Exhibit 10.18
FIRST AMENDMENT TO
THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT
(this "Amendment") is entered into as of September 21, 1999, among Quanta
Services, Inc., a Delaware corporation ("Borrower"), the lenders from time to
time parties thereto (each a "Lender" and collectively "Lenders"), and BANK OF
AMERICA, N.A., f/k/a NationsBank, N.A., as administrative agent for the Lenders
(in such capacity, the "Agent"). Capitalized terms used but not defined in this
Amendment have the meaning given such terms in the Credit Agreement (defined
below).
RECITALS
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A. The Borrower and the Lenders entered into that certain Third Amended
and Restated Secured Credit Agreement dated as of June 14, 1999 (the "Credit
Agreement").
B. The Borrower proposes to issue to Utilicorp United Inc. ("Utilicorp")
perpetual preferred stock which, among other things, (i) will have a dividend at
a 0.5% annual coupon rate, (ii) will be convertible into common stock of the
Borrower at the option of Utilicorp, and (iii) is not subject to mandatory
redemption by the Borrower at the request of Utilicorp.
C. The Borrower and the Lenders have agreed to amend the Credit
Agreement, to accommodate the issuance of the preferred stock, subject to the
terms and conditions set out in the Amendment.
D. The Borrower has requested certain other modifications to the Credit
Agreement and the Lenders are willing to make such modifications, subject to the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
undersigned agree as follows:
1. The definitions shall be added to Section 1.1 of the Credit Agreement:
2.
"Management Fee" means the management fee due from the Borrower to
Utilicorp under the terms of the management services agreement between
the Borrower and Utilicorp under which Utilicorp will provide to the
Borrower advice regarding (a) corporate and strategic planning, (b)
the development, evaluation, and marketing of the Borrower's products
and services, (c) identifying potential acquisition candidates and
additional business opportunities, and (d) other similar or related
services.
"Preferred Stock" means the perpetual preferred stock issued by the
Borrower to Utilicorp which (a) has a dividend at a 0.5% annual coupon
rate payable for 6 years after the date of issuance, (b) is
convertible into common stock of the Borrower at the option of
Utilicorp at a conversion price which is fixed (or the method of its
determination is fixed) on the date issued, (c) is not subject to
voluntary redemption by the Borrower or mandatory redemption by the
Borrower at the request of Utilicorp, (d) participates with the
Borrower's common stock in permitted distributions, (e) has voting
rights equal to the number of shares into which it could be converted
as of the applicable record date, (f) has preemptive rights to
maintain its proportionate equity ownership in the Borrower, and (g)
gives the Borrower the option to pay, defer, or pay in kind any
scheduled dividend. "Utilicorp" means Utilicorp United Inc., a
Delaware corporation.
1. The definition of EBITDA in Section 1.1 of the Credit Agreement shall be
deleted in its entirety and replaced with the following:
2.
"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 the
Management Fee expensed during such period, (iii) the amount of all
depreciation and amortization expense deducted in determining
Consolidated Net Income, and adjusted for (iv) 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.
1. The definition of Minimum Interest Coverage Ratio in Section 1.1 of the
Credit Agreement shall be deleted in its entirety and replaced with the
following:
2.
"Minimum Interest Coverage Ratio" means, for any period, the ratio of
(a) EBIT plus the amount of the Management Fee expensed during such
period, to (b) the sum of Consolidated Interest Expense, plus the
amount of any dividend or distribution in respect of the Preferred
Stock paid or scheduled to be paid during such period, plus the amount
of the Management Fee paid during such period.
1. Section 6.10(a) of the Credit Agreement shall be deleted in its entirety
and replaced with the following:
2.
"(a) the Borrower may not pay any dividends or other distributions on
its capital stock, provided that, if no Default then exists or results
therefrom, the Borrower may pay scheduled dividends in respect of the
Preferred Stock."
1. Section 6.11(a) of the Credit Agreement shall be deleted in its entirety
and replaced with the following:
2.
"(a) 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
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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 (after
deducting the amount of cash and Cash Equivalents held by such
acquired Person), 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."
1. Section 6.15(f) of the Credit Agreement shall be deleted in its entirety
and replaced with the following:
2.
"(f) loans to employees of the Borrower or any of its
Subsidiaries, provided that all such loans shall not exceed
$10,000,000 at any one time;"
1. A new section, Section 6.25, will be added to the Credit Agreement and will
read as follows:
2.
Section 6.25 Management Fee. The Management Fee may not (a) be
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paid if a Default exists or would result from such payment, or (b)
exceed, in any fiscal year of the Borrower, 5%, calculated on an
annual basis, of the outstanding amount of the Preferred Stock during
such period (taking into account the issuance of additional Preferred
Stock and the conversion of any Preferred Stock into common stock of
the Borrower).
1. Conditions. This Amendment shall not be effective until each of the
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following have been delivered to Agent:
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2.
(a) this Amendment signed by the Borrower, Guarantors, and Required
Lenders; and
(a) such other documents as Agent may reasonably request.
2. Fees and Expenses. The Borrower agrees to pay the reasonable fees and
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expenses of counsel to Agent for services rendered in connection with the
preparation, negotiation and execution of this Amendment.
3.
4. Representations and Warranties. The Borrower and Guarantors represent
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and warrant to the Lenders that they possess all requisite power and authority
to execute, deliver and comply with the terms of this Amendment, which has been
duly authorized and approved by all requisite corporate action on the part of
the Borrower and Guarantors, for which no consent of any Person is required, and
which will not violate their respective organizational documents, and agree to
furnish the Lenders with evidence of such authorization and approval upon
request. The Borrower and Guarantors further represent and warrant to the
Lenders that (a) the representations and warranties in each Credit Document to
which they are a party are true and correct in all material respects on and as
of the date of this Amendment as though made on the date of this Amendment
(except to the extent that (i) such representations and warranties speak to a
specific date or (ii) the facts on which such representations and warranties are
based have been changed by transactions contemplated by the Credit Agreement),
(b) it is in full compliance with all covenants and agreements contained in each
Credit Document to which it is a party, and (c) no Default or Potential Default
has occurred and is continuing.
5.
6. Scope of Amendment; Reaffirmation; Release. Except as affected by this
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Amendment, the Credit Documents are unchanged and continue in full force and
effect. However, in the event of any inconsistency between the terms of the
Credit Agreement as hereby amended and any other Credit Document, the terms of
the Credit Agreement shall control and such other document shall be deemed to be
amended hereby to conform to the terms of the Credit Agreement. All references
to the Credit Agreement shall refer to the Credit Agreement as amended by this
Amendment. The Borrower and Guarantors hereby reaffirm their respective
obligations under, and agree that, all Credit Documents to which they are a
party remain in full force and effect and continue to evidence their respective
legal, valid and binding obligations enforceable in accordance with their terms
(as the same are affected by this Amendment). The Borrower and Guarantors hereby
release the Lenders from any liability for actions or failures to act in
connection with the Credit Documents prior to the date hereof. This Amendment
shall be binding upon and inure to the benefit of each of the undersigned and
their respective successors and permitted assigns.
7.
8. Miscellaneous.
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9.
(a) No Waiver of Defaults. This Amendment does not constitute a waiver of,
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or a consent to, any present or future violation of or default under, any
provision of the Credit Documents, or a waiver of the Lenders' right to
insist upon future compliance with each term, covenant, condition and
provision of the Credit Documents, and the Credit Documents shall continue
to be binding upon, and inure to the benefit of, the Borrower, Guarantors,
and the Lenders and their respective successors and assigns.
(a) Form. Each agreement, document, instrument or other writing to be
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furnished Agent under any provision of this instrument must be in form and
substance satisfactory to Agent and its counsel.
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(a) Multiple Counterparts. This Amendment may be executed in any number of
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counterparts with the same effect as if all signatories have signed the
same document. All counterparts must be construed together to constitute
one and the same instrument.
(a) Governing Law. This Amendment and the other Credit Documents must be
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construed-and their performance enforced-under Texas law.
1. Entirety. The Credit Documents Represent the Final Agreement Between the
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Borrower, Guarantors and the Lenders and May Not Be Contradicted by Evidence of
Prior, Contemporaneous, or Subsequent Oral Agreements by the Parties. There Are
No Unwritten Oral Agreements among the Parties.
2.
The Amendment is executed as of the date set out in the preamble to this
Amendment.
QUANTA SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx
____________________________
Xxxxx X. Xxxxxx
Chief Financial Officer
BANK OF AMERICA, N.A., as Administrative Agent
and as a Lender
By: /s/ Xxxxx X. Xxxx
____________________________
Xxxxx X. Xxxx
Senior Vice President
BANK ONE, TEXAS, NATIONAL ASSOCIATION,
as a Documentation Agent and as a Lender
By: /s/ Xxxx Xxxxxxxx
____________________________
Name: Xxxx Xxxxxxxx
Title: Vice President
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BANKBOSTON, N.A., as a Documentation Agent and
as
a Lender
By: /s/ Xxxxxxx Xxxx
____________________________
Name: Xxxxxxx Xxxx
Title: Managing Director
CREDIT LYONNAIS NEW YORK BRANCH, as a
Managing Agent and as a Lender
By: /s/ Xxxxxx Xxxxxxxxx
_______________________________
Name: Xxxxxx Xxxxxxxxx
________________________
Title: Senior Vice President
_______________________
THE BANK OF NOVA SCOTIA, as a Managing
Agent and as a Lender
By: /s/ ECH Xxxxx
_______________________________________
Name: ECH Xxxxx
________________________________
Title: Senior Manager Loan Operations
_______________________________
NATIONAL CITY BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
___________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION, as a
Lender
By: /s/ Xxxxxxx X. Xxxxx
___________________________
Name: Xxxxxxx X. Xxxxx
Title: Vice President
FIRST UNION NATIONAL BANK, as a Lender
By: /s/ Xxxx X. Fellar
____________________________
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Name: Xxxx X. Fellar
Title: Senior Vice President
COMERICA BANK, as a Lender
By: /s/ XXXX X. XXXXXX
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD., as a
Lender
By:
----------------------------
Name: Xxxx X. XxXxxx
Title: Vice President and Manager
CHASE BANK OF TEXAS, N.A., as a Lender
By: /s/ XXXXX X. DOLPHIN
--------------------------------------
Name: Xxxxx X. Dolphin
Title: Senior Vice President
GUARANTY FEDERAL BANK, F.S.B., as a Lender
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
SUNTRUST BANK, ATLANTA, as a Lender
By: /s/ XXXXX XXXX
----------------------------
Name: Xxxxx Xxxx
Title: Vice President
By: /s/ XXXXXXXX X. XxXXXXXX
-----------------------------
Name: Xxxxxxxx X. XxXxxxxx
Title: Assistant Vice President
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BANKERS TRUST COMPANY, as a Lender
By: /s/ G. XXXXXX XXXXX
-----------------------------
Name: G. Xxxxxx Xxxxx
Title: Vice President
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GUARANTORS' CONSENT AND AGREEMENT
---------------------------------
As an inducement to the Lenders to execute, and in consideration of the
Lenders' execution of this Amendment, each of the undersigned hereby consents to
this Amendment and agrees that the same shall in no way release, diminish,
impair, reduce or otherwise adversely affect the obligations and liabilities of
the undersigned under their respective Guaranties described in the Credit
Agreement executed by the undersigned, or any agreements, documents or
instruments executed by any of the undersigned, all of which obligations and
liabilities are, and shall continue to be, in full force and effect. This
consent and agreement shall be binding upon the undersigned, and their
respective successors and assigns, and shall inure to the benefit of the
Lenders, and their respective successors and assigns.
Advanced Communication Technologies, Inc., an Oregon
corporation
Advanced Communication Technologies Inc., a Washington
corporation
Austin Trencher, Inc., a Delaware corporation
Xxxxxxx Xxxxx Construction Company, a Delaware
corporation
Driftwood Electrical Contractors, Inc., a Delaware
corporation
Environmental Professional Associates, Limited, a
California
corporation
Fiber Technology, Inc., a Texas corporation
Five Points Construction Co., a Texas corporation
GEM Engineering Co., Inc., a Delaware corporation
Golden State Utility Co., a Delaware corporation
X.X. Xxxxxxx Pipeline Construction, Inc., a Delaware
corporation
Xxxxxx & Xxxxxx, Inc., a Nevada corporation
Interstate Equipment Corp., a Delaware corporation
Xxxxxx Bros., Inc., a Delaware corporation
NorAm Telecommunications, Inc., an Oregon corporation
North Pacific Construction Co., Inc., a Delaware
corporation
Northern Line Layers, Inc.. a Delaware corporation
PAR Electrical Contractors, Inc., a Missouri
corporation
P.D.G. Electric Company, a Florida corporation
Potelco, Inc., a Washington corporation
QSI, Inc., a Delaware corporation
Quanta XVI Acquisition, Inc., a Delaware corporation
Quanta XVII Acquisition, Inc., a Delaware corporation
Quanta XVIII Acquisition, Inc., a Delaware corporation
Quanta XIX Acquisition, Inc., a Delaware corporation
Quanta XXI Acquisition, Inc., a Delaware corporation
Quanta XXII Acquisition, Inc., a Delaware corporation
Quanta XXIII Acquisition, Inc., a Delaware corporation
Quanta XXIV Acquisition, Inc., a Delaware corporation
Quanta XXV Acquisition, Inc., a Delaware corporation
Quanta XXVI Acquisition, Inc., a Delaware corporation
Quanta XXVII Acquisition, Inc., a Delaware corporation
Quanta XXVIII Acquisition, Inc., a Delaware corporation
Quanta XXIX Acquisition, Inc., a Delaware corporation
Quanta XXX Acquisition, Inc., a Delaware corporation
Quanta XXXI Acquisition, Inc., a Delaware corporation
Quanta XXXII Acquisition, Inc., a Delaware corporation
Quanta XXXIII Acquisition, Inc., a Delaware corporation
Quanta XXXIV Acquisition, Inc., a Delaware corporation
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Quanta XXXV Acquisition, Inc., a Delaware corporation
Quanta XXXVI Acquisition, Inc., a Delaware corporation
Quanta XXXVII Acquisition, Inc., a Delaware corporation
Quanta XXXVIII Acquisition, Inc., a Delaware
corporation
Quanta XXXIX Acquisition, Inc., a Delaware corporation
Quanta XL Acquisition, Inc., a Delaware corporation
Quanta XLI Acquisition, Inc., a Delaware corporation
Quanta Delaware, Inc., a Delaware corporation
Quanta Utility Installation Company, Inc., a Delaware
corporation
X. X. Xxxxxxxxxxx & Co., Inc., a Delaware corporation
Seaward Corporation, a Maine corporation
Spalj Construction Company, a Delaware corporation
Span-Con of Deerwood, Inc., a Minnesota corporation
Xxxxxxxx Welding, Inc., a Delaware corporation
Sumter Builders, Inc., a Delaware corporation
TTM, Inc., a North Carolina corporation
Telecom Network Specialists, Inc., a Delaware
corporation
The Xxxx Company, Inc., a Massachusetts corporation
Xxx Xxxxx Construction Company, a Delaware corporation
TRANS TECH Electric, Inc., an Indiana corporation
Underground Construction Co., Inc., a Delaware
corporation
Union Power Construction Company, a Colorado
corporation
VCI Telcom, Inc., a Delaware corporation
W.C. Communications, Inc., a Delaware corporation
W.H.O.M. Corporation, a California corporation
Xxxxxx Roadbores, Inc., a Delaware corporation
By: /s/ XXXX XXXXXXX
---------------------------------
Xxxx Xxxxxxx, President or Vice President of
each Guarantor
Coast To Coast, LLC, a California limited liability
company
By: Environmental Professional Associates, Limited,
Its Member
By: /s/ XXXX XXXXXXX
----------------------------
Xxxx Xxxxxxx, Vice President
By: Quanta Services, Inc., Its Member
By: /s/ XXXX XXXXXXX
----------------------------
Xxxx Xxxxxxx, Vice President
Quanta Services Management Partnership, L.P., a Texas
limited partnership
By: QSI, Inc., Its General Partner
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By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx, Vice President
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