________________________________________________________________________________
THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT
Dated as of
June 14, 1999
Among
QUANTA SERVICES, INC., AS BORROWER
AND
THE FINANCIAL INSTITUTIONS PARTIES HERETO, AS LENDERS
AND
NATIONSBANK, N.A. D/B/A BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT
AND
BANKBOSTON, N.A., AND BANK ONE, TEXAS,
NATIONAL ASSOCIATION, AS DOCUMENTATION AGENTS
AND
CREDIT LYONNAIS NEW YORK BRANCH AND
THE BANK OF NOVA SCOTIA, AS MANAGING AGENTS
AND
FIRST UNION NATIONAL BANK, LaSALLE BANK NATIONAL
ASSOCIATION, AND NATIONAL CITY BANK, AS CO-AGENTS
WITH
BANC OF AMERICA SECURITIES LLC,
AS LEAD ARRANGER AND BOOK MANAGER
________________________________________________________________________________
TABLE OF CONTENTS Page
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SECTION 1. DEFINITIONS; INTERPRETATION.......................................................... 1
Section 1.1 Definitions................................................................. 1
Section 1.2 Interpretation.............................................................. 11
SECTION 2. THE CREDIT FACILITY.................................................................. 11
Section 2.1 Loans....................................................................... 11
Section 2.2 Letters of Credit........................................................... 11
Section 2.3 Types of Loans and Minimum Borrowing Amounts................................ 14
Section 2.4 Manner of Borrowing......................................................... 14
Section 2.5 Interest Periods............................................................ 15
Section 2.6 Interest Payments........................................................... 16
Section 2.7 Default Rates............................................................... 16
Section 2.8 Maturity of Loans........................................................... 17
Section 2.9 Optional Prepayments........................................................ 17
Section 2.10 Mandatory Prepayments of Loans.............................................. 17
Section 2.11 The Notes................................................................... 18
Section 2.12 Breakage Fees............................................................... 18
Section 2.13 Commitment Terminations..................................................... 18
Section 2.14 Agent Reliance on Borrower Payment.......................................... 19
SECTION 3. FEES AND PAYMENTS.................................................................... 19
Section 3.1 Fees........................................................................ 19
Section 3.2 Place and Application of Payments........................................... 20
Section 3.3 Withholding Taxes........................................................... 20
SECTION 4. CONDITIONS PRECEDENT................................................................. 22
Section 4.1 Conditions Precedent to Initial Borrowing................................... 22
Section 4.2 Conditions Precedent to all Borrowings...................................... 23
SECTION 5. REPRESENTATIONS AND WARRANTIES....................................................... 24
Section 5.1 Organization................................................................ 24
Section 5.2 Power and Authority; Validity............................................... 24
Section 5.3 No Violation................................................................ 24
Section 5.4 Litigation.................................................................. 25
Section 5.5 Use of Proceeds; Margin Regulations......................................... 25
Section 5.6 Investment Company Act...................................................... 25
Section 5.7 Public Utility Holding Company Act.......................................... 25
Section 5.8 True and Complete Disclosure................................................ 25
Section 5.9 Financial Statements........................................................ 25
Section 5.10 No Material Adverse Change.................................................. 26
Section 5.11 Labor Controversies......................................................... 26
Section 5.12 Taxes....................................................................... 26
Section 5.13 ERISA....................................................................... 26
Section 5.14 Consents.................................................................... 26
Section 5.15 Capitalization.............................................................. 26
Section 5.16 Ownership of Property....................................................... 26
Section 5.17 Compliance with Statutes.................................................... 26
Section 5.18 Environmental Matters....................................................... 27
Section 5.19 Year 2000 Compliance........................................................ 27
Section 5.20 Existing Indebtedness and Liens............................................. 27
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SECTION 6. COVENANTS............................................................................ 27
Section 6.1 Existence................................................................... 27
Section 6.2 Maintenance................................................................. 28
Section 6.3 Taxes....................................................................... 28
Section 6.4 ERISA....................................................................... 28
Section 6.5 Insurance................................................................... 28
Section 6.6 Financial Reports and Other Information..................................... 28
Section 6.7 Lenders' Inspection Rights.................................................. 30
Section 6.8 Conduct of Business......................................................... 30
Section 6.9 New Subsidiaries and Additional Collateral.................................. 30
Section 6.10 Dividends and Negative Pledges.............................................. 31
Section 6.11 Restrictions on Fundamental Changes......................................... 31
Section 6.12 Environmental Laws.......................................................... 32
Section 6.13 Liens....................................................................... 32
Section 6.14 Indebtedness................................................................ 33
Section 6.15 Loans, Advances and Investments............................................. 33
Section 6.16 Transfer of Assets.......................................................... 34
Section 6.17 Transactions with Affiliates................................................ 34
Section 6.18 Compliance with Laws........................................................ 34
Section 6.19 Capital Expenditures........................................................ 34
Section 6.20 Minimum Consolidated Net Worth.............................................. 34
Section 6.21 Minimum Interest Coverage Ratio............................................. 34
Section 6.22 Funded Debt to EBITDA Ratio................................................. 35
Section 6.23 Senior Debt to EBITDA....................................................... 35
Section 6.24 Subordinated Debt Investment................................................ 35
SECTION 7. EVENTS OF DEFAULT AND REMEDIES....................................................... 35
Section 7.1 Events of Default........................................................... 35
Section 7.2 Non-Bankruptcy Defaults..................................................... 36
Section 7.3 Bankruptcy Defaults......................................................... 37
Section 7.4 Collateral for Undrawn Letters of Credit.................................... 37
Section 7.5 Notice of Default........................................................... 37
SECTION 8. CHANGE IN CIRCUMSTANCES.............................................................. 37
Section 8.1 Change of Law............................................................... 37
Section 8.2 Unavailability of Deposits or Inability to Ascertain LIBOR Rate............. 38
Section 8.3 Increased Cost and Reduced Return........................................... 38
Section 8.4 Lending Offices............................................................. 39
Section 8.5 Discretion of Lender as to Manner of Funding................................ 39
Section 8.6 Substitution of Lender...................................................... 39
SECTION 9. THE AGENT............................................................................ 39
Section 9.1 Appointment and Authorization............................................... 39
Section 9.2 Rights and Powers........................................................... 39
Section 9.3 Action by Agent............................................................. 40
Section 9.4 Consultation with Experts................................................... 40
Section 9.5 Indemnification Provisions; Credit Decision................................. 40
Section 9.6 Indemnity................................................................... 40
Section 9.7 Resignation of Agent and Successor Agent.................................... 41
Section 9.8 Lead Arranger and Book Manager, Documentation Agents,
Managing Agents, and Co-Agents.............................................. 41
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SECTION 10. MISCELLANEOUS........................................................................ 41
Section 10.1 No Waiver of Rights......................................................... 41
Section 10.2 Non-Business Day............................................................ 41
Section 10.3 Documentary Taxes........................................................... 41
Section 10.4 Survival of Representations................................................. 41
Section 10.5 Survival of Indemnities..................................................... 42
Section 10.6 Setoff...................................................................... 42
Section 10.7 Notices..................................................................... 42
Section 10.8 Counterparts................................................................ 43
Section 10.9 Successors and Assigns...................................................... 43
Section 10.10 Sales and Transfers of Borrowings and Notes; Participations
in Borrowings and Notes..................................................... 43
Section 10.11 Amendments.................................................................. 45
Section 10.12 Headings.................................................................... 45
Section 10.13 Legal Fees, Other Costs and Indemnification................................. 45
Section 10.14 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial............. 46
Section 10.15 Confidentiality............................................................. 47
Section 10.16 Severability................................................................ 47
Section 10.17 Change in Accounting Principles or Tax Laws................................. 47
Section 10.18 Loans Under Existing Credit Agreement....................................... 48
Section 10.19 Effectiveness............................................................... 48
Section 10.20 Notice...................................................................... 48
iii
EXHIBITS
Exhibit 2.4 Form of Borrowing Request
Exhibit 2.11 Form of Note
Exhibit 4.1A Form of Subsidiary Guaranty
Exhibit 4.1B Form of Pledge Agreement
Exhibit 4.1C Form of Security Agreement
Exhibit 4.1D Form of Patent Collateral Assignment
Exhibit 4.1E Form of Financial Condition Certificate
Exhibit 6.6 Form of Compliance Certificate
Exhibit 10.10 Form of Assignment Agreement
SCHEDULES
Schedule 1.1 Initial Commitments
Schedule 2.2 Existing Letters of Credit
Schedule 5.1 List of Subsidiaries
Schedule 5.4 List of Litigation
Schedule 5.12 List of Outstanding Tax Issues
Schedule 5.20 List of Existing Liens and Indebtedness
Schedule 6.13 List of Permitted Liens and Indebtedness
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THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT dated as of June 14,
1999, between Quanta Services, Inc., a Delaware corporation (the "Borrower"),
the lenders from time to time parties hereto (each a "Lender" and collectively,
the "Lenders"), NationsBank, N.A., d/b/a Bank of America, N.A., as
administrative agent for the Lenders (in such capacity, the "Agent"),
BankBoston, N.A. and Bank One, Texas, National Association, as documentation
agents for the Lenders (in such capacity, each is a "Documentation Agent"),
Credit Lyonnais New York Branch and The Bank of Nova Scotia, as managing agents
for the Lenders (in such capacity, each is a "Managing Agent"), and First Union
National Bank, LaSalle Bank National Association, and National City Bank as co-
agents for the Lenders (in such capacity, each is a "Co-Agent").
RECITALS
A. The Borrower, certain of the Lenders and Bank One, Texas, National
Association ("Existing Agent") previously entered into that certain Credit
Agreement dated as of April 9, 1998 (the "Initial Credit Agreement").
B. The Borrower, certain of the Lenders, and the Existing Agent
previously entered into that certain Amended and Restated Credit Agreement dated
as of August 3, 1998, which amended and restated in its entirety the Initial
Credit Agreement, as amended by that certain First Amendment to Amended and
Restated Credit Agreement dated as of September 29, 1998 (as so amended, the
"Amended and Restated Credit Agreement").
C. The Borrower, certain of the Lenders, and the Existing Agent
previously entered into that certain Second Amended and Restated Secured Credit
Agreement dated as of November 12, 1998, which amended and restated in its
entirety the Amended and Restated Credit Agreement (the "Second Amended and
Restated Credit Agreement").
D. The parties to the Second Amended and Restated Credit Agreement desire
to amend and restate such agreement in its entirety to increase the Commitment
Amount to $350,000,000, to increase the L/C Commitment Amount from $10,000,000
to $15,000,000, to increase the amount of the swing line from $5,000,000 to
$15,000,000, to change the administrative agent by substituting NationsBank,
N.A. d/b/a Bank of America for the Existing Agent, and to make certain other
amendments to which the parties have agreed.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained in this Agreement, the parties to this Agreement agree as
follows:
SECTION 1. DEFINITIONS; INTERPRETATION.
Section 1.1 Definitions. Unless otherwise defined in this Agreement,
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the following terms shall have the following meanings:
"Acquisition" means a direct or indirect purchase by the Borrower or any of
its Subsidiaries after the Effective Date for cash, stock or other securities or
other property, whether in one or more related transactions, of all or
substantially all of the assets or voting securities or other equity interests
of a Person or a business unit, division or group of a Person.
"Adjusted LIBOR Rate" means, for any Borrowing of LIBOR Loans, a rate per
annum determined in accordance with the following formula:
Adjusted LIBOR Rate = LIBOR Rate
----------------------
1.00 - Eurodollar Reserve Percentage
"Affiliate" means, for any Person, (i) any other Person that directly or
indirectly through one or more intermediaries controls, or is under common
control with, or is controlled by, such Person, and (ii) any other Person owning
beneficially or controlling ten percent (10%) or more of the equity interests in
such Person; provided that any investor in connection with any Subordinated Debt
Investment shall not be considered an Affiliate hereunder. As used
1
in this definition, "control" means the power, directly or indirectly, to direct
or cause the direction of management or policies of a Person (through ownership
of voting securities or other equity interests, by contract or otherwise).
"Agent" means NationsBank, N.A. d/b/a Bank of America, N.A. acting in its
capacity as administrative agent for the Lenders, and any successor agent
appointed hereunder pursuant to Section 9.7.
"Agreement" means this Credit Agreement, as amended, restated or
supplemented from time to time.
"Applicable Margin" means for Base Rate Loans or LIBOR Loans, as
applicable, for any day at such times as the relevant Funded Debt to EBITDA
Ratio is in one of the following ranges, the percentage per annum set forth
opposite such Funded Debt to EBITDA Ratio for such Loans for each tier of the
following pricing grid:
Funded Debt to
Tier EBITDA Ratio LIBOR Loans Base Rate Loans
--------- ----------------------- ------------ ----------------
I. Greater than or equal 2.00% 0.25%
to 3.0 to 1.0
II. Greater than or equal 1.75% 0.00%
to 2.5 to 1.0 but less
3.0 to 1.0
III. Greater than or equal 1.50% 0.00%
to 2.0 to 1.0 but less
than 2.5 to 1.0
IV. Greater than or equal 1.25% 0.00%
to 1.5 to 1.0 but less
than 2.0 to 1.0
V. Less than 1.5 to 1.0 1.00% 0.00%
For the period from the Effective Date through the earlier of (a) the date the
Compliance Certificate and financial statements required by Section 6.6(a)(i)
and Section 6.6(b), for the fiscal quarter ended September 30, 1999, are
required to be provided to the Agent, and (b) the date such Compliance
Certificate and financial statements are provided to the Agent, the Applicable
Margin for LIBOR Loans and for Base Rate Loans determined as of such quarter may
be greater than or equal to but may not be less than the respective Applicable
Margins in tier IV on the above pricing grid. Thereafter, the Applicable Margin
shall be set according to the tiers on the above pricing grid as determined by
the Agent based on the applicable Compliance Certificate and financial
statements required by Section 6.6(a)(i) or (ii) and Section 6.6(b), and any
change in the Applicable Margin shall be effective as of the earlier of (i) the
date such Compliance Certificate and financial statements are required to be
provided to the Agent, and (b) the date such Compliance Certificate and
financial statements are provided to the Agent. Notwithstanding the foregoing,
if, prior to the date the Compliance Certificate and financial statements are
required to be provided to Agent for the fiscal quarter ended September 30,
1999, the Borrower consummates a public offering of the Borrower's capital stock
and receives at least $75,000,000 in gross proceeds from such offering, the
Borrower may provide to Agent a pro forma Compliance Certificate which gives
effect to the public offering when calculating the Funded Debt to EBITDA Ratio,
and, to the extent the pro forma calculation results in a lower Funded Debt to
EBITDA Ratio and a corresponding reduction of the Applicable Margin, the
Applicable Margin may be adjusted downward from its then determined tier but
only to the next tier on the pricing grid. If Borrower fails to timely provide
to the Agent the Compliance Certificate and the financial statements, then from
the period beginning the first day after the date such Compliance Certificate
and financial statements are required to be provided to the Agent and ending on
the date such items are actually provided to the Agent,
2
the respective Applicable Margins for LIBOR Loans and for Base Rate Loans shall
be the Applicable Margins in tier I on the above pricing grid.
"Application" means an application for a Letter of Credit in the form from
time to time used by Agent's letter of credit department.
"Assignment Agreement" means an agreement in substantially the form of
Exhibit 10.10 whereby a Lender conveys part or all of its Commitments, Loans and
participations in Letters of Credit to another Person that thereupon becomes a
Lender, or that increases its Commitments, outstanding Loans and outstanding
participations in Letters of Credit pursuant to Section 10.10.
"Base Rate" means, for any day, the higher of (i) the fluctuating
commercial loan rate announced by the Agent from time to time as its base rate
for Dollar loans in the United States of America in effect on such day (which
base rate may not be the lowest rate charged by the Agent on loans to any of its
customers), or (ii) the Federal Funds Rate plus one-half of one percent (0.5%)
per annum, with any change in the Base Rate resulting from a change in either
such rate to be effective on the date of the relevant change.
"Base Rate Loan" means, as applicable, (i) a Revolving Loan bearing
interest prior to maturity at the Base Rate plus the Applicable Margin, or (ii)
a Swing Line Loan bearing interest prior to maturity at the Base Rate minus the
Commitment Fee Percentage.
"Beneficial Ownership," and "Beneficial Owner" shall have the meanings
assigned to them in Rule 13d-3 under the Exchange Act in effect on June 14,
1999.
"Borrower" means Quanta Services, Inc., a Delaware corporation.
"Borrowing" means any extension of credit made by the Lenders or the Agent,
as the case may be, by way of Loans or Letters of Credit, including any
Borrowings advanced, continued or converted. A Borrowing is "advanced" on the
day the Lenders or the Agent, as the case may be, advances funds comprising such
Borrowing to the Borrower or a Letter of Credit is issued, is "continued" (in
the case of LIBOR Loans) on the date a new Interest Period commences for such
Borrowing, and is "converted" when such Borrowing is changed from one type of
Loan to the other, all as requested by the Borrower pursuant to Section 2.4(a).
"Borrowing Request" means a request for a Borrowing as defined in Section
2.4.
"Business Day" means any day other than a Saturday or Sunday on which banks
are not authorized or required to close in Houston, Texas, and, if the
applicable Business Day relates to the advance or continuation of, conversion
into or payment on a LIBOR Loan, on which banks are dealing in Dollar deposits
in the interbank eurocurrency market in London, England.
"Capital Expenditures" means, for any period, the sum, without duplication,
of all expenditures of the Borrower and its Subsidiaries for fixed or capital
assets made during such period which, in accordance with GAAP, are required to
be classified as capital expenditures, in each case excluding all such
expenditures incurred by any entity or business acquired in an Acquisition prior
to the date of such Acquisition.
"Capitalized Lease Obligations" means, for any Person, the amount of such
Person's liabilities under all leases of real or personal property (or any
interest therein) which is required to be capitalized on the balance sheet of
such Person as determined in accordance with GAAP.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than twelve (12) months
from the date of acquisition; (ii) U.S. Dollar denominated time deposits and
certificates of deposit maturing within one (1) year
3
from the date of acquisition thereof with any Lender or any other financial
institution whose short-term senior unsecured debt rating is at least A-1 from
S&P or P-1 from Xxxxx'x; (iii) LIBOR denominated time deposits and certificates
of deposit maturing within six (6) months from the date of acquisition thereof
with any Lender or any other financial institution whose short-term senior
unsecured debt rating is at least A-1 from S&P or P-1 from Xxxxx'x; (iv)
commercial paper or Eurocommercial paper with a rating of at least A-1 from S&P
or P-1 from Xxxxx'x, with maturities of not more than twelve (12) months from
the date of acquisition; (v) repurchase obligations entered into with any Lender
or any other financial institution whose short-term senior unsecured debt rating
is at least A-1 from S&P or P-1 from Xxxxx'x, which are secured by a fully
perfected security interest in any obligation of the type described in (i) above
and has a market value of the time such repurchase is entered into of not less
than 100% of the repurchase obligation of such Lender or such other Person
thereunder; (vi) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within twelve (12) months from the date of
acquisition thereof or providing for the resetting of the interest rate
applicable thereto not less often than annually and, at the time of acquisition,
having one of the two highest ratings obtainable from either S&P or Xxxxx'x; and
(vii) money market funds which have at least $1,000,000,000 in assets and which
invest primarily in securities of the types described in clauses (i) through
(vi) above.
"Change in Control" shall be deemed to have occurred if (i) any Person
acquires, directly or indirectly, the Beneficial Ownership of any voting
security of the Borrower and immediately after such acquisition such Person is,
directly or indirectly, the Beneficial Owner of voting securities representing
50% or more of the total voting power of all the then outstanding voting
securities of the Borrower entitled to vote generally in the election of
directors; or (ii) individuals who on June 14, 1999, constituted the Borrower's
Board of Directors, or their approved successors, cease for any reason to
constitute at least a majority of the Borrower's Board of Directors. An
approved successor is a new director elected when the election or nomination for
the election by the Borrower's stockholders of such new director was approved by
vote of at least 2/3rds of the directors then still in office who were directors
on June 14, 1999, or their approved successors.
"Co-Agents" is defined in the Preamble.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all property and assets of the Borrower and its
Subsidiaries in which the Agent is granted a Lien for the benefit of the
Lenders.
"Collateral Account" means the cash collateral account for outstanding
undrawn Letters of Credit as defined in Section 7.4(b).
"Commitment" means, relative to any Lender, such Lender's obligation to
make Loans under Section 2.1, participate in Swing Line Loans under Section 2.1,
and participate in Letters of Credit issued pursuant to Section 2.2, in the
percentage and amount set forth on Schedule 1.1, or pursuant to Section 10.10,
as such percentage and amount may be adjusted from time to time pursuant to this
Agreement.
"Commitment Amount" means an amount equal to $350,000,000, as such amount
may be reduced from time to time pursuant to the terms of this Agreement.
"Commitment Fee" means the amount of the then applicable commitment fee
under Section 3.1(a).
"Commitment Fee Percentage" means the then applicable commitment fee
percentage set out on the grid in Section 3.1(a).
"Commitment Termination Date" means the earliest of (i) the Maturity Date;
(ii) the date on which the Commitments are terminated in full or reduced to zero
pursuant to Section 2.13; or (iii) the occurrence of any Event of Default
described in Section 7.1(f) or (g) with respect to the Borrower or the
occurrence and continuance of any other
4
Event of Default and either (x) the declaration of the Loans to be due and
payable pursuant to Section 7.2, or (y) in the absence of such declaration, the
giving of written notice by the Agent, acting at the direction of the Majority
Lenders, to the Borrower pursuant to Section 7.2 that the Commitments have been
terminated.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit 6.6.
"Consolidated Interest Expense" means, for any period, total interest
expense of the Borrower and its Subsidiaries on a consolidated basis for such
period in connection with Indebtedness, determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income (or loss),
after provision for taxes, of the Borrower and its Subsidiaries on a
consolidated basis for such period, determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date of determination, the
Borrower's consolidated stockholders equity determined in accordance with GAAP.
"Credit Documents" means this Agreement, the Notes, the Subsidiary
Guaranties, the Pledge Agreements, the Security Agreements, the Applications,
the Borrowing Requests, Interest Rate Protection Agreements with any Lender or
any Affiliate of Lender, and any other pledge agreements, documents or
instruments executed by the Borrower or any of its Subsidiaries in connection
with this Agreement.
"Default" means any event or condition the occurrence of which would, with
the passage of time or the giving of notice, or both, constitute an Event of
Default.
"Documentation Agent" is defined in the Preamble.
"Dollar" and "U.S. Dollar" and the sign "$" means lawful money of the
United States of America.
"EBIT" means, for any period, on a trailing four fiscal quarter basis, the
sum of Consolidated Net Income plus each of the following to the extent actually
deducted in determining Consolidated Net Income, (a) Consolidated Interest
Expense, and (b) provisions for taxes based on income or revenues, all
calculated on a consolidated basis for the Borrower and its Subsidiaries and as
determined in accordance with GAAP.
"EBITDA" means, for any period, on a trailing four fiscal quarter basis
(using the historical financial results of any business acquired in an
Acquisition through the Effective Date, to the extent applicable, all on a pro
forma basis, consistent with SEC regulations), the sum of (i) Consolidated Net
Income plus each of the following to the extent actually deducted in determining
Consolidated Net Income, (a) Consolidated Interest Expense, and (b) provisions
for taxes based on income or revenues, plus (ii) the amount of all depreciation
and amortization expense deducted in determining Consolidated Net Income, and
adjusted for (iii) Non-Cash Charges, all calculated on a consolidated basis for
the Borrower and its Subsidiaries and as determined in accordance with GAAP.
Upon the consummation of any Acquisition after the Effective Date, EBITDA may be
calculated, subject to the immediately following sentence, using a calculation
which (y) includes the historical financial results of the acquired business on
a pro forma trailing four fiscal quarter basis (consistent with SEC
regulations), and (z) assumes that the consummation of such Acquisition (and the
incurrence, refinancing, or assumption of any Indebtedness in connection with
such Acquisition) occurred on the first day of the trailing four fiscal quarter
period. The foregoing adjustment to EBITDA to take into account an Acquisition
may only be made if the balance sheet and statements of income, retained
earnings, and cash flows of the acquired Person (or the Person from whom the
assets, securities or other equity interests were acquired), are in compliance
with SEC regulations and requirements regarding the preparation and presentation
of historical financial information and pro forma financial information.
"Effective Date" means the date this Agreement becomes effective as defined
in Section 10.19.
5
"Enron Subordinated Debt Documents" means that certain Securities Purchase
Agreement by and among the Borrower, Enron Capital & Trade Resources Corp. and
Joint Energy Development Investments II Limited Partnership dated as of
September 29, 1998, the Convertible Subordinated Notes of the Borrower issued
pursuant thereto and any other Basic Document as defined therein, as amended
from time to time as permitted hereby.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of non-
compliance or violations, formal investigations or proceedings relating to any
Environmental Law ("Claims") or any permit issued under any Environmental Law,
including, without limitation, (i) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (ii)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
a release or threatened release of Hazardous Materials.
"Environmental Law" means any federal, state or local statute, law, rule,
regulation, ordinance, code, policy or rule of common law now or hereafter in
effect, including any judicial or administrative order, consent, decree or
judgment relating to (i) the environment, (ii) health or safety in relation to
the environment or (iii) Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Eurodollar Reserve Percentage" means, with respect to each Interest Period
for a LIBOR Loan, a percentage (expressed as a decimal) equal to the daily
average during such Interest Period of the percentages in effect on each day of
such Interest Period, if any, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor thereto), for determining the maximum
reserve requirements (including, without limitation, any supplemental, marginal
and emergency reserves) applicable to "Eurocurrency Liabilities" pursuant to
Regulation D of the Board of Governors of the Federal Reserve System or any
other then applicable regulation of the Board of Governors which prescribes
reserve requirements applicable to "Eurocurrency Liabilities" as presently
defined in Regulation D.
"Event of Default" means any of the events or circumstances specified in
Section 7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and the rules and regulations of the SEC promulgated thereunder.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16th of 1%) equal to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the next Business Day,
provided that (A) if such day is not a Business Day, the rate on such
transactions on the immediately preceding Business Day as so published on the
next Business Day shall apply, and (B) if no such rate is published on such next
Business Day, the rate for such day shall be the average of the offered rates
quoted to the Agent by two (2) federal funds brokers of recognized standing on
such day for such transactions as selected by the Agent.
"Fee Letter" means that certain letter agreement dated May 3, 1999, by and
between the Agent, the Lead Arranger and Book Manager, and the Borrower.
"Funded Debt" means, as of any date of determination, the sum, without
duplication, of the following for the Borrower and its Subsidiaries: (i)
Indebtedness for borrowed money, all obligations evidenced by bonds, debentures,
notes or similar instruments, and purchase money obligations which in accordance
with GAAP would be shown on the consolidated balance sheet of the Borrower as a
liability, (ii) all reimbursement obligations relative to the face amount of all
drawn letters of credit issued for the account of the Borrower or any of its
Subsidiaries, and (iii) all Capitalized Lease Obligations.
"Funded Debt to EBITDA Ratio" means, when determined, the ratio of (i)
Funded Debt, to (ii) EBITDA.
6
"GAAP" means generally accepted accounting principles from time to time in
effect as set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the statements and pronouncements of the Financial Accounting Standards Board or
in such other statements, opinions and pronouncements by such other entity as
may be approved by a significant segment of the U.S. accounting profession.
"Guarantor" means each Subsidiary of the Borrower listed on Schedule 5.1
and any other Subsidiary of the Borrower required to become a Guarantor pursuant
to Section 6.9.
"Guaranty" by any Person means all contractual obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business) of such Person guarantying any Indebtedness, dividend or other
obligation (including, without limitation, obligations in connection with sales
of any property) of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, all obligations
incurred through an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation, or to purchase any property or assets
constituting security therefor, primarily for the purpose of assuring the owner
of such Indebtedness or obligations of the ability of the primary obligor to
make payment of the Indebtedness or obligation; or (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation, or (y)
to maintain working capital or other balance sheet condition, or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, in each case primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation; or (iii) to lease property or to
purchase securities or other property or services of the primary obligor
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of the primary obligor to make payment of the
Indebtedness or obligation; or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purpose of all computations made under this Agreement, the
amount of a Guaranty in respect of any obligation shall be deemed to be equal to
the amount that would apply if such obligation were the direct obligation of
such Person rather than the primary obligor or, if less, the maximum aggregate
potential liability of such Person under the terms of the Guaranty.
"Hazardous Material" shall have the meaning assigned to the term Hazardous
Substance in the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Acts of
1986, and shall include any substance defined as "hazardous" or "toxic" or words
used in place thereof under any Environmental Law applicable to the Borrower or
any of its Subsidiaries.
"Highest Lawful Rate" means the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the Loans or the Reimbursement Obligations, or under laws
applicable to the Agent or any of the Lenders, which are presently in effect or,
to the extent allowed by applicable law, under such laws which may hereafter be
in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow. Determination of the rate of interest for the
purpose of determining whether the Loans or the Reimbursement Obligations are
usurious under all applicable laws shall be made by amortizing, prorating,
allocating, and spreading, in equal parts during the period of the full stated
term of the Loans, all interest at any time contracted for, taken, reserved,
charged or received from the Borrower in connection with the Loans or the
Reimbursement Obligations, as applicable.
"Indebtedness" means, for any Person, the following obligations of such
Person, without duplication: (i) obligations of such Person for borrowed money;
(ii) obligations of such Person representing the deferred purchase price of
property or services other than accounts payable arising in the ordinary course
of business and other than amounts which are being contested in good faith and
for which reserves in conformity with GAAP have been provided; (iii) obligations
of such Person evidenced by bonds, notes, bankers acceptances, debentures or
other similar instruments of such Person or reimbursement obligations or other
obligations with respect to letters of credit issued for such Person's account
or letters of credit issued pursuant to such Person's application therefor; (iv)
obligations of other Persons, whether or not assumed, secured by Liens upon
property or payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person, but only to the extent of such
property's fair market value; (v) Capitalized Lease Obligations of such Person;
(vi) obligations under Interest Rate Protection Agreements and under hedge,
swap, exchange, forward, future, collar or cap arrangements, fixed price
agreements and all other agreements
7
or arrangements designed to protect against fluctuations in commodity prices and
currency exchange rates; and (vii) obligations of such Person pursuant to a
Guaranty of any of the foregoing of another Person. For purposes of this
Agreement, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture to which such Person is a party, to the extent the
holder of such Indebtedness has recourse to such Person.
"Indemnified Taxes" shall have the meaning ascribed to such term in Section
3.3.
"Initial Borrowing Date" means the date on which all conditions precedent
set forth herein to the initial Borrowings are satisfied or waived in writing
and the initial Borrowing hereunder occurs.
"Interest Payment Date" means (i) for a Base Rate Loan, the last Business
Day of each calendar quarter such Loan is outstanding commencing June 30, 1999,
and (ii) for a LIBOR Loan, the last Business Day of each Interest Period for
such Loan and, during any Interest Period of six (6) months, the next Business
Day occurring three (3) months after the commencement of such Interest Period.
"Interest Period" means the period commencing on the date that a Borrowing
of LIBOR Loans is advanced, continued, or created by conversion and, subject to
Section 2.5, ending on the date one (1), two (2), three (3) or six (6) months
thereafter as selected by the Borrower pursuant to the terms of this Agreement.
"Interest Rate Protection Agreement" means any hedge, swap, exchange,
forward, future collar or cap arrangements, fixed price agreements or other
agreements or arrangements designed to protect against fluctuations in interest
rates.
"Investments" shall have the meaning ascribed to such term in Section 6.15.
"L/C Commitments" means, relative to any Lender, such Lender's obligation
to participate in Letters of Credit pursuant to Section 2.2 in the percentage
set forth opposite its signature hereto or pursuant to Section 10.10, as such
commitments may be reduced from time to time pursuant to the terms of this
Agreement.
"L/C Commitment Amount" means $15,000,000, as such amount may be reduced
from time to time pursuant to the terms of this Agreement.
"L/C Documents" means this Agreement, the Letters of Credit and any
Borrowing Requests and Applications with respect thereto and any draft or other
document presented in connection with a drawing thereunder.
"L/C Obligations" means the undrawn face amounts of all outstanding Letters
of Credit and all unpaid Reimbursement Obligations with respect to Letters of
Credit.
"Lead Arranger and Book Manager" means Banc of America Securities LLC.
"Lenders" is defined in the Preamble.
"Lending Office" means the branch, office or affiliate of a Lender
specified on the appropriate signature page hereof or designated pursuant to
Sections 8.4 or 10.10.
"Letter of Credit" means any of (a) the letters of credit issued by the
Agent on behalf of the Lenders for the account of the Borrower pursuant to
Section 2.2, and (b) the letters of credit set out on Schedule 2.2.
"LIBOR Loan" means a Revolving Loan bearing interest prior to maturity at
the Adjusted LIBOR Rate plus the Applicable Margin.
"LIBOR Rate" means a rate of interest per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/16 of 1%), equal to the offered
rate for U.S. Dollar deposits of not less than $1,000,000 for a period of time
equal to the applicable Interest Period for such Loan as of 11:00 a.m. City of
London, England time two (2) London
8
Business Days prior to the first date of each such Interest Period as shown on
the display designated as "British Bankers Assoc. Interest Settlement Rates" on
the Telerate System ("Telerate"), Page 3750 or Page 3740 or such other page or
pages as may replace such pages on Telerate for the purpose of displaying such
rate; provided, however, that if such rate is not available on Telerate then
such offered rate shall be otherwise independently determined by the Agent from
an alternate, substantially similar independent source available to the Agent or
shall be calculated by the Agent by a substantially similar methodology as that
theretofore used to determine such offered rate in Telerate.
"Lien" means any interest in any property or asset in favor of a Person
other than the owner of the property or asset and securing an obligation owed to
such Person, whether such interest is based on the common law, statute or
contract, including, but not limited to, the security interest lien arising from
a mortgage, encumbrance, pledge, conditional sale, security agreement or trust
receipt, or a lease, consignment or bailment for security purposes.
"Loan" means a Base Rate Loan or a LIBOR Loan, each of which is a "type" of
Loan hereunder, outstanding as a Revolving Loan or a Swing Line Loan, as
applicable.
"London Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions are generally authorized or obligated by law or
executive order to close in the City of London, England.
"Majority Lenders" means, at any time, the Lenders then holding in the
aggregate more than fifty percent (50%) of the aggregate of the Commitments, or
if the Commitments have terminated pursuant to the terms hereof, the aggregate
Obligations, provided that, the combination of Lenders comprising Majority
Lenders from time to time may not include any Lender which has failed to advance
its Percentage of a requested Borrowing. The percentage set forth opposite each
Lender's name in the line designated "Percentage" on the signature page hereto
reflects the initial voting percentage of each Lender hereunder on the Effective
Date.
"Managing Agents" is defined in the Preamble.
"Material Adverse Effect" means an effect that results in a material
adverse change since December 31, 1998 in (i) the business, properties, assets,
financial condition or, prior to the Initial Borrowing Date, prospects of the
Borrower and its Subsidiaries taken as a whole, or (ii) in the ability of the
Borrower, or Borrower and the Guarantors taken as a whole, to perform the
Obligations under the Credit Documents to which they are a party.
"Maturity Date" means June 14, 2004.
"Minimum Interest Coverage Ratio" means, for any period, the ratio of (a)
EBIT to (b) Consolidated Interest Expense.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor thereto.
"Non-Cash Charge" means, for any period, the amount of non-cash charges
determined in accordance with GAAP; provided that, (a) if any cash outlay is
made during such period in respect of such non-cash charge, only the amount of
such non-cash charge which exceeds the amount of the cash outlay may be added
back to Consolidated Net Income for purposes of calculating EBITDA, and (b) if
any cash outlay is made during such period in respect of a non-cash charge taken
for a prior period, the amount of such cash outlay shall be deducted from
Consolidated Net Income for the current period for purposes of calculating
EBITDA.
"Notes" shall mean the revolving promissory notes of the Borrower as
defined in Section 2.11.
"Obligations" means all joint and several obligations of the Borrower and
the Guarantors to pay fees, costs and expenses hereunder, to pay principal and
interest on Loans and Reimbursement Obligations and to pay any other obligations
to the Agent or the Lenders arising under any Credit Document.
"Patent Collateral Assignment" means the Patent Collateral Assignment in
substantially the form of Exhibit 4.1D, as amended, restated or supplemented
from time to time.
9
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Percentage" means, for each Lender, the percentage of the Commitments
represented by such Lender's Commitment; provided that, if the Commitments are
terminated, each Lender's Percentage shall be calculated based on its Commitment
in effect immediately before such termination, subject to any assignments by
such Lender of Obligations pursuant to Section 10.10.
"Permitted Business" means any business described in Section 6.8.
"Permitted Liens" means the Liens described in Section 6.13.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a government or any agency or political subdivision
thereof.
"Plan" means an employee pension benefit plan covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code that
is either (i) maintained by the Borrower or any of its Subsidiaries, or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
the Borrower or any of its Subsidiaries is then making or accruing an obligation
to make contributions or has within the preceding five (5) plan years made or
had an obligation to make contributions.
"Pledge Agreements" means each Pledge Agreement of the Borrower and any of
its Subsidiaries in substantially the form of Exhibit 4.1B, as amended, restated
or supplemented from time to time.
"Reimbursement Obligation" means the obligations of the Borrower to
reimburse the Agent, for the benefit of the Lenders, for each drawing under a
Letter of Credit as described in Section 2.2(c).
"Revolving Loans" means the revolving loans by the Lenders described in
Section 2.1(a).
"S&P" means Standard & Poor's Rating Group or any successor thereto.
"SEC" means the Securities and Exchange Commission.
"Second Amended and Restated Credit Agreement" is defined in the Preamble.
"Security Agreements" means each Security Agreement of the Borrower and any
of its Subsidiaries in substantially the form of Exhibit 4.1C, as amended,
restated or supplemented from time to time.
"Senior Debt" means, when determined, all Funded Debt which is not
expressly subordinated in payment to the Obligations.
"Senior Debt to EBITDA Ratio" means, when determined, the ratio of (i)
Senior Debt, to (ii) EBITDA.
"Subsidiary" means, for any Person, any corporation or other entity of
which more than fifty percent (50%) of the outstanding stock or comparable
equity interests having ordinary voting power for the election of the board of
directors of such corporation, any managers of such limited liability company or
similar governing body (irrespective of whether or not, at the time, stock or
other equity interests of any other class or classes of such corporation or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by such Person, as
applicable, or by one or more of its Subsidiaries.
"Subordinated Debt Investment" means (a) any issue of Indebtedness of the
Borrower or its Subsidiaries which is subordinated in right of payment and
collection to the Obligations on terms acceptable to Majority Lenders,
10
(b) publicly issued senior subordinated fixed rate debt securities (including
any such debt securities issued under Rule 144A) which mature after the Maturity
Date and are issued on then existing market terms which are acceptable to Agent,
and (c) the subordinated Indebtedness evidenced by the Enron Subordinated Debt
Documents.
"Subsidiary Guaranty" means each Guaranty of each direct or indirect
domestic Subsidiary of the Borrower in substantially the form of Exhibit 4.1A.
"Swing Line" means the credit facility in an amount of $15,000,000 for
making Swing Line Loans described in Section 2.1(b).
"Swing Line Loans" means the loans made by the Agent under Section 2.1(b).
"Taxes" shall have the meaning ascribed to such term in Section 5.12.
"Unfunded Vested Liabilities" means, for any Plan at any time, the amount,
if any, by which the present value of all vested nonforfeitable accrued benefits
under such Plan exceeds the fair market value of all Plan assets allocable to
such benefits, determined as of the then most recent valuation date for such
Plan, but only to the extent that such excess represents a potential liability
of the Borrower or any of its Subsidiaries to the PBGC or such Plan.
Section 1.2 Interpretation. The foregoing definitions shall be equally
--------------
applicable to the singular and plural forms of the terms defined. All
references to times of day in this Agreement shall be references to Houston,
Texas time unless otherwise specifically provided.
SECTION 2. THE CREDIT FACILITY.
Section 2.1 Loans.
-----
(1) Revolving Loans. Subject to the terms and conditions hereof,
---------------
each Lender severally and not jointly agrees to make one or more loans (each a
"Revolving Loan") to the Borrower from time to time before the Commitment
Termination Date on a revolving basis in an aggregate amount not to exceed at
any time outstanding an amount equal to its Commitment, subject to any
reductions thereof pursuant to the terms of this Agreement. No Lender shall be
required to make any Revolving Loan if, after giving effect thereto (and
assuming all Lenders fund their Percentage of the requested Revolving Loan), (i)
the aggregate principal amount of all Revolving Loans and L/C Obligations
outstanding would exceed the Commitment Amount then in effect, (ii) the
aggregate principal amount of all Revolving Loans of such Lender, its
participating interest in Swing Line Loans, and its participating interest in
all L/C Obligations would exceed its Commitment, (iii) the Commitments have
terminated under the terms of this Agreement, or (iv) a Default or Event of
Default exists. Each Borrowing of Revolving Loans shall be made ratably from the
Lenders in proportion to their respective Percentages. Revolving Loans may be
repaid, in whole or in part, and all or any portion of the principal amount
thereof reborrowed, before the Commitment Termination Date, subject to the terms
and conditions hereof.
(2) Swing Line Loans. Subject to the terms and conditions of
----------------
this Agreement, the Agent will make one or more loans (each a "Swing Line Loan")
to the Borrower from time to time before the Commitment Termination Date in an
aggregate amount not to exceed at any time outstanding the amount of the Swing
Line. At the request of the Agent, (i) without regard to the limitations in
Section 2.3, the Lenders shall make Revolving Loans to the Borrower in an amount
equal to the outstanding amount of the Swing Line Loans, and the Borrower hereby
instructs the Agent in such circumstance to apply the proceeds of such Revolving
Loans to such Swing Line Loans such that the Swing Line Loans are repaid in
full; or (ii) in the event any such Revolving Loans are not made, each Lender
shall severally and not jointly, purchase from the Agent (and if it fails to
effect such purchase, shall be deemed to have purchased from the Agent), and the
Agent hereby agrees to sell to each Lender, an undivided percentage
participation interest, up to the extent of such Lender's Percentage in each
Swing Line Loan, in each case (y) so long as no Event of Default of which the
Agent had actual knowledge existed at the time the Swing Line Loan was made and
(z) only to the extent that the aggregate principal amount of all Revolving
Loans of such Lender, its participating interest in Swing Line Loans, and its
participating interest in all L/C Obligations would not exceed its Commitment.
The Agent may but
11
is not obligated to make a Swing Line Loan if, after giving effect thereto (1)
the aggregate principal amount of all Revolving Loans, all Swing Line Loans, and
all L/C Obligations outstanding would exceed the Commitment Amount then in
effect, (2) the Commitments have terminated under the terms of this Agreement,
or (3) a Default or Event of Default exists. Swing Line Loans may be repaid, in
whole or in part, at any time. The aggregate outstanding amount of Swing Line
Loans may not exceed the amount of the Swing Line.
Section 2.2 Letters of Credit.
-----------------
(1) Issuance of Letters of Credit. Subject to the terms and
-----------------------------
conditions hereof, the Agent agrees to issue, from time to time prior to the
Commitment Termination Date, at the request of the Borrower and on behalf of the
Lenders and in reliance on their obligations under this Section 2.2, one or more
letters of credit (each a "Letter of Credit") for the Borrower's account;
provided that the Agent shall have no obligation to issue a Letter of Credit if,
after the issuance thereof, (i) the outstanding Loans and L/C Obligations would
thereby exceed the Commitment Amount then in effect, (ii) the outstanding L/C
Obligations would thereby exceed the L/C Commitment Amount then in effect, or
(iii) the issuance of such Letter of Credit would violate any legal or
regulatory restriction then applicable to the Agent or any Lender as notified by
such Lender to the Agent before the date of issuance of such Letter of Credit.
(2) Issuance Procedure. To request that the Agent issue a Letter
of Credit, the Borrower shall deliver to the Agent (with a duplicate copy to an
operations employee of the Agent as designated by the Agent from time to time) a
duly executed Application for the relevant Letter of Credit, or such other
computerized issuance or application procedure, instituted from time to time by
the Agent and agreed to by the Borrower, completed to the reasonable
satisfaction of the Agent, and such other documentation and information as the
Agent may reasonably request. In the event of any irreconcilable difference or
inconsistency between this Agreement and an Application, the provisions of this
Agreement shall govern. Upon receipt of a properly completed and executed
Application and any other reasonably requested documents or information at least
two (2) Business Days prior to any requested issuance date, the Agent will
process such Application in accordance with its customary procedures and issue
the requested Letter of Credit on the requested issuance date. The Borrower may
cancel any requested issuance of a Letter of Credit prior to the issuance
thereof without the incurrence of any fee, charge or expense. The Agent will
notify each Lender of the amount and expiration date of each Letter of Credit it
issues promptly upon issuance thereof. Each Letter of Credit (except for up to
$5,000,000 in aggregate face amounts of Letters of Credit) shall have an
expiration date no later than one (1) year from the date of issuance thereof,
provided that in no event shall a Letter of Credit have an expiration date later
than four (4) Business Days before the Maturity Date. If the Agent issues any
Letters of Credit with expiration dates that automatically extend unless the
Agent gives notice that the expiration date will not so extend, the Agent will
give such notice of non-renewal before the time necessary to prevent such
automatic extension if before such required notice date (i) the expiration date
of such Letter of Credit if so extended would be later than four (4) Business
Days before the Maturity Date, (ii) the Commitment Termination Date shall have
occurred, (iii) an Event of Default has occurred and is continuing, or (iv) the
Agent is so directed by the Borrower. The Agent agrees to issue amendments to
any Letter of Credit increasing its amount, or extending its expiration date, at
the request of the Borrower subject to the conditions precedent for all Loans of
Section 4.2 and the other terms and conditions of this Section 2.2.
(3) The Borrower's Reimbursement Obligations.
----------------------------------------
(1) The Borrower hereby irrevocably and unconditionally agrees
to reimburse the Agent, for the benefit of the Lenders, for each payment or
disbursement made to settle its obligations under any draft drawn under a Letter
of Credit (each, a "Reimbursement Obligation") within two (2) Business Days from
when such draft is paid with either funds not borrowed hereunder or with a
Borrowing subject to Section 2.4 and the other terms and conditions contained in
this Agreement. The Reimbursement Obligation shall bear interest (which the
Borrower hereby promises to pay) from and after the date such draft is paid
until (but excluding the date) the Reimbursement Obligation is paid at the
lesser of the Highest Lawful Rate or the Base Rate plus the Applicable Margin so
long as the Reimbursement Obligation shall not be past due, and thereafter at
the default rate per annum as set forth in Section 2.7(c), whether or not the
Maturity Date shall have occurred. If any such payment or disbursement is
reimbursed to the Agent after 2:00 p.m. on the date such payment or disbursement
is made by the Agent, interest shall be paid on the reimbursable amount for one
(1) day. The Agent shall give the Borrower notice of any drawing on a Letter of
Credit within one (1) Business Day after such drawing is paid.
12
(2) The Borrower agrees for the benefit of the Agent and each
Lender that, notwithstanding any provision of any Application, the obligations
of the Borrower under this Section 2.2(c) and each applicable Application shall
be absolute, unconditional and irrevocable (subject to Section 2.2(b)) and shall
be performed strictly in accordance with the terms of this Agreement and each
applicable Application under all circumstances whatsoever INCLUDING, BUT NOT
LIMITED TO, ANY DEFENSE BASED UPON THE AGENT'S OR ANY LENDER'S OWN SIMPLE OR
CONTRIBUTORY NEGLIGENCE (other than the defense of payment in accordance with
this Agreement or a defense based on the gross negligence or willful misconduct
of the Agent or any Lender), including, without limitation, the following
circumstances (subject in all cases to the defense of payment in accordance with
this Agreement or a defense based on the gross negligence or willful misconduct
of the Agent or any Lender):
(1) any lack of validity or enforceability of any of the
L/C Documents;
(2) any amendment or waiver of or any consent to depart
from all or any of the provisions of any of the L/C Documents;
(3) the existence of any claim, setoff, defense or other
right the Borrower or any Subsidiary may have at any time against
a beneficiary of a Letter of Credit (or any Person for whom a
beneficiary may be acting), the Agent, any Lender or any other
Person, whether in connection with this Agreement, another L/C
Document or any unrelated transaction;
(4) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect, provided that the Agent's
determination that documents presented under the Letter of Credit
comply with the terms thereof did not constitute gross negligence
or willful misconduct of the Agent;
(5) payment by the Agent under a Letter of Credit against
presentation to the Agent of a draft or certificate that does not
comply with the terms of the Letter of Credit, provided that the
Agent's determination that documents presented under the Letter
of Credit comply with the terms thereof did not constitute gross
negligence or willful misconduct of the Agent; or
(6) any other act or omission to act or delay of any kind
by the Agent, any Lender or any other Person or any other event
or circumstance whatsoever that might, but for the provisions of
this Section 2.2(c), constitute a legal or equitable discharge of
the Borrower's obligations hereunder or under any L/C Document,
provided that such act or omission of the Agent did not
constitute gross negligence or willful misconduct of the Agent or
any Lender .
(4) The Participating Interests. Each Lender severally and not
---------------------------
jointly agrees to purchase from the Agent, and the Agent hereby agrees to sell
to each Lender, an undivided percentage participating interest, to the extent of
its Percentage, in each Letter of Credit issued by, and Reimbursement Obligation
owed to, the Agent in connection with a Letter of Credit. Upon any failure by
the Borrower to pay any Reimbursement Obligation in connection with a Letter of
Credit at the time required in Sections 2.2(c) and 2.4(c), or if the Agent is
required at any time to return to the Borrower or to a trustee, receiver,
liquidator, custodian or other Person any portion of any payment by the Borrower
of any Reimbursement Obligation in connection with a Letter of Credit, the Agent
shall promptly give notice of same to each Lender, and the Agent shall have the
right to require each Lender to fund its participation in such Reimbursement
Obligation. Each Lender (except the Agent to the extent it is also a Lender)
shall pay to the Agent an amount equal to each Lender's Percentage of such
unpaid or recaptured Reimbursement Obligation not later than the Business Day it
receives notice from the Agent to such effect, if such notice is received before
2:00 p.m., or not later than the following Business Day if such notice is
received after such time. If a Lender fails to pay timely such amount
13
to the Agent, it shall also pay to the Agent interest on such amount accrued
from the date payment of such amount was made by the Agent to the date of such
payment by the Lender at a rate per annum equal to the Federal Funds Rate in
effect for each such day, and only after such payment shall such Lender be
entitled to receive its Percentage of each payment received on the relevant
Reimbursement Obligation and of interest paid thereon. If any such Lender fails
to pay such amount to the Agent, any payments made by the Borrower with respect
to the relevant Reimbursement Obligation shall first be applied by the Agent to
the unfunded participation in such Reimbursement Obligation before any other
Lenders receive any payments or proceeds. The Agent will thereafter pay each
Lender its Percentage of each payment received by it relating to that for which
such Lender has funded its Percentage, from the date of funding. THE SEVERAL
OBLIGATIONS OF THE LENDERS TO THE AGENT UNDER THIS SECTION 2.2(D) SHALL BE
ABSOLUTE, IRREVOCABLE AND UNCONDITIONAL UNDER ANY AND ALL CIRCUMSTANCES
WHATSOEVER AND SHALL NOT BE SUBJECT TO ANY SETOFF, COUNTERCLAIM OR DEFENSE TO
PAYMENT ANY LENDER MAY HAVE OR HAVE HAD AGAINST THE BORROWER, THE AGENT, ANY
OTHER LENDER OR ANY OTHER PERSON WHATSOEVER INCLUDING, BUT NOT LIMITED TO, ANY
DEFENSE BASED ON THE FAILURE OF THE DEMAND FOR PAYMENT UNDER THE LETTER OF
CREDIT TO CONFORM TO THE TERMS OF SUCH LETTER OF CREDIT OR THE LEGALITY,
VALIDITY, REGULARITY OR ENFORCEABILITY OF SUCH LETTER OF CREDIT AND INCLUDING,
BUT NOT LIMITED TO, THOSE RESULTING FROM THE AGENT'S OWN SIMPLE OR CONTRIBUTORY
NEGLIGENCE. Without limiting the generality of the foregoing, such obligations
shall not be affected by any Default or Event of Default or by any subsequent
reduction or termination of any Commitment of a Lender, and each payment by a
Lender under Section 2.2 shall be made without any offset, abatement,
withholding or reduction whatsoever.
Section 2.3 Types of Loans and Minimum Borrowing Amounts. Borrowings of
--------------------------------------------
Revolving Loans may be outstanding as either Base Rate Loans or LIBOR Loans, as
selected by the Borrower pursuant to Section 2.4. Borrowings of Swing Line Loans
may be outstanding only as Base Rate Loans. All Borrowings of LIBOR Loans
advanced on the Initial Borrowing Date shall be advanced as Base Rate Loans
unless a notice for a requested LIBOR Loan has been given pursuant to Section
2.4(a) by 11:00 a.m. at least three (3) Business Days before the Initial
Borrowing Date and indemnification has been provided to the Lenders in
connection therewith in the event the Initial Borrowing Date does not occur on
the date requested. Each Borrowing of Base Rate Loans (other than Swing Line
Loans) shall be in an amount of not less than $1,000,000, or a greater integral
multiple of $500,000. Each Borrowing of LIBOR Loans shall be in an amount of
not less than $5,000,000, or a greater integral multiple of $1,000,000. Each
Borrowing of a Swing Line Loan shall be in an amount of not less than $10,000,
or a greater integral multiple of $10,000.
Section 2.4 Manner of Borrowing.
-------------------
(1) Notice to the Agent. Subject to the limitations in Section
-------------------
2.3, the Borrower shall deliver a Borrowing Request in the form of Exhibit 2.4
(each a "Borrowing Request") to the Agent by no later than (i) 11:00 a.m. at
least three (3) Business Days before the date on which the Borrower requests the
Lenders or the Agent, as applicable, to advance a Borrowing of LIBOR Loans, (ii)
11:00 a.m. on the date the Borrower requests the Lenders or the Agent, as
applicable, to advance a Borrowing of Base Rate Loans (other than Swing Line
Loans), and (iii) 1:00 p.m. on the date the Borrower requests the Agent to
advance a Borrowing of Swing Line Loans, in each case pursuant to a duly
executed Borrowing Request, and the Agent shall promptly give the Lenders notice
thereof. Notwithstanding the foregoing, Swing Line Loans by the Agent made in
connection with a cash management agreement between Borrower and the Agent shall
be governed by the terms of that agreement and no notice of any such Swing Line
Loan is required and such Swing Line Loans are not subject to the minimum or
integral multiple amount requirements of Section 2.3.
(2) Selection of Interest Periods. The Borrower may select
multiple Interest Periods for the Revolving Loans constituting any particular
Borrowing, provided that at no time shall the number of different Interest
Periods for outstanding LIBOR Loans exceed eight (8). The Revolving Loans
included in each Borrowing shall bear interest initially at the type of rate
specified in the Borrowing Request with respect thereto. Thereafter, the
Borrower may from time to time elect to change or continue the type of interest
rate borne by each Borrowing or, subject to Section 2.3's minimum amount
requirement for each outstanding Borrowing, a portion thereof, as follows: (i)
if such Borrowing is of LIBOR Loans, the Borrower may continue part or all of
such Borrowing as LIBOR Loans for an Interest Period specified by the Borrower
or convert part or all of such Borrowing into Base Rate Loans on the last day of
the
14
Interest Period applicable thereto, or the Borrower may earlier convert part or
all of such Borrowing into Base Rate Loans so long as it pays the breakage fees
and funding losses provided in Section 2.12 and all interest accrued on such
Borrowing, and (ii) if such Borrowing is of Base Rate Loans, the Borrower may
convert all or part of such Borrowing into LIBOR Loans for an Interest Period
specified by the Borrower on any Business Day. Notices of the continuation of a
Borrowing of LIBOR Loans for an additional Interest Period or of the conversion
of part or all of a Borrowing of LIBOR Loans into Base Rate Loans or of Base
Rate Loans into LIBOR Loans must be given by no later than 11:00 a.m. at least
three (3) Business Days before the date of the requested continuation or
conversion. The Borrower shall give such notices concerning the advance,
continuation, or conversion of a Borrowing by telephone or facsimile (which
notice shall be irrevocable once given and, if by telephone, shall be promptly
confirmed in writing) pursuant to a Borrowing Request which shall specify the
date of the requested advance, continuation or conversion (which shall be a
Business Day), the amount of the requested Borrowing, the type of Loans to
comprise such new, continued or converted Borrowing and, if such Borrowing is to
be comprised of LIBOR Loans, the Interest Period applicable thereto. The
Borrower agrees that the Agent and each Lender may rely on any such telephonic
or facsimile notice given by any person it in good faith believes is an
authorized representative of the Borrower without the necessity of independent
investigation and that, if any such notice by telephone conflicts with any
written confirmation, such telephonic notice shall govern if the Agent or any
Lender has acted in reliance thereon.
(3) Borrower's Failure to Notify. If the Borrower fails to give
----------------------------
notice pursuant to Section 2.4(a) or (b) of (i) the continuation or conversion
of any outstanding principal amount of a Borrowing of LIBOR Loans or of (ii) a
Borrowing of Loans to pay outstanding Reimbursement Obligations, as applicable,
and has not notified the Agent by 11:00 a.m. at least three (3) Business Days
before the last day of the Interest Period for such Borrowing of LIBOR Loans or
by 11:00 a.m. on the day such Reimbursement Obligation becomes due that it
intends to repay such Borrowing or such Reimbursement Obligation with funds not
borrowed hereunder, the Borrower shall be deemed to have requested, (x) the
continuation of such Borrowing as a LIBOR Loan with an Interest Period of one
(1) month, or (y) the advance of a new Borrowing of Base Rate Loans on such day
in the amount of the Reimbursement Obligation then due, which Borrowing shall be
deemed to have been funded on such day to pay the Reimbursement Obligation then
due, in each case so long as no Default or Event of Default shall have occurred
and be continuing or would occur as a result of such Borrowing but otherwise
disregarding the conditions to a Borrowing set forth in Section 4.2. Upon the
occurrence and during the continuance of any Event of Default, (i) each LIBOR
Loan will automatically, on the last day of the then existing Interest Period
therefor, convert into a Base Rate Loan and (ii) the obligation of the Lenders
to make, continue or convert Loans into LIBOR Loans shall be suspended.
(4) Funding and Disbursement of Loans. Not later than 1:00 p.m.
---------------------------------
on the date of any requested advance of a new Borrowing of Revolving Loans, each
Lender, subject to all other provisions hereof, shall make available its
Revolving Loan comprising its ratable share of such Borrowing in funds
immediately available in Houston, Texas for the benefit of the Agent and
according to the disbursement instructions of the Agent. The Agent shall make
the proceeds of each such Borrowing, and each Swing Line Loan which the Agent
makes, in its sole discretion, available in immediately available funds to the
Borrower on the date of any requested advance of a new Borrowing by 2:00 p.m. No
Lender shall be responsible to the Borrower for any failure by another Lender to
fund its portion of a Borrowing, and no such failure by a Lender shall relieve
any other Lender from its obligation, if any, to fund its portion of a
Borrowing.
(5) Agent Reliance on Lender Funding. Unless the Agent shall
have been notified by a Lender before the date on which such Lender is scheduled
to make payment to the Agent of the proceeds of a Revolving Loan (which notice
shall be effective upon receipt) that such Lender does not intend to make such
payment, the Agent may assume that such Lender has made such payment when due
and in reliance upon such assumption may (but shall not be required to) make
available to the Borrower the proceeds of the Revolving Loan to be made by such
Lender and, if any Lender has not in fact made such payment to the Agent, such
Lender shall, on demand, pay to the Agent the amount made available to the
Borrower attributable to such Lender together with interest thereon for each day
during the period commencing on the date such amount was made available to the
Borrower and ending on (but excluding) the date such Lender pays such amount to
the Agent at a rate per annum equal to the interest rate attributable to the
relevant Revolving Loan. If such amount is not received from such Lender by the
Agent immediately upon demand, the Borrower will, on demand, repay to the Agent
the proceeds of the Loan attributable to such Lender with interest thereon at a
rate per annum equal to the interest rate applicable to the relevant Revolving
Loan. Nothing in this Section 2.4(e) shall be
15
deemed to relieve any Lender from its obligations to fund its Commitments
hereunder or to prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
Section 2.5 Interest Periods. As provided in Section 2.4(a) and (b), at
----------------
the time of each request for the advance or continuation of, or conversion into,
a Borrowing of LIBOR Loans, the Borrower shall select an Interest Period
applicable to such LIBOR Loans from among the available options subject to the
limitations in Section 2.4(a); provided, however, that:
(1) the Borrower may not select an Interest Period for a
Borrowing of LIBOR Loans that extends beyond the Maturity Date;
(2) whenever the last day of any Interest Period would otherwise
be a day that is not a Business Day, the last day of such Interest Period shall
either be (i) extended to the next succeeding Business Day, or (ii) reduced to
the immediately preceding Business Day if the next succeeding Business Day is in
the next calendar month; and
(3) for purposes of determining an Interest Period, a month
means a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month; provided, however,
that if there is no such numerically corresponding day in the month in which an
Interest Period is to end or if such Interest Period begins on the last Business
Day of a calendar month, then such Interest Period shall end on the last
Business Day of the calendar month in which such Interest Period is to end.
Section 2.6 Interest Payments.
-----------------
(1) Base Rate Loans. Each Base Rate Loan shall bear interest
---------------
(computed on the basis of a 365/366-day year and actual days elapsed, excluding
the date of repayment) on the unpaid principal amount thereof from the date such
Loan is made until maturity (whether by acceleration or otherwise) or conversion
to a LIBOR Loan in accordance with Section 2.4(b) hereof, at a rate per annum
equal to the lesser of (i) the Highest Lawful Rate, or (ii) with respect to
Revolving Loans, the sum of the Base Rate from time to time in effect plus the
Applicable Margin, or with respect to Swing Line Loans, the sum of the Base Rate
from time to time in effect minus the Commitment Fee Percentage, payable in
arrears on each Interest Payment Date for such Loan and at maturity (whether by
acceleration or otherwise) or conversion to a LIBOR Loan in accordance with
Section 2.4(b).
(2) LIBOR Loans. Each LIBOR Loan shall bear interest (computed
-----------
on the basis of a 360-day year and actual days elapsed, excluding the date of
repayment) on the unpaid principal amount thereof from the date such Loan is
made until maturity (whether by acceleration or otherwise) or conversion to a
Base Rate Loan in accordance with Section 2.4(b) hereof, at a rate per annum
equal to the lesser of (i) the Highest Lawful Rate, or (ii) the sum of the
Adjusted LIBOR Rate plus the Applicable Margin, payable in arrears on each
Interest Payment Date for such Loan and at maturity (whether by acceleration or
otherwise) or conversion to a Base Rate Loan in accordance with Section 2.4(b).
(3) Rate Determinations. The Agent shall determine each interest
-------------------
rate applicable to the Loans and Reimbursement Obligations hereunder (including
the Applicable Margin, determined as set forth in the definition thereof) and
such determination shall be conclusive and binding except in the case of the
Agent's manifest error or willful misconduct. The Agent shall give prompt
telephonic, telex or facsimile notice to the Borrower and each Lender of the
interest rate applicable to each Loan or Reimbursement Obligation (but, if such
notice is given by telephone, the Agent shall confirm such rate in writing)
promptly after the Agent has made such determination.
Section 2.7 Default Rates. If any payment of principal on any Loan is
-------------
not made when due after the expiration of the grace period therefor provided in
Section 7.1 (whether by acceleration or otherwise), such Loan shall bear
interest (computed on the basis of a year of 360, 365 or 366 days, as
applicable, and actual days elapsed) from the date such payment was due until
such principal then due is paid in full, payable on demand, at a rate per annum
equal to:
16
(1) for any Base Rate Loan which is a Revolving Loan the lesser
of (i) the Highest Lawful Rate, or (ii) the sum of two percent (2%) per annum
plus the Base Rate from time to time in effect (but not less than the Base Rate
in effect at maturity) plus the Applicable Margin;
(2) for any LIBOR Loan the lesser of (i) the Highest Lawful
Rate, or (ii) the sum of two percent (2%) per annum plus the rate of interest in
effect thereon at the time of such default until the end of the Interest Period
for such Loan and, thereafter, at a rate per annum equal to the sum of two
percent (2%) per annum plus the Base Rate from time to time in effect (but not
less than the Base Rate in effect at maturity) plus the Applicable Margin;
(3) for any unpaid Reimbursement Obligations, the lesser of (i)
the Highest Lawful Rate, or (ii) the sum of two percent (2%) per annum plus the
Base Rate from time to time in effect (but not less than the Base Rate in effect
at maturity) plus the Applicable Margin; and
(4) for any Base Rate Loan which is a Swing Line Loan, the
lesser of (i) the Highest Lawful Rate, or (ii) the sum of two percent (2%) per
annum plus the Base Rate from time to time in effect (but not less than the Base
Rate in effect at maturity) minus the Commitment Fee Percentage.
It is the intention of the Agent and each Lender to conform strictly to usury
laws applicable to it. Accordingly, if the transactions contemplated hereby or
the Loans or the Reimbursement Obligations would be usurious as to the Agent or
the Lenders under laws applicable to it (including the laws of the United States
of America and the State of Texas or any other jurisdiction whose laws may be
mandatorily applicable to the Agent or such Lender notwithstanding the other
provisions of this Agreement, the Notes or any other Credit Document), then, in
that event, notwithstanding anything to the contrary in this Agreement, the
Notes or any other Credit Document, it is agreed as follows: (i) the aggregate
of all consideration which constitutes interest under laws applicable to the
Lenders that is contracted for, taken, reserved, charged or received by the
Lenders under this Agreement, the Notes or any other Credit Document or
otherwise shall under no circumstances exceed the Highest Lawful Rate, and any
excess shall be credited by the applicable Lender on the principal amount of the
applicable Note or to the Reimbursement Obligations (or, if the principal amount
of such Note and all Reimbursement Obligations owed to such Lender shall have
been paid in full, refunded by such Lender to the Borrower); (ii) in the event
that the maturity of the Notes is accelerated by reason of an election of the
holder or holders thereof resulting from any Event of Default hereunder or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under laws applicable to the Lenders may
never include more than the Highest Lawful Rate, and excess interest, if any,
provided for in this Agreement, the Notes, any other Credit Document or
otherwise shall be automatically canceled by the applicable Lenders as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by the applicable Lenders on the principal amount of the applicable
Notes or Reimbursement Obligations (or if the principal amounts thereof shall
have been paid in full, refunded by the applicable Lender to the Borrower); and
(iii) if at any time the interest provided hereunder, together with any other
fees payable pursuant to this Agreement, the Notes or any other Credit Document
and deemed interest under applicable law, exceeds the amount that would have
accrued at the Highest Lawful Rate, the amount of interest and any such fees to
accrue to the Lenders hereunder and thereunder shall be limited to the amount
which would have accrued at the Highest Lawful Rate, but any subsequent
reductions shall not reduce the interest to accrue to the Lenders hereunder and
thereunder below the Highest Lawful Rate until the total amount of interest
accrued pursuant hereto and thereto and such fees deemed to be interest equals
the amount of interest which would have accrued to the Lenders if a varying rate
per annum equal to the interest hereunder had at all times been in effect plus
the amount of fees which would have been received but for the effect of this
Section 2.7. The Agent and the Lenders hereby elect to determine the applicable
rate ceiling under Section 303.201 of the Texas Finance Code Xxx. (Xxxxxx 1998)
by the weekly rate ceiling from time to time in effect, subject to the Agent's
and the Lenders' right subsequently to change such method in accordance with
applicable law. In the event the Loans and all Reimbursement Obligations are
paid in full by the Borrower prior to the Maturity Date and the interest
received for the actual period of the existence of the Loans or the
Reimbursement Obligations exceeds the Highest Lawful Rate, the applicable
Lenders shall refund to the Borrower the amount of the excess or shall credit
the amount of the excess against amounts owing under the Loans and none of the
Lenders shall be subject to any of the penalties provided by law for contracting
for, taking, reserving, charging or receiving interest in excess of the Highest
Lawful Rate. The provisions of Chapter 346 of Tex. Finance Code Xxx. (Xxxxxx
1998), regulating certain revolving credit accounts shall not apply to this
Agreement or any of the Notes.
17
Section 2.8 Maturity of Loans. Each Revolving Loan, together with
-----------------
accrued and unpaid interest thereon and all other fees then due and owing under
any Credit Document, shall mature and become due and payable on the Maturity
Date. Each Swing Line Loan, together with accrued and unpaid interest thereon,
shall mature and become due and payable five (5) days after the date of such
Swing Line Loan, provided that all such Swing Line Loans shall mature and become
due and payable no later than the Maturity Date.
Section 2.9 Optional Prepayments. The Borrower shall have the privilege
--------------------
of prepaying the Loans without premium or penalty in whole or in part at any
time. If the Borrower is prepaying LIBOR Loans, it shall give to the Agent
notice of such prepayment no later than 11:00 a.m. at least two (2) Business
Days before the proposed prepayment date. All prepayments of Loans shall be
accompanied by accrued interest thereon, together with, if such Loans being
prepaid are LIBOR Loans, any applicable breakage fees and funding losses
pursuant to Section 2.12. The Borrower may direct the application of any
optional prepayment hereunder to the Base Rate Loans or LIBOR Loans outstanding.
Section 2.10 Mandatory Prepayments of Loans. If the aggregate principal
------------------------------
amount of outstanding Loans and L/C Obligations shall at any time for any reason
exceed the Commitment Amount then in effect, the Borrower shall, immediately and
without notice or demand, pay the amount of such excess to the Agent for the
ratable benefit of the Lenders as a prepayment of the Loans and, if all Loans
have been paid, a pre-funding of Letters of Credit pursuant to the provisions of
Section 7.4. Any mandatory prepayment of Loans pursuant hereto shall not be
limited by the notice provision for prepayments set forth in Section 2.9, but
immediately upon determining the need to make any such prepayment, the Borrower
shall notify the Agent of such required prepayment. Each such prepayment shall
be accompanied by a payment of all accrued and unpaid interest on the Loans
prepaid and any applicable breakage fees and funding losses pursuant to Section
2.12.
Section 2.11 The Notes. The Revolving Loans outstanding to the Borrower
---------
from the Lenders (and, with respect to the Agent, any Swing Line Loans
outstanding to the Borrower) shall be evidenced by promissory notes of the
Borrower payable to each of the Lenders and the Agent in the form of Exhibit
2.11 (such promissory notes, together with any replacements thereof, the
"Notes"). Each holder of a Note shall record on its books and records or on a
schedule to the Note the amount of each Loan outstanding from it to the
Borrower, all payments of principal and interest and the principal balance from
time to time outstanding thereon, the type of such Loan and, if a LIBOR Loan,
the Interest Period and interest rate applicable thereto. Such record, whether
shown on the books and records of a holder of a Note or on a schedule to its
Note, shall be prima facie evidence as to all such matters; provided, however,
that the failure of any holder to record any of the foregoing or any error in
any such record shall not limit or otherwise affect the obligation of the
Borrower to repay all Loans outstanding to it hereunder, together with accrued
interest thereon. At the request of any holder of a Note and upon such holder
tendering to the Borrower the Note to be replaced, the Borrower shall furnish a
new Note to such holder to replace any outstanding Note and at such time the
first notation appearing on the schedule on the reverse side of, or attached to,
such new Note shall set forth the aggregate unpaid principal amount of all
Loans, if any, then outstanding thereon.
Section 2.12 Breakage Fees. If any Lender incurs any loss, cost or
-------------
expense (excluding any loss of anticipated profit, but including, without
limitation, any loss, cost, expense or premium reasonably incurred by reason of
the liquidation or re-employment of deposits or other funds acquired by such
Lender to fund or maintain any LIBOR Loan or the relending or reinvesting of
such deposits or amounts paid or prepaid to the Lenders) as a result of any of
the following events other than any such occurrence as a result of a change of
circumstance described in Sections 8.1 or 8.2:
(1) any payment, prepayment or conversion of a LIBOR Loan on a
date other than the last day of its Interest Period (whether by acceleration,
prepayment or otherwise);
(2) any failure to make a principal payment of a LIBOR Loan on
the due date therefor; or
(3) any failure by the Borrower to borrow, continue, prepay or
convert to a LIBOR Loan on the date specified in a notice given pursuant to
Section 2.4(a) or (b) (other than by reason of a default of a Lender),
18
then the Borrower shall pay to such Lender such amount as will reimburse such
Lender for such loss, cost or expense. If any Lender makes such a claim for
compensation, it shall provide to the Borrower a certificate executed by an
officer of such Lender setting forth the amount of such loss, cost or expense in
reasonable detail (including an explanation of the basis for and the computation
of such loss, cost or expense) no later than 120 days after the event giving
rise to the claim for compensation, and the amounts shown on such certificate
shall be conclusive and binding absent manifest error. Within ten (10) days of
receipt of such certificate, the Borrower shall pay to such Lender such amount
as will compensate such Lender for such loss, cost or expense as provided
herein, unless such Lender has failed to timely give notice to the Borrower of
such claim for compensation as provided herein, in which event the Borrower
shall no longer be obligated to pay such claim.
Section 2.13 Commitment Terminations. The Borrower shall have the right
-----------------------
at any time and from time to time, upon five (5) Business Days' prior and
irrevocable written notice to the Agent, to terminate or reduce the Commitments
without premium or penalty, in whole or in part, any partial termination to be
(i) in an amount not less than $1,000,000 as determined by the Borrower, and
(ii) allocated ratably among the Lenders in proportion to their respective
Commitments, as applicable; provided that the Commitment Amount may not be
reduced to an amount less than the sum of the aggregate principal amount of
outstanding Loans plus the aggregate outstanding L/C Obligations, after giving
effect to payments on such proposed termination or reduction date, unless the
Borrower provides to the Lenders or the Agent, as applicable, cash collateral in
an amount sufficient to cover such shortage or back-to-back letters of credit
from a financial institution satisfactory to all of the Lenders in an amount
equal to the undrawn face amount of any applicable outstanding Letters of Credit
with an expiry date of at least five (5) days after the expiry date of any
applicable Letter of Credit and which provide that the Lenders may make a
drawing thereunder in the event that it pays a drawing under such Letter of
Credit. Any termination of the Commitments pursuant to this Section 2.13 is
permanent and may not be reinstated. The Agent shall give prompt notice to each
Lender of any such termination of the Commitments.
Section 2.14 Agent Reliance on Borrower Payment. Except as otherwise
----------------------------------
provided under Section 2.2(c), unless Borrower has notified the Agent prior to
the date any payment or prepayment to be made by it is due (or if Borrower has
given notice of its intention to prepay a Loan on such date), that it does not
intend to make such payment or prepayment, the Agent may assume that the
Borrower has made such payment when due (or on the date stated in its prepayment
notice) and in reliance upon such assumption may (but shall not be required to)
make available to each Lender its Percentage of such payment. If such payment
was not in fact made to the Agent in immediately available funds, then each
Lender shall promptly on demand repay to the Agent the amount of such assumed
payment made available to such Lender, together with interest thereon in respect
of each day from and including the date such amount was made available by the
Agent to such Lender to the date such amount is repaid to the Agent at the
Federal Funds Rate.
SECTION 3. FEES AND PAYMENTS.
Section 3.1 Fees.
----
(1) Commitment Fee. For the period from the Effective Date to
--------------
and including the Commitment Termination Date the Borrower shall pay to the
Agent for the ratable account of the Lenders, a Commitment Fee (computed on a
basis of a 365/366-day year and actual days elapsed) on an amount equal to the
average daily difference between (i) the sum of the Commitment Amount and (ii)
the outstanding Revolving Loans and L/C Obligations, such Commitment Fee to be
calculated, for any day, at such times as the relevant Funded Debt to EBITDA
Ratio is in one of the following tiers, based upon the Commitment Fee Percentage
per annum set forth opposite the corresponding Funded Debt to EBITDA Ratio in
same tier set forth below, times such amount:
19
Tier Funded Debt to EBITDA Ratio Commitment Fee Percentage
---- --------------------------- -------------------------
I. Greater than or equal to 3.0 to 1.0 0.500%
II. Greater than or equal to 2.5 to 1.0 but less
than 3.0 to 1.0 0.375%
III. Greater than or equal to 2.0 to 1.0 but less
than 2.5 to 1.0 0.375%
IV. Greater than or equal to 1.5 to 1.0 but less
than 2.0 to 1.0 0.250%
V. Less than 1.5 to 1.0 0.250%
For the period from the Effective Date through the earlier of (a) the date the
Compliance Certificate and financial statements required by Section 6.6(a)(i)
and Section 6.6(b), for the fiscal quarter ended September 30, 1999, are
required to be provided to the Agent, and (b) the date such Compliance
Certificate and financial statements are provided to the Agent, the applicable
Commitment Fee Percentage determined as of such quarter may be greater than or
equal to but may not be less than the percentage in tier IV, and thereafter, the
Commitment Fee Percentage shall be set by the Agent at the same time and in the
same manner as the Applicable Margin is set. If, prior to the date the
Compliance Certificate and financial statements are required to be provided to
Agent for the fiscal quarter ended September 30, 1999, the Borrower consummates
a public offering of the Borrower's capital stock and receives at least
$75,000,000 in gross proceeds from such offering, the Borrower may provide to
Agent a pro forma Compliance Certificate which gives effect to the public
offering when calculating the Funded Debt to EBITDA Ratio, and, to the extent
the pro forma calculation results in a lower Funded Debt to EBITDA Ratio and a
corresponding reduction of the Commitment Fee Percentage, the Commitment Fee
Percentage may be adjusted downward from its then determined tier but only to
the next tier on the pricing grid. Such Commitment Fees shall be payable in
arrears commencing on September 30, 1999, and on the last Business Day of each
calendar quarter thereafter and on the Maturity Date unless the Commitments are
terminated in whole on an earlier date, in which event the Commitment Fee for
the period to but not including the date of such termination shall be paid in
whole on the date of such termination. If Borrower fails to timely provide to
the Agent the Compliance Certificate and the financial statements, then from the
period beginning the first day after the date such Compliance Certificate and
financial statements are required to be provided to the Agent and ending on the
date such items are actually provided to the Agent, the Commitment Fee shall be
the Commitment Fee in tier I on the above pricing grid.
(2) Letter of Credit Fees. Commencing upon the date of issuance
---------------------
or extension of any Letter of Credit, the Borrower shall pay to the Agent
quarterly in arrears (pro rated, if necessary for any portion of such quarter)
for the ratable account of the Lenders (based on their respective Percentages) a
non-refundable fee for any Letter of Credit equal to the greater of (x) $125 per
quarter, or (y) the face amount of such Letter of Credit times the Applicable
Margin for LIBOR Loans, calculated on the basis of a 365/366-day year and actual
days in the period and based on the then scheduled expiry date of the Letter of
Credit. Thereafter, such fees shall be payable by the Borrower in arrears on the
last Business Day of each calendar quarter of each year commencing with the next
succeeding calendar quarter, with the last such payment on the date any such
Letter of Credit expires. In addition, the Borrower shall pay to the Agent
solely for the Agent's account, in connection with each Letter of Credit,
reasonable administrative and amendment fees and expenses for letters of credit
established by the Agent from time to time in accordance with its customary
practices and as agreed between the Agent and the Borrower and a fronting fee of
1/8% of the face amount of each Letter of Credit.
(3) Agent Fees. The Borrower shall pay to each of the Agent and
----------
the Lead Arranger and Book Manager the fees agreed to between the Agent, the
Lead Arranger and Book Manager and the Borrower pursuant to the Fee Letter, and
any other fees from time to time agreed to by the Borrower and the Agent.
20
Section 3.2 Place and Application of Payments. All payments of
---------------------------------
principal of and interest on the Loans and the Reimbursement Obligations and all
other amounts payable by the Borrower under the Credit Documents shall be made
by the Borrower to the Agent by no later than 2:00 p.m. on the due date thereof
at the office of the Agent in Houston, Texas (or such other location as the
Agent may designate to the Borrower). Any payments received by the Agent from
the Borrower after 2:00 p.m. shall be deemed to have been received on the next
Business Day.
Section 3.3 Withholding Taxes.
-----------------
(1) Payments Free of Withholding. Except as otherwise required
----------------------------
by law and subject to Section 3.3(b), each payment by the Borrower to the Agent
or any Lender under this Agreement or any other Credit Document shall be made
without withholding for or on account of any present or future taxes (other than
overall net income taxes on the recipient) imposed by or within the jurisdiction
in which the Borrower is domiciled, any jurisdiction from which the Borrower
makes any payment, or (in each case) any political subdivision or taxing
authority thereof or therein, excluding, in the case of each Lender and the
Agent, taxes, assessments or other governmental charges
(1) imposed on, based upon, or measured by its income, and
branch profits, franchise and similar taxes imposed on it, by any jurisdiction
in which the Agent or such Lender, as the case may be, is incorporated or
maintains its principal place of business or Lending Office or which subjects
the Agent or such Lender to tax by reason of a connection between the taxing
jurisdiction and the Agent or such Lender (other than a connection resulting
from the transactions contemplated by this Agreement);
(2) imposed as a result of a connection between the taxing
jurisdiction and the Agent or such Lender, as the case may be, other than a
connection resulting from the transactions contemplated by this Agreement;
(3) imposed as a result of the transfer by such Lender of
its interest in this Agreement or any other Credit Document or a designation by
such Lender (other than pursuant to Section 3.3(d) hereof) of a new Lending
Office (other than taxes imposed as a result of any change in treaty, law or
regulation after such transfer of the Lender's interest in this Agreement or any
Credit Document or designation of a new Lending Office);
(4) imposed by the United States of America upon a Lender
organized under the laws of a jurisdiction outside of the United States, except
to the extent that such tax is imposed or increased as a result of any change in
applicable law, regulation or treaty (other than any addition of or change in
any "anti-treaty shopping," "limitation of benefits," or similar provision
applicable to a treaty) after the Effective Date, in the case of each Lender
originally a party hereto or, in the case of any Purchasing Lender (as defined
in Section 10.10), after the date on which it becomes a Lender;
(5) which would not have been imposed but for (a) the
failure of the Agent or any Lender, as the case may be, to provide (x) an
Internal Revenue Service Form 1001 or 4224, as the case may be, or any
substitute or successor form prescribed by the Internal Revenue Service pursuant
to Section 3.3(b) below, or (y) any other certification, documentation or proof
which is reasonably requested by the Borrower, or (b) a determination by a
taxing authority or a court of competent jurisdiction that a certification,
documentation or other proof provided by such Lender or the Agent to establish
an exemption from such tax, assessment or other governmental charge is false
(all such non-excluded taxes, assessments or other governmental charges and
liabilities being hereinafter referred to as "Indemnified Taxes"). If any such
withholding is so required, the Borrower shall make the withholding, pay the
amount withheld to the appropriate governmental authority before penalties
attach thereto or interest accrues thereon and forthwith pay such additional
amount as may be necessary to ensure that the net amount actually received by
the Agent and each Lender is free and clear of such Indemnified Taxes (including
Indemnified Taxes on such additional amount) and is equal to the amount that the
Agent or such Lender (as the case may be) would have received had such
withholding not been made. If the Agent or any Lender pays any amount in
respect of any Indemnified Taxes, penalties or interest, the Borrower shall
reimburse the Agent or that Lender for the payment on demand in the currency in
which such payment was made. If the Borrower pays any Indemnified Taxes,
penalties or interest, it shall deliver official tax receipts evidencing the
payment or certified copies thereof, or other satisfactory evidence of payment
if such tax receipts
21
have not yet been received by the Borrower (with such tax receipts to be
promptly delivered when actually received), to the Agent or the Lender on whose
account such withholding was made (with a copy to the Agent if not the recipient
of the original) within fifteen (15) days of such payment.
(2) U.S. Withholding Tax Exemptions. Each Lender that is not a
-------------------------------
United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Borrower and the Agent on or before the Effective
Date, two duly completed and signed copies of either Form 1001 (entitling such
Lender to a complete exemption from withholding under the Code on all amounts to
be received by such Lender, including fees, pursuant to the Credit Documents) or
Form 4224 (relating to all amounts to be received by such Lender, including
fees, pursuant to the Credit Documents) of the Internal Revenue Service.
Thereafter and from time to time, each Lender shall submit to the Borrower and
the Agent such additional duly completed and signed copies of one or the other
of such forms (or such successor forms as shall be adopted from time to time by
the relevant United States taxing authorities) as may be (i) notified by the
Borrower, directly or through the Agent, to such Lender, and (ii) required under
then-current United States law or regulations to avoid United States withholding
taxes on payments in respect of all amounts to be received by such Lender,
including fees, pursuant to the Credit Documents. Upon the request of the
Borrower, each Lender that is a United States person shall submit to the
Borrower a certificate to the effect that it is such a United States person.
Each such Lender shall make written demand on the Borrower for indemnification
or compensation hereunder not later than 120 days after the earlier of (i) the
date on which such Lender or Agent makes payment of Indemnified Taxes, or (ii)
the date on which the relevant taxing authority or other governmental authority
makes written demand upon such Lender or the Agent for payment of Indemnified
Taxes; provided that any failure of a Lender or the Agent to give the Borrower
timely notice as provided herein shall not relieve the Borrower of any
obligation which it has to pay such claim for compensation for such
indemnification.
(3) Inability of Lender to Submit Forms. If any Lender
-----------------------------------
determines, as a result of any change in applicable law, regulation or treaty,
or in any official application or interpretation thereof, that it is unable to
submit to the Borrower or the Agent any form or certificate that such Lender is
obligated to submit pursuant to Section 3.3(b) or that such Lender is required
to withdraw or cancel any such form or certificate previously submitted or any
such form or certificate otherwise becomes ineffective or inaccurate, such
Lender shall promptly notify the Borrower and the Agent of such fact and the
Lender shall to that extent not be obligated to provide any such form or
certificate and will be entitled to withdraw or cancel any affected form or
certificate, as applicable.
(4) Refund of Taxes. If any Lender or the Agent receives a
---------------
refund of any Indemnified Tax or any tax referred to in Section 10.3 with
respect to which the Borrower has paid any amount pursuant to this Section 3.3
or Section 10.3, such Lender or the Agent shall pay the amount of such refund
(including any interest received with respect thereto) to the Borrower.
SECTION 4. CONDITIONS PRECEDENT.
Section 4.1 Conditions Precedent to Initial Borrowing. The obligation
-----------------------------------------
of each Lender to advance the initial Loans hereunder and of the Agent to issue
any Letter of Credit on the Initial Borrowing Date is subject to the following
conditions precedent, all in form and substance satisfactory to the Lenders (and
which shall be evidenced by the making of such Loan(s) and, if applicable, the
issuance of such Letter(s) of Credit) and in sufficient number of signed
counterparts, where applicable, to provide one for each Lender (except for the
Notes, of which only one original shall be signed for each Lender):
(1) The Agent shall have received:
(1) Notes. The duly executed Notes of the Borrower;
-----
(2) Subsidiary Guaranties. The duly executed Subsidiary
---------------------
Guaranties of each of the Guarantors in substantially the form of Exhibit 4.1A;
(3) Pledge Agreements. The duly executed Pledge Agreements
-----------------
of each of the Borrower, NorAm Telecommunications, Inc., Spalj Construction
Company., Underground Construction Co., Inc.,
22
Quanta Services of Canada, Ltd., Seaward Corporation, and Environmental
Professional Associates, Limited in substantially the form of Exhibit 4.1B,
pledging 100% of the stock or membership interests of its domestic Subsidiaries
and 65% of the stock or equivalent interests of its foreign Subsidiaries,
together with the original stock certificates referenced therein and undated
stock powers executed in blank with respect to each such stock certificate;
(4) Security Agreements. The Security Agreements of the
-------------------
Borrower and each of the Guarantors in substantially the form of Exhibit 4.1C;
(5) Patent Collateral Assignment. The Patent Collateral
----------------------------
Assignment of Xxxxxxx Technologies, Inc. substantially the form of Exhibit 4.1D;
(6) Financing Statements. The duly executed UCC-1
--------------------
Financing Statements of each of the Borrower and the Guarantors with respect to
the stock or equivalent interests referenced in the Pledge Agreements, to the
extent applicable, the Collateral referenced in the Security Agreements, and the
Collateral referenced in the Patent Collateral Assignment, and duly executed
UCC-3s reflecting the change in administrative agent.
(7) Certificate of Officers of Borrower and Guarantors. A
--------------------------------------------------
certificate of the Secretary or Assistant Secretary and the President or Vice
President of each of the Borrower and the Guarantors containing specimen
signatures of the persons authorized to execute Credit Documents on such
Person's behalf or any other documents provided for herein, together with (x)
copies of resolutions of the Board of Directors of such Person authorizing the
execution and delivery of the Credit Documents and of all other legal documents
or proceedings taken by such Person in connection with the execution and
delivery of the Credit Documents, and (y) copies of such Person's Certificate or
Articles of Incorporation, certified by the Secretary of State of such Person's
jurisdiction of organization, and Bylaws;
(8) Certificates of Existence and Good Standing.
-------------------------------------------
Certificates of existence and good standing from the appropriate governing
agency of the Borrower's and each Guarantor's jurisdiction of organization and
of all jurisdictions where the Borrower is authorized to do business;
(9) Fees. Payment of all fees and all expenses incurred
----
through the Effective Date then due and owing to the Agent and the Lead Arranger
and Book Manager pursuant to this Agreement and the Fee Letter;
(10) Consents. Certified copies of all documents evidencing
--------
any necessary consents and governmental approvals taken or obtained by the
Borrower and the Guarantors with respect to the Credit Documents;
(11) Financial Condition Certificate. A certificate of the
-------------------------------
principal financial officer of the Borrower in substantially the form of Exhibit
4.1E;
(12) Financial Statements. Consolidated financial
--------------------
statements of the Borrower and its Subsidiaries for the fiscal year ending
December 31, 1998, and the fiscal quarter ending March 31, 1999 (in each case
including balance sheets and statements of income, retained earnings, and cash
flows, with the December 31, 1998 financial statements being audited by
independent public accountants of recognized national standing and prepared in
accordance with GAAP), which financial statements are acceptable to Agent;
(13) Lien Searches. A lien search report of the State and
-------------
county UCC records, tax lien records, and bankruptcy records for each of the
jurisdictions where Borrower or any Subsidiary is organized or authorized to do
business or does business, which shows no Liens on the Collateral other than
Permitted Liens and Liens to be discharged in connection with the Initial
Borrowing;
(14) Opinions of Counsel. The opinions of (1) Xxxx Xxxxxxx,
-------------------
General Counsel to the Borrower and the Guarantors, and (2) Gardere Xxxxx Xxxxxx
& Xxxxx, LLP, in each case covering such matters as the Lenders may reasonably
require;
23
(15) Compliance Certificate. A Compliance Certificate
----------------------
substantially in the form of Exhibit 6.6; and
(16) Other Documents. Such other documents as the Lenders
---------------
may reasonably request.
(2) All legal matters incident to the execution and delivery of
the Credit Documents shall be reasonably satisfactory to the Lenders.
Section 4.2 Conditions Precedent to all Borrowings. In the case of each
--------------------------------------
advance of a Borrowing hereunder (including the issuance of, increase in the
amount of, or extension of the expiry date of, a Letter of Credit and the
initial Borrowing hereunder but excluding the Revolving Loans to be made as
required by Section 2.1(b)):
(1) Notices. In the case of a Borrowing, the Agent shall have
-------
received the Borrowing Request required by Section 2.4, and in the case of the
issuance, extension or increase of a Letter of Credit, the Agent shall have
received a duly completed Application for such Letter of Credit meeting the
requirements of Section 2.2;
(2) Representations and Warranties True and Correct. Each of
-----------------------------------------------
the representations and warranties of the Borrower and its Subsidiaries set
forth herein and in the Credit Documents shall be true and correct in all
material respects as of the time of such new Borrowing, except as a result of
the transactions expressly permitted hereunder or thereunder and except to the
extent that any such representation or warranty relates solely to an earlier
date, in which case it shall have been true and correct in all material respects
as of such earlier date;
(3) No Default. No Default or Event of Default shall have
----------
occurred and be continuing or would occur as a result of such Borrowing;
(4) New Litigation and Changes in Pending Litigation. Since the
------------------------------------------------
Effective Date, no new litigation (including, without limitation, derivative or
injunctive actions), arbitration proceedings or governmental proceedings shall
be pending or known to be threatened against the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect; and no material development (whether or not disclosed) shall have
occurred in any litigation (including, without limitation, derivative or
injunctive actions), arbitration proceedings or governmental proceedings
previously disclosed, which could reasonably be expected to have a Material
Adverse Effect;
(5) Regulation U; Other Laws. The Borrowings to be made by the
------------------------
Borrower shall not result in either the Borrower or the Agent or any Lender
being in non-compliance with or in violation of Regulation U of the Board of
Governors of the Federal Reserve System and shall not be prohibited by any other
legal requirement (including Regulations T and X of the Board of Governors of
the Federal Reserve System) imposed by the banking laws of the United States of
America, and shall not otherwise subject the Agent or any Lender to a penalty or
other onerous conditions under or pursuant to any legal requirement; and
(6) No Material Adverse Change. There has occurred no event or
--------------------------
effect that has had or could reasonably be expected to have a Material Adverse
Effect.
Each request for the advance of a Borrowing and each request for the issuance
of, increase in the amount of, or extension of the expiry date of, a Letter of
Credit shall be deemed to be a representation and warranty by the Borrower on
the date of such Borrowing, or issuance of, increase in the amount of, or
extension of the expiry date of, such Letter of Credit that all conditions
precedent to such Borrowing have been satisfied or fulfilled unless the Borrower
gives to the Agent written notice to the contrary, in which case no Lender shall
be required to fund such advances and the Agent shall not be required to issue,
increase the amount of or extend the expiry date of such Letter of Credit unless
the Majority Lenders shall have previously waived in writing such non-
compliance. In the event an Event of Default shall have occurred or be
continuing or would occur as a result of such Borrowing, the Borrower may not
convert any Base Rate Loan into a LIBOR Loan or continue any LIBOR Loan and may
only convert or continue any LIBOR Loan into or as a Base Rate Loan in
accordance with Section 2.4(b) hereof and subject to the applicability of the
provisions of Section 2.7 regarding default rates of interest, and in such
case, any LIBOR Loan which has not been accelerated pursuant to
24
the terms hereof shall automatically convert into a Base Rate Loan at the end of
the applicable Interest Period unless prior to such time, any such Event of
Default shall have been cured or waived pursuant to the terms hereof. In the
event a Default shall have occurred and be continuing or would occur as a result
of such Borrowing, the Borrower may only convert any Base Rate Loan or continue
any LIBOR Loan into a LIBOR Loan with a one (1) month Interest Period.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and each Lender as
follows:
Section 5.1 Organization.
------------
(1) The Borrower and each of its Subsidiaries (i) is a duly
incorporated and existing corporation (or other Person) in good standing under
the laws of the jurisdiction of its organization, (ii) has all necessary
corporate power (or comparable power, in the case of a Subsidiary that is not a
corporation) to own the property and assets it uses in its business and
otherwise to carry on its business as presently conducted, and (iii) is duly
licensed or qualified and in good standing in each jurisdiction in which the
nature of the business transacted by it or the nature of the property owned or
leased by it makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified could not reasonably be expected to have
a Material Adverse Effect.
(2) As of the date hereof, the Borrower has no Subsidiaries
other than the Subsidiaries listed on Schedule 5.1, and the Borrower owns one
hundred percent (100%) of each class of capital stock or ownership interests of
each such Subsidiary.
Section 5.2 Power and Authority; Validity. Each of the Borrower and the
-----------------------------
Guarantors has the corporate (or comparable power, in the case of a Subsidiary
that is not a corporation) power and authority to execute, deliver and carry out
the terms and provisions of the Credit Documents to which it is a party and has
taken all necessary corporate (or comparable action, in the case of a Subsidiary
that is not a corporation) action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. Each of the
Borrower and the Guarantors has duly executed and delivered each such Credit
Document and each such Credit Document constitutes the legal, valid and binding
obligation of such Person enforceable in accordance with its terms, subject as
to enforcement only to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity, regardless of whether in a proceeding in equity
or at law.
Section 5.3 No Violation. Neither the execution, delivery nor
------------
performance by the Borrower or any of the Guarantors of the Credit Documents to
which it is a party nor compliance by any of such Persons with the terms and
provisions thereof, nor the consummation by it of the transactions contemplated
herein or therein, will (i) contravene any applicable provision of any law,
statute, rule or regulation, or any applicable order, writ, injunction or decree
of any court or governmental instrumentality, except where such contravention
could not reasonably be expected to have a Material Adverse Effect, (ii)
conflict with or result in any breach of any term, covenant, condition or other
provision of, or constitute a default under (except where such conflict, breach
or default could not reasonably be expected to have a Material Adverse Effect),
or result in the creation or imposition of (or the obligation to create or
impose) any Lien other than any Permitted Lien upon any of the property or
assets of the Borrower or its Subsidiaries under the terms of any contractual
obligation to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its properties or assets are bound or to which it may be
subject, or (iii) violate or conflict with any provision of the Certificate or
Articles of Incorporation or Bylaws or other governance documents, as
applicable, of such Person.
Section 5.4 Litigation. There are no lawsuits (including, without
----------
limitation, derivative or injunctive actions), arbitration proceedings or
governmental proceedings pending or, to the best knowledge of the Borrower,
threatened, involving the Borrower or any of its Subsidiaries except for such
lawsuits or other proceedings which could not reasonably be expected to have a
Material Adverse Effect and any lawsuits and proceedings disclosed in Schedule
5.4.
Section 5.5 Use of Proceeds; Margin Regulations. The proceeds of the
-----------------------------------
Loans may only be used to repay existing Indebtedness, to provide working
capital and for general corporate purposes (including the issuance of Letters
25
of Credit) and for Acquisitions. Neither the Borrower nor any of its
Subsidiaries are engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock. No proceeds of any Loan will be used to
purchase or carry any "margin stock" (as defined in Regulation U of the Board of
Governors of the Federal Reserve System), to extend credit for the purpose of
purchasing or carrying any "margin stock," or for a purpose which violates
Regulations T, U or X of the Board of Governors of the Federal Reserve System.
Section 5.6 Investment Company Act. Neither the Borrower nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
Section 5.7 Public Utility Holding Company Act. Neither the Borrower
----------------------------------
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 5.8 True and Complete Disclosure. All factual information (not
----------------------------
including estimated, pro forma financial information and other projections)
heretofore or contemporaneously furnished by the Borrower or any of its
Subsidiaries in writing to the Agent or the Lenders in connection with any
Credit Document or any transaction contemplated therein is, disregarding any
updated, corrected, supplemented, superseded or otherwise modified information
except as so updated, corrected, supplemented, superseded or otherwise modified
and all other such factual information hereafter furnished by any such Persons
in writing to the Lenders in connection herewith, any of the other Credit
Documents or the Loans will be, true and accurate in all material respects,
taken as a whole, on the date of such information and not incomplete by omitting
to state any material fact necessary to make the information therein not
misleading at such time in light of the circumstances under which such
information, taken as a whole, was provided. All estimates, pro forma financial
information and projections furnished by the Borrower or any of its Subsidiaries
in writing to the Lenders in connection with any Credit Document or any
transaction contemplated therein, were prepared by the Borrower in good faith
based upon assumptions believed by the Borrower to be reasonable at the time
such information was prepared, it being recognized by the Agent and the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount.
Section 5.9 Financial Statements. The financial statements heretofore
--------------------
delivered to the Lenders for the fiscal year ending December 31, 1998 and the
fiscal quarter ending March 31, 1999, were prepared in accordance with GAAP, and
such financial statements, together with the related notes and schedules, fairly
presents the financial position of the Borrower and its Subsidiaries as of the
dates thereof and the results of operations for the periods covered thereby,
subject to normal year-end adjustments and omission of certain footnotes as
permitted by the SEC.
Section 5.10 No Material Adverse Change. From December 31, 1998, there
--------------------------
has occurred no event or effect that has had, or to the best knowledge of the
Borrower could reasonably be expected to have, a Material Adverse Effect.
Section 5.11 Labor Controversies. There are no labor strikes, lock-outs,
-------------------
slow downs, work stoppages or similar events pending or, to the best knowledge
of the Borrower, threatened against the Borrower or any of its Subsidiaries that
could reasonably be expected to have a Material Adverse Effect.
Section 5.12 Taxes. Except as disclosed on Schedule 5.12, the Borrower
-----
and its Subsidiaries have filed all federal tax returns and all other material
tax returns required to be filed, and have paid all governmental taxes, rates,
assessments, fees, charges and levies (collectively, "Taxes") except such Taxes,
if any, as are being contested in good faith and for which reserves have been
provided in accordance with GAAP and except where the failure to pay such Taxes
could not reasonably be expected to have a Material Adverse Effect. Except as
disclosed on Schedule 5.12, no tax liens have been filed and no claims are being
asserted for Taxes. Except as disclosed on Schedule 5.12, the charges, accruals
and reserves on the books of the Borrower and its Subsidiaries for Taxes and
other governmental charges have been determined in accordance with GAAP.
26
Section 5.13 ERISA. With respect to each Plan, the Borrower and its
-----
Subsidiaries have fulfilled their obligations under the minimum funding
standards of, and are in compliance in all material respects with, ERISA and
with the Code to the extent applicable to it, and have not incurred any
liability under Title IV of ERISA to the PBGC or a Plan other than a liability
to the PBGC for premiums under Section 4007 of ERISA, except where such
liability could not reasonably be expected to have a Material Adverse Effect.
As of the Effective Date, neither the Borrower nor any of its Subsidiaries has
any contingent liability with respect to any post-retirement benefits under a
welfare plan as defined in ERISA other than liability for continuation coverage
described in Part 6 of Title I of ERISA, except where such liability could not
reasonably be expected to have a Material Adverse Effect.
Section 5.14 Consents. All consents and approvals of, and filings and
--------
registrations with, and all other actions of, all governmental agencies,
authorities or instrumentalities required to consummate the Borrowings
hereunder, on the date of each such Borrowing, have been obtained or made and
are or will be in full force and effect.
Section 5.15 Capitalization. All outstanding capital stock of the
--------------
Borrower and its Subsidiaries has been duly and validly issued, are fully paid
and nonassessable. None of the Borrower's Subsidiaries has outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
Section 5.16 Ownership of Property. The Borrower and its Subsidiaries
---------------------
have good title to or a valid leasehold interest in all of its property except
to the extent, in the aggregate, no Material Adverse Effect could reasonably be
expected to result from the failure to have such title or interest, subject to
no Liens except Permitted Liens. The Borrower and its Subsidiaries own or hold
valid licenses to use all the material patents, trademarks, permits, service
marks and trade names, free of any burdensome restrictions, that are necessary
to the operation of the business of the Borrower and its Subsidiaries as
presently conducted, except where the failure to own or hold such licenses could
not reasonably be expected to have a Material Adverse Effect.
Section 5.17 Compliance with Statutes. The Borrower and its Subsidiaries
------------------------
are in compliance in all material respects with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies and have all necessary permits, licenses and other necessary
authorizations with respect to the conduct of their businesses and the ownership
and operation of their properties except where the failure to so comply or hold
such permits, licenses or other authorizations could not reasonably be expected
to have a Material Adverse Effect.
Section 5.18 Environmental Matters.
---------------------
(1) Borrower and its Subsidiaries have complied with, and on the
date of each Borrowing will be in compliance with, all applicable Environmental
Laws and the requirements of any permits issued under such Environmental Laws
except where failure to so comply could not reasonably be expected to have a
Material Adverse Effect. To the best knowledge of the Borrower, there are no
pending, past or threatened Environmental Claims against the Borrower or any of
its Subsidiaries or any property owned or operated by the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Borrower, there are no conditions or
occurrences on or emanating from any property owned or operated by the Borrower
or any of its Subsidiaries or on any property adjoining or in the vicinity of
any such property that could reasonably be expected (i) to form the basis of an
Environmental Claim against the Borrower or any of its Subsidiaries or any
property owned or operated by the Borrower or any of its Subsidiaries, or (ii)
to cause any property owned or operated by the Borrower or any of its
Subsidiaries to be subject to any material restrictions on the ownership,
occupancy, the current or intended use or transferability of such property by
the Borrower or any of its Subsidiaries under any applicable Environmental Law
except for any such condition or occurrence described in clauses (i) or (ii)
which could not reasonably be expected to have a Material Adverse Effect.
(2) To the best knowledge of the Borrower (i) Hazardous
Materials have not at any time been generated, used, treated or stored on, or
transported to or from, any property owned or operated by the Borrower or any of
its Subsidiaries in a manner that has violated or could reasonably be expected
to violate any Environmental Law,
27
except for such violation which could not reasonably be expected to have a
Material Adverse Effect, and (ii) Hazardous Materials have not at any time been
released on or from any property owned or operated by the Borrower or any of its
Subsidiaries in a matter that has violated or could reasonably be expected to
violate any Environmental Law, except for such violation which could not
reasonably be expected to have a Material Adverse Effect.
Section 5.19 Year 2000 Compliance. All devices, systems, machinery,
--------------------
information technology, computer software and hardware, and other date sensitive
technology (jointly and severally its "systems") necessary for the Borrower and
its Subsidiaries to carry on their business as presently contemplated to be
conducted will be Year 2000 Compliant within a period of time calculated to
result in no material disruption of any of their business operations. For
purposes hereof, "Year 2000 Compliant" means that such systems are designed to
be used prior to, during and after the Gregorian calendar year 2000 A.D. and
will operate during each such time period without error relating to date data,
specifically including any error relating to, or the product of, date data which
represents or references different centuries or more than one century. The
Borrower and its Subsidiaries will (a) undertake a inventory, review, and
assessment of all areas within their businesses and operations that could be
adversely affected by the failure of the Borrower and its Subsidiaries to be
Year 2000 Compliant on a timely basis; and (b) develop a plan and time line for
becoming Year 2000 Compliant on a timely basis. The Borrower, when it
reasonably determines such action necessary, will make written inquiry of each
of its and its Subsidiaries' key suppliers, vendors, and customers, and will
obtain in writing confirmations from all such Persons, as to whether such
Persons have initiated programs to become Year 2000 Compliant. For purposes
hereof, "key suppliers, vendors, and customers" refers to those suppliers,
vendors, and customers of the Borrower and its Subsidiaries whose business
failure could reasonably be expected to have a Material Adverse Effect. The
fair market value of all Collateral pledged to the Lenders as collateral to
secure the Loans is not and shall not be less than currently anticipated or
subject to substantial deterioration in value because of the failure of such
Collateral to be Year 2000 Compliant."
Section 5.20 Existing Indebtedness and Liens. The Borrower and its
-------------------------------
Subsidiaries have no Indebtedness or Liens on any of their properties or assets
on the Effective Date other than as listed on Schedule 5.20.
SECTION 6. COVENANTS.
The Borrower covenants and agrees that, without the consent of the Majority
Lenders and so long as any Note, Letter of Credit or Reimbursement Obligation or
any other Obligation is outstanding or any Commitment is outstanding hereunder:
Section 6.1 Existence. The Borrower and its Subsidiaries will preserve
---------
and maintain their existence except (a) for the dissolution of any Subsidiaries
whose assets are transferred to the Borrower or any of its Subsidiaries; (b) the
Borrower shall not be required to preserve, renew or keep in full force and
effect the corporate or other existence of any Subsidiary, if the Board of
Directors of the Borrower shall determine in the exercise of its business
judgment that the preservation thereof is no longer desirable in the conduct of
business of the Borrower or any Subsidiary and that abandonment of any such
right shall not have a Material Adverse Effect on the Borrower and its
Subsidiaries, taken as a whole; and (iii) as otherwise expressly permitted
herein.
Section 6.2 Maintenance. The Borrower and its Subsidiaries will
-----------
maintain, preserve and keep their material plants, properties and equipment
necessary to the proper conduct of their businesses in reasonably good repair,
working order and condition (normal wear and tear excepted) and will from time
to time make all reasonably necessary repairs, renewals, replacements, additions
and betterments thereto consistent with usual and customary business practices
so that at all times such plants, properties and equipment are reasonably
preserved and maintained, in each case with such exceptions as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; provided, however, that nothing in this Section 6.2 shall
prevent the Borrower or any of its Subsidiaries from discontinuing the operation
or maintenance of any such plants, properties or equipment if such
discontinuance is, in the judgment of the Borrower or any such Subsidiary, as
applicable, desirable in the conduct of its business and not materially
disadvantageous to the Lenders.
28
Section 6.3 Taxes. The Borrower and its Subsidiaries will duly pay and
-----
discharge all Taxes upon or against them or their properties before penalties
accrue thereon, unless and to the extent that the same is being contested in
good faith and by appropriate proceedings and reserves have been established in
conformity with GAAP.
Section 6.4 ERISA. The Borrower and its Subsidiaries will promptly pay
-----
and discharge all obligations and liabilities arising under ERISA or otherwise
with respect to each Plan of a character which if unpaid or unperformed might
result in the imposition of a material Lien against any properties or assets of
the Borrower or any of its Subsidiaries and will promptly notify the Agent of
(a) the occurrence of any reportable event (as defined in ERISA) relating to a
Plan other than any such event with respect to which the PBGC has waived notice
by regulation; (b) receipt of any notice from PBGC of its intention to seek
termination of any Plan or appointment of a trustee therefor; (c) the Borrower's
or any of its Subsidiary's intention to terminate or withdraw from any Plan if
such termination or withdrawal would result in liability under Title IV of
ERISA; and (d) the occurrence of any event that could reasonably be expected to
result in the incurrence of any material liability, fine or penalty, or any
material increase in the contingent liability of the Borrower or any of its
Subsidiaries, in connection with any post-retirement benefit under a welfare
plan benefit (as defined in ERISA).
Section 6.5 Insurance. The Borrower and its Subsidiaries will maintain
---------
or cause to be maintained with responsible insurance companies, insurance
against any loss or damage to all material insurable property and assets owned
by them, such insurance to be of a character and in or in excess of such amounts
as are customarily maintained by companies similarly situated and operating like
property or assets, all of which policies shall name the Agent as a loss payee
for losses in excess of $50,000 and provide that no policy shall terminate
without at least thirty (30) days' advance written notice to the Agent and
otherwise be reasonably acceptable to the Agent. The Borrower and each of its
Subsidiaries will also insure employers' and public and product liability risks,
such insurance to be of a character and in or in excess of such amounts as are
customarily maintained by companies similarly situated and operating like
property or assets (with each liability insurance policy to name the Agent as an
additional insured) with responsible insurance companies, all as reasonably
acceptable to the Agent. No deductible under any of such policies shall exceed
$500,000, unless such deductible amount under any such policy shall become
unavailable on commercially reasonable terms and the Borrower shall not self-
insure any such risks, in each case except as may have covered claims by any
Subsidiary prior to the date of Acquisition thereof.
Section 6.6 Financial Reports and Other Information.
---------------------------------------
(1) The Borrower and its Subsidiaries will maintain a system of
accounting in such manner as will enable preparation of financial statements in
accordance with GAAP and will furnish to the Agent and its authorized
representatives such information about the business and financial condition of
the Borrower and its Subsidiaries, including, without limitation, any corporate
documents and records, within such time period, as the Agent or any Lender may
reasonably request; and, without any request, will furnish to the Agent:
(1) within forty-five (45) days after the end of each
fiscal quarter of each fiscal year of the Borrower, the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter
and the related consolidated statements of income and retained earnings and of
cash flows for such fiscal quarter and for the portion of the fiscal year ended
with the last day of such fiscal quarter, all of which shall be in reasonable
detail and in the case of consolidated statements, in the form filed with the
SEC and within five (5) days thereafter, a certificate of an officer of the
Borrower acceptable to the Agent that such financial reports fairly present the
financial condition of the Borrower and its Subsidiaries as of the dates
indicated and the results of their operations and changes in their cash flows
for the periods indicated and that they have been prepared in accordance with
GAAP, in each case, subject to normal year-end audit adjustments and the
omission of any footnotes as permitted by the SEC; and
(2) within one hundred twenty (120) days after the end of
each fiscal year of the Borrower, consolidated and consolidating balance sheets
of the Borrower and its Subsidiaries as at the end of such fiscal year and the
related consolidated and consolidating statements of income and consolidated
statements of retained earnings and of cash flows for such fiscal year and
setting forth consolidated comparative figures for the preceding fiscal year and
certified by an officer of the Borrower acceptable to the Agent, to the effect
that such statements fairly present the financial condition of the Borrower and
its Subsidiaries as of the dates indicated and the results of their operations
29
and changes in their cash flows, and in the case of the consolidated statements,
audited by an independent nationally-recognized accounting firm acceptable to
the Agent.
(2) Each financial statement furnished to the Agent pursuant to
subsections (i) and (ii) of Section 6.6(a) shall be accompanied by (i) a written
certificate signed by an officer of the Borrower acceptable to the Agent to the
effect that (x) no Default or Event of Default has occurred during the period
covered by such statements or, if any such Default or Event of Default has
occurred during such period, setting forth a description of such Default or
Event of Default and specifying the action, if any, taken by the Borrower to
remedy the same, and (y) the representations and warranties contained herein are
true and correct in all material respects as though made on the date of such
certificate, except to the extent that any such representation or warranty
relates solely to an earlier date, in which case it was true and correct as of
such earlier date and except as otherwise described therein, as a result of the
transactions expressly permitted hereunder or as previously disclosed to the
Lenders, and (ii) a Compliance Certificate in the form of Exhibit 6.6 showing
the Borrower's compliance with the financial covenants set forth herein.
(3) Promptly upon receipt thereof, the Borrower will provide the
Agent with a copy of each report or "management letter" submitted to the
Borrower or any of its Subsidiaries by its independent accountants or auditors
in connection with any annual, interim or special audit made by them of the
books and records of the Borrower or any of its Subsidiaries.
(4) Promptly after any officer of the Borrower obtains knowledge
of any of the following, the Borrower will provide the Agent with written notice
in reasonable detail of: (i) any pending or threatened Environmental Claim
against the Borrower or any of its Subsidiaries or any property owned or
operated by the Borrower or any of its Subsidiaries that if adversely determined
could reasonably be expected to have a Material Adverse Effect; (ii) any
condition or occurrence on any property owned or operated by the Borrower or any
of its Subsidiaries that results in noncompliance by the Borrower or any of its
Subsidiaries with any Environmental Law that could reasonably be expected to
have a Material Adverse Effect; and (iii) the taking of any material removal or
remedial action in response to the actual or alleged presence of any Hazardous
Material on any property owned or operated by the Borrower or any of its
Subsidiaries, which Hazardous Material or the removal or remediation thereof
could reasonably be expected to have a Material Adverse Effect.
(5) The Borrower will promptly and in any event, within ten (10)
days after an officer of the Borrower has knowledge thereof, give written notice
to the Agent of: (i) any pending or threatened litigation or proceeding against
the Borrower or any of its Subsidiaries asserting any uninsured claim or claims
against any of same in excess of $1,000,000 in the aggregate; (ii) the
occurrence of any Default or Event of Default; (iii) any circumstance that has
had a Material Adverse Effect; and (iv) any event which would result in a breach
of Sections 6.20, 6.21, 6.22, 6.23, or 6.24.
(6) The Borrower will (i) furnish such additional information,
statements and other reports with respect to the Borrower's compliance (and its
approach to and progress towards achieving compliance) with Section 5.19 as the
Agent may request from time to time; (ii) in the event of any change in
circumstances that causes or will likely cause any of the Borrower's
representations and warranties set forth in Section 5.19, to no longer be true,
the Borrower shall promptly, and in any event within ten (10) days of receipt of
information regarding a change in circumstances, provide the Agent with written
notice that describes in reasonable detail the change in circumstances and any
additional information any Lender requests of the Borrower in connection
therewith; (iii) give any representative of any Lender reasonable access to, and
permit such representative to examine, copy or make excerpts from, any and all
relevant books, records and documents in the possession of the Borrower and its
Subsidiaries and relating to their affairs, and to inspect any of the properties
and systems of the Borrower and its Subsidiaries, and to project test its
systems to determine if they are Year 2000 Compliant in an integrated
environment, all at the sole cost and expense of the Lenders, and (iv) give
Agent notice promptly after Borrower or any Subsidiary discovers or determines
that any computer application (including those of its suppliers, vendors, and
customers) that is material to any business operations of the Borrower or its
Subsidiaries will not be Year 2000 Compliant, except to the extent that such
failure could not reasonably be expected to have a Material Adverse Effect.
(7) Within 5 days after the consummation of any Acquisition, a
summary of the Acquisition's terms in a form acceptable to the Agent and the
Borrower.
30
(8) The Agent will promptly provide to each Lender all
information provided to it by the Borrower pursuant to this Section 6.6.
Section 6.7 Lenders' Inspection Rights. Upon reasonable notice from the
--------------------------
Agent or any Lender, the Borrower will permit the Agent or any Lender (and such
Persons as the Agent or any Lender may reasonably designate), at the Borrower's
expense while an Event of Default has occurred and is continuing, during normal
business hours following reasonable notice to visit and inspect any of the
properties of the Borrower or any of its Subsidiaries, to examine all of their
books and records, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision, the Borrower authorizes
such accountants to discuss with the Agent or any Lender, and such Persons as
the Agent or any Lender may designate, the affairs, finances and accounts of the
Borrower and its Subsidiaries provided that the Borrower has the opportunity to
be present at such discussions), all at such reasonable times and as often as
may be reasonably requested.
Section 6.8 Conduct of Business. The Borrower and its Subsidiaries will
-------------------
not engage in any line of business other than the specialty electric and
telecommunications infrastructure contracting service business, electrical
contracting services, installation of transportation, control and lighting
equipment and services or businesses reasonably related thereto (each, a
"Permitted Business").
Section 6.9 New Subsidiaries and Additional Collateral. The Borrower
------------------------------------------
shall (i) cause any direct or indirect domestic Subsidiary which is formed or
acquired after the Effective Date to become a Guarantor with respect to, and
jointly and severally liable with all other Guarantors for, all of the
Obligations under this Agreement and the Notes pursuant to a Guaranty
substantially in the form of Exhibit 4.1A and to execute and deliver a Security
Agreement substantially in the form of Exhibit 4.1C (and if applicable, a Patent
Collateral Assignment), together with a UCC-1 Financing Statement with respect
to the assets of such Guarantor as set forth therein, and (ii) execute and
deliver and cause any Subsidiary to execute and deliver to the Agent a Pledge
Agreement substantially in the form of Exhibit 4.1B, in respect of any
Subsidiary formed or acquired after the Effective Date and to deliver the
original stock certificates for any such Subsidiary as set forth therein (or
other evidence of its ownership interest therein) and undated stock powers
executed in blank with respect thereto, in each case within five (5) days
following such formation or acquisition. The Borrower shall provide to the
Agent a list of all its Subsidiaries with the state or country of incorporation
and the location of the principal place of business of each such Subsidiary at
the same time as it provides its quarterly financial reports to the Agent
pursuant to Section 6.6(a)(i). Upon demand by the Agent, the Borrower shall
promptly execute and deliver to the Agent, and shall cause its domestic
Subsidiaries to promptly execute and deliver to the Agent, such other and
further security documents as may be reasonably requested by the Agent to
perfect a Lien on its rolling stock and all equipment with certificates of
title. Nothing in this Section 6.9 may be construed as permitting any action
not permitted by Section 6.11.
Section 6.10 Dividends and Negative Pledges.
------------------------------
(1) The Borrower shall not pay any dividends or other
distributions on its capital stock.
(2) Except as otherwise permitted herein, neither the Borrower
nor any of its Subsidiaries shall, directly or indirectly, create or otherwise
permit to exist or become effective any restriction on the ability of any
Subsidiary of the Borrower to (i) pay dividends or make any other distributions
on its capital stock or any other interest or participation in its profits owned
by the Borrower or to pay any Indebtedness owed to the Borrower, or (ii) make
loans or advances to the Borrower or any of its Subsidiaries, except in either
case for restrictions existing under or by reason of applicable law, this
Agreement and the other Credit Documents.
(3) Neither the Borrower nor any of its Subsidiaries shall enter
into any agreement creating or assuming any Lien upon its properties, revenues
or assets, whether now owned or hereafter acquired other than as permitted
hereunder. Neither the Borrower nor any of its Subsidiaries shall enter into any
agreement other than this Agreement and the Credit Documents prohibiting the
creation or assumption of any Lien upon its properties, revenues or assets,
whether now owned or hereafter acquired or prohibiting or restricting the
ability of the Borrower or any of its Subsidiaries to amend or otherwise modify
this Agreement or any Credit Document.
31
Section 6.11 Restrictions on Fundamental Changes. Neither the Borrower
-----------------------------------
nor any of its Subsidiaries shall be a party to any merger into or consolidation
with, make an Acquisition or otherwise purchase or acquire all or substantially
all of the assets or stock of, any other Person, or sell all or substantially
all of its assets (other than sales of inventory or surplus or obsolete assets
in the ordinary course of business) or stock, except:
(1) the Borrower or any of its Subsidiaries may merge into or
consolidate with, make an Acquisition or otherwise purchase or acquire all or
substantially all of the assets or stock of any other Person, if in respect of
such merger, consolidation, purchase or Acquisition, (i) the Borrower is the
surviving entity to any such merger or consolidation to which the Borrower is a
party, or, if the Borrower is not a party to such transaction, a Subsidiary is
the surviving entity to any such merger or consolidation (or the other Person
will thereby become a Subsidiary), (ii) the nature of the business of such
acquired Person is a Permitted Business; (iii) no Default or Event of Default
shall have occurred and be continuing or would otherwise be existing as a result
of such merger, consolidation, purchase or Acquisition, (iv) such merger,
consolidation, purchase or Acquisition is non-hostile in nature; and (v) either
(y) the aggregate amount of (without duplication) (1) the cash purchase price
paid, (2) the Borrowings under this Agreement in respect of such, consolidation,
purchase or Acquisition, and (3) the Indebtedness of such acquired Person
assumed or otherwise refinanced by the Borrower or any of its Subsidiaries, does
not exceed, for any single Acquisition, an amount equal to 7.5% of Consolidated
Net Worth as of the end of the immediately preceding fiscal quarter, or (z) (1)
prior to the consummation of such merger, consolidation, purchase or
Acquisition, the Borrower shall have delivered to the Agent (which the Agent
shall promptly provide to each Lender) a report signed by an executive officer
of the Borrower which shall contain calculations demonstrating the Borrower's
compliance with Sections 6.20, 6.21, 6.22, and 6.23 (which calculation may use
historical financial results of the acquired business provided the calculation
(A) is made on a trailing four fiscal quarter pro forma basis (consistent with
SEC regulations), (B) assumes that the consummation of such merger,
consolidation, purchase or Acquisition (and the incurrence, refinancing, or
assumption of any Indebtedness in connection with such Acquisition) occurred on
the first day of the trailing four-quarter fiscal period, and (C) is based on a
balance sheet and statements of income, retained earnings, and cash flows of the
acquired Person (or the Person from whom the assets, securities or other equity
interests were acquired), which are in compliance with SEC regulations and
requirements regarding the preparation and presentation of historical financial
information and pro forma financial information, and (2) the Majority Lenders
have given their prior written consent to such merger, consolidation, purchase
or Acquisition.
(2) the Borrower may purchase or otherwise acquire all or
substantially all of the stock or assets of, or otherwise acquire by merger or
consolidation, any of its Subsidiaries, and any such Subsidiary may merge into,
or consolidate with, or purchase or otherwise acquire all or substantially all
of the assets or stock of or sell all or substantially all of its assets or
stock to, any other Subsidiary of the Borrower or the Borrower, in each case so
long as (i) if the transaction is with the Borrower, the Borrower shall be the
surviving entity to any such merger or consolidation, or (ii) if the transaction
is not with the Borrower, a domestic Subsidiary shall be the surviving entity to
any such merger or consolidation; and
(3) the sale of non operating assets unnecessary for the
continued operation of the Borrower's business and in the normal course of the
Borrower's business.
Except as otherwise permitted in this Section 6.11, the Borrower shall not sell
or dispose of any capital stock of or its ownership interest in any of the
Guarantors or any other Subsidiaries which it may form. Borrower shall give the
Agent the notice required under Section 6.9.
Section 6.12 Environmental Laws. The Borrower and its Subsidiaries shall
------------------
comply with all Environmental Laws (including, without limitation, obtaining and
maintaining all necessary permits, licenses and other necessary authorizations)
applicable to or affecting the properties or business operations of the Borrower
or any of its Subsidiaries except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
Section 6.13 Liens. The Borrower and its Subsidiaries shall not create,
-----
incur, assume or suffer to exist any Lien of any kind on any of their properties
or assets of any kind except the following (collectively, the "Permitted
Liens"):
32
(1) Liens arising in the ordinary course of business by operation of
law in connection with workers' compensation, unemployment insurance, old age
benefits, social security obligations, taxes, assessments, statutory obligations
or other similar charges, good faith deposits, pledges or other Liens in
connection with (or to obtain letters of credit in connection with) bids,
performance bonds, contracts or leases to which the Borrower or its Subsidiaries
are a party or other deposits required to be made in the ordinary course of
business; provided that in each case the obligation secured is not for
Indebtedness and is not overdue or, if overdue, is being contested in good faith
by appropriate proceedings and reserves in conformity with GAAP have been
provided therefor;
(2) mechanics', workmen, materialmen, landlords', carriers' or other
similar Liens arising in the ordinary course of business (or deposits to obtain
the release of such Liens) related to obligations not due or, if due, that are
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP have been provided therefor;
(3) inchoate Liens under ERISA and Liens for Taxes not yet due or
which are being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP have been provided therefor;
(4) Liens arising out of judgments or awards against the Borrower or
any of its Subsidiaries, or in connection with surety or appeal bonds or the
like in connection with bonding such judgments or awards, the time for appeal
from which or petition for rehearing of which shall not have expired or for
which the Borrower or such Subsidiary shall be prosecuting on appeal or
proceeding for review and for which it shall have obtained a stay of execution
or the like pending such appeal or proceeding for review; provided that the
aggregate amount of uninsured or underinsured liabilities (including interest,
costs, fees and penalties, if any) of the Borrower and its Subsidiaries secured
by such Liens shall not exceed $1,000,000 at any one time outstanding and
provided further there is adequate assurance, in the sole reasonable discretion
of the Lenders, that the insurance proceeds attributable thereto shall be paid
promptly upon the expiry of such time period or resolution of such proceeding if
necessary to remove such Liens;
(5) rights of a common owner of any interest in property held by a
Person and such common owner as tenants in common or through other common
ownership;
(6) encumbrances (other than to secure the payment of Indebtedness),
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations in any property or rights-of-way of a Person for the purpose of
roads, pipelines, transmission lines, transportation lines, distribution lines,
removal of gas, oil, coal, metals, steam, minerals, timber or other natural
resources, and other like purposes, or for the joint or common use of real
property, rights-of-way, facilities or equipment, or defects, irregularity and
deficiencies in title of any property or rights-of-way which do not materially
diminish the value of or the ability to use such property;
(7) financing statements filed by lessors of property (but only with
respect to the property so leased) and Liens under any conditional sale or title
retention agreements entered into in the ordinary course of business;
(8) rights of lessees of equipment owned by the Borrower or any of
its Subsidiaries;
(9) Liens on assets acquired securing Indebtedness permitted by
Section 6.14(f); provided that no such Liens shall encumber accounts, accounts
receivable, inventory (other than purchase money Liens), cash, deposit accounts,
Cash Equivalents, general intangibles, intellectual property or any stock or
other ownership interests in any Subsidiaries;
(10) existing Liens listed on Schedule 6.13 and any extension, renewal
or replacement (but not increase) thereof;
(11) Liens created by the Credit Documents; and
(12) Liens on any assets acquired in an Acquisition, provided that all
such Liens, other than Permitted Liens listed in (a) through (k) of this
Section, shall be released and any notice thereof removed from the public
records on or before thirty (30) days after the date of such Acquisition.
33
Section 6.14 Indebtedness. The Borrower and its Subsidiaries shall not
------------
contract, assume or suffer to exist any Indebtedness (including, without
limitation, any Guaranties), except:
(1) Indebtedness under the Credit Documents;
(2) unsecured intercompany loans and advances from the Borrower
to any of its Subsidiaries and unsecured intercompany loans and advances from
any of such Subsidiaries to the Borrower or any other Subsidiaries of the
Borrower;
(3) unsecured Indebtedness to a seller incurred in connection
with an Acquisition, provided that such Indebtedness is subordinated in payment
to the Obligations hereunder as reasonably acceptable to the Agent, such
Indebtedness contains covenants no more restrictive than the covenants contained
in this Agreement, and standstill provisions reasonably acceptable to the Agent
and no payments may be made thereon if a Default or Event of Default shall have
occurred and be continuing or would occur as a result of any such payment;
(4) Indebtedness under any Interest Rate Protection Agreements
entered into to protect the Borrower against fluctuations in interest rates and
not for speculative purposes;
(5) Indebtedness incurred in connection with Subordinated Debt
Investments; and
(6) 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.
Section 6.15 Loans, Advances and Investments. The Borrower and its
-------------------------------
Subsidiaries shall not lend money or make advances to any Person, or purchase or
acquire any stock, indebtedness, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person (any of the
foregoing, an "Investment") other than:
(1) Investments in Cash Equivalents;
(2) receivables owing to the Borrower or its Subsidiaries created
or acquired in the ordinary course of business and payable on customary trade
terms of the Borrower or such Subsidiary and in compliance with the requirements
of Section 6.17;
(3) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(4) deposits made in the ordinary course of business consistent
with past practices to secure the performance of leases;
(5) as permitted by Section 6.14(b);
(6) loans to employees of the Borrower or any of its
Subsidiaries, provided that all such loans shall not exceed $5,000,000 at any
one time;
(7) Investments in Persons other than Borrower or its
Subsidiaries, provided that all such Investments shall not exceed $1,000, 000 at
any one time;
(8) the existing loan to the NorAm Telecommunications, Inc.
employee stock ownership plan; and
(9) as permitted by Section 6.11.
34
Section 6.16 Transfer of Assets. The Borrower and its Subsidiaries shall
------------------
not permit any sale, transfer, conveyance, assignment or other disposition of
any material asset of the Borrower or any of its Subsidiaries except:
(1) transfers of inventory, equipment and other assets in the
ordinary course of business;
(2) the retirement or replacement of assets (with assets of equal
or greater value) in the ordinary course of business;
(3) transfers of any assets among the Borrower and any of its
domestic Subsidiaries; and
(4) the transfer of any assets acquired in an Acquisition which
are not necessary for the operation of the business of the Borrower and its
Subsidiaries, provided that the net cash proceeds thereof are reinvested by the
Borrower and its Subsidiaries in the operation of a Permitted Business.
Section 6.17 Transactions with Affiliates. Except as otherwise
----------------------------
specifically permitted herein, the Borrower and its Subsidiaries shall not enter
into or be a party to any material transaction or arrangement or series of
related transactions or arrangements which in the aggregate would be material
with any Affiliate of such Person, including without limitation, the purchase
from, sale to or exchange of property with or the rendering of any service by or
for, any Affiliate, except pursuant to the reasonable requirements of such
entity's business and upon fair and reasonable terms no less favorable to such
entity than would be able to be obtained in a comparable arm's-length
transaction with a Person other than an Affiliate.
Section 6.18 Compliance with Laws. The Borrower and its Subsidiaries
--------------------
shall conduct their businesses and otherwise be in compliance in all material
respects with all applicable laws, regulations, ordinances and orders of all
governmental, judicial and arbitral authorities applicable to them and shall
obtain and maintain all necessary permits, licenses and other authorizations
necessary to conduct their businesses and own and operate their properties
except where the failure to comply or have such permits, licenses or other
authorizations could not reasonably be expected to have a Material Adverse
Effect.
Section 6.19 Capital Expenditures. Neither the Borrower nor any of its
--------------------
Subsidiaries shall make or commit to make Capital Expenditures during any period
of four consecutive fiscal quarters in excess of 15% of Consolidated Net Worth,
with Consolidated Net Worth being determined as of the last day of the last
fiscal quarter of such period.
Section 6.20 Minimum Consolidated Net Worth. The Borrower will maintain
------------------------------
a minimum Consolidated Net Worth of not less than an amount equal to the sum of
(i) $296,000,000, plus (ii) for each fiscal quarter ended prior to (but not on)
such date of determination, commencing with the fiscal quarter ended June 30,
1999, (w) an amount equal to 50% of Consolidated Net Income for such fiscal
quarter, if positive, plus (x) an amount equal to 100% of the amount of any
equity issuance by the Borrower, including equity issued in a secondary offering
or equity issued to acquire another entity in an Acquisition, plus (y) an amount
equal to 100% of the stockholders equity of any entity acquired in an
Acquisition for which the Borrower uses the pooling of interest method of
accounting in accordance with GAAP, minus (z) any distributions to shareholders
of any Subchapter S corporation acquired in an Acquisition as a result of
operations of the corporation acquired prior to the closing of the Acquisition
or the terms of the Acquisition.
Section 6.21 Minimum Interest Coverage Ratio. The Borrower will maintain
-------------------------------
a Minimum Interest Coverage Ratio of at least 3.0 to 1.0.
Section 6.22 Funded Debt to EBITDA Ratio. The Borrower will maintain a
---------------------------
maximum Funded Debt to EBITDA Ratio of not greater than 3.50 to 1.0.
Section 6.23 Senior Debt to EBITDA. The Borrower will maintain a maximum
---------------------
Senior Debt to EBITDA Ratio of not greater than 3.0 to 1.0.
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.: 713-
000-0000)) of (i) any Change of Control within two (2) Business Days following
any such Change of Control,
35
and (ii) any notice received by the Borrower from any holder of a Subordinated
Debt Investment exercising any right to require the Borrower to redeem 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 of 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 of the Enron Subordinated Debt Documents
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.
SECTION 7. EVENTS OF DEFAULT AND REMEDIES.
Section 7.1 Events of Default. Any one or more of the following shall
-----------------
constitute an Event of Default:
(1) default by the Borrower in the payment of the principal
amount of any Loan, any Reimbursement Obligation or any interest thereon or any
fees payable hereunder within five (5) days following the date when due;
(2) default by the Borrower in the observance or performance of
any covenant set forth in Sections 6.6(e), 6.10(a), 6.11, 6.16, 6.21, or 6.24;
(3) default by the Borrower in the observance or performance of
any provision hereof or of any other Credit Document not mentioned in (a) or (b)
above which is not remedied within thirty (30) days after the earlier of (i)
such default or event of default first becoming known to any officer of the
Borrower, or (ii) notice to the Borrower by the Agent of the occurrence of such
default or event of default;
(4) any representation or warranty made or deemed made herein, in
any other Credit Document or in any financial or other report or document
furnished in compliance herewith or therewith by the Borrower or any of its
Subsidiaries proves untrue in any material respect as of the date of the
issuance or making, or deemed issuance or making thereof;
(5) default occurs in the payment when due (after any applicable
grace period) of Indebtedness in an aggregate principal amount of $1,000,000 or
more of the Borrower or any of its Subsidiaries, or the occurrence of any other
default, which with the passage of time or notice would permit the holder or
beneficiary of such Indebtedness, or a trustee therefor, to cause the
acceleration of the maturity of any such Indebtedness or any mandatory
unscheduled prepayment, purchase, or other early funding thereof;
(6) the Borrower or any of its Subsidiaries (i) has entered
involuntarily against it an order for relief under the United States Bankruptcy
Code or a comparable action is taken under any bankruptcy or insolvency law of
another country or political subdivision of such country, (ii) generally does
not pay, or admits its inability generally to pay, its debts as they become due,
(iii) makes a general assignment for the benefit of creditors, (iv) applies for,
seeks, consents to, or acquiesces in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any substantial part
of its property, (v) institutes any proceeding seeking to have entered against
it an order for relief under the United States Bankruptcy Code or any comparable
law, to adjudicate it insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fails to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (vi) makes any
board of directors resolution in direct furtherance of any matter described in
clauses (i)-(v) above, or (vii) fails to contest in good faith any appointment
or proceeding described in Section 7.1(g);
(7) a custodian, receiver, trustee, examiner, liquidator or
similar official is appointed for the Borrower or any of its Subsidiaries or any
substantial part of its property, or a proceeding described in Section 7.1(f)(v)
36
is instituted against the Borrower or any of its Subsidiaries, and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of sixty (60) days;
(8) the Borrower or any of its Subsidiaries fails within thirty
(30) days (or such earlier date as any steps to execute on such judgment or
order take place) to pay, bond or otherwise discharge, or to obtain an indemnity
against on terms and conditions satisfactory to the Lenders in their reasonable
discretion, any one or more judgments or orders for the payment of money in
excess of $1,000,000 in the aggregate which is uninsured or underinsured by at
least such amount (provided that there is adequate assurance, in the sole
discretion of the Lenders, that the insurance proceeds attributable thereto
shall be paid promptly upon the expiration of such time period or resolution of
such proceeding), which is not stayed on appeal or otherwise being appropriately
contested in good faith in a manner that stays execution;
(9) the Borrower or any of its Subsidiaries fails to pay when
due an amount aggregating in excess of $1,000,000 that it is liable to pay to
the PBGC or to a Plan under Title IV of ERISA; or a notice of intent to
terminate a Plan having Unfunded Vested Liabilities of the Borrower or any of
its Subsidiaries in excess of $1,000,000 (a "Material Plan") is filed under
Title IV of ERISA; or the PBGC institutes proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any Material Plan;
or a proceeding is instituted by a fiduciary of any Material Plan against the
Borrower or any of its Subsidiaries to collect any liability under Section 515
or 4219(c)(5) of ERISA and such proceeding is not dismissed within thirty (30)
days thereafter; or a condition exists by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must be
terminated;
(10) the Borrower, any Guarantor, any Person acting on behalf of
the Borrower or any Guarantor, or any governmental, judicial or arbitral
authority challenges the validity of any Credit Document or the Borrower's or
any Guarantor's obligations thereunder, or any Credit Document ceases to be in
full force and effect in all material respects or ceases to give to the Agent
and the Lenders the rights and powers purported to be granted in its favor
thereby in all material respects other than for any reason solely caused by or
within the sole control of the Agent or any Lender; or
(11) a Change of Control shall occur or the common stock of the
Borrower shall be delisted from the New York Stock Exchange; or
(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.
Section 7.2 Non-Bankruptcy Defaults. When any Event of Default other
-----------------------
than those described in subsections (f) or (g) of Section 7.1 has occurred and
is continuing, the Agent shall, by notice to the Borrower: (a) if so directed by
the Majority Lenders, terminate the remaining Commitments and all other
obligations of the Lenders hereunder on the date stated in such notice (which
may be the date thereof); (b) if so directed by the Majority Lenders, declare
the principal of and the accrued interest on all outstanding Notes to be
forthwith due and payable and thereupon all outstanding Notes, including both
principal and interest thereon, shall be and become immediately due and payable
together with all other amounts payable under the Credit Documents without
further demand, presentment, protest or notice of any kind, including, but not
limited to, notice of intent to accelerate and notice of acceleration, each of
which is expressly waived by the Borrower; and (c) if so directed by the
Majority Lenders, demand that the Borrower immediately pay to the Agent (to be
held by the Agent pursuant to Section 7.4) the full amount then available for
drawing under each or any outstanding Letter of Credit; and the Borrower agrees
to immediately make such payment and acknowledges and agrees that neither the
Agent nor the Lenders would have an adequate remedy at law for failure by the
Borrower to honor any such demand and that the Agent, for the benefit of the
Lenders shall have the right to require the Borrower to specifically perform
such undertaking whether or not any drawings or other demands for payment have
been made under any Letter of Credit. The Agent, after giving notice to the
Borrower pursuant to Section 7.1(c) or (d) or this Section 7.2, shall also
promptly send a copy of such notice to the other Lenders, but the failure to do
so shall not impair or annul the effect of such notice.
Section 7.3 Bankruptcy Defaults. When any Event of Default described in
-------------------
subsections (f) or (g) of Section 7.1 has occurred and is continuing with
respect to the Borrower, then (i) all outstanding Notes shall immediately
37
and automatically become due and payable together with all other amounts payable
under the Credit Documents without presentment, demand, protest or notice of any
kind, each of which is expressly waived by the Borrower, (ii) all obligations of
the Agent or any Lender to extend further credit pursuant to any of the terms
hereof shall immediately terminate, and (iii) the Borrower shall immediately pay
to the Agent (to be held by the Agent pursuant to Section 7.4) the full amount
then available for drawing under all outstanding Letters of Credit, the Borrower
acknowledging and agreeing that neither the Agent nor the Lenders would have an
adequate remedy at law for failure by the Borrower to honor any such demand and
that the Agent and the Lenders shall have the right to require the Borrower to
specifically perform such undertaking whether or not any drawings or other
demands for payment have been made under any of the Letters of Credit.
Section 7.4 Collateral for Undrawn Letters of Credit.
----------------------------------------
(1) If the prepayment of the amount available for drawing under
any or all outstanding Letters of Credit is required under Section 7.2 or 7.3,
the Borrower shall forthwith pay the amount required to be so prepaid, to be
held by the Agent as provided in subsection (b) below.
(2) All amounts prepaid pursuant to subsection (a) above shall
be held by the Agent in a separate collateral account (such account, and the
credit balances, properties and any investments from time to time held therein,
and any substitutions for such account, any certificate of deposit or other
instrument evidencing any of the foregoing and all proceeds of and earnings on
any of the foregoing being collectively called the "Collateral Account") as
security for, and for application by the Agent (to the extent available) to, the
reimbursement of any drawing under any Letter of Credit then or thereafter made
by the Agent, and to the payment of the unpaid balance of any Loans and all
other due and unpaid Obligations (collectively, the "Collateralized
Obligations"). The Collateral Account shall be held in the name of and subject
to the exclusive dominion and control of the Agent, for the benefit of the
Lenders, as pledgee hereunder. If and when requested by the Borrower, the Agent
shall invest and reinvest funds held in the Collateral Account from time to time
in Cash Equivalents specified from time to time by the Borrower, provided that
the Agent is irrevocably authorized to sell investments held in the Collateral
Account when and as required to make payments out of the Collateral Account for
application to Collateralized Obligations due and owing from the Borrower to the
Lenders. If such funds have been deposited pursuant to Section 7.2 or 7.3, when
and if either (i) the Borrower shall have made payment of all Collateralized
Obligations then due and payable, all relevant preference or other disgorgement
periods relating to the receipt of such payments have passed, and no Letters of
Credit, Commitments, Loans, Reimbursement Obligations or other Obligations
remain outstanding or (ii) no Default or Event of Default shall be continuing
hereunder, the Agent shall repay to the Borrower any remaining amounts held in
the Collateral Account.
Section 7.5 Notice of Default. The Agent shall give notice to the
-----------------
Borrower under Section 7.1(c) and (d) and 7.2 promptly upon being requested to
do so by the Majority Lenders and shall thereupon notify all the Lenders
thereof.
Section 7.6 Application of Proceeds. After the occurrence of and during
-----------------------
the continuance of an Event of Default, any payment to the Agent hereunder or
from the proceeds of any cash collateral shall be applied as the Agent and the
Lenders shall elect in their sole discretion.
SECTION 8. CHANGE IN CIRCUMSTANCES.
Section 8.1 Change of Law. Notwithstanding any other provisions of this
-------------
Agreement or any Note, if at any time any change in applicable law or regulation
or in the interpretation thereof makes it unlawful for any Lender to make or
continue to maintain LIBOR Loans or to give effect to its obligations as
contemplated hereby, such Lender shall promptly give written notice thereof
(which notice shall specify in reasonable detail the basis therefor) to the
Borrower and such Lender's obligations to make, continue or convert Loans into
LIBOR Loans under this Agreement shall be suspended until it is no longer
unlawful for such Lender to make or maintain LIBOR Loans. The Borrower shall
prepay on demand the outstanding principal amount of any such affected LIBOR
Loans, together with all interest accrued thereon and all other amounts then due
and payable to such Lender under this Agreement; provided, however, subject to
all of the terms and conditions of this Agreement, the Borrower may then elect
to borrow the principal amount of the affected LIBOR Loans from such Lender by
means of Base Rate Loans from such Lender that shall not be made ratably by the
Lenders but only by such affected Lender.
38
Section 8.2 Unavailability of Deposits or Inability to Ascertain LIBOR
----------------------------------------------------------
Rate. If on or before the first day of any Interest Period for any Borrowing of
----
LIBOR Loans the Agent determines (after consultation with other Lenders) that,
due to changes in circumstances since the date hereof, adequate and fair means
do not exist for determining the Adjusted LIBOR Rate or such rate will not
accurately reflect the cost to the Majority Lenders of funding LIBOR Loans for
such Interest Period, the Agent shall give written notice of such determination
(which notice shall specify in reasonable detail the basis therefor) to the
Borrower and the Lenders, whereupon until the Agent notifies the Borrower and
Lenders that the circumstances giving rise to such suspension no longer exist,
the obligations of the Lenders to make, continue or convert Loans into LIBOR
Loans shall be suspended.
Section 8.3 Increased Cost and Reduced Return.
---------------------------------
(1) If, on or after the Effective Date, the adoption of or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Lending Office), including the
Agent in its capacity as the issuer of Letters of Credit, with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(1) subjects any Lender of that type (or its Lending Office)
to any tax, duty or other charge related to any LIBOR Loan, Letter of Credit or
Reimbursement Obligation, or its participation in any thereof, or its obligation
to advance or maintain LIBOR Loans, issue Letters of Credit or to participate
therein, or shall change the basis of taxation of payments to any Lender (or its
Lending Office) of the principal of or interest on its LIBOR Loans, Letters of
Credit or participations therein, or any other amounts due under this Agreement
related to its LIBOR Loans, Letters of Credit, Reimbursement Obligations or
participations therein, or its obligation to make LIBOR Loans, issue Letters of
Credit or acquire participations therein (except for changes in the rate of tax
on the overall net income of such Lender or its Lending Office imposed by the
jurisdiction in which such Lender's principal executive office or Lending Office
is located); or
(2) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System)
against assets of, deposits with or for the account of, or credit extended by,
any Lender of that type (or its Lending Office) or imposes on any Lender of that
type (or its Lending Office) or on the interbank market any other condition
affecting its LIBOR Loans, its Letters of Credit, any Reimbursement Obligation
owed to it or its participation in any thereof, or its obligation to advance or
maintain LIBOR Loans, issue Letters of Credit or to participate in any thereof;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of advancing or maintaining any LIBOR Loan, issuing or
maintaining a Letter of Credit or participation therein, or to reduce the amount
of any sum received or receivable by such Lender (or its Lending Office) in
connection therewith under this Agreement or its Note(s), by an amount deemed by
such Lender to be material, then, within fifteen (15) days after demand in
reasonable detail by such Lender (with a copy to the Agent), the Borrower shall
be obligated to pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction.
(2) If, after the Effective Date, the Agent or any Lender shall
have determined that the adoption after the Effective Date of any applicable
law, rule or regulation regarding capital adequacy, or any change therein
(including, without limitation, any revision in the Final Risk-Based Capital
Guidelines of the Board of Governors of the Federal Reserve System (12 CFR Part
208, Appendix A; 00 XXX Xxxx 000, Xxxxxxxx X) or of the Office of the
Comptroller of the Currency (12 CFR Part 3, Appendix A), or in any other
applicable capital adequacy rules heretofore adopted and issued by any
governmental authority), or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the Agent or
any Lender (or its Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital, or on the capital of any corporation
controlling such Lender, as a consequence of its obligations hereunder to a
level below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's policies with
respect
39
to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time, within fifteen (15) days after demand in reasonable detail by
such Lender (with a copy to the Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(3) The Agent and each Lender that determines to seek
compensation under this Section 8.3 shall notify the Borrower and, in the case
of a Lender other than the Agent, the Agent of the circumstances that entitle
the Agent or Lender to such compensation and will designate a different Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the sole judgment of such Lender, be
otherwise disadvantageous to it; provided that, the foregoing shall not in any
way affect the rights of any Lender or the obligations of the Borrower under
this Section 8.3, and provided further that no Lender shall be obligated to make
its LIBOR Loans hereunder at any office located in the United States. A
certificate of any Lender claiming compensation under this Section 8.3 and
setting forth the additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error and shall be deemed to contain a
representation by the Lender issuing such certificate that: (i) such Lender has
used, in its sole judgment, reasonable efforts to minimize said compensation,
and (ii) the increased costs and charges are common to substantially all of the
comparable or similarly situated loan customers of such Lender and are not
unique to the Borrower. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
Section 8.4 Lending Offices. The Agent and each Lender may, at its
---------------
option, elect to make its Loans hereunder at the Lending Office for each type of
Loan available hereunder or at such other of its branches, offices or Affiliates
as it may from time to time elect and designate in a written notice to the
Borrower and the Agent subject to Section 8.3(c).
Section 8.5 Discretion of Lender as to Manner of Funding.
--------------------------------------------
Notwithstanding any other provision of this Agreement, each Lender shall be
entitled to fund and maintain its funding of all or any part of its Loans in any
manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if each Lender had
actually funded and maintained each LIBOR Loan through the purchase of deposits
in the Eurodollar interbank market having a maturity corresponding to such
Loan's Interest Period and bearing an interest rate equal to LIBOR for such
Interest Period.
Section 8.6 Substitution of Lender. If (i) any Lender has demanded
----------------------
compensation or given notice of its intention to demand compensation under
Section 8.3, or (ii) the Borrower is required to pay any additional amount to
any Lender under Section 2.12, the Borrower shall have the right, with the
assistance of the Agent, to seek a substitute lender or lenders reasonably
satisfactory to the Agent (which may be one or more of the Lenders) to replace
such Lender under this Agreement. The Lender to be so replaced shall cooperate
with the Borrower and substitute lender to accomplish such substitution on the
terms of Section 10.10, as applicable; provided that all the Commitments of such
Lender are replaced and such Lender is paid any amounts which it is owed
pursuant to Sections 2.12, 3.3, 7.6, 8.3 and 10.3. Any such replaced Lender
shall retain the benefits of Sections 3.3 and 10.13.
SECTION 9. THE AGENT.
Section 9.1 Appointment and Authorization. Each Lender hereby appoints
-----------------------------
NationsBank, N.A., d/b/a Bank of America, N.A. as the Agent under the Credit
Documents and hereby authorizes the Agent to take such action as Agent on each
of its behalf and to exercise such powers under the Credit Documents as are
delegated to the Agent, by the terms thereof, together with such powers as are
reasonably incidental thereto.
Section 9.2 Rights and Powers. The Agent shall have the same rights and
-----------------
powers under the Credit Documents as any other Lender and may exercise or
refrain from exercising such rights and powers as though it were not an Agent,
and the Agent and its respective Affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with the Borrower or any of its
Subsidiaries or Affiliates as if it were not an Agent under the Credit
Documents. The term Lender as used in all Credit Documents, unless the context
otherwise clearly requires, includes the Agent in its individual capacity as a
Lender. References herein to the Swing Line Loans, or to the amount owing to
the Agent for which an interest rate is being determined, refer to the Agent in
its individual capacity.
40
Section 9.3 Action by Agent. The obligations of the Agent under the
---------------
Credit Documents are only those expressly set forth therein. Without limiting
the generality of the foregoing, the Agent shall not be required to take any
action concerning any Default or Event of Default, except as expressly provided
in Sections 7.2 and 7.5. Unless and until the Majority Lenders give such
direction the Agent may, except as otherwise expressly provided herein or
therein, take or refrain from taking such actions as it deems appropriate and in
the best interest of all the Lenders. In no event, however, shall the Agent be
required to take any action in violation of applicable law or of any provision
of any Credit Document, and the Agent shall in all cases be fully justified in
failing or refusing to act hereunder or under any other Credit Document unless
it first receives any further assurances of its indemnification from the Lenders
that it may require, including prepayment of any related expenses and any other
protection it requires against any and all costs, expenses, and liabilities it
may incur in taking or continuing to take any such action. The Agent shall be
entitled to assume that no Default or Event of Default exists unless notified in
writing to the contrary by a Lender or the Borrower. In all cases in which the
Credit Documents do not require the Agent to take specific action, the Agent
shall be fully justified in using its discretion in failing to take or in taking
any action thereunder. Any instructions of the Majority Lenders, or of any
other group of Lenders called for under specific provisions of the Credit
Documents, shall be binding on all the Lenders and holders of Notes.
Section 9.4 Consultation with Experts. The Agent may consult with legal
-------------------------
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
Section 9.5 Indemnification Provisions; Credit Decision. Neither the
-------------------------------------------
Agent nor any of their directors, officers, agents, Affiliates, or employees
shall be liable for any action taken or not taken by them in connection with the
Credit Documents (i) with the consent or at the request of the Majority Lenders
or all the Lenders where unanimity is required or (ii) in the absence of their
own gross negligence or willful misconduct. Neither the Agent nor any of their
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement, any other Credit Document
or any Borrowing; (ii) the performance or observance of any of the covenants or
agreements of the Borrower or any Subsidiary contained herein or in any other
Credit Document; (iii) the satisfaction of any condition specified in Section 4,
except receipt of items required to be delivered to the Agent; or (iv) the
validity, effectiveness, genuineness, enforceability, perfection, value, worth
or collectability hereof or of any other Credit Document or of any other
documents or writing furnished in connection with any Credit Document or of any
Collateral; and the Agent makes no representation of any kind or character with
respect to any such matters mentioned in this sentence. The Agent may execute
any of their duties under any of the Credit Documents by or through employees,
agents, Affiliates, and attorneys-in-fact and shall not be answerable to the
Lenders or any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care. The Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate, other
document or statement (whether written or oral) believed by it to be genuine or
to be sent by the proper party or parties. In particular and without limiting
any of the foregoing, the Agent shall have no responsibility for confirming the
existence or worth of any Collateral or the accuracy of any Compliance
Certificate or other document or instrument received by any of them under the
Credit Documents. The Agent may treat the payee of any Note as the holder
thereof until written notice of transfer shall have been filed with such Agent
signed by such owner in form satisfactory to such agent. Each Lender
acknowledges that it has independently and without reliance on the Agent or any
other Lender obtained such information and made such investigations and
inquiries regarding the Borrower and its Subsidiaries as it deems appropriate,
and based upon such information, investigations and inquiries, made its own
credit analysis and decision to extend credit to the Borrower in the manner set
forth in the Credit Documents. It shall be the responsibility of each Lender to
keep itself informed about the creditworthiness and business, properties,
assets, liabilities, condition (financial or otherwise) and prospects of the
Borrower and its Subsidiaries, the creditworthiness of all account debtors of
the Borrower and its Subsidiaries, and the Agent shall have no liability
whatsoever to any Lender for such matters. The Agent shall have no duty to
disclose to the Lenders information that is not required by any Credit Document
to be furnished by the Borrower or any Subsidiaries to such agent at such time,
but is voluntarily furnished to such agent (either in its respective capacity as
Agent or in its individual capacity).
Section 9.6 Indemnity. The Lenders shall ratably, in accordance with
---------
their Percentages, indemnify and hold the Agent, Lead Arranger and Book Manager,
Documentation Agents, Managing Agents and Co-Agents, and their respective
directors, officers, employees, agents and representatives harmless from and
against any liabilities, losses, costs or expenses suffered or incurred by it or
by any security trustee under any Credit Document or in connection with
41
the transactions contemplated thereby, regardless of when asserted or arising,
except to the extent they are promptly reimbursed for the same by the Borrower
or out of the proceeds of any Collateral and except to the extent that any event
giving rise to a claim was caused by the gross negligence or willful misconduct
of the party seeking to be indemnified. The obligations of the Lenders under
this Section 9.6 shall survive termination of this Agreement.
Section 9.7 Resignation of Agent and Successor Agent. The Agent may
----------------------------------------
resign at any time upon at least thirty (30) days' prior written notice to the
Lenders and the Borrower. Upon any such resignation of the Agent, the Majority
Lenders, with the consent of the Borrower, which consent shall not be
unreasonably withheld, shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Majority Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent, may, on behalf
of the Lenders, appoint a successor Agent which shall be any Lender hereunder or
any commercial bank organized under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of its appointment as the Agent hereunder,
such successor Agent shall thereupon succeed to and become vested with all the
rights and duties of the retiring Agent under the Credit Documents, and the
retiring Agent shall be discharged from its duties and obligations thereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 9 and all protective provisions of the other Credit Documents shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent.
Section 9.8 Lead Arranger and Book Manager, Documentation Agents,
-----------------------------------------------------
Managing Agents, and Co-Agents. The Lenders identified on the facing page or
------------------------------
signature pages of this Agreement as Lead Arranger and Book Manager,
Documentation Agents, Managing Agents, and Co-Agents, respectively, shall have
no rights, powers, obligations, liabilities, responsibilities or duties under
this Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, such Lenders shall not have and shall not be deemed to
have any fiduciary relationship with any other Lender. Each Lender acknowledges
that it has not relied, and will not rely, on either such Lender in deciding to
enter into this Agreement or in taking any action hereunder.
SECTION 10. MISCELLANEOUS.
Section 10.1 No Waiver of Rights. No delay or failure on the part of the
-------------------
Agent or any of the Lenders, or on the part of the holder or holders of the
Notes, in the exercise of any power, right or remedy under any Credit Document
shall operate as a waiver thereof or as an acquiescence in any default, nor
shall any single or partial exercise thereof preclude any other or further
exercise of any other power, right or remedy. To the fullest extent permitted
by applicable law, the powers, rights and remedies under the Credit Documents of
the Lenders and the holder or holders of the Notes are cumulative to, and not
exclusive of, any rights or remedies any of them would otherwise have.
Section 10.2 Non-Business Day. Subject to Section 2.5(b), if any payment
----------------
of principal or interest on any Loan, Reimbursement Obligation or of any other
Obligation shall fall due on a day which is not a Business Day, interest or fees
(as applicable) at the rate, if any, for such Loan, such Reimbursement
Obligation or such other Obligation or Agent Obligation bears for the period
prior to maturity shall continue to accrue in the manner set forth herein on
such Obligation from the stated due date thereof to and including the next
succeeding Business Day on which the same shall be payable.
Section 10.3 Documentary Taxes. The Borrower agrees that it will pay any
-----------------
documentary, stamp or similar taxes payable with respect to any Credit Document,
including interest and penalties, in the event any such taxes are assessed
irrespective of when such assessment is made and regardless whether any credit
is then in use or available hereunder.
Section 10.4 Survival of Representations. All representations and
---------------------------
warranties made herein or in certificates given pursuant hereto shall survive
the execution and delivery of this Agreement and the other Credit Documents, and
shall continue in full force and effect with respect to the date as of which
they were made as long as the Borrower has any Obligation hereunder or any
Commitment hereunder is in effect.
Section 10.5 Survival of Indemnities. All indemnities and all other
-----------------------
provisions relative to reimbursement to the Agent and the Lenders of amounts
sufficient to protect the yield of the Lenders or the Agent with respect to the
42
Loans or the Swing Line Loans, as applicable, shall survive the termination of
this Agreement and the other Credit Documents and the payment of the Loans and
all other Obligations or Agent Obligations, as applicable, for a period of one
(1) year.
Section 10.6 Setoff. In addition to any rights now or hereafter granted
------
under applicable law and not by way of limitation of any such rights, upon the
occurrence of, and throughout the continuance of, any Default or Event of
Default, the Agent and each of the Lenders and each subsequent holder of any of
the Notes is hereby authorized by the Borrower at any time or from time to time,
without notice to the Borrower, to any Subsidiary of the Borrower or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts, and in whatever currency
denominated) and any other Indebtedness at any time held or owing by the Agent
or the Lenders or that subsequent holder to or for the credit or the account of
the Borrower, whether or not matured, against and on account of the obligations
and liabilities of the Borrower to the Agent or the Lenders or that subsequent
holder under the Credit Documents, including, but not limited to, all claims of
any nature or description arising out of or connected with the Credit Documents,
irrespective of whether or not (i) the Agent or any of the Lenders or that
subsequent holder shall have made any demand hereunder or (ii) the principal of
or the interest on the Loans, the Notes and other amounts due hereunder shall
have become due and payable hereunder and although said obligations and
liabilities, or any of them, may be contingent or unmatured. The Agent or such
Lender, as applicable, shall promptly give the Borrower notice of any such
setoff, provided that any failure to give such notice shall not impact the
validity of any such setoff or give rise to any liability of the Agent or any
Lender as a result of any such failure. The Agent and the Lenders agree, if
there shall be any other Lenders pursuant to Section 10.10(b), that if a Lender
receives and retains any payment, whether by setoff or application of deposit
balances or otherwise, on any of the Loans or L/C Obligations in excess of its
ratable share of payments on all such Obligations then owed to the Lenders
hereunder, then such Lender shall purchase for cash at face value, but without
recourse, ratably from each of the other Lenders such amount of the Loans or L/C
Obligations, or participations therein, held by such Lender (or interest
therein) as shall be necessary to cause such Lender to share such excess payment
ratably with all the other Lenders; provided, however, that if any such purchase
is made by any Lender, and if such excess payment or part thereof is thereafter
recovered from such purchasing Lender, the related purchases from the other
Lenders shall be rescinded ratably and the purchase price restored as to the
portion of such excess payment so recovered, with interest pro rata, to the
extent the purchasing Lender is required to pay interest on the amount restored.
Section 10.7 Notices. Except as otherwise specified herein, all notices
-------
under the Credit Documents shall be in writing (including cable, telecopy or
telex) and shall be given to a party hereunder at its address, telecopier number
or telex numbers set forth below or such other address, telecopier number or
telex as such party may hereafter specify by notice to the Lenders or the
Borrower, as applicable, given by courier, by United States certified or
registered mail, by telegram or by other telecommunication device capable of
creating a written record of such notice and its receipt. Notices under the
Credit Documents shall be addressed to the Agent and the Lenders as set forth on
the signature pages hereto and to the Borrower as follows:
Quanta Services, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx Xxxxxx
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to
Quanta Services, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
43
Each such notice, request or other communication shall be effective (i) if
given by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section 10.7 and a confirmation of receipt of such telecopy
has been received by the sender, (ii) if given by telex, when such telex is
transmitted to the telex number specified in this Section 10.7 and the answer
back is received by sender, (iii) if given by courier, when delivered, (iv) if
given by mail, five (5) days after such communication is deposited in the mail,
registered with return receipt requested, addressed as aforesaid or (v) if given
by any other means, when delivered at the addresses specified in this Section
10.7; provided that any notice given pursuant to Section 2 shall be effective
only upon receipt and, provided further, that any notice that but for this
provision would be effective after the close of business on a Business Day or on
a day that is not a Business Day shall be effective at the opening of business
on the next Business Day.
Section 10.8 Counterparts. This Agreement may be executed in any number
------------
of counterparts, and by the different parties on different counterpart signature
pages, each of which when executed shall be deemed an original but all such
counterparts taken together shall constitute one and the same Agreement.
Section 10.9 Successors and Assigns. This Agreement shall be binding
----------------------
upon the Borrower, the Agent, the Lead Arranger and Book Manager, the
Documentation Agents, Managing Agents, the Co-Agents and the Lenders and their
respective successors and assigns, and shall inure to the benefit of the
Borrower, the Agent, the Lead Arranger and Book Manager, the Documentation
Agents, Managing Agents, the Co-Agents and the Lenders and their respective
successors and assigns, including any subsequent holder of the Notes. The
Borrower may not assign any of its rights or obligations under any Credit
Document without the consent of the Agent and all of the Lenders.
Section 10.10 Sales and Transfers of Borrowings and Notes; Participations
-----------------------------------------------------------
in Borrowings and Notes.
-----------------------
(1) Any Lender may at any time sell to one or more banks or
other financial institutions having a combined capital and surplus of at least
$250,000,000 ("Participants"), participating interests in any Borrowing owing to
such Lender, any Note held by such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder, provided that no Lender may sell any
participating interests in any such Borrowing, Note, Commitment or other
interest hereunder without also selling to such Participant the appropriate pro
rata share of its Borrowings, Notes, Commitments and other interests hereunder,
and provided further that no Lender shall transfer, grant or assign any
participation under which the Participant shall have rights to vote upon or
consent to any matter to be decided by the Lender or the Majority Lenders
hereunder or under any Credit Document or approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would (i) increase the amount of such Lender's Commitment and such
increase would affect such Participant, (ii) reduce the principal of, or
interest on, any of such Lender's Borrowings, or any fees or other amounts
payable to such Lender hereunder and such reduction would affect such
Participant, (iii) postpone any date fixed for any scheduled payment of
principal of, or interest on, any of such Lender's Borrowings, or any fees or
other amounts payable to such Lender hereunder, or (iv) release any collateral
for any Obligation (including, without limitation, any Subsidiary Guaranty),
except as otherwise specifically provided in any Credit Document. In the event
of any such sale by a Lender of participating interests to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement and the Borrower and the Agent shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. The Borrower agrees that if amounts
outstanding under this Agreement and the Notes are due and unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of setoff
in respect of its participating interest in amounts owing under this Agreement
and any Note to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement or any Note, provided
that such right of setoff shall be subject to the obligation of such Participant
to share with the Lenders, and the Lenders agree to share with such Participant,
as provided in Section 10.6. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.12 and 8.3 with respect to its
participation in the Commitments and the Borrowings outstanding from time to
time, provided that no Participant shall be entitled to receive any greater
amount pursuant to such Sections than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred.
44
(2) Any Lender may at any time sell to any Lender or any Affiliate
thereof, and, with the consent of the Agent and the Borrower (which shall not be
unreasonably withheld or delayed), to one or more banks or other financial
institutions having a combined capital and surplus of at least $250,000,000 (a
"Purchasing Lender"), all or any part of its rights and obligations under this
Agreement and the Notes, pursuant to an Assignment Agreement in the form
attached as Exhibit 10.10 hereto, executed by such Purchasing Lender and such
transferor Lender (and, in the case of a Purchasing Lender which is not then a
Lender or an Affiliate thereof, by the Borrower and the Agent) and delivered to
the Agent; provided that, each such sale to a Purchasing Lender shall be in an
amount of $5,000,000 or more, or if in a lesser amount, such sale shall be of
all of the Lender's rights and obligations under this Agreement and all of the
Notes payable to it to one eligible assignee. Notwithstanding the above, any
Lender may sell to one or more eligible assignees all or any part of their
rights and obligations under this Agreement and the Notes with only the consent
of the Agent (which shall not be unreasonably withheld) if an Event of Default
shall have occurred and be continuing. No Lender may sell any Loans to a
Purchasing Lender without also selling to such Purchasing Lender the appropriate
pro rata share of its Borrowings, Notes, Commitments and other interests
hereunder, including participations in Letters of Credit hereunder; provided
that, the Agent shall not be required to sell its Swing Line Loans at such time
as it may sell any other portion of its Borrowings, Notes, Commitments and other
interests hereunder. Upon such execution, delivery, acceptance and recording,
from and after the effective date of the transfer determined pursuant to such
Assignment Agreement (x) the Purchasing Lender thereunder shall be a party
hereto and, to the extent provided in such Assignment Agreement, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein and
(y) the transferor Lender thereunder shall, to the extent provided in such
Assignment Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment Agreement covering all or the remaining
portion of a transferor Lender's rights and obligations under this Agreement,
such transferor Lender shall cease to be a party hereto). Such Assignment
Agreement shall be deemed to amend this Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of Commitments and Percentages arising from the purchase by
such Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement, the Notes and the other Credit
Documents. On or prior to the effective date of the transfer determined
pursuant to such Assignment Agreement, the Borrower, at its own expense, shall
execute and deliver to the Agent in exchange for any surrendered Notes, new
Notes as appropriate to the order of such Purchasing Lender in an amount equal
to the Commitments assumed by it pursuant to such Assignment Agreement, and, if
the transferor Lender has retained a Commitment or Borrowing hereunder, new
Notes to the order of the transferor Lender in an amount equal to the
Commitments or Borrowings retained by it hereunder. Such new Notes shall be
dated the Initial Borrowing Date and shall otherwise be in the form of the Notes
replaced thereby. The Notes surrendered by the transferor Lender shall be
returned by the Agent to the Borrower marked "cancelled."
(3) Upon its receipt of an Assignment Agreement executed by a
transferor Lender, a Purchasing Lender and the Agent (and, in the case of a
Purchasing Lender that is not then a Lender or an Affiliate thereof, by the
Borrower), together with payment to the Agent hereunder of a registration and
processing fee of $3,500, the Agent shall (i) promptly accept such Assignment
Agreement, and (ii) on the effective date of the transfer determined pursuant
thereto give notice of such acceptance and recordation to the Lenders and the
Borrower.
(4) The provisions of the foregoing clauses (b) and (c) shall not
apply to or restrict, or require the consent of or any notice to any Person to
effectuate, the pledge or assignment by any Lender of its rights under this
Agreement and its Notes to any Federal Reserve Bank.
(5) If, pursuant to this Section 10.10 any interest in this
Agreement or any Note is transferred to any transferee which is organized under
the laws of any jurisdiction other than the United States of America or any
State thereof, the transferor Lender shall cause such transferee, concurrently
with the effectiveness of such transfer, (i) to represent to the transferor
Lender (for the benefit of the transferor Lender, the Agent and the Borrower)
that under applicable law and treaties no taxes will be required to be withheld
by the Agent, the Borrower or the transferor Lender with respect to any payments
to be made to such transferee in respect of the Loans or the L/C Obligations,
(ii) to furnish to the transferor Lender (and, in the case of any Purchasing
Lender, the Agent and the Borrower) either U.S. Internal Revenue Service Form
4224 or U.S. Internal Revenue Service Form 1001 or such successor forms as shall
be adopted from time to time by the relevant United States taxing authorities
(wherein such transferee claims entitlement to complete exemption from U.S.
federal withholding tax on all interest payments hereunder), and (iii) to agree
(for the benefit of the transferor Lender, the Agent and the Borrower) to
provide the transferor Lender (and, in the case of any
45
Purchasing Lender, the Agent and the Borrower) a new Form 4224 or Form 1001, or
any successor forms thereto, upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments dully executed and completed
by such transferee, and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax exemption.
Section 10.11 Amendments. Any provision of the Credit Documents may be
----------
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by (a) the Borrower, (b) the Majority Lenders (in the case of a consent
or waiver, the Borrower may rely on the consent or waiver of the Agent on behalf
of the Majority Lenders, the Agent agreeing to obtain the necessary consents or
waivers from the Majority Lenders before providing such consent or waiver), and
(c) if the rights or duties of the Agent are affected thereby, the Agent;
provided that:
(1) no amendment or waiver shall (A) increase the
Commitment Amount without the consent of all Lenders or increase any Commitment
of any Lender without the consent of such Lender, (B) postpone the Maturity Date
without the consent of all Lenders (and the Agent in the case of Swing Line
Loans) or reduce the amount of or postpone the date for any scheduled payment of
any principal of or interest on any Loan, Reimbursement Obligation or of any fee
or any other amounts payable hereunder without the consent of each Lender owed
such Obligation or (C) release any Subsidiary Guaranty or any Collateral without
the consent of all the Lenders and the Agent; and
(2) no amendment or waiver shall, unless signed by
each Lender, change the provisions of this Section 10.11 or the definition of
Majority Lenders or affect the number of Lenders required to take any action
under any other provision of the Credit Documents.
Section 10.12 Headings. Section headings used in this Agreement are for
--------
reference only and shall not affect the construction of this Agreement.
Section 10.13 Legal Fees, Other Costs and Indemnification. The Borrower,
-------------------------------------------
upon demand by the Agent, the Lead Arranger and Book Manager, the Documentation
Agents, Managing Agents, any Co-Agent or any Lender, agrees to pay the
reasonable fees and disbursements of legal counsel to the Agent, the Lead
Arranger and Book Manager, the Documentation Agents, Managing Agents, any Co-
Agent or any Lender in connection with the preparation and execution of the
Credit Documents, any amendment, waiver or consent related thereto, whether or
not the transactions contemplated therein are consummated, any Default or Event
of Default by the Borrower hereunder and any enforcement (including, without
limitation, all workout and bankruptcy proceedings) of any of the Credit
Documents or collection of any Obligations; provided that the Borrower shall
only have to pay the reasonable fees and disbursements of one law firm in
connection therewith unless the Agent, the Lead Arranger and Book Manager, the
Documentation Agents, Managing Agents, any Co-Agent, any Lender or their counsel
is of the reasonable opinion that representation by one law firm would not be
feasible or that a conflict of interest would exist. The Borrower further
agrees to indemnify the Agent, the Lead Arranger and Book Manager, the
Documentation Agents, Managing Agents, each Co-Agent and each Lender and its
respective directors, officers, shareholders, employees and attorneys
(collectively, the "Indemnified Parties"), against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all reasonable attorneys' fees and other reasonable expenses of litigation or
preparation therefor, whether or not the Indemnified Party is a party thereto)
which any of them may pay or incur arising out of or relating to (a) any Credit
Document, the Loans, the Letters of Credit or the application or proposed
application by the Borrower of the proceeds of any Loan, REGARDLESS OF WHETHER
SUCH CLAIMS OR ACTIONS ARE FOUNDED IN WHOLE OR IN PART UPON THE ALLEGED SIMPLE
OR CONTRIBUTORY NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES AND/OR ANY OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, SHAREHOLDERS, EMPLOYEES OR ATTORNEYS, (b) any
investigation of any third party or any governmental authority involving the
Agent, the Lead Arranger and Book Manager, the Documentation Agents, Managing
Agents, any Co-Agent or any Lender and related to any use made or proposed to be
made by the Borrower of the proceeds of the Borrowings, or any transaction
financed or to be financed in whole or in part, directly or indirectly with the
proceeds of any Borrowing, and (c) any investigation of any third party or any
governmental authority, litigation or proceeding, related to any environmental
cleanup, audit, compliance or other matter relating to any Environmental Law or
the presence of any Hazardous Material (including, without limitation, any
losses, liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any Environmental Law) with respect to the Borrower or any of its
46
Subsidiaries, regardless of whether caused by, or within the control of, the
Borrower or any of its Subsidiaries; provided, however, that the Borrower shall
not be obligated to indemnify any Indemnified Party for any of the foregoing
arising out of (i) such Indemnified Party's gross negligence or willful
misconduct, (ii) the Agent's failure to pay under any Letter of Credit after the
presentation to it of a request required to be paid under applicable law, (iii)
the Agent's, the Lead Arranger and Book Manager's, the Documentation Agents',
Managing Agents', any Co-Agent's or any Lender's breach of any material
provision of any Credit Document, or any dispute solely among the Agent, the
Lead Arranger and Book Manager, the Documentation Agents, Managing Agents, the
Co-Agents, the Lenders or any of same. The Borrower, upon demand by the
Indemnified Party at any time, shall reimburse the Indemnified Party for any
legal or other expenses incurred in connection with investigating or defending
against any of the foregoing except if the same is excluded from indemnification
pursuant to the provisions of the foregoing sentence.
Section 10.14 Governing Law; Submission to Jurisdiction; Waiver of Jury
---------------------------------------------------------
Trial.
-----
(1) The Credit Agreement, and the other Credit Documents, and
the rights and duties of the parties thereto, shall be construed in accordance
with and governed by the internal laws of the State of Texas.
(2) THE AGENT, THE LEAD ARRANGER AND BOOK MANAGER, THE
DOCUMENTATION AGENTS, MANAGING AGENTS, EACH CO-AGENT, EACH LENDER AND THE
BORROWER HEREBY WAIVES ITS RIGHT TO RESOLVE DISPUTES, CLAIMS, AND CONTROVERSIES
ARISING FROM THE CREDIT AGREEMENT, ANY OTHER CREDIT DOCUMENT OR ANY MATTER IN
CONNECTION THEREWITH, INCLUDING, WITHOUT LIMITATION, CONTRACT DISPUTES AND TORT
CLAIMS, THROUGH ANY COURT PROCEEDING OR LITIGATION AND ACKNOWLEDGES THAT ALL
SUCH DISPUTES, CLAIMS AND CONTROVERSIES SHALL BE RESOLVED PURSUANT TO THIS
SECTION, EXCEPT THAT EQUITABLE RELIEF AND CERTAIN OTHER RIGHTS AND REMEDIES SET
FORTH BELOW MAY BE SOUGHT FROM ANY COURT OF COMPETENT JURISDICTION. EACH PARTY
REPRESENTS TO THE OTHER PARTIES THAT THIS WAIVER IS MADE KNOWINGLY AND
VOLUNTARILY AFTER CONSULTATION WITH AND UPON ADVICE OF ITS COUNSEL AND IS A
MATERIAL PART OF THIS AGREEMENT. ALL SUCH DISPUTES, CLAIMS AND CONTROVERSIES
SHALL BE RESOLVED BY BINDING ARBITRATION PURSUANT TO THE COMMERCIAL RULES OF THE
AMERICAN ARBITRATION ASSOCIATION ("AAA"). Any arbitration proceeding held
pursuant to this arbitration provision shall be conducted in Houston, Texas or
at any other place selected by mutual agreement of the parties. No act to take
or dispose of any collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This arbitration
provision shall not limit the right of any party during any dispute, claim or
controversy to seek, use, and employ ancillary, or preliminary rights and/or
remedies, judicial or otherwise, for the purposes of realizing upon, preserving,
protecting, foreclosing upon or proceeding under forcible entry and detainer for
possession of, any real or personal property, and any such action shall not be
deemed an election of remedies. Such remedies include, without limitation,
obtaining injunctive relief or a temporary restraining order, invoking a power
of sale under any deed of trust or mortgage, obtaining a writ of attachment or
imposition of a receivership, or exercising any rights relating to personal
property, including exercising the right of set-off, or taking or disposing of
such property with or without judicial process pursuant to the Uniform
Commercial Code. Any disputes, claims or controversies concerning the lawfulness
or reasonableness of an act, or exercise of any right or remedy concerning any
collateral, including any claim to rescind, reform, or otherwise modify any
agreement relating to the collateral, shall also be arbitrated; provided,
however that no arbitrator shall have the right or the power to enjoin or
restrain any act of either party. Judgment upon any award rendered by any
arbitrator may be entered in any court having jurisdiction. The statute of
limitations, estoppel, waiver, laches and similar doctrines which would
otherwise be applicable in an action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of any action for these purposes. The federal
arbitration act (Title 9 of the United States Code) shall apply to the
construction, interpretation, and enforcement of this arbitration provision.
(3) To the fullest extent permitted by applicable law, each
party hereto agrees that any court proceeding or litigation permitted by Section
10.14(b) may be brought and maintained in the courts of the State of Texas
sitting in Xxxxxx County or the United States District Court for the Southern
District of Texas. To the fullest extent permitted by applicable law, the
Borrower hereby expressly and irrevocably submits to the jurisdiction of the
courts of the State of Texas and the United States District Court for the
Southern District of Texas for the purpose of any such
47
litigation as set forth above and irrevocably agrees to be bound by any judgment
rendered thereby in connection with such litigation. To the fullest extent
permitted by applicable law, the Borrower further irrevocably consents to the
service of process, by registered mail, postage prepaid, or by personal service
within or without the state of Texas. To the fullest extent permitted by
applicable law, the Borrower hereby expressly and irrevocably waives any
objection which it may have or hereafter may have to the laying of venue of any
such litigation brought in any such court referred to above and any claim that
any such litigation has been brought in an inconvenient forum. To the extent
that the Borrower has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether through service of notice,
attachment prior to judgment, attachment in aid of execution or otherwise) with
respect to itself or its property, the Borrower hereby irrevocably waives to the
fullest extent permitted by applicable law, such immunity in respect of its
obligations under the Credit Agreement and the other Credit Documents.
(4) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
PARTY TO THIS AGREEMENT VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY
(BY ITS ACCEPTANCE OF THIS AGREEMENT) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING PERMITTED BY SECTION 10.14(B) AND WAIVES ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF THE CREDIT AGREEMENT, ANY OTHER CREDIT DOCUMENT, ANY
OTHER RELATED DOCUMENT OR ANY RELATIONSHIP BETWEEN THE AGENT, ANY LENDER, THE
BORROWER AND/OR ANY GUARANTOR, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR
DISPUTE SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO THE LENDERS TO PROVIDE THE LOANS AND THE LETTERS OF
CREDIT."
Section 10.15 Confidentiality. The Agent, the Lead Arranger and Book
---------------
Manager, the Documentation Agents, the Managing Agents, each Co-Agent and each
Lender (each a "Restricted Party", and collectively, the "Restricted Parties")
agrees it will not disclose without the Borrower's consent (other than to its
employees, contract employees, auditors, counsel or other professional advisors
or to its Affiliates) any information concerning the Borrower or any of its
Subsidiaries furnished to the Restricted Parties pursuant to any of the Credit
Documents, including, but not limited to, information which is marked or
otherwise designated as "confidential" by Borrower or any of its Subsidiaries;
provided that any Restricted Party may disclose any information (i) to any other
Restricted Party or its Affiliates or to the employees, contract employees,
auditors, counsel or other professional advisors of any other Restricted Party
or its Affiliates, (ii) that has become generally available to the public, other
than by the Restricted Party making such disclosure, (iii) that was previously
known to a Restricted Party , (iv) becomes known or available to a Restricted
Party from a source other than the Borrower or any of its Subsidiaries, (v) if
required or appropriate in any examination or audit or any report, statement or
testimony submitted to any federal or state regulatory body having or claiming
to have jurisdiction over such Restricted Party , (vi) if required or
appropriate in response to any summons or subpoena or in connection with any
litigation, (vii) in order to comply with any law, order, regulation or ruling
applicable to such Restricted Party, (viii) to any prospective or actual
permitted transferee in connection with any contemplated or actual permitted
transfer of any interest in any Note by any Lender subject to the terms of this
Agreement, (ix) in connection with the exercise of any remedies by any
Restricted Party, and (x) disclosed publicly by Borrower or any of its
Subsidiaries.
Section 10.16 Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.17 Change in Accounting Principles or Tax Laws. If (i) any
-------------------------------------------
change in accounting principles from those used in the preparation of the
financial statements of the Borrower referred to in Section 5.9 is hereafter
occasioned by the promulgation of rules, regulations, pronouncements and
opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accounts (or successors thereto or
agencies with similar functions) and such change materially affects the
calculation of any component of any financial covenant, standard or term found
in this Agreement, or (ii) there is a material change in federal or foreign tax
laws which materially affects the Borrower's ability to comply with the
financial covenants, standards or terms found in this
48
Agreement, the Borrower, the Agent and the Lenders agree to enter into
negotiations in order to amend such provisions so as to equitably reflect such
changes with the desired result that the criteria for evaluating the Borrower's
and its Subsidiaries' consolidated financial condition shall be the same after
such changes as if such changes had not been made. Unless and until such
provisions have been so amended, the provisions of this Agreement shall govern.
Section 10.18 Loans Under Existing Credit Agreement. On the Initial
-------------------------------------
Borrowing Date:
(1) The Borrower shall pay all accrued and unpaid commitment
fees outstanding under the Second Amended and Restated Credit Agreement;
(2) each Revolving Loan under the Second Amended and Restated
Credit Agreement shall be deemed to be repaid with the proceeds of new LIBOR
Loans and Base Rate Loans and each Swing Line Loan under the Second Amended and
Restated Credit Agreement shall be deemed to be repaid with the proceeds of a
new Base Rate Loan;
(3) each Letter of Credit outstanding under the Second Amended
and Restated Credit Agreement shall be deemed to have been issued under this
Agreement without payment of any further fronting fee (but subject to the other
fees set forth in Section 3.1(b)); and
(4) the Second Amended and Restated Credit Agreement and the
commitments thereunder shall be superseded by this Agreement and such
commitments shall terminate.
Section 10.19 Effectiveness. This Agreement shall become effective on
-------------
the date (the "Effective Date") on which the Borrower, the Agent, the Lead
Arranger and Book Manager, the Documentation Agents, Managing Agents, each Co-
Agent and each Lender has signed and delivered to the Agent a counterpart
signature page hereto or, in the case of a Lender, the Agent has received telex
or facsimile notice that such a counterpart has been signed and mailed to the
Agent.
Section 10.20 Notice. The Credit Documents constitute the entire
------
understanding among the Borrower, the Agent, the Lead Arranger and Book Manager,
the Documentation Agents, the Managing Agents, the Co-Agents, and the Lenders
and supersede all earlier or contemporaneous agreements, whether written or
oral, concerning the subject matter of the Credit Documents. THIS WRITTEN
AGREEMENT TOGETHER WITH THE OTHER CREDIT DOCUMENTS REPRESENTS 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 to this Agreement have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the day and year first above written.
BORROWER:
--------
QUANTA SERVICES, INC.
/s/ XXXXX X. XXXXXX
By:______________________________________
Xxxxx X. Xxxxxx
Chief Financial Officer
49
LENDERS:
-------
Percentage of Commitment: 11.4285714285% NATIONSBANK, N.A. d/b/a BANK OF
AMERICA, N.A., as Administrative Agent and as a Lender
/s/ XXXXX X. XXXX
By:__________________________
Xxxxx X. Xxxx
Senior Vice President
Address for Notices:
-------------------
Bank of America, N.A.
000 Xxxxxxxxx Xx., 0/xx/ Xxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
-----------------------
Name of Credit Bank: Bank of America, N.A.
City, State: Dallas, Texas
Method of Payment: ABA #000000000
Ref: Quanta Services, Inc.
Account No.: 1292000883
Attention: CCS/Agency Services
Telephone No.: (000) 000-0000
Lending Office:
---------------
000 Xxxxxxxxx Xx., 0/xx/ Xxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
50
Percentage of Commitment: 10.0000000000% BANK ONE, TEXAS, NATIONAL
ASSOCIATION, as a Documentation
Agent and as a Lender
/s/ XXXXX X. XXXXX
By:_________________________
Name: Xxxxx X. Xxxxx
Title: Managing Director
Address for Notices:
-------------------
Bank One, Texas, National Association
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xx. Xxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Telex No.: 6734165
Answerback: BONE DAL
Payment Instructions:
--------------------
Name of Credit Bank: Bank Xxx, Xxxxx, Xxxxxxxx Xxxxxxxxxxx
Xxxx, Xxxxx: Houston, Texas
Method of Payment: ABA #000000000
For Credit To: Bank One, Texas, National Association
Account No.: 0749905618
Reference: Quanta Services, Inc.
Attention: Xx. X.X. Xxxx
Lending Office:
--------------
Bank One, Texas, National Association
000 Xxxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxx, Xx.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
51
Percentage of Commitment: 10.0000000000% BANKBOSTON, N.A., as a Documentation
Agent and as a Lender
/s/ XXXXXXX XXXX
By:___________________________
Name: Xxxxxxx Xxxx
Title: Managing Director
Address for Notices:
-------------------
000 Xxxxxxx Xx. (00-00-00)
Xxxxxx, XX 00000
Attention: Ms. Xxxx Xxxxxx
Telephone No.: (617) 000- 0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: BankBoston, N.A.
City, State: Boston, Massachusetts
Method of Payment: ABA#000000000
Account No.: 540-99621
Account Name: Energy and Utilities Operating Account
Reference: Quanta Services, Inc.
Attention: Ms. Xxxx Xxxxxx
Lending Office:
--------------
Energy and Utilities Division
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Mr. Xxxxxxx Xxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
52
Percentage of Commitment: 10.0000000000% CREDIT LYONNAIS NEW YORK BRANCH,
as a Managing Agent and as a Lender
By: /s/ Xxxxxx Xxxxxxxxx
___________________________
Name: Xxxxxx Xxxxxxxxx
_________________________
Title: Senior Vice President
________________________
Address for Notices:
-------------------
Credit Lyonnais
c/o Credit Lyonnais Representative Office
0000 Xxxx Xxx., Xxxxx 0000-X
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: Credit Lyonnais New York
City, State: New York, New York
ABA No.: 000000000
Method of Payment: Federal Funds
For Credit To: Loan Servicing
Account No.: 01-88179-3701-00-179
Reference: Quanta Services, Inc.
Attention: Xxxx Xxxxxx
Lending Office:
--------------
Credit Lyonnais New York Branch
1301 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxx Xxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
53
Percentage of Commitment: 10.0000000000% THE BANK OF NOVA SCOTIA, as a
Managing Agent and as a Lender
By: /s/ A. S. Xxxxxxxxxx
___________________________________
Name: A.S. Xxxxxxxxxx
_________________________________
Title: Sr. Team Leader-Loan Operations
_______________________________
Address for Notices: with a copy to:
--------------------
The Bank of Nova Scotia, The Bank of Nova Scotia,
Atlanta Agency Houston Representative Xxxxxx
000 Xxxxxxxxx Xxxxxx X.X., Xxxxx 0000 1100 Louisiana, Suite 3000
Xxxxxxx, Xxxxxxx 00000 Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxx Xxxxxx Attention: Xx. Xxxx Xxxxxx
Telephone No.: (000) 000-0000 Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
Telex: 00542319 Telex: RCA 000000
Answerback: SCOTIABANK ATL Answerback: SCOTIABANK HOU
Payment Instructions:
---------------------
Name of Credit Bank: The Bank of Nova Scotia, New York Agency
City, State: New York, New York
Method of Payment: ABA #000000000
For Credit To: The Bank of Nova Scotia, Atlanta Agency
Account No.: 0000000
Reference: Quanta Services, Inc.
Attention: Houston Team
Lending Office:
--------------
The Bank of Nova Scotia,
Atlanta Agency
000 Xxxxxxxxx Xxxxxx X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Telex: 00000000
Answerback: XXXXXXXXXX XXX
00
Xxxxxxxxxx xx Xxxxxxxxxx: 7.1428571429% NATIONAL CITY BANK, as a Lender
/s/ XXXXXXX X. XXXXXX
By:____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Address for Notices:
-------------------
National City Bank
000 X. Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Mr. Xxxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: National City Bank
City, State: Columbus, Ohio
Method of Payment: ABA #000000000
For Credit To: National City Bank
Account No.: 151804
Reference: Quanta Services, Inc.
Attention: Xx. Xxxxxx Xxxxxxxx (000) 000-0000
Lending Office:
--------------
National City Bank
000 X. Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
55
Percentage of Commitment: 7.1428571429% LASALLE BANK NATIONAL ASSOCIATION, as
a Lender
/s/ XXXXXXX X. XXXXX
By:__________________________
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Address for Notices:
-------------------
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: LaSalle Bank National Association
City, State: Chicago, IL
Method of Payment: ABA # 000-000-000
For Credit To: Commercial Wires
Account No.: #7463690271/5200465084
Reference: Quanta Services, Inc.
Attention: Xx. Xxxxxxx X. Xxxxx
Lending Office:
--------------
000 XxXxxxx Xxxxxx, Xx. 214
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
56
Percentage of Commitment: 7.1428571429% FIRST UNION NATIONAL BANK, as a Lender
By: /s/ Xxxx X. Xxxxxx
____________________________
Name: Xxxx X. Xxxxxx
__________________________
Title: Sr. Vice President
_________________________
Address for Notices:
-------------------
First Union National Bank
000 Xxxxx Xxxxxxx Xxxxxx
XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Mr. Xxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: First Union National Bank
City, State: Charlotte, North Carolina
Method of Payment: ABA #000000000
For Credit To: First Union National Bank
Account No.: 465906-0000190
Reference: Quanta Services, Inc.
Attention: Xxxx Xxxxx
Lending Office:
--------------
First Union National Bank
000 Xxxxx Xxxxxxx Xxxxxx
XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Mr. Xxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
57
Percentage of Commitment: 5.7142857143% COMERICA BANK, as a Lender
/s/ XXXX X. XXXXXX
By:__________________________
Name: Xxxx X. Xxxxxx
Title: Vice President
Address for Notices:
-------------------
0000 Xxxxxx Xxxxxx Xx., Xxxxx 000
Xxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: Comerica Bank
City, State: Detroit, MI
Method of Payment: ABA #000000000
For Credit To: Commercial Loan Servicing
Account No.: 21585-90010
Reference: Quanta Services, Inc.
Lending Office:
--------------
Comerica Bank
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
58
Percentage of Commitment: 4.0000000000% THE BANK OF TOKYO-MITSUBISHI, LTD.,
as a Lender
/s/ XXXX X. XxXXXX
By:____________________________
Name: Xxxx X. XxXxxx
Title: Vice President and Manager
Address for Notices:
-------------------
The Bank of Tokyo - Mitsubishi, Ltd.,
Houston Agency
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx Xxxxx
Payment Instructions:
--------------------
Name of Credit Bank: The Bank of Tokyo-Mitsubishi, Ltd., New York Branch
City, State: New York, New York
Method of Payment: ABA #000-000-000
For Credit To: The Bank of Tokyo-Mitsubishi, Ltd., Houston Agency
Account No.: 00000000
Reference: Quanta Services, Inc.
Attention: Xx. Xxxxx X. Xxxxx
Lending Office:
--------------
The Bank of Tokyo - Mitsubishi, Ltd.,
Houston Agency
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
59
Percentage of Commitment: 4.0000000000% CHASE BANK OF TEXAS, N.A., as a Lender
By: /s/ Xxxxx X. Dolphin
_____________________________
Name: Xxxxx X. Dolphin
___________________________
Title: Sr. Vice President
__________________________
Address for Notices:
-------------------
Chase Bank of Texas, N.A.
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Dolphin
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: Chase Bank of Texas, N.A.
City, State: Houston, Texas
Method of Payment: ABA #000000000
Ref: Quanta Services, Inc.
Account No.: 00100381673
Attention: Commercial Loan Operations
Telephone No.: (000) 000-0000
Lending Office:
--------------
Chase Bank of Texas, N.A.
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
60
Percentage of Commitment: 4.0000000000% GUARANTY FEDERAL BANK, F.S.B.
/s/ XXXXX X. XXXXXXX
By:___________________________
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Address for Notices:
-------------------
Guaranty Bank
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: Guaranty Federal Bank, F.S.B.
City, State: Dallas, Texas
Method of Payment: 000-000-000
Account No.: 19408080854
Reference: Quanta Services, Inc.
Attention: Xxxxx Xxx Xxxxxx/Commercial Loan Support
Lending Office:
--------------
Guaranty Bank
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
61
Percentage of Commitment: 4.0000000000% SUNTRUST BANK, ATLANTA as a Lender
/s/ XXXXX XXXX
By:____________________________
Name: Xxxxx Xxxx
Title: Vice President
/s/ XXXXXXXX XxXXXXXX
By:____________________________
Name: Xxxxxxxx XxXxxxxx
Title: Banking Officer
Address for Notices:
-------------------
SunTrust Bank, Atlanta
Mail Code 1909
00 Xxxx Xxxxx, 00xx Xx.
Xxxxxxx, XX 00000
Attention: Mr. Xxxxx Xxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: Xxxxxxxx Xxxx, Xxxxxxx
Xxxx, Xxxxx: Atlanta, GA
Method of Payment: ABA# 000-000-000
Account No.: 9088000112
Reference: Quanta Services
Attention: Xxx Xxxxxxx
Lending Office:
--------------
Suntrust Bank, Atlanta
Mail Code 1941
00 Xxxx Xxxxx, 00xx Xx.
Xxxxxxx, XX 00000
62
Percentage of Commitment: 4.0000000000% BANKERS TRUST COMPANY, as a Lender
By:_____________________________
Name:___________________________
Title:__________________________
Address for Notices:
-------------------
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Mail Stop 2276
Attention: Xx. Xxxxxx Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: Bankers Trust Company
City, State: New York, New York
Method of Payment: ABA #000000000
For Credit To: Bankers Trust Company
Account No.: 00000000
Reference: Quanta Services, Inc.
Attention: Commercial Loan Account
Lending Office:
--------------
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Mail Stop 2276
Attention: Xx. Xxxxxx Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
63
