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EXHIBIT 4.3
THIRD AMENDMENT AND CONSENT
TO THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT
THIS THIRD AMENDMENT AND CONSENT TO THIRD AMENDED AND RESTATED SECURED
CREDIT AGREEMENT (this "Amendment") is entered into as of June 15, 2000, among
QUANTA SERVICES, INC., a Delaware corporation ("Borrower"), the Lenders, as
defined below, and BANK OF AMERICA, N.A., f/k/a NationsBank, N.A., as
administrative agent for the Lenders (in such capacity, the "Agent").
Capitalized terms used but not defined in this Amendment have the meaning given
such terms in the Credit Agreement (defined below).
RECITALS
A. The Borrower is party to that certain Third Amended and Restated
Secured Credit Agreement dated as of June 14, 1999 (as amended by the First
Amendment dated as of September 21, 1999, the Second Amendment dated as of March
21, 2000, and as may be amended, restated or supplemented from time to time, the
"Credit Agreement"), among the Borrower, Agent, and the lenders from time to
time parties thereto (each a "Lender" collectively, "Lenders").
B. The Borrower proposes to engage in a private offering of convertible
subordinated debt securities (the "Proposed Offering") pursuant to the
Subordinated Indenture (defined below).
C. Such convertible debt securities will constitute Subordinated Debt
Investments, and will be permitted Indebtedness under Section 6.14(e) of the
Credit Agreement, provided that such Indebtedness is subordinated in right of
payment and collection to the Obligations on terms acceptable to Majority
Lenders.
D. Attached as Exhibit "A" to this Amendment are extracts of terms of
the Proposed Offering as delivered by the Borrower to the Agent, which among
other things, sets forth the subordination terms (the "Subordination Terms") of
the Convertible Senior Notes (defined below).
E. Section 6.11(a)(v)(y) of the Credit Agreement requires, among other
things, Majority Lender approval of any Acquisition where the cash related
purchase price exceeds 7.5% of Consolidated Net Worth as of the end of the
immediately preceding fiscal quarter (the "Consolidated Net Worth Test").
F. The Borrower is contemplating the Acquisition of Xxxx Construction
Company, a Mississippi corporation for a proposed cash purchase price of
approximately $68,000,000, with an anticipated closing date in July, 2000 (the
"Proposed Acquisition").
G. UtiliCorp United, the current holder of the $49,350,000 subordinated
Indebtedness (the "Enron Subordinated Debt") pursuant to the Enron Subordinated
Debt Documents, has given notice that it intends to convert such Indebtedness to
equity (the "Enron Subordinated Debt Conversion"), which conversion will result
in the Borrower's compliance with the Consolidated Net Worth Test for purposes
of the Proposed Acquisition.
H. For purposes of the Proposed Acquisition only, the Borrower has
requested that the Enron Subordinated Debt be included into the calculation of
the Borrower's Consolidated Net Worth for the fiscal quarter ending June 30,
2000, to the extent that such Indebtedness is not otherwise converted on or
prior to such date.
I. The Borrower and the Lenders have agreed (1) to amend the Credit
Agreement to accommodate the Proposed Offering, and (2) for purposes of the
Proposed Acquisition only, to include
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the Enron Subordinated Debt into the Consolidated Net Worth Test for purposes of
Section 6.11(a)(v)(y) of the Credit Agreement, in each case subject to the terms
and conditions set out in this Amendment.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the undersigned agree as follows:
1. New Definitions. Section 1.1 of the Credit Agreement shall be
amended to add the following new definitions:
"Convertible Subordinated Notes" means the notes, guarantees,
and all other obligations now or hereafter arising under, or pursuant
to, the First Supplemental Indenture, including, without limitation,
the "2007 Notes" (as defined in the Supplemental Indenture)."
"First Supplemental Indenture" means that certain First
Supplemental Indenture dated as of July 25, 2000, by the Borrower, as
Issuer, to Chase Bank of Texas, National Association, as Trustee,
executed and delivered pursuant to the Subordinated Indenture, as the
same may be amended, restated or supplemented from time to time.
"Subordinated Indenture" means that certain Subordinated
Indenture dated as of July 25, 2000, by the Borrower, as Issuer, to
Chase Bank of Texas, National Association, as Trustee, as the same may
be amended, restated or supplemented from time to time.
2. Notices. Section 6.6(e) of the Credit Agreement shall be
amended to delete the "and" at the end of clause (iii); to delete the period at
the end of clause (iv); to add a semicolon and "and" at the end of clause (iv);
to add a clause (v) so that clauses (iii), (iv) and (v) read as follows (with
the underlined portions showing the new or revised language):
"....(iii) any circumstance that has had a Material Adverse
Effect; (iv) any event which would result in a breach of Sections 6.20,
6.21, 6.22, 6.23, or 6.24; and (v) to the extent not covered by clauses
(i) through (iv) above, any notice received by, or required to be
delivered by, the Borrower under the Subordinated Indenture and the
First Supplemental Indenture."
3. Indebtedness. Section 6.14 of the Credit Agreement shall be
amended to delete the "and" at the end of clause (f); to delete the period at
the end of clause (g); to add a semicolon and "and" at the end of clause (g);
and add a clause (h) so that clauses (f), (g) and (h) read as follows (with the
underlined portions showing new or revised language):
"(f) other Indebtedness not included within subsections (a)
through (e) above, provided that such Indebtedness shall not exceed, at
any one time outstanding, an amount equal to 8.5% of Consolidated Net
Worth as of the end of the immediately preceding fiscal quarter;
(g) Indebtedness not to exceed $400,000,000 at any time under
the Senior Notes and the Note Purchase Agreement"; and ---
(h) Indebtedness not to exceed $300,000,000 at any time under
the Subordinated Indenture, including without limitation, the
Indebtedness under the Convertible Subordinated Notes and the First
Supplemental Indenture."
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4. Subordinated Debt Investment. Section 6.24 of the Credit
Agreement shall be amended to delete each reference to the term "Change of
Control" and in each case replace it with the defined term "Change in Control"
so that such section shall read in its entirety as follows (with the underlined
portions showing new or revised language):
"Section 6.24 Subordinated Debt Investment. The Borrower shall
provide written notice to the Agent (by confirmed fax to each of the
Agent and its legal counsel, Xxxxxx & Xxxxxx, L.L.P., attention: Xx.
Xxxx X. Xxxxxxxx (fax no.: 000-000-0000)) of (i) any Change in Control
within two (2) Business Days following any such Change in Control, and
(ii) any notice received by the Borrower from any holder of a
Subordinated Debt Investment exercising any right to (a) require the
Borrower to redeem or (b) in respect of the Convertible Subordinated
Notes, convert, in either case as applicable, all or any part of a
Subordinated Debt Investment within two (2) Business Days of the
Borrower's receipt thereof. The Borrower shall not redeem all or any
part of the Indebtedness evidenced by the Enron Subordinated Debt
Documents as a result of a Change in Control before ten (10) days
following the date of a Redemption Notice (as defined in the Enron
Subordinated Debt Documents) or if prohibited by the subordination
provisions contained therein. The Borrower shall not redeem, pursuant
to any optional redemption right it may have, all or any part of a
Subordinated Debt Investment before the Maturity Date. The Borrower
shall not amend, modify or change in any way any provision of a
Subordinated Debt Investment so as to change the stated maturity date
of the principal of such Indebtedness, or any installment of interest
thereon, to an earlier date, increase the rate of interest thereon or
any premium payable on the redemption thereof, change any of the
redemption or subordination provisions thereof (or the definitions of
any defined terms contained therein) or otherwise change in any respect
materially adverse to the interests of the Lenders any of the terms
thereof, in each case, without the consent of the Majority Lenders."
5. Events of Default. Section 7.1 of the Credit Agreement shall
be amended to delete the "or" at the end of clause (l); to delete the period at
the end of clause (m); to add a semicolon and "or" at the end of clause (m); and
add a clause (n) so that clauses (l), (m) and (n) read as follows deleted and
replaced in its entirety as follows (with the underlined portions showing new or
revised language):
"(l) an Event of Default shall occur and be continuing under
the Enron Subordinated Debt Documents or any other documents evidencing
a Subordinated Debt Investment;
(m) an Event of Default shall occur and be continuing under
the Note Purchase Agreement, the Senior Notes, or any other document
evidencing Indebtedness under the Senior Notes or the Note Purchase
Agreement"; or
(n) an Event of Default shall occur and be continuing under
the Subordinated Indenture, the First Supplemental Indenture or the
Convertible Subordinated Notes, or any other document evidencing
Indebtedness under the Subordinated Indenture, the First Supplemental
Indenture or the Convertible Subordinated Notes."
6. Consent. Each Lender which signs this Amendment consents to
(a) the Subordination Terms, provided that the same shall not waive or otherwise
modify the covenants contained in Section 6.10(a) of the Credit Agreement, and
the Agent entering into such agreements or other documents as the Agent or its
counsel deems reasonable and necessary in connection with therewith, and (b) for
purposes of the Proposed Acquisition only, the inclusion of the Enron
Subordinated Debt into the Consolidated Net
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Worth Test for the fiscal quarter ended June 30, 2000 only pursuant to Section
6.11(a)(v)(y) of the Credit Agreement, to the extent that such Indebtedness is
not otherwise converted on or prior to June 30, 2000, provided that (i) the same
shall not waive or otherwise modify any other covenants contained in the Credit
Documents, and (ii) the Borrower otherwise complies with all other terms and
conditions of the Credit Documents in respect of such Proposed Acquisition.
7. Conditions. This Amendment shall not be effective until each
of the following have been delivered to the Agent or the following conditions
have been otherwise satisfied in the Agent's sole discretion:
(a) this Amendment signed by the Borrower, the Guarantors, and
the Majority Lenders;
(b) the Borrower has delivered to the Agent for the benefit of
the Lenders a certificate from the Borrower that (i) no Default or
Potential Default exists under the Credit Agreement, (ii) in respect of
the Proposed Offering, the Convertible Subordinated Notes have been
issued, (iii) no default or event of default exists (y) in respect of
the Proposed Offering, under the Subordinated Indenture or the First
Supplemental Indenture, and (z) in respect of the consent granted
herein regarding clause (b) of Section 6 above, under the Enron
Subordinated Debt Documents, and (iv) contains a true and complete copy
of the Subordinated Indenture, the First Supplemental Indenture duly
executed and delivered, together with copies of all other material
documents executed and delivered in connection therewith; and
(c) such other documents as the Agent may reasonably request.
8. Fees and Expenses. The Borrower agrees to pay the reasonable
fees and expenses of counsel to Agent for services rendered in connection with
the preparation, negotiation and execution of this Amendment.
9. Representations and Warranties. The Borrower and Guarantors
represent and warrant to the Lenders that they possess all requisite power and
authority to execute, deliver and comply with the terms of this Amendment, which
has been duly authorized and approved by all requisite corporate action on the
part of the Borrower and Guarantors, for which no consent of any Person is
required, and which will not violate their respective organizational documents,
and agree to furnish the Lenders with evidence of such authorization and
approval upon request. The Borrower and Guarantors further represent and warrant
to the Lenders that (a) the representations and warranties in each Credit
Document to which they are a party are true and correct in all material respects
on and as of the date of this Amendment as though made on the date of this
Amendment (except to the extent that (i) such representations and warranties
speak to a specific date or (ii) the facts on which such representations and
warranties are based have been changed by transactions contemplated by the
Credit Agreement), (b) it is in full compliance with all covenants and
agreements contained in each Credit Document to which it is a party, and (c) no
Default or Event of Default has occurred and is continuing.
10. Scope of Amendment; Reaffirmation; Release. Except as
affected by this Amendment, the Credit Documents are unchanged and continue in
full force and effect. However, in the event of any inconsistency between the
terms of the Credit Agreement as hereby amended and any other Credit Document,
the terms of the Credit Agreement shall control and such other document shall be
deemed to be amended hereby to conform to the terms of the Credit Agreement. All
references to the Credit Agreement shall refer to the Credit Agreement as
amended by this Amendment. The Borrower and
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Guarantors hereby reaffirm their respective obligations under, and agree that,
all Credit Documents to which they are a party remain in full force and effect
and continue to evidence their respective legal, valid and binding obligations
enforceable in accordance with their terms (as the same are affected by this
Amendment). The Borrower and Guarantors hereby release the Lenders from any
liability for actions or failures to act in connection with the Credit Documents
prior to the date hereof. This Amendment shall be binding upon and inure to the
benefit of each of the undersigned and their respective successors and permitted
assigns.
11. Miscellaneous.
(a) No Waiver of Defaults. This Amendment does not constitute
a waiver of, or a consent to, any present or future violation of or
default under, any provision of the Credit Documents, or a waiver of
the Lenders' right to insist upon future compliance with each term,
covenant, condition and provision of the Credit Documents, and the
Credit Documents shall continue to be binding upon, and inure to the
benefit of, the Borrower, Guarantors, and the Lenders and their
respective successors and assigns.
(b) Form. Each agreement, document, instrument or other
writing to be furnished Agent under any provision of this instrument
must be in form and substance satisfactory to Agent and its counsel.
(c) Multiple Counterparts. This Amendment may be executed in
any number of counterparts with the same effect as if all signatories
have signed the same document. All counterparts must be construed
together to constitute one and the same instrument.
(d) Governing Law. This Amendment and the other Credit
Documents must be construed-and their performance enforced-under Texas
law.
12. Entirety . THE CREDIT DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE BORROWER, GUARANTORS AND THE LENDERS AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
[Signatures and Guarantors' Consent and Agreement appear on following pages.]
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The Amendment is executed as of the date set out in the preamble to
this Amendment.
QUANTA SERVICES, INC.
By:/S/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
BANK OF AMERICA, N.A., as Administrative
Agent and as a Lender
By: /S/ XXXXX X. XXXX
------------------------------------
Xxxxx X. Xxxx
Senior Vice President
BANK ONE, TEXAS, NATIONAL ASSOCIATION,
as a Documentation Agent and as a Lender
By: /S/ XXXX XXXXXXXX
------------------------------------
Xxxx Xxxxxxxx
Vice President
FLEET NATIONAL BANK (f/k/a Bank Boston,
N.A.), as a Documentation Agent and as a
Lender
By: /S/ XXXX X. XXXXXX
------------------------------------
Xxxx X. Xxxxxx
Managing Director
CREDIT LYONNAIS NEW YORK BRANCH, as a
Managing Agent and as a Lender
By: /S/ XXXXXX XXXXXXXXX
-------------------------------------
Xxxxxx Xxxxxxxxx
Senior Vice President
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XXX XXXX XX XXXX XXXXXX, as a Managing
Agent and as a Lender
By: /S/ F.C.H. XXXXX
--------------------------------------
F.C.H. Xxxxx
Senior Manager Loan Operations
NATIONAL CITY BANK, as a Lender
By: /S/ XXXXXXX X. XXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxx
Vice President
LASALLE BANK NATIONAL ASSOCIATION, as a
Lender
By:
--------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
FIRST UNION NATIONAL BANK, as a Lender
By: /S/ XXXX X. XXXXXX
-------------------------------------
Xxxx X. Xxxxxx
Senior Vice President
COMERICA BANK, as a Lender
By: /S/ XXXX X. XXXXXX
-----------------------------------
Xxxx X. Xxxxxx
First Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD., as a
Lender
By: /S/ XXX FORT
------------------------------------
Xxx Fort
Vice President
By: /S/ X. X. XXXXXX
-------------------------------------
X. X. Xxxxxx
Vice President and Manager
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CHASE BANK OF TEXAS, N.A., as a Lender
By: /S/ XXXXX X. DOLPHIN
------------------------------------
Xxxxx X. Dolphin
Senior Vice President
GUARANTY FEDERAL BANK, F.S.B., as a
Lender
By: /S/ XXXXXXX XXXXXXXX
-------------------------------------
Xxxxxxx Xxxxxxxx
Vice President
SUNTRUST BANK, ATLANTA, as a Lender
By: /S/ XXXXX XXXX
-------------------------------------
Xxxxx Xxxx
Vice President
By: /S/ M. XXX XXXX
-------------------------------------
M. Xxx Xxxx
Officer
BANKERS TRUST COMPANY, as a Lender
By: /S/ XXXXX XXXXXXX
-------------------------------------
Xxxxx Xxxxxxx
Vice President
Exhibit "A" - Subordination Terms
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GUARANTORS' CONSENT AND AGREEMENT
As an inducement to the Lenders to execute, and in consideration of the
Lenders' execution of this Amendment, each of the undersigned hereby consents to
this Amendment and agrees that the same shall in no way release, diminish,
impair, reduce or otherwise adversely affect the obligations and liabilities of
the undersigned under their respective Guaranties described in the Credit
Agreement executed by the undersigned, or any agreements, documents or
instruments executed by any of the undersigned, all of which obligations and
liabilities are, and shall continue to be, in full force and effect. This
consent and agreement shall be binding upon the undersigned, and their
respective successors and assigns, and shall inure to the benefit of the
Lenders, and their respective successors and assigns.
Advanced Communication Technologies, Inc.
Arby Construction, Inc.
Austin Trencher, Inc.
CCLC, Inc.
Computapole, Inc.
Xxxxx Communications, Inc.
Xxxxx Electric Company, Inc.
Crown Fiber Communications, Inc.
Xxxxxxx Xxxxx Construction Company
Driftwood Electrical Contractors, Inc.
Xxxxxxx Pipeline Company, Inc.
Environmental Professional Associates, Limited
Fiber Technology, Inc.
Five Points Construction Company
GEM Engineering Co., Inc.
Golden State Utility Co.
Grand Electric Company
X.X. Xxxxxxx Pipeline Construction, Inc.
Xxxxxx Construction Company
Xxxxxx & Xxxxxx, Inc.
Intermountain Electric, Inc.
Xxxxxx Bros., Inc.
Network Communications Services, Inc.
NorAm Telecommunications, Inc.
North Pacific Construction Company
North Sky Communications
Northern Line Layers, Inc.
Pac West Construction, Inc.
PAR Electrical Contractors, Inc.
PDG Electric Company
Potelco, Inc.
QSI, Inc.
Quanta Acquisition XLV, Inc.
Quanta Delaware, Inc.
Quanta L Acquisition, Inc.
Quanta LI Acquisition, Inc.
Quanta LII Acquisition, Inc.
Quanta LIII Acquisition, Inc.
Quanta Services Management Partnership, L.P.
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Quanta Utility Installation Co., Inc.
Quanta XLI Acquisition, Inc.
Quanta XLII Acquisition, Inc.
Quanta XLIII Acquisition, Inc.
Quanta XLIV Acquisition, Inc.
Quanta XLIX Acquisition, Inc.
Quanta XLVI Acquisition, Inc.
Quanta XLVII Acquisition, Inc.
Quanta XLVIII Acquisition, Inc.
Quanta XVII Acquisition, Inc.
Quanta XXXIX Acquisition, Inc.
X. X. Xxxxxxxxxxx & Co., Inc.
Ranger Directional, Inc.
S.K.S. Pipeliners, Inc.
Seaward Corporation
Spalj Construction Company
Specialty Drilling, Inc.
Xxxxxxxx Welding, Inc.
Sumter Builders, Inc.
Telecom Network Specialists, Inc.
The Xxxx Company, Inc.
Xxx Xxxxx Construction Company
TRANS TECH Electric, Inc.
Xxxxxxx Construction Co.
TTM, Inc.
TVS Systems, Inc.
Underground Construction Co., Inc.
Utilco, Inc.
VCI Telecom, Inc.
W.H.O.M. Corporation
Xxxx X. Xxxxxx, Inc.
West Coast Communications, Inc.
World Fiber, Inc.
By: /s/ XXXX XXXXXXX
-----------------------------------------------
Xxxx Xxxxxxx, President or Vice President
of each Guarantor
Coast To Coast, LLC
By: Environmental Professional Associates,
Limited, Its Member
By: /s/ XXXX XXXXXXX
-------------------------------------
Xxxx Xxxxxxx, Vice President
By: Quanta Services, Inc., Its Member
By: /s/ XXXX XXXXXXX
--------------------------------------
Xxxx Xxxxxxx, Vice President
Quanta Services Management Partnership, L.P.
By: QSI, Inc., Its General Partner
By: /s/ XXXX XXXXXXX
-------------------------------------
Xxxx Xxxxxxx, Vice President
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EXHIBIT "A"
SUBORDINATION TERMS
SUBORDINATION
The payment of the principal of, premium, if any, and interest on the
Notes will, to the extent described in the Indenture, be subordinated in right
of payment to the prior payment in full of all our Senior Indebtedness. The
holders of all Senior Indebtedness will first be entitled to receive payment in
full of all amounts due or to become due on the Senior Indebtedness, or
provision for payment in money or money's worth, before the holders of the Notes
will be entitled to receive any payment in respect of the Notes, when there is a
payment or distribution of assets to creditors upon our:
o liquidation;
o dissolution;
o winding up;
o reorganization;
o assignment for the benefit of creditors;
o marshaling of assets;
o bankruptcy;
o insolvency; or
o similar proceedings.
No payments on account of the Notes or on account of the purchase or
acquisition of Notes may be made if a default in any payment with respect to
Senior Indebtedness has occurred and is continuing. If (1) there is a default on
any Senior Indebtedness other than a payment default that occurs that permits
the Holders of that Senior Indebtedness to accelerate its maturity and (2) the
Trustee and the Borrower receive the notice required by the Indenture, no
payments may be made on the Notes for up to 179 days in any 365-day period
unless the default is cured or waived. By reason of this subordination, in the
event of our insolvency, holders of the Notes may recover less, ratably, than
holders of our Senior Indebtedness.
"Senior Indebtedness" means:
o the principal of and premium, if any, and interest on, and
fees, costs, enforcement expenses, collateral protection
expenses and other reimbursement or indemnity obligations in
respect of all of our indebtedness or obligations of us to any
person for money borrowed that is evidenced by a note, bond,
debenture, loan agreement, or similar instrument or agreement;
o commitment or standby fees due and payable to lending
institutions with respect to credit facilities available to
us;
o all of our noncontingent obligations (1) for the reimbursement
of any obligor on any letter of credit, banker's acceptance,
or similar credit transaction, (2) under interest rate swaps,
caps, collars, options, and similar arrangements, and (3)
under any foreign exchange contract, currency swap agreement,
futures contract, currency option contract, or other foreign
currency hedge;
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o all of our obligations for the payment of money relating to
capitalized lease obligations;
o any liabilities of others described in the preceding clauses
that we have guaranteed or which are otherwise our legal
liability; and
o renewals, extensions, refundings, refinancings,
restructurings, amendments, and modifications of any such
indebtedness or guarantee; other than any indebtedness or
other obligation of us that by its terms is not superior in
right of payment to the Notes.
EVENTS OF DEFAULT
Each of the following is an "event of default":
(1) a default in the payment of any interest upon any of the Notes
when due and payable, continued for 30 days;
(2) a default in the payment of the principal of and premium, if
any, on any of the Notes when due, including on a redemption
date;
(3) failure to pay when due the principal of or interest on
indebtedness for money borrowed by us or our subsidiaries in
excess of $20.0 million, or the acceleration of that
indebtedness that is not withdrawn within 15 days after the
date of written notice to us by the Trustee or to us and the
Trustee by the holders of at least 25% in principal amount of
the outstanding Notes;
(4) a default by us in the performance, or breach, of any of our
other covenants in the indenture which are not remedied by the
end of a period of 60 days after written notice to us by the
Trustee or to us and the Trustee by the holders of at least
25% in principal amount of the outstanding Notes; or
(5) events of bankruptcy, insolvency or reorganization of the
Borrower.
If an event of default described in clauses (1), (2), (3) or (4) occurs
and is continuing, either the Trustee or the holders of at least 25% in
principal amount of the outstanding Notes may declare the principal amount of an
accrued interest on all Notes to be immediately due and payable. This
declaration may be rescinded if the conditions described in the Indenture are
satisfied. If an event of default of the type referred to in clause (5) occurs,
the principal amount of and accrued interest on the outstanding Notes will
automatically become immediately due and payable.
Within 90 days after a default, the Trustee must give to the registered
holders of Notes notice of all uncured defaults known to it. The Trustee will be
protected in withholding the notice if it in good faith determines that the
withholding of the notice is in the best interests of the registered holders,
except in the case of a default in the payment of the principal of, or premium,
if any, or interest on, any of the Notes when due or in the payment of any
redemption obligation.
The holders of not less than a majority in principal amount of the
outstanding Notes may direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee. Subject to the provisions of the Indenture
relating
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to the duties of the Trustee, if an event of default occurs and is continuing,
the Trustee will be under no obligation to exercise any of the rights or powers
under the Indenture at the request or direction of any of the holders of the
Notes unless the holder have offered to the Trustee reasonable indemnity or
security against any loss, liability or expense. Except to enforce the right to
receive payment of principal, premium, if any, or interest when due or the right
to convert a note in accordance with the Indenture, no holder may institute any
proceeding or pursue any remedy with respect to the Indenture or the Notes
unless it complies with the conditions provided in the Indenture, including:
o holders of at least 25% in principal amount of the outstanding
Notes have requested the Trustee to pursue the remedy; and
o holders have offered the Trustee security or indemnity
satisfactory to the Trustee against any loss, liability or
expense.
We are required to deliver to the Trustee annually a certificate
indicating whether the officers signing the certificate know of any default by
us in the performance or observance of any of the terms of the Indenture. If the
officers know of a default, the certificate must specify the status and nature
of all defaults.
