issued.
5. JOINDER OF ADDITIONAL BORROWERS. In accordance with Section 7.17 of
the Credit Agreement, each of Additional Borrower shall become a Borrower under
the Credit Agreement and a Grantor under the Security Agreement, in each case as
of the Effective Date. In connection with said joinder, the Borrowers shall
cause to be delivered to the Agent and the Lenders (i) a new SCHEDULE I to the
Credit Agreement reflecting the addition of the Additional Borrowers, (ii)
supplements to SCHEDULE I to the Security Agreement providing the information
required thereby for each Additional Borrower, and (iii) any supplements,
modifications or amendments to ANNEX I to the Credit Agreement as may be
required to provide any and all necessary disclosure pertaining to the
Additional Borrower so as to make said disclosure true and complete as to all of
the Borrowers after giving effect to the joinder of the Additional Borrowers to
the Credit Agreement.
6. FULL FORCE AND EFFECT. Except as expressly modified by this
Amendment, all of the terms and conditions of the Credit Agreement shall
continue in full force and effect, and all parties hereto shall be entitled to
the benefits thereof. This Amendment is limited as written and shall not be
deemed (i) to be an amendment of or a consent under or waiver of any other term
or condition of the Credit Agreement or (ii) to prejudice any right or rights
which the Lenders now have or may have in the future under or in connection with
the Credit Agreement or such other agreements.
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7. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to
enter into this Amendment, each Borrower makes the following representations and
warranties to the Lenders, which shall survive the execution and delivery
hereof:
(i) The execution and delivery of this Amendment has been
authorized by all necessary corporate action on its
part, this Amendment has been duly executed and
delivered by it, and this Amendment and the Credit
Agreement, as amended hereby, constitutes the legal,
valid and binding obligations of it enforceable against
it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization and other laws
affecting creditors' rights generally, moratorium laws
from time to time in effect and general principles of
equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(ii) No Event of Default has occurred and is continuing
under the Credit Agreement, and no event has occurred
which, with notice, lapse of time or both, would
constitute such an Event of Default; and
(iii) The representations and warranties set forth in the
Credit Agreement and the other Credit Documents are
true and correct as of the date hereof in all material
respects.
8. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and all which when taken together shall constitute one and the same agreement.
9. GOVERNING LAW. This Amendment, including the validity thereof and
the rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the laws of the State of New Jersey.
10. CONDITIONS PRECEDENT. This Amendment shall not be effective until
(i) the Agent shall have received counterparts of this Amendment, duly executed
by each of the parties hereto, (ii) each Lender shall have received a Revolving
Credit Note reflecting its Commitment as of the Effective Date duly executed by
the Borrowers and delivered to each Lender, (iii) Wachovia shall have received a
Swingline Note reflecting its Swingline Commitment as of the Effective Date duly
executed by the Borrowers and delivered to Wachovia, (iv) Merrill shall have
received from Banknorth the payments required pursuant to Section 4(a) hereof,
(v) the Borrowers shall have caused the following items to be delivered to the
Agent and the Lenders with respect to the Additional Lenders, in each case in
form and substance satisfactory to the Agent and the Lenders: (a) a joinder to
Credit Agreement and Security Agreement in the form of EXHIBIT C hereto duly
executed by each Additional Borrower and delivered to the Agent, (b)
documentation substantially in the form required by clauses (iii) (LIEN
SEARCHES), (iv) (INCUMBENCY CERTIFICATE), (v) (OPINION OF COUNSEL), (vi)
(SECRETARY'S CERTIFICATE) and (VII) (GOOD STANDING CERTIFICATES) of Section 5.01
of the Credit Agreement, with respect to each Additional Borrower, (iv) the
Borrowers shall have caused to be delivered to the Agent and the Lenders the
revised, amended, supplemented and/or additional schedules and annexes
contemplated by Section 5 of this Amendment, (vii) the Borrowers shall have paid
to the Agent for the ratable benefit of the
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Lenders, the $15,000 amendment fee required pursuant to Section 3.05 of the
Credit Agreement, and (viii) Borrowers shall have paid all reasonable fees and
expenses of the Agent's counsel incurred in connection with the preparation,
negotiation, execution and delivery and review of this Amendment. The date on
which all of the foregoing conditions are satisfied as determined by the Lenders
is referred to herein as the "EFFECTIVE DATE".
11. EXECUTION CERTIFICATION. The parties hereto certified that this
Amendment was executed and delivered in the State of New Jersey.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the day and year first above written.
THE BORROWERS:
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TRC COMPANIES, INC. TRC ENVIRONMENTAL CORPORATION
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Senior Vice President Vice President and Treasurer
TRC ENGINEERS, INC. TRC ENVIRONMENTAL SOLUTIONS, INC.
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Vice President and Treasurer Assistant Treasurer
TRC MARIAH ASSOCIATES INC. TRC GARROW ASSOCIATES, INC.
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Vice President and Treasurer Treasurer
TRC ALTON GEOSCIENCE, INC. VECTRE CORP.
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Assistant Treasurer Treasurer
HUNTER ASSOCIATES TEXAS, LTD. LOWNEY ASSOCIATES
By Hunter Associates, Inc.,
its General Partner
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Treasurer Treasurer
OMNI ENVIRONMENTAL IMBSEN & ASSOCIATES
CORPORATION
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Treasurer Assistant Treasurer
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ENGINEERED AUTOMATION ECON CAPITAL, LP
SYSTEMS, INCORPORATED By TRC Companies, Inc.,
its General Partner
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Treasurer Treasurer
TRC ENERGYSOLVE LLC GBF HOLDINGS LLC
By TRC Companies, Inc., By TRC Companies, Inc.,
its Managing Member . its Managing Member
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Treasurer Treasurer
PBWO HOLDINGS, LLC CO-ENERGY GROUP LLC
By TRC Companies, Inc.,
its Managing Member
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Treasurer Assistant Treasurer
HUNTER ASSOCIATES, INC. METUCHEN REALTY ACQUISITION, LLC
By TRC Companies, Inc.,
its Managing Member
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Treasurer Treasurer
E/PRO ENGINEERING AND CARSON-SALCEDO-MCWILLIAMS, INC.
ENVIRONMENTAL CONSULTING LLC
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Treasurer Treasurer
NEW CENTURY ENGINEERING SITE-BLAUVELT ENGINEERS, INC.
SUPPORT SERVICES, LLC (New Jersey)
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Treasurer Treasurer
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SITE CONSTRUCTION SERVICES INC. SITE-BLAUVELT ENGINEERS, INC.
(New York)
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Treasurer Treasurer
SITE-BLAUVELT ENGINEERS, INC.
(Virginia)
By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr.,
Treasurer
THE ADDITIONAL BORROWERS
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CUBIX CORPORATION NOVAK ENGINEERING, INC.
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Assistant Treasurer Assistant Treasurer
SGS WITTER, INC. ESSEX ENVIRONMENTAL, INC.
By: /s/ Harold C. Elston, Jr. By: /s/ Harold C. Elston, Jr.
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Harold C. Elston, Jr., Harold C. Elston, Jr.,
Assistant Treasurer Assistant Treasurer
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THE AGENT:
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WACHOVIA BANK, NATIONAL ASSOCIATION,
(formerly known as First Union
National Bank),
AS AGENT
By: /s/ Paul J. Bakey
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Paul J. Bakey,
Vice President
THE LENDERS:
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WACHOVIA BANK, NATIONAL ASSOCIATION,
(formerly known as First Union
National Bank),
INDIVIDUALLY
By: /s/ Paul J. Bakey
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Paul J. Bakey,
Vice President
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC.
By: /s/ Randall R. Meck
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Randall R. Meck,
Vice President
BANKNORTH, N.A.
By: /s/ Jeffrey R. Westling
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Jeffrey R. Westling
Senior Vice President
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