AMENDMENT NO. 1 TO CREDIT, SECURITY AND GUARANTY AGREEMENT
Exhibit 10.6
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 30th day of June 2023 (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”), SCCI NATIONAL HOLDINGS, INC., a Delaware corporation (“Holdings”), MIDCAP FUNDING IV TRUST, a Delaware statutory trust, 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 March 27, 2023 (the “Original 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. Borrowers and Holdings (a) have entered into three Transfer Agreements, each dated as of June 19, 2023 and by and among Shimmick and Transportation Operations & Maintenance Solutions, LLC (“TOMS”), pursuant to which Shimmick transferred certain assets and liabilities relating to toll-road operations and management services to TOMS and (b) intend to enter into that certain Amended and Restated Membership Interest Purchase Agreement (the “MIPA”), by and among Shimmick, as seller, OEP Neology Cayman LP, as buyer, and TOMS, pursuant to which OEP Neology Cayman LP will purchase 100% of the outstanding equity interests of TOMS in accordance with the terms and conditions of the MIPA (the foregoing clauses (a) and (b), collectively, the “Project Disney Transaction”).
C. Borrowers and Holdings have requested, and Agent and all Lenders have agreed, to consent to the Project Disney Transaction and amend certain provisions of the Original Credit Agreement, all 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:
1. Recitals. This Agreement shall constitute a Financing Document and the Recitals and each reference to the Credit Agreement, unless otherwise expressly noted, will be deemed to reference the Credit Agreement as amended hereby. The Recitals set forth above shall be construed as part of this Agreement as if set forth fully in the body of this Agreement and capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement (including those capitalized terms used in the Recitals hereto).
2. Limited Consent. Subject to the terms and conditions set forth herein, (a) notwithstanding Section 5.7 of the Credit Agreement, Agent and the Lenders party hereto hereby consent to the Project Disney Transaction and that the Project Disney Transaction shall not, in and of itself, constitute an “Event of Default” under the Credit Agreement and (b) notwithstanding Section 4.1(b) of the Credit Agreement, Agent and the Lenders party hereto hereby consent to an extension of the delivery date with respect to the Credit Parties’ audited financial statements for each of the fiscal years ended December 31, 2021 and December 31, 2022 to July 15, 2023 (or such later date as Agent may agree in its sole discretion). The consent set forth in this Section 2 is effective solely for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (i) be a consent to any amendment, waiver or modification of any other term or condition of the Credit Agreement or of any other Financing Document; (ii) be a consent to any amendment, waiver or modification of the Redemption Agreement; (iii) prejudice any right that Agent or Lenders have or may have in the future under or in connection with the Credit Agreement or any other Financing Document; (iv) constitute a consent to or waiver of any past, present or future Default or Event of Default or other violation of any provisions of the Credit Agreement or any other Financing Documents, (v) create any obligation to forbear from taking any enforcement action, or to make any further extensions of credit or (vi) establish a custom or course of dealing among any of the Credit Parties, on the one hand, or Agent or any Lender, on the other hand.
3. Amendments to Original Credit Agreement. Subject to the terms and conditions of this Agreement, including, without limitation, the conditions to effectiveness set forth in Section 5 below, the Original Credit Agreement is hereby amended as follows:
(a) Section 1.1 of the Original Credit Agreement is hereby amened to add the following definition of “First Amendment Effective Date” in the appropriate alphabetical order therein:
““First Amendment Effective Date” means June 30, 2023.”
(b) The definition of “Revolving Loan Commitment Amount” in Section 1.1 of the Original Credit Agreement is hereby amended by deleting the last sentence of such defined term in its entirety and replacing it with the following:
“For the avoidance of doubt, the aggregate Revolving Loan Commitment Amount of all Lenders (i) on the Closing Date and at all times other than as described in clauses (ii) and (iii) below shall be $30,000,000, (ii) from the First Amendment Effective Date through and including August 30, 2023, $35,250,000, and (iii) if the Additional Tranche is fully activated by Borrowers pursuant to the terms of the Agreement such amount shall increase to $75,000,000.”
4. Representations and Warranties; Reaffirmation of Security Interest. Each Credit Party hereby confirms that all of the representations and warranties set forth in the Credit Agreement are true and correct in all material respects (without duplication of any materiality qualifier in the text of such representation or warranty) with respect to such Credit Party as of the date hereof except to the extent that any such representation or warranty relates to a specific date in which case such representation or warranty shall be true and correct as of such earlier date. Nothing herein is intended to impair or limit the validity, priority or extent of Agent’s security interests in and Liens on the Collateral. Each Credit Party acknowledges and agrees that the Credit Agreement, the other Financing Documents and this Agreement constitute the legal, valid and binding obligation of such Credit Party, and are enforceable against such Credit Party in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights generally and by general equitable principles.
5. Conditions to Effectiveness. This Agreement shall become effective as of the date on which each of the following conditions has been satisfied, as determined by Agent in its sole discretion:
(a) Each Credit Party shall have delivered to Agent this Agreement, dated as of even date herewith, each executed by an authorized officer of such Credit Party;
(b) all representations and warranties of Credit Party contained herein shall be true and correct in all material respects (without duplication of any materiality qualifier in the text of such representation or warranty) as of the date hereof except to the extent that any such representation or warranty relates to a specific date in which case such representation or warranty shall be true and correct as of such earlier date (and such parties’ delivery of their respective signatures hereto shall be deemed to be its certification thereof);
(c) prior to and after giving effect to the agreements set forth herein, no Default or Event of Default shall exist under any of the Financing Documents; and
(d) Credit Parties shall have delivered such other documents, information, certificates, records, permits, and filings as the Agent may reasonably request.
6. Costs and Fees. In consideration of Agent’s agreement to enter into this Agreement, Xxxxxxxxx agrees to pay Agent, for the benefit of all Revolving Lenders, an amendment fee in the amount of $250,000 (the “Amendment Fee”). Such fee shall be due and payable on the First Amendment Effective Date and, once paid, is non-refundable. If the Amendment Fee is not paid when due, Borrowers hereby authorize Agent to deduct all of such fees set forth in this Section 6 from the proceeds of one or more Revolving Loans made under the Credit Agreement.
7. Release. In consideration of the agreements of Agent and Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Credit Party, voluntarily, knowingly, unconditionally and irrevocably, with specific and express intent, for and on behalf of itself and all of its respective parents, subsidiaries, affiliates, members, managers, predecessors, successors, and assigns, and each of their respective current and former directors, officers, shareholders, agents, and employees, and each of their respective predecessors, successors, heirs, and assigns (individually and collectively, the “Releasing Parties”) does hereby fully and completely release, acquit and forever discharge each of Agent, Lenders, and each their respective parents, subsidiaries, affiliates, members, managers, shareholders, directors, officers and employees, and each of their respective predecessors, successors, heirs, and assigns (individually and collectively, the “Released Parties”), of and from any and all actions, causes of action, suits, debts, disputes, damages, claims, obligations, liabilities, costs, expenses and demands of any kind whatsoever, at law or in equity, whether matured or unmatured, liquidated or unliquidated, vested or contingent, xxxxxx or inchoate, known or unknown that the Releasing Parties (or any of them) has against the Released Parties or any of them (whether directly or indirectly). Each Credit Party acknowledges that the foregoing release is a material inducement to Agent’s and each Xxxxxx’s decision to enter into this Agreement and agree to the modifications contemplated hereunder, and has been relied upon by Agent and Xxxxxxx in connection therewith.
8. No Waiver or Novation. The execution, delivery and effectiveness of this Agreement shall not, except as expressly provided in this Agreement, operate as a waiver of any right, power or remedy of Agent, nor constitute a waiver of any provision of the Credit Agreement, the Financing Documents or any other documents, instruments and agreements executed or delivered in connection with any of the foregoing. Nothing herein is intended or shall be construed as a waiver of any existing Defaults or Events of Default under the Credit Agreement or the other Financing Documents or any of Agent’s rights and remedies in respect of such Defaults or Events of Default. This Agreement (together with any other document executed in connection herewith) is not intended to be, nor shall it be construed as, a novation of the Credit Agreement.
9. Affirmation. Except as specifically amended pursuant to the terms hereof, each Credit Party hereby acknowledges and agrees that the Credit Agreement and all other Financing Documents (and all covenants, terms, conditions and agreements therein) shall remain in full force and effect, and are hereby ratified and confirmed in all respects by such Credit Party. Each Credit Party covenants and agrees to comply with all of the terms, covenants and conditions of the Credit Agreement and the Financing Documents, notwithstanding any prior course of conduct, waivers, releases or other actions or inactions on Agent’s or any Lender’s part which might otherwise constitute or be construed as a waiver of or amendment to such terms, covenants and conditions.
10. Miscellaneous.
(a) Reference to the Effect on the Credit Agreement. Upon the effectiveness of this Agreement, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of similar import shall mean and be a reference to the Credit Agreement, as amended by this Agreement. Except as specifically amended above, the Credit Agreement, and all other Financing Documents (and all covenants, terms, conditions and agreements therein), shall remain in full force and effect, and are hereby ratified and confirmed in all respects by each Credit Party.
(b) Governing Law. THIS AGREEMENT AND ALL DISPUTES AND OTHER MATTERS RELATING HERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
(c) Incorporation of Credit Agreement Provisions. The provisions contained in Section 11.6 (Indemnification), Section 13.8(b) (Submission to Jurisdiction), and Section 13.9 (Waiver of Jury Trial) of the Credit Agreement are incorporated herein by reference to the same extent as if reproduced herein in their entirety.
(d) Headings. Section headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
(e) Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by facsimile or by electronic mail delivery of an electronic version (e.g., .pdf or .tif file) of an executed signature page shall be effective as delivery of an original executed counterpart hereof and shall bind the parties hereto.
(f) Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.
(g) Severability. In case any provision of or obligation under this Agreement shall be invalid, illegal or unenforceable in any applicable jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
(h) Successors/Assigns. This Agreement shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the parties hereto, subject to the provisions of the Credit Agreement and the other Financing Documents.
[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: | MIDCAP FUNDING IV TRUST, | |||||
| as Agent | ||||||
| By: Apollo Capital Management, L.P., | ||||||
| its investment manager | ||||||
| By: Apollo Capital Management GP, LLC, | ||||||
| its general partner | ||||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||||
| Name: | Xxxxxxx Xxxxxxxx | |||||
| Title: | Authorized Signatory | |||||
| LENDER: | MIDCAP FINANCIAL TRUST, | |||||
| as a Lender | ||||||
| By: Apollo Capital Management, L.P., | ||||||
| its investment manager | ||||||
| By: Apollo Capital Management GP, LLC, | ||||||
| its general partner | ||||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||||
| Name: | Xxxxxxx Xxxxxxxx | |||||
| Title: | Authorized Signatory | |||||
[Signatures Continue on Following Page]
| BORROWERS: | SHIMMICK CONSTRUCTION COMPANY, INC. | |||||
| By: | /s/ Xxxxx Xxxxxxxxx | |||||
| Name: | Xxxxx Xxxxxxxxx | |||||
| Title: | CFO | |||||
| RUST CONSTRUCTORS INC. | ||||||
| By: | /s/ Xxxxxxx Xxxxxx | |||||
| Name: | Xxxxxxx Xxxxxx | |||||
| Title: | President | |||||
| THE LEASING CORPORATION | ||||||
| By: | /s/ Xxxxx Xxxxxxxxx | |||||
| Name: | Xxxxx Xxxxxxxxx | |||||
| Title: | CFO | |||||
| GUARANTORS: | SCCI NATIONAL HOLDINGS, INC. | |||||
| By: | /s/ Xxxxx Xxxxxxxxx | |||||
| Name: | Xxxxx Xxxxxxxxx | |||||
| Title: | CFO | |||||
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