Amend. #7 to Credit Agreement



 Exhibit 10.4 
  
 AMENDMENT SEVEN TO CREDIT AGREEMENT 
  
 This Amendment Seven to Credit Agreement (“Amendment”) is dated as of October 6, 2004 (“Effective
Date”), among MATRIX SERVICE COMPANY, as Borrower, the Lenders and BANK ONE, NA (as successor by merger to Bank One, Oklahoma, NA), with its main office in Chicago, Illinois, as a Lender, LC Issuer and as Agent for the Lenders.

  
 RECITALS 
  
 A. Reference is made to the Credit Agreement dated as of March 7, 2003, among
Borrower, Lenders and Agent, as amended by Amendment One to Credit Agreement dated as of May 22, 2003, Amendment Two to Credit Agreement dated as of August 27, 2003, Amendment Three to Credit Agreement dated as of December 19, 2003, Amendment Four
to Credit Agreement dated as of March 11, 2004, Amendment Five to Credit Agreement dated as of May 6, 2004, and Amendment Six to Credit Agreement dated as of August 5, 2004 (as amended, the “Credit Agreement”) pursuant to which each of the
Lenders established their respective Commitments in favor of the Borrower. 
  
 B. Borrower has requested the Lenders to make certain modifications to the Credit Agreement; and the Lenders and Agent have agreed thereto, as specifically set forth below. 
  
 C. Terms used herein shall have the meanings ascribed to them in the Credit
Agreement, unless otherwise defined herein. 
  
 AGREEMENT

  
 1. Amendment to Credit Agreement. 
  
 1.1. The pricing grid set forth in the Pricing Schedule is hereby replaced
with the following: 
  

											
	 LEVERAGE
 RATIO

	 	APPLICABLE MARGIN (BPS)

	 	LETTERS
OF
CREDIT
FEE (bps)

	 	COMMITMENT
FEE (bps)


	 	EURODOLLAR
LOANS* (+)

	 	ABR
LOANS* (+)

	 	SWING LINE
LOANS (+)

	 	 
	£ 4.50x	 	425.0	 	200.0	 	200.0	 	425.0	 	62.5
	 	 	
	 	
	 	
	 	
	 	

	£ 4.25x	 	400.0	 	175.0	 	175.0	 	400.0	 	62.5
	 	 	
	 	
	 	
	 	
	 	

	£ 4.00x	 	375.0	 	150.0	 	150.0	 	375.0	 	62.5
	 	 	
	 	
	 	
	 	
	 	

	£ 3.75x	 	350.0	 	125.0	 	125.0	 	350.0	 	62.5
	 	 	
	 	
	 	
	 	
	 	

	£ 3.50x	 	325.0	 	100.0	 	100.0	 	325.0	 	62.5
	 	 	
	 	
	 	
	 	
	 	

	£ 3.25x	 	300.0	 	75.0	 	75.0	 	300.0	 	62.5
	 	 	
	 	
	 	
	 	
	 	

	£ 3.00x	 	275.0	 	50.0	 	50.0	 	275.0	 	62.5
	 	 	
	 	
	 	
	 	
	 	

	£ 2.75x	 	250.0	 	25.0	 	25.0	 	250.0	 	62.5
	 	 	
	 	
	 	
	 	
	 	

	£ 2.50x	 	225.0	 	00.0	 	00.0	 	225.0	 	50.0
	 	 	
	 	
	 	
	 	
	 	

	£ 2.00x	 	200.0	 	-25.0	 	-25.0	 	200.0	 	37.5
	 	 	
	 	
	 	
	 	
	 	

	£ 1.50x	 	175.0	 	-50.0	 	-50.0	 	175.0	 	32.5
	 	 	
	 	
	 	
	 	
	 	


  
 *Term Loan pricing shall be 25.0 bps
higher 







 1.2. Capital Expenditures. Section 6.16 is hereby replaced with the following: 
  
 “6.16 Capital Expenditures. The Borrower will
not, nor will it permit any Subsidiary to, expend, or be committed to expend, in excess of $8,000,000 for Capital Expenditures during fiscal year 2005, and thereafter $9,000,000 for Capital Expenditures during any one fiscal year on a non-cumulative
basis in the aggregate for the Borrower and its Subsidiaries.” 
  
 1.3. Fixed Charge Coverage Ratio. Section 6.27.1 is hereby amended to evidence that the phrase “1.15 to 1.0 through August 31, 2004; thereafter 1.25 to 1.0 through May 31, 2005; and thereafter, 1.50 to 1.0” is hereby
deleted and replaced with “1.15 to 1.0 through February 28, 2005; thereafter 1.0 to 1.0 through May 31, 2005; and thereafter, 1.25 to 1.0”. 
  
 1.4. Leverage Ratio (Total Debt). Section 6.27.2 is hereby amended to evidence that the phrase “3.25 to 1.0 through the first fiscal quarter
ending August 31, 2004, and thereafter 3.50 to 1.0” is hereby deleted and replaced with “4.50 to 1.0 through February 28, 2005; and thereafter, 3.50 to 1.0”. 
  
 1.5. Leverage Ratio (Senior Debt). Section 6.27.4 is hereby amended to evidence that the phrase “(a) 3.25 to 1.0
through August 31, 2004; and (b) thereafter, 2.25 to 1.0” is hereby deleted and replaced with “(a) 3.00 to 1.0 through February 28, 2005; and (b) thereafter, 2.25 to 1.0”. 
  
 2. Deliveries. Upon the execution hereof, Borrower shall: (i) deliver payment of the costs and fees described in Section 7, below;
and (ii) deliver such other documents reasonably required by Agent in connection herewith. 
  
 3. Waiver of Default. Lenders hereby waive the Default that occurred in Borrower’s Total Leverage Ratio as of August 31, 2004. Such waiver applies only to the stated Default for the stated period, and
shall not preclude other or further exercise of any and all rights of Lenders as to future Defaults, whether matured or unmatured. 
  
 4. Representations. Borrower represents to Agent and Lenders that, after giving affect to the amendments to the Credit Agreement contemplated hereby: (i) no
Default or Unmatured Default exists; (ii) the representations and warranties contained in Article V of the Loan Agreement are true and correct as of the date hereof, except to the extent such representation or warranty is stated to relate solely to
an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date; and (iii) it is in compliance with the financial covenants as set forth in Section 6.27 as amended by this Amendment.

  
 5. Ratifications. Borrower shall deliver to Agent fully executed
originals of the Ratification of Security Agreements and Ratification of Guaranty Agreement, in the forms set forth on Schedules “5-A” and “5-B”, respectively, attached hereto. 
  
 6. Release And Waiver Of Claims. In consideration of each Lender’s agreement to
enter into this Amendment, Borrower hereby agrees as follows: 
  

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 A. General Release and Waiver of Claims: Borrower hereby releases and forever discharges Agent and
each Lender and their respective successors, assigns, partners, directors, officers, agents, attorneys, and employees from any and all claims, demands, cross-actions, controversies, causes of action, damages, rights, liabilities and obligations, at
law or in equity whatsoever, known or unknown, whether past, present or future, now held, owned or possessed by Borrower, or which Borrower may, as a result of any actions or inactions occurring on or prior to the Effective Date, hereafter hold or
claim to hold under common law or statutory right, arising, directly or indirectly out of the Loan or any of the Loan Documents or any of the documents, instruments or any other transactions relating thereto or the transactions contemplated thereby.

  
 Borrower understands and agrees that this is a full, final and
complete release and agrees that this release may be pleaded as an absolute and final bar to any or all suit or suits pending or which may hereafter be filed or prosecuted by Borrower, or anyone claiming by, through or under Borrower, in respect of
any of the matters released hereby, and that no recovery on account of the matters described herein may hereafter be had from anyone whomsoever, and that the consideration given for this release is no admission of liability. 
  
 B. Releases Binding on Affiliates of Borrower. The provisions, waivers
and releases set forth are binding upon Borrower and its agents, employees, representatives, officers, directors, general partners, limited partners, joint shareholders, beneficiaries, trustees, administrators, subsidiaries, affiliates, employees,
servants and attorneys. 
  
 7. Costs and Fees. As inducement for the
Lenders and Agent to execute this Amendment, Borrower shall pay a fee equal to 0.50% of the aggregate commitment under the Total Facility ($405,597), in good funds, upon the execution hereof, to Agent for distribution to the Lenders in accordance
with their Pro Rata Share and pay all other costs, expenses and fees incurred by Lenders in connection herewith including without limitation the fees of Riggs, Abney, Neal, Turpen, Orbison & Lewis. 
  
 8. Governing Law. This Amendment shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the laws of the State of Oklahoma. 
  
 9. Reimbursement. Borrower agrees to reimburse Agent for any costs, expenses, and fees (including reasonable attorney fees) incurred in connection with the preparation of this Amendment. 
  
 10. Counterparts. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Borrower, the Agent, the LC Issuer and
the Lenders and each party has notified the Agent by facsimile transmission or telephone that it has taken such action. 
  
 IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the Agent have executed this Amendment as of the date first above written. 
  

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	MATRIX SERVICE COMPANY
		
	 By:
	 	 /s/ George L. Austin


	 	 	 George L. Austin, Vice President




			
	 Notice Address:
	 	 10701 East Ute Street

	 	 	 Tulsa, OK 74116

	 Attention:
	 	 George L. Austin,

	 	 	 Vice President

	 Telephone:
	 	 (918) 838-8822

	 FAX:
	 	 (918) 838-8810



  

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	BANK ONE, NA (as successor by merger
	to Bank One, Oklahoma, NA)
	 Lender, LC Issuer and as Agent

		
	 By:
	 	 /s/ David G. Page


	 	 	 David G. Page, First Vice President




			
	 Notice Address:
	 	 4th
Floor OK2-6110

	 	 	 15 East Fifth Street

	 	 	 Tulsa, OK 74103

	 Attention:
	 	 David G. Page,

	 	 	 First Vice President

	 Telephone:
	 	 (918) 586-5430

	 FAX:
	 	 (918) 586-5474



  

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	INTERNATIONAL BANK OF COMMERCE,
	 successor in interest to LOCAL OKLAHOMA

	 BANK, an Oklahoma Banking Corporation,

	 formerly known as LOCAL OKLAHOMA BANK, NA

		
	 By:
	 	 /s/ Barry J. Woods


	 	 	 Barry J. Woods, Senior Vice President




			
	 Notice Address:
	 	 2250 East 73rd Street

	 	 	 Suite 200

	 	 	 Tulsa, OK 74136

	 Attention:
	 	 Barry J. Woods,

	 	 	 Senior Vice President

	 Telephone:
	 	 (918) 497-2436

	 FAX:
	 	 (918) 497-2455



  

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	WACHOVIA BANK,
	NATIONAL ASSOCIATION
		
	 By:
	 	 /s/ Patrick A. McGovern


	 	 	 Patrick A. McGovern, Sr. Vice President




			
	 Notice Address:
	 	 123 South Broad Street

	 	 	 14th Floor – PA1202

	 	 	 Philadelphia, PA 19109

	 Attention:
	 	 Patrick A. McGovern,

	 	 	 Sr. Vice President

	 Telephone:
	 	 (215) 670-6577

	 FAX:
	 	 (215) 670-6645



  

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	UMB BANK, N.A.
		
	 By:
	 	 /s/ Richard J. Lehrter


	 	 	 Richard J. Lehrter, Community Bank President




			
	 Notice Address:
	 	 1437 South Boulder Avenue

	 	 	 Suite 150

	 	 	 Tulsa, OK 74119

	 Attention:
	 	 Richard J. Lehrter, President

	 Telephone:
	 	 (918) 295-2000

	 FAX:
	 	 (918) 295-2020



  

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	WELLS FARGO BANK, NA
	 (formerly known as Wells Fargo Bank Texas, NA)

		
	 By:
	 	 /s/ Brad S. Thompson


	 	 	 Brad S. Thompson, Vice President




			
	 Notice Address:
	 	 3rd
Floor MACT5303-031

	 	 	 1445 Ross Avenue

	 	 	 Dallas, TX 75202

	 Attention:
	 	 Brad S. Thompson,

	 	 	 Vice President

	 Telephone:
	 	 (214) 740-1545

	 FAX:
	 	 (214) 953-3982



  

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 Schedule 5-A 
  
 RATIFICATION OF SECURITY AGREEMENTS 
  
         As inducement for and in consideration of the Lenders and Agent executing the Amendment
Seven to Credit Agreement of even date herewith with respect to the Credit Agreement dated as of March 7, 2003, among Matrix Service Company, the Lenders, Bank One, NA, as Agent, Wells Fargo Bank Texas, N.A., as Co-Agent and Banc One Capital
Markets, Inc. as Lead Arranger and Sole Book Runner, the undersigned Borrower and Subsidiaries hereby ratify and confirm their respective Pledge and Security Agreements and agree that each remains in full force and effect. This Ratification may be
executed in multiple counterparts. 
  
         Dated effective this 6th day of October, 2004. 
  
         IN WITNESS WHEREOF, the Borrower and Subsidiaries hereby executed this Ratification of Security Agreements as of the date first written above. 
  

			
	MATRIX SERVICE COMPANY,
	 a Delaware corporation

		
	 By:
	 	 /s/ George L. Austin


	 	 	 George L. Austin, Vice President



  

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         IN WITNESS WHEREOF, each of the Subsidiaries has caused this Agreement to
be duly executed, under seal, by its authorized officer as of the day and year first above written. 
  

			
	MATRIX SERVICE INC., an Oklahoma corporation; MATRIX SERVICE MID-CONTINENT, INC., an Oklahoma corporation; MATRIX SERVICE, INC. CANADA, an Ontario, Canada
corporation; HAKE ACQUISITION CORP., a Delaware corporation; HAKE GROUP, INC., a Delaware corporation; BOGAN, INC. (including Fiberspec, a division), a Pennsylvania corporation; FRANK W. HAKE, INC., a Pennsylvania
corporation; HOVER SYSTEMS, INC., a Pennsylvania corporation; I & S, INC., a Pennsylvania corporation; MCBISH MANAGEMENT, INC., a Pennsylvania corporation; MECHANICAL CONSTRUCTION, INC., a Delaware corporation;
MID-ATLANTIC CONSTRUCTORS, INC., a Pennsylvania corporation; TALBOT REALTY, INC., a Pennsylvania corporation; BISH INVESTMENTS, INC., a Delaware corporation; I & S JOINT VENTURE, L.L.C., a Pennsylvania limited liability
company
		
	 By:
	 	 /s/ George L. Austin


	 	 	 George L. Austin, Vice President



  

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 Schedule 5-B 
  
 RATIFICATION OF SUBSIDIARY GUARANTY 
  
         As inducement for and in consideration of the Lenders and Agent executing the Amendment
Seven to Credit Agreement of even date herewith with respect to the Credit Agreement dated as of March 7, 2003, among Matrix Service Company, the Lenders, Bank One, NA, as Agent, Wells Fargo Bank Texas, N.A., as Co-Agent and Banc One Capital
Markets, Inc. as Lead Arranger and Sole Book Runner, the undersigned Guarantors hereby ratify and confirm the Guaranty Agreement and agree that it remains in full force and effect. 
  
         Dated effective this 6th day of October, 2004. 
  
         IN WITNESS WHEREOF, each of the Subsidiary
Guarantors has caused Ratification of Subsidiary Guaranty to be duly executed, under seal, by its authorized officer as of the day and year first above written. 
  

			
	MATRIX SERVICE INC., an Oklahoma corporation; MATRIX SERVICE MID-CONTINENT, INC., an Oklahoma corporation; MATRIX SERVICE, INC. CANADA, an Ontario, Canada
corporation; HAKE ACQUISITION CORP., a Delaware corporation; HAKE GROUP, INC., a Delaware corporation; BOGAN, INC. (including Fiberspec, a division), a Pennsylvania corporation; FRANK W. HAKE, INC., a Pennsylvania
corporation; HOVER SYSTEMS, INC., a Pennsylvania corporation; I & S, INC., a Pennsylvania corporation; MCBISH MANAGEMENT, INC., a Pennsylvania corporation; MECHANICAL CONSTRUCTION, INC., a Delaware corporation;
MID-ATLANTIC CONSTRUCTORS, INC., a Pennsylvania corporation; TALBOT REALTY, INC., a Pennsylvania corporation; BISH INVESTMENTS, INC., a Delaware corporation; I & S JOINT VENTURE, L.L.C., a Pennsylvania limited liability
company
		
	 By:
	 	 /s/ George L. Austin


	 	 	 George L. Austin, Vice President



  

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