Exhibit 10(ii)29
Amendment No. 2
This Amendment No. 2 (this "Amendment") to the Second Amended and
Restated Credit Agreement, dated as of September 27, 2001 (the "Amendment
Effective Date"), is entered into among The IT Group, Inc., a Delaware
corporation (the "Company"), IT Corporation, a California corporation and a
wholly-owned subsidiary of the Company ("ITC"), OHM Corporation, an Ohio
corporation and a wholly-owned subsidiary of the Company ("OHM"), OHM
Remediation Services Corp., an Ohio corporation and wholly-owned subsidiary of
OHM ("OHM Remediation"), Beneco Enterprises, Inc., a Utah corporation and
wholly-owned Subsidiary of OHM ("Beneco" and together with the Company, ITC, OHM
and OHM Remediation, collectively, the "Borrowers"), the Lenders (as defined
below) party hereto and Citicorp USA, Inc., a Delaware corporation, in its
capacity as administrative agent and collateral agent (in such capacity, the
"Administrative Agent"), and amends the Second Amended and Restated Credit
Agreement dated as of March 7, 2000 (as amended hereby and as the same may be
further amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") entered into among the Borrowers, the institutions from time
to time party thereto as Lenders (the "Lenders"), the institutions from time to
time party thereto as Issuing Banks (the "Issuing Banks"), the Administrative
Agent, Fleet National Bank, a national banking association, in its capacity as
documentation agent for the Lenders and the Issuing Banks and Royal Bank of
Canada and Credit Lyonnais New York Branch, in their respective capacities as
co-agents. Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Credit Agreement as in effect on the
date hereof without giving effect to this Amendment unless otherwise expressly
stated.
W i t n e s s e t h:
Whereas, the Company has requested that the Administrative Agent and
the Requisite Lenders amend Sections 10.1 (Minimum Consolidated Net Worth), 10.2
(Minimum Fixed Charge Coverage Ratio), 10.3 (Minimum Interest Coverage Ratio)
and 10.4 (Maximum Leverage Ratio) of the Credit Agreement (collectively, the
"Specified Covenants") for the third and fourth fiscal quarters of Fiscal Year
2001;
Whereas, ITC desires (a) to contribute certain parcels of land (the
"Transferred Properties") to the capital of four newly-created, wholly-owned
limited liability companies organized under the law of a state of the United
States acceptable to the Administrative Agent in its sole discretion exercised
reasonably (collectively, the "CP Subsidiaries") and (b) to contribute all
Capital Stock in these CP Subsidiaries to a newly-created, wholly-owned foreign
Subsidiary of the Company ("CP Holdings") (collectively, the "Specified
Transactions"); and the Company has requested that the Administrative Agent and
the Requisite Lenders make the appropriate amendments to the Credit Agreement to
permit the Specified Transactions; and
Whereas, the Administrative Agent and the undersigned Lenders
(constituting the Requisite Lenders) have agreed (a) to amend the Specified
Covenants, (b) to amend other terms of the Credit Agreement as set forth herein
(to permit the Specified Transactions and to make certain other amendments), in
each case subject to certain conditions set forth below;
Now, Therefore, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and other good and valuable
consideration, the adequacy and receipt of which is hereby acknowledged, and in
reliance upon the representations, warranties and
covenants contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:
Section 1. Amendments
The Credit Agreement is, effective as of the Amendment Effective Date
(but subject to the satisfaction (or due waiver) of the conditions set forth in
Section 2 (Conditions Precedent to the Effectiveness of this Amendment) hereof),
hereby amended as follows:
(a) Amendment to Article I (Definitions)
(i) The following definitions for the following terms are
hereby inserted in Section 1.1 (Defined Terms) of the Credit Agreement in
the appropriate place to preserve the alphabetical order of the definitions
in such section and, if applicable, the following definitions shall replace
in their entirety all existing definitions for the following terms in such
section:
"California Properties" means each of the following parcels
of Real Property owned by ITC prior to its transfer to a CP
Subsidiary, and in each case as more specifically identified to the
Administrative Agent prior to October 31, 2001: (a) forty-one acres
(approximately) located at the Vine Hill site, near Martinez,
California, (b) thirty acres (approximately) located at the Xxxxx site
near Martinez, California, (c) two-hundred and fifty acres
(approximately) located at the Panoche site near Benicia, California
and (d) one thousand nine hundred and thirty acres (approximately)
located adjacent to Interstate 680 near Benicia, California.
"CP Holdings" means a direct Subsidiary of ITC, wholly-owned
by ITC and organized and existing under the laws of a jurisdiction
acceptable to the Administrative Agent and with a corporate form and
organizational documents acceptable to the Administrative Agent.
"CP Subsidiaries" means each of four limited liability
companies, wholly-owned Subsidiaries of CP Holdings and organized and
existing under the law of a state of the United States acceptable to
the Administrative Agent in its sole discretion exercised reasonably
and with organizational documents acceptable to the Administrative
Agent.
"EBITDA" means, for any period on a consolidated basis for
the Company and its Subsidiaries other than the Leachate Subsidiary
and Keystone (but only if such Subsidiaries have been designated
Unrestricted Subsidiaries), (i) the sum of the amounts for such period
of (A) Consolidated Net Income, (B) depreciation, amortization expense
and other non-cash charges, (C) interest expense to the extent
deducted in the determination of Consolidated Net Income, (D) charges
for federal, state, local and foreign income taxes and (E)
extraordinary losses and losses in respect of discontinued operations
which have been deducted in the determination of Consolidated Net
Income, (F) solely for the fiscal quarter ending December 31, 2000, to
the extent included in the calculation of Consolidated Net Income for
such period, (x) the aggregate
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amount of accounts receivable (or other contractual rights to payment)
written off by the Company and its Subsidiaries in such period, up to
a maximum amount of $35,000,000 plus (y) the aggregate amount of loss
incurred by the Company and its Subsidiaries in such period due to the
sale of all of the equity interest of IT International Operations,
Inc. in Chi Mei International Technology Co., Ltd., up to a maximum
amount of $3,000,000 and (G) solely for the fiscal quarter ending
December 31, 2001, to the extent included in the calculation of
Consolidated Net Income for such period, the aggregate amount of
accounts receivable (or other contractual rights to payment) written
off by the Company and its Subsidiaries in such period, up to a
maximum amount of $18,000,000, minus (ii) extraordinary gains and
gains in respect of discontinued operations not already excluded from
the determination of Consolidated Net Income.
"Maximum Subsidiary/Joint Venture Investment Amount" means,
without duplication, (i) the sum of (A) all cash Investments made by
the Loan Parties (other than Immaterial Subsidiary Guarantors) after
February 25, 1998 in any Permitted Joint Venture or any Subsidiary of
the Company that is an Immaterial Subsidiary Guarantor or that is not
a Loan Party, (B) the amount of outstanding Accommodation Obligations
incurred by the Loan Parties (other than Immaterial Subsidiary
Guarantors) in respect of obligations of any Permitted Joint Venture
or any Subsidiary of the Company that is an Immaterial Subsidiary
Guarantor or that is not a Loan Party and (C) the amount of
consideration paid by the Loan Parties (other than Immaterial
Subsidiary Guarantors) in connection with Permitted Acquisitions made
prior to the Effective Date pursuant to clause (ii) of the definition
thereof in the Original Credit Agreement less (ii) the sum of any cash
dividends or other cash distributions (but not intercompany loans)
received by the Loan Parties (other than Immaterial Subsidiary
Guarantors) in respect of the Capital Stock of any such Permitted
Joint Venture or Subsidiary after February 25, 1998.
"Subsidiary Guarantor" means 00-00 Xxxxxxx Xxxxx Xxxxxxxxx,
XXX, Advanced Analytical Solutions, Inc., American Landfill Supply
Co., The Dorchester Group, LLC, EMCON, Emcon Industrial Services,
Inc., Empire State I, LLC, Empire State II, LLC, Gradient Corporation,
Groundwater Technology, Inc. (f/k/a Fluor Xxxxxx GTI, Inc.), IT
Alaska, Inc. (f/k/a EMCON Alaska, Inc.), IT C & V Operations, Inc., IT
Corporation of North Carolina, Inc., IT E & C Operations, Inc. (f/k/a
PEG Acquisition Corp.), IT Environmental and Facilities, Inc., IT
International Holdings, Inc., IT International Investments, Inc.
(f/k/a Fluor Xxxxxx GTI International, Inc.), IT International
Operations, Inc., IT Investment Holdings, Inc., IT Japan Services,
Inc., IT Korea Services, Inc., IT-Tulsa Holdings, Inc., Jellinek,
Xxxxxxxx & Xxxxxxxx, Inc., JSC International, Inc., Kato Road LLC,
Keystone Recovery, Inc., Landbank, Inc., Landbank Environmental
Properties, LLC, Landbank Remediation Corp., LFG Specialties, Inc.,
Monterey Landfill Gas Corporation, National Earth Products, Inc.,
Northeast Restoration Company, LLC, Organic Waste Technologies, Inc.,
Pacific Environmental Group, Inc., PHR Environmental Consultants,
Inc., Sielken, Inc., Universal Professional Insurance Company
("UPIC"), Wehran-New York, Inc., CP Holdings, each CP Subsidiary, each
other Material Subsidiary of the
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Company and each other Subsidiary of the Company that becomes a party
to a Subsidiary Guaranty.
(b) Amendments to Article VI (Representations and Warranties)
(i) clause (ff) of Section 6.1 (Representations and
Warranties from and after the Effective Date) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
(ff) No Unrestricted Material Domestic Subsidiary. None
of the Subsidiaries listed on Schedule 1.01.10 would be a Material
Subsidiary if such Subsidiary was not listed on such Schedule 1.01.10
and was not otherwise an Unrestricted Subsidiary, other than
Subsidiaries organized under the law of a jurisdiction outside of the
United States of America.
(ii) Section 6.2 (Subsequent Funding Representations and
Warranties) of the Credit Agreement is hereby amended by deleting the roman
numeral "(i)" in the eighth line thereof.
(c) Amendments to Article IX (Negative Covenants).
(i) Section 9.2 (Sales of Assets) of the Credit Agreement
is hereby amended by deleting the "and" at the end of clause (c) thereof,
replacing the period at the end of clause (d) thereof with "; and" and
adding the following new clause (e) at the end thereof:
(e) ITC shall be permitted to contribute (i) on and after the date the
Administrative Agent shall have received, each in form and substance
satisfactory to the Agents, Subsidiary Guaranties and appropriate
opinions of counsel, in each case for each of the CP Subsidiaries (and
such additional documentation as the Agents or the Requisite Lenders
may reasonably require in respect of such contribution), the
California Properties to the capital of each of the CP Subsidiaries
and (ii) on and after the date the Administrative Agent shall have
received, each in form and substance satisfactory to the Agents,
Subsidiary Guaranties and appropriate opinions of counsel, in each
case for CP Holdings and each of the CP Subsidiaries (and such
additional documentation as the Agents or the Requisite Lenders may
reasonably require in respect of such contribution), all (but not
part) of the Capital Stock of the CP Subsidiaries to the capital of CP
Holdings.
(ii) clause (d) of Section 9.4 (Investments) of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:
(d) Investments by (i) the Company in any Subsidiary of
the Company that is a Loan Party (other than an Immaterial Subsidiary
Guarantor) or by any such Loan Party in the Company or in any other
such Loan Party, (ii) the Loan Parties (other than the Immaterial
Subsidiary Guarantors) in connection with a Permitted Acquisition,
provided, however, that no such Investment shall be made in connection
with a Permitted Acquisition completed during the period
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from September 27, 2001 through March 29, 2002, and (iii) the Loan
Parties (other than the Immaterial Subsidiary Guarantors) in other
Subsidiaries of the Company that are Immaterial Subsidiary Guarantors
or that are not Loan Parties or in Permitted Joint Ventures, which
Investments shall not cause (together with any Accommodation
Obligations made pursuant to Section 9.5(d) and any Permitted
Acquisitions made prior to the Effective Date pursuant to clause (ii)
of the definition thereof in the Original Credit Agreement) the
Maximum Subsidiary/Joint Venture Investment Amount to exceed
$40,000,000 in the aggregate at any time; and
(iii) clause (d) of Section 9.5 (Accommodation Obligations)
of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:
(d) Accommodation Obligations of (i) the Company in
respect of any Subsidiary of the Company that is a Loan Party (other
than an Immaterial Subsidiary Guarantor) or of any such Loan Party in
respect of the Company or any other such Loan Party or (ii) the Loan
Parties (other than the Immaterial Subsidiary Guarantors) in respect
of any other Subsidiary of the Company that is an Immaterial
Subsidiary Guarantor or that is not a Loan Party or of any Permitted
Joint Venture, which Accommodation Obligations shall not cause
(together with any Investments made pursuant to Section 9.4(d) and any
Permitted Acquisitions made prior to the Effective Date pursuant to
clause (ii) of the definition thereof in the Original Credit
Agreement) the Maximum Subsidiary/Joint Venture Investment Amount to
exceed $40,000,000 in the aggregate at any time; and
(iv) Section 9.7 (Conduct of Business; Subsidiaries;
Permitted Acquisitions) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
Except in connection with a Permitted Acquisition, neither
the Company nor any of the Restricted Subsidiaries shall engage in any
business other than the businesses engaged in by such Borrower on the
date hereof and any business or activities which are substantially
similar or complementary thereto. The Company shall not create,
capitalize or acquire any Subsidiary or Permitted Joint Venture after
the date hereof except in connection with (i) a Permitted Acquisition
or (ii) in connection with the designation of an Unrestricted
Subsidiary. The Company and the Restricted Subsidiaries shall not
enter into any transaction or series of transactions in which it
acquires all or any significant portion of the assets of another
Person except for Permitted Acquisitions made by such Borrower and
Subsidiaries of such Borrower; provided, however, that no such
Permitted Acquisition shall be completed during the period from
September 27, 2001 through March 29, 2002. Notwithstanding anything
in this Agreement to the contrary, neither the Company nor any
Subsidiary of the Company shall engage in the business of owning or
operating (as the principal licensee) any facility principally
involved in the on-going commercial disposal of "hazardous waste" (as
defined under the Solid Waste Disposal Act, 42 U.S.C. (S)(S) 6901 et
seq., as amended, and any successor statute). Notwithstanding the
foregoing, (a) ITC shall be permitted to create the CP
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Subsidiaries and CP Holdings, each of which shall conduct no business
other than holding the California Properties and the Capital Stock of
the CP Subsidiaries, respectively and (b) ITC shall be permitted to
contribute (x) the California Properties to the capital of each CP
Subsidiary and (y) all (but not part) of the Capital Stock of the CP
Subsidiaries to the capital of CP Holdings.
(d) Amendments to Article X (Financial Covenants)
(i) Section 10.1 (Minimum Consolidated Net Worth) of the
Credit Agreement is hereby amended by replacing the dollar amounts set forth in
the table therein opposite the following time periods with the dollar amounts
set forth below:
-----------------------------------------------------------------------------------------------
Period Minimum
===============================================================================================
The last day of the Third Fiscal Quarter of the Fiscal Year 2001 to $250,000,000
the last day of the Fourth Fiscal Quarter of Fiscal Year 2001
-----------------------------------------------------------------------------------------------
The last day of the Fourth Fiscal Quarter of the Fiscal Year 2001 to $250,000,000
the last day of the First Fiscal Quarter of Fiscal Year 2002
-----------------------------------------------------------------------------------------------
(ii) Section 10.2 (Minimum Fixed Charge Coverage Ratio) of
the Credit Agreement is hereby amended by replacing the ratios set forth in the
table therein opposite the following time periods with the ratios set forth
below:
-----------------------------------------------------------------------------------------------
Fiscal Quarter Minimum Ratio
===============================================================================================
For the Third Fiscal Quarter of Fiscal Year 2001 1.25 to 1.0
-----------------------------------------------------------------------------------------------
For the Fourth Fiscal Quarter of Fiscal Year 2001 1.25 to 1.0
-----------------------------------------------------------------------------------------------
(iii) Section 10.3 (Minimum Interest Coverage Ratio) of the
Credit Agreement is hereby amended by replacing the ratios set forth in the
table therein opposite the following time periods with the ratios set forth
below:
Fiscal Quarter Minimum Ratio
===============================================================================================
For the Third Fiscal Quarter of Fiscal Year 2001 1.80 to 1.0
-----------------------------------------------------------------------------------------------
For the Fourth Fiscal Quarter of Fiscal Year 2001 1.85 to 1.0
-----------------------------------------------------------------------------------------------
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The It Group, Inc.
Amendment No. 2
(iv) Section 10.4 (Maximum Leverage Ratio) of the Credit
Agreement is hereby amended by replacing the ratios set forth in the table
therein opposite the following time periods with the ratios set forth
below:
------------------------------------------------------------------------------------------
Fiscal Quarter Maximum Ratio
==========================================================================================
For Third Fiscal Quarter of Fiscal Year 2001 5.50 to 1.0
------------------------------------------------------------------------------------------
For Fourth Fiscal Quarter of Fiscal Year 2001 5.20 to 1.0
------------------------------------------------------------------------------------------
Section 2. Conditions Precedent to the Effectiveness of this Amendment
This Amendment shall become effective as of the Amendment Effective
Date on or after the date (the "Conditions Satisfaction Date" and, together with
the Amendment Effective Date, the "Amendment Dates") when the Administrative
Agent shall have notified the Borrower that the following conditions precedent
have been satisfied:
(a) Certain Documents. The Administrative Agent shall have received
all of the following, all of which shall be in form and substance satisfactory
to the Agents, in sufficient originally executed copies for each of the Lenders:
(i) this Amendment, duly authorized and executed by the
Borrowers, the Guarantors and Lenders constituting the Requisite Lenders;
and
(ii) such additional documentation as the Agents or the
Requisite Lenders may reasonably require.
(b) Representations and Warranties. Each of the representations and
warranties contained in Article VI (Representations and Warranties) of the
Credit Agreement or the other Loan Documents shall be true and correct in all
material respects on and as of the date hereof and as of each Amendment Date, in
each case as if made on and as of such date and except to the extent that such
representations and warranties specifically relate to a specific date, in which
case such representations and warranties shall be true and correct in all
material respects as of such specific date; provided, however, that references
therein to the "Credit Agreement" shall be deemed to refer to the Credit
Agreement as amended hereby as of the Amendment Effective Date.
(c) No Events of Default. After giving effect to this Amendment, no
Default or Event of Default (except for those that may have been duly waived and
other than in respect of the delivery of certain Loan Documents) shall have
occurred and be continuing on the date hereof or either Amendment Date.
(d) Corporate and Other Proceedings. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Amendment shall be
satisfactory in all respects in form and substance to the Administrative Agent
and the Requisite Lenders.
(e) Fees and Expenses Paid. The Borrower shall have paid all
Obligations due on or before the later of the date hereof, the Amendment
Effective Date and the Conditions
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Satisfaction Date including, without limitation, the fees set forth in Section
5(a) (Fees, Costs and Expenses) hereof, the Credit Agreement or any other Loan
Document.
Section 3. Representations and Warranties
On and as of the date hereof and each Amendment Date, after giving
effect to the terms of this Amendment, each Borrower hereby represents and
warrants to the Administrative Agent and each Lender as follows:
(a) this Amendment has been duly authorized, executed and delivered
by the Borrower and each Guarantor and constitutes a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms and the Credit Agreement, as amended by this Amendment as of the
Amendment Effective Date, constitutes the legal, valid and binding obligation of
the Borrower and each Guarantor, enforceable against the Borrower and each
Guarantor in accordance with its terms;
(b) each of the representations and warranties contained in Article
IV (Representations and Warranties) of the Credit Agreement or the other Loan
Documents are true and correct in all material respects on and as of the date
hereof and each Amendment Date, in each case as if made on and as of such date
and except to the extent that such representations and warranties specifically
relate to a specific date, in which case such representations and warranties
shall be true and correct in all material respects as of such specific date;
provided, however, that references therein to the "Credit Agreement" shall be
deemed to include this Amendment; and
(c) no Default or Event of Default has occurred and is continuing
(except for those that may have been duly waived and other than in respect of
the delivery of certain Loan Documents).
Section 4. Reference to and Effect on the Loan Documents
(a) As of the Amendment Effective Date, each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of like
import, and each reference in the other Loan Documents to the Credit Agreement,
shall mean and be a reference to the Credit Agreement as amended hereby as of
the Amendment Effective Date, and this Amendment and the Credit Agreement shall
be read together and construed as a single instrument. The table of contents,
signature pages and list of Exhibits and Schedules of the Credit Agreement shall
be modified to reflect the changes made in this Amendment as of the Amendment
Effective Date.
(b) Except as specifically waived above, all of the terms of the
Credit Agreement and all other Loan Documents shall remain unchanged and in full
force and effect.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender, any Issuing Bank, the Arrangers or the Agents
under the Credit Agreement or any of the Loan Documents, nor constitute a waiver
of any provision of the Credit Agreement or any of the Loan Documents.
(d) This Amendment is a Loan Document.
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Section 5. Fees, Costs and Expenses
(a) As consideration for the execution of this Amendment, the
Borrowers agree to pay to the Administrative Agent for the account of each
Lender for which the Administrative Agent shall have received (by facsimile or
otherwise) an executed signature page for this Amendment by October 12, 2001 in
accordance with their respective Pro Rata Shares a fee equal to 0.25% of the sum
of (i) the Revolving Credit Commitments in effect as of the date hereof and (ii)
the principal amount of Term Loans outstanding on the date hereof.
(b) The Borrowers agree to pay on demand in accordance with the terms
of Section 13.2 (Expenses) of the Credit Agreement all costs and expenses of the
Administrative Agent in connection with the preparation, reproduction, execution
and delivery of this Amendment and all other Loan Documents entered into in
connection herewith, including, without limitation, the reasonable fees and out-
of-pocket expenses of counsel for the Administrative Agent with respect thereto.
Section 6. Guarantor Consent
Each Guarantor hereby consents to this Amendment and agrees that the
terms hereof shall not affect in any way its obligations and liabilities under
the Loan Documents, all of which obligations and liabilities shall remain in
full force and effect and each of which is hereby reaffirmed.
Section 7. Headings
The headings contained in this Amendment are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto.
Section 8. Execution in Counterparts
This Amendment may be executed and delivered in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which taken together shall constitute one and the same original agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are attached to the same
document. Delivery of an executed counterpart by telecopy shall be effective as
delivery of a manually executed counterpart of this Amendment.
Section 9. Notices
All communications and notices hereunder shall be given as provided in
the Credit Agreement.
Section 10. Severability
The fact that any term or provision of this Agreement is held invalid,
illegal or unenforceable as to any person in any situation in any jurisdiction
shall not affect the validity, enforceability or legality of the remaining terms
or provisions hereof or the validity,
9
enforceability or legality of such offending term or provision in any other
situation or jurisdiction or as applied to any other person.
Section 11. Successors
The terms of this Amendment shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors or assigns.
Section 12. Governing Law
This Amendment shall be interpreted, and the rights and liabilities of
the parties determined, in accordance with the law of the State of New York.
Section 13. Waiver of Jury Trial
Each of the parties hereto irrevocably waives trial by jury in any
action or proceeding with respect to this Agreement or any other Loan Document.
[SIGNATURE PAGES FOLLOW]
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In Witness Whereof, this Amendment has been duly executed on the date
set forth above.
[Signature Pages To Be Provided]
[The IT Group, Inc. / Signature Page to Amendment No. 2 to Second Amended and
Restated Credit Agreement]
