EXHIBIT 10.1
AGREEMENT AND AMENDMENT TO
CREDIT AGREEMENT
This Agreement and Amendment to Credit Agreement (this "Amendment") dated
as of June 30, 2004 among the financial institutions (collectively, the "Banks")
party to the Credit Agreement (as such term is hereinafter defined); INTEGRATED
ELECTRICAL SERVICES, INC. (the "Borrower"), and BANK ONE, NA, with its main
office in Chicago, Illinois, as administrative agent (in such capacity, the
"Administrative Agent") for the Banks;
W I T N E S S E T H:
WHEREAS, the Borrower, the Banks and the Administrative Agent executed and
delivered that certain Credit Agreement (as heretofore amended and supplemented,
the "Credit Agreement") dated as of February 27, 2004; and
WHEREAS, the Borrower, the Banks and the Administrative Agent now desire to
amend the Credit Agreement to modify certain of the financial covenants and
limitations on certain Restricted Payments;
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
representations and warranties herein set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties hereby agree as follows:
Section 5.5(b)(ii) of the Credit Agreement is hereby amended to read in its
entirety as follows:
(ii) Maximum Total Debt to EBITDA Ratio. As of the last day of the
fiscal quarter ending on each date set forth below, the Borrower shall not
permit the ratio of (A) the consolidated Total Debt of the Borrower as of
such date to (B) the consolidated EBITDA of the Borrower for the four
fiscal quarters then ending, to be greater than the corresponding ratio set
forth below:
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Maximum Total
Date Debt to EBITDA Ratio
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June 30, 2004 4.50 to 1
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September 30, 2004 5.00 to 1
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December 31, 2004 5.50 to 1
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March 31, 2005 5.65 to 1
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June 30, 2005 4.75 to 1
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September 30, 2005 4.50 to 1
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December 31, 2005 4.00 to 1
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March 31, 2006
and thereafter 3.85 to 1
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Section 5.5(c) of the
Credit Agreement is hereby amended to read in its
entirety as follows:
(c) Minimum Fixed Charge Coverage Ratio. As of the last day of each
fiscal quarter (beginning with the quarter ending June 30, 2004), the
Borrower shall not permit the ratio of (i) the consolidated Net EBITDA of
the Borrower for the preceding four fiscal quarters then ended to (ii) the
consolidated Fixed Charges of the Borrower for the preceding four fiscal
quarters then ended to be less than (A) 1.20 to 1 for the quarters ending
June 30, September 30 and December 31, 2004; (B) 1.25 to 1 for the quarter
ending March 31, 2005, and (C) 1.35 to 1 for each quarter thereafter.
Compliance with this paragraph (c) shall be determined in the applicable
Compliance Certificate based upon the adjusted financial reports contained
in Schedule B of such Compliance Certificate.
Section 5.10 of the
Credit Agreement is hereby amended to read in its
entirety as follows:
5.10 Distributions. The Borrower shall not
(a) declare or pay any dividends;
(b) purchase, redeem, retire, or otherwise acquire for value any of
its capital stock now or hereafter outstanding;
(c) make any distribution of assets to its stockholders as such,
whether in cash, assets, or in obligations of it;
(d) allocate or otherwise set apart any sum for the payment of any
dividend or distribution on, or for the purchase, redemption, or retirement
of, any shares of its capital stock; or
(e) make any other distribution by reduction of capital or otherwise
in respect of any shares of its capital stock, except that the Borrower may
make payments of dividends on Qualified Preferred Stock; provided, however,
that the Borrower may
(i) declare or pay dividends if (x) no Default has then occurred and
is continuing and (y) assuming such dividend had been paid on the last day
of the immediately preceding fiscal quarter, (1) the Total Debt to EBITDA
ratio, as measured in accordance with Section 5.5(b)(ii), would have been
no greater than 2.50 to 1 and (2) no Default (including but not limited to
any Default under Section 5.5) would have occurred as of the last day of
such quarter;
(ii) purchase, redeem, retire or otherwise acquire for value any of
its capital stock if (x) no Default has then occurred and is continuing and
(y) assuming such transaction had been consummated on the last day of the
immediately preceding fiscal quarter, (1) the Total Debt to EBITDA ratio,
as measured in accordance with Section 5.5(b)(ii), would have been no
greater than 3.50 to 1 and (2) no Default (including but not limited to any
Default under Section 5.5) would have occurred as of the last day of such
quarter, and
(iii) purchase, redeem, retire or otherwise acquire for value its
capital stock pursuant to employee stock purchase programs if (x) no
Default has then occurred and is continuing and (y) assuming such capital
stock had been purchased, redeemed, retired or otherwise acquired for value
on the last day of the immediately preceding fiscal quarter, no Default
(including but not limited to any Default under Section 5.5) would have
occurred as of the last day of such quarter.
Conditions. This Amendment shall not become effective until (a) it has been
executed and delivered by the Borrower and the Majority Banks; (b) the Borrower
shall have paid to the Administrative Agent, for the account of each Bank
executing and delivering this Amendment before 5:00 p.m., Houston time, on
August 12, 2004, an amendment fee at the rate (which shall be the same for all
such Banks) heretofore established by the Administrative Agent and the Borrower,
and (c) the Administrative Agent shall have received such other documents and
instruments as it may reasonably request; provided, however, that if all of such
conditions are not satisfied by 5:00 p.m., Houston time, on August 12, 2004,
then this Amendment shall be of no force or effect.
Representations True; No Default. The Borrower represents and warrants that
the representations and warranties contained in the Credit Documents are true
and correct in all material respects on and as of the date hereof as though made
on and as of such date. The Borrower hereby certifies that no event has occurred
and is continuing which constitutes a Default or an Event of Default.
Ratification. Except as expressly amended hereby, the Loan Documents shall
remain in full force and effect. The
Credit Agreement, as hereby amended, and
all rights and powers created thereby or thereunder and under the other Credit
Documents are in all respects ratified and confirmed and remain in full force
and effect.
Definitions and References. Any term used herein that is defined in the
Credit Agreement shall have the meaning therein ascribed to it. The terms
"Agreement" and "Credit Agreement" as used in the Credit Documents or any other
instrument, document or writing furnished to the Administrative Agent or any
Bank by the Borrower and referring to the Credit Agreement, shall mean the
Credit Agreement as hereby amended.
Miscellaneous. This Amendment (a) shall be binding upon and inure to the
benefit of the Borrower, the Banks, the Administrative Agent and their
respective successors, assigns, receivers and trustees (but the Borrower shall
not assign its rights hereunder without the express prior written consent of the
Required Lenders); (b) may be modified or amended only by a writing signed by
the party against whom the same is to be enforced; (c) may be executed in
several counterparts, and by the parties hereto on separate counterparts, and
each counterpart, when so executed and delivered, shall constitute an original
agreement, and all such separate counterparts shall constitute but one and the
same agreement, and (e) together with the other Credit Documents, embodies the
entire agreement and understanding between the parties with respect to the
subject matter hereof and supersedes all prior agreements, consents and
understandings relating to such subject matter.
THE CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER:
INTEGRATED ELECTRICAL SERVICES, INC.
By:
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Name:
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Title:
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BANKS:
BANK ONE, NA
By:
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Name:
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Title:
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U.S. BANK NATIONAL ASSOCIATION
By:
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Name:
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Title:
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BANK OF SCOTLAND
By:
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Name:
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Title:
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LaSALLE BANK NATIONAL ASSOCIATION
By:
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Name:
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Title:
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XXXXX FARGO BANK, N.A.
By:
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Name:
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Title:
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SOUTHWEST BANK OF TEXAS, N.A.
By:
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Name:
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Title:
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FIRST AMERICAN BANK, SSB HOUSTON
By:
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Name:
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Title:
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ALLIED IRISH BANK, P.L.C.
By:
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Name:
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Title:
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AIB DEBT MANAGEMENT LIMITED
By:
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Name:
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Title:
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REGIONS BANK
By:
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Name:
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Title:
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FIRST BANK & TRUST
By:
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Name:
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Title:
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HIBERNIA NATIONAL BANK
By:
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Name:
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Title:
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RZB FINANCE LLC
By:
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Name:
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Title:
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